Richmond Mutual Bancorporation, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS Richmond Mutual Bancorporation, Inc. Condensed Consolidated Balance Sheets September 30, 2025 December 31, 2024 (Unaudited) Assets Cash and due from banks $ 11,415,968 $ 8,986,540 Interest-earning demand deposits 22,848,985 12,770,650 Cash and cash equivalents 34,264,953 21,757,190 Interest-earning time deposits — 300,000 Investment securities - available for sale 250,449,435 258,191,630 Investment securities - held to maturity 2,771,714 3,497,913 Loans held for sale 1,441,000 1,092,920 Loans and leases, net of allowance for credit losses of $ 16,364,629 and $ 15,790,885 , respectively 1,178,231,605 1,158,879,008 Premises and equipment, net 13,426,599 12,922,028 Federal Home Loan Bank stock 13,907,100 13,907,100 Interest receivable 5,832,015 6,030,000 Mortgage-servicing rights 1,896,665 1,950,504 Cash surrender value of life insurance 3,929,070 3,856,494 Other assets 19,415,208 22,490,073 Total assets $ 1,525,565,364 $ 1,504,874,860 Liabilities Noninterest-bearing deposits $ 110,814,992 $ 110,105,973 Interest-bearing deposits 1,007,443,355 983,833,884 Total deposits 1,118,258,347 1,093,939,857 Federal Home Loan Bank advances 254,000,000 265,000,000 Advances by borrowers for taxes and insurance 801,579 590,439 Interest payable 2,914,144 4,831,674 Other liabilities 9,556,118 7,641,130 Total liabilities 1,385,530,188 1,372,003,100 Commitments and Contingent Liabilities — — Stockholders' Equity Common stock, $ 0.01 par value Authorized - 90,000,000 shares Issued and outstanding - 10,426,263 shares and 10,814,960 shares at September 30, 2025 and December 31, 2024, respectively 104,263 108,150 Additional paid-in capital 92,836,644 97,709,231 Retained earnings 95,371,985 91,582,986 Unearned employee stock ownership plan (ESOP) ( 10,170,922 ) ( 10,722,410 ) Accumulated other comprehensive loss ( 38,106,794 ) ( 45,806,197 ) Total stockholders' equity 140,035,176 132,871,760 Total liabilities and stockholders' equity $ 1,525,565,364 $ 1,504,874,860 See Notes to Condensed Consolidated Statements. 1 Richmond Mutual Bancorporation, Inc. Condensed Consolidated Statements of Income (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Interest Income Loans and leases $ 19,676,223 $ 18,070,712 $ 57,632,973 $ 53,132,574 Investment securities 1,933,714 2,002,123 5,817,466 6,178,777 Other 203,430 188,197 577,092 545,183 Total interest income 21,813,367 20,261,032 64,027,531 59,856,534 Interest Expense Deposits 7,757,269 8,331,483 23,413,643 23,398,461 Borrowings 2,761,137 2,496,750 8,301,414 7,616,600 Total interest expense 10,518,406 10,828,233 31,715,057 31,015,061 Net Interest Income 11,294,961 9,432,799 32,312,474 28,841,473 Provision for (reversal of) credit losses 268,674 ( 98,848 ) 1,744,459 354,758 Net Interest Income After Provision for (Reversal of) Credit Losses 11,026,287 9,531,647 30,568,015 28,486,715 Non-interest Income Service charges on deposit accounts 319,433 325,470 925,343 908,121 Card fee income 316,425 301,384 950,849 893,031 Loan and lease servicing fees 164,032 122,106 412,270 381,060 Net gains (loss) on securities (includes $ 0 , $ 11,331 , $( 156,859 ), and $( 50,698 ), respectively, related to accumulated other comprehensive income reclassifications) — 11,331 ( 156,859 ) ( 50,698 ) Net gains on loan and lease sales 94,280 211,102 290,723 420,740 Other income 404,059 353,787 1,118,084 1,013,953 Total non-interest income 1,298,229 1,325,180 3,540,410 3,566,207 Non-interest Expenses Salaries and employee benefits 4,500,594 4,580,929 13,979,656 13,826,856 Net occupancy expenses 340,023 332,479 1,071,294 1,005,702 Equipment expenses 234,667 233,619 742,464 699,175 Data processing fees 955,062 894,080 2,782,562 2,680,029 Deposit insurance expense 306,000 380,000 949,000 1,163,000 Printing and office supplies 47,528 31,816 130,519 124,225 Legal and professional fees 540,344 463,108 1,518,935 1,376,585 Advertising expense 109,563 111,183 273,400 281,999 Bank service charges 37,379 66,191 121,717 183,427 Real estate owned expense 8,425 3,883 11,712 16,370 Other expenses 1,003,180 918,246 2,984,382 2,767,545 Total non-interest expenses 8,082,765 8,015,534 24,565,641 24,124,913 Income Before Income Tax Expense 4,241,751 2,841,293 9,542,784 7,928,009 Provision for income taxes (includes $ 0 , $ 2,380 , $( 32,940 ), and $( 10,647 ), respectively, related to income tax expense (benefit) from reclassification of items) 644,745 369,415 1,375,470 1,026,636 Net Income $ 3,597,006 $ 2,471,878 $ 8,167,314 $ 6,901,373 Earnings Per Share Basic $ 0.37 $ 0.25 $ 0.84 $ 0.68 Diluted $ 0.36 $ 0.24 $ 0.82 $ 0.68 See Notes to Condensed Consolidated Statements. 2 Richmond Mutual Bancorporation, Inc. Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net Income $ 3,597,006 $ 2,471,878 $ 8,167,314 $ 6,901,373 Other Comprehensive Income Unrealized gain on available for sale securities, net of tax expense of $ 1,419,506 , $ 2,184,979 , $ 2,013,736 , and $ 1,072,553 , respectively 5,340,047 8,219,682 7,575,484 4,034,841 Less: reclassification adjustment for realized gains (losses) included in net income, net of tax expense (benefit) of $ 0 , $ 2,380 , $( 32,940 ), and $( 10,647 ), respectively — 8,951 ( 123,919 ) ( 40,051 ) 5,340,047 8,210,731 7,699,403 4,074,892 Comprehensive Income $ 8,937,053 $ 10,682,609 $ 15,866,717 $ 10,976,265 See Notes to Condensed Consolidated Statements. 3 Richmond Mutual Bancorporation, Inc. Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) Three Months Ended September 30, 2025 Common Stock Additional Paid-in Capital Retained Earnings Unearned ESOP Shares Accumulated Other Comprehensive Loss Total Shares Outstanding Amount Balances, June 30, 2025 10,389,137 $ 103,891 $ 92,798,702 $ 93,220,564 $ ( 10,354,751 ) $ ( 43,446,841 ) $ 132,321,565 Net income — — — 3,597,006 — — 3,597,006 Other comprehensive income — — — — — 5,340,047 5,340,047 ESOP shares earned — — 9,020 — 183,829 — 192,849 Granting of restricted stock awards 37,126 372 ( 372 ) — — — — Stock based compensation — — 29,294 — — — 29,294 Common stock dividends ($ 0.15 per share) — — — ( 1,445,585 ) — — ( 1,445,585 ) Balances, September 30, 2025 10,426,263 $ 104,263 $ 92,836,644 $ 95,371,985 $ ( 10,170,922 ) $ ( 38,106,794 ) $ 140,035,176 Nine Months Ended September 30, 2025 Common Stock Additional Paid-in Capital Retained Earnings Unearned ESOP Shares Accumulated Other Comprehensive Loss Total Shares Outstanding Amount Balances, December 31, 2024 10,814,960 $ 108,150 $ 97,709,231 $ 91,582,986 $ ( 10,722,410 ) $ ( 45,806,197 ) $ 132,871,760 Net income — — — 8,167,314 — — 8,167,314 Other comprehensive income — — — — — 7,699,403 7,699,403 ESOP shares earned — — 972 — 551,488 — 552,460 Granting of restricted stock awards 37,126 372 ( 372 ) — — — — Stock based compensation — — 756,213 — — — 756,213 Common stock dividends ($ 0.45 per share) — — — ( 4,378,315 ) — — ( 4,378,315 ) Repurchase of common stock ( 425,823 ) ( 4,259 ) ( 5,629,400 ) — — — ( 5,633,659 ) Balances, September 30, 2025 10,426,263 $ 104,263 $ 92,836,644 $ 95,371,985 $ ( 10,170,922 ) $ ( 38,106,794 ) $ 140,035,176 See Notes to Condensed Consolidated Statements. 4 Three Months Ended September 30, 2024 Common Stock Additional Paid-in Capital Retained Earnings Unearned ESOP Shares Accumulated Other Comprehensive Loss Total Shares Outstanding Amount Balances, June 30, 2024 11,018,824 $ 110,188 $ 99,813,232 $ 89,457,837 $ ( 11,090,068 ) $ ( 47,180,935 ) $ 131,110,254 Net income — — — 2,471,878 — — 2,471,878 Other comprehensive income — — — — — 8,210,731 8,210,731 ESOP shares earned — — ( 17,074 ) — 183,829 — 166,755 Stock based compensation — — 371,537 — — — 371,537 Exercise of stock options 1,300 13 ( 24 ) — — — ( 11 ) Common stock dividends ($ 0.14 per share) — — — ( 1,418,672 ) — — ( 1,418,672 ) Repurchase of common stock ( 71,306 ) ( 713 ) ( 885,162 ) — — — ( 885,875 ) Balances, September 30, 2024 10,948,818 $ 109,488 $ 99,282,509 $ 90,511,043 $ ( 10,906,239 ) $ ( 38,970,204 ) $ 140,026,597 Nine Months Ended September 30, 2024 Common Stock Additional Paid-in Capital Retained Earnings Unearned ESOP Shares Accumulated Other Comprehensive Loss Total Shares Outstanding Amount Balances, December 31, 2023 11,208,500 $ 112,085 $ 101,347,566 $ 87,902,747 $ ( 11,457,726 ) $ ( 43,045,096 ) $ 134,859,576 Net income — — — 6,901,373 — — 6,901,373 Other comprehensive loss — — — — — 4,074,892 4,074,892 ESOP shares earned — — ( 75,005 ) — 551,487 — 476,482 Forfeiture of restricted stock awards ( 400 ) ( 4 ) 4 — — — — Stock based compensation — — 1,102,526 — — — 1,102,526 Exercise of stock options 1,952 19 ( 32 ) — — — ( 13 ) Common stock dividends ($ 0.42 per share) — — — ( 4,293,077 ) — — ( 4,293,077 ) Repurchase of common stock ( 261,234 ) ( 2,612 ) ( 3,092,550 ) — — — ( 3,095,162 ) Balances, September 30, 2024 10,948,818 $ 109,488 $ 99,282,509 $ 90,511,043 $ ( 10,906,239 ) $ ( 38,970,204 ) $ 140,026,597 See Notes to Condensed Consolidated Statements. 5 Richmond Mutual Bancorporation, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended September 30, 2025 2024 Operating Activities Net income $ 8,167,314 $ 6,901,373 Adjustments to reconcile net income to net cash provided by operating activities Provision for credit losses 1,744,459 354,758 Depreciation and amortization 665,165 638,183 Deferred income tax ( 355,561 ) ( 25,729 ) Stock based compensation 756,213 1,102,526 Investment securities amortization, net 566,266 726,168 Net loss on sale of investment securities - available for sale 156,859 50,698 Net gains on loan and lease sales ( 290,723 ) ( 420,740 ) (Gain) loss on sale of real estate owned ( 6,067 ) 7,050 Gain on sale of premises and equipment ( 4,500 ) ( 6,000 ) Accretion of loan origination fees ( 619,566 ) ( 581,788 ) Amortization of mortgage-servicing rights 153,070 141,242 ESOP shares expense 552,460 476,482 Increase in cash surrender value of life insurance ( 72,576 ) ( 68,601 ) Loans originated for sale ( 13,745,585 ) ( 20,561,099 ) Proceeds on loans sold 14,093,665 19,987,599 Net change in Interest receivable 197,985 ( 30,261 ) Other assets 1,346,317 1,976,081 Other liabilities 1,914,988 ( 1,743,912 ) Interest payable ( 1,917,530 ) ( 962,951 ) Net cash provided by operating activities 13,302,653 7,961,079 Investing Activities Net change in interest-bearing time deposits 300,000 ( 300,000 ) Purchases of securities available for sale ( 4,792,287 ) ( 3,502,331 ) Proceeds from maturities and paydowns of securities available for sale 14,793,251 16,414,642 Proceeds from sales of securities available for sale 6,765,143 6,907,932 Proceeds from maturities and paydowns of securities held to maturity 725,239 895,228 Net change in loans ( 20,982,158 ) ( 49,250,751 ) Proceeds from sales of real estate owned 43,502 125,109 Purchases of premises and equipment ( 1,165,236 ) ( 344,322 ) Proceeds from sale of premises and equipment — 6,000 Purchase of FHLB stock — ( 1,260,000 ) Net cash used in investing activities ( 4,312,546 ) ( 30,308,493 ) Financing Activities Net change in Demand and savings deposits 17,460,240 ( 4,363,372 ) Certificates of deposit 6,858,250 52,317,925 Advances by borrowers for taxes and insurance 211,140 111,445 Proceeds from FHLB advances 229,000,000 230,500,000 Repayment of FHLB advances ( 240,000,000 ) ( 249,500,000 ) Repurchase of common stock ( 5,633,659 ) ( 3,095,162 ) Proceeds from stock option exercises — ( 13 ) Dividends paid ( 4,378,315 ) ( 4,293,077 ) Net cash provided by financing activities 3,517,656 21,677,746 Net Change in Cash and Cash Equivalents 12,507,763 ( 669,668 ) Cash and Cash Equivalents, Beginning of Period 21,757,190 20,240,125 Cash and Cash Equivalents, End of Period $ 34,264,953 $ 19,570,457 Additional Cash Flows and Supplementary Information Interest paid $ 33,632,587 $ 31,978,012 Transfers from loans to other real estate owned — — See Notes to Condensed Consolidated Statements. 6 Richmond Mutual Bancorporation, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Amounts) Note 1: Basis of Presentation The accompanying financial information is unaudited and has been prepared from the consolidated financial statements of Richmond Mutual Bancorporation, Inc., and its wholly owned direct and indirect subsidiaries, First Bank Richmond, First Insurance Management, Inc., FB Richmond Holdings, Inc. and FB Richmond Properties, Inc. References in this document to Richmond Mutual Bancorporation refer to Richmond Mutual Bancorporation, Inc. References to “we,” “us,” and “our” or the “Company” refers to Richmond Mutual Bancorporation and its wholly-owned direct and indirect subsidiaries, First Bank Richmond, First Insurance Management, Inc., FB Richmond Holdings, Inc., and FB Richmond Properties, Inc. unless the context otherwise requires. First Bank Richmond is an Indiana state-chartered commercial bank headquartered in Richmond, Indiana and the wholly owned banking subsidiary of Richmond Mutual Bancorporation. First Bank Richmond provides full banking services through its seven full- and one limited-service offices located in Cambridge City (1), Centerville (1), Richmond (5) and Shelbyville (1), Indiana, its five full-service offices located in Piqua (2), Sidney (2) and Troy (1), Ohio, and its loan production office in Columbus, Ohio. Administrative, trust and wealth management services are conducted through First Bank Richmond's Corporate Office/Financial Center located in Richmond, Indiana. As an Indiana-chartered commercial bank, First Bank Richmond is subject to regulation by the Indiana Department of Financial Institutions ("IDFI") and the Federal Deposit Insurance Corporation ("FDIC"). First Insurance Management, Inc., a wholly-owned subsidiary of the Company which was formed and began operations in June 2022, is a Nevada-based captive insurance company that insures against certain risks unique to the operations of the Company and its subsidiaries and for which insurance may not be currently available or economically feasible in today's insurance marketplace. First Insurance Management, Inc. is subject to the regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance. FB Richmond Holdings, Inc., a wholly-owned subsidiary of First Bank Richmond which was formed and began operations in April 2020, is a Nevada corporation that holds and manages substantially all of First Bank Richmond's investment portfolio. FB Richmond Holdings, Inc. has one active subsidiary, FB Richmond Properties, Inc., a Delaware corporation which holds loans on behalf of First Bank Richmond. The accompanying unaudited condensed consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include information or note disclosures necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. Accordingly, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 ("2024 Form 10-K") filed with the Securities and Exchange Commission (“SEC”) on March 27, 2025 (SEC File No. 001-38956). However, in the opinion of management, all adjustments which are necessary for a fair presentation of the consolidated financial statements have been included. Those adjustments consist only of normal recurring adjustments. The results of operations for the periods are not necessarily indicative of the results to be expected for the full year. Use of Estimates in Preparation of Financial Statements Financial statements prepared in accordance with generally accepted accounting principles in the United States ("GAAP") require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. Loans For all loan classes, the accrual of interest is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Past due status is based on contractual terms of the loan. For all loan classes, the entire balance of the loan is considered past due if the minimum payment contractually required to be paid is not received by the 7 contractual due date. For all loan classes, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful. The Company charges off residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance, which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value, less costs to sell when the loan is 120 days past due, charge-off of unsecured open-end loans when the loan is 90 days past due, and charge down to the net realizable value when other secured loans are 90 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off. For all classes, all interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status. On occasion, the Company will provide modifications to loans and leases to borrowers experiencing financial difficulty, by providing payment delays, term extensions, or interest-rate reductions. In some cases, combinations of modifications may be made to the same loan or lease. If determined that the value of the modified loan or lease is less than the recorded investment in the loan, a charge-off is recognized to the allowance for credit losses on loans and leases. Note 2: Accounting Pronouncements The Jumpstart Our Business Startups Act (the "JOBS Act"), enacted in April 2012, introduced a number of changes to the federal securities laws intended to facilitate access to the capital markets. Under the JOBS Act, a company with total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year qualifies as an “emerging growth company” ("EGC"). The Company previously qualified as, and elected to be treated as, an EGC under the JOBS Act. As an EGC, the Company elected to adopt new or revised accounting standards in the same manner and timing as a private company, an election that was required to be made upon the filing of its initial registration statement and remained irrevocable for as long as the Company maintained EGC status. As of December 31, 2024, the Company ceased to qualify as an EGC. Accordingly, beginning with the fiscal year ending December 31, 2025, the Company was required to adopt new or amended accounting standards as applicable to public companies and comply with other reporting and disclosure requirements of the Securities Exchange Act of 1934, as amended, and related SEC rules and regulations. In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures , requiring public entities to disclose information about significant expenses for their reportable segments on both an interim and annual basis. Public entities must disclose significant expense categories and amounts for each reportable segment, which are derived from expenses regularly reported to the entity’s chief operating decision-maker (CODM) and included in the segment's reported measures of profit or loss. Additionally, public entities must disclose the title and position of the CODM and explain how the CODM uses these measures to assess segment performance. The ASU also mandates certain segment-related interim disclosures that were previously required only on an annual basis. The ASU is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted this ASU on January 1, 2024. Adoption of ASU No. 2023-07 did not have a material impact on the Company's consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU applies to contracts, hedging relationships and other transactions that reference the London Interbank Offer Rate ("LIBOR") or other rate references expected to be discontinued because of reference rate reform. The ASU permits an entity to make necessary modifications to eligible contracts or transactions without requiring contract remeasurement or reassessment of a previous accounting determination. In December of 2022, the FASB issued ASU No. 2022-06 which extended the period of time preparers can utilize the reference rate reform relief guidance in Topic 848. The guidance ensures the relief in Topic 848 covers the period of time during which a significant number of modifications may take place and the ASU defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. 8 In March 2023, the FASB issued ASU No. 2023-02, Investments Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method . This ASU allows reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. ASU No. 2023-02 is effective for all public business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023. The Company adopted this guidance on January 1, 2024. Adoption of ASU 2023-02 did not have a material impact on the Company's consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This ASU established new income tax disclosure requirements and modified existing requirements. The ASU requires additional information be disclosed for specified categories, and reconciling items that meet a certain threshold, within the rate reconciliation on an annual basis. Additionally, this ASU requires information be disclosed on the amount of income taxes paid (net of refunds), disaggregated by federal, state, and foreign taxes and the amount of income taxes paid (net of refunds) disaggregated by jurisdiction based on a quantitative threshold. ASU No. 2023-09 is effective for all public business entities for annual periods beginning after December 15, 2024. The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements. Note 3: Investment Securities The amortized cost and approximate fair values, together with gross unrealized gains and losses, of investment securities are as follows: September 30, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale U.S. Treasury securities $ 796 $ — $ 2 $ 794 SBA Pools 3,619 — 420 3,199 Federal agencies 15,000 — 1,065 13,935 State and municipal obligations 157,268 7 28,578 128,697 Mortgage-backed securities - government-sponsored enterprises (GSE) residential 110,502 72 16,394 94,180 Corporate obligations 11,500 — 1,856 9,644 298,685 79 48,315 250,449 Held to maturity State and municipal obligations 2,772 9 57 2,724 2,772 9 57 2,724 Total investment securities $ 301,457 $ 88 $ 48,372 $ 253,173 9 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale U.S. Treasury securities $ 3,159 $ 2 $ — $ 3,161 SBA Pools 4,243 — 543 3,700 Federal agencies 15,000 — 1,666 13,334 State and municipal obligations 162,524 1 32,166 130,359 Mortgage-backed securities - (GSE) residential 119,748 5 21,440 98,313 Corporate obligations 11,500 — 2,175 9,325 316,174 8 57,990 258,192 Held to maturity State and municipal obligations 3,498 8 85 3,421 3,498 8 85 3,421 Total investment securities $ 319,672 $ 16 $ 58,075 $ 261,613 The amortized cost and fair value of investment securities at September 30, 2025, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Available for Sale Held to Maturity Amortized Cost Fair Value Amortized Cost Fair Value Within one year $ 1,770 $ 1,767 $ 725 $ 725 One to five years 23,490 22,463 987 988 Five to ten years 45,435 41,006 450 450 After ten years 117,488 91,033 610 561 188,183 156,269 2,772 2,724 Mortgage-backed securities –GSE residential 110,502 94,180 — — Totals $ 298,685 $ 250,449 $ 2,772 $ 2,724 Investment securities with a carrying value of $ 138,306,000 and $ 136,799,000 were pledged at September 30, 2025 and December 31, 2024, respectively, to secure certain deposits and for other purposes as permitted or required by law. Proceeds from the sale of securities available for sale were $ 0 and $ 6,765,000 for the three and nine months ended September 30, 2025. Gross losses recognized on the sale of securities available for sale for the three and nine months ended September 30, 2025 were $ 0 and $ 157,000 , while there were no gross gains recognized during those same periods. Proceeds from the sale of securities available for sale for the three and nine months ended September 30, 2024 were $ 3,119,000 and $ 6,908,000 , respectively. Gross losses recognized on the sale of securities available for sale for the three and nine months ended September 30, 2024 were $ 9,000 and $ 71,000 , respectively, while gross gains recognized were $ 157,000 during those same periods. Certain investments in debt securities, as reflected in the table below, are reported in the condensed consolidated financial statements and notes at an amount less than their historical cost. Total fair value of these investments at September 30, 2025 and December 31, 2024 was $ 244,243,000 and $ 255,749,000 , respectively, which is approximately 96 % and 98 % of the Company’s aggregated available for sale and held to maturity investment portfolio at those dates, respectively. These declines primarily resulted from changes in market interest rates since their purchase. The Company does not consider available for sale securities with unrealized losses to be experiencing credit losses at September 30, 2025. Management considers it more likely than not that the Company will not be required to sell these investments before recovery of the amortized cost basis, which may be the maturity dates of the securities. 10 Held to maturity securities are financial assets measured at amortized cost. Held to maturity securities are required to have an established allowance for credit losses that represents the portion of the amortized cost basis of a financial asset that is not expected to be collectable. The Company estimates expected credit losses on a collective basis by security type, with consideration given to historical information, credit ratings, and the statistical probability of future losses. The Company monitors the credit quality of investment securities held to maturity through the use of credit ratings quarterly. As of September 30, 2025, there was no allowance for credit losses recognized on the Company's securities held to maturity portfolio. The following table summarizes the amortized cost of held to maturity securities by credit quality indicator as of September 30, 2025 and December 31, 2024: State and municipal obligations September 30, 2025 December 31, 2024 AA+ $ 350 $ 483 AA — — AA- — 295 A+ 375 605 BBB+ — — Not rated 2,047 2,115 $ 2,772 $ 3,498 The Company has elected to exclude accrued interest receivable from the calculation of the allowance for credit losses. The following tables show the Company’s investment securities by gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2025 and December 31, 2024: Description of Securities September 30, 2025 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for sale U.S. Treasury Securities $ 795 $ 2 $ — $ — $ 795 $ 2 SBA Pools — — 2,899 420 2,899 420 Federal agencies — — 13,935 1,065 13,935 1,065 State and municipal obligations — — 125,795 28,578 125,795 28,578 Mortgage-backed securities - GSE residential — — 89,917 16,394 89,917 16,394 Corporate obligations — — 9,644 1,856 9,644 1,856 Total available for sale 795 2 242,190 48,313 242,985 48,315 Held to maturity State and municipal obligations 280 — 978 57 1,258 57 Total $ 1,075 $ 2 $ 243,168 $ 48,370 $ 244,243 $ 48,372 11 Description of Securities December 31, 2024 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for sale SBA Pools $ 454 $ 1 $ 2,991 $ 542 $ 3,445 $ 543 Federal agencies — — 13,334 1,666 13,334 1,666 State and municipal obligations 1,578 17 127,705 32,149 129,283 32,166 Mortgage-backed securities - GSE residential 1,045 10 96,296 21,430 97,341 21,440 Corporate obligations — — 9,324 2,175 9,324 2,175 Total available for sale 3,077 28 249,650 57,962 252,727 57,990 Held to maturity State and municipal obligations 1,253 12 1,769 73 3,022 85 Total $ 4,330 $ 40 $ 251,419 $ 58,035 $ 255,749 $ 58,075 Federal Agency Obligations. The unrealized losses on the Company’s investments in direct obligations of U.S. federal agencies were caused by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. The Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. SBA Pools and Mortgage-Backed Securities - GSE Residential. The unrealized losses on the Company’s investment in mortgage-backed securities and SBA pools were caused by interest rate changes and illiquidity. The Company expects to recover the amortized cost basis over the term of the securities. The decline in fair value is attributable to changes in interest rates and not credit quality. The Company does not intend to sell the securities and it is not more likely than not the Company will be required to sell the securities before recovery of their amortized cost basis, which may be maturity. State, Municipal, and Corporate Obligations. The unrealized losses on the Company’s investments in securities of state, municipal, and corporate obligations were caused by interest rate changes. The contractual terms of those securities do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. The Company does not intend to sell the securities and it is not more likely than not the Company will be required to sell the securities before recovery of their amortized cost basis, which may be maturity. The Company expects the fair value of the securities described above to recover as the securities approach their maturity or reset date. 12 Note 4: Loans, Leases and Allowance The following table shows the composition of the loan and lease portfolio at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Commercial mortgage $ 420,680 $ 371,705 Commercial and industrial 138,333 126,367 Construction and development 67,446 132,570 Multi-family 216,982 185,864 Residential mortgage 166,594 172,644 Home equity lines of credit 18,816 16,826 Direct financing leases 146,413 148,102 Consumer 19,914 21,218 1,195,178 1,175,296 Less Allowance for credit losses on loans and leases 16,365 15,791 Deferred loan fees 581 626 $ 1,178,232 $ 1,158,879 The Company rates all loans and leases by credit quality using the following designations: Grade 1 – Exceptional Exceptional loans and leases are top-quality loans to individuals whose financial credentials are well known to the Company. These loans and leases have excellent sources of repayment, are well documented and/or virtually free of risk (i.e., CD secured loans). Grade 2 – Quality Loans and Leases These loans and leases have excellent sources of repayment with no identifiable risk of collection, and they conform in all respects to Company policy and IDFI and FDIC regulations. Documentation exceptions are minimal or are in the process of being corrected and not of a type that could subsequently expose the Company to risk of loss. Grade 3 – Acceptable Loans This category is for “average” quality loans and leases. These loans and leases have adequate sources of repayment with little identifiable risk of collection and they conform to Company policy and IDFI/FDIC regulations. Grade 4 – Acceptable but Monitored Loans and leases in this category may have a greater than average risk due to financial weakness or uncertainty but do not appear to require classification as special mention or substandard loans. Loans and leases rated “4” need to be monitored on a regular basis to ascertain that the reasons for placing them in this category do not advance or worsen. Grade 5 – Special Mention Loans and leases in this category have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or in the Company’s credit position at some future date. Special Mention loans and leases are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. This special mention rating is designed to identify a specific level of risk and concern about an asset’s quality. Although a special mention loan or lease has a higher probability of default than a pass rated loan or lease, its default is not imminent. 13 Grade 6 – Substandard Loans and leases in this category are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Substandard loans and leases have a high probability of payment default, or they have other well-defined weaknesses. Such loans and leases have a distinct potential for loss; however, an individual loan’s or lease’s potential for loss does not have to be distinct for the loan or lease to be rated substandard. The following are examples of situations that might cause a loan or lease to be graded a “6”: • Cash flow deficiencies (losses) jeopardize future loan or lease payments. • Sale of non-collateral assets has become a primary source of loan or lease repayment. • The relationship has deteriorated to the point that sale of collateral is now the Company’s primary source of repayment, unless this was the original source of loan or lease repayment. • The borrower is bankrupt or for any other reason future repayment is dependent on court action. Grade 7 – Doubtful A loan or lease classified as doubtful has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, highly questionable and improbable. A doubtful loan or lease has a high probability of total or substantial loss. Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. Because of high probability of loss, nonaccrual accounting treatment will be required for doubtful loans and leases. Grade 8 – Loss Loans and leases classified loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan or lease has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan or lease even though partial recovery may be effected in the future. No material changes have been made to the risk characteristics discussed above contained in the Company's 2024 Form 10-K. 14 The following tables present the credit risk profile of the Company’s loan and lease portfolio based on rating category, payment activity, and origination year as of September 30, 2025 and rating category as of December 31, 2024: 2025 2024 2023 2022 2021 Prior Revolving loans amortized cost basis Total As of September 30, 2025: Commercial mortgage Pass $ 53,720 $ 31,812 $ 43,919 $ 81,884 $ 54,162 $ 110,444 $ 37,081 $ 413,022 Substandard — — — — 7,658 — — 7,658 Total Commercial mortgage 53,720 31,812 43,919 81,884 61,820 110,444 37,081 420,680 Current period gross charge-offs — — — — — — — — Commercial and industrial Pass 18,134 16,227 23,483 7,079 9,654 11,196 50,683 136,456 Substandard — — — 207 — 32 1,638 1,877 Total Commercial and industrial 18,134 16,227 23,483 7,286 9,654 11,228 52,321 138,333 Current period gross charge-offs — — — — 2 — — 2 Construction and development Pass 20,185 22,079 10,860 1,526 6,763 110 — 61,523 Special Mention — — 429 594 — — — 1,023 Substandard — — — — — 4,900 — 4,900 Total Construction and development 20,185 22,079 11,289 2,120 6,763 5,010 — 67,446 Current period gross charge-offs — — — — — — — — Multi-family Pass 18,630 18,748 9,126 66,430 46,604 23,892 26,352 209,782 Special Mention — — — 2,362 1,382 — — 3,744 Substandard — — — — — 3,456 — 3,456 Total Multi-family 18,630 18,748 9,126 68,792 47,986 27,348 26,352 216,982 Current period gross charge-offs — — — — — — — — Residential mortgage Pass 14,666 16,926 30,488 25,482 25,417 49,362 2,819 165,160 Substandard — — 107 — 447 880 — 1,434 Total Residential mortgage 14,666 16,926 30,595 25,482 25,864 50,242 2,819 166,594 Current period gross charge-offs — — — — — — — — Home equity Pass 105 — 182 — 57 — 18,055 18,399 Substandard — — — — — — 417 417 Total Home equity lines of credit 105 — 182 — 57 — 18,472 18,816 Current period gross charge-offs — — — — — — — — Direct financing leases Pass 45,980 41,426 37,024 15,138 4,842 942 — 145,352 Substandard — 129 66 136 61 — — 392 Doubtful 9 201 282 111 60 6 — 669 Total Direct financing leases 45,989 41,756 37,372 15,385 4,963 948 — 146,413 Current period gross charge-offs — 171 817 326 234 17 — 1,565 Consumer Pass 5,384 5,079 4,251 3,309 1,332 445 — 19,800 Substandard — 2 29 39 38 6 — 114 Total Consumer 5,384 5,081 4,280 3,348 1,370 451 — 19,914 Current period gross charge-offs 42 17 39 31 9 23 — 161 Total Loans and Leases $ 176,813 $ 152,629 $ 160,246 $ 204,297 $ 158,477 $ 205,671 $ 137,045 $ 1,195,178 Total current period gross charge-offs $ 42 $ 188 $ 856 $ 357 $ 245 $ 40 $ — $ 1,728 15 2024 2023 2022 2021 2020 Prior Revolving loans amortized cost basis Total As of December 31, 2024: Commercial mortgage Pass $ 22,469 $ 40,634 $ 82,254 $ 65,852 $ 31,382 $ 90,763 $ 33,393 $ 366,747 Substandard — — — 234 4,724 — — 4,958 Total Commercial mortgage 22,469 40,634 82,254 66,086 36,106 90,763 33,393 371,705 Current period gross charge-offs — — — — — — — — Commercial and industrial Pass 18,197 28,998 9,866 11,111 2,703 9,648 44,026 124,549 Substandard — — 282 — — 35 1,501 1,818 Total Commercial and industrial 18,197 28,998 10,148 11,111 2,703 9,683 45,527 126,367 Current period gross charge-offs — — — — — 16 — 16 Construction and development Pass 20,811 44,837 43,691 18,185 30 116 — 127,670 Substandard — — — — — 4,900 — 4,900 Total Construction and development 20,811 44,837 43,691 18,185 30 5,016 — 132,570 Current period gross charge-offs — — — — — — — — Multi-family Pass 7,252 3,789 61,936 50,178 6,195 24,845 26,751 180,946 Special Mention — — — 1,461 3,457 — — 4,918 Total Multi-family 7,252 3,789 61,936 51,639 9,652 24,845 26,751 185,864 Current period gross charge-offs — — — — — — — — Residential mortgage Pass 22,614 33,949 28,498 28,302 16,239 39,174 2,513 171,289 Substandard — 35 — 450 — 870 — 1,355 Total Residential mortgage 22,614 33,984 28,498 28,752 16,239 40,044 2,513 172,644 Current period gross charge-offs — — — — — 10 — 10 Home equity Pass 18 198 — 57 — — 16,539 16,812 Substandard — — — — — — 14 14 Total Home equity lines of credit 18 198 — 57 — — 16,553 16,826 Current period gross charge-offs — — — — — — — — Direct financing leases Pass 53,286 53,601 25,447 11,381 3,336 329 — 147,380 Substandard 127 318 175 40 28 — — 688 Doubtful — 9 — 7 18 — — 34 Total Direct financing leases 53,413 53,928 25,622 11,428 3,382 329 — 148,102 Current period gross charge-offs — 741 592 325 72 1 — 1,731 Consumer Pass 6,807 6,272 5,200 2,088 438 314 — 21,119 Substandard — 3 47 49 — — — 99 Total Consumer 6,807 6,275 5,247 2,137 438 314 — 21,218 Current period gross charge-offs 47 89 114 32 — 3 — 285 Total Loans and Leases $ 151,581 $ 212,643 $ 257,396 $ 189,395 $ 68,550 $ 170,994 $ 124,737 $ 1,175,296 Total current period gross charge-offs $ 47 $ 830 $ 706 $ 357 $ 72 $ 30 $ — $ 2,042 For the three months ended September 30, 2025 and December 31, 2024, the Company did not have any revolving loans convert to term loans. 16 The following tables present the Company’s loan and lease portfolio aging analysis of the recorded investment in loans and leases as of September 30, 2025 and December 31, 2024: September 30, 2025 Delinquent Loans and Leases Current Total Portfolio Loans and Leases Total Loans and Leases > 90 Days Accruing 30-59 Days Past Due 60-89 Days Past Due 90 Days and Over Total Past Due Commercial mortgage $ — $ — $ 704 $ 704 $ 419,976 $ 420,680 $ — Commercial and industrial — 81 — 81 138,252 138,333 — Construction and development — — 4,900 4,900 62,546 67,446 — Multi-family — — 2,362 2,362 214,620 216,982 2,362 Residential mortgage 874 344 1,432 2,650 163,944 166,594 1,357 Home equity 203 40 417 660 18,156 18,816 417 Direct financing leases 588 44 162 794 145,619 146,413 162 Consumer 170 38 114 322 19,592 19,914 114 Totals $ 1,835 $ 547 $ 10,091 $ 12,473 $ 1,182,705 $ 1,195,178 $ 4,412 December 31, 2024 Delinquent Loans and Leases Current Total Portfolio Loans and Leases Total Loans and Leases > 90 Days Accruing 30-59 Days Past Due 60-89 Days Past Due 90 Days and Over Total Past Due Commercial mortgage $ 101 $ 216 $ — $ 317 $ 371,388 $ 371,705 $ — Commercial and industrial 419 — — 419 125,948 126,367 — Construction and development 429 240 4,900 5,569 127,001 132,570 — Multi-family — — — — 185,864 185,864 — Residential mortgage 781 540 1,356 2,677 169,967 172,644 1,261 Home equity 11 58 14 83 16,743 16,826 14 Direct financing leases 673 362 340 1,375 146,727 148,102 340 Consumer 108 183 99 390 20,828 21,218 99 Totals $ 2,522 $ 1,599 $ 6,709 $ 10,830 $ 1,164,466 $ 1,175,296 $ 1,714 17 The following table presents information on the Company’s nonaccrual loans and leases at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Nonaccrual loans and leases Nonaccrual loans and leases without an allowance for credit losses Nonaccrual loans and leases Nonaccrual loans and leases without an allowance for credit losses Commercial mortgage $ 704 $ — $ — $ — Commercial and industrial 32 32 35 — Construction and development 4,900 — 4,900 — Residential mortgage 76 76 94 94 Direct financing leases 669 669 34 34 Total nonaccrual loans and leases $ 6,381 $ 777 $ 5,063 $ 128 During both the three months ended September 30, 2025 and December 31, 2024, the Company recognized $ 1,000 of interest income on nonaccrual loans and leases. The following tables present the Company's amortized cost basis of collateral dependent loans, and their respective collateral type, which are individually analyzed to determine expected credit losses as of September 30, 2025 and December 31, 2024: September 30, 2025 Commercial Real Estate Multi-family Housing Residential Real Estate Other Total Allowance on Collateral Dependent Loans Commercial mortgage $ 7,436 $ — $ — $ — $ 7,436 $ 150 Commercial and industrial — — — 1,638 1,638 — Construction and development 5,923 — — — 5,923 1,750 Multi-family — 7,201 — — 7,201 250 Residential mortgage — — 124 — 124 — Total $ 13,359 $ 7,201 $ 124 $ 1,638 $ 22,322 $ 2,150 December 31, 2024 Commercial Real Estate Multi-family Housing Residential Real Estate Other Total Allowance on Collateral Dependent Loans Commercial mortgage $ 4,724 $ — $ — $ — $ 4,724 $ — Commercial and industrial — — — 1,501 1,501 — Construction and development 4,900 — — — 4,900 1,000 Multi-family — 1,461 — — 1,461 — Residential mortgage — — 143 — 143 — Total $ 9,624 $ 1,461 $ 143 $ 1,501 $ 12,729 $ 1,000 18 Loan/Lease Modification Disclosures under ASU 2022-02 In certain situations, the Company may modify the terms of a loan or lease to a borrower experiencing financial difficulty. These modifications may include payment delays, term extensions, or interest-rate reductions. In some cases, combinations of modifications may be made to the same loan or lease. If a determination is made that a modified loan or lease has been deemed uncollectible, the loan or lease (or portion of the loan or lease) is charged-off, reducing the amortized cost basis of the loan or lease and adjusting the allowance for credit losses. During the three and nine months ended September 30, 2025 and 2024, the Company had no new modifications to borrowers experiencing financial difficulty. There were no modified loans or leases that had a payment default during the three or nine months ended September 30, 2025 or 2024, and that were modified in the twelve months prior to that default by borrowers experiencing financial difficulty. Other Real Estate Owned Other real estate owned is included in other assets on the Condensed Consolidated Balance Sheets. There was no other real estate owned at September 30, 2025, compared to $ 37,000 of other real estate owned, consisting of foreclosed residential real estate properties, at December 31, 2024. At September 30, 2025 and December 31, 2024, the recorded investment in consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process w as $ 289,000 a nd $ 275,000 , respectively. Direct Financing Leases The following lists the components of the net investment in direct financing leases: September 30, 2025 December 31, 2024 Total minimum lease payments to be received $ 167,468 $ 168,934 Initial direct costs 9,198 9,360 176,666 178,294 Less: Unearned income ( 30,253 ) ( 30,192 ) Net investment in direct finance leases $ 146,413 $ 148,102 The following table summarizes the future minimum lease payments receivable subsequent to September 30, 2025: Remainder of 2025 $ 18,028 2026 61,105 2027 44,158 2028 27,686 2029 13,083 Thereafter 3,408 $ 167,468 Allowance for Credit Losses on Loans and Leases The allowance for credit losses on loans and leases is established for current expected credit losses on the Company's loan and lease portfolios in accordance with ASC Topic 326. This requires significant judgment to estimate credit losses measured on a collective pool basis when similar risk characteristics exist, and for loans evaluated individually. The Company estimates expected future losses for the loan's entire contractual term, taking into account expected payments when appropriate. The allowance is an estimation based on management's evaluation of expected losses related to the Company's financial assets 19 measured at amortized cost. It considers relevant available information from internal and external sources relating to the historical loss experience, current conditions and reasonable and supportable forecasts for the Company's outstanding loan and lease balances. The Company utilizes a cash flow ("CF") analysis method of estimating expected losses, which relies on key inputs and assumptions. Significant factors affecting the calculation are the segmenting of loans and leases based upon similar risk characteristics, applied loss rates based upon reasonable and supportable forecasts, and contractual term adjustments, including prepayment and curtailment adjustments. To ensure the allowance is maintained at an adequate level, a detailed analysis is performed on a quarterly basis, with an appropriate provision made to adjust the allowance. The Company has elected to exclude accrued interest receivable from the calculation of the allowance for credit losses, as it is the Company's policy to write off accrued interest in a timely manner as it is deemed uncollectible by reversing interest income. The Company categorizes its loan portfolios into eight segments, as discussed above, based on similar risk characteristics. Loans within each segment are collectively evaluated using either a CF methodology or remaining life methodology. When estimating for credit loss, the Company forecasts the first four quarters of the credit loss estimate and reverts to a long-run average of each considered factor. The Company developed its reasonable and supportable forecasts using economic data, such as national gross domestic product ("GDP") and unemployment rate. Qualitative adjustments are applied to each collectively segmented pool to appropriately capture differences in current or expected qualitative risk characteristics. When evaluating the estimation for expected credit losses, the Company evaluates these qualitative adjustments for any changes in: • lending policies, procedures, and strategies, • the nature and volume of the loan and lease portfolio, • international, national, regional, and local conditions, • the experience, depth, and ability of lending management, • the volume and severity of past due loans, • the quality of the loan review system, • the underlying collateral, • concentration risk, and • the effect of other external factors. The following tables summarize changes in the allowance for credit losses by segment for the three and nine months ended September 30, 2025 and 2024, respectively: Balances, June 30, 2025 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, September 30, 2025 Commercial mortgage $ 4,788 $ ( 157 ) $ — $ — $ 4,631 Commercial and industrial 1,660 53 ( 2 ) 11 1,722 Construction and development 2,143 153 — — 2,296 Multi-family 2,652 ( 85 ) — — 2,567 Residential mortgage 1,876 ( 52 ) — 2 1,826 Home equity 211 ( 34 ) — — 177 Direct financing leases 2,512 553 ( 400 ) 118 2,783 Consumer 377 32 ( 61 ) 15 363 Total $ 16,219 $ 463 $ ( 463 ) $ 146 $ 16,365 20 Balances, December 31, 2024 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, September 30, 2025 Commercial mortgage $ 4,486 $ 145 $ — $ — $ 4,631 Commercial and industrial 1,483 225 ( 2 ) 16 1,722 Construction and development 2,243 53 — — 2,296 Multi-family 2,660 ( 93 ) — — 2,567 Residential mortgage 1,910 ( 108 ) — 24 1,826 Home equity 184 ( 7 ) — — 177 Direct financing leases 2,469 1,595 ( 1,565 ) 284 2,783 Consumer 356 103 ( 161 ) 65 363 Total $ 15,791 $ 1,913 $ ( 1,728 ) $ 389 $ 16,365 Balances, June 30, 2024 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, September 30, 2024 Commercial mortgage $ 4,781 $ ( 531 ) $ — $ — $ 4,250 Commercial and industrial 1,421 152 ( 16 ) 3 1,560 Construction and development 3,464 ( 1,096 ) — — 2,368 Multi-family 2,097 500 — — 2,597 Residential mortgage 1,761 220 — 2 1,983 Home equity 133 43 — — 176 Direct financing leases 1,920 983 ( 463 ) 18 2,458 Consumer 305 66 ( 34 ) 44 381 Total $ 15,882 $ 337 $ ( 513 ) $ 67 $ 15,773 Balances, December 31, 2023 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, September 30, 2024 Commercial mortgage $ 4,655 $ ( 405 ) $ — $ — $ 4,250 Commercial and industrial 1,281 217 ( 16 ) 78 1,560 Construction and development 3,883 ( 1,515 ) — — 2,368 Multi-family 1,789 808 — — 2,597 Residential mortgage 1,681 301 ( 10 ) 11 1,983 Home equity 102 74 — — 176 Direct financing leases 1,955 1,706 ( 1,334 ) 131 2,458 Consumer 317 144 ( 172 ) 92 381 Total $ 15,663 $ 1,330 $ ( 1,532 ) $ 312 $ 15,773 During the third quarter of 2025, the allowance for credit losses on loans and leases increased from $ 16.2 million at June 30, 2025, to $ 16.4 million at September 30, 2025. The increase was attributable to provisions for credit losses totaling $ 463,000 during the three months ended September 30, 2025, partially offset by net charge-offs of $ 317,000 . During the third quarter of 2025, updates were made to our allowance for credit losses calculation, including macroeconomic inputs, credit metrics, and refreshed loss driver data. As a result of these refinements, several loan and lease categories saw changes to their respective loss rates during the quarter. • Commercial Mortgage – Allowance decreased as improved credit performance and lower modeled loss rates offset the impact of a $ 27.0 million increase in loan balances. • Commercial & Industrial – Allowance increased despite a $ 2.4 million decline in balances, reflecting slightly higher modeled loss rates due to portfolio mix changes. 21 • Construction & Development – Allowance increased as certain project exposures were reassessed for higher loss sensitivity, while loan balances declined by $ 34.9 million. • Multi-Family – Allowance decreased as strong collateral performance and stable market conditions led to lower modeled loss rates, while loan balances increased $ 25.2 million. • Residential Mortgage, Home Equity, Direct Financing Leases, and Consumer – Allowances decreased in line with lower portfolio balances and stable credit trends. Our commercial loan portfolio, consisting of commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, represented 70.6 % and 69.5 % of our portfolio as of September 30, 2025 and December 31, 2024, respectively. The allowance for credit losses on loans and leases allocated to the commercial loan portfolio represented 68.5 % and 68.9 % of our total allowance at September 30, 2025 and December 31, 2024, respectively. Economic Outlook Due to the future-focused nature of the calculation for the allowance for credit losses, management must make significant assumptions. Estimating an appropriate allowance requires management to use relevant forward-looking information drawn from reasonable and supportable forecasts. Economic factors are a consequential part of these forecasts, and as such are evaluated periodically for developments that may impact the Company's allowance for credit losses and loan and lease portfolio. As of September 30, 2025, several key economic factors continue to influence the Company's loan and lease portfolio. Persistent inflation, slowing economic growth, and labor market uncertainty are contributing to a more challenging operating environment for many borrowers. In addition, geopolitical tensions and tariff-related risks are creating potential disruptions in supply chains and increased input costs for certain industries. These conditions may continue to affect borrower performance and credit demand in the near term. Despite these challenges, the Company's overall credit quality remains stable, supported by conservative underwriting standards and ongoing portfolio monitoring. Management continues to evaluate macroeconomic assumptions used in the allowance for credit losses model to ensure they reflect current and expected economic conditions. The Company remains focused on its three strategic growth markets: Columbus, Ohio, Cincinnati/Dayton/Springfield, Ohio, and Indianapolis, Indiana. These markets continue to exhibit above-average population and employment growth, strong commercial activity, and resilient real estate fundamentals relative to broader economic trends. The Company's loan growth in these markets continues to be concentrated in commercial real estate lending, consistent with its strategic focus and relationship-based lending model. Forecasts for these markets are summarized below: • Columbus, Ohio – The Columbus MSA continues to experience steady economic expansion, driven by growth in technology, healthcare, and strategic development. Job creation and infrastructure expansion are supported by over $ 2 billion in public and private development projects, while population growth sustains demand for housing, services, and consumer goods. Challenges include persistent inflationary pressures, housing affordability constraints, and labor shortages across multiple industries. • Cincinnati/Dayton/Springfield, Ohio – The Cincinnati/Dayton/Springfield MSA is projected to experience moderate growth. Cincinnati leads the region in employment and GDP gains, supported by manufacturing, construction, and technology investments. Dayton remains stable despite slower job growth and inflationary pressures. Ongoing labor market constraints, particularly in skilled trades and technology fields, persist. The region’s connection with Columbus as part of Ohio’s emerging “Silicon Corridor” enhances opportunities for investment, workforce development, and regional competitiveness. • Indianapolis, Indiana – The Indianapolis MSA continues to demonstrate favorable economic conditions, supported by advanced manufacturing, technology, and urban revitalization initiatives. Downtown capital projects totaling approximately $ 9 billion are underway, while consumer demand and population growth of about 1.2 % support urban momentum. Inflation, elevated interest rates, and tariff-related impacts on manufacturing present ongoing challenges; however, the region remains well positioned relative to peer metros due to its diversified and innovation-driven economy. The overall economic outlook remains complex and uncertain, creating a challenging environment requiring continued vigilance and adaptability. Potential economic volatility could materially affect the Company’s loan and lease portfolio, 22 including the allowance for credit losses. As a result, the Company expects that future estimates may fluctuate throughout the remainder of 2025. Allowance for Credit Losses on Unfunded Commitments The allowance for credit losses on unfunded commitments is included in other liabilities on the Condensed Consolidated Balance Sheets. The estimate of expected losses on unfunded commitments is calculated based on the loss rate for the loan or lease segment in which the loan or lease commitments would be classified if funded, adjusted for the estimate of funding probability. Adjustments to the allowance, either additional provisions or reversals, are recorded in the provision for (reversal of) credit losses in the Condensed Consolidated Statements of Income. The following tables detail activity in the allowance for credit losses on unfunded commitments during the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30, 2025 2024 Beginning balance $ 584 $ 1,103 Reversal of credit losses ( 194 ) ( 436 ) Ending balance $ 390 $ 667 Nine Months Ended September 30, 2025 2024 Beginning balance $ 558 $ 1,642 Reversal of credit losses ( 168 ) ( 975 ) Ending balance $ 390 $ 667 Note 5: Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 Unobservable inputs supported by little or no market activity that are significant to the fair value of the assets or liabilities 23 Recurring Measurements The following tables present the fair value measurements of assets recognized in the Condensed Consolidated Balance Sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2025 and December 31, 2024: Fair Value Measurements Using Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) September 30, 2025 Available for sale securities U.S. Treasury securities $ 794 $ 794 $ — $ — SBA Pools 3,199 — 3,199 — Federal agencies 13,935 — 13,935 — State and municipal obligations 128,697 — 127,372 1,325 Mortgage-backed securities - GSE residential 94,180 — 94,180 — Corporate obligations 9,644 — 9,644 — $ 250,449 $ 794 $ 248,330 $ 1,325 Fair Value Measurements Using Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2024 Available for sale securities U.S. Treasury securities $ 3,161 $ 3,161 $ — $ — SBA Pools 3,700 — 3,700 — Federal agencies 13,334 — 13,334 — State and municipal obligations 130,359 — 130,359 — Mortgage-backed securities - GSE residential 98,313 — 98,313 — Corporate obligations 9,325 — 9,325 — $ 258,192 $ 3,161 $ 255,031 $ — Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the nine months ended September 30, 2025. Available for Sale Securities Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy, which includes equity securities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include agency securities, obligations of state and political subdivisions, and mortgage-backed securities. Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities without relying exclusively on quoted prices for specific investment securities but rather relying on the investment securities’ relationship to other benchmark quoted investment 24 securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. During the nine months ended September 30, 2025, approximately $ 1.3 million of state and municipal obligations were transferred from Level 2 to Level 3 due to the absence of observable market inputs and reliance on the original purchase price for valuation. There was no other activity in Level 3 investments during the nine months ended September 30, 2025. Nonrecurring Measurements As of September 30, 2025 and December 31, 2024, there were no assets or liabilities measured at fair value on a nonrecurring basis. Fair Value of Financial Instruments The following tables present estimated fair values of the Company’s financial instruments at September 30, 2025 and December 31, 2024: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) September 30, 2025 Financial assets Cash and cash equivalents $ 34,265 $ 34,265 $ — $ — Available for sale securities 250,449 794 248,330 1,325 Held to maturity securities 2,772 — 2,724 — Loans held for sale 1,441 — — 1,441 Loans and leases receivable, net 1,178,232 — — 1,145,219 FHLB stock 13,907 — 13,907 — Interest receivable 5,832 — 5,832 — Financial liabilities Deposits 1,118,258 — 1,120,561 — FHLB advances 254,000 — 254,734 — Interest payable 2,914 — 2,914 — 25 Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2024 Financial assets Cash and cash equivalents $ 21,757 $ 21,757 $ — $ — Interest-earning time deposits 300 — 300 — Available for sale securities 258,192 3,161 255,031 — Held to maturity securities 3,498 — 3,421 — Loans held for sale 1,093 — — 1,093 Loans and leases receivable, net 1,158,879 — — 1,099,274 FHLB stock 13,907 — 13,907 — Interest receivable 6,030 — 6,030 — Financial liabilities Deposits 1,093,940 — 1,095,961 — FHLB advances 265,000 — 264,162 — Interest payable 4,832 — 4,832 — Note 6: Earnings per Share Basic EPS is computed by dividing net income allocated to common stock by the weighted average number of common shares outstanding during the period which excludes the participating securities. Diluted EPS includes the dilutive effect of additional potential common shares from stock compensation awards, but excludes awards considered participating securities. ESOP shares are not considered outstanding for EPS until they are earned. The following table presents the computation of basic and diluted EPS for the periods indicated: Three Months Ended September 30, 2025 2024 Net income $ 3,597 $ 2,472 Shares outstanding for Basic EPS: Average shares outstanding 10,420,613 10,986,327 Less: average restricted stock award shares not vested 31,476 83,379 Less: average unearned ESOP Shares 761,835 815,942 Shares outstanding for Basic EPS 9,627,302 10,087,006 Additional Dilutive Shares 266,551 129,388 Shares outstanding for Diluted EPS 9,893,853 10,216,394 Basic Earnings Per Share $ 0.37 $ 0.25 Diluted Earnings Per Share $ 0.36 $ 0.24 26 Nine Months Ended September 30, 2025 2024 Net income $ 8,167 $ 6,901 Shares outstanding for Basic EPS: Average shares outstanding 10,515,467 11,072,685 Less: average restricted stock award shares not vested 54,975 138,637 Less: average unearned ESOP Shares 775,261 829,418 Shares outstanding for Basic EPS 9,685,231 10,104,630 Additional Dilutive Shares 258,045 106,245 Shares outstanding for Diluted EPS 9,943,276 10,210,875 Basic Earnings Per Share $ 0.84 $ 0.68 Diluted Earnings Per Share $ 0.82 $ 0.68 Note 7: Benefit Plans 401(k) The Company has a retirement savings 401(k) plan, in which substantially all employees may participate. The Company matches employees' contributions at the rate of 50 percent for the first six percent of base salary contributed by participants. The Company’s expense for the plan was $ 61,000 and $ 192,000 for the three and nine months ended September 30, 2025, respectively, and $ 76,000 and $ 214,000 for the three and nine months ended September 30, 2024, respectively. Employee Stock Ownership Plan As part of the reorganization and related stock offering, the Company established an Employee Stock Ownership Plan, or ESOP, covering substantially all employees. The ESOP acquired 1,082,130 shares of Company common stock at an average price of $ 13.59 per share on the open market with funds provided by a loan from the Company. Dividends on unallocated shares used to repay the loan for the Company are recorded as a reduction of the loan or accrued interest, as applicable. Dividends on allocated shares paid to participants are reported as compensation expense. Unearned ESOP shares which have not yet been allocated to ESOP participants are excluded from the computation of average shares outstanding for earnings per share calculation. Accordingly, 748,456 and 789,035 shares of common stock acquired by the ESOP were shown as a reduction of stockholders’ equity at September 30, 2025 and December 31, 2024, respectively. Shares are released to participants proportionately as the loan is repaid. 27 ESOP expense for the three and nine months ended September 30, 2025 was $ 193,000 and $ 552,000 , respectively, and was $ 167,000 and $ 476,000 for the three and nine months ended September 30, 2024, respectively. September 30, 2025 December 31, 2024 Earned ESOP shares 333,674 293,095 Unearned ESOP shares 748,456 789,035 Total ESOP shares 1,082,130 1,082,130 Quoted per share price $ 14.21 $ 14.15 Fair value of earned shares (in thousands) $ 4,742 $ 4,147 Fair value of unearned shares (in thousands) $ 10,636 $ 11,165 Richmond Mutual Bancorporation, Inc. 2020 Equity Incentive Plan On September 15, 2020, the Company's stockholders approved the Richmond Mutual Bancorporation, Inc. 2020 Equity Incentive Plan ("2020 EIP") which provides for the grant to eligible participants of up to (i) 1,352,662 shares of Company common stock to be issued upon the exercise of stock options and stock appreciation rights and (ii) 541,065 shares of Company common stock to participants as restricted stock awards (which may be in the form of shares of common stock or share units giving the participant the right to receive shares of common stock at a specified future date). Restricted Stock Awards . On October 1, 2020, the Company awarded 449,086 shares of common stock under the 2020 EIP with a grant date fair value of $ 10.53 per share (total fair value of $ 4.7 million at issuance) to eligible participants. On April 1, 2021, the Company awarded an additional 4,000 shares of common stock under the 2020 EIP with a grant date fair value of $ 13.86 (total fair value of $ 55,000 at issuance) to eligible participants. These awards vested in five equal annual installments with the first vesting having occurred on June 30, 2021. As of September 30, 2025, these awards were fully vested. On July 15, 2025, the Company awarded 37,126 shares of common stock under the 2020 EIP with a grant date fair value of $ 13.37 per share (total fair value of $ 496,000 at issuance) to eligible participants. These awards vest in five equal installments with the first vesting occurring on June 30, 2026. Forfeited shares may be awarded to other eligible recipients in future grants until the 2020 EIP terminates in September 2030. The following table summarizes the restricted stock award activity in the 2020 EIP during the nine months ended September 30, 2025. Nine Months Ended September 30, 2025 Number of Restricted Shares Weighted Average Grant Date Fair Value Non-vested, beginning of period 83,379 $ 10.55 Granted 37,126 13.37 Vested ( 83,379 ) 10.55 Forfeited — — Non-vested, September 30, 2025 37,126 13.37 Total compensation cost recognized in the Condensed Consolidated Statements of Income for restricted stock awards during the three and nine months ended September 30, 2025 was $ 22,000 and $ 456,000 , and the related tax benefit recognized was $ 5,000 and $ 96,000 , respectively. As of September 30, 2025, there was $ 474,000 of unrecognized compensation expense related to restricted stock awards. Stock Option Plan. On October 1, 2020, the Company awarded options to purchase 1,095,657 shares of common stock under the 2020 EIP with an exercise price of $ 10.53 per share, the fair value of a share of the Company's common stock on the date of 28 grant, to eligible participants. On April 1, 2021, the Company awarded options to purchase 8,000 shares of common stock under the 2020 EIP with an exercise price of $ 13.86 per share, the fair value of a share of the Company's common stock on the date of the grant, to eligible participants. These awards vested in five equal annual installments with the first vesting having occurred on June 30, 2021. As of September 30, 2025, these awards were fully vested. On July 15, 2025, the Company awarded options to purchase 55,467 shares of common stock under the 2020 EIP with an exercise price of $ 13.37 per share, the fair value of a share of the Company's common stock on the date of grant, to eligible participants. These awards vest in five equal annual installments with the first vesting occurring on June 30, 2026. Forfeited options are available to be awarded in future grants until the 2020 EIP terminates in September 2030. The following table summarizes the stock option activity in the 2020 EIP during the nine months ended September 30, 2025. Nine Months Ended September 30, 2025 Number of Shares Weighted-Average Exercise Price Balance at beginning of period 1,016,497 $ 10.55 Granted 55,467 13.37 Exercised — — Forfeited/expired — — Balance, September 30, 2025 1,071,964 10.55 Exercisable at end of period 1,016,497 $ 10.55 The fair value of options granted is estimated on the date of the grant using a Black Scholes model with the following assumptions: July 15, 2025 Dividend yields 4.49 % Volatility factors of expected market price of common stock 30.00 % Risk-free interest rates 4.16 % Expected life of options 6.5 years A summary of the status of the Company stock option shares as of September 30, 2025 is presented below. Shares Weighted Average Grant Date Fair Value Non-vested, beginning of year 204,096 $ 2.91 Vested ( 204,096 ) 2.91 Granted 55,467 3.00 Forfeited — — Non-vested, September 30, 2025 55,467 $ 3.00 Total compensation cost recognized in the Condensed Consolidated Statements of Income for option-based payment arrangements for the three and nine months ended September 30, 2025 was $ 7,000 and $ 300,000 , and the related tax benefit recognized was $ 0 and $ 31,000 , respectively. As of September 30, 2025, there was $ 154,000 in unrecognized compensation expense related to the stock option awards. 29 Note 8: Qualified Affordable Housing Investments The Company has investments in certain limited partnerships that fund affordable housing projects and provide the Company with low income housing tax credits ("LIHTC"). At September 30, 2025 and December 31, 2024, the balance of these investments in LIHTC totaled $ 820,000 and $ 951,000 , respectively. These balances are reflected in the other assets line of the Condensed Consolidated Balance Sheets. The assets are amortized as a component of the provision for income taxes. The following table summarizes the amortization expense and tax credits recognized for the Company's LIHTC investments for the three and nine months ended September 30, 2025 and 2024. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Amortization expense $ 44 $ 44 $ 131 $ 134 Tax credits recognized 47 47 138 137 Note 9: Segment Information The Company has one reportable segment: community banking. The Company's reportable segment is determined by the Chief Executive Officer, who serves as the chief operating decision maker ("CODM"), based on information regarding the Company's products and services. The CODM evaluates the financial performance of the Company's business components by assessing revenue streams, significant expenses, and budget-to-actual results. The Company's primary source of revenue is providing banking services to its customers. Significant expenses associated with banking operations include interest expense, credit loss expense, and salaries and employee benefits. The CODM evaluates performance, directs resource allocation, and makes key operating decisions based on consolidated net income reported in the Condensed Consolidated Statements of Income. Segment assets are measured based on total consolidated assets as reported in the Condensed Consolidated Balance Sheets. 30