Richmond Mutual Bancorporation, Inc. 10-K

Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm Shareholders, Board of Directors, and Audit Committee Richmond Mutual Bancorporation, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Richmond Mutual Bancorporation, Inc. (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Allowance for Credit Losses on Loans and Leases – Qualitative Adjustments As described in Note 6 to the consolidated financial statements, the Company’s allowance for credit losses on loans and leases (ACL) was approximately $16,466,000 as of December 31, 2025. The ACL is established for current expected credit losses on the Company's loan and lease portfolios. 64 The Company estimates expected future losses for the loan's entire contractual term, taking into account expected payments when appropriate. The ACL is an estimation based on management's evaluation of expected losses related to the Company's financial assets 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 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 ACL is maintained at an adequate level, a detailed analysis is performed on a quarterly basis, with an appropriate provision made to adjust the ACL. Qualitative adjustments are applied to each collectively segmented pool to appropriately capture differences in current or expected qualitative risk characteristics. We identified the qualitative adjustments component of the ACL as a critical audit matter. The principal considerations for that determination included the high degree of judgment and subjectivity in auditing management’s measurements of those qualitative factor adjustments related to economic conditions and other external factors. Auditing these assumptions required a high degree of auditor effort and specialized skills and knowledge. How We Addressed the Matter in Our Audit The primary procedures we performed to address this critical audit matter included: • Gaining an understanding of controls over the qualitative adjustments used in the ACL calculation including controls addressing the: • Determination of qualitative adjustments for each loan and lease segment. • Completeness and accuracy of the inputs to the qualitative adjustments applied to each loan and lease segment in the ACL calculation. • Substantively testing management's determination of the qualitative adjustments used in the ACL calculation, including: • Testing management’s process for developing the qualitative adjustments, which included assessing the relevance and reliability of data used to develop the qualitative adjustments, and included evaluating management’s judgments and assumptions for reasonableness. Among other procedures, our evaluation considered evidence from internal and external sources. • Performing a qualitative factor sensitivity analysis. • Evaluating the qualitative adjustments for directional consistency, testing the qualitative adjustments for reasonableness, and obtaining evidence for significant changes. • Testing the mathematical accuracy of the qualitative adjustments applied to the loan segments in the ACL calculation. /s/ Forvis Mazars, LLP Forvis Mazars, LLP We have served as the Company’s auditor since at least 1982; however, an earlier year cannot be determined. Indianapolis, Indiana March 23, 2026 65 Richmond Mutual Bancorporation, Inc. Consolidated Balance Sheets December 31, 2025 and 2024 December 31, 2025 December 31, 2024 Assets Cash and due from banks $ 9,275,184 $ 8,986,540 Interest-bearing demand deposits 23,855,310 12,770,650 Cash and cash equivalents 33,130,494 21,757,190 Interest-bearing time deposits 2,070,000 300,000 Investment securities - available for sale 251,915,497 258,191,630 Investment securities - held to maturity 2,747,889 3,497,913 Loans held for sale 828,000 1,092,920 Loans and leases, net of allowance for credit losses of $ 16,465,708 and $ 15,790,885 , respectively 1,176,812,906 1,158,879,008 Premises and equipment, net 13,396,583 12,922,028 Federal Home Loan Bank stock 13,907,100 13,907,100 Interest receivable 6,299,925 6,030,000 Mortgage-servicing rights 1,883,446 1,950,504 Cash surrender value of life insurance 3,953,634 3,856,494 Other assets 18,845,066 22,490,073 Total assets $ 1,525,790,540 $ 1,504,874,860 Liabilities Noninterest-bearing deposits $ 100,090,746 $ 110,105,973 Interest-bearing deposits 1,014,802,514 983,833,884 Total deposits 1,114,893,260 1,093,939,857 Federal Home Loan Bank advances 240,000,000 265,000,000 Other borrowings 12,000,000 — Advances by borrowers for taxes and insurance 650,674 590,439 Interest payable 3,456,973 4,831,674 Other liabilities 9,008,533 7,641,130 Total liabilities 1,380,009,440 1,372,003,100 Commitments and Contingent Liabilities — — Stockholders' Equity Common stock, $ 0.01 par value Authorized - 90,000,000 shares Issued and outstanding - 10,501,260 shares and 10,814,960 shares at December 31, 2025 and 2024, respectively 105,013 108,150 Additional paid-in capital 92,897,260 97,709,231 Retained earnings 97,324,605 91,582,986 Unearned employee stock ownership plan (ESOP) ( 9,987,093 ) ( 10,722,410 ) Accumulated other comprehensive loss ( 34,558,685 ) ( 45,806,197 ) Total stockholders' equity 145,781,100 132,871,760 Total liabilities and stockholders' equity $ 1,525,790,540 $ 1,504,874,860 See Notes to Consolidated Financial Statements 66 Richmond Mutual Bancorporation, Inc. Consolidated Statements of Income Years Ended December 31, 2025 and 2024 2025 2024 Interest Income Loans and leases $ 77,383,468 $ 71,596,350 Investment securities 7,705,994 8,103,183 Other 818,092 826,661 Total interest income 85,907,554 80,526,194 Interest Expense Deposits 31,248,368 31,750,966 Borrowings 10,812,848 10,068,067 Total interest expense 42,061,216 41,819,033 Net Interest Income 43,846,338 38,707,161 Provision for credit losses 2,152,969 550,265 Net Interest Income After Provision for Credit Losses 41,693,369 38,156,896 Non-interest Income Service charges on deposit accounts 1,265,712 1,238,661 Card fee income 1,316,702 1,236,692 Loan and lease servicing fees, including mortgage servicing right impairment 680,807 463,337 Net loss on securities (includes $( 156,040 ) and $( 50,698 ), respectively, related to accumulated other comprehensive loss reclassifications) ( 156,040 ) ( 50,698 ) Net gains on loan and lease sales 409,369 554,546 Other income 1,545,856 1,315,614 Total non-interest income 5,062,406 4,758,152 Non-interest Expenses Salaries and employee benefits 18,543,844 18,348,049 Net occupancy expenses 1,455,560 1,354,982 Equipment expenses 1,000,925 926,548 Data processing fees 3,789,236 3,615,221 Deposit insurance expense 1,194,000 1,530,500 Printing and office supplies 181,829 170,282 Legal and professional fees 1,839,738 1,822,092 Advertising expense 432,761 377,787 Bank service charges 150,566 230,410 Real estate owned expense 25,271 22,653 Other expenses 4,489,017 3,652,828 Total non-interest expenses 33,102,747 32,051,352 Income Before Income Tax Expense 13,653,028 10,863,696 Provision for income taxes (includes $( 32,769 ) and $( 10,647 ), respectively, related to income tax expense from reclassification of items) 2,076,261 1,486,348 Net Income $ 11,576,767 $ 9,377,348 Earnings Per Share Basic $ 1.20 $ 0.93 Diluted $ 1.17 $ 0.92 See Notes to Consolidated Financial Statements 67 Richmond Mutual Bancorporation, Inc. Consolidated Statements of Comprehensive Income Years Ended December 31, 2025 and 2024 2025 2024 Net Income $ 11,576,767 $ 9,377,348 Other Comprehensive Income (Loss) Unrealized gain (loss) on available-for-sale securities, net of tax (expense) benefit of $( 2,957,076 ) and $ 744,610 , respectively 11,124,240 ( 2,801,152 ) Less: reclassification adjustment for realized losses included in net income, net of tax expense of $( 32,769 ) and $( 10,647 ), respectively ( 123,272 ) ( 40,051 ) Total Other Comprehensive Income (Loss) 11,247,512 ( 2,761,101 ) Comprehensive Income $ 22,824,279 $ 6,616,247 See Notes to Consolidated Financial Statements 68 Richmond Mutual Bancorporation, Inc. Consolidated Statements of Stockholders’ Equity Years Ended December 31, 2025 and 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 — — — 9,377,348 — — 9,377,348 Other comprehensive loss, net of tax benefit — — — — — ( 2,761,101 ) ( 2,761,101 ) ESOP shares earned — — ( 74,344 ) — 735,316 — 660,972 Forfeiture of restricted stock awards ( 400 ) ( 4 ) 4 — — — — Stock based compensation — — 1,474,062 — — — 1,474,062 Exercise of stock options (1) 1,952 20 ( 32 ) — — — ( 12 ) Common stock dividends ($ 0.56 per share) — — — ( 5,697,109 ) — — ( 5,697,109 ) Repurchase of common stock ( 395,092 ) ( 3,951 ) ( 5,038,025 ) — — — ( 5,041,976 ) 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 — — — 11,576,767 — — 11,576,767 Other comprehensive income, net of tax expense — — — — — 11,247,512 11,247,512 ESOP shares earned — — 2,734 — 735,317 — 738,051 Granting of restricted stock awards 88,379 884 ( 884 ) — — — — Stock based compensation — — 815,821 — — — 815,821 Exercise of stock options (1) 23,744 237 ( 241 ) — — — ( 4 ) Common stock dividends ($ 0.60 per share) — — — ( 5,835,148 ) — — ( 5,835,148 ) Repurchase of common stock ( 425,823 ) ( 4,258 ) ( 5,629,401 ) — — — ( 5,633,659 ) Balances, December 31, 2025 10,501,260 $ 105,013 $ 92,897,260 $ 97,324,605 $ ( 9,987,093 ) $ ( 34,558,685 ) $ 145,781,100 See Notes to Consolidated Financial Statements ( 1) The amount shown represents the number of shares issued in net-settled option transactions where some shares are netted from a portion of the exercises. 69 Richmond Mutual Bancorporation, Inc. Consolidated Statements of Cash Flows Years Ended December 31, 2025 and 2024 2025 2024 Operating Activities Net income $ 11,576,767 $ 9,377,348 Adjustments to reconcile net income to net cash provided by operating activities Provision for credit losses 2,152,969 550,265 Depreciation and amortization 891,834 850,244 Deferred income tax ( 114,442 ) 158,285 Stock based compensation 815,821 1,474,062 Investment securities amortization, net 754,838 943,315 Net loss on sale of investment securities available for sale 156,040 50,698 Net gains on loan and lease sales ( 409,369 ) ( 554,546 ) (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 ( 884,026 ) ( 767,469 ) Amortization of mortgage-servicing rights 208,603 192,807 ESOP shares expense 738,051 660,972 Increase in cash surrender value of life insurance ( 97,140 ) ( 91,565 ) Loans originated for sale ( 20,708,456 ) ( 26,266,889 ) Proceeds on loans sold 20,443,536 26,566,309 Net change in Interest receivable ( 269,925 ) ( 186,295 ) Other assets 732,172 2,757,010 Other liabilities 1,367,403 ( 1,397,861 ) Interest payable ( 1,374,701 ) 434,722 Net cash provided by operating activities 15,969,408 14,752,462 Investing Activities Net change in interest-bearing time deposits ( 1,770,000 ) ( 300,000 ) Purchases of securities available for sale ( 5,702,862 ) ( 7,501,450 ) Proceeds from maturities and paydowns of securities available for sale 18,540,188 20,603,526 Proceeds from sales of securities available for sale 6,765,888 6,907,932 Proceeds from maturities and paydowns of securities held to maturity 749,419 1,449,228 Net change in loans ( 18,405,177 ) ( 68,868,279 ) Proceeds from sales of real estate owned 43,502 125,109 Purchases of premises and equipment ( 1,361,889 ) ( 460,380 ) Proceeds from sale of premises and equipment — 6,000 Purchases of FHLB stock — ( 1,260,000 ) Net cash used in investing activities ( 1,140,931 ) ( 49,298,314 ) Financing Activities Net change in Demand and savings deposits 16,564,101 23,730,746 Certificates of deposit 4,389,302 29,069,200 Advances by borrowers for taxes and insurance 60,235 2,068 Proceeds from other borrowings 12,000,000 — Proceeds from FHLB advances 284,000,000 288,500,000 Repayment of FHLB advances ( 309,000,000 ) ( 294,500,000 ) Repurchase of common stock ( 5,633,659 ) ( 5,041,976 ) Proceeds from stock option exercises ( 4 ) ( 12 ) Dividends paid ( 5,835,148 ) ( 5,697,109 ) Net cash provided by financing activities ( 3,455,173 ) 36,062,917 Net Change in Cash and Cash Equivalents 11,373,304 1,517,065 Cash and Cash Equivalents, Beginning of Period 21,757,190 20,240,125 Cash and Cash Equivalents, End of Period $ 33,130,494 $ 21,757,190 Additional Cash Flows and Supplementary Information Interest paid $ 43,435,917 $ 41,384,311 Income tax paid 1,338,381 ( 406,837 ) Transfers from loans to other real estate owned 56,136 37,435 Right of use assets obtained in exchange for new operating lease liabilities 298,061 — See Notes to Consolidated Financial Statements 70 Richmond Mutual Bancorporation, Inc. Notes to Consolidated Financial Statements December 31, 2025 and 2024 (Table Dollar Amounts in Thousands, Except Per Share Amounts) Note 1: Nature of Operations and Summary of Significant Accounting Policies On July 1, 2019, Richmond Mutual Bancorporation, Inc., a Delaware corporation (“RMB-Delaware”), completed its reorganization from a mutual holding company form of organization to a stock form of organization (“corporate reorganization”). RMB-Delaware, which owned 100% of First Bank Richmond (the “Bank” or “First Bank”), was succeeded by Richmond Mutual Bancorporation, Inc., a new Maryland corporation (the "Company”). As part of the corporate reorganization, First Mutual of Richmond, Inc.’s (the “MHC”) ownership interest in RMB-Delaware was sold in a public offering. Gross proceeds from the offering were $ 130.3 million. In conjunction with the corporate reorganization, the Company contributed 500,000 shares and $ 1.25 million of cash to a newly formed charitable foundation, First Bank Richmond, Inc. Community Foundation (the “Foundation”). Additionally, a “liquidation account” was established for the benefit of certain depositors of the Bank in an amount equal to the MHC’s ownership interest in the retained earnings of RMB-Delaware as of December 31, 2017 and March 31, 2019. First Bank, headquartered in Richmond, Indiana, is a state-chartered commercial bank. Established in 1887 as a mutual savings and loan, it became a federal mutual savings and loan in 1935, operating as First Federal Savings and Loan Association of Richmond. In 1993, the Bank operated as First Bank Richmond, S. B. after converting to a state-chartered mutual savings bank. It transitioned to a national bank charter in 1998 as part of a mutual holding company reorganization. In 2007, its holding company, Richmond Mutual Bancorporation-Delaware, acquired Mutual Federal Savings Bank in Sidney, Ohio. Mutual Federal operated independently until 2016, when it merged with First Bank Richmond to streamline operations. In 2017, the Bank converted to an Indiana state-chartered commercial bank and adopted the name First Bank Richmond, while continuing to operate in Ohio under the name Mutual Federal, a division of First Bank Richmond. First Bank generates commercial, mortgage and consumer loans and leases, and receives deposits from customers located primarily in Wayne and Shelby Counties in Indiana, and Shelby, Miami, and Franklin Counties in Ohio. First Bank’s loans and leases are generally secured by specific items of collateral including real property, consumer assets and business assets. When the word "loan" or "loans" is used in these financial statements it includes leases, unless the context indicates otherwise. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses. Consolidation - The consolidated financial statements include the accounts of the Company and First Bank and their direct and indirect subsidiaries after elimination of all material intercompany transactions. Cash Equivalents - The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. Investment Securities - Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Securities held to maturity are carried at amortized cost. Debt securities not classified as held to maturity or not classified as trading are classified as available for sale. 71 Debt securities available for sale are carried at fair value with unrealized gains and losses reported separately in accumulated other comprehensive income (loss), net of tax. Equity securities are carried at fair value with changes in unrealized gains and losses recognized through net income. Trading account securities are held for resale in anticipation of short-term market movements and are valued at fair value. Gains and losses, both realized and unrealized, are included in other income. The Company accounts for recognition and presentation of impaired securities in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Code ("ASC") 326. When an impairment has occurred, it is determined whether or not the impairment is due to credit or non-credit related factors. If it is determined that the impairment is credit-related, then it must also be determined if the Company has the intent to sell the security or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of these factors are present, then the impairment will be recognized in earnings with a corresponding adjustment to the amortized cost basis of the security. If the Company does not intend to sell the security and it is more likely than not that the sale of the security will not be required before recovery of its amortized cost basis, the present values of expected cash flows to be collected from the security will be compared against the amortized cost basis of the security. If the amortized cost basis of the security is greater than the present cash flows expected, a credit loss would exist and it would determine the amount of allowance, if any, that would be deemed needed. A needed allowance would result in an allowance recognized on the balance sheet with a corresponding adjustment to earnings. Amortization of premiums and accretion of discounts are recorded as interest income from securities. Realized gains and losses are recorded as net security gains (losses). Gains and losses on sales of securities are determined on the specific-identification method. Purchased premiums and discounts on collateralized mortgage obligations (CMOs), real estate mortgage investment conduits (REMICs) and other mortgage related securities are amortized or accreted using the effective interest method. The period of amortization used is estimated based on anticipated principal prepayments. Differences between anticipated and actual prepayments result in adjustments which are charged or credited to income as an adjustment to yield. For classification purposes, REMICs are grouped with mortgage-backed securities. Leases - Lease financing consists of direct financing leases. Direct financing leases are carried at cost. Cost is defined as the total minimum lease payments receivable and the estimated residual value of the leased property, less the amount of unearned income. Unearned income on direct financing leases is recognized as income over the term of the lease using a method that approximates the interest method. Loans - Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balances adjusted for unearned income, charge-offs, the allowance for credit losses on loans, any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans. For loans amortized at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan. 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 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. For all loan portfolio segments except residential and consumer loans, the Company promptly charges off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on 72 information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For collateral dependent loans, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral. 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. Loans modified to borrowers experiencing financial difficulty recognize interest income on an accrual basis at the renegotiated rate or terms, provided the loan is in compliance with the modified terms. If determined that 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. Allowance for Credit Losses - The allowance for credit losses is established for current expected credit losses on the Company's loan and lease portfolios in accordance with ASC Topic 326. Losses are estimated to have occurred through a provision for credit losses charged to income. Credit losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for credit losses is evaluated on a regular basis by management and is maintained at a level believed to be adequate to absorb expected credit losses within the Company's loan and lease portfolio. In evaluating the allowance, management considers all relevant information available, from internal and external sources relating to historical experience, current conditions, and reasonable and supportable forecasts. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available. The allowance consists of collectively pooled and individually evaluated components. "Collectively pooled" refers to loans and leases grouped based upon similar risk characteristics. Quantitative methodologies and qualitative adjustments are applied to each pooled segment. The Company has identified eight segments of loans and leases which are collectively pooled based on similar risk characteristics. The allowance for credit losses on pooled loans and leases is estimated based upon periodic review of the loan and lease portfolio. The Company utilizes a cash flow ("CF") model to estimate the portion of quantitative allowance reserve for collectively pooled loans and leases. CF models allow for effective incorporation of reasonable and supportable forecasts in a consistent manner. If inadequate information is available to perform CF modeling for a collective pool, the Company uses the Remaining Life Method ("RLM") as a substitute. The RLM uses periodic charge-off rates and applies those rates to the projected balances over the remaining life of the loan or lease. 73 Accrued interest receivable is excluded from the calculation of the allowance for credit losses, as the Company's policy is to write off accrued interest promptly when deemed uncollectible by reversing interest income. Key inputs into the CF model include loan and lease-level information, such as the amortized cost basis of individual loans and leases, prepayment and curtailment rates for the collective pool, and forecasted loss drivers. The Company uses prepayment and curtailment rates based upon studies done using internal historical information, or benchmarked rates from external sources when the Company's own historical data is not sufficient. 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 develops its reasonable and supportable forecasts using economic data, such as gross domestic product and unemployment rate. For all collectively pooled segments, qualitative adjustments are applied to capture differences in current or expected qualitative risk characteristics. In assessing estimated credit losses, management considers any changes in the following factors and how they relate to the Company's current lending environment: (i) lending policies, procedures, and strategies, (ii) the nature and volume of the portfolio, (iii) international, national, regional, and local conditions, (iv) the experience, depth, and ability of lending management, (v) the volume and severity of past due loans, (vi) the quality of the loan and lease review system, (vii) the underlying collateral, (viii) concentration risk, and (ix) the effect of other external factors. Loans and leases with different risk characteristics are individually evaluated for potential credit losses and assigned individual reserves. These individually evaluated loans and leases are removed from the pools and are not included in the collective evaluation. Individually analyzed loans and leases may be identified due to current information and events, such as non-accrual status, delinquency status or history, or other potential identifiers impacting the collectability of the loan or lease. Individual reserves are determined at the loan- or lease-level based on an analysis of the expected future cash flows, the fair value of the collateral less costs to sell, or observable market value. Mortgage Loans Held for Sale – Mortgage loans originated and intended for sale in the secondary market are recorded at the lower of cost or fair value on an individual loan basis. Premises and Equipment - Premises and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method based principally on the estimated useful lives of the assets. Maintenance and repairs are expensed as incurred while major additions and improvements are capitalized. Gains and losses on dispositions are included in current operations. Federal Home Loan Bank (FHLB) stock - FHLB stock is a required investment for institutions that are members of the FHLB system. The required investment in the common stock is based on a predetermined formula, carried at cost and evaluated for impairment. Foreclosed Assets Held for Sale - Assets acquired through or in lieu of loan foreclosure are held for sale and are initially recorded at fair value, less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value, less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net income or expense from foreclosed assets. Mortgage Servicing Rights - Mortgage servicing rights on originated loans that have been sold are initially recorded at fair value. Capitalized mortgage servicing rights, which include purchased servicing rights, are amortized in proportion to and over the period of estimated servicing revenues. Impairment of mortgage servicing rights is assessed based on the fair value of those rights. Fair values are estimated using discounted cash flows based on a current market interest rate. For purposes of measuring impairment, the rights are stratified based on the predominant risk characteristics of the underlying loans. The predominant characteristic currently used for stratification is type of loan. The amount of impairment recognized is the amount by which the capitalized mortgage servicing rights for a stratum exceed their fair value. 74 Low Income Housing Tax Credits (LIHTC) - The Company has invested in LIHTC through funds that assist corporations in investing in limited partnerships and limited liability companies that own, develop and operate low-income residential rental properties for purposes of qualifying for the LIHTC. These investments are accounted for under the proportional amortization method which recognizes the amortization of the investment in proportion to the tax credit and other tax benefits received. Long-lived Asset Impairment - The Company evaluates the recoverability of the carrying value of long-lived assets whenever events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset is less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value. No asset impairment was recognized during the years ended December 31, 2025 and 2024. Revenue Recognition - ASC 606, “Revenue from Contracts with Customers," provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance enumerates five steps that entities should follow in achieving this core principle. Revenue generated from financial instruments, including loans and investment securities, are not included in the scope of ASC 606. Revenue-gathering activities that are within the scope of ASC 606 and that are presented as non-interest income in the Company’s consolidated statements of income include: – Service charges on deposit accounts – these include general service fees charged for deposit account maintenance and activity and transaction-based fees charged for certain services, such as debit card, wire transfer and overdraft activities. Revenue is recognized when the performance obligation is completed, which is generally after a transaction is completed or monthly for account maintenance services. – Card fee income – this includes debit card fees charged based on the volume and number of debit card transactions. Revenue is recognized when the performance obligation is completed, which is generally after a transaction is completed or monthly for account maintenance services. Income Tax - Income tax in the consolidated statements of operations includes deferred income tax provisions or benefits for all significant temporary differences in recognizing income and expenses for financial reporting and income tax purposes. The Company files consolidated income tax returns with its parent and subsidiary. Uncertain Tax Positions - The Company has adopted the provisions of ASC 740, Income Taxes , concerning the accounting and disclosures for uncertain tax positions, previously deferred by ASC 740-10-65. As part of the implementation of this standard, management evaluated its current tax positions and determined the adoption of this standard had no material impact on the consolidated financial statements of the Company. Share Based Compensation - At December 31, 2025, the Company had share-based compensation plans, which are described more fully in Note 16. All share-based payments are to be recognized as expense, based upon their fair values, in the financial statements over the vesting period of the awards. The Company has recorded approximately $ 309,000 and $ 594,000 in compensation expense relating to vesting of stock options, which are recognized as they occur, for the years ended December 31, 2025 and 2024, respectively. The Company has recorded approximately $ 507,000 and $ 880,000 in compensation expense relating to the vesting restricted stock awards for the years ended December 31, 2025 and 2024, respectively. Advertising Expense - The Company's advertising costs are expensed as incurred. 75 Note 2: Accounting Pronouncements The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") provides certain reporting and other relief to companies that qualify as "emerging growth companies" ("EGCs"). A company qualifies as an EGC if it meets the revenue and other criteria established under the JOBS Act. The Company previously qualified as an EGC and elected to use the extended transition period for complying with new or revised accounting standards, which allowed the Company to adopt such standards on the timeline applicable to private companies. This election was irrevocable and remained in effect while the Company qualified as an EGC. As of December 31, 2024, the Company no longer qualified as an EGC. Accordingly, beginning with the fiscal year ending December 31, 2025, the Company was required to comply with new or revised accounting standards and other reporting requirements applicable to public companies. In November 2023, the FASB issued 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. 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 adopted this guidance on January 1, 2025. Adoption of ASU No. 2023-09 did not have a material impact on the Company's consolidated financial statements. 76 Note 3: Acquisition of The Farmers Bancorp, Frankfort, Indiana On November 11, 2025, the Company entered into a definitive Agreement and Plan of Merger (the "Merger Agreement") with The Farmers Bancorp, Frankfort, Indiana ("Farmers Bancorp"), headquartered in Frankfort, Indiana. Pursuant to the Merger Agreement, Farmers Bancorp is expected to merge with and into the Company, with the Company surviving the holding company merger. Immediately following the holding company merger, The Farmers Bank, an Indiana state-chartered bank and wholly owned subsidiary of Farmers Bancorp, will merge with and into First Bank Richmond, with First Bank Richmond surviving the bank merger. Under the terms of the Merger Agreement, each outstanding share of Farmers Bancorp common stock will be converted into the right to receive 3.40 shares of the Company’s common stock (the "Exchange Ratio"), with cash paid in lieu of fractional shares (collectively, the "Merger Consideration"). In addition, (i) each unvested restricted stock unit award of Farmers Bancorp will automatically vest, and the underlying shares will be treated as outstanding and entitled to receive the Merger Consideration, less applicable tax withholding; and (ii) each unvested performance share award of Farmers Bancorp will be terminated and cashed out at target performance levels immediately prior to the effective time of the merger. Based on the Company’s closing stock price of $ 13.15 per share on November 10, 2025, the aggregate equity value of the Merger Consideration was approximately $ 82 million. The final value of the merger consideration will fluctuate until closing based on changes in the Company’s stock price. Upon completion of the merger, Farmers Bancorp shareholders are expected to own approximately 38 % of the outstanding shares of the combined company. The merger was approved and adopted by the Board of Directors of each company and is expected to be completed in the second calendar quarter of 2026, subject to customary closing conditions, including receipt of required regulatory approvals and approval by the shareholders of both the Company and Farmers Bancorp. The merger will be accounted for as a business combination under ASC 805, Business Combinations , with the Company expected to be the accounting acquirer. The combined company will continue to trade on the Nasdaq Capital Market under the ticker symbol "RMBI." The holding company will operate under the name "Richmond Mutual Bancorporation, Inc.," while the combined bank will operate under a new name to be jointly determined prior to closing. The administrative headquarters of the combined company will be located in Richmond, Indiana, and the administrative headquarters of the combined bank will be located in Frankfort, Indiana. The merger has not been completed as of December 31, 2025. Accordingly, the accompanying consolidated financial statements do not include the assets, liabilities, results of operations, or cash flows of Farmers Bancorp, and no purchase accounting adjustments have been recorded as of that date. Note 4: Restriction on Cash and Due From Banks At December 31, 2025, the Company’s cash accounts exceeded federally insured limits by approximately $ 1,037,000 . The Company’s cash balances with the Federal Reserve Bank and the Federal Home Loan Bank, which are not federally insured, totaled approximately $ 21,564,000 at December 31, 2025. The Federal Reserve Board announced on March 15, 2020 the reduction of the reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated the restriction on the Company's cash and cash equivalents for December 31, 2025. 77 Note 5: Investment Securities The amortized cost and approximate fair values, together with gross unrealized gains and losses, of investment securities are as follows: 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale SBA Pools $ 3,473 $ — $ ( 349 ) $ 3,124 Federal agencies 15,000 — ( 939 ) 14,061 State and municipal obligations 157,102 160 ( 25,444 ) 131,818 Mortgage-backed securities - government-sponsored enterprises (GSE) residential 108,586 93 ( 15,574 ) 93,105 Corporate obligations 11,500 — ( 1,693 ) 9,807 295,661 253 ( 43,999 ) 251,915 Held to maturity State and municipal obligations 2,748 7 ( 38 ) 2,717 2,748 7 ( 38 ) 2,717 Total investment securities $ 298,409 $ 260 $ ( 44,037 ) $ 254,632 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 – government-sponsored enterprises (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 78 The amortized cost and fair value of investment securities at December 31, 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 One year or less $ 1,476 $ 1,466 $ 725 $ 725 After one to five years 23,414 22,496 963 963 After five to ten years 48,846 44,566 450 450 After ten years 113,339 90,282 610 579 187,075 158,810 2,748 2,717 Mortgage-backed securities –GSE residential 108,586 93,105 — — Totals $ 295,661 $ 251,915 $ 2,748 $ 2,717 Investment securities with a carrying value of $ 114,823,000 and $ 109,909,000 were pledged at December 31, 2025 and 2024, respectively, to secure certain deposits and for other purposes as permitted or required by law. Proceeds from the sale of investment securities available for sale for the years ended December 31, 2025 and 2024 were $ 6,766,000 and $ 6,908,000 , respectively. Gross losses recognized on the sale of investment securities available for sale for the years ended December 31, 2025 and 2024 were $ 157,000 and $ 71,000 , respectively. Gross gains on the sale of investment securities available for sale were $ 20,000 for the year ended December 31, 2024, while there were no gross gains during the year ended December 31, 2025. Certain investments in debt securities are reported in the consolidated financial statements and notes at an amount less than their historical cost. Total fair value of these investments at December 31, 2025 and 2024 was $ 244,503,000 and $ 255,749,000 , respectively, which is approximately 96 % and 98 % of the fair value of the Company’s 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 investment securities available for sale with unrealized losses to be experiencing credit losses at December 31, 2025 and 2024. Management considers it more likely than not that the Company will not be required to sell these investment securities before recovery of the amortized cost basis, which may be the maturity date of the securities. Investment securities held to maturity are financial assets measured at amortized cost. Investment securities held to maturity 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 using credit ratings quarterly. In the absence of credit ratings, assumptions are applied to the security to estimate total expected loss. As of December 31, 2025 and 2024, there was no allowance for credit losses recognized on the Company's investment securities held to maturity portfolio. 79 The following table summarizes the amortized cost of investment securities held to maturity by credit quality indicator as of December 31, 2025 and 2024: State and municipal obligations 2025 2024 AA+ $ 350 $ 483 AA- — 295 A+ 375 605 Not rated 2,023 2,115 $ 2,748 $ 3,498 Accrued interest receivable for held to maturity securities was $ 44,000 and $ 52,000 at December 31, 2025 and 2024, respectively. 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 investments’ 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 December 31, 2025 and 2024: 2025 Less Than 12 Months 12 Months or More Total Description of Securities Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for sale SBA Pools $ 89 $ — $ 2,856 $ ( 349 ) $ 2,945 $ ( 349 ) Federal agencies — — 14,061 ( 939 ) 14,061 ( 939 ) State and municipal obligations — — 127,699 ( 25,444 ) 127,699 ( 25,444 ) Mortgage-backed securities – GSE residential 907 ( 4 ) 88,088 ( 15,570 ) 88,995 ( 15,574 ) Corporate obligations — — 9,807 ( 1,693 ) 9,807 ( 1,693 ) Total available-for-sale 996 ( 4 ) 242,511 ( 43,995 ) 243,507 ( 43,999 ) Held to maturity State and municipal obligations — — 996 ( 38 ) 996 ( 38 ) Total $ 996 $ ( 4 ) $ 243,507 $ ( 44,033 ) $ 244,503 $ ( 44,037 ) 80 2024 Less Than 12 Months 12 Months or More Total Description of Securities 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 ) SBA Pools and Mortgage-Backed Securities - GSE Residential The unrealized losses on the Company’s investment in SBA pools and mortgage-backed securities 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 market value is attributable to changes in interest rates and not credit quality. 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. 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 investments do not permit the issuer to settle the securities at a price less than the amortized cost bases 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. The Company expects the fair value of the securities as described above to recover as the securities approach their maturity or reset date. 81 Note 6: Loans, Leases and Allowance Categories of loans and leases at December 31, 2025 and 2024 include: 2025 2024 Commercial mortgage $ 414,316 $ 371,705 Commercial and industrial 142,508 126,367 Construction and development 71,705 132,570 Multi-family 208,894 185,864 Residential mortgage 171,063 172,644 Home equity lines of credit 20,147 16,826 Leases 145,806 148,102 Consumer 19,280 21,218 1,193,719 1,175,296 Less Allowance for credit losses 16,466 15,791 Deferred loan fees 440 626 $ 1,176,813 $ 1,158,879 First Bank rates all loans and leases by credit quality using the following designations: Grade 1 - Exceptional Exceptional loans are top-quality loans to individuals whose financial credentials are well known to the Company. These loans have excellent sources of repayment, are well documented and/or virtually free of risk (i.e., CD secured loans). Grade 2 - Quality Loans These loans have excellent sources of repayment with no identifiable risk of collection, and they conform in all respects to Company policy and Indiana Department of Financial Institutions ("DFI") and Federal Deposit Insurance Corporation ("FDIC") regulations. Documentation exceptions are minimal or are in the process of being corrected and are 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. These loans have adequate sources of repayment with little identifiable risk of collection and they conform to Company policy and DFI/FDIC regulations. Grade 4 - Acceptable but Monitored Loans 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 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 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 in the Company’s credit position at some future date. Special Mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. This special mention rating is 82 designed to identify a specific level of risk and concern about an asset’s quality. Although a special mention loan has a higher probability of default than a grade 1-4 or "pass" rated loan, its default is not imminent. Grade 6 - Substandard Loans 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 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 have a high probability of payment default, or they have other well-defined weaknesses. Such loans have a distinct potential for loss; however, an individual loan’s potential for loss does not have to be distinct for the loan to be rated substandard. The following are examples of situations that might cause a loan to be graded a “6”: • Cash flow deficiencies (losses) jeopardize future loan payments; • Sale of non-collateral assets has become a primary source of loan 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 repayment; • The borrower is bankrupt or for any other reason future repayment is dependent on court action. Grade 7 - Doubtful A loan 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 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. Grade 8 - Loss Loans classified as loss are considered uncollectible and of such little value that their continuance as bankable assets are not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan even though partial recovery may be affected in the future. The risk characteristics of each loan portfolio segment are as follows: Commercial and Industrial Commercial and industrial loans are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets, such as accounts receivable or inventory, and may include a personal guarantee. Short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. 83 Commercial Mortgage including Construction and Development Loans in this segment include commercial loans, commercial construction loans, and multi-family loans. This segment also includes loans secured by 1-4 family residences which were made for investment purposes. Commercial real estate loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The characteristics of properties securing the Company’s commercial real estate portfolio are diverse, but with geographic location almost entirely in the Company’s market area. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. In general, the Company avoids financing single purpose projects unless other underwriting factors are present to help mitigate risk. In addition, management tracks the level of owner-occupied commercial real estate versus nonowner-occupied loans. Construction loans are underwritten utilizing feasibility studies, independent appraisal reviews and financial analysis of the developers and property owners. Construction loans are generally based on estimates of costs and value associated with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing. Residential, Home Equity, and Consumer Residential, home equity, and consumer loans consist of three segments - residential mortgage loans, including brokered mortgage loans, home equity lines of credit, and personal loans. For residential mortgage loans that are secured by 1-4 family residences and are generally owner-occupied, the Company generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are typically secured by a subordinate interest in 1-4 family residences. Consumer personal loans are secured by consumer personal assets, such as automobiles or recreational vehicles. Some consumer personal loans are unsecured, such as small installment loans and certain lines of credit. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas, such as unemployment levels. Repayment can also be impacted by changes in property values on residential properties. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers. Leases Lease financing consists of direct financing leases and are used by commercial customers to finance capital purchases of equipment. The credit decisions for these transactions are based upon an assessment of the overall financial capacity of the applicant. A determination is made as to the applicant’s financial condition and ability to repay in accordance with the proposed terms as well as an overall assessment of the risks involved. The following tables present the credit risk profile of the Company’s loan portfolio based on rating category, payment activity, and origination year as of December 31, 2025 and 2024: 84 2025 2024 2023 2022 2021 Prior Revolving loans amortized cost basis Total As of December 31, 2025: Commercial mortgage Pass $ 65,746 $ 28,457 $ 43,078 $ 81,156 $ 38,485 $ 104,920 $ 44,820 $ 406,662 Substandard — — — — 7,654 — — 7,654 Total Commercial mortgage 65,746 28,457 43,078 81,156 46,139 104,920 44,820 414,316 Current period gross charge-offs — — — — — — — — Commercial and industrial Pass 24,361 14,524 21,342 6,601 9,148 11,218 53,505 140,699 Substandard — — — 173 — 30 1,606 1,809 Total Commercial and industrial 24,361 14,524 21,342 6,774 9,148 11,248 55,111 142,508 Current period gross charge-offs — — — — 2 — — 2 Construction and development Pass 31,478 14,823 1,914 1,516 15,946 105 — 65,782 Special Mention — — 429 594 — — — 1,023 Substandard — — — — — 4,900 — 4,900 Total Construction and development 31,478 14,823 2,343 2,110 15,946 5,005 — 71,705 Current period gross charge-offs — — — — — — — — Multi-family Pass 19,060 16,545 10,946 62,286 46,369 20,269 26,246 201,721 Substandard — — — 2,362 1,355 3,456 — 7,173 Total Multi-family 19,060 16,545 10,946 64,648 47,724 23,725 26,246 208,894 Current period gross charge-offs — — — — — — — — Residential mortgage Pass 25,873 14,224 29,613 24,979 25,038 46,869 2,944 169,540 Substandard — — 234 — 446 843 — 1,523 Total Residential mortgage 25,873 14,224 29,847 24,979 25,484 47,712 2,944 171,063 Current period gross charge-offs — — — — — — — — Home equity lines of credit Pass 48 — 224 — 57 — 19,730 20,059 Substandard — — — — — — 88 88 Total Home equity lines of credit 48 — 224 — 57 — 19,818 20,147 Current period gross charge-offs — — — — — — — — Direct financing leases Pass 59,587 37,199 31,748 12,243 3,128 604 — 144,509 Substandard — 64 225 232 61 — — 582 Doubtful 40 212 392 38 33 — — 715 Total Direct financing leases 59,627 37,475 32,365 12,513 3,222 604 — 145,806 Current period gross charge-offs 9 260 961 413 291 23 — 1,957 Consumer Pass 6,246 4,586 3,793 2,933 1,163 391 122 19,234 Substandard — — 24 — 22 — — 46 Total Consumer 6,246 4,586 3,817 2,933 1,185 391 122 19,280 Current period gross charge-offs 51 19 55 72 9 23 — 229 Total Loans and Leases $ 232,439 $ 130,634 $ 143,962 $ 195,113 $ 148,905 $ 193,605 $ 149,061 $ 1,193,719 Total current period gross charge-offs $ 60 $ 279 $ 1,016 $ 485 $ 302 $ 46 $ — $ 2,188 85 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 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 lines of credit 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 86 The following tables present the Company’s loan portfolio aging analysis of the recorded investment in loans as of December 31, 2025 and 2024: 2025 Delinquent Loans Total Portfolio Loans Total Accruing Loans 90 Days or More Past Due 30-59 Days Past Due 60-89 Days Past Due 90 Days and Over Total Past Due Current Commercial mortgage $ — $ — $ 7,435 $ 7,435 $ 406,881 $ 414,316 $ — Commercial and industrial — — — — 142,508 142,508 — Construction and development — — 4,900 4,900 66,805 71,705 — Multi-family — — 2,362 2,362 206,532 208,894 2,362 Residential mortgage 773 481 1,522 2,776 168,287 171,063 1,445 Home equity lines of credit 126 70 88 284 19,863 20,147 88 Leases 511 296 299 1,106 144,700 145,806 299 Consumer 148 50 46 244 19,036 19,280 46 Totals $ 1,558 $ 897 $ 16,652 $ 19,107 $ 1,174,612 $ 1,193,719 $ 4,240 2024 Delinquent Loans Total Portfolio Loans Total Accruing Loans 90 Days or More Past Due 30-59 Days Past Due 60-89 Days Past Due 90 Days and Over Total Past Due Current 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 lines of credit 11 58 14 83 16,743 16,826 14 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 87 The following table presents information on the Company's nonaccrual loans and leases at December 31, 2025 and 2024: December 31, 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 $ 7,435 $ 6,732 $ — $ — Commercial and industrial 30 — 35 — Construction and development 4,900 — 4,900 — Residential mortgage 76 76 94 94 Direct financing leases 715 715 34 34 Total nonaccrual loans and leases $ 13,156 $ 7,523 $ 5,063 $ 128 During the years ended December 31, 2025 and 2024, the Company recognized $ 3,000 and $ 5,000 , respectively, 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, at the dates indicated: December 31, 2025 Commercial Real Estate Multi-family Housing Residential Real Estate Other Total Allowance on Collateral Dependent Loans Commercial mortgage $ 7,435 $ — $ — $ — $ 7,435 $ 150 Commercial and industrial — — — 1,607 1,607 — Construction and development 5,923 — — — 5,923 1,750 Multi-family — 7,174 — — 7,174 250 Residential mortgage — — 124 — 124 — Total $ 13,358 $ 7,174 $ 124 $ 1,607 $ 22,263 $ 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 88 Loan 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 year ended December 31, 2025, the Company had no new modifications to borrowers experiencing financial difficulty. During the year ended December 31, 2024, the Company modified two residential mortgage loans, both involving term extensions, to borrowers experiencing financial difficulty. The total amortized cost basis of the loans modified at December 31, 2024 was $ 168,000 . For the year ended December 31, 2024, loan and lease modifications to borrowers experiencing financial difficulty resulted in a weighted average term extension of 20 months for the modified loans. There were no modified loans or leases that had a payment default during the years ended December 31, 2025 and 2024 and that were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. Other Real Estate Owned At December 31, 2025 and 2024, the balance of real estate owned included $ 56,000 and $ 37,000 , respectively, of foreclosed real estate properties recorded as a result of obtaining physical possession of the property. At December 31, 2025 and 2024, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceeds were in process was $ 923,000 and $ 275,000 , respectively. Direct Financing Leases The following lists the components of the net investment in direct financing leases: December 31, 2025 December 31, 2024 Total minimum lease payments to be received $ 166,565 $ 168,934 Initial direct costs 9,422 9,360 175,987 178,294 Less: Unearned income ( 30,181 ) ( 30,192 ) Net investment in direct finance leases $ 145,806 $ 148,102 The following summarizes the future minimum lease payments receivable subsequent to December 31, 2025: 2026 $ 65,255 2027 47,954 2028 31,526 2029 16,216 2030 5,283 Thereafter 331 $ 166,565 89 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 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 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. Accrued interest receivable totaled $ 4.4 million and $ 4.1 million at December 31, 2025 and 2024, respectively. 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 gross domestic product 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. 90 The following tables summarize changes in the allowance for credit losses by segment for the years ended December 31, 2025 and 2024: Balances, December 31, 2024 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, December 31, 2025 Commercial mortgage $ 4,486 $ 88 $ — $ 1 $ 4,575 Commercial and industrial 1,483 302 ( 2 ) 29 1,812 Construction and development 2,243 55 — — 2,298 Multi-family 2,660 ( 324 ) — — 2,336 Residential mortgage 1,910 ( 106 ) — 29 1,833 Home equity 184 5 — — 189 Direct financing leases 2,469 2,217 ( 1,957 ) 346 3,075 Consumer 356 146 ( 229 ) 75 348 Total $ 15,791 $ 2,383 $ ( 2,188 ) $ 480 $ 16,466 Balances, December 31, 2023 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, December 31, 2024 Commercial mortgage $ 4,655 $ ( 169 ) $ — $ — $ 4,486 Commercial and industrial 1,281 138 ( 16 ) 80 1,483 Construction and development 3,883 ( 1,640 ) — — 2,243 Multi-family 1,789 871 — — 2,660 Residential mortgage 1,681 225 ( 10 ) 14 1,910 Home equity 102 82 — — 184 Direct financing leases 1,955 1,942 ( 1,731 ) 303 2,469 Consumer 317 185 ( 285 ) 139 356 Total $ 15,663 $ 1,634 $ ( 2,042 ) $ 536 $ 15,791 Our commercial loan portfolio, consisting of commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, represented 70.2 % and 69.5 % of our portfolio as of December 31, 2025 and 2024, respectively. The allowance for credit losses on loans and leases allocated to the commercial loan portfolio represented 66.9 % and 68.9 % of our total allowance at December 31, 2025 and 2024, respectively. Economic Outlook Due to the forward-looking nature of the allowance for credit losses, management is required to make significant estimates and assumptions. Estimating the allowance requires the use of relevant forward-looking information based on reasonable and supportable forecasts. Economic factors are a key component of these forecasts and are evaluated periodically for developments that may affect the Company's loan and lease portfolio and related credit losses. As of December 31, 2025, the Company's reasonable and supportable forecasts incorporate assumptions regarding inflationary pressures, moderating economic growth, unemployment trends, and geopolitical risks. These factors are reflected in the Company's allowance for credit losses methodology and may influence borrower performance and overall credit conditions. The Company's loan portfolio is concentrated in three primary market regions: Columbus, Ohio; Cincinnati/Dayton, Ohio; and Indianapolis, Indiana. Economic conditions in these regions, particularly those affecting commercial real estate and commercial lending activity, are considered in the Company's credit loss estimates. 91 • Columbus, Ohio - The Columbus market region continues to experience economic activity supported by investment in technology, healthcare, education, and related development projects. These sectors have contributed to job growth and infrastructure expansion, and population trends in Central Ohio have supported demand for housing and services. • Cincinnati/Dayton, Ohio - The economic outlook for the Cincinnati and Dayton market region remains stable, supported by activity in manufacturing, construction, healthcare, and technology-related sectors. Employment and business investment trends have contributed to regional economic activity. • Indianapolis, Indiana - The Indianapolis market region continues to experience development and investment activity, including in manufacturing, technology, logistics, and urban redevelopment initiatives. While inflationary pressures and labor market conditions present ongoing challenges, economic activity in the region has supported expectations for continued development. The overall economic outlook remains uncertain, and actual economic conditions may differ from the assumptions incorporated into the Company's forecasts. Given the sensitivity of the allowance for credit losses to changes in economic conditions and other variables, future changes in the economic environment may result in material fluctuations in the Company's allowance for credit losses during 2026. 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. Additional provisions applied to the allowance are recognized in the provision for credit losses on the Consolidated Statements of Income. The following table details activity in the allowance for credit losses on unfunded commitments during the year ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Beginning balance $ 558 $ 1,642 Reversal of provision for credit losses ( 230 ) ( 1,084 ) Ending balance $ 328 $ 558 Note 7: Premises and Equipment 2025 2024 Cost Land $ 3,061 $ 3,061 Buildings 16,184 15,705 Furniture and equipment 8,812 8,153 Computer software 1,211 1,211 Construction in progress 716 506 Total cost 29,984 28,636 Accumulated depreciation and amortization ( 16,587 ) ( 15,714 ) Net $ 13,397 $ 12,922 92 Note 8: Leases The Company enters into leases for certain retail branches, land, and office space. Operating leases are included in other assets and the lease liability is included in other liabilities in our balance sheets. The Company does not have any finance leases. Lease right-of-use (ROU) assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate at commencement date in determining the present value of lease payments when the rate implicit in a lease is not known. The Company's incremental borrowing rate is based on the FHLB amortizing advance rate, adjusted for the lease term and other factors. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company's leases are generally for periods of five to 15 years with various renewal options. The exercise of such lease renewal options is not included in the present value of lease obligations unless it is reasonably certain that the option will be exercised. The Company has lease agreements which contain both lease and non-lease components such as common area maintenance charges, real estate taxes, and insurance. Non-lease components are not included in the measurement of the lease liability and are recognized in expense when incurred. The Company has elected not to recognize short-term leases, with original lease terms of twelve months or less, on the Company's balance sheet. Certain of the Company's lease arrangements include rental payments adjusted periodically for inflation. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Supplemental balance sheet information related to leases is presented in the table below as of December 31, 2025 and 2024: 2025 2024 Operating lease assets $ 629 $ 393 Total lease ROU assets $ 629 $ 393 Operating lease liabilities $ 643 $ 404 Total lease liabilities $ 643 $ 404 Weighted average remaining lease term (years) Operating leases 7.1 6.2 Weighted average discount rate Operating leases 3.86 % 3.37 % The table below presents the components of lease expense for the years ended December 31, 2025 and 2024: 2025 2024 Lease cost: Operating lease cost $ 104 $ 92 Total lease cost: $ 104 $ 92 93 Supplemental cash flow information related to leases is presented in the tables below. Maturity of lease liabilities 2026 $ 99 2027 101 2028 103 2029 88 2030 84 Thereafter 270 Total lease payments $ 745 Less: Present value discount 102 Present value of lease liabilities $ 643 Note 9: Loan Servicing Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others totaled $ 221,623,000 and $ 226,528,000 at December 31, 2025 and 2024, respectively. The aggregate fair value of capitalized servicing rights at December 31, 2025 and 2024 totaled approximately $ 2,160,000 and $ 2,559,000 , respectively. Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value. For purposes of measuring impairment, risk characteristics including product type, investor type and interest rates, were used to stratify the originated mortgage-servicing rights. 2025 2024 Servicing Rights Balances, beginning of period $ 1,951 $ 1,945 Servicing rights capitalized 141 198 Amortization of servicing rights ( 209 ) ( 192 ) Balances, end of period $ 1,883 $ 1,951 Note 10: 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 December 31, 2025 and 2024, the balance of these investments in LIHTC totaled $ 775,000 and $ 951,000 , respectively. These balances are reflected in the other assets line of the Condensed Consolidated Balance Sheet. The assets are amortized as a component of the provision for income taxes. 94 The following table summarizes the amortization expense and tax credits recognized for the Company's LIHTC investments for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Amortization expense $ 175 $ 178 Tax credits recognized 185 184 Note 11: Deposits 2025 2024 Demand deposits $ 448,790 $ 434,228 Savings deposits 114,501 112,499 Brokered certificates 235,947 257,587 Certificates and other time deposits greater than $250,000 82,646 67,493 Other certificates and time deposits 233,009 222,133 $ 1,114,893 $ 1,093,940 Certificates and other time deposits maturing in years ending December 31: 2026 $ 411,664 2027 115,493 2028 18,007 2029 2,356 2030 3,201 Thereafter 881 $ 551,602 Note 12: Borrowings First Bank has Federal Home Loan Bank advances, with interest rates ranging from 1.06 % to 5.16 %. The maturities of FHLB advances at December 31, 2025 were as follows: FHLB Advances 2026 $ 136,000 2027 48,000 2028 29,000 2029 7,000 2030 20,000 $ 240,000 95 First mortgage loans and investment securities totaling $ 581,473,000 and $ 539,251,000 were pledged as collateral for FHLB advances at December 31, 2025 and 2024, respectively. Certain advances are subject to restrictions or penalties in the event of prepayment. FHLB advances totaling $ 27,000,000 are subject to an option by the FHLB to put the entire advance to a periodic adjustable rate on the lock-out date. The adjustable rate would be for the remaining term at a predetermined rate based on the Secured Overnight Financing Rate, or SOFR. If the FHLB exercises its option to convert the advance to an adjustable rate, the advance will be prepayable at the Company’s option, at par and without a penalty. The Bank has an available line of credit with the FHLB totaling $ 10,000,000 . The line of credit expires April 2025, renews annually, and bears interest at a rate equal to the current variable advance rate. At December 31, 2025, the current interest rate was 4.02 %. There were no amounts outstanding on the line at December 31, 2025 or 2024. At December 31, 2025, other borrowings totaled $ 12.0 million and consisted entirely of federal funds purchased. The weighted average interest rate on these borrowings was 3.75 % at December 31, 2025. Note 13: Income Tax Pretax income from continuing operations is as follows: Year Ended December 31, 2025 Domestic $ 13,653 Foreign — Total $ 13,653 Income tax expense from continuing operations are as follows: 2025 2024 Income tax expense (benefit) Currently payable Federal $ 2,178 $ 1,328 State (1) 12 — Deferred Federal ( 215 ) 250 State (1) 101 ( 92 ) Total income tax expense $ 2,076 $ 1,486 (1) State taxes in Indiana make up the majority (greater than 50%) of the State taxes, net of federal benefit for 2025. 96 A cumulative deferred tax asset is included in other assets. The components of the asset are as follows: 2025 2024 Assets Allowance for credit losses $ 3,880 $ 3,816 Net operating loss carryforward 204 254 Nonaccrual interest 29 28 Investment basis 4 4 Deferred compensation 805 684 Stock compensation 327 431 ESOP 364 328 Unrealized loss on securities available for sale 9,186 12,176 Charitable contributions — 4 Other 300 255 Total assets 15,099 17,980 Liabilities FHLB stock dividend 164 166 Fixed assets 108 1 Mortgage-servicing rights 435 455 Prepaid assets 475 507 Other 33 92 Total liabilities 1,215 1,221 Net deferred tax asset $ 13,884 $ 16,759 Effective tax rates differ from the federal statutory rate of 21% for the year ended December 31, 2025 due to the following, in accordance with ASU 2023-09 (See Note 2 for additional details on ASU 2023-09 adoption): 2025 Amount Percent Income before income taxes $ 13,653 Federal statutory income tax 2,867 21.0 % State taxes, net of federal benefit (1) 111 0.8 % Tax credits: Low-income housing tax credit (net of amortization) ( 30 ) ( 0.2 ) % Nontaxable or nondeductible items: Tax-exempt interest ( 637 ) ( 4.7 ) % ESOP 1 — % Cash surrender value - life insurance ( 20 ) ( 0.1 ) % Small insurance captive premiums ( 165 ) ( 1.2 ) % Stock compensation ( 54 ) ( 0.4 ) % Other 3 — % Income tax expense and effective tax rate $ 2,076 15.2 % (1) State taxes in Indiana make up the majority (greater than 50%) of the State taxes, net of federal benefit for 2025. 97 Effective tax rates differ from the federal statutory rate of 21% for the year ended December 31, 2024 due to the following, prior to the adoption of ASU 2023-09: Reconciliation of federal statutory to actual tax expense 2024 Federal statutory income tax at 21% $ 2,281 Tax-exempt interest ( 672 ) Effect of state income taxes ( 92 ) ESOP ( 92 ) Cash surrender value - life insurance ( 19 ) Low income housing tax credit ( 30 ) Small insurance captive premiums ( 183 ) Stock compensation 11 Carryforward attribute expiration 407 Other ( 125 ) Actual tax expense $ 1,486 Income taxes paid (net of refunds) is as follows: Year Ended December 31, 2025 Cash paid for taxes (net of refund received) - Federal $ 1,338 Cash paid for taxes (net of refund received) - State — Other 2 Total $ 1,340 There were no individual state or local jurisdictions with taxes paid that equaled or exceeded 5% of total income taxes paid in 2025. As of December 31, 2025, the Company had no federal charitable contribution carryforwards. During 2025, the Company utilized a carryforward of approximately $ 20,000 from December 31, 2024, to offset its federal taxable income. As of December 31, 2025, the Company had state net operating loss carryforwards of $ 4.4 million, which will begin to expire in 2041. At December 31, 2025 and 2024, the Company determined that it is more likely than not that the deferred tax assets will be realized, largely based on available tax planning strategies and its projections of future taxable income. Therefore, no valuation reserve was recorded at December 31, 2025 and 2024. The determination of the realizability of the deferred tax assets is highly subjective and dependent upon judgment concerning the evaluation of both positive and negative evidence, the forecasts of future income, applicable tax planning strategies and assessments of current and future economic and business conditions. Positive evidence includes current positive earnings trends and the probability that taxable income will be generated in future periods, while negative evidence includes any cumulative losses in the current year and prior two years and general business and economic trends. Failure to achieve sufficient projected taxable income might affect the ultimate realization of the net deferred tax assets. 98 Note 14: Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, included in stockholders' equity, are as follows: 2025 2024 Net unrealized loss on available for sale securities $ ( 43,746 ) $ ( 57,982 ) Tax benefit 9,187 12,176 Net-of-tax amount $ ( 34,559 ) $ ( 45,806 ) Note 15: Commitments and Contingent Liabilities In the normal course of business, there are outstanding commitments and contingent liabilities, such as commitments to extend credit and standby letters of credit, which are not included in the accompanying consolidated financial statements. First Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. First Bank uses the same credit policies in making such commitments as it does for instruments that are included in the consolidated statements of financial condition. Financial instruments whose contract amounts represent credit risk as of December 31, 2025 and 2024, were as follows: 2025 2024 Commitments to extend credit $ 107,415 $ 126,239 Standby letters of credit $ 2,045 $ 1,642 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The subsidiary evaluates each customer's credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the subsidiary upon extension of credit, is based on management's credit evaluation. Collateral held varies, but may include residential real estate, income-producing commercial properties, or other assets of the borrower. Standby letters of credit are conditional commitments issued by the subsidiary to guarantee the performance of the customer to a third party. Note 16: 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 6 percent of base salary contributed by participants. The Company’s expense for the plan was $ 239,000 and $ 276,000 for the years ended December 31, 2025 and 2024, respectively. Employee Stock Ownership Plan As part of the reorganization and related stock offering, the Company established an Employee Stock Ownership Plan ("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 in the open market with funds provided by a loan from the Company. The Company is obligated at the option of each beneficiary to repurchase shares of 99 the ESOP upon the beneficiary’s termination or after retirement. 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 are not vested, are excluded from the computation of average shares outstanding for earnings per share calculation. Accordingly, $ 9,987,000 and $ 10,722,000 of common stock acquired by the ESOP was shown as a reduction of stockholders’ equity at December 31, 2025 and 2024, respectively. Shares are released to participants proportionately as the loan is repaid. ESOP expense for the years ended December 31, 2025 and 2024 was $ 738,000 and $ 661,000 , respectively. December 31, 2025 December 31, 2024 Earned ESOP shares 347,201 293,095 Unearned ESOP shares 734,929 789,035 Total ESOP shares 1,082,130 1,082,130 Quoted per share price $ 14.04 $ 14.15 Fair value of earned shares (in thousands) $ 4,875 $ 4,147 Fair value of unearned shares (in thousands) $ 10,318 $ 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 occurring on June 30, 2021. As of December 31, 2025, these awards were fully vested. On July 15, 2025, the Company awarded 37,126 shares of common stock under the 2020 EIP to eligible participants. The grant date fair value was $ 13.37 per share, for a total fair value of $ 496,000 at issuance. On November 20, 2025, the Company awarded an additional 51,253 shares of common stock under the 2020 EIP with a grant date fair value of $ 12.92 (total fair value of $ 662,000 at issuance) to eligible participants. These awards vest in five equal annual installments, with the first installment vesting on June 30, 2026, subject to the participant's continued service. Any shares forfeited prior to vesting may be reissued to other eligible participants in future grants until the 2020 EIP expires in September 2030. 100 The following table summarizes the restricted stock awards activity in the 2020 EIP for the year ended December 31, 2025. Year Ended December 31, 2025 Number of Restricted Shares Weighted Average Grant Date Fair Value Non-vested, beginning of year 83,379 $ 10.55 Granted 88,379 13.11 Vested ( 83,379 ) 10.55 Forfeited — — Non-vested, end of year 88,379 $ 13.11 Total compensation cost recognized in the income statement for restricted stock awards during 2025 and 2024 was $ 507,000 and $ 880,000 , respectively, and the related tax benefit recognized was $ 107,000 and $ 185,000 , respectively. As of December 31, 2025, unrecognized compensation expense related to restricted stock awards was $ 1.1 million. 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 $ 10.53 per share, the fair value of a share of the Company's common stock on the date of the 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 the Company's common stock on the date of the grant, to eligible participants. The options awarded vested in five equal annual installments with the first vesting occurring on June 30, 2021. As of December 31, 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 at an exercise price of $ 13.37 per share, equal to the fair market value of the Company's common stock on the grant date, to eligible participants. The options vest in five equal annual installments, with the first installment vesting on June 30, 2026, subject to the participant's continued service. Options forfeited prior to vesting may be reissued to other eligible participants in future grants until the 2020 EIP expires in September 2030. The 2020 EIP permits net-settle option exercises. Under a net-settle exercise, a participant may satisfy the exercise price by withholding a portion of the shares that would otherwise be issued. Withheld shares are canceled and are no longer available for future grants. The following table summarizes the stock option activity in the 2020 EIP during the year ended December 31, 2025. 2025 Number of Shares Weighted-Average Exercise Price Balance at beginning of year 1,016,497 $ 10.55 Granted 55,467 13.37 Exercised ( 108,213 ) 10.53 Forfeited/expired ( 202,899 ) 10.53 Balance at end of year 760,852 10.76 Exercisable at end of year 705,385 $ 10.56 101 The fair value of options granted is estimated on the date of 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 December 31, 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, end of year 55,467 $ 3.00 Total compensation cost recognized in the income statement for option-based payment arrangements during 2025 and 2024 was $ 309,000 and $ 594,000 , and the related tax benefit recognized was $ 31,000 and $ 64,000 , respectively. As of December 31, 2025, unrecognized compensation expense related to the stock option awards was $ 145,000 . Note 17: Earnings Per Share Basic earnings per share ("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 (in thousands, except for share and per share data): 102 For the Year Ended For the Year Ended December 31, 2025 December 31, 2024 Net income $ 11,577 $ 9,377 Shares outstanding for Basic EPS: Average shares outstanding 10,502,458 11,028,029 Less: average restricted stock award shares not vested 64,308 124,747 Less: average unearned ESOP Shares 768,468 822,631 Shares outstanding for Basic EPS 9,669,682 10,080,651 Additional Dilutive Shares 231,584 148,061 Shares outstanding for Diluted EPS 9,901,266 10,228,712 Basic EPS $ 1.20 $ 0.93 Diluted EPS $ 1.17 $ 0.92 Note 18: Dividend and Capital Restrictions The Bank is subject to certain restrictions on the amount of dividends that it may declare without prior regulatory approval. Generally, the Bank's payment of dividends is limited to net income for the current year plus the two preceding calendar years, less capital distributions paid over the comparable period. The Bank’s payment of dividends is also subject to the restrictions of the capital conservation buffer as discussed in Note 19. Note 19: Regulatory Capital First Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, First Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under U.S. GAAP, regulatory reporting requirements and regulatory capital standards. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore, First Bank’s regulators could require adjustments to regulatory capital not reflected in these financial statements. Quantitative measures established by regulatory capital standards to ensure capital adequacy require First Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined) to risk-weighted assets (as defined), common equity Tier I capital (as defined) to total risk-weighted assets (as defined) and of Tier I capital (as defined) to average assets (as defined). Management believes, as of December 31, 2025, that First Bank meets all capital adequacy requirements to which it is subject. As of December 31, 2025, the most recent notification from the regulators categorized First Bank as well-capitalized under the regulatory framework for prompt corrective action. To be categorized as well-capitalized, First Bank must maintain minimum total risk-based capital, Tier I risk-based capital, common equity Tier I risk-based capital and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed First Bank’s category. 103 First Bank’s actual and required capital amounts and ratios are as follows: Actual Minimum for Capital Adequacy Purposes Minimum to be Categorized as "Well-Capitalized" Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio As of December 31, 2025 Total capital (to risk-weighted assets) $ 186,532 14.6 % $ 101,960 8.0 % $ 127,451 10.0 % Tier I capital (to risk-weighted assets) 170,591 13.4 76,470 6.0 101,960 8.0 Common Equity Tier I capital (to risk-weighted assets) 170,591 13.4 57,353 4.5 82,843 6.5 Tier I leverage capital (to average assets) 170,591 11.0 62,290 4.0 77,862 5.0 As of December 31, 2024 Total capital (to risk-weighted assets) $ 181,415 14.2 % $ 102,014 8.0 % $ 127,518 10.0 % Tier I capital (to risk-weighted assets) 165,471 13.0 76,511 6.0 102,014 8.0 Common Equity Tier I capital (to risk-weighted assets) 165,471 13.0 57,383 4.5 82,887 6.5 Tier I leverage capital (to average assets) 165,471 10.7 61,579 4.0 76,974 5.0 The above minimum capital requirements exclude the capital conservation buffer required to avoid limitations on capital distributions, including share repurchases, dividend payments and certain discretionary bonus payments to executive officers. The capital conservation buffer was 2.50 % of total risk weighted assets at both December 31, 2025 and December 31, 2024. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Note 20: Related Party Transactions The Company has entered into transactions with certain directors, executive officers and its affiliates or associates (related parties). Such transactions were made in the ordinary course of business on substantially the same terms and conditions, including interest rates, as those prevailing at the same time for comparable transactions with other customers. The aggregate amount of loans to such related parties at December 31, 2025 and 2024 was approximately $ 8,027,000 and $ 8,557,000 , respectively. Annual activity consisted of the following: 2025 2024 Balance, beginning of the year $ 8,557 $ 8,624 New loans — 419 Change in composition — — Repayments ( 530 ) ( 486 ) Balance, end of the year $ 8,027 $ 8,557 Deposits from related parties held by the Company at December 31, 2025 and 2024 totaled $ 3,440,000 and $ 3,837,000 , respectively. 104 Note 21: Fair Values 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 and are significant to the fair value of the assets or liabilities Recurring Measurements The following tables present the fair value measurements of assets recognized in the accompanying 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 December 31, 2025 and 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) December 31, 2025 Available-for-sale securities SBA Pools $ 3,124 $ — $ 3,124 $ — Federal agencies 14,061 — 14,061 — State and municipal obligations 131,818 — 130,339 1,479 Mortgage-backed securities - GSE residential 93,105 — 93,105 — Corporate obligations 9,807 — 9,807 — $ 251,915 $ — $ 250,436 $ 1,479 105 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 year ended December 31, 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, mortgage-backed securities, and SBA pools. 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 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 year ended December 31, 2025, approximately $ 1.4 million of state and municipal obligations were transferred from Level 2 to Level 3 due to the absence of observable market inputs used in the valuation at year-end, requiring the use of significant unobservable inputs. Changes in fair value of approximately $ 154,000 were recognized in other comprehensive income, resulting in an aggregate Level 3 balance of approximately $ 1.5 million at December 31, 2025. There were no sales, settlements, or transfers out of Level 3 during the year. Nonrecurring Measurements As of December 31, 2025 and 2024, there were no assets or liabilities measured at fair value on a nonrecurring basis. 106 Fair Value of Financial Instruments The following tables present estimated fair values of the Company’s financial instruments at December 31, 2025 and 2024. 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, 2025 Financial assets Cash and cash equivalents $ 33,130 $ 33,130 $ — $ — Interest-earning time deposits 2,070 — — — Available-for-sale securities 251,915 — 250,436 1,479 Held-to-maturity securities 2,748 — 2,717 — Loans held for sale 828 — — 828 Loans and leases receivable, net 1,176,813 — — 1,148,160 FHLB stock 13,907 — 13,907 — Interest receivable 6,300 — 6,300 — Financial liabilities Deposits 1,114,893 — 1,117,026 — FHLB advances 240,000 — 240,832 — Other borrowings 12,000 — 12,041 — Interest payable 3,457 — 3,457 — 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 — 107 While these estimates of fair value are based on management’s judgment of the most appropriate factors, there is no assurance that were the Company to have disposed of such items at December 31, 2025 and 2024, the estimated fair values would necessarily have been achieved at that date, since market values may differ depending on various circumstances. The estimated fair values at December 31, 2025 and 2024 should not necessarily be considered to apply at subsequent dates. The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying consolidated balance sheets at amounts other than fair value. Cash and Cash Equivalents, Interest-Earning Time Deposits and Federal Home Loan Bank Stock – The carrying amount approximates fair value. Held-to-Maturity Securities – Fair value is based on quoted market prices, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Loans and Leases – The fair value of loans and leases is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations. The carrying amount of accrued interest approximates its fair value. Deposits – Deposits include demand deposits, savings accounts, NOW accounts and money market deposits. The carrying amount approximates fair value. The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities. Interest Receivable and Interest Payable – The carrying amount approximates fair value. Federal Home Loan Bank Advances – Rates currently available to the Company for borrowings with similar terms and remaining maturities are used to estimate the fair value of existing debt. 108 Note 22: Condensed Financial Information (Parent Company Only) Presented below is condensed financial information as to financial position, results of operations and cash flows of the Company: Condensed Balance Sheets 2025 2024 Assets Cash and cash equivalents $ 2,963 $ 5,545 Investment in subsidiaries 139,056 122,733 Other assets 6,399 6,987 Total assets $ 148,418 $ 135,265 Other Liabilities $ 2,637 $ 2,393 Stockholders' Equity 145,781 132,872 Total liabilities and stockholders' equity $ 148,418 $ 135,265 Condensed Statements of Income and Comprehensive Income 2025 2024 Income: Dividends from bank subsidiary $ 8,000 $ 4,750 Dividends from captive subsidiary 890 — Other income 509 587 Total income 9,399 5,337 Other expenses 2,976 2,875 Income before income tax benefit and undistributed subsidiary income 6,423 2,462 Income tax benefit ( 561 ) ( 301 ) Equity in undistributed income of subsidiaries (dividends in excess of net income): Bank subsidiary 4,572 5,629 Captive subsidiary 21 985 Net income $ 11,577 $ 9,377 Comprehensive income $ 22,824 $ 6,616 109 Condensed Statements of Cash Flows 2025 2024 Operating Activities Net income $ 11,577 $ 9,377 Adjustments to reconcile net income to net cash from operating activities: Equity in undistributed net income of subsidiaries ( 4,593 ) ( 6,614 ) ESOP expense 738 661 Stock based compensation 816 1,474 Changes in other assets and other liabilities 349 ( 1,839 ) Net cash provided by operating activities 8,887 3,059 Investing Activities Net cash used in investing activities — — Financing Activities Dividends paid ( 5,835 ) ( 5,697 ) Repurchase of common stock ( 5,634 ) ( 5,042 ) Net cash used in financing activities ( 11,469 ) ( 10,739 ) Net Change in Cash and Cash Equivalents ( 2,582 ) ( 7,680 ) Cash and Cash Equivalents, Beginning of Period 5,545 13,225 Cash and Cash Equivalents, End of Period $ 2,963 $ 5,545 Note 23: 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 Consolidated Statements of Income. Segment assets are measured based on total consolidated assets as reported in the Consolidated Balance Sheets. Note 24: Significant Estimates and Concentrations Accounting principles generally accepted in the United States of America require disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Estimates related to the allowance for loan losses are reflected in the footnote regarding loans. Current vulnerabilities due to certain concentrations of credit risk are discussed in the footnote on commitments and credit risk. Other significant estimates and concentrations not discussed in those footnotes include: General Litigation – The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations and cash flows of the Company. Note 25: Subsequent Events Subsequent events have been evaluated through March 23, 2026, which is the date the consolidated financial statements were issued. 110 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure None.