Richmond Mutual Bancorporation, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS Richmond Mutual Bancorporation, Inc. Condensed Consolidated Balance Sheets June 30, 2026 December 31, 2025 (Unaudited) Assets Cash and due from banks $ 11,937,626 $ 9,275,184 Interest-earning demand deposits 22,782,945 23,855,310 Cash and cash equivalents 34,720,571 33,130,494 Interest-earning time deposits 2,850,000 2,070,000 Investment securities - available for sale 245,271,477 251,915,497 Investment securities - held to maturity 2,353,776 2,747,889 Loans held for sale — 828,000 Loans and leases, net of allowance for credit losses of $ 16,973,886 and $ 16,465,708 , respectively 1,207,852,229 1,176,812,906 Premises and equipment, net 13,563,207 13,396,583 Federal Home Loan Bank stock 13,907,100 13,907,100 Interest receivable 6,255,602 6,299,925 Mortgage-servicing rights 1,874,690 1,883,446 Cash surrender value of life insurance 4,002,851 3,953,634 Other assets 19,377,847 18,845,066 Total assets $ 1,552,029,350 $ 1,525,790,540 Liabilities Noninterest-bearing deposits $ 100,070,823 $ 100,090,746 Interest-bearing deposits 1,046,572,571 1,014,802,514 Total deposits 1,146,643,394 1,114,893,260 Federal Home Loan Bank advances 244,000,000 240,000,000 Other borrowings — 12,000,000 Advances by borrowers for taxes and insurance 718,729 650,674 Interest payable 2,940,999 3,456,973 Other liabilities 9,453,651 9,008,533 Total liabilities 1,403,756,773 1,380,009,440 Commitments and Contingent Liabilities — — Stockholders' Equity Common stock, $ 0.01 par value Authorized - 90,000,000 shares Issued and outstanding - 10,504,760 shares and 10,501,260 shares at June 30, 2026 and December 31, 2025, respectively 105,048 105,013 Additional paid-in capital 93,128,490 92,897,260 Retained earnings 99,406,275 97,324,605 Unearned employee stock ownership plan (ESOP) ( 9,619,435 ) ( 9,987,093 ) Accumulated other comprehensive loss ( 34,747,801 ) ( 34,558,685 ) Total stockholders' equity 148,272,577 145,781,100 Total liabilities and stockholders' equity $ 1,552,029,350 $ 1,525,790,540 See Notes to Condensed Consolidated Statements. 1 Richmond Mutual Bancorporation, Inc. Condensed Consolidated Statements of Income (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Interest Income Loans and leases $ 19,790,248 $ 19,182,992 $ 38,901,227 $ 37,956,750 Investment securities 1,880,707 1,920,303 3,753,688 3,883,752 Other 227,646 242,842 406,077 373,662 Total interest income 21,898,601 21,346,137 43,060,992 42,214,164 Interest Expense Deposits 7,213,068 7,811,994 14,511,415 15,656,374 Borrowings 2,611,605 2,774,702 5,029,236 5,540,277 Total interest expense 9,824,673 10,586,696 19,540,651 21,196,651 Net Interest Income 12,073,928 10,759,441 23,520,341 21,017,513 Provision for credit losses 823,147 744,690 1,516,241 1,475,785 Net Interest Income After Provision for Credit Losses 11,250,781 10,014,751 22,004,100 19,541,728 Non-interest Income Service charges on deposit accounts 330,191 309,936 652,169 605,910 Card fee income 338,381 335,944 655,705 634,424 Loan and lease servicing fees 95,265 135,880 188,845 248,238 Net loss on securities (includes $ 0 , $( 156,859 ), $ 0 , and $( 156,859 ), respectively, related to accumulated other comprehensive income reclassifications) — ( 156,859 ) — ( 156,859 ) Net gains on loan and lease sales 181,319 101,338 354,391 196,443 Other income 634,933 353,698 1,026,790 714,025 Total non-interest income 1,580,089 1,079,937 2,877,900 2,242,181 Non-interest Expenses Salaries and employee benefits 4,726,129 4,767,107 9,289,688 9,479,062 Net occupancy expenses 400,089 342,971 837,936 731,271 Equipment expenses 231,256 263,307 484,272 507,797 Data processing fees 1,100,919 925,536 2,292,998 1,827,500 Deposit insurance expense 250,000 304,000 535,000 643,000 Printing and office supplies 45,943 34,518 87,242 82,991 Legal and professional fees 353,765 447,674 812,556 978,591 Advertising expense 69,407 98,225 174,104 163,837 Bank service charges 58,370 37,720 106,585 84,338 Real estate owned expense 1,408 1,225 13,623 3,287 Merger and acquisition expense 1,863,428 — 1,863,428 — Other expenses 1,067,007 887,980 2,373,714 1,981,202 Total non-interest expenses 10,167,721 8,110,263 18,871,146 16,482,876 Income Before Income Tax Expense 2,663,149 2,984,425 6,010,854 5,301,033 Provision for income taxes 436,345 382,427 998,759 730,725 Net Income $ 2,226,804 $ 2,601,998 $ 5,012,095 $ 4,570,308 Earnings Per Share Basic $ 0.23 $ 0.27 $ 0.52 $ 0.47 Diluted $ 0.22 $ 0.26 $ 0.51 $ 0.46 See Notes to Condensed Consolidated Statements. 2 Richmond Mutual Bancorporation, Inc. Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net Income $ 2,226,804 $ 2,601,998 $ 5,012,095 $ 4,570,308 Other Comprehensive Gain (Loss) Income Unrealized gain (loss) on available for sale securities, net of tax (expense) benefit of $( 605,320 ), $( 254,992 ), $ 50,271 , and $( 594,230 ), respectively 2,277,156 959,255 ( 189,116 ) 2,235,437 Less: reclassification adjustment for realized losses included in net income, net of tax (expense) benefit of $ 0 , $ 32,940 , $ 0 , and $ 32,940 , respectively — ( 123,919 ) — ( 123,919 ) 2,277,156 1,083,174 ( 189,116 ) 2,359,356 Comprehensive Income $ 4,503,960 $ 3,685,172 $ 4,822,979 $ 6,929,664 See Notes to Condensed Consolidated Statements. 3 Richmond Mutual Bancorporation, Inc. Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) Three Months Ended June 30, 2026 Common Stock Additional Paid-in Capital Retained Earnings Unearned ESOP Shares Accumulated Other Comprehensive Loss Total Shares Outstanding Amount Balances, March 31, 2026 10,501,260 $ 105,013 $ 92,988,675 $ 98,644,946 $ ( 9,803,264 ) $ ( 37,024,957 ) $ 144,910,413 Net income — — — 2,226,804 — — 2,226,804 Other comprehensive income — — — — — 2,277,156 2,277,156 ESOP shares earned — — 14,779 — 183,829 — 198,608 Stock based compensation — — 88,216 — — — 88,216 Exercise of stock options 3,500 35 36,820 — — — 36,855 Common stock dividends ($ 0.15 per share) — — — ( 1,465,475 ) — — ( 1,465,475 ) Balances, June 30, 2026 10,504,760 $ 105,048 $ 93,128,490 $ 99,406,275 $ ( 9,619,435 ) $ ( 34,747,801 ) $ 148,272,577 Six Months Ended June 30, 2026 Common Stock Additional Paid-in Capital Retained Earnings Unearned ESOP Shares Accumulated Other Comprehensive Loss Total Shares Outstanding Amount Balances, December 31, 2025 10,501,260 $ 105,013 $ 92,897,260 $ 97,324,605 $ ( 9,987,093 ) $ ( 34,558,685 ) $ 145,781,100 Net income — — — 5,012,095 — — 5,012,095 Other comprehensive loss — — — — — ( 189,116 ) ( 189,116 ) ESOP shares earned — — 18,701 — 367,658 — 386,359 Stock based compensation — — 175,709 — — — 175,709 Exercise of stock options 3,500 35 36,820 — — — 36,855 Common stock dividends ($ 0.30 per share) — — — ( 2,930,425 ) — — ( 2,930,425 ) Balances, June 30, 2026 10,504,760 $ 105,048 $ 93,128,490 $ 99,406,275 $ ( 9,619,435 ) $ ( 34,747,801 ) $ 148,272,577 See Notes to Condensed Consolidated Statements. Three Months Ended June 30, 2025 Common Stock Additional Paid-in Capital Retained Earnings Unearned ESOP Shares Accumulated Other Comprehensive Loss Total Shares Outstanding Amount Balances, March 31, 2025 10,490,264 $ 104,903 $ 93,836,968 $ 92,058,581 $ ( 10,538,580 ) $ ( 44,530,015 ) $ 130,931,857 Net income — — — 2,601,998 — — 2,601,998 Other comprehensive income — — — — — 1,083,174 1,083,174 ESOP shares earned — — ( 2,700 ) — 183,829 — 181,129 Stock based compensation — — 363,459 — — — 363,459 Common stock dividends ($ 0.15 per share) — — — ( 1,440,015 ) — — ( 1,440,015 ) Repurchase of common stock ( 101,127 ) ( 1,012 ) ( 1,399,025 ) — — — ( 1,400,037 ) Balances, June 30, 2025 10,389,137 $ 103,891 $ 92,798,702 $ 93,220,564 $ ( 10,354,751 ) $ ( 43,446,841 ) $ 132,321,565 4 Six Months Ended June 30, 2025 Common Stock Additional Paid-in Capital Retained Earnings Unearned ESOP Shares Accumulated Other Comprehensive Loss Total Shares Outstanding Amount Balances, December 31, 2024 10,814,960 $ 108,150 $ 97,709,231 $ 91,582,986 $ ( 10,722,410 ) $ ( 45,806,197 ) $ 132,871,760 Net income — — — 4,570,308 — — 4,570,308 Other comprehensive income — — — — — 2,359,356 2,359,356 ESOP shares earned — — ( 8,047 ) — 367,659 — 359,612 Stock based compensation — — 726,918 — — — 726,918 Common stock dividends ($ 0.30 per share) — — — ( 2,932,730 ) — — ( 2,932,730 ) Repurchase of common stock ( 425,823 ) ( 4,259 ) ( 5,629,400 ) — — — ( 5,633,659 ) Balances, June 30, 2025 10,389,137 $ 103,891 $ 92,798,702 $ 93,220,564 $ ( 10,354,751 ) $ ( 43,446,841 ) $ 132,321,565 See Notes to Condensed Consolidated Statements. 5 Richmond Mutual Bancorporation, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, 2026 2025 Operating Activities Net income $ 5,012,095 $ 4,570,308 Adjustments to reconcile net income to net cash provided by operating activities Provision for credit losses 1,516,241 1,475,785 Depreciation and amortization 448,146 440,839 Deferred income tax 231,496 ( 237,680 ) Stock based compensation 175,709 726,918 Investment securities amortization, net 358,561 364,455 Net loss on sale of investment securities - available for sale — 156,859 Net gains on loan and lease sales ( 354,391 ) ( 196,443 ) Gain on sale of premises and equipment — ( 4,500 ) Accretion of loan origination fees ( 426,253 ) ( 446,258 ) Amortization of mortgage-servicing rights 128,335 95,477 ESOP shares expense 386,359 359,612 Increase in cash surrender value of life insurance ( 49,217 ) ( 47,798 ) Loans originated for sale ( 17,411,254 ) ( 10,018,214 ) Proceeds on loans sold 16,583,254 9,765,589 Net change in Interest receivable 44,323 ( 166,155 ) Other assets ( 757,507 ) 1,277,317 Other liabilities 445,118 ( 102,499 ) Interest payable ( 515,974 ) ( 988,458 ) Net cash provided by operating activities 5,815,041 7,025,154 Investing Activities Net change in interest-bearing time deposits ( 780,000 ) — Purchases of securities available for sale ( 955,025 ) ( 4,330,256 ) Proceeds from maturities and paydowns of securities available for sale 7,000,209 8,875,127 Proceeds from sales of securities available for sale — 6,765,143 Proceeds from maturities and paydowns of securities held to maturity 395,000 565,159 Net change in loans ( 30,238,499 ) ( 8,701,674 ) Proceeds from sales of real estate owned 43,502 — Purchases of premises and equipment ( 614,770 ) ( 703,448 ) Net cash provided by (used in) investing activities ( 25,149,583 ) 2,470,051 Financing Activities Net change in Demand and savings deposits 21,195,739 10,048,117 Certificates of deposit 10,554,395 ( 7,598,958 ) Advances by borrowers for taxes and insurance 68,055 76,318 Repayment of other borrowings ( 12,000,000 ) — Proceeds from FHLB advances 158,000,000 179,000,000 Repayment of FHLB advances ( 154,000,000 ) ( 177,000,000 ) Repurchase of common stock — ( 5,633,659 ) Proceeds from stock option exercises 36,855 — Dividends paid ( 2,930,425 ) ( 2,932,730 ) Net cash provided by (used in) financing activities 20,924,619 ( 4,040,912 ) Net Change in Cash and Cash Equivalents 1,590,077 5,454,293 Cash and Cash Equivalents, Beginning of Period 33,130,494 21,757,190 Cash and Cash Equivalents, End of Period $ 34,720,571 $ 27,211,483 Additional Cash Flows and Supplementary Information Interest paid $ 20,056,625 $ 22,185,109 See Notes to Condensed Consolidated Statements. 6 Richmond Mutual Bancorporation, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Amounts) Note 1: Basis of Presentation The accompanying financial information is unaudited and has been prepared from the consolidated financial statements of Richmond Mutual Bancorporation, Inc., and its wholly owned direct and indirect subsidiaries, First Bank Richmond, First Insurance Management, Inc., FB Richmond Holdings, Inc. and FB Richmond Properties, Inc. References in this document to Richmond Mutual Bancorporation refer to Richmond Mutual Bancorporation, Inc. References to “we,” “us,” and “our” or the “Company” refers to Richmond Mutual Bancorporation and its wholly-owned direct and indirect subsidiaries, First Bank Richmond, First Insurance Management, Inc., FB Richmond Holdings, Inc., and FB Richmond Properties, Inc. unless the context otherwise requires. First Bank Richmond is an Indiana state-chartered commercial bank headquartered in Richmond, Indiana and the wholly owned banking subsidiary of Richmond Mutual Bancorporation. First Bank Richmond provides full banking services through its seven full- and one limited-service offices located in Cambridge City (1), Centerville (1), Richmond (5) and Shelbyville (1), Indiana, its six full-service offices located in Piqua (2), Sidney (2), Troy (1), and Columbus (1), Ohio. Administrative, trust and wealth management services are conducted through First Bank Richmond's Corporate Office/Financial Center located in Richmond, Indiana. As an Indiana-chartered commercial bank, First Bank Richmond is subject to regulation by the Indiana Department of Financial Institutions ("IDFI") and the Federal Deposit Insurance Corporation ("FDIC"). First Insurance Management, Inc., a wholly-owned subsidiary of the Company which was formed and began operations in June 2022, is a Nevada-based captive insurance company that insures against certain risks unique to the operations of the Company and its subsidiaries and for which insurance may not be currently available or economically feasible in today's insurance marketplace. First Insurance Management, Inc. is subject to the regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance. FB Richmond Holdings, Inc., a wholly-owned subsidiary of First Bank Richmond which was formed and began operations in April 2020, is a Nevada corporation that holds and manages substantially all of First Bank Richmond's investment portfolio. FB Richmond Holdings, Inc. has one active subsidiary, FB Richmond Properties, Inc., a Delaware corporation which holds loans on behalf of First Bank Richmond. The accompanying unaudited condensed consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include information or note disclosures necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. Accordingly, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K") filed with the Securities and Exchange Commission (“SEC”) on March 23, 2026 (SEC File No. 001-38956). However, in the opinion of management, all adjustments which are necessary for a fair presentation of the consolidated financial statements have been included. Those adjustments consist only of normal recurring adjustments. The results of operations for the periods are not necessarily indicative of the results to be expected for the full year. Use of Estimates in Preparation of Financial Statements Financial statements prepared in accordance with generally accepted accounting principles in the United States ("GAAP") require the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. Loans For all loan classes, the accrual of interest is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Past due status is based on contractual terms of the loan. For all loan classes, the entire balance of the loan is considered past due if the minimum payment contractually required to be paid is not received by the 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. 7 The Company charges off residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance, which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value, less costs to sell when the loan is 120 days past due, charge-off of unsecured open-end loans when the loan is 90 days past due, and charge down to the net realizable value when other secured loans are 90 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off. For all classes, all interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status. On occasion, the Company will provide modifications to loans and leases to borrowers experiencing financial difficulty, by providing payment delays, term extensions, or interest-rate reductions. In some cases, combinations of modifications may be made to the same loan or lease. If it is determined that the value of the modified loan or lease is less than the recorded investment in the loan, a charge-off is recognized through the allowance for credit losses on loans and leases. Note 2: Accounting Pronouncements In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2024-03, Income Statement - Reporting Comprehensive Income Expense - Disaggregation Disclosures (Subtopic 220-40); Disaggregation of Income Statement Expenses . This ASU requires certain expenses be disaggregated into specific categories in disclosures within the financial statements and footnotes to the financial statements. ASU No. 2024-03 is effective for all public business entities for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of ASU No. 2024-03 on its consolidated financial statements. In November 2025, the FASB issued ASU No. 2025-08, Financial Instruments - Credit Losses (Topic 326), Purchased Loans. This ASU amended the guidance in ASC 326 on the accounting for certain purchased loans. The amendments in this update expand the use of the “gross-up” approach to certain acquired loans classified as purchased seasoned loans ("PSLs"). The amendments are intended to reduce complexity and improve comparability in the accounting for acquired loans. ASU No. 2025-08 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of ASU No. 2025-08 on its consolidated financial statements. 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. Effective July 1, 2026, subsequent to the June 30, 2026 quarter end, Farmers Bancorp merged with and into the Company, with the Company continuing as the surviving holding company. Immediately following the holding company merger, The Farmers Bank merged with and into First Bank Richmond, with First Bank Richmond continuing as the surviving bank and changing its name to First Bank Midwest. As a result of the merger, the Company acquired 100 % of the outstanding equity interests of Farmers Bancorp. In connection with the merger, the Company issued 6,254,358 shares of its common stock to Farmers Bancorp shareholders based on the exchange ratio of 3.40 shares of Company common stock for each outstanding share of Farmers Bancorp common stock. Cash of approximately $ 1,000 was paid in lieu of fractional shares. The preliminary acquisition-date fair value of the consideration transferred was approximately $ 99.3 million and consisted primarily of Company common stock. The merger expands the Company’s presence in complementary Indiana markets, increases the scale of the combined organization and is expected to provide opportunities for operating efficiencies and enhanced products and services. 8 Because the merger was completed after June 30, 2026, the accompanying consolidated financial statements do not include the assets, liabilities, results of operations or cash flows of Farmers Bancorp, and no acquisition accounting adjustments have been reflected as of June 30, 2026. Farmers Bancorp’s results of operations will be included in the Company’s consolidated results beginning July 1, 2026. The Company’s accounting for the merger was incomplete as of the date these financial statements were issued. The Company continues to evaluate the acquisition-date fair values of acquired loans, investment securities, deposits, premises and equipment, identifiable intangible assets, borrowings, deferred taxes and other assets and liabilities. Accordingly, the allocation of the purchase price, the amount of goodwill and certain other disclosures required by ASC 805 have not yet been finalized and may be adjusted during the measurement period. During each of the three and six months ended June 30, 2026, the Company recognized merger-related expenses of $ 1.9 million, which were included in non-interest expense in the consolidated statements of income. Note 4: Investment Securities The amortized cost and approximate fair values, together with gross unrealized gains and losses, of investment securities are as follows: June 30, 2026 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available for sale SBA Pools $ 3,192 $ — $ ( 381 ) $ 2,811 Federal agencies 15,000 — ( 948 ) 14,052 State and municipal obligations 155,523 153 ( 25,454 ) 130,222 Mortgage-backed securities - government-sponsored enterprises (GSE) residential 104,040 19 ( 16,009 ) 88,050 Corporate obligations 11,500 — ( 1,364 ) 10,136 289,255 172 ( 44,156 ) 245,271 Held to maturity State and municipal obligations 2,354 6 ( 39 ) 2,321 2,354 6 ( 39 ) 2,321 Total investment securities $ 291,609 $ 178 $ ( 44,195 ) $ 247,592 December 31, 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 9 The amortized cost and fair value of investment securities at June 30, 2026, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Available for Sale Held to Maturity Amortized Cost Fair Value Amortized Cost Fair Value Within one year $ 4,145 $ 4,069 $ 365 $ 365 One to five years 20,759 19,907 929 930 Five to ten years 51,213 46,209 450 450 After ten years 109,098 87,036 610 576 185,215 157,221 2,354 2,321 Mortgage-backed securities –GSE residential 104,040 88,050 — — Totals $ 289,255 $ 245,271 $ 2,354 $ 2,321 Investment securities with a carrying value of $ 133,302,000 and $ 114,823,000 were pledged at June 30, 2026 and December 31, 2025, respectively, to secure certain deposits and for other purposes as permitted or required by law. There were no proceeds from the sales of securities available for sale for the three and six months ended June 30, 2026, compared to $ 6,765,000 in proceeds from sales of securities available for sale for both the three and six months ended June 30, 2025. Certain investments in debt securities, as reflected in the table below, are reported in the condensed consolidated financial statements and notes at an amount less than their historical cost. Total fair value of these investments at June 30, 2026 and December 31, 2025 was $ 239,079,000 and $ 244,503,000 , respectively, which is approximately 96 % and 96 % of the Company’s aggregated available for sale and held to maturity investment portfolio at those dates, respectively. These declines primarily resulted from changes in market interest rates since their purchase. The Company does not consider available for sale securities with unrealized losses to be experiencing credit losses at June 30, 2026. Management considers it more likely than not that the Company will not be required to sell these investments before recovery of the amortized cost basis, which may be the maturity dates of the securities. Held to maturity securities are financial assets measured at amortized cost. Held to maturity securities are required to have an established allowance for credit losses that represents the portion of the amortized cost basis of a financial asset that is not expected to be collected. The Company estimates expected credit losses on a collective basis by security type, with consideration given to historical information, credit ratings, and the statistical probability of future losses. The Company monitors the credit quality of investment securities held to maturity through the use of credit ratings quarterly. As of June 30, 2026, there was no allowance for credit losses recognized on the Company's securities held to maturity portfolio. The following table summarizes the amortized cost of held to maturity securities by credit quality indicator as of June 30, 2026 and December 31, 2025: State and municipal obligations June 30, 2026 December 31, 2025 AA+ $ 175 $ 350 A+ 190 375 Not rated 1,989 2,023 $ 2,354 $ 2,748 The Company has elected to exclude accrued interest receivable from the calculation of the allowance for credit losses. 10 The following tables show the Company’s investment securities by gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2026 and December 31, 2025: Description of Securities June 30, 2026 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for sale SBA Pools $ 65 $ — $ 2,623 $ ( 381 ) $ 2,688 $ ( 381 ) Federal agencies — — 14,052 ( 948 ) 14,052 ( 948 ) State and municipal obligations 542 ( 8 ) 126,018 ( 25,446 ) 126,560 ( 25,454 ) Mortgage-backed securities - GSE residential 2,181 ( 44 ) 82,532 ( 15,965 ) 84,713 ( 16,009 ) Corporate obligations — — 10,136 ( 1,364 ) 10,136 ( 1,364 ) Total available for sale 2,788 ( 52 ) 235,361 ( 44,104 ) 238,149 ( 44,156 ) Held to maturity State and municipal obligations — — 930 ( 39 ) 930 ( 39 ) Total $ 2,788 $ ( 52 ) $ 236,291 $ ( 44,143 ) $ 239,079 $ ( 44,195 ) Description of Securities December 31, 2025 Less Than 12 Months 12 Months or More Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Available for sale 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 ) Federal Agency Obligations. The unrealized losses on the Company’s investments in direct obligations of U.S. federal agencies were caused by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. The Company does not intend to sell the investments and it is not more likely than not the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. SBA Pools and Mortgage-Backed Securities - GSE Residential. The unrealized losses on the Company’s investment in mortgage-backed securities and SBA pools were caused by interest rate changes and illiquidity. The Company expects to recover the amortized cost basis over the term of the securities. The decline in fair value is attributable to changes in interest rates and not credit quality. The Company does not intend to sell the securities and it is not more likely than not the Company will be required to sell the securities before recovery of their amortized cost basis, which may be maturity. State, Municipal, and Corporate Obligations. The unrealized losses on the Company’s investments in securities of state, municipal, and corporate obligations were primarily caused by interest rate changes. The contractual terms of those securities do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. The Company 11 does not intend to sell the securities and it is not more likely than not the Company will be required to sell the securities before recovery of their amortized cost basis, which may be maturity. The Company expects the fair value of the securities described above to recover as the securities approach their maturity or reset date. Note 5: Loans, Leases and Allowance The following table shows the composition of the loan and lease portfolio at June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Commercial mortgage $ 419,123 $ 414,316 Commercial and industrial 158,075 142,508 Construction and development 86,201 71,705 Multi-family 207,760 208,894 Residential mortgage 170,149 171,063 Home equity lines of credit 22,398 20,147 Direct financing leases 143,602 145,806 Consumer 17,951 19,280 1,225,259 1,193,719 Less Allowance for credit losses on loans and leases 16,974 16,466 Deferred loan fees 433 440 $ 1,207,852 $ 1,176,813 The Company rates all loans and leases by credit quality using the following designations: Grade 1 – Exceptional Exceptional loans and leases are top-quality loans to individuals whose financial credentials are well known to the Company. These loans and leases have excellent sources of repayment, are well documented and/or virtually free of risk (i.e., CD secured loans). Grade 2 – Quality Loans and Leases These loans and leases have excellent sources of repayment with no identifiable risk of collection, and they conform in all respects to Company policy and IDFI and FDIC regulations. Documentation exceptions are minimal or are in the process of being corrected and not of a type that could subsequently expose the Company to risk of loss. Grade 3 – Acceptable Loans This category is for “average” quality loans and leases. These loans and leases have adequate sources of repayment with little identifiable risk of collection and they conform to Company policy and IDFI and FDIC regulations. Grade 4 – Acceptable but Monitored Loans and leases in this category may have a greater than average risk due to financial weakness or uncertainty but do not appear to require classification as special mention or substandard loans. Loans and leases rated “4” need to be monitored on a regular basis to ascertain that the reasons for placing them in this category do not advance or worsen. Grade 5 – Special Mention 12 Loans and leases in this category have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or in the Company’s credit position at some future date. Special Mention loans and leases are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. This special mention rating is designed to identify a specific level of risk and concern about an asset’s quality. Although a special mention loan or lease has a higher probability of default than a pass rated loan or lease, its default is not imminent. Grade 6 – Substandard Loans and leases in this category are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Substandard loans and leases have a high probability of payment default, or they have other well-defined weaknesses. Such loans and leases have a distinct potential for loss; however, an individual loan’s or lease’s potential for loss does not have to be distinct for the loan or lease to be rated substandard. The following are examples of situations that might cause a loan or lease to be graded a “6”: • Cash flow deficiencies (losses) jeopardize future loan or lease payments. • Sale of non-collateral assets has become a primary source of loan or lease repayment. • The relationship has deteriorated to the point that sale of collateral is now the Company’s primary source of repayment, unless this was the original source of loan or lease repayment. • The borrower is bankrupt or for any other reason future repayment is dependent on court action. Grade 7 – Doubtful A loan or lease classified as doubtful has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, highly questionable and improbable. A doubtful loan or lease has a high probability of total or substantial loss. Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. Because of high probability of loss, nonaccrual accounting treatment will be required for doubtful loans and leases. Grade 8 – Loss Loans and leases classified loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan or lease has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan or lease even though partial recovery may be effected in the future. No material changes have been made to the risk characteristics discussed above from those contained in the Company's 2025 Form 10-K. 13 The following tables present the credit risk profile of the Company’s loan and lease portfolio based on rating category, payment activity, and origination year as of June 30, 2026 and December 31, 2025: 2026 2025 2024 2023 2022 Prior Revolving loans amortized cost basis Total As of June 30, 2026: Commercial mortgage Pass $ 13,192 $ 66,913 $ 42,906 $ 41,435 $ 109,517 $ 133,866 $ 2,776 $ 410,605 Substandard 873 — — — — 7,645 — 8,518 Total Commercial mortgage 14,065 66,913 42,906 41,435 109,517 141,511 2,776 419,123 Current period gross charge-offs — — — — — — — — Commercial and industrial Pass 20,802 22,741 33,564 28,969 7,761 37,755 4,699 156,291 Substandard — — — — 115 1,669 — 1,784 Total Commercial and industrial 20,802 22,741 33,564 28,969 7,876 39,424 4,699 158,075 Current period gross charge-offs — — — — — — — — Construction and development Pass 13,344 42,836 6,607 1,995 1,496 15,023 — 81,301 Substandard — — — — — 4,900 — 4,900 Total Construction and development 13,344 42,836 6,607 1,995 1,496 19,923 — 86,201 Current period gross charge-offs — — — — — — — — Multi-family Pass 6,724 18,951 17,250 11,207 71,986 74,464 — 200,582 Substandard — — — — 2,362 4,816 — 7,178 Total Multi-family 6,724 18,951 17,250 11,207 74,348 79,280 — 207,760 Current period gross charge-offs — — — — — — — — Residential mortgage Pass 13,161 19,783 13,808 31,268 23,408 66,886 60 168,374 Substandard — — — 34 119 1,622 — 1,775 Total Residential mortgage 13,161 19,783 13,808 31,302 23,527 68,508 60 170,149 Current period gross charge-offs — — — — — — — — Home equity Pass 294 46 143 111 — 57 21,694 22,345 Substandard — — — — — — 53 53 Total Home equity lines of credit 294 46 143 111 — 57 21,747 22,398 Current period gross charge-offs — — — — — — — — Direct financing leases Pass 31,804 50,461 29,231 22,472 7,385 1,230 — 142,583 Substandard — 3 15 63 65 17 — 163 Doubtful — 51 200 468 121 16 — 856 Total Direct financing leases 31,804 50,515 29,446 23,003 7,571 1,263 — 143,602 Current period gross charge-offs — 131 219 634 125 71 — 1,180 Consumer Pass 2,890 5,096 3,740 2,798 2,231 1,159 — 17,914 Substandard — 5 — — 17 15 — 37 Total Consumer 2,890 5,101 3,740 2,798 2,248 1,174 — 17,951 Current period gross charge-offs 14 — 8 25 1 1 — 49 Total Loans and Leases $ 103,084 $ 226,886 $ 147,464 $ 140,820 $ 226,583 $ 351,140 $ 29,282 $ 1,225,259 Total current period gross charge-offs $ 14 $ 131 $ 227 $ 659 $ 126 $ 72 $ — $ 1,229 14 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 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 For the three months ended June 30, 2026 and December 31, 2025, the Company did not have any revolving loans convert to term loans. 15 The following tables present the Company’s loan and lease portfolio aging analysis of the recorded investment in loans and leases as of June 30, 2026 and December 31, 2025: June 30, 2026 Delinquent Loans and Leases Current Total Portfolio Loans and Leases Total Loans and Leases > 90 Days Accruing 30-59 Days Past Due 60-89 Days Past Due 90 Days and Over Total Past Due Commercial mortgage $ 176 $ — $ 8,308 $ 8,484 $ 410,639 $ 419,123 $ — Commercial and industrial 2 — — 2 158,073 158,075 — Construction and development 100 — 4,900 5,000 81,201 86,201 — Multi-family — — 2,362 2,362 205,398 207,760 — Residential mortgage 759 285 1,775 2,819 167,330 170,149 1,701 Home equity 442 140 19 601 21,797 22,398 19 Direct financing leases 208 210 9 427 143,175 143,602 9 Consumer 123 17 37 177 17,774 17,951 37 Totals $ 1,810 $ 652 $ 17,410 $ 19,872 $ 1,205,387 $ 1,225,259 $ 1,766 December 31, 2025 Delinquent Loans and Leases Current Total Portfolio Loans and Leases Total Loans and Leases > 90 Days Accruing 30-59 Days Past Due 60-89 Days Past Due 90 Days and Over Total Past Due Commercial mortgage $ — $ — $ 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 126 70 88 284 19,863 20,147 88 Direct financing 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 16 The following table presents information on the Company’s nonaccrual loans and leases at June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 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 $ 8,310 $ 7,205 $ 7,435 $ 6,732 Commercial and industrial 28 — 30 — Construction and development 4,900 — 4,900 — Multi-family 5,854 2,362 — — Residential mortgage 74 74 76 76 Direct financing leases 856 856 715 715 Total nonaccrual loans and leases $ 20,022 $ 10,497 $ 13,156 $ 7,523 During the three months ended June 30, 2026, the Company recognized $ 9,000 of interest income on nonaccrual loans and leases, compared to $ 3,000 for the three months ended December 31, 2025. The following tables present the Company's amortized cost basis of collateral dependent loans, and their respective collateral type, which are individually analyzed to determine expected credit losses as of June 30, 2026 and December 31, 2025: June 30, 2026 Commercial Real Estate Multi-family Housing Residential Real Estate Home Equity Line of Credit Other Total Allowance on Collateral Dependent Loans Commercial mortgage $ 8,309 $ — $ — $ — $ — $ 8,309 $ 450 Commercial and industrial — — — — 1,642 1,642 — Construction and development 4,900 — — — — 4,900 1,750 Multi-family — 7,178 — — — 7,178 250 Residential mortgage — — 237 — — 237 — Home equity — — — 34 — 34 — Total $ 13,209 $ 7,178 $ 237 $ 34 $ 1,642 $ 22,300 $ 2,450 17 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 Loan/Lease Modification Disclosures under ASU No. 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 reducing the allowance for credit losses. During the three and six months ended June 30, 2026, the Company modified one multifamily loan to borrowers experiencing financial difficulty. The modification involved an interest-rate reduction and payment term change. The total amortized cost basis of the modified loan was $ 3.5 million at the time of modification. Under the modified terms, the contractual interest rate was reduced from 7.125 % to 6.125 %. Additionally, 50 % of the interest due will be paid currently, with the remaining 50 % capitalized into the outstanding principal balance. During the three and six months ended June 30, 2025, the Company had no new modifications to borrowers experiencing financial difficulty. There were no modified loans or leases that had a payment default during the three or six months ended June 30, 2026 or 2025, and that were modified in the preceding twelve months by borrowers experiencing financial difficulty. Other Real Estate Owned Other real estate owned is included in other assets on the Condensed Consolidated Balance Sheets. There was $ 56,000 of other real estate owned, consisting of foreclosed residential real estate properties, at both June 30, 2026 and December 31, 2025. At June 30, 2026 and December 31, 2025, the recorded investment in consumer and commercial mortgage loans secured by real estate properties for which formal foreclosure proceedings were in process w a s $ 8,312,000 a nd $ 923,000 , respectively. Direct Financing Leases The following lists the components of the net investment in direct financing leases: June 30, 2026 December 31, 2025 Total minimum lease payments to be received $ 165,165 $ 166,565 Initial direct costs 8,669 9,422 173,834 175,987 Less: Unearned income ( 30,232 ) ( 30,181 ) Net investment in direct financing leases $ 143,602 $ 145,806 The following table summarizes the future minimum lease payments receivable subsequent to June 30, 2026: 18 Remainder of 2026 $ 34,263 2027 56,200 2028 39,569 2029 22,882 2030 10,307 Thereafter 1,944 $ 165,165 Allowance for Credit Losses on Loans and Leases The allowance for credit losses on loans and leases is established for 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 or lease'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 cash flow ("CF") analysis method of estimating expected losses, which relies on key inputs and assumptions. Significant factors affecting the calculation are the segmenting of loans and leases based upon similar risk characteristics, applied loss rates based upon reasonable and supportable forecasts, and contractual term adjustments, including prepayment and curtailment adjustments. To ensure the allowance is maintained at an adequate level, a detailed analysis is performed on a quarterly basis, with an appropriate provision made to adjust the allowance. The Company has elected to exclude accrued interest receivable from the calculation of the allowance for credit losses, since it is the Company's policy to write off accrued interest in a timely manner as it is deemed uncollectible by reversing interest income. The Company categorizes its loan portfolios into eight segments, as discussed above, based on similar risk characteristics. Loans within each segment are collectively evaluated using either a CF methodology or remaining life methodology. When estimating for credit loss, the Company forecasts the first four quarters of the credit loss and reverts to a long-run average of each considered factor. The Company developed its reasonable and supportable forecasts using economic data, such as national gross domestic product ("GDP") and unemployment rate. Qualitative adjustments are applied to each collectively segmented pool to appropriately capture differences in current or expected qualitative risk characteristics. When evaluating the estimation for expected credit losses, the Company evaluates these qualitative adjustments for any changes in the following factors: • lending policies, procedures, and strategies, • the nature and volume of the loan and lease portfolio, • international, national, regional, and local conditions, • the experience, depth, and ability of lending management, • the volume and severity of past due loans, • the quality of the loan review system, • the underlying collateral, • concentration risk, and • the effect of other external factors. The following tables summarize changes in the allowance for credit losses by segment for the three and six months ended June 30, 2026 and 2025, respectively: 19 Balances, March 31, 2026 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, June 30, 2026 Commercial mortgage $ 4,813 $ ( 65 ) $ — $ — $ 4,748 Commercial and industrial 1,808 233 — 9 2,050 Construction and development 2,463 45 — — 2,508 Multi-family 2,327 ( 40 ) — — 2,287 Residential mortgage 1,787 20 — 1 1,808 Home equity 200 10 — — 210 Direct financing leases 3,006 566 ( 642 ) 89 3,019 Consumer 336 22 ( 38 ) 24 344 Total $ 16,740 $ 791 $ ( 680 ) $ 123 $ 16,974 Balances, December 31, 2025 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, June 30, 2026 Commercial mortgage $ 4,575 $ 173 $ — $ — $ 4,748 Commercial and industrial 1,812 219 — 19 2,050 Construction and development 2,298 210 — — 2,508 Multi-family 2,336 ( 49 ) — — 2,287 Residential mortgage 1,833 ( 27 ) — 2 1,808 Home equity 189 21 — — 210 Direct financing leases 3,075 858 ( 1,180 ) 266 3,019 Consumer 348 7 ( 49 ) 38 344 Total $ 16,466 $ 1,412 $ ( 1,229 ) $ 325 $ 16,974 Balances, March 31, 2025 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, June 30, 2025 Commercial mortgage $ 4,734 $ 54 $ — $ — $ 4,788 Commercial and industrial 1,623 34 — 3 1,660 Construction and development 2,001 142 — — 2,143 Multi-family 2,807 ( 155 ) — — 2,652 Residential mortgage 1,901 ( 27 ) — 2 1,876 Home equity 196 15 — — 211 Direct financing leases 2,467 633 ( 647 ) 59 2,512 Consumer 349 71 ( 60 ) 17 377 Total $ 16,078 $ 767 $ ( 707 ) $ 81 $ 16,219 20 Balances, December 31, 2024 Provision for (reversal of) credit losses Charge-offs Recoveries Balances, June 30, 2025 Commercial mortgage $ 4,486 $ 302 $ — $ — $ 4,788 Commercial and industrial 1,483 172 — 5 1,660 Construction and development 2,243 ( 100 ) — — 2,143 Multi-family 2,660 ( 8 ) — — 2,652 Residential mortgage 1,910 ( 56 ) — 22 1,876 Home equity 184 27 — — 211 Direct financing leases 2,469 1,042 ( 1,165 ) 166 2,512 Consumer 356 71 ( 100 ) 50 377 Total $ 15,791 $ 1,450 $ ( 1,265 ) $ 243 $ 16,219 During the second quarter of 2026, the allowance for credit losses on loans and leases increased from $ 16.7 million at March 31, 2026, to $ 17.0 million at June 30, 2026. The increase was attributable to provisions for credit losses totaling $ 791,000 during the three months ended June 30, 2026, partially offset by net charge-offs of $ 557,000 . Set forth below is a segment analysis of the loan and lease portfolio reflecting the change in the allowance for each segment. • Commercial Mortgage – Allowance decreased due to improved modeled loss rates. • Commercial & Industrial – Allowance increased due in part to a $ 12.9 million increase in portfolio balances. • Construction & Development – Allowance increased due in part to an $ 11.9 million increase in portfolio balances. • Multi-Family – Allowance decreased as portfolio balances decreased $ 274,000 . • Consumer - Allowance increased while portfolio loan balances decreased $ 228,000 . • Residential Mortgage, Direct Financing Leases, and Home Equity – Allowances increased due to higher portfolio balances. Our commercial loan portfolio, consisting of commercial and multi-family real estate loans, commercial and industrial loans, and construction loans, represented 71.1 % and 70.2 % of our total loan and lease portfolio as of June 30, 2026 and December 31, 2025, respectively. The allowance for credit losses on loans and leases allocated to the commercial loan portfolio represented 68.3 % and 66.9 % of our total allowance at June 30, 2026 and December 31, 2025, respectively. Economic Outlook Due to the future-focused nature of the calculation for the allowance for credit losses, management must make significant assumptions. Estimating an appropriate allowance requires management to use relevant forward-looking information drawn from reasonable and supportable forecasts. Economic factors are a consequential part of these forecasts, and as such are evaluated periodically for developments that may impact the Company's allowance for credit losses and loan and lease portfolio. As of June 30, 2026, several key economic factors continue to influence the Company's loan and lease portfolio. Persistent inflation, slowing economic growth, and labor market uncertainty are contributing to a more challenging operating environment for many borrowers. In addition, geopolitical tensions and tariff-related risks are creating potential disruptions in supply chains and increased input costs for certain industries. These conditions may continue to affect borrower performance and credit demand in the near term. Management continues to evaluate macroeconomic assumptions used in the allowance for credit losses model to ensure they reflect current and expected economic conditions. The Company remains focused on its three strategic growth markets: Columbus, Ohio, Cincinnati/Dayton/Springfield, Ohio, and Indianapolis, Indiana. These markets continue to exhibit strong commercial activity and resilient real estate fundamentals relative to broader economic trends. The Company's loan growth in these markets continues to be concentrated in commercial real estate lending, consistent with its strategic focus and relationship-based lending model. Forecasts for these markets are summarized below: 21 • Columbus, Ohio – The Columbus MSA continues to experience steady economic conditions, driven by ongoing investments in technology and infrastructure. The housing market's high demand continues to be supported by long-term population growth and regional investments. Despite the positive momentum, the market faces challenges such as utility and power constraints, housing deficits, and labor shortages across multiple industries. • Cincinnati/Dayton/Springfield, Ohio – The Cincinnati/Dayton/Springfield MSA is projected to experience moderate economic growth during 2026. Cincinnati continues to experience moderate economic expansion supported by manufacturing and technology investments. Dayton remains economically resilient despite manufacturing layoffs, supported by a stable real estate market and collaboration with JobsOhio. The region faces challenges such as stagnant population growth as well as infrastructure and budgetary issues. However, the region’s connection with Columbus as part of Ohio’s emerging Silicon Corridor enhances opportunities for investment, workforce development, and regional competitiveness. • Indianapolis, Indiana – The Indianapolis MSA continues to demonstrate moderate growth driven by expanding industrial and logistics sectors as well as ongoing urban revitalization initiatives. Downtown capital projects totaling approximately $ 4 billion are underway; the READI 2.0 program commits funding toward improving quality of life and infrastructure in the region. Tariff-related impacts on manufacturing and rising unemployment projections present ongoing challenges; however, the region remains well positioned relative to peer metros due to its diversified and innovation-driven economy. The overall economic outlook remains complex and uncertain, creating a challenging environment requiring continued vigilance and adaptability. Potential economic volatility could materially affect the Company’s loan and lease portfolio, including the allowance for credit losses. As a result, the Company expects that future estimates of the allowance for credit losses may fluctuate throughout the remainder of 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. Adjustments to the allowance, either additional provisions or reversals, are recorded in the provision for (reversal of) credit losses in the Condensed Consolidated Statements of Income. The following table details activity in the allowance for credit losses on unfunded commitments during the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, 2026 2025 Beginning balance $ 400 $ 607 Provision for (recovery of) credit losses 32 ( 23 ) Ending balance $ 432 $ 584 Six Months Ended June 30, 2026 2025 Beginning balance $ 328 $ 558 Provision for credit losses 104 26 Ending balance $ 432 $ 584 Note 6: Fair Value of Financial Instruments 22 Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 Unobservable inputs supported by little or no market activity that are significant to the fair value of the assets or liabilities Recurring Measurements The following tables present the fair value measurements of assets recognized in the Condensed Consolidated Balance Sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2026 and December 31, 2025: 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) June 30, 2026 Available for sale securities SBA Pools $ 2,811 $ — $ 2,811 $ — Federal agencies 14,052 — 14,052 — State and municipal obligations 130,222 — 128,759 1,463 Mortgage-backed securities - GSE residential 88,050 — 88,050 — Corporate obligations 10,136 — 10,136 — $ 245,271 $ — $ 243,808 $ 1,463 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 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 Condensed Consolidated Balance Sheets, as well as the general classification of such 23 assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the six months ended June 30, 2026. Available for Sale Securities Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy, which includes equity securities. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 2 securities include agency securities, obligations of state and political subdivisions, and mortgage-backed securities. Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities without relying exclusively on quoted prices for specific investment securities, but rather relying on the investment securities’ relationship to other benchmark quoted investment securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Nonrecurring Measurements As of June 30, 2026 and December 31, 2025, there were no assets or liabilities measured at fair value on a nonrecurring basis. Fair Value of Financial Instruments The following tables present estimated fair values of the Company’s financial instruments at June 30, 2026 and December 31, 2025: Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) June 30, 2026 Financial assets Cash and cash equivalents $ 34,721 $ 34,721 $ — $ — Interest-earning time deposits 2,850 — 2,850 — Available for sale securities 245,271 — 243,808 1,463 Held to maturity securities 2,354 — 2,717 — Loans and leases receivable, net 1,207,852 — — 1,175,116 FHLB stock 13,907 — 13,907 — Interest receivable 6,256 — 6,256 — Financial liabilities Deposits 1,146,643 — 1,046,573 — FHLB advances 244,000 — 243,600 — Interest payable 2,941 — 2,941 — 24 Fair Value Measurements Using Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2025 Financial assets Cash and cash equivalents $ 33,130 $ 33,130 $ — $ — Interest-earning time deposits 2,070 — 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 — Note 7: Earnings per Share Basic EPS is computed by dividing net income allocated to common stock by the weighted average number of common shares outstanding during the period, which excludes the participating securities. Diluted EPS includes the dilutive effect of additional potential common shares from stock compensation awards, but excludes awards considered participating securities. ESOP shares are not considered outstanding for EPS until the shares are committed to be released to participants. The following table presents the computation of basic and diluted EPS for the periods indicated: Three Months Ended June 30, 2026 2025 Net income $ 2,227 $ 2,602 Shares outstanding for Basic EPS: Average shares outstanding 10,502,375 10,416,086 Less: average restricted stock award shares not vested 88,185 82,463 Less: average unearned ESOP Shares 721,254 775,360 Shares outstanding for Basic EPS 9,692,936 9,558,263 Additional Dilutive Shares 220,421 286,609 Shares outstanding for Diluted EPS 9,913,357 9,844,872 Basic Earnings Per Share $ 0.23 $ 0.27 Diluted Earnings Per Share $ 0.22 $ 0.26 25 Six Months Ended June 30, 2026 2025 Net income $ 5,012 $ 4,570 Shares outstanding for Basic EPS: Average shares outstanding 10,501,821 10,563,679 Less: average restricted stock award shares not vested 88,281 82,918 Less: average unearned ESOP Shares 727,979 782,085 Shares outstanding for Basic EPS 9,685,561 9,698,676 Additional Dilutive Shares 201,916 265,482 Shares outstanding for Diluted EPS 9,887,477 9,964,158 Basic Earnings Per Share $ 0.52 $ 0.47 Diluted Earnings Per Share $ 0.51 $ 0.46 Note 8: Benefit Plans 401(k) The Company has a retirement savings 401(k) plan, in which substantially all employees may participate. The Company matches employees' contributions at the rate of 50 percent for the first six percent of base salary contributed by participants. The Company’s expense for the plan was $ 58,000 and $ 94,000 for the three and six months ended June 30, 2026 and $ 66,000 and $ 130,000 for the three and six months ended June 30, 2025. Employee Stock Ownership Plan As part of the reorganization and related stock offering, the Company established an Employee Stock Ownership Plan, or ESOP, covering substantially all employees. The ESOP acquired 1,082,130 shares of Company common stock at an average price of $ 13.59 per share on the open market with funds provided by a loan from the Company. Dividends on unallocated shares used to repay the loan from the Company are recorded as a reduction of the loan or accrued interest, as applicable. Dividends on allocated shares paid to participants are reported as compensation expense. Unearned ESOP shares, which have not yet been allocated to ESOP participants, are excluded from the computation of average shares outstanding for the earnings per share calculation. Accordingly, $ 9,619,000 and $ 9,987,000 of common stock acquired by the ESOP were shown as a reduction of stockholders’ equity at June 30, 2026 and December 31, 2025, respectively. Shares are released to participants proportionately as the loan is repaid. 26 ESOP expense for the three and six months ended June 30, 2026 was $ 199,000 and $ 386,000 , respectively, and was $ 181,000 and $ 360,000 for the three and six months ended June 30, 2025 , respectively. June 30, 2026 December 31, 2025 Earned ESOP shares 374,254 347,201 Unearned ESOP shares 707,876 734,929 Total ESOP shares 1,082,130 1,082,130 Quoted per share price $ 15.88 $ 14.04 Fair value of earned shares (in thousands) $ 5,943 $ 4,875 Fair value of unearned shares (in thousands) $ 11,241 $ 10,318 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 . Under the Company's 2020 Equity Incentive Plan (the "2020 EIP"), 453,086 shares of common stock were granted in fiscal years 2020 and 2021 with grant date fair values ranging from $ 10.53 to $ 13.86 per share. As of June 30, 2026, 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 grant date 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 per share (total grant date fair value of $ 662,000 at issuance) to eligible participants. These awards vest in five equal 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 eligible recipients in future grants until the 2020 EIP expires in September 2030. The following table summarizes the restricted stock award activity in the 2020 EIP during the six months ended June 30, 2026. Six Months Ended June 30, 2026 Number of Restricted Shares Weighted Average Grant Date Fair Value Non-vested, beginning of period 88,379 $ 13.11 Granted — — Vested ( 17,677 ) 13.11 Forfeited — — Non-vested, June 30, 2026 70,702 13.11 Total compensation cost recognized in the Condensed Consolidated Statements of Income for restricted stock awards during the three and six months ended June 30, 2026 was $ 80,000 and $ 159,000 , and the related tax benefit recognized was $ 17,000 and $ 33,000 , respectively. As of June 30, 2026, there was $ 926,000 of unrecognized compensation expense related to restricted stock awards. Stock Option Plan. Under the Company's 2020 EIP, options to purchase an aggregate of 1,103,657 shares of common stock were granted in fiscal years 2021 and 2022 at exercise prices ranging from $ 10.53 to $ 13.86 per share. As of June 30, 2026, these awards were fully vested. 27 On July 15, 2025, the Company awarded options to purchase 55,467 shares of common stock under the 2020 EIP with an exercise price of $ 13.37 per share, which represented the fair value of a share of the Company's common stock on the date of grant, to eligible participants. These awards vest in five equal annual installments, with the first vesting occurring on June 30, 2026. Forfeited options are available to be awarded in future grants until the 2020 EIP terminates in September 2030. The following table summarizes the stock option activity in the 2020 EIP during the six months ended June 30, 2026. Six Months Ended June 30, 2026 Number of Shares Weighted-Average Exercise Price Balance at beginning of period 760,852 $ 10.76 Granted — — Exercised ( 3,500 ) 10.53 Forfeited/expired — — Balance, June 30, 2026 757,352 10.76 Exercisable at end of period 712,979 $ 10.60 The fair value of options granted is estimated on the date of the grant using a Black Scholes model with the following assumptions: July 15, 2025 Dividend yields 4.49 % Volatility factors of expected market price of common stock 30.00 % Risk-free interest rates 4.16 % Expected life of options 6.5 years A summary of the status of the Company stock option shares as of June 30, 2026 is presented below. Shares Weighted Average Grant Date Fair Value Non-vested, beginning of year 55,467 $ 3.00 Vested ( 11,094 ) — Non-vested, June 30, 2026 44,373 $ 3.00 Total compensation cost recognized in the Condensed Consolidated Statements of Income for option-based payment arrangements for the three and six months ended June 30, 2026 was $ 8,000 and $ 17,000 , respectively, and the related tax benefit recognized was $ 0 for both periods. As of June 30, 2026, there was $ 129,000 in unrecognized compensation expense related to the stock option awards. Note 9: 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 June 30, 2026 and December 31, 2025, the balance of these investments in LIHTC totaled $ 682,000 and $ 775,000 , respectively. These balances are reflected in the other assets line of the Condensed Consolidated Balance Sheets. The assets are amortized as a component of the provision for income taxes. 28 The following table summarizes the amortization expense and tax credits recognized for the Company's LIHTC investments for the three and six months ended June 30, 2026 and 2025. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Amortization expense $ 49 $ 44 $ 93 $ 87 Tax credits recognized 47 43 94 91 Note 10: 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 operations, products, and services. The CODM evaluates the financial performance of the Company's business components by assessing revenue streams, significant expenses, and budget-to-actual results. The Company's primary source of revenue is providing banking services to its customers. Significant expenses associated with banking operations include interest expense, credit loss expense, and salaries and employee benefits. The CODM evaluates performance, directs resource allocation, and makes key operating decisions based on consolidated net income reported in the Condensed Consolidated Statements of Income. Segment assets are measured based on total consolidated assets as reported in the Condensed Consolidated Balance Sheets. 29