FNRN US Equity☆

ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

Introduction

This overview highlights selected information in this Annual Report on Form 10-K and may not contain all of the information that is important to you. For a more complete understanding of trends, events, commitments, uncertainties, liquidity, capital resources, and critical accounting estimates, you should carefully read this entire Annual Report on Form 10-K. For a discussion of changes in results of operations comparing the years ended December 31, 2024 and 2023, for the Company and its subsidiary, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 7, 2025.

Our subsidiary, First Northern Bank of Dixon, is a California state-chartered bank that derives most of its revenues from lending and deposit taking in the Sacramento Valley region of Northern California. Interest rates, business conditions and customer confidence all affect our ability to generate revenues. In addition, the regulatory environment and competition can challenge our ability to generate those revenues.

Financial highlights for 2025 include:

The Company reported net income of $21.1 million for 2025, a 5.5% increase compared to net income of $20.0 million for 2024. Net income per common share for 2025 was $1.30, an increase of 8.3% compared to net income per common share of $1.20 for 2024. Net income per common share on a fully diluted basis was $1.27 for 2025, an increase of 6.7% compared to net income per common share on a fully diluted basis of $1.19 for 2024.

Net interest income totaled $67.5 million for 2025, an increase of 4.8% from $64.4 million in 2024, primarily due to increases in yields earned on loans and investment securities, which was partially offset by decreases both in volume and yield earned on due from banks and increases in average rate paid on average interest-bearing transaction deposits and savings and MMDAs. Net interest margin was 3.77% for the year ended 2025 which was a 4.7% or 17 basis point increase from the 3.60% reported for the year ended 2024.

No provision for credit losses was recorded in 2025, compared to a reversal of provision for credit losses of $0.3 million in 2024. No provision for credit losses was recorded in 2025 primarily due to positive trends in gross domestic product and single-family home prices, coupled with an overall decrease in forecasted loss rates and improvements in qualitative risk factors.

Non-interest income totaled $6.1 million in 2025, an increase of 1.3% from $6.0 million in 2024. The increase was primarily due to a decrease in realized losses on sales/calls of available for sale securities and an increase in other income, which was partially offset by decreases in service charges on deposit accounts and debit card income.

Non-interest expenses totaled $46.2 million for 2025, up 7.9% from $42.8 million in 2024. The increase was primarily due to increases in salaries and employee benefits, occupancy and equipment, data processing and legal fees. The increase in salaries and benefits was primarily due to an increase in full-time equivalent employees and increases in contingent compensation and group medical insurance expense. The increase in occupancy and equipment was primarily due to an increase in service contracts related to upgrading and maintaining facilities. The increase in data processing was primarily due to an increase in costs of service contracts.

The Company reported total assets of $1.91 billion and $1.89 billion for the years ended December 31, 2025 and 2024, respectively.

Investments totaled $617.2 million as of December 31, 2025, a 2.6% decrease from $633.9 million as of December 31, 2024. U.S. Treasury securities totaled $87.5 million as of December 31, 2025, down 17.0% from $105.5 million as of December 31, 2024; securities of U.S. government agencies and corporations totaled $85.3 million, down 10.8% from $95.7 million as of December 31, 2024; obligations of state and political subdivisions totaled $75.0 million, up 11.0% from $67.6 million as of December 31, 2024; collateralized mortgage obligations totaled $92.3 million, down 2.8% from $95.0 million as of December 31, 2024; and mortgage-backed securities totaled $277.1 million, up 2.6% from $270.1 million as of December 31, 2024.

35

Table of Contents

Loans (including loans held-for-sale), net of allowance, totaled $1.050 billion as of December 31, 2025, a 0.4% increase from $1.047 billion as of December 31, 2024. Commercial loans totaled $146.2 million as of December 31, 2025, up 24.0% from $117.9 million as of December 31, 2024; commercial real estate loans were $702.5 million, down 2.9% from $723.6 million as of December 31, 2024; agriculture loans were $93.6 million, up 1.1% from $92.6 million as of December 31, 2024; residential mortgage loans were $100.7 million, down 4.9% from $105.9 million as of December 31, 2024; residential construction loans were $5.8 million, down 14.9% from $6.9 million as of December 31, 2024; and consumer loans totaled $15.5 million, down 1.5% from $15.7 million as of December 31, 2024.

Deposits totaled $1.68 billion as of December 31, 2025, a 1.2% decrease from $1.70 billion as of December 31, 2024.

There were no FHLB advances outstanding as of December 31, 2025 and December 31, 2024.

Stockholders' equity increased to $212.0 million as of December 31, 2025, a 20.2% increase from $176.3 million as of December 31, 2024. The increase was primarily due to 2025 net income of $21.1 million and a decrease in accumulated other comprehensive loss, net of $18.4 million.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, income and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to the allowance for credit losses. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements:

Allowance for Credit Losses on Loans

The Company believes the allowance for credit losses (ACL) accounting policy is critical because the loan portfolio represents the largest asset on the consolidated balance sheet, and there is significant judgment used in determining the adequacy of the ACL. Management estimates the ACL using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Loan losses are charged off against the allowance, while recoveries of amounts previously charged off are credited to the allowance. A provision for credit losses is based on the Company’s periodic evaluation of the factors mentioned below, as well as other pertinent factors.

In determining the ACL, accruing loans with similar risk characteristics are generally evaluated collectively. To estimate expected losses the Company generally utilizes historical loss trends and the remaining contractual lives of the loan portfolios to determine estimated credit losses through a reasonable and supportable forecast period. The Company utilized a reasonable and supportable forecast period of approximately four quarters and obtained the forecast data from Moody’s Analytics. Individual loan credit quality indicators, including historical credit losses, have been statistically correlated with various econometrics, including national unemployment rate, national gross domestic product, and single-family home prices. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. The Company also considered the impact of portfolio concentrations, changes in underwriting practices, imprecision in its economic forecasts, and other risk factors that might influence its loss estimation process. Increases in external risk factors due to more pessimistic business and economic conditions could potentially add $4.6 million based on existing loan balances, if not more, to the ACL. While management utilizes its best judgment and information available, the ultimate adequacy of our allowance accounts is dependent upon a variety of factors beyond our control, including the performance of our portfolios, the economy and changes in interest rates.

36

Table of Contents

Impact of Recently Issued Accounting Standards

Accounting Standards Adopted in 2025

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Among other things, these amendments provide additional transparency into an entity’s income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The standard requires that public business entities disclose, on an annual basis, specific categories in the rate reconciliation and additional information for reconciling items meeting a certain quantitative threshold. The amendments also require that entities disclose on an annual basis: 1) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes and 2) the income taxes paid (net of refunds received) disaggregated by individual jurisdictions exceeding 5% of total income taxes paid (net of refunds received). The amendments are effective for public business entities for annual periods beginning after December 15, 2024. The Company adopted this ASU retrospectively. Adoption of this ASU did not have a material impact on the Company's consolidated financial statements. For additional information, see Note 18 to the Consolidated Financial Statements in this Form 10-K.

In March 2024, the FASB issued guidance within ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The amendments in the ASU apply to companies that provide employees and non-employees with profits interest and similar awards to align compensation with a company’s operating performance and provide those holders with the opportunity to participate in future profits and/or equity appreciation of the company. The purpose of the ASU is to clarify the application of the scope guidance in Accounting Standards Codification (ASC) paragraph 718-10-15-3 in determining if a profit interest award should be accounted for in accordance with Topic 718: Compensation—Stock Compensation. The amendment in ASC paragraph 718-10-15-3 is solely intended to improve the overall clarity and does not change the guidance. The ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If a company adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes the interim period. The amendments should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) on a prospective basis. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements, as the Company does not typically provide these types of awards. For additional information, see Note 15 to the Consolidated Financial Statements in this Form 10-K.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. ASU 2025-01 amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.

In November 2025, the FASB issued ASU 2025-08, Financial Instruments - Credit Losses (Topic 326): Purchased Loans. This ASU expands the population of acquired financial assets accounted for using the gross-up approach. Acquired loans (excluding credit cards) are deemed purchased seasoned loans and accounted for using the gross-up approach upon acquisition if criteria established by the new guidance are met. This change aims to enhance comparability, consistency, and better reflect the economics of acquiring financial assets. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. This ASU enables entities to apply hedge accounting to a greater number of highly effective economic hedges in the following five areas: similar risk assessment for cash flow hedges, hedging forecasted interest payments on choose-your-rate debt instruments, cash flow hedges of nonfinancial forecasted transactions, net written options as hedging instruments, foreign-currency-denominated debt instrument as hedging instrument and hedged item (dual hedge). This ASU is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted on any date on or after the issuance of ASU No. 2025-09. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.

37

Table of Contents

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU does not change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. The amendments in this ASU: clarify that the guidance in Topic 270 applies to all entities that provide interim financial statements and notes in accordance with GAAP; create a comprehensive list in FASB Accounting Standards Codification Topic 270 of interim disclosures that are required in interim financial statements and notes in accordance with GAAP; incorporate a disclosure principle, which is modeled after previous SEC guidance, that requires entities to disclose events and changes that occur after the end of the most recent fiscal year that have a material impact on the entity; and improve guidance about information included in and the format of interim financial statements. The amendments in this ASU are effective for pubic business entities for interim periods within annual periods beginning after December 15, 2027. Early adoption is permitted for all entities. The amendments can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements. The amendments in this ASU update the FASB ASC for a broad range of Topics arising from technical corrections, unintended application of the ASC, clarifications, and other minor improvements. The amendments in this ASU, which addresses 33 issues, affect a wide variety of Topics in the ASC and apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this ASU are effective for all entities for annual periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted in both interim and annual periods in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.

38

Table of Contents

STATISTICAL INFORMATION AND DISCUSSION

The following statistical information and discussion should be read in conjunction with the audited consolidated financial statements and accompanying notes included in Part II (Item 8) of this Annual Report on Form 10-K.

The following tables present information regarding the consolidated average assets, liabilities and stockholders’ equity, the amounts of interest income from average earning assets and the resulting yields, and the amount of interest expense paid on interest-bearing liabilities. Average loan balances include non-performing loans. Interest income includes proceeds from loans on non-accrual status only to the extent cash payments have been received and applied as interest income. Tax-exempt income is not shown on a tax equivalent basis.

Distribution of Assets, Liabilities and Stockholders’ Equity;

Interest Rates and Interest Differential

(Dollars in thousands)

Average Balance Percent Average Balance Percent

ASSETS

LIABILITIES & STOCKHOLDERS’ EQUITY

Deposits:

FHLB advances 1,645 0.1 % — — %

39

Table of Contents

Net Interest Earnings

Average Balances, Yields and Rates

(Dollars in thousands)

Investment Securities:

40

Table of Contents

Continuation of

Net Interest Earnings

Average Balances, Yields and Rates

(Dollars in thousands)

Interest-Bearing Liabilities:

Interest payable and Other Liabilities 15,056 16,542

Net Interest Spread (2) 3.16 % 2.98 %

41

Table of Contents

Analysis of Changes

in Interest Income and Interest Expense

(Dollars in thousands)

Following is an analysis of changes in interest income and expense (dollars in thousands) for 2025 over 2024. Changes not solely due to interest rate or volume have been allocated proportionately to interest rate and volume.

Volume Interest Rate Change

Investment Securities - Non-taxable 290 136 426

Other Earning Assets 25 (58 ) (33 )

Increase (decrease) in Interest Income (315 ) 3,970 3,655

Deposits:

Interest-Bearing Transaction Deposits 76 338 414

FHLB advances 75 — 75

Increase (decrease) in Interest Expense (19 ) 562 543

Increase (decrease) in Net Interest Income: $ (296 ) $ 3,408 $ 3,112

42

Table of Contents

INVESTMENT PORTFOLIO

Composition of Investment Securities

The mix of investment securities held by the Company at December 31 of the previous two fiscal years was as follows (dollars in thousands):

Investment securities available-for-sale (at fair value):

Securities of U.S. Government Agencies and Corporations 85,344 95,684

Obligations of State and Political Subdivisions 75,003 67,591

Maturities of Investment Securities

The following table summarizes the contractual maturity (dollars in thousands) and projected yields of the Company’s investment securities as of December 31, 2025. The yields on tax-exempt securities are shown on a tax equivalent basis. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. In addition, factors such as prepayments and interest rates may affect the yield on carrying value of mortgage related securities.

Period to Maturities

After One But After Five But

Within One Year Within Five Years Within Ten Years

Amount Yield Amount Yield Amount Yield

Investment securities available-for-sale (at fair value):

After Ten Years Total

Amount Yield Amount Yield

Investment securities available-for-sale (at fair value):

U.S. Treasury Securities $ — — $ 87,556 3.45 %

Securities of U.S. Government Agencies and Corporations — — 85,344 2.84 %

43

Table of Contents

LOAN PORTFOLIO

Composition of Loans

The mix of loans, net of deferred origination fees and costs and allowance for credit losses and excluding loans held-for-sale, at December 31, 2025 and December 31, 2024 was as follows (dollars in thousands):

Balance Percent Balance Percent

Net deferred origination fees and costs 733 142

As shown in the comparative figures for loan mix during 2025 and 2024, total loans increased primarily as a result of an increase in commercial loans, which was partially offset by decreases in commercial real estate and residential mortgage loans.

Commercial loans are primarily for financing the needs of a diverse group of businesses located in the Bank’s market areas. Commercial real estate loans generally fall into two categories, owner-occupied and non-owner occupied. Real estate construction loans are generally for financing the construction of single-family residential homes for individuals and builders we believe are well-qualified. These loans are secured by real estate and have short maturities. Residential mortgage loans, which are secured by real estate, include owner-occupied and non-owner-occupied properties in the Bank’s market areas. Loans are considered agriculture loans when the primary source of repayment is from the sale of an agricultural or agricultural-related product or service. Such loans are secured and/or unsecured to producers and processors of crops and livestock. The Bank also makes loans to individuals for investment purposes.

44

Table of Contents

Maturities and Sensitivities of Loans to Changes in Interest Rates

The following table presents the maturity distribution of our loan portfolio at December 31, 2025 (dollars in thousands) (excludes loans held-for-sale). The table also presents the portion of loans that have fixed interest rates or variable interest rates that fluctuate over the life of the loans in accordance with changes in an interest rate index.

Loans with fixed interest rates:

Residential Construction 83 — — — 83

Loans with variable interest rates:

Non-Accrual, Past Due, OREO and Loan Modifications

It is generally the Company’s policy to discontinue interest accruals once a loan is past due for a period of 90 days as to interest or principal payments. When a loan is placed on non-accrual, interest accruals cease and uncollected accrued interest is reversed and charged against current income. Payments received on non-accrual loans are applied against principal. A loan may only be restored to an accruing basis when it again becomes well secured and in the process of collection or all past due amounts have been collected and an appropriate period of performance has been demonstrated.

The following table summarizes the Company’s non-accrual loans by loan category (dollars in thousands), net of guarantees of the State of California and U.S. Government, including its agencies and its government-sponsored agencies, at December 31, 2025 and 2024.

Gross Guaranteed Net Gross Guaranteed Net

Residential construction — — — — — —

45

Table of Contents

Non-accrual loans amounted to $6,030,000 at December 31, 2025, and were comprised of one commercial loan totaling $139,000, one commercial real estate loan totaling $657,000, four agriculture loans totaling $4,423,000, three residential mortgage loans totaling $174,000 and five consumer loans totaling $637,000. Non-accrual loans amounted to $11,212,000 at December 31, 2024, and were comprised of one commercial loan totaling $139,000, one commercial real estate loan totaling $7,993,000, two agriculture loans totaling $2,236,000, three residential mortgage loans totaling $202,000 and four consumer loans totaling $642,000.

If interest on non-accrual loans had been accrued, such interest income would have approximated $627,000 and $497,000 during the years ended December 31, 2025 and 2024, respectively. Income actually recognized on nonaccrual loans at payoff approximated $421,000 and $450,000 for the years ended December 31, 2025 and 2024, respectively.

A loan is considered to be collateral dependent when repayment is expected to be provided substantially through the operation or sale of the collateral. The ACL on collateral dependent loans is measured using the fair value of the underlying collateral, adjusted for costs to sell when applicable, less the amortized cost basis of the financial asset. It is generally the Company’s policy that if the value of the underlying collateral is determined to be less than the recorded amount of the loan, a charge-off will be taken.

As the following table illustrates, total non-performing assets, which consists of loans on non-accrual status, loans past due 90-days and still accruing and Other Real Estate Owned ("OREO") net of guarantees of the State of California and U.S. Government, including its agencies and its government-sponsored agencies, decreased $4,750,000, or 42.9%, to $6,323,000 from December 31, 2024 to December 31, 2025. Non-performing assets net of guarantees represented 0.3% and 0.6% of total assets at December 31, 2025 and 2024, respectively. The Bank’s management believes that the $6,030,000 in non-accrual loans were appropriately reflected at the lower of the carrying value of the loan or the fair value of the underlying collateral at December 31, 2025. However, no assurance can be given that the existing or any additional collateral will be sufficient to secure full recovery of the obligations owed under these loans.

Gross Guaranteed Net Gross Guaranteed Net

(dollars in thousands)

Loans 90 days past due and still accruing — — — — — —

Other real estate owned 1,241 — 1,241 — — —

Non-performing loans (net of guarantees) to total loans 0.5 % 1.0 %

Non-performing assets (net of guarantees) to total assets 0.3 % 0.6 %

The Company had no loans that were 90 days or more past due and still accruing at December 31, 2025.

OREO consists of property that the Company has acquired by deed in lieu of foreclosure or through foreclosure proceedings, and property that the Company does not hold title to but is in actual control of, known as in-substance foreclosure. OREO can also consist of Company owned properties that the Company has determined are no longer intended for use or future development. The estimated fair value of the property is determined prior to transferring the balance to OREO. The balance transferred to OREO is the estimated fair value of the property less estimated cost to sell. Impairment may be deemed necessary to bring the book value of the loan equal to the appraised value. Appraisals or loan officer evaluations are then conducted periodically thereafter charging any additional impairment to the appropriate expense account. The Company had OREO totaling $1,241,000 as of the year ended December 31, 2025. OREO as of December 31, 2025 represented land, transferred from premises and equipment, that the Company determined is no longer intended for future development and is actively marketing it for sale. The Company had no OREO as of December 31, 2024.

46

Table of Contents

Potential Problem Loans

The Company manages asset quality and credit risk by maintaining diversification in its loan portfolio and through review processes that include analysis of credit requests and ongoing examination of outstanding loans and delinquencies, with particular attention to portfolio dynamics and loan mix. The Company strives to identify loans experiencing difficulty early enough to correct the problems, to record charge-offs promptly based on realistic assessments of collectability and current collateral values and to maintain an adequate allowance for credit losses at all times. Asset quality reviews of loans and other non-performing assets are administered using credit risk rating standards and criteria similar to those employed by state and federal banking regulatory agencies. The federal banking regulatory agencies utilize the following definitions for assets adversely classified for supervisory purposes: “Substandard Assets: a substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets 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 institution will sustain some loss if the deficiencies are not corrected.” “Doubtful Assets: An asset classified 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 currently existing facts, conditions, and values, highly questionable and improbable." OREO and loans rated Substandard and Doubtful are deemed “classified assets.” This category, which includes both performing and non-performing assets, receives an elevated level of attention regarding collection.

Commercial loans, whether secured or unsecured, generally are made to support the short-term operations and other needs of small businesses. These loans are generally secured by the receivables, equipment, and other real property of the business and are susceptible to the related risks described above. Problem commercial loans are generally identified by periodic review of financial information that may include financial statements, tax returns, and payment history of the borrower. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. When repayment becomes unlikely based on the borrower’s income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation. Appropriate valuations are obtained at origination of the credit and periodically thereafter (generally every 3-12 months depending on the collateral type and market conditions), once repayment is questionable, and the loan has been deemed classified.

Commercial real estate loans generally fall into two categories, owner-occupied and non-owner occupied. Loans secured by owner occupied real estate are primarily susceptible to changes in the market conditions of the related business. This may be driven by, among other things, industry changes, geographic business changes, changes in the individual financial capacity of the business owner, general economic conditions, and changes in business cycles. These same risks apply to commercial loans whether secured by equipment, receivables, or other personal property or unsecured. Problem commercial real estate loans are generally identified by periodic review of financial information that may include financial statements, tax returns, payment history of the borrower, and site inspections. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Losses on loans secured by owner-occupied real estate, equipment, or other personal property generally are dictated by the value of underlying collateral at the time of default and liquidation of the collateral. When default is driven by issues related specifically to the business owner, collateral values tend to provide better repayment support and may result in little or no loss. Alternatively, when default is driven by more general economic conditions, underlying collateral generally has devalued more and results in larger losses due to default. Loans secured by non-owner occupied real estate are primarily susceptible to risks associated with swings in occupancy or vacancy and related shifts in lease rates, rental rates or room rates. Most often, these shifts are a result of changes in general economic or market conditions or overbuilding and resultant over-supply of space. Losses are dependent on the value of underlying collateral at the time of default. Values are generally driven by these same factors and influenced by interest rates and required rates of return as well as changes in occupancy costs. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, sales invoices, or other appropriate means. Appropriate valuations are obtained at origination of the credit and periodically thereafter (generally every 3-12 months depending on the collateral type and market conditions), once repayment is questionable, and the loan has been deemed classified.

47

Table of Contents

Agricultural loans, whether secured or unsecured, generally are made to producers and processors of crops and livestock. Repayment is primarily from the sale of an agricultural product or service. Agricultural loans are generally secured by inventory, receivables, equipment, and other real property. Agricultural loans primarily are susceptible to changes in market demand for specific commodities. This may be exacerbated by, among other things, industry changes, changes in the individual financial capacity of the business owner, general economic conditions and changes in business cycles, as well as changing weather conditions. Problem agricultural loans are generally identified by periodic review of financial information that may include financial statements, tax returns, crop budgets, payment history, and crop inspections. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower’s income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation. Appropriate valuations are obtained at origination of the credit and periodically thereafter (generally every 3-12 months depending on the collateral type and market conditions), once repayment is questionable, and the loan has been deemed classified.

Residential mortgage loans, which are secured by real estate, are primarily susceptible to four risks: non-payment due to diminished or lost income, over-extension of credit, a lack of borrower’s cash flow to sustain payments, and shortfalls in collateral value. In general, non-payment is due to loss of employment and follows general economic trends in the marketplace, particularly the upward movement in the unemployment rate, loss of collateral value, and demand shifts. Problem residential mortgage loans are generally identified via payment default. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. When repayment becomes unlikely based on the borrower’s income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation. Appropriate valuations are obtained at origination of the credit and periodically thereafter (generally every 3-12 months depending on the collateral type and market conditions), once repayment is questionable, and the loan has been deemed classified.

Construction loans, whether owner occupied or non-owner occupied residential development loans, are not only susceptible to the related risks described above but the added risks of construction itself, including cost over-runs, mismanagement of the project, or lack of demand and market changes experienced at time of completion. Again, losses are primarily related to underlying collateral value and changes therein as described above. Problem construction loans are generally identified by periodic review of financial information that may include financial statements, tax returns and payment history of the borrower. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors, or repossession or foreclosure of the underlying collateral. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation. Appropriate valuations are obtained at origination of the credit and periodically thereafter (generally every 3-12 months depending on the collateral type and market conditions), once repayment is questionable, and the loan has been deemed classified.

Consumer loans, whether unsecured or secured, are primarily susceptible to four risks: non-payment due to diminished or lost income, over-extension of credit, a lack of borrower’s cash flow to sustain payments, and shortfall in collateral value. In general, non-payment is due to loss of employment and will follow general economic trends in the marketplace, particularly the upward movements in the unemployment rate, loss of collateral value, and demand shifts. Problem consumer loans are generally identified via payment default. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. When repayment becomes unlikely based on the borrower’s income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation. Appropriate valuations are obtained at origination of the credit and periodically thereafter (generally every 3-12 months depending on the collateral type and market conditions), once repayment is questionable, and the loan has been deemed classified.

48

Table of Contents

Once a loan becomes delinquent or repayment becomes questionable, a Company collection officer will address collateral shortfalls with the borrower and attempt to obtain additional collateral or a principal payment. If this is not forthcoming and payment of principal and interest in accordance with the contractual terms of the loan agreement becomes unlikely, the Company will consider the loan to be individually evaluated and will estimate its probable loss, using the present value of future cash flows discounted at the loan's effective interest rate, the loan's observable market price, or the fair value of the collateral if the loan is collateral dependent. For collateral dependent loans, the Company will utilize a recent valuation of the underlying collateral less estimated costs of sale, and charge-off the loan down to the estimated net realizable amount. Depending on the length of time until final collection, the Company may periodically revalue the estimated loss and take additional charge-offs or specific reserves as warranted. Revaluations may occur as often as every 3-12 months depending on the underlying collateral and volatility of values. Final charge-offs or recoveries are taken when the collateral is liquidated and the actual loss is confirmed. Unpaid balances on loans after or during collection and liquidation may also be pursued through legal action and attachment of wages or judgment liens on the borrower's other assets.

Excluding the non-performing loans, net of guarantees cited previously, loans totaling $18,259,000 and $11,782,000 were classified as substandard or doubtful loans, representing potential problem loans at December 31, 2025 and 2024, respectively. In Management’s opinion, the potential loss related to these problem loans was sufficiently covered by the Bank’s existing loan loss reserve (Allowance for Credit Losses) at December 31, 2025 and 2024. The ratio of the allowance for credit losses to total loans at December 31, 2025 and 2024 was 1.36% and 1.49%, respectively. The decrease in the ratio of the allowance for credit losses to total loans was primarily due to positive trends in gross domestic product and single-family home prices, coupled with an overall decrease in forecasted loss rates and improvements in qualitative risk factors. Management considered the allowance for credit losses of $14,519,000 to be adequate as a reserve against expected losses as of December 31, 2025.

49

Table of Contents

Analysis of the Allowance for Credit Losses On Loans

(Dollars in thousands)

Impact of adopting ASC 326 — — 800

Loans Charged-Off:

Commercial Real Estate (26 ) — —

Residential Mortgage (5 ) — (3 )

Residential Construction — — —

Recoveries:

Commercial Real Estate — — —

Agriculture — — 2,567

Residential Mortgage — — —

Residential Construction — — —

Ratio of net charge-offs during the year to average

Loans Outstanding During the Year (0.08 )% (0.09 )% (0.01 )%

Allowance for Credit Losses to Total Loans 1.36 % 1.49 % 1.55 %

Nonaccrual loans to Total Loans 0.57 % 1.06 % 0.37 %

50

Table of Contents

Allocation of the Allowance for Credit Losses

The Allowance for Credit Losses has been established as a general component available to absorb expected credit losses throughout the loan portfolio. The following table is an allocation of the Allowance for Credit Losses balance on the dates indicated (dollars in thousands):

Loan Type:

The Bank believes that any breakdown or allocation of the allowance into loan categories lends an appearance of exactness, which does not exist, because the allowance is available for all loans. The allowance breakdown shown above is computed taking actual experience into consideration but should not be interpreted as an indication of the specific amount and allocation of actual charge-offs that may ultimately occur. For additional information, see Note 3 to the Consolidated Financial Statements in this Form 10-K.

51

Table of Contents

Deposits

The following table sets forth the average amount and the average rate paid on each of the listed deposit categories (dollars in thousands) during the periods specified:

Average Average Average Average Average Average

Amount Rate Amount Rate Amount Rate

Deposit Type:

Approximately 40% of our deposits were uninsured for each of the years ended December 31, 2025 and 2024.

Time Deposits include brokered deposits totaling $0 and $9,999,000 as of December 31, 2025 and December 31, 2024, respectively. The brokered deposits purchased are time deposits $250,000 (dollars in thousands) or less that mature within twelve months.

The following table sets forth by time remaining to maturity for the Bank’s time deposits over $250,000 (dollars in thousands) as of December 31, 2025:

Three months or less $ 18,034

Over three months through six months 14,471

Over six months through twelve months 14,924

Over twelve months 6,201

Short-Term Borrowings

The Company had no secured borrowings and no Federal Funds purchased at December 31, 2025 and 2024.

Additional short-term borrowings available to the Company consist of a line of credit and advances with the Federal Home Loan Bank ("FHLB") secured under terms of a blanket collateral agreement by a pledge of FHLB stock and all loans held by the Company. At December 31, 2025, the Company had a current collateral borrowing capacity with the FHLB of $390,191,000 and, at such date, also had unsecured formal lines of credit totaling $130,000,000 with correspondent banks.

The Company had no Federal Funds purchased during the years ended December 31, 2025 and 2024.

Long-Term Borrowings

The Company had no long-term borrowings at December 31, 2025 and 2024. There were no average outstanding balances of long-term borrowings during 2025 and 2024.

52

Table of Contents

Supplemental Compensation Plans

The Company and the Bank maintain an unfunded non-contributory defined benefit pension plan (“Salary Continuation Plan”) and related split dollar plan for a select group of highly compensated employees. Eligibility to participate in the Salary Continuation Plan is limited to a select group of management or highly compensated employees of the Bank that are designated by the Board. Additionally, the Company and the Bank adopted a supplemental executive retirement plan (“SERP”) in 2006. The SERP is intended to integrate the various forms of retirement payments offered to executives. At December 31, 2025, the benefit obligation was $4,405,000, of which $4,716,000 was recorded in interest payable and other liabilities and $(311,000) was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets. At December 31, 2024, the benefit obligation was $4,500,000, of which $4,793,000 was recorded in interest payable and other liabilities and $(293,000) was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets.

The Company and the Bank maintain an unfunded non-contributory defined benefit pension plan (“Directors’ Retirement Plan”) and related split dollar plan for the directors of the Bank. At December 31, 2025, the benefit obligation was $380,000, of which $480,000 was recorded in interest payable and other liabilities and $(100,000) was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets. At December 31, 2024, the benefit obligation was $397,000, of which $539,000 was recorded in interest payable and other liabilities and $(142,000) was recorded in accumulated other comprehensive loss, net, in the Consolidated Balance Sheets.

For additional information, see Note 17 to the Consolidated Financial Statements in this Form 10-K.

Overview

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Net income for the year ended December 31, 2025, was $21.1 million, representing an increase of $1.1 million, or 5.5%, compared to net income of $20.0 million for the year ended December 31, 2024. The increase in net income was primarily attributable to an increase in net interest income of $3.1 million and a decrease in provision for income tax of $1.5 million, which was partially offset by an increase in non-interest expenses of $3.4 million. The increase in net interest income was primarily due to increases in yield on loans and investment securities and a decrease in volume and rate paid on time certificates, which was partially offset by decreases in volume and yield on due from banks and increases in rates paid on interest-bearing transaction deposits and savings and MMDAs. The increase in non-interest expenses was primarily due to an increase in salaries and employee benefits, occupancy and equipment and data processing expenses. The decrease in provision for income tax was due to the execution of a tax planning strategy that involved purchasing investment tax credits under the Inflation Reduction Act of 2022 tied to alternative energy projects. The investment tax credits were acquired at a discount and recognized as a reduction to income tax expense in 2025.

Total assets were $1.91 billion as of December 31, 2025, representing an increase of $19.2 million, or 1.0%, compared to total assets of $1.89 billion as of December 31, 2024. For the year ended December 31, 2025 compared to the year ended December 31, 2024, there was a $26.1 million increase in cash, $3.6 million increase in net loans, $9.9 million increase in interest receivable and other assets, which was partially offset by a $16.6 million decrease in investment securities and a $5.9 million decrease in certificates of deposit. Total deposits decreased $20.9 million, or 1.2%, to $1.68 billion as of December 31, 2025, compared to $1.70 billion at December 31, 2024.

53

Table of Contents

Results of Operations

Net Interest Income

Net interest income is the excess of interest and fees earned on the Bank’s loans, investment securities, federal funds sold and banker’s acceptances over the interest expense paid on deposits and other borrowed funds which are used to fund those assets. Net interest income is primarily affected by the yields and mix of the Bank’s interest-earning assets and interest-bearing liabilities outstanding during the period. The $3,655,000 increase in the Bank's interest and dividend income in 2025 from 2024 was primarily driven by an increase in interest rates on loans and investment securities, which was partially offset by a decrease in the average balance and interest rate on due from banks. The $2,610,000 increase in the Bank's interest income on loans was primarily driven by an increase of $2,444,000 attributable to an increase in interest rates. The $2,204,000 decrease in the Bank’s interest income on due from banks was primarily driven by a decrease of $1,000,000 due to the decreased average due from bank balances outstanding and a decrease of $1,204,000 attributable to a decrease in average interest rates paid on excess reserves at the FRB. The $132,000 decrease in the Bank's interest income on certificates of deposit was driven by a decrease of $147,000 due to the decrease in average certificates of deposit outstanding, which was partially offset by an increase of $15,000 due to the increase in average interest rates paid on certificates of deposit. The $3,414,000 increase in the Bank’s interest income on investment securities was driven by an increase of $2,773,000 due to an increase in interest rates and an increase of $641,000 driven by increased investment securities balances outstanding. The $543,000 increase in the Bank's interest expense on deposits was primarily driven by an increase of $568,000 due to increases in interest rates, which was partially offset by a decrease of $25,000 due to a decrease in average time certificates balances outstanding. See “Analysis of Changes in Interest Income and Interest Expense” in this Annual Report on Form 10-K for the effects of interest rates and loan/deposit volume on net interest income.

The FRB influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is significantly affected by changes in the prime interest rate. As of December 31, 2024, the prime rate was 7.50%. The prime rate decreased several times beginning in September 2025, decreasing to 6.75% as of December 31, 2025.

As of December 31, 2024, the target range for the federal funds rate was 4.25% to 4.50%. During 2025 the FRB cut interest rates in each of September, October and December. As of December 31, 2025, the target rate for the federal funds rate was 3.50% to 3.75%. For additional information, see “The Bank is Subject to Interest Rate Risk” and “Beginning in 2021, the U.S. Economy Began to Reflect Relatively Rapid Rates of Increase in the Consumer Price Index and Other Economic Indices; a Prolonged Elevated Rate of Inflation Could Present Risks for the U.S. Banking Industry and Our Business”, in “Risk Factors” (Item 1A) of this Annual Report on Form 10-K.

We are primarily funded by core deposits, with non-interest-bearing demand deposits historically being a significant source of funds. This lower-cost funding base is expected to have a positive impact on our net interest income and net interest margin in a rising interest rate environment.

The nature and impact of future changes in interest rates and monetary policy on the business and earnings of the Company cannot be predicted. For additional information, see “The Effects of Changes or Increases in, or Supervisory Enforcement of, Banking or Other Laws and Regulations or Governmental Fiscal or Monetary Policies Could Adversely Affect Us”, and “The Bank is Subject to Interest Rate Risk” and “Beginning in 2021, the U.S. Economy Began to Reflect Relatively Rapid Rates of Increase in the Consumer Price Index and Other Economic Indices; a Prolonged Elevated Rate of Inflation Could Present Risks for the U.S. Banking Industry and Our Business” in “Risk Factors" (Item 1A) of this Annual Report on Form 10-K.

Interest income on loans for 2025 was up 4.7% from 2024, increasing from $55,389,000 to $57,999,000. The increase in interest income on loans was primarily due to higher yields earned on newly originated loans and loans repricing at higher rates coupled with a 0.3% increase in average balance of loans.

Interest income on interest-bearing due from banks for 2025 was down 34.0% from 2024, decreasing from $6,477,000 to $4,273,000. The decrease in interest income on interest-bearing due from banks was the result of a 17.0% decrease in average balances of interest-bearing due from banks coupled with a 109 basis point decrease in yield on interest-bearing due from banks.

Interest income on certificates of deposit for 2025 was down 18.2% from 2024, decreasing from $724,000 to $592,000. The decrease in interest income on certificates of deposit was primarily due to a 19.9% decrease in average balances of certificates of deposit, which was partially offset by an 9 basis point increase in yield on certificates of deposit.

54

Table of Contents

Interest income on investment securities for 2025 was up 22.7% from 2024, increasing from $15,011,000 to $18,425,000. The increase in interest income on investment securities was the result of a 3.9% increase in average investment securities volume coupled with a 46 basis point increase in investment securities yields. The Bank deployed excess liquidity into the investment portfolio over the course of 2025 at higher reinvestment rates. Investment securities yields were 3.00% and 2.54% for 2025 and 2024, respectively.

Interest expense on interest-bearing liabilities for 2025 was up 3.8% from 2024, increasing from $14,292,000 to $14,835,000. The increase in interest expense on interest-bearing liabilities was the result of a 2.4% increase in interest-bearing liabilities coupled with a 2 basis point increase in interest rates paid on interest-bearing liabilities.

The mix of deposits for the previous three years was as follows (dollars in thousands):

Average Average Average

Balance Percent Balance Percent Balance Percent

The Bank’s net interest margin (net interest income divided by average earning assets) was 3.77% in 2025 and 3.60% in 2024. The net interest spread (average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities) was 3.16% in 2025 and 2.98% in 2024. The 18 basis point increase in net spread in 2025 over 2024 was due to an overall increase in interest rates on earning assets, which was partially offset by an overall increase in interest rates on deposits.

Provision for Credit Losses

The provision for credit losses is established by charges to earnings on management’s evaluation of expected losses on the loan portfolio. Based on this evaluation, the Company recorded no provision for credit losses in 2025 and a reversal of provision for credit losses of $250,000 in 2024. No provision for credit losses was recorded in 2025 primarily due to positive trends in gross domestic product and single-family home prices, coupled with an overall decrease in loss rates and improvements in risk factors. The reversal of provision for credit losses in 2024 was primarily due to a decrease in loans outstanding and a decrease in unfunded commitments. The ratio of the Allowance for Credit Losses to total loans at December 31, 2025 was 1.36% compared to 1.49% at December 31, 2024. The ratio of the Allowance for Credit Losses to total non-accrual loans and loans past due 90 days or more, net of guarantees was 285.7% at December 31, 2025, compared to 143.5% at December 31, 2024.

55

Table of Contents

Non-Interest Income and Expenses

Non-interest income consisted primarily of service charges on deposit accounts, net realized losses on sale of available-for-sale securities, net realized gains on sales of loans held-for-sale, debit card income and other income. Non-interest income increased to $6,097,000 in 2025 from $6,019,000 in 2024, representing an increase of $78,000, or 1.3%.

Non-interest expenses consisted primarily of salaries and employee benefits, occupancy and equipment expense, data processing expense, amortization of core deposit intangible and other expenses. Non-interest expenses increased to $46,164,000 in 2025 from $42,789,000 in 2024, representing an increase of $3,375,000, or 7.9%.

Following is an analysis of the increase or decrease in the components of non-interest expenses (dollars in thousands) during the periods specified:

Amount Percent

Salaries and Employee Benefits $ 1,525 6.4 %

Occupancy and Equipment 331 7.0 %

Stationery and Supplies 26 8.3 %

Directors Fees (9 ) (2.9 )%

Amortization of core deposit intangible (89 ) (10.9 )%

The increase in salaries and employee benefits in 2025 was primarily due to a 4.1% increase in regular salaries, 47.4% increase in contingent compensation, and 42.1% increase in group insurance, partially offset by a 24.5% decrease in commissions. The increase in regular salaries, contingent compensation, and group insurance was primarily due to an increase in full-time equivalent employees and increased costs of insurance provided to employees. The decrease in commissions was primarily due to a decrease in mortgage loan production volumes and deposit growth. The increase in occupancy and equipment was primarily due to an increase in service contracts related to upgrades to certain facilities coupled with the overall maintenance of facilities. The increase in data processing was primarily due to an increase in costs of service contracts. The increase in other expenses was primarily due to a 257.2% increase in legal fees, 84.5% increase in amortization expense on housing tax credits, 19.3% increase in contributions, and 16.3% increase in accounting and audit fees. The increase in legal fees is primarily due to general corporate matters and legal services rendered relating to the creation of the Company's new stock incentive plan and new employee stock purchase plan.

56

Table of Contents

Income Taxes

The provision for income taxes is primarily affected by the tax rate, the level of earnings before taxes and the level of tax-exempt income. In 2025, tax expense decreased to $6,277,000 from $7,806,000 in 2024, due to the execution of a tax planning strategy that involved purchasing investment tax credits under the Inflation Reduction Act of 2022 tied to alternative energy projects. The investment tax credits were acquired at a discount and recognized as a reduction to income tax expense in 2025. Non-taxable municipal bond income was $1,642,000 and $1,216,000 for the years ended December 31, 2025 and 2024, respectively.

Liquidity

Liquidity is defined as the ability to generate cash at a reasonable cost to fulfill lending commitments and support asset growth, while satisfying the withdrawal demands of deposit customers and any debt repayment requirements. The Bank’s principal sources of liquidity are core deposits and loan and investment payments and proceeds of sale and prepayments. Providing secondary sources of liquidity are excess reserves at the Federal Reserve Bank and the available-for-sale investment portfolio. The Company held $119,306,000 in excess reserves at the Federal Reserve Bank and $617,243,000 total investment securities at December 31, 2025. Under certain deposit, borrowing, and other arrangements, the Company must hold and pledge investment securities as collateral. At December 31, 2025, such collateral requirements totaled approximately $95,479,000. As a smaller source of liquidity, the Bank can utilize existing credit arrangements.

The Company’s primary source of liquidity on a stand-alone basis is dividends from the Bank. As discussed in Part I (Item 1) of this Annual Report on Form 10-K, dividends from the Bank are subject to regulatory and corporate law restrictions.

Liquidity risk can result from the mismatching of asset and liability cash flows, or from disruptions in the financial markets. The Bank experiences seasonal swings in deposits, which can impact liquidity. Management has sought to address these seasonal swings by scheduling investment maturities and developing seasonal credit arrangements with the FHLB, Federal Reserve Bank and Federal Funds lines of credit with correspondent banks. The Company maintains short-term unsecured lines of credit with other banks which totaled $130,000,000 at December 31, 2025. Additionally, the Company has a line of credit with the FHLB, with a remaining borrowing capacity at December 31, 2025 of $390,191,000; credit availability is subject to certain collateral requirements.

In addition, the ability of the Bank’s real estate department to originate and sell loans into the secondary market has provided another tool for the management of liquidity. As of December 31, 2025, the Company has not created any special purpose entities to securitize assets or to obtain off-balance sheet funding.

The liquidity position of the Bank is managed daily, thus enabling the Bank to adapt its position according to market fluctuations. Liquidity is measured by various ratios, the most common of which is the ratio of net loans (including loans held-for-sale) to deposits. This ratio was 62.6% on December 31, 2025, and 61.6% on December 31, 2024. The Bank’s ratio of core deposits to total assets was 85.0% and 87.0% for the years ended December 31, 2025 and December 31, 2024, respectively. Core deposits include demand deposits, interest-bearing transaction deposits, savings and money market deposit accounts, and non-brokered time deposits of $250,000 or less. Core deposits are important in maintaining a strong liquidity position as they represent a stable and relatively low-cost source of funds. Management believes that the Bank’s liquidity position was adequate in 2025. This is best illustrated by the change in the Bank’s net non-core ratio, which explains the degree of reliance on non-core liabilities to fund long-term assets. At December 31, 2025, the Bank’s net core funding dependence ratio, the difference between non-core funds, time deposits $250,000 or more and brokered time deposits under $250,000, and short-term investments to long-term assets, was (7.38)% as of December 31, 2025, and (5.17%) as of December 31, 2024. This ratio indicated that, at December 31, 2025, the Bank did not significantly rely upon non-core deposits and borrowings to fund the Bank’s long-term assets, namely loans and investments. The Bank believes that by maintaining adequate volumes of short-term investments and implementing competitive pricing strategies on deposits, it can ensure adequate liquidity to support future growth. The Bank also believes that its liquidity position remains strong to meet both present and future financial obligations and commitments, events or uncertainties that have resulted or are reasonably likely to result in material changes with respect to the Bank’s liquidity.

57

Table of Contents

Commitments

The following table details the amounts and expected maturities of commitments as of December 31, 2025 (amounts in thousands):

Maturities by period

Commitments Total Less than 1 year 1-3 years 3-5 years More than 5 years

Commitments to extend credit

Standby Letters of Credit 1,038 1,038 — — —

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.

Off-Balance Sheet Arrangements

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit in the form of loans or through standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheet. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. These loans have been sold to third parties without recourse, subject to customary default, representations and warranties, recourse for breaches of the terms of the sales contracts and payment default recourse.

Financial instruments, whose contract amounts represent credit risk at December 31 of the indicated years, were as follows (amounts in thousands):

Our liquidity position is continuously monitored and adjustments are made to balance between sources and uses of funds as deemed appropriate. The Bank believes that it has the means to provide adequate liquidity for funding normal operations in 2026.

58

Table of Contents

Capital

The Company believes a strong capital position is essential to the Company’s continued growth and profitability. A solid capital base provides depositors and shareholders with a margin of safety, while allowing the Company to take advantage of profitable opportunities, support future growth and provide protection against any unforeseen losses.

At December 31, 2025, stockholders’ equity totaled $212.0 million, an increase of $35.7 million from $176.3 million at December 31, 2024. The increase in 2025 was primarily due to net income of $21.0 million and a decrease in accumulated other comprehensive loss, net of $18.4 million. Also affecting capital in 2025 were stock repurchases totaling $4.7 million and paid-in capital in the amount of $0.9 million resulting from employee stock purchases and stock plan accruals.

On March 27, 2024, the Company approved a stock repurchase program effective May 1, 2024. The stock repurchase program, which remains in effect until April 30, 2026 unless terminated sooner, allows for repurchases by the Company in an aggregate amount of no more than 6% of the Company’s 17,144,680 outstanding shares of common stock as of March 21, 2024. This represented total shares of 1,028,679 eligible for repurchase at May 1, 2024. The total number of shares outstanding and shares eligible for repurchase has been adjusted to give retroactive effect to stock dividends and stock splits, including the 5% stock dividend declared on January 22, 2026, payable on March 25, 2026 to shareholders of record as of February 27, 2026. The Company repurchased 452,589 shares (adjusted for stock dividends) of the Company's outstanding common stock during the year ended December 31, 2025, and 147,142 shares remained available for repurchase under the stock repurchase program at December 31, 2025. The purpose of the stock repurchase program was to give management the ability to manage capital and create liquidity for shareholders who want to sell their stock. Management believed that the stock repurchase program was a prudent use of excess capital.

The capital of the Company and the Bank historically have been maintained at a level that is in excess of regulatory guidelines for a “well capitalized” institution. The policy of annual stock dividends rather than cash dividends has, over time, allowed the Company to match capital and asset growth through retained earnings and a managed program of geographic growth.

ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

59

Table of Contents

ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Management’s Report on Internal Control over Financial Reporting 61

Report of Independent Registered Public Accounting Firm (PCAOB ID #659) 62

Consolidated Balance Sheets as of December 31, 2025 and 2024 64

Consolidated Statements of Income for Years Ended December 31, 2025 and 2024 65

Notes to Consolidated Financial Statements 69

60

Table of Contents

Management’s Report

FIRST NORTHERN COMMUNITY BANCORP AND SUBSIDIARY

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of First Northern Community Bancorp and subsidiary (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting, and for performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2025. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and the board of directors; and (iii) provide reasonable assurance regarding prevention, or timely detection and correction of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Management recognizes that even a highly effective internal control system has inherent risks, including the possibility of human error and the circumvention or overriding of controls, and that the effectiveness of an internal control system can change with circumstances. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.

Under the supervision and with the participation of management, including the principal executive officer and principal financial officer, the Company conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management of the Company has concluded that the Company maintained effective internal control over financial reporting as of December 31, 2025.

/s/ Jeremiah Z. Smith

Jeremiah Z. Smith

President/Chief Executive Officer/Director

(Principal Executive Officer)

/s/ Kevin Spink

Kevin Spink

Executive Vice President/Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

March 12, 2026

61

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of

First Northern Community Bancorp

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of First Northern Community Bancorp and subsidiary (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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 consolidated 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 in accordance with the standards of the PCAOB. 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 in accordance with the standards of the PCAOB. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated 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 consolidated 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 consolidated 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 consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated 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 – Qualitative and Environmental Factors

Critical Audit Matter Description

As described in Notes 1 and 3 to the consolidated financial statements, the Company’s allowance for credit losses balance was $14.5 million as of December 31, 2025, and is estimated using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is a valuation account that is deducted from the loan’s amortized cost basis to present the net amount expected to be collected on the loans and is a material and complex estimate requiring significant management judgement in the estimation of expected lifetime losses within the loan portfolio at the balance sheet date.

62

Table of Contents

We identified management’s estimation of qualitative and environmental factors within the calculation of the allowance for credit losses as a critical audit matter. To estimate expected losses the Company generally utilizes historical loss trends and the remaining contractual lives of the loan portfolio to determine estimated credit losses through a reasonable and supportable forecast period. The qualitative and environmental factors are used to adjust the allowance for credit losses model forecasts for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. Qualitative and environmental factors also consider the impact of portfolio concentrations, changes in underwriting practices, imprecision of economic forecasts, and other risk factors that might influence the Company’s loss estimation process. Auditing management’s judgements regarding the qualitative and environmental factors applied to the allowance for credit losses involved a high degree of subjectivity.

How We Addressed the Matter in Our Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. Our audit procedures related to the allowance for credit losses included the following, among others:

/s/ BAKER TILLY US, LLP

Sacramento, California

March 12, 2026

We have served as the Company’s auditor since 2006.

63

Table of Contents

FIRST NORTHERN COMMUNITY BANCORP

AND SUBSIDIARY

Consolidated Balance Sheets

December 31, 2025 and 2024

(in thousands, except shares and share amounts)

Assets

Other real estate owned 1,241 —

Liabilities and Stockholders’ Equity

Liabilities:

Deposits:

Interest payable and other liabilities 19,789 15,301

Commitments and contingencies (Note 10 and 11)

Stockholders’ Equity:

Additional paid-in capital 977 977

Accumulated other comprehensive loss, net (15,478 ) (33,851 )

See accompanying notes to consolidated financial statements.

64

Table of Contents

FIRST NORTHERN COMMUNITY BANCORP

AND SUBSIDIARY

Consolidated Statements of Income

Years Ended December 31, 2025 and 2024

(in thousands, except per share amounts)

Interest and dividend income:

Due from banks interest bearing accounts 4,865 7,201

Investment securities:

Interest expense:

FHLB advances 75 —

Reversal of provision for credit losses — (250 )

Net interest income after reversal of provision for credit losses 67,472 64,610

Non-interest income:

Service charges on deposit accounts 1,684 1,718

Losses on sales/calls of available-for-sale securities (199 ) (234 )

Gains on sales of loans held-for-sale 45 52

Non-interest expenses:

Stationery and supplies 339 313

Amortization of core deposit intangible 731 820

Income before provision for income tax 27,405 27,840

Basic income per share $ 1.30 $ 1.20

Diluted income per share $ 1.27 $ 1.19

See accompanying notes to consolidated financial statements.

65

Table of Contents

FIRST NORTHERN COMMUNITY BANCORP

AND SUBSIDIARY

Consolidated Statements of Comprehensive Income

Years Ended December 31, 2025 and 2024

(in thousands)

Other comprehensive income (loss), net of tax:

See accompanying notes to consolidated financial statements.

66

Table of Contents

FIRST NORTHERN COMMUNITY BANCORP

AND SUBSIDIARY

Consolidated Statement of Stockholders’ Equity

Years Ended December 31, 2025 and 2024

(in thousands, except share data)

Accumulated

Additional Other

Common Stock Paid-in Retained Comprehensive

Shares Amounts Capital Earnings Income/(Loss) Total

Other comprehensive loss, net of tax (124 ) (124 )

Cash in lieu of fractional shares (148 ) (7 ) (7 )

Stock-based compensation 846 846

Stock options exercised, net 10,259 — —

Other comprehensive income, net of tax 18,373 18,373

Cash in lieu of fractional shares (129 ) (8 ) (8 )

Stock-based compensation 849 849

Stock options exercised, net 27,098 — —

See accompanying notes to consolidated financial statements.

67

Table of Contents

FIRST NORTHERN COMMUNITY BANCORP

AND SUBSIDIARY

Consolidated Statements of Cash Flows

Years Ended December 31, 2025 and 2024

(in thousands)

Cash flows from operating activities:

Reversal of provision for credit losses — (250 )

Amortization of core deposit intangible 731 820

Stock-based compensation 849 846

Depreciation and amortization of bank premises and equipment 996 1,057

Net loss on sales/calls of available-for-sale securities 199 234

Gain on sale of loans held-for-sale (45 ) (52 )

(Benefit) provision for deferred income taxes (355 ) 603

Proceeds from sales of loans held-for-sale 3,163 4,590

Originations of loans held-for-sale (3,118 ) (4,538 )

Increase in deferred loan origination costs, net (591 ) (64 )

Amortization of operating lease right-of-use asset 925 918

Gain on tax credit purchase (1,215 ) —

Purchase of tax credit (14,218 ) —

Increase in interest receivable and other assets (6,044 ) (412 )

Increase (decrease) in interest payable and other liabilities 5,885 (4,479 )

Net cash provided by operating activities 6,898 19,537

Cash flows from investing activities:

Proceeds from maturities of available-for-sale securities 60,170 85,775

Proceeds from sales of available-for-sale securities 31,875 6,563

Principal repayments on available-for-sale securities 86,436 75,500

Purchase of available-for-sale securities (134,474 ) (230,334 )

Proceeds from maturities of certificates of deposit 7,064 9,336

Purchases of certificates of deposit (1,170 ) (5,700 )

Net (increase) decrease in loans (3,030 ) 5,927

Purchases of bank premises and equipment, net (1,700 ) (343 )

Net cash provided by (used in) investing activities 44,818 (53,276 )

Cash flows from financing activities:

Net (decrease) increase in deposits (20,946 ) 7,645

FHLB repayments (20,000 ) —

Cash dividends paid in lieu of fractional shares (8 ) (7 )

Common stock issued 93 102

Repurchases of common stock (4,749 ) (3,764 )

Net cash (used in) provided by financing activities (25,610 ) 3,976

Net increase (decrease) in cash and cash equivalents 26,106 (29,763 )

Cash and cash equivalents at beginning of year 119,448 149,211

Supplemental Consolidated Statements of Cash Flows Information (Note 20)

See accompanying notes to consolidated financial statements.

68

Table of Contents

FIRST NORTHERN COMMUNITY BANCORP

AND SUBSIDIARY

Notes to Consolidated Financial Statements

Years Ended December 31, 2025 and 2024

(dollar in thousands, except shares and share amounts)

(1) Summary of Significant Accounting Policies

First Northern Community Bancorp (the “Company”) is a bank holding company whose only subsidiary, First Northern Bank of Dixon (“Bank”), a California state-chartered bank, conducts general banking activities, including collecting deposits and originating loans, and serves Solano, Yolo, Sacramento, Placer, El Dorado, Glenn, and Colusa Counties. All intercompany transactions between the Company and the Bank have been eliminated in consolidation. The consolidated financial statements also include the accounts of Yolano Realty Corporation, a wholly-owned subsidiary of the Bank. Yolano Realty Corporation was formed in September 2009 for the purpose of managing selected other real estate owned properties. Yolano Realty Corporation was an inactive subsidiary in 2025.

The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and revenues and expenses for the period. Actual results could differ from those estimates applied in the preparation of the accompanying consolidated financial statements. For the Company, the most significant accounting estimates are the allowance for credit losses on loans and business combinations. A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows.

Revision of Prior Period Financial Information

During the preparation of the Consolidated Financial Statements for the year ended December 31, 2025, management identified and corrected an error in its prior period Consolidated Financial Statements related to the classification of certain deposits between Demand deposits and Interest-bearing transaction deposits. As a result, the Company revised its Consolidated Balance Sheet for the year ended December 31, 2024, with a decrease in Demand deposits of $44,844 and a corresponding increase in Interest-bearing transaction deposits of $44,844. Management evaluated the materiality of the revision from a quantitative and qualitative perspective and concluded that the revision is immaterial to the Consolidated Financial Statements. This reclassification revision had no impact on the Company’s Total Deposits as previously reported. The revision also had no impact on the Consolidated Statements of Income, Comprehensive Income, Stockholders’ Equity or Cash Flows.

(a) Cash Equivalents

For purposes of the consolidated statements of cash flows, the Company considers due from banks, federal funds sold for one-day periods and short-term bankers acceptances to be cash equivalents. At times, the Company maintains deposits with other financial institutions in amounts that may exceed federal deposit insurance coverage. Management regularly evaluates the credit risk associated with correspondent banks.

(b) Investment Securities and Allowance for Credit Losses

Investment securities consist of U.S. Treasury securities, U.S. Agency securities, obligations of states and political subdivisions, obligations of U.S. Corporations, collateralized mortgage obligations and mortgage-backed securities. At the time of purchase of a security the Company designates the security as held-to-maturity or available-for-sale, based on its investment objectives, operational needs, and intent to hold. The Company does not purchase securities with the intent to engage in trading activity.

Held-to-maturity securities are recorded at amortized cost, adjusted for amortization or accretion of premiums or discounts. Available-for-sale securities are recorded at fair value with unrealized holding gains and losses, net of the related tax effect, reported as a separate component of stockholders’ equity until realized. The amortized cost of securities is adjusted for amortization of premiums and accretion of discounts to the earliest call date using the effective interest method. Such amortization and accretion is included in investment income, along with interest and dividends. The cost of securities sold is based on the specific identification method; realized gains and losses resulting from such sales are included in earnings.

69

Table of Contents

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, an allowance for credit losses is recorded to bring the security's amortized cost basis down to fair value. For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any unrealized losses that have not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available-for-sale debt securities is excluded from the estimate of credit losses. Accrued interest receivable on available-for-sale debt securities totaled $2,787 and $2,785 as of December 31, 2025 and December 31, 2024, respectively, and is included in interest receivable and other assets on the Consolidated Balance Sheets.

(c) Federal Home Loan Bank Stock and Other Equity Securities, at Cost

The Bank is a member of the Federal Home Loan Bank of San Francisco ("FHLB") and is required to obtain and hold a specific number of shares of capital stock of the FHLB. FHLB stock represents an equity interest that does not have a readily determinable fair value because its ownership is restricted and it lacks a market (liquidity). FHLB stock and other equity securities are recorded at cost and evaluated for impairment as of each reporting period.

(d) Loans and Allowance for Credit Losses

Loans are reported at the principal amount outstanding, net of deferred loan fees and costs and the allowance for credit losses. Loan fees net of certain direct costs of origination, which represent an adjustment to interest yield are deferred and amortized over the contractual term of the loan using the interest method. Unearned discount on installment loans is recognized as income over the terms of the loans by the interest method. Interest on other loans is calculated by using the simple interest method on the daily balance of the principal amount outstanding.

Loans on which the accrual of interest has been discontinued are designated as non-accrual loans. Accrual of interest on loans is discontinued either when reasonable doubt exists as to the full and timely collection of interest or principal or when a loan becomes contractually past due by ninety days or more with respect to interest or principal. When a loan is placed on non-accrual status, all interest previously accrued but not collected is reversed against current period interest income. Interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest. Accrual of interest on loans that are modified commence after a sustained period of performance. Interest is generally accrued on such loans in accordance with the new terms.

The allowance for credit losses (ACL) is a valuation account that is deducted from the loan's amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the recorded loan balance is confirmed as uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. The Company measures its ACL using the current expected credit loss (CECL) methodology in accordance with Accounting Standards Codification Topic 326,Financial Instruments - Credit Losses (Topic 326).

70

Table of Contents

Management estimates the ACL using relevant information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. In determining the ACL, accruing loans with similar risk characteristics are generally evaluated collectively. To estimate expected losses the Company generally utilizes historical loss trends and the remaining contractual lives of the loan portfolios to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators, including historical credit losses, have been statistically correlated with various econometrics, including national unemployment rate and national gross domestic product. The Company moved from California state loss drivers to national loss drivers at the beginning of 2024. The reason for the change is a higher credit loss correlation between the national loss driver variables than the state loss driver variables. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. The Company utilized a reasonable and supportable forecast period of approximately four quarters and obtained the forecast data from Moody’s Analytics. The Company also considered the impact of portfolio concentrations, changes in underwriting practices, imprecision in its economic forecasts, and other risk factors that might influence its loss estimation process.

Loans that do not share similar risk characteristics are individually evaluated by management for potential impairment. Included in loans individually evaluated are collateral dependent loans. A loan is considered to be collateral dependent when repayment is expected to be provided substantially through the operation or sale of the collateral. Collateral dependent loans are considered to have unique risk characteristics and are individually evaluated. The ACL on collateral dependent loans is measured using the fair value of the underlying collateral, adjusted for costs to sell when applicable, less the amortized cost basis of the financial asset. If the value of underlying collateral is determined to be less than the recorded amount of the loan, a charge-off will be taken.

The ACL is measured on a collective (pool) basis when similar risk characteristics exist. The Company has identified the following portfolio segments to evaluate and measure the ACL:

Commercial:

Commercial loans, whether secured or unsecured, generally are made to support the short-term operations and other needs of small businesses. These loans are generally secured by the receivables, equipment, and other real property of the business and are susceptible to the related risks described above. Problem commercial loans are generally identified by periodic review of financial information that may include financial statements, tax returns, and payment history of the borrower. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation.

Commercial Real Estate:

Commercial real estate loans generally fall into two categories: owner-occupied and non-owner occupied. Loans secured by owner-occupied real estate are primarily susceptible to changes in the market conditions of the related business. This may be driven by, among other things, industry changes, geographic business changes, changes in the individual financial capacity of the business owner, general economic conditions, and changes in business cycles. These same risks apply to commercial loans whether secured by equipment, receivables or other personal property or unsecured. Problem commercial real estate loans are generally identified by periodic review of financial information that may include financial statements, tax returns, payment history of the borrower, and site inspections. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary. Losses on loans secured by owner occupied real estate, equipment, or other personal property generally are dictated by the value of underlying collateral at the time of default and liquidation of the collateral. When default is driven by issues related specifically to the business owner, collateral values tend to provide better repayment support and may result in little or no loss. Alternatively, when default is driven by more general economic conditions, underlying collateral generally has devalued more and results in larger losses due to default. Loans secured by non-owner occupied real estate are primarily susceptible to risks associated with swings in occupancy or vacancy and related shifts in lease rates, rental rates or room rates. Most often, these shifts are a result of changes in general economic or market conditions or overbuilding and resulting over-supply of space. Losses are dependent on the value of underlying collateral at the time of default. Values are generally driven by these same factors and influenced by interest rates and required rates of return as well as changes in occupancy costs. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, sales invoices, or other appropriate means.

71

Table of Contents

Agriculture:

Agricultural loans, whether secured or unsecured, generally are made to producers and processors of crops and livestock. Repayment is primarily from the sale of an agricultural product or service. Agricultural loans are generally secured by inventory, receivables, equipment, and other real property. Agricultural loans primarily are susceptible to changes in market demand for specific commodities. This may be exacerbated by, among other things, industry changes, changes in the individual financial capacity of the business owner, general economic conditions and changes in business cycles, as well as adverse weather conditions such as drought, fire, or floods. Problem agricultural loans are generally identified by periodic review of financial information that may include financial statements, tax returns, crop budgets, payment history, and crop inspections. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors. Notwithstanding, when repayment becomes unlikely based on the borrower's income and cash flow, repossession or foreclosure of the underlying collateral may become necessary.

Residential mortgage loans:

Residential mortgage loans, which are secured by real estate, are primarily susceptible to four risks; non-payment due to diminished or lost income, over-extension of credit, a lack of borrower's cash flow to sustain payments, and shortfalls in collateral value. In general, non-payment is usually due to loss of employment and follows general economic trends in the economy, particularly the upward movement in the unemployment rate, loss of collateral value, and demand shifts.

Residential construction loans:

Construction loans, whether owner-occupied or non-owner occupied residential development loans, are not only susceptible to the risks related to residential mortgage loans, but the added risks of construction, including cost over-runs, mismanagement of the project, or lack of demand and market changes experienced at time of completion. Losses are primarily related to underlying collateral value and changes therein as described above. Problem construction loans are generally identified by periodic review of financial information that may include financial statements, tax returns and payment history of the borrower. Based on this information, the Company may decide to take any of several courses of action, including demand for repayment, requiring the borrower to provide a significant principal payment and/or additional collateral or requiring similar support from guarantors, or repossession or foreclosure of the underlying collateral. Collateral values may be determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independent third parties, purchase invoices, or other appropriate documentation.

Consumer:

Consumer loans, whether unsecured or secured, are primarily susceptible to four risks: non-payment due to diminished or lost income, over-extension of credit, a lack of borrower's cash flow to sustain payments, and shortfall in collateral value. In general, non-payment is usually due to loss of employment and will follow general economic trends in the economy, particularly the upward movements in the unemployment rate, loss of collateral value, inflation and demand shifts.

Unfunded commitments: The estimated credit losses associated with these unfunded lending commitments is calculated using the same models and methodologies noted above and incorporate utilization assumptions at time of default. The reserve for unfunded commitments is maintained on the Consolidated Balance Sheets in other liabilities.

Accrued interest receivable on loans is not included in the calculation of the ACL. Accrued interest receivable on loans totaled $4,561 and $4,875 as of December 31, 2025 and December 31, 2024, respectively, and is included in interest receivable and other assets on the Consolidated Balance Sheets.

(e) Loans Held-for-Sale

Loans originated and held-for-sale are carried at the lower of cost or estimated fair value in the aggregate. Net fees and costs of originating loans held for sale are deferred and are included in the basis for determining the gain or loss on sales of loans held for sale. Net unrealized losses are recognized through a valuation allowance by charges to income.

(f) Premises and Equipment

Premises and equipment are stated at cost, less accumulated depreciation. Depreciation is computed substantially by the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are depreciated over the estimated useful lives of the improvements or the terms of the related leases, whichever is shorter. The useful lives used in computing depreciation are as follows:

In Years

Buildings and improvements 15 - 50

Furniture and equipment 3 - 10

72

Table of Contents

(g) Other Real Estate Owned

Other real estate acquired by foreclosure is carried at fair value less estimated selling costs. Prior to foreclosure, the value of the underlying loan is written down to the fair value of the real estate to be acquired by a charge to the ACL, if necessary. Fair value of other real estate owned is generally determined based on an appraisal of the property. Any subsequent operating expenses or income, reduction in estimated values and gains or losses on disposition of such properties are included in other operating expenses.

Gain recognition on the disposition of real estate is dependent upon the transaction meeting certain criteria relating to the nature of the property sold and the terms of the sale. Under certain circumstances, revenue recognition may be deferred until these criteria are met.

The Bank held other real estate owned (“OREO”) totaling $1,241 and $0 as of December 31, 2025 and 2024 , respectively. OREO as of December 31, 2025 represented land, transferred from premises and equipment, that the Company determined is no longer intended for future development and is actively marketing it for sale. No impairment loss was recognized during the twelve months ended December 31, 2025.

(h) Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of

Long-lived assets and certain identifiable intangibles are required to be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

(i) Intangible Assets

Intangible assets represent the estimated fair value of the core deposit relationships acquired in a 2023 business combination less accumulated depreciation and other intangible assets. Core deposit intangibles are being amortized using the accelerated amortization method over an estimated life of ten years from the date of acquisition. Core deposit intangibles are evaluated on an annual basis for any events that would indicate impairment. Core deposit intangibles could also be tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value below its carrying amount. Management performed an assessment of the core deposit intangible as of December 31, 2025 and noted no triggering events that would indicate impairment. Other intangible assets represent a customer-related intangible asset acquired and recorded at fair value during 2025. See Note 6 of Notes to Consolidated Financial Statements.

(j) Pension Benefit Plans

The Company and the Bank maintain unfunded non-contributory defined benefit pension plans for a select group of highly compensated employees and directors, as well as a supplemental executive retirement plan. Net periodic benefit cost is recognized over the approximate service period of plan participants and includes discount rate assumptions. See Note 17 of Notes to Consolidated Financial Statements.

(k) Revenue from Contracts with Customers

The following are descriptions of the Company’s sources of Non-interest income within the scope of the FASB's Accounting Standards Codification Topic 606,Revenue from Contracts with Customers (Topic 606):

Service charges on deposit accounts

Service charges on deposit accounts include account maintenance and analysis fees and transaction-based fees. Account maintenance and analysis fees consist primarily of account fees and analyzed account fees charged on deposit accounts on a monthly basis. The performance obligation is satisfied and the fees are recognized on a monthly basis as the service period is completed. Transaction-based fees consist of non-sufficient funds fees, wire fees, overdraft fees and fees on other products and services and are charged to deposit customers for specific services provided to the customer. The performance obligation is completed as the transaction occurs and the fees are recognized at the time each specific service is provided to the customer.

73

Table of Contents

Investment and brokerage services income

The Bank earns investment and brokerage services fees for providing a broad range of alternative investment products and services through Raymond James Financial Services, Inc. Brokerage fees are generally earned in two ways. Brokerage fees for managed accounts charge a set annual percentage fee based on the underlying portfolio value and are earned and recognized on a quarterly basis. Brokerage fees for a standard commission account are charged on a per transaction fee and are earned and recognized at the time of the transaction.

Debit card income

Debit card income represents fees earned on Bank-issued debit card transactions. The Bank earns interchange fees from debit cardholder transactions through the related payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The performance obligation is satisfied and the fees are earned when the cost of the transaction is charged to the cardholders’ account. Certain expenses directly associated with the debit card are recorded on a net basis with the interchange income.

Other income

Other income within the scope of Topic 606 includes check sales fees, bankcard fees, and merchant fees. Check sales fees, based on check sales volume, are received from check printing companies and are recognized monthly. Bankcard fees are earned from the Bank’s credit card program and are recognized monthly as the service period is completed. Merchant fees are earned for card payment services provided to its merchant customers. The Bank has a contract with a third party to provide card payment services to merchants that contract for those services. Merchant fees are recognized monthly as the service period is completed.

(l) Gain or Loss on Sale of Loans and Servicing Rights

Transfers and servicing of financial assets are accounted for and reported based on consistent application of a financial-components approach that focuses on control. Transfers of financial assets that are sales are distinguished from transfers that are secured borrowings. A sale is recognized when the transaction closes and the proceeds are other than beneficial interests in the assets sold. A gain or loss is recognized to the extent that the sales proceeds and the fair value of the servicing asset exceed or are less than the book value of the loan.

The Company recognizes an asset for the fair value of the rights to service loans for others when loans are sold on a servicing-retained basis. The Company sold substantially all of its conforming long-term residential mortgage loans originated during the years ended December 31, 2025 and 2024, for cash proceeds equal to the fair value of the loans.

Mortgage servicing rights ("MSR") in loans sold are measured by allocating the previous carrying amount of the transferred assets between the loans sold and retained interest, if any, based on their relative fair value at the date of transfer. The Company determines its classes of servicing assets based on the asset type being serviced along with the methods used to manage the risk inherent in the servicing assets, which includes the market inputs used to value the servicing assets. The Company measures and reports its residential mortgage servicing assets initially at fair value and amortizes the servicing rights in proportion to, and over the period of, estimated net servicing revenues. Management assesses servicing rights for impairment as of each financial reporting date. Fair value adjustments that encompass market-driven valuation changes and the runoff in value that occurs from the passage of time are each separately reported.

In determining the fair value of the MSR, the Company uses quoted market prices when available. Subsequent fair value measurements are determined using a discounted cash flow model. In order to determine the fair value of the MSR, the present value of expected future cash flows is estimated. Assumptions used include market discount rates, anticipated prepayment speeds, delinquency and foreclosure rates, and ancillary fee income. This model is periodically validated by an independent external model validation group. The model assumptions and the MSR fair value estimates are also compared to observable trades of similar portfolios as well as to MSR broker valuations and industry surveys, as available. Key assumptions used in measuring the fair value of the MSR as of December 31, were as follows:

Constant prepayment rate 7.53 % 6.76 %

Weighted average life (years) 7.24 7.55

74

Table of Contents

The expected life of the loan can vary from management’s estimates due to prepayments by borrowers, especially when rates fall. Prepayments in excess of management’s estimates would negatively impact the recorded value of the mortgage servicing rights. The value of the mortgage servicing rights is also dependent upon the discount rate used in the model, which we base on current market rates. Management reviews this rate on an ongoing basis based on current market rates. A significant increase in the discount rate would reduce the value of mortgage servicing rights.

(m) Income Taxes

The Company accounts for income taxes under the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A liability for uncertain tax positions is recorded for unrecognized tax benefits related to uncertain tax positions where it is more likely than not that the position will be sustained upon examination by a taxing authority. Interest and/or penalties related to income taxes are reported as a component of provision for income taxes.

(n) Stock Based Compensation

The Company accounts for share based compensation transactions whereby the Company receives employee services in exchange for equity instruments, including stock options and restricted stock. The Company recognizes in the Consolidated Statements of Income the grant-date fair value of stock options and other equity-based forms of compensation issued to employees over their requisite service period (generally the vesting period). The fair value of options granted is determined on the date of the grant using a Black-Scholes-Merton pricing model. The grant date fair value of restricted stock is determined by the closing market price of the day prior to the grant date. The Company issues new shares of common stock upon the exercise of stock options. See Note 15 of Notes to Consolidated Financial Statements.

(o) Earnings Per Share (“EPS”)

Basic EPS includes no dilution and is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period, excluding non-vested restricted shares. Diluted EPS reflects the potential dilution of securities that could share in the earnings of an entity. The number of potential common shares included in annual diluted EPS is a year-to-date average of the number of potential common shares included in each quarter’s diluted EPS computation under the treasury stock method. The calculation of weighted average shares includes two classes of the Company’s outstanding common stock: common stock and restricted stock awards. Holders of restricted stock also receive dividends at the same rate as common shareholders, subject to vesting restrictions, and they both share equally in undistributed earnings. There are no unvested share-based payment awards that contain nonforfeitable rights to dividends. See Note 14 of Notes to Consolidated Financial Statements.

(p) Advertising Costs

Advertising costs were $491 and $460 for the years ended December 31, 2025 and 2024, respectively. Advertising costs are expensed as incurred.

(q) Comprehensive Income

Accounting principles generally accepted in the United States require that recognized revenue, expenses, gains, and losses be included in net income. Certain changes in assets and liabilities, such as unrealized gain and losses on available-for-sale securities and directors’ and officers’ retirement plans, are reported as a separate component of the equity section of the Consolidated Balance Sheet. Such items, along with net income, are components of comprehensive income.

(r) Stock Dividend

On January 23, 2025, the Company announced that its Board of Directors had declared a 5% stock dividend which resulted in approximately 758,576 shares, which were paid on March 25, 2025 to shareholders of record as of February 28, 2025. On January 22, 2026, the Company announced that its Board of Directors had declared a 5% stock dividend which will result in approximately 781,251 shares, which will be paid on March 25, 2026 to shareholders of record as of February 27, 2026.

75

Table of Contents

Data for earnings per share and stock compensation plans for all periods presented have been adjusted to give retroactive effect to stock dividends and stock splits, including the 5% stock dividend declared on January 22, 2026. December 31, 2025 figures included in the Consolidated Balance Sheets and Consolidated Statement of Stockholders’ Equity have been adjusted to reflect the estimated impact of the 2026 stock dividend. Figures that have been adjusted include common stock shares issued and outstanding, common stock balance and retained earnings balance. The December 31, 2024 and 2023 balances included in the Consolidated Balance Sheets and Statement of Stockholders’ Equity have not been adjusted to retroactively reflect the stock dividends, but instead show the historical rollforward of stock dividends declared.

(s) Segment Reporting

The Company is a holding company for a community bank, which offers a wide array of products and services to its customers. The Bank's primary business is that of a traditional banking institution, gathering deposits and originating loans in its respective primary market areas. Pursuant to its banking strategy, emphasis is placed on building relationships with its customers, as opposed to building specific lines of business. As a result, the Company is not organized around discernible lines of business and prefers to work as an integrated unit to customize solutions for its customers, with business line emphasis and product offerings changing over time as needs and demands change. The Company's operations are managed, and financial performance is evaluated, by our chief operating decision maker on a Company-wide basis. The performance of the Company is reviewed monthly by the Company's executive management and Board of Directors. As resource allocation and performance decisions are not made based on discrete financial information of individual lines of business, the Company considers its current business and operations as a single reportable operating segment. See Note 23 of Notes to Consolidated Financial Statements.

(t) Business Combinations

The Company accounts for acquisitions of businesses using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair values at the date of acquisition. Management utilizes various valuation techniques including discounted cash flow analyses to determine these fair values. Any excess of the purchase consideration over the fair value of acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill and a deficit is recognized as a bargain purchase gain.

Goodwill and intangible assets acquired in a business combination and that are determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate the necessity for such impairment tests to be performed. The Company has no goodwill arising from business combinations. The Company recognized a bargain purchase gain arising from business combinations in 2023. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Core deposit intangible assets arising from business combinations are amortized on an accelerated basis reflecting the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up. The total estimated life of the core deposit intangible is approximately 10 years. Other intangible assets represent a customer-related intangible asset acquired and recorded at fair value. The total estimated life of the customer-related intangible asset is approximately 5 years.

(u) Impact of Recently Issued Accounting Standards

Accounting Standards Adopted in 2025

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures. Among other things, these amendments provide additional transparency into an entity’s income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The standard requires that public business entities disclose, on an annual basis, specific categories in the rate reconciliation and additional information for reconciling items meeting a certain quantitative threshold. The amendments also require that entities disclose on an annual basis: 1) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes and 2) the income taxes paid (net of refunds received) disaggregated by individual jurisdictions exceeding 5% of total income taxes paid (net of refunds received). The amendments are effective for public business entities for annual periods beginning after December 15, 2024. The Company adopted this ASU retrospectively. Adoption of this ASU did not have a material impact on the Company's consolidated financial statements. For additional information, see Note 18 to the Consolidated Financial Statements in this Form 10-K.

76

Table of Contents

In March 2024, the FASB issued guidance within ASU 2024-01,Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The amendments in the ASU apply to companies that provide employees and non-employees with profits interest and similar awards to align compensation with a company’s operating performance and provide those holders with the opportunity to participate in future profits and/or equity appreciation of the company. The purpose of the ASU is to clarify the application of the scope guidance in Accounting Standards Codification (ASC) paragraph 718-10-15-3 in determining if a profit interest award should be accounted for in accordance with Topic 718: Compensation—Stock Compensation. The amendment in ASC paragraph 718-10-15-3 is solely intended to improve the overall clarity and does not change the guidance. The ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If a company adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes the interim period. The amendments should be applied either (1) retrospectively to all prior periods presented in the financial statements or (2) on a prospective basis. Adoption of this ASU did not have a material impact on the Company’s consolidated financial statements, as the Company does not typically provide these types of awards. For additional information, see Note 15 to the Consolidated Financial Statements in this Form 10-K.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. In January 2025, the FASB issued ASU 2025-01,Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. ASU 2025-01 amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU 2024-03 is permitted. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.

In November 2025, the FASB issued ASU 2025-08,Financial Instruments - Credit Losses (Topic 326): Purchased Loans. This ASU expands the population of acquired financial assets accounted for using the gross-up approach. Acquired loans (excluding credit cards) are deemed purchased seasoned loans and accounted for using the gross-up approach upon acquisition if criteria established by the new guidance are met. This change aims to enhance comparability, consistency, and better reflect the economics of acquiring financial assets. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.

In November 2025, the FASB issued ASU 2025-09,Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. This ASU enables entities to apply hedge accounting to a greater number of highly effective economic hedges in the following five areas: similar risk assessment for cash flow hedges, hedging forecasted interest payments on choose-your-rate debt instruments, cash flow hedges of nonfinancial forecasted transactions, net written options as hedging instruments, foreign-currency-denominated debt instrument as hedging instrument and hedged item (dual hedge). This ASU is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted on any date on or after the issuance of ASU No.2025-09. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11,Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU does not change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. The amendments in this ASU: clarify that the guidance in Topic 270 applies to all entities that provide interim financial statements and notes in accordance with GAAP; create a comprehensive list in FASB Accounting Standards Codification Topic 270 of interim disclosures that are required in interim financial statements and notes in accordance with GAAP; incorporate a disclosure principle, which is modeled after previous SEC guidance, that requires entities to disclose events and changes that occur after the end of the most recent fiscal year that have a material impact on the entity; and improve guidance about information included in and the format of interim financial statements. The amendments in this ASU are effective for pubic business entities for interim periods within annual periods beginning after December 15, 2027. Early adoption is permitted for all entities. The amendments can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.

77

Table of Contents

In December 2025, the FASB issued ASU 2025-12,Codification Improvements. The amendments in this ASU update the FASB ASC for a broad range of Topics arising from technical corrections, unintended application of the ASC, clarifications, and other minor improvements. The amendments in this ASU, which addresses 33 issues, affect a wide variety of Topics in the ASC and apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this ASU are effective for all entities for annual periods beginning after December 15, 2026, and interim periods within those annual periods. Early adoption is permitted in both interim and annual periods in which financial statements have not yet been issued or made available for issuance. The Company is evaluating the accounting and disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.

78

Table of Contents

(2) Investment Securities

The amortized cost, unrealized gains and losses, estimated fair values and related allowance for credit losses on investments in debt and other securities at December 31, 2025 are summarized as follows:

Amortized Unrealized Unrealized Estimated fair

cost gains losses value ACL

Investment securities available-for-sale:

The amortized cost, unrealized gains and losses, estimated fair values and related allowance for credit losses on investments in debt and other securities at December 31, 2024 are summarized as follows:

Amortized Unrealized Unrealized Estimated fair

cost gains losses value ACL

Investment securities available-for-sale:

Gross realized gains from sales and calls of available-for-sale securities were $93 and $0 for the years ended December 31, 2025 and 2024, respectively. Gross realized losses from sales of available-for-sale securities were $292 and $234 for the years ended December 31, 2025 and 2024, respectively.

The amortized cost and estimated fair value of debt and other securities at December 31, 2025, by contractual maturity, are shown in the following table:

Amortized Estimated

cost fair value

Maturity in years:

Due after five years through ten years 38,904 38,235

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. In addition, factors such as prepayments and interest rates may affect the yield on the carrying value of mortgage-related securities.

79

Table of Contents

An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of December 31, 2025, follows:

Less than 12 months 12 months or more Total

Thirty securities, all considered investment grade, which had a fair value of $57,763 and a total unrealized loss of $138, have been in an unrealized loss position for less than twelve months as of December 31, 2025. Three hundredforty-four securities, all considered investment grade, which had a fair value of $301,152 and total unrealized loss of $25,276, have been in an unrealized loss position for more than twelve months as of December 31, 2025. The unrealized losses on the Company's investment securities were caused by market conditions for these types of investments, particularly changes in risk-free interest rates. The decline in fair value is attributable to changes in interest rates and not credit quality, and the Company does not intend to sell the securities. The Company has concluded it is not more likely than not that the Company will be required to sell these securities prior to recovery of their anticipated cost basis. Therefore, as of December 31, 2025 and December 31, 2024, the Company had not recorded an allowance for credit losses on these securities and the unrecognized or unrealized losses on these securities have not been recognized into income.

The fair value of investment securities could decline in the future if the general economy deteriorates, inflation increases, credit ratings decline, the issuer's financial condition deteriorates, or the liquidity for securities declines. As a result, a credit loss may occur in the future.

An analysis of gross unrealized losses of the available-for-sale investment securities portfolio as of December 31, 2024, follows:

Less than 12 months 12 months or more Total

Investment securities carried at $95,479 and $53,589 at December 31, 2025 and 2024, respectively, were pledged to secure public deposits or for other purposes as required or permitted by law.

80

Table of Contents

(3) Loans and Allowance for Credit Losses

The composition of the Company’s loan portfolio, by loan class, as of December 31, is as follows:

Deferred origination fees and costs, net 733 142

At December 31, 2025 and 2024, all loans were pledged under a blanket collateral lien to secure actual and potential borrowings from the Federal Home Loan Bank.

Allowance for Credit Losses

The following table summarizes the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the Consolidated Balance Sheets within other liabilities as of December 31, 2025:

Allowance for Credit Losses – Year ended December 31, 2025