Bank First Corp

Previous wording

General**.** Net income increased $0.8 million to $16.9 million for three months ended June 30, 2025, comparedto $16.1 million for the same period in 2024. This increase is primarily driven from new and renewed loans pricing at higher yields while deposits, particularly certificates, continue to reprice lower. Average balances of interest-earning assets grew $0.3 million period-over-period, amplifying the impact of higher yields on these new and renewed loans.

Current wording

General**.** Net income increased $1.4 million to $18.0 million for three months ended September 30, 2025, comparedto $16.6 million for the same period in 2024. This increase is primarily driven from new and renewed loans pricing at higher yields while deposits, particularly certificates, continue to reprice lower.

Previous wording

Net interest and dividend income increased by $3.7 million to $36.7 million for the three months ended June 30, 2025 compared to $33.0 million for three months ended June 30, 2024. Total average interest-earning assets were $4.01 billion for the three months ended June 30, 2025, up from $3.70 billion for the same period in 2024. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve.

Current wording

Net interest and dividend income increased by $2.4 million to $38.3 million for the three months ended September 30, 2025 compared to $35.9 million for three months ended September 30, 2024. Total average interest-earning assets were $3.95 billion for the three months ended September 30, 2025, up from $3.83 billion for the same period in 2024. In addition, average rates paid on interest-bearing liabilities declined from 2.79% for the three months ended September 30, 2024, to 2.52% for the three months ended September 30, 2025. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve.

Previous wording

Interest Expense. Interest expense increased $1.6 million, or 9.4%, to $17.9 million for the three months ended June 30, 2025 compared to $16.3 million for the same period in 2024. The increase in interest expense was primarily due to higher levels of interest-bearing liabilities.

Current wording

Interest Expense. Interest expense decreased $0.9 million, or 5.2%, to $17.2 million for the three months ended September 30, 2025 compared to $18.1 million for the same period in 2024.

Previous wording

Interest expense on interest-bearing deposits increased by $0.4 million to $16.2 million for the three months ended June 30, 2025 compared to $15.8 million for the same period in 2024. The average balance and rate of interest-bearing deposits was $2.62 billion and 2.48% for the three months ended June 30, 2025, compared to $2.42 billion and 2.63% for the same period in 2024. The Bank's cost of funds decreased by 0.07% from the second quarter of 2024, including a decrease of 0.44% in the average rate paid on the Bank's interest checking and 0.35% in average rate paid on the Bank’s certificate of deposits.

Current wording

Interest expense on interest-bearing deposits decreased by $0.7 million to $15.8 million for the three months ended September 30, 2025 compared to $16.5 million for the same period in 2024. The average balance and rate of interest-bearing deposits was $2.59 billion and 2.42% for the three months ended September 30, 2025, compared to $2.44 billion and 2.69% for the same period in 2024. The Bank's cost of funds decreased by 0.27% from the third quarter of 2024, including a decrease of 0.54% in the average rate paid on the Bank's interest checking and 0.56% in average rate paid on the Bank’s certificate of deposits.

Previous wording

We recorded a provision of $0.2 million for credit loss during the three months ended June 30, 2025 compared to no provision for credit loss during the same period in 2024. Economic forecasts, primarily US gross domestic product projections, decreased slightly during the second quarter of 2025 while projections for unemployment increased. We recorded minimal net charge-offs during the three months ended June 30, 2025 compared to net recoveries of $0.2 million during the three months ended June 30, 2024. Also, due to a reduction in unfunded loan commitments and an increase in outstanding loans, the Bank moved $0.4 million from its ACL-Unfunded Commitments to its ACL – Loans during the second quarter of 2025. The Bank’s loan portfolio continues to exhibit very little credit stress. The ACL - Loans was $44.3 million, or 1.24% of total loans, at June 30, 2025 compared to $45.1 million, or 1.32% of total loans at June 30, 2024.

Current wording

We recorded a provision of $0.7 million for credit loss during the three months ended September 30, 2025 compared to no provision for credit loss during the same period in 2024. Economic forecasts, primarily US gross domestic product projections, increased slightly during the third quarter of 2025 while projections for unemployment also increased. We incurred minimal net charge-offs during the three months ended September 30, 2025 compared to net charge-offs of $0.3 million during the three months ended September 30, 2024. The Bank’s loan portfolio continues to exhibit very little credit stress. The ACL - Loans was $44.5 million, or 1.23% of total loans, at September 30, 2025 compared to $45.2 million, or 1.30% of total loans at September 30, 2024.

Previous wording

Noninterest income decreased $1.0 million to $4.9 million for the three months ended June 30, 2025 compared to$5.9 million for the same period in 2024. Income provided by the Bank’s investment in Ansay & Associates, LLC totaled $1.2 million during the second quarter of 2025, down $0.2 million from the prior-year second quarter. Negative valuation adjustments to the Bank’s MSRs totaling $0.1 million during the second quarter of 2025 compared negatively to $0.3 million in positive valuation adjustments during the second quarter of 2024. Finally, the Bank benefited from a $0.4 million gain during the second quarter of 2024 from death benefits on bank-owned life insurance policies, creating a negative variance year-over-year in other non-interest income for the second quarter.

Current wording

Noninterest income increased $1.1 million to $6.0 million for the three months ended September 30, 2025 compared to$4.9 million for the same period in 2024. Income provided by the Bank’s investment in Ansay totaled $1.3 million during the third quarter of 2025, up $0.3 million from the prior-year third quarter. Positive valuation adjustments to the Bank’s MSRs totaling $0.2 million during the third quarter of 2025 compared favorably to $0.3 million in negative valuation adjustments during the third quarter of 2024. Finally, gains on sales of mortgage loans totaled $0.5 million during the third quarter of 2025, up from $0.4 million in the prior-year third quarter.

Previous wording

Income Tax Expense. We recorded a provision for income taxes of $3.8 million for the three months ended June 30, 2025 compared to a provision of $3.8 million for the same period during 2024, reflecting effective tax rates of 18.3% and 19.0%, respectively. The effective tax rates were reduced from the statutory federal and state income tax rates during both periods as a result of tax-exempt interest income produced by certain qualifying loans and investments in the Bank’s portfolios.

Current wording

Income Tax Expense. We recorded a provision for income taxes of $4.5 million for the three months ended September 30, 2025 compared to a provision of $4.1 million for the same period during 2024, reflecting effective tax rates of 19.9% for both periods. The effective tax rates were reduced from the statutory federal and state income tax rates during both periods as a result of tax-exempt interest income produced by certain qualifying loans and investments in the Bank’s portfolios.

Previous wording

Results of Operations for the Six Months Ended June 30, 2025 and June 30, 2024

Current wording

Results of Operations for the Nine Months Ended September 30, 2025 and September 30, 2024

Previous wording

General**.** Net income increased $3.6 million to $35.1 million for six months ended June 30, 2025, comparedto $31.5 million for the same period in 2024. The Bank’s net income continues to benefit from new and renewed loans being priced at higher yields, while deposits continue to reprice lower.

Current wording

General**.** Net income increased $5.1 million to $53.1 million for the nine months ended September 30, 2025, comparedto $48.0 million for the same period in 2024. The Bank’s net income continues to benefit from new and renewed loans being priced at higher yields, while deposits continue to reprice lower.

Previous wording

Net Interest Income**.** Net interest and dividend income increased by $6.8 million to $73.2 million for the six months ended June 30, 2025 compared to $66.4 million for six months ended June 30, 2024. As discussed earlier, the rise in net interest income was mainly driven by the repricing of new and renewed loans in a higher interest rate environment and overall growth in interest-earning assets. Comparing the first six months of 2025 to the first six months of 2024, rates earned on interest-earning assets increased by 0.13% while average interest-earning assets increased by $334.9 million. Tax equivalent net interest margin increased 0.07% to 3.69% for the six months ended June 30, 2025, up from 3.62% for the same period in 2024. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve.

Current wording

Net Interest Income**.** Net interest and dividend income increased by $9.3 million to $111.5 million for the nine months ended September 30, 2025 compared to $102.2 million for nine months ended September 30, 2024. As discussed earlier, the rise in net interest income was mainly driven by the repricing of new and renewed loans in a higher interest rate environment and overall growth in interest-earning assets. Comparing the first nine months of 2025 to the first nine months of 2024, rates earned on interest-earning assets increased by 0.07% while average interest-earning assets increased by $260.7 million. Tax equivalent net interest margin increased 0.08% to 3.75% for the nine months ended September 30, 2025, up from 3.67% for the same period in 2024. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve.

Previous wording

Interest Income. Total interest income increased $11.0 million, or 11.2%, to $109.6 million for the six months ended June 30, 2025 compared to $98.6 million for the same period in 2024. The increase in total interest income was primarily due to the aforementioned increase in rates earned on higher average interest-earning assets over recent quarters.

Current wording

Interest Income. Total interest income increased $12.4 million, or 8.1%, to $165.1 million for the nine months ended September 30, 2025 compared to $152.7 million for the same period in 2024. The increase in total interest income was primarily due to the aforementioned increase in rates earned on higher average interest-earning assets over recent quarters.

Previous wording

Interest Expense. Interest expense increased $4.1 million, or 12.8%, to $36.4 million for the six months ended June 30, 2025 compared to $32.3 million for the same period in 2024. The increase in interest expense was primarily due to elevated balances in average interest-bearing liabilities. The average balance of interest-bearing liabilities increased by $310.1 million during the first six months of 2025 compared to the same period in 2024 and the average interest rate paid on these balances was 2.62% for the first half of 2025 compared to 2.61% for the first half of 2024.

Current wording

Interest Expense. Interest expense increased $3.2 million, or 6.3%, to $53.6 million for the nine months ended September 30, 2025 compared to $50.4 million for the same period in 2024. The increase in interest expense was primarily due to elevated balances in average interest-bearing liabilities. The average balance of interest-bearing liabilities increased by $248.3 million during the first nine months of 2025 compared to the same period in 2024. Offsetting the cost of these higher levels of average interest-bearing liabilities was a decline in the average interest rate paid on these balances which declined from 2.67% for the first three quarters of 2024 to 2.59% for the first three quarters of 2025.

Previous wording

Interest expense on interest-bearing deposits totaled $33.1 million and $31.2 million for the six months ended June 30, 2025 and 2024, respectively. The average cost of interest-bearing deposits was 2.51% for the six months ended June 30, 2025, compared to 2.57% for the same period in 2024.

Current wording

Interest expense on interest-bearing deposits totaled $48.8 million and $47.7 million for the nine months ended September 30, 2025 and 2024, respectively. The average cost of interest-bearing deposits was 2.48% for the nine months ended September 30, 2025, compared to 2.61% for the same period in 2024.

Previous wording

Provision for Credit Losses. We recorded a provision for credit losses of $0.6 million for the six months ended June 30, 2025 compared to $0.2 million for the same period in 2024. The increased provision for the first six months of 2025 was primarily related to loan growth. We recorded net charge-offs of $0.8 million for the six months ended June 30, 2025 compared to net recoveries of $0.8 million for the same period in 2024. As mentioned earlier, due to a reduction in unfunded loan commitments and an increase in outstanding loans, the Bank also transferred $0.4 million from its ACL-Unfunded Commitments to its ACL – Loans during the first six months of 2025. The ACL - Loans was $44.3 million, or 1.24% of total loans, at June 30, 2025 compared to $45.1 million, or 1.32% of total loans at June 30, 2024.

Current wording

Provision for Credit Losses. We recorded a provision for credit losses of $1.3 million for the nine months ended September 30, 2025 compared to $0.2 million for the same period in 2024. The increased provision for the first nine months of 2025 was primarily related to loan growth. We recorded net charge-offs of $0.8 million for the nine months ended September 30, 2025 compared to net recoveries of $0.5 million for the same period in 2024. The ACL - Loans was $44.5 million, or 1.23% of total loans, at September 30, 2025 compared to $45.2 million, or 1.30% of total loans at September 30, 2024.

Previous wording

Noninterest Expense. Noninterest expense increased $2.0 million to $41.4 million for the six months ended June 30, 2025 compared to $39.4 million for the same period in 2024. Occupancy expense increased by $0.6 million, or 20.6%, over the first half of 2024 due to aforementioned branch construction and remodel projects competed during the first six months of 2025. Data processing expense increased by $0.6 million, or 12.5%, over the first two quarters of 2025 due to the aforementioned elevated expenditures related to the Bank’s upgrade of its digital banking platform. Also, federal deposit insurance increased primarily due to elevated deposit levels which occurred late in the fourth quarter of 2024 and persisted through much of the second quarter of 2025. Finally, gains on sales and valuations of OREO totaling $0.2 million during the first two quarters of 2025 was less than similar gains of $0.5 million during the first two quarters of 2024.

Current wording

Noninterest Expense. Noninterest expense increased $2.9 million to $62.4 million for the nine months ended September 30, 2025 compared to $59.5 million for the same period in 2024. Occupancy expense increased by $0.6 million, or 12.6%, in the year-over-year third quarters due to branch construction and remodel projects competed during the first nine months of 2025. Data processing expense increased by $0.6 million, or 8.1%, in the year-over-year third quarters due to elevated expenditures related to the Bank’s upgrade of its digital banking platform during 2025. Outside service fees were elevated through nine months of 2025 due to $0.9 million in expenses related to the Company’s acquisition of Centre. Federal deposit insurance increased primarily due to elevated deposit levels which occurred late in the fourth quarter of 2024 and persisted through much of the first three quarters of 2025. Finally, gains on sales and valuations of OREO totaling $0.2 million during the first three quarters of 2025 was less than similar gains of $0.5 million during the first three quarters of 2024.

Previous wording

Income Tax Expense. We recorded a provision for income taxes of $7.7 million for the six months ended June 30, 2025 compared to a provision of $5.6 million for the same period during 2024, reflecting effective tax rates of 17.9% and 15.1%, respectively. The Company’s home state passed tax legislation during the third quarter of 2023 which exempted income from a significant portion of the Company’s loans from taxation in Wisconsin. Final rules relating to qualifying loans under this legislation were not published until the first quarter of 2024. Based on these final rules, the Company was able to further reduce its estimated tax liability from 2023 by $1.3 million, resulting in the lower provision for income taxes and effective tax rate during the first six months of 2024. The effective tax rates were reduced from the statutory federal and state income tax rates during both periods as a result of tax-exempt interest income produced by certain qualifying loans and investments in the Bank’s portfolios.

Current wording

Income Tax Expense. We recorded a provision for income taxes of $12.2 million for the nine months ended September 30, 2025 compared to a provision of $9.7 million for the same period during 2024, reflecting effective tax rates of 18.6% and 16.8%, respectively. The Company’s home state passed tax legislation during the third quarter of 2023 which exempted income from a significant portion of the Company’s loans from taxation in Wisconsin. Final rules relating to qualifying loans under this legislation were not published until the first quarter of 2024. Based on these final rules, the Company was able to further reduce its estimated tax liability from 2023 by $1.3 million, resulting in the lower provision for income taxes and effective tax rate during the first nine months of 2024. The effective tax rates were reduced from the statutory federal and state income tax rates during both periods as a result of tax-exempt interest income produced by certain qualifying loans and investments in the Bank’s portfolios.

Previous wording

Total Assets. Total assets decreased $130.0 million, or 2.9%, to $4.37 billion at June 30, 2025, from $4.50 billion at December 31, 2024.

Current wording

Total Assets. Total assets decreased $74.6 million, or 1.7%, to $4.42 billion at September 30, 2025, from $4.50 billion at December 31, 2024.

Previous wording

Investment Securities. The carrying value of total investment securities decreased by $56.7 million to $277.1 million at June 30, 2025, from $333.8 million at December 31, 2024. The decrease in investments was primarily attributed to the maturity of short-duration securities during the first half of 2025. These investments were acquired during the fourth quarter of 2024 to meet heightened needs for collateral due to a seasonal collateralized deposit increase.

Current wording

Investment Securities. The carrying value of total investment securities decreased by $59.9 million to $273.9 million at September 30, 2025, from $333.8 million at December 31, 2024. The decrease in investments was primarily attributed to the maturity of short-duration securities during the first quarter of 2025. These investments were acquired during the fourth quarter of 2024 to meet heightened needs for collateral due to a seasonal increase in collateralized deposits.

Previous wording

Loans. Net loans increased by $63.0 million, totaling $3.54 billion at June 30, 2025 compared to $3.47 billion at December 31, 2024.

Current wording

Loans. Net loans increased by $112.1 million, totaling $3.59 billion at September 30, 2025 compared to $3.47 billion at December 31, 2024.

Previous wording

Deposits. Deposits decreased $65.6 million, or 1.8%, to $3.60 billion at June 30, 2025 from $3.66 billion at December 31, 2024.

Current wording

Deposits. Deposits decreased $122.3 million, or 3.3%, to $3.54 billion at September 30, 2025 from $3.66 billion at December 31, 2024.

Previous wording

Borrowings. At June 30, 2025, borrowings consisted of advances from the FHLB of Chicago and subordinated debt to other banks and an individual. FHLB borrowings decreased $25.5 million, or 18.8%, to $109.9 million at June 30, 2025 from $135.4 million at December 31, 2024. Subordinated debt remained stable at $12.0 million at June 30, 2025 and December 31, 2024.

Current wording

Borrowings. At September 30, 2025, borrowings consisted of advances from the FHLB of Chicago and subordinated debt to other banks and an individual. FHLB borrowings increased $74.5 million, or 55.1%, to $209.9 million at September 30, 2025 from $135.4 million at December 31, 2024. The Company executed a three week borrowing from the FHLB of Chicago totaling $100.0 million on the final day of the most recent quarter to enhance its liquidity position due to seasonal lows in customer core deposits. Subordinated debt remained stable at $12.0 million at September 30, 2025 and December 31, 2024.

Previous wording

Stockholders’ Equity. Total stockholders’ equity decreased $27.4 million, or 4.3%, to $612.3 million at June 30, 2025 from $639.7 million at December 31, 2024. Repurchases of the Company’s common stock totaling $22.0 million and dividends declared totaling $43.6 million offset the positive impact of earnings totaling $35.1 million during the first six months of the year.

Current wording

Stockholders’ Equity. Total stockholders’ equity decreased $11.6 million, or 1.8%, to $628.1 million at September 30, 2025 from $639.7 million at December 31, 2024. Repurchases of the Company’s common stock totaling $22.0 million and dividends declared totaling $48.1 million offset the positive impact of earnings totaling $53.1 million during the first nine months of the year.

Previous wording

Our loan portfolio is our most significant earning asset, comprising 82.1% and 78.3% of our total assets as of June 30, 2025 and December 31, 2024, respectively. Our strategy is to grow our loan portfolio by originating quality commercial and consumer loans that comply with our credit policies and that produce revenues consistent with our financial objectives. We believe our loan portfolio is well-balanced, which provides us with the opportunity to grow while monitoring our loan concentrations.

Current wording

Our loan portfolio is our most significant earning asset, comprising 82.2% and 78.3% of our total assets as of September 30, 2025 and December 31, 2024, respectively. Our strategy is to grow our loan portfolio by originating quality commercial and consumer loans that comply with our credit policies and that produce revenues consistent with our financial objectives. We believe our loan portfolio is well-balanced, which provides us with the opportunity to grow while monitoring our loan concentrations.

Previous wording

Loans increased $63.2 million, or 1.8%, to $3.58 billion as of June 30, 2025 compared to $3.52 billion as of December 31, 2024. This increase during the first six months of 2025 was primarily driven by solid demand for new credit from our existing customer relationships. This growth was comprised of an increase of $38.3 million or 6.5% in commercial and industrial loans, a decrease of $4.7 million or 0.6% in owner occupied commercial real estate loans, an increase of $9.4 million or 1.8% in non-owner occupied commercial real estate, an increase of $50.8 million or 15.6% in multi-family loans, a decrease of $28.1 million or 10.1% in construction and development loans, a decrease of $4.2 million or 0.5% in residential 1-4 family loans and an increase of $1.7 million or 2.4% in consumer and other loans.

Current wording

Loans increased $112.5 million, or 3.2%, to $3.63 billion as of September 30, 2025 compared to $3.52 billion as of December 31, 2024. This increase during the first nine months of 2025 was primarily driven by solid demand for new credit from our existing customer relationships. This growth was comprised of an increase of $64.3 million or 10.9% in commercial and industrial loans, an increase of $15.2 million or 1.8% in owner occupied commercial real estate loans, an increase of $1.3 million or 0.3% in non-owner occupied commercial real estate, an increase of $45.6 million or 14.0% in multi-family loans, a decrease of $15.5 million or 5.6% in construction and development loans, an increase of $1.6 million or 0.2% in residential 1-4 family loans and a negligible increase in consumer and other loans.

Previous wording

Commercial and Industrial (C&I). Our C&I portfolio totaled $628.5 million and $590.2 million at June 30, 2025 and December 31, 2024, respectively, and represented 18% of our total loans as of June 30, 2025 and 17% of our total loans as of December 31, 2024.

Current wording

Commercial and Industrial (C&I). Our C&I portfolio totaled $654.4 million and $590.2 million at September 30, 2025 and December 31, 2024, respectively, and represented 18% of our total loans as of September 30, 2025 and 17% of our total loans as of December 31, 2024.

Previous wording

Commercial Real Estate (CRE). Our CRE loan portfolio totaled $1.74 billion and $1.68 billion at June 30, 2025 and December 31, 2024, respectively, and represented 48% of our total loans at those dates. The growth in our CRE loan portfolio through the first six months of 2025 consisted primarily of multi-family real estate as developers respond to a shortage of available dwellings in our markets. Management views owner occupied CRE as an extension of C&I lending as typically the primary repayment source on these loans is operating profits from the underlying business.

Current wording

Commercial Real Estate (CRE). Our CRE loan portfolio totaled $1.74 billion and $1.68 billion at September 30, 2025 and December 31, 2024, respectively, and represented 48% of our total loans at those dates. The growth in our CRE loan portfolio through the first nine months of 2025 consisted primarily of multi-family real estate as developers respond to a shortage of available dwellings in our markets. Management views owner occupied CRE as an extension of C&I lending as typically the primary repayment source on these loans is operating profits from the underlying business.

Previous wording

Construction and Development (C&D). Our C&D loan portfolio totaled $249.9 million and $278.0 million at June 30, 2025 and December 31, 2024, respectively, and represented 7% of our total loans as of June 30, 2025 and 8% of our total loans as of December 31, 2024.

Current wording

Construction and Development (C&D). Our C&D loan portfolio totaled $262.4 million and $278.0 million at September 30, 2025 and December 31, 2024, respectively, and represented 7% of our total loans as of September 30, 2025 and 8% of our total loans as of December 31, 2024.

Previous wording

Our C&D loans are generally for the purpose of creating value out of real estate through construction and development work, and also include loans used to purchase recreational use land. Borrowers typically provide a copy of a construction or development contract which is subject to bank acceptance prior to loan approval. Disbursements are handled by a title company. Borrowers are required to inject their own equity into the project prior to any note proceeds being disbursed. These loans are, by their nature, intended to be short term and are refinanced into other loan types at the end of the construction and development period.

Current wording

Our C&D loans are generally for the purpose of creating value out of real estate through construction and development work, and also include loans used to purchase recreational use land. Borrowers typically provide a copy of a construction or development contract which is subject to bank acceptance prior to loan approval. Disbursements are handled by a title company. Borrowers are required to inject their own equity into the project prior to any note proceeds being disbursed. These loans are, by their nature, intended to be short term and are refinanced into other loan types at the end of the construction and development period. This short term and transitory nature causes the total balances in this loan category to increase and decrease from period-to-period.

Previous wording

Residential 1 – 4 Family. Residential 1 – 4 family loans held in portfolio amounted to $891.7 million and $895.9 million at June 30, 2025 and December 31, 2024, respectively, and represented 25% of our total loans at those dates.

Current wording

Residential 1 – 4 Family. Residential 1 – 4 family loans held in portfolio amounted to $897.5 million and $895.9 million at September 30, 2025 and December 31, 2024, respectively, and represented 25% of our total loans at those dates.

Previous wording

We offer fixed and adjustable-rate residential mortgage loans with maturities up to 30 years. One-to-four family residential mortgage loans are generally underwritten according to Fannie Mae guidelines, and we refer to loans that conform to such guidelines as “conforming loans.” We generally originate both fixed and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency, which is generally $726,200 for one-unit properties. In addition, we also offer loans above conforming lending limits typically referred to as “jumbo” loans. These loans are typically underwritten to the same guidelines as conforming loans; however, we may choose to hold a jumbo loan within its portfolio with underwriting criteria that does not exactly match conforming guidelines.

Current wording

We offer fixed and adjustable-rate residential mortgage loans with maturities up to 30 years. One-to-four family residential mortgage loans are generally underwritten according to Fannie Mae guidelines, and we refer to loans that conform to such guidelines as “conforming loans.” We generally originate both fixed and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits as established by the Federal Housing Finance Agency, which is generally $806,500 for one-unit properties. In addition, we also offer loans above conforming lending limits typically referred to as “jumbo” loans. These loans are typically underwritten to the same guidelines as conforming loans; however, we may choose to hold a jumbo loan within its portfolio with underwriting criteria that does not exactly match conforming guidelines.

Previous wording

We were servicing mortgage loans sold to others without recourse of approximately $1.17 billion at June 30, 2025 and December 31, 2024.

Current wording

We were servicing mortgage loans sold to others without recourse of approximately $1.18 billion and $1.17 billion at September 30, 2025 and December 31, 2024, respectively.

Previous wording

Loans sold with the retention of servicing assets result in the capitalization of servicing rights. Loan servicing rights are carried at fair value. The net balance of capitalized servicing rights amounted to $13.4 million at June 30, 2025 and December 31, 2024.

Current wording

Loans sold with the retention of servicing assets result in the capitalization of servicing rights. Loan servicing rights are carried at fair value. The net balance of capitalized servicing rights amounted to $13.7 million at September 30, 2025 and $13.4 million December 31, 2024.

Previous wording

Consumer Loans. Our consumer loan portfolio totaled $57.9 million and $55.4 million at June 30, 2025 and December 31, 2024, respectively, and represented 2% of our total loans at those dates. Consumer loans include secured and unsecured loans, lines of credit and personal installment loans.

Current wording

Consumer Loans. Our consumer loan portfolio totaled $57.4 million and $55.4 million at September 30, 2025 and December 31, 2024, respectively, and represented 2% of our total loans at those dates. Consumer loans include secured and unsecured loans, lines of credit and personal installment loans.

Previous wording

Other Loans. Our other loans totaled $14.8 million and $15.6 million at June 30, 2025 and December 31, 2024, respectively, and are immaterial to the overall loan portfolio. The other loans category consists primarily of over-drafted depository accounts, loans utilized to purchase or carry securities and loans to nonprofit organizations.

Current wording

Other Loans. Our other loans totaled $13.7 million and $15.6 million at September 30, 2025 and December 31, 2024, respectively, and are immaterial to the overall loan portfolio. The other loans category consists primarily of over-drafted depository accounts, loans utilized to purchase or carry securities and loans to nonprofit organizations.

Previous wording

Loans are typically placed on nonaccrual status when any payment of principal and/or interest is 90 days or more past due, unless the collateral is sufficient to cover both principal and interest and the loan is in the process of collection. Loans are also placed on nonaccrual status when management believes, after considering economic and business conditions, that the principal or interest will not be collectible in the normal course of business. We monitor closely the performance of our loan portfolio. In addition to the monitoring and review of loan performance internally, we have also contracted with an independent organization to review our commercial and retail loan portfolios. The status of delinquent loans, as well as situations identified as potential problems, are reviewed on a regular basis by senior management. The increase in the amount of nonaccrual loans through the first six months of 2025 was primarily due to the deterioration of one customer relationship, which resulted in the loan being moved to nonaccrual status.

Current wording

Loans are typically placed on nonaccrual status when any payment of principal and/or interest is 90 days or more past due, unless the collateral is sufficient to cover both principal and interest and the loan is in the process of collection. Loans are also placed on nonaccrual status when management believes, after considering economic and business conditions, that the principal or interest will not be collectible in the normal course of business. We monitor closely the performance of our loan portfolio. In addition to the monitoring and review of loan performance internally, we have also contracted with an independent organization to review our commercial and retail loan portfolios. The status of delinquent loans, as well as situations identified as potential problems, are reviewed on a regular basis by senior management. The increase in nonaccrual loans through the first nine months of 2025 was primarily due to the deterioration of one customer relationship, which resulted in several loans being moved to nonaccrual status.

Previous wording

At June 30, 2025, the ACL - Loans was $44.3 million (representing 1.24% of period end loans). The Bank recorded a provision for credit losses of $1.0 million during the first half of 2025. The ACL– Loans has remained consistent over recent quarters as economic conditions have remained stable and the Company’s overall asset quality remain strong. The Company recorded net charge-offs totaling $0.8 million during the first six months of 2025.

Current wording

At September 30, 2025, the ACL - Loans was $44.5 million (representing 1.23% of period end loans). The Bank recorded a provision for credit losses of $1.2 million during the first three quarters of 2025. The ACL – Loans has remained consistent over recent quarters as economic conditions have remained stable and the Company’s overall asset quality remain strong. The Company recorded net charge-offs totaling $0.8 million during the first nine months of 2025.

Previous wording

Deposits. Our current deposit products include non-interest bearing and interest-bearing checking accounts, savings accounts, money market accounts, and certificate of deposits. As of June 30, 2025, deposit liabilities accounted for approximately 82.4% of our total liabilities and equity. We accept deposits primarily from customers in the communities in which our branches and offices are located, as well as from small businesses and other customers throughout our lending area. We rely on our competitive pricing and products, quality customer service, and convenient locations and hours to attract and retain deposits. Deposit rates and terms are based primarily on current business strategies, market interest rates, liquidity requirements and our deposit growth goals.

Current wording

Deposits. Our current deposit products include non-interest bearing and interest-bearing checking accounts, savings accounts, money market accounts, and certificate of deposits. As of September 30, 2025, deposit liabilities accounted for approximately 80.1% of our total liabilities and equity. We accept deposits primarily from customers in the communities in which our branches and offices are located, as well as from small businesses and other customers throughout our lending area. We rely on our competitive pricing and products, quality customer service, and convenient locations and hours to attract and retain deposits. Deposit rates and terms are based primarily on current business strategies, market interest rates, liquidity requirements and our deposit growth goals.

Previous wording

Total deposits were $3.60 billion and $3.66 billion as of June 30, 2025 and December 31, 2024, respectively. Noninterest-bearing deposits at June 30, 2025 and December 31, 2024, were $990.0 million and $1.02 billion, respectively, while interest-bearing deposits were $2.61 billion and $2.64 billion at June 30, 2025 and December 31, 2024, respectively. The Bank continue to see a shift in its deposit portfolio from noninterest-bearing deposits to interest-bearing deposits as prevailing interest rates have increased over the last several years.

Current wording

Total deposits were $3.54 billion and $3.66 billion as of September 30, 2025 and December 31, 2024, respectively. Noninterest-bearing deposits at September 30, 2025 and December 31, 2024, were $984.6 million and $1.02 billion, respectively, while interest-bearing deposits were $2.55 billion and $2.64 billion at September 30, 2025 and December 31, 2024, respectively. The Bank continues to see a shift in its deposit portfolio from noninterest-bearing deposits to interest-bearing deposits as prevailing interest rates have increased over the last several years.

Previous wording

At June 30, 2025, we had a total of $656.7 million in certificates of deposit, including $20.1 million of brokered deposits. Based on historical experience and our current pricing strategy, we believe we will retain a majority of these accounts upon maturity, although our long-term strategy is to minimize reliance on certificates of deposits by increasing relationship deposits in lower earning savings and demand deposit accounts.

Current wording

At September 30, 2025, we had a total of $665.0 million in certificates of deposit, including $15.1 million of brokered deposits. Based on historical experience and our current pricing strategy, we believe we will retain a majority of these accounts upon maturity, although our long-term strategy is to minimize reliance on certificates of deposits by increasing relationship deposits in lower earning savings and demand deposit accounts.

Previous wording

The Company’s borrowings have historically consisted primarily of FHLB of Chicago advances collateralized by a blanket pledge agreement on the Company’s FHLB capital stock and retail and commercial loans held in the Company’s portfolio. There were $109.9 million and $135.4 million of advances outstanding from the FHLB at June 30, 2025 and December 31, 2024, respectively.

Current wording

The Company’s borrowings have historically consisted primarily of FHLB of Chicago advances collateralized by a blanket pledge agreement on the Company’s FHLB capital stock and retail and commercial loans held in the Company’s portfolio. There were $209.9 million and $135.4 million of advances outstanding from the FHLB at September 30, 2025 and December 31, 2024, respectively.