FIRST NORTHERN COMMUNITY BANCORP

(dollar in thousands, except shares and share amounts)

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 2009for the purpose of managing selected other real estate owned properties. Yolano Realty Corporation was an inactive subsidiary in2025.*

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 hadno* impact on the Company’s Total Deposits as previously reported. The revision also hadno impact on the Consolidated Statements of Income, Comprehensive Income, Stockholders’ Equity or Cash Flows.

For purposes of the consolidated statements of cash flows, the Company considers due from banks, federal funds sold forone-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.

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 doesnot 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.

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For available-for-sale debt securities in an unrealized loss position, the Companyfirst assesses whether it intends to sell, or it is more likely thannot 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 donot 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 havenot 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 ininterest receivable and other assets on the Consolidated Balance Sheets.

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 doesnot 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.

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 byninety days or more with respect to interest or principal. When a loan is placed on non-accrual status, all interest previously accrued butnot 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 donot 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 Topic326, Financial Instruments - Credit Losses (Topic326*).*

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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 of2024. 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* maybe 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 approximatelyfour* 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 donot 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* mayinclude financial statements, tax returns, and payment history of the borrower. Based on this information, the Company maydecide 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 maybecome necessary. Collateral values maybe determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independentthird* parties, purchase invoices, or other appropriate documentation.

Commercial Real Estate:

Commercial real estate loans generally fall intotwo 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* maybe 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 mayinclude financial statements, tax returns, payment history of the borrower, and site inspections. Based on this information, the Company maydecide 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 maybecome 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 mayresult in little orno* 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* maybe determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independentthird* parties, sales invoices, or other appropriate means.

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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* maybe 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 mayinclude financial statements, tax returns, crop budgets, payment history, and crop inspections. Based on this information, the Company maydecide 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 tofour 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, arenot 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* mayinclude financial statements, tax returns and payment history of the borrower. Based on this information, the Company maydecide 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 maybe determined by appraisals obtained through Bank-approved, licensed appraisers, qualified independentthird* parties, purchase invoices, or other appropriate documentation.

Consumer:

Consumer loans, whether unsecured or secured, are primarily susceptible tofour 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 isnot 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.

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.

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:

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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, 2025and2024* , respectively. OREO as of* December 31, 2025represented land, transferred from premises and equipment, that the Company determined isno* longer intended for future development and is actively marketing it for sale. No impairment loss was recognized during thetwelve months ended* December 31, 2025.*

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.

Intangible assets represent the estimated fair value of the core deposit relationships acquired in a2023 business combination less accumulated depreciation and other intangible assets. Core deposit intangibles are being amortized using the accelerated amortization method over an estimated life often 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 thannot reduce the fair value below its carrying amount. Management performed an assessment of the core deposit intangible as of* December 31, 2025and notedno* triggering events that would indicate impairment. Other intangible assets represent a customer-related intangible asset acquired and recorded at fair value during2025. See Note6 of Notes to Consolidated Financial Statements.

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 Note17 of Notes to Consolidated Financial Statements.

The following are descriptions of the Company’s sources of Non-interest income within the scope of the FASB's Accounting Standards Codification Topic606, Revenue from Contracts with Customers (Topic606*)*:

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.

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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 intwo 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 Topic606 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 athird party to provide card payment services to merchants that contract for those services. Merchant fees are recognized monthly as the service period is completed.

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, 2025and2024*, 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:

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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.

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 thannot 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.

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 Note15 of Notes to Consolidated Financial Statements.

Basic EPS includesno 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 includestwo 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 areno unvested share-based payment awards that contain nonforfeitable rights to dividends. See Note14 of Notes to Consolidated Financial Statements.

Advertising costs were $491 and $460 for the years ended* December 31, 2025and2024*, respectively. Advertising costs are expensed as incurred.

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.

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, 2025to 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, 2026to shareholders of record as of February 27, 2026.*

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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 the2026 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* and2023 balances included in the Consolidated Balance Sheets and Statement of Stockholders’ Equity havenot been adjusted to retroactively reflect the stock dividends, but instead show the historical rollforward of stock dividends declared.

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 isnot 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 arenot 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 Note23 of Notes to Consolidated Financial Statements.

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 arenot 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 hasno goodwill arising from business combinations. The Company recognized a bargain purchase gain arising from business combinations in2023. 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.

Accounting Standards Adopted in2025

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740*): 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 and2*) the income taxes paid (net of refunds received) disaggregated by individual jurisdictions exceeding5% 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 didnot* have a material impact on the Company's consolidated financial statements. For additional information, see Note18 to the Consolidated Financial Statements in this Form10-K.

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In* March 2024,the FASB issued guidance within ASU2024*-01, Compensation—Stock Compensation (Topic718*): 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) paragraph718-10-15-3 in determining if a profit interest award should be accounted for in accordance with Topic718: Compensation—Stock Compensation. The amendment in ASC paragraph718-10-15-3 is solely intended to improve the overall clarity and doesnot 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 havenot* 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 didnot have a material impact on the Company’s consolidated financial statements, as the Company doesnot typically provide these types of awards. For additional information, see Note15 to the Consolidated Financial Statements in this Form10-K.

Recently Issued Accounting Pronouncements

In* November 2024,the FASB issued ASU2024*-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220*-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 ASU2025*-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220*-40): Clarifying the Effective Date.ASU2025*-01 amends the effective date of ASU2024-03 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 ASU2024*-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 ASU2025*-08, Financial Instruments - Credit Losses (Topic326*): 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 havenot* 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 ASU2025*-09, Derivatives and Hedging (Topic815*): Hedge Accounting Improvements.This ASU enables entities to apply hedge accounting to a greater number of highly effective economic hedges in the followingfive* 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 ASUNo.* 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 ASU2025*-11, Interim Reporting (Topic270*): Narrow-Scope Improvements.* This ASU doesnot 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 Topic270 applies to all entities that provide interim financial statements and notes in accordance with GAAP; create a comprehensive list in FASB Accounting Standards Codification Topic270 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.

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In* December 2025,the FASB issued ASU2025*-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 addresses33 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 havenot* 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.

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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:

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:

Gross realized gains from sales and calls of available-for-sale securities were $93 and $0 for the years ended* December 31, 2025and2024*, respectively. Gross realized losses from sales of available-for-sale securities were $292 and $234 for the years ended* December 31, 2025and2024*, 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:

Expected maturities* maydiffer from contractual maturities because borrowers mayhave 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.

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

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 thantwelve months as of* December 31, 2025*. Three hundred forty-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 thantwelve 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 andnot credit quality, and the Company doesnot intend to sell the securities. The Company has concluded it isnot more likely thannot 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 hadnot recorded an allowance for credit losses on these securities and the unrecognized or unrealized losses on these securities havenot 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:

Investment securities carried at $95,479 and $53,589 at* December 31, 2025and2024*, respectively, were pledged to secure public deposits or for other purposes as required or permitted by law.

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

At* December 31, 2025and2024*, 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*:

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, 2024*:

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The Company utilizesthree economic variables, forecasted unemployment, gross domestic product and single-family home prices, as loss drivers for its allowance for credit losses. The Company recordedno provision expense for the year ended* December 31, 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. Management believes that the allowance for credit losses at December 31, 2025*appropriately reflected expected credit losses in the loan portfolio at that date.

Collateral-Dependent Loans

In accordance with ASC326, a loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. All loans individually analyzed were collateral-dependent loans as of* December 31, 2025* and* December 31, 2024*. The following table presents the amortized cost basis of collateral-dependent loans by class, which are individually evaluated to determine expected credit losses as of* December 31, 2025* and* December 31, 2024*:

*** December 31, 2025***

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*** December 31, 2024***

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Foreclosure Proceedings

The Company hadno residential real estate property in the process of foreclosure at* December 31, 2025* and* December 31, 2024*.

Non-accrual and Past Due Loans

The Company’s loans by delinquency and non-accrual status, as of* December 31, 2025* and* December 31, 2024*, was as follows:

The Company recognized $421 and $450 of interest income on nonaccrual loans during the years ended* December 31, 2025* and* December 31, 2024*, respectively.

Loan Modifications

Occasionally, the Company modifies loans to borrowers in financial difficulty by providing principal forgiveness, term extension, payment delays or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL.

In some cases, the Company provides multiple types of concessions onone loan. Typically,one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness,* maybe granted. For the loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at leasttwo* of the following: a term extension, principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction.

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The following tables present the amortized cost basis of loans that were experiencing both financial difficulty and modification during the periods indicated, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial difficulty as compared to the amortized cost basis of each class of financing receivable is also presented below.

The amortized cost basis of loans that were experiencing both financial difficulty and modification during the year ended* December 31, 2025* were as follows:

The Company hadno commitments to lend additional funds to borrowers whose loans were modified at* December 31, 2025*.

The amortized cost basis of loans that were experiencing both financial difficulty and modification during the year ended* December 31, 2024* were as follows:

The Company hadno commitments to lend additional funds to borrowers whose loans were modified at* December 31, 2024*.

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The following table presents the financial effect of the loan modifications to borrowers experiencing financial difficulty during the year ended* December 31, 2025*:

The following table presents the financial effect of the loan modifications to borrowers experiencing financial difficulty during the year ended* December 31, 2024*:

Loans that were modified within the previoustwelve months were current on payments as of* December 31, 2025*. There wereno loans modified within the previoustwelve months and for which there was a payment default during the year ended* December 31, 2025*. Loans that were modified within the previoustwelve months were current on payments as of* December 31, 2024.There wereno loans modified within the previoustwelve* months and for which there was a payment default during the year ended* December 31, 2024.*

Upon the Company's determination that a modified loan (or portion of a loan) has subsequently become uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL is adjusted by the same amount.

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Credit Quality Indicators

All new loans are rated using the credit risk ratings and criteria adopted by the Company. Risk ratings are adjusted as future circumstances warrant. All credits risk rated1, 2, 3, 4 or5 equate to a Pass as indicated by Federal and State regulatory agencies; a6 equates to a Special Mention; a7 equates to Substandard; an8 equates to Doubtful; and a9 equates to a Loss. General definitions for each risk rating are as follows:

Risk Rating“1”*** – Pass (Superior Quality):*** A Superior asset is a loan that is secured by cash or properly margined marketable securities held by the Bank. A superior asset represents the highest quality currently and a negligible potential for future credit risk based on every measurement. Repayment capacity is unquestionable.

Risk Rating“2”*** – Pass (Excellent Quality):*** An Excellent asset has minimal risk based on a conservatively structured balance sheet, well diversified revenue streams, low operating cost structure or low risk business model. Other risks that* mayimpact credit quality are remote or absorbable by the Borrower withno* meaningful impact on its financial condition. .

Risk Rating“3”*** – Pass (Good Quality):*** A good asset isone that has a well-structured balance sheet relative to peers, a stable and consistent income stream and well managed cost structure. While credit risk is considered low, risks* may*be present that could cause a minor financial operational impact sometime in the future.

Risk Rating“4”*** – Pass (Acceptable Quality):*** An acceptable asset isone that’s primary repayment source is satisfactory to cover debt service under normal conditions. Financial strength and flexibility are adequate; however, financial strength would likely be weakened during prolonged periods of adversity or with the emergence ofone or more inherent risks.

Risk Rating“5”*** – Pass (Watch):*** A watch asset isone that reflects higher than acceptable risk; however, control features or other factors (e.g. structure, collateral and collateral monitoring, operational controls, including funds control, guarantors, etc.) mitigate inherent risks or other uncertainties that* mayotherwise warrant a more severe rating. Repayment capacity is generally adequate for debt service, butone* or more factors or conditions exist that* may*result in repayment inadequacies. These factors or conditions are expected to change within a reasonable amount of time.

Risk Rating“6”*** – Special Mention:*** A Special Mention asset has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses* mayresult in deterioration of the repayment prospects for the asset or in the institution's credit position at some future date. Special Mention assets arenot* adversely classified and donot expose an institution to sufficient risk to warrant adverse classification.

Risk Rating“7”*** – Substandard:*** Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies arenot corrected.

Risk Rating“8”*** – Doubtful:***Loans classified Doubtful have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.

Risk Rating“9”*** – Loss:Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable assets isnot warranted. This classification doesnot* mean that the loan has absolutelyno recovery or salvage value but rather it isnot practical or desirable to defer writing off this basically worthless asset even though partial recovery* may*be affected in the future.

Active Charge-Off. Loans in this category are considered uncollectible and of such little value that their removal from the Company’s books is required. The charge-off is pending or already processed. Collateral positions have been or are in the process of being liquidated and the borrower/guarantor* mayor may**not* be cooperative in repayment of the debt. Recovery prospects are unknown, but the Company is actively engaged in the collection of the loan.

Inactive Charge-Off. Loans in this category are considered uncollectible and of such little value that their removal from the Company’s books is required. The charge-off is pending or already processed. Collateral positions have been liquidated and the borrower/guarantor has nothing of any value remaining to apply to the repayment of our loan. Any further collection activities would be of little value.

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The following tables present the loan portfolio by loan class, origination year, and internal risk rating as of* December 31, 2025* and* December 31, 2024*. Generally, existing term loans that were re-underwritten are reflected in the table in the year of renewal. Lines of credit that have a conversion feature at the time of origination, such as construction to permanent loans, are presented by year of origination. Revolving loans converted to term loans totaled $1,780 and $3,121 as of* December 31, 2025* and* December 31, 2024*, respectively.

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The Company recognizes a gain or loss and a related asset for the fair value of the rights to service loans for others when loans are sold and servicing is retained. The Company sold a substantial portion of its portfolio of conforming long-term residential mortgage loans originated during the year ended* December 31, 2025* on a servicing retained basis, for cash proceeds equal to the fair value of the loans. At* December 31, 2025and2024*, the Company serviced real estate mortgage loans for others totaling $162,644 and $174,464, respectively.

The recorded value of mortgage servicing rights is amortized in proportion to, and over the period of, estimated net servicing revenues. The Company assesses capitalized mortgage servicing rights for impairment based upon the fair value of those rights at each reporting date. For purposes of measuring impairment, the rights are stratified based upon the product type, term and interest rates. Fair value is determined by discounting estimated net future cash flows from mortgage servicing activities using discount rates that approximate current market rates and estimated prepayment rates, among other assumptions. The amount of impairment recognized, if any, is the amount by which the capitalized mortgage servicing rights for a stratum exceeds their fair value. Impairment, if any, is recognized through a valuation allowance for each individual stratum. Changes in the carrying amount of mortgage servicing rights are reported in earnings under other operating income on the Consolidated Statements of Income.

The following table summarizes the activity related to the Company’s mortgage servicing rights assets for the years ended* December 31, 2025and2024*. Mortgage servicing rights are included in Interest Receivable and Other Assets on the Consolidated Balance Sheets.

At* December 31, 2025* and* December 31, 2024*, the estimated fair market value of the Company's mortgage servicing rights asset was $1,748 and $1,910, respectively. The changes in fair value of mortgage servicing rights during2025 and2024 were primarily due to amortization and increase in estimated prepayment speeds.

The Company received contractually specified servicing fees of $427 and $450 for the years ended* December 31, 2025and2024*, respectively. Contractually specified servicing fees are included in Other Income on the Consolidated Statements of Income.

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Premises and equipment consisted of the following at* December**31,* of the indicated years:

Depreciation and amortization expense, included in occupancy and equipment expense, was $996 and $1,057 for the years ended* December 31, 2025and2024*, respectively.

Intangible assets represent the estimated fair value of the core deposit relationships acquired in the2023 acquisition ofthree branches from Columbia State Bank less accumulated depreciation and other intangible assets. In2025, the Company acquired a customer-related intangible asset that was recorded at a fair value of $1,742.

The following table summarizes the changes in the Company's intangible assets for thetwelve months ended* December 31, 2025and2024:*

The following table presents the estimated amortization expense for intangible assets remaining at* December 31, 2025:*

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Interest receivable and other assets consisted of the following at* December**31,* of the indicated years:

The Company hadno secured borrowings andno Federal Funds purchased at* December 31, 2025* and* December 31, 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. At* December 31, 2025*, the Company had a current collateral borrowing capacity with the FHLB of $390,191 and, at such date, also had unsecured formal lines of credit totaling $130,000 with correspondent banks.

Average outstanding balances of short-term borrowings were $1,645 and $0 during2025 and2024, respectively. Short-term borrowings during2025 consisted of FHLB advances. There wereno short-term borrowings during2024. Maturity of the FHLB advance during2025 was 1 month at an interest rate of 4.55%. There wereno short-term borrowings at* December 31, 2025and December 31, 2024.*

The Company hadno long-term borrowings at* December 31, 2025and2024*.

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The Company leasesten branch and administrative locations under operating leases expiring on various dates through2035. Leases with an initial term of12 months or less arenot recorded on the balance sheet and lease expense is recognized on a straight-line basis over the lease term. The Bank hadno financing leases as of* December 31, 2025*.

Most leases include options to renew, with renewal terms that can extend the lease term from 3 to 10 years. The exercise of lease renewal options is at the Company’s sole discretion. Most leases are currently in the extension period. For the remaining leases with options to renew, the Company hasnot included the extended lease terms in the calculation of lease liabilities as the options arenot reasonably certain of being exercised. Certain lease agreements include rental payments that are adjusted periodically for inflation. The Company's lease agreements donot contain any residual value guarantees or restrictive covenants.

The Company uses its FHLB advance fixed rates, which are its incremental borrowing rates for secured borrowings, as the discount rates to calculate lease liabilities.

The Company had right-of-use assets totaling $5,393 and $3,155 as of* December 31, 2025* and* December 31, 2024*, respectively. Right-of-use assets are included in Interest receivable and other assets on the Consolidated Balance Sheets. The Company had lease liabilities totaling $5,795 and $3,645 as of* December 31, 2025* and* December 31, 2024*, respectively. Lease liabilities are included in Interest payable and other liabilities on the Consolidated Balance Sheets. The Company recognized lease expenses totaling $1,140 and $1,228 for the years ended* December 31, 2025* and* December 31, 2024*, respectively. Lease expense is included in Occupancy and Equipment expense on the Consolidated Statements of Income.

The table below summarizes the payments of remaining lease liabilities at* December 31:*

The following table presents supplemental cash flow information related to leases for the year ended* December 31:*

The following table presents the weighted average operating lease term and discount rate at* December 31:*

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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 in addition to entering into commitments to sell loans in conjunction with our mortgage banking activities. 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.

The Bank’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

Financial instruments, whose contract amounts represent credit risk at* December**31* of the indicated periods, were as follows:

Commitments to extend credit are agreements to lend to a customer as long as there isno violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and* mayrequire payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts donot* necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation. Collateral held varies but* may*include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to athird party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank issues both financial and performance standby letters of credit. The financial standby letters of credit are primarily to guarantee payment tothird parties. At* December 31, 2025*, there wereno financial standby letters of credit outstanding. The performance standby letters of credit are typically issued to municipalities as specific performance bonds. At* December 31, 2025*, there was $1,038 issued in performance standby letters of credit and the Bank carriedno liability. The Bank has experiencedno draws on these letters of credit and doesnot expect to in the future; however, should a triggering event occur, the Bank either has collateral in excess of the letter of credit or imbedded agreements of recourse from the customer. The Bank has set aside a reserve for unfunded commitments in the amount of $1,200 and $700 at* December 31, 2025and2024*, respectively, which is recorded in “interest payable and other liabilities” on the Consolidated Balance Sheets.

Commitments to extend credit and standby letters of credit bear similar credit risk characteristics as outstanding loans. As of* December 31, 2025*, the Company hadno off-balance sheet derivatives requiring additional disclosure.

The Company* mayenter into interest rate lock commitments in connection with its mortgage banking activities to fund residential mortgage loans within specified times in the future. There wereno interest rate lock commitments at December 31, 2025and2024*. These commitments expose the Company to the risk that the price of the loan underlying the interest rate lock commitment might decline from the inception of the interest rate lock to the funding of the mortgage loan. To protect against this risk, the Company* mayenter into commitments to sell loans to economically hedge the risk of potential changes in the value of the loans that would result from the commitment. There wereno commitments at December 31, 2025and2024*. Mortgage loans sold to investors* maybe sold with servicing rights retained, for which the Company makes only standard legal representations and warranties as to meeting certain underwriting and collateral documentation standards. Management believes that any liabilities that mayresult from such recourse provisions arenot* significant.

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At* December 31, 2025*, the aggregate maturities for time deposits were as follows:

The Company is subject to various legal proceedings in the normal course of its business. In the opinion of management, after having consulted with legal counsel, the outcome of the pending legal proceedings shouldnot have a material adverse effect on the consolidated financial condition or results of operations of the Company.

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The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company’s and the Bank's consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and the Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

Quantitative measures established by regulation to help ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below).

In* July 2013,*the Federal Reserve and the other U.S. federal banking agencies adopted final rules making significant changes to the U.S. regulatory capital framework for U.S. banking organizations and to conform this framework to the guidelines published by the Basel Committee known as the Basel III Global Regulatory Framework for Capital and Liquidity. The Basel Committee is a committee of banking supervisory authorities from major countries in the global financial system which formulates broad supervisory standards and guidelines relating to financial institutions for implementation on a country-by-country basis. These rules adopted by the Federal Reserve and the other federal banking agencies (the U.S. Basel III Capital Rules) replaced the federal banking agencies’ general risk-based capital rules, advanced approaches rule, market risk rule, and leverage rules, in accordance with certain transition provisions.

Banks, such as First Northern, became subject to the final rules on* January 1, 2015.The final rules implemented higher minimum capital requirements, included a new common equity Tier1* capital requirement, and established criteria that instruments must meet in order to be considered common equity Tier1 capital, additional Tier1 capital, or Tier2 capital. The final rules provide for increased minimum capital ratios as follows: (a) a common equity Tier1 capital ratio of4.5%; (b) a Tier1 capital ratio of6%; (c) a total capital ratio of8%; and (d) a Tier1 leverage ratio to average consolidated assets of4%. Under these rules, in order to avoid certain limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, a banking organization must hold a capital conservation buffer composed of common equity Tier1 capital above its minimum risk-based capital requirements (equal to2.5% of total risk-weighted assets). The capital conservation buffer is designed to absorb losses during periods of economic stress.

Pursuant to the Economic Growth, Regulatory Relief and Consumer Protection Act ("EGRRCPA"), the FRB adopted a final rule, effective* August 31, 2018,amending the Small Bank Holding Company and Savings and Loan Holding Company Policy Statement (the “policy statement”) to increase the consolidated assets threshold to qualify to utilize the provisions of the policy statement from$1* billion to*$3* billion. Bank holding companies, such as the Company, are subject to capital adequacy requirements of the FRB; however, bank holding companies which are subject to the policy statement arenot subject to compliance with the regulatory capital requirements until they hold*$3* billion or more in consolidated total assets. As a consequence, as of* December 31, 2018,the Company wasnot* required to comply with the FRB’s regulatory capital requirements until such time that its consolidated total assets equal*$3* billion or more or if the FRB determines that the Company isno longer deemed to be a small bank holding company. However, if the Company had been subject to these regulatory capital requirements, it would have exceeded all regulatory requirements.

In* Augustof2020,* the Federal banking agencies adopted the final version of the community bank leverage ratio framework rule (the “CBLR”), implementingtwo interim final rules adopted in* Aprilof2020.* The rule provides an optional, simplified measure of capital adequacy. Under the optional CBLR framework, the CBLR was8.5% through calendar year2021 and is9% thereafter. The rule is applicable to all non-advanced approaches FDIC-supervised institutions with less than*$10* billion in total consolidated assets. Banksnot electing the CBLR framework will continue to be subject to the generally applicable risk-based capital rule. On* November 25, 2025,the US federal banking regulators proposed changes to the CBLR framework intended to encourage additional community banks to opt into the CBLR framework. This proposal would reduce the CBLR requirement from9%* to8% and extend the grace period for qualifying institutions that fall below the8% ratio to return to compliance from the currenttwo quarters tofour quarters, provided they maintain a7% leverage ratio. At the present time, the Company and the Bank donot intend to elect to use the CBLR framework.

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Management believes, as of* December 31, 2025*, that the Bank met all capital adequacy requirements to which it is subject. As of* December 31, 2025*, the most recent notification from the FDIC categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as "well capitalized" the Bank must meet the minimum ratios as set forth below. As of the date hereof, there have beenno conditions or events since that notification that management believes have changed the institution’s category.

The Bank had Tier I Leverage, Common Equity Tier1, Tier I Risk-Based and Total Risk-Based capital above the “well capitalized” levels at* December 31, 2025and2024*, respectively, as set forth in the following table (calculated in accordance with the Basel III capital rules):

• Ratio for regulatory requirement excludes the capital conservation buffer of2.50%.

Banks chartered under California law, such as the Bank, generally* mayonly pay cash dividends to the extent such payments donot* exceed the lesser of retained earnings of the bank’s net income for its lastthree fiscal years (less any distributions to shareholders during such period). In the event a bank desires to pay cash dividends in excess of such amount, the bank* maypay a cash dividend with the prior approval of the DFPI in an amountnot* exceeding the greatest of the bank’s retained earnings, the bank’s net income for its last fiscal year, or the Bank’s net income for its current fiscal year.

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The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Securities available-for-sale and trading securities are recorded at fair value on a recurring basis. Additionally, from time to time, the Company* may*be required to record at fair value other assets on a non-recurring basis, such as loans held-for-sale, loans held-for-investment and certain other assets. These non-recurring fair value adjustments typically involve application of lower of cost or market accounting or write-downs of individual assets. Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally corresponds with the Company’s quarterly valuation process.

Assets Recorded at Fair Value on a Recurring Basis

The tables below present the recorded amount of assets and liabilities measured at fair value on a recurring basis as of* December 31, 2025and2024*.

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Assets Recorded at Fair Value on a Non-recurring Basis

Assets measured at fair value on a non-recurring basis are included in the table below by level within the fair value hierarchy as of* December 31, 2025* and2024.

There wereno liabilities measured at fair value on a recurring or non-recurring basis at* December 31, 2025and2024*.

Key methods and assumptions used in measuring the fair value of collateral dependent loans as of* December 31, 2025* were as follows:

The following section describes the valuation methodologies used for assets recorded at fair value.

Investment Securities Available-for-Sale

Investment securities available-for-sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted market prices, if available. If quoted market prices arenot available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions, and other factors such as credit loss assumptions. Level1 securities include those traded on an active exchange, such as the New York Stock Exchange, U.S. Treasury securities that are traded by dealers or brokers in active over-the-counter markets and money market funds. Level2 securities include mortgage-backed securities issued by government sponsored entities, municipal bonds and corporate debt securities. Securities classified as Level3 include asset-backed securities in less liquid markets where valuations include significant unobservable assumptions.

Collateral Dependent Loans

The Company doesnot record loans at fair value on a recurring basis. Loans that donot share similar risk characteristics are individually evaluated by management. 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. Collateral dependent loans where a charge-off is recorded based on the fair value of collateral require classification in the fair value hierarchy. When a loan is evaluated based on the fair value of the underlying collateral securing the loan, the Company records the collateral dependent loan as non-recurring Level3 given the valuation includes significant unobservable assumptions.

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Disclosures about Fair Value of Financial Instruments

The following table summarizes fair value estimates for financial instruments for the years ended* December 31, 2025and2024*, excluding financial instruments recorded at fair value on a recurring basis (summarized in thefirst table in this note).

Limitations

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument and expected exit prices. These estimates donot reflect any premium or discount that could result from offering for sale atone time the Company’s entire holdings of a particular financial instrument. Becauseno market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that arenot considered financial instruments. Other significant assets and liabilities that arenot considered financial assets or liabilities include deferred tax liabilities and premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and havenot been considered in many of the estimates.

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All income per share amounts have 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.*

Earnings Per Share

Basic and diluted earnings per share for the years ended* December 31,*were computed as follows:

Optionsnot included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 7,312 shares and 260,115 shares for the years ended* December 31, 2025and2024*, respectively. Restricted stocknot included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 302 shares and 2,139 shares for the years ended* December 31, 2025and2024*, respectively.

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The total number of shares authorized, number of shares outstanding, weighted average exercise prices, exercise prices and weighted average grant date fair value have 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, 2026to shareholders of record as of February 27, 2026.*

On* May 13, 2025,the Company's shareholders approved the2026* Stock Incentive Plan, which became effective on* February 1, 2026concurrent with the termination of the2016* Stock Incentive Plan. There are 472,974 shares authorized under the2026 Stock Incentive Plan. The total number of shares authorized 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.The2026* Stock Incentive Plan will terminate on* March 15, 2036.*

The Compensation Committee of the Board of Directors is authorized to prescribe the terms and conditions of each option, including exercise price, vestings, or duration of the option. Generally, option grants vest at a rate of 25% per year after thefirst anniversary of the date of grant and restricted stock awards vest at a rate of 100% afterfour years. Options expire 10 years after the date of grant. Options are granted with an exercise price of the fair value of the related common stock on the date of grant.

Stock option activity under the2016 Stock Incentive Plan during the year ended* December 31, 2025*, was as follows:

The following table presents information on stock options for the year ended* December 31, 2025*:

There wereno stock options granted by the Company during the year ended* December 31, 2025* and* December 31, 2024*.

The intrinsic value of options exercised during the years ended* December 31,was $268 in2025* and $90 in2024. The fair value of awards vested during the years ended* December 31was $25 in2025* and $88 in2024.

As of* December 31, 2025*, there was $6 of total unrecognized compensation related to non-vested stock options. This cost is expected to be recognized over a weighted average period of approximately 0.2 years.

For the years ended* December 31, 2025and2024*, there was $25 and $35, respectively, of recognized compensation related to stock options.

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The Company determines fair value at grant date using the Black-Scholes-Merton pricing model that takes into account the stock price at the grant date, the exercise price, the risk-free interest rate, the volatility of the underlying stock and the expected life of the option.

The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. Expected volatility is based on both the implied volatilities from the traded option on the Company’s stock and historical volatility on the Company’s stock.

The Company expenses the fair value of the option on a straight line basis over the vesting period. The Company estimates forfeitures and only recognizes expense for those shares that actually vest.

In addition to stock options, the Company also grants restricted stock awards to directors, certain officers and employees. The restricted shares awarded become fully vested afterfour years of continued employment or service from the date of grant. Restricted shares are forfeited if officers and employees terminate prior to the lapsing of restrictions.

The following table presents information about non-vested restricted stock awards outstanding for the year ended* December 31, 2025*:

The aggregate intrinsic value of restricted stock awards vested in calendar years2025 and2024, was $725 and $687, respectively.

The weighted average fair value per share of restricted stock awards granted during the years ended* December 31,was $9.24 in2025* and $7.58 in2024.

As of* December 31, 2025*, there was $876 of total unrecognized compensation related to non-vested restricted stock awards. This cost is expected to be recognized over a weighted average period of approximately 2.6 years.

For the years ended* December 31, 2025and2024*, there was $763 and $761, respectively, of recognized compensation related to restricted stock awards.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan ("ESPP"). On* May 13, 2025,the Company's shareholders approved the2026* ESPP, which became effective on* November 23, 2025concurrent with the termination of the2016* ESPP. There are 315,000 shares authorized under the2026 ESPP, which include authorized but unissued shares under the2016 ESPP. The total number of shares authorized 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, 2026to shareholders of record as of February 27, 2026.The2026* ESPP will expire on* March 15, 2036.*

The ESPP is implemented by participation periods ofnot more than twenty-seven months each. The Board of Directors determines the commencement date and duration of each participation period. An eligible employee isone who has been continually employed for at leastninety (90) days prior to commencement of a participation period. Under the terms of the ESPP, employees can choose to have up to 10 percent of their compensation withheld to purchase the Company’s common stock each participation period. The purchase price of the stock is 85% of the lower of the fair value on the last trading day before the Date of Participation or the fair value on the last trading day during the participation period. Approximately 45% of eligible employees are participating in the ESPP in the current participation period, which began* December 2, 2025and will end November 23, 2026.*

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Under the ESPP, at the annual stock purchase date of* November 23, 2025,there were $93 in contributions, and 12,073 shares were purchased at a price of $7.70. For the years ended December 31, 2025and2024*, there was $61 and $50, respectively, of recognized compensation related to ESPP issuances. Compensation cost is reported in salaries and employee benefits expense in the Consolidated Statements of Income.

The total number of shares authorized, number of shares purchased and stock price have been adjusted to give retroactive effect to stock dividends and stock splits, including the 5% stock dividend declared on* January 22, 2026,payable March 25, 2026,to shareholders of record as of February 27, 2026.*

The Bank maintains a profit sharing plan for the benefit of its employees. Employees who have completed1,000 hours of service and are actively employed on the last day of the plan year are eligible. Under the terms of this plan, a portion of the Bank’s profits, as determined by the Board of Directors, will be set aside and maintained in a trust fund for the benefit of qualified employees. Contributions to the plan, included in salaries and employee benefits in the Consolidated Statements of Income, were $1,980 and $1,870 in2025 and2024, respectively. The profit sharing plan also has a401(k) feature that allows employees to contribute to the profit sharing plan, even if they arenot eligible for a contribution from the Bank. An employee is eligible to make contributions through the401(k) feature on the1st of the month following 90 days of employment.

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EXECUTIVE RETIREMENT PLAN

Pension Benefit 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. The Salary Continuation Plan provides defined annual benefit levels between $50 and $100 depending on responsibilities at the Bank. The retirement benefits are paid for 10 years following retirement at age65. Reduced retirement benefits are available after age55 and10 years of service. There are currentlyone active andthree retired participants in the Salary Continuation Plan.

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”) in2006. The SERP is intended to integrate the various forms of retirement payments offered to executives. There are currentlytwo active andone retired participant in the SERP.

The SERP benefit is calculated using3-year average salary plus7-year average bonus (average compensation). For each year of service, the benefit formula credits 2% to 2.5% of average compensation up to a cumulative maximum of50%. Therefore, for an executive serving20 to25 years, the target benefit is 50% of average compensation.

The target benefit is reduced for other forms of retirement income provided by the Bank. Reductions are made for 50% of the social security benefit expected at age65 and for the accumulated value of contributions the Bank makes to the executive’s profit sharing plan. For purposes of this reduction, contributions to the profit sharing plan are accumulated each year at a3-year average of the yields on10-year Treasury securities. Retirement benefits are paid monthly for120 months, plus6 months for each full year of service over10 years, up to a maximum of180 months.

Reduced benefits are payable for retirement prior to age65. Should retirement occur prior to age65, the benefit determined by the formula described above is reduced5% for each year payments commence prior to age65. Therefore, the new SERP benefit is reduced50% for retirement at age55. No benefit is payable for voluntary terminations prior to age55.

The following table sets forth the status of the Salary Continuation Plan and SERP as of* December 31, 2025* and* December 31, 2024*:

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The Company expects to recognize approximately $2 of the unrecognized net actuarial loss and prior service cost as a component of net periodic benefit cost in2026.

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Plan Assets

The Bank informally funds the liabilities of the Salary Continuation Plan through life insurance purchased on the lives of plan participants. This informal funding doesnot meet the definition of “plan assets” under pension accounting standards. Therefore, assets held for this purpose arenot disclosed as part of the Salary Continuation Plan.

Cash Flows

Contributions and Estimated Benefit Payments

For unfunded plans, contributions to the Salary Continuation Plan are the benefit payments made to participants. The Bank paid $441 in benefit payments during fiscal2025. The following benefit payments, which reflect expected future service, are expected to be paid in future fiscal years:

Disclosure of settlements and curtailments:

There wereno events during fiscal2025 that would constitute a curtailment or settlement.

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DIRECTORS’** RETIREMENT PLAN**

On* July 19, 2001,the Company and the Bank approved an unfunded non-contributory defined benefit pension plan (“Directors’ Retirement Plan”) and related split dollar plan for the directors of the Bank. The Directors' Retirement Plan provides a retirement benefit equal to$1* per year of service as a director, up to a maximum benefit amount of*$15.* The retirement benefit is payable forten years following retirement at age65. Reduced retirement benefits are available after age55 andten years of service.

The following table sets forth the status of the Directors' Retirement Plan as of* December 31, 2025* and* December 31, 2024*:

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Plan Assets

The Bank informally funds the liabilities of the Directors’ Retirement Plan through life insurance purchased on the lives of plan participants. This informal funding doesnot meet the definition of “plan assets” under pension accounting standards. Therefore, assets held for this purpose arenot disclosed as part of the Directors’ Retirement Plan.

Cash Flows

Contributions and Estimated Benefit Payments

For unfunded plans, contributions to the Directors’ Retirement Plan are the benefit payments made to participants. The Bank paid $44 in benefit payments during fiscal year2025. The following benefit payments, which reflect expected future service, are expected to be paid in future fiscal years:

Disclosure of settlements and curtailments:

There wereno events during fiscal year2025 that would constitute a curtailment or settlement.

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EXECUTIVE ELECTIVE DEFERRED COMPENSATION PLAN—** 2001 EXECUTIVE DEFERRAL PLAN**

On* July 19, 2001,the Bank approved a revised Executive Elective Deferred Compensation Plan (“2001* Executive Deferral Plan”) for certain officers to provide them the ability to make elective deferrals of compensation due to tax law limitations on benefit levels under qualified plans. Deferred amounts earn interest at an annual rate determined by the Bank’s Board. The2001 Executive Deferral Plan is a non-qualified plan funded with bank owned life insurance policies taken on the lives of the participating officers. During the year ended* December 31, 2001,the Bank purchased insurance making a single-premium payment aggregating $1,125, which is reported in other assets on the Consolidated Balance Sheets. The Bank is the beneficiary and owner of the policies. The cash surrender value of the related insurance policies as of December 31, 2025and2024* totaled $3,043 and $2,966, respectively. The net decrease in accrued liability for the2001 Executive Deferral Plan totaled $62 and $60 for the years ended* December 31, 2025and2024*, respectively. The net decrease was due to payments totaling $65 for each of the years ended* December 31, 2025and2024*, which was partially offset by interest accrued totaling $3 and $5 for the years ended* December 31, 2025and2024*, respectively. Interest expense for the2001 Executive Deferral Plan totaled $3 and $5 for the years ended* December 31, 2025and2024*, respectively.

DIRECTOR ELECTIVE DEFERRED FEE PLAN—** 2001 DIRECTOR DEFERRAL PLAN**

On* July 19, 2001,the Bank approved a Director Elective Deferred Fee Plan (“2001* Director Deferral Plan”) for directors to provide them the ability to make elective deferrals of director's fees. Deferred amounts earn interest at an annual rate determined by the Bank’s Board. The2001 Director Deferral Plan is a non-qualified plan funded with bank owned life insurance policies taken on the lives of the participating directors. The Bank is the beneficiary and owner of the policies. The cash surrender value of the related insurance policies as of* December 31, 2025and2024* totaled $172 and $167, respectively. The net decrease in accrued liability for the2001 Director Deferral Plan totaled $4 for each of the years ended* December 31, 2025and2024*. The net decrease was due to payments totaling $4 for each of the years ended* December 31, 2025and2024*, respectively. Interest expense for the2001 Director Deferral Plan totaled $0 for each of the years ended* December 31, 2025and2024*, respectively.

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The provision for income tax expense consisted of the following for the years ended* December**31:*

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at* December 31, 2025and2024*, consisted of:

Based upon the level of historical taxable income and projections for future taxable income over the periods during which the deferred tax assets are deductible, management believed it is more-likely-than-not the Company will realize the benefits of these deductible differences.

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At* December 31, 2025*, the Company hadno state net operating loss carry forwards. At* December 31, 2025,*the Company had federal tax credit carry forwards totaling $1,732.

A reconciliation of income taxes computed at the federal statutory rate and the provision for income taxes for the years ended* December 31,*is as follows:

• State taxes in California made up the majority (greater than50 percent) of the tax effect in this category.

Federal income taxes paid totaled $16,060 and $4,920 for the years ended* December 31, 2025and2024,* respectively. California income taxes paid totaled $2,720 and $2,750 as of* December 31, 2025and2024,* respectively.

Accounting for Uncertainty in Income Taxes

The Company hadno unrecognized tax benefits for the years ended* December 31, 2025and2024*. The Company recognizedno changes in unrecognized tax benefits during2025 and2024, due to the expiration of a statute of limitations. The Company hadno significant uncertain tax positions as of* December 31, 2025* and* December 31, 2024*. The Company doesnot currently anticipate any significant increase or decrease in unrecognized tax benefits during2026.

The Company classifies interest and penalties as a component of the provision for income taxes. At* December 31, 2025*, there wereno unrecognized interest and penalties. The tax years ended* December 31, 2024*,2023, and 2022 remain subject to examination by the Internal Revenue Service. The tax years ended* December 31, 2024*,2023,2022, and2021 remain subject to examination by the California Franchise Tax Board. The deductibility of these tax positions will be determined through examination by the appropriate tax authorities or the expiration of the tax statute of limitations.

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The following table details activity in accumulated other comprehensive income/(loss) for the year ended* December 31, 2025*.

The following table details activity in accumulated other comprehensive income/(loss) for the year ended* December 31, 2024*.

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Supplemental disclosures to the Consolidated Statements of Cash Flows for the years ended* December**31,* are as follows:

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This information should be read in conjunction with the other notes to the consolidated financial statements. The following presents summary balance sheets and summary statements of income and cash flows information for the years ended* December 31:*

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The Bank, in the ordinary course of business, has loan and deposit transactions with directors and executive officers. In management’s opinion, these transactions were on substantially the same terms as comparable transactions with other customers of the Bank. The amount of such deposits totaled approximately $4,582 and $3,963 at* December 31, 2025and2024*, respectively.

The following is an analysis of the activity of loans to executive officers and directors for the years ended* December**31:*

The Company hasone reportable segment: banking operations. The Company is engaged in a single line of business, indicative of a traditional banking institution, gathering deposits and originating loans in its primary market areas. Loans, interest bearing accounts, investment securities, deposits, and non-interest income provide the revenues of the banking operation. Loan products offered to customers generate a majority of the Company’s interest and dividend income. Deposit products offered to customers generate non-interest income such as fees and service charges. Interest income on securities, net gains on sales of loans, and debit card income are other sources of revenue. Interest expense, provisions for credit losses, salaries and employee benefits, occupancy and equipment, and data processing provide significant expenses in banking operations. The Company manages its operations, allocates resources and monitors and reports its financials as a single operating segment. The Company's Chief Executive Officer is considered the Chief Operating Decision Maker. The Chief Operating Decision Maker evaluates segment performance using consolidated net income.

Accounting policies for segments are the same as those described in Note1 of Notes to Consolidated Financial Statements.

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