FIRST NORTHERN COMMUNITY BANCORP

June 30, 2026 and 2025 and December 31, 2025

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of First Northern Community Bancorp (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they donot include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The results of operations for any interim period arenot necessarily indicative of results expected for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form10-K for the year ended* December 31, 2025* as filed with the Securities and Exchange Commission ("SEC"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. All material intercompany balances and transactions have been eliminated in consolidation.

2. ACCOUNTING POLICIES

The most significant accounting policies followed by the Company are presented in Note1 to the audited consolidated financial statements included in the Company’s Annual Report on Form10-K for the year ended* December 31, 2025*. These policies, along with the disclosures presented in the other financial statement notes and in this discussion, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined.

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.

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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 public business entities for interim periods within annual periods beginning after* December 15, 2027.*Early adoption is permitted for all entities. The amendments can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is evaluating the disclosure requirements of this update and the impact of adopting the new guidance on the consolidated financial statements.

In* December 2025,the FASB issued 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 address33 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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3. INVESTMENT SECURITIES

The amortized cost, unrealized gains and losses, estimated fair values, and allowance for credit losses (ACL) of investments in debt and other securities at* June 30, 2026* are summarized as follows:

The amortized cost, unrealized gains and losses and estimated fair values of investments in debt and other securities at* December 31, 2025* are summarized as follows:

The Company generated $4,873,000 and $23,948,000 in proceeds from sales of available-for-sale securities for thethree-month periods ended* June 30, 2026and2025*, respectively. The Company generated $4,873,000 and $27,315,000 in proceeds from sales of available-for-sale securities for thesix-month periods ended* June 30, 2026and2025,* respectively. Gross realized gains on sales of available-for-sale securities were $0 and $93,000 for thethree-month periods ended* June 30, 2026and2025*, respectively. Gross realized gains on sales of available-for-sale securities were $0 and $93,000 for thesix-month periods ended* June 30, 2026and2025*, respectively. Gross realized losses on sales or calls of available-for-sale securities were $112,000 and $129,000 for thethree-month periods ended* June 30, 2026and2025*, respectively. Gross realized losses on sales of available-for-sale securities were $112,000 and $182,000 for thesix-month periods ended* June 30, 2026and2025,* respectively.

The amortized cost and estimated fair value of debt and other securities at* June 30, 2026*, 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* June 30, 2026*, follows:

One hundred andsixty-six securities, all considered investment grade, which had an aggregate fair value of $249,414,000 and a total unrealized loss of $3,148,000, have been in an unrealized loss position for less thantwelve months as of* June 30, 2026*. Three hundred andfifteen securities, all considered investment grade, which had an aggregate fair value of $255,399,000 and a total unrealized loss of $26,065,000, have been in an unrealized loss position for more thantwelve months as of* June 30, 2026*. 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* June 30, 2026*, 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 and interest rates increase, credit ratings decline, the issuer's financial condition deteriorates, or the liquidity for securities declines. As a result, an allowance for 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, 2025*, follows:

Investment securities carried at $90,604,000 and $95,479,000 at* June 30, 2026* and* December 31, 2025*, respectively, were pledged to secure public deposits or for other purposes as required or permitted by law.

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4. LOANS AND ALLOWANCE FOR CREDIT LOSSES

The composition of the Company’s loan portfolio, by loan class, as of* June 30, 2026* and* December 31, 2025* was as follows:

At* June 30, 2026* and* December 31, 2025*, all loans were pledged under a blanket collateral lien to secure actual or potential borrowings from the Federal Home Loan Bank (“FHLB”).

Allowance for Credit Losses

The following tables summarize 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 condensed consolidated balance sheet within other liabilities, as of and for thethree andsix months ended* June 30, 2026* and* June 30, 2025.*

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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. During the quarter ended* June 30, 2026*, the levels of forecasted gross domestic product and single-family home prices improved. The Company recorded provision expense totaling $600,000 for thethree months ended* June 30, 2026primarily due to an increase in qualitative factors to incorporate additional risk related to geopolitical matters. During thesix* months ended* June 30, 2026,the Company recorded a provision for credit losses totaling $900,000 primarily due to increases in loans receivable coupled with the negative trends in forecast factors. Management believes the allowance for credit losses at June 30, 2026* appropriately reflected expected credit losses in the loan portfolio at that date.

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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* June 30, 2026* and* December 31, 2025*. 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* June 30, 2026* and* December 31, 2025*:

*** June 30, 2026***

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*** December 31, 2025***

Foreclosure Proceedings

The Company hadone consumer loan totaling $143,000 secured by residential real estate property that was in the process of foreclosure at* June 30, 2026.The Company hadno consumer loans secured by residential real estate property that were in the process of foreclosure at December 31, 2025.*

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Non-accrual and Past Due Loans

The Company’s loans by delinquency and non-accrual status, as of* June 30, 2026* and* December 31, 2025*, was as follows:

The Company recognized $0 and $378,000 of interest income on nonaccrual loans during thethree months ended* June 30, 2026* and* June 30, 2025*, respectively. The Company recognized $2,000 and $378,000 of interest income on nonaccrual loans during thesix months ended* June 30, 2026* and* June 30, 2025*, 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 thethree months ended* June 30, 2026* were as follows:

The amortized cost basis of loans that were experiencing both financial difficulty and modification during thesix months ended* June 30, 2026* were as follows:

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The amortized cost basis of loans that were experiencing both financial difficulty and modification during thethree months ended* June 30, 2025* were as follows:

The amortized cost basis of loans that were experiencing both financial difficulty and modification during thesix months ended* June 30, 2025* were as follows:

The Company hadno commitments to lend additional funds to borrowers whose loans were modified at* June 30, 2026* and* June 30, 2025*.

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The following table presents the financial effect of the loan modifications to borrowers experiencing financial difficulty during thethree-month period ended* June 30, 2026*:

The following table presents the financial effect of the loan modifications to borrowers experiencing financial difficulty during thesix-month period ended* June 30, 2026*:

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The following table presents the financial effect of the loan modifications to borrowers experiencing financial difficulty during thethree-month period ended* June 30, 2025*:

The following table presents the financial effect of the loan modifications to borrowers experiencing financial difficulty during thesix-month period ended* June 30, 2025*:

Loans that were modified within the previoustwelve months were current on payments as of* June 30, 2026and June 30, 2025.There wereno loans modified within the previoustwelve* months and for which there was a payment default duringthree- andsix-month periods ended* June 30, 2026* and* June 30, 2025*.

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 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 bank regulatory agencies; a6 equates to a Special Mention; a7 equates to Substandard; an8 equates to Doubtful; and a9 equates to a Loss. For the definitions of each risk rating, see Note3 to our consolidated financial statements included in our Annual Report on Form10-K for the year ended* December 31, 2025*.

The following tables present the loan portfolio by loan class, origination year, and internal risk rating as of* June 30, 2026*. 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 $6,631,000 and $1,780,000 as of* June 30, 2026* and* December 31, 2025,*respectively.

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5. MORTGAGE OPERATIONS

Transfers and servicing of financial assets and extinguishments of liabilities 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. Retained servicing rights on 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. Fair values are estimated using discounted cash flows based on a current market interest rate.

The Company recognizes a gain and a related asset for the fair value of the rights to service loans for others when loans are sold. The Company sold a substantial portion of its portfolio of conforming long-term residential mortgage loans originated during thesix months ended* June 30, 2026* for cash proceeds equal to the fair value of the loans. The Company serviced real estate mortgage loans for others totaling $155,568,000 and $162,644,000 at* June 30, 2026* and* December 31, 2025*, 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 loan servicing income on the condensed consolidated statements of income.

Key assumptions used in measuring the fair value of mortgage servicing rights as of* June 30, 2026* and* December 31, 2025* were as follows:

The following table summarizes the changes to the Company’s mortgage servicing rights assets as of the periods presented. Mortgage servicing rights are included in Interest Receivable and Other Assets on the condensed consolidated balance sheets.

At* June 30, 2026* and* December 31, 2025*, the estimated fair market value of the Company’s mortgage servicing rights assets was $1,840,000 and $1,748,000, respectively. The change in fair value of mortgage servicing rights during2026 was primarily due to a decrease in prepayment speeds.

The Company received contractually specified servicing fees of $98,000 and $108,000 for thethree months ended* June 30, 2026* and* June 30, 2025*, respectively. The Company received contractually specified servicing fees of $200,000 and $217,000 for thesix months ended* June 30, 2026and June 30, 2025,*respectively. Loan servicing income on the condensed consolidated statements of income includes contractually specified servicing fees, mortgage servicing rights additions, amortization and changes in the valuation allowance.

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6. FAIR VALUE MEASUREMENTS

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 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 table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of* June 30, 2026* and* December 31, 2025*.

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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* June 30, 2026* and* December 31, 2025.*

There wereno liabilities measured at fair value on a recurring or non-recurring basis at* June 30, 2026* and* December 31, 2025*.

Key methods and assumptions used in measuring the fair value of collateral dependent loans as of* June 30, 2026* were as follows:

The following section describes the valuation methodologies used for assets and liabilities 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 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. 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 estimated fair values of the Company’s financial instruments for the periods ended* June 30, 2026* and* December 31, 2025* were approximately as follows:

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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7. COMMITMENTS AND CONTINGENCIES

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit in the form of loans or through standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheet. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

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 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. The types of 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* June 30, 2026* and* 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. Performance standby letters of credit totaled $1,038,000 for each of the periods ended* June 30, 2026* and* December 31, 2025*. The Bank had experiencedno draws on outstanding letters of credit, resulting inno related liability included on its balance sheet as of* June 30, 2026and December 31, 2025;however, should a triggering event occur, the Bank either has collateral in excess of the letter of credit or embedded agreements of recourse from the customer. The Bank set aside a reserve for unfunded commitments in the amount of $1,150,000 and $1,200,000 at June 30, 2026* and* December 31, 2025*, respectively, which is recorded in "interest payable and other liabilities" on the condensed consolidated balance sheets.

Commitments to extend credit and standby letters of credit bear similar credit risk characteristics as outstanding loans. As of* June 30, 2026* and* 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. 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* such commitments at* June**30,* 2026 and* December 31, 2025.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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8. STOCK PLANS

On* January 22, 2026,the Board of Directors of the Company declared a 5% stock dividend payable March 25, 2026 to shareholders of record as of February 27, 2026.*All stock options and restricted stock amounts outstanding have been adjusted to give retroactive effect to stock dividends.

The following table presents the activity related to stock options for thethree months ended* June 30, 2026*.

The following table presents the activity related to stock options for thesix months ended* June 30, 2026*.

The intrinsic value of options exercised was $466,000 and $268,000 during thesix months ended* June 30, 2026* and* June 30, 2025*, respectively. The fair value of awards vested was $25,000 during each of thesix-month periods ended* June 30, 2026and June 30, 2025.The intrinsic value of options exercised was $0 and $90,000 during thethree* months ended* June 30, 2026and June 30, 2025,respectively. The fair value of awards vested was $0 during each of thethree*-month periods ended* June 30, 2026and June 30, 2025.*

As of* June 30, 2026*, there wasno unrecognized compensation cost related to non-vested stock options.

There was $0 and $6,000 of recognized compensation cost related to stock options granted for thethree months ended* June 30, 2026and June 30, 2025,respectively. There was $6,000 and $12,000 of recognized compensation cost related to stock options granted for thesix* months ended* June 30, 2026,and June 30, 2025,*respectively.

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The following table presents the activity related to non-vested restricted stock for thethree months ended* June 30, 2026*.

The following table presents the activity related to non-vested restricted stock for thesix months ended* June 30, 2026*.

The weighted average fair value of restricted stock granted during thesix months ended* June 30, 2026* was $14.02 per share.

As of* June 30, 2026*, there was $1,416,000 of total unrecognized compensation cost related to non-vested restricted stock. This cost is expected to be recognized over a weighted average period of approximately 3.00 years.

There was $140,000 and $150,000 of recognized compensation cost related to restricted stock awards for thethree months ended* June 30, 2026and June 30, 2025,respectively. There was $234,000 and $334,000 of recognized compensation cost related to restricted stock awards for thesix* months ended* June 30, 2026and June 30, 2025,*respectively.

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The Company has an Employee Stock Purchase Plan (“ESPP”). There are 315,000 shares authorized for issuance under the 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 March 25, 2026 to shareholders of record as of February 27, 2026.The 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. The Board of Directors approved the current participation period of* December 2, 2025to November 23, 2026.An eligible employee isone* who has been continually employed for at least90 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 percent 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.

As of* June 30, 2026*, there was $31,000 unrecognized compensation cost related to ESPP issuances. This cost is expected to be recognized over a weighted average period of approximately 0.5 years.

There was $16,000 and $10,000 of recognized compensation cost related to ESPP issuances for thethree months ended* June 30, 2026and June 30, 2025,respectively. There was $31,000 and $18,000 of recognized compensation cost related to ESPP issuances for thesix* months ended* June 30, 2026and June 30, 2025,*respectively.

The weighted average fair value at issuance date during thesix months ended* June 30, 2026* was $2.79 per share.

A summary of the weighted average assumptions used in valuing ESPP issuances during thethree andsix months ended* June 30, 2026* is presented below.

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9. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table details activity in accumulated other comprehensive income (loss) for thethree months ended* June 30, 2026*.

The following table details activity in accumulated other comprehensive income (loss) for thesix months ended* June 30, 2026*.

The following table details activity in accumulated other comprehensive income (loss) for thethree months ended* June 30, 2025*.

The following table details activity in accumulated other comprehensive income (loss) for thesix months ended* June 30, 2025*.

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10. OUTSTANDING SHARES AND EARNINGS PER SHARE

On* January 22, 2026,the Board of Directors of the Company declared a 5% stock dividend payable March 25, 2026 to shareholders of record as of February 27, 2026.*All income per share amounts have been adjusted to give retroactive effect to stock dividends.

Earnings Per Share (EPS)

Basic EPS includesno dilution and is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the respective period. Diluted EPS is computed by dividing net income available to common shareholders by the weighted average number of shares outstanding plus dilutive shares for the quarter. Diluted shares include all common stock equivalents (“in-the-money” stock options, unvested restricted stock, stock units, warrants and rights, convertible bonds and preferred stock), which reflects the potential dilution of securities that could share in the earnings of the Company.

The following table presents a reconciliation of basic and diluted EPS for thethree andsix months ended* June 30, 2026and2025*:

Restricted stocknot included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 231 shares and 0 shares for thethree months ended* June 30, 2026and2025,* respectively. There wereno stock options which werenot included in the computation of diluted earnings per share because they would have had an anti-dilutive effect for thethree months ended* June 30, 2026and2025.* Restricted stocknot included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 13,516 shares and 609 shares for thesix months ended* June 30, 2026and2025,* respectively. Stock optionsnot included in the computation of diluted earnings per share because they would have had an anti-dilutive effect amounted to 0 shares and 14,744 shares for thesix months ended* June 30, 2026and2025,* respectively.

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11. LEASES

The Company leases nine 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 Company hadno financing leases as of* June 30, 2026*.

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 $5,202,000 and $5,393,000 as of* June 30, 2026* and* December 31, 2025*, respectively. Right-of-use assets are included in Interest receivable and other assets on the condensed consolidated balance sheets. The Company had lease liabilities totaling $5,684,000 and $5,795,000 as of* June 30, 2026* and* December 31, 2025*, respectively. Lease liabilities are included in Interest payable and other liabilities on the condensed consolidated balance sheets. The Company recognized lease expense totaling $293,000 and $283,000 for thethree-month periods ended* June 30, 2026and2025*, respectively, and $585,000 and $567,000 for thesix-month periods ended* June 30, 2026and2025,* respectively. Lease expense includes operating lease costs, short-term lease costs and variable lease costs. Lease expense is included in occupancy and equipment expense on the condensed consolidated statements of income.

The table below summarizes the maturity of remaining lease liabilities at* June 30, 2026*:

The following table presents supplemental cash flow information related to leases for thethree andsix months ended* June 30, 2026* and2025:

The following table presents the weighted average operating lease term and discount rate as of* June 30, 2026* and* December 31, 2025*:

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12. SEGMENT DISCLOSURES

The Company evaluated its operating segments in accordance with ASC280, Segment Reporting, and determined it 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.

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.

Loans, interest bearing accounts, investment securities, deposits, and non-interest income provide the revenues in banking operations and are presented in the Company's consolidated balance sheets. Interest expense, provisions for credit losses, salaries and employee benefits, occupancy and equipment, and data processing provide significant expenses in banking operations and are presented in the Company's consolidated statements of income. Segment performance is evaluated using consolidated net income with the majority of the Company's net income derived from net interest income.

The accounting policies for the segment is consistent with those described in Note1 - Summary of Significant Accounting Policies to the consolidated financial statements in the Company’s2025 Form10-K.

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