SOUTHERN MISSOURI BANCORP INC

Previous wording

Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes. The following discussion reviews the Company’s condensed consolidated financial condition at December 31, 2024, and results of operations for the three- and six- month periods ended December 31, 2024 and 2023.

Current wording

Management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes. The following discussion reviews the Company’s condensed consolidated financial condition at March 31, 2025, and results of operations for the three-and nine- month periods ended March 31, 2025 and 2024.

Previous wording

During the first six months of fiscal 2025, total assets increased by $303.4 million. The increase was primarily attributable to an increase in net loans receivable, cash and cash equivalents, and AFS securities. Net loans receivable increased by $175.0 million; cash and cash equivalents increased by $84.9 million; and AFS securities increased by $40.2 million. Liabilities increased $279.7 million, which was primarily attributable to an increase in deposits of $267.6 million. Equity increased $23.6 million, attributable primarily to earnings retained after cash dividends paid, in combination with a $1.0 million reduction in accumulated other comprehensive losses (AOCL) as the market value of the Company’s investments appreciated due to the decrease in market interest rates. For more information, see “Comparison of Financial Condition at December 31, 2024 and June 30, 2024.”

Current wording

During the first nine months of fiscal 2025, total assets increased by $372.2 million. The increase was primarily attributable to an increase in net loans receivable, cash equivalents, and available for sale (AFS) securities. Loans, net of the ACL, increased $171.3 million; cash equivalents increased by $166.0 million; and AFS securities increased $35.0 million. Liabilities increased $332.1 million, primarily attributable to an increase in deposits of $318.3 million. Equity increased $40.0 million, attributable primarily to earnings retained after cash dividends paid, in combination with a $3.5 million reduction in accumulated other comprehensive losses (AOCL) due to the market value of the Company’s investments appreciating as a result of the decrease in market interest rates. For more information, see “Comparison of Financial Condition at March 31, 2025 and June 30, 2024.”

Previous wording

Net income for the first six months of fiscal 2025 was $27.1 million, an increase of $1.8 million, or 7.0% as compared to the same period of the prior fiscal year. Compared to the year-ago period, the Company’s increase in net income was attributable to increases in net interest income and noninterest income, which were partially offset by increases in provision for credit losses (PCL), noninterest expense, and provision for income taxes. Diluted net income was $2.40 per common share for the first six months of fiscal 2025, as compared to $2.23 per common share for the same period of the prior fiscal year. For the first six months of fiscal 2025, as compared to the same period of the prior fiscal year, net interest income increased $4.9 million or 7.0%; PCL increased $1.3 million, or 71.7%; noninterest income increased $2.5 million, or 22.2%; noninterest expense increased $3.2 million, or 6.6%; and income before income taxes increased $3.0 million, or 9.5%. During the second quarter of fiscal 2024, the Bank sold bonds with a book value of $12.4 million, realizing a loss of $682,000 which was recognized in noninterest income. Recognition of this loss during the quarter reduced after-tax net income by $541,000. For more information see “Results of Operations.”

Current wording

Net income for the first nine months of fiscal 2025 was $42.8 million, an increase of $6.1 million, or 16.8% as compared to the same period of the prior fiscal year. Compared to the year-ago period, the Company’s increase in net income was attributable to increases in net interest income and noninterest income, which were partially offset by increases in noninterest expense, provision for income taxes, and provision for credit losses (PCL). Diluted net income was $3.79 per common share for the first nine months of fiscal 2025, as compared to $3.22 per common share for the same period of the prior fiscal year. For the first nine months of fiscal 2025, as compared to the same period of the prior fiscal year, net interest income increased $9.9 million or 9.5%; noninterest income increased $3.6 million or 21.2%, noninterest expense increased $3.5 million, or 4.8%; provision for income taxes increased $2.6 million or 27.0%; and PCL increased $1.3

Previous wording

Interest rates during the first six months of fiscal 2025 remained volatile and moved lower at the shorter end of the curve due to Federal Open Market Committee federal funds rate cuts totaling 100 basis points during the fiscal year. Market expectations are for slight reductions in the federal funds rate over the next year, while concerns that economic conditions could keep inflation somewhat elevated and above the FOMC target range, yields on the longer end of the curve increased. As a result, the yield curve uninverted, with 33 basis points positive slope between the two-year and ten-year treasury rates. At December 31, 2024, as compared to June 30, 2024, the yield on two-year treasuries decreased from 4.72% to 4.24%; the yield on five-year treasuries increased from 4.33% to 4.38%; the yield on ten-year treasuries increased from 4.34% to 4.57%; and the yield on 30-year treasuries increased from 4.50% to 4.79%.

Current wording

Interest rates during the first nine months of fiscal 2025 remained volatile and moved lower at the shorter end and mid-point of the curve due to Federal Open Market Committee (FOMC) federal funds rate cuts totaling 100 basis points during the fiscal year. Market expectations are for further reductions in the federal funds rate over the next year, while there are concerns that economic conditions could keep inflation somewhat elevated and above the FOMC target range due to recent tariff announcements. Yields at the mid-point of the curve decreased at the end of the period, but as stated previously, have been volatile and above year end 2024 levels through most of the fiscal year. The yield curve uninverted, with a 30 basis point positive slope between the two-year and ten-year treasury rates. At March 31, 2025, as compared to June 30, 2024, the yield on two-year treasuries decreased from 4.72% to 3.86%; the yield on five-year treasuries decreased from 4.33% to 3.91%; the yield on ten-year treasuries decreased from 4.34% to 4.16%; and the yield on 30-year treasuries increased from 4.50% to 4.52%.

Previous wording

As compared to the first six months of the prior fiscal year, our average yield on earning assets increased by 43 basis points, primarily attributable to increased yields on loans receivable, as well as available for sale securities, as compared to year-ago levels. Our cost of interest-bearing liabilities increased by 45 basis points, as certificates of deposit and savings balances increased to higher market rates. Special deposit rates and some brokered CD funding was utilized to increase balance sheet liquidity in the first six months of fiscal 2025 to support loan growth and AFS security purchases. Despite a decrease of one basis point in the net interest spread, to 2.78%, the net interest margin increased by three basis points to 3.37% during the first six months of fiscal 2025, as compared to the same period in fiscal 2024. The increase in the net interest margin was due to a higher composition of higher yielding assets, primarily loans and securities, and a lower balance of lower yielding cash and cash equivalents, compared to the prior fiscal year period. In addition, net interest income benefitted from a 6.3% increase in average earnings assets, compared to the prior fiscal year period. The 100 basis points of federal funds rate cuts, from September 2024 to December 2024, a higher percentage of variable rate deposits compared to the prior fiscal year, and relatively stable price competition for deposits have eased the pressure on the net interest spread, which has increased in the second quarter of fiscal 2025, compared to the linked quarter and the second quarter of fiscal 2024.

Current wording

As compared to the first nine months of the prior fiscal year, our average yield on earning assets increased by 33 basis points, primarily attributable to increased yields on loans receivable, as loans renewed and new loans were originated at higher market rates. Our cost of interest-bearing liabilities increased by 26 basis points, as certificates of deposit and savings balances increased to higher market rates. Special deposit rates and some brokered CD funding was utilized to increase balance sheet liquidity in the first nine months of fiscal 2025 to support loan growth and AFS security purchases. Due to average earning assets repricing higher than interest-bearing liabilities, the net interest spread increased seven basis points to 2.80% and the net interest margin increased by nine basis points to 3.37% during the first nine-months of fiscal 2025, as compared to the same period in fiscal 2024. The increase in the net interest margin was due primarily to the increase in net interest spread and a greater composition of higher yielding assets, primarily loans, and a lower balance of lower yielding cash and cash equivalents, compared to the prior fiscal year period. In addition, net interest income benefitted from a 6.3% increase in average earnings assets, compared to the prior fiscal year period. The 100 basis points of federal funds rate cuts, from September 2024 to December 2024, a higher percentage of variable rate deposits compared to the prior fiscal year, and relatively stable price competition for deposits have eased the pressure on interest expense, while loans repriced to higher market rates, and allowed the net interest spread and net interest margin to expand in the fiscal 2025 period.

Previous wording

The Company’s net income is also affected by the level of its noninterest income and noninterest expense. Noninterest income generally consists primarily of deposit account service charges, bank card interchange income, loan-related fees, earnings on bank-owned life insurance, gains on sales of loans, and other general operating income. Noninterest expense consists primarily of compensation and employee benefits, occupancy-related expenses, data processing expense, telecommunications expense, deposit insurance assessments, professional fees, advertising, postage and office expenses , amortization of intangible assets, and other general operating expenses.

Current wording

The Company’s net income is also affected by the level of its noninterest income and noninterest expense. Noninterest income generally consists of deposit account service charges, bank card interchange income, loan-related fees, earnings on bank-owned life insurance, gains on sales of loans, and other general operating income. Noninterest expense consists primarily of compensation and employee benefits, occupancy-related expenses, data processing expense, telecommunications expense, deposit insurance assessments, legal and professional fees, advertising, postage and office expenses, amortization of intangible assets, and other general operating expenses.

Previous wording

The Company’s noninterest income for the six- month period ended December 31, 2024, was $14.0 million, an increase $2.5 million, or 22.2%, as compared to the same period of the prior fiscal year. In the current period, the increase was primarily attributable to increases in other loan fees, deposit account charges and related fees, bank card interchange income, wealth management fees, earnings on bank owned life insurance, and the absence of a net realized loss on sale of AFS securities. These increases were partially offset by lower loan late charges, other noninterest income, and lower net realized gain on sale of loans. Other noninterest income decreased primarily due to modest losses on the disposal of fixed assets, which were comprised of various equipment.

Current wording

The Company’s noninterest income for the nine-month period ended March 31, 2025, was $20.7 million, an increase of $3.6 million, or 21.2%, as compared to the same period of the prior fiscal year. In the current period, the increase was primarily attributable to the absence of a net realized loss on sale of AFS securities and increases in other loan fees, deposit account charges and related fees, bank card interchange income, wealth management fees, and earnings on bank owned life insurance. These increases were partially offset by lower loan late charges, other noninterest income, and lower loan servicing fees. Other noninterest income decreased primarily due to modest losses on the disposal of fixed assets, which were comprised of various equipment.

Previous wording

professional fees, occupancy and equipment, and advertising expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional expenses increased primarily due to a one-time expense associated with a performance improvement project that started during the first fiscal quarter of 2025. This expense was fully realized in the September quarter, with only modest reimbursables remaining to be recognized in the second quarter of fiscal 2025. Occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. Increased advertising activity grew marketing expenses compared to the prior period.

Current wording

Noninterest expense for the nine-month period ended March 31, 2025, was $76.1 million, an increase of $3.5 million, or 4.8%, as compared to the same period of the prior fiscal year. In the current period, this increase in noninterest expense was attributable primarily to increases in compensation and benefits, legal and professional fees, occupancy and equipment, and advertising expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional expenses increased primarily due to a one-time $840,000 expense associated with a performance improvement project that started during the first

Previous wording

We expect, over time, to continue to grow our assets through the origination and occasional purchase of loans, and purchases of investment securities. The primary funding for this asset growth is expected to come through deposits from retail and commercial clients, as well as public units. In addition, we will utilize brokered funding and short- and long-

Current wording

We expect, over time, to continue to grow our assets through the origination and occasional purchase of loans, and purchases of investment securities. The primary funding for this asset growth is expected to come through deposits from retail and commercial clients, as well as public units. In addition, we will utilize brokered funding and short- and long-term FHLB borrowings. We have grown and intend to continue to grow deposits by offering desirable deposit products for our current customers and by attracting new depository relationships. We will also continue to explore strategic expansion opportunities in market areas that we believe will be attractive to our business model.

Previous wording

The Company experienced balance sheet growth in the first six months of fiscal 2025, with total assets of $4.9 billion at December 31, 2024, reflecting an increase of $303.4 million, or 6.6%, as compared to June 30, 2024. Growth primarily reflected increases in net loans receivable, cash and cash equivalents, and AFS securities.

Current wording

The Company experienced balance sheet growth in the first nine months of fiscal 2025, with total assets of $5.0 billion at March 31, 2025, reflecting an increase of $372.2 million, or 8.1%, as compared to June 30, 2024. Growth primarily reflected an increase in net loans receivable, cash equivalents, and available for sale (AFS) securities.

Previous wording

Cash and cash equivalents were $145.8 million at December 31, 2024, an increase of $84.9 million, or 139.4%, as compared to June 30, 2024. The increase was primarily the result of strong deposit generation that outpaced loan growth (on a percentage basis) and AFS securities purchases during the period. AFS securities were $468.1 million at December 31, 2024, up $40.2 million, or 9.4%, as compared to June 30, 2024.

Current wording

Cash equivalents and time deposits were a combined $227.1 million at March 31, 2025, an increase of $165.7 million, or 270.0%, as compared to June 30, 2024. The increase was primarily the result of strong deposit generation, reflecting seasonal trends, that outpaced loan growth during the period. AFS securities were $462.9 million at March 31, 2025, up $35.0 million, or 8.2%, as compared to June 30, 2024.

Previous wording

Loans, net of the allowance for credit losses (ACL), were $4.0 billion at December 31, 2024, increasing by $175.0 million, or 4.6%, as compared to June 30, 2024. The Company noted growth primarily in drawn construction, 1-4 family residential, commercial and industrial, agricultural production loan draws, owner occupied commercial real estate, and agriculture real estate loan balances. This was somewhat offset by a decrease in loans secured by non-owner occupied commercial real estate, multi-family property, and consumer loans. For more information see “Note 4: Loans and Allowance for Credit Losses.”

Current wording

Loans, net of the allowance for credit losses (ACL), were $4.0 billion at March 31, 2025, an increase of $171.3 million, or 4.5%, as compared to June 30, 2024. Gross loans increased by $173.7 million, while the ACL attributable to outstanding loan balances increased $2.4 million, or 4.6%, as compared to June 30, 2024. The increase in loan balances was attributable to growth in 1-4 family residential, commercial and industrial, construction and land development, multi-family real estate, agriculture real estate, owner occupied commercial real estate, and agricultural production loan balances. This was somewhat offset by a decrease in consumer loans, loans secured by non-owner occupied commercial real estate, and other loan balances.

Previous wording

Loans anticipated to fund in the next 90 days totaled $172.5 million at December 31, 2024, as compared to $157.1 million at June 30, 2024, and $140.5 million at December 31, 2023.

Current wording

Loans anticipated to fund in the next 90 days totaled $163.3 million at March 31, 2025, as compared to $157.1 million at June 30, 2024, and $117.2 million at March 31, 2024.

Previous wording

The Bank’s concentration in non-owner occupied commercial real estate, as defined for regulatory purposes, is estimated at 316.9% of Tier 1 capital and ACL at December 31, 2024, as compared to 317.5% as of June 30, 2024, with these loans representing 41.0% of gross loans at December 31, 2024. Multi-family residential real estate, hospitality (hotels/restaurants), care facilities, retail stand-alone, and strip centers are the most common collateral types within the non-owner occupied commercial real estate loan portfolio. The multi-family residential real estate loan portfolio commonly includes loans collateralized by properties currently in the low-income housing tax credit (LIHTC) program or that have exited the program. The hospitality and retail stand-alone segments include primarily franchised businesses; care facilities consisting mainly of skilled nursing and assisted living centers; and strip centers, which can be defined as non-mall shopping centers with a variety of tenants. Non-owner-occupied office property types included 33 loans totaling $24.2 million, or 0.60% of gross loans at December 31, 2024, none of which were adversely classified, and are generally comprised of smaller spaces with diverse tenants. The Company continues to monitor its commercial real estate concentration and the individual segments closely.

Current wording

The Bank’s concentration in non-owner occupied commercial real estate loans is estimated at 304.0% of Tier 1 capital and ACL on March 31, 2025, as compared to 317.5% as of June 30, 2024, with these loans representing 40.4% of total loans at March 31, 2025. Multi-family residential real estate, hospitality (hotels/restaurants), care facilities, retail stand-alone, and strip centers are the most common collateral types within the non-owner occupied commercial real estate loan portfolio. The multi-family residential real estate loan portfolio commonly includes loans collateralized by properties currently in the low-income housing tax credit (LIHTC) program or that have exited the program. The hospitality and retail stand-alone segments include primarily franchised businesses; care facilities consisting mainly of skilled nursing and assisted living centers; and strip centers, which can be defined as non-mall shopping centers with a variety of tenants. Non-owner-occupied office property types included 31 loans totaling $23.9 million, or 0.59% of gross loans at March 31, 2025, none of which were adversely classified, and are generally comprised of smaller spaces with diverse tenants. The Company continues to monitor its commercial real estate concentration and the individual segments closely.

Previous wording

Deposits were $4.2 billion at December 31, 2024, an increase of $267.6 million, or 6.8%, as compared to June 30, 2024. The deposit portfolio saw year-to-date increases primarily in certificates of deposit and savings accounts, as customers continued to move balances into high yield savings accounts and special rate time deposits in the relatively high-rate environment. Public unit balances totaled $565.9 million at December 31, 2024, a decrease of $28.7 million compared to June 30, 2024, but an increase of $55.4 million as compared to $510.5 million at September 30, 2024. Public unit balances increased compared to September 30, 2024, the linked quarter, due to seasonal inflows, but decreased year-to-date due to the loss of a large local public unit depositor. Brokered deposits totaled $254.0 million at December 31, 2024, an increase of $80.3 million as compared to June 30, 2024, but a decrease of $19.1 million compared to September 30, 2024, the linked quarter. Fiscal year-to-date, the Company increased brokered deposits due to more attractive pricing for brokered certificates of deposit relative to local market rates and the need to meet seasonal loan demand, and to build on-balance sheet liquidity. The average loan-to-deposit ratio for the second quarter of fiscal 2025 was 96.4%, as compared to 96.3% for the quarter ended June 30, 2024, and 94.3% for the same period of the prior fiscal year. The loan-to-deposit ratio at period end December 31, 2024, was 95.6%.

Current wording

Deposits were $4.3 billion at March 31, 2025, an increase of $318.3 million, or 8.1%, as compared to June 30, 2024. The deposit portfolio saw year-to-date increases in certificates of deposit and savings accounts, as customers remained willing to move balances into high yield savings accounts and special rate time deposits in the higher rate environment. Public unit balances totaled $575.8 million at March 31, 2025, a decrease of $18.8 million compared to June 30, 2024, and increased $9.8 million from December 31, 2024, reflecting seasonal trends. Brokered deposits totaled $235.6 million at March 31, 2025, an increase of $61.8 million as compared to June 30, 2024, but a decrease of $18.5 million compared

Previous wording

The Company’s stockholders’ equity was $512.4 million at December 31, 2024, an increase of $23.6 million, or 4.8%, as compared to June 30, 2024. The increase was attributable primarily to earnings retained after cash dividends paid, in combination with a $1.0 million reduction in accumulated other comprehensive losses (AOCL) as the market value of the Company’s investments appreciated due to the decrease in market interest rates. The AOCL totaled $16.4 million at December 31, 2024 compared $17.5 million at June 30, 2024. The Company does not hold any securities classified as held-to-maturity.

Current wording

The Company’s stockholders’ equity was $528.8 million at March 31, 2025, an increase of $40.0 million, or 8.2%, as compared to June 30, 2024. The increase was attributable primarily to earnings retained after cash dividends paid, in combination with a $3.5 million reduction in accumulated other comprehensive losses (AOCL) as the market value of the Company’s investments appreciated due to the decrease in market interest rates. The AOCL totaled $14.0 million at March 31, 2025, compared $17.5 million at June 30, 2024. The Company does not hold any securities classified as held-to-maturity.

Previous wording

Average Balance Sheet, Interest, and Average Yields and Rates for the Three- and Six- Month Periods Ended

Current wording

Average Balance Sheet, Interest, and Average Yields and Rates for the Three- and Nine- Month Periods Ended

Previous wording

The tables below present certain information regarding our financial condition and net interest income for the three- and six- month periods ended December 31, 2024 and 2023. The tables present the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. Yields on tax-exempt obligations were not computed on a tax equivalent basis.

Current wording

The tables below present certain information regarding our financial condition and net interest income for the three- and nine- month periods ended March 31, 2025 and 2024. The tables present the annualized average yield on interest-earning assets and the annualized average cost of interest-bearing liabilities. We derived the yields and costs by dividing annualized income or expense by the average balance of interest-earning assets and interest-bearing liabilities, respectively, for the periods shown. Yields on tax-exempt obligations were not computed on a tax equivalent basis.

Previous wording

The following tables set forth the effects of changing rates and volumes on the Company’s net interest income for the three- and six- month periods ended December 31, 2024, compared to the three- and six- month periods ended December 31, 2023. Information is provided with respect to (i) effects on interest income and expense attributable to changes in volume (changes in volume multiplied by the prior rate), (ii) effects on interest income and expense attributable to change in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume).

Current wording

The following tables set forth the effects of changing rates and volumes on the Company’s net interest income for the three- and nine- month periods ended March 31, 2025, compared to the three- and nine- month periods ended March 31, 2024. Information is provided with respect to (i) effects on interest income and expense attributable to changes in volume (changes in volume multiplied by the prior rate), (ii) effects on interest income and expense attributable to change in rate (changes in rate multiplied by prior volume), and (iii) changes in rate/volume (change in rate multiplied by change in volume).

Previous wording

General. Net income for the three-month period ended December 31, 2024, was $14.7 million, an increase of $2.5 million, or 20.2%, as compared to the same period of the prior fiscal year. The increase was attributable to increases in net interest income and noninterest income, partially offset by increases in provision for income taxes, noninterest expense and provision for credit losses.

Current wording

General. Net income for the three-month period ended March 31, 2025, was $15.7 million, an increase of $4.4 million or 38.7%, as compared to the same period of the prior fiscal year. The increase was attributable to increases in net interest income and noninterest income, partially offset by increases in noninterest expense, income taxes, and PCL.

Previous wording

For the three-month period ended December 31, 2024, fully-diluted net income per share available to common shareholders was $1.30, up $0.23, or 21.5%, as compared to the same quarter a year ago. Our annualized return on average assets for the three-month period ended December 31, 2024, was 1.21%, as compared to 1.07% for the same period of the prior fiscal year. Our return on average common stockholders’ equity for the three-month period ended December 31, 2024, was 11.5%, as compared to 10.6% in the same period of the prior fiscal year.

Current wording

For the three-month period ended March 31, 2025, fully-diluted net income per share available to common shareholders was $1.39, up $0.40, or 40.4%, as compared to the same quarter a year ago. Our annualized return on average assets for the three-month period ended March 31, 2025, was 1.27%, as compared to 0.97% for the same period of the prior fiscal year. Our return on average common stockholders’ equity for the three-month period ended March 31, 2025, was 12.1%, as compared to 9.5% in the same period of the prior fiscal year.

Previous wording

Loan discount accretion and deposit premium amortization related to the May 2020 acquisition of Central Federal Savings & Loan Association, the February 2022 merger of FortuneBank, and the January 2023 acquisition of Citizens Bank & Trust resulted in $987,000 in net interest income for the three-month period ended December 31, 2024, as compared to $1.5 million in net interest income for the same period a year ago. Combined, this component of net interest income contributed nine basis points to net interest margin in the three-month period ended December 31, 2024, compared to 14 basis points during the same period of the prior fiscal year, when the net interest margin was 3.25%.

Current wording

Loan discount accretion and deposit premium amortization related to the Company’s November 2018 acquisition of First Commercial Bank, the May 2020 acquisition of Central Federal Savings & Loan Association, the February 2022 merger of FortuneBank, and the January 2023 acquisition of Citizens Bank & Trust resulted in $1.5 million in net interest income for the three-month period ended March 31, 2025, as compared to $1.2 million in net interest income for the same period a year ago. Combined, this component of net interest income contributed 13 basis points to net interest margin in the three-month period ended March 31, 2025, as compared to an 11-basis point contribution for the same period of the prior fiscal year, and as compared to a nine-basis point contribution in the three-month period ended December 31, 2024, when net interest margin was 3.36%.

Previous wording

**Provision for Credit Losses.**The Company recorded a PCL of $932,000 in the three-month period ended December 31, 2024, as compared to a PCL of $900,000 in the same period of the prior fiscal year. The current period PCL was the result of a $501,000 provision attributable to the ACL for loan balances outstanding and a $431,000 provision attributable to the allowance for off-balance sheet credit exposures. As a percentage of average loans outstanding, the Company recorded net charge offs of 0.02% (annualized) during the current period, as compared to 0.10% for the same period of the prior fiscal year. (See “Critical Accounting Policies”, “Allowance for Credit Loss Activity” and “Nonperforming Assets”).

Current wording

Provision for Credit Losses. The Company recorded a PCL of $932,000 in the three-month period ended March 31, 2025, as compared to a PCL of $900,000 in the same period of the prior fiscal year. The current period PCL was the result of a $1.3 million provision attributable to the ACL for loan balances outstanding and a $368,000 negative provision attributable to the allowance for off-balance sheet credit exposures. The negative provision attributable to the allowance for off-balance sheet credit exposures was primarily the result of lower loss drivers and qualitative factors. As a percentage of average loans outstanding, the Company recorded net charge offs of 0.11% (annualized) during the current period, as compared to 0.01% for the same period of the prior fiscal year. In the three-month period ended March 31, 2025, $1.1 million of net charge offs were realized, with the increase from prior periods primarily due to a single agricultural relationship with suspected fraudulent activity. (See “Critical Accounting Policies”, “Allowance for Credit Loss Activity” and “Nonperforming Assets”).

Previous wording

Noninterest Expense. Noninterest expense for the three-month period ended December 31, 2024, was $24.9 million, an increase of $1.0 million, or 4.3%, as compared to the same period of the prior fiscal year. The increase was attributable primarily to increases in compensation and benefits, legal and professional fees, other operating expense, and occupancy expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional fees were elevated due to consulting fees tied to internal projects, recruiter costs, and the settlement of a legal matter. Other operating expense increased due to increased expenses associated with SBA loans and costs for employee travel and training. Lastly, occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. Partially offsetting these increases from the prior year period were lower data processing and telecommunication expenses, and a reduction in intangible amortization, as the core deposit intangible recognized from a prior period merger was fully amortized in the prior quarter.

Current wording

Noninterest Expense. Noninterest expense for the three-month period ended March 31, 2025, was $25.4 million, an increase of $342,000, or 1.4%, as compared to the same period of the prior fiscal year. The increase was primarily attributable to increases in other noninterest expense, occupancy and equipment, and legal and professional fees. The increase in other noninterest expense was primarily due to card fraud losses and deposit product expenses. Occupancy and equipment expenses increased due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. In addition, higher maintenance costs and service agreements were experienced. Lastly, legal and professional fees were elevated due primarily to an increase in accruals for audit expenses and the remaining expenses associated with the performance improvement project. Partially offsetting these increases from the prior year

Previous wording

Income Taxes. The income tax provision for the three-month period ended December 31, 2024, was $4.5 million, an increase of $1.4 million, or 43.3%, as compared to the same period of the prior fiscal year. The current period effective tax rate was 23.7%, as compared to 20.6% in the same quarter of the prior fiscal year. The effective tax rate for the December 31, 2024, quarter was elevated due a $380,000 adjustment of tax accruals attributable to completed merger activity.

Current wording

Income Taxes. The income tax provision for the three-month period ended March 31, 2025, was $4.1 million, an increase of 45.9% as compared to the same period of the prior fiscal year, primarily due to the increase in net income before income taxes. The effective tax rate was 20.9%, as compared to 20.1% in the same quarter of the prior fiscal year. The increase in the effective tax rate is primarily attributable to a reduction in total tax-exempt income, which also constituted a smaller proportion of pre-tax income compared to the same period in the prior fiscal year.

Previous wording

General. Net income for the six-month period ended December 31, 2024, was $27.1 million, an increase of $1.8 million, or 7.0% as compared to the same period of the prior fiscal year. Compared to the year-ago period, the Company’s increase in net income was attributable to increases in net interest income and noninterest income, partially offset by increases in PCL, noninterest expense, and provision for income taxes.

Current wording

General. Net income for the nine-month period ended March 31, 2025, was $42.8 million, an increase of $6.1 million, or 16.8% as compared to the same period of the prior fiscal year. The Company’s increase in net income was attributable to increases in net interest income and noninterest income, partially offset by increases in noninterest expense, provision for income taxes, and PCL.

Previous wording

For the six-month period ended December 31, 2024, fully-diluted net income per share available to common shareholders was $2.40, as compared to $2.23 for the same period of the prior fiscal year, an increase of $0.17, or 7.6%. Our annualized return on average assets for the six-month period ended December 31, 2024, was 1.15%, as compared to 1.20% for the same period of the prior fiscal year. Our return on average common stockholders’ equity for the six-month period ended December 31, 2024, was 10.8%, as compared to 11.7% in the same period of the prior fiscal year.

Current wording

For the nine-month period ended March 31, 2025, fully-diluted net income per share available to common shareholders was $3.79, as compared to $3.22 for the same period of the prior fiscal year, which represented an increase of $0.57, or 17.7%. Our annualized return on average assets for the nine-month period ended March 31, 2025, was 1.19%, as compared to 1.08% for the same period of the prior fiscal year. Our return on average common stockholders’ equity for the nine-month period ended March 31, 2025, was 11.2%, as compared to 10.6% in the same period of the prior fiscal year.

Previous wording

Net Interest Income. Net interest income for the six-month period ended December 31, 2024, was $74.8 million, an increase of $4.9 million, or 7.0%, as compared to the same period of the prior fiscal year. The increase was attributable to a 6.3% increase in the average balance of interest-earning assets and an increase in the net interest margin to 3.37%, as compared to 3.34% in the same period a year ago. The increase in the net interest margin was due to a higher composition of higher yielding assets, primarily loans and securities, and a lower balance of lower yielding cash and cash equivalents, compared to the prior year.

Current wording

Net Interest Income. Net interest income for the nine-month period ended March 31, 2025, was $114.3 million, an increase of $9.9 million, or 9.5%, as compared to the same period of the prior fiscal year. The increase was attributable to a 6.3% increase in the average balance of interest-earning assets and an increase in the net interest margin to 3.37%, as compared to 3.28% in the same period a year ago. The net interest spread improved seven basis points, to 2.80% at March 31, 2025, as compared to the same period of the prior fiscal year. The increase in the net interest margin was due to a higher interest-earning asset yield and the composition of higher yielding assets, primarily loans and securities, and a lower balance of lower yielding cash and cash equivalents, compared to the prior year. This was partially offset by a higher cost of interest-bearing liabilities as customers remained willing to move balances into high yield savings accounts and special rate time deposits in the higher rate environment.

Previous wording

Loan discount accretion and deposit premium amortization related to the November 2018 acquisition of First Commercial Bank, the May 2020 acquisition of Central Federal Savings & Loan Association, the February 2022 merger of FortuneBank, and the January 2023 acquisition of Citizens Bank & Trust resulted in $2.0 million in net interest income for the six-month period ended December 31, 2024, as compared to $3.2 million in net interest income for the same period a year ago. Combined, this component of net interest income contributed nine basis points to net interest margin in the six-month period ended December 31, 2024, as compared to a 15 basis point contribution for the same period of the prior fiscal year.

Current wording

Loan discount accretion and deposit premium amortization related to the Company’s November 2018 acquisition of First Commercial Bank, the May 2020 acquisition of Central Federal Savings & Loan Association, the February 2022 merger of FortuneBank, and the January 2023 acquisition of Citizens Bank & Trust, resulted in $3.5 million in net interest income for the nine-month period ended March 31, 2025, as compared to $4.4 million in net interest income for the same period a year ago. Combined, this component of net interest income contributed 10 basis points to net interest margin in the nine-month period ended March 31, 2025, as compared to a 14-basis point contribution for the same period of the prior fiscal year.

Previous wording

Provision for Credit Losses. The PCL for the six-month period ended December 31, 2024, was a charge of $3.1 million, an increase of $1.3 million from the same period of the prior fiscal year. The current period PCL was the result of a $2.5 million provision attributable to the ACL for loan balances outstanding and a $569,000 provision attributable to the allowance for off-balance sheet credit exposures. As a percentage of average loans outstanding, the Company recorded net charge offs of two basis points (annualized) during the current period, compared to seven basis points during the same period of the prior fiscal year. (See “Critical Accounting Policies”, “Allowance for Credit Loss Activity” and “Nonperforming Assets”).

Current wording

Provision for Credit Losses. The PCL for the nine-month period ended March 31, 2025, was a charge of $4.0 million, as compared to $2.7 million in the same period of the prior fiscal year. The current period PCL was the result of a $3.8 million provision attributable to the ACL for loan balances outstanding and a $201,000 provision attributable to the allowance for off-balance sheet credit exposures. As a percentage of average loans outstanding, the Company recorded net charge offs of five basis points (annualized) during the current period, compared to five basis points during the same period of the prior fiscal year. (See “Critical Accounting Policies”, “Allowance for Credit Loss Activity” and “Nonperforming Assets”).

Previous wording

Noninterest Income. Noninterest income for the six-month period ended December 31, 2024, was $14.0 million, an increase of $2.5 million, or 22.2%, as compared to the same period of the prior fiscal year. In the current period, the increase was primarily attributable to increases in other loan fees, deposit account charges and related fees, bank card interchange income, wealth management fees, earnings on bank owned life insurance, and the absence of a net realized loss on sale of AFS securities. These increases were partially offset by lower loan late charges, other noninterest income, and lower net realized gain on sale of loans. Other noninterest income decreased primarily due to modest losses on the disposal of fixed assets, which were comprised of various equipment. The lower gain on sale of loans was primarily attributable to lower gain on sale of residential loans.

Current wording

Noninterest Income. Noninterest income for the nine-month period ended March 31, 2025, was $20.7 million, an increase of $3.6 million, or 21.2%, as compared to the same period of the prior fiscal year. In the current period, the increase was primarily attributable to the absence of a net realized loss on sale of AFS securities and increases in other loan fees, deposit account charges and related fees, bank card interchange income, wealth management fees, and earnings on bank owned life insurance. These increases were partially offset by lower loan late charges, other noninterest

Previous wording

Noninterest expense for the six-month period ended December 31, 2024, was $50.7 million, an increase of $3.2 million, or 6.6%, as compared to the same period of the prior fiscal year. In the current period, this increase in noninterest expense was attributable primarily to increases in compensation and benefits, legal and professional fees, occupancy and equipment, and advertising expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional expenses increased primarily due to a one-time expense associated with a performance improvement project that started during the first quarter of fiscal 2025. This expense was fully realized in the September quarter, with only modest reimbursables remaining to be recognized in the second quarter of fiscal 2025. Occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. Increased advertising activity grew marketing expenses compared to the prior period.

Current wording

Noninterest Expense. Noninterest expense for the nine-month period ended March 31, 2025, was $76.1 million, an increase of $3.5 million, or 4.8%, as compared to the same period of the prior fiscal year. In the current period, this increase in noninterest expense was attributable primarily to increases in compensation and benefits, legal and professional fees, occupancy and equipment, and advertising expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional expenses increased primarily due to a one-time expense associated with a performance improvement project that started during the first fiscal quarter of 2025 and to an increase in accruals for audit expenses. The performance improvement project expense was fully realized in the September quarter, with only modest reimbursables recognized through the third quarter of fiscal 2025. Occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. In addition, higher maintenance costs and service agreements were experienced. Increased advertising activity grew marketing expenses compared to the prior period. This was partially offset by decreases in intangible amortization, telecommunication, and data processing expenses. The decrease in intangible amortization was primarily the result of the core deposit intangible recognized in an older merger, which was fully amortized in the second quarter of fiscal 2025.

Previous wording

Income Taxes. The income tax provision for the six-month period ended December 31, 2024, was $7.9 million, an increase of $1.3 million, or 19.0%, as compared to the same period of the prior fiscal year, due primarily to increased pre-tax income and a $380,000 adjustment of tax accruals attributable to completed merger & acquisition activity. The effective tax rate increased to 22.6% as compared to 20.8% over the same period last year.

Current wording

Income Taxes. The income tax provision for the nine-month period ended March 31, 2025, was $12.1 million, an increase of $2.6 million, or 27.0%, as compared to the same period of the prior fiscal year, due primarily to higher pre-tax income. Additionally, during the second quarter of fiscal year 2025, a $380,000 adjustment to tax accruals was recognized, attributable to completed merger and acquisition activity, with no similar adjustment in the prior fiscal year nine month period.

Previous wording

The following table summarizes changes in the ACL over the three- and six- month periods ended December 31, 2024 and 2023:

Current wording

The following table summarizes changes in the ACL over the three- and nine- month periods ended March 31, 2025 and 2024:

Previous wording

Our ACL at December 31, 2024, totaled $54.7 million, representing 1.36% of gross loans and 659% of NPLs, as compared to an ACL of $52.5 million, representing 1.36% of gross loans and 786% of NPLs, at June 30, 2024. The Company has estimated its expected credit losses as of December 31, 2024, under ASC 326-20, and management believes the ACL as of that date was adequate based on that estimate. There remains, however, significant uncertainty as borrowers adjust to relatively high market interest rates, despite the Federal Reserve having reduced short-term rates somewhat during this fiscal year. Qualitative adjustments in the Company’s ACL model were increased compared to June 30, 2024, due to various factors that are relevant to determining expected collectability of credit. The Company decreased the allowance attributable to classified hotel loans that have been slow to recover from the COVID-19 pandemic as a result of updated collateral appraisals, which provided a more favorable assessment than the Company’s prior period estimates. Additionally, PCL was required due to loan growth in fiscal year 2025 to date. As a percentage of average loans outstanding, the Company recorded net charge offs of two basis points (annualized) during the current period, compared to seven basis points during the same period of the prior fiscal year.

Current wording

Our ACL at March 31, 2025, totaled $54.9 million, representing 1.37% of gross loans and 250% of nonperforming loans, as compared to an ACL of $52.5 million, representing 1.36% of gross loans and 786% of nonperforming loans at June 30, 2024. The Company has estimated its expected credit losses as of March 31, 2025, under ASC 326-20, and management believes the ACL as of that date was adequate based on that estimate. There remains, however, significant uncertainty as borrowers adjust to relatively high market interest rates, although the Federal Reserve has reduced short-term rates somewhat during this fiscal year. Qualitative adjustments in the Company’s ACL model were increased compared to June 30, 2024, due to various factors that are relevant in determining expected collectability of credit. Additionally, a provision for credit loss was required due to loan net charge offs and to provide reserves for overdrafts in the third quarter of fiscal year 2025.

Previous wording

At December 31, 2024, the Company had accrued within other liabilities an allowance for off-balance sheet credit exposures of $3.8 million, as compared to $3.3 million at June 30, 2024. The increase reflects the component of the PCL attributable to off-balance sheet credit exposures. This amount is maintained as a separate liability account to cover estimated credit losses associated with off-balance sheet credit instruments such as off-balance sheet loan commitments, standby letters of credit, and guarantees. The $569,000 increase in the estimated allowance for off-balance sheet credit exposures was primarily the result of an expected increase in credit utilization based on historical usage of these off-balance sheet credit exposures.

Current wording

At March 31, 2025, the Company had accrued within other liabilities an allowance for off-balance sheet credit exposures of $3.5 million, as compared to $3.3 million at June 30, 2024. The increase reflects the component of the PCL attributable to off-balance sheet credit exposures. This amount is maintained as a separate liability account to cover estimated credit losses associated with off-balance sheet credit instruments such as off-balance sheet loan commitments, standby letters of credit, and guarantees. The $201,000 increase in the estimated allowance for off-balance sheet credit exposures was primarily the result of an expected increase in credit utilization based on historical usage of these off-balance sheet credit exposures.

Previous wording

At December 31, 2024, the Company had loans of $39.6 million, or 0.98% of total loans, adversely classified ($39.6 million classified “substandard”; none classified “doubtful”), as compared to loans of $40.9 million, or 1.06% of total loans, adversely classified ($40.9 million classified “substandard”; none classified “doubtful”) at June 30, 2024, and $39.3 million, or 1.05% of total loans, adversely classified ($39.3 million classified “substandard”; none classified “doubtful”), at December 31, 2023. Classified loans were generally comprised of loans secured by agriculture, commercial, and residential real estate, and other commercial purpose collateral. All of these loans were classified due to concerns as to the borrowers’ ability to continue to generate sufficient cash flows to service the debt. Of our classified loans, the Company had ceased recognition of interest on loans with a carrying value of $8.3 million at December 31, 2024. The Company’s total past due loans increased from $9.2 million at June 30, 2024, to $13.4 million at December 31, 2024. This increase was primarily from loans collateralized by 1-4 family real estate and agricultural real estate. Total past due loans were $8.3 million at December 31, 2023. See “Note 4 – Loans and Allowance for Credit Losses – Past Due Loans” in the “Notes to Consolidated Financial Statements.”

Current wording

At March 31, 2025, the Company had loans of $48.8 million, or 1.21% of total loans, adversely classified ($48.8 million classified “substandard”; none classified “doubtful”), as compared to loans of $40.9 million, or 1.06% of total loans, adversely classified ($40.9 million classified “substandard”; none classified “doubtful”) at June 30, 2024, and $43.3 million, or 1.15% of total loans, adversely classified ($43.3 million classified “substandard”; none classified “doubtful”), at March 31, 2024. Classified loans were generally comprised of loans secured by commercial and residential real estate, and other commercial purpose collateral. All loans were classified due to concerns as to the borrowers’ ability to continue to generate sufficient cash flows to service the debt. Of our classified loans, the Company had ceased recognition of interest on loans with a carrying value of $22.0 million at March 31, 2025. The Company’s total past due loans increased from $9.2 million at June 30, 2024, to $24.4 million at March 31, 2025. Total past due loans were $8.6 million at March 31, 2024. See Note 4 – “Loans and Allowance for Credit Losses” in the Notes to Consolidated Financial Statements. For additional information on the increase in substandard loans, see “Non-Performing Assets” within Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Previous wording

The Company adopted ASU No. 2022-02 in fiscal 2024, which eliminates the accounting guidance for troubled debt restructurings (TDRs), while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. At December 31, 2024, modifications to borrowers experiencing financial difficulty totaled $24.9 million, of which $843,000 was considered nonperforming and included in the nonaccrual loan total above. The remaining $24.1 million in modified loans have complied with the modified terms for a reasonable period of time and are therefore considered by the Company to be accrual status loans. On the basis of guidance under ASU No. 2022-02, in general, these loans were subject to classification as modifications due to payment delays and term extensions given to borrowers experiencing financial difficulty at December 31, 2024. At June 30, 2024, these modifications totaled $25.5 million, of which $895,000 was considered nonperforming and included in the nonaccrual loan total above. The remaining $24.6 million in modifications at June 30, 2024, had complied with the modified terms for a reasonable period of time and were therefore considered by the Company to be accrual status loans.

Current wording

The Company adopted ASU No. 2022-02 in fiscal 2025, which eliminated the accounting guidance for TDRs, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. At March 31, 2025, modifications to borrowers experiencing financial difficulty totaled $24.9 million, of which $1.6 million was considered nonperforming and included in the nonaccrual loan total above. The remaining $23.3 million in modified loans have complied with the modified terms for a reasonable period of time and are therefore considered by the Company to be accrual status loans. On the basis of guidance under ASU No. 2022-02, in general, these loans were subject to classification as modifications due to term extensions, with only $897,000 being due to payment delay, given to borrowers experiencing financial difficulty at March 31, 2025. At June 30, 2024, these modifications totaled $25.5 million, of which $895,000 was considered nonperforming and included in the nonaccrual loan total above. The remaining $24.6 million in modifications at June 30, 2024, had complied with the modified terms for a reasonable period of time and were therefore considered by the Company to be accrual status loans.

Previous wording

At December 31, 2024, nonperforming assets totaled $10.8 million, as compared to $10.6 million at June 30, 2024, and $9.8 million at December 31, 2023. The rise in the nonperforming assets, compared to June 30,2024, reflects an increase in nonperforming loans, which was largely offset by a reduction in other real estate owned due to property sales. The increase in nonperforming loans was primarily attributable to the addition of three unrelated loans collateralized by single-family residential property, totaling $1.4 million.

Current wording

At March 31, 2025, the nonperforming assets totaled $ 23.8 million, as compared to $10.6 million at June 30, 2024, and $11.3 million at March 31, 2024. The rise in the nonperforming assets, compared to June 30, 2024, reflects an increase in nonperforming loans, which was partially offset by a reduction in other real estate owned due to property sales. The increase in NPLs was primarily attributable to several commercial relationships added in the third quarter of 2025 and the addition of three unrelated loans collateralized by single-family residential property in the linked quarter. The increase during the third quarter was mostly attributable to loans totaling $10 million primarily secured by two specific-purpose non-owner occupied commercial properties in different states. The loans have some guarantors in common. The properties, now vacant, were originally leased to a single tenant that became insolvent.

Previous wording

At December 31, 2024, the Company had outstanding commitments and approvals to extend credit of approximately $894.7 million (including $595.5 million in unused lines of credit) in mortgage and non-mortgage loans. These commitments and approvals are expected to be funded through existing cash balances, cash flow from normal operations and, if needed, advances from the FHLB or the Federal Reserve’s discount window. At December 31, 2024, the Bank had pledged $1.5 billion of its single-family residential, home equity, and commercial real estate loan portfolios to the FHLB for available credit of approximately $858.1 million, of which $107.1 million was advanced, while $499,000 was encumbered by residential real estate loans sold onto the secondary market through the FHLB, and none was utilized as collateral for the issuance of letters of credit to secure public unit deposits. The Bank has the ability to pledge other assets, including, for example, additional unpledged real estate loans held by the Bank or the Bank’s REIT, and the unpledged securities in the Bank’s portfolio, which could provide additional collateral for additional borrowings. In total, FHLB borrowings are generally limited to 45% of bank assets, or approximately $2.1 billion, subject to available collateral. Also, at December 31, 2024, the Bank had pledged a total of $412.2 million in loans secured by farmland and agricultural production loans to the Federal Reserve, providing access to $357.3 million in primary credit borrowings from the Federal Reserve’s discount window, none of which was advanced at December 31, 2024. In addition, the Bank has other assets available to pledge to the Federal Reserve, such as commercial loans, which could provide additional collateral for additional borrowings. Management believes its liquid resources will be sufficient to meet the Company’s liquidity needs.

Current wording

At March 31, 2025, the Company had outstanding commitments and approvals to extend credit of approximately $901.4 million (including $602.4 million in unused lines of credit) in mortgage and non-mortgage loans. These commitments and approvals are expected to be funded through existing cash balances, cash flow from normal operations and, if needed, advances from the FHLB or the Federal Reserve’s discount window. At March 31, 2025, the Bank had pledged $1.5 billion of its single-family residential, home equity, and commercial real estate loan portfolios to the FHLB for available credit of approximately $863.8 million, of which $104.1 million was advanced, while $506,000 was encumbered by residential real estate loans sold onto the secondary market through the FHLB, and none was utilized as collateral for the issuance of letters of credit to secure public unit deposits. The Bank has the ability to pledge other assets, including, for example, additional unpledged real estate loans held by the Bank or the Bank’s REIT, and the unpledged securities in the Bank’s portfolio, which could provide additional collateral for additional borrowings. In total, FHLB borrowings are generally limited to 45% of Bank assets, or approximately $2.2 billion, subject to available collateral. Also, at March 31, 2025, the Bank had pledged a total of $377.1 million in loans secured by farmland and agricultural production loans to the Federal Reserve, providing access to $324.6 million in primary credit borrowings from the Federal Reserve’s discount window, none of which was advanced at March 31, 2025. In addition, the Bank has other assets available to pledge to the Federal Reserve, such as commercial loans, which could provide additional collateral for additional borrowings. Management believes its liquid resources will be sufficient to meet the Company’s liquidity needs.