Bank First Corp

Previous wording

Bank First Corporation is a Wisconsin corporation that was organized primarily to serve as the holding company for Bank First, N.A. Bank First, N.A., which was incorporated in 1894, is a nationally-chartered bank headquartered in Manitowoc, Wisconsin. It is a member of the Board of Governors of the Federal Reserve System (“Federal Reserve”), and is regulated by the Office of the Comptroller of the Currency (“OCC”). Including its headquarters in Manitowoc, Wisconsin, the Bank has twenty-six banking locations in Manitowoc, Outagamie, Brown, Winnebago, Sheboygan, Shawano, Waupaca, Ozaukee, Monroe, Fond du Lac, Waushara, Dane, Columbia and Jefferson counties in Wisconsin. The Bank offers loan, deposit and treasury management products at each of its banking locations.

Current wording

Bank First Corporation is a Wisconsin corporation that was organized primarily to serve as the holding company for Bank First, N.A. Bank First, N.A., which was incorporated in 1894, is a nationally-chartered bank headquartered in Manitowoc, Wisconsin. It is a member of the Board of Governors of the Federal Reserve System (“Federal Reserve”), and is regulated by the Office of the Comptroller of the Currency (“OCC”). Including its headquarters in Manitowoc, Wisconsin, the Bank has twenty-seven banking locations in Manitowoc, Outagamie, Brown, Winnebago, Sheboygan, Shawano, Waupaca, Ozaukee, Monroe, Fond du Lac, Waushara, Dane, Columbia, Door and Jefferson counties in Wisconsin. The Bank offers loan, deposit and treasury management products at each of its banking locations.

Previous wording

As with most community banks, the Bank derives a significant portion of its income from interest received on loans and investments. The Bank’s primary source of funding is deposits, both interest-bearing and noninterest-bearing. In order to maximize the Bank’s net interest income, or the difference between the income on interest-earning assets and the expense of interest-bearing liabilities, the Bank must not only manage the volume of these balance sheet items, but also the yields earned on interest-earning assets and the rates paid on interest-bearing liabilities. To account for credit risk inherent in all loans, the Bank maintains an ACL - Loans to absorb possible losses on existing loans that may become uncollectible. The Bank establishes and maintains this allowance by charging a provision for loan losses against operating earnings. Beyond its net interest income, the Bank further receives income through the net gain on sale of loans held for sale as well as servicing income which is retained on those sold loans. In order to maintain its operations and bank locations, the Bank incurs various operating expenses which are further described within the “Results of Operations” later in this section.

Current wording

As with most community banks, the Bank derives a significant portion of its income from interest received on loans and investments. The Bank’s primary source of funding is deposits, both interest-bearing and noninterest-bearing. In order to maximize the Bank’s net interest income, or the difference between the income on interest-earning assets and the expense of interest-bearing liabilities, the Bank must not only manage the volume of these balance sheet items, but also the yields earned on interest-earning assets and the rates paid on interest-bearing liabilities. To account for credit risk inherent in all loans, the Bank maintains an ACL - Loans to absorb possible losses on existing loans that may become uncollectible. The Bank establishes and maintains this allowance by charging a provision for credit losses against operating earnings. Beyond its net interest income, the Bank further receives income through the net gain on sale of loans held for sale as well as servicing income which is retained on those sold loans. In order to maintain its operations and bank locations, the Bank incurs various operating expenses which are further described within the “Results of Operations” later in this section.

Previous wording

Net interest and dividend income increased by $3.2 million to $36.5 million for the three months ended March 31, 2025 compared to $33.3 million for three months ended March 31, 2024. The increase in net interest income was primarily due to repricing of new and renewed loans in a higher interest rate environment, as well as steady growth in interest-bearing assets. Total average interest-earning assets were $4.10 billion for the three months ended March 31, 2025, up from $3.74 billion for the same period in 2024. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve.

Current wording

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

Previous wording

Interest Income. Total interest income increased $5.7 million, or 11.7%, to $55.0 million for the three months ended March 31, 2025 compared to $49.3 million for the same period in 2024. The increase in total interest income was primarily due to an increase in in interest-earning assets coupled with higher average interest rates earned on interest-earning assets. The average balance of interest-earning assets increased by $359.3 million during the three months ended March 31, 2025 compared to the same period in 2024 and the average interest rate earned on these assets increased by 0.16% in the year-over-year first quarters.

Current wording

Interest Income. Total interest income increased $5.3 million, or 10.6%, to $54.6 million for the three months ended June 30, 2025 compared to $49.3 million for the same period in 2024. The increase in total interest income was primarily due to an increase in in interest-earning assets coupled with higher average interest rates earned on interest-earning assets. The average balance of interest-earning assets increased by $310.9 million during the three months ended June 30, 2025 compared to the same period in 2024 and the average interest rate earned on these assets increased by 0.10% in the year-over-year second quarters.

Previous wording

Interest Expense. Interest expense increased $2.6 million, or 16.3%, to $18.5 million for the three months ended March 31, 2025 compared to $15.9 million for the same period in 2024. The increase in interest expense was primarily due to higher crediting interest rates on also higher levels of interest-bearing liabilities.

Current wording

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

Previous wording

Interest expense on interest-bearing deposits increased by $1.5 million to $16.9 million for the three months ended March 31, 2025 compared to $15.4 million for the same period in 2024. The average balance and rate of interest-bearing deposits was $2.69 billion and 2.54% for the three months ended March 31, 2025, compared to $2.46 billion and 2.51% for the same period in 2024. The Bank's cost of funds decreased by 0.08% from the fourth quarter of 2024, including a decrease of 0.18% in the average rate paid on the Bank's non-brokered certificates of deposit.

Current wording

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

Previous wording

We recorded a provision of $0.4 million for credit loss during the three months ended March 31, 2025 compared to a provision of $0.2 million for credit loss during the same period in 2024. Economic forecasts, primarily US gross domestic product projections, decreased slightly during the first quarter of 2025 while projections for unemployment increased. We recorded net charge offs of $0.8 million during the three months ended March 31, 2025 compared to net recoveries of $0.6 million during the three months ended March 31, 2024. Other than a $0.8 million charge-off during the first quarter of 2025, related to a single customer relationship, the Bank’s loan portfolio continues to exhibit very little credit stress. The ACL - Loans was $43.7 million, or 1.23% of total loans, at March 31, 2025 compared to $44.4 million, or 1.31% of total loans at March 31, 2024.

Current wording

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

Previous wording

Noninterest income increased $2.2 million to $6.6 million for the three months ended March 31, 2025 compared to$4.4 million for the same period in 2024. Service charges increased by 23.0% from the prior-year first quarter as the Bank continues to benefit from a renegotiated vendor incentive program related to credit and debit card payments processing. Positive valuation adjustments to the Bank’s MSRs totaling $0.2 million during the first quarter of 2025 compared favorably to $0.3 million in negative valuation adjustments during the first quarter of 2024. Finally, the Bank received a $2.3 million death benefit related to its bank-owned life insurance portfolio. The underlying policies had a cash value of $1.3 million, leading to a gain of $1.0 million which is recorded in other noninterest income.

Current wording

Noninterest income increased $1.2 million to $11.5 million for the six months ended June 30, 2025 compared to $10.3 million for the same period in 2024. Service charges increased $0.3 million for the first six months of 2025 compared to the same period in 2024 as the Bank continues to benefit from a vendor incentive program which was renegotiated in the second quarter of 2024 related to credit and debit card payments processing. During the first six months of 2025, the Bank recognized a $1.1 million gain from death benefits tied to its bank-owned life insurance portfolio, compared to $0.4 million in the same period of 2024. These amounts are recorded under other noninterest income.

Previous wording

Income Tax Expense. We recorded a provision for income taxes of $3.9 million for the three months ended March 31, 2025 compared to a provision of $1.8 million for the same period during 2024, reflecting effective tax rates of 17.5% and 10.5%, respectively. The Company’s home state passed tax legislation during the third quarter of 2023 which exempted income from a significant portion of the Company’s loans from taxation in Wisconsin. As a result of this legislation, income from a significant portion of the Company’s loans will no longer be subject to taxation in its home state. Final rules relating to qualifying loans under this legislation were not published until the first quarter of 2024. Based on these final rules, the Company was able to further reduce its estimated tax liability from 2023 by $1.3 million, resulting in the lower provision for income taxes and effective tax rate during the first quarter of 2024. Although not as impactful as this event in the first quarter of 2024, tax-exempt income during the first quarter of 2025 resulting from a death benefit on life insurance lowered the effective tax rate for the most recent quarter from levels seen in the final three quarters of 2024.

Current wording

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

Previous wording

Total Assets. Total assets increased $11.4 million, or 0.3%, to $4.51 billion at March 31, 2025, from $4.50 billion at December 31, 2024.

Current wording

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

Previous wording

Cash and Cash Equivalents. Cash and cash equivalents increased by $39.5 million to $300.9 million at March 31, 2025, from $261.3 million at December 31, 2024.

Current wording

Cash and Cash Equivalents. Cash and cash equivalents decreased by $141.0 million to $120.3 million at June 30, 2025, from $261.3 million at December 31, 2024. This decline resulted from the reduction in seasonal customer deposits during the first half of 2025 amplified by growth in the Bank’s loan portfolio.

Previous wording

Investment Securities. The carrying value of total investment securities decreased by $59.8 million to $274.0 million at March 31, 2025, from $333.8 million at December 31, 2024. The quarter-over-quarter decrease in investments was primarily attributed to the maturity of short-duration securities during the most recent quarter. These investments were acquired during the fourth quarter of 2024 to meet heightened needs for collateral due to a seasonal collateralized deposit increase during the fourth quarter of 2024.

Current wording

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

Previous wording

Loans. Net loans increased by $31.3 million, totaling $3.50 billion at March 31, 2025 compared to $3.47 billion at December 31, 2024.

Current wording

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

Previous wording

Deposits. Deposits increased $13.1 million, or 0.4%, to $3.67 billion at March 31, 2025 from $3.66 billion at December 31, 2024.

Current wording

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

Previous wording

Borrowings. At March 31, 2025, borrowings consisted of advances from the FHLB of Chicago and subordinated debt to other banks and an individual. FHLB borrowings decreased $0.5 million, or 0.4%, to $134.9 million at March 31, 2025 from $135.4 million at December 31, 2024. Subordinated debt remained stable at $12.0 million at March 31, 2025 and December 31, 2024.

Current wording

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

Previous wording

Stockholders’ Equity. Total stockholders’ equity increased $8.7 million, or 1.4%, to $648.4 million at March 31, 2025 from $639.7 million at December 31, 2024. Repurchases of the Company’s common stock totaling $6.4 million and dividends declared totaling $4.5 million offset the positive impact of earnings totaling $18.2 million during the first three months of the year.

Current wording

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

Previous wording

Our loan portfolio is our most significant earning asset, comprising 78.8% and 78.3% of our total assets as of March 31, 2025 and December 31, 2024, respectively. Our strategy is to grow our loan portfolio by originating quality commercial and consumer loans that comply with our credit policies and that produce revenues consistent with our financial objectives. We believe our loan portfolio is well-balanced, which provides us with the opportunity to grow while monitoring our loan concentrations.

Current wording

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

Previous wording

Loans increased $30.9 million, or 0.9%, to $3.55 billion as of March 31, 2025 compared to $3.52 billion as of December 31, 2024. This increase during the first three months of 2025 was primarily driven by solid demand for new credit from our existing customer relationships. This growth was comprised of an increase of $7.5 million or 1.5% in commercial and industrial loans, an increase of $4.8 million or 0.5% in owner occupied commercial real estate loans, an increase of $0.6 million or 0.1% in non-owner occupied commercial real estate, an increase of $28.6 million or 8.8% in multi-family loans, an increase of $0.5 million or 0.2% in construction and development loans, a decrease of $9.9 million or 1.1% in residential 1-4 family loans and a decrease of $1.2 million or 1.7% in consumer and other loans.

Current wording

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

Previous wording

Commercial and Industrial (C&I). Our C&I portfolio totaled $507.9 million and $500.4 million at March 31, 2025 and December 31, 2024, respectively, and represented 14% of our total loans at both dates.

Current wording

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

Previous wording

Commercial Real Estate (CRE). Our CRE loan portfolio totaled $1.79 billion and $1.75 billion at March 31, 2025 and December 31, 2024, respectively, and represented 50% of our total loans at those dates. The growth in our CRE loan portfolio through the first three months of 2025 consisted primarily of multi-family real estate as developers respond to a shortage of available dwellings in our markets. Management views owner occupied CRE, which expanded marginally during the quarter, as an extension of C&I lending as typically the primary repayment source on these loans is operating profits from the underlying business.

Current wording

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

Previous wording

Construction and Development (C&D). Our C&D loan portfolio totaled $278.5 million and $278.0 million at March 31, 2025 and December 31, 2024, respectively, and represented 8% of our total loans at those dates.

Current wording

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

Previous wording

Residential 1 – 4 Family. Residential 1 – 4 family loans held in portfolio amounted to $903.3 million and $913.2 million at March 31, 2025 and December 31, 2024, respectively, and represented 26% of our total loans at those dates.

Current wording

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

Previous wording

Loans sold with the retention of servicing assets result in the capitalization of servicing rights. Loan servicing rights are carried at fair value. The net balance of capitalized servicing rights amounted to $13.5 million and $13.4 million at March 31, 2025 and December 31, 2024, respectively.

Current wording

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

Previous wording

Consumer Loans. Our consumer loan portfolio totaled $54.8 million and $55.4 million at March 31, 2025 and December 31, 2024, respectively, and represented 2% of our total loans at those dates. Consumer loans include secured and unsecured loans, lines of credit and personal installment loans.

Current wording

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

Previous wording

Other Loans. Our other loans totaled $15.0 million and $15.6 million at March 31, 2025 and December 31, 2024, respectively, and are immaterial to the overall loan portfolio. The other loans category consists primarily of over-drafted depository accounts, loans utilized to purchase or carry securities and loans to nonprofit organizations.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

At March 31, 2025, the ACL - Loans was $43.7 million (representing 1.23% of period end loans). Bank First recorded a provision for credit losses of $0.4 million during the first three quarters of 2025. The ACL– Loans has remained consistent over recent quarters as economic conditions have remained stable and the Company’s overall asset quality remain strong. The Company recorded net charge-offs totaling $0.8 million during the first three months of 2025.

Current wording

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

Previous wording

Deposits. Our current deposit products include non-interest bearing and interest-bearing checking accounts, savings accounts, money market accounts, and certificate of deposits. As of March 31, 2025, deposit liabilities accounted for approximately 81.6% of our total liabilities and equity. We accept deposits primarily from customers in the communities in which our branches and offices are located, as well as from small businesses and other customers throughout our lending area. We rely on our competitive pricing and products, quality customer service, and convenient locations and hours to attract and retain deposits. Deposit rates and terms are based primarily on current business strategies, market interest rates, liquidity requirements and our deposit growth goals.

Current wording

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

Previous wording

Total deposits were $3.67 billion and $3.66 billion as of March 31, 2025 and December 31, 2024, respectively. Noninterest-bearing deposits at March 31, 2025 and December 31, 2024, were $993.8 million and $1.02 billion, respectively, while interest-bearing deposits were $2.68 billion and $2.64 billion at March 31, 2025 and December 31, 2024, respectively. The Bank continue to see a shift in its deposit portfolio from noninterest-bearing deposits to interest-bearing deposits as prevailing interest rates have increased over the last several years.

Current wording

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

Previous wording

At March 31, 2025, we had a total of $662.5 million in certificates of deposit, including $20.1 million of brokered deposits. Based on historical experience and our current pricing strategy, we believe we will retain a majority of these accounts upon maturity, although our long-term strategy is to minimize reliance on certificates of deposits by increasing relationship deposits in lower earning savings and demand deposit accounts.

Current wording

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

Previous wording

The Company’s borrowings have historically consisted primarily of FHLB of Chicago advances collateralized by a blanket pledge agreement on the Company’s FHLB capital stock and retail and commercial loans held in the Company’s portfolio. There were $134.9 million and $135.4 million of advances outstanding from the FHLB at March 31, 2025 and December 31, 2024, respectively.

Current wording

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

Previous wording

Securities available for sale consist of U.S. government sponsored agencies, obligations of states and political subdivision, mortgage-backed securities, and corporate notes. Securities classified as available for sale, which management has the intent and ability to hold for an indefinite period of time, but not necessarily to maturity, are carried at fair value, with unrealized gains and losses, net of related deferred income taxes, included in stockholders’ equity as a separate component of other comprehensive income. The fair value of securities available for sale totaled $163.7 million and included negligible gross unrealized gains and gross unrealized losses of $11.9 million at March 31, 2025. At December 31, 2024, the fair value of securities available for sale totaled $223.1 million and included negligible gross unrealized gains and gross unrealized losses of $12.9 million.

Current wording

Securities available for sale consist of U.S. government sponsored agencies, obligations of states and political subdivision, mortgage-backed securities, and corporate notes. Securities classified as available for sale, which management has the intent and ability to hold for an indefinite period of time, but not necessarily to maturity, are carried at fair value, with unrealized gains and losses, net of related deferred income taxes, included in stockholders’ equity as a separate component of other comprehensive income. The fair value of securities available for sale totaled $167.2 million and included $0.2 million gross unrealized gains and gross unrealized losses of $11.0 million at June 30, 2025. At December 31, 2024, the fair value of securities available for sale totaled $223.1 million and included negligible gross unrealized gains and gross unrealized losses of $12.9 million.

Previous wording

Securities classified as held to maturity consist of U.S. treasury securities and obligations of states and political subdivisions. These securities, which management has the intent and ability to hold to maturity, are reported at amortized cost. Securities held to maturity totaled $110.2 million at March 31, 2025 and $110.8 million at December 31, 2024.

Current wording

Securities classified as held to maturity consist of U.S. treasury securities and obligations of states and political subdivisions. These securities, which management has the intent and ability to hold to maturity, are reported at amortized cost. Securities held to maturity totaled $109.9 million at June 30, 2025 and $110.8 million at December 31, 2024.

Previous wording

The Company had recognized no net losses on sales of securities during the three months ended March 31, 2025. The Company had recognized net losses on sales of securities of $0.03 million during the three months ended March 31, 2024.

Current wording

The Company had recognized no net losses on sales of securities during the six months ended June 30, 2025. The Company had recognized net losses on sales of securities of $0.03 million during the six months ended June 30, 2024.

Previous wording

As of March 31, 2025, 203 debt securities had gross unrealized losses, with an aggregate depreciation of 4.2% from our amortized cost basis. The largest unrealized loss percentage of any single security was 23.4% (or $0.5 million) of its amortized cost. The largest unrealized dollar loss of any security was $0.8 million (or 22.1%).

Current wording

As of June 30, 2025, 198 debt securities had gross unrealized losses, with an aggregate depreciation of 3.6% from our amortized cost basis. The largest unrealized loss percentage of any single security was 24.6% (or $0.5 million) of its amortized cost. The largest unrealized dollar loss of any security was $0.8 million (or 21.0%).

Previous wording

Capital Adequacy. Total stockholders’ equity was $648.4 million at March 31, 2025 compared to $639.7 million at December 31, 2024.

Current wording

Capital Adequacy. Total stockholders’ equity was $612.3 million at June 30, 2025 compared to $639.7 million at December 31, 2024.