UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For fiscal year ended December 31, ~~2024~~2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For transition period from __________ to ___________

Commission File Number 0-33203

LANDMARK BANCORP, INC.

(Exact name of Registrant as specified in its charter)

Delaware

43-1930755

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification Number)

701 Poyntz Avenue, Manhattan, Kansas 66502

(Address of principal executive offices) (Zip Code)

(785) 565-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:		Trading Symbol(s)		Name of each exchange on which registered:
Common Stock, par value $0.01 per share		LARK		Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, based on the last sales price of $1826.2944 quoted on the Nasdaq Global Market on the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $74109.16 million. On ~~March~~April 2510, ~~2025~~2026, the total number of shares of common stock outstanding was 56,~~782~~098,~~259~~324.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the Annual Meeting of Stockholders of the registrant to be held on May 2120, ~~2025~~2026, are incorporated by reference in Part III hereof, to the extent indicated herein.

LANDMARK BANCORP, INC.

~~2024~~2025 Form 10-K Annual Report

Table of Contents

ITEM 1.	BUSINESS	1	3
ITEM 1A.	RISK FACTORS	23	27
ITEM 1B.	UNRESOLVED STAFF COMMENTS	36	40
ITEM 1C.	CYBERSECURITY	36	40
ITEM 2.	PROPERTIES	37	41
ITEM 3.	LEGAL PROCEEDINGS	37	41
ITEM 4.	MINE SAFETY DISCLOSURES	37	41
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	38	42
ITEM 6.	[RESERVED]	38	42
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	38	42
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	46	49
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	48	52
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	90	97
ITEM 9A.	CONTROLS AND PROCEDURES	90	97
ITEM 9B.	OTHER INFORMATION	90	97
ITEM 9C.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	90	97
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	91	98
ITEM 11.	EXECUTIVE COMPENSATION	91	98
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	92	98
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	92	99
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	92	99
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	93	~~100~~
ITEM 16.	FORM 10-K SUMMARY	95	~~102~~
SIGNATURES		96	~~103~~

PART I.

ITEM 1. BUSINESS

The Company

Landmark Bancorp, Inc. (the “Company,” “our,” and “we”) is a financial holding company that was incorporated under the laws of the State of Delaware in 2001. Currently, the Company’s business consists of the ownership of Landmark National Bank (the “Bank”) and Landmark Risk Management, Inc. (the “Captive”), which are wholly-owned subsidiaries of the Company. As of December 31, ~~2024~~2025, the Company had approximately $1.6 billion in consolidated total assets.

The Company is headquartered in Manhattan, Kansas, and has expanded its geographic presence through both opening of new branches and strategic acquisitions. InThe ~~February~~Company ~~2024,~~has ~~the~~29 ~~Bank~~branch ~~opened~~offices ~~a loan production office~~ in ~~Kansas~~23 ~~City,~~communities ~~Missouri.~~across ~~On October 1, 2022,~~ the ~~Company~~state ~~completed its acquisition~~ of ~~Freedom~~Kansas ~~Bancshares,~~and ~~Inc.~~in ~~(“Freedom”)~~February 2024, ~~the~~opened ~~holding~~a ~~company~~loan ~~of Freedom Bank. The acquisition was accounted~~production ~~for~~office asin aKansas ~~business~~City, ~~combination under ASC 805~~Missouri.

The Bank ~~has~~provides ~~continued~~banking services to ~~focus~~individuals onand ~~increasing~~businesses ~~its~~primarily ~~originations~~within ofits ~~commercial,~~local ~~commercial~~communities ~~real~~throughout ~~estate~~Kansas ~~(“CRE”)~~ and ~~agricultural~~in ~~loans,~~the ~~which~~Kansas City ~~management~~metropolitan ~~believes~~area. ~~will be~~The ~~more~~banking ~~profitable~~services ~~and~~provided ~~provide~~to ~~more~~individuals ~~growth~~and ~~for~~businesses ~~the~~include ~~Bank~~commercial, ~~than~~commercial ~~traditional~~real ~~one-to-four~~estate ~~family~~(“CRE”), agriculture, residential real estate, and consumer lending. The Bank ~~has~~ ~~grown~~also ~~its~~offers ~~one-to-four~~a ~~family~~variety ~~residential~~of ~~loan~~deposit ~~portfolio~~products ~~over~~including ~~the past two years as higher interest rates increased consumer~~ demand, checking, ~~for~~money ~~variable~~market, ~~rate loans~~savings, ~~which~~time ~~were~~deposits ~~retained~~and intreasury ~~the~~management ~~Bank’s portfolio~~services. ~~Additionally,~~Greater ~~greater~~ emphasis has been placed on diversification of the deposit mix through the expansion of core deposit accounts such as checking, savings, and money market accounts. ~~The~~We ~~Bank~~are ~~has also~~committed ~~diversified~~to ~~its geographical markets as a result of its branching and acquisition opportunities. The Company’s main office~~developing isrelationships inwith ~~Manhattan,~~our ~~Kansas.~~customers ~~The Company has 29 branch offices in 23 communities across the state of Kansas~~ and ~~one~~providing ~~loan~~a ~~production~~total ~~office in~~banking ~~Kansas City, Missouri~~service.

Landmark Risk Management, Inc., which was formed and began operations in 2017, is a Nevada-based captive insurance company which provides property and casualty insurance coverage to the Company and the Bank for which insurance may not be currently available or economically feasible in the current insurance marketplace. The Captive is subject to the regulations of the State of Nevada and undergoes periodic examinations by the Nevada Division of Insurance.

The results of operations of the Bank and the Company are dependent primarily upon net interest income and, to a lesser extent, upon other income derived from loan servicing fees, customer deposit services and sales of one-to-four family residential mortgage loans~~, loan servicing fees and customer deposit services~~. Additional expenses of the Bank include general and administrative expenses such as salaries, employee benefits, ~~federal~~occupancy ~~deposit~~and ~~insurance~~related ~~premiums~~expenses, data processing, ~~occupancy~~professional fees and ~~related~~federal ~~expenses~~deposit insurance premiums.

Deposits of the Bank are insured by the Deposit Insurance Fund (the “DIF”) of the Federal Deposit Insurance Corporation (the “FDIC”) up to the maximum amount allowable under applicable federal laws and regulations. The Bank is regulated by the Office of the Comptroller of the Currency (the “OCC”), as the chartering authority for national banks, and the FDIC, as the administrator of the DIF. The Company and the Bank are also subject to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) with respect to reserves required to be maintained against deposits and certain other matters, including the regulation of bank holding companies. The Bank is a member of the Federal Reserve Bank of Kansas City and the Federal Home Loan Bank (the “FHLB”) of Topeka.

The Company’s executive office and the Bank’s main office are located at 701 Poyntz Avenue, Manhattan, Kansas 66502. The telephone number is (785) 565-2000.

Market Areas

The Bank’s primary deposit gathering and lending markets are geographically diversified throughout central, eastern, southeast, and southwest Kansas. The primary industries within these respective markets are also diverse and dependent upon a wide array of industry and governmental activity for their economic base. A brief description of the four geographic areas and the communities which the Bank serves is set forth below.

3Central region. The central region of the Bank’s market area consists of the Bank’s locations in Auburn, Junction City, Manhattan, Osage City, Topeka and Wamego, Kansas and includes the counties of Riley, Geary, Osage, Pottawatomie and Shawnee. The economies are significantly impacted by employment at Fort Riley Military Base in Junction City and Kansas State University, the second largest university in Kansas, which is located in Manhattan. Topeka is the capital of Kansas and strongly influenced by the government of the State of Kansas. Topeka and Manhattan are regional destinations for retail shopping as well as home to regional hospitals. Manhattan is also home to the National Bio and Agro-Defense Facility, which has a significant impact on the regional economy. Additionally, manufacturing and service industries play a key role within the central Kansas market.

Central region. The central region of the Bank’s market area consists of the Bank’s locations in Auburn, Junction City, Manhattan, Osage City, Topeka and Wamego, Kansas and includes the counties of Riley, Geary, Osage, Pottawatomie and Shawnee. The economies are significantly impacted by employment at Fort Riley Military Base in Junction City and Kansas State University, the second largest university in Kansas, which is located in Manhattan. Topeka is the capital of Kansas and strongly influenced by the government of the State of Kansas. Topeka and Manhattan are regional destinations for retail shopping as well as home to regional hospitals. Manhattan was selected as the site of a new National Bio and Agro-Defense Facility, which has had a significant impact on the regional economy. Additionally, manufacturing and service industries play a key role within the central Kansas market.1

Eastern region. The Bank’s eastern Kansas branches are located in the communities of Lawrence, Lenexa, Louisburg, Osawatomie, Overland Park, Paola, Prairie Village and Wellsville, Kansas, ~~and~~with a loan production office in Kansas City Missouri. The Bank’s Lawrence locations are located in Douglas County and are significantly impacted by the University of Kansas, the largest university in Kansas. The eastern region is strongly influenced by the Kansas City metropolitan market, which is the highest growth area in the State of Kansas. The region is influenced by public and private industries and businesses of all sizes. In addition, housing growth and CRE are major drivers of the region’s economy. The acquisition of Freedom Bank in 2022 expanded the Bank’s presence in Overland Park and contributed to the growth in loans and deposits. Panasonic Energy is currently constructing a new lithium-ion battery manufacturing facility in De Soto, Kansas which is expected to begin production in the spring of 2025. This new plant is projected to have a significant impact on the regional economy in eastern Kansas.

Southeast region. The southeast region of the Bank’s market area consists of the Bank’s locations in Fort Scott, Iola, Mound City and Pittsburg, Kansas. Agriculture, oil, and gas are the predominant industries in the southeast Kansas region. Both Fort Scott and Pittsburg are recognized as regional commercial centers within the southeast region of the state, which attracts small retail businesses to the region. Additionally, Pittsburg State University and Fort Scott Community College attract a number of individuals from the surrounding area to live within the communities to participate in educational programs and pursue a degree. Additionally, manufacturing and service industries play a key role within the southeast Kansas market.

Southwest region. The Bank’s southwest Kansas branches are located in the communities of Dodge City, Garden City, Great Bend, Hoisington and ~~LaCrosse~~La Crosse, Kansas. Agriculture, oil, and gas are the predominant industries in the southwest Kansas region. ~~Predominant~~Significant activities involve crop production, feed lot operations, and food processing. Dodge City is known as the “Cowboy Capital of the World” and maintains a significant tourism industry. Both Dodge City and Garden City are recognized as regional commercial centers within the state with small businesses, manufacturing, retail, and service industries having a significant influence upon the local economies. Additionally, the Dodge City, Garden City and Great Bend communities each have a community college that attracts individuals from the surrounding areas. ~~Dodge City was selected as the site for a new state-of-the-art cheese and whey processing plant, which has had a significant impact on the regional economy.~~

Competition

The Company faces strong competition both in attracting deposits and making real estate, commercial and other loans. Its most direct competition for deposits and loans comes from large national and regional banks, local community banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, money market mutual funds, credit unions, financial technology (fintech) companies and other non-bank financial service providers including digital asset service providers, located in its principal market areas, including many larger financial institutions which have greater financial and marketing resources available to them. The ability of the Company to attract and retain deposits generally depends on its ability to provide a rate of return, service levels, liquidity and risk comparable to or better than those offered by competing investment opportunities. The Company competes for loans principally through the interest rates and loan fees it charges and the efficiency and quality of services it provides borrowers.

Human Capital Resources

Employees. At December 31, ~~2024~~2025, the Bank had a total of ~~287~~283 employees (~~283~~273 full time equivalent employees). The Company has no employees, although the Company is a party to several employment agreements with executives of the Bank. Employees are provided with a comprehensive benefits program, including basic and major medical insurance, life and disability insurance, sick leave, and a 401(k) profit sharing plan. Employees are not represented by any union or collective bargaining group, and the Bank considers its employee relations to be excellent.

Diversity, Equity and Inclusion. The Company believes that a diverse workforce is critical to achieving its strategic goals. The Company strives to foster a strong and inclusive culture that is committed to delivering extraordinary service to our clients and communities by meeting the financial needs of families and businesses across Kansas.

Talent development and retention. The Company utilizes various processes to recruit employees with values that align with the Company’s vision. The long-term success of the Company revolves around the ability to continue to develop and retain these employees.

Lending Activities

General. The Bank strives to provide a full range of financial products and services to small- and medium-sized businesses and to consumers in each market area it serves. The Bank targets owner-operated businesses and utilizes Small Business Administration (“SBA”) lending as a part of its product mix. The Bank has a loan committee for each of its markets, which has authority to approve credits within established guidelines. Concentrations in excess of those guidelines must be approved by either a corporate loan committee comprised of the Bank’s Chief Executive Officer, the Chief Credit Officer, and other senior commercial lenders or the Bank’s board of directors. When lending to an entity, the Bank generally obtains a guaranty from the principals of the entity. The loan mix is subject to the discretion of the Bank’s board of directors and the demands of the local marketplace.

The following is a brief description of each major category of the Bank’s lending activity.

One-to-Four Family Residential Real Estate Lending. The Bank originates one-to-four family residential real estate loans with both fixed and variable rates. One-to-four family residential real estate loans, which make up approximately 33.58% of total loans at December 31, ~~2024~~ 2025, are typically priced and originated following underwriting standards that are consistent with guidelines established by the major buyers in the secondary market. Generally, residential real estate loans retained in the Bank’s loan portfolio have fixed or variable rates with adjustment periods of seven years or less and amortization periods of typically either 15 or 30 years. A significant portion of these loans prepay prior to maturity. The Bank has no potential negative amortization loans. While the origination of fixed-rate, one-to-four family residential loans continues to be a key component of our business, the majority of these loans are sold in the secondary market. One-to-four family residential real estate loans that exceed 80% of the appraised value of the real estate generally are required, by policy, to be supported by private mortgage insurance, although on occasion the Bank will retain non-conforming residential loans to known customers at premium pricing. The balances of one-to-four family residential real estate loans increased as of December 31, 2025 ~~2024~~ compared to December 31, ~~2023~~2024, primarily due to demand for the Bank’s variable rate mortgage loans. These loans are retained in portfolio and were the primary factor for the 166.46% increase in balances during ~~2024~~2025 and ~~2023~~2024. While the Bank retains some of the new fixed rate mortgage loan originations, most new fixed rate mortgage loans continue to be sold.

Construction and Land Lending. Loans in this category include loans to facilitate the development of both residential and CRE, which make up approximately 21.48% of total loans at December 31, ~~2024~~2025. Construction and land loans generally have terms of less than 18 months, ~~and~~ and the Bank will retain a security interest in the borrower’s real estate. Construction loans are generally limited, by policy, to 80% of the appraised value of the property. Land loans are generally limited, by policy, to 65% of the appraised value of the property. The origination of construction and land loans has not been a primary strategy of the Bank over the past few years to reduce risk in the Bank’s loan portfolio. The balances of construction and land loans ~~increased~~decreased 2018.19% as of December 31, ~~2024~~ 2025 compared to December 31, ~~2023~~2024 primarily due to ~~higher~~lower demand from the Bank’s loan customers.

CRE Lending. CRE loans, including multi-family loans, generally have amortization periods of 15 or 20 years. CRE loans comprise approximately 35.5% of total loans at December 31, 2025. CRE and multi-family loans are generally limited, by policy, to 80% of the appraised value of the property and are subject to strict underwriting guidelines. CRE loans are also supported by an analysis demonstrating the borrower’s ability to repay. The Bank continues to focus on generating additional CRE, which are part of an overall banking relationship with the customer, and does not focus on originating transactional type loans where the borrower does not have other financial relationships with the Bank. This focus results in more owner-occupied CRE loans that are diversified by borrower type and geography. The Bank monitors the CRE loan portfolio closely for concentrations in loan types as well as the financial performance of the borrowers. Currently, the Bank has not identified any negative trends related to the CRE loan portfolio. The Bank’s loan growth over the past few years has been driven in large part by CRE loans.

CRE Lending. CRE loans, including multi-family loans, generally have amortization periods of 15 or 20 years. CRE loans comprise approximately 32.8% of total loans at December 31, 2024. CRE and multi-family loans are generally limited, by policy, to 80% of the appraised value of the property and are subject to strict underwriting guidelines. CRE loans are also supported by an analysis demonstrating the borrower’s ability to repay. The Bank continues to focus on generating additional CRE, which are part of an overall banking relationship with the customer, and does not focus on originating transactional type loans where the borrower does not have other financial relationships with the Bank. This focus results in more owner-occupied CRE loans that are diversified by borrower type and geography. The Bank monitors the CRE loan portfolio closely for concentrations in loan types as well as the financial performance of the borrowers. Currently, the Bank has not identified any negative trends related to the CRE loan portfolio. The Bank’s loan growth over the past few years has been driven in large part by CRE loans.3

Commercial Lending. Commercial loans, which make up approximately 1816.30% of total loans at December 31, ~~2024~~2025, include loans to service, retail, wholesale and light manufacturing businesses. Commercial loans are made based on the financial strength and repayment ability of the borrower, as well as the collateral securing the loans. The Bank targets owner-operated businesses as its customers and makes lending decisions based upon a cash flow analysis of the borrower as well as a collateral analysis. Accounts receivable loans and loans for inventory purchases are generally on a one-year renewable term, and loans for equipment generally have a term of seven years or less. The Bank generally takes a blanket security interest in all assets of the borrower. Equipment loans are generally limited, by policy, to 75% of the cost or appraised value of the equipment. Inventory loans are generally limited to 50% of the value of the inventory, and accounts receivable loans are generally limited to 75% of a predetermined eligible base. The Bank continues to focus its organic growth on generating additional commercial loan relationships, including SBA loans.

Agriculture Lending. Agricultural real estate and operating loans, which make up approximately 9.53% of total loans at December 31, ~~2024~~2025, generally have amortization periods of 20 years or less, during which time the Bank generally retains a security interest in the borrower’s ~~real~~ real estate. The Bank also provides short-term credit for operating loans and intermediate-term loans for farm product, livestock and ~~machinery~~ machinery purchases and other agricultural improvements. Farm product loans generally have a one-year term, and machinery, equipment and breeding livestock loans generally have five to seven year terms. Extension of credit is based upon the borrower’s ability to repay, as well as the existence of federal guarantees and crop insurance coverage. These loans are generally secured by a blanket lien on livestock, equipment, feed, hay, grain and growing crops. Equipment and breeding livestock loans are generally limited, by policy, to 75% of appraised value of the collateral. The Bank continues to focus on generating additional agriculture loan relationships in each of its market areas.

Municipal Lending. Loans to municipalities, which make up approximately 0.76% of total loans at December 31, ~~2024~~2025, are generally related to equipment leasing or general fund loans. Terms are generally limited to 5 years. Equipment leases are generally made for the purchase of municipal assets and are secured by the leased asset. The Bank is generally not active in the origination of municipal loans and leases; however, the Bank may originate loans or leases for municipalities in its market areas.

Consumer and Other Lending. Loans classified as consumer and other loans, which make up approximately 23.80% of total loans at December 31, ~~2024~~2025, include automobile, boat, home improvement and home equity loans. With the exception of home improvement loans and home equity loans, the Bank generally takes a purchase money security interest in collateral for which it provides the original financing. Home improvement loans and home equity loans are principally secured through second mortgages. The terms of the loans typically range from one to five years, depending upon the use of the proceeds, and generally range from 75% to 90% of the value of the collateral. The majority of these loans are installment loans with fixed interest rates. Home improvement and home equity loans are generally secured by a second mortgage on the borrower’s personal residence and, when combined with the first mortgage, limited to 80% of the value of the property unless further protected by private mortgage insurance. Home improvement loans are generally made for terms of five to seven years with fixed interest rates. Home equity loans are generally made for terms of ten years on a revolving basis with adjustable monthly interest rates tied to the national prime interest rate. While the Bank primarily provides consumer loans to its existing customers, consumer lending is not a category the Bank targets for organic growth.

Loan Origination and Processing

Loan originations are derived from a number of sources. Residential loan originations result from real estate broker referrals, direct solicitation by the Bank’s loan officers, present depositors and borrowers, referrals from builders and attorneys, walk-in customers and, in some instances, other lenders. Consumer and CRE loan originations generally emanate from many of the same sources.

Residential loan applications are underwritten and closed based upon standards which generally meet secondary market guidelines. The loan underwriting procedures followed by the Bank conform to regulatory specifications and are designed to assess both the borrower’s ability to make principal and interest payments and the value of any assets or property serving as collateral for the loan. Generally, as part of the process, a loan officer meets with each applicant to obtain the appropriate employment and financial information as well as any other required loan information. The Bank then obtains reports with respect to the borrower’s credit record, and on real estate loans, orders and reviews an appraisal of any collateral for the loan (prepared for the Bank by an independent appraiser).

Loan applicants are notified promptly of the decision of the Bank. Prior to closing any long-term loan, the borrower must provide proof of fire and casualty insurance on the property serving as collateral, and such insurance must be maintained during the full term of the loan. Title insurance is required on loans collateralized by real property.

The Bank is focusing on the generation of commercial, CRE and agriculture loans to grow and diversify the loan portfolio. Total gross loans increased during ~~2024~~2025 as a result of the origination of variable rate mortgage loans and loan growth in CRE, ~~commercial~~ and agriculture ~~loans.~~ ~~The Bank was able to generate loan growth across the geographic markets that it serves, primarily in commercial, CRE and one-to-four residential real estate~~ loans.

Deposits

The Bank has a diversified deposit base. The deposit base consists of retail, commercial and public fund customers located in the markets in which the Bank operates. The Bank provides a diverse financial suite of products to its deposit customers and seeks to be the primary financial service provider for these customers. The Bank considers these deposit relationships to be its core deposit base. If the Bank requires funding that exceeds these customers’ deposit balances, non-core or brokered deposits may be utilized. The balance of these non-core or brokered deposits at December 31, ~~2024~~2025 was $91108.49 million, or 67.98% of total deposits, compared to $8391.24 million, or 6.39% of total deposits at December 31, ~~2023~~2024.

In order for the Bank to attract and retain stable deposit relationships, the Bank offers business cash management solution services to help local companies better manage their cash flow. The Bank also offers Insured Cash Sweep (“ICS”) and Certificate of Deposit Account Registry Service to provide customers with FDIC insurance coverage for deposit balances that exceed the insurance limit of $250,000. The ICS accounts are integrated with the Bank’s core processor so transfers can be automated for the Bank’s customers. The expertise and experience of the Bank’s management coupled with the latest technology accessed through third party providers enables the Bank to maximize the growth of business-related deposits.

As for consumers, deposit growth is driven by a variety of factors including, but not limited to, population growth, bank and non-bank competition, local bank mergers and consolidations, increases in household income, interest rates, accessibility of location and the sales efforts of Bank personnel. Time deposits can be attracted and increased by paying an interest rate higher than that offered by competitors, but are the costliest type of deposit. The most profitable type of deposits are non-interest bearing demand (checking) accounts, which can be attracted by offering free checking. However, both high interest rates and free checking accounts generate certain expenses for a bank and the desire to increase deposits must be balanced with the need to be profitable and the extent of banking relationships with the customers. The deposit services of the Bank are generally comprised of demand deposits, savings deposits, money market deposits, time deposits and individual retirement accounts.

Supervision and Regulation

General

~~FDIC-insured~~Deposits ~~institutions,~~of ~~like~~ the Bank, ~~their holding companies and their affiliates~~ are ~~extensively~~insured ~~regulated under federal law. As a result, our growth and earnings performance may be affected not only~~ by ~~management decisions and general economic conditions, but also by~~ the ~~requirements of~~Deposit ~~applicable~~Insurance ~~statutes~~Fund ~~and by~~ (the ~~regulations~~“DIF”) ~~and policies~~ of ~~various~~the ~~banking~~Federal ~~agencies,~~Deposit ~~including~~Insurance ~~our~~Corporation ~~primary~~(the ~~federal~~“FDIC”) up ~~regulator,~~to the ~~Federal~~ ~~Reserve,~~maximum ~~and~~amount ~~the~~allowable ~~Bank’s~~under ~~primary~~applicable federal ~~regulator,~~laws ~~the~~and ~~OCC,~~regulations. asThe ~~well~~Bank asis ~~the~~regulated ~~FDIC,~~by as the ~~insurer~~Office of the ~~Bank’s deposits,~~Comptroller ~~and~~of the ~~Consumer~~Currency ~~Financial Protection Bureau~~ (the “~~CFPB~~OCC”), as the ~~regulator~~chartering ofauthority ~~consumer~~for ~~financial~~national ~~services~~banks, and ~~their~~the ~~providers. Furthermore~~FDIC, ~~taxation~~as ~~laws~~the ~~administered~~administrator byof the ~~Internal~~DIF. The ~~Revenue~~Company ~~Service~~ and ~~state~~the ~~taxing~~Bank ~~authorities,~~are ~~accounting~~also ~~rules~~subject ~~developed~~to regulation by the ~~Financial~~ ~~Accounting Standards~~ Board ~~(“FASB”),~~of ~~securities~~Governors ~~laws~~of ~~administered by~~ the ~~Securities~~Federal ~~and~~Reserve ~~Exchange~~System ~~Commission~~ (the “~~SEC~~Federal Reserve”) ~~and~~with ~~state~~respect ~~securities~~to ~~authorities,~~reserves ~~and~~required ~~anti-money~~to ~~laundering~~be maintained against deposits and ~~sanctions~~certain ~~laws~~other ~~enforced~~matters, byincluding the ~~U.S.~~regulation ~~Department~~ of ~~the~~bank ~~Treasury (“Treasury”)~~holding ~~have~~companies. anThe ~~impact~~Bank onis ~~our~~a ~~business.~~member ~~The~~of ~~effect~~the ofFederal ~~these~~Reserve ~~statutes,~~Bank ~~regulations,~~of ~~regulatory~~Kansas ~~policies~~City and ~~accounting~~the ~~rules~~Federal ~~are~~Home ~~significant~~Loan ~~to our~~Bank ~~operations~~(the ~~and~~“FHLB”) ~~results~~of Topeka.

~~Federal~~FDIC-insured ~~and state banking laws impose a comprehensive system of supervision~~institutions, ~~regulation~~like ~~and enforcement on~~ the ~~operations of FDIC-insured institutions~~Bank, their holding companies and their affiliates ~~that~~are isextensively ~~intended~~regulated ~~primarily~~under ~~for~~federal ~~the~~law. ~~protection~~As ofa ~~the~~result, ~~FDIC-insured~~our growth ~~deposits~~ and ~~depositors~~earnings ofperformance ~~banks, rather~~may ~~than~~be ~~shareholders.~~affected ~~These~~not ~~laws,~~only ~~and~~by ~~the~~management ~~regulations~~decisions ofand ~~the~~general ~~banking~~economic ~~agencies issued under them~~conditions, ~~affect,~~but ~~among~~also ~~other~~by ~~things,~~ the ~~scope~~ requirements of ~~our~~applicable ~~business,~~statutes and by the ~~kinds~~regulations and ~~amounts~~policies of ~~investments~~various ~~that~~banking ~~we may make~~agencies, ~~required~~including ~~capital~~our ~~levels~~primary ~~relative~~federal ~~to assets~~regulator, the ~~nature~~ Federal Reserve, and ~~amount~~the ofBank’s ~~collateral~~primary ~~for~~federal ~~loans~~regulator, the ~~establishment of branches~~OCC, ~~our~~as ~~ability~~well toas ~~merge,~~the ~~consolidate and acquire~~FDIC, ~~dealings~~as ~~with~~ the ~~Company’s and~~insurer of the Bank’s ~~insiders~~ deposits, and ~~affiliates~~consumer ~~and~~financial ~~our~~protection ~~payment~~agencies. ofFurthermore, ~~dividends.~~taxation Inlaws ~~reaction~~administered toby the ~~global~~Internal ~~financial~~Revenue ~~crisis~~Service and ~~particularly~~state taxing ~~following~~authorities, ~~passage~~accounting ofrules ~~the~~developed ~~Dodd-Frank~~by ~~Wall~~the ~~Street~~Financial ~~Reform~~Accounting ~~and~~Standards ~~Consumer~~Board ~~Protection Act~~ (~~the~~ “~~Dodd-Frank Act~~FASB”), wesecurities ~~experienced heightened~~laws ~~regulatory requirements and scrutiny. Although the reforms primarily targeted large banking organizations and systemically~~administered ~~important~~by ~~financial institutions, their influence filtered down in varying degrees to community banking organizations over time and caused our compliance and risk management processes, and~~ the ~~costs~~Securities ~~thereof, to increase. The Economic Growth, Regulatory Relief~~ and ~~Consumer Protection~~Exchange ~~Act~~Commission ~~of 2018~~ (“~~Regulatory Relief Act~~SEC”) ~~eliminated~~and ~~questions~~state ~~about~~securities ~~the~~authorities, ~~applicability~~and ~~of certain Dodd~~anti-~~Frank~~money ~~Act~~laundering reforms to community banking systems, including relieving them of any requirement to engage in mandatory stress tests, maintain a risk committee or comply with the Volcker Rule’s complicated prohibitions on proprietary trading and ~~ownership of private funds. These reforms~~sanctions ~~have~~laws ~~been~~enforced ~~favorable~~by ~~to our operations. It is anticipated that~~ the ~~Trump Administration and the current~~ U.S. ~~Congress~~Department ~~likely~~of ~~will not increase~~ the ~~regulatory~~Treasury ~~burden~~(“Treasury”) onhave ~~community~~an ~~banking~~impact ~~organizations and may seek to reduce and streamline certain prudential and regulatory requirements applicable to community banking organizations at a federal level based~~ on ~~statements~~our ~~made~~business. byThe ~~relevant~~effect ~~congressional leaders and the acting leaders~~ of ~~certain~~these ~~federal banking agencies. At this time~~statutes, ~~however~~ regulations, itregulatory ispolicies ~~not~~and ~~possible~~accounting torules ~~predict~~are ~~with~~significant ~~any~~to ~~certainty the actual impact that the Trump Administration may have on the banking industry or~~ our operations and results.

The supervisory framework for U.S. banking organizations subjects banks and bank holding companies to regular examination by their respective banking agencies, which results in examination reports and ratings that are not publicly available and that can impact the conduct and growth of their businesses. These examinations consider not only compliance with applicable laws and regulations, but also capital levels, asset quality and risk, management ability and performance, earnings, liquidity, and various other factors. The banking agencies generally have broad discretion to impose restrictions and limitations on the operations of a regulated entity where the agencies determine, among other things, that such operations are unsafe or unsound, fail to comply with applicable law or are otherwise inconsistent with laws and regulations. The approach to supervision adopted by each banking agency may have significant impacts on the operations and results of the Company and the Bank, as well as the banking industry in general. Based on recent statements made by congressional leaders and the acting leaders of certain federal banking agencies, there may be changes in the supervisory processes and approach made by the Trump Administration banking agencies, but it is not possible at this time to predict the specific changes (or the timing of any such changes) that may be made.5

Federal and state banking laws impose a comprehensive system of supervision, regulation and enforcement on the operations of FDIC-insured institutions, their holding companies and affiliates that is intended primarily for the protection of the FDIC-insured deposits and depositors of banks, rather than shareholders. These laws, and the regulations of the banking agencies issued under them, affect, among other things, the scope of our business, the kinds and amounts of investments that we may make, required capital levels relative to assets, the nature and amount of collateral for loans, the establishment of branches, our ability to merge, consolidate and acquire, dealings with the Company’s and the Bank’s insiders and affiliates and our payment of dividends.

In response to the global financial crisis and particularly following passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), we experienced heightened regulatory requirements and scrutiny. Although the reforms primarily targeted large banking organizations and systemically important financial institutions, their influence filtered down in varying degrees to community banking organizations over time and caused our compliance and risk management processes, and the costs thereof, to increase. The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (the “Regulatory Relief Act) clarified the inapplicability of certain Dodd-Frank Act reforms to community banking organizations, including relieving them of any requirement to engage in mandatory stress tests, maintain a risk committee or comply with the Volcker Rule’s complicated prohibitions on proprietary trading and ownership of private funds.

Over the past year, the federal banking agencies have continued efforts to reduce regulatory burden on banking organizations, including community banking organizations, through various supervisory, regulatory and policy initiatives. These efforts have included the rescission or revision of certain rulemakings and proposals, initiatives to streamline examination and application processes and efforts to increase transparency and consistency in supervisory expectations. Congress also has considered additional measures aimed at easing specific compliance obligations for community banks, although no reforms comparable in scope to the Regulatory Relief Act have been enacted to date. The Company believes that these developments may be favorable to the operations of the Company or the Bank: however, future changes in laws, regulations or supervisory priorities, and their impacts on the Company’s or the Bank’s business, remain uncertain.

The supervisory framework applicable to U.S. banking organizations subjects banks and bank holding companies to regular examination by their respective banking agencies. These examinations result in confidential examination reports and supervisory ratings that may impact an institution’s operations, capital levels, growth and strategic initiatives. Examinations consider not only compliance with applicable laws and regulations, but also capital levels, asset quality and risk, management ability and performance, earnings, liquidity and overall risk profile, among other things. The banking agencies generally have broad discretion to impose restrictions and limitations on the operations of a regulated entity where the agencies determine that such operations are unsafe or unsound, fail to comply with applicable law or are otherwise inconsistent with laws and regulations. Changes in supervisory approach or emphasis may materially affect the operations and financial results of the Company and the Bank, as well as the banking industry in general.

In recent supervisory communications, rulemakings and policy statements, the federal banking agencies have indicated an increased focus on core, material financial risks (rather than risk management processes), greater transparency in supervisory expectations, and efforts to reduce examination burden, particularly for community banks. For example, the OCC has proposed or implemented initiatives: (i) to clarify standards for unsafe or unsound practices; (ii) to reduce the regulatory burden on community banking organizations in connection with anti-money laundering and countering the financing of terrorism examinations; and (iii) generally to streamline examination procedures for community banking organizations by allowing examiners to tailor the scope and frequency of examinations based on risk-based supervision, consistent with applicable laws and regulations. These initiatives may enable management to focus more effectively on growth opportunities and the management of material financial risks.

The following is a summary of the material elements of the supervisory and regulatory framework applicable to the Company and the Bank. It does not describe all of the statutes, regulations and regulatory policies that apply, nor does it restate all of the requirements of those that are described. The descriptions are qualified in their entirety by reference to the particular statutory and regulatory provision.

The Role of Capital

Regulatory capital represents the net assets of a banking organization available to absorb losses. Because of the risks attendant to their business, FDIC-insured institutions, such as banks, as well as their holding companies (i.e., banking organizations) ~~are~~ generally are required to to hold more capital than other businesses, which directly affects our earnings capabilities. Although capital ~~has~~ historically has been ~~one~~ one of the key measures of the financial health of both bank holding companies and banks, its role became fundamentally more important in in the wake of the global financial crisis, as the banking agencies recognized that the amount and quality of capital held by banking ~~organizations~~ organizations prior to that crisis was insufficient to absorb losses during periods of severe stress.

Capital Levels. Banking organizations have been required to hold minimum levels of capital based on guidelines established by the federal banking agencies since 1983. The minimum capital levels for banking organizations have been expressed in terms of ratios of “capital” divided by “total assets.” The capital guidelines for U.S. banking organizations beginning in 1989 have been based upon international capital accords (known as the “Basel” accords) adopted by the Basel Committee on Banking Supervision, a committee of central banks and bank supervisors that acts as the primary global standard-setter for prudential regulation, as ~~implemented~~interpreted and implemented by the U.S. federal banking agencies on an interagency basis. These accords recognized that bank assets for the purpose of the capital ratio calculations needed to be risk weighted (the theory being that riskier assets should require more capital) and that off-balance sheet exposures needed to be factored in the calculations. Following the global financial crisis, the Group of Governors and Heads of Supervision, the oversight body of the Basel Committee on Banking Supervision, announced an agreement on a strengthened set of capital requirements for banking organizations around the world, known as the Basel III accords, to address deficiencies recognized in connection with the global financial crisis.

The Basel III Rule. The U.S. federal banking agencies adopted the U.S. Basel III regulatory capital reforms, and, at the same time, effected changes required by the Dodd-Frank Act, in regulations that were effective in 2015 (with certain phase-ins) ~~in 2015~~ (the “Basel III Rule”). The Basel III Rule established capital standards for banks and bank holding companies that are meaningfully more stringent than those in place previously and are still in effect today. The Basel III Rule increased the required quantity and quality of capital and required a more complex, detailed and calibrated assessment of risk in the calculation of risk weightings for bank assets. The Basel III Rule is applicable to all banking organizations that are subject to minimum capital requirements, including national and state banks and savings and loan associations, as well as to holding companies, other than “small bank holding companies” and certain qualifying banking organizations that may elect a simplified framework (which we have not done). The Company and the Bank is currently are subject to the Basel III Rule as described below.

Not only did the Basel III Rule increase most of the required minimum capital ratios in effect prior to January 1, 2015, but, inby requiring that ~~forms of~~ capital instruments be of higher quality to absorb loss, it introduced the concept of Common Equity Tier 1 Capital, (“CET1”), which consists primarily of common stock, related surplus (net of ~~Treasury~~treasury stock), retained earnings, and ~~Common~~CET1 ~~Equity Tier 1~~ minority interests, subject to certain regulatory adjustments and deductions. The Basel III Rule also changed the definition of regulatory capital by establishing more stringent criteria ~~that~~ for instruments ~~must meet~~ to bequalify ~~considered~~as Additional Tier 1 Capital (primarily non-cumulative perpetual preferred stock that ~~meets~~ meets certain requirements) and Tier 2 Capital (primarily other types of preferred stock and subordinated debt, subject to limitations). ~~The~~ In addition, the Basel III Rule ~~also~~limited ~~constrained~~ the inclusion of minority interests, mortgage-servicing assets, and deferred tax assets in regulatory capital and required deductions from ~~Common~~CET1 ~~Equity Tier 1 Capital~~ in the event that such assets exceeded aprescribed ~~percentage of a banking organization’s Common Equity Tier 1 Capital~~thresholds.

The Basel III Rule requires banking organizations to maintain minimum capital ratios asto be deemed “adequately capitalized” as follows:

● A ratio of ~~Common~~CET1 ~~Equity Tier 1 Capital~~ equal to 4.5% of risk-weighted assets;; ● A ratio of Tier 1 Capital equal to 6% of risk-weighted assets;; ● A ratio of Total Capital (Tier 1 plus Tier 2 Capital) equal to 8% of risk-weighted assets;; and ● A leverage ratio of Tier 1 Capital to total quarterly average assets equal to 4% ~~in all circumstances~~.

In addition, banking organizations that want to make capital distributions (including dividends and stock repurchases) and pay discretionary bonuses to executive officers without restriction must maintain 2.5% in CET1 in the form of a capital conservation buffer. The purpose of the conservation buffer is to ensure that banking organizations maintain a cushion of capital that can be used to absorb losses during periods of financial and economic stress. Factoring in the capital conservation buffer increases the minimum ratios described above to 7% for CET1, 8.5% for Tier 1 Capital and 10.5% for Total Capital.

Well Capitalized Requirements. The capital ratios described above represent minimum standards for banking organizations to be considered “adequately capitalized.” Banking agencies uniformly encourage banking organizations to maintain capital levels above these minimums and to be classified as “well capitalized.” To that end, federal law and regulations provide various incentives for banking organizations to maintain regulatory capital in excess of minimum regulatory requirements. For example, a well capitalized banking organization may: (i) qualify for exemptions from prior notice or application requirements otherwise applicable to certain activities; (ii) receive expedited processing of other required notices or applications; and (iii) accept, roll-over or renew brokered deposits. In addition, the banking agencies may require higher capital levels where warranted by an institution’s specific risk profile or operating circumstances. For example, the Federal Reserve’s capital guidelines contemplate that additional capital may be required to take adequate account of, among other things, risks, such as interest rate risk, or risks associated with credit concentrations, nontraditional activities or securities trading activities. Further, any banking organization experiencing or anticipating significant growth would be expected to maintain capital ratios, including tangible capital positions (i.e., Tier 1 Capital less all intangible assets), well above the minimum regulatory levels.

Under the capital regulations of the Federal Reserve for the Company and the OCC for the Bank, in order to be well capitalized, we must maintain:

	●	A CET1 ratio to risk-weighted assets of 6.5% or more;

	●	A ratio of Tier 1 Capital to total risk-weighted assets of 8% or more;

	●	A ratio of Total Capital to total risk-weighted assets of 10% or more; and

	●	A leverage ratio of Tier 1 Capital to total adjusted average quarterly assets of 5% or greater.

Under the Basel III Rule, a banking organization may be considered “well capitalized,” while not complying with the capital conservation buffer requirement described above.

As of December 31, 2025: (i) the Bank was not subject to a directive from the OCC to increase its capital and (ii) the Bank was well-capitalized, as defined by OCC regulations. As of December 31, 2025, the Company had regulatory capital in excess of the Federal Reserve’s requirements and met the Basel III Rule requirements to be well-capitalized. The Company and the Bank also are in compliance with the capital conservation buffer.

Basel III Endgame Proposal. Previously, the federal banking agencies proposed a “Basel III Endgame Rule” to complete the implementation of certain aspects of the Basel III accords, particularly relating to risk-weighted assets; however, the proposal was not adopted, in part due to stakeholder concerns regarding potential economic impacts, data transparency and the alignment of certain provisions with statutory tailoring requirements. Based on public statements from federal agency officials, it is anticipated that a revised proposal may be issued in the future. Any reproposal of the Basel III Endgame Rule is expected to primarily affect large, complex banking organizations.

Prompt Corrective Action. The concept of a banking organization being “adequately capitalized” or “well capitalized,” as defined above, is part of a regulatory regime that provides the federal banking agencies with broad power to take “prompt corrective action” to resolve the problems of undercapitalized depository institutions based on the capital level of each particular institution. The extent of the banking agencies’ powers depends on whether the institution in question is “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized,” in each case as defined by regulation. Depending upon the capital category to which a banking organization is assigned, the agencies’ corrective powers include: (i) requiring the institution to submit a capital restoration plan; (ii) limiting the institution’s asset growth and restricting its activities; (iii) requiring the institution to issue additional capital stock (including additional voting stock) or to sell itself; (iv) restricting transactions between the institution and its affiliates; (v) restricting the interest rate that the institution may pay on deposits; (vi) ordering a new election of directors of the institution; (vii) requiring that senior executive officers or directors be dismissed; (viii) prohibiting the institution from accepting deposits from correspondent banks; (ix) requiring the institution to divest certain subsidiaries; (x) prohibiting the payment of principal or interest on subordinated debt; and (xi) ultimately, appointing a receiver for the institution.

Community Bank Capital Simplification. Community banking organizations have long raised concerns with the federal banking agencies about the regulatory burden, complexity and costs associated with certain provisions of the Basel III Rule. In response, Congress provided an “off-ramp” for institutions, like the Company, with total consolidated assets of less than $10 billion as part of the Regulatory Relief Act. Section 201 of the Regulatory Relief Act specifically instructed the federal banking agencies to establish a single “Community Bank Leverage Ratio” (“CBLR”) of between 8 and 10%. Under a final regulation promulgated by the federal banking agencies, a community banking organization is eligible to elect to comply with its capital requirements under the CBLR framework if it has: (i) less than $10 billion in total consolidated assets; (ii) limited amounts of certain assets and off-balance sheet exposures; and (iii) a CBLR greater than 9%. In late 2025, the federal banking agencies proposed changes to the CBLR framework intended to encourage broader adoption, including reducing the required leverage ratio from 9.0% to 8.0%; however, the proposal has not yet been finalized. Neither the Company nor the Bank has elected to use the CBLR framework at this time.

Supervision and Regulation of the Company

General. The Company, as the sole shareholder of the Bank, is a bank holding company. As a bank holding company that has elected financial holding company status, we are registered with, and subject to regulation, supervision and enforcement by, the Federal Reserve under the Bank Holding Company Act of 1956, as amended (the “BHCA”). We are legally obligated to act as a source of financial and managerial strength to the Bank and to commit resources to support the Bank in circumstances where we might not otherwise do so. Under the BHCA, we are subject to periodic examination by the Federal Reserve and are required to file with the Federal Reserve periodic reports of our operations and such additional information regarding the Company and the Bank as the Federal Reserve may require.

Acquisitions and Activities. The primary purpose of a bank holding company is to control and manage banks. The BHCA generally requires the prior approval of the Federal Reserve for any merger involving a bank holding company or any acquisition by a bank holding company of another bank or bank holding company. Pursuant to the BHCA and the Dodd-Frank Act, the Federal Reserve may permit a well capitalized and well managed bank holding company to acquire banks located in any U.S. state, subject to federal deposit concentration limits, applicable nondiscriminatory state deposit-cap laws and state minimum-existence requirements for target banks (not exceeding five years).

The BHCA generally prohibits the Company from acquiring direct or indirect ownership or control of more than 5% of a class of the outstanding voting shares of any nonbanking entity and from engaging in any business other than that of banking, managing and controlling banks or furnishing services to banks and their subsidiaries. This general prohibition is subject to a number of exceptions. The principal exception allows bank holding companies to engage in, and to own shares of companies engaged in, certain businesses found by the Federal Reserve prior to November 11, 1999 to be “so closely related to banking... as to be a proper incident thereto.” This authority would permit the Company to engage in a variety of banking-related businesses, including, among other things, the ownership and operation of a savings association, or any entity engaged in consumer finance, equipment leasing, the operation of a computer service bureau (including software development) and mortgage banking and brokerage services. The BHCA does not place formal territorial restrictions on the domestic activities of nonbank subsidiaries of bank holding companies. In addition to approval from the Federal Reserve that may be required in certain circumstances, prior approval for the establishment or acquisition of nonbank subsidiaries by the Company may be required from other agencies that regulate such nonbank company.

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~~Under~~Capital ~~the~~Requirements. Bank holding companies are required to maintain capital ~~regulations~~in ofaccordance ~~the~~with Federal Reserve ~~for~~capital ~~the~~adequacy ~~Company~~requirements. For ~~and~~a ~~the~~discussion ~~OCC~~of ~~for~~capital ~~the~~requirements ~~Bank~~generally, insee ~~order to be well~~“-~~capitalized,~~the we“Role ~~must~~of ~~maintain:~~Capital” above.

●Dividend Payments. AOur ~~Common~~ability ~~Equity~~to ~~Tier~~pay 1dividends ~~Capital~~to ~~ratio~~shareholders tomay ~~risk-weighted~~be ~~assets~~affected ofby ~~6.5%~~both orgeneral ~~more;~~corporate ●law Aconsiderations ~~ratio~~and the policies and capital requirements of ~~Tier~~the 1Federal ~~Capital~~Reserve applicable to ~~total~~bank ~~risk-weighted~~holding ~~assets~~companies. ofAs 8%a orDelaware ~~more;~~corporation, ●we Aare ~~ratio~~subject to the limitations of ~~Total~~the ~~Capital~~Delaware General Corporation Law (the “DGCL”). The DGCL allows us to ~~total~~pay ~~risk-weighted~~dividends ~~assets~~only out of ~~10%~~surplus (as ordefined ~~more;~~ and ●computed Ain ~~leverage~~accordance ~~ratio~~with the provisions of ~~Tier~~the 1DGCL) ~~Capital~~or toif ~~total~~we ~~adjusted~~have ~~average~~no ~~quarterly~~such ~~assets~~surplus, out of 5%its net profits for the fiscal year in which the dividend is declared and/or ~~greater~~the preceding fiscal year.

ItAs isa ~~possible~~general ~~under~~matter, the ~~Basel~~Federal ~~III~~Reserve ~~Rule~~has indicated that the board of directors of a bank holding company should eliminate, defer or significantly reduce dividends to beshareholders ~~well-capitalized~~if: (i) the company’s net income available to shareholders for the past four quarters, net ~~while~~of ~~remaining~~dividends ~~out~~previously paid during that period, is not sufficient to fully fund the dividends; (ii) the prospective rate of earnings ~~compliance~~retention is inconsistent with the company’s capital needs and overall current and prospective financial condition; or (iii) the company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. The Federal Reserve also possesses enforcement powers over bank holding companies and their nonbank subsidiaries to prevent or remedy actions that represent unsafe or unsound practices or violations of applicable statutes and regulations. Among these powers is the ability to proscribe the payment of dividends by banks and bank holding companies. Finally, the Basel III Rule imposes consolidated capital requirements on banking organizations. As a result, banking organizations must hold a capital conservation buffer ~~discussed~~of 2.5% in CET1 above the minimum risk-based capital requirements to not be subject to regulatory limits on dividends and other capital distributions. See “The Role of Capital” above.

AsMonetary Policy. The monetary policy of ~~December~~the ~~31,~~Federal ~~2024:~~Reserve ~~(i)~~has a significant effect on the ~~Bank~~operating ~~was~~results ~~not~~of ~~subject~~bank toholding acompanies and ~~directive~~their ~~from~~subsidiaries. Among the ~~OCC~~tools available to ~~increase~~the ~~its~~Federal ~~capital~~Reserve ~~and~~to ~~(ii)~~affect the ~~Bank~~money ~~was~~supply ~~well-capitalized, as~~are ~~defined~~open bymarket ~~OCC~~transactions ~~regulations~~in U.S. government Assecurities ofand ~~December~~changes ~~31,~~in ~~2024,~~ the ~~Company~~discount ~~had~~rate ~~regulatory~~on ~~capital~~bank borrowings. These means are used in ~~excess~~varying combinations to influence overall growth and distribution of ~~the~~bank ~~Federal~~loans, ~~Reserve’s~~investments ~~requirements~~ and ~~met~~deposits, ~~the~~and ~~Basel~~their ~~III~~use ~~Rule~~may ~~requirements~~affect tointerest berates ~~well-capitalized.~~charged ~~The~~on ~~Company~~loans ~~also~~or paid ison indeposits, ~~compliance~~which ~~with~~may impact the ~~capital~~Company’s ~~conservation~~business ~~buffer~~and operations.

Prompt Corrective Action. The concept of a banking organization being “well-capitalized” is part of a regulatory regime that provides the federal banking agencies with broad power to take “prompt corrective action” to resolve the problems of undercapitalized depository institutions based on the capital level of each particular institution. The extent of the banking agencies’ powers depends on whether the institution in question is “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized,” in each case as defined by regulation. Depending upon the capital category to which a banking organization is assigned, the agencies’ corrective powers include: (i) requiring the institution to submit a capital restoration plan; (ii) limiting the institution’s asset growth and restricting its activities; (iii) requiring the institution to issue additional capital stock (including additional voting stock) or to sell itself; (iv) restricting transactions between the institution and its affiliates; (v) restricting the interest rate that the institution may pay on deposits; (vi) ordering a new election of directors of the institution; (vii) requiring that senior executive officers or directors be dismissed; (viii) prohibiting the institution from accepting deposits from correspondent banks; (ix) requiring the institution to divest certain subsidiaries; (x) prohibiting the payment of principal or interest on subordinated debt; and (xi) ultimately, appointing a receiver for the institution.

~~Community~~Federal ~~Bank~~Securities ~~Capital Simplification~~Regulation. ~~Community~~Our ~~banking~~common ~~organizations~~stock ~~have~~is ~~long~~registered ~~raised concerns~~ with the ~~federal~~SEC ~~banking~~under ~~agencies about~~ the ~~regulatory~~Securities ~~burden,~~Act ~~complexity, and costs associated with certain provisions~~ of 1933 (the ~~Basel III Rule. In response, U.S. Congress provided an~~ “~~off-ramp~~Securities Act”) ~~for~~and ~~institutions, like~~ the ~~Bank,~~Securities ~~with~~Exchange ~~total consolidated assets of less than $10 billion as part of the Regulatory Relief~~ Act. ~~Section 201~~ of ~~the~~1934 ~~Regulatory Relief Act specifically instructed~~ (the ~~federal banking agencies to establish a single~~ “~~Community Bank~~Exchange ~~Leverage Ratio~~Act” ~~(“CBLR”~~), ofeach ~~between~~as ~~8 and 10%~~amended. ~~Under the final rule~~Consequently, awe ~~community~~are ~~banking organization is eligible~~subject to ~~elect to comply with its capital requirements under~~ the ~~CBLR~~information, ~~framework~~proxy ~~if it has: (i) less than $10 billion in total consolidated assets~~solicitation, ~~(ii)~~insider ~~limited~~trading ~~amounts of certain assets~~ and ~~off-balance~~other ~~sheet~~restrictions ~~exposures,~~ and ~~(iii)~~requirements aof ~~CBLR~~the ~~greater~~SEC ~~than~~under ~~9%. We may elect~~ the ~~CBLR~~Exchange ~~framework at any time but have not currently determined to do so~~Act.

~~Supervision~~Corporate Governance/Incentive Compensation. The Dodd-Frank Act addressed many investor protection, corporate governance and ~~Regulation~~executive compensation matters that will affect most U.S. publicly traded companies. It increased stockholder influence over boards of directors by requiring companies to give stockholders a nonbinding vote on executive compensation and so-called “golden parachute” payments, and authorizing the ~~Company~~SEC to promulgate rules that would allow stockholders to nominate and solicit voters for their own candidates using a company’s proxy materials.

~~General.~~ The Dodd-Frank ~~Company,~~Act asalso directed the ~~sole~~Federal ~~shareholder~~Reserve, oftogether with the ~~Bank~~other federal banking and financial services agencies, isto apromulgate rules ~~bank~~prohibiting ~~holding~~excessive ~~company.~~incentive-based Ascompensation apaid to executives of bank holding ~~company~~companies, weregardless ~~are~~of ~~registered~~whether ~~with,~~such companies ~~and~~are ~~subject~~publicly totraded. ~~regulation,~~Although ~~supervision~~several ~~and~~agencies ~~enforcement~~have ~~by,~~made ~~the~~repeated ~~Federal~~efforts ~~Reserve~~to implement rules under ~~the~~this ~~Bank~~provision ~~Holding~~of ~~Company~~the Dodd-Frank Act—including a ofproposal ~~1956~~issued most recently in May 2024, aswhich ~~amended (the~~was ~~“BHCA”)~~subsequently withdrawn—no final rule has been adopted at this time. WeNevertheless, the ~~are~~federal ~~legally~~banking ~~obligated~~agencies tohave ~~act~~issued asinteragency aguidance ~~source~~on ofsound ~~financial~~incentive ~~and~~compensation ~~managerial~~practices ~~strength~~for tobanking organizations, reflecting the ~~Bank~~agencies’ ~~and~~recognition tothat ~~commit resources~~incentive tocompensation ~~support~~practices in the ~~Bank~~financial inindustry ~~circumstances~~were ~~where~~among wethe ~~might~~factors ~~not~~contributing ~~otherwise~~to the doglobal sofinancial crisis. ~~Under~~The ~~the~~interagency ~~BHCA,~~guidance werecognizes ~~are~~three ~~subject~~core toprinciples ~~periodic~~for ~~examination~~effective incentive compensation plans: (i) byappropriately ~~the~~balancing ~~Federal~~risk ~~Reserve~~and reward; (ii) compatibility with effective controls and ~~are~~risk ~~required~~management; toand ~~file~~(iii) ~~with~~support by strong corporate governance, including active and effective oversight by the ~~Federal~~organization’s ~~Reserve~~board ~~periodic~~of ~~reports~~directors. Although much of ~~our~~the ~~operations~~guidance is directed at large banking organizations that are expected to maintain systematic and ~~such~~formalized ~~additional~~policies ~~information~~and procedures, smaller banking ~~regarding~~organizations, like the Company, ~~and~~are ~~the~~expected ~~Bank~~to asimplement ~~the~~less ~~Federal~~extensive ~~Reserve~~and ~~may~~less ~~require~~formalized systems pursuant to the guidance.

~~Acquisitions~~Supervision and ~~Activities.~~Regulation ~~The primary purpose~~ of ~~a bank holding company is to control and manage banks. The BHCA generally requires~~ the ~~prior~~ approval of the Federal Reserve for any merger involving a bank holding company or any acquisition by a bank holding company of another bank or bank holding company. Subject to certain conditions (including deposit concentration limits established by the BHCA), the Federal Reserve may allow a bank holding company to acquire banks located in any state of the United States (“U.S.”). In approving interstate acquisitions, the Federal Reserve is required to give effect to applicable state law limitations on the aggregate amount of deposits that may be held by the acquiring bank holding company and its FDIC-insured institution affiliates in the state in which the target bank is located (provided that those limits do not discriminate against out-of-state institutions or their holding companies) and state laws that require that the target bank have been in existence for a minimum period of time (not to exceed five years) before being acquired by an out-of-state bank holding company. Furthermore, in accordance with the Dodd-Frank Act, bank holding companies must be well-capitalized and well-managed in order to effect interstate mergers or acquisitions. For a discussion of the capital requirements, see “–The Role of Capital” above.Bank

~~The~~General. ~~BHCA~~The ~~generally~~Bank ~~prohibits the Company from acquiring direct or indirect ownership or control of 5% or more of a class of the voting shares of any company that~~ is ~~not~~ a national bank, ~~and~~chartered ~~from~~by ~~engaging~~the inOCC ~~any~~under ~~business~~the ~~other~~National ~~than~~Bank ~~that of banking~~Act, ~~managing~~ and ~~controlling banks or furnishing services to banks and their subsidiaries. This general prohibition is subject to~~ a ~~number~~member of ~~exceptions.~~the ~~The~~Federal ~~principal~~Reserve ~~exception~~System. ~~allows~~The ~~bank~~deposit ~~holding~~accounts ~~companies to engage in, and to own shares~~ of ~~companies~~the ~~engaged~~Bank ~~in,~~are ~~certain~~insured ~~businesses found~~ by the ~~Federal~~DIF ~~Reserve prior~~ to ~~November 11, 1999 to be “so closely related to banking ... as to be a proper incident thereto.” This authority would permit~~ the ~~Company~~maximum toextent ~~engage~~provided inunder afederal ~~variety~~law ~~of banking-related businesses, including the ownership~~ and ~~operation~~FDIC ~~of a savings association~~regulations, orcurrently ~~any~~$250,000 ~~entity~~per ~~engaged~~insured ~~in consumer finance~~depositor, ~~equipment~~per ~~leasing,~~ownership ~~the operation of a computer service bureau (including software development) and mortgage banking and brokerage services~~category. ~~The~~Ongoing ~~BHCA~~policy ~~does~~discussions ~~not~~at ~~place territorial restrictions on~~ the ~~domestic~~federal ~~activities~~level ofhave ~~nonbank~~focused ~~subsidiaries of~~on ~~bank~~potential ~~holding companies. In addition~~ changes to ~~approval~~deposit ~~from~~insurance ~~the~~coverage, ~~Federal~~including ~~Reserve~~possible ~~that~~adjustments ~~may~~to becoverage ~~required in certain circumstances~~limits, ~~prior~~although ~~approval for~~no ~~acquisitions~~changes byhave ~~the~~been ~~Company may be required from other agencies that regulate the target company of an acquisition~~enacted.

As a national bank, the Bank is subject to the examination, supervision, reporting and enforcement requirements of the OCC. The FDIC, as administrator of the DIF, also has residual authority over the Bank.

Deposit Insurance Assessments. As an FDIC-insured institution, the Bank is required to pay deposit insurance premium assessments to the FDIC. The FDIC has adopted a risk-based assessment system whereby FDIC-insured institutions pay insurance premiums at rates based on their risk classification. For institutions like the Bank that are not considered large and highly complex banking organizations, assessments are now based on examination ratings and financial ratios. The total base assessment rates, effective as of January 1, 2023, generally range from 2.5 basis points (for the lowest risk institutions) to 32 basis points or beyond (for higher risk institutions).

At least semi-annually, the FDIC updates its loss and income projections for the DIF and, if needed, increases or decreases the assessment rates, following notice and comment on proposed rulemaking. For this purpose, the reserve ratio is the DIF balance divided by estimated insured deposits. In response to the global financial crisis, the Dodd-Frank Act increased the minimum reserve ratio from 1.15% to 1.35% of the estimated amount of total insured deposits. In its May 2025 report, the FDIC stated that the reserve ratio likely will reach the statutory minimum by the September 30, 2028 deadline, and no adjustments to the base assessment rates is currently projected.

In addition, because the cost of the failures of Silicon Valley Bank and Signature Bank to the DIF attributable to the systemic risk exception was approximately $16.7 billion, the FDIC adopted a special assessment for banking organizations with $5 billion or more in total assets. Because the Company is a banking organization with less than $5 billion in total assets, this special assessment does not apply to us.

~~Additionally,~~Supervisory ~~bank~~Assessments. ~~holding~~National ~~companies~~banks ~~that~~are ~~meet~~required ~~certain eligibility requirements prescribed by the BHCA and elect~~ to ~~operate~~pay assupervisory ~~financial~~assessments holding companies may engage in, or own shares in companies engaged in, a wider range of nonbanking activities, including securities and insurance underwriting and sales, merchant banking and any other activity that the Federal Reserve, in consultation with the Secretary of the Treasury, determines by regulation or order is financial in nature or incidental to ~~any such financial activity or that~~ the ~~Federal~~OCC ~~Reserve determines by order~~ to befund ~~complementary to any such financial activity, as long as~~ the ~~activity~~operations ~~does~~of ~~not pose a substantial risk to~~ the ~~safety~~OCC. orThe ~~soundness~~amount of ~~FDIC-insured institutions or~~ the ~~financial~~OCC’s ~~system~~general ~~generally.~~assessment Weis ~~elected~~calculated tousing ~~operate as~~ a ~~financial~~formula ~~holding~~that ~~company~~considers ~~in May 2017. In order to maintain our status as a financial holding company, both~~ the ~~Company~~bank’s ~~and~~size ~~the Bank must be well-capitalized, well-managed,~~ and ~~the~~ ~~Bank~~its ~~must~~supervisory ~~have at least a satisfactory CRA rating~~condition. ~~If the Federal Reserve determines that either we or the Bank is not well-capitalized~~ orDuring ~~well-managed,~~ the ~~Federal~~year ~~Reserve~~ended ~~will~~December ~~provide a period of time in which to achieve compliance~~31, ~~but during the period of noncompliance~~2025, ~~the~~ ~~Federal Reserve may place any limitations on us that it deems appropriate. Furthermore, if~~ the ~~Federal Reserve determines that the~~ Bank ~~has~~paid ~~not~~supervisory ~~received~~assessments ~~a satisfactory CRA rating, we would not be able~~ to ~~commence~~the ~~any~~OCC ~~new~~totaling ~~financial activities or acquire a company that engages in such activities~~$168,000.

~~Change~~Capital ~~in Control~~Requirements. ~~Federal~~Banks ~~law~~generally ~~prohibits~~are ~~any~~required ~~person~~to ormaintain ~~company~~capital ~~from~~levels ~~acquiring~~in ~~“control”~~excess of another ~~FDIC-insured depository institution or its holding company without prior notice to the appropriate federal banking agency~~businesses. ~~“Control”~~For isa ~~conclusively~~discussion ~~presumed to exist upon the acquisition~~ of ~~25%~~capital requirements, orsee ~~more~~“The ofRole ~~the outstanding voting securities~~ of aCapital” ~~bank or bank holding company, but may arise under certain circumstances between 10% and 24~~above.~~99% ownership.~~

~~Capital~~Liquidity Requirements. ~~Bank~~Liquidity ~~holding~~is ~~companies~~a measure of the ability and ease with which bank assets may be converted to meet financial obligations such as deposits or other funding sources. Banks are required to implement liquidity risk management frameworks that ensure they maintain sufficient ~~capital~~liquidity, inincluding ~~accordance~~a ~~with~~cushion ~~Federal~~of ~~Reserve~~unencumbered, ~~capital~~high ~~adequacy~~quality ~~requirements~~liquid assets, to withstand a range of stress events. The level ~~For~~and aspeed ~~discussion~~of deposit outflows contributing to the failures of ~~capital~~Silicon ~~requirements~~Valley ~~generally~~Bank, ~~see~~Signature “–Bank and First Republic Bank in 2023 was unprecedented and contributed to acute liquidity and funding strain, underscoring the ~~“Role~~importance of ~~Capital”~~liquidity ~~above~~risk management and contingency funding planning by insured depository institutions like the Bank, as highlighted in a 2023 addendum to existing interagency guidance on funding and liquidity risk management.

~~Dividend~~The ~~Payments.~~primary ~~Our~~roles ~~ability~~of toliquidity ~~pay~~risk ~~dividends~~management are to: ~~shareholders~~(i) ~~may~~prospectively beassess ~~affected~~the byneed ~~both~~for ~~general~~funds ~~corporate~~to ~~law~~meet ~~considerations~~financial obligations; and (ii) ensure the ~~policies and~~availability ~~capital~~of ~~requirements~~cash ofor collateral to fulfill those needs at the ~~Federal~~appropriate ~~Reserve~~time ~~applicable~~by coordinating the various sources of funds available to ~~bank~~the ~~holding~~institution ~~companies~~under normal and stressed conditions. AsThe aBasel ~~Delaware~~III ~~corporation,~~Rule weincludes ~~are~~a ~~subject~~liquidity framework that requires the largest insured institutions to ~~the~~measure ~~limitations~~their ofliquidity ~~the~~against ~~Delaware~~specific ~~General~~liquidity ~~Corporation~~tests. ~~Law~~One (test, referred to as the ~~“DGCL”).~~Liquidity Coverage ~~The~~Ratio, ~~DGCL~~or ~~allows~~LCR, usis designed to ~~pay~~ensure ~~dividends~~that ~~only~~the ~~out~~banking organization has an adequate stock of unencumbered high-quality liquid ~~its~~assets ~~surplus~~that ~~(as~~can ~~defined~~be converted easily and ~~computed~~immediately in ~~accordance~~private ~~with~~markets ~~the~~into ~~provisions~~cash ofto ~~the~~meet ~~DGCL)~~liquidity orneeds iffor wea ~~have~~30-calendar noday ~~such~~liquidity stress ~~surplus~~scenario. The other test, ~~out~~known ofas ~~its~~the ~~net~~Net ~~profits~~Stable Funding Ratio, or NSFR, is designed to promote more medium- and long-term funding ~~for~~of the ~~fiscal~~assets and activities of FDIC-insured institutions over a one-year horizon. These tests provide an incentive for banks and bank holding companies to increase their holdings in ~~which~~treasury securities and other sovereign debt as a component of assets, increase the ~~dividend~~use of islong-term ~~declared~~debt as a funding source and~~/or~~ ~~the~~rely ~~preceding~~on ~~fiscal~~stable ~~year~~funding like core deposits (in lieu of brokered deposits).

AsAlthough athese ~~general~~tests ~~matter,~~do ~~the~~not ~~Federal~~apply ~~Reserve has indicated that the board of directors of a bank holding company should eliminate, defer or significantly reduce dividends~~ to ~~shareholders if: (i)~~ the ~~company’s net income available to shareholders for the past four quarters~~Bank, ~~net~~ ofwe ~~dividends~~continue ~~previously paid during that period, is not sufficient~~ to ~~fully~~review ~~fund~~our ~~the~~liquidity ~~dividends;~~risk ~~(ii)~~management ~~the~~policies ~~prospective rate of earnings retention is inconsistent with the company’s capital needs and overall current and prospective financial condition; or (iii) the company will not meet, or is~~ in ~~danger~~light of ~~not meeting, its minimum~~ regulatory ~~capital adequacy ratios. The Federal Reserve also possesses~~requirements ~~enforcement powers over bank holding companies~~ and ~~their~~industry ~~nonbank subsidiaries to prevent or remedy actions that represent unsafe or unsound practices or violations of applicable statutes and regulations~~developments. Among these powers is the ability to proscribe the payment of dividends by banks and bank holding companies. In addition, under the Basel III Rule, banking organizations that wish to pay dividends have to maintain 2.5% in Common Equity Tier 1 Capital attributable to the capital conservation buffer. See “–The Role of Capital” above.

~~Incentive~~Dividend ~~Compensation~~Payments. ~~There~~The ~~have~~primary ~~been~~source of funds for the Company is dividends from the Bank. Under the National Bank Act, a ~~number~~national bank may pay dividends out of ~~developments~~its inundivided ~~recent~~profits ~~years~~in ~~focused~~such onamounts ~~incentive~~and ~~compensation~~at ~~plans~~such ~~sponsored~~times byas the bank’s board of directors deems prudent. ~~holding~~Without ~~companies~~prior ~~and~~OCC ~~their~~approval, ~~subsidiary~~however, ~~banks~~a national bank may not pay dividends in any calendar year that, ~~reflecting~~in ~~recognition~~the aggregate, exceed the bank’s year-to-date net income plus the bank’s retained net income for the two preceding years. The payment of dividends by any FDIC-insured institution is affected by the ~~federal~~requirement ~~banking~~to ~~agencies~~maintain adequate capital pursuant to applicable capital adequacy guidelines and ~~U.S.~~regulations, and ~~Congress~~an ~~that~~FDIC-insured ~~flawed~~institution ~~incentive~~generally is prohibited from paying any dividends if, following payment thereof, the institution would ~~compensation~~be ~~practices~~undercapitalized. inAs described above, the ~~financial~~Bank ~~industry~~exceeded ~~were~~its ~~one~~capital requirements under applicable guidelines as of ~~many~~December ~~factors~~31, ~~contributing~~2025. Notwithstanding tothe availability of funds for dividends, however, the ~~global~~OCC ~~financial~~may ~~crisis.~~prohibit ~~The~~the ~~result~~payment ~~was~~of dividends by the Bank if it determines ~~interagency~~such ~~guidance~~payment onwould ~~sound~~constitute ~~incentive~~an ~~compensation~~unsafe ~~practices~~or ~~for~~unsound practice. In addition, under the Basel III Rule, banking organizations that wish to pay dividends must maintain 2.5% in CET1 attributable to the capital conservation buffer. See “The Role of Capital” above.

~~The~~Investments, ~~interagency~~Activities ~~guidance~~and ~~recognized~~Acquisitions. ~~three~~The ~~core~~Bank ~~principles.~~is ~~Effective~~permitted ~~incentive~~to ~~plans~~make ~~should:~~investments ~~(i)~~and ~~provide~~engage ~~employees~~in ~~incentives~~activities ~~that~~directly ~~appropriately~~or through subsidiaries ~~balance~~as ~~risk~~authorized by, and ~~reward;~~subject ~~(ii)~~to bethe ~~compatible~~limitations ~~with~~set ~~effective~~forth ~~controls~~in, ~~and~~the ~~risk-management;~~National Bank Act as well as OCC regulations and ~~(iii)~~interpretations. The Bank may be ~~supported~~required byto ~~strong~~obtain ~~corporate~~approval ~~governance, including~~from ~~active~~the OCC and ~~effective~~other ~~oversight~~applicable bybanking ~~the~~or ~~organization’s~~financial ~~board~~services ofagencies ~~directors.~~before ~~Much~~engaging in ofcertain ~~the~~acquisitions ~~guidance~~or ismergers ~~directed~~under atapplicable ~~large~~law. ~~banking organizations~~With respect to interstate merger and acquisitions, ~~because~~federal oflaw ~~the~~permits ~~size~~national banks ~~and~~to ~~complexity~~merge ofwith ~~their~~banks ~~operations,~~in ~~the~~other ~~banking~~states ~~agencies~~subject ~~expect~~to: ~~those~~(i) ~~organizations~~regulatory toapproval; ~~maintain systematic~~(ii) federal and ~~formalized~~state ~~policies,~~deposit ~~procedures,~~concentration limits; and (iii) ~~systems~~state ~~for~~law ~~ensuring~~requirements that the ~~incentive~~merging ~~compensation~~bank ~~arrangements~~has ~~for~~been ~~all~~in ~~executive and~~existence ~~non-executive~~for ~~employees~~a ~~covered~~minimum byperiod ~~this~~of ~~guidance~~time ~~are~~(not ~~identified~~to ~~and~~exceed ~~reviewed~~five years), ~~and~~prior to ~~appropriately~~the ~~balance~~merger. ~~risks~~In ~~and~~2025, ~~rewards. Under~~ the ~~interagency~~federal ~~guidance~~banking agencies, ~~smaller~~including ~~banking~~the ~~organizations,~~OCC ~~like~~and the ~~Company~~FDIC, ~~that~~rescinded ~~use~~certain ~~incentive~~prior ~~compensation~~administrative ~~arrangements~~actions regarding ~~are~~the ~~expected to~~review ~~implement~~and ~~less~~approval ~~extensive,~~of ~~formalized,~~mergers and ~~detailed policies~~acquisitions, ~~procedures,~~with the intent of streamlining and ~~systems~~expediting ~~than~~the ~~those~~regulatory review of certain ~~larger~~merger ~~banks~~and acquisition applications.

InBranching ~~May~~Authority. ~~2024,~~As ~~certain~~a ofnational ~~the~~bank ~~federal~~headquartered ~~banking~~in ~~and other financial services agencies~~Kansas, ~~including~~ the ~~OCC,~~Bank ~~released~~has athe ~~proposed~~same ~~rule~~branching ~~regarding certain~~rights ~~incentive-based compensation arrangements at certain financial institutions with at least $1 billion~~ in ~~assets,~~Kansas as ~~required~~banks chartered under ~~Section~~Kansas ~~956~~law, ofsubject ~~the~~to ~~Dodd-Frank~~OCC ~~Act~~approval. ~~This~~Kansas ~~proposal~~law ~~was~~grants ~~largely~~Kansas-chartered ~~based~~banks ~~on an earlier 2016 proposal. The Federal Reserve and~~ the ~~SEC,~~authority ~~however, did~~to ~~not~~establish ~~join~~branches ~~this~~anywhere ~~proposal and it was not published~~ in the ~~Federal~~State of ~~Register~~Kansas, ~~signaling~~subject ~~potential~~to ~~interagency~~receipt ~~misalignment.~~of Inall ~~March 2025,~~required ~~the~~regulatory ~~FDIC~~approvals. ~~withdrew~~The ~~its~~Dodd-Frank ~~support~~Act ~~for~~permits ~~this~~well ~~proposed~~capitalized ~~rule,~~and ~~making~~well itmanaged ~~unlikely~~banks to ~~that~~establish ~~any~~new ~~rule~~branches inacross astate ~~substantially~~lines ~~similar~~without ~~form~~legal ~~will be finalized~~impediments.

~~Monetary~~Affiliate ~~Policy~~and Insider Transactions. The ~~monetary~~Bank ~~policy~~is ofsubject ~~the~~to ~~Federal~~certain ~~Reserve~~restrictions ~~has~~imposed aby ~~significant~~federal ~~effect~~law on “covered transactions” between the ~~operating~~Bank ~~results~~and ofits ~~bank~~“affiliates.” ~~holding~~The ~~companies and~~Company ~~their~~is ~~subsidiaries.~~an ~~Among~~affiliate of the ~~tools~~Bank ~~available~~for topurposes ~~the~~of ~~Federal~~these ~~Reserve~~restrictions. Covered transactions subject to ~~affect~~these ~~the~~restrictions ~~money~~include ~~supply~~extensions ~~are~~of ~~open~~credit ~~market~~to ~~transactions~~the Company, investments in ~~U.S. government~~the ~~securities~~stock ~~and~~or ~~changes~~other insecurities of the ~~discount~~Company ~~rate~~and onthe ~~bank~~acceptance ~~borrowings.~~of ~~These~~the ~~means~~stock ~~are~~or ~~used~~other insecurities ~~varying~~of ~~combinations~~the toCompany ~~influence overall~~as ~~growth~~collateral ~~and~~for ~~distribution~~loans ofmade ~~bank~~by ~~loans,~~the ~~investments~~Bank. ~~and~~The ~~deposits,~~Dodd-Frank Act ~~and~~enhanced ~~their~~these ~~use~~requirements ~~may~~by ~~affect~~expanding ~~interest~~the ~~rates~~definition ~~charged~~of on“covered ~~loans~~transactions” ~~or paid~~and onextending ~~deposits,~~the period for which collateral ~~may~~requirements ~~impact~~regarding ~~the~~covered ~~Company’s~~transactions ~~business~~must ~~and~~be ~~operations~~maintained.

~~Federal~~Certain ~~Securities~~limitations ~~Regulation.~~and ~~Our~~reporting ~~common~~requirements ~~stock~~also ~~will~~apply beto ~~registered~~extensions ~~with~~of credit by the ~~SEC~~Bank ~~under~~to ~~the~~its ~~Securities~~directors ~~Exchange~~and ~~Act~~officers, to directors and officers of ~~1934~~the Company and its subsidiaries, asto ~~amended (~~principal shareholders of the Company and to “~~Exchange~~related ~~Act~~interests”) asof asuch directors, ~~result~~officers ofand ~~the~~principal ~~offering~~shareholders. ~~Consequently~~In addition, wefederal ~~will~~law beand ~~subject~~regulations tomay govern the ~~information,~~terms ~~proxy~~on ~~solicitation,~~which any person who ~~insider~~is ~~trading~~a ~~and~~director ~~other~~or ~~restrictions~~officer ~~and~~of ~~requirements~~the Company or the Bank, or a principal shareholder of the ~~SEC~~Company, ~~under~~may obtain credit from banks with which the ~~Exchange~~Bank ~~Act~~maintains a correspondent relationship.

~~Corporate~~Safety ~~Governance. The Dodd-Frank Act addressed many investor protection, corporate governance~~ and ~~executive~~Soundness ~~compensation~~Standards/Risk ~~matters that will affect most U~~Management.S. ~~publicly~~FDIC-insured ~~traded~~institutions ~~companies.~~are Itexpected ~~increased~~to ~~stockholder~~operate ~~influence~~in ~~over~~a ~~boards~~safe ofand ~~directors~~sound bymanner. ~~requiring~~The ~~companies to~~federal ~~give~~banking ~~stockholders~~agencies ahave ~~nonbinding~~adopted ~~vote~~operational ~~on executive compensation~~ and ~~so-called~~managerial ~~“golden~~standards ~~parachute”~~to ~~payments,~~promote ~~and authorizing~~ the ~~SEC~~safety ~~to promulgate rules that would allow stockholders to nominate~~ and ~~solicit~~soundness ~~voters~~of ~~for~~such ~~their~~institutions ~~own~~that ~~candidates using a company’s~~address ~~proxy~~internal ~~materials.~~controls, ~~The~~information ~~Dodd-Frank~~systems, ~~Act~~internal ~~also~~audit ~~directed~~systems, ~~the~~loan ~~Federal Reserve~~documentation, ~~together~~credit ~~with~~underwriting, ~~the~~interest ~~other~~rate ~~federal~~exposure, ~~banking and financial services~~asset ~~agencies~~growth, ~~to promulgate rules prohibiting excessive~~ compensation, ~~paid~~fees toand ~~executives of bank holding companies~~benefits, ~~regardless~~asset ofquality ~~whether such~~and ~~companies are publicly traded~~earnings.

~~Supervision~~These standards generally prescribe the goals to be achieved in each area, and ~~Regulation~~each institution is responsible for establishing its own procedures to achieve those goals. If an institution fails to operate in a safe and sound manner, its primary federal regulator may require the submission of a plan to achieve and maintain compliance. Failure to submit an acceptable compliance plan, or to implement an approved plan in any material respect, may result in a formal agency order directing the ~~Bank~~institution to cure the deficiency. Until such deficiency is resolved, the banking agency may restrict the institution’s rate of growth, require additional capital, limit deposit rates or take other corrective action as deemed appropriate. Operating in an unsafe or unsound manner also may constitute grounds for other enforcement action by the federal banking agencies, including cease and desist orders and civil money penalty assessments.

~~General.~~ The federal ~~Bank~~banking isagencies ahave ~~national~~emphasized ~~bank,~~the ~~chartered~~importance byof ~~the~~sound ~~OCC~~risk ~~under~~management ~~the~~processes ~~National~~and ~~Bank~~strong ~~Act.~~internal ~~The~~controls ~~deposit~~when ~~accounts~~evaluating the activities of ~~the~~FDIC-insured ~~Bank~~institutions. ~~are~~In ~~insured~~2025, by however, the ~~DIF~~agencies, toincluding the ~~maximum~~OCC, ~~extent~~signaled ~~provided~~a ~~under~~shift ~~federal~~toward ~~law~~focusing on the identification and ~~FDIC~~management ~~regulations,~~of ~~currently~~material ~~$250~~financial risks,~~000~~ ~~per~~rather ~~insured~~than ~~depositor~~primarily ~~category~~on adherence to prescriptive operational processes. Although effective risk management, internal controls and board and management oversight remain important, supervisory attention may increasingly center on whether specific practices pose material harm to the ~~Bank~~institution’s isfinancial acondition ~~member~~or create a risk of ~~the~~loss ~~Federal~~to ~~Reserve~~the ~~System~~DIF. AsDespite athis ~~national~~potential ~~bank~~shift in focus, the ~~Bank~~agencies iscontinue ~~subject~~ to ~~the~~evaluate ~~examination~~a broad spectrum of risks—including credit, ~~supervision~~market, ~~reporting~~ liquidity, operational and ~~enforcement~~legal ~~requirements~~risks—emphasizing oftheir ~~the~~potential ~~OCC~~impact on safety and soundness. Notably, the federal ~~chartering~~banking ~~authority~~agencies ~~for~~have ~~national~~taken ~~banks.~~a ~~The~~number ~~Bank~~of isactions ~~subject~~ to ~~that~~remove ~~authority~~reputation ~~and~~risk isfrom ~~examined~~consideration, citing concerns about its use in byrestricting ~~the~~banking ~~OCC~~services to certain industries or groups. ~~The~~Key ~~FDIC,~~risk asthemes ~~administrator~~identified ofare ~~the~~discussed ~~DIF,~~in ~~also~~more ~~has~~detail ~~regulatory~~under ~~authority~~“Item 1A. ~~over~~Risk ~~the~~Factors” ~~Bank~~of this Annual Report on Form 10-K.

~~Deposit~~The ~~Insurance. As an FDIC-insured institution, the~~ Bank is ~~required~~expected to ~~pay~~have ~~deposit~~active ~~insurance~~board ~~premium~~and ~~assessments~~senior tomanagement ~~the~~oversight; ~~FDIC.~~adequate ~~The FDIC~~policies, ~~has~~procedures ~~adopted~~and alimits; adequate risk~~-based~~ measurement, ~~assessment~~monitoring ~~system~~and ~~whereby~~management ~~FDIC-insured~~information ~~institutions~~systems; ~~pay~~and ~~insurance~~comprehensive ~~premiums~~internal atcontrols. ~~rates~~The ~~based~~federal onbanking ~~their~~agencies ~~risk~~also ~~classification.~~have ~~For~~released ~~institutions~~specific ~~like~~risk ~~the~~management ~~Bank~~guidance ~~that~~on ~~are~~certain ~~not~~topics, ~~considered~~including ~~large~~third-party ~~and~~relationships, ~~highly~~in ~~complex~~response ~~banking~~to ~~organizations,~~the ~~assessments are~~proliferation ~~now~~of ~~based~~relationships onbetween ~~examination~~banking ~~ratings~~organizations and ~~financial~~fintech ~~ratios.~~companies ~~The~~(although ~~total~~the ~~base~~guidance ~~assessment~~applies ~~rates,~~more ~~effective as of January 1, 2023, currently range from 2~~broadly).~~5 basis points to 32 basis points.~~

At least semi-annually, the FDIC updates its loss and income projections for the DIF and, if needed, increases or decreases the assessment rates, following notice and comment on proposed rulemaking. For this purpose, the reserve ratio is the DIF balance divided by estimated insured deposits. In response to the global financial crisis, the Dodd-Frank Act increased the minimum reserve ratio from 1.15% to 1.35% of the estimated amount of total insured deposits. In its October 2024 semiannual update, the FDIC stated that the reserve ratio likely will reach the statutory minimum by the September 30, 2028 deadline, and no adjustments to the base assessment rates is currently projected.

In addition, because the total cost of the failures of Silicon Valley Bank, Signature Bank and First Republic Bank was approximately $24.1 billion, the FDIC adopted a special assessment for banking organizations with $5 billion or more in total assets. Because the Company is a banking organization with less than $5 billion in total assets, this special assessment does not apply to us.

~~Supervisory~~Privacy ~~Assessments~~and Cybersecurity. ~~National~~The ~~banks~~Bank ~~are~~is ~~required~~subject to ~~pay~~numerous ~~supervisory~~U.S. ~~assessments~~laws toand ~~the~~regulations ~~OCC~~aimed toat ~~fund~~protecting ~~the~~non-public, ~~operations~~personal and confidential information of ~~the~~its ~~OCC~~customers. ~~The~~These ~~amount~~laws require the Bank to periodically disclose its privacy policies and practices regarding the sharing of such nonpublic, customer information, and in certain circumstances, permit consumers to opt out of the ~~assessment~~sharing isof ~~calculated~~information ~~using~~with unaffiliated athird ~~formula~~parties. ~~that~~They ~~considers~~also limit the ~~bank~~Bank’s ~~size~~ability ~~and~~to ~~its~~share ~~supervisory~~certain ~~condition.~~information ~~During~~with ~~the~~affiliates ~~year~~and ~~ended~~non-affiliates ~~December~~for 31marketing and/or non-marketing purposes, ~~2024~~or to contact customers with marketing offers. In addition, as a part of its operational risk mitigation, the Bank ~~paid~~is ~~supervisory~~required ~~assessments~~to implement a comprehensive information security program that includes administrative, technical and physical safeguards to ensure the ~~OCC~~security ~~totaling~~and ~~$205~~confidentiality of customer records and information,~~000~~ and to require the same of its service providers. These security and privacy policies and procedures are in effect across all business lines and geographic locations.

~~Capital~~Risks ~~Requirements.~~and ~~Banks~~exposures ~~are~~related ~~generally~~to ~~required~~cybersecurity require financial institutions to ~~maintain~~design ~~capital~~multiple ~~levels~~layers inof ~~excess~~security controls to establish lines of ~~other~~defense ~~businesses.~~and ~~For~~to aensure ~~discussion~~that their risk management processes also address the risk posed by compromised customer credentials, including security measures to reliably authenticate customers accessing internet-based services of ~~capital~~the financial institution. Bank management ~~requirements~~is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, ~~see~~resumption “–and maintenance of the institution’s operations after a cyber-attack involving destructive malware. The ~~Role~~Bank and the Company also are subject to a number of ~~Capital”~~laws ~~above~~and regulations requiring notifications and disclosures regarding certain cybersecurity incidents.

~~Liquidity~~Financial ~~Requirements~~Subsidiaries. ~~Liquidity~~Under isfederal alaw ~~measure of the ability~~ and ~~ease~~OCC ~~with~~regulations, ~~which~~national ~~bank~~banks ~~assets~~are ~~may~~authorized ~~be converted~~ to ~~meet~~engage, through “financial ~~obligations~~subsidiaries,” ~~such~~in asany ~~deposits~~activity orthat ~~other~~is ~~funding~~permissible ~~sources.~~for ~~Banks~~a ~~are~~financial ~~required~~holding tocompany ~~implement~~and ~~liquidity~~any ~~risk~~activity ~~management frameworks~~ that ~~ensure~~the ~~they~~Secretary ~~maintain sufficient~~of ~~liquidity~~the Treasury, ~~including~~in aconsultation with ~~cushion~~the ofFederal ~~unencumbered~~Reserve, ~~high-quality~~determines ~~liquid~~is ~~assets,~~financial toin ~~withstand~~nature aor ~~range~~incidental ofto ~~stress~~any ~~events.~~such ~~The~~financial ~~level and~~activity, ~~speed~~except: of(i) ~~deposit~~insurance ~~outflows~~underwriting; (ii) ~~contributing~~real toestate ~~the~~development ~~failures~~or ofreal ~~Silicon~~estate ~~Valley~~investment ~~Bank,~~activities ~~Signature~~(unless ~~Bank~~otherwise ~~and~~permitted ~~First~~by ~~Republic~~law); ~~Bank~~(iii) ininsurance ~~the~~company ~~first~~portfolio ~~half~~investments; ofand ~~2023~~(iv) ~~was~~merchant ~~unprecedented~~banking. ~~and~~The ~~contributed~~authority toof ~~acute~~a ~~liquidity~~national ~~and~~bank ~~funding~~to ~~strain.~~invest ~~These~~in ~~events~~a ~~have~~financial ~~further~~subsidiary ~~underscored~~is ~~the~~subject ~~importance~~to conditions, ofincluding, ~~liquidity~~among ~~risk~~other ~~management~~things, ~~and~~requirements ~~contingency~~that ~~funding~~the ~~planning~~bank bymust ~~insured~~be ~~depository~~well ~~institutions~~managed ~~like~~and ~~the~~well ~~Bank,~~capitalized as(after ~~highlighted~~deducting infrom acapital ~~2023~~the ~~addendum~~bank’s tooutstanding ~~existing~~investments ~~interagency~~in ~~guidance~~financial ~~on funding and liquidity risk management~~subsidiaries).

~~The~~Federal ~~primary~~Home ~~roles~~Loan ofBank ~~liquidity~~System. ~~risk~~The ~~management~~Bank ~~are~~is ~~to:~~a ~~(i)~~member ~~prospectively assess the need for funds to meet financial obligations; and (ii) ensure the availability~~ of ~~cash or collateral to fulfill those needs at~~ the ~~appropriate~~FHLB ~~time by coordinating the various sources~~ of ~~funds available~~Topeka, towhich ~~the~~serves ~~institution~~as ~~under normal and stressed conditions. The Basel III Rule includes~~ a ~~liquidity~~central ~~framework~~credit ~~that~~facility ~~requires~~for ~~the largest~~its ~~insured institutions to measure their liquidity against specific liquidity tests~~members. ~~One test, referred to as the Liquidity Coverage~~ ~~Ratio,~~The orFHLB ~~LCR,~~ is ~~designed~~funded toprimarily ~~ensure~~from ~~that~~proceeds from the ~~banking~~sale ~~organization~~of ~~has~~obligations ~~an adequate stock~~ of unencumbered high-quality liquid assets that can be converted easily and immediately in private markets into cash to meet liquidity needs for a 30-calendar day liquidity stress scenario. The other test, known as the ~~Net~~FHLB ~~Stable Funding Ratio~~system, orand ~~NSFR,~~makes isloans ~~designed~~ to ~~promote~~member ~~more~~banks ~~medium-~~in ~~and long-term funding of~~ the ~~assets~~form ~~and activities~~ of ~~FDIC-insured~~FHLB ~~institutions over a one-year horizon~~advances. ~~These~~All ~~tests~~advances ~~provide~~from anthe ~~incentive~~FHLB ~~for~~are ~~banks~~required ~~and bank holding companies~~ to ~~increase~~be ~~their~~fully ~~holdings~~collateralized ~~in Treasury securities and other sovereign debt~~ as adetermined ~~component~~by ~~of assets, increase~~ the ~~use of long-term debt as a funding source and rely on stable funding like core deposits (in lieu of brokered deposits)~~FHLB.

~~Although~~Community ~~these~~Reinvestment ~~tests~~Act doRequirements. ~~not~~The ~~apply~~CRA toimposes on the Bank a continuing and affirmative obligation, weconsistent ~~continue~~with tosafe ~~review~~and sound ~~our~~operations, ~~liquidity~~to ~~risk~~help ~~management~~meet ~~policies~~the incredit ~~light~~needs of ~~regulatory~~its ~~requirements~~ entire community, including low- and ~~industry~~moderate-income ~~developments~~neighborhoods. ~~For~~The ~~instance,~~OCC inregularly assesses ~~July~~the ~~2024,~~Bank’s ~~the~~record ~~FDIC~~of ~~released~~meeting athese ~~request~~credit ~~for~~needs ~~information~~through onperiodic ~~deposits,~~CRA ~~soliciting~~examinations. ~~information on~~The ~~whether~~Bank’s ~~and~~CRA toratings ~~what~~derived from ~~extent~~these ~~certain~~examinations ~~types~~can ofhave ~~deposits~~significant ~~may~~impacts ~~behave~~on ~~differently~~the ~~from~~activities ~~each~~in ~~other~~which ~~(particularly~~the ~~during~~Bank ~~periods~~and ofthe ~~economic or~~Company ~~financial~~may ~~stress),~~engage. ~~the~~For ~~results~~example, ofa ~~which~~low CRA rating may impact ~~liquidity~~the ~~monitoring~~review ~~and~~of ~~risk~~applications ~~management~~for ~~requirements,~~acquisitions ~~including~~by ~~for~~the ~~FDIC-insured institutions,~~Bank ~~like~~or the ~~Bank,~~Company’s ~~going~~financial ~~forward~~holding company status.

~~Dividend~~In ~~Payments.~~2023, ~~The primary source of funds for~~ the ~~Company~~federal isbanking ~~dividends~~agencies ~~from~~issued ~~the Bank. Under the National Bank Act,~~ a ~~national~~final ~~bank may~~rule ~~pay~~intended ~~dividends~~to ~~out~~strengthen ~~of its undivided profits in such amounts~~ and atmodernize ~~such~~the ~~times~~CRA asregulations (the ~~bank’s~~“CRA ~~board of directors deems prudent~~Rule”). ~~Without~~The ~~prior~~CRA ~~OCC~~Rule ~~approval,~~was ~~however,~~subsequently achallenged ~~national~~in ~~bank~~court, ~~may~~which ~~not~~prevented ~~pay~~it ~~dividends~~from intaking ~~any~~effect. ~~calendar~~In ~~year that~~2025, in the ~~aggregate,~~federal ~~exceed~~banking ~~the~~agencies ~~bank’s~~issued ~~year-to-date~~a ~~net~~proposed ~~income~~rule ~~plus~~to ~~the~~rescind ~~bank’s retained net income for~~ the ~~two~~CRA ~~preceding~~Rule ~~years.~~and ~~The~~reinstate ~~payment of dividends by any FDIC-insured institution is affected by~~ the ~~requirement~~prior toCRA ~~maintain~~regulatory ~~adequate~~framework ~~capital~~adopted ~~pursuant~~in to1995. ~~applicable capital adequacy guidelines and regulations~~Additionally, ~~and~~ anthe ~~FDIC-insured~~OCC ~~institution~~has ~~generally is prohibited from paying any dividends if~~indicated that, ~~following~~although ~~payment thereof,~~ the ~~institution~~frequency ~~would be~~of ~~undercapitalized.~~OCC Asexaminations ~~described~~based ~~above,~~on ~~the~~statutory ~~Bank exceeded its capital~~ requirements ~~under~~is ~~applicable~~unlikely ~~guidelines~~to ~~as of December 31~~change, ~~2024. Notwithstanding~~bank ~~the~~examiners ~~availability~~will ofhave ~~funds~~greater discretion ~~for~~in ~~dividends,~~determining ~~however,~~ the ~~OCC~~scope ~~may prohibit the payment~~ of ~~dividends~~compliance byand ~~the~~consumer ~~Bank~~compliance ifactivities itthat ~~determines such~~often ~~payment~~inform ~~would constitute an unsafe or unsound practice. In addition, under~~ the ~~Basel~~CRA ~~III~~evaluation ~~Rule~~process, ~~banking organizations that wish to~~which ~~pay~~could ~~dividends~~result ~~have to maintain 2.5%~~ in ~~Common~~more ~~Equity~~streamlined ~~Tier~~CRA 1examinations ~~Capital~~for ~~attributable~~community ~~to the capital conservation buffer~~banks. ~~See “–The Role of Capital” above.~~

Anti-Money Laundering/Countering the Financing of Terrorism/Sanctions. The Bank Secrecy Act (“BSA”) is a U.S. federal statutory framework, as amended and supplemented by subsequent laws and implemented through regulations, which is designed to combat money laundering, the financing of terrorism and other illicit financial activity. The BSA and related anti-money laundering/countering the financing of terrorism (“AML/CFT”) laws and regulations are intended to prevent terrorists and criminals from accessing the U.S. financial system and have significant implications for FDIC-insured institutions and other businesses involved in the transmission of funds. Together, this regulatory framework provides a foundation to promote financial transparency and deter and detect efforts to misuse the U.S. financial system to launder criminal proceeds, finance terrorist acts or facilitate other illicit conduct.

~~Investments,~~The ~~Activities~~BSA and ~~Acquisitions.~~related ~~The~~laws ~~Bank~~and isregulations ~~permitted~~require tofinancial ~~make~~institutions ~~investments~~ and ~~engage~~financial inservices ~~activities~~companies ~~directly~~to orestablish ~~through~~and ~~subsidiaries as~~maintain ~~authorized by,~~ policies and ~~subject~~procedures tofor ~~the~~addressing: ~~limitations~~(i) ~~set~~customer ~~forth~~identification ~~in, the National Bank Act as well as OCC regulations~~ and ~~interpretations. The~~due ~~Bank~~diligence; ~~may~~(ii) ~~be required to seek approval from~~ the ~~OCC~~prevention and ~~other~~detection ~~banking~~of ormoney ~~financial services agencies before engaging in certain acquisitions~~laundering ~~or mergers under applicable state~~ and ~~federal~~terrorist ~~law.~~financing; In(iii) ~~2024, each of~~ the ~~OCC~~identification and ~~the~~reporting ~~FDIC~~of ~~separately~~suspicious ~~released~~activities ~~updated policy statements—~~and in ~~the~~currency ~~case~~transactions; of(iv) ~~the~~compliance with ~~OCC,~~laws arelating ~~final~~to ~~rule—regarding~~currency ~~how~~crimes; ~~each~~and ~~banking~~(v) ~~agency~~cooperation ~~reviews~~with ~~applications~~law ~~submitted~~enforcement ~~pursuant~~authorities. toThe ~~the~~ Bank ~~Merger Act~~also ~~based~~must oncomply ~~statutory~~with ~~factors.~~stringent economic Inand ~~March~~trade ~~2025,~~sanctions ~~the~~regimes ~~FDIC~~administered ~~issued a notice of proposed rulemaking to repeal its 2024 policy statement~~ and ~~reinstate~~ ~~its~~enforced ~~prior~~by ~~policy~~the ~~statement~~Office onof ~~bank~~Foreign ~~mergers,~~Assets ~~while it considers wider changes to its bank merger review practices~~Control.

~~Insider~~Although ~~Transactions.~~core ~~The~~AML/CFT ~~Bank~~statutory isrequirements ~~subject to certain restrictions imposed by federal law on “covered transactions” between the Bank~~ and ~~its~~expectations ~~“affiliates.”~~remain ~~The~~unchanged, ~~Company~~certain ~~is an affiliate~~ of the ~~Bank~~federal ~~for~~banking ~~purposes~~agencies, ofincluding ~~these~~the ~~restrictions~~OCC, and ~~covered transactions~~ ~~subject to~~ the ~~restrictions~~Financial ~~include~~Crimes ~~extensions~~Enforcement ofNetwork ~~credit~~(FinCEN) tohave ~~the~~recently ~~Company,~~pursued ~~investments in the stock~~ or ~~other~~considered ~~securities~~efforts ofto ~~the~~modernize ~~Company~~ and ~~the~~streamline ~~acceptance~~AML/CFT ofcompliance through ~~the~~a ~~stock~~more ~~or other securities of the Company as collateral for loans made by the Bank. The Dodd~~risk-~~Frank~~based ~~Act enhanced the requirements for certain transactions with affiliates~~approach, including antargeted ~~expansion~~regulatory ofrelief, ~~the~~revised ~~definition~~examination ofexpectations ~~“covered transactions”~~ and anefforts ~~increase~~to inreduce ~~the~~certain compliance ~~amount~~burden, ofparticularly ~~time~~ for ~~which~~lower-risk ~~collateral~~and ~~requirements~~community ~~regarding~~banking ~~covered transactions must be maintained~~organizations.

~~Certain~~Concentrations ~~limitations~~in ~~and~~CRE. ~~reporting~~Concentration ~~requirements~~risk ~~are~~exists ~~also~~when ~~placed~~FDIC-insured oninstitutions ~~extensions~~allocate ofa ~~credit~~disproportionate byamount ~~the~~of ~~Bank~~assets to ~~its~~any ~~directors~~one ~~and~~industry or ~~officers,~~economic tosegment. ~~directors and~~Concentration ~~officers~~in CRE lending is one area of ~~the~~regulatory ~~Company~~focus. ~~and~~The ~~its~~Interagency ~~subsidiaries,~~Concentrations toin ~~principal~~Commercial ~~shareholders~~Real Estate ofLending, ~~the~~Sound ~~Company~~Risk ~~and~~Management toPractices guidance (“~~related~~CRE ~~interests~~Guidance”) ~~of such~~provides ~~directors~~supervisory criteria, ~~officers~~including ~~and~~the ~~principal~~following numerical ~~shareholders.~~indicators, Into ~~addition,~~assist ~~federal~~bank ~~law~~examiners ~~and~~in ~~regulations~~identifying ~~may~~banks ~~affect~~with ~~the~~potentially ~~terms~~significant onCRE ~~which~~loan ~~any~~concentrations ~~person~~that may warrant ~~who~~greater issupervisory ascrutiny. ~~director~~These orindicators ~~officer~~include: of(i) ~~the~~total ~~Company~~CRE orloans ~~the~~exceeding ~~Bank,~~300% orof acapital ~~principal~~and ~~shareholder~~increasing of50% or more in the preceding ~~Company,~~three ~~may~~years; ~~obtain~~or ~~credit~~(ii) ~~from~~construction ~~banks~~and ~~with which~~land ~~the~~development ~~Bank~~loans ~~maintains~~exceeding a100% ~~correspondent~~of ~~relationship~~capital.

~~Safety~~The ~~and~~CRE ~~Soundness~~Guidance ~~Standards/Risk~~does ~~Management.~~not ~~FDIC-insured~~establish ~~institutions~~binding ~~are~~limits ~~expected~~on CRE lending activities, but instead is intended to ~~operate~~inform insupervisory aassessments ~~safe~~of whether an institution’s risk profile, earnings capacity and ~~sound~~capital ~~manner~~levels are commensurate with its CRE exposure. ~~The~~In ~~federal~~recent years, the federal banking agencies have ~~adopted~~issued ~~operational~~statements ~~and~~to ~~managerial~~reinforce ~~standards~~prudent torisk-management ~~promote~~practices ~~the~~related ~~safety~~to ~~and~~CRE ~~soundness~~lending, ofin ~~such~~response to ~~institutions~~observed ~~that~~growth ~~address internal~~in ~~controls,~~many ~~information~~CRE ~~systems~~markets, ~~internal~~increased ~~audit~~competitive ~~systems~~pressures, ~~loan~~rising ~~documentation,~~CRE ~~credit~~concentrations and an easing of CRE underwriting, standards. ~~interest~~In ~~rate~~other ~~exposure~~statements, ~~asset~~the federal banking agencies reminded FDIC-insured institutions to maintain underwriting discipline and ~~growth~~to identify, ~~compensation~~measure, ~~fees~~monitor and ~~benefits~~manage the risks arising from CRE lending, ~~asset~~including ~~quality~~by ~~and~~holding ~~earnings~~capital commensurate with those risks.

InBased ~~general,~~on the safety and soundness standards prescribe the goals to be achieved in each area, and each institution is responsible for establishing its own procedures to achieve those goals. If an institution fails to operate in a safe and sound manner, the FDIC-insured institutionBank’s ~~primary~~loan ~~federal~~portfolio ~~regulator~~as ~~may~~of ~~require~~December ~~the institution to submit a plan for achieving and maintaining compliance. If an FDIC-insured institution fails to submit an acceptable compliance plan~~31, ~~or fails in any material respect to implement a compliance plan that has been accepted by its primary federal regulator~~2025, ~~the~~we ~~banking~~do ~~agency~~not isexceed ~~required to issue an order directing~~ the ~~institution to~~300% ~~cure~~guideline ~~the~~for ~~deficiency.~~CRE ~~Until~~loans the deficiency cited in the agency’s order is cured, the banking agency may restrict the FDIC-insured institution’s rate of growth, require the FDIC-insured institution to increase its capital, restrict the rates that the institution pays on deposits or ~~require~~ the ~~institution~~100% toguideline ~~take any action that the agency deems appropriate under the circumstances. Operating in an unsafe or unsound manner will also constitute grounds~~ for ~~other enforcement action by the federal banking agencies, including cease~~ ~~and~~construction ~~desist orders~~ and ~~civil~~land ~~money~~development ~~penalty assessments~~loans.

~~During~~Consumer ~~the~~Financial ~~past~~Services. ~~decade,~~The ~~the~~historical ~~banking~~structure ~~agencies~~of ~~have~~federal ~~increasingly~~consumer ~~emphasized~~protection ~~the~~regulation ~~importance~~applicable ofto ~~sound~~all ~~risk~~providers ~~management~~of ~~processes and strong internal~~consumer ~~controls~~financial ~~when~~products ~~evaluating~~and ~~the~~services ~~activities~~changed ofsignificantly ~~the~~on ~~FDIC-insured~~July ~~institutions~~21, ~~that~~2011, ~~they~~when ~~supervise.~~the ~~Properly~~Consumer ~~managing~~Financial ~~risk~~Protection ~~has~~Bureau ~~been identified~~(“CFPB”) ascommenced ~~critical~~operations to ~~the~~supervise ~~conduct~~and ofenforce ~~safe~~consumer ~~and~~protection ~~sound~~laws. ~~banking~~The ~~activities~~CFPB ~~and~~ has ~~become~~broad ~~even~~rulemaking ~~more~~authority ~~important~~for asa ~~new~~wide ~~technologies,~~range ~~third-party~~of ~~relationships,~~consumer ~~product~~protection ~~innovation,~~laws ~~and~~that ~~the~~apply ~~size~~to ~~and~~all ~~speed~~providers of ~~financial~~consumer ~~transactions~~products ~~have~~and ~~changed~~services, including the ~~nature~~Bank, ofas ~~banking~~well ~~markets.~~as ~~The~~the ~~agencies~~authority ~~have~~to ~~identified~~prohibit a“unfair, ~~spectrum~~deceptive ofor ~~risks~~abusive” ~~facing~~acts aand ~~banking~~practices. ~~organization,~~The ~~including,~~CFPB ~~but~~has ~~not~~examination ~~limited~~and ~~to,~~enforcement ~~credit,~~authority ~~market,~~over ~~liquidity,~~providers ~~operational,~~with more ~~legal~~than ~~and~~$10 ~~reputational risk~~billion in assets. ~~Key~~FDIC-insured ~~risk~~institutions ~~themes~~with ~~identified~~$10 ~~are~~billion ~~discussed~~or less in ~~more~~assets, ~~detail~~like ~~under~~the ~~“Item~~Bank, ~~1A.~~continue ~~Risk~~to ~~Factors”~~be ofexamined by ~~this~~their ~~Annual~~applicable ~~Report~~federal onbanking ~~Form 10-K~~agencies.

~~The~~In ~~Bank~~response ~~is expected~~ to ~~have~~mortgage-related ~~active~~abuses ~~board~~that ~~and~~contributed ~~senior~~to ~~management~~the ~~oversight;~~global ~~adequate~~financial ~~policies~~crisis, ~~procedures~~the Dodd-Frank Act and ~~limits;~~CFPB ~~adequate~~rulemaking ~~risk~~significantly expanded ~~measurement~~underwriting, ~~monitoring~~ disclosure and ~~management~~anti-predatory ~~information~~lending ~~systems;~~requirements ~~and~~for ~~comprehensive~~residential ~~internal~~mortgage ~~controls.~~loans, ~~The~~including ~~federal~~by ~~banking~~imposing ~~agencies~~ability-to-repay standards ~~also~~and ~~have~~establishing ~~released~~a ~~specific risk~~presumption ~~management~~of ~~guidance~~compliance onfor certain ~~topics,~~“qualified ~~including~~mortgages.” ~~third-party~~The ~~relationships,~~CFPB inhas ~~response~~continued to ~~the proliferation of relationships between~~refine ~~banking~~these ~~organizations~~requirements ~~and~~through ~~fintech~~additional ~~companies~~rulemaking ~~(although~~addressing ~~the~~qualified ~~guidance~~mortgages ~~applies~~ability-to-repay ~~more broadly)~~standards.

Over the last several years, the CFPB has taken an aggressive approach to the regulation (and supervision, where applicable) of providers of consumer financial products and services. However, more recently, changes in leadership and policy direction have led to: (i) shifts in regulatory priorities, including the rescission or reconsideration of certain CFPB guidance and rules; (ii) a reduction in CFPB enforcement activity; and (iii) constraints on the CFPB’s budget and resources, although the CFPB continues to retain statutory authority to administer, supervise and enforce federal consumer financial protection laws. The CFPB’s rules have not had a significant impact on the Bank’s operations, except for higher compliance costs.

~~Privacy~~Although ~~and~~national ~~Cybersecurity.~~banks, ~~The~~including the Bank, ishistorically ~~subject~~have tobenefited ~~many~~from ~~U.S.~~ federal ~~and~~preemption ~~state~~of ~~laws~~certain ~~and~~state ~~regulations~~consumer ~~governing~~protection ~~requirements~~laws, ~~for maintaining~~recent ~~policies~~court ~~and~~decisions ~~procedures~~have tocalled ~~protect~~into ~~non-public~~question ~~personal~~the ~~and~~scope ~~confidential information~~ of ~~their~~preemption ~~customers.~~under ~~These laws require~~ the National Bank ~~to periodically~~Act, ~~disclose~~potentially ~~its~~narrowing ~~privacy~~the ~~policies~~circumstances in ~~and~~which ~~practices relating to sharing~~ such ~~information~~laws ~~and~~are ~~permit~~preempted, ~~consumers~~as toapplied ~~opt out of their ability~~ to ~~share~~national ~~information~~banks ~~with~~operating ~~unaffiliated~~in ~~third~~particular ~~parties under certain circumstances~~states. ~~They~~As ~~also~~a ~~impact the Bank’s ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes~~result, ornational ~~to contact customers with marketing offers. In addition~~banks, ~~as a part of its operational risk mitigation,~~ including the Bank, ismay be required to ~~implement a comprehensive information security program that includes administrative~~monitor, ~~technical,~~ and ~~physical~~potentially ~~safeguards~~comply towith, ~~ensure~~a ~~the~~broader ~~security~~range ~~and confidentiality~~ of ~~customer records~~state ~~and~~consumer ~~information~~protection ~~and~~requirements tothat ~~require~~could increase the ~~same~~Bank’s ofcompliance ~~its~~costs ~~service~~and ~~providers.~~regulatory ~~These~~complexity, ~~security~~notwithstanding ~~and~~continued ~~privacy~~OCC ~~policies~~support ~~and~~for ~~procedures~~a ~~are~~robust ~~in effect~~interpretation ~~across~~of ~~all~~preemption ~~business~~under ~~lines~~the ~~and~~National ~~geographic~~Bank ~~locations~~Act.

~~Risks and~~Corporate exposures related to cybersecurity require financial institutions to design multiple layers of security controls to establish lines of defense and to ensure that their risk management processes also address the risk posed by compromised customer credentials, including security measures to reliably authenticate customers accessing internet-based services of the financial institution. Bank management is expected to maintain sufficient business continuity planning processes to ensure the rapid recovery, resumption and maintenance of the institution’s operations after a cyber-attack involving destructive malware. The Bank and the Company also are subject to a number of federal and state laws and regulations requiring notifications and disclosures regarding certain cybersecurity incidents.Information

Branching Authority. National banks headquartered in Kansas, such as the Bank, have the same branching rights in Kansas as banks chartered under Kansas law, subject to OCC approval. Kansas law grants Kansas-chartered banks the authority to establish branches anywhere in the State of Kansas, subject to receipt of all required regulatory approvals. The Dodd-Frank Act permits well-capitalized and well-managed banks to establish new branches across state lines without legal impediments. However, while Federal law permits state and national banks to merge with banks in other states, such mergers are subject to: (i) regulatory approval; (ii) federal and state deposit concentration limits; and (iii) state law limitations requiring the merging bank to have been in existence for a minimum period of time (not to exceed five years) prior to the merger.

Financial Subsidiaries. Under federal law and OCC regulations, national banks are authorized to engage, through “financial subsidiaries,” in any activity that is permissible for a financial holding company and any activity that the Secretary of the Treasury, in consultation with the Federal Reserve, determines is financial in nature or incidental to any such financial activity, except (i) insurance underwriting, (ii) real estate development or real estate investment activities (unless otherwise permitted by law), (iii) insurance company portfolio investments and (iv) merchant banking. The authority of a national bank to invest in a financial subsidiary is subject to a number of conditions, including, among other things, requirements that the bank must be well-managed and well-capitalized (after deducting from capital the bank’s outstanding investments in financial subsidiaries).

Federal Home Loan Bank System. The Bank is a member of the FHLB of Topeka, which serves as a central credit facility for its members. The FHLB is funded primarily from proceeds from the sale of obligations of the FHLB system, and makes loans to member banks in the form of FHLB advances. All advances from the FHLB are required to be fully collateralized as determined by the FHLB.

Community Reinvestment Act Requirements. The CRA requires the Bank to have a continuing and affirmative obligation in a safe and sound manner to help meet the credit needs of its entire community, including low- and moderate-income neighborhoods. The OCC regularly assesses the Bank’s record of meeting the credit needs of its communities in dedicated examinations. The Bank’s CRA ratings derived from these examinations can have significant impacts on the activities in which the Bank and the Company may engage. For example, a low CRA rating may impact the review of applications for acquisitions by the Bank or the Company’s financial holding company status.

On October 24, 2023, the federal banking agencies issued a final rule to strengthen and modernize the CRA regulations (the CRA Rule). Elements of this rule were supposed to become effective on April 1, 2024 (while other elements had much later effective dates). However, the effective date of the CRA Rule was paused because of an order issued as part of ongoing litigation claiming that the federal banking agencies exceeded their statutory authority in promulgating the CRA Rule. Despite the lawsuit, management of the Bank is continuing to assess the impact of the CRA Rule on its CRA lending and investment activities in its respective markets.

The CRA Rule is designed to update how CRA activities qualify for consideration, where CRA activities are considered, and how CRA activities are evaluated. More specifically, the federal banking agencies described the goals of the CRA Rule as follows: (i) to expand access to credit, investment, and basic banking services in low- and moderate-income communities; (ii) to adapt to changes in the banking industry, including mobile and internet banking by modernizing assessment areas while maintaining a focus on branch-based areas; (iii) to provide greater clarity, consistency, and transparency in the application of the regulations through the use of standardized metrics as part of CRA evaluation and clarifying eligible CRA activities focused on low- and moderate-income communities and underserved rural communities; (iv) to tailor CRA rules and data collection to bank size and business model; and (v) to maintain a unified approach among the banking agencies.

Anti-Money Laundering/Sanctions. The Bank Secrecy Act (“BSA”) is the common name for a series of laws and regulations enacted in the U.S. to combat money laundering and the financing of terrorism. They are designed to deny terrorists and criminals the ability to obtain access to the U.S. financial system and have significant implications for FDIC-insured institutions and other businesses involved in the transfer of money. The so-called Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) regime under the BSA provides a foundation to promote financial transparency and deter and detect those who seek to misuse the U.S. financial system to launder criminal proceeds, finance terrorist acts, or move funds for other illicit purposes.

The laws mandate financial services companies to have policies and procedures with respect to measures designed to address: (i) customer identification programs; (ii) money laundering; (iii) terrorist financing; (iv) identifying and reporting suspicious activities and currency transactions; (v) currency crimes; and (vi) cooperation between FDIC-insured institutions and law enforcement authorities. The Bank must also comply with stringent economic and trade sanctions regimes administered and enforced by the Office of Foreign Assets Control.

Concentrations in CRE. Concentration risk exists when FDIC-insured institutions deploy too many assets to any one industry or segment. A concentration in CRE is one example of regulatory concern, which has been subject to additional scrutiny by federal banking agencies as well as the SEC (the publicly-traded banking organization) in recent years. The Interagency Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices guidance (“CRE Guidance”) provides supervisory criteria, including the following numerical indicators, to assist bank examiners in identifying banks with potentially significant CRE loan concentrations that may warrant greater supervisory scrutiny: (i) CRE loans exceeding 300% of capital and increasing 50% or more in the preceding three years; or (ii) construction and land development loans exceeding 100% of capital. The CRE Guidance does not limit banks’ levels of CRE lending activities, but rather guides institutions in developing risk management practices and levels of capital that are commensurate with the level and nature of their CRE concentrations. On December 18, 2015, and again in recent years, the federal banking agencies have issued statements to reinforce prudent risk-management practices related to CRE lending, having observed substantial growth in many CRE asset and lending markets, increased competitive pressures, rising CRE concentrations in banks, and an easing of CRE underwriting standards. The federal banking agencies have reminded FDIC-insured institutions to maintain underwriting discipline and exercise prudent risk-management practices to identify, measure, monitor, and manage the risks arising from CRE lending. In addition, FDIC-insured institutions must maintain capital commensurate with the level and nature of their CRE concentration risk.

Based on the Bank’s loan portfolio as of December 31, 2024, we do not exceed the 300% guideline for CRE loans.

Consumer Financial Services. The historical structure of federal consumer protection regulation applicable to all providers of consumer financial products and services changed significantly on July 21, 2011, when the CFPB commenced operations to supervise and enforce consumer protection laws. The CFPB has broad rulemaking authority for a wide range of consumer protection laws that apply to all providers of consumer products and services, including the Bank, as well as the authority to prohibit “unfair, deceptive or abusive” acts and practices. The CFPB has examination and enforcement authority over providers with more than $10 billion in assets. FDIC-insured institutions with $10 billion or less in assets, like the Bank, continue to be examined by their applicable federal banking agencies.

Because abuses in connection with residential mortgages were a significant factor contributing to the financial crisis, many rules issued by the CFPB, as required by the Dodd-Frank Act, addressed mortgage and mortgage-related products, their underwriting, origination, servicing and sales. The Dodd-Frank Act significantly expanded underwriting requirements applicable to loans secured by 1-4 family residential real property and augmented federal law combating predatory lending practices. In addition to numerous disclosure requirements, the Dodd-Frank Act and CFPB rules imposed new standards for mortgage loan originations on all lenders, including banks and savings associations, in an effort to strongly encourage lenders to verify a borrower’s ability to repay, while also establishing a presumption of compliance for certain “qualified mortgages.” The Regulatory Relief Act provided relief in connection with mortgages for banks with assets of less than $10 billion, and, as a result, mortgages the Bank makes are now considered to be qualified mortgages if they are held in portfolio for the life of the loan.

Over the last several years, the CFPB has taken an aggressive approach to the regulation (and supervision, where applicable) of providers of consumer financial products and services. Given the increased number and expansive nature of its regulatory initiatives, the CFPB has been subject to lawsuits brought by the banking industry and other providers of consumer financial products and services. The CFPB’s approach will likely change under the Trump Administration, but it remains unclear exactly what changes will occur or how quickly. In addition, certain rules that the Biden Administration CFPB finalized, such as rules relating to overdraft fees and reporting requirements for small business lending, may be subject to reversal by either the U.S. Congress or the new CFPB administration. The CFPB’s rules have not had a significant impact on the Bank’s operations, except for higher compliance costs.

Company Web Site

The Company maintains a corporate website at www.landmarkbancorpinc.com. In addition, the Company has an investor relations link at the Bank’s corporate website at www.banklandmark.com. Many of the Company’s policies, including its code of business conduct and ethics, committee charters and other investor information, are available on its website. The Company makes available free of charge on or through its website its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, proxy statements, and annual reports as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC. Copies of the Company’s filings with the SEC are also available from the SEC’s website (http://www.sec.gov) free of charge. The Company will also provide copies of its filings free of charge upon written request to our Corporate Secretary at Landmark Bancorp, Inc., 701 Poyntz Avenue, Manhattan, Kansas 66502.

Statistical Data

The Company has a fiscal year ending on December 31. Unless otherwise noted, the information presented in this Annual Report on Form 10-K presents information on behalf of the Company as of and for the year ended December 31, ~~2024~~2025.

Certain of the statistical data required to be disclosed by banks pursuant to the Securities Act ~~of 1933~~ is set forth in the following pages. This data should be read in conjunction with the consolidated financial statements, related notes and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K.

I. Distribution of Assets, Liabilities, and Stockholders’ Equity; Interest Rates and Interest Differential

The following table describes the extent to which changes in tax equivalent interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities affected the Company’s interest income and expense during the periods indicated. The table distinguishes between (i) changes attributable to rate (changes in rate multiplied by prior volume), (ii) changes attributable to volume (changes in volume multiplied by prior rate), and (iii) net change (the sum of the previous columns). The net changes attributable to the combined effect of volume and rate which cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate.

Years ended December 31,

2024 vs 2023

2023 vs 2022

2025 vs 2024

2024 vs 2023

Increase/(decrease) attributable to

Volume

Rate

Net

Volume

Rate

Net

(Dollars in thousands)

Interest income:

Interest-bearing deposits at banks

~~(183~~8

)

~~134~~24

~~(49~~32

)

(66183

)

~~(13~~134

)

(7949

)

Investment securities

Taxable

(2,~~007~~489

)

1,~~710~~959

(~~297~~530

)

~~423~~(2,007

)

21,~~757~~710

~~3,180~~(297

)

Tax-exempt (1)

(~~271~~546

)

~~143~~310

(~~128~~236

)

(~~148~~271

)

~~176~~143

28(128

)

Loans (2)

57,~~055~~132

~~4,590~~688

97,~~645~~820

105,~~103~~055

84,~~174~~590

189,~~277~~645

Total

24,~~594~~105

62,~~577~~981

97,~~171~~086

102,~~312~~594

116,~~094~~577

219,~~406~~171

Interest expense:

Deposits

~~818~~1,063

6(2,~~238~~445

)

7(1,~~056~~382

)

~~343~~818

126,~~135~~238

127,~~478~~056

FHLB advances and other borrowings

(~~223~~460

)

61(593

)

(~~162~~1,053

)

~~3,140~~(223

)

~~324~~61

~~3,464~~(162

)

Subordinated debentures

45(215

)

45(215

)

~~750~~45

Repurchase agreements

(~~174~~243

)

1949

(~~155~~194

)

73(174

)

~~280~~19

~~353~~(155

)

Total

~~421~~360

6(3,~~363~~204

)

6(2,~~784~~844

)

~~3,556~~421

136,~~489~~363

176,~~045~~784

Net interest income

23,~~173~~745

~~214~~6,185

29,~~387~~930

62,~~756~~173

~~(2,395~~214

)

42,~~361~~387

(1)	The change in tax-exempt income on investment securities is presented on a fully taxable equivalent basis, using a 21% federal tax rate.

(2)	The change in tax-exempt loan income is presented on a fully taxable equivalent basis, using a 21% federal tax rate.

1916

The following table sets forth information relating to average balances of interest-earning assets and interest-bearing liabilities for the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023. Average balances are derived from daily average balances. Non-accrual loans were included in the computation of average balances but have been reflected in the table as loans carrying a zero yield. The yields set forth in the table below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or interest expense. This table reflects the average yields on assets and average costs of liabilities for the periods indicated (derived by dividing income or expense by the monthly average balance of assets or liabilities, respectively) as well as the “net interest margin” (which reflects the effect of the net earnings balance) for the periods shown.

	Year ended December 31, 2024								Year ended December 31, 2023								Year ended December 31, 2022
		Year ended December 31, 2025								Year ended December 31, 2024								Year ended December 31, 2023
	~~Average balance~~	Average balance	~~Income/ expense~~	Income/ expense		~~Yield/ cost~~	Yield/ cost		~~Average balance~~	Average balance	~~Income/ expense~~	Income/ expense		~~Yield/ cost~~	Yield/ cost		~~Average balance~~	Average balance	~~Income/ expense~~	Income/ expense		~~Yield/ cost~~	Yield/ cost
(Dollars in thousands)
Assets
Interest-earning assets:
Interest bearing deposits at banks	$	6,~~303~~546	$	~~193~~225			3.0644	%	$	106,~~095~~303	$	~~242~~193			23.4006	%	$	6010,~~014~~095	$	~~321~~242			02.5340	%
Investment securities
Taxable		~~318~~265,~~483~~821		98,~~297~~768			23.9230	%		~~363~~318,~~735~~483		9,~~594~~297			2.6492	%		~~342~~363,~~131~~735		69,~~414~~594			12.8764	%
Tax-exempt (1)		~~114~~100,~~445~~016		3,~~698~~461			3.2346	%		~~122~~114,~~533~~445		3,~~826~~698			3.1223	%		~~132~~122,~~601~~533		3,~~798~~826			23.8612	%
Loans receivable, net (2)		~~974~~1,~~294~~086,576		6169,~~415~~235			6.3037	%		~~891~~974,~~487~~294		5161,~~770~~415			56.8130	%		~~702~~891,~~247~~487		3351,~~493~~770			45.7781	%
Total interest-earning assets		1,~~413~~458,~~525~~959		7481,~~603~~689			5.2860	%		1,~~387~~413,~~850~~525		6574,~~432~~603			45.7128	%		1,~~236~~387,~~993~~850		4465,~~026~~432			34.5671	%
Non-interest-earning assets		~~144~~140,~~710~~456								~~147~~144,~~844~~710								~~120~~147,~~486~~844
Total	$	1,~~558~~599,~~235~~415							$	1,~~535~~558,~~694~~235							$	1,~~357~~535,~~479~~694
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Money market and checking	$	~~589~~614,~~360~~270	$	1312,~~629~~586			2.3105	%	$	~~591~~589,~~000~~360	$	1013,~~818~~629			12.8331	%	$	~~535~~591,~~693~~000	$	210,~~318~~818			01.4383	%
Savings accounts		~~149~~147,~~475~~197		~~188~~173			0.1312	%		~~161~~149,~~417~~475		~~126~~188			0.0813	%		~~169~~161,~~478~~417		46126			0.0308	%
Certificates of deposit		~~199~~217,~~388~~894		8,~~493~~169			43.2675	%		~~139~~199,~~956~~388		48,~~310~~493			34.0826	%		98139,~~975~~956		~~412~~4,310			03.4208	%
Total deposits		~~938~~979,~~223~~361		2220,~~310~~928			2.3814	%		~~892~~938,~~373~~223		1522,~~254~~310			12.7138	%		~~804~~892,~~146~~373		215,~~776~~254			01.3571	%
FHLB advances and other borrowings		7061,~~226~~273		32,~~886~~833			54.5362	%		7470,~~210~~226		43,~~048~~886			5.4553	%		1574,~~061~~210		~~584~~4,048			35.8845	%
Subordinated debentures		21,651		1,~~635~~420			76.5556	%		21,651		1,~~590~~635			7.3455	%		21,651		~~840~~1,590			37.8834	%
Repurchase agreements		124,~~216~~730		~~344~~150			23.8217	%		1812,~~361~~216		~~499~~344			2.7282	%		1318,~~239~~361		~~146~~499			12.1072	%
Total Borrowings		~~104~~87,~~093~~654		54,~~865~~403			5.6302	%		~~114~~104,~~222~~093		65,~~137~~865			5.3763	%		49114,~~951~~222		16,~~570~~137			35.1437	%
Total interest-bearing liabilities		1,~~042~~067,~~316~~015		2825,~~175~~331			2.7037	%		1,~~006~~042,~~595~~316		2128,~~391~~175			02.5170	%		~~854~~1,~~097~~006,595		421,~~346~~391			02.5113	%
Non-interest-bearing liabilities		~~385~~384,~~976~~368								~~414~~385,~~760~~976								~~383~~414,~~590~~760
Stockholders’ equity		~~129~~148,~~943~~032								~~114~~129,~~339~~943								~~119~~114,~~792~~339
Total	$	1,~~558~~599,~~235~~415							$	1,~~535~~558,~~694~~235							$	1,~~357~~535,~~479~~694
Interest rate spread (3)							23.5823	%							2.58	%							32.0558	%
Net interest margin (4)			$	4656,~~428~~358			3.2886	%			$	4446,~~041~~428			3.1728	%			$	3944,~~680~~041			3.2117	%
Tax equivalent interest - imputed (1) (2)				~~704~~673								~~749~~704								~~800~~749
Net interest income			$	4555,~~724~~685							$	4345,~~292~~724							$	3843,~~880~~292
Ratio of average interest-earning assets to average interest-bearing liabilities				135.6	%							137.9	%							144.8	%
Ratio of average interest-earning assets				136.7	%							135.6	%							137.9	%

	(1)	Income on tax-exempt investment securities is presented on a fully taxable equivalent basis, using a 21% federal tax rate.
	(2)	Income on tax-exempt loans is presented on a fully taxable equivalent basis, using a 21% federal tax rate.
	(3)	Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
	(4)	Net interest margin represents net interest income divided by average interest-earning assets.

2017

II. Investment Portfolio

Available-for-sale Investment Securities. The following table sets forth the carrying value of the Company’s available-for-sale investment securities at the dates indicated. The Company’s federal agency obligations consist of obligations of U.S. government-sponsored enterprises, primarily the FHLB. The Company’s agency mortgage-backed securities portfolio consists of securities predominantly underwritten to the standards of and guaranteed by the government-sponsored agencies of Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Government National Mortgage Association (“GNMA”).

	As of December 31,
	2024		2023
	2025		2024
	(Dollars in thousands)
Available-for-sale investment securities:
U.S. treasury securities	$	6453,~~458~~183	$	9564,~~667~~458
Municipal obligations, tax-exempt		~~107~~87,~~128~~809		~~120~~107,~~623~~128
Municipal obligations, taxable		7190,~~715~~603		7971,~~083~~715
Agency mortgage-backed securities		~~129~~116,~~211~~562		~~157~~129,~~396~~211
Total available-for-sale investment securities, at fair value	$	~~372~~348,~~512~~157	$	~~452~~372,~~769~~512

The following table sets forth certain information regarding the carrying values, weighted average yields, and maturities of the Company’s available-for-sale investment securities portfolio, as of December 31, ~~2024~~2025. Yields on tax-exempt obligations have been computed on a tax equivalent basis, using a 21% federal tax rate for ~~2024~~2025. Mortgage-backed investment securities include scheduled principal payments and estimated prepayments based on observable market inputs. Actual prepayments will differ from contractual maturities because borrowers have the right to prepay obligations with or without prepayment penalties.

	As of December 31, 2024
	As of December 31, 2025
	One year or less					One to five years					Five to ten years					More than ten years					Total
	Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Average
	Carrying value		Average yield			Carrying value		Average yield			Carrying value		Average yield			Carrying value		Average yield			Carrying value		Average yield
	value		yield			value		yield			value		yield			value		yield			value		yield
	(Dollars in thousands)
Available-for-sale investment securities:
U.S. treasury securities	$	1518,~~618~~705		21.2655	%	$	3928,~~047~~412		3.0950	%	$	96,~~793~~066		4.5152	%	$	-		0.00	%	$	6453,~~458~~183		32.1193	%
Municipal obligations, tax-exempt		1415,~~698~~571		23.8101	%		3524,~~242~~018		23.8012	%		4135,~~998~~296		3.5982	%		1512,~~190~~924		4.2464	%	$	~~107~~87,~~128~~809		3.3261	%
Municipal obligations, taxable		34,~~493~~683		21.4974	%		2324,~~561~~053		23.7209	%		2630,~~408~~391		34.7000	%		1831,~~253~~476		4.5176	%	$	7190,~~715~~603		3.5391	%
Agency mortgage-backed securities		~~1,460~~187		2.2317	%		~~112~~96,~~185~~418		2.5636	%		1517,~~566~~496		24.0851	%		-2,461		04.0027	%	$	~~129~~116,~~211~~562		2.5072	%
Total available-for-sale investment securities	$	3539,~~269~~146		2.5116	%	$	~~210~~172,~~035~~901		2.7275	%	$	9389,~~765~~249		34.4706	%	$	3346,~~443~~861		4.3970	%	$	~~372~~348,~~512~~157		3.0428	%

2118

III. Loan Portfolio

Loan Portfolio Composition. The following table sets forth the composition of the loan portfolio balances by type of loan as of the dates indicated.

	As of December 31,
	2024			2023
	2025			2024
	(Dollars in thousands)
One-to-four family residential real estate loans	$	~~352~~375,~~209~~299		$	~~302~~352,~~544~~209
Construction and land loans		2520,~~328~~531			2125,~~090~~328
Commercial real estate loans		~~345~~394,~~159~~323			~~320~~345,~~962~~159
Commercial loans		~~192~~178,~~325~~201			~~180~~192,~~942~~325
Agriculture loans		~~100~~102,~~562~~829			89100,~~680~~562
Municipal loans		76,~~091~~874			47,~~507~~091
Consumer loans		2933,~~679~~666			2829,~~931~~679
Total gross loans		1,~~052~~111,~~353~~723			~~948~~1,~~656~~052,353
Net deferred loan costs and loans in process		(~~307~~872	)		(~~429~~307	)
Allowance for credit losses		(12,~~825~~458	)		(1012,~~608~~825	)
Loans, net	$	1,~~039~~098,~~221~~393		$	~~937~~1,~~619~~039,221

The following table sets forth the contractual maturities of loans as of December 31, ~~2024~~2025. The table does not include unscheduled prepayments.

As of December 31, 2024

As of December 31, 2025

1 year or less

1-5 years

6-15 years

After 15 years

Total

(Dollars in thousands)

One-to-four family residential real estate loans

5168,~~008~~689

~~145~~164,~~832~~902

~~140~~131,~~754~~989

149,~~615~~719

~~352~~375,~~209~~299

Construction and land loans

139,~~373~~208

104,~~764~~407

14,~~137~~546

542,370

2520,~~328~~531

Commercial real estate loans

5874,~~699~~846

~~174~~184,~~454~~949

~~103~~117,~~555~~218

817,~~451~~310

~~345~~394,~~159~~323

Commercial loans

~~158~~147,~~942~~189

3330,~~125~~847

~~258~~165

~~192~~178,~~325~~201

Agriculture loans

6977,~~733~~315

2319,~~970~~617

65,~~748~~758

~~111~~139

~~100~~102,~~562~~829

Municipal loans

~~233~~228

~~785~~727

~~624~~354

5,~~449~~565

76,~~091~~874

Consumer loans

1314,~~630~~191

1416,~~408~~711

12,~~580~~764

61-

2933,~~679~~666

Total gross loans

~~365~~391,~~618~~666

~~403~~422,~~338~~160

~~254~~262,~~656~~794

2835,~~741~~103

1,~~052~~111,~~353~~723

The following table sets forth, as of December 31, ~~2024~~2025, the dollar amount of all loans that mature after one year and whether such loans had fixed interest rates or adjustable interest rates:

As of December 31, 2024

As of December 31, 2025

Fixed

Adjustable

Total

(Dollars in thousands)

One-to-four family residential real estate loans

4937,~~479~~460

~~251~~269,~~722~~150

~~301~~306,~~201~~610

Construction and land loans

71,~~728~~478

49,~~227~~845

11,~~955~~323

Commercial real estate loans

6159,~~672~~264

~~224~~260,~~788~~213

~~286~~319,~~460~~477

Commercial loans

2726,~~591~~170

54,~~792~~842

3331,~~383~~012

Agriculture loans

72,~~180~~780

2322,~~649~~734

3025,~~829~~514

Municipal loans

1,~~301~~081

5,~~557~~565

6,~~858~~646

Consumer loans

~~871~~1,405

1518,~~178~~070

1619,~~049~~475

Total gross loans

~~155~~129,~~822~~638

~~530~~590,~~913~~419

~~686~~720,~~735~~057

2219

Non-performing Assets. The following table sets forth information with respect to non-performing assets, including non-accrual loans and real estate acquired through foreclosure or by deed in lieu of foreclosure (“real estate owned”) as of the dates indicated. The accrual of interest on non-performing loans is discontinued at the time the loan is ninety days delinquent, unless the credit is well secured and in process of collection. Loans are placed on non-accrual or are charged off at an earlier date if collection of principal or interest is considered doubtful. Under the original terms of the Company’s non-accrual loans as of December 31, ~~2024~~2025, interest earned on such loans for the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023 would have increased interest income by $~~423~~450,000, $96423,000 ~~and~~ and $~~137~~96,000, respectively, if included in the Company’s interest income for those years. No interest income related to non-accrual loans was included in interest income for the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023.

	As of December 31,
	2024			2023			2022
	2025			2024			2023
	(Dollars in thousands)
Non-accrual loans	$	139,~~115~~994		$	213,~~391~~115		$	32,~~326~~391
Accruing loans over 90 days past due		-			-			-
Non-performing investments		-			-			-
Real estate owned, net		~~167~~-			~~928~~167			~~934~~928
Non-performing assets	$	139,~~282~~994		$	313,~~319~~282		$	43,~~260~~319
Allowance for credit losses to total gross loans		1.2212	%		1.1222	%		1.0312	%
Non-performing loans to total gross loans		10.2590	%		01.25	%		0.3925	%
Non-performing assets to total assets		0.8462	%		0.2184	%		0.2821	%
Allowance for credit losses to non-performing loans		97124.7965	%		~~443~~97.6679	%		~~264~~443.3166	%

The ~~increase~~decrease in non-accrual loans as of December 31, ~~2024~~2025, ~~was~~compared ~~primarily related~~ to ~~one~~December ~~commercial~~31, ~~loan relationship totaling $8.3 million that transferred to non-accrual status during~~ 2024., ~~The commercial loan~~ was ~~modified~~primarily todriven ~~interest~~by ~~only~~the ~~payments~~charge-off ~~for~~of ~~six~~a ~~months in late~~single ~~2024.~~commercial ~~The~~credit ~~loan~~during ~~is current under~~ the ~~terms~~third quarter of ~~the modification agreement but classified as non-accrual~~2025. The ~~decrease~~increase in non-accrual loans as of December 31, 2024, compared to December 31, 2023, was primarily related to ~~one~~the ~~CRE~~same commercial loan relationship ~~totaling~~being ~~$1.2~~transferred ~~million that returned~~ to non-accrual status during ~~2023~~ 2024.

~~At December 31, 2024, the $167,000 of real estate owned consisted of one parcel of agricultural land.~~ The decrease in real estate owned as of December 31, ~~2024~~2025, compared to December 31, ~~2023~~2024, was due to the sale of ~~sale of~~ one ~~commercial~~parcel ~~property~~of ~~and three residential real~~agricultural ~~estate properties during 2024~~land. The decrease in real estate owned as of December 31, ~~2023~~2024, compared to December 31, ~~2022~~2023, was due to athe ~~valuation allowance~~sale ~~recorded~~of ~~against~~one acommercial property and three residential real estate ~~property~~properties during 2024.

As part of the Company’s credit risk management, the Company continues to aggressively manage the loan portfolio to identify problem loans and has placed additional emphasis on its commercial and CRE relationships. As discussed in more detail in the “Asset Quality and Distribution” section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K, as of December 31, ~~2024~~2025, the Company concluded its allowance for credit losses (“ACL”) was adequate based on the evaluation of the loan portfolio’s expected credit losses.

IV. Summary of Credit Loss Experience

The following table sets forth information with respect to the Company’s allowance for credit losses as of the dates and for the periods indicated:

	As of and for the years ended December 31,
	2024			2023			2022
	2025			2024			2023
	(Dollars in thousands)
Balances at beginning of year	$	1012,~~608~~825		$	810,~~791~~608		$	8,~~775~~791
Adoption of ASC 326		-			~~1,523~~-			-1,523
Provision for credit losses		2,~~400~~350			~~250~~2,400			-250
Charge-offs:
One-to-four family residential real estate loans		-			-			-
Construction and land loans		-			-			-
Commercial real estate loans		-			-			-
Commercial loans		(~~186~~2,675	)		(~~479~~186	)		-(479	)
Agriculture loans		~~(64~~-	)		-(64	)		-
Municipal loans		-			-			-
Consumer loans		(~~409~~375	)		(~~371~~409	)		(~~336~~371	)
Total charge-offs		(~~659~~3,050	)		(~~850~~659	)		(~~336~~850	)
Recoveries:
One-to-four family residential real estate loans		-			-			-
Construction and land loans		~~245~~5			~~675~~245			~~165~~675
Commercial real estate loans		-4			-			-
Commercial loans		35113			35			3835
Agriculture loans		54-			7454			5974
Municipal loans		126			-12			6-
Consumer loans		~~130~~205			~~110~~130			84110
Total recoveries		~~476~~333			~~894~~476			~~352~~894
Net (charge-offs) recoveries		(~~183~~2,717	)		44(183	)		1644
Balances at end of year	$	12,~~825~~458		$	1012,~~608~~825		$	810,~~791~~608
Allowance for credit losses to total gross loans		1.2212	%		1.1222	%		1.0312	%
Net loans charged-off to average net loans		0.0225	%		0.0002	%		0.00	%

The Company recorded net loan charge-offs of $183,000 during 2024, compared to net loan recoveries of $44,000 during 2023. The net loan charge-offs were associated with various loans during 2024. The Company recorded net loan recoveries of $44,000 during 2023 compared to net loan recoveries of $16,000 during 2022. The net loan recoveries in 2023 were primarily related to a $626,000 recovery related to a construction loan previously charged-off in 2011. In 2022, the Company recorded net loan recoveries of $16,000 primarily related to a $150,000 recovery on a land loan.20

24The Company recorded net loan charge-offs of $2.7 million during 2025, compared to net loan charge-offs of $183,000 during 2024. The increase in net charge-offs was primarily related to the charge-off of a single commercial credit during the third quarter of 2025. The Company recorded net loan charge-offs of $183,000 during 2024, compared to net loan recoveries of $44,000 during 2023. The net loan charge-offs were associated with various loans during 2024.

The distribution of the Company’s allowance for credit losses on loans at the dates indicated and the percent of loans in each category to total loans is summarized in the following table. This allocation reflects management’s judgment as to risks inherent in the types of loans indicated, but in general the Company’s total allowance for credit losses included in the table is not restricted and is available to absorb all loan losses. The amount allocated in the following table to any category should not be interpreted as an indication of expected actual charge-offs in that category.

	As of December 31,
	2024								2023								2022
	2025								2024								2023
	Amount		% Loan type to total loans			Net charge-offs to average loans			Amount		% Loan type to total loans			Net charge-offs to average loans			Amount		% Loan type to total loans			Net charge-offs to average loans
	(Dollars in thousands)
One-to-four family residential real estate loans	$	12,~~765~~001		33.58	%		0.00	%	$	21,~~035~~765		3133.95	%		0.00	%	$	~~655~~2,035		2731.9	%		0.00	%
Construction and land loans		~~143~~111		21.48	%		(0.9702	%)		~~150~~143		2.24	%		3(0.1997	%)		~~117~~150		2.72	%		(03.7219	%)
Commercial real estate loans		45,~~506~~680		3235.85	%		0.00	%		4,~~518~~506		3332.8	%		0.00	%		34,~~158~~518		3533.8	%		0.00	%
Commercial loans		43,~~964~~125		1816.30	%		01.0833	%		24,~~486~~964		1918.13	%		(0.2508	%)		2,~~753~~486		2019.41	%		(0.0325	%)
Agriculture loans		1,~~227~~305		9.53	%		0.0100	%		1,~~190~~227		9.5	%		0.0901	%		1,~~966~~190		9.95	%		(0.0709	%)
Municipal loans		5144		0.76	%		(0.1909	%)		1551		0.57	%		(0.0019	%)		515		0.25	%		(0.2900	%)
Consumer loans		~~169~~192		23.80	%		0.9552	%		~~214~~169		32.08	%		(0.9195	%)		~~137~~214		3.10	%		(0.9891	%)
Total	$	12,~~825~~458		100.0	%		0.0225	%	$	~~$10~~12,~~608~~825		100.0	%		0.0002	%	$	810,~~791~~608		100.0	%		0.00	%

The ~~decrease~~increase in the allowance for credit losses on the one-to-four family residential real estate loans as of December 31, ~~2024~~2025, compared to December 31, ~~2023~~2024, was primarily due to ~~lower~~higher projected losses over the life of the loans in the portfolio. The ~~increase~~decrease in the allowance for credit losses on the one-to-four family residential real estate loans as of December 31, ~~2023~~2024, compared to December 31, ~~2022~~2023, was ~~primarily~~ primarily due to ~~the~~lower ~~adoption~~projected oflosses ~~ASU~~over ~~2016-13,~~the ~~Financial~~life ~~Instruments-Credit Losses (Topic 326), commonly referred to as “CECL” and, to a lesser extent, higher balances~~ of the loans in ~~the~~that portfolio.

The ~~decrease~~decreases in the allowance for credit losses on construction and land loans as of December 31, ~~2024~~2025, compared to December 31, ~~2023~~2024, ~~was primarily related to lower projected losses over the life of the loans in the portfolio. The increase in the allowance for credit losses on construction~~ and ~~land loans~~ as of December 31, ~~2023~~2024, compared to December 31, ~~2022~~2023, was primarily related to lower projected losses over the ~~adoption~~life of ~~CECL~~the loans in the portfolio.

The decrease in the allowance for credit losses on CRE loans as of December 31, 2024 compared to December 31, 2023 was primarily related to lower projected losses over the life of the loans in the portfolio. The increase in the allowance for credit losses on CRE loans as of December 31, 2023 compared to December 31, 2022 was primarily related to the adoption of CECL and higher balances of loans in this portfolio.21

The increase in the allowance for credit losses on ~~commercial~~CRE loans as of December 31, ~~2024~~2025, compared to December 31, ~~2023~~2024, was primarily ~~related~~ related to angrowth ~~increase~~ in the ~~allowance~~CRE ~~for~~portfolio ~~credit~~and onhigher ~~individually~~projected ~~evaluated~~losses over the life of the loans in the portfolio. The decrease in the allowance for credit losses on ~~commercial~~ CRE loans as of December 31, ~~2023~~2024, compared to December 31, ~~2022~~2023, was primarily related to ~~the payoff of a loan that was previously individually~~lower ~~evaluated~~projected ~~for~~losses ~~loss~~over ~~and~~the ~~had~~life anof ~~allowance~~the ~~for~~loans ~~credit~~in ~~losses allocated against~~ the ~~principal balance~~portfolio.

The ~~increase~~decrease in the allowance for credit losses on ~~agriculture~~commercial loans as of December 31, ~~2024~~2025, compared to December 31, ~~2023~~2024, was primarily related to ana ~~increase~~decrease in ~~loan~~the ~~balances~~allowance ~~and~~for ~~higher~~credit ~~forecast~~on ~~losses~~individually evaluated loans. The ~~decrease~~increase in the allowance for credit losses on commercial ~~agriculture~~ loans as of December 31, ~~2023~~2024, compared to December 31, ~~2022~~2023, was primarily related to an increase in the ~~adoption~~allowance offor ~~CECL~~credit on individually evaluated loans.

The increase in the allowance for credit losses on ~~municipal~~agriculture loans as of December 31, ~~2024~~2025, compared to December 31, ~~2023~~2024, ~~was~~and ~~primarily related to an increase in loans. The increase in the allowance for credit losses on municipal loans~~ as of December 31, ~~2023~~2024, as compared to December 31, ~~2022~~2023, was primarily related to ~~the~~an ~~adoption~~increase ofin ~~CECL~~loan balances and higher forecast losses.

The decrease in the allowance for credit losses ison ~~discussed~~municipal inloans ~~more~~as ~~detail~~of inDecember ~~the~~31, ~~“Asset~~2025, ~~Quality~~compared ~~and~~to ~~Distribution”~~December ~~section~~31, of2024, ~~“Item~~was 7.primarily ~~Management’s~~related ~~Discussion~~to ~~and~~a ~~Analysis~~decrease ofin ~~Financial~~municipal ~~Condition~~loans. ~~and~~The ~~Results~~increase ofin ~~Operations”~~the ofallowance ~~this~~for ~~Annual~~credit ~~Report~~losses on ~~Form~~municipal ~~10-K. As~~loans as of December 31, 2024, wecompared ~~believed~~to ~~the~~December ~~Company’s~~31, ~~allowance~~2023, ~~for~~was ~~credit~~primarily ~~losses~~related ~~continued~~ to bean ~~adequate~~increase ~~based~~in onmunicipal ~~the Company’s evaluation of the loan portfolio’s expected incurred losses~~loans.

25The allowance for credit losses is discussed in more detail in the “Asset Quality and Distribution” section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K. As of December 31, 2025, we believed the Company’s allowance for credit losses continued to be adequate based on the Company’s evaluation of the loan portfolio’s expected losses.

V. Deposits

The following table presents the average deposit balances and the average rate paid on those balances for the years indicated.

(Dollars in thousands)	Years ended December 31,
	2024					2023
	2025					2024
	Average Balance		Average Rate			Average Balance		Average Rate
Non-interest bearing demand	$	~~362~~360,~~871~~568		-		$	~~393~~362,~~448~~871		-
Money market and checking		~~589~~614,~~360~~270		2.3105	%		~~591~~589,~~000~~360		12.8331	%
Savings accounts		~~149~~147,~~475~~197		0.1312	%		~~161~~149,~~417~~475		0.0813	%
Certificates of deposit		~~199~~217,~~388~~894		43.2675	%		~~139~~199,~~956~~388		34.0826	%
Total	$	1,~~301~~339,~~094~~929				$	1,~~285~~301,~~821~~094

Total deposits include uninsured deposits, excluding collateralized public fund deposits, of $181.5 million and $197.2 million as of December 31, 2024 and 2023, respectively. This represents 13.7% of our total deposits at December 31, 2024 and compares favorably with other similar community banking organizations. Approximately 93.1% of the Company’s total deposits were considered core deposits at December 31, 2024. These deposit balances are from retail, commercial and public fund customers located in the markets where the Company has bank branch locations.22

Total deposits include uninsured deposits, excluding collateralized public fund deposits, of $246.4 million and $181.5 million as of December 31, 2025 and 2024, respectively. This represents 17.7% of our total deposits at December 31, 2025, and compares favorably with other similar community banking organizations. Approximately 92.2% of the Company’s total deposits were considered core deposits at December 31, 2025. These deposit balances are from retail, commercial and public fund customers located in the markets where the Company has bank branch locations.

The following table presents the maturities of certificates of deposit $250,000 or greater.

(Dollars in thousands)	As of December 31,
	2024		2023
	2025		2024
Three months or less	$	2122,~~441~~492	$	2321,~~919~~441
Over three months through six months		1829,~~989~~676		1118,~~069~~989
Over six months through 12 months		68,~~773~~127		86,~~697~~773
Over 12 months		51,~~023~~503		65,~~545~~023
Total	$	5261,~~226~~798	$	5052,~~230~~226

VI. Return on Equity and Assets

The following table presents information on return on average equity, return on average assets, equity to total assets and our dividend payout ratio.

	As of or for the years ended December 31,
	2024			2023			2022
	2025			2024			2023
Return on average assets		01.8317	%		0.8083	%		0.7380	%
Return on average equity		1012.0168	%		10.7001	%		810.2570	%
Equity to total assets		810.6500	%		8.1365	%		78.4113	%
Dividend payout ratio		3526.4006	%		35.8740	%		4235.5587	%

ITEM 1A. RISK FACTORS

An investment in our securities is subject to certain risks inherent in our business. Before making an investment decision, you should carefully consider the risks and uncertainties described below together with all of the other information included in this report. In addition to the risks and uncertainties described below, other risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and results of operations. The value or market price of our securities could decline due to any of these identified or other risks, and you could lose all or part of your investment.

Credit Risks

We must effectively manage our credit risk.

There are risks inherent in making any loan, including risks inherent in dealing with individual borrowers, risks of nonpayment, risks resulting from uncertainties as to the future value of collateral and risks resulting from changes in economic and industry conditions. In general, these risks have increased as a result of recent changes in prevailing interest rates and uncertainties associated with inflation, which have potentially increased the risk of a near-term decline in growth or an economic downturn. We attempt to minimize our credit risk through prudent loan application approval procedures, careful monitoring of the concentration of our loans within specific industries and periodic independent reviews of outstanding loans by our credit review department. However, we cannot assure you that such approval and monitoring procedures will reduce these credit risks.

Most of our loans are commercial, real estate, or agriculture loans, each of which is subject to distinct types of risk. To reduce the lending risks we face, we generally take a security interest in borrowers’ property for all three types of loans. In addition, we sell certain residential real estate loans to third parties. Nevertheless, the risk of non-payment is inherent in all types of loans, and if we are unable to collect amounts owed, it may materially affect our operations and financial performance. For a more complete discussion of our lending activities see “Item 1. Business” of this Annual Report on Form 10-K.

Our business is subject to domestic and, to a lesser extent, international economic conditions and other factors, many of which are beyond our control and could materially and adversely affect us.

Our financial performance generally, and in particular the ability of customers to pay interest on and repay principal of outstanding loans and the value of collateral securing those loans, as well as demand for loans and other products and services we offer, is highly dependent upon the business environment not only in the markets where we operate, but also in the state of Kansas generally and in the U.S. as a whole. A favorable business environment is generally characterized by, among other factors: economic growth; efficient capital markets; low inflation; low unemployment; high business and investor confidence; and strong business earnings. Unfavorable or uncertain economic and market conditions can be caused by: declines in economic growth, business activity or investor or business confidence; limitations on the availability or increases in the cost of credit and capital; increases in inflation or interest rates; high unemployment; uncertainty in U.S. trade policies, legislation, treaties and tariffs; natural disasters; acts of war or terrorism, including ~~the~~ongoing ~~current~~conflicts ~~conflict~~ in the Middle East, the Russian invasion of Ukraine and recent military actions in Venezuela, or threats thereof, and the response of the United States to any such threats and attacks; widespread disease or pandemics; or a combination of these or other factors.

Economic conditions in the state of Kansas are generally impacted by commodity prices, which may adversely impact the Kansas economy, specifically the agriculture sector. Declines in commodity prices could materially and adversely affect our results of operations. During 2024, commodity prices declined from near record highs experienced in 2023. The outlook is for commodity prices to continue to decline modestly over the next few years before stabilizing, but are subject to global economic and market conditions.

The agricultural economy in the Midwest, including Kansas, has been stable over the previous several years. A prolonged period of weakness in the agricultural economy could result in a decrease in demand for loans or other products and services offered by us, an increase in agricultural loan delinquencies and defaults, an increase in impaired assets and foreclosures, a decline in the value of our loans secured by real estate, and an inability to sell foreclosed assets. The effects of a prolonged period of a weakened agricultural economy could have a material adverse effect on our business, financial condition and results of operations.

27Elevated levels of inflation could adversely impact our business and results of operations.

~~Continued~~The United States has experienced elevated levels of inflation in recent years, with the consumer price index climbing approximately 2.7% in 2025 before seasonal adjustment. Continued elevated levels of inflation could ~~adversely~~have ~~impact~~complex ~~our~~effects on the Company’s business, results of operations and financial condition, some of which could be materially adverse. For example, While the Company generally expects any inflation-related increases in the Company’s interest expense to be offset by increases in interest income, inflation-driven increases in the Company’s levels of noninterest expense could negatively impact results of operations. Continued elevated levels of inflation could also cause increased volatility and uncertainty in the business environment, which could adversely affect loan demand and the Company’s clients’ ability to repay indebtedness. It is possible that governmental responses to the current inflation environment such as changes to monetary and fiscal policy that are too strict, or the imposition or threatened imposition of price controls, could adversely affect the Company’s business. The duration and severity of the current inflationary period cannot be estimated with precision.

The U.S. has recently experienced elevated levels of inflation, with the consumer price index climbing approximately 2.9% in 2024. Continued levels of inflation could have complex effects on our business and results of operations, some of which could be materially adverse. For example, elevated inflation harms consumer purchasing power, which could negatively affect our retail customers and the economic environment and, ultimately, many of our business customers, and could also negatively affect our levels of non-interest expense. In addition, if interest rates continue to remain elevated, the value of our securities portfolio would be negatively impacted. Continued elevated levels of inflation could also cause increased volatility and uncertainty in the business environment, which could adversely affect loan demand and our clients’ ability to repay indebtedness. It is also possible that governmental responses to the current inflation environment could adversely affect our business, such as changes to monetary and fiscal policy that are too strict, or the imposition or threatened imposition of price controls. The duration and severity of the current inflationary period cannot be estimated with precision.

Our allowance for credit losses may prove to be insufficient to absorb losses in our loan portfolio.

We maintain our allowance for credit losses at a level considered appropriate by management to absorb all expected future losses ~~expected~~ expected in the loan portfolio at the balance sheet date. Additionally, our Board of Directors regularly monitors the appropriateness of our allowance for credit losses. The allowance is also subject to regulatory examinations and a determination by the regulatory agencies as to the appropriate level of the allowance. The amount of future credit losses is susceptible to changes in economic, operating and other conditions, including changes in interest rates and the value of the underlying collateral, which may be beyond our control, and such losses may exceed current estimates. At December 31, ~~2024~~2025 and ~~2023~~2024, our allowance for credit losses as a percentage of total loans, was 1.2212% and 1.1222%, respectively, and as a percentage of total non-performing loans was 97 124.7965% and ~~443~~97.6679%, respectively. Although management believes that the allowance for credit losses is appropriate to absorb future losses on any existing loans that may become uncollectible, we cannot predict credit losses with certainty, nor can we assure you that our allowance for credit losses will prove sufficient to cover actual credit losses in the future. Credit losses in excess of our reserves will adversely affect our business, financial condition and results of operations.

Also, as of January 1, 2023, the Company was required to adopt accounting standard update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326). CECL changed how the Company calculates its allowance for credit losses by requiring the Company to determine periodic estimates of lifetime expected credit losses on loans and recognize the expected credit losses as allowances for credit losses. This is a change from the previous method of providing allowances for credit losses that are incurred.24

Our concentration of one-to-four family residential mortgage loans may result in lower yields and profitability.

One-to-four family residential mortgage loans comprised $~~352~~375.23 million and $~~302~~352.52 million, or 33.58% and 3133.95%, of our loan portfolio at December 31, ~~2024~~2025 and ~~2023~~2024, respectively. These loans are secured primarily by properties located in the state of Kansas. Our concentration of these loans results in lower yields relative to other loan categories within our loan portfolio. While these loans generally possess higher yields than investment securities, their repayment characteristics are not as well defined, and they generally possess a higher degree of interest rate risk versus other loans and investment securities within our portfolio. This increased interest rate risk is due to the repayment and prepayment options inherent in residential mortgage loans which are exercised by borrowers based upon the overall level of interest rates. ~~These~~Residential ~~residential~~ mortgage loans are generally made on the basis of the borrower’s ability to make repayments from his or her employment and the value of the property securing the loan. ~~Thus,~~As as a result, repayment ~~of these loans~~ is also subject to general economic and employment conditions within the communities and surrounding areas where the property is located.

A decline in residential real estate market prices or home sales has the potential to adversely affect our one-to-four family residential mortgage portfolio in several ways, such as a decrease in collateral values and an increase in non-performing loans, each of which could adversely affect our operating results and/or financial condition.

Our loan portfolio has a large concentration of real estate loans, which involve risks specific to real estate value.

Real estate lending (including CRE, construction and land and residential real estate) comprises the largest portion of our loan portfolio. These categories were $~~722~~790.72 million, or approximately 6871.71% of our total loan portfolio, as of December 31, ~~2024~~2025, as compared to $~~644~~722.6 7 million, or approximately 67 68.97% of our total loan portfolio, as of December 31, ~~2023~~2024. The market value of real estate can fluctuate significantly in a short period of time as a result of market conditions in the geographic area in which the real estate is located. Although a significant portion of CRE and construction and land loans are secured by a secondary form of collateral, adverse developments affecting real estate ~~values~~ values in one or more of our markets could increase the credit risk associated with our loan portfolio. Additionally, real estate lending ~~typically~~ typically involves higher loan principal amounts, and the repayment of the loans generally is dependent, in large part, on sufficient income from the properties securing the loans to cover operating expenses and debt service. Economic events or governmental regulations outside of the control of the borrower or lender could negatively impact the future cash flow and market values of the affected properties, ~~including~~ including (i) declines in the rents or decreases in occupancy and, therefore, in the cash flows generated by those real properties on which the borrowers depend to fund their loan payments to us, (ii) decreases in the values of those real properties, which make it more ~~difficult~~ difficult for the borrowers to sell those real properties for amounts sufficient to repay their loans in full, and (iii) job losses of ~~residential~~ residential home buyers, which makes it more difficult for these borrowers to fund their loan payments. Adverse changes affecting real estate values, including decreases in office occupancy due to the shift to remote working environments ~~following the COVID-19 pandemic,~~ and the liquidity of real estate in one or more of the Company’s markets could increase the credit risk associated with the Company’s loan portfolio, significantly impair the value of property pledged as collateral on loans and affect the Company’s ability to sell the collateral upon foreclosure without a loss or additional losses or the Company’s ability to sell those loans on the secondary market.

If the loans that are collateralized by real estate become troubled during a time when market conditions are declining or have declined, then we may not be able to realize the amount of security that we anticipated at the time of originating the loan, which could cause us to increase our provision for credit losses and adversely affect our operating results and financial condition. In light of the uncertainty that exists in the economy and credit markets nationally, there can be no guarantee that we will not experience additional deterioration in credit performance by our real estate loan customers.

The Company’s loan portfolio has a large concentration of CRE loans, which involve risks specific to real estate values and the health of the real estate market generally.

As of December 31, ~~2024~~2025, the Company had $~~370~~414.59 million of CRE loans, consisting of $~~110~~138.76 million of non-owner occupied loans, $~~197~~218.23 million of owner occupied loans, $37.34 million of loans secured by multifamily residential properties and $2520.35 million of construction and land development loans. CRE loans represented 3537.23% of the Company’s total loan portfolio and ~~272~~258% of the Bank’s total capital at December 31, ~~2024~~2025. The market value of real estate can fluctuate significantly in a short period of time as a result of interest rates and market conditions in the area in which the real estate is located and some of these values have been negatively affected by the recent rise in prevailing interest rates. Adverse developments affecting real estate values in the Company’s market areas could increase the credit risk associated with the Company’s loan portfolio. Additionally, the repayment of CRE loans generally is dependent, in large part, on sufficient income from the properties securing the loans to cover operating expenses and debt service. Economic events, including decreases in office occupancy due to the shift to remote working environments ~~following the COVID-19 pandemic,~~ or governmental regulations outside of the control of the borrower or lender could negatively impact the future cash flow and market values of the affected properties. If the loans that are collateralized by real estate become troubled during a time when market conditions are declining or have declined, then the Company may not be able to realize the full value of the collateral that the Company anticipated at the time of originating the loan, which could force the Company to take charge-offs or require the Company to increase the Company’s provision for credit losses, which could have a material adverse effect on the Company’s business, financial condition, results of operations and growth prospects.

Commercial loans make up a significant portion of our loan portfolio.

Commercial loans comprised $~~192~~178.32 million and $~~180~~192.93 million, or 1816.30% and 1918.13%, of our loan portfolio at December 31, ~~2024~~2025 and ~~2023~~2024, respectively. Our commercial loans are made based primarily on the identified cash flow of the borrower and secondarily on the underlying collateral provided by the borrower. Most often, this collateral is accounts receivable, inventory, or machinery. Credit support provided by the borrower for most of these loans, and the probability of repayment is based on the liquidation of the pledged collateral and enforcement of a personal guarantee, if any exists. As a result, in the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. The collateral securing other loans may depreciate over time, may be difficult to appraise and may fluctuate in value based on the success of the business. Due to the larger average size of each commercial loan as compared with other loans such as residential loans, as well as collateral that is generally less readily marketable, losses incurred on a small number of commercial loans could have a material adverse impact on our financial condition and results of operations.

The success of our SBA lending program is dependent upon the continued availability of SBA loan programs, our status as a Preferred Lender under the SBA loan programs and our ability to comply with applicable SBA lending requirements.

As an SBA Preferred Lender, we enable our clients to obtain SBA loans without being subject to the potentially lengthy SBA approval process necessary for lenders that are not SBA Preferred Lenders. The SBA periodically reviews the lending operations of participating lenders to assess, among other things, whether the lender exhibits prudent risk management. When weaknesses are identified, the SBA may request corrective actions or impose other restrictions, including revocation of the lender’s Preferred Lender status. If we lose our status as a Preferred Lender, we may lose our ability to compete effectively with other SBA Preferred Lenders, and as a result we could experience a material adverse effect to our financial results. Any changes to the SBA program, including changes to the level of guaranty provided by the federal government on SBA loans or changes to the level of funds appropriated by the federal government to the various SBA programs, may also have an adverse effect on our business, results of operations and financial condition.

In order for a borrower to be eligible to receive an SBA loan, the lender must establish that the borrower would not be able to secure a bank loan without the credit enhancements provided by a guaranty under the SBA program. Accordingly, the SBA loans in our portfolio generally have weaker credit characteristics than the rest of our portfolio, and may be at greater risk of default in the event of deterioration in economic conditions or the borrower’s financial condition. In the event of a loss resulting from default and a determination by the SBA that there is a deficiency in the manner in which the loan was originated, funded or serviced by us, the SBA may deny its liability under the guaranty, reduce the amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of the principal loss related to the deficiency from us. Management has estimated losses inherent in the outstanding guaranteed portion of SBA loans and recorded a recourse reserve at a level determined to be appropriate. Significant increases to the recourse reserve may materially decrease our net income, which may adversely affect our business, results of operations and financial condition.

Our agriculture loans involve a greater degree of risk than other loans, and the ability of the borrower to repay may be affected by many factors outside of the borrower’s control.

Agriculture operating loans comprised $5164.91 million and $4951.69 million, or 45.98% and 54.39%, of our loan portfolio at December 31, ~~2024~~2025 and ~~2023~~2024, respectively. The repayment of agriculture operating loans is dependent on the successful operation or management of the farm property. Likewise, agricultural operating loans involve a greater degree of risk than lending on residential properties, particularly in the case of loans that are unsecured or secured by rapidly depreciating assets such as farm equipment, livestock or crops. We generally secure agricultural operating loans with a blanket lien on livestock, equipment, food, hay, grain and crops. Nevertheless, any repossessed collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation.

We also originate agriculture real estate loans. At December 31, ~~2024~~2025 and ~~2023~~2024, agricultural real estate loans totaled $4838.7 million and $4048.17 million, or 43.65% and 4.26% of our total loan portfolio, respectively. Agricultural real estate lending involves a greater degree of risk and typically involves larger loans to single borrowers than lending on single-family residences. As with agriculture operating loans, payments on agricultural real estate loans are dependent on the profitable operation or management of the farm property securing the loan. The success of the farm may be affected by many factors outside the control of the farm borrower, including adverse weather conditions that prevent the planting of a crop or limit crop yields (such as hail, drought and floods), loss of livestock due to disease or other factors, declines in market prices for agricultural products (both domestically and internationally) and the impact of government regulations (including changes in price supports, tariffs, trade agreements, subsidies and environmental regulations). In addition, many farms are dependent on a limited number of key individuals whose injury or death may significantly affect the successful operation of the farm. If the cash flow from a farming operation is diminished, the borrower’s ability to repay the loan may be impaired. The primary crops in our market areas are wheat, corn and soybean. Accordingly, adverse circumstances affecting wheat, corn and soybean crops could have an adverse effect on our agricultural real estate loan portfolio.

Our business is concentrated in and dependent upon the continued growth and welfare of the markets in which we operate, including eastern, central, southeast and southwest Kansas.

We operate primarily in eastern, central, southeast and southwest Kansas, and as a result, our financial condition, results of operations and cash flows are subject to changes in the economic conditions in those areas. Although each market we operate in is geographically and economically diverse, our success depends upon the business activity, population, income levels, deposits and real estate activity in each of these markets. Although our customers’ business and financial interests may extend well beyond our market area, adverse economic conditions that affect our specific market area could reduce our growth rate, affect the ability of our customers to repay their loans to us and generally affect our financial condition and results of operations. Because of our geographic concentration, we are less able than other regional or national financial institutions to diversify our credit risks across multiple markets.

Non-performing assets take significant time to resolve and adversely affect our results of operations and financial condition, and could result in further losses in the future.

As of December 31, ~~2024~~2025, our non-performing loans (which consist of non-accrual loans and loans past due 90 days or more and still accruing interest) totaled $1310.10 million, or 10.2590% of our loan portfolio, and our non-performing assets (which include non-performing loans plus real estate owned) totaled $1310.30 million, or 0.8462% of total assets. In addition, we had $64.23 million in accruing loans that were 30-89 days delinquent as of December 31, ~~2024~~2025.

Our non-performing assets adversely affect our net income in various ways. We do not record interest income on non-accrual loans or other real estate owned, thereby adversely affecting our net income and returns on assets and equity, increasing our loan administration costs and adversely affecting our efficiency ratio. When we take collateral in foreclosure and similar proceedings, we are required to mark the collateral to its then-fair market value, which may result in a loss. These non-performing loans and other real estate owned also increase our risk profile and the capital our regulators believe is appropriate in light of such risks. The resolution of non-performing assets requires significant time commitments from management and can be detrimental to the performance of their other responsibilities. If we experience increases in non-performing loans and non-performing assets, our net interest income may be negatively impacted and our loan administration costs could increase, each of which could have an adverse effect on our net income and related ratios, such as return on assets and equity.

Interest Rate Risks

Monetary policies and regulations of the Federal Reserve could adversely affect our business, financial condition and results of operations.

In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve. An important function of the Federal Reserve is to regulate the money supply and credit conditions. Among the instruments used by the Federal Reserve to implement these objectives are open market operations in U.S. government securities, adjustments of the discount rate and changes in reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits.

The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. The effects of such policies upon our business, financial condition and results of operations cannot be predicted.

The Federal Reserve has indicated that it is working to avoid abrupt or unpredictable changes in economic or financial conditions so as not to disrupt the financial systems, also known as “shocks;” despite this, the impact of these changes cannot be certain. Vulnerabilities in the financial system can amplify the impact of an initial shock following rate increases, potentially leading to unintended volatility, as well as to disruptions in the provision of financial services, such as clearing payments, the provision of liquidity, and the availability of credit. Furthermore, asset liquidation pressures can be amplified by liquidity mismatches and the leverage of certain nonbank financial intermediaries such as hedge funds. ~~The financial crisis in March 2020 also demonstrated that pressures on dealer intermediation can limit the availability of liquidity during times of market stress.~~ Given the interconnectedness of the global financial system, these vulnerabilities could impact the Company’s business operations and financial condition.

Interest rates and other conditions impact our results of operations.

Our profitability is in part a function of the spread between the interest rates earned on investments and loans and the interest rates paid on deposits and other interest-bearing liabilities. Like most banking institutions, our net interest spread and margin will be affected by general economic conditions and other factors, including fiscal and monetary policies of the federal government that influence market interest rates and our ability to respond to changes in such rates. At any given time, our assets and liabilities will be such that they are affected differently by a given change in interest rates. It is currently expected that, during ~~2025~~2026, ~~and perhaps beyond,~~ the Federal Open Market Committee of the Federal Reserve, (“ FOMC”) will continue to closely monitor interest rates, in part to ~~reduce~~manage the rate of inflation to its preferred level. In ~~2024,~~ the ~~FOMC~~fourth ~~decreased~~quarter atof ~~various~~2025, ~~dates throughout~~ the ~~year~~FOMC decreased the target range for the federal funds rate ~~from 5.25%~~ to ~~5.50% to~~ a range of 43.2550% to 43.5075%., ~~These~~following ~~decreases~~a ~~were~~series ~~made~~of insignificant ~~response~~increases tobeginning ~~declining~~in ~~inflationary pressures~~2023. If the FOMC further ~~increases~~alters ~~or decreases~~ the targeted federal funds rates, overall interest rates likely will ~~also~~continue ~~rise~~to ~~or fall~~change, which may ~~negatively~~ impact the entire national economy. AsChanges ~~a result, an increase or decrease~~ in interest rates, ~~the~~directly impact ~~length of loan terms or~~ the ~~mix of~~Company’s ~~adjustable and fixed rate loans in our portfolio could have a positive or negative effect on our~~ net interest income, ~~capital~~ and ~~liquidity. We~~also ~~measure~~may ~~interest~~affect ~~rate~~the ~~risk~~demand ~~under~~for ~~various~~loans ~~rate scenarios~~ and ~~using specific criteria and assumptions. A summary of this process, along with~~ the ~~results~~value of ~~our~~fixed-rate ~~net~~investment ~~interest income simulations, is presented in “Item 7A~~securities. ~~Quantitative and Qualitative Disclosures About~~ ~~Market~~These ~~Risk”~~effects offrom ~~this~~interest ~~Annual~~rate ~~Report~~changes onor ~~Form~~from ~~10-K.~~other ~~Although~~sustained weeconomic ~~believe~~stress ~~our~~or ~~current~~a ~~level~~recession, ofamong ~~interest~~other ~~rate sensitivity is reasonable and effectively managed~~matters, ~~significant~~could ~~fluctuations in interest rates may~~ have ana material adverse effect on ~~our~~the Company’s business, financial condition, liquidity and results of operations.

~~Changes~~Continued inelevated interest rates ~~also~~may ~~can~~result ~~affect~~in ~~the~~a ~~value~~further ofdecline ~~loans, securities and other assets. An increase~~ in ~~interest~~value ~~rates that adversely affects the ability~~ of ~~borrowers~~our tofixed-rate ~~pay~~debt ~~the~~securities. ~~principal~~The orunrealized ~~interest~~losses onresulting ~~loans~~from holding ~~may~~these ~~lead~~securities towould anbe ~~increase~~recognized in ~~non-performing~~other ~~assets~~comprehensive ~~and a reduction of~~ income ~~recognized,~~and ~~which~~reduce ~~could~~total ~~have~~stockholders’ ~~a material adverse effect on our results of operations and cash flows~~equity. ~~Further,~~Unrealized ~~when we place a loan~~losses ondo ~~nonaccrual~~not ~~status,~~negatively weimpact ~~reverse~~our ~~any~~regulatory ~~accrued~~capital ~~but~~ratios; ~~unpaid interest receivable~~however, ~~which~~tangible ~~decreases~~common ~~interest~~equity ~~income.~~and ~~Subsequently, we continue to have a cost to fund~~ the ~~loan,~~associated ~~which~~ratios iswould ~~reflected~~be asreduced. ~~interest~~If debt ~~expense,~~securities ~~without~~in ~~any~~an ~~interest~~unrealized ~~income~~loss toposition ~~offset~~are ~~the associated funding expense. Thus~~sold, ansuch ~~increase~~losses inbecome ~~the~~realized ~~amount~~and ofwill ~~non-performing~~reduce ~~assets~~our ~~would~~regulatory ~~have~~capital ~~an adverse impact on net interest income~~ratios.

Continued high interest rates may result in a further decline in value of our fixed-rate debt securities. The unrealized losses resulting from holding these securities would be recognized in other comprehensive income and reduce total stockholders’ equity. Unrealized losses do not negatively impact our regulatory capital ratios; however, tangible common equity and the associated ratios would be reduced. If debt securities in an unrealized loss position are sold, such losses become realized and will reduce our regulatory capital ratios.28

Declines in value may adversely impact the carrying amount of our investment portfolio and result in other-than-temporary impairment charges.

We may be required to record impairment charges on our investment securities if they suffer declines in value that are considered other-than-temporary. If the credit quality of the securities in our investment portfolio deteriorates, we may also experience a loss in interest income from the suspension of either interest or dividend payments. Numerous factors, including lack of liquidity for resales of certain investment securities, absence of reliable pricing information for investment securities, adverse changes in business climate or adverse actions by regulators could have a negative effect on our investment portfolio in future periods.

The value of the financial instruments we own may decline in the future.

An increase in market interest rates may affect the market value of our securities portfolio, potentially reducing accumulated other comprehensive income and/or earnings. Additionally, an increase in market interest rates may reduce the value of our loan portfolio, although, in accordance with U.S. generally accepted accounting principles (“GAAP”), such a decline in value may not be reflected in the carrying balance of our loans in the same manner as our debt securities available-for-sale. The market value of these investments may be affected by factors other than the underlying performance of the servicer of the securities or the mortgages underlying the securities, such as changes in the interest rate environment, negative trends in the residential and CRE markets, ratings downgrades, adverse changes in the business climate and a lack of liquidity in the secondary market for certain investment securities. In addition, we may determine to sell securities in our available-for-sale investment securities portfolio, and any such sale could cause us to realize currently unrealized losses that resulted from the recent increases in the prevailing interest rates.

Downgrades in the credit rating of one or more insurers that provide credit enhancement for our state and municipal securities portfolio may have an adverse impact on the market for and valuation of these types of securities.

We invest in tax-exempt and taxable state and local municipal investment securities, some of which are insured by monoline insurers. As of December 31, ~~2024~~2025, we had $178.84 million of municipal securities, which represented 4851.02% of our total securities portfolio. Even though management generally purchases municipal securities on the overall credit strength of the issuer, the reduction in the credit rating of an insurer may negatively impact the market for and valuation of our investment securities. Such downgrade could adversely affect our liquidity, financial condition and results of operations.

Legal, Accounting and Compliance Risks

Legislative and regulatory reforms applicable to the financial services industry may have a significant impact on our business, financial condition and results of operations.

The laws, regulations, rules, policies and regulatory interpretations governing us are constantly evolving and may change significantly over time as Congress and various regulatory agencies react to adverse economic conditions or other matters. The implementation of any current, proposed or future regulatory or legislative changes to laws applicable to the financial industry may impact the profitability of our business activities and may change certain of our business practices, including the ability to offer new products, obtain financing, attract deposits, make loans, and achieve satisfactory interest spreads, and could expose us to additional costs, including increased compliance costs. These regulations and legislation may be impacted by the political ideologies of the executive and legislative branches of the U.S. government as well as the heads of regulatory and administrative agencies~~, which may change as a result of elections~~.

The Company and the Bank are subject to stringent capital and liquidity requirements.

~~The~~Bank ~~Basel~~holding ~~III~~companies ~~Rule~~and ~~imposes~~banks ~~stringent~~are ~~capital~~subject ~~requirements~~to onstringent ~~bank~~capital ~~holding companies and banks~~requirements. In addition to the minimum capital requirements, banks and bank holding companies are also required to maintain a capital conservation buffer of 2.5% of Common Equity Tier 1 Capital on top of minimum risk-weighted asset ratios to make capital distributions (including for dividends and repurchases of stock) and pay ~~discretionary~~ discretionary bonuses to executive officers without restriction. Banking institutions that do not maintain capital in excess of ~~the~~such ~~Basel~~requirements, ~~III Rule standards~~ including the capital conservation buffer, face constraints on the payment of dividends, equity repurchases and compensation based on the amount of the shortfall. Accordingly, if the Bank fails to maintain the applicable minimum capital ratios and the capital ~~conservation~~ conservation buffer, distributions to the Company may be prohibited or limited. Future increases in minimum capital requirements could adversely affect our net income.

~~Future increases in minimum capital requirements could adversely affect our net income.~~ Furthermore, our failure to comply with the minimum capital requirements could result in our regulators taking formal or informal actions against us, which could restrict our future growth or operations.

We may be required to pay higher FDIC insurance premiums in the future.

Future bank failures may prompt the FDIC to increase its premiums above the current levels or to issue special assessments. The Bank generally is unable to control the amount of premiums or special assessments that it or its subsidiary is required to pay for FDIC insurance. Any future changes in the calculation or assessment of FDIC insurance premiums may have a material adverse effect on the Bank’s results of operations, financial condition, and the ability to continue to pay dividends on common stock at the current rate or at all.

There is uncertainty surrounding potential legal, regulatory and policy changes by new presidential administrations in the United States that may directly affect financial institutions and the global economy.

Changes in federal policy and at regulatory agencies occur over time through policy and personnel changes following elections and changes in federal administration, including the change in administration which occurred in January 2025, which lead to changes involving the level of oversight and focus on the financial services industry. During his campaign, newly elected President Trump proposed numerous regulatory and policy changes including new tariffs, mass deportations, tax changes and general deregulation, The nature, timing and economic and political effects of potential changes to the current legal and regulatory framework affecting financial institutions remain highly uncertain, and may take time to be implemented. Uncertainty surrounding future changes may adversely affect our operating environment and therefore our business, financial condition, results of operations and growth prospects.

We are subject to changes in accounting principles, policies or guidelines.

Our financial performance is impacted by accounting principles, policies and guidelines. Some of these policies require the use of estimates and assumptions that may affect the value of our assets or liabilities and financial results. Some of our accounting policies are critical because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. If such estimates or assumptions underlying our financial statements are incorrect, we may experience material losses.

From time to time, the FASB and the SEC change the financial accounting and reporting standards or the interpretation of those standards that govern the preparation of our financial statements. In addition, trends in financial and business reporting, ~~including environmental social and governance (ESG) related disclosures,~~ could require us to incur additional reporting expense. These changes are beyond our control, can be difficult to predict and could materially impact how we report our financial condition and results of operations. Changes in these standards are continuously occurring, and more drastic changes may occur in the future. The implementation of such changes could have a material adverse effect on our financial condition and results of operations.

Our business is affected from time to time by federal and state laws and regulations relating to hazardous substances.

Under the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), owners and operators of properties containing hazardous substances may be liable for the costs of cleaning up the substances. CERCLA and similar state laws can affect us both as an owner of branches and other properties used in our business and as a lender holding a security interest in property which is found to contain hazardous substances. In particular, our branch office located in Iola is located on property that has been designated as a “Superfund” site under CERCLA, and we may hold mortgages on properties located in Iola that are also designated as “Superfund” sites. While CERCLA contains an exemption for holders of security interests, the exemption is not available if the holder participates in the management of a property, and some courts have broadly defined what constitutes participation in management of property. Moreover, CERCLA and similar state statutes can affect our decision whether or not to foreclose on a property. Before foreclosing on CRE, our general policy is to obtain an environmental report, thereby increasing the costs of foreclosure. In addition, the existence of hazardous substances on a property securing a troubled loan may cause us to elect not to foreclose on the property, thereby reducing our flexibility in handling the loan.

Operational, Strategic and Reputational Risks

We may experience difficulties in managing our growth, and our growth strategy involves risks that may negatively impact our net income.

As part of our general strategy, we may acquire banks, branches and related businesses that we believe provide a strategic fit with our business. In the past, we have acquired a number of local banks and branches, and, to the extent that we grow through future acquisitions, we cannot assure you that we will be able to adequately and profitably manage this growth. Acquiring other banks and businesses will involve risks commonly associated with acquisitions, including:

● potential exposure to unknown or contingent liabilities of banks and businesses we acquire; ● exposure to potential asset quality issues of the acquired bank or related business; ● difficulty and expense of integrating the operations and personnel of banks and businesses we acquire; ● potential disruption to our business; ● potential diversion of our management’s time and attention; and ● the possible loss of key employees and customers of the banks and businesses we acquire.

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	●	exposure to potential asset quality issues of the acquired bank or related business;
	●	difficulty and expense of integrating the operations and personnel of banks and businesses we acquire;
	●	potential disruption to our business;
	●	potential diversion of our management’s time and attention; and
	●	the possible loss of key employees and customers of the banks and businesses we acquire.

In addition to acquisitions, we may expand into additional communities or attempt to strengthen our position in our current markets by undertaking additional branch openings. We believe that it generally takes several years for new banking facilities to first achieve operational profitability, due to the impact of organization and overhead expenses and the start-up phase of generating loans and deposits. To the extent that we undertake additional branch openings, we are likely to experience the effects of higher operating expenses relative to operating income from the new operations, which may have an adverse effect on our levels of reported net income, return on average equity and return on average assets.

We face intense competition in all phases of our business from other banks and financial institutions.

The banking and financial services business in our market is highly competitive. Our competitors include large national and regional banks, local community banks, savings and loan associations, securities and brokerage companies, mortgage companies, insurance companies, finance companies, money market mutual funds, credit unions, fintech companies, digital asset service providers, and other non-bank financial service providers, many of which have greater financial, marketing and technological resources than us. Many of these competitors are not subject to the same regulatory restrictions that we are and may be able to compete more effectively as a result. Increased competition in our market may result in a decrease in the amounts of our loans and deposits, reduced spreads between loan rates and deposit rates or loan terms that are more favorable to the borrower. Any of these results could have a material adverse effect on our ability to grow and remain profitable. If increased competition causes us to significantly discount the interest rates we offer on loans or increase the amount we pay on deposits, our net interest income could be adversely impacted. If increased competition causes us to relax our underwriting standards, we could be exposed to higher losses from lending activities. Additionally, many of our competitors are much larger in total assets and capitalization, have greater access to capital markets and offer a broader range of financial services than we can offer.

Technology and other changes are allowing consumers and businesses to complete financial transactions that historically have involved banks through alternative methods. For example, the wide acceptance of internet-based commerce has resulted in a number of alternative payment processing systems and lending platforms in which banks play only minor roles. Customers can also maintain funds in prepaid debit cards or digital currencies, and pay bills and transfer funds directly without the direct assistance of banks. The diminishing role of banks as financial intermediaries has resulted and could continue to result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. The loss of these revenue streams and the potential loss of lower cost deposits as a source of funds could have a material adverse effect on our business, financial condition and results of operations.

While we do not offer products relating to digital assets, including cryptocurrencies, stablecoins and other similar assets, there has been a significant increase in digital asset adoption globally over the past several years. Certain characteristics of digital asset transactions, such as the speed with which such transactions can be conducted, the ability to transact without the involvement of regulated intermediaries, the ability to engage in transactions across multiple jurisdictions, and the anonymous nature of the transactions, are appealing to certain consumers notwithstanding the various risks posed by such transactions. Accordingly, digital asset service providers—which, at present are not subject to the same degree of scrutiny and oversight as banking organizations and other financial institutions—are becoming active competitors to more traditional financial institutions. The process of eliminating banks as intermediaries, known as “disintermediation,” could result in the loss of fee income, as well as the loss of customer deposits and the related income generated from those deposits. The loss of these revenue streams and the lower cost of deposits as a source of funds could have a material adverse effect on our financial condition and results of operations. Potential partnerships with digital asset companies, moreover, could also entail significant investment.

The financial services industry continues to undergo rapid technological changes with frequent introductions of new technology-driven products and services, including internet services, cryptocurrencies and payment systems. In addition to better serving customers, the effective use of technology increases efficiency as well as enables financial institutions to reduce costs. Our future success will depend in part upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience as well as to create additional efficiencies in our operations as we continue to grow and expand our market area. Many of our larger competitors have substantially greater resources to invest in technological improvements. As a result, they may be able to offer additional or superior products to those that we will be able to offer, which would put us at a competitive disadvantage. Accordingly, we cannot provide you with assurance that we will be able to effectively implement new technology-driven products and services or be successful in marketing such products and services to our customers.

35Issues with the use of artificial intelligence in our marketplace may result in reputational harm or liability or could otherwise adversely affect the Company’s business.

~~Issues~~Artificial ~~with~~intelligence, including generative artificial intelligence, is or may be enabled by or integrated into the ~~use~~Company’s ofproducts or those developed by its third-party partners. As with many developing technologies, artificial intelligence inpresents risks and challenges that could affect its further development, adoption, and use, and therefore our ~~marketplace~~business. Artificial intelligence algorithms may be flawed, for example datasets may contain biased information or otherwise be insufficient, and inappropriate or controversial data practices could impair the acceptance of artificial intelligence solutions and result in burdensome new regulations. If the analyses that products incorporating artificial intelligence assist in producing for the Company or its third-party partners are deficient, biased or inaccurate, the Company could be subject to competitive harm, potential legal liability and brand or reputational harm. The use of artificial intelligence may also present ethical issues. If the Company or ~~liability~~its third-party partners offer artificial intelligence enabled products that are controversial because of their purported or real impact on human rights, privacy, or ~~could~~other ~~otherwise~~issues, ~~adversely~~the Company may experience competitive harm, potential legal liability and brand or reputational harm. In addition, the Company expects that governments will continue to assess and implement new laws and regulations concerning the use of artificial intelligence, which may affect or impair the usability or efficiency of products and services and those developed by the Company’s ~~business~~third-party partners.

Artificial intelligence, including generative artificial intelligence, is or may be enabled by or integrated into the Company’s products or those developed by its third party partners. As with many developing technologies, artificial intelligence presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. Artificial intelligence algorithms may be flawed, for example datasets may contain biased information or otherwise be insufficient, and inappropriate or controversial data practices could impair the acceptance of artificial intelligence solutions and result in burdensome new regulations. If the analyses that products incorporating artificial intelligence assist in producing for the Company or its third party partners are deficient, biased or inaccurate, the Company could be subject to competitive harm, potential legal liability and brand or reputational harm. The use of artificial intelligence may also present ethical issues. If the Company or its third party partners offer artificial intelligence enabled products that are controversial because of their purported or real impact on human rights, privacy, or other issues, the Company may experience competitive harm, potential legal liability and brand or reputational harm. In addition, the Company expects that governments will continue to assess and implement new laws and regulations concerning the use of artificial intelligence, which may affect or impair the usability or efficiency of products and services and those developed by the Company’s third party partners.

Attractive acquisition opportunities may not be available to us in the future.

We expect that other banking and financial service companies, many of which have significantly greater resources than us, will compete with us in acquiring other financial institutions if we pursue such acquisitions. This competition could increase prices for potential acquisitions that we believe are attractive. Also, acquisitions are subject to various regulatory approvals. If we fail to receive the appropriate regulatory approvals, we will not be able to consummate an acquisition that we believe is in our best interests. Among other things, our regulators consider our capital, liquidity, profitability, regulatory compliance and levels of goodwill and intangibles when considering acquisition and expansion proposals. Any acquisition could be dilutive to our earnings and stockholders’ equity per share of our common stock.

Our community banking strategy relies heavily on our management team, and the unexpected loss of key managers may adversely affect our operations.

Much of our success to date has been influenced strongly by our ability to attract and to retain senior management experienced in banking and financial services and familiar with the communities in our market area. Our ability to retain executive officers, the current management teams, branch managers and loan officers will continue to be important to the successful implementation of our strategy. It is also critical, as we grow, to be able to attract and retain qualified additional management and loan officers with the appropriate level of experience and knowledge about our market area to implement our community-based operating strategy. The unexpected loss of services of any key management personnel, or the inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business, financial condition and results of operations.

Labor shortages and failure to attract and retain qualified employees could negatively impact our business, results of operations and financial condition.

A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, and decreased labor force size and participation. Although we have not experienced any material labor shortage to date, we have recently observed an overall tightening and increasingly competitive local labor market. As of December 31, ~~2024~~2025, the unemployment rate in Kansas was 3.68%. A sustained labor shortage or increased turnover rates within our employee base could lead to increased costs, such as increased compensation expense to attract and retain employees.

In addition, if we are unable to hire and retain employees capable of performing at a high-level, or if mitigation measures we may take to respond to a decrease in labor availability have unintended negative effects, our business could be adversely affected. An overall labor shortage, lack of skilled labor, increased turnover or labor inflation, could have a material adverse impact on our operations, results of operations, liquidity or cash flows.

The occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

As a bank, we are susceptible to fraudulent activity, information security breaches and cybersecurity-related incidents that may be ~~committed~~ committed against us or our clients, which may result in financial losses or increased costs to us or our clients, disclosure or misuse of our information or our client information, misappropriation of assets, privacy breaches against our clients, litigation or damage to our reputation. Such fraudulent activity may take many forms, including check fraud, electronic fraud, wire fraud, phishing, social engineering and other dishonest acts by our employees, clients, third-party vendors or by other outside actors. As described in Note 24 (Subsequent Event) to the Company’s consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K, the Company experienced an instance of employee fraud which resulted in immaterial financial losses. Information security breaches and cybersecurity-related incidents may include fraudulent or unauthorized access to systems used by us or our clients, denial or degradation of service attacks and malware or other cyber-attacks.

In recent periods, there continues to be a rise in electronic fraudulent activity, security breaches and cyber-attacks within the financial services industry, especially in the commercial banking sector due to cyber criminals targeting commercial bank accounts. Moreover, several large corporations, including financial institutions and retail companies, have suffered major data breaches, in some cases exposing not only confidential and proprietary corporate information, but also sensitive financial and other personal information of their customers and employees and subjecting them to potential fraudulent activity. Some of our clients may have been affected by these breaches, which could increase their risks of identity theft and other fraudulent activity that could involve their accounts with us.

Information pertaining to us and our clients is maintained, and transactions are executed, on networks and systems maintained by us and certain third -party partners, such as our online banking, mobile banking or accounting systems. The secure maintenance and transmission of confidential information, as well as execution of transactions over these systems, are essential to protect us and our clients against fraud and security ~~breaches~~ breaches and to maintain the confidence of our clients. Breaches of information security also may occur through intentional or unintentional ~~acts~~ acts by those having access to our systems or the confidential information of our clients, including employees. In addition, increases in in criminal activity levels and sophistication, advances in computer capabilities, new discoveries, vulnerabilities in third party technologies (including browsers and operating systems) or other developments could result in a compromise or breach of the technology, processes and controls that we use to prevent fraudulent transactions and to protect data about us, our clients and underlying transactions, as well as the technology used by our clients to access our systems. Our third party partners’ inability to anticipate, or failure to adequately mitigate, breaches of security could result in a number of negative events, including losses to us or our clients, loss of business or clients, damage to our reputation, the incurrence of additional expenses, disruption to our business, additional regulatory scrutiny or penalties or our exposure to civil litigation and possible financial liability, any of which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We depend on information technology and telecommunications systems of third parties, and any systems failures, interruptions or data breaches involving these systems could adversely affect our operations and financial condition.

Our business is highly dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems, third party servicers, accounting systems, mobile and online banking platforms and financial intermediaries. We outsource to third parties many of our major systems, such as data processing and mobile and online banking. The failure of these systems, or the termination of a third -party software license or service agreement on which any of these systems is based, could interrupt our operations. Because our information technology and telecommunications systems interface with and depend on third party systems, we could experience service denials if demand for such services exceeds capacity or such third -party systems fail or experience interruptions. A system failure or service denial could result in a deterioration of our ability to process loans or gather deposits and provide customer service, compromise our ability to operate effectively, result in potential noncompliance with applicable laws or regulations, damage our reputation, result in a loss of customer business or subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on business, financial condition, results of operations and growth prospects. In addition, failures of third parties to comply with applicable laws and regulations, or fraud or misconduct on the part of employees of any of these third parties, could disrupt our operations or adversely affect our reputation.

It may be difficult for us to replace some of our third party vendors, particularly vendors providing our core banking and information services, in a timely manner if they are unwilling or unable to provide us with these services in the future for any reason and even if we are able to replace them, it may be at higher cost or result in the loss of customers. Any such events could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Our operations rely heavily on the secure processing, storage and transmission of information and the monitoring of a large number of transactions on a minute-by-minute basis, and even a short interruption in service could have significant consequences. We also interact with and rely on retailers, for whom we process transactions, as well as financial counterparties and regulators. Each of these third parties may be targets of the same types of fraudulent activity, computer break-ins and other cyber security breaches described above, and the cyber security measures that they maintain to mitigate the risk of such activity may be different than our own and may be inadequate.

As a result of financial entities and technology systems becoming more interdependent and complex, a cyber-incident, information breach or loss, or technology failure that compromises the systems or data of one or more financial entities could have a material impact on counterparties or other market participants, including ourselves. As a result of the foregoing, our ability to conduct business may be adversely affected by any significant disruptions to us or to third parties with whom we interact.

We are subject to certain operational risks, including, but not limited to, customer or employee fraud, losses related to our depositors and data processing system failures and errors.

Employee errors and misconduct could subject us to financial losses or regulatory sanctions and seriously harm our reputation. Misconduct by our employees could include hiding unauthorized activities from us, improper or unauthorized activities on behalf of our customers or improper use of confidential information. It is not always possible to prevent employee errors and misconduct, and the precautions we take to prevent and detect this activity may not be effective in all cases. Employee errors could also subject us to financial claims for negligence. We are also subject to losses related to our customers, whether due to simple errors or mistakes, circumvention of controls, incomplete or fraudulent information provided by customers, or unauthorized override of controls by our employees, other financial institutions or other third parties.

We maintain a system of internal controls, including internal controls over financial reporting, and insurance coverage to mitigate against operational risks, including data processing system failures and errors and customer or employee fraud. A recently discovered instance of employee fraud, as described in Note 24 (Subsequent Event) to the Company’s consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K, resulted in immaterial financial losses. Should our internal controls fail to prevent or detect anany subsequent occurrence, or if any resulting loss is not insured or exceeds applicable insurance limits, it could have a material adverse effect on our business, financial condition and results of operations.

Our framework for managing risks may not be effective in mitigating risk and loss to us.

Our risk management framework seeks to mitigate risk and loss to us. We have established processes and procedures intended to identify, measure, monitor, report and analyze the types of risk to which we are subject, including liquidity risk, credit risk, market risk, interest rate risk, operational risk, compensation risk, legal and compliance risk, cyber risk, and reputational risk, among others. However, as with any risk management framework, there are inherent limitations to our risk management strategies as there may exist, or develop in the future, risks that we have not appropriately anticipated or identified. Our ability to successfully identify and manage risks facing us is an important factor that can significantly impact our results. If our risk management framework proves ineffective, we could suffer unexpected losses and could be materially adversely affected.

Financial services companies depend on the accuracy and completeness of information about customers and counterparties.

In deciding whether to extend credit or enter into other transactions, we may rely on information furnished by or on behalf of customers and counterparties, including financial statements, credit reports and other financial information. We may also rely on representations of those customers, counterparties or other third parties, such as independent auditors, as to the accuracy and completeness of that information. Reliance on inaccurate or misleading financial statements, credit reports or other financial information could have a material adverse impact on our business, financial condition and results of operations.

Liquidity and Capital Risks

Our growth or future losses may require us to raise additional capital in the future, but that capital may not be available when it is needed.

We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations. We anticipate that our existing capital resources will satisfy our capital requirements for the foreseeable future. However, we may at some point need to raise additional capital to support continuing growth. Our ability to raise additional capital is particularly important to our strategy of growth through acquisitions. Our ability to raise additional capital depends on conditions in the capital markets, economic conditions and a number of other factors, including investor perceptions regarding the banking industry, market conditions and governmental activities, and on our financial condition and performance. In particular, if we were required to raise additional capital in the current interest rate environment, we believe the pricing and other terms investors may require in such an offering may not be attractive to us. Accordingly, we cannot assure you of our ability to raise additional capital if needed on terms acceptable to us. If we cannot raise additional capital when needed, our ability to further expand our operations through internal growth and acquisitions could be materially impaired.

Risks Related to our Common Stock

There can be no assurances concerning continuing dividend payments.

Our common stockholders are only entitled to receive the dividends declared by our Board of Directors. Although we have historically paid quarterly dividends on our common stock and an annual 5% stock dividend, there can be no assurances that we will be able to continue to pay regular quarterly dividends or an annual stock dividend or that any dividends we do declare will be in any particular amount. The primary source of money to pay our cash dividends comes from dividends paid to the Company by the Bank. The Bank’s ability to pay dividends to the Company is subject to, among other things, its earnings, financial condition and applicable regulations, which in some instances limit the amount that may be paid as dividends. In addition, the Company and the Bank are required to maintain a capital conservation buffer of 2.5% of Common Equity Tier 1 Capital on top of minimum risk-weighted asset ratios to pay dividends without additional restrictions.

Debt covenants and other lender requirements may adversely impact our ability to borrow funds.

Our ability to borrow funds may be impacted by our ability to comply with covenants concerning minimum capital and other financial ratios required by potential lending partners. If we are not able to borrow funds on terms that are acceptable to us, our liquidity may be impacted which could, in turn, affect the Company’s ability to pay dividends, its results of operations, and its ability to take advantage of strategic opportunities.

Failure to pay interest on our debt may adversely impact our ability to pay dividends.

Our $21.7 million of subordinated debentures are held by three business trusts that we control. Interest payments on the debentures must be paid before we pay dividends on our capital stock, including our common stock. We have the right to defer interest payments on the debentures for up to 20 consecutive quarters. However, if we elect to defer interest payments, all deferred interest must be paid before we may pay dividends on our capital stock. Deferral of interest payments could also cause a decline in the market price of our common stock.

There is a limited trading market for our common shares, and you may not be able to resell your shares at or above the price you paid for them.

Although our common shares are listed for trading on the Nasdaq Global Market under the symbol “LARK,” the trading in our common shares has substantially less liquidity than many other publicly traded companies. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the market of willing buyers and sellers of our common shares at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which we have no control. We cannot assure you that volume of trading in our common shares will increase in the future.

The stock market can be volatile, and fluctuations in our operating results and other factors could cause our stock price to decline.

The stock market has experienced, and may continue to experience, fluctuations that significantly impact the market prices of securities issued by many companies. Market fluctuations could adversely affect our stock price. These fluctuations have often been unrelated or disproportionate to the operating performance of particular companies. These broad market fluctuations, as well as general economic, systemic, political and market conditions, such as recessions, loss of investor confidence, interest rate changes, tariffs, government shutdowns, ~~Brexit,~~ or international currency fluctuations, may negatively affect the market price of our common stock. Moreover, our ~~operating~~ operating results may fluctuate and vary from period to period due to the risk factors set forth herein. As a result, period-to-period ~~comparisons~~ comparisons should not be relied upon as an indication of future performance. Our stock price could fluctuate significantly in response to our quarterly or annual results, annual projections and the impact of these risk factors on our operating results or financial position.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Risk Management and Strategy. The Company relies extensively on various information systems and other electronic resources to operate its business. In addition, nearly all of the Company’s customers, service providers and other business partners on whom the Company depends, including the providers of the Company’s online banking, mobile banking and accounting systems, use these systems and their own electronic information systems. Any of these systems can be compromised, including by employees, customers and other individuals who are authorized to use them, and bad actors using sophisticated and constantly evolving set of software, tools and strategies to do so.

Accordingly, the Company has devoted significant resources to assessing, identifying and managing risks associated with cybersecurity threats, as noted below:

●

Identifying and assessing cybersecurity threats: The Company regularly evaluates its systems and data for potential vulnerabilities and analyzes the evolving cyber threat landscape, to ensure it proactively addresses risks before they materialize. The Company employs monitoring tools that can detect and help respond to cybersecurity threats in real-time.

●

Integration with Overall Risk Management: Cybersecurity risks are seamlessly integrated into the Company’s broader risk management framework, ensuring a holistic view and prioritized mitigation strategies.

●

Management of Third-Party Risk: The Company’s comprehensive third-party management process includes rigorous due diligence, oversight and identification of cybersecurity risks associated with vendors and service providers.

●

Team: The Company has an internal committee that is responsible for conducting regular assessments of its information systems, existing controls, vulnerabilities and potential improvements.

●

Engagement of Expert Assistance: The Company leverages the expertise of independent consultants, legal advisors, and audit firms to evaluate the effectiveness of our risk management systems and address potential cybersecurity incidents efficiently.

●

Training: The Company conducts periodic cybersecurity training for its workforce.

This information security program is a key part of the Company’s overall risk management system. The program includes administrative, technical and physical safeguards to help protect the security and confidentiality of customer records and information. These security and privacy policies and procedures are in effect across all of the Company’s businesses and geographic locations.

From time-to-time, the Company has identified cybersecurity threats and cybersecurity incidents that require the Company to make changes to its processes and to implement additional safeguards. While none of these identified threats or incidents have materially affected the Company, it is possible that threats and incidents the Company identifies in the future could have a material adverse effect on its business strategy, results of operations and financial condition.

Governance. The Company’s management team is responsible for the day-to-day management of cybersecurity risks it faces, including the Company’s Chief Executive Officer and Chief Financial Officer.

In addition, the Company’s and the Bank’s Boards of Directors, both as a whole and through the Bank’s Enterprise Risk Management Committee (“ERM”) is responsible for the oversight of risk management, including cybersecurity risks. In that role, the boards of directors and the ERM, with support from the Bank’s cybersecurity advisors, are responsible for ensuring that the risk management processes designed and implemented by management are adequate and functioning as designed.

ITEM 2. PROPERTIES

The Company has 29 offices in 23 communities across Kansas: Manhattan (2), Auburn, Dodge City (2), Fort Scott (2), Garden City, Great Bend (2), Hoisington, Iola, Junction City, LaCrosse, Lawrence (2), Lenexa, Louisburg, Mound City, Osage City, Osawatomie, Overland Park, Paola, Pittsburg, Prairie Village, Topeka (2), Wamego and Wellsville, Kansas. The Company has opened a loan production office in Missouri. The Company owns its main office in Manhattan, Kansas and 25 branch offices, and leases three branch offices. The Company leases the branch offices in Topeka, Wamego and Prairie Village, Kansas and one loan production office in Kansas City, Missouri. The Company also leases a parking lot for one of the Dodge City branch offices it owns.

ITEM 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the Company or the Bank is a party or of which any of their property is subject, other than ordinary routine litigation incidental to the Bank’s business. While the ultimate outcome of current legal proceedings cannot be predicted with certainty, it is the opinion of management that the resolution of these legal actions should not have a material effect on the Company’s consolidated financial position or results of operations.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock has traded on the Nasdaq Global Market under the symbol “LARK” since 2001. At ~~March~~April 2010, ~~2025~~2026, the Company had approximately ~~267~~256 common shareholders of record and approximately 2,~~120~~835 beneficial owners of our common stock.

In January ~~2025~~2026, we declared our ~~94th~~98th consecutive cash quarterly dividend of $0.21 per share. We also distributed a 5% stock dividend for the ~~24th~~25th consecutive year in December ~~2024~~2025. As adjusted for the stock dividend, the quarterly cash dividends were $0.20 per share in ~~2024~~2025. We currently have no plans to change our dividend strategy given our current capital and liquidity positions.

In March 2020, our Board of Directors approved a stock repurchase plan, permitting us to repurchase up to 225,890 shares (“March 2020 Repurchase Program”). As of December 31, ~~2024~~2025, there were 157,456 shares remaining to repurchase under the March 2020 Repurchase Program. Unless terminated earlier by resolution of the Board of Directors, the March 2020 Repurchase Program will expire when we have repurchased all shares authorized for repurchase thereunder.

The following table sets forth information about the Company’s purchases of its common stock during the fourth quarter of ~~2024.~~2025:

Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced plans		Maximum number of shares that may yet be purchased under the plans
October 1-31, 2024		861	$	20.02		861		157,456
October 1-31, 2025		-	$	-		-		157,456
November 1-30, 2024		-		-		-		157,456
November 1-30, 2025		-		-		-		157,456
December 1-31, 2024		-		-		-		157,456
December 1-31, 2025		-		-		-		157,456
Total		~~861~~-	$	~~20.02~~-		~~861~~-		157,456

ITEM 6. [RESERVED]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Forward-Looking Statements

This document (including information incorporated by reference) contains, and future oral and written statements by us and our management may contain, forward-looking statements, within the meaning of such term in the Private Securities Litigation Reform Act of 1995, with respect to our financial condition, results of operations, plans, objectives, future performance and business. Forward-looking statements, which may be based upon beliefs, expectations and assumptions of our management and on information currently available to management, are generally identifiable by the use of words such as “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “may,” “will,” “would,” “could,” “should” or other similar expressions, including the negatives of such expressions. Additionally, all statements in this document, including forward-looking statements, speak only as of the date they are made, and we undertake no obligation to update any statement in light of new information or future events.

4238

Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on operations and future prospects by us and our subsidiaries include, but are not limited to, the following:

● The strength of the local, state, national and international economies and financial markets, including the effects of ~~changing~~ inflationary pressures and ~~supply~~future ~~chain~~monetary ~~constraints~~policies onof ~~such~~the ~~economies~~Federal Reserve in response thereto; ● ~~Changes~~Effects toon the U.S. oreconomy ~~state~~resulting ~~tax~~from ~~laws,~~actions ~~regulations~~taken ~~and~~by ~~governmental policies concerning~~ the ~~Company’s~~federal ~~general business~~government, including ~~changes~~the inthreat ~~interpretation~~ or ~~prioritization~~implementation ~~and~~of ~~changes~~tariffs, inimmigration ~~response~~enforcement toand ~~prior~~changes ~~bank~~in ~~failures~~foreign policy; ● Changes in interest rates and prepayment rates of our assets; ● Increased competition in the financial services sector and the inability to attract new customers, including from non-bank competitors such as credit unions and “fintech” companies; ● Timely development and acceptance of new products and services; ● Rapid and expensive technological changes implemented by us and other parties in the financial services industry, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequence to us and our customers, including the development and implementation of tools incorporating artificial intelligence; ● Our risk management framework; ● Interruptions in information technology and telecommunications systems and third-party services; ● The economic effects of severe weather, natural disasters, widespread disease or pandemics, or other external events; ● The loss of key executives or employees; ● Changes in consumer spending; ● Integration of acquired businesses; ● The commencement, cost and outcome of litigation and other legal proceedings and regulatory actions against us or to which the Company may become subject; ● Changes in accounting policies and practices, such as the implementation of the current expected credit losses accounting standard; ● The economic impact of past and any future terrorist attacks, military conflicts, acts of war, including ongoing conflicts in the Middle East, the Russian invasion of Ukraine and other international conflicts, or threats thereof, and the response of the United States to any such threats and attacks; ● The ability to manage credit risk, forecast loan losses and maintain an adequate allowance for loan losses; ● Fluctuations in the value of securities held in our securities portfolio; ● Concentrations within our loan portfolio and large loans to certain borrowers (including commercial real estate loans); ● The concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; ● The level of non-performing assets on our balance sheets; ● The ability to raise additional capital; ● The occurrence of fraudulent activity, breaches or failures of our or our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; ● Declines in real estate values; ● The effects of fraud on the part of our employees, customers, vendors or counterparties; and ● Our success at managing and responding to the risks involved in the foregoing items.

● Interruptions in information technology and telecommunications systems and third-party services; ● Changes and uncertainty in benchmark interest rates, including the timing of additional rate changes, if any, by the Federal Reserve;

● The economic effects of severe weather, natural disasters, widespread disease or pandemics, or other external events; ● The composition of our executive management team and our ability to attract and retain key personnel; ● Changes in consumer spending; ● Integration of acquired businesses; ● The commencement, cost and outcome of litigation and other legal proceedings and regulatory actions against us or to which we may become subject; ● Changes in accounting policies and practices, such as the implementation of the current expected credit losses accounting standard; ● The economic impact of past and any future terrorist attacks, acts of war, including ongoing conflicts in the Middle East and the conflict in Ukraine, or threats thereof, and the response of the United States to any such threats and attacks; ● The ability to manage credit risk, forecast loan losses and maintain an adequate allowance for loan losses; ● Fluctuations in the value of securities held in our securities portfolio;

● Concentrations within our loan portfolio, large loans to certain borrowers, and large deposits from certain clients; ● The concentration of large deposits from certain clients who have balances above current FDIC insurance limits and may withdraw deposits to diversify their exposure; ● The level of non-performing assets on our balance sheets; ● The ability to raise additional capital; ● Fluctuations in the values of the securities held in our securities portfolio, including as a result of changes in interest rates; ● The extensive regulatory framework that applies to the Company; ● The impact of recent and future legislative and regulatory changes, including in response to prior bank failures; ● Governmental monetary, trade and fiscal policies; ● The occurrence of fraudulent activity, breaches or failures of our or our third party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; and ● Declines in real estate values.

These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements. Additional information concerning us and our business, including other factors that could materially affect our financial results, is included in “Item 1A. Risk Factors” of this Annual Report on Form 10-K.

CORPORATE PROFILE AND OVERVIEW

Landmark Bancorp, Inc. is a financial holding company incorporated under the laws of the State of Delaware and is engaged in the banking business through its wholly-owned subsidiary, Landmark National Bank, and in the insurance business through its wholly-owned subsidiary, Landmark Risk Management, Inc. The Company is listed on the Nasdaq Global Market under the symbol “LARK.” The Bank is dedicated to providing quality financial and banking services to its local communities. Our strategy includes growing our commercial, CRE and agriculture loan portfolios, while continuing to emphasize and ~~maintaining~~maintain high quality assets. We are committed to developing relationships with our borrowers and providing a total banking service.

The Bank is principally engaged in the business of attracting deposits from the general public and using such deposits, together with borrowings and other funds, to originate one-to-four family residential real estate, construction and land, CRE, commercial, agriculture, municipal and consumer loans. Although not our primary business function, we do invest in certain investment and mortgage-related securities using deposits and other borrowings as funding sources.

Our results of operations depend generally on net interest income, which is the difference between interest income from interest-earning assets and interest expense on interest-bearing liabilities. Net interest income is affected by regulatory, economic and competitive factors that influence interest rates, loan demand and deposit flows. In addition, we are subject to interest rate risk to the degree that our interest-earning assets mature or reprice at different times, or at different speeds, than our interest-bearing liabilities. Our results of operations are also affected by non-interest income, such as service charges, loan fees, gains from the sale of newly originated loans and gains or losses on investments, and certain other non-interest related items. Our principal operating expenses, aside from interest expense, consist of, among others, compensation and employee benefits, occupancy costs, data processing expenses, professional fees, amortization of intangibles expense, federal deposit insurance costs, ~~data processing expenses~~ and provision for credit losses.

We are significantly impacted by prevailing economic conditions including federal monetary and fiscal policies and federal regulations of financial institutions. Deposit balances are influenced by numerous factors such as competing investments, the level of income and the personal rate of savings within our market areas. Factors influencing lending activities include the demand for housing, the interest rate pricing competition from other lending institutions, and rates of inflation.

Currently, our business consists of its ownership of the Bank, with its main office in Manhattan, Kansas and ~~thirty~~28 additional offices in central, eastern, southeast and southwest Kansas and Missouri, and our ownership of the Captive, a Nevada-based captive insurance company.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are those that are both most important to the portrayal of our financial condition and results of operations, and require our management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies relate to the allowance for credit losses and goodwill, both of which involve significant judgment by our management.

On January 1, 2023, we adopted ~~CECL~~ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), commonly referred to as “CECL”, which changed our allowance for credit losses from an incurred loss methodology to an expected loss methodology. The CECL model is subject to changes in our economic forecast, which can impact the calculation of our allowance for credit losses substantially. Our most significant critical accounting estimates relate to the allowance for credit losses on loans, which involve significant judgment by our management. The analysis is updated on a quarterly basis based on historical loss information adjusted for current conditions and reasonable and supportable forecasts. Additionally, the Company considers changes in economic and business conditions, changes in policies, procedures and underwriting, changes in management or staff and their related experience, changes in nature and volume of the portfolio, changes in loan review, changes in collateral values, changes in past due and ~~nonaccrual~~non-accrual loans, changes in competition, legal and regulatory issues, changes in concentrations and other qualitative factors, which impacts the estimate of future credit losses. These qualitative factors comprise a significant portion of the Company’s allowance for credit losses. Based on a sensitivity analysis of all collectively evaluated loan pools, a five basis point change in the qualitative risk factors across all loan categories would result in an increase or decrease of $~~520~~551,000, ~~or 4.1%,~~ in the allowance for credit losses as of December 31, ~~2024~~2025. See Note 1 (Summary of Significant Accounting Policies) to the Company’s consolidated financial statements in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for a more detailed description methodology ~~and impact of adoption~~.

We have completed several business and asset acquisitions since 2002, which have generated significant amounts of goodwill. The initial value assigned to goodwill is the residual of the purchase price over the fair value of all identifiable tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized; however, it is tested for impairment at each calendar year end or more frequently when events or circumstances dictate. The Company performed a qualitative assessment of factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount as of December 31, 2024. This assessment included a review of macroeconomic conditions, industry and market specific considerations and other relevant factors including the Company’s market capitalization, with control premiums and valuation multiples, compared to recent financial industry acquisition multiples for similar institutions to estimate the fair value of the Company’s single reporting unit. The Company’s qualitative impairment test indicated that its goodwill was not impaired. The Company can make no assurances that future impairment tests will not result in goodwill impairments.40

44We have completed several business and asset acquisitions since 2002, which have generated significant amounts of goodwill. The initial value assigned to goodwill is the residual of the purchase price over the fair value of all identifiable tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized; however, it is tested for impairment at each calendar year end or more frequently when events or circumstances dictate. The Company performed a qualitative assessment of factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount as of December 31, 2025. This assessment included a review of macroeconomic conditions, industry and market specific considerations and other relevant factors including the Company’s market capitalization, with control premiums and valuation multiples, compared to recent financial industry acquisition multiples for similar institutions to estimate the fair value of the Company’s single reporting unit. The Company’s qualitative impairment test indicated that its goodwill was not impaired. The Company can make no assurances that future impairment tests will not result in goodwill impairments.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, ~~2024~~2025 AND DECEMBER 31, ~~2023~~2024

SUMMARY OF PERFORMANCE. Net earnings for ~~2024~~2025 increased $~~767~~5.8 million,~~000,~~ or 644.34%, to $1318.08 million as compared to $1213.20 million for ~~2023~~2024. The ~~increase~~ increase in net earnings during ~~2024~~2025 was primarily related to an increase in net interest income due primarily to an increase in ~~loans~~loan balances and higher yields on interest-earning assets.

We distributed a 5% stock dividend for the ~~24th~~25th consecutive year in December ~~2024~~2025. All per share and average share data in this section reflect the ~~2024~~2025 and ~~2023~~2024 stock dividends.

Interest Income. Interest income for ~~2024~~2025 increased $97.21 million, or 149.26%, to $7381.90 million, as compared to ~~2023~~2024. Interest income on loans increased $97.68 million, or 1812.67%, to $6169.~~4 million~~2 million for ~~2024~~2025, as compared to ~~2023~~2024 due to higher yields and average balances. Our yields increased from 56.8130% in ~~2023~~2024 to 6.337% in ~~2024~~ 2025. The increase in interest income on loans was also driven by an increase in average loan balances, which increased from $~~891~~974.5 3 million in 2024 ~~2023~~ to $~~974~~1.31 ~~million~~billion in ~~2024~~2025. Interest income on investment securities decreased $~~382~~737,000, or 36.10%, to $1211.36 million during ~~2024~~2025, as compared to ~~2023~~2024. The decrease in interest income on investment securities was primarily the result of a decrease in the average balances of investment securities in ~~2024~~2025, which decreased from $~~486~~432.39 million in ~~2023~~2024 to $~~432~~365.98 million in ~~2024~~ 2025.

Interest Expense. Interest expense during ~~2024~~2025 ~~increased~~decreased $62.8 million, or 3110.51%, to $2825.23 million as compared to ~~2023~~2024. Interest expense on interest-bearing deposits ~~increased~~decreased $7.1.4 million to $2220.39 million for ~~2024~~2025 as compared to $1522.3 million in ~~2023~~2024. Our total cost of interest-bearing deposits ~~increased~~decreased from 12.7138% during ~~2023~~2024 to 2.3814% during ~~2024~~2025 as a result of ~~higher~~lower interest rates. ~~and~~Offsetting ~~increased~~the ~~competition~~decrease ~~for~~in ~~deposits.~~interest ~~Also~~expense ~~contributing~~due to ~~the~~lower ~~increase~~cost inof interest-bearing ~~expense~~deposits was an increase in average interest-bearing deposit balances, which increased from $~~892~~938.42 million in ~~2023~~2024 to $~~938~~979.24 million in ~~2024~~in 2025. Interest expense on borrowings decreased $~~272,000~~1.5 million to $54.94 million during ~~2024~~2025, as compared to ~~2023~~2024, due to a decrease in our average borrowings, which decreased from $~~114~~104.21 million in ~~2023~~2024 to $~~104~~87.17 million in ~~2024~~2025.

Net Interest Income. Net interest income represents the difference between income derived from interest-earning assets and the expense incurred on interest-bearing liabilities. Net interest income is affected by both the difference between the rates of interest earned on interest-earnings assets and the rates paid on interest-bearing liabilities (“interest rate spread”) as well as the relative amounts of interest-earning assets and interest-bearing liabilities.

During ~~2024~~2025, net interest income increased $210.40 million, or 521.68%, to $4555.7 million compared to $4345.37 million in ~~2023~~2024. The increase in net ~~interest~~ interest income was primarily a result of an increase in interest income on loans, coupled with lower interest expense, partially offset by ~~higher~~lower interest ~~expense~~income on investment securities. The accretion of purchase accounting adjustments increased net interest income by $~~1.0~~794,000 ~~million~~ in ~~2024~~2025 compared to $~~993,000~~1.0 million in ~~2023~~2024. Compared to the same period last year, ~~higher~~net interest ~~rates~~income ~~increased~~was ~~the~~benefitted by higher average balances and yields on ~~our~~loans, ~~interest-earning~~coupled ~~assets~~with ~~and~~lower ~~the~~costs ~~cost~~ of ~~our~~ interest-bearing liabilities. Our net interest margin, on a tax-equivalent basis, increased to 3.2886% during ~~2024~~2025 from 3.1728% during ~~2023~~2024. Lower interest rates may not result in a higher net interest margin as a result of increased competition for loans and deposits. ~~and~~The ~~the~~ slope of the yield curve also impacts our net interest margin. Additionally, deposit balances may decline resulting in the need for higher cost funding.

Provision for credit Losses. On January 1, 2023, we adopted CECL and established an ACL based on this framework. The ACL is based on the historical loss rates and the weighted average remaining maturity for financial assets measured at amortized costs including loans, investment securities and unfunded loan commitments. The historical loss rates are adjusted to reflect reasonable and supportable forecasts to estimate expected credit losses over the life of the financial asset.

During ~~2024~~2025, we recorded a $2.34 million provision for credit losses compared to a $~~349,000~~2.3 million provision for credit losses in ~~2023~~2024. ~~The~~We ~~$2.3 million~~recorded ~~provision~~net ~~for~~loan ~~credit~~charge-offs ~~losses during 2024 consisted~~ of a $2.47 million ~~provision~~during to2025 ~~the~~compared ~~allowance~~to ~~for~~net ~~credit~~charge-offs ~~losses on loans and a credit provision~~ of $~~100~~183,000 toduring ~~unfunded loan commitments~~2024. WeThe ~~recorded~~increase in net ~~loan~~ charge-offs during of2025 ~~$183,000~~was ~~during~~primarily ~~2024~~due ~~compared~~ to ~~net~~the ~~loan~~charge-off ~~recoveries~~ of ~~$44,000~~a single commercial credit during ~~2023~~the third quarter.

45Non-interest Income. Total non-interest income was $15.0 million in 2025, an increase of $207,000, or 1.4%, compared to 2024. The increase in non-interest income was primarily the result of a decrease in losses on sales of investment securities of $928,000 and an increase of $789,000 in gains on sales of loans. A loss of $103,000 was recorded on the sale of investment securities during 2025, a decrease from the $1.0 million loss recorded on the sale of investment securities in 2024. These increases were partially offset by a decrease of $604,000 in bank owned life insurance due to death benefits recognized in 2024 and a decrease of $547,000 in fees and service charges primarily due to lower fees to deposit accounts.

Non-interest ~~Income~~Expense. ~~Total non~~Non-interest ~~income~~expense ~~was~~increased $141.72 million, inor ~~2024~~2.6%, anto ~~increase of~~ $145.52 million, orin ~~11.4%,~~2025 compared to ~~2023~~$44.1 million in 2024. The increase in non-interest ~~income~~expense in 2025 was primarily ~~the~~driven by ~~result of~~ an increase of $~~810,000~~2.4 million in ~~bank~~compensation ~~owned~~and ~~life~~benefits ~~insurance~~expense due to ~~the~~an ~~accrual~~increase ~~of death benefits~~ in ~~2024.~~the ~~Also~~number ~~contributing~~of toemployees ~~the~~coupled ~~increase~~with inhigher ~~non-interest~~incentive ~~income~~compensation ~~was~~costs antied ~~increase~~to ofimproved ~~$522,000~~Company inperformance. ~~fees~~This ~~and~~increase ~~service~~was ~~charges~~partially ~~primarily~~offset ~~due~~by toa ~~higher~~decrease ~~fees to deposit accounts. A loss~~ of $~~1.0~~752,000 ~~million~~in ~~was~~valuation allowances ~~recorded~~for onassets ~~the~~held for sale ofand ~~investment securities during 2024,~~ a decrease ~~from~~of ~~the~~ $~~1.2~~510,000 ~~million~~in ~~loss~~occupancy ~~recorded~~and onequipment ~~the sale of investment securities in 2023~~expense.

~~Non-interest~~INCOME ~~Expense~~TAXES. ~~Non-interest~~We ~~expense~~recorded ~~increased~~income ~~$2.1~~tax ~~million, or~~expense ~~5.0%,~~of to $444.13 million in ~~2024~~2025 compared to $421.01 million in ~~2023~~2024. The ~~increase~~effective intax ~~non-interest~~rate ~~expense~~increased from 7.7% in 2024 ~~was~~to ~~mainly~~18.6% ~~associated with~~in a2025, ~~$1.1~~primarily ~~million~~due ~~valuation~~to ~~allowance~~decreased ~~recorded~~recognition ~~against~~of ~~real~~previously ~~estate~~unrecognized ~~held~~tax ~~for sale~~benefits. ~~Also~~During ~~contributing~~2025, towe ~~the increase in non-interest~~recognized ~~expense was a~~ $~~460~~161,000 ~~increase~~of inpreviously ~~professional~~unrecognized ~~fees~~tax ~~associated~~benefits ~~with~~compared ~~increased~~to ~~legal~~$1.0 ~~and~~million ~~consulting~~during ~~costs and a $422~~2024,~~000~~ ~~increase~~which ~~in compensation.~~reduced ~~Partially offsetting~~ the ~~increase~~effective intax ~~non-interest~~rates ~~expense was a $680,000 decrease~~ in ~~amortization of mortgage serving rights~~both ~~and other intangibles~~years.

~~INCOME~~FINANCIAL ~~TAXES~~CONDITION. WeEconomic ~~recorded~~conditions ~~income~~in ~~tax~~the ~~expense~~U.S. ofremained ~~$1.1~~resilient ~~million~~during in2025 ~~2024~~despite ~~compared~~elevated inflation levels and economic uncertainty over tariffs continuing to $2impact the economy.0 ~~million~~Rate incuts ~~2023~~by the Federal Reserve Bank during 2025 have positively benefitted financial institutions’ earnings and net interest margin. The ~~effective~~Federal ~~tax~~Reserve lowered interest rates by 75 basis points during 2025 due to improvements in the inflation outlook, however, additional rate ~~decreased~~cuts are dependent upon further reductions in the inflation rate and ~~from~~other 13economic factors.8% inWe ~~2023~~maintain tostrong 7capital and liquidity, and a stable, conservative deposit portfolio with a significant majority of our deposits being retail-based and insured by the FDIC.7% We spend significant time each month monitoring our interest rate and concentration risks through our asset/liability management and lending strategies that involve a relationship-based banking model offering stability and consistency. The State of Kansas and the geographic markets in ~~2024~~which the Company operates have also been impacted by economic headwinds. Supply chain constraints, ~~primarily~~labor ~~due~~shortages and geopolitical events have contributed to ~~higher~~the ~~tax-exempt~~rising ~~income~~inflation levels which are impacting all areas of the economy both nationally and locally. The Company’s allowance for credit losses continues to factor in estimates of the ~~recognition~~economic impact of ~~previously~~these ~~unrecognized~~conditions ~~tax~~and ~~benefits~~other qualitative factors on our loan portfolio. ~~During~~ ~~2024~~However, weour ~~recognized~~loan ~~$1.0~~portfolio ~~million~~is diversified across various types of ~~previously~~loans ~~unrecognized~~and ~~tax~~collateral ~~benefits~~throughout ~~compared~~the markets in which we operate. Aside from a few problem loans that management is working to ~~$517~~resolve,~~000~~ ~~during~~our ~~2023,~~asset ~~which~~quality ~~reduced~~has remained strong over the ~~effective~~past few years. While further increases in problem assets may arise, ~~tax~~management ~~rates~~believes its efforts to run a high quality financial institution with a sound asset base will continue to create a strong foundation for continued growth and profitability in ~~both~~the ~~years~~future.

FINANCIAL CONDITION. Economic conditions in the U.S. remained sluggish during 2024 as elevated inflation levels and higher interest rates continued to impact the economy. Elevated interest rates and a flat or negative sloping yield curve have impacted financial institutions generally, resulting in continued higher costs of funding and lower fair values for investment securities. The Federal Reserve lowered interest rates by 1.00% in the second half of 2024 due to improvements in the inflation outlook, however, additional rate cuts are dependent upon further reductions in the inflation rate and other economic factors. We maintain strong capital and liquidity, and a stable, conservative deposit portfolio with a significant majority of our deposits being retail-based and insured by the FDIC. We spend significant time each month monitoring our interest rate and concentration risks through our asset/liability management and lending strategies that involve a relationship-based banking model offering stability and consistency. The State of Kansas and the geographic markets in which the Company operates have also been impacted by economic headwinds. Supply chain constraints, labor shortages and geopolitical events have contributed to the rising inflation levels which are impacting all areas of the economy both nationally and locally. The Company’s allowance for credit losses continues to factor in estimates of the economic impact of these conditions and other qualitative factors on our loan portfolio. However, our loan portfolio is diversified across various types of loans and collateral throughout the markets in which we operate. Aside from a few problem loans that management is working to resolve, our asset quality has remained strong over the past few years. While further increases in problem assets may arise, management believes its efforts to run a high quality financial institution with a sound asset base will continue to create a strong foundation for continued growth and profitability in the future.42

Asset Quality and Distribution. Our primary investing activities are the origination of one-to-four family residential real estate, construction and land, CRE, commercial, agriculture, municipal and consumer loans and the purchase of investment securities. Total assets were $1.6 billion at both December 31, ~~2024~~2025 and ~~December 31, 2023~~2024. Net loans, excluding loans held for sale, increased $~~101~~59.62 million, 10or 5.87%, to $1.01 billion at December 31, ~~2024~~2025, compared to $~~937~~1.60 ~~million~~ billion at December 31, ~~2023~~2024. Investment securities available-for-sale decreased $8024.34 million, or 176.75%, from $~~452~~372.85 million at December 31, ~~2023~~ 2024 to $~~372~~348.5 2 million at December 31, ~~2024~~2025.

The allowance for credit losses is established through a provision for credit losses based on our economic projections. At December 31, ~~2024~~2025, our allowance for credit losses on loans totaled $12.85 million, or 1.2212% of gross loans outstanding, compared to $1012.68 million, or 1.1222% of gross loans outstanding, at December 31, ~~2023~~2024. The ~~increase~~decrease in our allowance for credit losses on loans as a percentage of gross loans outstanding was primarily due to ana ~~increase~~decrease in the reserves on individually evaluated loans.

As of December 31, ~~2024~~2025 and ~~2023~~2024, approximately $2622.19 million and $726.51 million, respectively, of loans were considered classified and assigned a risk rating of special mention, substandard or doubtful. The ~~increase~~decrease in classified loans was primarily due to a commercial loan ~~relationships~~relationship that ~~moved~~was tocharged ~~classified~~off ~~status~~ during ~~2024~~2025. These ratings indicate that the loans identified as potential problem loans have more than normal risk which raised doubts as to the ability of the borrower to comply with present loan repayment terms. ~~Even~~Management ~~though these borrowers were experiencing moderate cash flow problems as well as some deterioration in collateral value, management~~ believed the general allowance was sufficient to cover all expected future losses expected in the loan portfolio at the balance sheet date.

46Loans past due 30-89 days and still accruing interest totaled $4.3 million, or 0.38% of gross loans, at December 31, 2025, compared to $6.2 million, or 0.59% of gross loans, at December 31, 2024. At December 31, 2025, $10.0 million of loans were on non-accrual status, or 0.90% of gross loans, compared to $13.1 million, or 1.25% of gross loans, at December 31, 2024. Past due loans are determined in accordance with the contractual repayment terms. Non-accrual loans consist of loans 90 or more days past due and certain individually evaluated loans. There were no loans 90 days delinquent and accruing interest at either December 31, 2025 or 2024.

~~Loans~~As ~~past~~part ~~due~~of ~~30-89~~our ~~days~~credit ~~and~~risk ~~still~~management, ~~accruing~~we ~~interest~~continue ~~totaled~~to ~~$6.2~~manage ~~million,~~the orloan ~~0.59%~~portfolio ofto ~~gross~~identify problem loans, atand ~~December~~have ~~31,~~placed ~~2024,~~additional ~~compared to $1.6~~emphasis ~~million,~~on orcommercial ~~0.17%~~CRE ofand ~~gross~~construction ~~loans,~~and atland ~~December~~relationships. ~~31,~~We ~~2023.~~are Atworking ~~December~~to ~~31,~~resolve ~~2024,~~or ~~$13.1~~remove ~~million~~non-performing credits out of ~~loans~~the ~~were~~loan onportfolio. ~~non-accrual~~At ~~status~~December 31, or2025, ~~1.25% of~~we ~~gross~~had ~~loans,~~no real estate owned compared to $~~2.4 million~~167,000 ~~or 0.25%~~ of ~~gross~~real ~~loans,~~estate owned at December 31, ~~2023~~2024. ~~Past~~The ~~due~~decrease ~~loans are determined~~ in ~~accordance with~~real ~~the~~estate ~~contractual~~owned ~~repayment~~as ~~terms.~~of ~~Non-accrual~~December ~~loans~~31, ~~consist~~2025 ofcompared ~~loans~~to 90December or31, ~~more~~2024 ~~days~~was ~~past~~ due ~~and~~to ~~certain~~the ~~individually~~sale ~~evaluated loans.~~of ~~There~~properties ~~were~~held as noother ~~loans~~real 90estate ~~days delinquent and accruing interest at December 31, 2024 and 2023~~owned.

AsLiability ~~part~~Distribution. ofOur ~~our~~primary ~~credit~~ongoing ~~risk~~sources ~~management,~~of wefunds are ~~continue~~deposits, toFHLB ~~manage~~borrowings, ~~the~~proceeds ~~loan~~from ~~portfolio~~principal ~~to identify problem loans~~ and ~~have~~interest ~~placed~~payments ~~additional emphasis~~ on ~~commercial~~loans ~~CRE~~ and ~~construction~~investment securities and ~~land~~proceeds ~~relationships.~~from Wethe sale ~~are~~of ~~working~~mortgage toloans ~~resolve~~and ~~the~~investment ~~remaining~~securities. ~~problem~~While ~~credits~~maturities orand ~~move~~scheduled ~~the~~amortization ~~non-performing credits out~~ of ~~the~~loans ~~loan~~are ~~portfolio.~~a Atpredictable ~~December~~source ~~31,~~of ~~2024~~funds, deposit weflows ~~had~~and ~~$167,000~~mortgage ofprepayments ~~real~~are ~~estate~~greatly ~~owned~~influenced ~~compared~~by togeneral ~~$928,000~~interest atrates ~~December~~and ~~31,~~economic ~~2023~~conditions. ~~The~~ ~~decrease~~We inhad ~~real~~a ~~estate~~balance ~~owned as~~ of $1.4 ~~December~~billion ~~31,~~in ~~2024~~deposits ~~compared~~at to December 31, ~~2023~~2025 ~~was~~as ~~primarily~~compared ~~due~~ to ~~the sale of properties~~$1. As3 ofbillion at December 31, 2024~~, real estate owned consisted of a single parcel of undeveloped land~~. ~~The Company is currently marketing the property.~~

~~Liability~~Total ~~Distribution.~~borrowings ~~Our~~decreased ~~primary~~$54.8 ~~ongoing sources of funds are deposits~~million, ~~FHLB~~or ~~borrowings~~61.9%, ~~proceeds~~to ~~from~~$33.7 ~~principal~~million ~~and~~at ~~interest~~December ~~payments~~31, on2025, ~~loans and investment securities and proceeds~~ from ~~the sale~~$88.5 ofmillion ~~mortgage~~at ~~loans~~December ~~and~~31, ~~investment securities~~2024. ~~While~~The ~~maturities~~decrease in ~~and~~borrowings ~~scheduled~~was ~~amortization~~primarily ofdue ~~loans~~to ~~are a predictable source of funds,~~ deposit ~~flows~~growth and ~~mortgage~~the ~~prepayments~~sale ~~are greatly influenced by general interest rates and economic conditions. We had a balance~~ of ~~$1.3~~ ~~billion~~investment ~~in deposits at December 31, 2024 and December 31, 2023~~securities.

~~Total~~Non-interest-bearing ~~borrowings~~deposits ~~decreased~~at December 31, 2025 were $10364.57 million, or 1026.63% of deposits, compared to $88351.6 million, or 26.5% of deposits, at December 31, 2024. Money market and checking accounts were 46.9% of our deposit portfolio and totaled $651.0 million at December 31, 2025, compared to 47.9% of our deposit portfolio totaling $637.0 million, at December 31, 2024. Savings accounts increased to $151.4 million, or 10.8% of deposits, at December 31, 2025, from $99145.5 million, or 10.9% of deposits, at December 31, 2024. Certificates of deposit totaled $221.8 million, or 16.0% of deposits, at December 31, 2025, compared to $194.7 million, or 14.7% of deposits, at December 31, ~~2023~~2024. ~~The~~Competition for deposits may affect our ability to continue to increase deposit balances and could result in a decrease in our deposit balances in future periods. Such decreases in ~~borrowings~~deposit ~~was~~balances ~~primarily~~may ~~due~~cause us to ~~deposit~~secure ~~growth~~funding ~~and~~through ~~the~~other ~~sale~~borrowings ofwhich ~~investment~~would ~~securities~~likely result in higher interest costs.

Non-interest-bearing deposits at December 31, 2024 were $351.6 million, or 26.5% of deposits, compared to $367.1 million, or 27.9% of deposits, at December 31, 2023. Money market and checking accounts were 47.9% of our deposit portfolio and totaled $637.0 million at December 31, 2024, compared to 46.6% of our deposit portfolio totaling $613.6 million, at December 31, 2023. Savings accounts decreased to $145.5 million, or 10.9% of deposits, at December 31, 2024, from $152.4 million, or 11.6% of deposits, at December 31, 2023. Certificates of deposit totaled $194.7 million, or 14.7% of deposits, at December 31, 2024, compared to $183.2 million, or 13.9% of deposits, at December 31, 2023. Competition for deposits may affect our ability to continue to increase deposit balances and could result in a decrease in our deposit balances in future periods.43

Certificates of deposit at December 31, ~~2024~~2025, scheduled to mature in one year or less totaled $~~181~~213.04 million. Historically, maturing deposits have generally remained with the Bank, and we believe that a significant portion of the deposits maturing in one year or less will remain with us upon maturity in some type of deposit account.

CASH FLOWS. During ~~2024~~2025, our cash and cash equivalents ~~decreased~~increased by $~~6.8~~707,000 ~~million~~ as compared to ~~2023~~2024. Our operating activities provided ~~net~~ net cash of $1421.26 million in ~~2024~~2025, compared to $1214.62 million in ~~2023~~2024, which is primarily the result of increased net earnings and sales of one-to-four family residential mortgage loans. Our investing activities used net cash of $1821.14 million during ~~2024~~2025, compared to $5018.6 1 million in ~~2023~~ 2024, primarily to fund loan growth. Our financing activities ~~used~~provided net cash of $~~2.9~~441,000 ~~million~~ during ~~2024~~2025, compared to ~~providing~~ using $423.0 million in ~~2023~~2024, primarily as a result of ~~funding~~an ~~dividend~~increase ~~payments~~in deposits.

Liquidity. Our most liquid assets are cash and cash equivalents and investment securities available-for-sale. The levels of these assets are dependent on the operating, financing, lending and investing activities during any given year. These liquid assets totaled $~~396~~372.94 million at December 31, ~~2024~~2025 and $~~484~~396.89 million at December 31, ~~2023~~2024. During periods in which we are not able to originate a sufficient amount of loans and/or periods of high principal prepayments, we generally increase our liquid assets by investing in short-term, high-grade investments.

47Liquidity management is both a daily and long-term function of our strategy. Excess funds are generally invested in short-term investments. Excess funds are typically generated as a result of increased deposit balances, while uses of excess funds are generally deposit withdrawals and loan advances. In the event we require funds beyond our ability to generate them internally, additional funds are generally available through the use of brokered deposits, FHLB advances, a line of credit with the FHLB, other borrowings or through sales of investment securities. At December 31, 2025, we had an outstanding balance of $8.9 million against our line of credit with the FHLB. At December 31, 2025, we had collateral pledged to the FHLB that would allow us to borrow $239.1 million, subject to FHLB credit requirements and policies. At December 31, 2025, we had no borrowings through the Federal Reserve discount window, while our borrowing capacity with the Federal Reserve was $42.0 million. We also have various other federal funds agreements, both secured and unsecured, with correspondent banks totaling approximately $35.0 million in available credit under which we had no outstanding borrowings at December 31, 2025. At December 31, 2025, we had subordinated debentures totaling $21.7 million and $1.5 million of repurchase agreements. At December 31, 2025, the Company had no borrowings against a $5.0 million line of credit from an unrelated financial institution maturing on November 1, 2026, with an interest rate that adjusts daily based on the prime rate less 0.50%. This line of credit has covenants specific to capital and other financial ratios, which the Company was in compliance with at December 31, 2025. The Company also borrowed $1.7 million from the same unrelated financial institution at a fixed rate of 6.15%. This borrowing matures on September 1, 2027 and requires quarterly principal and interest payments. The original balance of this borrowing was $10.0 million and was used to fund part of the acquisition of Freedom.

~~Liquidity~~OFF-BALANCE ~~management~~SHEET isARRANGEMENTS. ~~both~~As a ~~daily~~provider ~~and long-term function~~ of ~~our~~financial ~~strategy.~~services, ~~Excess~~we ~~funds~~routinely ~~are~~issue ~~generally~~financial ~~invested~~guarantees in ~~short-term~~the ~~investments.~~form ~~Excess funds~~of ~~are~~financial ~~typically~~and ~~generated~~performance standby asletters ~~a result~~ of ~~increased~~credit. ~~deposit~~Standby ~~balances,~~letters ~~while uses~~ of ~~excess~~credit ~~funds~~ are ~~generally~~contingent ~~deposit~~commitments ~~withdrawals and~~issued ~~loan~~by ~~advances.~~us Ingenerally ~~the event we require funds beyond our ability~~ to ~~generate~~guarantee ~~them~~the ~~internally,~~payment ~~additional~~or ~~funds are generally available~~performance ~~through~~obligation ~~the use~~ of ~~brokered~~a ~~deposits,~~customer ~~FHLB~~to ~~advances,~~ a ~~line~~third ~~of credit with the FHLB, other borrowings or through sales of investment securities~~party. AtWhile ~~December~~these ~~31,~~standby ~~2024,~~letters ~~we had an outstanding balance~~ of ~~$48.8 million against our line of~~ credit ~~with~~represent ~~the~~a ~~FHLB.~~potential Atoutlay ~~December 31,~~by ~~2024~~us, wea ~~had~~significant ~~collateral~~amount of ~~pledged to~~ the ~~FHLB~~commitments ~~that~~may ~~would~~expire ~~allow~~without usbeing todrawn ~~borrow $171~~upon.0 ~~million,~~We ~~subject~~have torecourse ~~FHLB~~against ~~credit~~the ~~requirements~~customer ~~and policies.~~for Atany ~~December~~amount ~~31, 2024, we had no borrowings through~~ the ~~Federal~~customer ~~Reserve~~is ~~discount window, while our borrowing capacity with the~~required ~~Federal~~to ~~Reserve~~pay ~~was~~to ~~$50.5~~a ~~million.~~third Weparty ~~also~~under ~~have~~a ~~various~~standby ~~other~~letter ~~federal~~of ~~funds agreements, both secured and unsecured, with correspondent banks totaling approximately $35~~credit.0 ~~million~~The inletters ~~available~~of credit ~~under~~are ~~which~~subject weto ~~had~~the nosame ~~outstanding~~credit ~~borrowings at December 31~~policies, ~~2024. At~~underwriting ~~December~~standards ~~31,~~and ~~2024,~~approval weprocess ~~had~~as ~~subordinated~~loans ~~debentures~~made ~~totaling~~by ~~$21~~us.7 ~~million~~Most ~~and $13.8 million~~ of ~~repurchase agreements. At December 31, 2024,~~ the ~~Company~~standby ~~had~~letters ~~no borrowings against a $5.0 million line~~ of credit ~~from~~are ansecured, ~~unrelated~~and ~~financial~~in ~~institution~~the ~~maturing~~event onof ~~November~~nonperformance 1,by ~~2025~~the customers, ~~with~~we anhave ~~interest~~the ~~rate~~right ~~that~~to ~~adjusts daily based on~~ the ~~prime~~underlying ~~rate~~collateral, ~~less~~which ~~0.50%.~~could ~~This~~include ~~line~~CRE, ofphysical ~~credit~~plant ~~has covenants specific to capital~~ and ~~other financial ratios. At December 31~~property, ~~2024~~inventory, ~~the Company’s tier 1 capital ratio of 12.43% was below the minimum required~~receivables, ~~under~~cash ~~such~~and ~~covenants~~marketable ~~of 12~~securities.~~50%.~~ The ~~Company~~contract ~~requested~~amount ~~from~~of ~~the~~these ~~lender~~standby aletters ~~waiver~~ of ~~the default~~credit, which ~~was~~represents ~~granted by~~ the ~~lender.~~maximum Onpotential ~~March~~future ~~14,~~payments ~~2025,~~guaranteed ~~the~~by ~~Company and the lender entered into a Change in Terms Agreement~~us, ~~reducing~~was ~~the minimum risk-based capital ratio required under such covenants to 12.00% going forward. The Company also borrowed~~ $42.2 million ~~from the same unrelated financial institution~~ at a ~~fixed~~December ~~rate of 6.15%. This borrowing matures on September 1~~31, ~~2027~~2025 ~~and~~as ~~requires~~compared ~~quarterly~~to ~~principal and interest payments. The original balance of this borrowing was~~ $101.09 million ~~and~~at ~~was~~December ~~used~~31, ~~to fund part of the acquisition of Freedom~~2024.

~~OFF-BALANCE~~At ~~SHEET~~December ~~ARRANGEMENTS.~~31, ~~As a provider of financial services~~2025, we ~~routinely~~had ~~issue~~outstanding ~~financial~~loan ~~guarantees~~commitments, inexcluding ~~the form of financial and performance~~ standby letters of credit., ~~Standby letters~~ of ~~credit~~$203.5 ~~are~~million, ~~contingent~~as ~~commitments~~compared ~~issued by us generally~~ to ~~guarantee the payment or performance~~$201.2 ~~obligation~~million ofat aDecember ~~customer to a third party. While these standby letters of credit represent a potential outlay by us~~31, ~~a significant amount of the commitments may expire without being drawn upon~~2024. We ~~have~~anticipate ~~recourse~~that ~~against~~sufficient ~~the~~funds ~~customer~~will ~~for~~be ~~any~~available ~~amount the customer is required~~ to ~~pay~~meet tocurrent aloan ~~third party under a standby letter of credit~~commitments. ~~The~~These ~~letters of credit are subject to the same credit policies, underwriting~~commitments ~~standards~~consist ~~and approval process as loans made by us. Most~~ of ~~the~~unfunded ~~standby~~lines ~~letters~~ of credit ~~are secured,~~ and incommitments ~~the event of nonperformance by the customers, we have the right~~ to ~~the~~finance ~~underlying~~real ~~collateral,~~estate ~~which could include CRE, physical plant and property, inventory, receivables, cash and marketable securities~~loans. The contract amount of these standby letters of credit, which represents the maximum potential future payments guaranteed by us, was $1.9 million at December 31, 2024 as compared to $1.6 million at December 31, 2023.

At December 31, 2024, we had outstanding loan commitments, excluding standby letters of credit, of $201.2 million, as compared to $211.8 million at December 31, 2023. We anticipate that sufficient funds will be available to meet current loan commitments. These commitments consist of unfunded lines of credit and commitments to finance real estate loans.

CAPITAL. As discussed in more detail in the “Supervision and Regulation” section of “Item 1. Business” of this Annual Report on Form 10-K, current regulatory capital regulations require financial institutions (including banks and bank holding companies) to meet certain regulatory capital requirements. The Company and the Bank are subject to the Basel III Rule that implemented the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision and certain changes required by the Dodd-Frank Act. The Basel III Rule is applicable to all U.S. banks that are subject to minimum capital requirements, as well as to bank and savings and loan holding companies other than “small bank holding companies” (generally, non-public bank holding companies with consolidated assets of less than $3.0 billion).

At December 31, 2024, the Bank maintained a leverage ratio of 9.10% and a total risk-based capital ratio of 13.5%. As shown by the following table, the Bank’s capital exceeded the minimum capital requirements in effect at December 31, 2024, including the capital conservation buffers.44

	Actual		Actual			Minimum		Minimum
(dollars in thousands)	amount		percent			amount		percent(1)
Leverage	$	140,523		9.10	%	$	61,770		4.00	%
Common Equity Tier 1 Capital		140,523		12.43	%		79,146		7.00	%
Tier 1 Capital		140,523		12.43	%		96,106		8.50	%
Total risk-based Capital		152,987		13.53	%		118,719		10.50	%

At December 31, 2025, the Bank maintained a leverage ratio of 9.67% and a total risk-based capital ratio of 13.96%. As shown by the following table, the Bank’s capital exceeded the minimum capital requirements in effect at December 31, 2025, including the capital conservation buffers.

	Actual		Actual			Minimum		Minimum
(dollars in thousands)	amount		percent			amount		percent(1)
Leverage	$	152,915		9.67	%	$	63,223		4.00	%
Common Equity Tier 1 Capital		152,915		12.92	%		82,871		7.00	%
Tier 1 Capital		152,915		12.92	%		100,629		8.50	%
Total Risk-Based Capital		165,313		13.96	%		124,306		10.50	%

(1) The minimum required percent includes a capital conservation buffer of 2.5%.

48Banks and bank holding companies are generally expected to operate at or above the minimum capital requirements. The Company’s and the Bank’s ratios above are well in excess of regulatory minimums. As of December 31, 2025 and 2024, the Company and the Bank also exceeded the “well capitalized” thresholds, which is the highest rating available. There are no conditions or events that management believes have changed the Company’s and the Bank’s category as of the date of this report. We have $21.7 million in trust preferred securities which, in accordance with current capital guidelines, have been included in total risk-based capital as of December 31, 2025. Cash distributions on the securities are payable quarterly, are deductible for income tax purposes and are included in interest expense in the consolidated financial statements.

Banks and bank holding companies are generally expected to operate at or above the minimum capital requirements. The Company’s and the Bank’s ratios above are well in excess of regulatory minimums. As of December 31, 2024 and 2023, the Company and the Bank also exceeded the “well capitalized” thresholds, which is the highest rating available. There are no conditions or events that management believes have changed the Company’s and the Bank’s category as of the date of this report. We have $21.7 million in trust preferred securities which, in accordance with current capital guidelines, have been included in total risk-based capital as of December 31, 2024. Cash distributions on the securities are payable quarterly, are deductible for income tax purposes and are included in interest expense in the consolidated financial statements.

DIVIDENDS

During the year ended December 31, ~~2024~~2025, we paid quarterly cash dividends of $0.20 per share to our stockholders, as adjusted to give effect to 5% stock dividends, which we distributed for the ~~24th~~25th consecutive year in December ~~2024~~2025. The ~~2023~~2024 quarterly cash dividends were $0.19 per share as adjusted to give effect to 5% stock dividends.

The payment of dividends by any financial institution or its holding company is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations. As described above, the Bank exceeded its minimum capital requirements under applicable guidelines as of December 31, ~~2024~~2025. The National Bank Act imposes limitations on the amount of dividends that a national bank may pay without prior regulatory approval. Generally, the amount is limited to the bank’s current year’s net earnings plus the adjusted retained earnings for the three preceding years. As of December 31, ~~2024~~2025, $43.90 million was available to be paid as dividends to the Company by the Bank without prior regulatory approval.

Additionally, our ability to pay dividends is limited by the subordinated debentures associated with the trust preferred securities that are held by three business trusts that we control. Interest payments on the debentures must be paid before we pay dividends on our capital stock, including our common stock. We have the right to defer interest payments on the debentures for up to 20 consecutive quarters. However, if we elect to defer interest payments, all deferred interest must be paid before we may pay dividends on our capital stock.

EFFECTS OF INFLATION

Our consolidated financial statements and accompanying footnotes have been prepared in accordance with GAAP, which generally require the measurement of financial position and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of money over time due to inflation. The impact of inflation can be found in the increased cost of our operations because our assets and liabilities are primarily monetary, and interest rates have a greater impact on our performance than do the effects of inflation.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk is defined as the exposure of net interest income and fair value of financial instruments (interest-earning assets, deposits and borrowings) to movements in interest rates. Our results of operations depend to a large degree on our net interest income and ability to manage interest rate risk. Major sources of interest rate risk include timing differences in the maturity and re-pricing characteristics of assets and liabilities, changes in the shape of the yield curve, changes in customer behavior and changes in relationships between rate indices (basis risk). Our management measures these risks and their impacts in several ways, including through the use of income simulations and valuation analyses. Multiple interest rate scenarios are used in this analysis which include changes in interest rates, spread narrowing and widening, yield curve twists and changes in assumptions about customer behavior in various interest rate scenarios. A mismatch between maturities, interest rate sensitivities and prepayment characteristics of assets and liabilities results in interest-rate risk. Like most financial institutions, we have material interest-rate risk exposure to changes in both short-term and long-term interest rates, as well as variable interest rate indices. Interest rates in the financial markets affect our decisions on pricing our assets and liabilities which impacts our net interest income, a significant cash flow source for us. As a result, a substantial portion of our risk management activities relates to managing interest rate risk.

Our Asset/Liability Management Committee monitors the interest rate sensitivity of our balance sheet using earnings simulation models and interest sensitivity “gap” analysis. We have set policy limits of interest rate risk to be assumed in the normal course of business and monitor such limits through our simulation process.

49In the past, we have been successful in meeting the interest rate sensitivity objectives set forth in our policy. Simulation models are prepared to determine the impact on net interest income for the coming twelve months, including using rates at December 31, 2025 and forecasting volumes for the twelve-month projection. This position is then subjected to a shift in interest rates of 100, 200 and 300 basis points rising and 100 basis points falling with an impact to our net interest income on a one-year horizon as follows:

In the past, we have been successful in meeting the interest rate sensitivity objectives set forth in our policy. Simulation models are prepared to determine the impact on net interest income for the coming twelve months, including using rates at December 31, 2024 and forecasting volumes for the twelve-month projection. This position is then subjected to a shift in interest rates of 100, 200 and 300 basis points rising and 100 basis points falling with an impact to our net interest income on a one-year horizon as follows:

	As of December 31, 2025						As of December 31, 2024
Scenario	Dollar change in net interest income ($000’s)			Percent change in net interest income			Dollar change in net interest income ($000’s)			Percent change in net interest income
300 basis point rising	$	(5,612	)		(7.1	)%	$	(6,831	)		(13.8	)%
200 basis point rising		(3,498	)		(4.5	)%		(4,629	)		(9.4	)%
100 basis point rising		(1,375	)		(1.8	)%		(2,434	)		(4.9	)%
100 basis point falling		(183	)		(0.2	)%		282			0.6	%
200 basis point falling		(1,639	)		(2.1	)%		(588	)		(1.2	)%
300 basis point falling		(4,352	)		(5.5	)%		(1,774	)		(3.6	)%

	As of December 31, 2024						As of December 31, 2023
Scenario	Dollar change in net interest income ($000’s)			Percent change in net interest income			Dollar change in net interest income ($000’s)			Percent change in net interest income
300 basis point rising	$	(6,831	)		(13.8	)%	$	(5,924	)		(13.8	)%
200 basis point rising	$	(4,629	)		(9.4	)%	$	(4,012	)		(9.3	)%
100 basis point rising	$	(2,434	)		(4.9	)%	$	(2,122	)		(4.9	)%
100 basis point falling	$	282			0.6	%	$	17			0.0	%
200 basis point falling	$	(588	)		(1.2	)%	$	(909	)		(2.1	)%
300 basis point falling	$	(1,774	)		(3.6	)%	$	(2,037	)		(4.7	)%

ASSET/LIABILITY MANAGEMENT

Interest rate “gap” analysis is a common, though imperfect, measure of interest rate risk which measures the relative dollar amounts of interest-earning assets and interest-bearing liabilities which reprice within a specific time period, either through maturity or rate adjustment. The “gap” is the difference between the amounts of such assets and liabilities that are subject to such repricing. A “positive” gap for a given period means that the amount of interest-earning assets maturing or otherwise repricing within that period exceeds the amount of interest-bearing liabilities maturing or otherwise repricing during that same period. In a rising interest rate environment, an institution with a positive gap would generally be expected, absent the effects of other factors, to experience a greater increase in the yield of its assets relative to the cost of its liabilities. Conversely, the cost of funds for an institution with a positive gap would generally be expected to decline less quickly than the yield on its assets in a falling interest rate environment. Changes in interest rates generally have the opposite effect on an institution with a “negative” gap.

The following is our “static gap” schedule. Loans include prepayment assumptions based on historical prepayment speeds. Mortgage-backed securities include published prepayment assumptions, while all other investments assume no prepayments.

Certificates of deposit reflect contractual maturities only. Money market, checking and savings accounts reprice immediately in the first period. Borrowing reflects contractual repricing and maturities.

We have been successful in meeting the interest sensitivity objectives set forth in our policy. This has been accomplished primarily by managing the assets and liabilities while maintaining our traditional high credit standards.

50INTEREST-EARNING ASSETS AND INTEREST-BEARING LIABILITIES REPRICING SCHEDULE (“GAP” TABLE)

~~INTEREST-EARNING~~As ~~ASSETS~~of ~~AND~~December ~~INTEREST-BEARING~~31, ~~LIABILITIES REPRICING SCHEDULE~~2025

(“GAP” TABLE)

	3 months or less			3 to 12 months			1 to 5 years			Over 5 years			Total
	(Dollars in thousands)
Interest-earning assets:
Investment securities	$	28,664		$	38,061		$	156,516		$	128,705		$	351,946
Loans		320,788			177,663			511,747			106,666			1,116,864
Total interest-earning assets	$	349,452		$	215,724		$	668,263		$	235,371		$	1,468,810

Interest-bearing liabilities:
Certificates of deposit	$	130,127		$	83,275		$	8,364		$	-		$	221,766
Money market and checking accounts		650,987			-			-			-			650,987
Savings accounts		151,406			-			-			-			151,406
Borrowed money		19,115			13,737			867			-			33,719
Total interest-bearing liabilities	$	951,635		$	97,012		$	9,231		$	-		$	1,057,878

Interest sensitivity gap per period	$	(602,183	)	$	118,712		$	659,032		$	235,371		$	410,932
Cumulative interest sensitivity gap		(602,183	)		(483,471	)		175,561			410,932

Cumulative gap as a percent of total interest-earning assets		(41.00	%)		(32.92	%)		11.95	%		27.98	%

Cumulative interest sensitive assets as a percent of cumulative interest sensitive liabilities		36.72	%		53.90	%		116.60	%		138.84	%

~~As of December 31, 2024~~47

	3 months or less			3 to 12 months			1 to 5 years			Over 5 years			Total
	(Dollars in thousands)
Interest-earning assets:
Investment securities	$	19,745		$	32,959		$	162,081		$	161,399		$	376,184
Loans		248,884			205,678			492,478			108,733			1,055,773
Total interest-earning assets	$	268,629		$	238,637		$	654,559		$	270,132		$	1,431,957
Interest-bearing liabilities:
Certificates of deposit	$	101,825		$	79,128		$	13,739		$	2		$	194,694
Money market and checking accounts		636,963			-			-			-			636,963
Savings accounts		145,514			-			-			-			145,514
Borrowed money		71,102			14,003			3,400			-			88,505
Total interest-bearing liabilities	$	955,404		$	93,131		$	17,139		$	2		$	1,065,676
Interest sensitivity gap per period	$	(686,775	)	$	145,506		$	637,420		$	270,130		$	366,281
Cumulative interest sensitivity gap		(686,775	)		(541,269	)		96,151			366,281
Cumulative gap as a percent of total interest-earning assets		(47.96	%)		(37.80	%)		6.71	%		25.58	%
Cumulative interest sensitive assets as a percent of cumulative interest sensitive liabilities		28.12	%		48.38	%		109.02	%		134.37	%

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and the Board of Directors

Landmark Bancorp, Inc. ~~and Subsidiaries~~

Manhattan, Kansas

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Landmark Bancorp, Inc. ~~and Subsidiaries~~ (the “Company”) as of December 31, ~~2024~~2025 and ~~2023~~2024, the related consolidated statements of earnings, comprehensive income ~~(loss)~~, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, ~~2024~~2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2024~~2025 and ~~2023~~2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2024~~2025, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph - Change in Accounting Principle

As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for credit losses in 2023 due to the adoption of Accounting Standards Codification Topic 326, Financial Instruments – Credit Losses (ASC Topic 326). The Company adopted the new credit loss standard using the modified retrospective method such that prior period amounts are not adjusted and continue to be reported in accordance with previously applicable generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (U.S.) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses on Loans – Qualitative Factors

52The allowance for credit losses on loans is a valuation account that is deducted from the amortized costs basis of loans to present the net amount expected to be collected on loans. The Company utilized a weighted average remaining maturity model to estimate the quantitative component of the allowance for credit losses for loans. The quantitative model was adjusted with qualitative factors, including but not limited to: changes in economic and business conditions, changes in policies, procedures and underwriting, changes in management or staff and their related experience, changes in nature and volume of the portfolio, changes in loan review, changes in collateral values, changes in past due and nonaccrual loans, changes in competition, legal and regulatory issues, changes in concentrations and other qualitative factors that could affect credit losses.

As described in Note 1 of the consolidated financial statements and the explanatory paragraph above, the Company adopted ASC Topic 326 as of January 1, 2023 using the modified retrospective method. The allowance for credit losses on loans is a valuation account that is deducted from the amortized costs basis of loans to present the net amount expected to be collected on loans. The Company utilized a weighted average remaining maturity model to estimate the quantitative component of the allowance for credit losses for loans. The quantitative model was adjusted with qualitative factors, including but not limited to: changes in economic and business conditions, changes in policies, procedures and underwriting, changes in management or staff and their related experience, changes in nature and volume of the portfolio, changes in loan review, changes in collateral values, changes in past due and nonaccrual loans, changes in competition, legal and regulatory issues, changes in concentrations and other qualitative factors that could affect credit losses.

We identified auditing the qualitative factors as a critical audit matter as it involved significant management judgment, which in turn led to a high degree of auditor judgment and subjectivity to evaluate management’s determination and application of the qualitative factors.

The primary substantive audit procedures we performed to address this critical audit matter included:

●

Testing the completeness and accuracy of internal data and the reliability and relevance of external data used as the basis for the qualitative factors;

●

Evaluating the reasonableness of management’s judgments related to the determination of the qualitative factors and the accuracy of the resulting allocation of the allowance;

●

Analytically evaluating the qualitative factors including the magnitude of the adjustments; and

●

Tracing the allowance allocation from the qualitative factor analysis to the overall allowance calculation.

	/s/ Crowe LLP
	Crowe LLP

We have served as the Company’s auditor since 2014.

Dallas, Texas

~~March 25~~April 14, ~~2025~~2026

5349

LANDMARK BANCORP, INC. ~~AND SUBSIDIARIES~~

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)	December 31,			December 31,
	December 31,			December 31,
	2024			2023
(Dollars in thousands, except per share amounts)	2025			2024
Assets
Cash and cash equivalents	$	20,~~275~~982		$	2720,~~101~~275
Interest-bearing deposits at other banks		43,~~110~~218			4,~~918~~110
Investment securities available-for-sale, at fair value		~~372~~348,~~512~~157			~~452~~372,~~769~~512
Investment securities, held-to-maturity, net of allowance for credit losses of $91 and $91, fair value of $3,290 and $3,049		3,672			3,555
Investment securities, held-to-maturity, net of allowance for credit losses of $91 and $91, fair value of $3,477 and $3,290		3,789			3,672
Bank stocks, at cost		65,~~618~~756			86,~~123~~618
Loans, net of allowance for credit losses of $12,825 and $10,608		1,039,221			937,619
Loans, net of allowance for credit losses of $12,458 and $12,825		1,098,393			1,039,221
Loans held for sale, at fair value		35,~~420~~141			~~853~~3,420
Bank owned life insurance		3940,~~056~~176			3839,~~333~~056
Premises and equipment, net		2019,~~220~~325			1920,~~709~~220
Goodwill		32,377			32,377
Other intangible assets, net		21,~~578~~990			32,~~241~~578
Mortgage servicing rights		3,~~061~~189			3,~~158~~061
Real estate owned, net		~~167~~-			~~928~~167
Accrued interest and other assets		2624,~~855~~149			2826,~~988~~855
Total assets	$	1,~~574~~606,~~142~~642		$	1,~~561~~574,~~672~~142
Liabilities and Stockholders’ Equity
Liabilities:
Deposits:
Non-interest-bearing demand	$	~~351~~364,~~595~~695		$	~~367~~351,~~103~~595
Money market and checking		~~636~~650,~~963~~987			~~613~~636,~~613~~963
Savings		~~145~~151,~~514~~406			~~152~~145,~~381~~514
Certificates of deposit		~~194~~221,~~694~~766			~~183~~194,~~154~~694
Total deposits		1,~~328~~388,~~766~~854			1,~~316~~328,~~251~~766
Federal Home Loan Bank and other borrowings		5310,~~046~~567			6453,~~662~~046
Subordinated debentures		21,651			21,651
Repurchase agreements		131,~~808~~501			1213,~~714~~808
Accrued interest and other liabilities		2023,~~656~~438			1920,~~480~~656
Total liabilities		1,~~437~~446,~~927~~011			1,~~434~~437,~~758~~927
Commitments and contingencies		-			-
Stockholders’ equity:
Preferred stock, $0.01 par value per share, 200,000 shares authorized; none issued		-			-
Common stock, $0.01 par value per share, 7,500,000 shares authorized; 5,775,198 and 5,755,477 shares issued at December 31, 2024 and 2023, respectively		58			55
Common stock, $0.01 par value per share, 7,500,000 shares authorized; 6,074,381 and 6,063,958 shares issued at December 31, 2025 and 2024, respectively		61			58
Additional paid-in capital		95102,~~051~~597			8995,~~208~~051
Retained earnings		5663,~~934~~658			5456,~~282~~934
Treasury stock, at cost; zero and 4,002 shares at December 31, 2024 and 2023, respectively		-			(75	)
Treasury stock, at cost; zero shares at December 31, 2025 and 2024, respectively		-			-
Accumulated other comprehensive loss		(155,~~828~~685	)		(1615,~~556~~828	)
Total stockholders’ equity		~~136~~160,~~215~~631			~~126~~136,~~914~~215
Total liabilities and stockholders’ equity	$	1,~~574~~606,~~142~~642		$	1,~~561~~574,~~672~~142

See accompanying notes to consolidated financial statements.

5450

LANDMARK BANCORP, INC. ~~AND SUBSIDIARIES~~

Consolidated Statements of Earnings

(Dollars in thousands, except per share amounts)

~~2024~~2025

~~2023~~2024

~~2022~~2023

Years ended December 31,

(Dollars in thousands, except per share amounts)

~~2024~~2025

~~2023~~2024

~~2022~~2023

Interest income:

Loans

6169,~~400~~222

5161,~~753~~400

3351,~~473~~753

Investment securities:

Taxable

98,~~298~~768

9,~~594~~298

69,~~414~~594

Tax-exempt

32,~~008~~801

3,~~094~~008

3,~~018~~094

Interest-bearing deposits at banks

~~193~~225

~~242~~193

~~321~~242

Total interest income

7381,~~899~~016

6473,~~683~~899

4364,~~226~~683

Interest expense:

Deposits

2220,~~310~~928

1522,~~254~~310

215,~~776~~254

FHLB and other borrowings

32,~~886~~833

43,~~048~~886

~~584~~4,048

Subordinated debentures

1,~~635~~420

1,~~590~~635

~~840~~1,590

Repurchase agreements

~~344~~150

~~499~~344

~~146~~499

Total interest expense

2825,~~175~~331

2128,~~391~~175

421,~~346~~391

Net interest income

4555,~~724~~685

4345,~~292~~724

3843,~~880~~292

Provision for credit losses

2,~~300~~350

~~349~~2,300

-349

Net interest income after provision for credit losses

4353,~~424~~335

4243,~~943~~424

3842,~~880~~943

Non-interest income:

Fees and service charges

10,~~742~~195

10,~~220~~742

910,~~651~~220

Gains on sales of loans, net

23,~~386~~175

2,~~269~~386

32,~~444~~269

Increase in cash surrender value of bank owned life insurance

1,~~723~~119

~~913~~1,723

~~780~~913

Losses on sales of investment securities, net

(~~1,031~~103

)

(1,~~246~~031

)

(1,~~103~~246

)

Other

~~924~~565

~~1,074~~924

~~928~~1,074

Total non-interest income

14,~~744~~951

1314,~~230~~744

13,~~700~~230

Non-interest expense:

Compensation and benefits

2325,~~103~~507

2223,~~681~~103

2022,~~405~~681

Occupancy and equipment

5,~~663~~153

5,~~565~~663

5,~~118~~565

Data processing

12,~~889~~047

1,~~940~~889

1,~~580~~940

Amortization of mortgage servicing rights and other intangibles

~~1,164~~948

1,~~844~~164

1,~~446~~844

Professional fees

2,~~912~~950

2,~~452~~912

12,~~892~~452

Acquisition costs

3,398

Valuation allowance on assets held for sale

356

1,108

Valuation allowance on real estate held for sale

1,108

Other

8,272

8,240

7,501

Other

8,240

7,501

7,431

Total non-interest expense

45,233

44,079

41,983

Total non-interest expense

44,079

41,983

41,270

Earnings before income taxes

23,053

14,089

14,190

Earnings before income taxes

14,089

14,190

11,310

Income tax expense

4,278

1,086

1,954

Income tax expense

1,086

1,954

1,432

Net earnings

18,775

13,003

12,236

Net earnings

13,003

12,236

9,878

Earnings per share (1):

Basic

2.26

2.13

1.71

Basic (1)

3.09

2.15

2.03

Diluted

2.26

2.13

1.71

Diluted (1)

3.07

2.15

2.03

(1) All per share amounts have been adjusted to give effect to the 5% stock dividends paid during December 2025, 2024, ~~2023~~ and ~~2022~~2023.

See Notes to Consolidated Financial Statements.

5551

LANDMARK BANCORP, INC. ~~AND SUBSIDIARIES~~

Consolidated Statements of Comprehensive Income ~~(Loss)~~

	2024			2023			2022
(Dollars in thousands)	2025			2024			2023
(Dollars in thousands)	Years ended December 31,
	Years ended December 31,
	2024			2023			2022
(Dollars in thousands)	2025			2024			2023
Net earnings	$	1318,~~003~~775		$	1213,~~236~~003		$	912,~~878~~236
Net unrealized holding gains (losses) on available-for-sale securities		13			10,025			(39,440	)
Net unrealized holding gains on available-for-sale securities		13,279			13			10,025
Less reclassification adjustment on losses included in earnings		1,031			1,246			1,103
Reclassification adjustment on losses included in earnings		103			1,031			1,246
Net unrealized gains (losses)		1,044			11,271			(38,337	)
Net unrealized gains		13,382			1,044			11,271
Income tax effect on net losses included in earnings		(~~253~~25	)		(~~305~~253	)		(~~271~~305	)
Income tax effect on net unrealized holding (gains) losses		(63	)		(2,456	)		9,662
Income tax effect on net unrealized holding gains		(3,214	)		(63	)		(2,456	)
Other comprehensive income (loss)		728			8,510			(28,946	)
Other comprehensive income		10,143			728			8,510
Total comprehensive income (loss)	$	13,731		$	20,746		$	(19,068	)
Total comprehensive income	$	28,918		$	13,731		$	20,746

See accompanying notes to consolidated financial statements.

5652

LANDMARK BANCORP, INC. ~~AND SUBSIDIARIES~~

Consolidated Statements of Stockholders’ Equity

(Dollars in thousands, except per share amounts)	Common stock		Additional paid-in capital		Retained earnings			Treasury stock			Accumulated other comprehensive ~~income~~ (loss) income			Total
Balance at January 1, 2022	$	50	$	79,120	$	52,593		$	-		$	3,880		$	135,643
Net earnings		-		-		9,878			-			-			9,878
Other comprehensive loss		-		-		-			-			(28,946	)		(28,946	)
Dividends paid ($0.73 per share) (1)		-		-		(4,198	)		-			-			(4,198	)
Issuance of restricted common stock, 17,551 shares		-		-		-			-			-			-
Stock-based compensation		-		295		-			-			-			295
Purchase of 49,721 treasury shares		-		-		-			(1,239	)		-			(1,239	)
Exercise of stock options, 112 shares (2)		-		-		-			-			-			-
5% stock dividend, 247,831 shares		2		4,858		(6,099	)		1,239			-			-
Balance at December 31, 2022	$	52	$	84,273	$	52,174		$	-		$	(25,066	)	$	111,433
Cumulative effect of change in accounting principle from implementation of ASU 2016-13		-		-		(1,204	)		-			-			(1,204	)
Balance at January 1, 2023	$	52	$	84,273	$	50,970		$	-		$	(25,066	)	$	110,229
Net earnings		-		-		12,236			-			-			12,236
Other comprehensive income		-		-		-			-			8,510			8,510
Dividends paid ($0.76 per share) (1)		-		-		(4,390	)		-			-			(4,390	)
Dividends paid ($0.73 per share) (1)		-		-		(4,390	)		-			-			(4,390	)
Issuance of restricted common stock, 5,192 shares		-		-		-			-			-			-
Stock-based compensation		-		352		-			-			-			352
Purchase of 3,812 treasury shares		-		-		-			(75	)		-			(75	)
Exercise of stock options, 2,693 shares (2)		-		52		-			-			-			52
Exercise of stock options		-		52		-			-			-			52
5% stock dividend, 260,640 shares		3		4,531		(4,534	)		-			-			-
Balance at December 31, 2023	$	55	$	89,208	$	54,282		$	(75	)	$	(16,556	)	$	126,914
Net earnings		-		-		13,003			-			-			13,003
Other comprehensive income		-		-		-			-			728			728
Dividends paid ($0.80 per share) (1)		-		-		(4,612	)		-			-			(4,612	)
Dividends paid ($0.76 per share) (1)		-		-		(4,612	)		-			-			(4,612	)
Dividends paid		-		-		(4,612	)		-			-			(4,612	)
Issuance of restricted common stock, 41,175 shares		-		-		-			-			-			-
Issuance of restricted common stock		-		-		-			-			-			-
Stock-based compensation		-		520		-			-			-			520
Purchase of 17,288 treasury shares		-		-		-			(338	)					(338	)
Purchase of treasury shares		-		-		-			(338	)					(338	)
Purchase		-		-		-			(338	)					(338	)
5% stock dividend, 274,838 shares		3		5,323		(5,739	)		413			-			-
5% stock dividend		3		5,323		(5,739	)		413			-			-
Balance at December 31, 2024	$	58	$	95,051	$	56,934		$	-		$	(15,828	)	$	136,215
Balance	$	58	$	95,051	$	56,934		$	-		$	(15,828	)	$	136,215
Net earnings		-		-		18,775			-			-			18,775
Other comprehensive income		-		-		-			-			10,143			10,143
Dividends paid ($0.80 per share) (1)		-		-		(4,861	)		-			-			(4,861	)
Dividends paid		-		-		(4,861	)		-			-			(4,861	)
Issuance of restricted common stock, 985 shares		-		-		-			-			-			-
Issuance of restricted common stock		-		-		-			-			-			-
Stock-based compensation		-		359		-			-			-			359
Exercise of stock options, 15,801 shares (2)		-		-		-			-			-			-
5% stock dividend, 289,120 shares		3		7,187		(7,190	)		-			-			-
5% stock dividend		3		7,187		(7,190	)		-			-			-
Balance at December 31, 2025	$	61	$	102,597	$	63,658		$	-		$	(5,685	)	$	160,631
Balance	$	61	$	102,597	$	63,658		$	-		$	(5,685	)	$	160,631

(1) Dividends per share have been adjusted to give effect to the 5% stock dividends paid during December 2025, 2024, ~~2023~~ and ~~2022~~2023.

(2)	Shares from the exercise of stock options are shown net of forfeitures related to cashless exercises.

See accompanying notes to consolidated financial statements.

5753

LANDMARK BANCORP, INC. ~~AND SUBSIDIARIES~~

Consolidated Statements of Cash Flows

	2024			2023			2022
(Dollars in thousands)	2025			2024			2023
(Dollars in thousands)	Years ended December 31,
	Years ended December 31,
	2024			2023			2022
(Dollars in thousands)	2025			2024			2023
Cash flows from operating activities:
Net earnings	$	1318,~~003~~775		$	1213,~~236~~003		$	912,~~878~~236
Adjustments to reconcile net earnings to net cash provided by operating activities:
Provision for credit losses		2,~~300~~350			~~349~~2,300			-349
Valuation allowance on real estate owned		1,108			6			354
Valuation allowance on assets held for sale		356			1,108			6
Amortization of investment security (discounts) premiums, net		(~~111~~195	)		~~240~~(111	)		~~1,481~~240
Accretion of purchase accounting adjustments		(~~1,035~~794	)		(~~993~~1,035	)		(~~460~~993	)
Amortization of mortgage servicing rights and intangibles		~~1,164~~948			1,~~844~~164			1,~~446~~844
Depreciation		1,~~335~~280			1,~~270~~335			1,~~134~~270
Increase in cash surrender value of bank owned life insurance		(1,~~723~~119	)		(~~913~~1,723	)		(~~780~~913	)
Stock-based compensation		~~520~~359			~~352~~520			~~295~~352
Deferred income taxes		(~~212~~136	)		~~404~~(212	)		~~(1,190~~404	)
Net loss on investment securities		1,031			1,246			1,103
Net losses on investment securities		103			1,031			1,246
Net gains on sales of premises and equipment and foreclosed assets		(~~326~~81	)		(1326	)		(~~114~~1	)
Net gains on sales of loans		(23,~~386~~175	)		(2,~~269~~386	)		(32,~~444~~269	)
Proceeds from sale of loans		85104,~~799~~438			8085,~~475~~799			~~145~~80,~~923~~475
Origination of loans held for sale		(86103,~~384~~472	)		(7686,~~995~~384	)		(~~140~~76,~~990~~995	)
Changes in assets and liabilities:
Accrued interest and other assets		(~~1,123~~785	)		(1,~~276~~123	)		5(1,~~146~~276	)
Accrued interest, expenses and other liabilities		12,~~276~~782			(31,~~371~~276	)		4(3,~~998~~371	)
Net cash provided by operating activities		1421,~~236~~634			1214,~~604~~236			2412,~~780~~604
Cash flows from investing activities:
Net increase in loans		(~~103~~61,~~084~~845	)		(97103,~~361~~084	)		(7397,~~571~~361	)
Net change in interest-bearing deposits at banks		~~808~~892			~~4,150~~808			(14,~~728~~150	)
Maturities and prepayments of investment securities		7162,~~080~~373			5471,~~537~~080			5354,~~877~~537
Purchases of investment securities		(2352,~~322~~774	)		(2923,~~112~~322	)		(~~226~~29,~~336~~112	)
Proceeds from sale of available-for-sale securities		3228,~~623~~230			2032,~~913~~623			5220,~~597~~913
Redemption of bank stocks		16,~~487~~194			1116,~~192~~487			411,~~208~~192
Purchase of bank stocks		(1415,~~982~~332	)		(1314,~~845~~982	)		(613,~~074~~845	)
Net cash paid in bank acquisition		-			-			(572	)
Proceeds from sales of premises and equipment and foreclosed assets		406			4,700			7
Proceeds from sales of premises and equipment and foreclosed assets		4,700			7			1,379
Premiums paid on bank owned life insurance		-			(95	)		(97	)
Premiums paid on bank owned life insurance		(95	)		(97	)		(63	)
Proceeds from bank owned life insurance		1,093			-			-
Purchases of premises and equipment, net		(~~2,320~~605	)		(~~995~~2,320	)		(~~876~~995	)
Net cash used in investing activities		(1821,~~105~~368	)		(5018,~~611~~105	)		(~~197~~50,~~159~~611	)
Cash flows from financing activities:
Net increase in deposits		1260,~~515~~088			1512,~~591~~515			115,~~758~~591
Federal Home Loan Bank advance borrowings		~~778~~839,~~725~~823			~~727~~778,~~629~~725			~~327~~727,~~360~~629
Federal Home Loan Bank advance repayments		(~~787~~879,~~893~~769	)		(~~677~~787,~~815~~893	)		(~~326~~677,~~160~~815	)
Proceeds from other borrowings		~~360~~-			-360			~~10,065~~-
Repayments on other borrowings		(2,~~808~~533	)		(2,~~352~~808	)		(12,~~065~~352	)
Change in repurchase agreements		1(12,~~094~~307	)		~~(16~~1,~~688~~094	)		(~~199~~16,688	)
Proceeds from exercise of stock options		-			52-			-52
Payment of dividends		(4,~~612~~861	)		(4,~~390~~612	)		(4,~~198~~390	)
Purchase of treasury stock		~~(338~~-	)		(75338	)		(~~1,239~~75	)
Net cash (used in) provided by financing activities		(2,957	)		41,952			6,322
Net cash provided by (used in) financing activities		441			(2,957	)		41,952
Net (decrease) increase in cash and cash equivalents		(6,826	)		3,945			(166,057	)
Net increase (decrease) in cash and cash equivalents		707			(6,826	)		3,945
Cash and cash equivalents at beginning of year		2720,~~101~~275			2327,~~156~~101			~~189~~23,~~213~~156
Cash and cash equivalents at end of year	$	20,~~275~~982		$	2720,~~101~~275		$	2327,~~156~~101

~~(continued)~~ 54

58LANDMARK BANCORP, INC.

LANDMARK BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

(Dollars in thousands)	Years ended December 31,
	Years ended December 31,
	2024		2023		2022
(Dollars in thousands)	2025		2024		2023
Supplemental disclosure of cash flow information:
Cash payments paid during the year for income taxes	$	~~834~~3,424	$	55834	$	~~1,104~~55
Cash paid during the year for interest		2825,~~321~~294		1928,~~851~~321		419,~~032~~851
Cash paid during the year for operating leases		~~177~~209		~~156~~177		~~175~~156
Supplemental schedule of noncash investing and financing activities:
Transfer of premises and equipment to real estate held for sale		-		~~4,343~~-		-4,343
Operating lease asset and related liability recorded		-		61		-
Transfer of loans to repossessed assets		1,000		-		-
Bank acquisition:
Operating lease asset and related liability recorded		-		-		61
Fair value of liabilities assumed	$	-	$	-	$	181,350
Fair value of assets acquired		-		-		200,033

See accompanying notes to consolidated financial statements.

5955

LANDMARK BANCORP, INC. ~~AND SUBSIDIARIES~~

Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Policies

Principles of Consolidation. The accompanying consolidated financial statements include the accounts of Landmark Bancorp, Inc. and its wholly owned subsidiaries, the Bank and the Captive. All intercompany balances and transactions have been eliminated in consolidation. The Bank, considered a single operating segment, is principally engaged in the business of attracting deposits from the general public and using such deposits, together with borrowings and other funds, to originate one-to-four family residential real estate, construction and land, CRE, commercial, agriculture, municipal and consumer loans. The Captive provides property and casualty insurance coverage to the Company and the Bank for which insurance may not be currently available or economically feasible in today’s insurance marketplace.

Use of Estimates. The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Business Combinations. At the date of acquisition, the Company records the net assets acquired and liabilities assumed on the consolidated balance sheets at their estimated fair values, and goodwill is recognized for the excess purchase price over the estimated fair value of acquired net assets. The results of operations for acquired companies are included in the Company’s consolidated statements of earnings beginning at the acquisition date. Expenses arising from the acquisition activities are recorded in the consolidated statements of earnings during the period incurred.

Reserve Requirements. Regulations of the Federal Reserve require reserves to be maintained by all banking institutions according to the types and amounts of certain deposit liabilities. These requirements restrict a portion of the amounts shown as consolidated cash and due from banks from everyday usage in the operation of banks. As of December 31, ~~2024~~2025 and ~~2023~~2024, the Bank did not have a minimum reserve requirement.

Cash Flows. Cash and cash equivalents include cash on hand and amounts due from banks with original maturities of fewer than 90 days, and are carried at cost. Net cash flows are reported for customer loan and deposit transactions.

Interest-Bearing Deposits in Banks. Interest-bearing deposits in other banks include investments in certificates of deposits with original maturities greater than 90 days, and are carried at cost.

Implementation of CECL. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). The provisions of the update eliminated the probable initial recognition threshold under previous GAAP which requires reserves to be based on an incurred loss methodology. Under CECL, reserves required for financial assets measured at amortized cost reflect an organization’s estimate of all expected credit losses over the expected term of the financial asset and thereby require the use of reasonable and supportable forecasts to estimate future credit losses. Because CECL encompasses all financial assets carried at amortized cost, the requirement that reserves be established based on an organization’s reasonable and supportable estimate of expected credit losses extends to held-to-maturity debt securities. Under the provisions of the update, credit losses recognized on available-for-sale debt securities are presented as an allowance as opposed to a write-down. In addition, CECL modified the accounting for purchased loans. Under prior GAAP, a purchased loan’s contractual balance was adjusted to fair value through a credit discount, and no reserve was recorded on the purchased loan upon acquisition. Under CECL loans determined to be purchased credit deteriorated have an allowance for credit losses established through purchase accounting. Finally, increased disclosure requirements under CECL oblige organizations to present credit quality disclosures disaggregated by the year of origination or vintage. FASB expects that the evaluation of underwriting standards and credit quality trends by financial statement users will be enhanced with the additional vintage disclosures. In October 2019, the FASB approved a change in the effective dates for CECL which delayed the effective date to fiscal years beginning after December 15, 2022 for smaller reporting companies.

On January 1, 2023, the Company adopted CECL. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity investment securities. It also applies to off-balance credit exposures not accounted for as insurance (loan commitments and standby letters of credit). In addition, ASC 326 made changes to the accounting for available-for-sale investment securities management does not intend to sell or believes that it is more likely than not they will be required to sell.

The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Results for the reporting periods beginning after January 1, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP requirements. The adoption of CECL resulted in an increase in the allowance for credit losses on loans of $1.5 million, an initial allowance for credit losses on held-to-maturity investment securities of $72,000, an increase in deferred tax assets of $391,000 and a decrease in retained earnings of $1.2 million. The increases in allowance for credit losses is primarily due to moving to a weighted average remaining maturity allowance methodology and the transition of purchase accounting discounts on loans from an adjustment to amortized cost in the allowance calculation.

The following table illustrates the impact of ASC 326:

Impact of Adoption of ASC 326 (CECL)

(Dollars in thousands)	As reported under ASC 326		Pre-ASC 326 adoption		Impact of ASC 326 adoption
	January 1, 2023
(Dollars in thousands)	As reported under ASC 326		Pre-ASC 326 adoption		Impact of ASC 326 adoption
Allowance for credit losses:
Held-to-maturity investment securities	$	72	$	-	$	72
One-to-four family residential real estate loans	$	1,677	$	655	$	1,022
Construction and land loans		166		117		49
Commercial real estate loans		4,221		3,158		1,063
Commercial loans		2,898		2,753		145
Paycheck protection program loans		-		-		-
Agriculture loans		1,142		1,966		(824	)
Municipal loans		16		5		11
Consumer loans		194		137		57
Total allowance for credit losses for loans	$	10,314	$	8,791	$	1,523
Unfunded loan commitments	$	170	$	170	$	-

Investment Securities. Investment securities are classified as held-to-maturity when management has the positive intent and ability to hold them to maturity. Securities are classified as available-for-sale when they might be sold before maturity. Held-to-maturity securities are carried at amortized cost while available-for-sale securities are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Realized gains and losses on sales of available-for-sale securities are recorded on a trade date basis and are calculated using the specific identification method.

Allowance for Credit Losses – Held-to-Maturity Investment Securities. Management measures expected credit losses on held-to-maturity investment securities on a collective basis by major security type. Accrued interest is excluded from the estimate of credit losses. The estimate of expected credit losses considers historical loss information adjusted for current conditions and reasonable and supportable forecasts.

6156

Allowance for Credit Losses – Available-for-Sale Investment Securities. For available-for-sale investment securities in an unrealized loss position, the Company first assesses whether it intends to sell, or is more likely than not will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, the current interest rate environment, changes to rating of the security or security issuer, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected was less than the amortized cost basis, a credit loss exists and an allowance for credit losses would be recorded for the credit loss, which is limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as provision for or reversal of credit loss expense. Losses are charged against the allowance for credit losses when the Company determines the available-for-sale security is uncollectible or when either of the criteria regarding intent or requirement to sell is met. The Company does not estimate credit losses on available-for-sale security accrued interest receivable.

Bank Stocks. Bank stocks are investments acquired for regulatory purposes and borrowing availability and are accounted for at cost. The cost of such investments represents their redemption value as such investments do not have a readily determinable fair value. The Company evaluates bank stocks for other-than-temporary impairment by analyzing the ultimate recoverability based on a credit analysis of the issuer.

Acquired Loans. Acquired loans are recorded at estimated fair value at the time of acquisition. The Company’s acquired loans were not acquired with deteriorated credit quality. Estimated fair values of acquired loans are based on a discounted cash flow methodology that considers various factors including the type of loan and related collateral, the expected timing of cash flows, classification status, fixed or variable interest rate, term of loan and whether or not the loan is amortizing, and a discount rate reflecting the Company’s assessment of risk inherent in the cash flow estimates. Discounts or premiums created when acquired loans are recorded at their estimated fair values are accreted or amortized over the remaining term of the loan as an adjustment to the related loan’s yield. Similar to originated loans described below, the accrual of interest income on acquired loans is discontinued when the collection of principal or interest, in whole or in part, is doubtful.

Loans. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost. The amortized cost is the principal balance outstanding net of previous charge-offs, and for purchased loans, net of unamortized purchase premiums and discounts. Interest income is accrued on the unpaid principal balance. Origination fees received on loans held in portfolio and the estimated direct costs of origination are deferred and amortized to interest income using the level yield method without anticipating prepayments.

The accrual of interest on non-performing loans is discontinued at the time the loan is ninety days delinquent, unless the credit is well secured and in process of collection. Loans are placed on non-accrual or are charged off at an earlier date if collection of the principal or interest is considered doubtful. All interest accrued but not collected for loans that are placed on non-accrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash basis or cost recovery method, until qualifying for return to accrual. Loans are evaluated individually and are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Allowance for Credit Losses - Loans. The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on loans. The analysis is updated on a quarterly basis based on historical loss information adjusted for current conditions and reasonable and supportable forecasts. Additionally, the Company considers asset quality trends, composition and trends in the loan portfolio, underlying collateral values, industry trends and other pertinent factors, including regulatory recommendations. The level of the allowance for credit losses maintained by management is believed adequate to absorb all expected future losses expected in the loan portfolio at the balance sheet date. The allowance is adjusted through provision for credit losses and charge-offs, net of recoveries of amounts previously charged off.

The allowance for credit losses is measured on a collective basis for pools of loans with similar risk characteristics. The Company has identified the following pools of financial assets with similar risk characteristics for measuring expected credit losses.

62One-to-Four Family Residential Real Estate. One-to-four family residential real estate loans consist primarily of loans secured by one-to-four family residential properties. Repayment is primarily dependent on the personal cash flow of the borrower.

One-to-Four Family Residential Real Estate. One-to-four family residential real estate loans consists primarily of loans secured by 1-4 family residential properties. Repayment is primarily dependent on the personal cash flow of the borrower.

Construction and Land. Construction and land loans consist primarily of loans to facilitate the development of both residential and CRE. Repayment is primarily dependent on the completion of the development and refinancing to longer term financing.

Commercial Real Estate. CRE loans consist primarily of loans secured by office buildings, industrial buildings, warehouses, retail buildings and multi-family housing and are primarily owner-occupied. For such loans, repayment is largely dependent upon the operation of the borrower’s business.

Commercial. Commercial loans include loans to business enterprises issued for commercial, industrial and/or other professional purposes. These loans are generally secured by equipment, inventory and accounts receivable of the borrower and repayment is primarily dependent on business cash flows.

Agriculture. Agriculture loans include operating and real estate loans to agriculture enterprises. Generally, the borrower’s ability to repay is based on the cash flows from farming operations.

Municipal. Municipal loans are generally related to equipment leasing or general fund loans. Repayment is primarily dependent on the tax revenue of the municipal entity.

Consumer. Consumer loans include automobile, boat, home improvement and home equity loans. Repayment is primarily dependent on the personal cash flow of the borrower.

The Company utilizes a weighted average remaining maturity allowance methodology to calculate the quantitative component of the allowance for credit losses. Historical loss rates are adjusted for current conditions and reasonable and supportable forecasts. Following the economic forecast period loss rates revert back to historical loss rates over a reasonable period of time. Additional adjustments for qualitative factors are included to quantify the risks within each of the loan categories that are not included in the historical loss rates or economic projections. These adjustments include but are not limited to: changes in economic and business conditions, changes in policies, procedures and underwriting, changes in management or staff and their related experience, changes in nature and volume of the portfolio, changes in loan review, changes in collateral values, changes in past due and ~~nonaccrual~~non-accrual loans, changes in competition, legal and regulatory issues, changes in concentrations and other qualitative factors that could affect credit losses. The data for the allowance calculation may be obtained from internal or external sources. The Company has made the accounting policy election to exclude accrued interest receivable on loans from the estimate of credit losses.

Loans that do not share similar risk characteristics with the collectively evaluated pools are evaluated on an individual basis and are excluded from the collectively evaluated loan pools. Such loans are evaluated for credit losses based on either discounted cash flows or the fair value of collateral.

The Company estimates expected credit losses over the contractual term of obligations to extend credit, unless the obligation is unconditionally ~~cancellable~~cancelable. The allowance for off-balance-sheet exposures is adjusted through the provision for credit losses. The estimates are determined based on the likelihood of funding during the contractual term and an estimate of credit losses subsequent to funding. Estimated credit losses on subsequently funded balances are based on the same assumptions used to estimated credit losses on loans.

Loan Modifications. Loan modifications, including modifications to borrowers experiencing financial difficulty, are treated as a new loan if two conditions are met. The terms of the new loan are at least as favorable to the Company as the terms for comparable loans to other customers with similar collection risks and modifications to the terms of the original loan are more than minor.

Loans Held for Sale. Mortgage loans originated and intended for sale in the secondary market are carried at fair value. The fair value includes the servicing value of the loans as well as any accrued interest.

Mortgage loans held for sale are generally sold with servicing rights retained. The carrying value of mortgage loans sold is reduced by the amount allocated to the servicing right. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

Mortgage Servicing Rights. When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be recorded in amortization of intangibles in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.

Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income. Changes in valuation allowances are included in amortization expense on the income statement. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds, default rates and losses.

Transfers of Financial Assets. Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Mortgage Loan Repurchase Reserve. The Company routinely sells one-to-four family residential mortgage loans to secondary mortgage market investors. Under standard representations and warranties clauses in the Company’s mortgage sale agreements, the Company may be required to repurchase mortgage loans sold or reimburse the investors for credit losses incurred on those loans if a breach of the contractual representations and warranties occurred. The Company establishes a mortgage repurchase liability in an amount equal to management’s estimate of losses on loans for which the Company could have a repurchase obligation or loss reimbursement. The estimated liability incorporates the volume of loans sold in previous periods, default expectations, historical investor repurchase demand and actual loss severity. Provisions to the mortgage repurchase reserve reduce gains on sales of loans.

Premises and Equipment. Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Major replacements and betterments are capitalized while maintenance and repairs are charged to expense when incurred. Gains or losses on dispositions are reflected in earnings as incurred.

Bank Owned Life Insurance. The Company has purchased life insurance policies on certain key officers. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Goodwill and Intangible Assets. Goodwill is not amortized; however, it is tested for impairment at each calendar year end or more frequently when events or circumstances dictate. The Company performed a qualitative assessment of factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount as of December 31, ~~2024~~2025. This assessment included a review of macroeconomic conditions, industry and market specific considerations and other relevant factors including the Company’s market capitalization, with control premiums and valuation multiples, compared to recent financial industry acquisition multiples for similar institutions to estimate the fair value of the Company’s single reporting unit. A goodwill impairment would be recorded for the amount that the carrying value exceeds the implied fair value.

Intangible assets include core deposit intangibles. Core deposit intangible assets are amortized over their estimated useful life of ten years on an accelerated basis. When facts and circumstances indicate potential impairment, the Company will evaluate the recoverability of the intangible asset’s carrying value, using estimates of undiscounted future cash flows over the remaining asset life. Any impairment loss is measured by the excess of carrying value over fair value.

Income Taxes. The objective of accounting for income taxes is to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. Judgment is required in assessing the future tax consequences of events that have been recognized in financial statements or tax returns. Uncertain income tax positions will be recognized only if it is more likely than not that they will be sustained upon examination by taxing authorities, based upon their technical merits. Once that standard is met, the amount recorded will be the largest amount of benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense in the consolidated statements of earnings. The Company assesses deferred tax assets to determine if the items are more likely than not to be realized, and a valuation allowance is established for any amounts that are not more likely than not to be realized.

Loan Commitments and Related Financial Instruments. Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Loss Contingencies. Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Comprehensive Income. Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on securities available for sale, net of tax which are also recognized as separate components of equity.

Real Estate Owned. Assets acquired through, or in lieu of, foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed.

Stock-Based Compensation. The Company uses the Black-Scholes option pricing model to estimate the grant date fair value of its stock options, which is recognized as compensation expense over the option vesting period, on a straight-line basis, which is typically four years. The fair value of restricted common stock is equal to the Company’s stock price on the grant date, which is recognized as compensation expense on a straight-line basis over the vesting period. The Company accounts for forfeitures as they occur.

Earnings per Share. Basic earnings per share represent net earnings divided by the weighted average number of common shares outstanding during the year. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued. The diluted earnings per share computation for 2024, ~~2023~~ and ~~2022~~2023 excluded ~~207~~218,~~745,~~132 ~~174,889~~ and 54183,~~304~~633, respectively, of unexercised stock options because their inclusion would have been anti-dilutive. There were no anti-diluted stock options as of December 31, 2025.

6560

The shares used in the calculation of basic and diluted earnings per share, which have been adjusted to give effect to the 5% common stock dividends paid by the Company in December ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, are shown below:

	2024		2023		2022
	2025		2024		2023
(Dollars in thousands, except per share amounts)	Years ended December 31,
	2024		2023		2022
	2025		2024		2023
Net earnings available to common shareholders	$	1318,~~003~~775	$	1213,~~236~~003	$	912,~~878~~236
Weighted average common shares outstanding - basic		56,~~758~~070,~~056~~662		56,~~751~~045,~~585~~959		56,~~766~~039,~~900~~164
Assumed exercise of stock options		648,~~226~~199		36,~~255~~537		163,~~556~~418
Weighted average common shares outstanding - diluted		56,~~764~~118,~~282~~861		56,~~754~~052,~~840~~496		56,~~783~~042,~~456~~582
Earnings per share:
Basic	$	23.2609	$	2.1315	$	12.7103
Diluted	$	23.2607	$	2.1315	$	12.7103

Derivative Financial Instruments. Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free standing derivatives. The fair value of the interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. In order to hedge the change in interest rates resulting from its commitments to fund the loans, the Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into. Fair values of these mortgage derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in the fair values of these derivatives are included in net gains on sales of loans.

Dividend Restriction. Banking regulations require maintaining certain capital levels and may limit the dividends paid by the bank to the holding company or by the holding company to shareholders.

Fair Value of Financial Instruments. Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Reclassifications. Some items in the prior -year financial statements were reclassified to the current presentation. Reclassifications had no effect on prior -year net income or stockholders’ equity.

(2) Impact of Recent Accounting Pronouncements

The FASB issued ASU 2023-0709, ~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures, in ~~November~~December 2023. The amendments ~~require~~ ~~disclosure of significant segment expenses and other segment items on an annual and interim basis. Public entities are required~~require toadditional ~~disclose~~disclosures ~~significant~~regarding ~~expense categories and amounts for each reportable segment, as well as~~ the ~~amount~~rate ~~and~~reconciliation a description of the composition of other segment items. Significant expense categories are derived from expenses that are regularly provided to an entity’s chief operating decision-maker (“CODM”), and ~~included~~income intaxes ~~a segment’s reported measures of profit or loss~~paid. Public entities are also required to disclose the title and position of the CODM and explain how the CODM uses the reported measures of profit or loss in assessing segment performance and deciding how to allocate resources. This ASU ~~requires interim disclosures of certain segment-related disclosures that previously were only required annually. ASU~~ 2023-0709 ~~requires~~also ~~annual~~removed ~~disclosures~~certain ~~for~~existing ~~fiscal years beginning January 1,~~disclosure ~~2024~~requirements and ~~interim~~is ~~disclosures~~effective for ~~fiscal~~annual ~~years~~periods beginning January 1, 2025. The Company adopted ASU 2023-0709 ineffective ~~2024~~January 1, 2025 and ~~other~~elected to adopt the amendments retrospectively. Other than the inclusion of additional disclosures, the adoption did not have a significant ~~impact~~effect on the Company’s consolidated financial statements. ~~The standard will be effective for the Company’s consolidated financial statements for interim periods beginning January 1, 2025.~~

The FASB issued ASU ~~2023~~2025-0903, Income ~~Taxes~~Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (~~Topic~~Subtopic ~~740~~220-40): ~~Improvements~~Disaggregation of to Income ~~Tax~~Statement ~~Disclosures,~~Expenses in ~~December~~November ~~2023~~2024. The amendments require ~~additional~~ new disclosures ~~regarding~~providing ~~the~~further ~~rate~~detail ~~reconciliation~~of ~~and~~a company’s income statement ~~taxes~~expense ~~paid~~items. ASU ~~2023~~2025-0903 ~~also~~is ~~removed~~effective ~~certain~~for ~~existing~~annual ~~disclosure~~periods ~~requirements and~~beginning isJanuary ~~effective~~1, ~~for~~2027, ~~annual~~and interim periods beginning January 1, ~~2025~~2028. Early adoption is permitted. The amendments ~~in ASU 2023-09~~ should be applied on a prospective basis~~, though retrospective application is permitted~~. Other than the inclusion of additional disclosures, the adoption is not expected to have a significant effect on the Company’s consolidated financial statements.

66The FASB issued ASU 2025-08, Financial Instruments – Credit Losses (Topic 326): Purchased Loans in November 2025. The amendment expands the scope of the “gross-up” method, formerly applicable only to purchased credit-deteriorated (“PCD”) assets, to include acquired non-PCD loans that meet certain criteria, now referred to as “purchased seasoned loans” (“PSLs”). Under this model, an allowance for expected credit losses is recognized at acquisition, offsetting the loan’s amortized cost basis, thereby eliminating the day-one credit-loss expense previously required for non-PCD assets. PSLs are defined as non-PCD loans acquired either (i) through a business combination, or (ii) purchased more than 90 days after origination when the acquirer was not involved in origination. ASU 2025-08 will be effective on a prospective basis for loans acquired on or after the adoption date, for interim and annual reporting periods beginning in 2027, though early adoption is permitted. ASU 2025-08 is not expected to have a significant impact on the Company’s consolidated financial statements.

The FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses in November 2024. The amendments require new disclosures providing further detail of a company’s income statement expense items. ASU 2024-03 is effective for annual periods beginning January 1, 2027, and interim periods beginning January 1, 2028. Early adoption is permitted. The amendments should be applied on a prospective basis. Other than the inclusion of additional disclosures, the adoption is not expected to have a significant effect on the Company’s consolidated financial statements.61

(3) ~~Acquisition~~Investment Securities

On October 1, 2022, the Company acquired 100% of the outstanding common shares of Freedom Bancshares, Inc., in exchange for $33.4 million of cash. Freedom was the holding company of Freedom Bank. Freedom Bank was founded in 2006 and operated out of a single location in Overland Park, Kansas. The acquisition was effected through the merger of Freedom with and into the Bank. The purchase price was financed with $10.0 million of debt issued by Company and through cash received from a dividend from the Bank.

The transaction was accounted for using the acquisition method of accounting, and as such, assets acquired and liabilities assumed were recorded at their estimated fair value on the acquisition date. Acquired loans were recorded at fair value at the acquisition date and no separate valuation allowance was established. No purchased credit impaired loans were acquired. Market value adjustments are accreted or amortized on a level yield basis over the expected term of the asset or liability. Additionally, the Company recorded a core deposit intangible of $4.2 million. The core deposit intangible is amortized on an accelerated basis over the estimated useful life of the deposits. Goodwill of $14.7 million from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the operations of the banks. The goodwill is not deductible for income tax purposes. During 2023, goodwill was increased by $178,000 due to adjustments related to filing final tax returns for Freedom and Freedom Bank, which are reflected in the table below. The Company incurred $3.4 million of acquisition related costs relating to the acquisition during 2022, of which $3.1 million was deductible for income tax purposes.

Results of the operations of the acquired business are included in the income statement from the effective date of the acquisition.

The following table summarizes the consideration paid for Freedom and the amounts of the assets acquired and liabilities assumed at the acquisition date:

Schedule of Assets and Liabilities Acquisition

	As of
(Dollars in thousands)	October 1, 2022
Cash paid in acquisition	$	33,350
Assets acquired:
Cash and cash equivalents		32,778
Investment securities		33,126
Bank stocks		699
Loans		113,910
Bank owned life insurance		4,374
Premises and equipment		3,782
Core deposit intangibles		4,170
Other		7,016
Total assets acquired		199,855
Liabilities assumed:
Deposits		150,410
FHLB advances		7,000
Other borrowings		22,198
Other liabilities		1,742
Total liabilities assumed		181,350
Net assets acquired		18,505
Goodwill	$	14,845

The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Company believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables, which have shown evidence of credit deterioration since origination were not considered impaired at the acquisition date and were not subject to the guidance relating to purchased credit impaired loans. Receivables acquired that were not subject to these requirements include non-impaired loans with a fair value and gross contractual amounts receivable of $113.9 million and $118.1 million on the date of acquisition.

Unaudited pro forma consolidated operating results for the years ended December 31, 2022 and December 31, 2021, as if the acquisition was consummated on January 1 of that year are as follows:

Schedule of Unaudited Pro Forma Consolidated Operating Acquisition

	2022		2021
(Dollars in thousands, except per share amounts)	Years ended December 31,
	2022		2021
Net interest income	$	44,750	$	45,942
Net earnings		9,098		19,922
Earnings per share (1):
Basic (1)		1.58		3.45
Diluted (1)		1.57		3.44

(1) All per share amounts have been adjusted to give effect to the 5% stock dividends paid during December 2024, 2023 2022 and 2021.

(4) Investment Securities

A summary of investment securities available-for-sale and securities held-to-maturity is as follows:

(Dollars in thousands)	As of December 31, 2025
			Gross		Gross
	Amortized		unrealized		unrealized			Estimated
	cost		gains		losses			fair value

Available-for-sale:
U. S. treasury securities	$	52,795	$	580	$	(192	)	$	53,183
Municipal obligations, tax exempt		88,979		149		(1,319	)		87,809
Municipal obligations, taxable		92,105		555		(2,057	)		90,603
Agency mortgage-backed securities		121,780		193		(5,411	)		116,562
Total available-for-sale	$	355,659	$	1,477	$	(8,979	)	$	348,157

Held-to-maturity:
Other	$	3,789	$	-	$	(312	)	$	3,477
Total held-to-maturity	$	3,789	$	-	$	(312	)	$	3,477

(Dollars in thousands)

As of December 31, 2024

Gross

Amortized

unrealized

Estimated

cost

gains

losses

fair value

Filing Compare · LANDMARK BANCORP INC