Third Quarter Report September 30, 2025

Dear Shareholders:

Net income for the quarter ended September 30, 2025 totaled $581,000, or $1.13 per share. This represented a robust 36% increase compared with net income of $428,000, or $0.82 per share, reported for the third quarter of 2024. The change in earnings was primarily due to a $226,000 increase in net interest income. Also, the provision for credit losses decreased $60,000, and noninterest expense increased by $62,000, compared with third quarter 2024.

Net income for the nine months ended September 30, 2025 totaled $1,545,000 compared with $1,245,000 reported for the same period in 2024. Loan interest income has increased $602,000 due to higher interest rates and steady lending, while interest expense decreased $24,000 due to lower cost of borrowings. Loan portfolio growth of 4.0% this year is especially encouraging given the limited real estate inventory for sale. With recent resumption of easing monetary policy, lower funding costs are anticipated to support the net interest margin.

Overhead expenses have increased 5.8% in 2025 due to operational improvements, product enhancements, a competitive labor market as well as persistent inflation. Risk monitoring remains diligent with strong credit quality and asset-liability management as well as strengthened cybersecurity and business continuity resiliency.

Earnings per share totaled $3.01 and generated 1.01% return on average assets and 8.49% return on equity for the nine months ended September 30, 2025. A dividend of $0.57 per share for the third quarter was paid October 1. Please do not hesitate to contact me if you have any questions.

Sincerely,

Nelson L. Person
President & CEO