Document

"NIM increased as expected, expanding 8 basis points over the prior quarter with earning assets continuing to reprice on stable cost of funds. Loan growth was driven by the commercial loan portfolio, based on our pipeline in the first quarter and the continued concentrated efforts in this business line. The increase in total deposits was highlighted by an $89 million increase in non-maturity deposits, which mostly was due to a large deposit from a not-for-profit entity that is expected to be used by the customer by the end of the year. While short-term, this deposit is another example of our strong relationships with the communities we serve. As previously announced, the Bank also recovered the entire overdraft charge-off that occurred during the third quarter of 2024. This recovery positively affected the provision for credit losses for the quarter.

Available-for-sale ("AFS") securities at fair value were $501 million, decreasing $12.5 million at the end of second quarter 2025. The decline was driven by amortization and maturities of $26.8 million, partially offset by purchases totaling $10.6 million. Net unrealized losses on securities totaled $17.6 million, compared to $21.5 million at the end of the first quarter of 2025. Net unrealized losses as a percentage of total AFS securities decreased to 3% from 4% at the end of the first quarter of 2025, primarily due to the treasury portfolio rapidly approaching maturity. The par value and corresponding book yields that are estimated to mature or pay off by year include: $28.2 million in principal with a weighted-average book yield of 2.36% over the remainder of 2025; $217.4 million at 1.17% in 2026; and $63.0 million at 1.87% in 2027. Some of these securities amortize and actual principal paydown may differ from the estimates in this press release.

Total loans were $1.4 billion at the end of the second quarter, increasing $29.8 million from growth in core loans (non-GAAP) led by commercial and residential loans. Commercial loans, excluding advances to mortgage brokers, increased $23.1 million, or 10.3% on an annualized basis. The outsized growth is primarily the result of closing several loans that were originally expected to close in the first quarter, along with executing on our pipeline that was robust going into the second quarter 2025. While our commercial pipeline is strong at the beginning of the third quarter, future loan growth could be lower due to changes in timing and funding, customer demand, and overall economic conditions. Residential mortgages increased $11.3 million mostly due to drawdowns on construction loans and an increase in originations that are both associated with seasonal patterns. Loan growth during the quarter was partially offset by a decline in the agricultural and consumer loan portfolios that continue to roll off amid decreasing demand.

The allowance for credit losses increased $242 thousand to $13.0 million as of June 30, 2025. The increase reflects core loan growth during the period and changes in historical loss rates. Nonaccrual loan balances increased $991 thousand to $1.2 million, primarily due to the downgrade of one unique commercial real estate loan to nonaccrual status during the quarter. Past due and accruing accounts between 30 to 89 days, as a percentage of total loans, was 0.08% compared to 0.41% at the end of first quarter 2025.

Total deposits were $1.85 billion, increasing $51.5 million, at the end of the second quarter. The growth was driven by demand deposits, which increased $89.3 million, primarily due to one customer with large deposits during the second quarter that is expected to be withdrawn by the customer by the end of they year. Consumer demand for retail certificates of deposit accounts continues based on the current elevated market interest rate environment, resulting in a $5.7 million increase during the period. Money market and interest-bearing demand deposits led to a $26.3 million and $20.6 million decline in deposits, respectively, as a result of seasonal trends.

NIM was 3.14%, an increase from 3.06% in the first quarter 2025 and from 2.82% in the second quarter of 2024. The book yield from securities was 2.38% and 2.17% during the second quarters of 2025 and 2024, respectively. The yield on loans expanded to 5.71% in the second quarter, up from 5.50% in the same quarter of 2024. The expansion in loan yields was a result of higher interest rates on new loans and variable rate commercial loans that continue to reprice. At the end of the second quarter, approximately 38% of commercial loans were fixed at rates lower than current market rates, and the majority will contractually reprice to variable rates over the next four years. Cost of interest-bearing liabilities was 2.24%, decreasing from 2.26% in the previous quarter and from 2.38% in the second quarter of 2024, primarily due to reductions to rates in the money market and certificate of deposit products. NIM is expected to continue to expand as loans reprice and the cost of interest-bearing liabilities stabilizes.

The Company continues to closely monitor credit quality in light of the continued economic uncertainty caused by, among other factors, the prolonged elevated interest rate environment, stronger than expected employment data in recent periods, continued uncertainty regarding U.S. trade and tariff policy and the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas. Accordingly, additional provisions for credit losses may be necessary in future periods.

Noninterest income was $3.7 million in the second quarter of 2025 compared to $3.6 million for the same quarter of 2024. Service charges and fees increased $48 thousand because of profitability initiatives designed to increase fee income. Earnings on bank-owned life insurance ("BOLI") policies increased $47 thousand over the prior year quarter due to new investments in a separate account BOLI, which was offset in part by a one-time expense of $120 thousand due to restructuring charges. Wealth management fees grew $36 thousand due to growth in assets under management ("AUM") as compared to the second quarter of 2024. AUM totaled $679 million, $657 million and $648 million as of June 30, 2025, March 31, 2025, and June 30, 2024, respectively.

Noninterest expenses were $13.7 million in the second quarter 2025 compared to $12.9 million in the same quarter of 2024. The change mostly was due to higher compensation and benefit expenses totaling $526 thousand, which reflect annual merit increases in 2025, incentives, and higher medical insurance claims compared to the second quarter of 2024. Professional services included $173 thousand in fees related to profitability initiative costs and $47 thousand in legal fees related to our Nasdaq uplisting.

Isabella Bank Corporation (Nasdaq: ISBA) is the parent holding company of Isabella Bank, a state-chartered community bank headquartered in Mt. Pleasant, Michigan. Isabella Bank was established in 1903 and has been committed to serving its customers' and communities' local banking needs for over 120 years. The Bank offers personal and commercial lending and deposit products, as well as investment, trust, and estate planning services. The Bank has locations throughout eight Mid-Michigan counties: Bay, Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw.

The Company routinely posts important information for investors on its website (www.isabellabank.com and, more specifically, under the News tab at ir.isabellabank.com/news). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD (Fair Disclosure) promulgated by the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, investors should monitor the Company’s web site, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.

Information in this press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended and Rule 3b-6 promulgated thereunder. We intend such forward looking statements to be covered by the safe harbor provisions for forward looking statements contained in the Private Securities Litigation Reform Act of 1995, and are included in this statement for purposes of these safe harbor provisions. Forward-looking statements generally relate to losses, impact of events, financial condition, plans, objectives, outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or affecting the Company and its future business and operations. Forward-looking statements are typically identified by words or phrases such as “will likely result”, “expect”, “could”, “may”, “plan”, “believe”, “estimate”, “anticipate”, “strategy”, “trend”, “forecast”, “outlook”, “project”, “intend”, “assume”, “outcome”, “continue”, “remain”, “potential”, “opportunity”, “current”, “position”, “maintain”,

“sustain”, “seek”, “achieve” and variations of such words and similar expressions, or future or conditional verbs such as will, would, should, could or may. These forward-looking statements are based on current information and/or management’s good faith belief as to future events. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized. Additional information regarding risks and uncertainties to which the Company’s business and future financial performance are subject is contained in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q on file with the SEC, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of such documents, and other documents the Company files or furnishes with the SEC from time to time, which are available on the SEC’s website, www.sec.gov. Due to these and other possible uncertainties and risks, the Company cautions you not to unduly rely on forward-looking statements. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans or expectations contemplated by the Company will be achieved. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Any forward-looking statement speaks only as to the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made, except as required by law. All forward-looking statements, express or implied, included in the press release are qualified in their entirety by this cautionary statement.

Some of the financial measures included in this press release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States (“GAAP”). The Company believes these non-GAAP financial measures provide both management and investors a more complete understanding of the Company’s financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures.

We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies.

The following table outlines selected financial data as of, and for the three-month periods ended:


	Three Months Ended
	June 30 2025			March 31 2025			December 31 2024			September 30 2024			June 30 2024
PER SHARE
Basic earnings	$	0.68		$	0.53		$	0.54		$	0.44		$	0.47
Diluted earnings	0.68			0.53			0.54			0.44			0.46
Core diluted earnings (1)	0.55			0.57			0.52			0.61			0.46
Dividends	0.28			0.28			0.28			0.28			0.28
Book value (2)	29.95			29.10			28.32			28.63			27.06
Tangible book value (1) (2)	23.39			22.58			21.82			22.14			20.60
Market price (2)	30.15			23.59			25.99			21.21			18.20
Common shares outstanding (2) (3)	7,361,684			7,408,010			7,424,893			7,438,720			7,474,016
Average number of diluted common shares outstanding (3)	7,398,109			7,432,162			7,451,718			7,473,184			7,494,828
PERFORMANCE RATIOS
Return on average total assets	0.96		%	0.77		%	0.76		%	0.62		%	0.68		%
Core return on average total assets (1)	0.79		%	0.83		%	0.74		%	0.87		%	0.68		%
Return on average shareholders' equity	9.19		%	7.48		%	7.47		%	6.26		%	6.97		%
Core return on average shareholders' equity (1)	7.48		%	8.05		%	7.29		%	8.70		%	6.96		%
Return on average tangible shareholders' equity (1)	11.78		%	9.65		%	9.66		%	8.15		%	9.19		%
Core return on average tangible shareholders' equity (1)	9.59		%	10.40		%	9.43		%	11.32		%	9.17		%
Net interest margin yield (fully taxable equivalent) (1)	3.14		%	3.06		%	2.98		%	2.96		%	2.82		%
Efficiency ratio (1)	70.53		%	71.73		%	71.08		%	72.30		%	73.93		%
Gross loan to deposit ratio (2)	75.57		%	76.07		%	81.48		%	79.93		%	80.22		%
Shareholders' equity to total assets (2)	10.23		%	10.25		%	10.08		%	10.11		%	9.82		%
Tangible shareholders' equity to tangible assets (1) (2)	8.17		%	8.14		%	7.95		%	8.00		%	7.65		%
ASSETS UNDER MANAGEMENT
Wealth assets under management (2)	678,959			656,617			658,042			679,858			647,850
ASSET QUALITY
Nonaccrual loans (2)	1,164			173			282			547			994
Foreclosed assets (2)	667			649			544			546			629
Net loan charge-offs (recoveries)	(1,432)			(52)			102			1,359			393
Net loan charge-offs (recoveries) to average loans outstanding	(0.10)		%	0.00		%	0.01		%	0.10		%	0.03		%
Nonperforming loans to gross loans (2)	0.09		%	0.01		%	0.02		%	0.04		%	0.07		%
Nonperforming assets to total assets (2)	0.09		%	0.04		%	0.04		%	0.06		%	0.08		%
Allowance for credit losses to gross loans (2)	0.93		%	0.93		%	0.91		%	0.89		%	0.95		%
CAPITAL RATIOS (2)
Tier 1 leverage	9.04		%	8.96		%	8.86		%	8.77		%	8.83		%
Common equity tier 1 capital	12.46		%	12.58		%	12.21		%	12.08		%	12.37		%
Tier 1 risk-based capital	12.46		%	12.58		%	12.21		%	12.08		%	12.37		%
Total risk-based capital	15.34		%	15.50		%	15.06		%	14.90		%	15.29		%


	June 30 2025		March 31 2025		December 31 2024		September 30 2024		June 30 2024
ASSETS
Cash and demand deposits due from banks	$	34,246	$	28,786	$	22,830	$	27,019	$	22,690
Fed Funds sold and interest bearing balances due from banks	74,308		40,393		1,712		359		869
Total cash and cash equivalents	108,554		69,179		24,542		27,378		23,559

Available-for-sale securities, at fair value	500,560		513,040		489,029		506,806		505,646
Federal Home Loan Bank stock	5,600		5,600		12,762		12,762		12,762
Mortgage loans held-for-sale	55		127		242		504		637

Loans	1,397,513		1,367,724		1,423,571		1,424,283		1,381,636
Less allowance for credit losses	12,977		12,735		12,895		12,635		13,095
Net loans	1,384,536		1,354,989		1,410,676		1,411,648		1,368,541

Premises and equipment	28,171		28,108		27,659		27,674		27,843
Cash surrender value of bank-owned life insurance policies	45,774		45,833		34,882		34,625		34,382
Goodwill and other intangible assets	48,282		48,282		48,283		48,283		48,283
Other assets	34,636		37,429		38,166		37,221		38,486
Total assets	$	2,156,168	$	2,102,587	$	2,086,241	$	2,106,901	$	2,060,139
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Demand deposits	$	493,477	$	404,194	$	416,373	$	421,493	$	412,193
Interest bearing demand deposits	223,376		243,939		237,548		228,902		232,660
Money market deposits	446,845		473,138		423,883		471,745		429,150
Savings	289,746		286,399		281,665		276,095		279,847
Certificates of deposit	395,932		390,239		387,591		383,597		368,449
Total deposits	1,849,376		1,797,909		1,747,060		1,781,832		1,722,299
Short-term borrowings	43,208		47,310		53,567		52,434		44,194
Federal Home Loan Bank advances	—		—		30,000		15,000		45,000
Subordinated debt, net of unamortized issuance costs	29,469		29,447		29,424		29,402		29,380
Total borrowed funds	72,677		76,757		112,991		96,836		118,574

Other liabilities	13,615		12,365		15,914		15,248		17,017
Total liabilities	1,935,668		1,887,031		1,875,965		1,893,916		1,857,890
Shareholders’ equity
Common stock	124,607		125,547		126,224		125,218		126,126
Shares to be issued for deferred compensation obligations	2,331		2,508		2,383		3,981		3,951
Retained earnings	107,949		104,940		103,024		101,065		99,808
Accumulated other comprehensive income (loss)	(14,387)		(17,439)		(21,355)		(17,279)		(27,636)
Total shareholders’ equity	220,500		215,556		210,276		212,985		202,249
Total liabilities and shareholders' equity	$	2,156,168	$	2,102,587	$	2,086,241	$	2,106,901	$	2,060,139


	Six Months Ended June 30
		2025		2024
Interest income
Loans		$	39,180	$	36,920
Available-for-sale securities		5,675		5,688
Federal Home Loan Bank stock		285		304
Federal funds sold and other		735		556
Total interest income		45,875		43,468
Interest expense
Deposits		14,854		14,476
Short-term borrowings		665		642
Federal Home Loan Bank advances		170		1,026
Subordinated debt		532		532
Total interest expense		16,221		16,676
Net interest income		29,654		26,792
(Reversal of) provision for credit losses		(1,206)		562
Net interest income after provision for credit losses		30,860		26,230
Noninterest income
Service charges and fees		4,045		3,956
Wealth management fees		2,063		1,987
Earnings on bank-owned life insurance policies		672		496
Net gain on sale of mortgage loans		77		101
Other		357		536
Total noninterest income		7,214		7,076
Noninterest expenses
Compensation and benefits		14,879		13,985
Occupancy and equipment		5,250		5,325
Other professional services		1,574		1,040
ATM and debit card fees		1,041		956
Marketing		928		851
FDIC insurance premiums		570		532
Other losses		454		561
Other		2,348		2,321
Total noninterest expenses		27,044		25,571
Income before income tax expense		11,030		7,735
Income tax expense		2,050		1,123
Net income		$	8,980	$	6,612
Earnings per common share
Basic		$	1.21	$	0.88
Diluted		1.21		0.88
Cash dividends per common share		0.56		0.56


	Three Months Ended
	June 30 2025		March 31 2025		December 31 2024		September 30 2024		June 30 2024
Interest income
Loans	$	19,832	$	19,348	$	20,145	$	20,230	18,863
Available-for-sale securities	3,032		2,643		2,656		2,749		2,804
Federal Home Loan Bank stock	125		160		168		168		158
Federal funds sold and other	253		482		200		194		263
Total interest income	23,242		22,633		23,169		23,341		22,088
Interest expense
Deposits	7,391		7,463		7,583		7,631		7,313
Short-term borrowings	324		341		413		384		321
Federal Home Loan Bank advances	132		38		352		571		638
Subordinated debt	266		266		266		267		266
Total interest expense	8,113		8,108		8,614		8,853		8,538
Net interest income	15,129		14,525		14,555		14,488		13,550
(Reversal of) provision for credit losses	(1,099)		(107)		376		946		170
Net interest income after provision for credit losses	16,228		14,632		14,179		13,542		13,380
Noninterest income
Service charges and fees	2,071		1,974		2,186		2,133		2,023
Wealth management fees	1,084		979		1,051		1,003		1,048
Earnings on bank-owned life insurance policies	300		372		259		252		253
Net gain on sale of mortgage loans	47		30		75		37		67
Other	184		173		401		103		217
Total noninterest income	3,686		3,528		3,972		3,528		3,608
Noninterest expenses
Compensation and benefits	7,496		7,383		7,340		7,251		6,970
Occupancy and equipment	2,650		2,600		2,554		2,645		2,619
Other professional services	863		711		584		588		527
ATM and debit card fees	555		486		516		503		487
Marketing	469		459		458		403		425
FDIC insurance premiums	267		303		309		291		280
Other losses	339		115		209		347		416
Other	1,106		1,242		1,360		1,200		1,171
Total noninterest expenses	13,745		13,299		13,330		13,228		12,895
Income before income tax expense	6,169		4,861		4,821		3,842		4,093
Income tax expense	1,138		912		825		561		612
Net income	$	5,031	$	3,949	$	3,996	$	3,281	$	3,481
Earnings per common share
Basic	$	0.68	$	0.53	$	0.54	$	0.44	$	0.47
Diluted	0.68		0.53		0.54		0.44		0.46
Cash dividends per common share	0.28		0.28		0.28		0.28		0.28


	Three Months Ended
	June 30 2025		March 31 2025		December 31 2024		September 30 2024		June 30 2024
INTEREST EARNING ASSETS
Loans (1)	5.71	%	5.71	%	5.66	%	5.72	%	5.50	%
Available-for-sale securities	2.38	%	2.20	%	2.15	%	2.17	%	2.17	%
Federal Home Loan Bank stock	8.94	%	5.82	%	5.25	%	5.26	%	4.97	%
Fed funds sold	3.83	%	4.32	%	4.54	%	5.36	%	5.30	%
Other	4.92	%	4.06	%	4.94	%	5.18	%	7.38	%
Total interest earning assets	4.81	%	4.75	%	4.72	%	4.75	%	4.59	%
INTEREST BEARING LIABILITIES
Interest bearing demand deposits	0.37	%	0.41	%	0.36	%	0.28	%	0.30	%
Money market deposits	2.55	%	2.58	%	2.71	%	2.77	%	2.85	%
Savings	0.76	%	0.76	%	0.64	%	0.61	%	0.56	%
Certificates of deposit	3.82	%	3.93	%	4.07	%	4.13	%	4.01	%
Short-term borrowings	3.11	%	3.18	%	3.22	%	3.17	%	3.18	%
Federal Home Loan Bank advances	4.53	%	4.53	%	4.88	%	5.52	%	5.55	%
Subordinated debt, net of unamortized issuance costs	3.61	%	3.62	%	3.62	%	3.62	%	3.63	%
Total interest bearing liabilities	2.24	%	2.26	%	2.38	%	2.42	%	2.38	%
Net yield on interest earning assets (FTE) (2)	3.14	%	3.06	%	2.98	%	2.96	%	2.82	%

Net interest spread	2.57	%	2.49	%	2.34	%	2.33	%	2.21	%

(1) Includes loans held-for-sale and nonaccrual loans


	Three Months Ended
	June 30 2025		March 31 2025		December 31 2024		September 30 2024		June 30 2024
INTEREST EARNING ASSETS
Loans (1)	$	1,388,684	$	1,370,765	$	1,412,578	$	1,403,810	$	1,375,523
Available-for-sale securities (2)	534,352		514,479		522,733		536,379		545,827
Federal Home Loan Bank stock	5,600		11,011		12,762		12,762		12,762
Fed funds sold	6		4		8		4		7
Other (3)	20,487		47,374		15,905		14,597		14,054
Total interest earning assets	1,949,129		1,943,633		1,963,986		1,967,552		1,948,173
NONEARNING ASSETS
Allowance for credit losses	(13,369)		(12,884)		(12,598)		(13,125)		(13,431)
Cash and demand deposits due from banks	22,026		23,899		22,800		25,903		23,931
Premises and equipment	28,306		27,962		27,773		27,868		27,999
Other assets	106,595		102,927		92,608		87,002		80,539
Total assets	$	2,092,687	$	2,085,537	$	2,094,569	$	2,095,200	$	2,067,211
INTEREST BEARING LIABILITIES
Interest bearing demand deposits	$	236,076	$	240,860	$	232,271	$	232,018	$	238,866
Money market deposits	449,110		460,663		436,235		451,216		434,061
Savings	286,434		286,364		276,856		274,828		283,605
Certificates of deposit	395,450		387,820		386,871		375,936		366,440
Short-term borrowings	41,661		43,563		50,862		48,304		40,609
Federal Home Loan Bank advances	11,539		3,333		28,261		40,435		45,494
Subordinated debt, net of unamortized issuance costs	29,455		29,433		29,410		29,388		29,365
Total interest bearing liabilities	1,449,725		1,452,036		1,440,766		1,452,125		1,438,440
NONINTEREST BEARING LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits	409,262		403,024		425,116		418,973		411,282
Other liabilities	14,158		16,265		15,775		15,658		16,755
Shareholders’ equity	219,542		214,212		212,912		208,444		200,734
Total liabilities and shareholders’ equity	$	2,092,687	$	2,085,537	$	2,094,569	$	2,095,200	$	2,067,211

(1) Includes loans held-for-sale and nonaccrual loans

The following table outlines our asset quality analysis as of, and for the three-month periods ended:


	June 30 2025			March 31 2025			December 31 2024			September 30 2024			June 30 2024
NONPERFORMING ASSETS
Commercial and industrial	$	17		$	—		$	—		$	120		$	271
Commercial real estate	533			—			—			—			—
Agricultural	—			—			—			—			167
Residential real estate	614			173			282			427			556
Consumer	—			—			—			—			—
Total nonaccrual loans	1,164			173			282			547			994
Accruing loans past due 90 days or more	31			26			19			64			15
Total nonperforming loans	1,195			199			301			611			1,009
Foreclosed assets	667			649			544			546			629
Debt securities	—			—			—			12			12
Total nonperforming assets	$	1,862		$	848		$	845		$	1,169		$	1,650
Nonperforming loans to gross loans	0.09		%	0.01		%	0.02		%	0.04		%	0.07		%
Nonperforming assets to total assets	0.09		%	0.04		%	0.04		%	0.06		%	0.08		%
Allowance for credit losses as a % of nonaccrual loans (1)	N/M			N/M			N/M			N/M			N/M
ALLOWANCE FOR CREDIT LOSSES
Allowance at beginning of period	$	12,735		$	12,895		$	12,635		$	13,095		$	13,390
Charge-offs	390			172			299			1,767			527
Recoveries	1,822			224			197			408			134
Net loan charge-offs (recoveries)	(1,432)			(52)			102			1,359			393
(Reversal of) provision for credit losses - loans	(1,190)			(212)			362			899			98
Allowance at end of period	$	12,977		$	12,735		$	12,895		$	12,635		$	13,095
Allowance for credit losses to gross loans	0.93		%	0.93		%	0.91		%	0.89		%	0.95		%
Reserve for unfunded commitments	708			617			512			498			450
Provision for credit losses - unfunded commitments	91			105			14			47			72
Reserve to unfunded commitments	0.16		%	0.14		%	0.15		%	0.15		%	0.14		%
NET LOAN CHARGE-OFFS (RECOVERIES)
Commercial and industrial	$	68		$	(80)		$	13		$	(6)		$	334
Commercial real estate	(50)			(2)			(2)			(318)			(29)
Agricultural	—			—			(4)			—			—
Residential real estate	(16)			(13)			(16)			(20)			(19)
Consumer	(1,434)			43			111			1,703			107
Total	$	(1,432)		$	(52)		$	102		$	1,359		$	393
Net (recoveries) charge-offs (Quarter to Date annualized to average loans)	(0.41)		%	(0.02)		%	0.03		%	0.39		%	0.11		%
Net (recoveries) charge-offs (Year to Date annualized to average loans)	(0.22)		%	(0.02)		%	0.14		%	0.17		%	0.06		%
DELINQUENT AND NONACCRUAL LOANS
Accruing loans 30-89 days past due	$	1,076		$	5,555		$	5,682		$	2,226		$	1,484
Accruing loans past due 90 days or more	31			26			19			64			15
Total accruing past due loans	1,107			5,581			5,701			2,290			1,499
Nonaccrual loans	1,164			173			282			547			994
Total past due and nonaccrual loans	$	2,271		$	5,754		$	5,983		$	2,837		$	2,493

Loan Analysis


	June 30 2025		March 31 2025		December 31 2024		September 30 2024		June 30 2024		Annualized Growth % Quarter to Date
Commercial and industrial (1)	$	207,719	$	205,172	$	200,623	$	197,372	$	198,769	4.97	%
Commercial real estate (1)	614,383		596,282		591,718		590,255		586,481		12.14	%
Advances to mortgage brokers	3,005		3,015		63,080		76,187		39,300		(1.33)	%
Agricultural	96,842		94,359		99,694		96,794		94,996		10.53	%
Total commercial loans	921,949		898,828		955,115		960,608		919,546		10.29	%
Residential real estate	398,668		387,348		380,872		369,846		365,188		11.69	%
Consumer	76,896		81,548		87,584		93,829		96,902		(22.82)	%
Gross loans	$	1,397,513	$	1,367,724	$	1,423,571	$	1,424,283	$	1,381,636	8.71	%


	June 30 2025		March 31 2025		December 31 2024		September 30 2024		June 30 2024		Annualized Growth % Quarter to Date
Noninterest bearing demand deposits	$	493,477	$	404,194	$	416,373	$	421,493	$	412,193	88.36	%
Interest bearing demand deposits	223,376		243,939		237,548		228,902		232,660		(33.72)	%
Money market deposits	446,845		473,138		423,883		471,745		429,150		(22.23)	%
Savings	289,746		286,399		281,665		276,095		279,847		4.67	%
Certificates of deposit	395,932		390,239		387,591		383,597		368,449		5.84	%
Total deposits	$	1,849,376	$	1,797,909	$	1,747,060	$	1,781,832	$	1,722,299	11.45	%


		Three Months Ended
		June 30 2025			March 31 2025			December 31 2024			September 30 2024			June 30 2024
Net income		$	5,031		$	3,949		$	3,996		$	3,281		$	3,481
Net gains (losses) on foreclosed assets		—			(55)			74			4			6
Overdraft (charge-off) recoveries (1)		1,556			—			66			(1,622)			—
Profitability initiative cost (2)		(173)			—			(23)			—			—
Legal fees related to Nasdaq (2)		(47)			(121)			—			—			—
Income tax impact on items above		(281)			37			(25)			340			(1)
Exchange fees on bank-owned life insurance transfers (3)		(120)			—			—			—			—
Income tax expense on bank-owned life insurance surrender (4)		—			(166)			—			—			—
Core net income	(A)	$	4,096		$	4,254		$	3,904		$	4,559		$	3,476

Noninterest expenses		$	13,745		$	13,299		$	13,330		$	13,228		$	12,895
Amortization of acquisition intangibles		—			1			1			—			1
Non-core expenses		220			121			23			—			—
Core noninterest expense	(B)	$	13,525		$	13,177		$	13,306		$	13,228		$	12,894

Net interest income		$	15,129		$	14,525		$	14,555		$	14,488		$	13,550
Tax equivalent adjustment for net interest margin		178			184			213			232			237
Net interest income (FTE)	(C)	15,307			14,709			14,768			14,720			13,787
Noninterest income		3,686			3,528			3,972			3,528			3,608
Tax equivalent adjustment for efficiency ratio		63			78			54			53			53
Core revenue (FTE)		19,056			18,315			18,794			18,301			17,448
Non-core revenue (loss)		(120)			(55)			74			4			6
Core revenue	(D)	$	19,176		$	18,370		$	18,720		$	18,297		$	17,442
Efficiency ratio	(B/D)	70.53		%	71.73		%	71.08		%	72.30		%	73.93		%

Average earning assets	(E)	1,949,129			1,943,633			1,963,986			1,967,552			1,948,173
Net yield on interest earning assets (FTE)	(C/E)	3.14		%	3.06		%	2.98		%	2.96		%	2.82		%

Average assets	(F)	2,092,687			2,085,537			2,094,569			2,095,200			2,067,211
Average shareholders' equity	(G)	219,542			214,212			212,912			208,444			200,734
Average tangible shareholders' equity	(H)	171,260			165,929			164,629			160,161			152.451
Average diluted shares outstanding (5)	(I)	7,398,109			7,432,162			7,451,718			7,473,184			7,494,828

Core diluted earnings per share	(A/I)	$	0.55		$	0.57		$	0.52		$	0.61		$	0.46
Core return on average assets	(A/F)	0.79		%	0.83		%	0.74		%	0.87		%	0.68		%
Core return on average shareholders' equity	(A/G)	7.48		%	8.05		%	7.29		%	8.70		%	6.96		%
Core return on average tangible shareholders' equity	(A/H)	9.59		%	10.40		%	9.43		%	11.32		%	9.17		%


Table Index			Consolidated Financial Schedules (Unaudited)
A			Selected Financial Data
B			Consolidated Balance Sheets - Quarterly Trend
C			Consolidated Statements of Income
D			Consolidated Statements of Income - Quarterly Trend
E			Average Yields and Costs
F			Average Balances
G			Asset Quality Analysis
H			Consolidated Loan and Deposit Analysis
I			Reconciliation of Non-GAAP Financial Measures