NOTE 12 - LEGAL CONTINGENCIES

3 Months Ended

Mar. 31, 2026

LEGAL CONTINGENCIES

LEGAL CONTINGENCIES

NOTE 12 - LEGAL CONTINGENCIES

In the normal course of business, the Company and its subsidiaries are subject to pending and threatened litigation, claims investigations and legal and administrative cases and proceedings.

Under applicable accounting standards, reserves are established for legal claims only when losses associated with the claims are judged to be probable, and the loss can be reasonably estimated. When a material loss contingency is reasonably possible, but not probable, the Company does not record a liability, but instead discloses the nature of the matter and an estimate of the loss or range of losses, to the extent such estimate can be made. Significant judgment is required in both the determination of possibility or probability, and whether the loss or range of losses is reasonably estimable. The Company’s judgments are subjective and based on the status of the legal or regulatory proceedings, the merits of the Company’s defenses and consultation with in-house and outside legal counsel. Because of uncertainties related to these matters, accruals are based on the best information available to the Company and its advisors at the time, including, among other information, settlement agreements. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation and may revise its estimates accordingly. Due to the inherent uncertainties of the legal and regulatory processes, such judgments may be materially different than the actual outcomes. Legal costs such as outside counsel fees are expensed in the period in which the services are rendered.

Assessments of litigation exposure are difficult because they involve inherently unpredictable factors including, but not limited to: whether the proceeding is in the early stages; whether damages are unspecified, unsupported or uncertain; whether there is a potential for punitive or other pecuniary damages; whether the matter involves legal uncertainties, including novel issues of law; whether the matter involves multiple parties and/or jurisdictions; whether discovery has begun or is not complete; whether meaningful settlement discussions have commenced; and whether the proceeding involves class allegations. In many lawsuits and arbitrations, it is not possible to determine whether a liability will be

incurred, or to estimate the ultimate or minimum amount of that liability, until the matter is close to resolution, in which case a reserve will not be recognized until that time. As a result, the Company may be unable to estimate reasonably possible losses with respect to litigation matters it faces.

In June 2025, CSB was named as a defendant in a lawsuit filed in the Iowa District Court in and for Polk County. The plaintiff alleged, on behalf of himself and a proposed statewide class of consumers, breach of contract and unjust enrichment arising from the CSB’s alleged improper assessment and collection of multiple insufficient funds fees and/or overdraft fees specifically for representment transactions. The petition seeks an unspecified amount of monetary damages.

CSB initially filed a motion to dismiss, which was denied in February 2026. CSB filed an Answer and Affirmative Defenses to the petition on April 10, 2026. Management has engaged outside counsel experienced in this area to assist with defense and risk assessment. CSB continues to dispute the allegations made by the plaintiff, and intends to continue to defend itself vigorously. The Company believes a loss is not considered probable at this time.

The Company believes a material loss contingency related to the petition is reasonably possible, but not probable, based on currently-available information. However, the Company is unable to estimate the ultimate or minimum loss or range of losses, if any, at this time due to a number of uncertainties, including, but not limited to: (i) the current early stages of the proceedings and discovery not having commenced; (ii) the absence of specificity as to alleged damages; and (iii) the lack of resolution of significant factual and legal issues.

As of March 31, 2026, the Company did not have any accrued liabilities recorded for loss contingencies in its consolidated financial statements.