CSBB 10-K & 10-Q changes, risk factors and insider trading

Economic activity in the Company’s market area grewincreased modestlyslightly in the fourth quarter of 2024.2025. DemandConsumer demand for goods and services increaseddeclined moderately asand steadyis salesexpected wereto recordedflatten duringout in the fourthnear quarter of 2024.future. Reported unemployment levels in December 20242025 ranged from 2.9%2.8% to 4.6%4.4% in the four primary counties served by the Company. These levels increaseddecreased from the December 20232024 range of 2.1%2.9% to 3.3%.4.6%. Labor demand remained solidfairly asflat while competition for workers with specialized skills has put upward pressure on labor costs. The local housing market continueshas to be strong with lowincreasing inventory levels. Residential construction activity has increased modestly with stable interest rates and resolution of uncertainty after the election as the main factors increasing demand. Nonresidential construction activity has also improvedincreased modestly since the prior year. CoreAll depositsdeposit decreasedtypes slightly,increased and customers continue to move funds into higher yielding interest-bearing accounts.

The following table setsets forth certain selected consolidated financial information:

2 Dividend payout ratio is calculated as dividends declaredper share as a percentage of netearnings income.per share.

CSB’s 20242025 net income was $10.0$13.4 million compared to $14.8$10.0 million for 2023,2024, aan decreaseincrease of 32%.33.5%. Total revenue, net interest income plus noninterest income, increased $1.1$5.7 million, or 2.5%,13%, over the prior year to a total of $44$50 million. The provision for credit lossesloss increasedexpense decreased to $7.0$5.4 million as compared to $442$7.0 thousandmillion for the prior year. Noninterest expense increased $529$3.2 thousand,million, or 2%13% and the provision for income tax decreasedincreased $1.3$877 millionthousand over the prior year due to aan decreaseincrease in taxable income. Basic and diluted earnings per share were $3.76,$5.07, downup 32%35% from the prior year. The return on average assets was 1.08% in 2025 compared to 0.85% in 2024 compared to 1.27% in 2023 and return on average equity was 8.96%10.94% in 20242025 compared to 14.69%8.96% in 2023.2024.

Net interest income is the largest source of the Company’s revenue and consists of the difference between interest income generated on earning assets and interest expense incurred on liabilities (deposits, short-term and long-term borrowings). Changes in volume, interest rates, composition of interest-earning assets, and interest-bearing liabilities affect net interest income. Net interest income increased $712$5.5 thousand,million, or 2%,15%, in 20242025 compared to 2023.2024. The increase was a result of a $5.6$5.4 million increase in interest income,income partiallyand offseta by an increasedecrease of $4.9$95 millionthousand in interest expense. The FTE net interest margin decreasedincreased to 3.31%3.63% from 3.32%3.31% in 2023.2024.

Interest income increased $5.6$5.4 million, or 12%,11%, in 20242025 compared to 20232024 primarily due to an increase of $5.8$5.3 million, or 16%,13%, in interest and fees on loans fromprimarily due to an increase in average balances of $52$70 million and an increase in yield of 4215 basis points ("bps"). Interest income on taxable securities decreased $488$300 thousand due to a decrease in average balances of $31$35 million. Interest income on interest-earning deposits mainly held at the Federal Reserve increased $277$530 thousand in 20242025 compared to 20232024 primarily due to an increase in average balances of $5$22 million.

Interest expense increaseddecreased $4.9$95 million,thousand, or 49%,less than 1%, in 20242025 as compared to 20232024, primarily due to shiftslower incost volume from noninterest-bearing demandof deposits andas lowershort-term yieldinginterest interest-bearingrates demand deposits to higher yielding time deposits.dropped. Average noninterest-bearing demand and interest-bearing demand deposit balances decreasedincreased $57$6 million during the year and average time deposit balances increased $69$34 million, and the average interest rate paid on time deposits increaseddecreased by 11230 bps.

The provision for credit losses on loans is determined by management as the amount required to bring the allowance for credit losses to a level considered appropriate to absorb an estimation of credit loss during the expected weighted average life of the loan. During 2024,2025, a provision for credit loss expense on loans of $7.2$5.3 million was recognized compared to a provision of $198$7.2 thousandmillion in 2023.2024. A recoveryprovision for credit loss expense on off-balance sheet commitments of $213$72 thousand was recognized in 20242025 as compared to a provisionrecovery for credit loss expense for off-balance sheet commitments of $244$213 thousand in 2023.2024. Nonperforming loans increaseddecreased $1.3$1.1 million from 20232024 to 2024.2025. See Financial Condition – Allowance for Credit Losses for additional discussion and information relative to the provision for credit losses.

Noninterest income increased $358$193 thousand, or 5%,3%, in 20242025 compared to the same period in 2023. Trust services revenue increased $206 thousand with asset market value increases. Gain on sales of mortgage loans, including mortgage servicing rights ("MSRs") increased $120 thousand, as $9 million in loans were sold into the secondary market compared to $5 million in 2023.2024. Earnings on bank owned life insurance increased $112$129 thousand, with the purchase of an additional $2 million of insurance. CreditDebit card interchange income decreasedincreased $58$92 thousand due to an overall declineincrease in volume. Service charges on deposit accounts decreasedincreased $53$56 thousand, as increases in monthly deposit account service charges wereand offset by decreasesincreases in non-sufficient funds ("NSF") charges. Trust services revenue decreased $73 thousand due to a one time fee collected in 2024 which did not recur in 2025.

Noninterest expense increased $529$3 thousand,million, or 2%,13%, in 20242025 compared to 2023.2024. Salaries and employee benefits decreasedincreased $50$2 thousandmillion aswith increases in base salaries weredue offsetto byfilled decreasespositions and increases in employeemedical, profitincentive sharingcompensation and incentiveretirement compensation. Ohio financial institutions tax expense increased $97 thousand, which is based on the increase in shareholders' equity.benefits. Professional and director fees increased $94$228 thousand, primarily from increases in legal expensesand relatedaudit and accounting expenses. Occupancy expense increased $194 thousand, due to loansnow collectionremoval efforts.and HVAC repairs. Other expenses increased $116$221 thousand, or 4%.8% as increases in education expenses of $53 thousand over the prior year contributed to this difference.

The provision for income taxes amounted to $2.3$3.2 million in 20242025 as compared to $3.6$2.3 million in 2023.2024. The decreaseincrease in 20242025 resulted from lowerhigher taxable income. The corporate statutory tax rate was 21% for 20242025 and 2023.2024. The effective tax rate in 20242025 and 20232024 was 18.8%19.3% and 19.7%,18.8%, respectively.

Total assets of the Company were $1.3 billion and $1.2 billion on December 31, 20242025 and 2023,2024, representing an increase of $13$101 million, or 1%.8%. Net loans increased $35$87 million, or 5%,12%, while investment securities decreased $37$14 million, or 10%,4%, and total cash and cash equivalents increased $9$26 million, or 15%.35%. Deposits increased $17$83 million and short-term borrowings decreased $10$6 million, while other borrowings from the Federal Home Loan Bank (“FHLB”) decreased by $488$349 thousand.

Total loans increased $36$92 million, or 5%,12%, during 2024.2025. Volume increases were recognized as follows: commercial real estate $65 million, or 34%, commercial real estate buildings held for investment and leased to others increased $18$13 million, or 22%, construction loans increased $15 million, or 31%,13%, residential real estate loans increased $11$16 million, or 6%,9%, and home equity lines of credit increased $2$8 million, or 4%.17%. Commercial and industrial loans decreasedincreased $8 million, or 5%6% during 2024,2025, construction loans decreased $16 million, or 25%, and consumer installment loans, including consumer indirect loans, also decreased $2 million, or 10%. At year-end 2024,2025, commercial real estate is comprised mostly of owner occupied buildings of $191$256 million, and $101$114 million of buildings held for investment and leased to others. Owner occupied buildings are mostly light industrial, warehouse buildings and auto repair. Investment properties include healthcare buildings, retail strip centers, and residential investment properties.

The Company originated $58$78 million and $52$58 million of residential mortgage loans held in the portfolio, including residential construction, conventional 1-4 family, and equity line loans, which were predominately variable rate, in 20242025 and 2023,2024, respectively. TheDemand increasefor homes increased as rates declined then stabilized and borrowers chose variable-rate products hopeful for lower rates in interest rates slowed consumer demand for 1-4 family fixed-rate thirty-year residential mortgages which are sold into the secondary market,future, thus limiting the Company's mortgage sales to $8 million in 2025 and $9 million in 2024 and $5 million in 2023.2024. Home equity loan balances increased $2$8 million during 20242025 with demand improving as interest rates declined during the second half of the year.dropped.

Management anticipates modest economic growth in the Company’s local service areas will continue to improve.continue. Commercial and commercial real estate loans, in aggregate, comprise approximately 59%63% and 61%59% of the total loan portfolio at year-end 20242025 and 2023,2024, respectively. Residential real estate loans approximated 30% of the portfolio in 20242025 and 2023.2024. Construction and land development loans increaseddecreased from 7%9% to 9%6% of the portfolio. The Company is well within the respective regulatory guidelines for investment in construction, development, and investment property loans that are not owner occupied. The Company has very little exposure to commercial office space leased properties. See Note 3 - Loans for further discussion on Concentrations of Credit. Most of the Company’s lending activity is with customers primarily located within Holmes, Medina, Stark, Tuscarawas and Wayne counties in Ohio.

Nonperforming assets consist of nonaccrual loans, loans past due 90 days and still accruing, and other real estate acquired through or in lieu of foreclosure. Loans are placed on nonaccrual status when they become past due 90 days or more, or when mortgage loans are past due as to principal and interest 120 days or more, unless they are both well secured and in the process of collection. During 2025, $614 thousand in nonaccrual loans were collected, $404 thousand were charged-off, and $451 thousand new loans entered nonaccrual status.

The allowance for credit losses ("ACL") is maintained at a level considered by management to be adequate to cover credit losses currently expected over the weighted average life of the loan pools. The ACL increased by $1$5 million, or 15%,64%, to $12.5 million on December 31, 2025, from $7.6 million on December 31, 2024, from $6.6 million on December 31, 2023.2024. The additional ACL was primarily the result of the increaserecognition inof thea historicalfourth lossquarter ratevaluation appliedallowance toof the$4 million for one large commercial andcredit industrialthat loanremains portfolioa asperforming well as the increase in the average life of the loans.asset. The Bank continues to maintain qualitative factors tied to changes in: the lending policy, economic conditions, lending credit management, delinquent and classified loans, and the value of collateral.

The ACL on loans totaled $7.6$12.5 million, or 1.03%1.5% of total loans at year-end 20242025 as compared to $6.6$7.6 million, or 0.94%,1.03%, of total loans at year-end 2023.2024. The Bank had net credit losses of $428 thousand in 2025, compared to $6.3 million in 2024,2024. comparedDuring fourth quarter 2025, a performing loan was determined to $130be thousandcollateral independent recoveriesthrough incontinued 2023.operation. As a result, a $4 million valuation allowance was recognized. As previously disclosed during 2024, the credit facility being liquidated through court liquidation continues on a $7 million commercial relationship thatreceivership has been charged down by $6 million. Related to this loan, approximately $900 thousand remains in nonperforming assets with $400 thousand in auction proceeds held by the receiver and $500 thousand in commercial real estate (office building)no remaining toloan bebalances liquidated.at December 31, 2025.

The Company maintains an internal watch list for loans where management’s analysis of the borrower’s operating results and financial condition indicates the borrower’s cash flows are inadequate to meet its debt service requirements and for loans where there exists an increased risk that a shortfall may occur. See the Credit Quality Indicators section of Note 3 to the Consolidated Financial Statements for additional information. Nonperforming loans, which consist of loans past due 90 days or more and nonaccrual loans, aggregated $652 thousand, or 0.08%, of loans at year-end 2025 compared to $1.7 million, or 0.23%, of loans at year-end 2024 compared to $396 thousand, or 0.06%, of loans at year-end 2023.2024.

Net premises and equipment increaseddecreased $1$492 millionthousand to $14$13.6 million at year-end 20242025 with $2$426 millionthousand in capitalized purchases and $1$886 millionthousand in depreciation expense. Total bank-owned life insurance increased from $25 million at year-end 2023 to $28 million at year-end 2024,2024 to $31 million at year-end 2025, including a $2 million purchase of insurance and increasing cash surrender values. There was no other real estate owned on December 31, 20242025 or 2023.2024. The Company recognized a net deferred tax asset of $2.3 million on December 31, 2025, and 2024, compared to a net deferred tax asset of $2.6 million on December 31, 2023. The decrease is primarily due to an improvement in the net unrealized loss on securities.respectively.

The Company’s deposits are obtained primarily from individuals and businesses located in its market area. For deposits, the Company must compete with products offered by other financial institutions, as well as alternative investment options. Time deposits and money market savings account balances increased for the year ended 2024. Market rates on deposits and cash management products increaseddecreased during the first half of the year before beginning to decrease in the second half of the year.

The Company obtains additional funds through securities sold under repurchase agreements, overnight borrowings from the FHLB or other financial institutions, and advances from the FHLB. Short-term borrowings, consisting of securities sold under repurchase agreements, decreasedincreased $10$5.8 million. Other borrowings, consisting of FHLB advances, decreased $488$349 thousand as the result of principal repayments. The majority of FHLB borrowings on December 31, 2024,2025, have long term maturities with monthly amortizing payments.

Total shareholders’ equity was $114.8$126.3 million at December 31, 2024,2025, compared to $107.9$114.8 million on December 31, 2023.2024. This increase was primarily due to net income of $10.0$13.4 million and a $1.9$3.4 million decrease in the accumulated other comprehensive loss recognized on the available-for-sale securities portfolio, resulting from investment payment and maturities as well as decreasing interest rates. DividendsDuring were2025, the Company paid of $4.2$4.3 million in dividends, and $762repurchased $999 thousand of its common shares were repurchased in 2024.shares. The Board of Directors approved a Stock Repurchase Program on February 26, 2021, allowing the repurchase of up to 5% of the Company’s then-outstanding common shares. Repurchased shares are to be held as treasury stock and are available for general corporate purposes. On December 31, 2024,2025, approximately 4522 thousand common shares could still be repurchased under the current authorized program. Shares repurchased during 2025 totaled 23,074 shares for $999 thousand and shares purchased in 2024 totaled 19,849 shares for $762 thousand and shares purchased in 2023 totaled 37,638 shares for $1.4 million.thousand.

As summarized in the Consolidated Statements of Cash Flows, the most significant investing activities for the Company in 20242025 included net loan originations of $42$92 million and securities purchases of $15$52 million, offset by maturities and repayment of securities totaling $54$71 million. The Company’s financing activities included a $17$83 million increase in deposits, $10$6 million decreaseincrease in short-term borrowings, and $4 million decrease in cash dividends paid.

Management reviews Net Interest Income at Risk with the Board on a periodic basis. Additional earnings simulations are run to test an immediate interest rate shock over a twenty-four month period. The Company was within all Board-approved limits at December 31, 20242025 and 20232024 for the first twelve-month periods of the twenty-four month horizon.

Management periodically measures and reviews the economic value of equity at risk with the Board. As of December 31, 2024,2025, the Company was within all policy limits set by the Board. As of December 31, 2023, the percentage change of the market value of equity was outside of the board policy limit in the -400 basis point scenario. The technical fail in the declining rate scenario in 2023 was caused by the duration of liabilities remaining high and loan and investment prepayment speeds increasing.

SIGNIFICANTSignificant ASSUMPTIONSAssumptions ANDRelated OTHERto CONSIDERATIONSMarket Risk

The abovemarket risk analysis is based on numerous assumptions, including relative levels of market interest rates, loan prepayments, and reactions of depositors to changes in interest rates and this should not be relied upon as being indicative of actual results. Further, the analysis does not contemplate all actions the Company may undertake in response to changes in interest rates.

CRITICAL ACCOUNTING ESTIMATESPOLICIES

As previously noted in the section entitled Allowance for Credit Losses, management performs an analysis to assess the adequacy of its allowance for credit losses using the current expected credit loss (CECL) model. This analysis encompasses a variety of factors including: the potential loss exposure for individually reviewed loans, the historical loss experience, changes in delinquent and classified loans, any significant changes in lending or loan review staff, an evaluation of current and future economic conditions, any significant changes in the volume or mix of loans within each category, a review of the significant concentrations of credit, and any legal, competitive, or regulatory concerns. Potential future earnings volatility is driven by CECL's life of credit loss and economic forecasts of unemployment, recession and future credit loss within the portfolio. Under stress testing performed by the Bank in 2024,2025, the unemployment forecast models as the largest driver of credit loss provision volatility. When sustained unemployment is significantly increased to 10%8% over a two-year period, an additional provision of approximately $1.4$1 million would be required under current model assumptions. While the weighted average life of the loan portfolio has extended toremains five years, at December 31, 2024,2025, stressing the commercial real estate, lessors of buildings and residential mortgage portfolios' weighted average lives by 10%, or an increase of 64 months, resulted in a minimal increase of $124$61 thousand to the allowance for credit losses.

The following management’s discussion and analysis focuses on the consolidated financial condition of the Company on MarchJune 31,30, 2026 as compared to December 31, 2025, and the consolidated results of operations for the three and six months ended MarchJune 31,30, 2026 compared to the same periods in 2025. The purpose of this discussion is to provide the reader with a more thorough understanding of the Consolidated Financial Statements. This discussion should be read in conjunction with the interim condensed Consolidated Financial Statements and related footnotes contained in Part I, Item 1 of this Quarterly Report.

Total assets decreasedremain $27 million to $1.27 billionsteady at March 31, 2026 compared to $1.29 billion at June 30, 2026 and December 31, 2025. During the threesix months ended MarchJune 31,30, 2026, securities decreased $7$20 million, net loans increased $22$39 million, and cash and cash equivalents decreased $44$18 million. Deposits and short-term borrowings decreased $30$4 million.

Net loans increased $22$39 million, or 3%,5%, as commercial and commercial real estate loans increased $13$21 million, or 3%,4%, compared to December 31, 2025 and residential real estate loans increased $4$5 million, or 2%, from December 31, 2025. Construction loans increased $2$8 million, or 5%,17%, from December 31, 2025. Consumer refinance activity remains slow on mortgage loans, while home construction activity rose as well as home equity line origination increases of $3$21 million. Residential mortgage loan originations, including home equity lines, for the threesix months ended MarchJune 31,30, 2026 totaled $17$40 million, an increase from $10$32 million in mortgage originations during the threesix months ended MarchJune 31,30, 2025. Mortgage loan originations sold into the secondary market remained stable at $1.5$4 million, during the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 respectively. The Bank originates and sells primarily fixed rate thirty-year mortgages into the secondary market.

The allowance for credit losses for loans increased $477$1 thousandmillion from December 31, 2025 to $12.9$13.5 million. The increase in the allowance was primarily due to theone volumeindividually evaluated loan relationship, an increase in loansloan originated.volume, and an increase in risk forecast within the home equity line portfolio. Net charge-offs were $7$35 thousand, or an annualized 0.0%0.01% of average loans, in the current three-monthsix-month period compared to net charge-offs of $29$391 thousand, or 0.02%0.10% of average loans in the year-ago three-monthsix-month period. At MarchJune 31,30, 2026, the allowance for credit losses to total loans was 1.52%.1.56%. We believe the allowance level is appropriate given the level of problem loans and composition of the overall loan portfolio in the current economic environment.

Nonperforming loans increased $366$6.6 thousandmillion to $1.0$7.3 million, or 0.12%,0.84%, of total loans from $652 thousand, or 0.08% of total loans, on December 31, 2025. For the threesix months ended MarchJune 31,30, 2026, $45$6.7 thousandmillion in loans were placed on nonaccrual statusstatus, and one mortgage loan for $351 thousand was 90 days past due, $30$93 thousand in paydowns were received, and no nonperforming loans were charged-off due to non-payment.

The ratio of gross loans to deposits was 77% and 74% at MarchJune 31,30, 2026 and December 31, 2025.

The Company has no exposure to government-sponsored enterprise preferred stocks, collateralized debt obligations, or trust preferred securities. Management has considered industry analyst reports, sector credit reports, and the volatility within the bond market in concluding that the gross unrealized losses of $29 million within the available-for-sale and held-to-maturity portfolios as of MarchJune 31,30, 2026, was primarily the result of current market yields compared to the yields at the time the investments were purchased by the Company and not due to credit quality. As a result, all embedded security losses on MarchJune 31,30, 2026, are considered temporary and no allowance for credit loss is necessary.

The weighted average life of total debt securities was 5.035.10 years at MarchJune 31,30, 2026 as compared to 5.12 years at December 31, 2025. If interest rates declined 100 basis points, the weighted average life was estimated to fall to 4.554.57 years at MarchJune 31,30, 2026. If interest rates rose 100 basis points the weighted average life would be expected to increase to 5.57 years at MarchJune 31,30, 2026.

Deposits decreasedincreased $26$5 million, or 2%,0.5%, from December 31, 2025 with noninterest-bearing deposits decreasing approximately $16$1.8 million, or 6%,0.6%, and interest-bearing deposit accounts decreasingincreasing approximately $10$7 million, or 1%.0.9%. Total deposits as of MarchJune 31,30, 2026 are $1.1 billion, or 3%,4%, above MarchJune 31,30, 2025 deposit balances. On a year over year comparison, increases were recognized in interest bearing demand accounts of $34$11 million, and time deposits of $8$27 million noninterest-bearing demand deposits of $4 million, and savings accounts of $3 million. Decreases were recognized in noninterest-bearing demand deposits of $10 million and money market accounts of $1$378 million.thousand. Deposits have increased as customers move funds into interest bearing demand accounts and time certificates of deposit to take advantage of higher interest rates in those products. The estimated amount of uninsured deposits was $263$272 million, $281 million, and $262$266 million as of MarchJune 31,30, 2026, December 31, 2025, and MarchJune 31,30, 2025, respectively.

Short-term borrowings consisting of overnight repurchase agreements with retail customers decreased $4$10 million, or 12%,30%, to $28$22 million at MarchJune 31,30, 2026 as compared to December 31, 20252025. as theseThese balances arehave cyclicalreturned to a more typical amount and typicallyare lowereven inwith theJune first30, quarter.2025. Other borrowings decreased $25$223 thousand as the Company repaid FHLB advances.

Total shareholders’ equity amounted to $129$133 million, or 10%, of total assets at MarchJune 31,30, 2026, an increase of $2.9$6.3 million, or 2%,5%, from $126 million at December 31, 2025. The increase in shareholders’ equity during the threesix months ended MarchJune 31,30, 2026 was due to net income of $4.4$9.2 million, net of other comprehensive loss of $392$570 thousand and cash dividends of $1.1$2.3 million. Total accumulated other comprehensive loss ("AOCL") increased during the threesix months ended MarchJune 31,30, 2026 due to higher U.S. Treasury rates and decreased prices in government agency and corporate bonds as AFS securities are marked to fair value. This remaining unrealized loss in securities is temporary and is adjusted monthly for additional interest rate fluctuations, principal paydowns, calls, and maturities. The Company and the Bank met all regulatory capital requirements at MarchJune 31,30, 2026 as shown in the Capital Resources section of this report.

Three months ended MarchJune 31,30, 2026 and 2025

For the quarters ended MarchJune 31,30, 2026 and 2025, the Company recorded net income of $4.4$4.7 million and $3.6$3.7 million and $1.69$1.80 and $1.37$1.41 per share, respectively. The $828$1 thousandmillion increase in net income for the period was primarily the result of an increase of $1.8$1.5 million in net interest income, offseta by$175 anthousand increase in non interest income, and a decrease in the provision for credit losses and off-balance sheet commitments of $93$29 thousand. Additionally,The anoninterest $176expense increase of $465 thousand increase in noninterest income waspartially offset bythe arevenue $824 thousand increase in noninterest expenses.increases. The federal income tax provision increased $215$262 thousand. Pre-provision net revenue ("PPNR"), (a non-GAAP measure), totaled $6 million for the quarter ended MarchJune 31,30, 2026, an increase of $1.1$1.2 million, or 23%,24%, from the prior year's firstsecond quarter.

Interest income for the quarter ended MarchJune 31,30, 2026, was $15 million representing a $1.7$1.5 million, or 13%11% increase, compared to the same period in 2025. This increase was primarily due to the higher average balances of loans of $89$83 million. These increases were partially offset by volume decreases in securities and interest-earning deposits in other banks of $13$18 million over the comparable period. Rates on average interest-earning deposits in other banks decreased 76 basis points, while loan rates increased 1713 basis points, and securities' interest rates increased 3032 basis points for the quarter ended MarchJune 31,30, 2026 as compared to the same period in 2025. Interest expense for the quarter ended MarchJune 31,30, 2026 was $3.5 million, a decrease of $95$35 thousand, or 3%,1%, from the same quarter in 2025. The decrease in interest expense occurred primarily due to rate decreases in time deposit accounts during the quarter ended MarchJune 31,30, 2026.

For the quarter ended MarchJune 31,30, 2026, the bank recognized net charge-offs of $7$28 thousand, compared to $29$362 thousand net charge-offs for the same quarter in 2025. The provision for credit losses on loans in the current quarter of $484$609 thousand, compared to a provision of $408$639 thousand in the same quarter ended 2025. The Company recorded a $11$24 thousand provisionrecovery for credit loss expense on off-balance commitments in the firstsecond quarter 2026 compared to a $6$25 thousand recovery in the same quarter of 2025. The provision for credit losses is determined based on management’s calculation of the adequacy of the allowance for credit losses, which includes provisions for classified loans as well as for the remainder of the portfolio based on historical data, including past charge-offs and current economic trends.

Noninterest income increased $176$175 thousand, or 10%, compared to the firstsecond quarter of 2025. The increase was primarily the result of a $41$49 thousand increase in debit card interchange fees, a $42 thousand increase in credit card interchange fees, a $40 thousand increase in trust fees, $39$37 thousand increase in earnings on bank owned life insurance, $28 thousand increase in debitservice card interchange fees and a $24 thousand increase in unrealized gainscharges on equity securities.deposits.

Noninterest expense increased $824$465 thousand, or 13%,7%, from the firstsecond quarter 2025. Salary and employee benefit costs increased $536$328 thousand, or 15%,8%, compared to the prior year quarter with an increase in the number of full time equivalent employees from 173175 in 2025 to 182185 in 2026 as vacant positions were filled. Software expense increased $118$83 thousand, or 29%,19%, professionaldebit and director fees increased $45 thousand, or 11%, marketing and public relationscard expense increased $26$23 thousand,thousand or 25%, state financial institutions tax increased $23 thousand, or 10%, due to the increase in capital.12%. Occupancy expense decreased $8$16 thousand, or 2%.5%. The Company’s firstsecond quarter efficiency ratio decreased to 54.8%53.1% compared to 56.8%56.6% in the prior year.

Federal income tax expense increased $215$262 thousand, or 24%,29%, for the quarter ended MarchJune 31,30, 2026 as compared to the firstsecond quarter 2025. The provision for income taxes was $1.1$1.2 million (effective rate of 19.7%19.8%) for the quarter ended MarchJune 31,30, 2026, compared to $878$903 thousand (effective rate of 19.5%) for the same quarter ended 2025.

The Company maintained a strong capital position with tangible common equity to tangible assets (a non-GAAP measure) of 9.9% at MarchJune 31,30, 2026 compared with 9.4% at December 31, 2025.

Failure to meet specified minimum capital requirements could result in regulatory actions by the Federal Reserve or Ohio Division of Financial Institutions that could have a material effect on the Company’s financial condition or results of operations. Management believes there were no material changes to capital resources as presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. As of MarchJune 31,30, 2026, the Company and the Bank met all capital adequacy requirements to which they were subject.