Financial Analysis

Quarter Ended Six Months Ended December 31, December 31, Type of Services 2025 2024 2025 2024 (In Thousands) Loan servicing and other fees (1) $ 176 $ 60 $ 322 $ 164 Deposit account fees 273 282 538 580 Card and processing fees 286 300 588 620 Other (2) 182 203 282 380 Total non-interest income $ 917 $ 845 $ 1,730 $ 1,744 (1) Not within the scope of ASC 606. (2) Includes net BOLI income of $46 thousand, $46 thousand, $92 thousand and $92 thousand, net loss on sale of loans of $0 , $20 thousand, $34 thousand and $41 thousand, net unrealized gain (loss) on other equity investments of $19 thousand, $85 thousand, $(9) thousand and $110 thousand, for the quarters and six months ended December 31, 2025 and 2024, respectively which are not within the scope of ASC 606. …

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Note 7: Fair Value of Financial Instruments The Corporation adopted ASC 820, Fair Value Measurements and Disclosures, and elected the fair value option pursuant to ASC 825, Financial Instruments. ASC 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 825 permits entities to elect to measure many financial instruments and certain other assets and liabilities at fair value on an instrument-by-instrument basis (the fair value option) at specified election dates. The Corporation elected the fair value option on loans held for investment which were previously originated for sale and other equity investments. At each subsequent reporting date, an entity is required to report unrealized gains and losses on items in earnings for which the fair value option has been elected. The objective of the fair value option is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The following table presents, as of the dates indicated, the difference between the fair value and the unpaid principal balance of loans held for investment and the base cost of other equity investments for which the Corporation has elected the fair value option: Net Unpaid Principal Unrealized (In Thousands) Fair Value or Base Cost (Loss) Gain As of Dece …

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"Note 9: Leases The Corporation accounts for its leases in accordance with ASC 842 which requires the Corporation to record liabilities for future lease obligations as well as assets representing the right to use the underlying leased assets. The Corporation's leases primarily represent future obligations to make payments for the use of buildings, space or equipment for its operations. Liabilities to make future lease payments are recorded in accounts payable, accrued interest and other liabilities for operating leases and borrowings for finance leases, while right-of-use assets are recorded in premises and equipment in the Corporation's Condensed Consolidated Statements of Financial Condition. At December 31, 2025, the Corporation's leases were classified as operating leases and finance leases; and the Corporation did not have any operating or finance leases with an initial term of 12 months or less (""short-term leases""). Liabilities to make future lease payments and right-of-use assets are recorded for operating leases and finance leases and do not include short-term leases. These liabilities and right-of-use assets are determined based on the total contractual base rents for each lease, which include options to extend or renew each lease, where applicable, and where the Corporation believes it has an economic incentive to extend or renew the lease. Since lease extensions are not reasonably certain, the Corporation generally does not recognize payments occurring during op …

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ASU 2025-08: In November 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025-08 to update ASC 326: Financial Instruments Credit Losses to address concerns regarding complexity and lack of comparability in the accounting for purchased loans under the current credit loss standard (Topic 326). This ASU removes the previous distinction in accounting between purchased credit-deteriorated (PCD) assets and non-PCD assets by applying the gross-up accounting method; formerly used only for PCD assets, to most acquired loans. These loans will now be designated as purchased seasoned loans (PSLs). This change eliminates the Day-1 credit loss expense on PSLs, which the industry considered a double-count of expected losses on acquired performing loans, by recognizing expected credit losses at acquisition without immediate impact to earnings. This new guidance is effective for annual reporting periods beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim reporting period, it should apply the amendments as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period. The Corporation is in the process of reviewing the impact of this ASU and has not yet determine …

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"Note 8: Revenue From Contracts With Customers In accordance with ASC 606, revenues are recognized when goods or services are transferred to the customer in exchange for the consideration the Corporation expects to be entitled to receive. The largest portion of the Corporation's revenue is from interest income, which is not in the scope of ASC 606. All of the Corporation's revenue from contracts with customers in the scope of ASC 606 is recognized in non-interest income. If a contract is determined to be within the scope of ASC 606, the Corporation recognizes revenue as it satisfies a performance obligation. Payments from customers are generally collected at the time services are rendered, monthly, quarterly or annually. For contracts with customers within the scope of ASC 606, revenue is either earned at a point in time or revenue is earned over time. Examples of revenue earned at a point in time are automated teller machine (""ATM"") transaction fees, wire transfer fees, non-sufficient fund fees and interchange fees. Revenue is primarily based on the number and type of transactions that are generally derived from transactional information accumulated by the Corporations systems and is recognized immediately as the transactions occur or upon providing the service to complete the customer's transaction. The Corporation is generally the principal in these contracts, except for interchange fees, in which case the Corporation is acting as the agent and records revenue net of exp …

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Note 11: Segment Reporting The Corporation operates as a single reportable segment, providing a broad range of banking and financial services to individuals, businesses, and institutional clients. These services include primarily commercial and consumer lending, deposit products, and to a lesser extent, loan servicing and wealth management services. The commercial and consumer lending primarily consists of single-family, multi-family and commercial real estate mortgage lending and, to a lesser extent, construction, commercial business, other mortgage and consumer lending. The Corporations chief operating decision maker (CODM) is the Chief Executive Officer. The CODM relies on the Senior Management Committee, which includes the Senior Vice President Chief Financial Officer, Senior Vice President Chief Lending Officer, Senior Vice President Retail Banking, Senior Vice President Single Family, and others, to provide detailed financial and operational reports. The CODM regularly evaluates the financial performance of the Corporation and allocates resources accordingly. Key financial performance metrics used by the CODM include net interest income, provision for (recovery of) credit losses, non-interest income, non-interest expenses, net income, diluted earnings per share, return on average assets, return on average equity, net interest margin, efficiency ratio, loans held for investment and deposit balance growth, loans held for investment as a percentage of total deposits, core …

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Note 12: Subsequent Events On January 22, 2026, the Corporation announced that the Board of Directors declared a quarterly cash dividend of $0.14 per share. Shareholders of the Corporations common stock at the close of business on February 12, 2026 are entitled to receive the cash dividend. The cash dividend will be payable on March 5, 2026. On January 22, 2026, subsequent to quarter-end, the Corporations Board of Directors approved a new stock repurchase program authorizing the repurchase of up to five percent (5%) of the Corporations outstanding common stock, or approximately 318,875 shares. The Corporation plans to purchase the shares from time to time in the open market or through privately negotiated transactions over a one-year period, subject to market conditions, the capital requirements of the Corporation, available cash and other relevant factors. The prior repurchase program, which was initiated on January 23, 2025, was terminated effective January 23, 2026. As a result, the 16,825 shares that remained available for repurchase under the prior program will no longer be eligible for repurchase. …

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