Financial Analysis

(7) Commitments and Contingencies : Loan commitments: The Bank is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit, credit lines, letters of credit, and overdraft protection. They involve, to varying degrees, elements of credit risk in excess of amounts recognized on the consolidated balance sheets. The Banks exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and issuing letters of credit as it does for on-balance-sheet instruments. A summary of the contract amount of the Banks exposure to off-balance-sheet risk as of June 30, 2025 and December 31, 2024 is approximately as follows: Summary of Contract Amount of Banks Exposure to Off-Balance-Sheet Risk June 30, 2025 December 31, 2024 Commitments to extend credit $ 244,966 $ 218,871 Committed credit-card lines 6,816 6,387 Standby letters of credit 7,040 6,737 Contract amount of the banks exposure to off-balance-sheet risk $ 258,822 $ 231,995 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

(15) Fair Value Measurements : Accounting standards define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Quoted prices (unadjusted) or identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect the Companys own assumptions about the assumptions that market participants would use in pricing an asset or liability. The following is a description of valuation methodologies used for assets recorded at fair value: Debt securities available for sale: The fair values of the Companys debt securities available for sale are primarily determined by quoted prices in active markets (Level 1) and matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for specific debt securities, but rather by relying on the d …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

(12) Transactions with Related Parties : Certain directors, executive officers, and principal shareholders of the Company, and their related interests, had loans outstanding in the aggregate amounts of approximately $ 3,516 and $ 7,494 at June 30, 2025 and December 31, 2024, respectively. During the six months ended June 30, 2025, total principal additions were $ 5,271 and total principal payments were $ 9,249 . Changes in related party composition during the quarter totaled an increase of $ 0 . Deposit accounts with related parties totaled approximately $ 3,904 and $ 6,272 at June 30, 2025 and December 31, 2024, respectively. In managements opinion, such loans and deposits were made in the ordinary course of business and were made on substantially the same terms (including interest rates and collateral) as those prevailing at the time for comparable transactions with other persons. Further, in managements opinion, these loans did not involve more than normal risk of collectability or present other unfavorable features. …

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(16) Revenue from Contracts with Customers : All of the Companys revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income. A description of the Companys revenue streams accounted for under ASC 606 follows: Customer-service fees: The Company earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as ATM fees, stop payment charges, statement rendering and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills the customers request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies the performance obligation. Overdraft fees are recognized at the point in time the overdraft occurs. Service charges on deposits are withdrawn from the customers account balance. Interchange income: The Company earns interchange fees from debit and credit cardholder transactions conducted through the Visa and MasterCard payment networks. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (000s omitted except s …

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(17) Segments : The Company is divided into two reportable segments: Commercial Banking and Mortgage Banking. Commercial Banking provides a full range of loan and deposit products to individual consumers and businesses in all markets through retail lending, deposit services, online banking mobile banking, private banking, commercial lending, commercial real estate lending, agricultural lending, and other banking services. Mortgage banking provides residential mortgage banking products through five offices in Illinois and one office in Wisconsin through our Mortgage Banking Company. The majority of the loans are sold with servicing released. Financial information for each business segment reflects that which is specifically identifiable. Income taxes are allocated based on the effective federal tax rate adjusted for any tax-exempt activity. All tax-exempt activity and provision have been fully allocated to the commercial banking segment. Measurement of performance of business segments is based on the management structure of the Company and is not necessarily comparable with similar information for any other financial institution. Information presented is also not necessarily indicative of the segments operations if they were independent entities. TRI-COUNTY FINANCIAL GROUP, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (000s omitted except share data) (17) Segments (continued): Principally, all of the net assets of the Company are invol …

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(18) Subsequent events : The Company has evaluated subsequent events for recognition and disclosure through September 15, 2025, which is the date the condensed consolidated financial statements were available to be issued.

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