Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believes that the Bank met capital adequacy requirements to which it was subject at December 31, 2025 and December 31, 2024.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. The Bank must maintain a “well capitalized” rating to access brokered deposits without FDIC waiver. An “adequately capitalized” rating requires an FDIC waiver to access brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At December 31, 2025, the Bank did meet all of its regulatory capital requirements to be well-capitalized.

In February 2019, the federal bank regulatory agencies issued a final rule that revised certain capital regulations under ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and included a transition option that allows banking organizations to phase in, over a three year period, the day one adverse effects of adoption on their regulatory capital ratios (three year transition option). In connection with the adoption of ASC

326 on January 1, 2023, the Company recognized an after-tax cumulative effect reduction to retained earnings. The Company elected to adopt the three year transition option and the deferral has been applied in capital ratios presented below. Actual and required capital amounts and ratios for the Bank are presented below at December 31, 2025:


	Actual				Required for Capital Adequacy Purposes				To be Well Capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital
(to Risk Weighted Assets)	$	98,560	10.18	%	$	77,441	8.00	%	$	96,802	10.00	%
Tier 1 Capital
(to Risk Weighted Assets)	$	86,337	8.92	%	$	58,081	6.00	%	$	77,441	8.00	%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)	$	86,337	8.92	%	$	43,561	4.50	%	$	62,921	6.50	%
Tier 1 Capital
(to Average Assets)	$	86,337	6.52	%	$	52,983	4.00	%	$	66,229	5.00	%


	Actual				Required for Capital Adequacy Purposes				To be Well Capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital
(to Risk Weighted Assets)	$	124,420	12.14	%	$	81,985	8.00	%	$	102,482	10.00	%
Tier 1 Capital
(to Risk Weighted Assets)	$	111,586	10.89	%	$	61,489	6.00	%	$	81,985	8.00	%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)	$	111,586	10.89	%	$	46,117	4.50	%	$	66,613	6.50	%
Tier 1 Capital
(to Average Assets)	$	111,586	8.82	%	$	50,579	4.00	%	$	63,224	5.00	%

Banking regulations limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits of the Bank for that year combined with the retained net profits for the preceding two years. The Company has temporarily suspended common and preferred stock dividends, see Part II Item 3 of this report for additional information.