Note 10: Restrictions on Dividends

The Company’s principal source of funds for dividend payments is dividends received from its subsidiary bank. For the years ended December 31, 2025 and 2024, dividends received from the subsidiary bank were $14,000 and $20,000, respectively.

Substantially all of NBI’s retained earnings are undistributed earnings of its sole banking subsidiary, which are restricted by various regulations administered by federal bank regulatory agencies. Bank regulatory agencies restrict, unless prior approval is obtained, the total dividend payments of a bank in any calendar year to the bank’s retained net income of that year to date, as defined, combined with its retained net income of the preceding two years, less any dividends paid. During 2024, the Bank applied to its primary regulator and was approved to dividend to NBI an amount in excess of the regulatory maximum. The excess dividend provided cash for regular shareholder dividends and operating expenses of NBI. As of December 31, 2025, in order for NBB to dividend more than its current year net income, regulatory approval would be required.