NOTE 11. Subsequent Events

The Company has evaluated all events or transactions that occurred through the date the Company issued these financial statements.

Subsequent to June 30, 2026, the Company entered into an agreement to sell the previously disclosed $15.5 million nonaccrual commercial real estate loan. The loan was sold at par and the Company provided 80% financing to the purchaser in the form of a 3-year interest only balloon loan, with the sold loan as collateral. Because the Company retains indirect credit exposure to the transferred asset , the transaction does not qualify for sale accounting under applicable accounting and regulatory guidance. The purchaser is required to keep the taxes and insurance current on the underlying asset, as well as responsibility for prospective foreclosure related litigation expenses.

The 20% cash down payment made by the purchaser reduced nonaccrual loans by $3.1 million. If the purchaser satisfies their obligations in accordance with the agreement, the Company will recognize a $0.4 million discount.