# EDGAR Filing Document

**Accession Number:** 0001967656
**File Stem:** 0001558370-25-010895
**Filing Date:** 2025-8
**Character Count:** 186498
**Document Hash:** 15f8d236a9bb485bbf16fc7bab8f1e9d
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001558370-25-010895.hdr.sgml**: 20250808

**ACCESSION NUMBER**: 0001558370-25-010895

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 107

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250808

**DATE AS OF CHANGE**: 20250808

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PFS Bancorp, Inc.
- **CENTRAL INDEX KEY:** 0001967656
- **STANDARD INDUSTRIAL CLASSIFICATION:** SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 922956265
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-56602
- **FILM NUMBER:** 251197223

**BUSINESS ADDRESS:**
- **STREET 1:** 1730 FOURTH STREET
- **CITY:** PERU
- **STATE:** IL
- **ZIP:** 61354
- **BUSINESS PHONE:** 815-223-4300

**MAIL ADDRESS:**
- **STREET 1:** 1730 FOURTH STREET
- **CITY:** PERU
- **STATE:** IL
- **ZIP:** 61354

?xml version='1.0' encoding='ASCII'? PFS Bancorp, Inc._June 30, 2025

[**Table of Contents**](#TOC)

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 10-Q**

&nbsp;&nbsp;&nbsp;&nbsp;☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2025

**OR**

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______________ to _______________

**Commission File No. 000-56602**

![Graphic](pfsb-20250630x10q001.jpg)

**PFS Bancorp, Inc.**

(Exact Name of Registrant as Specified in Its Charter)

---

| | |
|:---|:---|
| **Maryland** | **92-2956265** |
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
| **1730 Fourth Street, Peru, Illinois**  | **61354** |
| (Address of Principal Executive Offices) | (Zip Code) |

---

**(815) 223-4300**

(Registrant's Telephone Number, Including Area Code)

**N/A**

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

<u>Title of each class</u> &nbsp;&nbsp;&nbsp;&nbsp; <u>Trading symbol(s)</u> &nbsp;&nbsp;&nbsp;&nbsp; <u>Name of each exchange on which registered</u>

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b 2 of the Exchange Act:

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒

1,648,910 shares of the registrant's common stock, par value $0.01 per share, were outstanding as of August 8, 2025.

------

[**Table of Contents**](#TOC)

**PFS Bancorp, Inc.** 

**Form 10-Q**

Index

---

| | | |
|:---|:---|:---|
| ('<br>', '\u2063') | ('&nbsp;&nbsp;<br>', '&nbsp;&nbsp;<br>') | ('Unnamed: 4_level_0', '**Page**<br>') |
|  | [**Part I. – Financial Information**](#PartIFinancialInformation_292446) | 2 |
| [Item 1.](#Item1FinancialStatements_587719) | [Financial Statements](#Item1FinancialStatements_587719) | 2 |
|  | [Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024](#ConsolidatedBalanceSheets_334359) | 2 |
|  | [Consolidated Statements of Income for the Three and Six months Ended June 30, 2025 and 2024 (unaudited)](#ConsolidatedStatementsofIncome_489472) | 3 |
|  | [Consolidated Statements of Comprehensive Income (Loss) for the Three and Six months Ended June 30, 2025 and 2024 (unaudited)](#ConsolidatedStatementsofComprehensiveInc) | 4 |
|  | [Consolidated Statements of Stockholders' Equity for the Three and Six months Ended June 30, 2025 and 2024 (unaudited)](#ConsolidatedStatementsofEquityCapital_11) | 5 |
|  | [Consolidated Statements of Cash Flows for the Six months Ended June 30, 2025 and 2024 (unaudited)](#ConsolidatedStatementsofCashFlows_530529) | 7 |
|  | [Notes to Consolidated Financial Statements (unaudited)](#Note1NatureofOperationsandSummaryofSigni) | 8 |
| [Item 2.](#Item2ManagementsDiscussionandAnalysisofF) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#Item2ManagementsDiscussionandAnalysisofF) | 42 |
| [Item 3.](#Item3QuantitativeandQualitativeDisclosur) | [Quantitative and Qualitative Disclosures about Market Risk](#Item3QuantitativeandQualitativeDisclosur) | 53 |
| [Item 4.](#Item4ControlsandProcedures_777486) | [Controls and Procedures](#Item4ControlsandProcedures_777486) | 53 |
|  | [**Part II. – Other Information**](#PartIIOtherInformation_309292) | 54 |
| [Item 1.](#Item1LegalProceedings_362204) | [Legal Proceedings](#Item1LegalProceedings_362204) | 54 |
| [Item 1A.](#Item1ARiskFactors_323994) | [Risk Factors](#Item1ARiskFactors_323994) | 54 |
| [Item 2.](#Item2UnregisteredSalesofEquitySecurities) | [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](#Item2UnregisteredSalesofEquitySecurities) | 54 |
| [Item 3.](#Item3DefaultsUponSeniorSecurities_649181) | [Defaults upon Senior Securities](#Item3DefaultsUponSeniorSecurities_649181) | 54 |
| [Item 4.](#Item4MineSafetyDisclosures_736227) | [Mine Safety Disclosures](#Item4MineSafetyDisclosures_736227) | 54 |
| [Item 5.](#Item5OtherInformation_322593) | [Other Information](#Item5OtherInformation_322593) | 54 |
| [Item 6.](#Item6EXHIBITINDEX_204477) | [Exhibits](#Item6EXHIBITINDEX_204477) | 55 |
|  | [Signature Page](#SIGNATURES_961047) | 56 |

---

[**Table of Contents**](#TOC)

**Part I. – Financial Information**

---

| | |
|:---|:---|
| **Item 1.** | **Financial Statements** |

---

**PFS Bancorp, Inc.**

**Consolidated Balance Sheets**

**June 30, 2025 (Unaudited) and December 31, 2024**

**(Dollars In thousands, except per share amounts)**

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| **Assets** |  |  |
| &nbsp;&nbsp;Cash and cash equivalents — cash and due from bank | $14489 | $16256 |
| &nbsp;&nbsp;Available-for-sale debt securities (net of credit losses of $0 at June 30, 2025 and December 31, 2024, respectively, amortized cost of $74,375 and $71,289 at June 30, 2025 and December 31, 2024, respectively) | 71123 | 66658 |
| &nbsp;&nbsp;Held-to-maturity debt securities (net of allowance for credit losses of $0 as of June 30, 2025 and December 31, 2024) | 6892 | 8168 |
| &nbsp;&nbsp;Equity securities | 351 | 325 |
| &nbsp;&nbsp;Loans, net of allowance for credit losses of $813 and $700 at June 30, 2025 and December 31, 2024 | 105532 | 96274 |
| &nbsp;&nbsp;Premises and equipment, net of accumulated depreciation of $2,878 and $2,811 at June 30, 2025 and December 31, 2024 | 2049 | 2101 |
| &nbsp;&nbsp;Federal Home Loan Bank stock | 354 | 347 |
| &nbsp;&nbsp;Interest receivable | 778 | 733 |
| &nbsp;&nbsp;Cash surrender value of bank-owned life insurance | 4031 | 3979 |
| &nbsp;&nbsp;Deferred income taxes | 1406 | 1857 |
| &nbsp;&nbsp;Mortgage servicing rights | 254 | 254 |
| &nbsp;&nbsp;Other | 647 | 685 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $207906 | $197637 |
| **Liabilities and Equity Capital** |  |  |
| &nbsp;&nbsp;**Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand | $12395 | $17952 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Savings, NOW and money market | 83300 | 73082 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time | 73042 | 68553 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | 168737 | 159587 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred compensation | 646 | 645 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax payable | 176 | 173 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest payable and other liabilities | 581 | 557 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 170140 | 160962 |
| **Stockholders' Equity** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock, $0.01 par value, 1,000,000 shares authorized, none issued |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock, $0.01 par value, 14,000,000 shares authorized, 1,725,000 issued, 1,617,032 and 1,679,307 outstanding at June 30, 2025 and December 31, 2024 | 17 | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional Paid in Capital | 15605 | 15603 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unallocated common stock of ESOP | (1244) | (1270) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury stock - 107,968 shares at June 30, 2025 and 45,693 shares at December 31, 2024 | (1111) | (463) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred compensation liability | 400 | 400 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 26424 | 25701 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive (loss) | (2325) | (3313) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity  | 37766 | 36675 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $207906 | $197637 |

---

*See Notes to Consolidated Financial Statements*

[**Table of Contents**](#TOC)

***PFS Bancorp, Inc.***

**Consolidated Statements of Income**

**For the Three and Six months Ended June 30, 2025 (Unaudited) and 2024 (Unaudited)**

**(Dollars In Thousands, except per share amounts)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** <br>**June 30, 2025** | **Three Months Ended** <br>**June 30, 2024** | **Six Months Ended** <br>**June 30, 2025** | **Six Months Ended** <br>**June 30, 2024** |
| **Interest and Dividend Income** |  |  |  |  |
| &nbsp;&nbsp;Loans, including fees | $1417 | $1132 | $2733 | $2205 |
| &nbsp;&nbsp;Debt securities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | 449 | 397 | 864 | 747 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-exempt | 134 | 138 | 269 | 277 |
| &nbsp;&nbsp;Dividends | 4 | 5 | 11 | 12 |
| &nbsp;&nbsp;Other | 254 | 324 | 502 | 638 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest and dividend income | 2258 | 1996 | 4379 | 3879 |
| **Interest Expense** |  |  |  |  |
| &nbsp;&nbsp;Deposits | 813 | 748 | 1626 | 1397 |
| **Net Interest Income** | 1445 | 1248 | 2753 | 2482 |
| **Provision for Credit Losses** | 57 | 7 | 113 | 33 |
| **Net Interest Income After Provision for Credit Losses** | 1388 | 1241 | 2640 | 2449 |
| **Noninterest Income** |  |  |  |  |
| &nbsp;&nbsp;Commission income | 7 | 3 | 10 | 15 |
| &nbsp;&nbsp;Customer service fees | 116 | 107 | 217 | 214 |
| &nbsp;&nbsp;Net realized gain on loan sales | 2 | 2 | 3 | 4 |
| &nbsp;&nbsp;Loan servicing fees | 15 | 16 | 30 | 33 |
| &nbsp;&nbsp;Other | 59 | 54 | 90 | 102 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | 199 | 182 | 350 | 368 |
| **Noninterest Expense** |  |  |  |  |
| &nbsp;&nbsp;Salaries and employee benefits | 562 | 528 | 1118 | 1117 |
| &nbsp;&nbsp;Occupancy | 73 | 60 | 162 | 140 |
| &nbsp;&nbsp;Depreciation | 33 | 41 | 67 | 81 |
| &nbsp;&nbsp;Data processing | 106 | 179 | 252 | 318 |
| &nbsp;&nbsp;Professional fees | 111 | 116 | 198 | 206 |
| &nbsp;&nbsp;Marketing | 47 | 47 | 83 | 83 |
| &nbsp;&nbsp;Printing and office supplies | 29 | 17 | 41 | 31 |
| &nbsp;&nbsp;Deposit insurance premiums | 40 | 38 | 80 | 75 |
| &nbsp;&nbsp;Other | 34 | 37 | 69 | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expense | 1035 | 1063 | 2070 | 2123 |
| **Income Before Income Taxes** | 552 | 360 | 920 | 694 |
| **Provision for Income Taxes** | 114 | 86 | 197 | 144 |
| **Net Income** | $438 | $274 | $723 | $550 |
| **Earnings per share-basic and diluted** | $0.28 | $0.17 | $0.46 | $0.35 |
| **Weighted-average shares outstanding-basic and diluted** | 1553758 | 1594592 | 1566621 | 1593904 |

---

*See Notes to Consolidated Financial Statements*

[**Table of Contents**](#TOC)

***PFS Bancorp, Inc.***

**Consolidated Statements of Comprehensive Income (Loss)**

**For the Three and Six months Ended June 30, 2025 (Unaudited) and 2024 (Unaudited)**

**(In Thousands)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** <br>**June 30, 2025** | **Three Months Ended** <br>**June 30, 2024** | **Six Months Ended** <br>**June 30, 2025** | **Six Months Ended** <br>**June 30, 2024** |
| **Net Income** | $438 | $274 | $723 | $550 |
| **Other Comprehensive Income (Loss)** |  |  |  |  |
| &nbsp;&nbsp;Unrealized gains (losses) on available-for-sale debt securities, net of taxes of $137 and $81 for the three months ended June 30, 2025 and 2024, respectively, and $391 and $(47) for the six months ended June 30, 2025 and 2024, respectively. | 345 | 204 | 988 | (118) |
| Other comprehensive income (loss) | 345 | 204 | 988 | (118) |
| **Comprehensive Income**  | $**783** | $**478** | $**1711** | $**432** |

---

*See Notes to Consolidated Financial Statements*

[**Table of Contents**](#TOC)

**PFS Bancorp, Inc.**

**Consolidated Statements of Stockholders' Equity**

**For the Three and Six months Ended June 30, 2025 (Unaudited) and 2024 (Unaudited)**

**(In Thousands)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | <br>**Common**<br>**Stock** | <br>**Additional**<br>**Paid-in Capital** | <br>**Unallocated**<br>**Common Stock**<br>**of ESOP** | <br>**Retained** <br>**Earnings** | **Accumulated** <br>**Other** <br>**Comprehensive** <br>**Income (loss)** | <br>**Treasury**<br>**Stock** | <br>**Deferred Comp**<br>**Liability** | <br>**Total**<br>**Stockholders'**<br>**Equity** |
| **Balance, March 31, 2024** | $17 | $15604 | $(1311) | $25072 | $(3496) | $(400) | 400 | $35886 |
| &nbsp;&nbsp;Net income |  |  |  | 274 |  |  |  | 274 |
| &nbsp;&nbsp;ESOP shares committed to be released (1,380 shares) |  | (1) | 13 |  |  |  |  | 12 |
| &nbsp;&nbsp;Other comprehensive income |  |  |  |  | 204 |  |  | 204 |
| **Balance, June 30, 2024** | $17 | $15603 | $(1298) | $25346 | $(3292) | $(400) | $400 | $36376 |
| **Balance, March 31, 2025** | $17 | $15604 | $(1256) | $25986 | $(2670) | (669) | 400 | $37412 |
| &nbsp;&nbsp;Net income |  |  |  | 438 |  |  |  | 438 |
| &nbsp;&nbsp;ESOP shares committed to be released (1,380 shares) |  | 1 | 12 |  |  |  |  | 13 |
| &nbsp;&nbsp;Purchased 43,233 shares of treasury stock |  |  |  |  |  | (442) |  | (442) |
| &nbsp;&nbsp;Other comprehensive income |  |  |  |  | 345 |  |  | 345 |
| **Balance, June 30, 2025** | $17 | $15605 | $(1244) | $26424 | $(2325) | $(1111) | $400 | $37766 |

---

[**Table of Contents**](#TOC)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common** | | | | | | | |
|  | **Stock** | <br>**Additional**<br>**Paid-in Capital** | <br>**Unallocated**<br>**Common Stock**<br>**of ESOP** | <br>**Retained** <br>**Earnings** | **Accumulated** <br>**Other** <br>**Comprehensive** <br>**Income (loss)** | <br>**Treasury**<br>**Stock** | <br>**Deferred Comp**<br>**Liability** | <br>**Total**<br>**Stockholders'**<br>**Equity** |
| **Balance, December 31, 2023** | $17 | $15605 | $(1325) | $24796 | $(3174) | $(400) | $400 | $35919 |
| &nbsp;&nbsp;Net income |  |  |  | 550 |  |  |  | 550 |
| &nbsp;&nbsp;ESOP shares committed to be released (2,760 shares) |  | (2) | 27 |  |  |  |  | 25 |
| &nbsp;&nbsp;Other comprehensive loss |  |  |  |  | (118) |  |  | (118) |
| **Balance, June 30, 2024** | $17 | $15603 | $(1298) | $25346 | $(3292) | $(400) | $400 | $36376 |
| **Balance, December 31, 2024** | $17 | $15603 | $(1270) | $25701 | $(3313) | $(463) | $400 | $36675 |
| &nbsp;&nbsp;Net income |  |  |  | 723 |  |  |  | 723 |
| &nbsp;&nbsp;ESOP shares committed to be released (2,760 shares) |  | 2 | 26 |  |  |  |  | 28 |
| &nbsp;&nbsp;Purchased 62,275 shares of treasury stock |  |  |  |  |  | (648) |  | (648) |
| &nbsp;&nbsp;Other comprehensive income |  |  |  |  | 988 |  |  | 988 |
| **Balance, June 30, 2025** | $17 | $15605 | $(1244) | $26424 | $(2325) | $(1111) | $400 | $37766 |

---

*See Notes to Consolidated Financial Statements*

[**Table of Contents**](#TOC)

#### PFS Bancorp, Inc.

#### Consolidated Statements of Cash Flows Six months Ended June 30, 2025 (Unaudited) and 2024 (Unaudited) (In Thousands)

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| **Operating Activities** |  |  |
| &nbsp;&nbsp;Net income | $723 | $550 |
| &nbsp;&nbsp;Items not requiring (providing) cash: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 67 | 81 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 113 | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of premiums and discounts on debt securities | 18 | 109 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | 60 | 23 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of equity securities | (26) | (55) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net realized (gain) loss on loan sales | (3) | (4) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of premises and equipment |  | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Earnings on cash surrender value of life insurance | (52) | (49) |
| &nbsp;&nbsp;&nbsp;&nbsp;ESOP compensation expense | 28 | 25 |
| &nbsp;&nbsp;Changes in: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest receivable | (45) | (30) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets  | 38 | 130 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest payable and other liabilities | 28 | 190 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 949 | 1007 |
| **Investing Activities** |  |  |
| &nbsp;&nbsp;Purchases of available-for-sale debt securities | (7089) | (10302) |
| &nbsp;&nbsp;Proceeds from maturities of available-for-sale debt securities | 3989 | 3424 |
| &nbsp;&nbsp;Proceeds from maturities of held-to-maturity debt securities | 1272 | 270 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net change in loans | (9368) | (637) |
| &nbsp;&nbsp;Purchase of premises and equipment | (15) | (150) |
| &nbsp;&nbsp;Purchase of FHLB Stock | (7) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (11218) | (7395) |
| **Financing Activities** |  |  |
| &nbsp;&nbsp;Net increase (decrease) in demand deposits, money market, |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;NOW and savings accounts | 4661 | (258) |
| &nbsp;&nbsp;Net increase in certificates of deposit | 4489 | 4663 |
| &nbsp;&nbsp;Purchase of treasury stock  | (648) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 8502 | 4405 |
| **Increase (Decrease) in Cash and Cash Equivalents** | (1767) | (1983) |
| **Cash and Cash Equivalents, Beginning of Year** | 16256 | 20202 |
| **Cash and Cash Equivalents, End of Year** | $14489 | $18219 |
| **Supplemental Cash Flows Information** |  |  |
| &nbsp;&nbsp;Interest paid | $1632 | $1396 |
| &nbsp;&nbsp;Income taxes paid  | $213 | $262 |

---

*See Notes to Consolidated Financial Statements*

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

#### Note 1: Nature of Operations and Summary of Significant Accounting Policies

#### Nature of Operations
PFS Bancorp, Inc, a Maryland corporation (the "Company"), is the savings and loan holding company for Peru Federal Savings Bank ("Bank"). Upon completion of the Bank's mutual-to-stock conversion, which occurred on October 17, 2023, the Company became 100% owner of the Bank. 100% of the common stock of PFS Bancorp, Inc is held by the public. The cost of conversion and the issuing of common stock totaling $1.6 million were deferred and deducted from the sales proceeds of the offering.

The Bank is a federal chartered stock savings bank. The Bank is primarily engaged in providing a full range of banking and financial services to individual and corporate customers in northern Illinois, primarily LaSalle County, from its two facilities located in Peru, Illinois. The Bank is subject to competition from other financial institutions. The Bank is subject to the regulation of the Office of the Comptroller of the Currency ("OCC") and undergoes periodic examinations by the OCC. The Bank has a wholly owned subsidiary, PFSB Financial Services Inc., which is inactive.

#### Jumpstart Our Business Startups Act
The Jumpstart Our Business Act (the JOBS Act), which was signed into law on April 5, 2012, has made numerous changes to the federal securities laws to facilitate access to capital markets. Under the JOBS Act, a company with total annual gross revenues of less than $1.235 billion (adjusted for inflation) during the most recently completed fiscal year qualifies as an "emerging growth company". The Company qualifies as an "emerging growth company" and expects to continue to qualify as an "emerging growth company" until December 31, 2028.

As an "emerging growth company" the Company has elected to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, the Company's consolidated financial statements may not be comparable to the financial statements of companies that comply with such new or revised accounting standards.

#### Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses, mortgage servicing rights, and fair values of financial instruments.

In the opinion of Company management, the accompanying unaudited consolidated financial statements at June 30, 2025 and for the periods ended June 30, 2025 and June 30, 2024 include all adjustments, consisting of only normal recurring entries, necessary for a fair presentation of the consolidated balance sheet at June 30, 2025 and the consolidated statements of income for the interim periods ended June 30, 2025 and 2024. The consolidated statement of income for the interim period ended June 30, 2025 is not necessarily indicative of the results of operations for the full year. This information should be read in conjunction with the Company's audited consolidated financial statements for the years ended December 31, 2024 and 2023 contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

#### Cash Equivalents
The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. At June 30, 2025 and December 31, 2024, cash equivalents consisted of due from bank accounts.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

At June 30, 2025 and December 31, 2024, the Company's cash accounts exceeded federally insured limits by $2,880 and $4,270, respectively.

#### Debt Securities
Certain debt securities that management has the positive intent and ability to hold to maturity are classified as "held to maturity" and recorded at amortized cost. Securities not classified as held to maturity are classified as "available for sale" and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss). Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and the allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available-for-sale debt securities totaled $376 and $378 at June 30, 2025 and December 31, 2024 respectively and is excluded from the estimate of credit losses.

The Company uses the current expected credit loss ("CECL") model to estimate the allowance for credit losses on securities held to maturity. The CECL model considers historical loss rates and other qualitative adjustments, as well as a forward-looking component that considers reasonable and supportable forecasts over the expected life of each security.

Management believes the Company will collect all amounts owed on securities held to maturity issued by the U.S. government or a U.S. government-sponsored agency since these securities are either explicitly or implicitly guaranteed by the U.S. government, and have a long history of no credit losses. Management evaluates all other securities held to maturity using a probability of default method. The probability of default method estimates the probability a security with a certain credit rating will default during its remaining contractual term (probability of default) and how much loss is expected to be incurred if a security defaults (loss give default rate). The Company obtains information from third parties (e.g., Moody's) to estimate the probability of default for each credit rating based on the remaining term of the security and the loss given default rate.

Accrued interest receivable on held-to-maturity debt securities totaled $26 and $31 at June 30, 2025 and December 31, 2024 respectively and is excluded from the estimate of credit losses.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

#### Equity Securities
The Company measures equity securities at fair value with changes in fair value recognized in net income. Gains and losses on the sale of equity securities are recorded on the trade date and are determined using the specific identification method.

#### Loans Held for Sale
Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to noninterest income. Gains and losses on loan sales are recorded on the consolidated statements of income.

#### Loans
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoffs are reported at their outstanding principal balances adjusted for unearned income, charge-offs, the allowance for credit losses, and for loans amortized at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees, net of direct origination costs are deferred over the life of the loan.

The accrual of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off are reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The Company maintains lending policies and procedures designed to focus lending efforts on the type, location, and duration of loans most appropriate for its business model and markets. The Company's principal lending activity is the origination of residential and commercial real estate loans, commercial loans, and consumer loans. The primary lending market is in LaSalle County, Illinois. Generally, loans are collateralized by assets of the borrower and guaranteed by the principals of the borrowing entity.

The Board of Directors reviews and approves the Company's lending policy on an annual basis. Quarterly, the Board Loan Committee reviews the allowance for credit losses and reports related to loan production, loan quality, concentrations of credit, loan delinquencies and non-performing and potential problem loans.

#### Allowance for Credit Losses on Loans and Unfunded Commitments
The allowance for credit losses on loans and unfunded commitments ("allowance") represents management's estimate of the reserve necessary to adequately account for probable losses that could ultimately be realized from current loan exposures. In determining the adequacy of the allowance, management relies predominately on a disciplined credit review and approval process. The review process is directed by overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty.

The allowance for credit losses is established as losses are estimated to have occurred through a provision for credit losses charged to income. Credit losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for credit losses is evaluated on a regular basis by management and is based upon management's periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

situations that may affect the borrower's ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The allowance consists of allocated and general components. The allocated component relates to loans that are individually evaluated. For those loans that are individually evaluated, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the individually evaluated loan is lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical charge-off experience and expected loss given default derived from the Company's internal risk rating process. Other adjustments may be made to the allowance for pools of loans after an assessment of internal or external influences on credit quality that are not fully reflected in the historical loss or risk rating data.

The Company uses the CECL model to estimate the allowance for credit losses on loans. The CECL model considers historical loss rates and other qualitative adjustments, as well as forward-looking component that considers reasonable and supportable forecasts over the expected life of each loan. To develop the allowance for credit losses on loans estimate under the CECL model, the Company segments the loan portfolio into loan pools based on loan type and similar credit risk elements, performs an individual evaluation of certain collateral dependent and other credit-deteriorated loans, calculates the historical loss rates for the segmented loan pools, applies the loss rates over the calculated life of the collectively evaluated loan pools; adjusts for forecasted macro-level economic conditions and other anticipated changes in credit quality; and determines qualitative adjustments based on factors and conditions unique to the Company's loan portfolio.

Under the CECL model, loans that do not share similar risk characteristics with the loans in their respective pools are individually evaluated for expected credit losses and are excluded from the collectively evaluated loan credit loss estimates. Management evaluates nonaccrual loans, and other loans with evidence of credit deterioration. For loans individually evaluated, a specific reserve is estimated based on either the fair value of collateral or the discounted value of expected future cash flows.

Management evaluates all collectively evaluated loan pools using the weighted average remaining life ("remaining life") methodology. The remining life methodology applies calculated quarterly net loss rates to collectively evaluated loan pools on a periodic basis based on the estimated remining life of each pool. The estimated losses under the remaining life methodology are then adjusted for qualitative factors deemed appropriate by management.

The estimated remining life of each pool is determined using quarterly, pool-based attrition measurements using the Company's loan-level historical data. The Company's historical call report data is utilized for historical loss rate calculations, and the lookback period for each collectively evaluated loan pool is determined by management based upon the estimated remaining life of the pool. Forecasted historical loss rates are calculated using the Company's historical data based on the lookback, forecast, and reversion period inputs by management. Management elected to utilize a 2-year forecast period, with immediate reversion to historical losses after the forecast period.

The quantitative analysis described above is supplemented with other qualitative factors based on the risks presented for each collectively evaluated loan pool. These qualitative factors include: past due loan trends; collateral value trends, changes to lending policies, quality of loan review, expertise of management, regulatory environment, micro and macro-economic conditions, and effects of changes in credit concentrations.

Unfunded commitments are evaluated using the same pool methodology and assumptions as the allowance for credit losses on collectively evaluated loans, adjusted for estimated funding rates based on historical rates. A reserve is maintained for these unfunded commitments to absorb estimated probable credit losses over noncancelable loan commitments. The allowance for losses on unfunded commitments is included in other liabilities on the balance sheet.

The Company may modify loans to borrowers experiencing financial difficulty and grant concessions that could include principal loan forgiveness, maturity date extension, interest rate, interest-only period, and payment deferral.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

The Company excludes accrued interest receivable from the amortized cost basis of loans when estimating credit losses and when presenting required disclosures in the consolidated financial statements. Accrued interest on loans totaling $376 and $324 at June 30, 2025 and December 31, 2024, respectively, was excluded from the amortized cost basis of loans. Accrued interest is written off at the same time as when a loan is moved to non-accrual status.

Risk characteristics applicable to each segment of the loan portfolio are described as follows.

*Residential 1-4 Family Real Estate:* The residential 1-4 family real estate are generally secured by owner-occupied 1-4 family residences. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers. Credit risk in these loans can be impacted by economic conditions within the Company's market areas that might impact either property values or a borrower's personal income. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

*Commercial Real Estate:* Commercial real estate loans typically involve larger principal amounts, and repayment of these loans is generally dependent on the successful operations of the property securing the loan or the business conducted on the property securing the loan. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economies in the Company's market areas.

*Construction and Land Development Real Estate:* Construction and land development real estate loans are usually based upon estimates of costs and estimated value of the completed project and include independent appraisal reviews and a financial analysis of the developers and property owners. Sources of repayment of these loans may include permanent loans, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are considered to be higher risk than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, general economic conditions, and the availability of long-term financing. Credit risk in these loans may be impacted by the creditworthiness of a borrower, property values and the local economies in the Company's market areas.

*Commercial:* The commercial portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions. The loans in this category are repaid primarily from the cash flow of a borrower's principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations.

*Consumer:* The consumer loan portfolio consists of various term and line of credit loans such as automobile loans and loans for other personal purposes. Repayment for these types of loans will come from a borrower's income sources that are typically independent of the loan purpose. Credit risk is driven by consumer economic factors (such as unemployment and general economic conditions in the Company's market area) and the creditworthiness of a borrower.

#### Premises and Equipment
Land is carried at cost. Depreciable assets are stated at cost less accumulated depreciation. Depreciation is charged to expense using the straight-line method over the estimated useful lives of the assets.

The estimated useful lives for each major depreciable classification of premises and equipment are as follows:

Buildings and improvements &nbsp;&nbsp;&nbsp;&nbsp; 5-50 years <br> Equipment &nbsp;&nbsp;&nbsp;&nbsp;3-7 years

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

#### Federal Home Loan Bank Stock
Federal Home Loan Bank stock is a required investment for institutions that are members of the Federal Home Loan Bank system. The required investment in the common stock is based on a predetermined formula, carried at cost and evaluated for impairment.

#### Bank-owned Life Insurance
The Company has purchased life insurance policies on certain key executives. Bank-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

#### Mortgage Servicing Rights
Mortgage servicing assets are recognized separately when rights are acquired through purchase or through sale of financial assets. Under the servicing assets and liabilities accounting guidance (ASC 860-50), servicing rights resulting from the sale or securitization of loans originated by the Company are initially measured at fair value at the date of transfer. The Company has elected to initially and subsequently measure the mortgage servicing rights for consumer mortgage loans using the fair value method. Under the fair value method, the servicing rights are carried in the balance sheet at fair value and the changes in fair value are reported in earnings in the period in which the changes occur.

Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. These variables change from quarter to quarter as market conditions and projected interest rates change and may have an adverse impact on the value of the mortgage servicing right and may result in a reduction to noninterest income.

Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal or a fixed amount per loan and are recorded as income when earned in loan servicing fees in non-interest income.

#### Transfers of Financial Assets
Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company—put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets.

#### Income Taxes
The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, *Income Taxes).* The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

Tax positions are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to the management's judgment. With a few exceptions, the Company is no longer subject to U.S. federal and state income tax examinations by tax authorities for years before 2019.

The Company recognizes interest and penalties on income taxes as a component of income tax expense.

The Company files consolidated income tax returns with its subsidiary.

#### Comprehensive Income (Loss)
Comprehensive income (loss) consists of net income and other comprehensive income (loss), net of applicable income taxes. Other comprehensive income (loss) includes unrealized appreciation (depreciation) on available-for-sale securities and reclassification adjustment for realized losses included in net income.

#### Revenue Recognition
The majority of the Company's revenues come from interest income and other sources, including loans and securities, which are outside the scope of Financial Accounting Standards Board Accounting Standards Update 2014-09, *Revenues from Contracts with Customers* (Topic 606). The Company's services that fall within the scope of Topic 606 are presented within noninterest income in the accompanying consolidated statements of income and are recognized as revenue as the Company satisfies its obligation to the customer.

A description of the Company's revenue streams accounted for under Topic 606 is as follows:

*Customer Service Fees.* The Company generates revenues through fees charged to depositors related to deposit account maintenance fees, overdrafts, interchange income, wire transfers and additional miscellaneous services provided at the request of the depositor. For deposit-related services, revenue is recognized when performance obligations are satisfied, which is, generally, at a point in time.

*Commission Income.* Brokerage commissions and fees primarily relate to investment advisory and brokerage activities as well as the sale of other non-deposit investment products to customers of the Company. The Company's performance obligation for investment advisory services is generally satisfied, and related revenue recognized, over the period in which the services are provided. Fees earned for brokerage activities, such as facilitating securities transactions, are generally recognized at the time of transaction execution. Commissions or fees earned on the sale of other non-deposit investment products are primarily recognized on a monthly basis based on the executed sales dates. Payment for these services is generally received shortly after month end.

*Gains/Losses on Sales of Foreclosed Assets.* The Company records a gain or loss from the sale of foreclosed assets when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of foreclosed assets to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

foreclosed asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Company adjusts the transaction price and related gain (loss) on sale if a significant financing component is present.

#### Rate Lock Commitments
The Company enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (rate lock commitment). Rate lock commitments on mortgage loans that are intended to be sold are considered to be derivatives. Rate lock commitments are recorded only to the extent of fees received since recording the estimated fair value of these commitments would not have a significant impact on the consolidated financial statements.

#### Off-Balance-Sheet Instruments
In the ordinary course of business, the Company has entered into off-balance-sheet financial instruments, including commitments to extend credit, unfunded commitments under lines of credit, and standby letters of credit. Such financial instruments are recorded in the consolidated financial statements when they become payable.

#### Legal Contingencies
Various legal claims arise from time to time in the normal course of business. In the opinion of management, any liability resulting from such proceedings would not have a material impact on the consolidated financial statements of the Company.

#### Advertising
Advertising costs are expensed as incurred.

**Stock-based Compensation**

Stock-based payments to employees, including grants of restricted stock or stock options, are valued at fair value of the award on the date of grant and expensed on a straight-line basis as compenstion expense over the applicable vesting period. A Black-Scholes model is utilized to estimate the fair value of stock options and the quoted market price of the Company's stock at the date of grant is used to estimate the fair value of restricted stock awards.

**Earnings per Common Share**

Basic earnings per common share are calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share includes the dilutive effect of outstanding common stock awards unless the impact is anti-dilutive, by application of the treasury stock method.

#### Note 2: Restriction on Cash and Due From Banks
Effective March 12, 2021, the Federal Reserve's board of directors approved the final rule reducing the required reserve requirement ratios to zero percent, effectively eliminating the requirement to maintain reserve balances in cash or on deposit with the Federal Reserve Bank. This reduction in the required reserves does not have a defined timeframe and may be revised by the Federal Reserve's board in the future.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

#### Note 3: Debt Securities
The amortized cost and approximate fair values, together with gross unrealized gains and losses, of debt securities are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**Amortized** <br>**Cost** | **Gross** <br>**Unrealized** <br>**Gains** | **Gross** <br>**Unrealized** <br>**Losses** | <br>**Fair Value** |
| **Available-for-sale Debt Securities:** |  |  |  |  |
| &nbsp;&nbsp;June 30, 2025: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Government and federal agencies | $7672 | $77 | (64) | $7685 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government sponsored enterprises (GSEs) - residential | 45978 | 284 | (2506) | 43756 |
| &nbsp;&nbsp;&nbsp;&nbsp;State and political subdivisions | 20725 | 18 | (1061) | 19682 |
|  | $74375 | $379 | $(3631) | $71123 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**Amortized** <br>**Cost** | **Gross** <br>**Unrealized** <br>**Gains** | **Gross** <br>**Unrealized** <br>**Losses** | <br>**Fair Value** |
| **Available-for-sale Debt Securities:** |  |  |  |  |
| &nbsp;&nbsp;December 31, 2024: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Government and federal agencies | $8154 | $— | $(187) | $7967 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government sponsored enterprises (GSEs) - residential | 42344 | 71 | (3557) | 38858 |
| &nbsp;&nbsp;&nbsp;&nbsp;State and political subdivisions | 20791 | 50 | (1008) | 19833 |
|  | $71289 | $121 | $(4752) | $66658 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | <br>**Amortized** <br>**Cost** | **Gross** <br>**Unrealized** <br>**Gains** | **Gross** <br>**Unrealized** <br> **Losses** | <br>**Fair Value** |
| **Held-to-maturity Debt Securities:** |  |  |  |  |
| &nbsp;&nbsp;June 30, 2025 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Government and Federal agencies | $765 | $— | $(117) | $648 |
| &nbsp;&nbsp;&nbsp;&nbsp;Certificates of Deposit | 6127 | 70 |  | 6197 |
|  | $6892 | $70 | $(117) | $6845 |
| **Held-to-maturity Debt Securities:** |  |  |  |  |
| &nbsp;&nbsp;December 31, 2024 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Government and Federal agencies | $815 | $— | $(140) | $675 |
| &nbsp;&nbsp;&nbsp;&nbsp;Certificates of Deposit | 7353 | 113 | (1) | 7465 |
|  | $8168 | $113 | $(141) | $8140 |

---

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

The amortized cost and fair value of available-for-sale securities and held-to-maturity debt securities at June 30, 2025, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Available-for-sale** | **Available-for-sale** | **Held-to-maturity** | **Held-to-maturity** |
|  | **Amortized**<br> **Cost** | **Fair**<br> **Value** | **Amortized**<br> **Cost** | **Fair**<br> **Value** |
| Within one year | $1837 | $1830 | $2583 | $2592 |
| One to five years | 8496 | 8356 | 3544 | 3605 |
| Five to ten years | 11802 | 11322 |  |  |
| After ten years | 6262 | 5859 |  |  |
|  | 28397 | 27367 | 6127 | 6197 |
| Mortgage-backed securities | 45978 | 43756 | 765 | 648 |
| &nbsp;&nbsp;Totals | $74375 | $71123 | $6892 | $6845 |

---

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was $13,293 at June 30, 2025 and $13,446 at December 31, 2024.

There were no sales of securities for the three and six months ended June 30, 2025 and 2024.

A portion of available-for-sale investments in debt securities are reported in the consolidated financial statements at an amount less than their historical cost.

The following table shows the Company's investments' gross unrealized losses and fair value of the Company's investments with unrealized losses, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2025 and December 31, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Less than 12 Months** | **Less than 12 Months** | **12 Months or More** | **12 Months or More** | **Total** | **Total** |
|  | **Fair**<br> **Value** | **Unrealized**<br> **Losses** | **Fair** <br>**Value** | **Unrealized**<br> **Losses** | **Fair** <br>**Value** | **Unrealized**<br> **Losses** |
| **Available-for-sale Debt Securities:** |  |  |  |  |  |  |
| &nbsp;&nbsp;U.S. Government and federal agencies | $— | $— | $2798 | $(64) | $2798 | $(64) |
| &nbsp;&nbsp;State and political subdivisions | 5144 | (183) | 12293 | (878) | 17437 | (1061) |
| &nbsp;&nbsp;Mortgage backed securities-GSE residential | 4879 | (72) | 23535 | (2434) | 28414 | (2506) |
| **Total AFS securities** | $10023 | $(255) | $38626 | $(3376) | $48649 | $(3631) |

---

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Less than 12 Months** | **Less than 12 Months** | **12 Months or More** | **12 Months or More** | **Total** | **Total** |
|  | **Fair**<br>&nbsp;&nbsp;&nbsp;&nbsp;**Value** | **Unrealized**<br> **Losses** | **Fair** <br>**Value** | **Unrealized**<br> **Losses** | **Fair**<br> **Value** | **Unrealized**<br> **Losses** |
| **Available-for-sale Debt Securities:** |  |  |  |  |  |  |
| &nbsp;&nbsp;U.S. Government and federal agencies | $4690 | $(71) | $3277 | $(116) | $7967 | $(187) |
| &nbsp;&nbsp;State and political subdivisions | 5947 | (89) | 10829 | (919) | 16776 | (1008) |
| &nbsp;&nbsp;Mortgage backed securities - GSE residential | 9750 | (217) | 24506 | (3340) | 34256 | (3557) |
| **Total AFS securities** | $20387 | $(377) | $38612 | $(4375) | $58999 | $(4752) |

---

Total fair value of these investments at June 30, 2025 and December 31, 2024, was $48,649 and $58,999. The following table shows the total available-for-sale securities and aggregate depreciation by security type:

---

| | | |
|:---|:---|:---|
|  | **Number of**<br>**securities in a**<br>**loss position** | <br>**Aggregate** <br>**depreciation** |
| June 30, 2025 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Government and Federal agencies | 5 | (2.24)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government sponsored enterprises (GSEs) - residential | 170 | (8.11)% |
| &nbsp;&nbsp;&nbsp;&nbsp;State and political subdivisions | 47 | (5.73)% |
| Total Portfolio | 222 | (6.95)% |
| December 31, 2024 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Government and Federal agencies | 13 | (2.30)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government sponsored enterprises (GSEs) - residential | 184 | (9.40)% |
| &nbsp;&nbsp;&nbsp;&nbsp;State and political subdivisions | 46 | (5.67)% |
| Total Portfolio | 243 | (7.45)% |

---

These unrealized losses relate principally to the changes in market interest rates and are not due to changes in the financial condition of the issuer, the quality of the underlying assets, or applicable credit enhancements. In analyzing whether and allowance for credit losses on debt securities is required, management considers whether the securities are issued by a government body or agency, whether a rating agency has downgraded the securities, industry analysts' reports, the financial condition and performance of the issuer, and the quality of any underlying assets or credit enhancements. Since management has the ability to hold debt securities for the foreseeable future, no allowance for credit losses related to debt securities has been recorded at June 30, 2025 and December 31, 2024.

Management has evaluated the Company's held-to-maturities securities unrealized losses and have concluded that no anticipated credit losses are expected and therefore no reserve for losses related to held-to-maturity securities has been included in the Company's allowance for credit losses.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

#### Note 4: Equity Securities
Equity securities comprised the following as of June 30, 2025 and December 31, 2024 and are included in the consolidated balance sheets:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| Community Development Corp. Stock | $62 | $62 |
| FHLMC Preferred Stock | 289 | 263 |
| Total | $351 | $325 |

---

Community Development Corp. (CDC) Stock is presented on the balance sheets at fair value. The FHLMC Preferred Stock is presented on the balance sheet at fair value. The table below details changes in the carrying amount of the CDC stock and FHLMC Preferred Stock for the six months ended June 30, 2025 and year ended December 31, 2024.

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| Net gains and losses recognized during the period on equity securities | $26 | $210 |
| Less: Net gains and losses recognized during the period on equity securities sold during the period |  |  |
| Unrealized gains and losses recognized during the period on equity securities still held at the reporting date | $26 | $210 |

---

#### Note 5:&nbsp;&nbsp;&nbsp;&nbsp;Loans and Allowance for Credit Losses
Classes of loans at June 30, 2025 and December 31, 2024 include:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| Mortgage loans on real estate: |  |  |
| &nbsp;&nbsp;Residential 1-4 family | $66000 | $65721 |
| &nbsp;&nbsp;Commercial | 28587 | 21412 |
| &nbsp;&nbsp;Construction and land development | 1358 | 1637 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total mortgage loans on real estate | 95945 | 88770 |
| Commercial loans | 6145 | 4656 |
| Consumer | 4156 | 3479 |
|  | 106246 | 96905 |
| Plus: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred Loan Costs | 99 | 69 |
| Less: |  |  |
| &nbsp;&nbsp;Allowance for credit losses | 813 | 700 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loans | $105532 | $96274 |

---

The Company participates in the U.S. Department of Agriculture's Rural Development Section 502 Guaranteed Loan Program. This program assists approved lenders in providing low- and moderate-income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas. Eligible applicants may, purchase, build, rehabilitate, or relocate a dwelling in an eligible rural area with 100% financing. The program provides a 90% loan note guarantee to approved lenders in order to reduce the risk of extending 100% loans to eligible rural homebuyers. As of June 30, 2025 and December 31, 2024, the company held $2,497 and $2,572 respectively, of USDA Guaranteed loans in the Residential 1-4 Family portfolio of loans.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

The following tables present the balance in the allowance for credit losses based on portfolio segment for the periods presented:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended**  | **For the Three Months Ended**  | **For the Three Months Ended**  | **For the Three Months Ended**  |
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Mortgage Loans on Real Estate** | **Mortgage Loans on Real Estate** | **Mortgage Loans on Real Estate** | |
|  | <br>**Residential** <br>**1-4 Family** | <br>**Commercial** | **Construction** <br>**and Land** <br>**Development** | <br>**Commercial** |
| **Allowance for credit losses:** |  |  |  |  |
| &nbsp;&nbsp;Balance, beginning of period | $266 | $383 | $11 | $66 |
| &nbsp;&nbsp;Provision charged to expense | 2 | 43 | (1) | 22 |
| &nbsp;&nbsp;Losses charged off |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |  |  |
| &nbsp;&nbsp;Balance, end of period | $268 | $426 | $10 | $88 |
| **Allowance for credit losses for unfunded loan commitments**  |  |  |  |  |
| &nbsp;&nbsp;Balance, beginning of period | $4 | $21 | $— | $3 |
| &nbsp;&nbsp;Provision charged to expense | (1) | (16) | 6 |  |
| &nbsp;&nbsp;Losses charged off |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |  |  |
| &nbsp;&nbsp;Balance, end of period | $3 | $5 | $6 | $3 |

---

---

| | | |
|:---|:---|:---|
|  | **For the Three Months Ended**  | **For the Three Months Ended**  |
|  | **June 30, 2025 (Continued)** | **June 30, 2025 (Continued)** |
|  | **Consumer** | **Total** |
| **Allowance for credit losses:** |  |  |
| &nbsp;&nbsp;Balance, beginning of period | $19 | $745 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision charged to expense | 2 | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;Losses charged off |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |
| &nbsp;&nbsp;Balance, end of year | $21 | $813 |
| **Allowance for credit losses for unfunded loan commitments**  |  |  |
| &nbsp;&nbsp;Balance, beginning of year | $— | $28 |
| &nbsp;&nbsp;Provision charged to expense |  | (11) |
| &nbsp;&nbsp;Losses charged off |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |
| &nbsp;&nbsp;Balance, end of year | $— | $17 |

---

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended**  | **For the Three Months Ended**  | **For the Three Months Ended**  | **For the Three Months Ended**  |
|  | **June 30, 2024** | **June 30, 2024** | **June 30, 2024** | **June 30, 2024** |
|  | **Mortgage Loans on Real Estate** | **Mortgage Loans on Real Estate** | **Mortgage Loans on Real Estate** | |
|  | <br>**Residential** <br>**1-4 Family** | <br>**Commercial** | **Construction** <br>**and Land** <br>**Development** | <br>**Commercial** |
| **Allowance for credit losses:** |  |  |  |  |
| &nbsp;&nbsp;Balance, beginning of period | $256 | $348 | $11 | $75 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision charged to expense | 2 | (1) | (3) | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Losses charged off |  |  |  | (11) |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |  |  |
| &nbsp;&nbsp;Balance, end of year | $258 | $347 | $8 | $62 |
| **Allowance for credit losses for unfunded loan commitments**  |  |  |  |  |
| &nbsp;&nbsp;Balance, beginning of year | $4 | $7 | $2 | $4 |
| &nbsp;&nbsp;Provision charged to expense |  | 1 | 9 | (1) |
| &nbsp;&nbsp;Losses charged off |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |  |  |
| &nbsp;&nbsp;Balance, end of year | $4 | $8 | $11 | $3 |

---

---

| | | |
|:---|:---|:---|
|  | **For the Three Months Ended**  | **For the Three Months Ended**  |
|  | **June 30, 2024 (Continued)** | **June 30, 2024 (Continued)** |
|  | **Consumer** | **Total** |
| **Allowance for credit losses:** |  |  |
| &nbsp;&nbsp;Balance, beginning of period | $16 | $706 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision charged to expense | 2 | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Losses charged off |  | (11) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance, end of year | $18 | $693 |
| **Allowance for credit losses for unfunded loan commitments**  |  |  |
| &nbsp;&nbsp;Balance, beginning of year | $— | $17 |
| &nbsp;&nbsp;Provision charged to expense |  | 9 |
| &nbsp;&nbsp;Losses charged off |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |
| &nbsp;&nbsp;Balance, end of year | $— | $26 |

---

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six Months Ended**  | **Six Months Ended**  | **Six Months Ended**  | **Six Months Ended**  |
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Mortgage Loans on Real Estate** | **Mortgage Loans on Real Estate** | **Mortgage Loans on Real Estate** | |
|  | <br>**Residential** <br>**1-4 Family** | <br>**Commercial** | **Construction** <br>**and Land** <br>**Development** | <br>**Commercial** |
| **Allowance for credit losses:** |  |  |  |  |
| &nbsp;&nbsp;Balance, beginning of year | $271 | $339 | $13 | $60 |
| &nbsp;&nbsp;Provision charged to expense | (3) | 87 | (3) | 28 |
| &nbsp;&nbsp;Losses charged off |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |  |  |
| &nbsp;&nbsp;Balance, end of year | $268 | $426 | $10 | $88 |
| **Allowance for credit losses for unfunded loan commitments**  |  |  |  |  |
| &nbsp;&nbsp;Balance, beginning of year | $2 | $7 | $6 | $2 |
| &nbsp;&nbsp;Provision charged to expense | 1 | (2) |  | 1 |
| &nbsp;&nbsp;Losses charged off |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |  |  |
| &nbsp;&nbsp;Balance, end of year | $3 | $5 | $6 | $3 |

---

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended**  | **Six Months Ended**  |
|  | **June 30, 2025 (Continued)** | **June 30, 2025 (Continued)** |
|  | **Consumer** | **Total** |
| **Allowance for credit losses:** |  |  |
| &nbsp;&nbsp;Balance, beginning of year | $17 | $700 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision charged to expense | 4 | 113 |
| &nbsp;&nbsp;&nbsp;&nbsp;Losses charged off |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |
| &nbsp;&nbsp;Balance, end of year | $21 | $813 |
| **Allowance for credit losses for unfunded loan commitments**  |  |  |
| &nbsp;&nbsp;Balance, beginning of year | $— | $17 |
| &nbsp;&nbsp;Provision charged to expense |  |  |
| &nbsp;&nbsp;Losses charged off |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |
| &nbsp;&nbsp;Balance, end of year | $— | $17 |

---

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Six Months Ended**  | **For the Six Months Ended**  | **For the Six Months Ended**  | **For the Six Months Ended**  |
|  | **June 30, 2024** | **June 30, 2024** | **June 30, 2024** | **June 30, 2024** |
|  | **Mortgage Loans on Real Estate** | **Mortgage Loans on Real Estate** | **Mortgage Loans on Real Estate** | |
|  | <br>**Residential** <br>**1-4 Family** | <br>**Commercial** | **Construction** <br>**and Land** <br>**Development** | <br>**Commercial** |
| **Allowance for credit losses:** |  |  |  |  |
| &nbsp;&nbsp;Balance, beginning of year | $247 | $332 | $15 | $65 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision charged to expense | 11 | 15 | (7) | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Losses charged off |  |  |  | (11) |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |  |  |
| &nbsp;&nbsp;Balance, end of year | $258 | $347 | $8 | $62 |
| **Allowance for credit losses:** |  |  |  |  |
| &nbsp;&nbsp;Balance, beginning of year | $2 | $10 | $8 | $2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision charged to expense | 2 | (2) | 3 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Losses charged off |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |  |  |
| &nbsp;&nbsp;Balance, end of year | $4 | $8 | $11 | $3 |

---

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended**  | **For the Six Months Ended**  |
|  | **June 30, 2024 (Continued)** | **June 30, 2024 (Continued)** |
|  | **Consumer** | **Total** |
| **Allowance for credit losses:** |  |  |
| &nbsp;&nbsp;Balance, beginning of year | $16 | $675 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision charged to expense | 2 | 29 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Losses charged off |  | (11) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance, end of year | $18 | $693 |
| **Allowance for credit losses for unfunded loan commitments:** |  |  |
| &nbsp;&nbsp;Balance, beginning of year | $— | $22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision charged to expense |  | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Losses charged off |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recoveries |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Balance, end of year | $— | $26 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| The provision for credit losses is determined by the Company as the amount that is added to ACL accounts to bring the ACL to that, in management's judgement, is necessary to absorb expected credit losses over the lives of the respective financial instruments. The following table presents the components of the provision for credit losses: | The provision for credit losses is determined by the Company as the amount that is added to ACL accounts to bring the ACL to that, in management's judgement, is necessary to absorb expected credit losses over the lives of the respective financial instruments. The following table presents the components of the provision for credit losses: | The provision for credit losses is determined by the Company as the amount that is added to ACL accounts to bring the ACL to that, in management's judgement, is necessary to absorb expected credit losses over the lives of the respective financial instruments. The following table presents the components of the provision for credit losses: | The provision for credit losses is determined by the Company as the amount that is added to ACL accounts to bring the ACL to that, in management's judgement, is necessary to absorb expected credit losses over the lives of the respective financial instruments. The following table presents the components of the provision for credit losses: | The provision for credit losses is determined by the Company as the amount that is added to ACL accounts to bring the ACL to that, in management's judgement, is necessary to absorb expected credit losses over the lives of the respective financial instruments. The following table presents the components of the provision for credit losses: |
|  | **Three months ended June 30,**  | **Three months ended June 30,**  | **Six months ended June 30,**  | **Six months ended June 30,**  |
|  | **2025** | **2024** | **2025** | **2024** |
| Provision for credit losses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans | $68 | $(2) | $113 | $29 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unfunded loan commitments | (11) | 9 | - | 4 |
| &nbsp;&nbsp;Total | $57 | $7 | $113 | $33 |

---

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

Management's opinion as to the ultimate collectability of loans is subject to estimates regarding future cash flows from operations and the value of property, real and personal, pledged as collateral. These estimates are affected by changing economic conditions and the economic prospects of borrowers.

#### Credit Quality Indicators
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. All commercial and land development loans are graded at inception of the loan. Subsequently, analyses are performed on an annual basis and grade changes are made, as necessary. Interim grade reviews may take place if circumstances of the borrower warrant a timelier review. The Company utilizes an internal asset classification system as a means of reporting problem and potential problem loans. The Company uses the following definitions for risk ratings:

**Pass —** Loans classified as pass are well protected by the ability of the borrower to pay or by the value of the asset or underlying collateral.

**Special Mention —** Loans classified as watch represent loans with the minimum level of acceptable credit risk and servicing requirements and the borrower has the capacity to perform according to the terms and repayment is expected. However, one or more elements of uncertainty exist.

**Substandard —** Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

**Doubtful —** Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

**Loss —** Loans classified as loss are the portion of the loan that is considered uncollectible so that its continuance as an asset is not warranted. The amount of the loss determined will be charged-off.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

The Company evaluates the loan risk grading system definitions and allowance for credit loss methodology on an ongoing basis. No significant changes were made to either during the six months ended June 30, 2025 or during the year ended December 31, 2024. The following tables represents loans, as of June 30, 2025 and December 31, 2024, by grading category and year in which the loans were originated:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **2025** | **2024** | **2023** | **2022** | **2021** | <br>**Prior** | **Revolving**<br>**Lines of**<br>**Credit** | <br>**Total** |
| **Pass** |  |  |  |  |  |  |  |  |
| Residential 1-4 Family | $2881 | $8068 | $7188 | $8661 | $7277 | $30887 | $818 | $65780 |
| Commercial Real Estate | 8387 | 5101 | 3121 | 3925 | 3139 | 3801 |  | 27474 |
| Construction and Land Development | 169 | 231 | 798 |  |  | 160 |  | 1358 |
| Commercial | 1665 | 1031 | 2602 | 108 | 98 | 72 | 569 | 6145 |
| Consumer | 1523 | 1243 | 727 | 224 | 297 | 142 |  | 4156 |
| Total Pass | $14625 | $15674 | $14436 | $12918 | $10811 | $35062 | $1387 | $104913 |
| **Special Mention** |  |  |  |  |  |  |  |  |
| Residential 1-4 Family | $— | $— | $— | $— | $— | $— | $— | $— |
| Commercial Real Estate |  |  | 626 |  |  |  |  | 626 |
| Construction and Land Development |  |  |  |  |  |  |  |  |
| Commercial |  |  |  |  |  |  |  |  |
| Consumer |  |  |  |  |  |  |  |  |
| Total Special Mention | $— | $— | $626 | $— | $— | $— | $— | $626 |
| **Substandard** |  |  |  |  |  |  |  |  |
| Residential 1-4 Family | $— | $— | $— | $— | $— | $220 | $— | $220 |
| Commercial Real Estate |  |  |  |  |  | 487 |  | 487 |
| Construction and Land Development |  |  |  |  |  |  |  |  |
| Commercial |  |  |  |  |  |  |  |  |
| Consumer |  |  |  |  |  |  |  |  |
| Total Substandard | $— | $— | $— | $— | $— | $707 | $— | $707 |
| **Total**  | $14625 | $15674 | $15062 | $12918 | $10811 | $35769 | $1387 | $106246 |
| **Current period gross charge-offs:** |  |  |  |  |  |  |  |  |
| Residential 1-4 Family | $— | $— | $— | $— | $— | $— | $— | $— |
| Commercial Real Estate |  |  |  |  |  |  |  |  |
| Construction and Land Development |  |  |  |  |  |  |  |  |
| Commercial |  |  |  |  |  |  |  |  |
| Consumer |  |  |  |  |  |  |  |  |
|  | $— | $— | $— | $— | $— | $— | $— | $— |

---

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **2024** | **2023** | **2022** | **2021** | **2020** | <br>**Prior** | **Revolving**<br>**Lines of**<br>**Credit** | <br>**Total** |
| **Pass** |  |  |  |  |  |  |  |  |
| Residential 1-4 Family | $8124 | $7509 | $8960 | $7554 | $14686 | $17705 | $835 | $65373 |
| Commercial Real Estate | 5344 | 3339 | 4034 | 3440 | 1285 | 2837 |  | 20279 |
| Construction and Land Development | 625 | 843 |  |  | 46 | 123 |  | 1637 |
| Commercial | 1086 | 2742 | 180 | 215 | 6 | 93 | 334 | 4656 |
| Consumer | 1659 | 945 | 322 | 373 | 172 | 8 |  | 3479 |
| Total Pass | $16838 | $15378 | $13496 | $11582 | $16195 | $20766 | $1169 | $95424 |
| **Special Mention** |  |  |  |  |  |  |  |  |
| Residential 1-4 Family | $— | $— | $— | $— | $— | $— | $— | $— |
| Commercial Real Estate |  | 637 |  |  |  |  |  | 637 |
| Construction and Land Development |  |  |  |  |  |  |  |  |
| Commercial |  |  |  |  |  |  |  |  |
| Consumer |  |  |  |  |  |  |  |  |
| Total Special Mention | $— | $637 | $— | $— | $— | $— | $— | $637 |
| **Substandard** |  |  |  |  |  |  |  |  |
| Residential 1-4 Family | $— | $— | $— | $— | $— | $348 | $— | $348 |
| Commercial Real Estate |  |  |  |  |  | 496 |  | 496 |
| Construction and Land Development |  |  |  |  |  |  |  |  |
| Commercial |  |  |  |  |  |  |  |  |
| Consumer |  |  |  |  |  |  |  |  |
| Total Substandard | $— | $— | $— | $— | $— | $844 | $— | $844 |
| **Total**  | $16838 | $16015 | $13496 | $11582 | $16195 | $21610 | $1169 | $96905 |
| **Current period gross charge-offs:** |  |  |  |  |  |  |  |  |
| Residential 1-4 Family | $— | $— | $— | $— | $— | $— | $— | $— |
| Commercial Real Estate |  |  |  |  |  | (179) |  | (179) |
| Construction and Land Development |  |  |  |  |  |  |  |  |
| Commercial |  | (13) |  |  |  |  |  | (13) |
| Consumer |  | (2) |  |  |  |  |  | (2) |
|  | $— | $(15) | $— | $— | $— | $(179) | $— | $(194) |

---

The following tables present the Company's loan portfolio aging analysis as of June 30, 2025 and December 31, 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **June 30, 2025** |  |  |  | **2025** |  | **Total**  |
|  | **30-59 Days**  | **60-89 Days**  | **90 Days and** | **Total Past**  |  | **Loans**  |
|  | **Past Due** | **Past Due** | **Greater** | **Due** | **Current** | **Receivable** |
| Mortgage loans on real estate: |  |  |  |  |  |  |
| &nbsp;&nbsp;Residential 1-4 family | $639 | $171 | $31 | $841 | $65159 | $66000 |
| &nbsp;&nbsp;Commercial | 247 |  |  | 247 | 28340 | 28587 |
| &nbsp;&nbsp;Construction and land development |  |  |  |  | 1358 | 1358 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total real estate loans | 886 | 171 | 31 | 1088 | 94857 | 95945 |
| Commercial |  |  |  |  | 6145 | 6145 |
| Consumer | 38 | 16 |  | 54 | 4102 | 4156 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $924 | $187 | $31 | $1142 | $105104 | $106246 |

---

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **December 31, 2024** |  |  |  | **2024** |  | **Total**  |
|  | **30-59 Days**  | **60-89 Days**  | **90 Days and** | **Total Past**  |  | **Loans**  |
|  | **Past Due** | **Past Due** | **Greater** | **Due** | **Current** | **Receivable** |
| Mortgage loans on real estate: |  |  |  |  |  |  |
| &nbsp;&nbsp;Residential 1-4 family | $445 | $219 | $317 | $981 | $64740 | $65721 |
| &nbsp;&nbsp;Commercial |  |  |  |  | 21412 | 21412 |
| &nbsp;&nbsp;Construction and land development |  |  |  |  | 1637 | 1637 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total real estate loans | 445 | 219 | 317 | 981 | 87789 | 88770 |
| Commercial |  |  |  |  | 4656 | 4656 |
| Consumer | 46 |  |  | 46 | 3433 | 3479 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $491 | $219 | $317 | $1027 | $95878 | $96905 |

---

During the six months ended June 30, 2025, there was no accrued interest that was written off, related to loans placed in nonaccrual status during the year. During the year ended December 31, 2024 accrued interest that was written off, related to loans placed in nonaccrual status during the year, amounted to $5, all related to Residential Real Estate loans.

**Collateral-Dependent Loans**

At June 30, 2025, the Company held loans that were individually evaluated for impairment due to financial difficulties experienced by the borrower and for which the repayment, on the basis of our assessment, is expected to be provided substantially through the sale or operations of the collateral. The ACL for these collateral dependent loans is primarily based on the fair value of the underlying collateral at the reporting date. The following describes the types of collateral that secure collateral dependent loans:

● One-to-four family mortgages are primarily secured by first liens on residential real estate.

● Commercial real estate loans are primarily secured by office and industrial buildings.

● Commercial and industrial loans are primarily secured by accounts receivables, inventory, and equipment.

● Home equity loans are primarily secured by second liens on residential real estate.

● Consumer loans are primarily secured by titles on automobiles and recreational vehicles.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

The following table presents information regarding collateral dependent loans as of June 30, 2025 and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Loan**<br>**Balance** | **Specific**<br>**Allowance** | **Loan**<br>**Balance** | **Specific**<br>**Allowance** |
| Mortgage loans on real estate: |  |  |  |  |
| &nbsp;&nbsp;Residential 1-4 family | 220 |  | $348 | $— |
| &nbsp;&nbsp;Commercial | 487 |  | 496 |  |
| &nbsp;&nbsp;Construction and land development |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total real estate loans | 707 |  | 844 |  |
| Commercial |  |  |  |  |
| Consumer |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $707 | $— | $844 | $— |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | <br>**Nonaccrual**<br>**Loans with No**<br>**Allowance for**<br>**Credit Losses** | <br>**Nonaccrual**<br>**Loans with an**<br>**Allowance for**<br>**Credit Losses** | <br>**Total**<br>**Nonaccrual**<br>**Loans** | **Total**<br>**Nonaccrual**<br>**Loans at**<br>**Beginning of**<br>**Year** | **Interest**<br>**Income**<br>**Recognized on**<br>**Nonaccrual**<br>**Loans** | **Amortized**<br>**Cost Basis**<br>**of Loans 90+** <br>**Days Past Due**<br>**Not on Nonaccrual** |
| **June 30, 2025** |  |  |  |  |  |  |
| Residential - First Mortgage | 220 |  | 220 | 348 |  |  |
| Commercial real estate  |  |  |  |  |  |  |
| Construction and land development |  |  |  |  |  |  |
| Commercial and Industrial |  |  |  |  |  |  |
| Consumer |  |  |  |  |  |  |
| &nbsp;&nbsp;Total | $220 | $— | $220 | $348 | $— | $— |
|  |  |  |  | **Total** | **Interest** | **Amortized** |
|  | **Nonaccrual** | **Nonaccrual** |  | **Nonaccrual** | **Income** | **Cost Basis** |
|  | **Loans with No** | **Loans with an** | **Total** | **Loans at** | **Recognized on** | **of Loans 90+**  |
|  | **Allowance for** | **Allowance for** | **Nonaccrual** | **Beginning of** | **Nonaccrual** | **Days Past Due** |
|  | **Credit Losses** | **Credit Losses** | **Loans** | **Year** | **Loans** | **Not on Nonaccrual** |
| **December 31, 2024** |  |  |  |  |  |  |
| Residential - First Mortgage | 348 |  | 348 | 177 |  |  |
| Commercial real estate  |  |  |  | 156 |  |  |
| Construction and land development |  |  |  |  |  |  |
| Commercial and Industrial |  |  |  |  |  |  |
| Consumer |  |  |  |  |  |  |
| &nbsp;&nbsp;Total | $348 | $— | $348 | $333 | $— | $— |

---

There were no new loans modified due to borrowers experiencing financial difficulties during the six months ended June 30, 2025 or 2024.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

#### Note 6: Premises and Equipment
Major classifications of premises and equipment, stated at cost, are as follows:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| Land | $746 | $746 |
| Buildings and improvements | 3063 | 3063 |
| Equipment | 1118 | 1103 |
|  | 4927 | 4912 |
| Less accumulated depreciation | (2878) | (2811) |
| &nbsp;&nbsp;Net premises and equipment | $2049 | $2101 |

---

#### Note 7: Mortgage Servicing Rights
Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of mortgage loans serviced for others was $20,469 and $21,650 at June 30, 2025 and December 31, 2024, respectively.

The following summarizes the activity in mortgage servicing rights measured using the fair value method for the three and six months ended June 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,**<br>**2024** |
| Fair value as of the beginning of period | $254 | $300 |
| Changes in fair value due to changes in valuation inputs or assumptions |  | (46) |
| Fair value at the end of period | $254 | $254 |

---

The estimated fair value of mortgage servicing rights is determined using a valuation model that calculates the present value of expected future servicing and ancillary income, net of expected servicing costs. The model incorporates various assumptions, such as discount rates and prepayment speeds based on market data from independent organizations. Information about the estimated fair value of mortgage servicing rights at June 30, 2025 and December 31, 2024 follows:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,**<br>**2024** |
| Range of discount rates | 9.625-12.625% | 9.625-12.625% |
| Range of prepayment speeds (1) | 91-375 | 91-375 |
| Weighted average default rate | 1.06% | 1.06% |

---

Management did not utilize a valuation model to calculate the fair value of mortgage servicing rights at June 30, 2025 but Management determined the change in fair value was not significant to the consolidated financial statements as of June 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Prepayment speeds measured in the Public Securities Associate Standard prepayment model (PSA). PSA is the assumed monthly rate of prepayment that is annualized to the outstanding principal balance of a mortgage loan.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

#### Note 8: Time Deposits
Time deposits in denominations of $250 or more were $15,230 on June 30, 2025 and $10,748 on December 31, 2024.

At June 30, 2025, the scheduled maturities of time deposits are as follows:

---

| | |
|:---|:---|
| 2025 | $39223 |
| 2026 | 24330 |
| 2027 | 7776 |
| 2028 | 1200 |
| 2029 | 265 |
| Thereafter | 248 |
|  | $73042 |

---

#### Note 9: Borrowings
As of June 30, 2025 and December 31, 2024, the Company had no borrowed funds.

The Bank has a master contract agreement with the Federal Home Loan Bank that provides for borrowing up to the maximum range of 60-80% of the book value of the Bank's qualifying loans based on the pledged loan class and range of 90-98% of qualifying investment securities pledged. The FHLB provides both fixed and floating rate advances. Floating rates are based on, but not directly tied to, short-term market rates of interest, such as Secured Overnight Financing Rate (SOFR), federal funds, or treasury bill rates. Advances with call provisions permit the FHLB to request payment beginning on the call date and quarterly thereafter. FHLB advances are subject to a prepayment penalty if they are repaid prior to maturity.

At June 30, 2025, the Bank's available and unused portion of this borrowing agreement totaled approximately $47.6 million. At December 31, 2024, the Bank's available and unused portion of this borrowing agreement totaled approximately $47.6 million.

At June 30, 2025, the Bank's available and unused unsecured line of credit with Bankers' Bank of Wisconsin and United Bankers' Bank totaled $4.0 million and $5.0 million, respectively. At December 31, 2024, the Bank's available and unused unsecured line of credit with Bankers' Bank of Wisconsin and United Bankers' Bank totaled $4.0 million and $5.0 million, respectively.

#### Note 10: Income Taxes
Income tax expense was $114 and $86 for the three months ended June 30, 2025 and 2024, respectively, and was $197 and $144 for the six months ended June 30, 2025 and 2024, respectively.

Deferred tax assets are deferred tax consequences attributable to deductible temporary differences and carryforwards. After the deferred tax asset has been measured using the applicable enacted tax rate and provisions of the enacted tax law, it is then necessary to assess the need for a valuation allowance. A valuation allowance is needed when, based on the weight of the available evidence, it is more likely than not that some portion of the deferred asset will not be realized. As required by generally accepted accounting principles, available evidence is weighted heavily on cumulative losses, with less weight placed on future projected profitability. The realization of deferred tax assets is dependent on the existence of taxable income of the appropriate character (e.g., ordinary or capital) within the carry-back and carry-forward periods available under the tax law, which would consider future reversals of existing taxable temporary differences and available tax planning strategies. As of June 30, 2025 and December 31, 2024 the Company has determined that no allowance is deemed necessary. The net deferred assets were $1,406 and $1,857 as of June 30, 2025 and December 31, 2024, respectively.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

The Company's Board of Directors and management continue to assess the deferred tax assets in light of recent changes in market conditions, forecasted future projected income and available tax planning strategies. As such, there may be deferred tax impairment in subsequent periods.

The Company files income tax returns in the U.S. federal jurisdiction and the State of Illinois. During the three and six months ended June 30, 2025 and 2024, the Company recognized no interest or penalties.

#### Note 11: Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss), included in equity capital, are as follows:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| Net unrealized gain (loss) on available-for-sale debt securities | $(3252) | $(4631) |
| Tax effect | 927 | 1318 |
| &nbsp;&nbsp;Net-of-tax amount | $(2325) | $(3313) |

---

#### Note 12: Regulatory Matters
The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under U.S. GAAP, regulatory reporting requirements and regulatory capital standards. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore, the Bank's regulators could require adjustment to regulatory capital not reflected in these consolidated financial statements.

Quantitative measures established by regulatory reporting standards ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined) to risk weighted assets (as defined), common equity Tier I capital (as defined) to total risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined).

Management believes, as of June 30, 2025 and December 31, 2024, that the Bank meets all capital adequacy requirements to which it is subject. As of June 30, 2025, the most recent notification from regulatory agencies categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum capital ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the Bank's category.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

The Bank's actual capital amounts and ratios are also presented in the table.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  | **Minimum to Be Well** | **Minimum to Be Well** |
|  |  |  |  |  | **Capitalized Under**  | **Capitalized Under**  |
|  |  |  |  |  | **Prompt** | **Prompt** |
|  |  |  | **Minimum Capital** | **Minimum Capital** | **Corrective Action** | **Corrective Action** |
|  | **Actual** | **Actual** | **Requirement** | **Requirement** | **Provisions** | **Provisions** |
|  | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** |
| As of June 30, 2025: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Leverage ratio (to average assets) | $32426 | 15.6% | $8324 | 4.0% | $10406 | 5.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Common Equity Tier 1 (to risk weighted assets) | $32426 | 31.2% | $4680 | 4.5% | $6760 | 6.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 Capital ratio (to risk weighted assets) | $32426 | 31.2% | $6240 | 6.0% | $8320 | 8.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Capital (to risk-weighted assets) | $33256 | 32.0% | $8320 | 8.0% | $10401 | 10.0% |
| As of December 31, 2024: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Leverage ratio (to average assets) | $31662 | 15.9% | $7972 | 4.0% | $9965 | 5.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Common Equity Tier 1 (to risk weighted assets) | $31662 | 33.0% | $4318 | 4.5% | $6238 | 6.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 Capital ratio (to risk-weighted assets) | $31662 | 33.0% | $5758 | 6.0% | $7677 | 8.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Capital (to risk-weighted assets) | $32379 | 33.7% | $7677 | 8.0% | $9596 | 10.0% |

---

The net unrealized gain or loss on available-for-sale securities, net of tax is not included in computing regulatory capital.

#### Note 13: Related Party Transactions
At June 30, 2025 and December 31, 2024, the Company had loans outstanding to executive officers, directors, significant shareholders, and their affiliates (related parties), of $882 and $924, respectively.

Deposits from related parties held by the Company at June 30, 2025 and December 31, 2024 totaled $1,121 and $1,268, respectively.

In management's opinion, such loans and other extensions of credit 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 management's opinion, these loans did not involve more than normal risk of collectability or present other unfavorable features.

A summary of loans to directors, executive officers, and their affiliates as of June 30, 2025 and December 31, 2024 is as follows:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br>**2025** | **December 31,** <br>**2024** |
| Beginning balance | $924 | $1053 |
| New Loans |  | 54 |
| Repayments | (42) | (183) |
| Ending balance | $882 | $924 |

---

The Company's Board-approved law firm is Duncan & Brandt, P.C, which is solely owned by the Company's Vice Chairman Jonathan Brandt. The Company pays an annual retainer to Duncan & Brandt of $15 and $15 for the three months ended June 30, 2025 and 2024, and $30 and $30 for the six months ended June 30, 2025 and 2024, respectively. In addition to the annual retainer, the firm received various fees for legal services rendered in the normal course of business of $5 and $3

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

for the three months ended June 30, 2025 and 2024 and $9 and $6 for the six months ended June 30, 2025 and 2024, respectively.

#### Note 14: Employee Benefits
The Company has a retirement savings 401(k) plan covering substantially all employees. Employees may contribute a percentage of their compensation, up to the maximum allowable by the IRS, with the Company matching 50 percent of the employee's contribution on the first 5 percent of the employee's compensation. Employer contributions charged to expense for the three months ended June 30, 2025 and 2024 were $19 and $19, respectively and $45 and $39 for the six months ended June 30, 2025 and 2024, respectively.

The Company has deferred compensation agreements with directors. The agreements provide for the payment of benefits at termination or retirement. The plan assets are comprised of Company stock held in a Rabbi Trust and cash assets. The cash balances earn a rate of return equivalent to the Moody's Bond Indices Corporate AAA rate as of December 31<sup>st</sup> of the prior year. The charge to expense for the agreements was $8 and $(19) for the three months ended June 30, 2025 and 2024, respectively and $(27) and $(13) for the six months ended June 30, 2025 and 2024, respectively . The liability accrued for these plans totaled $646 and $645 at June 30, 2025 and December 31, 2024, respectively.

The Company has an Employee Stock Ownership Plan. See Note 18.

#### Note 15: Disclosures About Fair Value of Assets
ASC Topic 820, Fair value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This accounting standard also emphasizes that fair value (i.e., the price that would be received in an orderly transaction that is not a forced liquidation or distressed sale at the measurement date), among other things, is based on exit price versus entry price, should include assumptions about risk such as nonperformance risk in liability fair values, and is a market-based measurement, not an entity-specific measurement. When considering the assumptions that market participants would use in pricing an asset or liability, this accounting standard establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

The fair value hierarchy prioritizes inputs used to measure fair value into three broad levels:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Level 1** | In general, fair values determined by Level 1 inputs use quoted market prices for identical assets or liabilities that the entity can access at measurement date. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Level 2** | Fair Values determined by Level 2 inputs use inputs other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in markets, quoted prices for identical or similar assets or liabilities in markets where there are few transactions and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Level 3** | Unobservable inputs for the asset or liability and included situations where there is little, if any, market activity for the asset or liability. |

---

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

particular input to the fair value measurement in its entirety requires judgement and considers factors specific to the asset or liability.

Some assets and liabilities, such as securities available for sale, are measured at fair value on a recurring basis under accounting principles generally accepted in the United States. Other assets and liabilities, such as individually analyzed loans and equity securities without a readily determinable fair value, may be measured at fair value on a nonrecurring basis.

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the six months ended June 30, 2025 or year ended December 31, 2024.

#### Equity Securities
Equity securities with a readily determinable fair value are measured at fair value on a recurring basis. The fair value measurement of equity securities with a readily determinable fair value are based on the quoted price of the security and is considered a Level 1 fair value measurement. Equity securities without a readily determinable fair value are measured at fair value on a nonrecurring basis when transaction prices for identical or similar securities are identified. Fair value measurements on equity securities without a readily determinable fair value are generally considered a Level 2 fair value measurement.

#### Debt Securities
Securities available for sale may be classified as Level 1, Level 2, or Level 3 measurements within the fair value hierarchy. Level 1 securities included debt securities traded on a national exchange. The fair value measurement of a Level 1 security is based on the quoted price of the security. Level 2 securities include U.S. government and agency securities, obligations of states and political subdivisions, corporate debt securities, and mortgage related securities. The fair value measurement of a Level 2 security is obtained from an independent pricing service and is based on recent sales of similar securities and other observable market data. Level 3 securities include trust preferred securities that are not traded in a market. The fair value measurement of Level 3 securities are determined by the Company's Chief Financial Officer (CFO) and reported to the Company's board of directors. Fair values are calculated using discounted cash flow models that incorporate various assumptions, including expected cash flows and market credit spreads. When comparable sales are available, these are used to validate the models used. Other available industry data, such as information regarding defaults and deferrals, are incorporated into the expected cash flows.

#### Mortgage Servicing Rights
Management measures mortgage servicing rights through the completion of a proprietary model. Inputs to the model are developed by the accounting staff and are reviewed by management. The model is tested annually using baseline data to check its accuracy.

Mortgage servicing rights are evaluated on a recurring basis. Serviced loan pools are stratified by year of origination, and a fair value measurement is obtained for each stratum from an independent firm. The measurement is based on recent sales of mortgage servicing rights with similar characteristics. Since the fair value measurement is based on observable market data, it is considered a Level 2 measurement.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

#### Recurring Measurements
The following table presents the fair value measurements of assets recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2025 and December 31, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** |
|  | <br>**Fair Value** | **Quoted Prices**<br>**in**<br>**Active**<br>**Markets for**<br>**Identical** <br>**Assets**<br>**(Level 1)** | <br>**Significant**<br>**Other**<br>**Observable** <br>**Inputs**<br>**(Level 2)** | <br>**Significant**<br>**Unobservable**<br>**Inputs**<br>**(Level 3)** |
| **June 30, 2025:** |  |  |  |  |
| **Available-for Sale debt securities:** |  |  |  |  |
| &nbsp;&nbsp;U.S. Government and federal agencies | $7685 | $1107 | $6578 | $— |
| &nbsp;&nbsp;Mortgage-backed: GSE - residential | 43756 |  | 43756 |  |
| &nbsp;&nbsp;State and political Subdivision | 19682 |  | 19682 |  |
| **Total Available-For-sale debt securities** | $**71123** | $**1107** | $**70016** | $**—** |
| **Equity securities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;FHLMC stock | $289 | $289 | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Community Development Corp. Stock | 62 |  | 62 |  |
| **Mortgage servicing rights** | 254 |  | 254 |  |
| **Total** | $**71728** | $**1396** | $**70332** | $**—** |
| **December 31, 2024:** |  |  |  |  |
| **Available-for Sale debt securities:** |  |  |  |  |
| &nbsp;&nbsp;U.S. Government and federal agency | $7967 | $1626 | $6341 | $— |
| &nbsp;&nbsp;Mortgage-backed: GSE - residential | 38858 |  | 38858 |  |
| &nbsp;&nbsp;State and political subdivision | 19833 |  | 19833 |  |
| **Total Available-for-sale debt securities** | $**66658** | $**1626** | $**65032** | $**—** |
| **Equity securities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;FHLMC Stock | $263 | $263 | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Community Development Corp. Stock | 62 |  | 62 |  |
| **Mortgage servicing rights** | 254 |  | 254 |  |
| **Total** | $**67237** | $**1889** | $**65348** | $**—** |

---

The Company estimates the fair value of all financial instruments regardless of whether such instruments are measured at fair value. The following methods and assumptions were used by the Company to estimate fair value of financials instruments not previously discussed.

*Cash and cash equivalents —* Fair value approximates the carrying value.

*Loans —* Fair value of variable rate loans that reprice frequently is based on carrying values. Fair value of other loans is estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings. Fair value of individually analyzed and other non-performing loans is estimated using discounted expected cash flows or fair value of the underlying collateral, if applicable.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

*FHLB stock —* Fair value is the redeemable (carrying) value based on the redemption provisions of the Federal Home Loan Bank.

*Interest receivable and payable —* Fair value approximates the carrying value.

*Cash surrender value of bank-owned life insurance —* Fair value is based on reported values of the assets.

*Deposits—* Fair value of deposits with no state maturity, such as demand deposits, savings, and money market accounts, by definition, is the amount payable on demand on the reporting date. Fair value of fixed rate time deposits is estimated using discounted cash flows applying interest rates currently being offered on similar time deposits.

The carrying value and estimated fair value of financial instruments follow:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Carrying Value**  | **Level 1**  | **Level 2**  | **Level 3**  |
| Financial assets: |  |  |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $14489 | $14489 | $— | $— |
| &nbsp;&nbsp;Available-for-sale debt securities | 71123 | 1107 | 70016 |  |
| &nbsp;&nbsp;Held-to-maturity debt securities | 6892 |  | 6845 |  |
| &nbsp;&nbsp;Equity securities | 351 | 289 | 62 |  |
| &nbsp;&nbsp;Loans | 105532 |  |  | 100740 |
| &nbsp;&nbsp;Interest receivable | 778 | 778 |  |  |
| &nbsp;&nbsp;Federal Home Loan Bank Stock | 354 |  |  | 354 |
| &nbsp;&nbsp;Cash surrender value of bank-owned life insurance | 4031 |  |  | 4031 |
| Financial liabilities: |  |  |  |  |
| &nbsp;&nbsp;Deposits | 168737 |  |  | 152188 |
| &nbsp;&nbsp;Interest payable | 1 | 1 |  |  |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Carrying Value** | **Level 1** | **Level 2** | **Level 3** |
| Financial assets: |  |  |  |  |
| &nbsp;&nbsp;Cash and cash equivalents | $16256 | $16256 | $— | $— |
| &nbsp;&nbsp;Available-for-sale debt securities | 66658 | 1626 | 65032 |  |
| &nbsp;&nbsp;Held-to-maturity debt securities | 8168 |  | 8140 |  |
| &nbsp;&nbsp;Equity securities | 325 | 263 | 62 |  |
| &nbsp;&nbsp;Loans | 96274 |  |  | 90996 |
| &nbsp;&nbsp;Interest receivable | 733 | 733 |  |  |
| &nbsp;&nbsp;Federal Home Loan Bank Stock | 347 |  |  | 347 |
| &nbsp;&nbsp;Cash surrender value of bank-owned life insurance | 3979 |  |  | 3979 |
| Financial liabilities: |  |  |  |  |
| &nbsp;&nbsp;Deposits | 159587 |  |  | 143604 |
| &nbsp;&nbsp;Interest payable | 7 | 7 |  |  |

---

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

#### Nonrecurring Measurements
The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2025 and December 31, 2024.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** |
|  | <br>**Fair Value** | **Quoted**<br>**Prices**<br>**in Active**<br>**Markets for**<br>**Identical**<br>**Assets**<br>**(Level 1)** | <br>**Significant**<br>**Other**<br>**Observable**<br>**Inputs**<br>**(Level 2)** | <br>**Significant**<br>**Unobservable**<br>**Inputs**<br>**(Level 3)** |
| **June 30, 2025:** |  |  |  |  |
| &nbsp;&nbsp;Individually analyzed loans (collateral dependent) | $— | $— | $— | $— |
| **December 31, 2024:** |  |  |  |  |
| &nbsp;&nbsp;Individually analyzed loans (collateral dependent) | $— | $— | $— | $— |

---

During the six months ended June 30, 2025, there were no loans determined to have credit losses where a specific valuation allowance was needed. During the six months June 30, 2024, there were no loans were determined to have credit losses where a specific valuation allowance was needed.

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

#### Individually Analyzed (Collateral Dependent)
The estimated fair value of collateral-dependent individually analyzed loans is based on the appraised fair value of the collateral, less estimated cost to sell. Collateral-dependent individually analyzed loans are classified within Level 3 of the fair value hierarchy.

The Company considers the appraisal or evaluation as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value. Appraisals of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by management. Appraisals are reviewed for accuracy and consistency. Appraisers are selected from the list of approved appraisers maintained by management. The appraised values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the sale of the collateral. These discounts and estimates are developed by the management by comparison to historical results.

#### Note 16: Commitments, Credit Risk and Contingencies
The Company grants commercial, residential and consumer loans to customers located primarily in LaSalle County, Illinois. Although the Company has a diversified loan portfolio, a substantial portion of its debtors' ability to honor their contracts is dependent upon economic conditions in this county.

#### Lines of Credit
Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management's credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

equipment, commercial real estate, and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on-balance-sheet instruments.

At June 30, 2025, the Company had granted unused lines of credit to borrowers aggregating approximately $3,899 and $1,170 for commercial lines and open-end consumer lines, respectively. At December 31, 2024, the Company had granted unused lines of credit to borrowers aggregating approximately $2,911 and $1,251 for commercial lines and open-end consumer lines, respectively.

#### Note 17: Government Assistance
On October 31, 2012, the Company entered into a settlement agreement on the foreclosure of the Country Aire Subdivision in LaSalle, IL whereby the Company assumed the rights and responsibility as the developer of this subdivision. This subdivision was granted a Tax Incremental Financing (TIF) district by the City of LaSalle in 2004. The previous developer did not complete the terms of the TIF agreement, thus the Company entered into an agreement with the City of LaSalle to meet the requirements of the TIF agreement and then receive the incentives upon completion of all terms of the agreement. The City of LaSalle accepted the subdivision on October 25, 2016. Because the incentives are based on the incremental taxes generated from the sale of the lots and the building of homes the Company continued to market and sell lots with the final contract in 2019. At December 31, 2019, the Company had met all the requirements and had all lots sold therefore a TIF receivable was recorded for the estimated value of funds to be received from the City of Lasalle over the remaining term of the TIF district. Each year end the Company evaluates the TIF receivable based on the 3<sup>rd</sup> party TIF administrator's estimated value of homes, their incremental taxes and the developer's share of the incremental taxes. The receivable for these funds are included in Other Assets on the Consolidated Balance Sheets and changes to the valuation are adjusted through Other Non-interest Income on the Consolidated Statements of Income. The balance of this receivable was $331 and $449 as of June 30, 2025 and December 31, 2024, respectively.

#### Note 18: ESOP
In connection with the Conversion, the Company established an Employee Stock Ownership Plan ("ESOP") for the exclusive benefit of eligible employees. The Company will make annual contributions to the ESOP in amounts as defined by the plan document. These contributions are used to pay debt service. Certain ESOP shares are pledged as collateral for debt. As the debt is repaid, shares are released from collateral and allocated to active participants, based on the proportion of debt service paid in the year. Shares allocated to participants are vested by 20% after one year of service (from the formation of PFS Bancorp, Inc.) 40% after 2 years, 60% after 3 years, 80% after 4 year and are fully vested after 5 years. If an employee retires, once meeting retirement age criteria, the shares are 100% vested.

In connection with the Company's initial public stock offering, the ESOP borrowed $1.38 million from the Company for the purpose of purchasing shares of the Company's common stock. A total of 138,000 shares were purchased with the loan proceeds. Accordingly, common stock acquired by the ESOP is shown as a reduction of shareholder's equity. The loan is expected to be repaid over a period of up to 25 years.

The annual contribution to the ESOP was made during the year ended December 31, 2024, as loan payments are made annually on December 31<sup>st</sup> of each year. Compensation expense is recognized over the service period based on the average fair value of the shares and totaled $13 and $12 for the three months ended June 30, 2025 and 2024, respectively, and $28 and $25 for six months ended June 30, 2025 and 2024, respectively, and $53 for the year ended December 31, 2024.

At December 31, 2024, there were 11,040 shares allocated to participants. There were 2,760 shares committed to be released to participants and 124,200 unallocated shares as of June 30, 2025. The fair value of unallocated ESOP shares totaled $1.4 million and $1.4 million at June 30, 2025 and December 31, 2024, respectively.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

#### Note 19: Earnings Per Share (EPS)
Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding, adjusted for weighted average unallocated ESOP shares, during the applicable period. Diluted earnings per share is computed using the weighted average number of shares determined for the basic earnings per common share computation plus the dilutive effect of stock compensation using the treasury stock method. Stock options and stock awards were evaluated and were excluded from diluted EPS calculation as they were anti-dilutive.

#### Earnings per common share for the three and six months ended June 30, 2025 and 2024 is presented in the following table:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **(dollars in thousands, except per share amounts)** | **(dollars in thousands, except per share amounts)** | **(dollars in thousands, except per share amounts)** | **(dollars in thousands, except per share amounts)** |
| Net income | $438 | $274 | $723 | $550 |
| Weighted shares outstanding for basic EPS |  |  |  |  |
| &nbsp;&nbsp;Weighted average shares outstanding | 1725000 | 1725000 | 1725000 | 1725000 |
| &nbsp;&nbsp;Less: Weighted average unallocated ESOP shares | (124890) | (130408) | (125580) | (131096) |
| &nbsp;&nbsp;Less: Weighted average Treasury shares  | (86352) | (40000) | (72799) | (40000) |
| &nbsp;&nbsp;Add: Weighted average shares in Rabbi Trust for Deferred Compensation Plan | 40000 | 40000 | 40000 | 40000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted average shares outstanding for basic EPS | 1553758 | 1594592 | 1566621 | 1593904 |
| &nbsp;&nbsp;Additional dilutive shares  |  |  |  |  |
| Weighted average shares outstanding for dilutive EPS | 1553758 | 1594592 | 1566621 | 1593904 |
| Basic income per share | $0.28 | $0.17 | $0.46 | $0.35 |
| Diluted income per share | $0.28 | $0.17 | $0.46 | $0.35 |

---

**NOTE 20 – STOCK BASED COMPENSATION**

Stock-Based Compensation Plans

On May 22, 2025, the Company's stockholders approved the PFS Bancorp, Inc. 2025 Equity Incentive Plan (the "Plan"). A total of 172,500 stock options and 69,000 restricted shares were approved for award. As of June 30, 2025, 69,000 shares of common stock remained available for grant as stock options, and 27,600 shares of common stock remained available for award of restricted stock the Plan. The stock options granted to employees and non-employee directors under this plan vest in five installments with the first installment vesting on the first anniversary of the date of grant. The exercise price for all stock options granted is equal to the quoted OTC market close price on the date that the awards were granted and expire ten years after the grant date, if not exercised. The restricted stock awards granted to employees and non-employee directors under this plan vest in five installments with the first installment vesting on the first anniversary of the date of grant.

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

Accounting for Stock-Based Compensation Plan

The fair value of stock options granted is estimated on the grant date using a Black-Scholes pricing model. The fair value of restricted shares is equal to the quoted OTC market closing price on the date of grant. The fair value of stock grants is recognized as compensation expense on a straight-line basis over the vesting period of the grants. Compensation expense is included in salaries and employee benefits in the consolidated statements of operations.

Assumptions are used in estimating the fair value of stock options granted. The weighted average expected life of the stock options represents the period of time that the options are expected to be outstanding. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected volatility is based on the actual volatility of PFS Bancorp, Inc. stock for the weighted average lifetime period prior to issuance date. The following assumptions were used in estimating the fair value of options granted during the six months ended June 30, 2025 and June 30, 2024, respectively:

---

| | |
|:---|:---|
|  | **Six Months Ended** <br>**June 30, 2025** |
| Dividend yield | —% |
| Risk-free interest rate | 4.21% |
| Expected volatility | 16.9% |
| Weighted average expected life (years) | 6.5 |
| Weighted average per share value of options | $3.30 |

---

A summary of the Company's stock option activity for the six months ended June 30, 2025 is presented below.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Stock Options** | **Shares** | **Weighted Average Exercise Price** | **Weighted Average Remaining in Contractual Term (Years)** | **Aggregate Intrinsic Value** |
| Outstanding December 31, 2024 |  |  |  |  |
| Granted | 103500 | $11.06 | 9.9 | $3795 |
| Exercised |  |  |  |  |
| Forfeited |  |  |  |  |
| Vested shares expired |  |  |  |  |
| Outstanding June 30, 2025 | 103500 | $11.06 | 9.9 | $3795 |
| Options exercisable at June 30, 2025 |  |  |  |  |

---

[**Table of Contents**](#TOC)

**Notes to Consolidated Financial Statements (Unaudited)**

**(Dollars in thousands)**

The following table summarizes information about the Company's nonvested stock option activity for the six months ended June 30, 2025:

---

| | | |
|:---|:---|:---|
| **Stock Options** | **Shares** | **Weighted Average Grant Date Fair Value** |
| Nonvested at December 31, 2024 |  |  |
| Granted | 103500 | $3.30 |
| Vested |  |  |
| Forfeited |  |  |
| Nonvested at June 30, 2025 | 103500 | $3.30 |

---

The Company amortizes the expense related to stock options as compensation expense over the vesting period. The Company recognized $0 and $0 in stock option expense during the three months ended June 30, 2025 and 2024, respectively, and $0 and $0 in stock option expense during the six months ended June 30, 2025 and 2024, respectively.

At June 30, 2025, the Company had $342 in estimated unrecognized compensation costs related to outstanding stock options that is expected to be recognized over a weighted average period of 5 years.

The following table summarizes information about the Company's restricted stock activity for the six months ended June 30, 2025:

---

| | | |
|:---|:---|:---|
| **Restricted Stock** | **Shares** | **Weighted Average Grant Date Fair Value** |
| Nonvested at December 31, 2024 |  |  |
| Granted | 41400 | $11.06 |
| Vested |  |  |
| Forfeited |  |  |
| Nonvested at June 30, 2025 | 41400 | $11.06 |

---

The Company amortizes the expense related to restricted stock awards as compensation expense over the vesting period. The Company recognized $0 and $0 in restricted stock expense during the three months ended June 30, 2025 and 2024, respectively and recognized $0 and $0 in restricted stock expense during the six months ended June 30, 2025 and 2024, respectively. At June 30, 2025, the Company had $458 of unrecognized compensation expense related to restricted stock shares that is expected to be recognized over a weighted average period of 5 years.

[**Table of Contents**](#TOC)

#### Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
**General**

Management's discussion and analysis is intended to enhance your understanding of our financial condition and results of operations. The financial information in this section is derived from the accompanying consolidated financial statements. You should read the financial information in this section in conjunction with the business and financial information contained in this report and in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission.

**Cautionary Note Regarding Forward-Looking Statements**

This report contains forward-looking statements, which can be identified by the use of words such as "estimate," "project," "believe," "intend," "anticipate," "assume," "plan," "seek," "expect," "will," "may," "should," "indicate," "would," "believe," "contemplate," "continue," "intend," "target" and words of similar meaning. These forward-looking statements include, but are not limited to:

● statements of our goals, intentions and expectations;

● statements regarding our business plans, prospects, growth and operating strategies;

● statements regarding the quality of our loan portfolio; and

● estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not undertake any obligation to update any forward-looking statements after the date of this report.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

● general economic conditions, either nationally or in our market area, which are worse than expected;

● changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses;

● our ability to access cost-effective funding;

● fluctuations in real estate values and in the conditions of the residential real estate, commercial real estate, and agricultural real estate markets;

● demand for loans and deposits in our market area;

● our ability to implement and change our business strategies;

● competition among depository and other financial institutions;

● inflation and changes in the interest rate environment that reduce our margins and yields, the fair value of our financial instruments, or our level of loan originations, or increase the level of defaults, losses and prepayments within our loan portfolio;

[**Table of Contents**](#TOC)

● adverse changes in the securities markets;

● changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, capital requirements and insurance premiums;

● changes in the quality or composition of our loan or investment portfolios;

● technological changes that may be more difficult or expensive than expected;

● the inability of third-party providers to perform as expected;

● a failure or breach of our operational or security systems or infrastructure, including cyberattacks;

● our ability to manage market risk, credit risk and operational risk;

● our ability to enter new markets successfully and capitalize on growth opportunities;

● changes in consumer spending, borrowing and savings habits;

● changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

● our ability to retain key employees; and

● changes in the financial condition, results of operations or future prospects of issuers of securities that we own.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Except as required by applicable law or regulation, the Company assumes no obligation and disclaims any obligation to update any forward-looking statements.

**Summary of Significant Accounting Policies**

A summary of our accounting policies is described in Note 1 of the Notes to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to our significant policies described in such Form 10-K under "Management's Discussion and Analysis of Financial Condition and Results of Operations."

**Comparison of Financial Condition at June 30, 2025 and December 31, 2024**

***Total Assets***. Total assets increased $10.3 million, or 5.2%, from $197.6 million at December 31, 2024 to $207.9 million at June 30, 2025. The increase was primarily comprised of an increase in debt securities of $3.2 million and an increase in net loans of $9.2 million funded by a $9.1 increase in deposits.

***Cash and Due from Banks***. Cash and due from banks decreased by $1.8 million, or 11.0%, to $14.5 million at June 30, 2025 compared to $16.3 million at December 31, 2024. This decrease was primarily due to the funding of the increase in loans and debt securities.

***Available-for-Sale Investment Securities***. Available-for-sale investment securities increased by $4.4 million, or 6.6%, to $71.1 million at June 30, 2025 from $66.7 million at December 31, 2024. The increase was a result of purchases of available-for-sale securities of $7.1 million during the six months ended June 30, 2025 which was partially offset by principal payments on mortgage-backed securities and collateralized mortgage obligation securities and by maturities. The market

[**Table of Contents**](#TOC)

value adjustment on available-for-sale investment securities improved by $1.4 million during the six months ended June 30, 2025 due to decreases in market interest rates.

***Held-to-Maturity Investment Securities***. Held-to-maturity investment securities decreased by $1.3 million, or 15.9%, to $6.9 million at June 30, 2025 from $8.2 million at December 31, 2024, due to maturities. There were no purchases of held-to-maturity securities during the six months ended June 30, 2025.

***Loans, Net***. Loans, net, increased $9.2 million or 9.6%, to $105.5 million at June 30, 2025 compared to $96.3 million at December 31, 2024. One- to four-family residential mortgage loans increased $279,000, or 0.4%, from $65.7 million at December 31, 2024 to $66.0 million at June 30, 2025. Commercial real estate loans increased $7.2 million, or 33.6%, from $21.4 million at December 31, 2024 to $28.6 million at June 30, 2025. Construction and land development loans decreased by $279,000, or 17.0%, from $1.6 million at December 31, 2024 to $1.4 million at June 30, 2025. Commercial loans increased $1.4 million, or 29.8%, from $4.7 million at December 31, 2024 to $6.1 million at June 30, 2025. Consumer loans increased $677,000, or 19.5%, from $3.5 million at December 31, 2024 to $4.2 million at June 30, 2025.

During the six months ended June 30, 2025, the Company originated $19.7 million in loans consisting of $3.8 million in one-to four-family residential mortgage loans, $12.3 million in commercial real estate loans, $2.0 million in commercial loans and $1.6 million in consumer loans.

***Deposits***. Deposits increased $9.1 million, or 5.4%, from $159.6 million at December 31, 2024 to $168.7 million at June 30, 2025. Non-maturity deposits increased $4.7 million, or 5.2%, from $91.0 million at December 31, 2024 to $95.7 million at June 30, 2025. Time deposits increased by $4.4 million, or 6.4% from $68.6 million at December 31, 2024 to $73.0 at June 30, 2025. The majority of the time deposit increase were into certificates of deposit with maturities of less than one year.

***Total Stockholders' Equity***. Total stockholders' equity was $37.8 million at June 30, 2025, an increase of $1.1 million or 3.0%, from $36.7 million at December 31, 2024. The increase is due to net income of $723,000, a positive change in accumulated other comprehensive income of $1.0 million. In addition, the Company purchased $648,000 of treasury shares during the six months ended June 30, 2025.

[**Table of Contents**](#TOC)

***Average Balances and Yields***. The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects are immaterial. Average balances are daily average balances. Non-accrual loans are included in average balances only. Average yields include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Net deferred loan fees/costs are immaterial.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
|  | **Average**<br>**Outstanding**<br>**Balance** | <br>**Interest** | <br>**Average**<br>**Yield/Rate** | **Average**<br>**Outstanding**<br>**Balance** | <br>**Interest** | <br>**Average**<br>**Yield/Rate** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **Interest-earning assets:** |  |  |  |  |  |  |
| Cash and cash equivalents | $17971 | $170 | 3.79% | $18998 | $227 | 4.77% |
| Available-for-sale debt securities | 70304 | 578 | 3.29 | 68853 | 529 | 3.07 |
| Held-to-maturity debt securities | 7747 | 89 | 4.62 | 8888 | 103 | 4.65 |
| Equity securities | 321 |  |  | 143 |  |  |
| Loans, net | 101619 | 1417 | 5.58 | 91199 | 1132 | 4.97 |
| Federal Home Loan Bank stock | 354 | 4 | 4.66 | 347 | 5 | 5.49 |
| &nbsp;&nbsp;Total interest-earning assets | 198316 | 2258 | 4.56 | 188428 | 1996 | 4.24 |
| Noninterest-earning assets | 9785 |  |  | 10120 |  |  |
| &nbsp;&nbsp;Total assets | $208101 |  |  | $198548 |  |  |
| **Interest-bearing liabilities:** |  |  |  |  |  |  |
| Regular savings deposits | $34595 | 12 | 0.14% | $31367 | 13 | 0.16% |
| NOW savings deposits | 21201 | 13 | 0.24 | 19101 | 12 | 0.26 |
| Money market deposits | 25560 | 103 | 1.62 | 28481 | 117 | 1.64 |
| Time deposits | 71954 | 685 | 3.80 | 63942 | 606 | 3.79 |
| &nbsp;&nbsp;Total interest-bearing deposits | 153310 | 813 | 2.12 | 142891 | 748 | 2.09 |
| Federal Home Loan Bank advances |  |  |  |  |  |  |
| Other interest-bearing liabilities |  |  |  |  |  |  |
| &nbsp;&nbsp;Total interest-bearing liabilities | 153310 | 813 | 2.12% | 142891 | 748 | 2.09 |
| Noninterest-bearing demand deposits | 22162 |  |  | 25295 |  |  |
| Other noninterest-bearing liabilities | 3276 |  |  | 3108 |  |  |
| &nbsp;&nbsp;Total liabilities | 178748 |  |  | 171294 |  |  |
| Total equity capital | 29353 |  |  | 27254 |  |  |
| &nbsp;&nbsp;Total liabilities and equity capital | $208101 |  |  | $198548 |  |  |
| Net interest income |  | $1445 |  |  | $1248 |  |
| Net interest rate spread <sup>(1)</sup> |  |  | 2.44% |  |  | 2.15% |
| Net interest-earning assets <sup>(2)</sup> | $45006 |  |  | $45537 |  |  |
| Net interest margin <sup>(3)</sup> |  |  | 2.91% |  |  | 2.65% |
| Average interest-earning assets to interest-bearing liabilities | 129.36% |  |  | 131.87% |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Net interest margin represents net interest income annualized divided by average total interest-earning assets.

[**Table of Contents**](#TOC)

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended June 30, 2025 vs. 2024** | **Three Months Ended June 30, 2025 vs. 2024** | **Three Months Ended June 30, 2025 vs. 2024** |
|  | **Increase (Decrease) Due to:** | **Increase (Decrease) Due to:** | |
|  | **Volume** | **Rate** | **Total Increase**<br>**(Decrease)** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| **Interest-earning assets:** |  |  |  |
| Cash and cash equivalents | $(12) | $(45) | $(57) |
| Available-for-sale debt securities | 11 | 38 | 49 |
| Held-to-maturity debt securities | (13) | (1) | (14) |
| Equity securities |  |  |  |
| Loans, net | 130 | 155 | 285 |
| Federal Home Loan Bank stock |  | (1) | (1) |
| &nbsp;&nbsp;Total interest-earning assets | 116 | 146 | 262 |
| **Interest-bearing liabilities:** |  |  |  |
| Regular savings deposits | 1 |  | 1 |
| NOW savings deposits |  | (1) | (1) |
| Money market deposits | (12) | (2) | (14) |
| Time deposits | 76 | 3 | 79 |
| &nbsp;&nbsp;Total deposits | 65 |  | 65 |
| Federal Home Loan Bank advances |  |  |  |
| Other interest-bearing liabilities | *—* |  |  |
| &nbsp;&nbsp;Total interest-bearing liabilities | 65 |  | 65 |
| Change in net interest income | $51 | $146 | $197 |

---

**Comparison of Operating Results for the three months Ended June 30, 2025 and 2024**

***General***. Net income for the three months ended June 30, 2025 was $438,000, an increase of $164,000, or 59.9%, compared to $274,000 for the three months ended June 30, 2024.

***Interest Income***. Interest income for the three months ended June 30, 2025 increased by $262,000, or 13.1%, from $2.0 million for the three months ended June 30, 2024 to $2.3 million for the three months ended June 30, 2025. This increase is a result of a $285,000, or 25.2%, increase in loan interest and fees, and a $49,000, or 9.3%, increase in interest from available-for-sale investments, partially offset by a $57,000, or 25.1%, decrease in interest on cash and cash equivalents.

The average balance of loans during the three months ended June 30, 2025, increased by $10.4 million or 11.4%, from the average balance for the three months ended June 30, 2024, while the average yield on loans increased to 5.58% for the three months ended June 30, 2025, from 4.97% for the three months ended June 30, 2024. The increase in average yield on loans was due to higher market interest rates and increases in higher yielding commercial loans.

The average balance of available-for-sale debt securities increased by $1.4 million, or 2.0%, to $70.3 million for the three months ended June 30, 2025, from $68.9 million for the three months ended June 30, 2024, while the average yield on available-for-sale debt securities increased to 3.29% for the three months ended June 30, 2025 from 3.07% for the three months ended June 30, 2024. This increase in yield was due to higher market interest rates.

The average balance of held-to-maturity debt securities decreased by $1.2 million, or 13.5%, to $7.7 million for the three months ended June 30, 2025, from $8.9 million for the six months ended June 30, 2024, while the average yield on held-to-maturity debt securities decreased to 4.62% for the three months ended June 30, 2025, from 4.65% for the three months ended June 30, 2024. This decrease in yield due to maturity of higher yielding investments during the current period.

***Interest Expense***. Interest expense for the three months ended June 30, 2025 increased by $65,000, or 8.7%, to $813,000 for the three months ended June 30, 2025 from $748,000 for the three months ended June 30, 2024. This increase is a result of higher market interest rates. The Company experienced some upward competitive rate pressure in savings and NOW

[**Table of Contents**](#TOC)

accounts but rates for money market and time deposits have been the most rate sensitive with upward rate adjustment pressure.

The average balance of regular savings deposits increased by $3.2 million, or 10.2%, to $34.6 million for the three months ended June 30, 2025, from $31.4 million for the three months ended June 30, 2024, while the average rate on regular savings deposits decreased to 0.14% for the three months ended June 30, 2025, from 0.16% for the three months ended June 30, 2024.

The average balance of NOW savings deposits increased by $2.1 million, or 11.0%, to $21.2 million for the three months ended June 30, 2025, from $19.1 million for the three months ended June 30, 2024, while the average rate on NOW savings deposits decreased to 0.24% for the three months ended June 30, 2025, from 0.26% for the three months ended June 30, 2024.

The average balance of money market deposits decreased by $2.9, or 10.2%, to $25.6 million for the three months ended June 30, 2025, from $28.5 million for the three months ended June 30, 2024, while the average rate on money market deposits decreased to 1.62% for the three months ended June 30, 2025, from 1.64% for the three months ended June 30, 2024. This decrease in rate and balance resulted from a shift of higher balance money market accounts into higher yielding certificates of deposits.

The average balance of time deposits increased by $8.1 million, or 12.7%, to $72.0 million for the three months ended June 30, 2025, from $63.9 million for the three months ended June 30, 2024, while the average rate on time deposits increased to 3.80% for the three months ended June 30, 2025, from 3.79% for the three months ended June 30, 2024. This increase in rate resulted from higher market interest rates.

***Net Interest Income***. Net interest income for the three months ended June 30, 2025 was $1.4 million, an increase of $197,000, or 15.8%, from the $1.2 million for the three months ended June 30, 2024. The increase was due to the net interest rate spread increasing to 2.44% for the three months ended June 30, 2025, from 2.15% for the three months ended June 30, 2024 despite a decrease in average net interest earning assets of $531,000, or 1.2%, to $45.0 million for the three months ended June 30, 2025, from $45.5 million for the three months ended June 30, 2024.

***Provision for Credit Losses***. The provision for credit losses for the three months ended June 30, 2025, was $57,000 compared to $7,000 for the three months ended June 30, 2024. The increase was due to increase in loan balances, and no specific reserves were recorded during the quarter. The allowance for credit losses was $813,000, or 0.76% of total loans, at June 30, 2025.

***Noninterest Income***. Noninterest income increased $17,000, or 9.3%, to $199,000 for the three months ended June 30, 2025, compared to $182,000 for the three months ended June 30, 2024. Commission income increased $4,000, Customer service fee income increased $9,000, other noninterest income increased by $5,000 and loan servicing decreased by $1,000.

***Noninterest Expense***. Noninterest expense decreased $28,000, or 2.6%, to $1.0 million for the three months ended June 30, 2025, from $1.1 million for the three months ended June 30, 2024. During the three months ended June 30, 2025, salaries and benefits increased $34,000, occupancy expenses increased $13,000, printing and office supplies increased by $12,000, deposit insurance premiums increased $2,000 while depreciation decreased by $8,000, data processing expense decreased by $73,000, professional fees decreased $5,000 and Other non-interest expense decreased by $3,000.

***Provision for Income Taxes***. The provision for income taxes increased $28,000, or 32.6%, to $114,000 for the three months ended June 30, 2025, compared to $86,000 for the three months ended June 30, 2024. The increase was a primarily due to a $192,000, or 53.3% increase in income before taxes for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

[**Table of Contents**](#TOC)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
|  | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
|  | **Average**<br>**Outstanding**<br>**Balance** | <br>**Interest** | <br>**Average**<br>**Yield/Rate** | **Average**<br>**Outstanding**<br>**Balance** | <br>**Interest** | <br>**Average**<br>**Yield/Rate** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **Interest-earning assets:** |  |  |  |  |  |  |
| Cash and cash equivalents | $17668 | 331 | 3.75% | $18676 | $443 | 4.75% |
| Available-for-sale debt securities | 69246 | 1122 | 3.24 | 67722 | 1012 | 2.99 |
| Held-to-maturity debt securities | 7905 | 182 | 4.61 | 8917 | 207 | 4.64 |
| Equity securities | 323 | 3 | 0.87 | 129 | 2 | 1.94 |
| Loans, net | 100289 | 2733 | 5.45 | 90979 | 2205 | 4.85 |
| Federal Home Loan Bank stock | 351 | 8 | 4.69 | 347 | 10 | 5.52 |
| &nbsp;&nbsp;Total interest-earning assets | 195782 | 4379 | 4.47% | 186770 | 3879 | 4.15% |
| Noninterest-earning assets | 9832 |  |  | 10009 |  |  |
| &nbsp;&nbsp;Total assets | $205614 |  |  | $196779 |  |  |
| **Interest-bearing liabilities:** |  |  |  |  |  |  |
| Regular savings deposits | $31992 | $25 | 0.15% | $31458 | $25 | 0.16% |
| NOW savings deposits | 20450 | 24 | 0.24 | 18775 | 24 | 0.26 |
| Money market deposits | 26003 | 212 | 1.63 | 27705 | 219 | 1.58 |
| Time deposits | 70828 | 1365 | 3.85 | 62650 | 1129 | 3.60 |
| &nbsp;&nbsp;Total interest-bearing deposits | 149273 | 1626 | 2.18% | 140588 | 1397 | 1.99% |
| Federal Home Loan Bank advances |  |  |  |  |  |  |
| Other interest-bearing liabilities |  |  |  |  |  |  |
| &nbsp;&nbsp;Total interest-bearing liabilities | 149273 | 1626 | 2.18% | 140588 | 1397 | 1.99% |
| Noninterest-bearing demand deposits | 24106 |  |  | 25707 |  |  |
| Other noninterest-bearing liabilities | 3248 |  |  | 3143 |  |  |
| &nbsp;&nbsp;Total liabilities | 176627 |  |  | 169438 |  |  |
| Total equity capital | 28987 |  |  | 27341 |  |  |
| &nbsp;&nbsp;Total liabilities and equity capital | $205614 |  |  | $196779 |  |  |
| Net interest income |  | $2753 |  |  | $2482 |  |
| Net interest rate spread <sup>(1)</sup> |  |  | 2.29% |  |  | 2.16% |
| Net interest-earning assets <sup>(2)</sup> | $46509 |  |  | $46182 |  |  |
| Net interest margin <sup>(3)</sup> |  |  | 2.81% |  |  | 2.66% |
| Average interest-earning assets to interest-bearing liabilities | 131.16% |  |  | 132.85% |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Net interest margin represents net interest income annualized divided by average total interest-earning assets.

---

| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended June 30, 2025 vs. 2024** | **Six Months Ended June 30, 2025 vs. 2024** | **Six Months Ended June 30, 2025 vs. 2024** |
|  | **Increase (Decrease) Due to:** | **Increase (Decrease) Due to:** | |
|  | **Volume** | **Rate** | **Total Increase**<br>**(Decrease)** |
|  | **(In thousands)** | **(In thousands)** | **(In thousands)** |
| **Interest-earning assets:** |  |  |  |
| Cash and cash equivalents | $(24) | $(88) | $(112) |
| Available-for-sale debt securities | 23 | 87 | 110 |
| Held-to-maturity debt securities | (24) | (1) | (25) |
| Equity securities | 2 | (1) | 1 |
| Loans, net | 225 | 303 | 528 |
| Federal Home Loan Bank stock |  | (2) | (2) |
| &nbsp;&nbsp;Total interest-earning assets | 202 | 298 | 500 |
| **Interest-bearing liabilities:** |  |  |  |
| Regular savings deposits |  |  |  |
| NOW savings deposits | 2 | (2) |  |
| Money market deposits | (14) | 7 | (7) |
| Time deposits | 147 | 89 | 236 |

---

[**Table of Contents**](#TOC)

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;Total deposits | 135 | 94 | 229 |
| Federal Home Loan Bank advances |  |  |  |
| Other interest-bearing liabilities | *—* |  |  |
| &nbsp;&nbsp;Total interest-bearing liabilities | 135 | 94 | 229 |
| Change in net interest income | $67 | $204 | $271 |

---

**Comparison of Operating Results for the six months Ended June 30, 2025 and 2024**

***General***. Net income for the six months ended June 30, 2025 was $723,000, an increase of $173,000, or 31.5%, compared to $550,000 for the six months ended June 30, 2024 as a result of net interest margin increasing by $271,000, non-interest expenses decreasing by $53,000 partially offset by non-interest income decreasing by $18,000 and provision for income taxes increasing by $53,000.

***Interest Income***. Interest income for the six months ended June 30, 2025 increased by $500,000, or 12.8%, from $3.9 million for the six months ended June 30, 2024 to $4.4 million for the six months ended June 30, 2025. This increase is a result of a $528,000, or 23.9%, increase in loan interest and fees, and a $110,000, or 10.8%, increase in interest from debt securities, partially offset by a $112,000, or 25.3%, decrease in interest on cash and cash equivalents.

The average balance of loans during the six months ended June 30, 2025, increased by $9.3 million or 10.2%, from the average balance for the six months ended June 30, 2024, while the average yield on loans increased to 5.45% for the six months ended June 30, 2025, from 4.85% for the six months ended June 30, 2024. The increase in average yield on loans was due to higher market interest rates.

The average balance of available-for-sale debt securities increased by $1.5 million, or 2.2%, to $69.2 million for the six months ended June 30, 2025, from $67.7 million for the six months ended June 30, 2024, while the average yield on available-for-sale debt securities increased to 3.24% for the six months ended June 30, 2025 from 2.99% for the six months ended June 30, 2024. This increase in yield was due to higher market interest rates.

The average balance of held-to-maturity debt securities decreased by $1.0 million, or 11.2%, to $7.9 million for the six months ended June 30, 2025, from $8.9 million for the six months ended June 30, 2024, while the average yield on held-to-maturity debt securities decreased to 4.61% for the six months ended June 30, 2025, from 4.64% for the six months ended June 30, 2024. This decrease in yield due to maturity of higher yielding investments during the current period.

***Interest Expense***. Interest expense for the six months ended June 30, 2025 increased by $229,000, or 16.4%, to $1.6 million for the six months ended June 30, 2025 from $1.4 million for the six months ended June 30, 2024. This increase is a result of higher market interest rates. The Company experienced some upward competitive rate pressure in savings and NOW accounts but rates for money market and time deposits have been the most rate sensitive with upward rate adjustment pressure.

The average balance of regular savings deposits increased by $534,000, or 1.7%, to $32.0 million for the six months ended June 30, 2025, from $31.5 million for the six months ended June 30, 2024, while the average rate on regular savings deposits decreased to 0.15% for the six months ended June 30, 2025, from 0.16% for the six months ended June 30, 2024.

The average balance of NOW savings deposits increased by $1.7 million, or 9.0%, to $20.5 million for the six months ended June 30, 2025, from $18.8 million for the six months ended June 30, 2024, while the average rate on NOW savings deposits decreased to 0.24% for the six months ended June 30, 2025, from 0.26% for the six months ended June 30, 2024.

The average balance of money market deposits decreased by $1.7 million, or 6.1%, to $26.0 million for the six months ended June 30, 2025, from $27.7 million for the six months ended June 30, 2024, while the average rate on money market deposits increased to 1.63% for the six months ended June 30, 2025, from 1.58% for the six months ended June 30, 2024. This increase in rate resulted from higher market interest rates.

[**Table of Contents**](#TOC)

The average balance of time deposits increased by $8.1 million, or 12.9%, to $70.8 million for the six months ended June 30, 2025, from $62.7 million for the six months ended June 30, 2024, while the average rate on time deposits increased to 3.85% for the six months ended June 30, 2025, from 3.60% for the six months ended June 30, 2024. This increase in rate resulted from higher market interest rates.

***Net Interest Income***. Net interest income for the six months ended June 30, 2025 was $2.8 million, an increase of $271,000, or 10.9%, from the $2.5 million for the six months ended June 30, 2024. The increase was due to an increase in average net interest earning assets of $327,000, or 0.7%, to $46.5 million for the six months ended June 30, 2025, from $46.2 million for the six months ended June 30, 2024 while the net interest rate spread increased to 2.29% for the six months ended June 30, 2025, from 2.16% for the six months ended June 30, 2024.

***Provision for Credit Losses***. The provision for credit losses for the six months ended June 30, 2025, was $113,000 compared to $33,000 for the six months ended June 30, 2024. The increase was due to increase in loan balances, and no specific reserves were recorded during the quarter. The allowance for credit losses was $813,000, or 0.76% of total loans, at June 30, 2025.

***Noninterest Income***. Noninterest income decreased $18,000, or 4.9%, to $350,000 for the six months ended June 30, 2025, compared to $368,000 for the six months ended June 30, 2024. Commission income decreased $5,000, Customer service fee income increased $3,000, other noninterest income decreased by $12,000 and loan servicing decreased by $3,000.

***Noninterest Expense***. Noninterest expense decreased $53,000, or 2.5%, to $2.1 million for the six months ended June 30, 2025, from $2.1 million for the six months ended June 30, 2024. During the six months ended June 30, 2025, salaries and benefits increased $1,000, occupancy expenses increased $22,000, printing and office supplies increased $10,000, deposit insurance premiums increased by $5,000, while depreciation decreased by $14,000, data processing expense decreased by $66,000, professional fees decreased $8,000, and other non-interest expenses decreased by $3,000.

***Provision for Income Taxes***. The provision for income taxes increased $53,000, or 36.8%, to $197,000 for the six months ended June 30, 2025, compared to $144,000 for the six months ended June 30, 2024. The increase was a primarily due to a $226,000, or 32.6% increase in income before taxes for the six months ended June 30, 2025 compared to six months ended June 30, 2024.

**Liquidity and Capital Resources**

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We also have the ability to borrow from the Federal Home Loan Bank of Chicago and from a correspondent bank. At June 30, 2025, we had no borrowings from the Federal Home Loan Bank of Chicago but had the capacity to borrow $47.6 million. At June 30, 2025, we had no borrowings from correspondent banks but had the capacity to borrow $9.0 million.

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and short-term investments. The levels of these assets depend on our operating, financing, lending, and investing activities during any given period. For further information, see the consolidated statements of cash flows contained in the consolidated financial statements appearing elsewhere in this report.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. For the six months ended June 30, 2025, cash flows from operations, investing, and financial activities resulted in a net decrease in cash and cash equivalents of $1.8 million. Net cash provided from operating activities amounted to $949,000, primarily due to net income of $723,000, $18,000 from net amortization of premiums and discount from available-for-sale debt securities, $38,000 from the decrease in other assets and income tax

[**Table of Contents**](#TOC)

receivable, and $28,000 from the increase in interest payable and other liabilities, partially offset by earnings of $52,000 on cash surrender value of life insurance. Net cash provided by financing activities amounted to $8.5 million, primarily due a net increase in certificates of deposit of $4.5 million and an increase in demand deposits, money markets, NOW and savings accounts of $4.7 million partially offset by $648,000 of treasury stock purchased. Net cash used in investing activities amounted to $11.2 million, primarily due to purchases of available-for-sale investments of $7.1 million, an increase in loans of $9.4 million, partially offset with proceeds from maturities of available-for-sale investment securities of $4.0 million and maturities of held-to-maturity debt securities of $1.3 million.

We believe we maintain a strong liquidity position and are committed to maintaining it. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained.

PFS Bancorp, Inc. is a separate legal entity from Peru Federal Savings Bank and must provide for its own liquidity to pay its operating expenses and other financial obligations. The Company's primary source of income is dividends received from the Bank. The amount of dividends that the Bank may declare and pay to the Company is governed by applicable bank regulations. At June 30, 2025, the Company (on an unconsolidated basis) had liquid assets of $6.8 million.

At June 30, 2025, the Bank was categorized as well-capitalized under regulatory capital guidelines. Management is not aware of any conditions or events since the most recent notification that would change our category. For further information, see note 12 to the notes to consolidated financial statements appearing elsewhere in this report.

**Off-Balance Sheet Arrangements**

At June 30, 2025, we had $6.2 million of outstanding commitments to originate loans, $855,000 of which represents the balance of remaining funds to be disbursed on construction loans in process, $3.9 million in unused commercial line of credit commitments, $1.1 million of unfunded home equity loans, $50,000 of unfunded consumer line of credit, and $238,000 of commitments to fund new closed-end residential real estate loans. At June 30, 2025, certificates of deposit that are scheduled to mature on or before June 30, 2026 totaled $58.9 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed.

**Management of Market Risk**

***General*.** Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets and liabilities are sensitive to changes in interest rates. Therefore, a principal part of our operations is to manage interest rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates. All directors participate in discussions during the regular board meetings evaluating the interest rate risk inherent in our assets and liabilities, and the level of risk that is appropriate. These discussions take into consideration our business strategy, operating environment, capital, liquidity and performance objectives consistent with the policy and guidelines approved by them.

Our asset/liability management strategy attempts to manage the impact of changes in interest rates on net interest income, our primary source of earnings. Among the techniques we are using to manage interest rate risk are:

● maintaining capital levels that exceed the thresholds for well-capitalized status under federal regulations;

● maintaining a high level of liquidity;

● growing our core deposit accounts;

● managing our investment securities portfolio so as to reduce the average maturity and effective life of the portfolio; and

● continuing to diversify our loan portfolio by adding more commercial real estate loans and commercial loans, which typically have shorter maturities and/or balloon payments.

[**Table of Contents**](#TOC)

By following these strategies, we believe that we are better positioned to react to increases and decreases in market interest rates.

We have not engaged in hedging activities, such as engaging in futures or options. We do not anticipate entering into similar transactions in the future.

***Economic Value of Equity*.** We compute amounts by which the net present value of our assets and liabilities (economic value of equity or "EVE") would change in the event of a range of assumed changes in market interest rates. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumptions that the United States Treasury yield curve increases instantaneously by 100, 200, and 300 basis point increments or decreases instantaneously by 100, 200, and 300 basis point increments, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.

The following table sets forth, as of June 30, 2025 the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve. The estimated changes presented in the table are within Board of Director-approved policy guidelines.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **At June 30, 2025** | **At June 30, 2025** | **At June 30, 2025** | **At June 30, 2025** | **At June 30, 2025** | **At June 30, 2025** |
| | | **Estimated Increase (Decrease) in** | **Estimated Increase (Decrease) in** | **EVE as a Percentage of Present**  | **EVE as a Percentage of Present**  |
| | | **EVE** | **EVE** | **Value of Assets** <sup>(3)</sup> | **Value of Assets** <sup>(3)</sup> |
| <br>**Change in Interest**<br>**Rates (basis points)** <sup>(1)</sup> | <br>**Estimated** <br>**EVE** <sup>(2)</sup> | <br>**Amount** | <br>**Percent** | <br>**EVE Ratio** <sup>(4)</sup> | **Increase**<br>**(Decrease)** <br>**(basis points)** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| 300 | 33572 | (13614) | (28.85) | 18.66 | (455.00) |
| 200 | 38443 | (8743) | (18.53) | 20.48 | (273.00) |
| 100 | 43125 | (4061) | (8.61) | 22.08 | (113.00) |
| Level | 47186 |  |  | 23.21 |  |
| (100) | 48314 | 1128 | 2.39 | 23.12 | (9.00) |
| (200) | 48661 | 1475 | 3.13 | 22.67 | (54.00) |
| (300) | 47300 | 114 | 0.24 | 21.56 | (165.00) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Assumes an immediate uniform change in interest rates at all maturities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) EVE is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) EVE Ratio represents EVE divided by the present value of assets.

[**Table of Contents**](#TOC)

***Change in Net Interest Income.*** The following table sets forth, at June 30, 2025, the calculation of the estimated changes in our net interest income ("NII") that would result from the designated immediate changes in the United States Treasury yield curve. The estimated changes presented in the table are within Board of Director-approved policy guidelines.

---

| | | |
|:---|:---|:---|
| **At June 30, 2025** | **At June 30, 2025** | **At June 30, 2025** |
| **Change in Interest Rates**<br>**(basis points)** <sup>(1)</sup> | **Net Interest Income Year 1** <br>**Forecast** | **Year 1 Change from** <br>**Level** |
|  | **(Dollars in thousands)** |  |
| 300 | $6011 | (3.13)% |
| 200 | 6071 | (2.16)% |
| 100 | 6139 | (1.06)% |
| Level | 6205 | —% |
| (100) | 6201 | (0.06)% |
| (200) | 6248 | 0.69% |
| (300) | 6182 | (0.37)% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Assumes an immediate uniform change in interest rates at all maturities.

Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurement. Modeling changes in EVE and NII require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. For instance, the EVE and NII tables presented above assume that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. However, the shape of the yield curve changes constantly and the value and pricing of our assets and liabilities, including our deposits, may not closely correlate with changes in market interest rates. Accordingly, although the EVE and NII tables may provide an indication of our interest rate risk exposure at a particular point in time and in the context of a particular yield curve, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on EVE and NII will differ from actual results.

EVE and net interest NII calculations also may not reflect the fair values of financial instruments. For example, decreases in market interest rates can increase the fair values of our loans, deposits and borrowings.

#### Item 3. Quantitative and Qualitative Disclosures About Market Risk
The information in Item 2 under "Management's Discussion and Analysis of Financial Condition and Results of Operations – Management of Market Risk" is incorporated in this Item 3 by reference.

#### Item 4. Controls and Procedures
An evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of June 30, 2025. Based on that evaluation, the Company's management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company's disclosure controls and procedures were effective.

During the quarter ended June 30, 2025, there have been no changes in the Company's internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

[**Table of Contents**](#TOC)

#### Part II – Other Information

#### Item 1. Legal Proceedings
The Company is not subject to any pending legal proceedings. The Bank is subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Company's consolidated financial condition or results of operations.

#### Item 1A. Risk Factors
Not applicable, as the Company is a smaller reporting company.

#### Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
The following table presents information regarding the Company's stock repurchase activity during the quarter ended June 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total Number of Shares Purchased** | **Average Price Per Share** | **Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)** | **Maximum Number of Shares That May Yet be Purchased Under the Plans or Programs** |
| April 1, 2025 through April 30, 2025 | 2871 | $10.14 | 2871 |  |
| May 1, 2025 through May 31, 2025 | 34738 | $10.47 | 34738 |  |
| June 1, 2025 through June 30, 2025 | 5624 | $10.94 | 5624 |  |
| Total | 43233 | $10.54 | 43233 | 104532 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) On December 4, 2024, the Company authorized a stock repurchase program for up to 172,500 shares of common stock, representing 10% of shares then outstanding. The program was publicly announced on December 5, 2024. The Company intends to conduct repurchases on the open market, including y means of a trading plan adopted under SEC Rule 10b5-1, subject to market conditions and other factors. There is no guarantee as to the number of shares that the Company may ultimately repurchase. The Company may suspend or discontinue the program at any time.

#### Item 3. Defaults Upon Senior Securities
Not applicable.

#### Item 4. Mine Safety Disclosures
Not applicable.

#### Item 5. Other Information
During the three months ended June 30, 2025, none of the Company's directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company's securities that was intended to satisfy the affirmative defense conditions of SEC Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement" (as such term is defined in Item 408 of SEC regulations S-K).

[**Table of Contents**](#TOC)

#### Item 6. Exhibits

---

| | |
|:---|:---|
| 3.1 | [Articles of Incorporation of PFS Bancorp, Inc. <sup>(1)</sup>](https://www.sec.gov/Archives/edgar/data/1967656/000110465923031144/tm238313d1_ex3-1.htm) |
| 3.2 | [Bylaws of PFS Bancorp, Inc. <sup>(2)</sup>](https://www.sec.gov/Archives/edgar/data/1967656/000110465923031144/tm238313d1_ex3-2.htm) |
| 31 | [Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](pfsb-20250630xex31.htm) |
| 32 | [Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](pfsb-20250630xex32.htm) |
| 101 | The following materials for the quarter ended June 30, 2025, formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Stockholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Incorporated by reference to Exhibit 3.1 to the Company's Registration Statement on Form S 1, as amended (Commission File No. 333 270452), initially filed on March 10, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form S 1, as amended (Commission File No. 333 270452), initially filed on March 10, 2023.

[**Table of Contents**](#TOC)

#### SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| a<br>| r<br>|  |
|  |  | **PFS BANCORP, INC.** |
| Date: August 8, 2025 |  | ![Graphic](pfsb-20250630x10q008.jpg) |
|  |  | Eric J. Heagy |
|  |  | President, Chief Executive Officer |
|  |  | and Chief Financial Officer |

---

## Ex-31

**Exhibit 31**

**Certification of Chief Executive Officer and Chief Financial Officer**

**Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Eric J. Heagy, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of PFS Bancorp, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent function:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | |
|:---|:---|
| <br>Date: August 8, 2025 | ![Graphic](pfsb-20250630xex31001.jpg) |
|  | Eric J. Heagy |
|  | President, Chief Executive Officer |
|  | and Chief Financial Officer |

---

------

## Ex-32

**Exhibit 32**

**Certification of Chief Executive Officer and Chief Financial Officer**

**Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

Eric J. Heagy, President, Chief Executive Officer and Chief Financial Officer of PFS Bancorp, Inc. (the "Company"), certify in his capacity as an officer of the Company that he has reviewed the Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (the "Report") and that to the best of his knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. the Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| <br>Date: August 8, 2025 | ![Graphic](pfsb-20250630xex32001.jpg) |
|  | Eric J. Heagy |
|  | President, Chief Executive Officer and |
|  | Chief Financial Officer |

---

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

------