{"url_path":"/sec/cpbi/10-k/2026/item-1","section_key":"item-1","section_title":"Item 1 Business.","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-18","source_url":"https://www.sec.gov/Archives/edgar/data/1979332/0001193125-26-275962-index.html","accession_number":"0001193125-26-275962","cik":"0001979332","ticker":"CPBI","issuer_name":"Central Plains Bancshares, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1979332/0001193125-26-275962-index.html","primary_entity_key":"0001979332","primary_entity_name":"Central Plains Bancshares, Inc."},"word_count":16829,"has_tables":true,"body_markdown":"Item 1. Business.\n\nCentral Plains Bancshares, Inc.\n\nCentral Plains Bancshares, Inc. (the “Company” or “Central Plains Bancshares”) is a Maryland corporation and owns 100% of the outstanding common stock of Home Federal Savings and Loan Association of Grand Island (“Home Federal Savings”). On October 19, 2023, we completed our initial public offering of common stock in connection with the mutual-to-stock conversion of Home Federal Savings. The Company sold 4,130,815 shares of common stock at $10.00 per share in its subscription offering for gross proceeds of approximately $41.3 million. Since the completion of our initial public offering, we have not engaged in any significant business activity other than owning the common stock of and having savings deposits in Home Federal Savings. At March 31, 2026, we had consolidated assets of $558.6 million, consolidated deposits of $460.4 million and consolidated stockholders’ equity of $89.0 million.\n\nOur principal executive offices are located at 221 South Locust Street, Grand Island, Nebraska 68801, where our main administrative functions are conducted. Our telephone number at that address is (308) 382-4000.\n\nHome Federal Savings\n\nOriginally chartered in 1935, Home Federal Savings, which operates under the name “Home Federal Bank,” is a federally-chartered stock savings association headquartered in Grand Island, Nebraska. Our main office is located at 221 South Locust Street, Grand Island, Nebraska 68801, and our telephone number at that address is (308) 382-4000. Our website address is www.homefederalne.bank. Information on our website is not incorporated into this annual report and should not be considered part of this annual report.\n\nAvailable Information\n\nCentral Plains Bancshares, Inc. is a public company, and files current, quarterly and annual reports with the Securities and Exchange Commission. These reports and any amendments to these reports are available for free on our website, www.homefederalne.bank as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. Information on our website should not be considered a part of this Annual Report on Form 10-K. The Securities and Exchange Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC (http://www.sec.gov).\n\nGeneral\n\nWe conduct our operations from our main office in Grand Island, Nebraska, eight branch offices located in Grand Island, Hastings, Holdrege, Lexington, Lincoln and Superior, Nebraska, and a drive-up facility in Grand Island, Nebraska. We consider our primary market area for deposit gathering to be the Nebraska counties of Adams, Dawson, Hall, Lancaster, Nuckolls and Phelps.\n\nOur business consists primarily of accepting deposits from the general public and investing those deposits, together with funds generated from operations, in one- to four-family residential mortgage loans secured by properties located in our primary market area, as well as commercial real estate loans. To a lesser extent, we also originate commercial non-real estate loans, multi-family residential real estate loans, construction and land development loans, agricultural real estate and non-real estate loans and consumer loans. We offer a variety of deposit accounts including checking accounts, savings accounts and certificate of deposit accounts. In addition, we offer electronic banking services including mobile banking, on-line banking and bill pay, and electronic funds transfer via Zelle®. We have not needed to use significant levels of borrowings to fund our operations in recent years.\n\nHome Federal Savings is subject to comprehensive regulation and examination by the Office of the Comptroller of the Currency (the “OCC”).\n\nMarket Area\n\nWe serve southcentral Nebraska through our network of nine office locations, which cover a relatively broad area of southcentral Nebraska. We consider our primary market area for deposit gathering to be the Nebraska counties of Adams, Dawson, Hall, Nuckolls, Phelps, and Lancaster County. Our market area economy has a focus on manufacturing and agriculture with a cross-section of other economic sectors, including education, healthcare and services. The primary market area has developed a modern, diversified economy, including the historical agriculture sector. Attractions of the market area include a quality lifestyle, with sufficient personal and business services for residents.\n\n1\n\n[Table of Contents](#toc_page)\n\n \n\nWe believe that we have developed products and services that will meet the financial needs of our current and future customer base, and we continually plan to enhance our products and services to meet the changing needs of customers. Marketing strategies focus on the strength of our knowledge of local consumer and small business markets, as well as expanding relationships with current customers and reaching out to develop new, profitable business relationships.\n\nCompetition\n\nWe face strong competition within our primary market area, both in making loans and attracting retail deposits. Our market area includes large money centers and regional banks, community banks and savings institutions, and credit unions. We also face competition for loans from mortgage banking firms, consumer finance companies, credit unions, and fintech companies and, with respect to deposits, from money market funds, brokerage firms, mutual funds and insurance companies. At June 30, 2025 (the most recent date for which FDIC data is publicly available), we were ranked third among the 18 FDIC-insured financial institutions with offices in Hall County, Nebraska, with a deposit market share of 10.65%.\n\nLending Activities\n\nHistorically, our principal lending activity was the origination of one- to four-family residential mortgage loans secured by properties located in our primary market area, as well as commercial real estate loans. To a lesser extent, we have originated commercial non-real estate loans, multi-family residential real estate loans, construction and land development loans, agricultural real estate and non-real estate loans and consumer loans.\n\nIn recent years, we have expanded our focus on higher yielding commercial lending, including both commercial real estate and commercial non-real estate loans, while also continuing to grow our agricultural real estate and operating loan portfolios. This strategic emphasis reflects our commitment to diversifying our loan mix and supporting the credit needs of businesses and agricultural producers within our market area.\n\nWe offer both adjustable-rate and fixed-rate residential mortgage loans. Historically, a significant majority of the residential real estate loans that we originate have been long-term, fixed-rate loans that generally conform to secondary market guidelines.\n\nLoan Portfolio Composition. The following table shows the composition of our loan portfolio by type of loan at the dates.\n\n \n\n \n\n \n\nAt March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\nAmount\n\n \n\n \n\nPercent\n\n \n\n \n\nAmount\n\n \n\n \n\nPercent\n\n \n\n \n\n \n\n(Dollars in thousands)\n\n \n\nReal Estate - Construction\n\n \n\n$\n\n28,633\n\n \n\n \n\n \n\n6.39\n\n%\n\n \n\n$\n\n15,069\n\n \n\n \n\n \n\n3.75\n\n%\n\nReal Estate - Commercial\n\n \n\n \n\n129,235\n\n \n\n \n\n \n\n28.82\n\n \n\n \n\n \n\n120,184\n\n \n\n \n\n \n\n29.88\n\n \n\nReal Estate - Residential\n\n \n\n \n\n162,041\n\n \n\n \n\n \n\n36.14\n\n \n\n \n\n \n\n161,144\n\n \n\n \n\n \n\n40.06\n\n \n\nCommercial Non-Real Estate\n\n \n\n \n\n48,378\n\n \n\n \n\n \n\n10.79\n\n \n\n \n\n \n\n32,007\n\n \n\n \n\n \n\n7.96\n\n \n\nAgricultural\n\n \n\n \n\n54,655\n\n \n\n \n\n \n\n12.19\n\n \n\n \n\n \n\n42,835\n\n \n\n \n\n \n\n10.65\n\n \n\nOther Consumer\n\n \n\n \n\n10,158\n\n \n\n \n\n \n\n2.26\n\n \n\n \n\n \n\n14,649\n\n \n\n \n\n \n\n3.64\n\n \n\nLand Development and Sanitary & Improvement Districts (SIDs)\n\n \n\n \n\n15,306\n\n \n\n \n\n \n\n3.41\n\n \n\n \n\n \n\n16,327\n\n \n\n \n\n \n\n4.06\n\n \n\nTotal loans\n\n \n\n \n\n448,406\n\n \n\n \n\n \n\n100.00\n\n%\n\n \n\n \n\n402,215\n\n \n\n \n\n \n\n100.00\n\n%\n\nNet deferred loan costs\n\n \n\n \n\n(60\n\n)\n\n \n\n \n\n \n\n \n\n \n\n(18\n\n)\n\n \n\n \n\n \n\nAllowance for credit losses\n\n \n\n \n\n(5,809\n\n)\n\n \n\n \n\n \n\n \n\n \n\n(5,441\n\n)\n\n \n\n \n\n \n\nTotal loans, net\n\n \n\n$\n\n442,537\n\n \n\n \n\n \n\n \n\n \n\n$\n\n396,756\n\n \n\n \n\n \n\n \n\nContractual Terms to Final Maturities. The following table sets forth the contractual maturities of our total loan portfolio at March 31, 2026. Demand loans, loans having no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less. Because the table presents contractual maturities and does not reflect repricing or the effect of prepayments, actual maturities may differ.\n\n2\n\n[Table of Contents](#toc_page)\n\n \n\n \n\n \n\n \n\nAt March 31, 2026\n\n \n\n \n\n \n\nReal Estate-Construction\n\n \n\n \n\nReal Estate-Commercial\n\n \n\n \n\nReal Estate-Residential\n\n \n\n \n\nCommercial\nNon-Real\nEstate\n\n \n\n \n\nAgricultural\n\n \n\n \n\nOther\nConsumer\n\n \n\n \n\nLand\nDevelopment\nand SIDS\n\n \n\n \n\nTotal\n\n \n\n \n\n \n\n(Dollars in thousands)\n\n \n\nAmounts due in:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOne year or less\n\n \n\n$\n\n11,892\n\n \n\n \n\n$\n\n11,267\n\n \n\n \n\n$\n\n8,995\n\n \n\n \n\n$\n\n16,621\n\n \n\n \n\n$\n\n16,546\n\n \n\n \n\n$\n\n3,587\n\n \n\n \n\n$\n\n1,422\n\n \n\n \n\n$\n\n70,330\n\n \n\nMore than one year through five years\n\n \n\n \n\n5,104\n\n \n\n \n\n \n\n33,311\n\n \n\n \n\n \n\n21,747\n\n \n\n \n\n \n\n14,726\n\n \n\n \n\n \n\n6,624\n\n \n\n \n\n \n\n3,440\n\n \n\n \n\n \n\n10,641\n\n \n\n \n\n \n\n95,593\n\n \n\nMore than five years through fifteen years\n\n \n\n \n\n6,525\n\n \n\n \n\n \n\n47,004\n\n \n\n \n\n \n\n39,890\n\n \n\n \n\n \n\n17,031\n\n \n\n \n\n \n\n14,969\n\n \n\n \n\n \n\n3,131\n\n \n\n \n\n \n\n2,319\n\n \n\n \n\n \n\n130,869\n\n \n\nMore than fifteen years\n\n \n\n \n\n5,112\n\n \n\n \n\n \n\n37,653\n\n \n\n \n\n \n\n91,409\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n16,516\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n924\n\n \n\n \n\n \n\n151,614\n\n \n\nTotal\n\n \n\n$\n\n28,633\n\n \n\n \n\n$\n\n129,235\n\n \n\n \n\n$\n\n162,041\n\n \n\n \n\n$\n\n48,378\n\n \n\n \n\n$\n\n54,655\n\n \n\n \n\n$\n\n10,158\n\n \n\n \n\n$\n\n15,306\n\n \n\n \n\n$\n\n448,406\n\n \n\nThe following table sets forth our fixed-rate and adjustable-rate loans at March 31, 2026 that are contractually due after March 31, 2027.\n\n \n\n \n\n \n\n \n\n \n\n \n\nFloating or\n\n \n\n \n\nTotal at\n\n \n\n \n\n \n\nFixed\n\n \n\n \n\nAdjustable\n\n \n\n \n\nMarch 31,\n\n \n\n \n\n \n\nRate\n\n \n\n \n\nRate\n\n \n\n \n\n2026\n\n \n\n \n\n \n\n(Dollars in thousands)\n\n \n\nReal Estate - Construction\n\n \n\n$\n\n10,054\n\n \n\n \n\n$\n\n6,687\n\n \n\n \n\n$\n\n16,741\n\n \n\nReal Estate - Commercial\n\n \n\n \n\n44,431\n\n \n\n \n\n \n\n73,537\n\n \n\n \n\n \n\n117,968\n\n \n\nReal Estate - Residential\n\n \n\n \n\n83,812\n\n \n\n \n\n \n\n69,234\n\n \n\n \n\n \n\n153,046\n\n \n\nCommercial Non-Real Estate\n\n \n\n \n\n20,126\n\n \n\n \n\n \n\n11,631\n\n \n\n \n\n \n\n31,757\n\n \n\nAgricultural\n\n \n\n \n\n8,972\n\n \n\n \n\n \n\n29,137\n\n \n\n \n\n \n\n38,109\n\n \n\nOther Consumer\n\n \n\n \n\n6,437\n\n \n\n \n\n \n\n134\n\n \n\n \n\n \n\n6,571\n\n \n\nLand Development and SIDs\n\n \n\n \n\n10,640\n\n \n\n \n\n \n\n3,244\n\n \n\n \n\n \n\n13,884\n\n \n\nTotal\n\n \n\n$\n\n184,472\n\n \n\n \n\n$\n\n193,604\n\n \n\n \n\n$\n\n378,076\n\n \n\nReal Estate - Residential. At March 31, 2026, we had $162.0 million of loans secured by one- to four-family residential real estate and multi-family real estate loans, representing 36.14% of total loans as of that date. The significant majority of our one- to four-family residential real estate loans and multi-family dwellings are secured by properties located in our primary market area.\n\nOur one- to four-family residential real estate loans are generally underwritten to secondary market guidelines for Freddie Mac. We offer both fixed-rate and adjustable-rate residential mortgage loans for terms up to 30 years. Adjustable-rate loans are tied to the one-year Treasury Rate published by the Federal Reserve Board. For adjustable-rate loans, the interest rate is generally fixed for the initial term of up to five years, and then adjusts yearly thereafter with an annual rate cap of 2% and a lifetime rate cap of 5%. We generally limit the loan-to-value ratios of our residential mortgage loans to 80%, and up to 90% with private mortgage insurance, of the purchase price or appraised value, whichever is lower.\n\nWe also do not offer loans that provide for negative amortization of principal, such as \"Option ARM\" loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life of the loans. We do not currently offer \"subprime loans\" on one- to four-family residential real estate loans (i.e., generally loans to borrowers with credit scores less than 620).\n\nWe also originate multi-family real estate loans to experienced, growing small- and mid-size owners and investors in our market areas. At March 31, 2026, we had $42.9 million in multi-family residential real estate loans, representing 9.69% of our total loan portfolio. Our multi-family residential real estate loans are generally adjustable-rate loans or have a call period after three or five years. Our multi-family residential real estate loans are secured by apartment buildings located within our primary market area, or we participate with a Nebraska-based bank for loans outside of our primary market area. These loans are generally made in amounts of up to 75% of the lesser of the appraised value or the purchase price of the property with an appropriate projected debt service coverage ratio.\n\nOur underwriting procedures include considering the borrower’s expertise and require verification of the borrower’s credit history, income and financial statements, banking relationships, references and income projections for the property. We generally obtain personal guarantees on these loans.\n\nAt March 31, 2026, our largest multi-family loan had a balance of $5.5 million and was secured by an apartment complex located in our primary market area. At March 31, 2026, this loan was performing in accordance with its contractual terms.\n\nReal Estate - Commercial Loans. At March 31, 2026, we had $129.2 million in commercial real estate loans, or 28.82% of total loans. Our commercial real estate loans are secured by owner-occupied and non-owner occupied properties, including medical\n\n3\n\n[Table of Contents](#toc_page)\n\n \n\npractices, insurance offices, warehouses, single- and multi-tenant retail and hotels. Our commercial residential real estate loans are secured by properties located within our primary market area, or we generally participate with a Nebraska-based bank for loans outside of our primary market area. Generally, our commercial real estate loans have terms and amortization periods up to 20 years with options for balloon payments and interest rate adjustments to occur every five years. The interest rate is fixed for the initial term (five years or less) and then adjusts again at the end of the next period matching the initial term or as negotiated at the end of the first term. Commercial real estate loans generally have terms and amortization periods up to 20 years. We generally limit the loan-to-value ratios of our commercial real estate loans to 75% of the purchase price or appraised value, whichever is lower.\n\nAt March 31, 2026, our largest commercial real estate loan had an outstanding balance of $7.6 million and was secured by a single retail grocery chain property located in our primary market area. At March 31, 2026, this loan was performing according to its original terms.\n\nWe consider a number of factors in originating commercial real estate loans. We evaluate the qualifications and financial condition of the borrower, including credit history, profitability and expertise, as well as the value and condition of the property securing the loan. When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in owning or managing similar property and the borrower’s payment history with us and other financial institutions. In evaluating the property securing the loan, the factors we consider include the net operating income of the mortgaged property before debt service and depreciation, the ratio of the loan amount to the appraised value of the mortgaged property, and the debt service coverage ratio (the ratio of net operating income to debt service). Generally, the debt service coverage ratio on these loans is at least 1.20x. The significant majority of our commercial real estate loans are appraised by outside independent appraisers approved by the board of directors. Personal guarantees are generally obtained from the principals of commercial real estate borrowers.\n\nCommercial Non-Real Estate Loans. At March 31, 2026, commercial non-real estate loans were $48.4 million, or 10.79% of total loans. Commercial non-real estate loans include both term loans and lines of credit. Loan terms vary depending on the type of collateral (such as five years for a loan secured by machinery and equipment, with a maximum loan-to-value ratio of 75% for new equipment and 70% for used equipment), or the type of loan (such as one year for a loan to support business inventory and receivables). Generally, the maximum loan-to-value ratio for commercial non-real estate loans is up to 90%, which applies to loans secured by U.S. Government securities with specified terms and maturities.\n\nWhen making commercial non-real estate loans, we consider the financial statements of the borrower, our lending history with the borrower, the debt service capabilities and global cash flows of the borrower and other guarantors, the projected cash flows of the business and the value of the collateral, accounts receivable, inventory and equipment.\n\nAt March 31, 2026, our largest commercial non-real estate loan totaled $5.7 million and was secured by an assignment of cash flows from multiple apartment complex properties owned and operated by a large multi-state real estate investment and management group. At March 31, 2026, this loan was performing according to its original terms.\n\nReal Estate - Construction Loans. At March 31, 2026, we had $28.6 million in real estate construction loans, including properties for one- to four-family residences of $6.6 million and commercial construction properties of $22.00 million, representing 6.39% of our total loan portfolio. Our real estate construction loans are structured as straight construction or construction/permanent loans where after the initial construction period the loan converts to a permanent commercial mortgage loan. Our real estate construction loans are underwritten to the same guidelines for commercial loans.\n\nReal estate construction loans generally can be made with a maximum loan-to-value ratio of 75% of the estimated appraised market value upon completion of the project. Before making a commitment to fund a construction loan, we require an appraisal of the property by an independent licensed appraiser. We also generally require inspections of the property before disbursements of funds during the term of the real estate construction loan.\n\nAt March 31, 2026, our largest real estate construction loan totaled $5.5 million and was secured by property located in our primary market area. At March 31, 2026, this loan was performing according to its original terms.\n\nAgricultural Loans. At March 31, 2026, we had $54.7 million in agricultural loans, or 12.19% of total loans. Our agriculture loans are for the acquisition, development and/or refinancing of agricultural property, and for financing (i) crop and livestock production expenses, (ii) crop and livestock inventory carrying, (iii) the acquisition of breeding livestock and (iv) the acquisition of equipment, machinery, vehicles and other capital assets. Our agriculture loans include term loans and lines of credit, with terms of one year for financing of crop and livestock expenses or carrying crop and livestock inventory, to up to seven years for capital asset acquisition. Our agriculture real estate loans generally amortize over a 25-year term with interest rates generally adjusting every five years. We generally limit the loan-to-value ratio of our agriculture loans to 70% of the collateral value.\n\n4\n\n[Table of Contents](#toc_page)\n\n \n\nAt March 31, 2026, our largest agricultural loan totaled $6.0 million and was secured by property located in our primary market area. At March 31, 2026, this loan was performing according to its original terms.\n\nWe consider a number of factors in originating agricultural loans. We evaluate the qualifications and financial condition of the borrower, including credit history, profitability and expertise, as well as the value and condition of the property securing the loan. When evaluating the qualifications of the borrower, we consider the financial resources of the borrower, the borrower’s experience in agriculture and the borrower’s payment history with us and other financial institutions. In evaluating the property securing the loan, the factors we consider include the net operating income of the mortgaged property before debt service and depreciation, the ratio of the loan amount to the appraised value of the mortgaged property, and the debt service coverage ratio (the ratio of net operating income to debt service). Generally, we require that the debt service coverage ratio be at least 1.20x. The significant majority of our agricultural loans are appraised by outside independent appraisers approved by the board of directors. Personal guarantees are generally obtained from the principals of agricultural real estate borrowers.\n\nOther Consumer Loans. We offer a limited range of consumer loans, and, except as described below, principally to customers residing in our primary market area with other relationships with us and with acceptable credit ratings. At March 31, 2026, other consumer loans were $10.2 million, or 2.26% of total loans. Our consumer loans generally consist of dental implant loans (described below), automobile loans, energy loans, student loans, recreation vehicles, boat loans and unsecured preferred lines of credit for customers with qualified relationships. An energy loan is a home equity loan originated through a partnership with the Nebraska Energy Office, which provides a preferred interest rate for eligible home improvement projects designed to reduce energy costs.\n\nIncluded in the consumer loan portfolio are unsecured loans to individuals for dental implants. Home Federal Savings participates with a Nebraska-based financial institution to provide a funding line to a specialty finance company that has a nationwide network of dentists whose patients can apply directly for and obtain individual loans. Our portion of the loans to individuals totaled $5.6 million at March 31, 2026, and the average underlying loan size was $17,000. A reserve of between 7.5% and 11% of the outstanding balance of the funding line is maintained by the specialty finance company at the lead financial institution, who also services the loans. Any loan that may become over 120 days past due is automatically paid off from the reserve, which is replenished monthly back to covenant levels.\n\nLand Development and SIDs Loans. At March 31, 2026, land development and SIDs loans were $15.3 million, or 3.41% of total loans. Our land development loans complement our construction lending activities, as such loans are generally secured by lots that will be used for residential or commercial development. At March 31, 2026, our land development loans totaled $9.3 million, or 2.10% of total loans. Our largest land development loan totaled $1.5 million and was secured by property located in our primary market area. At March 31, 2026, this loan was performing according to its original terms.\n\nOur SID loans complement land development activities and provide funding for certain infrastructure improvements. Our SID loans are secured by bonds and warrants issued within the project district. The warrants are also the primary source of repayment. At March 31, 2026, our SIDs loans totaled $6.0 million, or 1.36% of total loans. Our largest SID loan totaled $2.1 million and was secured by bonds and warrants. At March 31, 2026, this loan was performing according to its original terms.\n\nLoan Underwriting Risks\n\nCommercial Real Estate Loans and Agricultural Real Estate Loans. Loans secured by commercial real estate or agricultural real estate generally have larger balances and involve a greater degree of risk than residential real estate loans. The primary concern in commercial real estate lending and agricultural real estate lending is the borrower’s creditworthiness and the feasibility and cash flow potential of the underlying business. Payments on loans secured by income producing properties often depend on successful operation and management of the properties. As a result, repayment of such loans may be subject, to a greater extent than residential real estate loans, to adverse conditions in the real estate market or the economy. To monitor cash flows on income properties, we require borrowers and loan guarantors to provide quarterly, semi-annual or annual financial statements, depending on the size of the loan, on commercial real estate loans. In reaching a decision on whether to make a commercial real estate loan, we consider and review a global cash flow analysis of the borrower and consider the net operating income of the property, the borrower’s expertise, credit history and profitability and the value of the underlying property. An environmental phase one report is obtained when the possibility exists that hazardous materials may have existed on the site, or the site may have been impacted by adjoining properties that handled hazardous materials.\n\nIf we foreclose on a commercial real estate loan or an agricultural real estate loan, the marketing and liquidation period to convert the real estate asset to cash can be lengthy with substantial holding costs. In addition, vacancies, deferred maintenance, repairs and market stigma can result in prospective buyers expecting sale price concessions to offset their real or perceived economic losses for the time it takes them to return the property to profitability. Depending on the individual circumstances, initial charge-offs and subsequent losses on commercial real estate loans can be unpredictable and substantial.\n\n5\n\n[Table of Contents](#toc_page)\n\n \n\nCommercial and Industrial Loans. Unlike residential real estate loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial and industrial loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flows of the borrower’s business, and the collateral securing these loans may fluctuate in value. Our commercial and industrial loans are originated primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. Collateral for commercial and industrial loans typically consists of equipment, accounts receivable, or inventory. Credit support provided by the borrower for most of these loans is based on the liquidation of the pledged collateral and enforcement of a personal guarantee, if any. Further, any collateral securing such loans may depreciate over time, may be difficult to appraise and may fluctuate in value. As a result, the availability of funds for the repayment of commercial and industrial loans may depend substantially on the success of the business itself.\n\nConstruction and Land Loans. Our construction loans are based upon estimates of costs and values associated with the completed project. Underwriting is focused on the borrowers’ financial strength, credit history and demonstrated ability to produce a quality product and effectively market and manage their operations.\n\nConstruction lending involves additional risks when compared with permanent lending because funds are advanced upon the security of the project, which is of uncertain value before its completion. Because of the uncertainties inherent in estimating construction costs, as well as the market value of the completed project and the effects of governmental regulation of real property, it is relatively difficult to evaluate accurately the total funds required to complete a project and the related loan-to-value ratio. In addition, generally during the term of a construction loan, interest may be funded by the borrower or disbursed from an interest reserve set aside from the construction loan budget. These loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of the borrower or guarantor to repay principal and interest. If the appraised value of a completed project proves to be overstated, we may have inadequate security for the repayment of the loan upon completion of construction of the project and may incur a loss. Land loans have substantially similar risks.\n\nConsumer Loans. Consumer loans may entail greater risk than residential real estate loans, particularly in the case of consumer loans that are unsecured or secured by assets that depreciate rapidly. Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstanding loan and a small remaining deficiency often does not warrant further substantial collection efforts against the borrower. Consumer loan collections depend on the borrower’s continuing financial stability, and therefore are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.\n\nAdjustable-Rate One- to Four-Family Residential Real Estate Loans. Although adjustable-rate mortgage loans may reduce to an extent our vulnerability to changes in market interest rates because they periodically re-price, as interest rates increase the required payments due from the borrower also increase (subject to rate caps), increasing the potential for default by the borrower. At the same time, the ability of the borrower to repay the loan and the marketability of the underlying collateral may be adversely affected by higher interest rates. Upward adjustments of the contractual interest rate are also limited by our maximum periodic and lifetime rate adjustments. As a result, the effectiveness of adjustable-rate mortgage loans in compensating for changes in market interest rates may be limited.\n\nLoan Originations, Purchases and Sales\n\nWe originate loans through employee marketing and advertising efforts, our existing customer base, walk-in customers and referrals from customers. All loans we originate are underwritten pursuant to our policies and procedures. While we originate both fixed-rate and adjustable-rate loans, our ability to generate each type of loan depends upon relative borrower demand and pricing levels established by competing banks, thrifts, credit unions, and mortgage-banking companies. Our volume of loan originations is influenced significantly by market interest rates and economic conditions, and, accordingly, the volume of our loan originations can vary from period to period. We generally do not sell any of the commercial and industrial or commercial real estate loans we originate, but we sell participation interests in loans, as described below.\n\nWe may purchase loan participations secured by properties primarily within the State of Nebraska in which we are not the lead lender. In these circumstances, we follow our customary loan underwriting and approval policies. At March 31, 2026, the outstanding balances of our loan participations where we were not the lead lender totaled $73.8 million, or 16.68% of our loan portfolio, of which $38.8 million, or 52.57%, were commercial real estate loans. All such loans were performing in accordance with their original repayment terms. We also have sold participation interests in loans that exceeded our loans-to-one borrower legal lending limit and for risk diversification. At March 31, 2026, we had participated out portions of loans with an aggregate principal balance of $72.2 million. Historically, we have not purchased whole loans.\n\nOur traditional mortgage banking model follows selling loan production to Freddie Mac. We had total loan sales for the fiscal years ended March 31, 2026 and 2025 of $25.8 million and $14.9 million, respectively.\n\n6\n\n[Table of Contents](#toc_page)\n\n \n\nLoan Approval Procedures and Authority\n\nOur lending is subject to written, non-discriminatory underwriting standards and origination procedures. Decisions on loan applications are made on the basis of detailed applications submitted by the prospective borrower and property valuations. Our policies require that for all one- to four-family residential real estate loans that we originate in amounts in excess of $400,000, property valuations must be performed by outside independent state-licensed appraisers approved by our board of directors or as required by Freddie Mac guidelines. The loan applications are designed primarily to determine the borrower’s ability to repay the requested loan, and the more significant items on the application are verified through use of credit reports, financial statements and tax returns.\n\nBy law, the aggregate amount of loans that we are permitted to make to any one borrower or a group of related borrowers is generally limited to 15% of Home Federal Savings’ unimpaired capital and surplus (25% if the amount in excess of 15% is secured by “readily marketable collateral” or 30% for certain residential development loans with regulatory approval). The total aggregate exposure to one group of borrowers is 50% of unimpaired capital and surplus where each separate borrower (individual or entity) is financially independent. At March 31, 2026, our loan to one borrower limitation was $11.8 million based on 15% of our unimpaired capital and surplus, $23.6 million for residential development loans with regulatory approval and $39.3 million for a group of related borrowers where each separate borrower is financially independent. At March 31, 2026, our largest single loan to one borrower had an outstanding balance of $7.6 million and was secured by a grocery store property located in our primary market area. At March 31, 2026, this loan was performing according to its original terms. At March 31, 2026, our largest credit relationship was a group of loans to related borrowers with total exposure of $16.3 million with all loans performing according to original terms. The borrowers consist of ten entities and two individual owners, with the significant majority of the loans secured by multi-family residential real estate. The relationship qualifies for the 50% of unimpaired capital and surplus limitation due to the financial strength of each borrower on an individual basis, without dependence on any other borrower in the group.\n\nIndividual officers, and officers acting with others, may approve loans up to specified limits. We have a Residential Loan Committee, comprising of our President and Chief Executive Officer, Executive Vice President and Chief Lending Officer, Executive Vice President and Chief Sales Officer and/ or Mortgage Loan Manager, and also a Senior Loan Committee, comprising of our President and Chief Executive Officer, Executive Vice President and Chief Lending Officer, Executive Vice President and Chief Sales Officer and other members of experienced lending staff. The Residential Loan Committee may approve one- to four-family residential real estate loans up to $1.0 million, and Senior Loan Committee may approve all other loans exceeding specified limits of individual lending officers and/or Executive Officers.\n\nGenerally, we require property and extended coverage casualty insurance in amounts at least equal to the principal amount of the loan or the value of improvements on the property, depending on the type of loan. In addition, we require an escrow for flood insurance (where appropriate) and generally require an escrow for required property taxes and insurance. On occasion, we allow borrowers to pay their own taxes and property and casualty insurance as long as proof of payment is provided.\n\nDelinquencies, Classified Assets and Non-performing Assets\n\nDelinquency Procedures. When a borrower fails to make a required monthly payment on a loan, we mail a notice to the borrower and attempt to contact the borrower by phone. Our personnel begin collection activity when a loan is 15 days past due. We attempt in-person discussions when a loan becomes 60 days delinquent, or sooner if deemed necessary. Our policies provide that a late notice be sent each month that the loan is past due. Once the loan is considered in default, generally at 90 days past due, a letter is generally sent to the borrower explaining that, unless the loan is brought current, we may initiate legal proceedings. In addition, the loan is placed on non-accrual status (if appropriate), and additional efforts are made to contact the borrower. If the borrower does not respond, we generally initiate foreclosure proceedings when the loan is 120 days past due. If the loan is reinstated, foreclosure proceedings will be discontinued, and the borrower will be permitted to continue to make payments. In certain instances, we may modify the loan or grant a limited exemption from loan payments to allow the borrower to reorganize his or her financial affairs.\n\nWhen we acquire real estate as a result of foreclosure or by deed in lieu of foreclosure, the real estate is classified as other real estate owned until it is sold. The real estate is recorded at estimated fair value at the date of acquisition, less estimated costs to sell, and any write-down resulting from the acquisition is charged to the allowance for loan losses. Subsequent decreases in the value of the property are charged to operations. After acquisition, all costs in maintaining the property are expensed as incurred. Costs relating to the development and improvement of the property, however, are capitalized to the extent of estimated fair value less estimated costs to sell.\n\n7\n\n[Table of Contents](#toc_page)\n\n \n\nReal estate and other assets we acquire as a result of foreclosure or by deed-in-lieu of foreclosure are classified as real estate owned until sold. At March 31, 2026, we had $74,260 in other real estate owned consisting of one single family residence. At March 31, 2025, we had no real estate acquired as a result of foreclosure or by deed in lieu of foreclosure.\n\nDelinquent Loans. The following table sets forth our loan delinquencies (including non-accrual loans), by type and amount at March 31, 2026 and 2025.\n\n \n\n \n\n \n\nAt March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\n30-59 Days\nPast Due\n\n \n\n \n\n60-89 Days\nPast Due\n\n \n\n \n\n90 Days\nor More\nPast Due\n\n \n\n \n\n30-59 Days\nPast Due\n\n \n\n \n\n60-89 Days\nPast Due\n\n \n\n \n\n90 Days\nor More\nPast Due\n\n \n\n \n\n \n\n(Dollars in thousands)\n\n \n\nReal Estate - Construction\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\nReal Estate - Commercial\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nReal Estate - Residential\n\n \n\n \n\n623\n\n \n\n \n\n \n\n26\n\n \n\n \n\n \n\n96\n\n \n\n \n\n \n\n486\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n87\n\n \n\nCommercial Non-Real Estate\n\n \n\n \n\n235\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n9\n\n \n\n \n\n \n\n—\n\n \n\nAgricultural\n\n \n\n \n\n1,356\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n79\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nOther Consumer\n\n \n\n \n\n125\n\n \n\n \n\n \n\n152\n\n \n\n \n\n \n\n138\n\n \n\n \n\n \n\n112\n\n \n\n \n\n \n\n345\n\n \n\n \n\n \n\n112\n\n \n\nLand Development and SIDs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nTotal\n\n \n\n$\n\n2,339\n\n \n\n \n\n$\n\n178\n\n \n\n \n\n$\n\n234\n\n \n\n \n\n$\n\n677\n\n \n\n \n\n$\n\n354\n\n \n\n \n\n$\n\n199\n\n \n\n \n\nNon-Performing Assets. The following table sets forth information regarding our non-performing assets at the dates presented.\n\n \n\n \n\n \n\nAt March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\n(Dollars in thousands)\n\n \n\nNon-accrual loans:\n\n \n\n \n\n \n\n \n\n \n\n \n\nReal Estate - Construction\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\nReal Estate - Commercial\n\n \n\n \n\n—\n\n \n\n \n\n \n\n359\n\n \n\nReal Estate - Residential\n\n \n\n \n\n9\n\n \n\n \n\n \n\n150\n\n \n\nCommercial Non-Real Estate\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nAgricultural\n\n \n\n \n\n1,632\n\n \n\n \n\n \n\n—\n\n \n\nOther Consumer\n\n \n\n \n\n—\n\n \n\n \n\n \n\n13\n\n \n\nLand Development and SIDs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n807\n\n \n\nTotal non-accruing loans\n\n \n\n \n\n1,641\n\n \n\n \n\n \n\n1,329\n\n \n\nAccruing loans past due 90 days or more:\n\n \n\n \n\n \n\n \n\n \n\n \n\nReal Estate-Construction\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nReal Estate-Commercial\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nReal Estate-Residential\n\n \n\n \n\n96\n\n \n\n \n\n \n\n3\n\n \n\nCommercial Non-Real Estate\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nAgricultural\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nOther Consumer\n\n \n\n \n\n138\n\n \n\n \n\n \n\n99\n\n \n\nLand Development and SIDs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nTotal accruing loans past due 90 days or more:\n\n \n\n \n\n234\n\n \n\n \n\n \n\n102\n\n \n\nTotal non-performing loans\n\n \n\n \n\n1,875\n\n \n\n \n\n \n\n1,431\n\n \n\nOther real estate owned\n\n \n\n \n\n74\n\n \n\n \n\n \n\n—\n\n \n\nTotal non-performing assets\n\n \n\n$\n\n1,949\n\n \n\n \n\n$\n\n1,431\n\n \n\nTotal loans outstanding\n\n \n\n \n\n448,406\n\n \n\n \n\n \n\n402,215\n\n \n\nTotal assets outstanding\n\n \n\n \n\n558,647\n\n \n\n \n\n \n\n508,702\n\n \n\nTotal non-accruing loans as a percentage of total loans outstanding\n\n \n\n \n\n0.37\n\n%\n\n \n\n \n\n0.33\n\n%\n\nTotal non-performing loans as a percentage of total loans outstanding\n\n \n\n \n\n0.42\n\n%\n\n \n\n \n\n0.36\n\n%\n\nTotal non-performing loans as a percentage of total assets\n\n \n\n \n\n0.34\n\n%\n\n \n\n \n\n0.28\n\n%\n\nTotal non-performing assets as a percentage of total assets\n\n \n\n \n\n0.35\n\n%\n\n \n\n \n\n0.28\n\n%\n\n \n\n8\n\n[Table of Contents](#toc_page)\n\n \n\nClassified Assets. Federal regulations provide that loans and other assets of lesser quality should be classified as “substandard,” “doubtful” or “loss.” An asset is considered “substandard” if it is inadequately protected by the current paying capacity or net worth of the obligor or of the collateral pledged. “Substandard” assets are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or other defined weaknesses that may preclude repayment from original sources. Repayment may depend upon collateral or other credit risk mitigants. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard,” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific allowance for credit losses is not warranted. Assets that do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are designated as “special mention.”\n\nWhen we classify assets as either substandard or doubtful, we undertake an impairment analysis which may result in allocating a portion of our general loss allowances to a specific allowance for such assets as we deem prudent. The allowance for credit losses is the amount estimated by management as necessary to absorb credit losses incurred in the loan portfolio that are both probable and reasonably estimable at the balance sheet date. When an insured institution classifies problem assets as “loss,” it is required either to establish a specific allowance for losses equal to 100% of that portion of the asset so classified or to charge-off such amount. An institution’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by the regulatory authorities, which may require the establishment of additional general or specific allowances.\n\nIn connection with the filing of our periodic regulatory reports and according to our classification of assets policy, we regularly review the problem loans in our portfolio to determine whether any loans require classification according to applicable regulations. If a problem loan deteriorates in asset quality, the classification is changed to “substandard,” “doubtful” or “loss” depending on the circumstances and the evaluation. Generally, loans 90 days or more past due are placed on nonaccrual status and classified “substandard.”\n\nOur classified and special mention assets at the dates presented were as follows. Substandard loans exceed our non-performing and delinquent loans due to the inclusion of $4.8 million and $3.5 million of performing loans as of March 31, 2026 and 2025, respectively, where there remains underlying uncertainties with respect to borrower performance.\n\n \n\n \n\n \n\nAt March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\n(Dollars in thousands)\n\n \n\nSubstandard loans\n\n \n\n$\n\n6,406\n\n \n\n \n\n$\n\n4,623\n\n \n\nDoubtful loans\n\n \n\n \n\n—\n\n \n\n \n\n \n\n5\n\n \n\nLoss loans\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nTotal classified loans\n\n \n\n$\n\n6,406\n\n \n\n \n\n$\n\n4,628\n\n \n\nSpecial mention loans\n\n \n\n$\n\n—\n\n \n\n \n\n$\n\n—\n\n \n\nOther Loans of Concern. At March 31, 2026, except for loans included in the above table, there were no other loans of concern for which we had information about possible credit problems of borrowers that caused us to have serious doubts about the ability of the borrowers to comply with present loan repayment terms and that may result in disclosure of such loans in the future.\n\nAllowance for Credit Losses\n\nThe allowance for credit losses (“ACL”) is an estimate of the expected credit losses on the loans held for investment, unfunded loan commitments, held to maturity securities, and available-for-sale debt securities portfolios.\n\nAllowance for Credit Losses on Loans—The ACL is maintained by management at a level believed adequate to absorb estimated credit losses that are expected to occur within the existing loan portfolio through their contractual terms adjusted for expected prepayments. The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on loans. Determination of the ACL is inherently subjective in nature since it requires significant estimates and management judgment and includes a level of imprecision given the difficulty of identifying and assessing the factors impacting loan repayment and estimating the timing and amount of losses. While management utilizes its best judgment and information available, the ultimate adequacy of the ACL is dependent upon a variety of factors beyond the Company's direct control, including, but not limited to, the performance of the loan portfolio, consideration of current economic trends, changes in interest rates and property values, estimated losses on pools of homogeneous loans based on an analysis that uses historical loss experience for prior periods that are determined to have like characteristics with the current period such as pre-recessionary, recessionary, or recovery periods, portfolio growth and concentration risk, management and staffing changes, the interpretation of loan risk classifications by regulatory authorities and other credit market factors.\n\n9\n\n[Table of Contents](#toc_page)\n\n \n\nThe ACL methodology consists of measuring loans on a collective (pool) basis when similar risk characteristics exist. The Company has identified seven portfolio segments and measures the ACL using the Scaled CECL Allowance for Losses Estimator (“SCALE”) method. The loan portfolios are real estate – construction, real estate – commercial, real estate – residential, commercial non-real estate, agriculture, other consumer and land development/sanitary improvement districts (SIDS). The SCALE method uses publicly available data from Schedule RI-C of the Call Report to derive the initial proxy expected lifetime loss rates. These proxy expected lifetime loss rates are then adjusted for Company-specific facts and circumstances to arrive at the final ACL estimate that adequately reflects the Company's loss history and credit risk within our portfolio.\n\nIn addition to the pooled analysis performed for the majority of our loan and commitment balances, we also review those loans that have collateral dependency or nonperforming status which requires a specific review of that loan, per our individually analyzed CECL calculations.\n\nLoans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed, while recoveries of amounts previously charged-off are credited to the ACL. Approved releases from previously established ACL reserves authorized under our ACL methodology also reduce the ACL. Additions to the ACL are established through the provision for credit losses on loans, which is charged to expense.\n\nThe Company’s ACL methodology is intended to reflect all loan portfolio risk, but management recognizes the inability to accurately depict all future credit losses in a current ACL estimate, as the impact of various factors cannot be fully known. Accrued interest receivable on loans is excluded from the amortized cost basis of financing receivables for the purpose of determining the allowance for credit losses.\n\nAllowance for Credit Losses on Unfunded Loan Commitments—The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk by a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The ACL related to off-balance sheet credit exposures, which is recorded within accounts payable, accrued expenses and other liabilities on the consolidated statement of financial condition, is estimated at each balance sheet date under the CECL model, and is adjusted as determined necessary through the provision for credit losses on the consolidated statement of income. The estimate for ACL on unfunded loan commitments includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.\n\nAllowance for Credit Losses on Securities Available-for-Sale—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 sell, the security before recovery of its amortized cost basis. If either of the aforementioned criteria exists, the Company will record an ACL related to securities available-for-sale with an offsetting entry to the provision for credit losses on securities on the income statement. If either of these criteria does not exist, the Company will evaluate the securities individually to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors, such as market interest rate fluctuations.\n\nIn evaluating securities available-for sale for potential impairment, the Company considers many factors, including the financial condition and near-term prospects of the issuer, which for debt securities considers external credit ratings and recent downgrades; and its ability and intent to hold the security for a period of time sufficient for a recovery in value. The Company also considers the extent to which the securities are issued by the federal government or its agencies, and any guarantee of issued amounts by those agencies. The amount of the impairment related to other factors is recognized in other comprehensive income (loss).\n\nAllowance for Credit Losses on Held-to Maturity Securities—The allowance for credit losses on held-to-maturity debt securities is estimated using a CECL methodology. Any expected credit loss is provided through the allowance for credit loss on held-to-maturity securities and is deducted from the amortized cost basis of the security so that the balance sheet reflects the net amount the Company expects to collect. Nearly all the Company's HTM debt securities are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. Accordingly, there is a zero-credit loss expectation on these securities.\n\n \n\n10\n\n[Table of Contents](#toc_page)\n\n \n\nThe following table sets forth activity in our allowance for credit losses during the periods presented.\n\n \n\n \n\n \n\nFor the Year Ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\n(Dollars in thousands)\n\n \n\nTotal loans outstanding at end of period\n\n \n\n$\n\n448,406\n\n \n\n \n\n$\n\n402,215\n\n \n\nTotal non-accrual loans at end of period\n\n \n\n \n\n1,641\n\n \n\n \n\n \n\n1,329\n\n \n\nTotal non-performing loans at end of period\n\n \n\n \n\n1,875\n\n \n\n \n\n \n\n1,431\n\n \n\nTotal average loans outstanding\n\n \n\n \n\n418,754\n\n \n\n \n\n \n\n391,330\n\n \n\nAllowance for credit losses, beginning of period\n\n \n\n \n\n5,441\n\n \n\n \n\n \n\n5,860\n\n \n\nProvision for credit losses\n\n \n\n \n\n306\n\n \n\n \n\n \n\n200\n\n \n\nCharge-offs:\n\n \n\n \n\n \n\n \n\n \n\n \n\nReal Estate - Construction\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nReal Estate - Commercial\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nReal Estate - Residential\n\n \n\n \n\n1\n\n \n\n \n\n \n\n—\n\n \n\nCommercial Non-Real Estate\n\n \n\n \n\n—\n\n \n\n \n\n \n\n13\n\n \n\nAgricultural\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nOther Consumer\n\n \n\n \n\n17\n\n \n\n \n\n \n\n4\n\n \n\nLand Development and SIDs\n\n \n\n \n\n—\n\n \n\n \n\n \n\n605\n\n \n\nTotal charge-offs\n\n \n\n$\n\n18\n\n \n\n \n\n$\n\n622\n\n \n\nRecoveries on loans previously charged-off:\n\n \n\n \n\n \n\n \n\n \n\n \n\nReal Estate - Construction\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nReal Estate - Commercial\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nReal Estate - Residential\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nCommercial Non-Real Estate\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nAgricultural\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nOther Consumer\n\n \n\n \n\n(3\n\n)\n\n \n\n \n\n(3\n\n)\n\nLand Development and SIDs\n\n \n\n \n\n(77\n\n)\n\n \n\n \n\n—\n\n \n\nTotal recoveries\n\n \n\n$\n\n(80\n\n)\n\n \n\n$\n\n(3\n\n)\n\nNet (recoveries) charge-offs\n\n \n\n$\n\n(62\n\n)\n\n \n\n$\n\n619\n\n \n\nAllowance for credit losses, end of period\n\n \n\n$\n\n5,809\n\n \n\n \n\n$\n\n5,441\n\n \n\nAllowance for credit losses as a percent of non-performing loans\n\n \n\n \n\n309.81\n\n%\n\n \n\n \n\n380.22\n\n%\n\nAllowance for credit losses as a percent of total loans outstanding\n\n \n\n \n\n1.30\n\n%\n\n \n\n \n\n1.35\n\n%\n\nAllowance for credit losses as a percent of total non-accrual loans\n\n \n\n \n\n353.99\n\n%\n\n \n\n \n\n409.41\n\n%\n\nNet (recoveries) charge-offs during the period to average loans outstanding during the period\n\n \n\n \n\n(0.01\n\n%)\n\n \n\n \n\n0.16\n\n%\n\nThe following table sets forth additional information with respect to charge-offs by category for the years presented.\n\n \n\n \n\n \n\nFor the Year Ended March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\nNet (recoveries) charge-offs to average loans outstanding during the year:\n\n \n\n \n\n \n\n \n\n \n\n \n\nReal Estate - Construction\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nReal Estate - Commercial\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nReal Estate - Residential\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nCommercial Non-Real Estate\n\n \n\n \n\n—\n\n \n\n \n\n \n\n0.04\n\n%\n\nAgricultural\n\n \n\n \n\n—\n\n \n\n \n\n \n\n—\n\n \n\nOther Consumer\n\n \n\n \n\n0.14\n\n%\n\n \n\n \n\n0.01\n\n%\n\nLand Development and SIDs\n\n \n\n \n\n(0.50\n\n%)\n\n \n\n \n\n3.71\n\n%\n\n \n\n11\n\n[Table of Contents](#toc_page)\n\n \n\nAllocation of Allowance for Credit/Loan Losses. The following table sets forth the allowance for credit/loan losses allocated by loan category and the percent of the allowance in each category to the total allocated allowance at the dates presented. The allowance for credit losses allocated to each category is not necessarily indicative of future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories.\n\n \n\n \n\n \n\nAt March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\nAmount of Allowance\n\n \n\n \n\nPercent of\nAllowance to\nTotal Allowance\n\n \n\n \n\nPercent of Loans in Category to Total Loans\n\n \n\n \n\nAmount of Allowance\n\n \n\n \n\nPercent of\nAllowance to\nTotal Allowance\n\n \n\n \n\nPercent of Loans in Category to Total Loans\n\n \n\n \n\n \n\n(Dollars in thousands)\n\n \n\nReal Estate - Construction\n\n \n\n$\n\n356\n\n \n\n \n\n \n\n6.13\n\n%\n\n \n\n \n\n6.39\n\n%\n\n \n\n$\n\n246\n\n \n\n \n\n \n\n4.52\n\n%\n\n \n\n \n\n3.75\n\n%\n\nReal Estate - Commercial\n\n \n\n \n\n1,787\n\n \n\n \n\n \n\n30.75\n\n \n\n \n\n \n\n28.82\n\n \n\n \n\n \n\n1,572\n\n \n\n \n\n \n\n28.88\n\n \n\n \n\n \n\n29.88\n\n \n\nReal Estate - Residential\n\n \n\n \n\n1,784\n\n \n\n \n\n \n\n30.71\n\n \n\n \n\n \n\n36.14\n\n \n\n \n\n \n\n1,926\n\n \n\n \n\n \n\n35.40\n\n \n\n \n\n \n\n40.06\n\n \n\nCommercial Non-Real Estate\n\n \n\n \n\n991\n\n \n\n \n\n \n\n17.06\n\n \n\n \n\n \n\n10.79\n\n \n\n \n\n \n\n667\n\n \n\n \n\n \n\n12.26\n\n \n\n \n\n \n\n7.96\n\n \n\nAgricultural\n\n \n\n \n\n558\n\n \n\n \n\n \n\n9.61\n\n \n\n \n\n \n\n12.19\n\n \n\n \n\n \n\n476\n\n \n\n \n\n \n\n8.75\n\n \n\n \n\n \n\n10.65\n\n \n\nOther Consumer\n\n \n\n \n\n135\n\n \n\n \n\n \n\n2.32\n\n \n\n \n\n \n\n2.26\n\n \n\n \n\n \n\n262\n\n \n\n \n\n \n\n4.82\n\n \n\n \n\n \n\n3.64\n\n \n\nLand Development and SIDs\n\n \n\n \n\n198\n\n \n\n \n\n \n\n3.41\n\n \n\n \n\n \n\n3.41\n\n \n\n \n\n \n\n292\n\n \n\n \n\n \n\n5.37\n\n \n\n \n\n \n\n4.06\n\n \n\nTotal\n\n \n\n$\n\n5,809\n\n \n\n \n\n \n\n100.00\n\n%\n\n \n\n \n\n100.00\n\n%\n\n \n\n$\n\n5,441\n\n \n\n \n\n \n\n100.00\n\n%\n\n \n\n \n\n100.00\n\n%\n\nAlthough we believe that we use the best information available to establish the allowance for credit losses, future adjustments to the allowance for credit losses may be necessary and results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making the determinations. Because future events affecting borrowers and collateral cannot be predicted with certainty, the existing allowance for credit losses may not be adequate and management may determine that increases in the allowance are necessary if the quality of any portion of our loan portfolio deteriorates as a result. Furthermore, as an integral part of its examination process, the OCC will periodically review our allowance for credit losses. The OCC may have judgments different than those of management, and we may determine to increase our allowance as a result of these regulatory reviews. Any material increase in the allowance for credit losses may adversely affect our financial condition and results of operations.\n\nInvestment Activities\n\nGeneral. The goal of our investment policy is to provide and maintain liquidity within regulatory guidelines, maintain high quality and diversified investments, provide collateral for pledging requirements and short-term borrowing needs, balance earnings depending on levels of loan demand, maximize returns through value investing, and manage interest rate risk.\n\nOur investment policy was adopted by the board of directors and is reviewed annually by the board of directors. All investment decisions are made by our Asset/Liability Committee according to board-approved policies. An investment schedule detailing the investment portfolio is reviewed at least monthly by the board of directors.\n\nOur current investment policy permits, with certain limitations, investments in: U.S. Treasury securities; securities issued by the U.S. government and its agencies or government sponsored enterprises including mortgage-backed securities and collateralized mortgage obligations issued by Fannie Mae, Ginnie Mae, and Freddie Mac; corporate and municipal bonds; collateralized mortgage obligations (CMOs) and real estate mortgage investment conduits (REMICs); certificates of deposit in other financial institutions; and federal funds, among other investments.\n\n12\n\n[Table of Contents](#toc_page)\n\n \n\nAt March 31, 2026, our investment portfolio consisted of securities and obligations issued by U.S. government-sponsored enterprises as well as state and municipal securities. At March 31, 2026, we also owned $639,000 of Federal Home Loan Bank of Topeka stock. As a member of Federal Home Loan Bank of Topeka, we are required to purchase stock in the Federal Home Loan Bank of Topeka, which is carried at cost and classified as a restricted investment.\n\n \n\n \n\n \n\nAt March 31,\n\n \n\n \n\n \n\n2026\n\n \n\n \n\n2025\n\n \n\n \n\n \n\nAmortized Cost\n\n \n\n \n\nFair Value\n\n \n\n \n\nAmortized Cost\n\n \n\n \n\nFair Value\n\n \n\nSecurities available-for-sale\n\n \n\n(Dollars in thousands)\n\n \n\nFHLMC bonds\n\n \n\n$\n\n24,376\n\n \n\n \n\n$\n\n23,214\n\n \n\n \n\n$\n\n23,085\n\n \n\n \n\n$\n\n21,466\n\n \n\nGNMA bonds\n\n \n\n \n\n6,948\n\n \n\n \n\n \n\n6,973\n\n \n\n \n\n \n\n5,035\n\n \n\n \n\n \n\n5,067\n\n \n\nFNMA bonds\n\n \n\n \n\n26,010\n\n \n\n \n\n \n\n24,827\n\n \n\n \n\n \n\n27,237\n\n \n\n \n\n \n\n25,590\n\n \n\nMunicipal bonds\n\n \n\n \n\n8,623\n\n \n\n \n\n \n\n7,520\n\n \n\n \n\n \n\n8,622\n\n \n\n \n\n \n\n7,246\n\n \n\nTotal securities available-for-sale\n\n \n\n$\n\n65,957\n\n \n\n \n\n$\n\n62,534\n\n \n\n \n\n$\n\n63,979\n\n \n\n \n\n$\n\n59,369\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nSecurities held-to-maturity\n\n \n\n \n\n \n\nFHLMC bonds\n\n \n\n$\n\n54\n\n \n\n \n\n$\n\n55\n\n \n\n \n\n$\n\n64\n\n \n\n \n\n$\n\n66\n\n \n\nGNMA bonds\n\n \n\n \n\n33\n\n \n\n \n\n \n\n33\n\n \n\n \n\n \n\n46\n\n \n\n \n\n \n\n46\n\n \n\nFNMA bonds\n\n \n\n \n\n88\n\n \n\n \n\n \n\n90\n\n \n\n \n\n \n\n112\n\n \n\n \n\n \n\n114\n\n \n\nTotal securities held-to-maturity\n\n \n\n$\n\n175\n\n \n\n \n\n$\n\n178\n\n \n\n \n\n$\n\n222\n\n \n\n \n\n$\n\n226\n\n \n\n \n\nPortfolio Maturities and Yields. The composition and maturities of the securities portfolio at March 31, 2026, are summarized in the following table. Maturities are based on the final contractual payment dates, and do not reflect the effect of scheduled principal repayments, prepayments, or early redemptions that may occur. The weighted average yield is calculated based on the yield to maturity weighted for the size of each security over the entire portfolio of securities. No tax-equivalent yield adjustments have been made, as the effects would be immaterial.\n\n \n\n \n\n \n\nOne Year or Less\n\n \n\n \n\nAfter One through\nFive Years\n\n \n\n \n\nAfter Five through\nTen Years\n\n \n\n \n\nOver Ten Years\n\n \n\n \n\nTotal\n\n \n\n \n\n \n\nAmortized\nCost\n\n \n\n \n\nWeighted\nAverage\nYield\n\n \n\n \n\nAmortized\nCost\n\n \n\n \n\nWeighted\nAverage\nYield\n\n \n\n \n\nAmortized\nCost\n\n \n\n \n\nWeighted\nAverage\nYield\n\n \n\n \n\nAmortized\nCost\n\n \n\n \n\nWeighted\nAverage\nYield\n\n \n\n \n\nAmortized\nCost\n\n \n\n \n\nFair\nValue\n\n \n\n \n\nWeighted\nAverage\nYield\n\n \n\nInvestment securities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nMunicipal bonds\n\n \n\n$\n\n1,064\n\n \n\n \n\n \n\n1.79\n\n%\n\n \n\n$\n\n2,382\n\n \n\n \n\n \n\n1.70\n\n%\n\n \n\n$\n\n2,842\n\n \n\n \n\n \n\n2.05\n\n%\n\n \n\n$\n\n2,335\n\n \n\n \n\n \n\n2.30\n\n%\n\n \n\n$\n\n8,623\n\n \n\n \n\n$\n\n7,520\n\n \n\n \n\n \n\n1.99\n\n%\n\nMortgage-backed securities:\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nU.S. Government agency and government-sponsored enterprise\n\n \n\n \n\n33\n\n \n\n \n\n \n\n3.08\n\n \n\n \n\n \n\n875\n\n \n\n \n\n \n\n2.91\n\n \n\n \n\n \n\n4,220\n\n \n\n \n\n \n\n3.87\n\n \n\n \n\n \n\n52,381\n\n \n\n \n\n \n\n3.83\n\n \n\n \n\n \n\n57,509\n\n \n\n \n\n \n\n55,192\n\n \n\n \n\n \n\n3.82\n\n \n\nTotal\n\n \n\n$\n\n1,097\n\n \n\n \n\n \n\n1.83\n\n%\n\n \n\n$\n\n3,257\n\n \n\n \n\n \n\n2.02\n\n%\n\n \n\n$\n\n7,062\n\n \n\n \n\n \n\n3.14\n\n%\n\n \n\n$\n\n54,716\n\n \n\n \n\n \n\n3.65\n\n%\n\n \n\n$\n\n66,132\n\n \n\n \n\n$\n\n62,712\n\n \n\n \n\n \n\n3.57\n\n%\n\nFor additional information regarding our investment securities portfolio, see Note 2 to the notes to consolidated financial statements.\n\nSources of Funds\n\nGeneral. Deposits have traditionally been our primary source of funds for use in lending and investment activities. We may also use borrowings to supplement cash flow needs, lengthen the maturities of liabilities for interest rate risk purposes and to manage the cost of funds. In addition, we receive funds from scheduled loan payments, investment maturities, loan prepayments and income on earning assets. While scheduled loan payments and income on earning assets are relatively stable sources of funds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and levels of competition.\n\nDeposits. Our deposits are generated primarily from our primary market area. We offer a selection of deposit accounts, including savings accounts, checking accounts, certificates of deposit and individual retirement accounts. Deposit account terms vary, with the principal differences being the minimum balance required, the amount of time the funds must remain on deposit and the interest rate.\n\nInterest rates paid, maturity terms, service fees and withdrawal penalties are established on a periodic basis. Deposit rates and terms are based primarily on current operating strategies and market rates, liquidity requirements, rates paid by competitors and growth goals. We rely upon personalized customer service, long-standing relationships with customers, and our favorable reputation in the community to attract and retain local deposits. We also seek to obtain deposits from our commercial loan customers.\n\n13\n\n[Table of Contents](#toc_page)\n\n \n\nThe flow of deposits is influenced significantly by general economic conditions, changes in money market and other prevailing interest rates and competition. The variety of deposit accounts offered allows us to be competitive in obtaining funds and responding to changes in consumer demand. Based on experience, we believe that our deposits are relatively stable. However, the ability to attract and maintain deposits and the rates paid on these deposits, has been and will continue to be significantly affected by market conditions.\n\nThe following table sets forth the distribution of total deposits, by account type, at the dates presented.\n\n \n\n \n\n \n\nAt March 31, 2026\n\n \n\n \n\nAt March 31, 2025\n\n \n\n \n\n \n\nAmount\n\n \n\n \n\nPercent\n\n \n\n \n\nAverage\nRate\n\n \n\n \n\nAmount\n\n \n\n \n\nPercent\n\n \n\n \n\nAverage\nRate\n\n \n\n \n\n \n\n(Dollars in thousands)\n\n \n\nNon-interest bearing demand\n\n \n\n$\n\n64,505\n\n \n\n \n\n \n\n14.01\n\n%\n\n \n\n \n\n—\n\n%\n\n \n\n$\n\n64,497\n\n \n\n \n\n \n\n15.50\n\n%\n\n \n\n \n\n—\n\n%\n\nSavings accounts\n\n \n\n \n\n49,768\n\n \n\n \n\n \n\n10.81\n\n \n\n \n\n \n\n0.53\n\n \n\n \n\n \n\n45,476\n\n \n\n \n\n \n\n10.93\n\n \n\n \n\n \n\n0.45\n\n \n\nMoney market accounts\n\n \n\n \n\n38,985\n\n \n\n \n\n \n\n8.47\n\n \n\n \n\n \n\n2.26\n\n \n\n \n\n \n\n30,718\n\n \n\n \n\n \n\n7.38\n\n \n\n \n\n \n\n2.29\n\n \n\nNOW accounts\n\n \n\n \n\n144,047\n\n \n\n \n\n \n\n31.29\n\n \n\n \n\n \n\n1.69\n\n \n\n \n\n \n\n152,782\n\n \n\n \n\n \n\n36.70\n\n \n\n \n\n \n\n1.67\n\n \n\nCertificates of deposit\n\n \n\n \n\n143,516\n\n \n\n \n\n \n\n31.18\n\n \n\n \n\n \n\n4.26\n\n \n\n \n\n \n\n104,129\n\n \n\n \n\n \n\n25.02\n\n \n\n \n\n \n\n4.47\n\n \n\nIndividual retirement accounts\n\n \n\n \n\n19,535\n\n \n\n \n\n \n\n4.24\n\n \n\n \n\n \n\n3.42\n\n \n\n \n\n \n\n18,599\n\n \n\n \n\n \n\n4.47\n\n \n\n \n\n \n\n3.56\n\n \n\nTotal\n\n \n\n$\n\n460,356\n\n \n\n \n\n \n\n100.00\n\n%\n\n \n\n \n\n2.55\n\n%\n\n \n\n$\n\n416,201\n\n \n\n \n\n \n\n100.00\n\n%\n\n \n\n \n\n2.56\n\n%\n\nAs of March 31, 2026 and 2025, the aggregate amount of uninsured deposits (deposits in amounts greater than or equal to $250,000, which is generally the maximum amount for federal deposit insurance), was $52.2 million and $54.8 million, respectively. In addition, as of March 31, 2026, the aggregate amount of all our uninsured certificates of deposit was $8.1 million. We have no deposits that are uninsured for any reason other than being in excess of the maximum amount for federal deposit insurance.\n\nAt March 31, 2026, we had approximately 179 depositors with uninsured deposits, resulting in an average balance of uninsured deposits of $291,000 per uninsured depositor. Of total uninsured deposits as of March 31, 2026, $30.4 million, or 58.28%, consisted of NOW accounts, $4.8 million, or 9.11%, consisted of savings accounts, $8.1 million, or 15.46%, consisted of certificates of deposit, including IRAs, $5.5 million, or 10.56% consisted of money market accounts and $3.4 million, or 6.59%, consisted of non-interest bearing demand accounts.\n\nThe following table sets forth the maturity of our uninsured certificates of deposit as of March 31, 2026.\n\n \n\n \n\n \n\nAt March 31, 2026\n\n \n\n \n\n \n\n(Dollars in thousands)\n\n \n\nMaturity Period:\n\n \n\n \n\n \n\nThree months or less\n\n \n\n$\n\n3,151\n\n \n\nOver three through six months\n\n \n\n \n\n2,553\n\n \n\nOver six through twelve months\n\n \n\n \n\n1,639\n\n \n\nOver twelve months\n\n \n\n \n\n723\n\n \n\nTotal\n\n \n\n$\n\n8,066\n\n \n\nBorrowings. We may obtain advances from the Federal Home Loan Bank of Topeka upon the security of our capital stock in it and our one- to four-family residential real estate portfolio. We may utilize these advances for asset/liability management purposes and for additional funding for our operations. Such advances may be made under several different credit programs, each of which has its own interest rate and range of maturities. At March 31, 2026, we had no outstanding advances from the Federal Home Loan Bank of Topeka. At March 31, 2026, based on pledged collateral and our ownership of Federal Home Loan Bank of Topeka common stock, we had access to up to $47.0 million of advances from the Federal Home Loan Bank of Topeka. The Association had $13.0 million in irrevocable letters of credit outstanding with the FHLB at March 31, 2026 to secure public deposits. We could significantly increase our borrowing capacity from the Federal Home Loan Bank of Topeka if we pledged additional assets as security.\n\nAs of March 31, 2026, the Association has an approved line of credit to borrow funds from the Federal Reserve Bank (“FRB”) Discount Window (“Discount Window”). The Association has pledged commercial real estate loans as security with a carrying value of $13.4 million to secure borrowings through the Discount Window, if needed. While the Association has conducted a test of borrowing through the Discount Window, there were no borrowings outstanding through the Discount Window at March 31, 2026. The Association had remaining availability for FRB borrowings of approximately $10.1 million at March 31, 2026.\n\nAs of March 31, 2026, we had a $5.0 million borrowing line from a private bankers’ bank, and we also have the ability to participate in the Federal Reserve Board’s Bank Term Funding Program if needed.\n\n14\n\n[Table of Contents](#toc_page)\n\n \n\nSubsidiary Activities\n\nHome Federal Savings’ only subsidiary is First Service Corporation, a Nebraska corporation that provides insurance services directly and sells securities through a third-party arrangement.\n\nEmployees\n\nAt March 31, 2026, we had 68 full-time employees and seven part-time employees. Our employees are not represented by a collective bargaining group, and we believe that our relationship with our employees is excellent. The success of our business is highly dependent on our employees, who provide value to our customers and communities. Our workplace culture provides a set of core values: a concern for others, trust, respect, hard work and a dedication to our customers. We seek to hire well-qualified employees who are also a good fit for our value system.\n\nWe believe that our ability to attract and retain top quality employees is a key to our future success. We continue to elevate individuals from within the organization into new roles and we expect to continue to assess our management and staffing needs and are likely to add personnel in the future in order to fully implement our business strategy.\n\nIn an effort to continue our investment in our employees and as part of the conversion, Home Federal Savings and Loan Association of Grand Island established the Employee Stock Ownership Plan (\"ESOP\") for its employees. Shares held in the ESOP will be released and allocated to employees on an annual basis based on the ratio of each such participant's annual compensation.\n\nFEDERAL AND STATE TAXATION\n\nFederal Taxation\n\nGeneral. Central Plains Bancshares and Home Federal Savings are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. The following discussion of federal taxation is intended only to summarize material federal income tax matters and is not a comprehensive description of the tax rules applicable to Central Plains Bancshares and Home Federal Savings.\n\nMethod of Accounting. For federal income tax purposes, we currently report our income and expenses on the accrual method of accounting and use a tax year ending March 31 for filing our federal income tax returns. The Small Business Protection Act of 1996 eliminated the use of the reserve method of accounting for bad debt reserves by savings institutions considered “large banks,” effective for taxable years beginning after 1995. Home Federal Savings is considered a “small bank” and therefore continues to use the reserve method of accounting for bad debt reserves.\n\nMinimum Tax. The alternative minimum tax (“AMT”) for corporations has been repealed for tax years beginning after December 31, 2017. Any unused minimum tax credit of a corporation may be used to offset regular tax liability for any tax year. At March 31, 2026 we had no minimum tax credit carryforward.\n\nNet Operating Loss Carryovers. Generally, a corporation may carry forward net operating losses generated in tax years beginning after December 31, 2017 indefinitely and can offset up to 80% of taxable income. Generally, net operating losses that existed prior to December 31, 2017 were required to be carried back to the two preceding years, with any excess carried over to the succeeding 20 tax years. Such losses can offset up to 100% of taxable income subject to Internal Revenue Code Section 382 limitation. At March 31, 2026, we had $1.4 million of pre-2018 net operating loss carry forward limited to utilization of $167,000 per tax year under Internal Revenue Code Section 382.\n\nCapital Loss Carryovers. Generally, a corporation may carry back capital losses to the preceding three taxable years and forward to the succeeding five taxable years. Any capital loss carryback or carryover is treated as a short-term capital loss for the year to which it is carried. As such, it is grouped with any other capital losses for the year to which carried and is used to offset any capital gains. Any undeducted loss remaining after the five-year carryover period is not deductible. At March 31, 2026, we had no capital loss carryovers.\n\nCorporate Dividends. Central Plains Bancshares may generally exclude from income 100% of dividends received from Home Federal Savings as a member of the same affiliated group of corporations.\n\nAudit of Tax Returns. Our federal income tax returns have not been audited in the most recent five-year period.\n\n15\n\n[Table of Contents](#toc_page)\n\n \n\nState Taxation\n\nWe are subject to Nebraska state taxation. Under Nebraska law, Home Federal Savings pays a financial institution tax that we classify as a franchise tax in lieu of a corporate income tax. The franchise tax is the lesser of two amounts computed based on our quarterly average deposits and net financial income, respectively. Presently, the tax is $0.31 per $1,000 of quarterly average deposits not to exceed an amount determined by applying 2.54% to our net financial income. Net financial income is our income after ordinary and necessary expenses but before income taxes as reported to the OCC.\n\nIn addition, Central Plains Bancshares is required to file a Nebraska corporation income tax return. For Nebraska income tax purposes, corporations are taxed at a flat rate, which is 5.20% for tax years beginning in 2025 and 4.55% for tax years beginning in 2026, subject to further scheduled reductions under Nebraska law. For this purpose, taxable income generally means federal taxable income, subject to certain state‑specific additions and subtractions, including the addition of interest income on non‑Nebraska municipal obligations and the exclusion of interest income from qualified U.S. governmental obligations. Taxable income reported by Central Plains Bancshares is determined without regard to the taxable income of Home Federal Savings, as Home Federal Savings files separate Nebraska financial institution tax returns.\n\nOther applicable state taxes include sales and use taxes and real and personal property taxes.\n\nOur state income tax returns have not been audited in the most recent five-year period.\n\nAs a Maryland business corporation, Central Plains Bancshares is required to file an annual report with and pay personal property taxes to the State of Maryland.\n\nSUPERVISION AND REGULATION\n\nGeneral\n\nAs a federal savings association, Home Federal Savings is subject to examination and regulation by the OCC and is also subject to examination by the FDIC as the insurer of its deposit accounts. This regulation and supervision establishes a comprehensive framework of activities in which an institution may engage and is intended primarily for the protection of the FDIC’s deposit insurance fund and depositors, and not for the protection of security holders. Home Federal Savings also is a member of and owns stock in the Federal Home Loan Bank of Topeka, which is one of the 11 regional banks in the Federal Home Loan Bank System.\n\nUnder this system of regulation, the regulatory authorities have extensive discretion in connection with their supervisory, enforcement, rulemaking and examination activities and policies, including rules or policies that: establish minimum capital levels; restrict the timing and amount of dividend payments; govern the classification of assets; determine the adequacy of loan loss reserves for regulatory purposes; and establish the timing and amounts of assessments and fees. Moreover, as part of their examination authority, the banking regulators assign numerical ratings to banks and savings institutions relating to capital, asset quality, management, liquidity, earnings and other factors. The receipt of a less than satisfactory rating in one or more categories may result in enforcement action by the banking regulators against a financial institution. A less than satisfactory rating may also prevent a financial institution, such as Home Federal Savings or its holding company, from obtaining necessary regulatory approvals to access the capital markets, pay dividends, acquire other financial institutions or establish new branches.\n\nIn addition, we must comply with significant anti-money laundering and anti-terrorism laws and regulations, Community Reinvestment Act laws and regulations, and fair lending laws and regulations. Government agencies have the authority to impose monetary penalties and other sanctions on institutions that fail to comply with these laws and regulations, which could significantly affect our business activities, including our ability to acquire other financial institutions or expand our branch network.\n\nCentral Plains Bancshares is a savings and loan holding company and is required to comply with the rules and regulations of the Federal Reserve Board. It is required to file certain reports with the Federal Reserve Board and is subject to examination by the enforcement authority of the Federal Reserve Board. Central Plains Bancshares is also subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.\n\nAny change in applicable laws or regulations, whether by the OCC, the FDIC, the Federal Reserve Board, the Securities and Exchange Commission or Congress, could have a material adverse impact on the operations and financial performance of Central Plains Bancshares and Home Federal Savings.\n\nSet forth below is a brief description of material regulatory requirements that are or will be applicable to Home Federal Savings and Central Plains Bancshares. The description is limited to certain material aspects of the statutes and regulations addressed and is not intended to be a complete description of such statutes and regulations and their effects on Home Federal Savings and Central Plains Bancshares.\n\n16\n\n[Table of Contents](#toc_page)\n\n \n\nFederal Banking Regulation\n\nBusiness Activities. A federal savings association derives its lending and investment powers from the Home Owners’ Loan Act, as amended, and applicable federal regulations. Under these laws and regulations, Home Federal Savings may invest in mortgage loans secured by residential and commercial real estate, commercial and industrial and consumer loans, certain types of debt securities and certain other assets, subject to applicable limits. Home Federal Savings may also establish subsidiaries that may engage in certain activities not otherwise permissible for Home Federal Savings to engage in directly, including real estate investment and securities and insurance brokerage.\n\nCapital Requirements. Federal regulations require federally insured depository institutions to meet several minimum capital standards: a common equity Tier 1 capital to risk-weighted assets ratio of 4.5%, a Tier 1 capital to risk-weighted assets ratio of 6.0%, a total capital to risk-weighted assets of 8.0%, and a 4.0% Tier 1 capital to adjusted average total assets leverage ratio.\n\nCommon equity Tier 1 capital is generally defined as common stockholders’ equity and retained earnings. Tier 1 capital is generally defined as common equity Tier 1 and additional Tier 1 capital. Additional Tier 1 capital includes certain noncumulative perpetual preferred stock and related surplus and minority interests in equity accounts of consolidated subsidiaries. Total capital includes Tier 1 capital (common equity Tier 1 capital plus additional Tier 1 capital) and Tier 2 capital. Tier 2 capital is comprised of capital instruments and related surplus, meeting specified requirements, and may include cumulative preferred stock and long-term perpetual preferred stock, mandatory convertible securities, intermediate preferred stock and subordinated debt. Also included in Tier 2 capital is the allowance for credit losses limited to a maximum of 1.25% of risk-weighted assets and, for institutions that have exercised an opt-out election regarding the treatment of Accumulated Other Comprehensive Income (“AOCI”), up to 45% of net unrealized gains on available-for-sale equity securities with readily determinable fair market values. Institutions that have not exercised the AOCI opt-out have AOCI incorporated into common equity Tier 1 capital (including unrealized gains and losses on available-for-sale-securities). Home Federal Savings exercised its AOCI opt-out election. Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations.\n\nIn determining the amount of risk-weighted assets for purposes of calculating risk-based capital ratios, all assets, including certain off-balance sheet assets (e.g., recourse obligations, direct credit substitutes, residual interests) are multiplied by a risk weight factor assigned by the regulations based on the risks believed inherent in the type of asset. Higher levels of capital are required for asset categories believed to present greater risk. For example, a risk weight of 0% is assigned to cash and U.S. government securities, a risk weight of 50% is generally assigned to prudently underwritten first lien one- to four-family residential real estate loans, a risk weight of 100% is assigned to commercial and consumer loans, a risk weight of 150% is assigned to certain past due loans and a risk weight of between 0% to 600% is assigned to permissible equity interests, depending on certain specified factors.\n\nIn addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements.\n\nThe federal banking agencies have developed a “Community Bank Leverage Ratio” (the ratio of Tier 1 capital to average total consolidated assets) for financial institutions with assets of less than $10 billion that meet certain qualifying criteria. A “qualifying community bank” that exceeds this ratio is deemed to be compliant with all other capital requirements, including the capital requirements to be considered “well capitalized” under Prompt Corrective Action statutes. The federal banking agencies have adopted a final rule that will reduce the required ratio to 8%, effective July 1, 2026. Home Federal Savings has not elected to be subject to the Community Bank Leverage Ratio framework.\n\nLoans-to-One Borrower. Generally, a federal savings association may not make a loan or extend credit to a single or related group of borrowers in excess of 15% of capital and surplus. An additional amount may be loaned, equal to 10% of capital and surplus, if the loan is secured by readily marketable collateral, which generally does not include real estate. At March 31, 2026, Home Federal Savings complied with the loans-to-one borrower limitations.\n\nQualified Thrift Lender Test. As a federal savings association, Home Federal Savings must satisfy the qualified thrift lender, or “QTL,” test. Under the QTL test, it must maintain at least 65% of its “portfolio assets” in “qualified thrift investments” (primarily residential mortgages and related investments, including mortgage-backed securities) in at least nine months of the most recent 12-month period. “Portfolio assets” generally means total assets of a savings association, less the sum of specified liquid assets up to 20% of total assets, goodwill and other intangible assets, and the value of property used in the conduct of the savings association’s business.\n\nHome Federal Savings also may satisfy the QTL test by qualifying as a “domestic building and loan association” as defined in the Internal Revenue Code of 1986, as amended. This test generally requires a savings association to have at least 75% of its deposits\n\n17\n\n[Table of Contents](#toc_page)\n\n \n\nheld by the public and earn at least 25% of its income from loans and U.S. government obligations. Alternatively, a savings association can satisfy this test by maintaining at least 60% of its assets in cash, real estate loans and U.S. Government or state obligations.\n\nA savings association that fails the qualified thrift lender test must operate under specified restrictions set forth in the Home Owners’ Loan Act. The Dodd-Frank Act made noncompliance with the QTL test subject to agency enforcement action for a violation of law. At March 31, 2026, Home Federal Savings complied with the qualified thrift lender test.\n\nCapital Distributions. Federal regulations govern capital distributions by a federal savings association, which include cash dividends, stock repurchases, and other transactions charged to its capital account. A federal savings association must file an application with the OCC for approval of a capital distribution if:\n\n•\nthe total capital distributions for the applicable calendar year exceed the sum of the savings association’s net income for that year to date plus its retained net income for the preceding two years;\n\n•\nthe savings association would not be at least adequately capitalized following the distribution;\n\n•\nthe distribution would violate any applicable statute, regulation, agreement or regulatory condition; or\n\n•\nthe savings association is not eligible for expedited treatment of its filings, generally due to an unsatisfactory CAMELS rating or being subject to a cease-and-desist order or formal written agreement that requires action to improve the institution’s financial condition.\n\nEven if an application is not otherwise required, every savings association that is a subsidiary of a savings and loan holding company, such as Home Federal Savings, must still file a notice with the Federal Reserve Board at least 30 days before the board of directors declares a dividend or approves a capital distribution.\n\nA notice or application related to a capital distribution may be disapproved if:\n\n•\nthe savings association would be undercapitalized following the distribution;\n\n•\nthe proposed capital distribution raises safety and soundness concerns; or\n\n•\nthe capital distribution would violate a prohibition contained in any statute, regulation or agreement.\n\nIn addition, an insured depository institution may not make any capital distribution if, after making such distribution, the institution would fail to meet any applicable regulatory capital requirement. A federal savings association also may not make a capital distribution that would reduce its regulatory capital below the amount required for the liquidation account established in connection with its conversion to stock form.\n\nCommunity Reinvestment Act and Fair Lending Laws. All federal savings associations have a responsibility under the Community Reinvestment Act and related regulations to help meet the credit needs of their communities, including low- and moderate-income borrowers. In connection with its examination of a federal savings association, the OCC is required to assess the federal savings association’s record of compliance with the Community Reinvestment Act. A savings association’s failure to comply with the provisions of the Community Reinvestment Act could, at a minimum, result in denial of certain corporate applications such as branches or mergers, or in restrictions on its activities. In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices on the basis of characteristics specified in those statutes. The failure to comply with the Equal Credit Opportunity Act and the Fair Housing Act could result in enforcement actions by the OCC, as well as other federal regulatory agencies and the Department of Justice.\n\nThe Community Reinvestment Act requires all institutions insured by the FDIC to publicly disclose their rating. Home Federal Savings received a “satisfactory” Community Reinvestment Act rating in its most recent federal examination.\n\nTransactions with Related Parties. A federal savings association’s authority to engage in transactions with its affiliates is limited by Sections 23A and 23B of the Federal Reserve Act and federal regulations, as made applicable to the association by the Home Owners' Loan Act. An affiliate is generally a company that controls, or is under common control with, an insured depository institution such as Home Federal Savings. Central Plains Bancshares is an affiliate of Home Federal Savings because of its control of Home Federal Savings. In general, transactions between an insured depository institution and its affiliates are subject to certain quantitative limits and collateral requirements. In addition, federal regulations prohibit a savings association from lending to any of its affiliates that are engaged in activities that are not permissible for bank holding companies and from purchasing the securities of any affiliate, other than a subsidiary. Finally, transactions with affiliates must be consistent with safe and sound banking practices, not involve the purchase of low-quality assets and be on terms that are as favorable to the institution as comparable transactions with non-affiliates.\n\n18\n\n[Table of Contents](#toc_page)\n\n \n\nHome Federal Savings’ authority to extend credit to its directors, executive officers and 10% stockholders, as well as to entities controlled by such persons, is currently governed by the requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O of the Federal Reserve Board. Among other things, these provisions generally require that extensions of credit to insiders:\n\n•\nbe made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features; and\n\n•\nnot exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of Home Federal Savings’ capital.\n\nIn addition, extensions of credit in excess of certain limits must be approved by Home Federal Savings’ board of directors. Extensions of credit to executive officers are subject to additional limits based on the type of extension involved.\n\nEnforcement. The OCC has primary enforcement responsibility over federal savings associations and has authority to bring enforcement action against all “institution-affiliated parties,” including directors, officers, stockholders, attorneys, appraisers and accountants who knowingly or recklessly participate in specified misconduct that caused or is likely to cause a financial loss to or have an adverse effect on a federal savings association. Formal enforcement action by the OCC may range from the issuance of a capital directive or cease and desist order to removal of officers and/or directors of the institution and the appointment of a receiver or conservator. Civil penalties cover a wide range of violations and actions, and maximum amounts are adjusted annually for inflation. The FDIC also has the authority to terminate deposit insurance or recommend to the OCC that enforcement action be taken with respect to a particular savings association. If such action is not taken, the FDIC has authority to take the action under specified circumstances.\n\nStandards for Safety and Soundness. Federal law requires each federal banking agency to prescribe certain standards for all insured depository institutions. These standards relate to, among other things, internal controls, information systems and audit systems, loan documentation, credit underwriting, interest rate risk exposure, asset growth, compensation and other operational and managerial standards as the agency deems appropriate. Interagency guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired. If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard. If an institution fails to meet these standards, the appropriate federal banking agency may require the institution to implement an acceptable compliance plan. Failure to implement such a plan can result in further enforcement action, including the issuance of a cease-and-desist order or the imposition of civil money penalties.\n\nInterstate Banking and Branching. Federal law permits well-capitalized and well-managed holding companies to acquire banks in any state, subject to Federal Reserve Board approval, certain concentration limits and other specified conditions. Interstate mergers of banks are also authorized, subject to regulatory approval and other specified conditions. In addition, among other things, amendments made by the Dodd-Frank Act permit banks to establish de novo branches on an interstate basis provided that branching is authorized by the law of the host state for the banks chartered by that state.\n\nPrompt Corrective Action. Federal law requires, among other things, that federal bank regulators take “prompt corrective action” with respect to institutions that do not meet minimum capital requirements. For this purpose, the law establishes five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. Under the regulations, an institution is deemed to be “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 ratio of 6.5% or greater. An institution is deemed to be “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a leverage ratio of 4.0% or greater and a common equity Tier 1 ratio of 4.5% or greater. An institution is deemed to be “undercapitalized” if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a leverage ratio of less than 4.0% or a common equity Tier 1 ratio of less than 4.5%. An institution is deemed to be “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a leverage ratio of less than 3.0% or a common equity Tier 1 ratio of less than 3.0%. An institution is considered to be “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets that is equal to or less than 2.0%.\n\nFederal law and regulations also specify circumstances under which a federal banking agency may reclassify a well-capitalized institution as adequately capitalized and may require an institution classified as less than well capitalized to comply with supervisory actions as if it were in the next lower category.\n\n19\n\n[Table of Contents](#toc_page)\n\n \n\nThe OCC may order savings associations that have insufficient capital to take corrective actions. For example, a savings association that is categorized as “undercapitalized” is subject to growth limitations and is required to submit a capital restoration plan, and a holding company that controls such a savings association is required to guarantee that the savings association complies with the restoration plan. A “significantly undercapitalized” savings association may be subject to additional restrictions. Savings associations deemed by the OCC to be “critically undercapitalized” would be subject to the appointment of a receiver or conservator.\n\nAt March 31, 2026, Home Federal Savings met the criteria for being considered “well capitalized.”\n\nInsurance of Deposit Accounts. Home Federal Savings is a member of the Deposit Insurance Fund, which is administered by the FDIC. Its deposit accounts are insured by the FDIC, generally up to a maximum of $250,000 per depositor.\n\nThe FDIC imposes deposit insurance assessments against all insured depository institutions. An institution’s assessment rate depends upon the perceived risk of the institution to the Deposit Insurance Fund, with institutions deemed less risky paying lower rates. Currently, assessments for institutions of less than $10 billion of total assets are based on financial measures and supervisory ratings derived from statistical models estimating the probability of failure within three years. The FDIC may increase or decrease the range of assessments uniformly, except that no adjustment can deviate more than two basis points from the base assessment rate without notice and comment rulemaking.\n\nA significant increase in insurance premiums would have an adverse effect on the operating expenses and results of operations of Home Federal Savings. We cannot predict what deposit insurance assessment rates will be in the future.\n\nInsurance of deposits may be terminated by the FDIC upon finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC. We do not know of any practice, condition or violation that might lead to termination of deposit insurance for Home Federal Savings.\n\nPrivacy Regulations. Federal regulations generally require that Home Federal Savings disclose its privacy policy, including identifying with whom it shares a customer’s “non-public personal information,” to customers at the time of establishing the customer relationship and annually thereafter. In addition, Home Federal Savings is required to provide its customers with the ability to “opt-out” of having their personal information shared with unaffiliated third parties and not to disclose account numbers or access codes to non-affiliated third parties for marketing purposes. Home Federal Savings has a privacy protection policy in place and believes that such policy is in compliance with the regulations.\n\nCyber Security. The federal banking agencies have adopted rules providing for notification requirements for banking organizations and their service providers for significant cybersecurity incidents. A banking organization is required to notify its primary federal regulator as soon as possible, and no later than 36 hours after the banking organization determines that a “computer-security incident” rising to the level of a “notification incident” has occurred. Notification is required for incidents that have materially disrupted or degraded, or are reasonably likely to materially disrupt or degrade, the banking organization’s ability to carry out banking operations, activities, or processes or to deliver banking products and services in the ordinary course, or operations the failure of which would threaten the stability of the financial sector. Service providers are required under the rule to notify affected banking organization customers as soon as possible when the provider determines that it has experienced a computer-security incident that has materially affected or is reasonably likely to materially affect the banking organization’s customers for four or more hours.\n\nBank Secrecy Act, USA PATRIOT Act and Anti-Money Laundering Regulations. We are subject to federal anti-money laundering and anti-terrorist financing laws, including the Bank Secrecy Act (“BSA”) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (the “USA PATRIOT Act”) and those laws’ implementing regulations issued by FinCEN. The USA PATRIOT Act provides federal agencies the power to address money laundering and terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened anti-money laundering requirements. The USA PATRIOT Act has also implemented measures intended to encourage information sharing among bank regulatory agencies and law enforcement bodies. Together, the BSA and USA PATRIOT Act impose affirmative obligations on a broad range of financial institutions, including banks, thrifts. brokers, dealers, credit unions, money transfer agents and parties registered under the Commodity Exchange Act. The BSA and the USA PATRIOT Act, and their implementing regulations also require banks to: establish anti-money laundering compliance programs that include policies, procedures and internal controls, the appointment of an anti-money laundering compliance officer, a training program, independent testing, and customer due diligence; file certain reports with FinCEN and law enforcement that are designed to assist in the direction and prevention of money laundering and terrorist financing activities; establish programs specifying procedures for obtaining and maintaining certain records from customers seeking to open new accounts, including verifying the identity of customers; in certain circumstances, comply with enhanced due diligence policies, procedures and controls designed to detect and review for certain high risk customers or accounts. The USA PATRIOT Act also includes prohibitions on correspondent accounts for foreign shell banks and requires compliance with record keeping obligations with respect to correspondent accounts of foreign banks.\n\n20\n\n[Table of Contents](#toc_page)\n\n \n\nProhibitions Against Tying Arrangements. Federal savings associations are prohibited, subject to some exceptions, from extending credit to or offering any other service, or fixing or varying the consideration for such extension of credit or service, on the condition that the customer obtain some additional service from the institution or its affiliates or not obtain services of a competitor of the institution.\n\nOther Regulations\n\nInterest and other charges collected or contracted for by Home Federal Savings are subject to state usury laws and federal laws concerning interest rates. Loan operations are also subject to state and federal laws applicable to credit transactions, such as the:\n\n•\nHome Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves;\n\n•\nEqual Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited factors in extending credit;\n\n•\nFair Credit Reporting Act of 1978, governing the use and provision of information to credit reporting agencies; and\n\n•\nRules and regulations of the various federal and state agencies charged with the responsibility of implementing such federal and state laws.\n\nThe deposit operations of Home Federal Savings also are subject to, among others, the:\n\n•\nRight to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records;\n\n•\nCheck Clearing for the 21st Century Act (also known as “Check 21”), which gives “substitute checks,” such as digital check images and copies made from that image, the same legal standing as the original paper check; and\n\n•\nElectronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.\n\nFederal Home Loan Bank System\n\nHome Federal Savings is a member of the Federal Home Loan Bank of Topeka, which is one of 11 regional Federal Home Loan Banks in the Federal Home Loan Bank System. The Federal Home Loan Bank of Topeka provides a central credit facility primarily for its member institutions. Members of the Federal Home Loan Bank of Topeka are required to acquire and hold shares of capital stock in the Federal Home Loan Bank of Topeka. Home Federal Savings complied with this requirement at March 31, 2026. Based on redemption provisions of the Federal Home Loan Bank of Topeka, the stock has no quoted market value and is carried at cost. Home Federal Savings reviews for impairment, based on the ultimate recoverability, the cost basis of the Federal Home Loan Bank of Topeka stock. At March 31, 2026, no impairment has been recognized.\n\nHolding Company Regulation\n\nCentral Plains Bancshares is a unitary savings and loan holding company subject to regulation and supervision by the Federal Reserve Board. The Federal Reserve Board has enforcement authority over Central Plains Bancshares and its non-savings institution subsidiaries. Among other things, this authority permits the Federal Reserve Board to restrict or prohibit activities that are determined to be a risk to Home Federal Savings.\n\nAs a savings and loan holding company, Central Plains Bancshares’ activities are limited to those activities permissible by law for financial holding companies (if Central Plains Bancshares makes an election to be treated as a financial holding company and meets the other requirements to be a financial holding company) or multiple savings and loan holding companies. Central Plains Bancshares does not intend to make an election to be treated as a financial holding company. A financial holding company may engage in activities that are financial in nature, incidental to financial activities or complementary to a financial activity. Such activities include lending and other activities permitted for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act, insurance and underwriting equity securities. Multiple savings and loan holding companies are authorized to engage in activities specified by federal regulation, including activities permitted for bank holding companies under Section 4(c)(8) of the Bank Holding Company Act.\n\n21\n\n[Table of Contents](#toc_page)\n\n \n\nFederal law prohibits a savings and loan holding company, directly or indirectly, or through one or more subsidiaries, from acquiring more than 5% of another savings institution or savings and loan holding company without prior written approval of the Federal Reserve Board, and from acquiring or retaining control of any depository institution not insured by the FDIC. In evaluating applications by holding companies to acquire savings institutions, the Federal Reserve Board must consider such things as the financial and managerial resources and future prospects of the company and institution involved, the effect of the acquisition on and the risk to the federal deposit insurance fund, the convenience and needs of the community and competitive factors. A savings and loan holding company may not acquire a savings institution in another state and hold the target institution as a separate subsidiary unless it is a supervisory acquisition under Section 13(k) of the Federal Deposit Insurance Act or the law of the state in which the target is located authorizes such acquisitions by out-of-state companies.\n\nSavings and loan holding companies historically have not been subject to consolidated regulatory capital requirements. The Dodd-Frank Act requires the Federal Reserve Board to establish minimum consolidated capital requirements for all depository institution holding companies that are as stringent as those required for the insured depository subsidiaries. However, savings and loan holding companies of under $3 billion in consolidated assets remain exempt from consolidated regulatory capital requirements, unless the Federal Reserve determines otherwise in particular cases.\n\nThe Dodd-Frank Act extended the “source of strength” doctrine to savings and loan holding companies. The Federal Reserve Board has promulgated regulations implementing the “source of strength” policy that require holding companies to act as a source of strength to their subsidiary depository institutions by providing capital, liquidity and other support in times of financial stress.\n\nThe Federal Reserve Board has issued a policy statement regarding the payment of dividends and the repurchase of shares of common stock by bank holding companies and savings and loan holding companies. In general, the policy provides that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition. Regulatory guidance provides for prior regulatory consultation with respect to capital distributions in certain circumstances such as where the company’s net income for the past four quarters, net of dividends previously paid over that period, is insufficient to fully fund the dividend or the company’s overall rate of earnings retention is inconsistent with the company’s capital needs and overall financial condition. The ability of a holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized. The policy statement also states that a holding company should inform the Federal Reserve Board supervisory staff before redeeming or repurchasing common stock or perpetual preferred stock if the holding company is experiencing financial weaknesses or if the repurchase or redemption would result in a net reduction, at the end of a quarter, in the amount of such equity instruments outstanding compared with the beginning of the quarter in which the redemption or repurchase occurred. These regulatory policies may affect the ability of Central Plains Bancshares to pay dividends, repurchase shares of common stock or otherwise engage in capital distributions.\n\nFor Central Plains Bancshares to be regulated by the Federal Reserve Board as savings and loan holding company rather than as a bank holding company, Home Federal Savings must qualify as a “qualified thrift lender” under federal regulations or satisfy the “domestic building and loan association” test under the Internal Revenue Code. Under the qualified thrift lender test, a savings institution is required to maintain at least 65% of its “portfolio assets” (total assets less: (i) specified liquid assets up to 20% of total assets; (ii) intangible assets, including goodwill; and (iii) the value of property used to conduct business) in certain “qualified thrift investments” (primarily residential mortgages and related investments, including certain mortgage-backed and related securities) in at least nine out of each 12 month period. At March 31, 2026, Home Federal Savings maintained approximately 65.13% of its portfolio assets in qualified thrift investments and was in compliance with the qualified thrift lender requirement.\n\nFederal Securities Laws\n\nCentral Plains Bancshares common stock is registered with the Securities and Exchange Commission after the conversion and stock offering. Central Plains Bancshares is subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934, as amended.\n\nThe registration under the Securities Act of 1933, as amended, of shares of common stock issued in Central Plains Bancshares’ stock offering does not cover the resale of those shares. Shares of common stock purchased by persons who are not affiliates of Central Plains Bancshares may be resold without registration. Shares purchased by an affiliate of Central Plains Bancshares are subject to the resale restrictions of Rule 144 under the Securities Act of 1933. If Central Plains Bancshares meets the current public information requirements of Rule 144 under the Securities Act of 1933, each affiliate of Central Plains Bancshares that complies with the other conditions of Rule 144, including those that require the affiliate’s sale to be aggregated with those of other persons, would be able to sell in the public market, without registration, a number of shares not to exceed, in any three-month period, the greater of 1% of the outstanding shares of Central Plains Bancshares, or the average weekly volume of trading in the shares during the preceding four calendar weeks. In the future, Central Plains Bancshares may permit affiliates to have their shares registered for sale under the Securities Act of 1933.\n\n22\n\n[Table of Contents](#toc_page)\n\n \n\nSarbanes-Oxley Act\n\nThe Sarbanes-Oxley Act is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures required under the federal securities laws. We have policies, procedures and systems designed to comply with these regulations, and we review and document such policies, procedures and systems to ensure continued compliance with these regulations.\n\nChange in Control Regulations\n\nUnder the Change in Bank Control Act, a federal statute, no person may acquire control of a savings and loan holding company such as Central Plains Bancshares unless the Federal Reserve Board has been given 60 days prior written notice and has not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition. Control, as defined under federal law and regulation, means the power, directly or indirectly, to direct management or policies of an insured depository institution, or the ownership, control of or holding irrevocable proxies representing more than 25% of any class of voting stock, control in any manner of the election of a majority of the institution’s directors, or a determination by the regulator that the acquiror has the power, directly or indirectly, to exercise a controlling influence over the management or policies of the institution. Acquisition of more than 10% of any class of a savings and loan holding company’s voting stock constitutes a rebuttable determination of control under the regulations under certain circumstances including where, as is the case with Central Plains Bancshares, the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934\n\nIn addition, federal regulations provide that no company may acquire control of a savings and loan holding company without the prior approval of the Federal Reserve Board. Any company that acquires such control becomes a “savings and loan holding company” subject to registration, examination and regulation by the Federal Reserve Board."}