Item 7A​ ​Quantitative and Qualitative Disclosures About Market Risk

The goal of the Company's asset/liability management strategy is to manage the interest rate sensitivity of both interest-earning assets and interest-bearing liabilities in order to maximize net interest income without exposing the Company to an excessive level of interest rate risk. The Company employs various strategies intended to manage the potential effect that changing interest rates may have on future operating results. The primary asset/liability management strategy has been to focus on matching the anticipated repricing intervals of interest-earning assets and interest-bearing liabilities. At times, however, depending on the level of general interest rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, the Company may increase its interest rate risk position in order to maintain its net interest margin.

In an effort to manage the interest rate risk resulting from fixed rate lending, the Company has at times utilized longer term (up to 10 year maturities) fixed-rate FHLB advances, which may be subject to early redemption, to offset interest rate risk. Other elements of the Company's current asset/liability strategy include: (i) increasing originations of commercial real estate, commercial business loans, agricultural real estate, and agricultural operating lines, which typically provide higher yields and shorter repricing periods, but inherently increase credit risk, (ii) utilizing hedges, such as pay fixed/receive floating swaps on longer maturity 1-4 family residential real estate loans (iii) limiting the price volatility of the investment portfolio by maintaining a relatively short weighted average maturity, (iv) actively soliciting less rate-sensitive nonmaturity deposits, and (v) offering competitively priced money market accounts and CDs with maturities of up to five years. The degree to which each segment of the strategy is achieved will affect profitability and exposure to interest rate risk.

The Company continues to generate long-term, fixed-rate residential loans. During the fiscal year ended June 30, 2025, fixed rate residential loan originations totaled $141.4 million (of which $21.6 million was originated for sale into the secondary market), compared to $119.4 million during the prior fiscal year (of which $21.9 million was originated for sale into the secondary market). At June 30, 2025, the fixed-rate, single-family residential loan portfolio totaled $632.9 million, with a weighted average maturity of 163 months, compared to $622.1 million, with a weighted average maturity of 176 months at June 30, 2024. The Company originated $58.4 million in adjustable rate residential loans during the fiscal year ended June 30, 2025, compared to $109.0 million during the prior fiscal year. At June 30, 2025, fixed rate loans with remaining maturities in excess of 10 years totaled $350.4 million, or 8.7%, of loans receivable, compared to $369.8 million, or 9.7%, of loans receivable, at June 30, 2024. The Company originated $375.2 million in fixed rate commercial, commercial real estate, and multi-family loans during the year ended June 30, 2025, compared to $300.3 million during the prior fiscal year. The Company also originated $119.5 million in adjustable rate commercial, commercial real estate, and multi-family loans during the fiscal year ended June 30, 2025, compared to $109.9 million during the prior fiscal year. At June 30, 2025, adjustable-rate home equity lines of credit totaled $86.7 million, compared to $72.8 million as of June 30, 2024. At June 30, 2025, the Company's weighted average life of its investment portfolio was 5.0 years, compared to 5.1 years at June 30, 2024. Effective duration of the portfolio indicates a relatively stable price sensitivity of approximately 2.6% per 100 basis points movement in market rates at June 30, 2025, unchanged from the year ago period. At June 30, 2025, CDs with original terms of two years or more totaled $322.5 million, compared to $335.0 million at June 30, 2024. Management continues to focus on customer retention, customer satisfaction, and offering new products to customers in order to increase the Company's amount of less rate-sensitive deposit accounts.

INTEREST RATE SENSITIVITY ANALYSIS

The following table sets forth as of June 30, 2025, management's estimates of the projected changes in net portfolio value in the event of 100, 200, 300, and 400 basis point, instantaneous and permanent parallel increases or decreases in market interest rates. The table for June 30, 2024, contains management's estimates of the projected changes in net portfolio value in the event of 100, 200, and 300 basis point, instantaneous and permanent parallel increases or decreases in market interest rates.

Computations of prospective effects of hypothetical interest rate changes are based on an internally generated model using actual maturity and repricing schedules for the Bank's loans and deposits, and are based on numerous assumptions, including relative levels of market interest rates, loan repayments and deposit run-offs. Further, the

computations do not consider any reactions that the Bank may undertake in response to changes in interest rates. These projected changes should not be relied upon as indicative of actual results in any of the aforementioned interest rate changes.

Management cannot accurately predict future interest rates or their effect on the Bank's NPV in the future. The shape of the yield curve may vary in certain interest rate environments and is not captured in an instantaneous parallel shock. Certain shortcomings are inherent in the method of analysis presented in the computation of NPV. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in differing degrees to changes in market interest rates. Additionally, certain assets, such as adjustable-rate loans, have an initial fixed rate period, typically from one to seven years, and over the remaining life of the asset changes in the interest rate are restricted. In addition, the proportion of adjustable-rate loans in the Bank's portfolios could decrease in future periods due to refinancing activity if market interest rates remain steady in the future. Further, in the event of a change in interest rates, prepayment and early withdrawal levels could deviate significantly from those assumed in the table. Finally, the ability of many borrowers to service their adjustable-rate debt may decrease in the event of an interest rate increase.

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The Company's growth strategy has included origination of fixed-rate loans, as discussed under "Quantitative and Qualitative Disclosures About Market Risk," above. Our fixed rate loan portfolio and the behavior of fixed-rate borrowers in a higher interest rate environment, especially over the course of fiscal 2023 and 2024, pressured our NPV. Since June 30, 2024, market interest rates at the mid-point of the curve have decreased, positively impacting the modeled value of our fixed rate loans and bonds at June 30, 2025. Also benefiting the NPV was an overall increase in earning asset yields compared to June 30, 2024, which was primarily attributable to an increase in loan yields, as securities and other interest earning asset yields decreased over this period. The decrease in rates had an inverse impact on liabilities, primarily attributable to the modeled value of the deposit portfolio. This was partially offset by a decrease in the cost of deposits since June 30, 2024. The Company's sensitivity has also decreased in this period due to an increase in cash balances and a slight decrease in fixed rate loans as a percentage of the total portfolio, as well as a slight reduction in the duration of fixed-rate loans in total. In addition to these on-balance sheet changes, the Company also increased the notional amount of its pay-fixed/receive-floating interest rate swaps, designed to hedge the residential loan portfolio

against the risk of rising interest rates, to $60 million in fiscal 2025, as compared to $40 million in similar interest rate swaps outstanding at June 30, 2024. $10 million of this additional notional amount is forward starting in the second quarter of fiscal 2026. The Company continues to manage its balance sheet to maximize earnings through interest rate cycles, while maintaining safe and sound risk management practices. Over time, the Company has worked to limit its exposure to rising rates by increasing the share of funding on its balance sheet obtained through lower cost non-maturity transaction accounts and retail time deposits, and by limiting short-term FHLB borrowings. See information regarding the Company's derivative financial agreements in Note 17: Derivative Financial Instruments of these Notes to Consolidated Financial Statements.

The Bank's board of directors is responsible for reviewing asset and liability management policies. The Bank's Asset/Liability Committee meets monthly to review interest rate risk and trends, as well as liquidity, capital ratios, and other requirements. The Bank's management is responsible for administering the policies and determinations of the board of directors with respect to the Bank's asset and liability management goals and strategies.

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