[10-Q] Security Midwest Bancorp, Inc. Quarterly Earnings Report

Rhea-AI Filing Summary

Security Midwest Bancorp, Inc. filed its quarterly report for the period ended September 30, 2025. The company completed its mutual-to-stock conversion on July 31, 2025, selling 889,781 shares at $10.00 for gross proceeds of $8,897,810. After approximately $1.55 million in offering costs, the company contributed $6.2 million to the bank, loaned $622,850 to its ESOP (which purchased 62,285 shares), and retained about $479,000.

Quarterly net income was $281,057, down from $371,263 a year ago, as higher noninterest expenses offset stronger net interest income. Year-to-date net income rose to $1,032,150 from $907,822. EPS was $0.34 for the quarter and $1.25 for the nine months. Net interest income improved to $1,969,945 in the quarter, while the provision for credit losses was $0.

Total assets were $203,868,750 versus $214,541,091 at year-end. Deposits were $179,750,881 versus $199,372,024. Loans receivable were $115,036,974 (net loans $113,885,820). Shareholders’ equity increased to $23,249,180 from $13,951,484, aided by the offering and an improvement in accumulated other comprehensive loss to $(3,194,982) from $(4,720,841).

Insights

Banking analyst

Conversion added capital; earnings steady YTD, expenses up.

Security Midwest Bancorp completed its mutual-to-stock conversion, raising $8,897,810 and boosting equity to $23,249,180 from $13,951,484. Proceeds were allocated to the bank, an ESOP loan of $622,850, and a retained portion, providing balance sheet flexibility.

Operating results show mixed trends: Q3 net interest income rose to $1,969,945 with a $0 provision, but noninterest expenses increased, particularly salaries and data processing, contributing to quarterly net income of $281,057. Year-to-date net income improved to $1,032,150.

Balance sheet shifts include lower deposits at $179,750,881 and assets at $203,868,750. Accumulated other comprehensive loss improved to $(3,194,982), reflecting securities valuation recovery. Actual impact will depend on sustaining margin gains and deposit trends in subsequent periods.

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ROC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________

Commission File Number: 000-56767

SECURITY MIDWEST BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland	99-4917712
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
510 E. Monroe Springfield, Illinois	62701
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (217) 789-3500

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

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

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of November 14, 2025, the registrant had 889,781 shares of common stock outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Shareholders' Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	45
PART II.	OTHER INFORMATION	46
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	47
Signatures		48

i

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Security Midwest Bancorp, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

		September 30,				December 31,
		2025				2024
Assets		(Unaudited)
Cash on hand		$	2,563,176			$	4,109,800
Due from banks			31,073,675				39,033,504
Federal funds sold			1,158,000				397,000
Cash and cash equivalents			34,794,851				43,540,304
Held-to-maturity securities			245,000				980,144
Available-for-sale securities			44,123,425				45,412,339
Loans held for sale			338,453				-
Loans receivable			115,036,974				114,210,342
Allowance for credit losses			(1,151,154	)			(1,162,211	)
Loans, net			113,885,820				113,048,131
Federal Home Loan Bank stock			697,500				697,500
Premises and equipment, net			3,063,929				2,909,534
Accrued interest receivable			657,720				710,199
Mortgage servicing rights, net			329,636				325,761
Deferred tax assets, net			2,027,219				2,965,633
Bank owned life insurance			2,290,112				2,237,215
Other assets			1,415,085				1,714,331
Total assets		$	203,868,750			$	214,541,091
Liabilities and Shareholders' Equity
Liabilities
Deposits
Demand		$	111,645,134			$	126,798,670
Savings			25,002,540				26,025,186
Time			43,103,207				46,548,168
Total deposits			179,750,881				199,372,024
Advances from borrowers for taxes and insurance			214,089				356,424
Accrued expenses and other liabilities			654,600				861,159
Total liabilities			180,619,570				200,589,607
Shareholders' Equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued			—				—
Common stock, $0.01 par value, 10,000,000 shares authorized,
issued 889,781 at September 30, 2025			8,898				—
Additional paid-in capital			7,341,182				—
Unallocated common stock of ESOP			(610,393	)			—
Retained earnings			19,704,475				18,672,325
Accumulated other comprehensive loss			(3,194,982	)			(4,720,841	)
Total shareholders' equity			23,249,180				13,951,484
Total liabilities and shareholders' equity		$	203,868,750			$	214,541,091

See Notes to Condensed Consolidated Financial Statements

1

Security Midwest Bancorp, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2025				2024				2025				2024
Interest Income
Loans		$	1,935,261			$	1,767,956			$	5,566,688			$	4,929,079
Investment securities			280,471				332,684				885,559				1,026,658
Interest-bearing deposits and other			295,811				504,675				1,054,582				1,428,622
Total interest income			2,511,543				2,605,315				7,506,829				7,384,359
Interest Expense
Deposits			541,585				783,848				1,660,685				2,162,451
Federal Home Loan Bank advances			13				47				46				3,348
Total interest expense			541,598				783,895				1,660,731				2,165,799
Net Interest Income			1,969,945				1,821,420				5,846,098				5,218,560
Provision for Credit Losses			—				27,884				8,750				27,884
Net Interest Income After Provision for Credit Losses			1,969,945				1,793,536				5,837,348				5,190,676
Noninterest Income
Service fees on deposits			239,576				268,597				740,739				793,316
Debit card fees			97,564				103,855				293,619				312,484
Mortgage loan servicing fees, net			28,164				31,937				87,573				100,794
Gain on sale of loans			39,069				21,342				112,572				40,567
Other noninterest income			88,969				79,100				214,837				156,319
Total noninterest income			493,342				504,831				1,449,340				1,403,480
Noninterest Expense
Salaries and employee benefits			1,263,593				999,566				3,498,892				3,021,195
Occupancy and equipment			130,076				141,012				429,206				415,679
Data processing fees			189,488				153,812				485,756				431,653
FDIC insurance premiums			18,000				36,000				68,853				99,000
Advertising			45,884				53,385				139,717				117,392
Directors fees			24,101				25,050				72,300				74,200
Debit card expense			17,461				19,434				53,246				56,763
Professional fees			191,367				168,669				483,624				484,595
Telephone and internet			34,479				33,658				106,173				99,017
Other			150,271				169,256				512,877				556,220
Total noninterest expense			2,064,720				1,799,842				5,850,644				5,355,714
Income before income taxes			398,567				498,525				1,436,044				1,238,442
Provision for income taxes			117,510				127,262				403,894				330,620
Net Income		$	281,057			$	371,263			$	1,032,150			$	907,822
Earnings per share - basic and diluted		$	0.34			n/a				$	1.25			n/a

See Notes to Condensed Consolidated Financial Statements

2

Security Midwest Bancorp, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2025				2024				2025				2024
Net income		$	281,057			$	371,263			$	1,032,150			$	907,822
Other comprehensive income:
Net unrealized gains on available-for-sale securities			996,400				1,577,306				2,134,070				1,395,712
Tax expense			(283,974	)			(449,532	)			(608,211	)			(397,778	)
Other comprehensive income			712,426				1,127,774				1,525,859				997,934
Comprehensive income		$	993,483			$	1,499,037			$	2,558,009			$	1,905,756

See Notes to Condensed Consolidated Financial Statements

3

Security Midwest Bancorp, Inc. and Subsidiaries

Condensed Consolidated Statements of Shareholder's Equity

(Unaudited)

																		Accumulated
						Additional				Unallocated								Other
		Common				Paid-in				Common Stock				Retained				Comprehensive
For the three months ended September 30, 2025		Stock				Capital				of ESOP				Earnings				Income (Loss)				Total
Balance at July 1, 2025		$	—			$	—			$	—			$	19,423,418			$	(3,907,408	)		$	15,516,010
Proceeds from issuance of common stock, net of offering costs			8,898				7,338,514				—				—				—				7,347,412
Purchase of ESOP shares			—				—				(622,850	)			—				—				(622,850	)
Net income			—				—				—				281,057				—				281,057
Release of ESOP shares			—				2,668				12,457				—				—				15,125
Other comprehensive income			—				—				—				—				712,426				712,426
Balance at September 30, 2025		$	8,898			$	7,341,182			$	(610,393	)		$	19,704,475			$	(3,194,982	)		$	23,249,180
For the nine months ended September 30, 2025
Balance at January 1, 2025		$	—			$	—			$	—			$	18,672,325			$	(4,720,841	)		$	13,951,484
Proceeds from issuance of common stock, net of offering costs			8,898				7,338,514				—				—				—				7,347,412
Purchase of ESOP shares			—				—				(622,850	)			—				—				(622,850	)
Net income			—				—				—				1,032,150				—				1,032,150
Release of ESOP shares			—				2,668				12,457				—				—				15,125
Other comprehensive income			—				—				—				—				1,525,859				1,525,859
Balance at September 30, 2025		$	8,898			$	7,341,182			$	(610,393	)		$	19,704,475			$	(3,194,982	)		$	23,249,180
																		Accumulated
						Additional				Unallocated								Other
		Common				Paid-in				Common Stock				Retained				Comprehensive
For the three months ended September 30, 2024		Stock				Capital				of ESOP				Earnings				Income (Loss)				Total
Balance at July 1, 2024		$	—			$	—			$	—			$	18,525,901			$	(4,666,098	)		$	13,859,803
Net income			—				—				—				371,263				—				371,263
Other comprehensive income			—				—				—				—				1,127,774				1,127,774
Balance at September 30, 2024		$	—			$	—			$	—			$	18,897,164			$	(3,538,324	)		$	15,358,840
For the nine months ended September 30, 2024
Balance at January 1, 2024		$	—			$	—			$	—			$	17,989,342			$	(4,536,258	)		$	13,453,084
Net income			—				—				—				907,822				—				907,822
Other comprehensive income			—				—				—				—				997,934				997,934
Balance at September 30, 2024		$	—			$	—			$	—			$	18,897,164			$	(3,538,324	)		$	15,358,840

See Notes to Condensed Consolidated Financial Statements

4

Security Midwest Bancorp, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

		Nine Months Ended
		September 30,
		2025				2024
Operating Activities
Net income		$	1,032,150			$	907,822
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			171,552				161,110
Amortization of premiums and discounts			222,939				232,623
Accretion of deferred loan origination fees, net			(55,470	)			(17,644	)
Amortization of mortgage servicing rights			37,571				29,705
Deferred income taxes			330,203				313,457
Provision for credit losses			8,750				27,884
Gain on sale of loans			(112,572	)			(40,567	)
Proceeds from sale of loans			5,596,899				2,002,243
Origination of loans held for sale			(5,866,626	)			(1,976,500	)
Increase in cash surrender value of life insurance			(52,897	)			(50,284	)
Gain on sale of foreclosed assets			(3,814	)			—
Release of ESOP shares			15,125				—
Changes in:
Accrued interest receivable			52,479				27,881
Other assets			299,246				(179,012	)
Accrued expenses and other liabilities			(216,309	)			(314,925	)
Net cash provided by operating activities			1,459,226				1,123,793
Investing Activities
Proceeds from maturities of held-to-maturity securities			735,000				1,231,000
Proceeds from paydowns of mortgage-backed securities			2,060,189				1,651,944
Proceeds from calls and maturities of available-for-sale securities			1,140,000				—
Net change in loans			(1,025,984	)			(5,435,023	)
Proceeds from sale of foreclosed assets			250,979				120,422
Purchase of premises and equipment			(325,947	)			(86,136	)
Net cash provided by (used in) investing activities			2,834,237				(2,517,793	)
Financing Activities
Net (decrease) increase in deposit accounts			(19,621,143	)			50,487,436
Repayment of FHLB advances			—				(10,500,000	)
Net change in advances by borrowers for taxes and insurance			(142,335	)			(209,735	)
Gross proceeds from issuance of common stock			8,897,810				—
Stock offering costs, net			(1,550,398	)			—
Purchase of ESOP shares			(622,850	)			—
Net cash (used in) provided by financing activities			(13,038,916	)			39,777,701
(Decrease) Increase in Cash and Cash Equivalents			(8,745,453	)			38,383,701
Cash and Cash Equivalents, Beginning of Period			43,540,304				33,810,148
Cash and Cash Equivalents, End of Period		$	34,794,851			$	72,193,849
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Interest on deposits and borrowings		$	1,677,556			$	2,191,043
Income taxes			35,000				—
Supplemental Disclosure of Noncash Investing Activities
Transfers from loans to real estate acquired through foreclosure		$	247,165			$	295,738

See Notes to Condensed Consolidated Financial Statements

5

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

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

Organization and Nature of Operations

Security Midwest Bancorp, Inc. (“Security Midwest Bancorp” or the “Company”) is a Maryland corporation incorporated on September 11, 2024 to serve as the bank holding company for Security Bank (the “Bank”) in connection with the Bank’s conversion from the mutual form of organization to the stock form of organization (the “Conversion”). The Conversion was completed on July 31, 2025. In connection with the Conversion, Security Midwest Bancorp acquired 100% ownership of Security Bank and the Company sold 889,781 shares of its common stock at $10.00 per share, for gross offering proceeds of $8,897,810. The cost of the conversion and issuance of common stock was approximately $1.55 million, which was deducted from the gross offering proceeds. The Company’s employee stock ownership plan purchased 62,285 shares of the common stock sold by the Company, which was equal to 7% of the shares of common stock issued by the Company. The ESOP purchased the shares using a loan from the Company. The Company contributed $6.2 million of the net proceeds from the offering to the Bank, loaned $622,850 of the net proceeds to the ESOP and retained approximately $479,000 of the net proceeds.

Security Bank, s.b. (the “Bank”) is a state-chartered mutual savings bank engaged primarily in the business of making residential mortgage loans and accepting deposits. Its operations are conducted through its three offices located in Springfield, Illinois. The Bank faces competition from other financial institutions and is subject to the regulation of certain federal and state agencies and undergoes periodic examinations by those regulatory authorities.

The Bank has two wholly owned subsidiaries: SB Financial Services, Inc. and 510 Monroe Holdings, LLC. SB Financial Services, Inc. sells insurance, on an agency basis, and related products, and also has a brokerage business. 510 Monroe Holdings, LLC was formed for the purpose of holding real estate acquired through foreclosure or other proceedings.

The consolidated financial statements included herein as of September 30, 2025, and for the interim three and nine months ended September 30, 2025 and 2024 are unaudited. The unaudited interim financial statements and the notes thereto have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and in the opinion of management, contains all normal recurring adjustments necessary to present fairly the consolidated financial position, results of operations, changes in equity and cash flows as of and for the periods presented. Such adjustments are the only adjustments contained in the consolidated financial statements.

The accompanying unaudited, consolidated financial statements and related notes should be read in conjunction with the audited annual consolidated financial statements and the notes thereto included in the prospectus dated May 14, 2025, as filed by Security Midwest Bancorp, Inc. with the Securities and Exchange Commission on May 22, 2025.

Principles of Consolidation

The consolidated financial statements as of and for the three and nine months ended September 30, 2025, include the accounts of the Company and the Bank, its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated in consolidation. The financial statements as of December 31, 2024 and for the three and nine months ended September 30, 2024, represent the Bank only, as the conversion to stock form, including the formation of Security Midwest Bancorp, Inc. was completed on July 31, 2025. References herein to the “Company” for periods prior to the completion of the stock conversion should be deemed to refer to the “Bank.”

Use of Estimates

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

6

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses, valuation of real estate acquired in connection with foreclosures or in satisfaction of loans and fair values of financial instruments.

Investment Securities

Held-to-maturity securities consist of certificates of deposit that management has the intent and ability to hold to maturity. Held-to-maturity securities are carried at amortized cost. Investment securities classified and accounted for as available for sale may be sold prior to maturity for asset/liability management purposes or may be sold in response to changes in interest rates or changes in prepayment risk, and to increase regulatory capital or other similar factors. Available-for-sale securities are carried at fair value with any adjustments to fair value, after tax, reported in other comprehensive income (loss). The Bank had no securities held for trading purposes as of September 30, 2025 and December 31, 2024.

Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities, identified as the call date as to premiums and the maturity date as to discounts. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

The Bank’s accounting treatment for a credit-related impairment, when the fair value of securities is below amortized cost, is set forth within this Note 1 at Allowance for Credit Losses.

The Bank recognized no credit-related impairments on debt securities during the nine months ended September 30, 2025 and the year ended December 31, 2024.

Loans Held for Sale

Loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by aggregate outstanding commitments from investors or current investor yield requirements. Net unrealized losses are recognized through a valuation allowance by charges to income. Loans held for sale are carried at cost at September 30, 2025. The Bank had no loans held for sale at December 31, 2024.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balances adjusted for unearned income, charge-offs net of recoveries, the allowance for credit losses and any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans.

For loans amortized at cost, interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan. For all loan portfolio segments except residential and consumer loans, the Bank promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For loans that are considered to be solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Bank charges-off residential and consumer loans, or portions thereof, when management reasonably determines the amount of the loss. The Bank adheres to delinquency thresholds established by applicable regulatory guidance to determine the charge-off timeframe for these loans.

7

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Loans at these delinquency thresholds for which the Bank can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

Loans are placed on nonaccrual status when past due 90 days or earlier, or when management considers collection of principal and interest is unlikely. For all classes, all interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income. The interest on these loans is accounted for on the cash basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Bank requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.

When cash payments are received on collateral dependent loans in each loan class, the Bank records the payment as interest income unless collection of the remaining recorded principal amount is doubtful, at which time payments are used to reduce the principal balance of the loan. Loans restructured due to financial difficulties of the borrower recognize interest income on an accrual basis at the renegotiated rate if the loan is in compliance with the modified terms, no principal reduction has been granted and the loan has demonstrated the ability to perform in accordance with the renegotiated terms for a period of at least six months.

Allowance for Credit Losses

The allowance for credit losses is established as losses are estimated to have occurred through a provision for credit losses charged to income. Credit losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance for credit losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

The Bank accounts for the allowance for credit losses in accordance with Accounting Standards Update (ASU) No. 2016-13 Financial Instruments—Credit Losses (Topic 326). ASC 326 requires a “current expected credit loss” (CECL) methodology that reflects expected credit losses over the lives of the credit instruments and requires consideration of a broad range of information to estimate credit losses. ASC 326 requires an estimate of all expected credit losses for financial assets measured at amortized cost, including loans and held-to-maturity debt securities, based on historical experience, current conditions, and reasonable and supportable forecasts. The ASU also applies to off-balance sheet credit exposures, such as loan commitments, standby letters of credit, financial guarantees, and other similar instruments.

Held-to-maturity securities

Expected credit losses on held-to-maturity securities are measured on a collective basis by security type. Accrued interest receivable on held-to-maturity securities totaled approximately $0 and $3,000 at September 30, 2025 and December 31, 2024, respectively, and is included within accrued interest receivable on the balance sheet. This amount is excluded from the estimate of expected credit losses. The held-to-maturity securities portfolio consists solely of certificates of deposit in other financial institutions. The estimate of credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management concluded that no allowance for credit losses was required on held-to-maturity securities at September 30, 2025 and December 31, 2024.

8

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Available-for-sale securities

For available for sale securities in an unrealized loss position, the Bank first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities available-for-sale that do not meet the above criteria, the Bank evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Bank considers the extent to which fair value is less than amortized cost and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security.

If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss), net of tax. The Bank elected to use zero loss estimates for securities 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 agencies and have a long history of no credit losses. Management concluded that no allowance for credit losses was required on available-for-sale securities at September 30, 2025 and December 31, 2024.

Accrued interest receivable on available-for-sale securities totaled approximately $139,000 and $180,000 at September 30, 2025 and December 31, 2024, respectively, and is included within accrued interest receivable on the balance sheet. This amount is excluded from the estimate of expected credit losses.

Loans

The allowance for credit losses (ACL) is a valuation allowance that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Management’s determination of the adequacy of the ACL is based on the assessment of the expected credit losses on loans over the expected life of the loan. The ACL is increased by provision expense and decreased by charge-offs, net of recoveries of amounts previously charged off and expected to be charged off. The Bank made the policy election to exclude accrued interest receivable on loans from the estimate of credit losses. Accrued interest receivable on loans totaled approximately $513,000 and $521,000 at September 30, 2025 and December 31, 2024, respectively, and is included within accrued interest receivable on the balance sheet. Management estimates the ACL balance using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience of a defined peer group, by affiliate, paired with economic forecasts provide the basis for the quantitatively modeled estimates of expected credit losses. The Bank adjusts its quantitative model, as necessary, to reflect conditions not already considered by the quantitative model. These adjustments are commonly known as the qualitative factors.

The ACL is measured on a collective (pool) basis when similar risk characteristics exist. The Bank uses the average historical loss method to measure the quantitative portion of the ACL over four-quarter forecast and four-quarter reversion periods.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When management determines that foreclosure is probable, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for estimated selling costs as appropriate.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals and modifications unless either of the following applies: management has a reasonable expectation at the reporting date that a restructuring will be executed with an individual borrower experiencing financial difficulties, or the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Bank.

9

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Unfunded Commitments

The Bank estimates expected credit losses over the contractual period in which the Bank is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Bank. The ACL on unfunded commitments is adjusted through the provision for credit loss expense. The estimate 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 consistent with the related ACL methodology. The allowance for credit losses on unfunded commitments is included within accrued expenses and other liabilities on the consolidated balance sheets.

Income Taxes

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

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

Tax positions are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any.

A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to management’s judgment.

Note 2 Securities

The amortized cost and fair values, together with gross unrealized gains and losses of securities, are as follows:

		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
Held-to-Maturity Securities:
September 30, 2025
Certificates of deposit		$	245,000			$	—			$	(296	)		$	244,704
December 31, 2024
Certificates of deposit		$	980,144			$	—			$	(11,737	)		$	968,407

10

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

		Amortized Cost				Gross Unrealized  Gains				Gross Unrealized  Losses				Fair Value
Available-for-sale Securities:
September 30, 2025
Municipal bonds, taxable		$	7,405,271			$	—			$	(810,389	)		$	6,594,882
Municipal bonds, non-taxable			1,775,370				28				(62,256	)			1,713,142
U.S. Government treasuries			7,997,486				—				(445,566	)			7,551,920
U.S. Government agencies			1,120,213				—				(119,786	)			1,000,427
Residential mortgage-backed securities			16,227,771				16,366				(1,849,132	)			14,395,005
Collateralized mortgage obligations			14,065,820				—				(1,197,771	)			12,868,049
		$	48,591,931			$	16,394			$	(4,484,900	)		$	44,123,425

		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Fair Value
Available-for-sale Securities:
December 31, 2024
Municipal bonds, taxable		$	8,021,120			$	—			$	(1,108,722	)		$	6,912,398
Municipal bonds, non-taxable			2,338,983				—				(118,010	)			2,220,973
U.S. Government treasuries			7,996,739				—				(738,449	)			7,258,290
U.S. Government agencies			1,157,342				—				(175,751	)			981,591
Residential mortgage-backed securities			17,444,497				—				(2,564,667	)			14,879,830
Collateralized mortgage obligations			15,056,234				—				(1,896,977	)			13,159,257
		$	52,014,915			$	—			$	(6,602,576	)		$	45,412,339

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

		Amortized				Fair
		Cost				Value
September 30, 2025
Available-for-sale
Within one year		$	255,000			$	255,028
One to five years			13,588,743				12,759,219
Five to ten years			3,954,597				3,427,579
After ten years			500,000				418,545
			18,298,340				16,860,371
Mortgage-backed securities			30,293,591				27,263,054
Totals		$	48,591,931			$	44,123,425

		Amortized				Fair
		Cost				Value
September 30, 2025
Held-to-maturity
Within one year		$	245,000			$	244,704

The carrying value of securities pledged as collateral, to secure public deposits and for other purposes, was approximately $12.5 million and $13.1 million at September 30, 2025 and December 31, 2024, respectively.

The Company had no sales of investment securities during the nine months ended September 30, 2025 and 2024.

11

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Certain investments in debt securities are reported in the financial statements at an amount less than their historical cost. Based on evaluation of available evidence, including recent changes in market interest rates and information obtained from regulatory filings, management believes the declines in fair value for these securities are not attributable to credit related events.

12

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The following table shows the number of securities and aggregate depreciation from the Bank’s amortized cost basis at September 30, 2025 and December 31, 2024.

				September 30, 2025								December 31, 2024
				Number of				Aggregate				Number of				Aggregate
Description of Securities				securities				depreciation				securities				depreciation
Available-for-sale Securities:
Municipal bonds, taxable					14				(10.9	)%			16				(13.8	)%
Municipal bonds, non-taxable					4				(4.1	)%			7				(5.0	)%
U.S. Government treasuries					2				(5.6	)%			2				(9.2	)%
U.S. Government agencies					4				(10.7	)%			4				(15.2	)%
Residential mortgage-backed securities					60				(12.6	)%			61				(14.7	)%
Collateralized mortgage obligations					14				(8.5	)%			14				(12.6	)%
Total					98				(9.6	)%			104				(12.5	)%

Should of any of these securities experience credit related impairment, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the credit-related impairment is identified.

The following tables show the Bank’s investments’ gross unrealized losses and fair value of the Bank’s investments with unrealized losses, aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2025 and December 31, 2024:

		September 30, 2025
		Less than 12 Months								12 Months or More								Total
Description of Securities		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Available-for-sale Securities:
Municipal bonds, taxable		$	—			$	—			$	6,594,882			$	(810,389	)		$	6,594,882			$	(810,389	)
Municipal bonds, non-taxable			—				—				1,458,114				(62,256	)			1,458,114				(62,256	)
U.S. Government treasuries			—				—				7,551,920				(445,566	)			7,551,920				(445,566	)
U.S. Government agencies			—				—				1,000,427				(119,786	)			1,000,427				(119,786	)
Residential mortgage-backed securities			1,680,218				(3,041	)			11,195,465				(1,846,091	)			12,875,683				(1,849,132	)
Collateralized mortgage obligations			—				—				12,868,049				(1,197,771	)			12,868,049				(1,197,771	)
		$	1,680,218			$	(3,041	)		$	40,668,857			$	(4,481,859	)		$	42,349,075			$	(4,484,900	)

		December 31, 2024
		Less than 12 Months								12 Months or More								Total
Description of Securities		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
Available-for-sale Securities:
Municipal bonds, taxable		$	—			$	—			$	6,912,398			$	(1,108,722	)		$	6,912,398			$	(1,108,722	)
Municipal bonds, non-taxable			—				—				2,220,973				(118,010	)			2,220,973				(118,010	)
U.S. Government treasuries			—				—				7,258,290				(738,449	)			7,258,290				(738,449	)
U.S. Government agencies			—				—				981,591				(175,751	)			981,591				(175,751	)
Residential mortgage-backed securities			1,528,223				(38,095	)			13,351,607				(2,526,572	)			14,879,830				(2,564,667	)
Collateralized mortgage obligations			—				—				13,159,257				(1,896,977	)			13,159,257				(1,896,977	)
		$	1,528,223			$	(38,095	)		$	43,884,116			$	(6,564,481	)		$	45,412,339			$	(6,602,576	)

U. S. Government Treasuries, U.S. Government Agencies, and Municipal Bonds

Unrealized losses on these securities have not been recognized into income because the issuers' bonds are of high credit quality, values have only been impacted by changes in interest rates since the securities were purchased, and the Bank does not intend to sell the

13

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

investments and it is not more likely than not the Bank will be required to sell the investments before recovery of their amortized cost basis. The fair value is expected to recover as the bonds approach the maturity date.

Mortgage-backed Securities and Collateralized Mortgage Obligations

The unrealized losses on the Bank’s investment in residential mortgage-backed securities and collateralized mortgage obligations were caused by changes in interest rates and illiquidity. The Bank expects to recover the amortized cost basis over the term of the securities. The decline in market value is attributable to changes in interest rates and illiquidity, not credit quality, and the Bank does not intend to sell the investments and it is not more likely than not the Bank will be required to sell the investments before recovery of their amortized cost basis. The fair value is expected to recover as the securities approach the maturity date.

Certificates of Deposit

Unrealized losses on these certificates of deposit have not been recognized into income because the issuers of the certificates are of high credit quality, values have only been impacted by changes in interest rates since the certificates were purchased, and the Bank does not intend to sell the certificates and it is not more likely than not the Bank will be required to sell the certificates before recovery of their amortized cost basis. The fair value is expected to recover as the certificates approach the maturity date.

Note 3: Loans and Allowance for Credit Losses

Categories of loans include:

	September 30,				December 31,
	2025				2024
Real Estate Loans:
1-4 Family, including construction	$	32,463,434			$	32,972,685
Multifamily		4,498,281				4,833,934
Commercial		53,997,517				53,885,284
Construction and development		3,984,521				2,961,682
Farmland		3,957,489				3,843,489
Other Loans:
Consumer		5,367,933				5,812,120
Commercial and industrial		10,956,019				10,043,504
Total loans		115,225,194				114,352,698
Allowance for credit losses		(1,151,154	)			(1,162,211	)
Deferred loan fees, net		(232,078	)			(200,384	)
Unearned dealer interest		43,858				58,028
Net loans	$	113,885,820			$	113,048,131

Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets. The unpaid principal balances of these loans were approximately $69,263,000 and $69,596,000 at September 30, 2025 and December 31, 2024, respectively.

The Bank provides residential, commercial and consumer loans primarily to residents and businesses located in central Illinois. Such loans originated in other geographical areas amounted to approximately $20,592,000 and $17,973,000, or approximately 17.9% and 15.7% of the gross loan balances at September 30, 2025 and December 31, 2024, respectively. A substantial portion of the Bank’s borrowers ability to honor their contracts is dependent on economic conditions and the specific economy in the respective geographic areas.

14

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Risk characteristics of each loan portfolio segment are described as follows:

Residential Real Estate

These loans include first liens and junior liens on 1-4 family residential real estate (both owner and non-owner occupied). One-to four family residential loans generally carry less risk than other loan types as they tend to be smaller balance loans, without concentrations, to a single borrower or group of borrowers. Repayment depends on the individual borrower’s capacity. The main risks for these loans are changes in the value of the collateral and stability of the local economic environment and its impact on the borrowers’ employment. Management specifically considers unemployment and changes in real estate values in the Bank’s market area.

Multifamily Real Estate

These loans include loans on residential real estate secured by property with five or more units. Multifamily real estate loans generally involve a greater degree of credit risk than one-to-four family residential real estate loans due to the reliance on the successful operation of the project. The main risks are changes in the value of the collateral, ability of borrowers to collect rents, vacancy and changes in the tenants’ employment status. Management specifically considers unemployment and changes in real estate values in the Bank’s market area.

Commercial Real Estate

These loans consist of non-farm and non-residential real estate. Although terms vary, commercial real estate loans generally have amortization periods of 15 to 25 years, as well as balloon payments of two to five years, and terms which provide that the interest rates thereon may be adjusted annually at the Bank’s discretion, based on a designated index and the credit risk of the borrower. Commercial real estate loans generally have greater credit risks compared to one-to-four family residential real estate loans, as they usually involve larger loan balances secured by non-homogeneous or specific-use properties. Repayment of these loans typically relies on the successful operation of a business or the generation of lease income by the property and is therefore more sensitive to adverse conditions in the economy and real estate market.

Construction and Development Real Estate

These loans include construction loans for 1-4 family residential and commercial properties (both owner and non-owner occupied) and first liens on land. Repayment of these loans can be dependent on the sale of the property to third parties or the successful completion of the improvements by the builder for the end user. In the event that a loan is made on property that is not yet approved for the planned development, there is the risk that approvals will not be granted or will be delayed. Construction loans also run the risk that improvements will not be completed on time or in accordance with specifications and projected costs. Construction real estate loans generally have terms of one year to 18 months during the construction period and interest rates based on a designated index.

Farmland Real Estate

These loans include loans on farm ground and land known to be used or usable for agricultural purposes, such as crop or livestock production. Repayment of these loans typically relies on the successful operation of a business. This loan type is sensitive to adverse economic conditions.

Commercial and Industrial

The commercial and industrial portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions. The Bank’s commercial business loan portfolio is comprised of loans for a variety of purposes and generally is secured by equipment, machinery and other business assets. Repayment is directly dependent on the successful

15

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

operation of the borrower’s business and the borrower’s ability to convert the assets to operating revenue and possess greater risk than most other types of loans should the repayment capacity of the borrower not be adequate.

Consumer Loans

These loans include vehicle loans, share loans and unsecured loans. Other loans consist of single-pay personal loans, including overdraft accounts and other small miscellaneous loans. Consumer loans tend to carry more risk than real estate loans; however, they tend to be smaller balance loans without concentrations to a single borrower or group of borrowers. Loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy.

The following tables present the activity in and balances of the allowance for credit losses by portfolio segment as of September 30, 2025 and 2024 and for the three and nine months ended September 30, 2025 and 2024 and as of and for the year ended December 31, 2024:

						Provision for
Three Months Ended		July 1,				(recovery of)												September 30,
September 30, 2025		2025				credit losses				Charge-offs				Recoveries				2025
Real Estate Loans:
1-4 Family, including construction		$	443,328			$	(6,541	)		$	—			$	—			$	436,787
Multifamily			8,355				(44	)			—				—				8,311
Commercial			417,689				(4,135	)			(124	)			1,198				414,628
Construction and development			91,189				(4,473	)			—				—				86,716
Farmland			6,976				(259	)			—				—				6,717
Other Loans:
Consumer			74,750				13,581				—				—				88,331
Commercial and industrial			106,800				1,871				—				993				109,664
Total allowance for credit losses    on loans			1,149,087				—				(124	)			2,191				1,151,154
Allowance for credit losses on    unfunded comitments			32,700				—				—				—				32,700
Total allowance for credit losses		$	1,181,787			$	—			$	(124	)		$	2,191			$	1,183,854

						Provision for
Three Months Ended		July 1,				(recovery of)												September 30,
September 30, 2024		2024				credit losses				Charge-offs				Recoveries				2024
Real Estate Loans:
1-4 Family, including construction		$	507,486			$	(39,339	)		$	(70	)		$	—			$	468,077
Multifamily			11,856				(1,173	)			—				—				10,683
Commercial			481,678				120,799				(5,272	)			—				597,205
Construction and development			60,821				(8,378	)			—				—				52,443
Farmland			6,881				34				—				—				6,915
Other Loans:
Consumer			116,971				(18,842	)			(115	)			—				98,014
Commercial and industrial			171,525				(23,217	)			(438	)			1,793				149,663
Total allowance for credit losses    on loans			1,357,218				29,884				(5,895	)			1,793				1,383,000
Allowance for credit losses on    unfunded comitments			22,000				(2,000	)			—				—				20,000
Total allowance for credit losses		$	1,379,218			$	27,884			$	(5,895	)		$	1,793			$	1,403,000

16

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

						Provision for
Nine Months Ended		January 1,				(recovery of)												September 30,
September 30, 2025		2025				credit losses				Charge-offs				Recoveries				2025
Real Estate Loans:
1-4 Family, including construction		$	471,164			$	(21,503	)		$	(12,874	)		$	—			$	436,787
Multifamily			10,150				(1,839	)			—				—				8,311
Commercial			452,406				(56,093	)			(6,747	)			25,062				414,628
Construction and development			24,529				62,187				—				—				86,716
Farmland			6,838				(121	)			—				—				6,717
Other Loans:
Consumer			90,013				25,816				(28,630	)			1,132				88,331
Commercial and industrial			107,111				(9,447	)			—				12,000				109,664
Total allowance for credit losses    on loans			1,162,211				(1,000	)			(48,251	)			38,194				1,151,154
Allowance for credit losses on    unfunded comitments			22,950				9,750				—				—				32,700
Total allowance for credit losses		$	1,185,161			$	8,750			$	(48,251	)		$	38,194			$	1,183,854

						Provision for
Nine Months Ended		January 1,				(recovery of)												September 30,
September 30, 2024		2024				credit losses				Charge-offs				Recoveries				2024
Real Estate Loans:
1-4 Family, including construction		$	523,626			$	(51,055	)		$	(12,225	)		$	7,731			$	468,077
Multifamily			12,081				(1,398	)			—				—				10,683
Commercial			1,245,891				110,697				(759,383	)			—				597,205
Construction and development			48,539				3,904				—				—				52,443
Farmland			7,525				(610	)			—				—				6,915
Other Loans:
Consumer			114,952				(19,001	)			(272	)			2,335				98,014
Commercial and industrial			205,569				(19,153	)			(39,442	)			2,689				149,663
Total allowance for credit losses    on loans			2,158,183				23,384				(811,322	)			12,755				1,383,000
Allowance for credit losses on    unfunded comitments			15,500				4,500				—				—				20,000
Total allowance for credit losses		$	2,173,683			$	27,884			$	(811,322	)		$	12,755			$	1,403,000

						Provision for
		January 1,				(recovery of)												December 31,
December 31, 2024		2024				credit losses				Charge-offs				Recoveries				2024
Real Estate Loans:
1-4 Family, including construction		$	523,626			$	(47,968	)		$	(12,225	)		$	7,731			$	471,164
Multifamily			12,081				(1,931	)			—				—				10,150
Commercial			1,245,891				(32,747	)			(760,738	)			—				452,406
Construction and development			48,539				(24,010	)			—				—				24,529
Farmland			7,525				(687	)			—				—				6,838
Other Loans:
Consumer			114,952				(17,153	)			(10,121	)			2,335				90,013
Commercial and industrial			205,569				156,180				(258,693	)			4,055				107,111
Total allowance for credit losses    on loans			2,158,183				31,684				(1,041,777	)			14,121				1,162,211
Allowance for credit losses on    unfunded comitments			15,500				7,450				—				—				22,950
Total allowance for credit losses		$	2,173,683			$	39,134			$	(1,041,777	)		$	14,121			$	1,185,161

17

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Information regarding the credit quality indicators most closely monitored, for other than residential real estate loans, by class as of September 30, 2025 and December 31, 2024, is as follows:

The Bank evaluates consumer and one-to-four family residential loans based on the delinquency status of each loan. Generally, the likelihood of loss for consumer and residential loans increases as the loan becomes more delinquent; therefore, management has established the delinquency status of consumer and residential loans as the primary credit quality indicator. In addition to monitoring delinquency status, certain substandard non-owner occupied one-to-four family residential loans are evaluated and categorized into the risk categories listed below based on relevant information about the ability of borrowers to service their debt.

The Bank categorizes all other loans into the following risk categories based on relevant information about the ability of borrowers to service their debt. During 2024, management revised the risk ratings by changing a risk rating of 5 from a pass rating to the special mention category; by changing a risk rating of 6 from special mention to a substandard rating; by changing a risk rating of 7 from substandard to a doubtful rating, and by changing a risk rating of 8 from doubtful to a loss rating.

Pass (risk rating 1 – 4) – A pass asset is well protected by the current worth and paying capacity of the obligator (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner. Pass assets also include certain assets considered watch, which are still protected by the worth and paying capacity of the borrower but deserve closer attention and a higher level of credit monitoring.

Special Mention (risk rating 5) – A special mention asset has potential weaknesses that deserve management’s close attention. The asset may also be subject to a weak or speculative market or to economic conditions, which may, in the future, adversely affect the obligator. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. Special mention assets are not adversely classified and do not expose the Bank to sufficient risk to warrant adverse classification.

Substandard (risk rating 6) – A substandard asset is an asset with a well-defined weakness that jeopardizes repayment, in whole or in part, of the debt. These credits are inadequately protected by the current worth and paying capacity of the obligor or of the collateral pledged. These assets are characterized by the distinct possibility that the Bank will sustain some loss of principal and/or interest if the deficiencies are not corrected. It is not necessary for a loan to have an identifiable loss potential in order to receive this rating.

Doubtful (risk rating 7) – An asset that has all the weaknesses inherent in the substandard classification, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely likely, but it is not identified at this point due to pending factors.

Loss (risk rating 8) – An asset, or portion thereof, classified as loss is considered uncollectible and of such little value that its continuance on the Bank’s books as an asset is not warranted. This classification does not necessarily mean that an asset has no recovery or salvage value; but rather, there is much doubt about whether, how much, or when the recovery would occur. As such, it is not practical or desirable to defer the write-off.

18

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Information regarding the credit quality indicators most closely monitored for other than residential real estate and consumer loans by class as of September 30, 2025 and December 31, 2024, is as follows:

		Amortized Cost Basis by Origination Year
		2025				2024				2023				2022				2021				Prior				Total
September 30, 2025
Real Estate Loans:
Multifamily:
Risk Rating
Satisfactory		$	—			$	—			$	—			$	1,497,912			$	2,689,553			$	310,816			$	4,498,281
Special Mention			—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—
Total Multifamily Loans		$	—			$	—			$	—			$	1,497,912			$	2,689,553			$	310,816			$	4,498,281
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Commercial
Risk Rating
Satisfactory		$	2,336,378			$	16,070,023			$	16,572,044			$	4,678,636			$	1,689,505			$	7,579,201			$	48,925,787
Special Mention			—				74,341				189,903				1,074,673				550,930				-				1,889,847
Substandard			—				99,150				—				—				—				3,082,733				3,181,883
Doubtful			—				—				—				—				—				—				—
Total Commercial Loans		$	2,336,378			$	16,243,514			$	16,761,947			$	5,753,309			$	2,240,435			$	10,661,934			$	53,997,517
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	6,747			$	6,747
Construction and development
Risk Rating
Satisfactory		$	2,141,472			$	200,832			$	1,293,724			$	—			$	—			$	—			$	3,636,028
Special Mention			—				—				—				—				—				319,837				319,837
Substandard			—				—				—				—				—				28,656				28,656
Doubtful			—				—				—				—				—				—				—
Total Construction and    Development Loans		$	2,141,472			$	200,832			$	1,293,724			$	—			$	—			$	348,493			$	3,984,521
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Farmland
Risk Rating
Satisfactory		$	930,000			$	124,879			$	460,000			$	—			$	998,988			$	1,197,443			$	3,711,310
Special Mention			—				—				24,418				—				—				221,761				246,179
Substandard			—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—
Total Farmland Loans		$	930,000			$	124,879			$	484,418			$	—			$	998,988			$	1,419,204			$	3,957,489
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Other Loans:
Commercial and industrial
Risk Rating
Satisfactory		$	821,730			$	3,108,877			$	372,342			$	3,437,175			$	165,271			$	2,091,968			$	9,997,363
Special Mention			—				—				289,678				13,451				4,005				538,762				845,896
Substandard			—				—				—				—				42,595				70,165				112,760
Doubtful			—				—				—				—				—				—				—
Total Commercial and    Industrial Loans		$	821,730			$	3,108,877			$	662,020			$	3,450,626			$	211,871			$	2,700,895			$	10,956,019
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—

19

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

		Amortized Cost Basis by Origination Year
		2024				2023				2022				2021				2020				Prior				Total
December 31, 2024
Real Estate Loans:
Multifamily:
Risk Rating
Satisfactory		$	—			$	—			$	1,542,939			$	2,967,822			$	144,857			$	178,316			$	4,833,934
Special Mention			—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—
Total Multifamily Loans		$	—			$	—			$	1,542,939			$	2,967,822			$	144,857			$	178,316			$	4,833,934
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Commercial
Risk Rating
Satisfactory		$	15,934,535			$	16,581,498			$	4,852,500			$	2,587,014			$	1,247,805			$	6,906,401			$	48,109,753
Special Mention			370,529				314,475				1,099,050				737,039				148,124				522,179				3,191,396
Substandard			—				—				—				—				—				2,584,135				2,584,135
Doubtful			—				—				—				—				—				—				—
Total Commercial Loans		$	16,305,064			$	16,895,973			$	5,951,550			$	3,324,053			$	1,395,929			$	10,012,715			$	53,885,284
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	760,738			$	760,738
Construction and development
Risk Rating
Satisfactory		$	524,993			$	2,085,264			$	—			$	—			$	—			$	322,768			$	2,933,025
Special Mention			—				—				—				—				—				—				—
Substandard			—				—				—				—				—				28,657				28,657
Doubtful			—				—				—				—				—				—				—
Total Construction and    Development Loans		$	524,993			$	2,085,264			$	—			$	—			$	—			$	351,425			$	2,961,682
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Farmland
Risk Rating
Satisfactory		$	127,058			$	495,000			$	—			$	1,078,411			$	688,696			$	1,203,422			$	3,592,587
Special Mention			—				26,963				—				—				223,939				—				250,902
Substandard			—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—
Total Farmland Loans		$	127,058			$	521,963			$	—			$	1,078,411			$	912,635			$	1,203,422			$	3,843,489
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Other Loans:
Commercial and industrial
Risk Rating
Satisfactory		$	2,065,485			$	674,123			$	3,538,144			$	279,893			$	1,326,814			$	1,553,549			$	9,438,008
Special Mention			—				220,223				—				72,057				18,324				74,459				385,063
Substandard			—				—				—				32,664				—				187,769				220,433
Doubtful			—				—				—				—				—				—				—
Total Commercial and    Industrial Loans		$	2,065,485			$	894,346			$	3,538,144			$	384,614			$	1,345,138			$	1,815,777			$	10,043,504
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	258,693			$	258,693

The Bank monitors the credit risk profile by payment activity for residential and consumer loan classes. Loans past due 90 days or more and loans on nonaccrual status are considered nonperforming. Nonperforming loans are reviewed monthly.

20

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The following table presents the amortized cost in residential and consumer loans based on payment activity:

		Amortized Cost Basis by Origination Year
		2025				2024				2023				2022				2021				Prior				Total
September 30, 2025
Real Estate Loans:
1-4 Family, including    construction
Risk Rating
Performing		$	4,110,580			$	2,787,285			$	3,781,263			$	3,496,433			$	6,821,951			$	10,887,436			$	31,884,948
Nonperforming			36,082				110,109				—				—				35,019				397,276				578,486
Total 1-4 Family Loans		$	4,146,662			$	2,897,394			$	3,781,263			$	3,496,433			$	6,856,970			$	11,284,712			$	32,463,434
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	12,874			$	12,874
Other Loans:
Consumer
Risk Rating
Performing		$	1,233,874			$	546,182			$	1,232,554			$	332,529			$	29,193			$	1,956,070			$	5,330,402
Nonperforming			—				—				—				—				—				37,531				37,531
Total Consumer Loans		$	1,233,874			$	546,182			$	1,232,554			$	332,529			$	29,193			$	1,993,601			$	5,367,933
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	28,630			$	28,630

		Amortized Cost Basis by Origination Year
		2024				2023				2022				2021				2020				Prior				Total
December 31, 2024
Real Estate Loans:
1-4 Family, including    construction
Risk Rating
Performing		$	3,700,956			$	3,983,417			$	4,002,872			$	7,329,773			$	2,507,017			$	10,634,470			$	32,158,505
Nonperforming			—				—				—				96,340				68,949				648,891				814,180
Total 1-4 Family Loans		$	3,700,956			$	3,983,417			$	4,002,872			$	7,426,113			$	2,575,966			$	11,283,361			$	32,972,685
Current period gross    charge-offs		$	—			$	—			$	—			$	—			$	—			$	12,225			$	12,225
Other Loans:
Consumer
Risk Rating
Performing		$	1,193,170			$	1,652,278			$	548,280			$	89,166			$	1,151,080			$	1,110,578			$	5,744,552
Nonperforming			—				—				—				—				—				67,568				67,568
Total Consumer Loans		$	1,193,170			$	1,652,278			$	548,280			$	89,166			$	1,151,080			$	1,178,146			$	5,812,120
Current period gross    charge-offs		$	—			$	—			$	—			$	325			$	—			$	9,796			$	10,121

The Bank evaluates the loan risk grading system definitions and allowance for credit losses methodology on an ongoing basis. No significant changes were made to either during the past year.

21

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The following tables present the Bank’s loan portfolio aging analysis of the recorded investment in loans as of September 30, 2025 and December 31, 2024:

		September 30, 2025
										Greater Than																Total Loans >
		30-59 Days				60-89 Days				90 Days				Total								Total Loans				90 Days &
		Past Due				Past Due				Past Due				Past Due				Current				Receivable				Accruing
Real Estate Loans
1-4 Family, including    construction		$	—			$	55,716			$	363,122			$	418,838			$	32,044,596			$	32,463,434			$	—
Multifamily			—				—				—				—				4,498,281				4,498,281				—
Commercial			—				—				—				—				53,997,517				53,997,517				—
Construction and    development			—				—				—				—				3,984,521				3,984,521				—
Farmland			—				—				—				—				3,957,489				3,957,489				—
Other Loans:
Consumer			27,283				—				—				27,283				5,340,650				5,367,933				—
Commercial and    industrial			—				—				63,333				63,333				10,892,686				10,956,019				—
Total		$	27,283			$	55,716			$	426,455			$	509,454			$	114,715,740			$	115,225,194			$	—

		December 31, 2024
										Greater Than																Total Loans >
		30-59 Days				60-89 Days				90 Days				Total								Total Loans				90 Days &
		Past Due				Past Due				Past Due				Past Due				Current				Receivable				Accruing
Real Estate Loans
1-4 Family, including    construction		$	350,758			$	101,642			$	590,194			$	1,042,594			$	31,930,091			$	32,972,685			$	—
Multifamily			—				—				—				—				4,833,934				4,833,934				—
Commercial			—				—				129,732				129,732				53,755,552				53,885,284				—
Construction and    development			—				—				—				—				2,961,682				2,961,682				—
Farmland			—				—				—				—				3,843,489				3,843,489				—
Other Loans:
Consumer			94,771				9,703				28,435				132,909				5,679,211				5,812,120				—
Commercial and    industrial			101,905				—				187,769				289,674				9,753,830				10,043,504				—
Total		$	547,434			$	111,345			$	936,130			$	1,594,909			$	112,757,789			$	114,352,698			$	—

The following tables present collateral-dependent loans by classes of loan type:

		September 30, 2025
		Type of Collateral
						Business								Allowance
		Real				Assets and								for Credit
		Estate				Other				Total				Losses
Real Estate Loans
1-4 Family, including construction		$	752,232			$	—			$	752,232			$	99,370
Multifamily			—				—				—				—
Commercial			3,181,883				—				3,181,883				1,397
Construction and development			28,656				—				28,656				—
Farmland			—				—				—				—
Other Loans:
Consumer			—				37,531				37,531				13,234
Commercial and industrial			—				112,760				112,760				32,664
Total		$	3,962,771			$	150,291			$	4,113,062			$	146,665

22

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

		December 31, 2024
		Type of Collateral
						Business								Allowance
		Real				Assets and								for Credit
		Estate				Other				Total				Losses
Real Estate Loans
1-4 Family, including construction		$	989,673			$	—			$	989,673			$	99,370
Multifamily			—				—				—				—
Commercial			2,584,135				—				2,584,135				1,397
Construction and development			28,657				—				28,657				—
Farmland			—				—				—				—
Other Loans:
Consumer			—				67,568				67,568				13,234
Commercial and industrial			—				220,433				220,433				32,664
Total		$	3,602,465			$	288,001			$	3,890,466			$	146,665

Non-performing loans as of September 30, 2025 and December 31, 2024, are as follows:

		September 30, 2025
		Nonaccrual				Nonaccrual				Total				Loans >				Total Non-				Interest
		Loans				Loans				Nonaccrual				90 Days &				Performing				Income
		Without ACL				With ACL				Loans				Accruing				Loans				Recognized
Real Estate Loans
1-4 Family, including construction		$	303,573			$	274,913			$	578,486			$	—			$	578,486			$	3,349
Multifamily			—				—				—				—				—				—
Commercial			—				—				—				—				—				—
Construction and development			—				—				—				—				—				—
Farmland			—				—				—				—				—				—
Other Loans:
Consumer			—				37,531				37,531				—				37,531				992
Commercial and industrial			63,333				—				63,333				—				63,333				—
Total nonaccrual		$	366,906			$	312,444			$	679,350			$	—			$	679,350			$	4,341

		December 31, 2024
		Nonaccrual				Nonaccrual				Total				Loans >				Total Non-				Interest
		Loans				Loans				Nonaccrual				90 Days &				Performing				Income
		Without ACL				With ACL				Loans				Accruing				Loans				Recognized
Real Estate Loans
1-4 Family, including construction		$	538,820			$	275,360			$	814,180			$	—			$	814,180			$	18,416
Multifamily			—				—				—				—				—				—
Commercial			129,732				—				129,732				—				129,732				—
Construction and development			—				—				—				—				—				—
Farmland			—				—				—				—				—				—
Other Loans:
Consumer			28,435				39,133				67,568				—				67,568				4,776
Commercial and industrial			187,769				32,664				220,433				—				220,433				3,526
Total nonaccrual		$	884,756			$	347,157			$	1,231,913			$	—			$	1,231,913			$	26,718

There were no significant loans modified for borrowers experiencing financial difficulty during the nine months ended September 30, 2025 and the year ended December 31, 2024.

23

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 4: Borrowings

The Bank had no borrowings outstanding as of September 30, 2025 and December 31, 2024.

Based on a pledge of collateral consisting of all shares of FHLB stock owned, approximately $21,935,000 of the Bank’s qualifying mortgage loans and investment securities with a fair value of approximately $12,488,000 as of September 30, 2025, the Bank was eligible to borrow up to approximately $33,695,000 as of September 30, 2025.

Based on a pledge of collateral consisting of all shares of FHLB stock owned, approximately $22,342,000 of the Bank’s qualifying mortgage loans and investment securities with a fair value of approximately $12,692,000 as of December 31, 2024, the Bank was eligible to borrow up to approximately $34,701,000 as of December 31, 2024.

The Bank has an unsecured federal funds purchase line of credit through the Bankers’ Bank with a maturity date of June 30, 2026. The maximum amount of the established unsecured line is $3,000,000 at September 30, 2025 and December 31, 2024. The line is subject to annual reviews and terms may be altered in the event of significant change in the financial condition of the Bank. Interest rates are variable. There were no funds advanced on this line as of September 30, 2025 and December 31, 2024.

Note 5: Regulatory Matters

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

Quantitative measures established by regulatory reporting standards to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined) to risk-weighted assets (as defined), common equity Tier I capital (as defined) to total risk-weighted assets (as defined) and of Tier I capital (as defined) to average assets (as defined). Management believes, as of September 30, 2025, that the Bank met all capital adequacy requirements to which it is subject.

As of September 30, 2025, the most recent notification from the regulators categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based capital, Tier I risk-based capital, common equity Tier I risk-based capital and Tier I leverage ratios as set forth in the table.

There are no conditions or events since that notification that management believes have changed the Bank’s category.

24

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The Bank’s actual and required capital amounts and ratios are as follows:

										Minimum Capital								Minimum to be Well
		Actual								Requirement								Capitalized
September 30, 2025		Amount				Ratio				Amount				Ratio				Amount				Ratio
		(Dollars in thousands)
Common equity Tier 1 capital to    risk-weighted assets		$	24,819				21.42	%		$	5,213				4.50	%		$	7,530				6.50	%
Tier 1 capital to risk-weighted assets			24,819				21.42	%			6,951				6.00	%			9,268				8.00	%
Total capital to risk-weighted assets			25,970				22.42	%			9,268				8.00	%			11,585				10.00	%
Tier 1 leverage to adjusted average assets			24,819				11.96	%			8,298				4.00	%			10,373				5.00	%

										Minimum Capital								Minimum to be Well
		Actual								Requirement								Capitalized
December 31, 2024		Amount				Ratio				Amount				Ratio				Amount				Ratio
		(Dollars in thousands)
Common equity Tier 1 capital to    risk-weighted assets		$	18,104				15.73	%		$	5,178				4.50	%		$	7,479				6.50	%
Tier 1 capital to risk-weighted assets			18,104				15.73	%			6,904				6.00	%			9,205				8.00	%
Total capital to risk-weighted assets			19,386				16.85	%			9,205				8.00	%			11,506				10.00	%
Tier 1 leverage to adjusted average assets			18,104				8.07	%			8,969				4.00	%			11,211				5.00	%

Note 6: Disclosures about Fair Value of Assets and Liabilities

Fair value is the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:

Level 1	Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
Level 2	Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3	Significant unobservable inputs that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

25

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Recurring Measurements

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

		Fair				Fair Value Measurements Using
		Value				Level 1				Level 2				Level 3
September 30, 2025
Municipal bonds, taxable		$	6,594,882			$	—			$	6,594,882			$	—
Municipal bonds, non-taxable			1,713,142				—				1,713,142				—
U.S. Government treasuries			7,551,920				7,551,920				—				—
U.S. Government agencies			1,000,427				—				1,000,427				—
Residential mortgage-backed securities			14,395,005				—				14,395,005				—
Collateralized mortgage obligations			12,868,049				—				12,868,049				—

		Fair				Fair Value Measurements Using
		Value				Level 1				Level 2				Level 3
December 31, 2024
Municipal bonds, taxable		$	6,912,398			$	—			$	6,912,398			$	—
Municipal bonds, non-taxable			2,220,973				—				2,220,973				—
U.S. Government treasuries			7,258,290				7,258,290				—				—
U.S. Government agencies			981,591				—				981,591				—
Residential mortgage-backed securities			14,879,830				—				14,879,830				—
Collateralized mortgage obligations			13,159,257				—				13,159,257				—

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

Available-for-sale Securities

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using quoted prices of securities with similar characteristics or independent asset pricing services and pricing models, the inputs of which are market-based or independently sourced market parameters, including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. In certain cases where Level 1 or Level 2 are not available, securities are classified within Level 3 of the hierarchy. The Bank had no Level 3 securities.

26

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Nonrecurring Measurements

The following table presents the fair value measurements of assets recognized in the accompanying balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2025 and December 31, 2024:

		Fair				Fair Value Measurements Using
		Value				Level 1				Level 2				Level 3
September 30, 2025
Collateral dependent loans		$	1,402,485			$	—			$	—			$	1,402,485
December 31, 2024
Collateral dependent loans		$	1,413,047			$	—			$	—			$	1,413,047

The Bank’s nonrecurring fair value adjustments to collateral dependent loans are recorded to reflect partial write-downs or specific reserves that are based on the observable market price or current estimated value of the collateral. These loans are reported at initial recognition of significant borrower distress and on an ongoing basis until recovery or charge-off.

The fair values of collateral dependent loans are generally determined using the sales comparison approach. Unobservable inputs consist primarily of adjustments for differences between sales of comparable properties.

The following table provides quantitative information about unobservable inputs used in nonrecurring Level 3 fair value measurements at September 30, 2025 and December 31, 2024:

										Range
		Fair				Valuation		Unbservable		(Weighted-
		Value				Technique		Inputs		Average)
September 30, 2025								Marketability
Collateral dependent loans		$	1,402,485			Appraisal		discount		10%
December 31, 2024								Marketability
Collateral dependent loans		$	1,413,047			Appraisal		discount		10%

27

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The estimated fair values of the Bank’s financial instruments not carried at fair value on the consolidated balance sheets are as follows:

		Carrying				Fair				Fair Value Measurements Using
		Value				Value				Level 1				Level 2				Level 3
September 30, 2025
Financial assets:
Cash and cash equivalents		$	34,794,851			$	34,794,851			$	34,794,851			$	—			$	—
Held-to-maturity securities			245,000				244,704				—				244,704				—
Loans held for sale			338,453				342,944				—				—				342,944
Loans, net			113,885,820				111,226,000				—				—				111,226,000
FHLB stock			697,500				697,500				—				697,500				—
Mortgage servicing rights, net			329,636				700,000				—				—				700,000
Bank owned life insurance			2,290,112				2,290,112				—				2,290,112				—
Accrued interest receivable			657,720				657,720				657,720				—				—
Financial liabilities:
Deposits			179,750,881				179,697,374				136,647,674				43,049,700				—
Advances by borrowers for
taxes and insurance			214,089				214,089				—				214,089				—
Accrued interest payable			47,616				47,616				47,616				—				—

		Carrying				Fair				Fair Value Measurements Using
		Value				Value				Level 1				Level 2				Level 3
December 31, 2024
Financial assets:
Cash and cash equivalents		$	43,540,304			$	43,540,304			$	43,540,304			$	—			$	—
Held-to-maturity securities			980,144				968,407				—				968,407				—
Loans, net			113,048,131				108,902,000				—				—				108,902,000
FHLB stock			697,500				697,500				—				697,500				—
Mortgage servicing rights, net			325,761				713,494				—				—				713,494
Bank owned life insurance			2,237,215				2,237,215				—				2,237,215				—
Accrued interest receivable			710,199				710,199				710,199				—				—
Financial liabilities:
Deposits			199,372,024				199,177,656				152,823,856				46,353,800				—
Advances by borrowers for
taxes and insurance			356,424				356,424				—				356,424				—
Accrued interest payable			64,441				64,441				64,441				—				—

Limitations: Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Fair value estimates may not be realizable in an immediate settlement of the instrument. In some instances, there are no quoted market prices for the Bank’s various financial instruments, in which case fair values may be based on estimates using present value or other valuation techniques, or based on judgments regarding future expected loss experience, current economic conditions, risk characteristic of the financial instruments, or other factors. Those techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. Subsequent changes in assumptions could significantly affect the estimates.

28

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 7: Stock Conversion and Change in Corporate Form

On July 31, 2025, the Bank completed the conversion to stock form and is now the wholly owned subsidiary of Security Midwest Bancorp, Inc. Security Midwest Bancorp, Inc. sold 889,781 shares of common stock, which includes 62,285 shares sold to the Bank’s Employee Stock Ownership Plan, for gross offering proceeds (before deducting offering expenses) of approximately $8.9 million based on the offering price of $10.00 per share. The common stock of Security Midwest Bancorp, Inc. began quoting on the OTCQB Market on August 1, 2025 under the symbol "SBMW".

The Bank intends to withdraw from the multi-employer defined benefit plan as disclosed in the prospectus. The withdrawal from the plan will require a payment by the Bank to the plan, estimated at $1.4 million based on July 1, 2024 valuation information. This payment will be recorded as a current period expense when paid.

The Bank has established a liquidation account in the amount of retained earnings contained in the final prospectus. The liquidation account will be maintained for the benefit of eligible savings account holders who maintain deposit accounts in the Bank after conversion.

The conversion was accounted for as a change in corporate form with the historic basis of the Bank’s assets, liabilities and equity unchanged as a result. Security Midwest Bancorp, Inc.is an emerging growth company, and, for as long as it continues to be an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies.” Security Midwest Bancorp, Inc. intends to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, its financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.

Note 8: Employee Stock Option Plan (ESOP)

In connection with the Conversion, the Company established an Employee Stock Ownership Plan (“ESOP”) for the exclusive benefit of eligible employees. It is expected that the Bank will make annual contributions to the ESOP in amounts as defined by the ESOP loan documents. The contributions will be used to repay the ESOP loan. Certain ESOP shares are pledged as collateral for the ESOP loan. As the ESOP loan is repaid, shares are released from collateral and allocated to eligible participants, based on the proportion of loan repayments paid in the year. Shares allocated to eligible participants will become 100% vested upon completion of five years of service with the Bank, including years of service prior to the formation of the ESOP.

At September 30, 2025, there were no shares allocated to participants. There were 1,246 shares committed to be released to participants and 61,039 unallocated shares. The fair value of unallocated ESOP shares totaled $772,000 at September 30, 2025.

In connection with the Company’s Conversion, the ESOP borrowed $622,850 from the Company for the purpose of purchasing shares of the Company’s stock. A total of 62,285 shares were purchased with the loan proceeds. Company stock purchased by the ESOP is shown as a reduction of stockholders’ equity. The ESOP loan is expected to be repaid over a period of 20 years.

The annual contribution to the ESOP will be made during the period ending December 31, 2025, as loan payments are scheduled to be made annually on December 31st of each year. Compensation expense is recognized over the service period based on the average fair value of the shares and totaled $15,125 for both the three and nine months ended September 30, 2025. There was no ESOP compensation expense for the three- and nine-month periods ended September 30, 2024.

29

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 9: Earnings Per Share

Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Unallocated common shares held by the ESOP are shown as a reduction in stockholders’ equity and are excluded from weighted-average common shares outstanding for both basic and diluted earnings per share calculations until they are committed to be released.

The Company had no dilutive or potentially dilutive securities during the three- and nine-month periods ended September 30, 2025.

Weighted-average shares outstanding for the three- and nine month periods ended September 30, 2025,have been calculated assuming the shares were outstanding at the beginning of each respective period.

The following table sets forth the computation of basic and diluted earnings per share:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2025				2024				2025				2024
Net income		$	281,057			$	371,263			$	1,032,150			$	907,822
Weighted-average common shares outstanding, gross			889,781				—				889,781				—
Less unallocated ESOP shares			(61,652	)			—				(61,652	)			—
Weighted-average common shares outstanding			828,129				—				828,129				—
Earnings per shares- basic and diluted		$	0.34			n/a				$	1.25			n/a

Note 10: Subsequent Events

During October 2025, the Company initiated a strategy to restructure a part of the investment securities portfolio by disposing of certain lower-yielding investment securities and reinvesting the proceeds into higher yielding securities. As a result, the Company sold $8.0 million of securities and realized a pretax loss on sale of approximately $419,000. The sales proceeds were redeployed into higher yielding securities and management anticipates a recovery of the loss incurred, through the enhanced yields obtained, within 18 months. The strategy also includes a leveraged purchase of higher yielding securities, whereby the Company has committed to borrow up to $40.0 million from the FHLB and intends to invest these proceeds into purchases of higher-yielding investment securities.

30

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This discussion and analysis reflects our financial information and other relevant statistical data, and is intended to enhance your understanding of our financial condition and results of operations. The information in this section has been derived from the accompanying unaudited financial statements and the audited consolidated financial statements, which appear beginning on page F-1 of our prospectus dated May 14, 2025.

FORWARD-LOOKING STATEMENTS

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

•statements of our goals, intentions and expectations;

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

•statements regarding the asset quality of our loan and investment portfolios; and

•estimates of our risks and future costs and benefits.

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

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

•acts of war, terrorism, natural disasters or global market disruptions, including global pandemics;

•general economic conditions, including any recessionary conditions and/or increases in unemployment, either nationally or in our market areas, that are worse than expected;

•adverse changes in the financial services industry, securities and local real estate markets (including real estate values);

•our ability to access cost-effective funding and to maintain adequate liquidity, primarily through deposits;

•significant increases in our loan losses, including as a result of our inability to resolve classified and non-performing assets or reduce risks associated with our loans, and management’s assumptions in determining the adequacy of the allowance for credit losses;

•credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and in our allowance for credit losses and provision for credit losses;

•our ability to implement and change our business strategies, including our ability to attract and maintain deposits and our success in introducing new financial products;

•competition among depository and other financial institutions, including with respect to our ability to charge overdraft fees;

31

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

•inflation and changes in the interest rate environment that reduce our margins and yields, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans originated for holding in our portfolio;

•monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board;

•our success in increasing our commercial real estate and commercial and industrial lending;

•our ability to maintain or improve our asset quality even as we increase our commercial real estate and commercial and industrial lending;

•fluctuations in the demand for loans, deposits and non-banking services in our market area, including changes in consumer spending and savings habits;

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

•changes in accounting and/or tax estimates;

•risks related to a high concentration of loans secured by real estate located in our market area;

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

•changes in laws or government regulations or policies affecting financial institutions and/or their holding companies, including changes in regulatory fees, capital requirements and insurance premiums;

•changes in laws or government regulations or policies affecting the cannabis industry;

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

•changes in our compensation and benefit plans, our ability to attract and retain key members of our senior management team and our ability to address staffing needs expeditiously in response to product demand or to implement our strategic plans;

•loan delinquencies and changes in the underlying cash flows of our borrowers;

•our ability to control costs and expenses, particularly those associated with operating as a public reporting company;

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

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

•the potential effects of new or increased tariffs and trade restrictions;

•the ability of third-party service providers to perform their obligations to us; and

•other economic, competitive, governmental, regulatory and operational factors affecting our operations, pricing, products and services described elsewhere in this prospectus.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

32

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Critical Accounting Policies

The discussion and analysis of the financial condition and results of operations are based on our financial statements, which are prepared in conformity with generally accepted accounting principles used in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses. We consider the accounting policies discussed below to be critical accounting policies. The estimates and assumptions that we use with respect to critical accounting policies are based on historical experience and various other factors and are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations.

The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company,” we may delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We intend to take advantage of the benefits of this extended transition period. Accordingly, our financial statements may not be comparable to companies that comply with such new or revised accounting standards.

The following represent our critical accounting policies:

Allowance for Credit Losses. The allowance for credit losses is the estimated amount considered necessary to cover expected, but unconfirmed, credit losses in the loan portfolio at the balance sheet date. The allowance is established through the provision for credit losses which is charged against income. In determining the allowance for credit losses, we make significant estimates and have identified this policy as one of our most critical accounting policies.

We perform a quarterly evaluation of the allowance for credit losses. Our determination of the adequacy of the allowance for credit losses is based on the assessment of the expected credit losses on loans over the expected life of the loans. Consideration is given to a variety of factors in establishing this estimate including, but not limited to, current economic conditions, delinquency statistics, geographic and industry concentrations, the adequacy of the underlying collateral, the financial strength of the borrower, results of internal loan reviews and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant change.

In accordance with the provisions of the accounting standards under CECL, we estimate the allowance for credit losses balance using relevant available information from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit loss experience of a defined peer group, by affiliate, paired with economic forecasts, provide the basis for the quantitatively modeled estimates of expected credit losses. We adjust our quantitative model, as necessary, to reflect conditions not already considered by the quantitative model. These adjustments are commonly known as the qualitative factors.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. We use the average historical loss method to measure the quantitative portion of the allowance for credit losses over the forecast and reversion periods.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When we determine that foreclosure is probable, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

Deferred Tax Assets. We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

33

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion of the deferred tax asset will not be realized. We exercise significant judgment in evaluating the amount and timing of recognition of the resulting tax liabilities and assets. These judgments require us to make projections of future taxable income. The judgments and estimates we make in determining our deferred tax assets, which are inherently subjective, are reviewed on a continual basis as regulatory and business factors change. Determining the proper valuation allowance for deferred taxes is critical in properly valuing the deferred tax asset and the related recognition of income tax expense or benefit. Any reduction in estimated future taxable income may require us to record a valuation allowance against our deferred tax assets.

Fair Value Measurements. The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. We estimate the fair value of a financial instrument and any related asset impairment using a variety of valuation methods. Where financial instruments are actively traded and have quoted market prices, quoted market prices are used for fair value. When the financial instruments are not actively traded, other observable market inputs, such as quoted prices of securities with similar characteristics, may be used, if available, to determine fair value. When observable market prices do not exist, we estimate fair value. These estimates are subjective in nature and imprecision in estimating these factors can impact the amount of gain or loss recorded. A more detailed description of the fair values measured at each level of the fair value hierarchy and the methodology we utilize is presented in Note 1 herein.

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

Total assets. Total assets were $203.9 million at September 30, 2025, a decrease of $10.7 million, or 5.0%, from December 31, 2024. The decrease was primarily comprised of a decrease in cash and cash equivalents of $8.7 million and a decrease in aggregate investment securities (available for sale and held to maturity) of $2.0 million, which were partially offset by an increase in loans held for sale and loans, net of $1.2 million.

Cash and cash equivalents. Cash and cash equivalents decreased by $8.7 million, or 20.1%, to $34.8 million at September 30, 2025 from December 31, 2024. The decrease was due primarily to a decrease in deposits of $19.6 million, which was partially offset by net proceeds received from the issuance of common stock totaling $6.7 million.

Investment securities. Investment securities, comprised of both available for sale and held to maturity securities, decreased $2.0 million, or 4.4%, to $44.4 million at September 30, 2025 from $46.4 million at December 31, 2024. The decrease was due primarily to maturities and repayments of investments totaling $3.9 million, partially offset by the effect of a $2.1 million decrease in the gross unrealized loss on securities available for sale during the nine months ended September 30, 2025 to a total unrealized loss of $4.5 million at September 30, 2025 compared to $6.6 million at December 31, 2024. At September 30, 2025 and December 31, 2024, investment securities held to maturity consisted solely of certificates of deposit totaling $245,000 and $980,000, respectively. We have used the proceeds from repayments and maturities of securities primarily to fund new loan originations and deposit withdrawals.

Loans held for sale. Loans held for sale increased $338,000 at September 30, 2025. The Bank had no loans held for sale at December 31, 2024. During the nine months ended September 30, 2025, loans originated for sale totaled $5.9 million, an increase of $3.9 million over the nine months ended September 30, 2024.

Gross loans. Gross loans increased by $827,000, or 0.7%, to $115.0 million at September 30, 2025 compared to December 31, 2024. During the nine months ended September 30, 2025, loan originations totaled $27 million, an increase of $6 million, or 28.6%, compared to the loan origination volume of $21 million for the nine months ended September 30, 2024.

During the nine months ended September 30, 2025, the increase in our loan portfolio was primarily comprised of increases in: construction and development loans of $1.0 million, or 34.5% to $4.0 million at September 30, 2025; and commercial and industrial loans of $913,000, or 9.1% to $11.0 million at September 30, 2025, which were partially offset by decreases in residential one- to four-family residential real estate loans of $509,000, or 1.5% to $32.5 million at September 30, 2025; multifamily real estate loans of $336,000, or 6.9% to $4.5 million at September 30, 2025; and consumer loans of $444,000, or 7.6%, to $5.4 million at September 30, 2025.

34

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Our strategy is to grow our loan portfolio, with a focus on owner-occupied one- to four-family residential real estate loans and commercial loans (both commercial real estate and commercial and industrial).

Deposits. Deposits decreased by $19.6 million, or 9.8%, to $179.8 million at September 30, 2025 from $199.4 million at December 31, 2024. The decrease was primarily due to decreases in demand deposits of $15.2 million, or 12.0%, to $111.6 million at September 30, 2025, primarily comprised of normal, expected deposit flows within our CRB customer portfolio; certificates of deposit of $3.4 million, or 7.4%, to $43.1 million at September 30, 2025 and savings deposits of $1.0 million, or 3.9%, to $25.0 million at September 30, 2025, compared to December 31, 2024.

At each of September 30, 2025 and December 31, 2024, we had a concentration of deposits from cannabis-related business (CRB) customers, comprised primarily of commercial demand accounts. These deposits totaled $45.2 million and $58.6 million at these respective dates.

During the nine months ended September 30, 2025, we continued our strategy of pursuing growth in demand accounts and other lower cost core deposits, in part by enhancing the products and services we offer, including mobile banking capabilities, expanding our offering of CRB services into other states, and streamlining commercial banking services through enhanced cash management and treasury management services. We intend to continue our efforts to increase our core deposit base, with an emphasis on growth in consumer and business demand deposits.

Borrowings. We had no outstanding advances from the Federal Home Loan Bank at either September 30, 2025 or December 31, 2024.

Shareholders' Equity. Shareholders' equity increased $9.3 million, or 66.5%, to $23.2 million at September 30, 2025, compared to $13.9 million at December 31, 2024. The increase was due primarily to the completion of the common stock offering and issuance of the common stock, resulting in total proceeds, net of offering costs, of $6.7 million, along with net income of $1.0 million during the nine months ended September 30, 2025 combined with a $1.5 million decrease in accumulated other comprehensive loss.

Comparison of Operating Results for the Three Months ended September 30, 2025 and 2024

General. Net income for the three months ended September 30, 2025 was $281,000, a decrease of $90,000, or 24.3%, compared to the three months ended September 30, 2024. The decrease in net income was primarily due to a $265,000 increase in noninterest expense and an $11,000 decrease in noninterest income, which were partially offset by a $149,000 increase in net interest income, a $28,000 decrease in the provision for credit losses, and a $10,000 decrease in income taxes.

Interest income. Interest income decreased $93,000, or 3.6%, to $2.5 million for the three months ended September 30, 2025 from $2.6 million for the three months ended September 30, 2024. This decrease was attributable to a $52,000, or 15.6%, decrease in interest on investment securities and a $208,000, or 41.3%, decrease in interest on interest-bearing deposits and other assets, which were partially offset by a $167,000, or 9.4%, increase in interest on loans. The increase in interest income on loans was primarily due to the increase in the yield earned on the loan portfolio.

The average yield on loans increased by 28 basis points to 6.75% for the three months ended September 30, 2025 from 6.47% for the three months ended September 30, 2024, while the average balance of loans increased by $5.4 million, or 4.9%, to $114.7 million during the three months ended September 30, 2025 compared to the average balance for the three months ended September 30, 2024. The increase in the average yield was due to the increase in market interest rates period-to-period.

The average balance of investment securities decreased $5.2 million, or 9.5%, to $49.3 million for the three months ended three months ended September 30, 2025 from the three months ended September 30, 2024, while the average yield on investment securities decreased by 16 basis points to 2.28% for the three months ended September 30, 2025 from 2.44% for the three months ended September 30, 2024.

The average balance of interest-bearing deposits and other assets, comprised primarily of certificates of deposit in other financial institutions, overnight deposits and stock in the Federal Home Loan Bank, decreased $13.5 million, or 30.9%, to $30.2 million for the three months ended September 30, 2025, while the average yield decreased 70 basis points, to 3.92% for the three months ended September 30, 2025 from 4.62% for the three months ended September 30, 2024.

35

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Interest Expense. Total interest expense decreased $242,000, or 30.9%, to $542,000 for the three months ended September 30, 2025, compared to $784,000 for the three months ended September 30, 2024. The decrease was wholly comprised of a decrease in interest expense on deposits. The decrease in interest expense on deposits was primarily due to a decrease of 64 basis points in the average cost of deposits to 1.75% for the three months ended September 30, 2025 from 2.39% for the three months ended September 30, 2024 and a decrease of $7.4 million, or 5.6%, in the average balance of deposits, to $123.7 million for the three months ended September 30, 2025 from $131.1 million for the three months ended September 30, 2024.

Net Interest Income. Net interest income increased $149,000, or 8.2%, to $2.0 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The interest rate spread increased to 3.42% for the three months ended September 30, 2025 from 2.63% for the three months ended September 30, 2024. The net interest margin increased to 4.06% for the three months ended September 30, 2025 from 3.51% for the three months ended September 30, 2024, as net interest-earning assets increased during the quarter compared to the same period in 2024.

		For the Three Months Ended September 30,
		2025												2024
		Average Outstanding Balance				Interest				Yield/ Rate				Average Outstanding Balance				Interest				Yield/ Rate
Interest-earning assets:		(Dollars in thousands)
Loans		$	114,716			$	1,935				6.75	%		$	109,357			$	1,768				6.47	%
Investment securities			49,338				281				2.28	%			54,491				333				2.44	%
Interest-bearing deposits and other			30,187				296				3.92	%			43,657				504				4.62	%
Total interest-earning assets			194,241				2,512				5.17	%			207,505				2,605				5.02	%
Non-interest-earning assets			9,654												8,353
Allowance for credit losses			(1,150	)											(1,359	)
Total assets		$	202,745											$	214,499
Interest-bearing liabilities:
Interest-bearing demand		$	56,232				126				0.90	%		$	54,147				159				1.17	%
Savings accounts			25,438				23				0.36	%			25,776				18				0.28	%
Certificates of deposit			42,041				393				3.74	%			51,141				607				4.75	%
Total deposits			123,711				542				1.75	%			131,064				784				2.39	%
Borrowings			1				—				0.00	%			3				—				0.00	%
Total interest-bearing liabilities			123,712				542				1.75	%			131,067				784				2.39	%
Non-interest-bearing deposits			62,002												67,931
Non-interest-bearing liabilities			920												1,372
Total liabilities			186,634												200,370
Equity			16,111												14,129
Total liabilities and equity		$	202,745											$	214,499
Net interest income						$	1,970											$	1,821
Net interest rate spread											3.42	%											2.63	%
Net interest-earning assets		$	70,529											$	76,438
Net interest margin											4.06	%											3.51	%
Average interest-earning assets    to interest-bearing liabilities			157.01	%											158.32	%

36

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

		Three Months Ended September 30,
		2025 vs. 2024
										Total
		Increase (decrease) due to								Increase
		Volume				Rate				(Decrease)
		(In thousands)
Interest-earning assets:
Loans		$	89			$	78			$	167
Investment securities			(30	)			(22	)			(52	)
Other interest-earning assets			(140	)			(68	)			(208	)
Total interest-earning assets			(81	)			(12	)			(93	)
Interest-bearing liabilities:
Interest-bearing demand			6				(39	)			(33	)
Savings accounts			—				5				5
Certificates of deposit			(98	)			(116	)			(214	)
Total deposits			(92	)			(150	)			(242	)
Borrowings			—				—				—
Total interest-bearing liabilities			(92	)			(150	)			(242	)
Change in net interest income		$	11			$	138			$	149

Provision for Credit Losses. Based on an analysis of the factors described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—Allowance for Credit Losses,” we did not record a provision for credit losses for the three months ended September 30, 2025, a decrease of $28,000 from the three months ended September 30, 2024. The allowance for credit losses was $1.2 million at September 30, 2025 and $1.4 million at September 30, 2024 and represented 1.00% of total loans at September 30, 2025 and 1.22% of total loans at September 30, 2024. Net charge-offs (recoveries) totaled $(2,000) and $4,000 during the three months ended September 30, 2025 and 2024, respectively.

Management’s determination of the allowance balance at September 30, 2025 included consideration of the $2.2 million, or 2.0%, increase in loans outstanding during the three months ended September 30, 2025, along with decreases in nonperforming and delinquent loans. Total nonperforming loans were $679,000 at September 30, 2025, compared to $1.2 million at December 31, 2024. Total loans past due 30 days or greater were $509,000 and $1.6 million at those respective dates. As a percentage of nonperforming loans, the allowance for credit losses was 169.4% at September 30, 2025 compared to 94.3% at December 31, 2024.

Our estimates and assumptions used in the determination of the adequacy of the allowance for credit losses could be proven incorrect in the future, and the actual amount of future provisions may exceed the amount of past provisions. Any such increase in future provisions that may be required may adversely impact our financial condition and results of operations.

Noninterest Income. Noninterest income information is as follows.

		Three Months Ended September 30,								Change
		2025				2024				Amount				Percent
		(Dollars in thousands)
Service fees on deposit accounts		$	240			$	269			$	(29	)			-10.8	%
Debit card fees			97				104				(7	)			-6.7	%
Mortgage loan servicing fees, net			28				32				(4	)			-12.5	%
Gain on sale of loans			39				21				18				85.7	%
Other			89				79				10				12.7	%
Total noninterest income		$	493			$	505			$	(12	)			-2.4	%

The increase in gain on sale of loans was due to an increase in sales volume period over period. Other noninterest income increased due primarily to an increase in fees on cashless ATMs at certain CRB locations and fees on consumer loan referrals, partially offset by a decrease in late charges on loans. The decrease in service fees on deposits was due primarily to a decrease in maintenance fees and cash counting service fees from our CRB customers between the periods. This decrease was partially offset by an increase in the

37

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

overall number of CRB accounts period over period, as we have focused on expanding our CRB relationship base to smaller customers.

Noninterest Expense. Noninterest expense information is as follows.

		Three Months Ended September 30,								Change
		2025				2024				Amount				Percent
		(Dollars in thousands)
Salaries and employee benefits		$	1,264			$	999			$	265				26.5	%
Occupancy and equipment			130				141				(11	)			-7.8	%
Data processing fees			190				154				36				23.4	%
FDIC insurance premiums			18				36				(18	)			-50.0	%
Advertising			46				53				(7	)			-13.2	%
Director fees			24				25				(1	)			-4.0	%
Debit card expense			17				19				(2	)			-10.5	%
Professional fees			191				170				21				12.4	%
Telephone and internet			35				34				1				2.9	%
Other			150				169				(19	)			-11.2	%
Total noninterest expense		$	2,065			$	1,800			$	265				14.7	%

The increase in salaries and employee benefits was due primarily to an increase in staffing levels and normal annual merit increases. The increase in data processing fees is attributable to implementation of new software to enhance the efficiency and productivity in the Loan Department, partially offset by a decrease in core processing expenses. The increase in professional fees was due primarily to an increase in audit fees, partially offset by a decrease in consulting fees. The decrease in other expense was due primarily to a nonrecurring expense in the 2024 period related to a customer appreciation event along with a decrease in charges for Federal Reserve processing and courier services, due to reduction in volume of courier services in 2025.

Income Taxes. Income taxes decreased by $10,000 or 7.7%, to $118,000 for the three months ended September 30, 2025, compared to $127,000 for the three months ended September 30, 2024. The decrease in the income tax provision for the three months ended September 30, 2025 was due primarily to a $100,000, or 20.1% decrease in pretax income. The effective tax rates were 29.5% and 25.5% for the three months ended September 30, 2025 and 2024, respectively.

Comparison of Operating Results for the Nine Months Ended September 30, 2025 and 2024

General. Net income for the nine months ended September 30, 2025 was $1.0 million, an increase of $124,000, or 13.7%, compared to the nine months ended September 30, 2024. The increase in net income was primarily due to a $627,000 increase in net interest income, a $46,000 increase in noninterest income and a $19,000 decrease in the provision for credit losses, which were partially offset by a $495,000 increase in noninterest expense and a $73,000 increase in income taxes.

Interest income. Interest income increased $122,000, or 1.7%, to $7.5 million for the nine months ended September 30, 2025 from $7.4 million for the nine months ended September 30, 2024. This increase was attributable to a $638,000, or 12.9%, increase in interest on loans, which was partially offset by a $142,000, or 13.8%, decrease in interest on investment securities and a $374,000, or 26.2%, decrease in interest on interest-bearing deposits and other assets. The increase in interest income on loans was primarily due to the increase in the yield earned on the loan portfolio.

The average yield on loans increased by 53 basis points to 6.56% for the nine months ended September 30, 2025 from 6.03% for the nine months ended September 30, 2024, while the average balance of loans increased by $4.3 million, or 3.9%, to $113.2 million during the nine months ended September 30, 2025 compared to the average balance for the nine months ended September 30, 2024. The increase in the average yield was due to the increase in market interest rates period-to-period.

The average balance of investment securities decreased $5.0 million, or 8.9%, to $50.7 million for the nine months ended September 30, 2025 for the nine months ended September 30, 2024, while the average yield on investment securities decreased by 13 basis points to 2.33% for the nine months ended September 30, 2025 from 2.46% for the nine months ended September 30, 2024.

38

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The average balance of interest-bearing deposits and other assets, comprised primarily of certificates of deposit in other financial institutions, overnight deposits and stock in the Federal Home Loan Bank, decreased $5.2 million, or 13.0%, to $34.5 million for the nine months ended September 30, 2025, while the average yield decreased 73 basis points, to 4.07% for the nine months ended September 30, 2025 from 4.80% for the nine months ended September 30, 2024.

Interest Expense. Total interest expense decreased $505,000, or 23.3%, to $1.7 million for the nine months ended September 30, 2025, compared to $2.2 million for the nine months ended September 30, 2024. The decrease was substantially comprised of a decrease in interest expense on deposits. The decrease in interest expense on deposits was primarily due to a decrease of 40 basis points in the average cost of deposits to 1.79% for the nine months ended September 30, 2025 from 2.19% for the nine months ended September 30, 2024, and a decrease of $7.9 million, or 6.0%, in the average balance of deposits, to $124.0 million for the nine months ended September 30, 2025 from $131.9 million for the nine months ended September 30, 2024.

Net Interest Income. Net interest income increased $627,000, or 12.0%, to $5.8 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The interest rate spread increased to 3.25% for the nine months ended September 30, 2025 from 2.63% for the nine months ended September 30, 2024. The net interest margin increased to 3.93% for the nine months ended September 30, 2025 from 3.41% for the nine months ended September 30, 2024.

		For the Nine Months Ended September 30,
		2025												2024
		Average Outstanding Balance				Interest				Yield/ Rate				Average Outstanding Balance				Interest				Yield/ Rate
Interest-earning assets:		(Dollars in thousands)
Loans		$	113,206			$	5,567				6.56	%		$	108,922			$	4,929				6.03	%
Investment securities			50,682				885				2.33	%			55,654				1,027				2.46	%
Interest-bearing deposits and other			34,542				1,055				4.07	%			39,715				1,429				4.80	%
Total interest-earning assets			198,430				7,507				5.04	%			204,291				7,385				4.82	%
Non-interest-earning assets			8,856												7,762
Allowance for credit losses			(1,150	)											(1,719	)
Total assets		$	206,136											$	210,334
Interest-bearing liabilities:
Interest-bearing demand		$	54,956				358				0.87	%		$	59,748				563				1.26	%
Savings accounts			25,768				61				0.32	%			27,269				54				0.26	%
Certificates of deposit			43,236				1,242				3.83	%			44,834				1,546				4.60	%
Total deposits			123,960				1,661				1.79	%			131,851				2,163				2.19	%
Borrowings			1				—				0.00	%			79				3				5.06	%
Total interest-bearing liabilities			123,961				1,661				1.79	%			131,930				2,166				2.19	%
Non-interest-bearing deposits			65,747												63,397
Non-interest-bearing liabilities			771												910
Total liabilities			190,479												196,237
Equity			15,657												14,097
Total liabilities and equity		$	206,136											$	210,334
Net interest income						$	5,846											$	5,219
Net interest rate spread											3.25	%											2.63	%
Net interest-earning assets		$	74,469											$	72,361
Net interest margin											3.93	%											3.41	%
Average interest-earning assets    to interest-bearing liabilities			160.07	%											154.85	%

39

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

		Nine Months Ended September 30,
		2025 vs. 2024
										Total
		Increase (decrease) due to								Increase
		Volume				Rate				(Decrease)
		(In thousands)
Interest-earning assets:
Loans		$	199			$	439			$	638
Investment securities			(89	)			(53	)			(142	)
Other interest-earning assets			(173	)			(201	)			(374	)
Total interest-earning assets			(63	)			185				122
Interest-bearing liabilities:
Interest-bearing demand			(42	)			(163	)			(205	)
Savings accounts			(3	)			10				7
Certificates of deposit			(53	)			(251	)			(304	)
Total deposits			(98	)			(404	)			(502	)
Borrowings			(3	)			—				(3	)
Total interest-bearing liabilities			(101	)			(404	)			(505	)
Change in net interest income		$	38			$	589			$	627

Provision for Credit Losses. Based on an analysis of the factors described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—Allowance for Credit Losses,” we recorded a $9,000 provision for credit losses for the nine months ended September 30, 2025, a decrease of 68.6%, compared to the nine months ended September 30, 2024. The allowance for credit losses was $1.2 million at September 30, 2025 and $1.4 million at September 30, 2024 and represented 1.00% of total loans at September 30, 2025 and 1.22% of total loans at September 30, 2024. Net charge-offs totaled $10,000 and $799,000 during the nine months ended September 30, 2025 and 2024, respectively.

Management’s determination of the allowance balance at September 30, 2025 included consideration of the $872,000, or 0.8%, increase in loans outstanding during the nine months ended September 30, 2025, along with decreases in nonperforming and delinquent loans. Total nonperforming loans were $679,000 at September 30, 2025, compared to $1.2 million at December 31, 2024. Total loans past due 30 days or greater were $509,000 and $1.6 million at those respective dates. As a percentage of nonperforming loans, the allowance for credit losses was 169.4% at September 30, 2025 compared to 94.3% at December 31, 2024.

Our estimates and assumptions used in the determination of the adequacy of the allowance for credit losses could be proven incorrect in the future, and the actual amount of future provisions may exceed the amount of past provisions. Any such increase in future provisions that may be required may adversely impact our financial condition and results of operations.

Noninterest Income. Noninterest income information is as follows.

		Nine Months Ended September 30,								Change
		2025				2024				Amount				Percent
		(Dollars in thousands)
Service fees on deposit accounts		$	741			$	793			$	(52	)			-6.6	%
Debit card fees			294				312				(18	)			-5.8	%
Mortgage loan servicing fees, net			87				101				(14	)			-13.9	%
Gain on sale of loans			112				41				71				173.2	%
Other			215				156				59				37.8	%
Total noninterest income		$	1,449			$	1,403			$	46				3.3	%

The increase in gain on sale of loans was due to an increase in sales volume period over period. Other noninterest income increased due primarily to an increase in fees on cashless ATMs at certain CRB locations and fees on consumer loans, partially offset by a decrease in late charges on loans. The decrease in service fees on deposits was due primarily to a decrease in maintenance fees and cash counting service fees from our CRB customers between the periods. This decrease was partially offset by an increase in the

40

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

overall number of CRB accounts period over period, as we have focused on expanding our CRB relationship base to smaller customers.

Noninterest Expense. Noninterest expense information is as follows.

		Nine Months Ended September 30,								Change
		2025				2024				Amount				Percent
		(Dollars in thousands)
Salaries and employee benefits		$	3,499			$	3,021			$	478				15.8	%
Occupancy and equipment			429				416				13				3.1	%
Data processing fees			486				432				54				12.5	%
FDIC insurance premiums			69				99				(30	)			-30.3	%
Advertising			140				117				23				19.7	%
Director fees			72				74				(2	)			-2.7	%
Debit card expense			53				57				(4	)			-7.0	%
Professional fees			484				485				(1	)			-0.2	%
Telephone and internet			106				99				7				7.1	%
Other			513				556				(43	)			-7.7	%
Total noninterest expense		$	5,851			$	5,356			$	495				9.2	%

The increase in salaries and employee benefits was due primarily to an increase in staffing levels and normal annual merit increases. The increase in data processing fees is attributable to implementation of new software to enhance the efficiency and productivity in the Loan Department, partially offset by a decrease in core processing expenses. The increase in advertising was due primarily to timing of advertising events and increase in business development expenses with the addition of a VP of Business Development. The decrease in other expense was due primarily to a nonrecurring expense in the 2024 period related to a customer appreciation event along with a decrease in charges for Federal Reserve processing and courier services, due to reduction in volume of courier services in 2025.

Income Taxes. Income taxes increased by $73,000, or 22.2%, to $404,000 for the nine months ended September 30, 2025, compared to $331,000 for the nine months ended September 30, 2024. The increase in the income tax provision for the nine months ended September 30, 2025 was due primarily to a $198,000, or 16.0% increase in pretax income. The effective tax rates were 28.1% and 26.7% for the nine months ended September 30, 2025 and 2024 and 2024, respectively.

41

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Management of Market Risk

General. The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, consisting primarily of mortgage loans, have longer maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage the impact of changes in market interest rates on net interest income and capital. We have an Asset/Liability and Investment Committee that is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the board of directors. The Committee establishes and monitors the volume, maturities, pricing and mix of assets and funding sources with the objective of managing assets and funding sources to provide results that are consistent with liquidity, growth, risk limits and profitability goals.

As part of our ongoing asset-liability management, we intend to use the following strategies to manage our interest rate risk:

i.increase our commercial loan portfolio (commercial and industrial loans as well as commercial real estate loans) with shorter term, higher yielding loan products;

ii.emphasize the marketing of our savings, money market and demand accounts;

iii.continue to maintain a high level of cash and cash equivalents; and

iv.invest in short- to medium-term to repricing and/or maturity securities depending on market interest rates.

Net Interest Income. We analyze our sensitivity to changes in interest rates through a net interest income model. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest- bearing liabilities, such as deposits and borrowings. We estimate what our net interest income would be for a 12-month period. We then calculate what the net interest income would be for the same period under the assumptions that the United States Treasury yield curve increases or decreases instantaneously by up to 400 basis points, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a 100 basis point increase in the “Change in Interest Rates” column below.

The table below sets forth, as of September 30, 2025, the calculation of the estimated changes in our net interest income that would result from the designated instantaneous changes in the United States Treasury yield curve.

At September 30, 2025
Change in Interest Rates (basis		Net Interest Income								Year 1 Change
points) (1)		Year 1 Forecast								From Level
400				$	9,041					10.91%
300					8,855					8.62%
200					8,640					5.99%
100					8,419					3.28%
Level					8,152					—
(100)					7,678					-5.81%
(200)					7,109					-12.79%
(300)					6,376					-21.79%
(400)					5,993					-26.48%

(1)Assumes an instantaneous uniform change in interest rates at all maturities.

42

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The table above indicates that at September 30, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 5.99% increase in net interest income, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced an 12.79% decrease in net interest income.

Net Economic Value. We also compute amounts by which the net present value of our assets and liabilities (economic value of equity, or “EVE”) would change in the event of a range of assumed changes in market interest rates. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumptions that the United States Treasury yield curve increases or decreases instantaneously by up to 400 basis points, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.

The table below sets forth, as of September 30, 2025, the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the United States Treasury yield curve.

At September 30, 2025
Change in												EVE as a Percentage of Present Value of Assets (3)
Interest Rates (basis						Estimated Increase (Decrease) in EVE						EVE				Increase (Decrease)
points) (1)		Estimated EVE (2)				Amount				Percent		Ratio (4)				(basis points)
(Dollars in thousands)
400		$	51,244			$	742			1.47%			28.42	%			307
300			51,715				1,213			2.40%			28.00	%			265
200			51,888				1,386			2.74%			27.40	%			205
100			51,637				1,135			2.25%			26.57	%			122
Level			50,502				—			—			25.35	%			—
(100)			49,803				(699	)		-1.38%			24.44	%			(91	)
(200)			43,980				(6,522	)		-12.91%			21.14	%			(421	)
(300)			36,709				(13,793	)		-27.31%			17.33	%			(802	)
(400)			27,539				(22,963	)		-45.47%			12.81	%			(1,254	)

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

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

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

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

The table above indicates that at September 30, 2025, in the event of an instantaneous parallel 200 basis point increase in interest rates, we would have experienced a 2.74% increase in EVE, and in the event of an instantaneous parallel 200 basis point decrease in interest rates, we would have experienced a 12.91% decrease in EVE. At September 30, 2025, all estimated changes presented in the above tables were within the current policy limits established by the board of directors.

Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the net interest income and net economic value tables presented assume that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the tables provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates, and actual results may differ. Furthermore, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Additionally, certain assets, such as adjustable-rate loans, have features that restrict changes in interest rates both on a short-term basis and over the life of the asset. In the event of

43

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

changes in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the tables.

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

Liquidity and Capital Resources

Liquidity Management. Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from sales, maturities and calls of securities. We also have the ability to borrow from the Federal Home Loan Bank of Chicago. At September 30, 2025, we had the ability to borrow approximately $33.7 million from the Federal Home Loan Bank of Chicago, and we also had the ability to borrow $3.0 million from a private bankers’ bank at that date. We had no borrowings outstanding at September 30, 2025.

The board of directors is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs and deposit withdrawals of our customers as well as unanticipated contingencies. We calculate our liquidity ratio as the sum of cash, short-term assets (generally securities with a remaining maturity of less than one year) and marketable assets divided by the sum of net deposits (generally time deposits of $250,000 or more and brokered deposits less than $250,000), short-term liabilities (generally borrowings with a remaining maturity of one year or less) and volatile liabilities (generally federal funds purchased, securities sold under agreements to repurchase, and time deposits of $250,000 or more). We seek to maintain a liquidity ratio of 20.0% or greater. We believe that we had enough sources of liquidity to satisfy our short and long-term liquidity needs as of September 30, 2025.

We monitor and adjust our investments in liquid assets based upon our assessment of: (1) expected deposit flows; (2) expected loan demand; (3) yields available on cash and cash equivalents and securities; and (4) the objectives of our asset/liability management program. Excess liquid assets are invested generally in cash and cash equivalents and short- and intermediate-term securities.

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and cash equivalents, which include federal funds sold. The levels of these assets depend on our operating, financing, lending and investing activities during any given period. At September 30, 2025, cash and cash equivalents totaled $34.8 million. Investment securities classified as available-for-sale, which provide an additional source of liquidity, totaled $44.1 million at September 30, 2025.

Our cash flows are comprised of three primary classifications: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities.

For the nine months ended September 30, 2025, cash flows from operating activities, investing activities and financing activities resulted in a net decrease in cash and cash equivalents of $8.7 million. Net cash provided by operating activities amounted to $1.5 million, primarily due to net income of $1.0 million. Net cash provided by investing activities amounted to $2.8 million, primarily due to the proceeds from maturities and paydowns or investment securities of $3.9 million, which was partially offset by an increase in loans of $1.0 million. Net cash used in financing activities amounted to $13.0 million, primarily due to a net decrease in deposits of $19.6 million, which was partially offset by net proceeds from issuance of common stock of $6.7 million.

For the nine months ended September 30, 2024, cash flows from operating activities, investing activities and financing activities resulted in a net increase in cash and cash equivalents of $38.4 million. Net cash provided by operating activities amounted to $1.1 million, primarily due to net income of $908,000. Net cash used in investing activities amounted to $2.5 million, primarily due to a net

44

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

increase in gross loans of $5.4 million, which was partially offset by proceeds from maturities and paydowns on investment securities of $2.9 million. Net cash provided by financing activities amounted to $39.8 million, primarily due to a net increase in deposits of $50.5 million, partially offset by a $10.5 million repayment of FHLB advances. For further information, see the statements of cash flows contained in the consolidated financial statements.

We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. We had loan commitments of $10.5 million at September 30, 2025. Certificates of deposit due within one year of September 30, 2025, totaled $40.0 million, or 92.9% of our certificates of deposit, and 22.3% of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other deposits and Federal Home Loan Bank advances. Depending on market conditions, we may be required to pay higher rates on such deposits or borrowings than we currently pay. We believe, however, based on past experience that a significant portion of such deposits will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.

Capital Management. At September 30, 2025 and December 31, 2024, Security Bank exceeded all regulatory capital requirements and was considered “well capitalized” under regulatory guidelines. See “Regulation and Supervision—Federal Bank Regulation—Capital Requirements” and Note 5 of the Notes to the Consolidated Financial Statements.

Item 4. Controls and Procedures.

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

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

45

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. At September 30, 2025, we were not involved in any legal proceedings the outcome of which would be material to our financial condition or results of operations.

Item 1A. Risk Factors.

Not Applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable

Item 3. Defaults Upon Senior Securities.

Not applicable

Item 4. Mine Safety Disclosures.

Not applicable

Item 5. Other Information.

Not applicable

46

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Item 6. Exhibits.

Exhibit Number		Description
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

47

Security Midwest Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

SIGNATURES

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

		SECURITY MIDWEST BANCORP, INC.
Date: November 14,2025		By:	/s/ Stephan P. Antonacci
			Stephan P. Antonacci
			President and Chief Executive Officer

Date: November 14,2025		By:	/s/ Brenda Minder
			Brenda Minder
			Executive Vice President and Chief Financial Officer

48