Note 12: Subsequent Events

On April 4, 2026, Nathan E. Walker, Executive Vice President of the Company and Chief Executive Officer and President of the Bank, passed away. On April 9, 2026, Stephen G. Lear, President and Chief Executive Officer of the Company, was appointed Chief Executive Officer and President of the Bank. Due to the passing of Mr. Walker, stock options to purchase 51,000 shares of the Company's common stock and 20,400 shares of restricted stock previously awarded to Mr. Walker under the 2023 Equity Plan vested during the quarter ending June 30, 2026, pursuant to the terms of the 2023 Equity Plan. The early vesting of the stock options and restricted stock awards will result in an additional expense of $134,000 and $141,000, respectively, during the quarter ending June 30, 2026. 

As previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission, on May 12, 2026, the Company and Brookfield Bancshares, Inc. (“Brookfield”), a Delaware corporation and registered bank holding company, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which (1) the Company will merge with and into a newly formed Delaware corporation and wholly owned subsidiary of Brookfield, BRKD Merger Sub Inc., with the Company as the surviving corporation (the “Merger”) and (2) immediately following the Merger, the Company will be merged with and into Brookfield, with Brookfield surviving the merger (the “Second Merger”). Following the Second Merger, the Bank will become a wholly-owned subsidiary of Brookfield, and will continue to operate under its existing name and federal savings association charter as a subsidiary of Brookfield.

Under the terms of the Merger Agreement, each share of common stock, par value $0.01 per share, of the Company (“Company Stock”) that is issued and outstanding at the effective time of the Merger (the “Effective Time”), will be converted into the right to receive cash in an aggregate amount equal to $73.662 million (the “Merger Consideration”), or approximately $14.28 per share of outstanding Company Stock.  In addition, all shares of restricted stock of the Company granted under the 2023 Equity Plan, whether or not vested, will vest at the Effective Time and be entitled to receive the Merger Consideration. All stock options granted under the 2023 Equity Plan, whether or not vested, will vest at the Effective Time and be entitled to receive a cash payment equal to the difference between the option’s exercise price and the per share Merger Consideration, to be paid out of the aggregate Merger Consideration.

The Merger is expected to close in the fourth quarter of 2026, subject to certain conditions, including, among others, approval of the Merger and the Merger Agreement by the Company’s stockholders, the receipt of all required regulatory approvals and expiration of applicable waiting periods, accuracy of specified representations and warranties of each party, the performance in all material respects by each party of its obligations under the Merger Agreement, and the absence of any injunctions or other legal restraints.