8-K/A

UNITED STATES

SECURITIES ANDEXCHANGE COMMISSION

Washington, D.C.20549

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FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section13 OR 15(d) of The Securities Exchange Act of 1934

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Date of Report (Date of earliest event reported)	August 15, 2022

Bank First Corporation

(Exact name of registrant as specified in its charter)

Wisconsin	001-38676	39-1435359
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
402 North 8th Street, Manitowoc, WI	54220
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(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code	(920) 652-3100
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Ticker symbol(s)	Name of each exchange on which <br><br>registered
Common Stock, par value $0.01 per share	BFC	The Nasdaq Stock Market LLC

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  x

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.  x

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Explanatory Note

On August 15, 2022, Bank First Corporation, a Wisconsin corporation (the “Company” or “BFC”) filed with the Securities and Exchange Commission (“SEC”) a Current Report on Form 8-K to report under Item 2.01 that the Company had completed its previously-announced merger (the “Merger”) with Denmark Bancshares, Inc., a Wisconsin corporation (“DBI”), pursuant to that certain Agreement and Plan of Merger by and between BFC and DBI, dated as of January 18, 2022 (the “Merger Agreement”). At the closing, DBI merged with and into BFC, with BFC as the surviving corporation, followed by the merger of DBI’s wholly-owned subsidiary bank, Denmark State Bank, with and into the BFC’s wholly-owned subsidiary bank, Bank First, N.A. (“Bank First”), with Bank First as the surviving bank.

This Amendment No. 1 amends the Company’s Current Report on Form 8-K filed on August 15, 2022 to include the financial statements and unaudited pro forma combined financial information referred to in Item 9.01(a) and (b) below relating to the Merger.

Cautionary Note Regarding Forward-LookingStatements

Statements in this Amendment No. 1 to the Current Report on Form 8-K, including the pro forma combined financial information attached hereto, contain “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. The pro forma combined financial information is based on preliminary estimates and assumptions that could cause actual results to differ materially from those expected or implied by the pro forma combined financial information or the estimates and assumptions used in preparing the pro forma combined financial information. The pro forma combined financial information and forward-looking statements are based on current expectations and projections about future events. Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantified and, consequently, the actual performance of the Company may differ materially from that expressed or implied by such forward-looking statements. Certain factors that could cause actual results to differ materially from the Company’s expectations include the risks detailed under “Item 1A. Risk Factors” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and in the other documents the Company files with the SEC. Many of these factors are beyond the Company’s ability to control or predict. Forward-looking statements are not guarantees of performance.

Item 9.01	Financial Statements and Exhibits.

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(a) Financial Statements of Businesses Acquired.

Audited financial statements of Denmark Bancshares, Inc. and its consolidated subsidiaries as of and for the years ended December 31, 2021 and 2020, and the notes related thereto, which are included in Exhibit 99.2 hereto and are incorporated herein by reference. Unaudited financial statements of Denmark Bancshares, Inc. and its consolidated subsidiaries as of and for the six months ended June 30, 2022 and June 30, 2021, and the notes related thereto, which are included in Exhibit 99.3 hereto and are incorporated herein by reference.

(b) Pro Forma Financial Information.

Unaudited pro forma combined financial information of Bank First Corporation as of and for the year ended December 31, 2021 and as of and for the six months ended June 30, 2022, and the notes related thereto, which are included in Exhibit 99.4 hereto and incorporated herein by reference.

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(d) Exhibits

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Exhibit <br><br>Number	Description
2.1	Agreement and Plan of Merger, dated as of January 18, 2022, by and between Bank First Corporation and Denmark Bancshares, Inc. (incorporated by reference to Exhibit 2.1 to Bank First Corporation’s Current Report on Form 8-K filed on January 19, 2022).
23.1	Consent of Plante & Moran, PLLC.
99.1	Press Release of Bank First Corporation dated August 15, 2022 (incorporated by reference to Exhibit 99.1 to Bank First Corporation’s Current Report on Form 8-K filed on August 15, 2022).
99.2	Audited consolidated financial statements of Denmark Bancshares, Inc. as of and for the years ended December 31, 2021 and 2020.
99.3	Unaudited consolidated financial statements of Denmark Bancshares, Inc. as of and for the six months ended June 30, 2022 and June 30, 2021.
99.4	Unaudited pro forma combined financial information of Bank First Corporation as of and for the year ended December 31, 2021 and as of and for the six months ended June 30, 2022.

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SIGNATURES

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

	BANK FIRST CORPORATION
Date:     September 9, 2022	By:	/s/ Kevin LeMahieu
		Kevin LeMahieu
		Chief Financial Officer

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Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the use in this current report on Form 8-K/A of Bank First Corporation of our report dated February 14, 2022 (except for Notes 12 and 15, as to which the date is March 15, 2022), relating to our audit of the consolidated financial statements of Denmark Bancshares, Inc. and Subsidiaries as of and for the years ended December 31, 2021 and 2020 appearing in Exhibit 99.2 to this current report on Form 8-K/A.

We further consent to the incorporation by reference in the Registration Statements on Forms S-8 (Nos. 333-228989, 333-229958, and 333-237110) and Form S-3 (333-239124) of Bank First Corporation of our report dated February 14, 2022 (except for Notes 12 and 15, as to which the date is March 15, 2022), with respect to the consolidated financial statements of Denmark Bancshares, Inc. and Subsidiaries as of and for the years ended December 31, 2021 and 2020 appearing in this current report on Form 8-K/A.

/s/ Plante & Moran, PLLC

Chicago, Illinois

September 9, 2022

Exhibit 99.2

Denmark<br>Bancshares, Inc. and Subsidiaries<br><br> <br><br><br><br><br>2021 Audited Financial Statements

TABLE OF CONTENTS

Selected Financial Data	2
Independent Auditor’s Report	3
Consolidated Financial Statements	5
Notes to Consolidated Financial Statements	10
Denmark Bancshares, Inc. (“DBI”),<br> headquartered in Denmark, Wisconsin, is a diversified one-bank holding company. Denmark State Bank (“DSB”), DBI's subsidiary<br> bank, offers seven full-service banking offices located in Denmark, Bellevue, Howard, Lawrence, Reedsville, Shawano and Whitelaw, serving<br> primarily Brown, Kewaunee, Manitowoc, Outagamie, Shawano and Sheboygan Counties.
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SELECTED FINANCIAL DATA

	Year Ended December 31,
	2021			2020			2019			2018			2017
INCOME STATEMENT DATA
Interest income	$	22,866		$	22,589		$	22,681		$	21,005		$	18,467
Interest expense		2,605			4,554			4,264			2,813			1,940
Net interest income	$	20,261		$	18,035		$	18,417		$	18,192		$	16,527
Less:  Provision for credit losses		0			735			0			375			375
Net interest income after provision for credit losses	$	20,261		$	17,300		$	18,417		$	17,817		$	16,152
Plus:   Noninterest income	$	4,842		$	4,431		$	3,320		$	2,071		$	2,260
Less:  Noninterest expense		16,370			16,563			15,136			14,233			14,052
Net noninterest expense	$	(11,528	)	$	(12,132	)	$	(11,816	)	$	(12,162	)	$	(11,792	)
Income before income taxes	$	8,733		$	5,168		$	6,601		$	5,655		$	4,360
Income tax expense		2,235			1,270			1,649			1,568			1,560
Net income	$	6,498		$	3,898		$	4,952		$	4,087		$	2,800
PER SHARE DATA
Earnings	$	2.07		$	1.22		$	1.54		$	1.26		$	0.86
Cash dividends declared		0.6000			0.5900			0.5850			0.5475			0.5250
Book value (year-end)		21.99			20.75			20.02			19.00			18.41
BALANCE SHEET DATA
Average balances:
Loans	$	476,763		$	470,019		$	423,965		$	403,631		$	369,981
Investment securities		44,739			35,410			36,884			51,096			59,205
Assets		660,319			608,692			517,272			486,533			462,567
Deposits		584,827			512,877			425,194			408,347			385,242
Stockholders' equity		67,462			65,549			63,443			61,041			60,131
Year-end balances:
Loans	$	479,057		$	475,953		$	434,770		$	420,827		$	372,480
Allowance for loan losses		7,741			7,668			6,891			6,787			6,258
Investment securities		36,462			31,329			35,595			42,066			57,527
Assets		687,644			646,441			552,594			506,202			474,520
Deposits		614,497			563,275			457,435			417,224			396,690
Borrowings		933			14,067			25,725			23,991			14,004
Stockholders' equity		68,026			65,029			63,993			61,469			59,714
FINANCIAL RATIOS
Return on average equity		9.63	%		5.95	%		7.81	%		6.70	%		4.66	%
Return on average assets		0.98	%		0.64	%		0.96	%		0.84	%		0.61	%
Net interest spread (tax-equivalent)		3.15	%		2.87	%		3.47	%		3.74	%		3.61	%
Dividend payout ratio		28.82	%		47.95	%		38.03	%		43.54	%		61.11	%
Average equity to average assets		10.22	%		10.77	%		12.26	%		12.55	%		13.00	%
Allowance for credit losses to loans		1.62	%		1.61	%		1.58	%		1.61	%		1.68	%
Non-performing loans to allowance for credit losses		5.82	%		7.03	%		6.33	%		9.86	%		18.66	%
Dollars in thousands except per share data.

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IndependentAuditor’s Report

Board of Directors

Denmark Bancshares, Inc.

Opinion

We have audited the consolidated financial statements of Denmark Bancshares, Inc. (the "Corporation"), which comprise the consolidated statements of financial condition as of December 31, 2021 and 2020 and the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Corporation as of December 31, 2021 and 2020 and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audits of the Consolidated Financial Statements section of our report. We are required to be independent of the Corporation and to meet our ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilitiesof Management for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Corporation's ability to continue as a going concern within one year after the date that the consolidated financial statements are issued or available to be issued.

Auditor’sResponsibilities for the Audits of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and, therefore, is not a guarantee that audits conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

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Board of Directors

Denmark Bancshares, Inc.

In performing audits in accordance with GAAS, we:

·	Exercise professional judgment and maintain professional skepticism throughout<br>the audits.
·	Identify and assess the risks of material misstatement<br>of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.<br>Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
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·	Obtain an understanding of internal control relevant<br>to the audits in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion<br>on the effectiveness of the Corporation's internal control. Accordingly, no such opinion is expressed.
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·	Evaluate the appropriateness of accounting policies<br>used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the<br>consolidated financial statements.
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·	Conclude whether, in our judgment, there are<br>conditions or events, considered in the aggregate, that raise substantial doubt about the Corporation's ability to continue as a going<br>concern for a reasonable period of time.
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We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits, significant audit findings, and certain internal control-related matters that we identified during the audits.

Other Information

Management is responsible for the other information included in the annual report. The other information is composed of the Selected Financial Data but does not include the consolidated financial statements and our auditor's report thereon. Our opinion on the consolidated financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audits of the consolidated financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the consolidated financial statements or whether the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

February 14, 2022, except for Notes 12 and 15, as to which the date is March 15, 2022

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Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

As of December 31,

	2021			2020
Assets
Cash and due from banks	$	38,490,134		$	24,100,714
Federal funds sold		112,665,088			94,209,679
Investment securities available for sale, at fair value		36,462,450			31,329,356
Loans		479,056,630			475,952,665
Allowance for loan losses		(7,741,069	)		(7,668,435	)
Net loans	$	471,315,561		$	468,284,230
Loans held for sale		82,401			1,404,587
Premises and equipment, net		5,578,294			6,105,294
Other investments		3,724,977			2,995,438
Accrued interest receivable		1,304,890			1,624,762
Bank-owned life insurance		13,018,897			12,667,909
Other assets		5,000,879			3,719,503
TOTAL ASSETS	$	687,643,571		$	646,441,472
Liabilities
Deposits
Noninterest-bearing	$	155,292,023		$	135,667,583
Interest-bearing		459,205,230			427,606,925
Total Deposits	$	614,497,253		$	563,274,508
Accrued interest payable		166,199			272,609
Other liabilities		4,020,829			3,798,254
Borrowings		932,844			14,066,975
Total Liabilities	$	619,617,125		$	581,412,346
Stockholders' Equity
Common stock, no par value, authorized 10,000,000 Class A shares; outstanding 3,003,883 at 12/31/2021 and 3,042,302 at 12/31/2020	$	18,009,891		$	17,836,258
Common stock, no par value, authorized 1,000,000 Class B non-voting shares; outstanding 89,285 as 12/31/2021 and 91,815 at 12/31/2020		614,035			614,035
Treasury stock shares, at cost (588,392 Class A and 30,895 Class B shares at 12/31/2021 and 532,700 Class A and 28,365 Class B shares at 12/31/2020)		(12,980,652	)		(11,528,855	)
Paid in capital		1,562,939			1,309,054
Retained earnings		60,828,648			56,203,275
Accumulated other comprehensive income		222,341			786,074
Deferred stock-based compensation		(230,756	)		(190,715	)
Total Stockholders' Equity	$	68,026,446		$	65,029,126
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	687,643,571		$	646,441,472

The accompanying notes are an integral part of these financial statements.

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Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

For the Years Ended December 31,

	2021		2020
Interest Income
Loans including fees	$	22,083,591	$	21,559,807
Investment securities:
Taxable		419,414		550,280
Tax-exempt		195,659		205,475
Federal funds sold		83,868		168,004
Other interest income		82,978		105,727
	$	22,865,510	$	22,589,293
Interest Expense
Deposits	$	2,036,052	$	3,205,033
Borrowings		568,602		1,348,677
	$	2,604,654	$	4,553,710
Net interest income	$	20,260,856	$	18,035,583
Provision for Credit Losses		0		735,000
Net interest income after provision for<br> credit losses	$	20,260,856	$	17,300,583
Other Income
Service fees and commissions	$	1,200,643	$	708,724
Other investment gains		34,478		65,081
Loan sale gains		2,190,179		2,457,821
Bank owned life insurance		350,987		345,298
Other		1,066,171		854,153
	$	4,842,458	$	4,431,077
Other Expense
Salaries and employee benefits	$	10,940,344	$	11,121,461
Data processing expenses		1,779,003		1,640,018
Occupancy expenses		1,470,978		1,534,601
Professional fees		519,729		618,580
Marketing expenses		348,357		373,554
Printing and supplies		110,877		175,066
Directors’ fees		193,940		171,320
FDIC insurance premiums		250,000		134,185
Other operating expenses		756,672		794,768
	$	16,369,900	$	16,563,553
Income before income taxes	$	8,733,414	$	5,168,107
Income tax expense		2,235,311		1,270,159
NET INCOME	$	6,498,103	$	3,897,948
EARNINGS PER COMMON SHARE	$	2.07	$	1.22

The accompanying notes are an integral part of these financial statements.

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Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of ComprehensiveIncome

For the Years Ended December 31,

	2021			2020
Net income	$	6,498,103		$	3,897,948
Other comprehensive (loss) income, net of tax
Unrealized holding (losses) gains arising during period		(772,236	)		708,773
Income tax benefit (expense) related to items of other comprehensive income		208,503			(191,369	)
Other comprehensive (loss) income, net of tax	$	(563,733	)	$	517,404
Comprehensive income	$	5,934,370		$	4,415,352

The accompanying notes are an integral part of these financial statements.

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Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statement of Changes in Stockholders’Equity

												Accumulated
				Treasury								Other			Deferred
		Class B		Shares			Paid in		Retained			Comprehensive			Stock-Based
		Amount		Amount			Capital		Earnings			Income (loss)			Compensation			Total
BALANCE, DECEMBER 31, 2019	17,687,411	$	614,035	$	(9,677,244	)	$	1,115,603	$	54,174,470		$	268,670		$	(190,283	)	$	63,992,662
Net income									$	3,897,948									3,897,948
Other comprehensive income, net of tax												$	517,404						517,404
Issuance of Class A restricted common stock							$	174,158							$	(174,158	)		0
Issuance of Class A common stock	148,847																		148,847
Stock-based compensation expense							$	19,293							$	173,726			193,019
Treasury stock acquisitions				$	(1,851,611	)													(1,851,611	)
Cash dividend declared, 0.59 per share									$	(1,869,143	)								(1,869,143	)
BALANCE, DECEMBER 31, 2020	17,836,258	$	614,035	$	(11,528,855	)	$	1,309,054	$	56,203,275		$	786,074		$	(190,715	)	$	65,029,126
Net income										6,498,103									6,498,103
Other comprehensive loss, net of tax													(563,733	)					(563,733	)
Issuance of Class A restricted common stock								234,581								(234,581	)		0
Issuance of Class A common stock	173,634																		173,634
Stock-based compensation expense								19,304								194,540			213,844
Treasury stock acquisitions					(1,451,797	)													(1,451,797	)
Cash dividend declared, 0.60 per share										(1,872,731	)								(1,872,731	)
BALANCE, DECEMBER 31, 2021	18,009,891	$	614,035	$	(12,980,652	)	$	1,562,939	$	60,828,648		$	222,341		$	(230,756	)	$	68,026,446

All values are in US Dollars.

The accompanying notes are an integral part of these financial statements.

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Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31,

	2021			2020
Cash Flows from Operating Activities:
Net income	$	6,498,103		$	3,897,948
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		696,216			737,399
Provision for credit losses		0			735,000
Gains on sales of loans		(2,190,179	)		(2,457,821	)
Loss on sale of other real estate and other assets		35,555			7,418
Gain on sale of other investments		(34,478	)		(65,081	)
Amortization of bond premium		178,005			209,194
Accretion of bond discount		(28,071	)		(2,403	)
Increase in fair value of equity securities		(215,768	)		(142,309	)
Mortgage loans originated for sale		(59,114,871	)		(92,655,877	)
Proceeds from sale of mortgage loans		62,631,149			93,778,111
Stock-based compensation		213,844			193,019
Income from BOLI		(350,987	)		(345,298	)
Decrease (increase) in interest receivable		319,872			(235,203	)
Decrease in interest payable		(106,410	)		(140,080	)
Benefit for deferred taxes		(163,006	)		(159,652	)
Other, net		(690,680	)		(424,334	)
Net Cash Provided by Operating Activities	$	7,678,294		$	2,930,031
Cash Flows from Investing Activities:
Maturities, pay-downs, calls and sales of AFS securities		8,030,621			10,125,742
Purchases of AFS securities		(14,085,885	)		(5,358,390	)
Purchases of other investments		(749,970	)		(239,324	)
Proceeds from redemption or sale of other investments		270,678			562,001
Federal funds sold, net		(18,455,409	)		(47,223,512	)
Proceeds from sale of foreclosed assets		0			113,593
Net increase in loans made to customers		(3,035,244	)		(41,251,133	)
Purchases of premises and equipment		(204,771	)		(1,259,117	)
Net Cash Used in Investing Activities	$	(28,229,980	)	$	(84,530,140	)
Cash Flows from Financing Activities:
Net increase in deposits	$	51,222,745		$	105,839,818
Purchase of treasury stock		(1,451,797	)		(1,851,611	)
Issuance of common stock		173,634			148,847
Dividends paid		(1,869,345	)		(1,888,677	)
Debt proceeds		0			6,705,719
Debt repayments		(13,134,131	)		(19,230,831	)
Net Cash Provided by Financing Activities	$	34,941,106		$	89,723,265
Net increase in cash and due from banks	$	14,389,420		$	8,123,156
Cash and due from banks, beginning		24,100,714			15,977,558
CASH AND DUE FROM BANKS, ENDING	$	38,490,134		$	24,100,714
Noncash Investing Activities:
Loans transferred to other real estate owned	$	0		$	110,819

The accompanying notes are an integral part of these financial statements.

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NOTE 1 – FINANCIAL STATEMENTS

Nature of Organization

Denmark Bancshares, Inc. (“DBI”) is a bank holding company as defined in the Bank Holding Company Act of 1956, as amended. As such, it exercises control over Denmark State Bank (“DSB”), Denmark Agricultural Credit Corporation (“DACC”) and DBI Properties, Inc. The majority of DBI’s assets are held by DSB. DSB, a wholly owned subsidiary of DBI, operates under a state bank charter, and provides a variety of banking services to its customers. Denmark Investments, Inc. (“DII”) was a wholly owned subsidiary of DSB which was domiciled in Nevada. This entity was dissolved as of December 31, 2020. DBI Properties, Inc. was formed in February 2009 for the purpose of holding certain foreclosed properties. All activities of the wholly owned subsidiaries are reflected in the consolidated financial statements for Denmark Bancshares, Inc. and Subsidiaries (collectively referred to as “DBI”).

DBI makes agribusiness, commercial and residential loans to customers throughout the state, but primarily in eastern Wisconsin. DBI has a diversified loan portfolio; however, a substantial portion of their debtors’ ability to honor their contract is dependent upon the agribusiness economic sector. The main loan and deposit accounts are fully disclosed in Notes 3 and 7. The significant risks associated with operating DBI include interest rate risk, credit risk, liquidity risk and concentration risk.

DACC was formed for the purpose of extending credit for agricultural loans utilizing funding sources with a lower cost of funds than those available to DSB. Over the last several years, DACC’s cost of funds was no longer more favorable than funding available to DSB. A cost-benefit analysis was performed during 2020 and the decision was made to put DACC into a dormant status, thereby moving all loans out of this entity and eliminating the availability of its $30 million line of credit.

On January 19, 2022, DBI entered into an Agreement and Plan of Merger with Bank First Corporation. Following the Merger, DSB will merge with and into Bank First, N.A., Bank First Corporation’s wholly-owned bank subsidiary, with Bank First, N.A. continuing as the surviving bank, and all DSB branches operating under the Bank First brand.

The Merger is targeted to take place early third quarter 2022 and is contingent upon customary closing conditions including regulatory approval and the approval of DBI’s and Bank First Corporation’s shareholders.

Basis of Consolidation

The consolidated financial statements include the accounts of Denmark Bancshares, Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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. Significant estimates in the financial statements include fair values of securities, fair values of financial instruments, valuation of deferred tax assets and the determination of the allowance for loan losses, which are discussed specifically in the following sections of this footnote.

Comprehensive Income

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Certain changes in assets and liabilities, however, such as unrealized gains and losses on available-for-sale securities, are reported as a direct adjustment to the equity section of the balance sheet. Such items, along with the net income, are considered components of comprehensive income.

Cash Flows

For purposes of reporting cash flows, cash and cash equivalents include cash on hand and amounts due from banks. Cash flows from demand deposits, NOW accounts, savings accounts, federal funds purchased and sold, cash receipts and payments of loans and time deposits are reported net. For purposes of cash flow reporting, income taxes paid were $2,225,000 and $1,270,000 and interest paid was $2,711,064 and $4,693,790 for the years ended December 31, 2021 and 2020, respectively.

Investment Securities

Debt investment securities are designated as available-for-sale. Debt securities classified as available-for-sale are stated at estimated fair value, with unrealized gains and losses, net of any applicable deferred income taxes, reported as a separate component of stockholders’ equity. Interest income is recognized at the coupon rate adjusted for amortization and accretion of premiums and discounts. Discounts are accreted into interest income over the estimated life of the related security and premiums are amortized against income to the earlier of the call date or weighted average life of the related security using the interest method. Realized gains or losses on dispositions are recorded in other operating income on the trade date, based on the net proceeds and the adjusted carrying amount of the securities sold using the specific identification method.

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Declines in fair value of securities that are deemed to be other-than-temporary, if applicable, are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of DBI to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Loans

Loans are reported at the principal amount outstanding, net of the allowance for loan losses. Interest on loans is calculated and accrued by using the simple interest method on the daily balance of the principal amount outstanding. During 2020 and 2021, as a result of the COVID-19 pandemic, DSB granted fully guaranteed commercial loans totaling $68.2 million with a coupon rate of 1% to qualified customers under the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”). The SBA paid origination fees that varied based on the size of the loan. DSB is recognizing the fee income over the life of the loan which is accelerated in the event the PPP loan is forgiven.

All loans are given an internal risk rating when the loan is originated. The internal risk ratings are defined as:

·Non-classifiedloans are assigned a risk rating of 1 – 4, with a one-rated credit being the highest quality. Non-classified loans have credit quality that ranges from well above average quality to some inherent weaknesses that may present higher than average risk due to conditions affecting the borrower, the borrower’s industry or economic environment.

·Specialmention loans are assigned a risk rating of 5. Potential weaknesses exist that deserve management’s close attention. If left uncorrected, the potential weaknesses may result in deterioration of repayment prospects or in DSB’s credit position at some future date.

·Substandardloans are assigned a risk rating of 6. These loans are inadequately protected by the current worth and borrowing capacity of the borrower. Well-defined weaknesses exist that may jeopardize the liquidation of the debt. There is a possibility of some loss if the deficiencies are not corrected. At this point, the loan may still be performing and accruing.

·Doubtfulloans are risk rated 7 and have all the weaknesses of a substandard credit plus the added characteristic that the weaknesses make collection or liquidation in full on the basis of current facts, conditions and values highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors, which may work to the advantage of strengthening the asset, its classification as an estimated loss is deferred until its more exact status can be determined.

·Lossloans are internally risk rated as an 8. A loss amount has been determined and this has been charged-off against the allowance for loan losses. All or a portion of the charge-off may be recovered in the future and any such recoveries would also be recorded through the allowance.

DBI’s policy is to place into nonaccrual status all loans that are contractually past due 90 days or more, along with other loans as to which reasonable doubt exists to the full and timely collection of principal and/or interest based on management’s view of the financial condition of the borrower. Income on such loans is then recognized only to the extent that cash is received and where the future collection of principal is probable. Interest accruals are resumed on such loans only when they are brought current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to both principal and interest.

Loan charge-offs for all loans will occur as soon as there is a reasonable probability of loss. When the amount of the loss can be readily calculated, the charge-off will be recorded as soon as practical within the calendar quarter the loss was identified. Loans that are partially charged-off will be placed in nonaccrual status unless the remaining loan is restructured with adequate collateral and payments are assured and current.

A loan is impaired when, based on current information and events, it is probable that not all amounts due will be collected according to the contractual terms of the loan agreement. Interest income is recognized in the same manner described above for nonaccrual loans. Further detail on the analysis of impaired loans can be found below in the discussion of the Allowance for Loan Losses.

Allowance for Loan Losses

The allowance for loan losses is an estimate of the losses that have been incurred in the loan portfolio. The allowance is based on two basic accounting principles: (1) FinancialAccounting Standards Board (“FASB”) Accounting Standards Codification (ASC) Topic 310-10 “Receivables –Overall,” which requires that losses be accrued when it is probable that DBI will not collect all principal and interest payments according to the loan’s contractual terms, and (2) FASB ASC Topic 450, “Contingencies,” which requires that losses be accrued when they are probable of occurring and estimable.

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On a quarterly basis, management utilizes a systematic methodology to determine an appropriate allowance for loan losses. This methodology includes a loan grading system that requires quarterly reviews; identification of loans to be evaluated on an individual basis for impairment; results of independent reviews of asset quality and the adequacy of the allowance by regulatory agencies; consideration of current trends and volumes of nonperforming, past-due, nonaccrual and potential problem loans; as well as national and local economic trends and industry conditions.

In applying the methodology, all troubled debt restructurings (“TDRs”), regardless of size, are considered impaired and will be individually evaluated. Nonaccrual and watchlist commercial real estate, construction and land development, agricultural real estate, multifamily residential real estate, commercial, and agricultural production loans over $50,000 are evaluated individually to determine if they are impaired. Nonaccrual residential real estate or consumer loans that are larger than customary for DBI, in addition to those that have a significant collateral shortfall, will also be considered impaired and evaluated individually as there would be no pool of similar loans to evaluate these loans under ASCTopic 450. Impairment is measured on a loan-by-loan basis by either the present value of expected cash flows discounted at the loan’s effective interest rate or the net realizable value of the collateral if the loan is collateral dependent. If the estimated net realizable value of the collateral is less than the recorded investment in the loan, an impairment is recognized by creating a valuation allowance in conjunction with ASC Topic 310-10.

Loans that are not impaired are segmented into groups by type of loan. The following loan types are utilized so each segment of loans will have similar risk factors: (1) residential real estate, (2) agricultural real estate, (3) commercial real estate, (4) construction and land development, (5) commercial, (6) agricultural, (7) consumer and other, and (8) guaranteed loans. These loans are further segmented by internal risk ratings of non-classified, special mention, substandard and doubtful, which are defined above. The guaranteed portion of loans is not assigned any allocation in the allowance for loan losses since they are guaranteed by various government entities.

Risk factor percentages are applied to the risk rating segments of the non-impaired loans to calculate an allowance allocation in conjunction with ASC Topic 450. The risk factor percentages are based on historical loan loss experience for each loan type and are adjusted for current economic conditions and trends as well as internal loan quality trends. The current economic conditions take into account items such as changes in vacancy rates for rental properties; changes in property values based on actual sales transactions; changes in current prices such as dairy commodities; and other available economic data. The internal loan quality trends take into account items such as changes in lending or underwriting policies, changes in the volume and nature of the portfolio, changes in management depth and expertise, changes in loan review or oversight, changes in effects of concentrations, and the impact of changes to the regulatory and competitive environment.

The above steps result in calculations that estimate the credit losses inherent in the portfolio at that time. The calculations are used to confirm the adequacy and appropriateness of the actual balance of the allowance, recognizing that the allowance represents an aggregation of judgments and estimates by management. Given the judgments described above, DBI maintains an unallocated reserve within its allowance for loan losses which quantifies inherent uncertainty and subjectivity of the estimate. DBI periodically evaluates the appropriateness of the unallocated reserve through review of observable trends and other factors to ensure it’s consistent with those overall credit trends.

Loans Held for Sale

Loans originated and intended for sale in the secondary market are carried at lower of cost or estimated fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to income.

Mortgage Servicing Rights

DBI recognizes as assets the rights to service mortgage loans for others, known as mortgage servicing rights (“MSRs”). DBI services the single-family mortgages it sells to the Federal National Mortgage Association (“FNMA” or “Fannie Mae”). DBI determines the fair value of MSRs at the date the loan is sold. To determine the fair value of MSRs, DBI calculates the present value of estimated future net servicing income using assumptions that market participants would use in estimating future net servicing income, including estimates of prepayment speeds, discount rate, default rates, cost to service, escrow account earnings, contractual servicing fee income, ancillary income and late fees.

Subsequent to the date of transfer, DBI has elected to measure its MSRs under the amortization method. Under this method, MSRs are amortized in proportion to, and over the period of, estimated net servicing income. MSRs are evaluated for impairment on a quarterly basis based on the fair value of those assets. Impairment is determined by stratifying MSRs into groupings based on predominant risk characteristics, such as interest rate, vintage and loan type. If, by individual stratum, the carrying amount of the MSRs exceeds fair value, a valuation reserve is established through a charge to earnings. The valuation reserve is adjusted as the fair value changes. MSRs are included in the other assets category in the accompanying Consolidated Statements of Financial Condition.

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Other Investments

Other investments are equity securities which are carried at fair value and consist primarily of Federal Home Loan Bank (“FHLB”) stock, Farmer Mac stock, AgriBank stock and privately-held bank stocks. Because the other investments do not have readily determinable fair values, DBI carries the securities at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the security by the same investee. Other investments are evaluated for impairment on an annual basis. As a member of the FHLB, DSB is required to hold stock in the FHLB based on the anticipated amount of FHLB borrowings to be advanced. This stock is recorded at cost, which approximates fair value. Transfer of the stock is substantially restricted.

Premises and Equipment

Premises and equipment owned are stated at cost less accumulated depreciation which is computed principally on the straight-line method over the estimated useful lives of the assets.

Bank-Owned Life Insurance

Consistent with many community banking organizations, DBI invests in bank-owned life insurance (“BOLI”) to protect itself against replacement costs and lost income associated with the untimely death of a key member of the bank’s management, as well as to serve as a source of funding for the bank’s employee benefit expenses. BOLI is recorded at its cash surrender value, or the amount that can be realized upon immediate liquidation.

Income Taxes

Deferred income tax assets and liabilities are determined using the liability method. Under this method the net deferred income taxes are provided for timing differences between book and tax bases of assets and liabilities in the consolidated financial statements and those reported for income tax purposes. A liability may also be recognized for unrecognized tax benefits from uncertain tax positions. Unrecognized tax benefits represent the differences between a tax position taken or expected to be taken in a tax return and the benefit recognized and measured in the financial statements. Interest and penalties related to unrecognized tax benefits are classified as income taxes.

Treasury Stock

Treasury stock is shown at cost. During the years ended December 31, 2021 and 2020, DBI repurchased 58,222 and 76,961 shares of common stock, respectively, at the average purchase price of $24.94 and $24.06 per share, respectively. The shares repurchased were part of a share repurchase plan.

Stock-Based Compensation

Compensation cost is recognized for restricted stock awards issued to employees and directors based upon the fair value of the awards at the date of the grant. Compensation cost is recognized over the required service period, generally defined as the vesting period. In addition, the Company has an employee stock purchase plan which allows for a 10% discount on the purchase of the Company’s common stock through periodic deferrals of participating employees’ compensation. The Company recognizes the discount as compensation cost over the period earned. Please refer to Note 10 for additional details on the stock-based compensation plan.

Earnings per Common Share

Earnings per common share are computed based on the weighted average number of shares of common stock outstanding during each year. DBI has a stock-based compensation plan for the executive management team. The shares of restricted stock are issued when granted, therefore basic and diluted earnings per share are equal and presented as one number. The number of shares used in computing basic earnings per share is 3,138,393 and 3,186,672 for the years ended December 31, 2021 and 2020, respectively.

Community Foundation

In 2016, DSB formed the Denmark State Bank Foundation (the “Foundation”), a donor-advised fund of a 501(c)(3) public charity under the Greater Green Bay Community Foundation. The Foundation was formed to provide financial contributions to a variety of non-profit organizations in the communities served by the bank, for the purpose of making a positive, long-lasting impact on those communities. There were no contributions made by DSB to the Foundation during 2021 or 2020. The Foundation had a balance of $379,725 and $373,379 of net assets as of December 31, 2021 and 2020, respectively. DBI’s Board of Directors authorized contributions of $80,000 from the Foundation during 2020 to assist various community organizations that were negatively impacted by the COVID-19 pandemic.

Subsequent Events

The financial statements and related disclosures include evaluation of events up through and including February 14, 2022 which is the date the financial statements were available to be issued.

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Upcoming Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments - Credit Losses; Measurement of Credit Losses on FinancialInstruments. The ASU includes increased disclosures and various changes to the accounting and measurement of financial assets including DBI’s loans and available-for-sale investment securities. Each financial asset presented on the statement of condition would have a unique allowance for credit losses that is deducted from the amortized cost basis to present the net carrying value. The amendments in this ASU also eliminate the probable initial recognition threshold in current U.S. GAAP and, instead, reflect an entity's current estimate of all expected credit losses using reasonable and supportable forecasts. The new credit loss guidance will be effective for DBI's year ending December 31, 2023. Upon adoption, the ASU will be applied using a modified retrospective transition method to the beginning of the first reporting period in which the guidance is effective. Early adoption for all institutions is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. DBI believes this standard will have an impact on the consolidated financial statements and is assessing the significance.

NOTE 2 – INVESTMENT SECURITIES

The amortized cost and estimated fair market value of debt securities available for sale were as follows:

	December 31, 2021
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
U.S. Government Treasuries	$	7,416,322	$	0	$	(83,100	)	$	7,333,222
U.S. Government-sponsored agency MBS		12,803,479		191,591		(75,015	)		12,920,055
State and local governments		15,124,564		323,345		(48,894	)		15,399,015
Asset-backed securities		813,508		615		(3,965	)		810,158
	$	36,157,873	$	515,551	$	(210,974	)	$	36,462,450
	December 31, 2020
---	---	---	---	---	---	---	---	---	---
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
U.S. Government-sponsored agency MBS	$	11,254,909	$	444,630	$	(1,016	)	$	11,698,523
State and local governments		18,051,916		635,530		0			18,687,446
Asset-backed securities		945,718		0		(2,331	)		943,387
	$	30,252,543	$	1,080,160	$	(3,347	)	$	31,329,356

There were no available-for-sale securities sold during 2021 or 2020.

The amortized cost and estimated fair values of debt securities at December 31, 2021, by maturity were as follows:

	Debt Securities Available-for-Sale
			Estimated
	Amortized		Fair
Amounts Maturing	Cost		Value
Within one year	$	2,624,472	$	2,641,434
From one through five years		7,253,860		7,265,374
From five through ten years		12,662,554		12,825,429
After ten years		0		0
Subtotal	$	22,540,886	$	22,732,237
Mortgage and asset-backed securities	$	13,616,987	$	13,730,213
Total	$	36,157,873	$	36,462,450

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Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position follows:

December 31, 2021

	Less Than Twelve Months				Over Twelve Months
	Gross		Estimated		Gross		Estimated
	Unrealized		Fair		Unrealized		Fair
Debt Securities Available for Sale	Losses		Value		Losses		Value
U.S. Government-treasuries	$	83,100	$	7,333,222	$	0	$	0
U.S. Government-sponsored agency MBS		74,426		5,845,638		589		114,604
State and local governments		48,894		1,726,107		0		0
Asset-backed securities		3,965		584,417		0		0
Total securities available for sale	$	210,385	$	15,489,384	$	589	$	114,604

December 31, 2020

	Less Than Twelve Months				Over Twelve Months
	Gross		Estimated		Gross		Estimated
	Unrealized		Fair		Unrealized		Fair
Debt Securities Available for Sale	Losses		Value		Losses		Value
U.S. Government-sponsored agency MBS	$	0	$	0	$	1,016	$	143,844
Asset-backed securities		0		0		2,331		943,387
Total securities available for sale	$	0	$	0	$	3,347	$	1,087,231

All debt securities with unrealized losses are assessed to determine if the impairment is other-than-temporary. Factors that are evaluated include the loan types supporting the securities, delinquency and foreclosure rates, credit support, weighted average loan-to-value, year of origination, borrower profile, existing and projected debt burden, underlying cash flow of the borrower and exposure to risks, among others.

There were no issuers of debt securities for which a significant concentration of investments (greater than 10 percent of stockholders’ equity) was held as of December 31, 2021.

Debt securities with an estimated fair value of $11.5 million and $12.4 million at December 31, 2021 and 2020, respectively were pledged to secure public deposits and for other purposes required or permitted by law.

NOTE 3 – LOANS

Major categories of loans included in the loan portfolio are as follows:

	December 31,
	2021			2020
Real Estate:
Residential	$	88,372,489		$	68,705,548
Commercial		163,456,468			146,984,921
Construction		26,678,745			21,352,112
Agricultural		77,848,753			73,348,676
		356,356,455			310,391,257
Commercial		80,678,804			118,640,622
Agricultural		33,447,807			37,873,555
Consumer and other		8,612,216			9,874,302
Unsecured loans		251,115			229,262
Total Loans Receivable	$	479,346,397		$	477,008,998
Allowance for loan losses		(7,741,069	)		(7,668,435	)
Deferred loan fees		(289,767	)		(1,056,333	)
Total Loans, Net	$	471,315,561		$	468,284,230

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During 2020, the SBA introduced the Paycheck Protection Program designed to provide liquidity to small businesses during the COVID-19 pandemic. The loans are guaranteed by the SBA and loan proceeds to borrowers are forgivable by the SBA if certain criteria are met. On January 15, 2021, the SBA re-opened the loan portal for a second round of the PPP loan program with a May 31, 2021 deadline for applications. DSB originated PPP loans totaling $22.9 million and $45.3 million during 2021 and 2020, respectively. As of December 31, 2021, all first round PPP loans have been forgiven and there were approximately $5.1 million of second round PPP loans included on the balance sheet. PPP processing fees received from SBA totaling $3.4 million were deferred and recognized as interest income using the effective yield method. Upon forgiveness of a loan and resulting repayment by the SBA, any unrecognized net fee for a given loan is recognized as interest income. DSB recognized $2.3 million and $0.8 million of the fees in 2021 and 2020, respectively.

Recorded Investment in Loans

As of December 31,

	2021				2020
			Ending Balance				Ending Balance
			Individually				Individually
	Ending		Evaluated		Ending		Evaluated
	Balance		for Impairment		Balance		for Impairment
Residential Real Estate	$	88,372,489	$	288,881	$	68,705,548	$	66,032
Commercial Real Estate		163,456,468		0		146,984,921		0
Construction & Land Dev		26,678,745		0		21,352,112		205,799
Agricultural Real Estate		77,848,753		2,214,013		73,348,676		366,029
Commercial		80,678,804		0		118,640,622		15,516
Agricultural		33,447,807		44,085		37,873,555		210,537
Consumer and other		8,863,331		200		10,103,564		0
Total	$	479,346,397	$	2,547,179	$	477,008,998	$	863,913

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The following tables show the investment in impaired loans and the corresponding allowance for those loans along with the recognized interest income associated with impaired loans:

Impaired Loans

As of December 31, 2021, and 2020

---

			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
2021	Investment		Balance		Allowance		Investment		Recognized
With no related allowance:
Residential Real Estate	$	288,881	$	352,567	$	0	$	380,540	$	0
Commercial Real Estate		0		0		0		0		0
Construction & Land Dev		0		0		0		0		0
Agricultural Real Estate		2,214,013		2,262,632		0		2,475,384		70,395
Commercial		0		0		0		0		0
Agricultural		44,085		44,085		0		56,187		3,371
Consumer and other		0		0		0		0		0
With a related allowance:
Residential Real Estate	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate		0		0		0		0		0
Construction & Land Dev		0		0		0		0		0
Agricultural Real Estate		0		0		0		0		0
Commercial		0		0		0		0		0
Agricultural		0		0		0		0		0
Consumer and other		200		243		200		1,049		0
Total:
Residential Real Estate	$	288,881	$	352,567	$	0	$	380,540	$	0
Commercial Real Estate		0		0		0		0		0
Construction & Land Dev		0		0		0		0		0
Agricultural Real Estate		2,214,013		2,262,632		0		2,475,384		70,395
Commercial		0		0		0		0		0
Agricultural		44,085		44,085		0		56,187		3,371
Consumer and other		200		243		200		1,049		0
Total	$	2,547,179	$	2,659,527	$	200	$	2,913,160	$	73,766

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| --- | | | | | Unpaid | | | | Average | | Interest | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Recorded | | Principal | | Related | | Recorded | | Income | | | 2020 | Investment | | Balance | | Allowance | | Investment | | Recognized | | | With no related allowance: | | | | | | | | | | | | Residential Real Estate | $ | 66,032 | $ | 130,055 | $ | 0 | $ | 146,609 | $ | 1,048 | | Commercial Real Estate | | 0 | | 0 | | 0 | | 0 | | 0 | | Construction & Land Dev | | 205,800 | | 205,800 | | 0 | | 209,634 | | 0 | | Agricultural Real Estate | | 366,029 | | 404,055 | | 0 | | 412,672 | | 7,891 | | Commercial | | 15,516 | | 16,907 | | 0 | | 22,063 | | 0 | | Agricultural | | 78,289 | | 85,811 | | 0 | | 108,411 | | 4,754 | | Consumer and other | | 0 | | 0 | | 0 | | 0 | | 0 | | With a related allowance: | | | | | | | | | | | | Residential Real Estate | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | | Commercial Real Estate | | 0 | | 0 | | 0 | | 0 | | 0 | | Construction & Land Dev | | 0 | | 0 | | 0 | | 0 | | 0 | | Agricultural Real Estate | | 0 | | 0 | | 0 | | 0 | | 0 | | Commercial | | 0 | | 0 | | 0 | | 0 | | 0 | | Agricultural | | 132,247 | | 132,247 | | 23,209 | | 141,632 | | 7,212 | | Consumer and other | | 0 | | 0 | | 0 | | 0 | | 0 | | Total: | | | | | | | | | | | | Residential Real Estate | $ | 66,032 | $ | 130,055 | $ | 0 | $ | 146,609 | $ | 1,048 | | Commercial Real Estate | | 0 | | 0 | | 0 | | 0 | | 0 | | Construction & Land Dev | | 205,799 | | 205,800 | | 0 | | 209,634 | | 0 | | Agricultural Real Estate | | 366,029 | | 404,055 | | 0 | | 412,672 | | 7,891 | | Commercial | | 15,516 | | 16,907 | | 0 | | 22,063 | | 0 | | Agricultural | | 210,537 | | 218,058 | | 23,209 | | 250,043 | | 11,966 | | Consumer and other | | 0 | | 0 | | 0 | | 0 | | 0 | | Total | $ | 863,913 | $ | 974,875 | $ | 23,209 | $ | 1,041,021 | $ | 20,905 |

No additional funds are committed to be advanced in connection with impaired loans.

Allowance for Loan Losses

For the Years Ended December 31, 2021 and2020

													Ending Balance
	Beginning										Ending		Individually
	Balance										Balance		Evaluated
2021	1/1/2021		Charge-offs			Recoveries		Provision			12/31/2021		for Impairment
Residential Real Estate	$	494,346	$	0		$	33,894	$	99,337		$	627,577	$	0
Commercial Real Estate		2,764,964		0			0		471,010			3,235,974		0
Construction & Land Dev		228,880		0			0		24,087			252,967		0
Agricultural Real Estate		1,432,239		0			0		(34,605	)		1,397,634		0
Commercial		1,169,473		0			4,039		(111,412	)		1,062,100		0
Agricultural		756,559		0			33,255		(71,996	)		717,818		0
Consumer and other		18,826		(1,857	)		3,303		(5,236	)		15,036		200
Unallocated		803,148		0			0		(371,185	)		431,963		0
Total	$	7,668,435	$	(1,857	)	$	74,491	$	0		$	7,741,069	$	200

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| --- | | | | | | | | | | | | | | | Ending Balance | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Beginning | | | | | | | | | | Ending | | Individually | | | | Balance | | | | | | | | | | Balance | | Evaluated | | | 2020 | 1/1/2020 | | Charge-offs | | | Recoveries | | Provision | | | 12/31/2020 | | for Impairment | | | Residential Real Estate | $ | 495,092 | $ | (30,889 | ) | $ | 41,861 | $ | (11,718 | ) | $ | 494,346 | $ | 0 | | Commercial Real Estate | | 1,846,168 | | 0 | | | 0 | | 918,796 | | | 2,764,964 | | 0 | | Construction & Land Dev | | 189,214 | | 0 | | | 34,034 | | 5,632 | | | 228,880 | | 0 | | Agricultural Real Estate | | 1,608,848 | | 0 | | | 0 | | (176,609 | ) | | 1,432,239 | | 0 | | Commercial | | 934,341 | | (43,135 | ) | | 3,900 | | 274,367 | | | 1,169,473 | | 0 | | Agricultural | | 1,004,654 | | 0 | | | 33,255 | | (281,350 | ) | | 756,559 | | 23,209 | | Consumer and other | | 18,401 | | (3,987 | ) | | 7,515 | | (3,103 | ) | | 18,826 | | 0 | | Unallocated | | 794,163 | | 0 | | | 0 | | 8,985 | | | 803,148 | | 0 | | Total | $ | 6,890,881 | $ | (78,011 | ) | $ | 120,565 | $ | 735,000 | | $ | 7,668,435 | $ | 23,209 |

Nonaccrual loans totaled $0.5 million at both December 31, 2021 and 2020. They were comprised of 1-4 family residential real estate loans totaling $289,000 and agricultural real estate loans totaling $161,000 as of December 31, 2021 and agricultural real estate loans totaling $224,000, construction and land development loans for $206,000, 1-4 family residential real estate loans totaling $51,000, ag production loans totaling $43,000 and commercial loans of $16,000 as of December 31, 2020. There were no loans past due ninety days or more and still accruing at December 31, 2021 or 2020. A schedule of loans by the number of days past due (including nonaccrual loans) along with a schedule of credit quality indicators follows:

Age Analysis of Past Due Financing Receivables

	30-89 Days		90 Days		Total				Total
December 31, 2021	Past Due		& Over		Past Due		Current		Loans
Residential Real Estate	$	0	$	66,599	$	66,599	$	88,305,890	$	88,372,489
Commercial Real Estate		0		0		0		163,456,468		163,456,468
Construction & Land Dev		0		0		0		26,678,745		26,678,745
Agricultural Real Estate		0		0		0		77,848,753		77,848,753
Commercial		0		0		0		80,678,804		80,678,804
Agricultural		0		0		0		33,447,807		33,447,807
Consumer and other		0		200		200		8,863,131		8,863,331
Total	$	0	$	66,799	$	66,799	$	479,279,598	$	479,346,397
	30-89 Days		90 Days		Total				Total
---	---	---	---	---	---	---	---	---	---	---
December 31, 2020	Past Due		& Over		Past Due		Current		Loans
Residential Real Estate	$	151,937	$	0	$	151,937	$	68,553,611	$	68,705,548
Commercial Real Estate		0		0		0		146,984,921		146,984,921
Construction & Land Dev		0		205,800		205,800		21,146,312		21,352,112
Agricultural Real Estate		0		142,727		142,727		73,205,949		73,348,676
Commercial		0		15,516		15,516		118,625,106		118,640,622
Agricultural		0		35,404		35,404		37,838,151		37,873,555
Consumer and other		0		0		0		10,103,564		10,103,564
Total	$	151,937	$	399,447	$	551,384	$	476,457,614	$	477,008,998

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Credit Quality Indicators

			Special
December 31, 2021	Non-Classified		Mention		Substandard		Doubtful		Total
Residential Real Estate	$	86,449,154	$	1,294,062	$	606,214	$	23,059	$	88,372,489
Commercial Real Estate		151,181,246		6,688,763		5,586,459		0		163,456,468
Construction & Land Dev		26,678,745		0		0		0		26,678,745
Agricultural Real Estate		57,594,628		14,791,550		5,389,329		73,246		77,848,753
Commercial		68,883,170		7,212,506		4,583,128		0		80,678,804
Agricultural		28,514,669		3,789,582		1,143,556		0		33,447,807
Consumer and other		8,825,929		37,202		0		200		8,863,331
Total	$	428,127,541	$	33,813,665	$	17,308,686	$	96,505	$	479,346,397
			Special
---	---	---	---	---	---	---	---	---	---	---
December 31, 2020	Non-Classified		Mention		Substandard		Doubtful		Total
Residential Real Estate	$	66,836,261	$	1,112,712	$	690,544	$	66,031	$	68,705,548
Commercial Real Estate		142,559,524		3,778,826		646,571		0		146,984,921
Construction & Land Dev		19,540,491		0		1,811,621		0		21,352,112
Agricultural Real Estate		58,769,266		7,102,308		7,296,631		180,471		73,348,676
Commercial		106,584,728		7,228,570		4,811,808		15,516		118,640,622
Agricultural		34,670,706		793,645		2,309,357		99,847		37,873,555
Consumer and other		10,074,961		12,998		15,605		0		10,103,564
Total	$	439,035,937	$	20,029,059	$	17,582,137	$	361,865	$	477,008,998

During the year ended December 31, 2021, there were three agricultural real estate loans to one borrower with a recorded investment of $2.1 million both prior to and following the modification modified as a troubled debt restructuring (“TDR”) and there no loans modified as TDRs during 2020. During the years ended December 31, 2021 and 2020, there were no loans that were previously modified as a TDR that subsequently defaulted.

In March 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was passed into law. Among other things, the CARES act suspended the requirements related to the accounting for TDRs for certain loan modifications related to the COVID-19 pandemic. This suspension of classification of TDRs was extended through December 31, 2021 as part of the 2021 Consolidation Appropriations Act. As a result of the pandemic, DSB provided a loan modification program to borrowers that included certain concessions such as interest-only or payment deferrals. There were no loans at December 31, 2021 with modification agreements under the CARES act and there were $4.0 million of loans that remained under a modification agreement but were not disclosed as TDRs at December 31, 2020.

NOTE 4 – OTHER INVESTMENTS

Major categories of equity investments are as follows:

	December 31,
	2021		2020
FHLB Stock	$	656,978	$	656,978
Privately held bank stocks		2,380,219		1,593,080
Other		687,780		745,380
Total	$	3,724,977	$	2,995,438

Downward adjustments to the fair value of DBI’s equity securities were $0 and $7,254 during the years ended December 31, 2021 and 2020, respectively. The cumulative amount of downward adjustment is $7,254. The downward adjustment in 2020 was recorded as a result of a publicly traded stock price. Upward adjustments to the fair value of equity investments for the years ended December 31, 2021 and 2020 were $215,768 and $149,563, respectively. On a cumulative basis, upward fair value adjustments of $1,246,182 have been recorded for DBI’s equity investments. The upward adjustments recognized during 2021 and 2020 were the result of observable transactions as well as a publicly traded stock price. DBI adjusted the carrying amount of these investments based on the share price indicated by these observable transactions. DBI sold two of its equity investments during the year ended December 31, 2021 for proceeds of $245,218 for a gain of $34,478 and three of its equity investments during the year ended December 31, 2020 for proceeds of $562,001 resulting in a gain on sale of $65,081.

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NOTE 5 – PREMISES AND EQUIPMENT

Premises and equipment are summarized as follows:

	December 31,
	2021			2020
Land	$	1,121,783		$	1,121,783
Buildings and improvements		8,393,768			8,387,078
Furniture and fixtures		5,727,180			5,849,136
	$	15,242,731		$	15,357,997
Less:  Accumulated depreciation	$	(9,853,245	)	$	(9,258,114	)
Net depreciated value	$	5,389,486		$	6,099,883
Construction in progress		188,808			5,411
Premises and equipment, net	$	5,578,294		$	6,105,294

Leases are classified as operating or finance leases at the lease commencement date. One operating lease for a financial center has a remaining term of 5.3 years, which includes two 5-year renewal options at the end of the in initial lease term. Lease extension options are included in the lease term if it is reasonably certain DBI will exercise the option. DBI does not have any financing leases as of December 31, 2021 and 2020. DBI has elected to not recognize leases with original lease terms of 12 months or less (short-term leases) on its balance sheet.

Lease expense for operating and short-term leases is recognized on a straight-line basis over the lease term. Right-of-use assets represent DBI’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. When the rate implicit in the lease is unknown, the present value of the lease payments is determined using our incremental borrowing rate based on the FHLB amortizing advance rate, adjusted for the lease term and other factors.

DBI has real estate lease agreements with lease and non-lease components, which are generally accounted for separately. Non-lease components such as common area maintenance charges, real estate taxes and insurance are not included in the measurement of the lease liability since they are generally able to be segregated.

The components of total lease cost, which are included in occupancy expenses on the consolidated statements of income, were as follows for the year ending:

	December 31,		December 31,
	2021		2020
Operating lease cost	$	113,131	$	148,131
Short-term lease cost		45,000		28,974
Total lease cost	$	158,131	$	177,105

The following table shows the future minimum rent payments required under the leases described above as of December 31, 2021:

Years Ending
December 31,		Operating Leases
	2022	$	113,761
	2023		115,022
	2024		115,022
	2025		115,022
	2026		115,022
	Thereafter		38,341
	Total	$	612,190

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Supplemental balance sheet information related to leases was as follows:

	December 31,			December 31,
	2021			2020
Operating lease right-of-use assets	$	560,051		$	708,422
Operating lease liabilities	$	568,876		$	715,356
Operating lease weighted average remaining lease term (years)		5.30			5.98
Operating lease weighted average discount rate		2.74	%		2.67	%

NOTE 6 – MORTGAGE SERVICING RIGHTS

MSRs are recognized based on the fair value of the servicing right on the date the corresponding mortgage loan is sold. An estimate of DBI’s MSRs is determined using assumptions that market participants would use in estimating future net servicing income, including estimates of prepayment speeds, discount rate, default rates, cost to service, escrow account earnings, contractual servicing fee income, ancillary income and late fees. Subsequent to the date of transfer, DBI has elected to measure its MSRs under the amortization method. Under this method, MSRs are amortized in proportion to, and over the period of, estimated net servicing income.

DBI has recorded MSRs related to loans sold without recourse to FNMA. DBI sells conforming, fixed-rate, closed-end, residential real estate mortgages to FNMA. The unpaid principal balances of residential mortgage loans serviced for FNMA were $163.0 million and $134.2 million at December 31, 2021 and 2020, respectively.

The change in amortized MSRs and the related valuation allowance is presented below:

	December 31,
	2021			2020
Mortgage servicing rights, beginning of period	$	828,720		$	480,322
Additions from originated servicing		506,086			744,931
Amortization expense		(461,247	)		(227,688	)
Change in valuation allowance		209,581			(168,845	)
Mortgage servicing rights, end of period	$	1,083,140		$	828,720

DBI evaluates mortgage servicing rights for impairment on a quarterly basis. There was a valuation allowance for amortized MSRs of $35,319 and $244,900 as of December 31, 2021 and 2020, respectively. Impairment is determined by stratifying MSRs into groupings based on predominant risk characteristics, such as interest rate and loan type. If, by individual stratum, the carrying amount of the MSRs exceeds fair value, a valuation reserve is established. The valuation reserve is adjusted as the fair value changes. At both December 31, 2021 and 2020, fair value was determined using a discount rate of 9.0%. At December 31, 2021 and 2020, estimates of prepayment speeds ranged from 7.75% to 29.64% and 9.78% to 35.69%, respectively.

NOTE 7 – INTEREST-BEARING DEPOSITS

Interest-bearing deposits consisted of the following:

	December 31,
	2021		2020
NOW accounts	$	81,316,405	$	69,244,709
Savings accounts		95,003,768		79,262,713
Money market accounts		175,734,361		149,613,460
Time deposit accounts		107,150,696		129,486,043
Total	$	459,205,230	$	427,606,925

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The following table shows the maturity distribution of time deposit accounts:

	December 31,
	2021		2020
Within one year	$	56,635,496	$	72,723,715
One to two years		30,111,680		34,527,310
Two to three years		7,561,560		8,680,964
Three to four years		6,715,959		5,438,250
Over four years		6,126,001		8,115,804
Total	$	107,150,696	$	129,486,043

Time deposits of $250,000 or more totaled $13.7 million and $17.5 million at December 31, 2021 and 2020, respectively.

NOTE 8 – BORROWINGS

As of December 31, 2021, DSB had available and unused federal funds lines of credit with two correspondent institutions up to $19.6 million, as well as an unused $20 million line at the Federal Reserve Bank’s discount window. Federal funds purchased generally mature within one day from the transaction date. There were no federal funds purchased outstanding as of December 31, 2021 or 2020.

Long-term debt consisted of the following:

	For the Years Ended December 31,
	2021					2020
	Rates			Amount		Rates		Amount
Federal Home Loan Bank
Fixed rate advances		1.79	%	$	932,844		1.38% - 3.06%	$	14,066,975
Total				$	932,844			$	14,066,975

The outstanding Federal Home Loan Bank advance at December 31, 2021 matures in 2023.

The notes payable to the FHLB are secured by residential mortgages with a carrying amount of $83.7 million and $72.5 million, as of December 31, 2021 and 2020, respectively along with $ $0.7 million of FHLB stock for both periods.

DBI has a revolving line of credit of $20 million with a correspondent bank that had no balance drawn as of December 31, 2021. This line has an interest rate tied to the Wall Street Journal Prime Rate less 100 basis points and matures in October 2023. The interest rate on the line of credit would have been 2.25 percent at December 31, 2021 if DBI had any outstanding borrowings. DBI is subject to a maximum non-performing loan covenant for this borrowing as well as a maximum limitation as a percentage of capital on the outstanding balance of the line.

As of December 31, 2021, DBI had a total of $58.5 million of unused lines of credit with banks to be drawn upon as needed for long-term debt subject to borrowing guidelines.

NOTE 9 – INCOME TAXES

The provision for income taxes in the consolidated statement of income is as follows:

	2021			2020			2019
Current:  Federal	$	1,691,152		$	991,092		$	1,008,382
State		707,165			438,720			382,071
	$	2,398,317		$	1,429,812		$	1,390,453
Deferred: Federal	$	(130,445	)	$	(115,324	)	$	131,080
State		(32,561	)		(44,329	)		127,386
	$	(163,006	)	$	(159,653	)	$	258,466
Total provision for income taxes	$	2,235,311		$	1,270,159		$	1,648,919

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Applicable income taxes for financial reporting purposes differ from the amount computed by applying the statutory federal income tax rate for the reasons noted in the table below:

	2021						2020
	Amount			%			Amount			%
Tax at statutory federal income tax rate	$	1,834,017			21	%	$	1,085,302			21	%
Increase (decrease) in tax resulting from:
Tax-exempt interest		(66,795	)		(1	)		(66,079	)		(1	)
State income tax, net of federal tax benefit		532,442			6			311,637			6
Bank-owned life insurance		(73,707	)		(1	)		(72,513	)		(1	)
Other, net		9,354			0			11,812			0
Applicable income taxes	$	2,235,311			26	%	$	1,270,159			25	%

Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The major components of the net deferred tax asset as of December 31, 2021 and 2020 are presented below:

	2021		2020
Deferred tax assets:
Allowance for credit losses	$	1,938,896	$	1,780,717
State tax net operating loss carryforward		86,326		95,627
Deferred compensation		62,683		49,491
Other		0		0
Total deferred tax assets	$	2,087,905	$	1,925,835
Deferred tax liabilities:
Accumulated depreciation on fixed assets	$	296,581	$	433,191
Security accretion		4,549		3,428
Mortgage servicing rights		297,086		227,303
Stock dividends received		66,986		66,986
Appreciation on equity securities		314,219		275,280
Unrealized gains on available-for-sale securities		82,236		290,740
Other		43,254		17,423
Total deferred tax liabilities	$	1,104,911	$	1,314,351
Net deferred tax asset	$	982,994	$	611,484

Income tax returns for the years ended 2017 through 2021 are open to examination by applicable federal and state taxing authorities. DBI has a state tax net operating loss carryforward of $1.5 million at December 31, 2021. The net operating loss could begin to expire if unused by 2031.

NOTE 10 – EMPLOYEE BENEFIT PLAN

DBI has a 401(k) Safe Harbor plan which makes employees who are at least eighteen years old eligible to contribute. Provisions of the 401(k) Safe Harbor plan through December 31, 2021 provide for the following:

·	DBI will make Safe Harbor matching contributions equal to 100% of each employee’s salary deferrals<br>up to a maximum of 6%. Employee contributions above 6% do not receive any matching contribution.

DBI provides no post-retirement benefits to employees except for the 401(k) Safe Harbor plan which are currently funded. DBI expensed contributions of $510,406 and $492,535 for the years 2021 and 2020, respectively, related to this plan.

In 2016, the Board approved the Long-Term Incentive Plan (the “Plan”) for executive officers. In 2019, the Plan was amended to include awards for the directors, as well. The Plan allows for the issuance of restricted stock to executive officers and directors that are subject to a service period restriction. The Plan initially allowed for the issuance of up to 36,000 shares of restricted stock. An additional 36,000 shares were authorized in 2020. There were 33,510 shares available to be issued at December 31, 2021.

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| --- | | Nonvested Shares | Shares | | | Weighted-<br> Average Grant-<br> Date Fair Value | | | --- | --- | --- | --- | --- | --- | | Nonvested at January 1, 2021 | | 20,598 | | $ | 23.16 | | Granted | | 9,478 | | | 24.75 | | Vested | | (6,688 | ) | | 23.10 | | Nonvested at December 31, 2021 | | 23,388 | | $ | 24.07 |

The fair value as of the date of the grant was $234,581, or $24.75 per share, and $174,158, or $24.30 per share, for awards granted in 2021 and 2020, respectively. At December 31, 2021 there was unrecognized compensation expense of $230,755 which will be fully recognized over the next 2.2 years.

The Company adopted the 2017 Employee Stock Purchase Plan (the “ESPP”). The ESPP allows employees to make elective payroll contributions throughout the year not to exceed $25,000. Payroll deferrals are used to purchase common stock of the Company at a 10% discount based on the lower of the fair value on the first day of the year or the last day of the year. Share-based compensation expense related to the ESPP of $19,304 and $19,293 was recognized during the year-ended December 31, 2021 and 2020, respectively.

NOTE 11 – COMMITMENTS AND CREDIT RISK

DBI and its subsidiaries are parties to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of their customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of financial position. The contract or notional amounts of those instruments reflect the extent of involvement DBI and its subsidiaries have in particular classes of financial instruments.

	Contract or
	Notional Amount		Secured
	December 31, 2021		Portion
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$	121,732,704	$	120,836,384
Standby letters of credit and financial guarantees written		890,670		890,670
	Contract or
---	---	---	---	---
	Notional Amount		Secured
	December 31, 2020		Portion
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$	123,290,700	$	122,379,076
Standby letters of credit and financial guarantees written		1,742,641		1,742,641

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. DBI and its subsidiaries evaluate each customer’s creditworthiness on a case-by-case basis. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties. As of December 31, 2021, variable rate commitments totaled $78.7 million.

Standby letters of credit are conditional commitments issued by DSB to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support commercial business transactions. When a customer fails to perform according to the terms of the agreement, DSB honors drafts drawn by the third party in amounts up to the contract amount. A majority of the letters of credit expire within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial and residential properties. All letters of credit are secured.

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NOTE 12 – RELATED PARTY TRANSACTIONS

At December 31, 2021 and 2020, certain DBI subsidiary executive officers, directors and companies in which they have a ten percent or more beneficial interest were indebted to DBI and its subsidiaries. Total indebtedness outstanding was $2.4 million and $2.8 million as of year-end 2021 and 2020, respectively. All such loans were made in the ordinary course of business and at rates and terms similar to those granted to other borrowers.

	12/31/2020								12/31/2021
	Beginning		New				Other		Ending
$(000)s	Balance		Loans		Payments		Changes		Balance
Aggregate related party loans	$	2,797	$	2,635	$	2,988	$	0	$	2,444
	12/31/2019									12/31/2020
---	---	---	---	---	---	---	---	---	---	---	---
	Beginning		New				Other			Ending
$(000)s	Balance		Loans		Payments		Changes (1)			Balance
Aggregate related party loans	$	1,606	$	2,079	$	385	$	(503	)	$	2,797
(1)	Effects of changes in composition of related parties
---	---

Deposit balances with DBI’s executive officers, directors and affiliated companies in which they are principal owners were $12.5 million and $13.2 million at December 31, 2021 and 2020, respectively.

NOTE 13 – FAIR VALUE MEASUREMENT

Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in a transaction between market participants on the measurement date. Some assets and liabilities are measured on a recurring basis while others are measured on a non-recurring basis, as required by U.S. GAAP, which also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. The three levels of inputs defined in the standard that may be used to measure fair value are as follows:

·Level1: Quoted prices for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

·Level2: 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, and other inputs that are observable or can be corroborated by observable market data.

·Level3: Significant unobservable inputs that are supported by little, if any, market activity. These unobservable inputs reflect estimates that market participants would use in pricing the assets or liability.

In instances whereby inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. DBI’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset and liability.

It is DBI’s policy to recognize transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers during the years ended December 31, 2021 or 2020.

Assets Recorded at Fair Value on a RecurringBasis

Investment securities available for sale are recorded at fair value on a recurring basis. The fair value measurement of most of DBI’s AFS securities is currently determined by an independent provider using Level 2 inputs. The measurement is based upon quoted prices for similar assets, if available. If quoted prices are not available, fair values are measured using matrix pricing models, or other model-based valuation techniques requiring observable inputs other than quoted prices such as yield curves, prepayment speed and default rates.

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Assets measured at fair value on a recurring basis, are summarized in the table below:

	December 31, 2021
	Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Fair Value
U.S. Government Treasuries	$	0	$	7,333,222	$	0	$	7,333,222
U.S. Government-sponsored agency MBS		0		12,920,055		0		12,920,055
State and local governments		0		15,399,015		0		15,399,015
Asset-backed securities		0		810,158		0		810,158
Total securities available for sale	$	0	$	36,462,450	$	0	$	36,462,450
	December 31, 2020
---	---	---	---	---	---	---	---	---
	Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Fair Value
U.S. Government-sponsored agency MBS	$	0	$	11,698,523	$	0	$	11,698,523
State and local governments		0		18,687,446		0		18,687,446
Asset-backed securities		0		943,387		0		943,387
Total securities available for sale	$	0	$	31,329,356	$	0	$	31,329,356

Assets Recorded at Fair Value on a NonrecurringBasis

Other investments do not have readily determinable fair values. DBI carries the securities at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the security by the same investee. When an observable price change in an orderly transaction occurs during the year, the investment is classified as nonrecurring Level 1 within the valuation hierarchy.

A loan is considered impaired when, based on current information or events, it is probable that not all amounts due will be collected according to the contractual terms of the loan agreement. Impairment is measured based on the fair value of the underlying collateral. The collateral value is determined based on appraisals and other market valuations for similar assets. The value of impaired loans is typically 65% - 80% of appraised value. Under FASB ASC Topic820, “Fair Value Measurements and Disclosures,” the fair value of impaired loans is reported before selling costs of the related collateral, while FASB ASC Topic 310, “Receivables,” requires that impaired loans be reported on the balance sheet net of estimated selling costs. Therefore, significant estimated selling costs would result in the reported fair value of impaired loans being greater than the measurement value of impaired loans as maintained on the balance sheet. In most instances, selling costs were estimated for real estate-secured collateral and included broker commissions, legal and title transfer fees and closing costs. Given the valuation technique and significant unobservable inputs utilized to determine the fair value, impaired loans are classified as nonrecurring Level 3 assets.

Assets measured at fair value on a nonrecurring basis, are summarized in the following table:

	December 31, 2021
	Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Fair Value
Other investments	$	416,249	$	0	$	0	$	416,249
Impaired loans		0		0		200		200
Total Assets	$	416,249	$	0	$	200	$	416,449
	December 31, 2020
---	---	---	---	---	---	---	---	---
	Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Fair Value
Other investments	$	275,280	$	0	$	0	$	275,280
Impaired loans		0		0		109,038		109,038
Total Assets	$	275,280	$	0	$	109,038	$	384,318

| 27 |

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The tables below summarize fair value of financial assets and liabilities at December 31, 2021 and 2020.

	December 31, 2021
	Carrying		Fair		Fair Value Hierarchy Level
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and federal funds sold	$	151,155,222	$	151,155,222	$	151,155,222	$	0	$	0
Investment securities		36,462,450		36,462,450		0		36,462,450		0
Loans, net of allowance for loan losses		471,315,561		471,310,578		0		0		471,310,578
Loans held for sale		82,401		84,960		0		84,960		0
Mortgage servicing rights		1,083,140		1,083,140		0		0		1,083,140
Other investments		3,724,977		3,724,977		416,249		0		3,308,728
Accrued interest receivable		1,304,890		1,304,890		0		1,304,890		0
TOTAL	$	665,128,641	$	665,126,217	$	151,571,471	$	37,852,300	$	475,702,446
Financial Liabilities
Deposits	$	614,497,253	$	615,925,949	$	507,346,558	$	108,579,391	$	0
Borrowings		932,844		963,151		0		963,151		0
Accrued interest payable		161,199		161,199		0		161,199		0
TOTAL	$	615,591,296	$	617,050,299	$	507,346,558	$	109,703,741	$	0
	December 31, 2020
---	---	---	---	---	---	---	---	---	---	---
	Carrying		Fair		Fair Value Hierarchy Level
	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and federal funds sold	$	118,310,394	$	118,310,394	$	118,310,394	$	0	$	0
Investment securities		31,329,356		31,329,356		0		31,329,356		0
Loans, net of allowance for loan losses		468,284,230		473,648,020		0		0		473,648,020
Loans held for sale		1,404,587		1,433,418		0		1,433,418		0
Mortgage servicing rights		828,720		828,720		0		0		828,720
Other investments		2,995,438		2,995,438		275,280		0		2,720,158
Accrued interest receivable		1,624,762		1,624,762		0		1,624,762		0
TOTAL	$	624,777,487	$	630,170,108	$	118,585,674	$	34,387,536	$	477,196,898
Financial Liabilities
Deposits	$	563,274,508	$	565,911,465	$	433,788,465	$	132,123,000	$	0
Borrowings		14,066,975		14,660,147		0		14,660,147		0
Accrued interest payable		272,609		272,609		0		272,609		0
TOTAL	$	577,614,092	$	580,844,221	$	433,788,465	$	147,055,756	$	0

NOTE 14 – REGULATORY MATTERS

DSB is subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on DSB’s financial statements. Under capital adequacy guidelines and regulatory framework for prompt corrective action, DSB must meet specific capital guidelines that involve quantitative measures of DSB’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. DSB’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

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Quantitative measures established by regulation to ensure capital adequacy require DSB to maintain minimum amounts and ratios (set forth in the table below) of Tier 1 and Total capital to risk-weighted assets and of Tier 1 capital to average assets. In addition, DSB is also required to maintain minimum amounts and ratios of Common Equity Tier 1 capital to risk-weighted assets. It is management’s opinion, as of December 31, 2020, that DSB meets all applicable capital adequacy requirements. DBI will be subject to the same minimum amounts and ratios as DSB once total assets exceed $3 billion.

As of December 31, 2020, the most recent notification from the Federal Deposit Insurance Corporation categorized DSB as well-capitalized under the regulatory framework for prompt corrective action. To be categorized well-capitalized DSB must maintain minimum total risk-based, tier 1 risk-based and tier 1 leverage ratios as set forth in the table below. These tables do not include the 2.5 percent capital conservation buffer requirement. A Bank with a capital conservation buffer greater than 2.5 percent of risk-weighted assets would not be restricted by payout limitations. However, if the 2.5 percent threshold is not met, the Bank would be subject to increased limitations on capital distributions and discretionary bonus payments to executive officers as the capital conservation buffer approaches zero. Capital ratios for DBI are provided for information purposes only as there are no regulatory capital requirements for the holding company.

											To Be Well Capitalized
											Under Prompt
						Minimum For Capital					Corrective
	Amount					Adequacy Purposes:					Action Provision:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2021
Denmark Bancshares, Inc.
Total Capital (to Risk-Weighted Assets)	$	74,162,766		14.6	%		N/A		N/A			N/A		N/A
Tier 1 Capital (to Risk-Weighted Assets)	$	67,804,105		13.4	%		N/A		N/A			N/A		N/A
Tier 1 Capital (to Average Assets)*	$	67,804,105		10.2	%		N/A		N/A			N/A		N/A
Denmark State Bank
Common Equity Tier 1 Capital (to Risk-Weighted Assets)	$	60,433,556		12.4	%	$	21,951,716		>4.5	%	$	31,708,035		>6.5	%
Total Capital (to Risk-Weighted Assets)	$	66,551,543		13.6	%	$	39,025,273		>8.0	%	$	48,781,592		>10.0	%
Tier 1 Capital (to Risk-Weighted Assets)	$	60,433,556		12.4	%	$	29,268,955		>6.0	%	$	39,025,273		>8.0	%
Tier 1 Capital (to Average Assets)*	$	60,433,556		9.1	%	$	26,659,975		>4.0	%	$	33,324,969		>5.0	%
As of December 31, 2020
Denmark Bancshares, Inc.
Total Capital (to Risk-Weighted Assets)	$	70,274,205		14.6	%		N/A		N/A			N/A		N/A
Tier 1 Capital (to Risk-Weighted Assets)	$	64,243,052		13.4	%		N/A		N/A			N/A		N/A
Tier 1 Capital (to Average Assets)*	$	64,243,052		9.9	%		N/A		N/A			N/A		N/A
Denmark State Bank
Common Equity Tier 1 Capital (to Risk-Weighted Assets)	$	55,653,663		12.0	%	$	20,842,086		>4.5	%	$	30,105,235		>6.5	%
Total Capital (to Risk-Weighted Assets)	$	61,466,328		13.3	%	$	37,052,597		>8.0	%	$	46,315,747		>10.0	%
Tier 1 Capital (to Risk-Weighted Assets)	$	55,653,663		12.0	%	$	27,789,448		>6.0	%	$	37,052,597		>8.0	%
Tier 1 Capital (to Average Assets)*	$	55,653,663		8.7	%	$	25,655,250		>4.0	%	$	32,069,063		>5.0	%

*Average assets are based on the most recent quarter’s adjusted average total assets.

Wisconsin law provides that state chartered banks may declare and pay dividends out of undivided profits but only after provision has been made for all expenses, losses, required reserves, taxes and interest accrued or due from the bank. Payment of dividends in some circumstances may require the written consent of the Wisconsin Department of Financial Institutions –Division of Banking (“WDFI”).

29

NOTE 15 – PARENT COMPANY ONLY INFORMATION

Following in a condensed form, are parent company only statements of financial condition, income and cash flows of DBI. The financial information contained in this footnote is to be read in association with the preceding accompanying notes to the consolidated financial statements.

Denmark Bancshares, Inc.

Statements of Financial Condition

(000)s			2020
Assets
Cash in banks	4,905		$	7,037
Investment
Banking subsidiary	60,656			56,440
Nonbanking subsidiaries	2,511			2,501
Fixed assets (net of depreciation of 0 and 5,132, respectively)	0			0
Buildings available for sale	0			0
Other assets	2,177			813
TOTAL ASSETS	70,249		$	66,791
Liabilities
Accrued expenses	528		$	269
Dividends payable	928			925
Other liabilities	231			17
Note payable - unrelated bank	0			0
Total liabilities	1,687		$	1,211
Stockholders' Equity
Common stock, no par value, authorized 10,000,000 Class A shares; outstanding 3,003,883 at 12/31/2021 and 3,042,302 at 12/31/2020	18,010		$	17,836
Common stock, no par value, authorized 1,000,000 Class B non-voting shares; outstanding 89,285 as 12/31/2021 and 91,815 at 12/31/2020	614		$	614
Treasury stock shares, at cost (588,392 Class A and 30,895 Class B shares at 12/31/2021 and 532,700 Class A and 28,365 Class B shares at 12/31/2020)	(12,981	)	$	(11,529	)
Paid in capital	1,563		$	1,309
Retained earnings	61,365			56,755
Accumulated other comprehensive income	222			786
Deferred stock-based compensation	(231	)		(191	)
Total stockholders' equity	68,562		$	65,580
TOTAL<br> LIABILITIES AND STOCKHOLDERS' EQUITY	70,249		$	66,791

All values are in US Dollars.

30

Denmark Bancshares, Inc.

Statements of Income

For the Years Ended December 31,

$(000)s	2021			2020
Income
Dividend income from banking subsidiary		1,755			1,755
Dividend income from nonbanking subsidiary		0			5,625
Fair value adjustment of equity securities		79			81
Gain on sale of securities		25			65
Other income		30			8
Total income	$	1,889		$	7,534
Expenses
Management fees to banking subsidiary	$	77		$	75
Other operating expenses		143			204
Total expenses	$	220		$	279
Income before income tax benefit and undistributed income of<br> subsidiaries	$	1,669		$	7,255
Income tax benefit		(23	)		(34	)
Income before undistributed income of subsidiaries	$	1,692		$	7,289
Equity in Undistributed Income of Subsidiaries
Banking subsidiary		4,780			2,060
Nonbank subsidiaries		10			(5,467	)
NET INCOME	$	6,482		$	3,882

31

Denmark Bancshares, Inc.

Statements of Cash Flows

For the Years Ended December 31,

$(000)s	2021			2020
Cash Flows from Operating Activities:
Net Income	$	6,482		$	3,882
Adjustments to reconcile net income to net cash provided by<br> operating activities:
Equity earnings of banking subsidiary		(6,535	)		(3,815	)
Equity earnings of nonbanking subsidiaries		(10	)		(158	)
Dividend from banking subsidiary		1,755			1,755
Dividend from nonbanking subsidiary		0			5,625
Gain on sale of other investments		(25	)		(65	)
Increase in fair value of equity securities		(79	)		(81	)
Stock-based compensation		214			193
Increase in other assets		(715	)		(562	)
Increase in other liabilities		473			96
Net Cash Provided by Operating Activities	$	1,560		$	6,870
Cash Flows from Investing Activities:
Purchases of other investments	$	(749	)	$	(149	)
Proceeds from redemption or sale of other investments		204			562
Net Cash (Used in) Provided by Investing Activities	$	(545	)	$	413
Cash Flows from Financing Activities:
Common stock issuance		174			149
Treasury stock purchases		(1,452	)		(1,852	)
Dividends paid		(1,869	)		(1,889	)
Net Cash Used in Financing Activities	$	(3,147	)	$	(3,592	)
Net (decrease) increase in cash	$	(2,132	)	$	3,691
Cash, beginning		7,037			3,346
CASH, ENDING	$	4,905		$	7,037

32

Exhibit 99.3

Denmark<br> Bancshares, Inc. and Subsidiaries
June 30,<br> 2022 Financial Statements

Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

	June 30, 2022			December 31, 2021
	(Unaudited)			(Audited)
Assets
Cash and due from banks	$	33,830,206		$	38,490,134
Federal funds sold		132,280,086			112,665,088
Investment securities available for sale, at fair value		29,530,957			36,462,450
Loans		465,575,725			479,056,630
Allowance for loan losses		(7,722,879	)		(7,741,069	)
Net loans	$	457,852,846		$	471,315,561
Loans held for sale		65,496			82,401
Premises and equipment, net		5,303,636			5,578,294
Other investments		3,079,177			3,724,977
Accrued interest receivable		1,176,719			1,304,890
Bank-owned life insurance		13,195,877			13,018,897
Other assets		5,183,153			5,000,879
TOTAL ASSETS	$	681,498,153		$	687,643,571
Liabilities
Deposits
Noninterest-bearing	$	161,368,453		$	155,292,023
Interest-bearing		448,047,943			459,205,230
Total Deposits	$	609,416,396		$	614,497,253
Accrued interest payable		165,641			166,199
Other liabilities		3,262,455			4,020,829
Borrowings		864,874			932,844
Total Liabilities	$	613,709,366		$	619,617,125
Stockholders' Equity
Common stock, no par value, authorized 10,000,000 Class A shares; outstanding 3,012,964 at 6/30/2022 and 3,003,883 at 12/31/2021	$	18,183,326		$	18,009,891
Common stock, no par value, authorized 1,000,000 Class B non-voting shares; outstanding 89,285 at 6/30/2022 and 89,285 at 12/31/2021		614,035			614,035
Treasury stock shares, at cost (588,392 Class A and 30,895 Class B shares at 6/30/2022 and 588,392 Class A and 30,895 Class B shares at 12/31/2021)		(13,249,219	)		(12,980,652	)
Paid in capital		1,767,018			1,562,939
Retained earnings		62,197,086			60,828,648
Accumulated other comprehensive income (loss)		(1,390,990	)		222,341
Deferred stock-based compensation		(332,469	)		(230,756	)
Total Stockholders' Equity	$	67,788,787		$	68,026,446
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	681,498,153		$	687,643,571

The accompanying notes are an integral part of these financial statements.

1

Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(Unaudited)

	Three months ended June 30,					Six months ended June 30,
	2022		2021			2022		2021
Interest Income
Loans including fees	$	5,070,819	$	5,092,932		$	10,063,428	$	10,877,982
Investment securities:
Taxable		100,928		101,913			203,787		208,541
Tax-exempt		35,620		48,673			83,938		98,434
Federal funds sold		233,021		16,905			271,024		30,958
Other interest income		11,023		14,641			33,630		33,215
	$	5,451,411	$	5,275,064		$	10,655,807	$	11,249,130
Interest Expense
Deposits	$	408,513	$	518,644		$	835,781	$	1,103,548
Borrowings		3,921		19,092			7,994		560,001
	$	412,434	$	537,736		$	843,775	$	1,663,549
Net interest income	$	5,038,977	$	4,737,328		$	9,812,032	$	9,585,581
Provision for Credit Losses		0		(75,000	)		0		0
Net interest income after
provision for credit losses	$	5,038,977	$	4,812,328		$	9,812,032	$	9,585,581
Other Income
Service fees and commissions	$	313,377	$	440,967		$	577,363	$	617,989
Other investment gains		0		0			0		9,018
Loan sale gains		98,107		528,344			292,174		1,479,030
Bank owned life insurance		90,328		87,205			176,980		172,156
Other		222,317		234,000			459,074		570,425
	$	724,129	$	1,290,516		$	1,505,591	$	2,848,618
Other Expense
Salaries and employee benefits	$	2,409,184	$	2,713,370		$	5,301,046	$	5,556,610
Data processing expenses		429,682		454,537			890,621		886,112
Occupancy expenses		326,718		353,188			696,863		723,441
Professional fees		180,671		113,810			619,308		283,318
Marketing expenses		82,658		92,258			127,347		147,950
Printing and supplies		8,033		14,611			28,131		36,453
Directors' fees		47,423		51,977			99,899		105,650
FDIC insurance premiums		50,000		62,400			100,000		125,200
Other operating expenses		176,851		210,946			379,784		390,903
	$	3,711,220	$	4,067,094		$	8,242,999	$	8,255,637
Income before income taxes	$	2,051,886	$	2,035,747		$	3,074,624	$	4,178,562
Income tax expense		496,999		524,252			775,511		1,069,431
NET INCOME	$	1,554,887	$	1,511,495		$	2,299,113	$	3,109,131
EARNINGS PER COMMON SHARE	$	0.50	$	0.48		$	0.74	$	0.99

The accompanying notes are an integral part of these financial statements.

2

Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of ComprehensiveIncome

(Unaudited)

,

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
Net income	$	1,554,887		$	1,511,495		$	2,299,113		$	3,109,131
Other comprehensive (loss) income, net of tax
Unrealized holding (losses) gains arising during period		(765,193	)		38,152			(2,210,042	)		(357,796	)
Income tax benefit (expense) related to items of other comprehensive income		206,602			(10,301	)		596,711			96,606
Other comprehensive (loss) income, net of tax	$	(558,591	)	$	27,851		$	(1,613,331	)	$	(261,190	)
Comprehensive income	$	996,296		$	1,539,346		$	685,782		$	2,847,941

The accompanying notes are an integral part of these financial statements.

3

Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statement of Changes in Stockholders’Equity

(Unaudited)

												Accumulated
				Treasury								Other			Deferred
		Class B		Shares			Paid in		Retained			Comprehensive			Stock-Based
		Amount		Amount			Capital		Earnings			Income (loss)			Compensation			Total
BALANCE, JANUARY 1, 2021	17,836,258	$	614,035	$	(11,528,855	)	$	1,309,054	$	56,203,275		$	786,074		$	(190,715	)	$	65,029,126
Net income									$	1,597,636									1,597,636
Other comprehensive income, net of tax												$	(289,041	)					(289,041	)
Issuance of Class A restricted common stock								234,581								(234,581	)		0
Issuance of Class A common stock	173,634																		173,634
Stock-based compensation expense																45,075			45,075
Treasury stock acquisitions					(52,410	)													(52,410	)
BALANCE, MARCH 31, 2021	18,009,892	$	614,035	$	(11,581,265	)	$	1,543,635	$	57,800,911		$	497,033		$	(380,221	)	$	66,504,020
Net income										1,511,495									1,511,495
Other comprehensive income, net of tax													27,851						27,851
Stock-based compensation expense																49,636			49,636
Cash dividend declared, 0.30 per share										(944,780	)								(944,780	)
BALANCE, JUNE 30, 2021	18,009,892	$	614,035	$	(11,581,265	)	$	1,543,635	$	58,367,626		$	524,884		$	(330,585	)	$	67,148,222
BALANCE, JANUARY 1, 2022	18,009,891	$	614,035	$	(12,980,652	)	$	1,562,939	$	60,828,648		$	222,341		$	(230,756	)	$	68,026,446
Net income									$	744,226									744,226
Other comprehensive income, net of tax												$	(1,054,740	)					(1,054,740	)
Issuance of Class A restricted common stock								204,079								(204,079	)		0
Issuance of Class A common stock	173,435																		173,435
Stock-based compensation expense																50,548			50,548
Treasury stock acquisitions					(268,567	)													(268,567	)
BALANCE, MARCH 31, 2022	18,183,326	$	614,035	$	(13,249,219	)	$	1,767,018	$	61,572,874		$	(832,399	)	$	(384,287	)	$	67,671,348
Net income										1,554,887									1,554,887
Other comprehensive income, net of tax													(558,591	)					(558,591	)
Stock-based compensation expense																51,818			51,818
Cash dividend declared, 0.30 per share										(930,675	)								(930,675	)
BALANCE, JUNE 30, 2022	18,183,326	$	614,035	$	(13,249,219	)	$	1,767,018	$	62,197,086		$	(1,390,990	)	$	(332,469	)	$	67,788,787

All values are in US Dollars.

The accompanying notes are an integral part of these financial statements.

4

Denmark Bancshares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
	2022			2021
Cash Flows from Operating Activities:
Net income	$	2,299,113		$	3,109,131
Adjustments to reconcile net income to net cash provided by<br> operating activities:
Depreciation		318,638			339,314
Gains on sales of loans		(292,174	)		(1,479,030	)
Gain on sale of other investments		0			(9,018	)
Amortization of bond premium		65,805			94,919
Accretion of bond discount		(17,078	)		(18,106	)
Increase in fair value of equity securities		(29,200	)		(137,200	)
Mortgage loans originated for sale		(9,958,075	)		(38,292,970	)
Proceeds from sale of mortgage loans		10,437,790			40,256,200
Stock-based compensation		102,366			94,711
Income from BOLI		(176,980	)		(172,156	)
Decrease in interest receivable		128,171			309,792
Decrease in interest payable		(558	)		(74,451	)
Other, net		(346,661	)		(600,679	)
Net Cash Provided by Operating Activities	$	2,531,157		$	3,420,457
Cash Flows from Investing Activities:
Maturities, pay-downs, calls and sales of AFS securities		4,672,724			5,248,894
Purchases of AFS securities		0			(11,152,330	)
Proceeds from redemption or sale of other investments		675,000			66,618
Federal funds sold, net		(19,614,998	)		11,115,366
Net increase in loans made to customers		13,292,079			(9,457,988	)
Purchases of premises and equipment		(43,980	)		(27,002	)
Net Cash Used in Investing Activities	$	(1,019,175	)	$	(4,206,442	)
Cash Flows from Financing Activities:
Net increase in deposits	$	(5,080,857	)	$	19,377,826
Purchase of treasury stock		(268,567	)		(52,410	)
Issuance of common stock		173,435			173,634
Dividends paid		(927,951	)		(924,565	)
Debt repayments		(67,970	)		(13,066,765	)
Net Cash (Used in) Provided by Financing Activities	$	(6,171,910	)	$	5,507,720
Net (decrease) increase in cash and due from banks	$	(4,659,928	)	$	4,721,735
Cash and due from banks, beginning of period		38,490,134			24,100,714
CASH AND DUE FROM BANKS, END OF PERIOD	$	33,830,206		$	28,822,449

| 5 |

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NOTE 1 – BASIS OF PRESENTATION

Denmark Bancshares, Inc. (“DBI” or the “Company”) is a bank holding company as defined in the Bank Holding Company Act of 1956, as amended. As such, it exercises control over Denmark State Bank (“DSB”), Denmark Agricultural Credit Corporation (“DACC”) and DBI Properties, Inc. The majority of DBI’s assets are held by DSB. DSB, a wholly owned subsidiary of DBI, operates under a state bank charter, and provides a variety of banking services to its customers. DBI Properties, Inc. was formed in February 2009 for the purpose of holding certain foreclosed properties. All activities of the wholly owned subsidiaries are reflected in the consolidated financial statements for Denmark Bancshares, Inc. and Subsidiaries (collectively referred to as “DBI”).

These interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, certain information and footnote disclosures required by GAAP have been omitted or abbreviated. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited financial statements and footnotes as of and for the year ended December 31, 2021 (“Annual Report”).

The unaudited consolidated financial statements include all adjustments, consisting of normal recurring adjustment necessary for a fair presentation of the results for the interim periods. The results for interim periods are not necessarily indicative of results for a full year.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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. Significant estimates in the financial statements include fair values of securities, fair values of financial instruments, valuation of deferred tax assets and the determination of the allowance for loan losses, which are discussed specifically in the following sections of this footnote.

Critical Accounting Policies

There have been no material changes or developments with respect to the assumptions or methodologies that the Company uses when applying what management believes are critical accounting policies and developing critical accounting estimates as previously disclosed in the Company’s Annual Report.

Upcoming Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments - Credit Losses; Measurement of Credit Losses on FinancialInstruments. The ASU includes increased disclosures and various changes to the accounting and measurement of financial assets including DBI’s loans and available-for-sale investment securities. Each financial asset presented on the statement of condition would have a unique allowance for credit losses that is deducted from the amortized cost basis to present the net carrying value. The amendments in this ASU also eliminate the probable initial recognition threshold in current U.S. GAAP and, instead, reflect an entity's current estimate of all expected credit losses using reasonable and supportable forecasts. The new credit loss guidance will be effective for DBI's year ending December 31, 2023. Upon adoption, the ASU will be applied using a modified retrospective transition method to the beginning of the first reporting period in which the guidance is effective. Early adoption for all institutions is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. DBI believes this standard will have an impact on the consolidated financial statements and is assessing the significance.

| 6 |

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NOTE 2 – INVESTMENT SECURITIES

The amortized cost and estimated fair market value of debt securities available for sale were as follows:

	June 30, 2022
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
U.S. Government Treasuries	$	7,424,960	$	0	$	(675,761	)	$	6,749,199
U.S. Government-sponsored agency MBS		11,224,981		2,611		(635,094	)		10,592,498
State and local governments		12,053,471		22,353		(614,569	)		11,461,255
Asset-backed securities		733,011		0		(5,006	)		728,005
	$	31,436,423	$	24,964	$	(1,930,430	)	$	29,530,957
	December 31, 2021
---	---	---	---	---	---	---	---	---	---
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
U.S. Government Treasuries	$	7,416,322	$	0	$	(83,100	)	$	7,333,222
U.S. Government-sponsored agency MBS		12,803,479		191,591		(75,015	)		12,920,055
State and local governments		15,124,564		323,345		(48,894	)		15,399,015
Asset-backed securities		813,508		615		(3,965	)		810,158
	$	36,157,873	$	515,551	$	(210,974	)	$	36,462,450

There were no available-for-sale securities sold during the first six months of 2022 or 2021.

The amortized cost and estimated fair values of debt securities at June 30, 2022, by maturity were as follows:

	Debt Securities Available-for-Sale
			Estimated
	Amortized		Fair
Amounts Maturing	Cost		Value
Within one year	$	2,978,657	$	2,976,827
From one through five years		7,938,078		7,309,422
From five through ten years		8,561,696		7,924,205
After ten years		0		0
Subtotal	$	19,478,431	$	18,210,454
Mortgage and asset-backed securities	$	11,957,992	$	11,320,503
Total	$	31,436,423	$	29,530,957

Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position follows:

June 30, 2022

	Less Than Twelve Months				Over Twelve Months
	Gross		Estimated		Gross		Estimated
	Unrealized		Fair		Unrealized		Fair
Debt Securities Available for Sale	Losses		Value		Losses		Value
U.S. Government Treasuries	$	675,761	$	6,749,199	$	0	$	0
U.S. Government-sponsored agency MBS		409,605		7,651,002		225,489		2,622,945
State and local governments		431,086		6,737,866		183,483		1,091,517
Asset-backed securities		2,312		202,603		2,694		525,401
Total securities available for sale	$	1,518,764	$	21,340,670	$	411,666	$	4,239,863

| 7 |

| --- |

December 31, 2021

	Less Than Twelve Months				Over Twelve Months
	Gross		Estimated		Gross		Estimated
	Unrealized		Fair		Unrealized		Fair
Debt Securities Available for Sale	Losses		Value		Losses		Value
U.S. Government Treasuries	$	83,100	$	7,333,222	$	0	$	0
U.S. Government-sponsored agency MBS		74,426		5,845,638		589		114,604
State and local governments		48,894		1,726,107		0		0
Asset-backed securities		3,965		584,417		0		0
Total securities available for sale	$	210,385	$	15,489,384	$	589	$	114,604

All debt securities with unrealized losses are assessed to determine if the impairment is other-than-temporary. Factors that are evaluated include the loan types supporting the securities, delinquency and foreclosure rates, credit support, weighted average loan-to-value, year of origination, borrower profile, existing and projected debt burden, underlying cash flow of the borrower and exposure to risks, among others.

There were no issuers of debt securities for which a significant concentration of investments (greater than 10 percent of stockholders’ equity) was held as of June 30, 2022.

Debt securities with an estimated fair value of $7.7 million and $11.5 million at June 30, 2022 and December 31, 2021, respectively were pledged to secure public deposits and for other purposes required or permitted by law.

NOTE 3 – LOANS

Major categories of loans included in the loan portfolio as of June 30, 2022 and December 31, 2021 are as follows:

	June 30,			December 31,
	2022			2021
Real Estate:
Residential	$	104,594,669		$	88,372,489
Commercial		165,129,393			163,456,468
Construction		14,990,563			26,678,745
Agricultural		73,440,463			77,848,753
		358,155,088			356,356,455
Commercial		72,070,537			80,678,804
Agricultural		27,487,325			33,447,807
Consumer and other		7,758,893			8,612,216
Unsecured		132,772			251,115
Total Loans Receivable	$	465,604,615		$	479,346,397
Allowance for loan losses		(7,722,879	)		(7,741,069	)
Deferred loan fees		(28,890	)		(289,767	)
Total Loans, Net	$	457,852,846		$	471,315,561

During 2020, the SBA introduced the Paycheck Protection Program (“PPP”) designed to provide liquidity to small businesses during the COVID-19 pandemic. The loans are guaranteed by the SBA and loan proceeds to borrowers are forgivable by the SBA if certain criteria are met. On January 15, 2021, the SBA re-opened the loan portal for a second round of the PPP loan program with a May 31, 2021 deadline for applications. DSB originated loans totaling $68.2 million under PPP. As of June 30, 2022, all first round PPP loans have been forgiven and there were approximately $0.4 million of second round PPP loans included on the balance sheet. PPP processing fees received from SBA totaling $3.4 million were deferred and recognized as interest income using the effective yield method. Upon forgiveness of a loan and resulting repayment by the SBA, any unrecognized net fee for a given loan is recognized as interest income. DSB recognized $0.3 million and $1.1 million of the fees in the first six months of 2022 and 2021, respectively.

| 8 |

| --- |

The following is a summary of total loans and those individually evaluated for impairment as of June 30, 2022 and December 31, 2021:

	June 30, 2022				December 31, 2021
			Ending Balance				Ending Balance
			Individually				Individually
	Ending		Evaluated		Ending		Evaluated
	Balance		for Impairment		Balance		for Impairment
Residential Real Estate	$	104,594,669	$	111,600	$	88,372,489	$	288,881
Commercial Real Estate		165,129,393		0		163,456,468		0
Construction & Land Dev		14,990,563		0		26,678,745		0
Agricultural Real Estate		73,440,463		1,442,947		77,848,753		2,214,013
Commercial		72,070,537		50,690		80,678,804		0
Agricultural		27,487,325		32,134		33,447,807		44,085
Consumer and other		7,891,665		0		8,863,331		200
Total	$	465,604,615	$	1,637,371	$	479,346,397	$	2,547,179

The following tables show the investment in impaired loans and the corresponding allowance for those loans along with the recognized interest income associated with impaired loans as of June 30, 2022 and December 31, 2021:

			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
June 30, 2022	Investment		Balance		Allowance		Investment		Recognized
With no related allowance:
Residential Real Estate	$	111,600	$	150,823	$	0	$	153,249	$	0
Commercial Real Estate		0		0		0		0		0
Construction & Land Dev		0		0		0		0		0
Agricultural Real Estate		1,442,947		1,484,250		0		1,742,272		44,360
Commercial		50,690		67,586		0		67,586		0
Agricultural		32,134		32,134		0		38,274		1,130
Consumer and other		0		0		0		0		0
With a related allowance:
Residential Real Estate	$	0	$	0	$	0	$	0	$	0
Commercial Real Estate		0		0		0		0		0
Construction & Land Dev		0		0		0		0		0
Agricultural Real Estate		0		0		0		0		0
Commercial		0		0		0		0		0
Agricultural		0		0		0		0		0
Consumer and other		0		0		0		0		0
Total:
Residential Real Estate	$	111,600	$	150,823	$	0	$	153,249	$	0
Commercial Real Estate		0		0		0		0		0
Construction & Land Dev		0		0		0		0		0
Agricultural Real Estate		1,442,947		1,484,250		0		1,742,272		44,360
Commercial		50,690		67,586		0		67,586		0
Agricultural		32,134		32,134		0		38,274		1,130
Consumer and other		0		0		0		0		0
Total	$	1,637,371	$	1,734,793	$	0	$	2,001,381	$	45,490

| 9 |

| --- | | | | | Unpaid | | | | Average | | Interest | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Recorded | | Principal | | Related | | Recorded | | Income | | | December 31, 2021 | Investment | | Balance | | Allowance | | Investment | | Recognized | | | With no related allowance: | | | | | | | | | | | | Residential Real Estate | $ | 288,881 | $ | 352,567 | $ | 0 | $ | 380,540 | $ | 0 | | Commercial Real Estate | | 0 | | 0 | | 0 | | 0 | | 0 | | Construction & Land Dev | | 0 | | 0 | | 0 | | 0 | | 0 | | Agricultural Real Estate | | 2,214,013 | | 2,262,632 | | 0 | | 2,475,384 | | 70,395 | | Commercial | | 0 | | 0 | | 0 | | 0 | | 0 | | Agricultural | | 44,085 | | 44,085 | | 0 | | 56,187 | | 3,371 | | Consumer and other | | 0 | | 0 | | 0 | | 0 | | 0 | | With a related allowance: | | | | | | | | | | | | Residential Real Estate | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | | Commercial Real Estate | | 0 | | 0 | | 0 | | 0 | | 0 | | Construction & Land Dev | | 0 | | 0 | | 0 | | 0 | | 0 | | Agricultural Real Estate | | 0 | | 0 | | 0 | | 0 | | 0 | | Commercial | | 0 | | 0 | | 0 | | 0 | | 0 | | Agricultural | | 0 | | 0 | | 0 | | 0 | | 0 | | Consumer and other | | 200 | | 243 | | 200 | | 1,049 | | 0 | | Total: | | | | | | | | | | | | Residential Real Estate | $ | 288,881 | $ | 352,567 | $ | 0 | $ | 380,540 | $ | 0 | | Commercial Real Estate | | 0 | | 0 | | 0 | | 0 | | 0 | | Construction & Land Dev | | 0 | | 0 | | 0 | | 0 | | 0 | | Agricultural Real Estate | | 2,214,013 | | 2,262,632 | | 0 | | 2,475,384 | | 70,395 | | Commercial | | 0 | | 0 | | 0 | | 0 | | 0 | | Agricultural | | 44,085 | | 44,085 | | 0 | | 56,187 | | 3,371 | | Consumer and other | | 200 | | 243 | | 200 | | 1,049 | | 0 | | Total | $ | 2,547,179 | $ | 2,659,527 | $ | 200 | $ | 2,913,160 | $ | 73,766 |

No additional funds are committed to be advanced in connection with impaired loans.

A summary of activity in the ALLL by loan type as of June 30, 2022 and 2021 is summarized as follows:

													Ending Balance
	Beginning										Ending		Individually
	Balance										Balance		Evaluated
2022	1/1/2022		Charge-offs			Recoveries		Provision			6/30/2022		for Impairment
Residential Real Estate	$	627,577	$	(3,542	)	$	0	$	117,154		$	741,189	$	0
Commercial Real Estate		3,235,974		0			0		74,648			3,310,622		0
Construction & Land Dev		252,967		0			0		(110,557	)		142,410		0
Agricultural Real Estate		1,397,634		0			0		(104,646	)		1,292,988		0
Commercial		1,062,100		(16,897	)		0		(56,040	)		989,163		0
Agricultural		717,818		0			0		(158,398	)		559,420		0
Consumer and other		15,036		(504	)		2,753		(4,362	)		12,923		0
Unallocated		431,963		0			0		242,201			674,164		0
Total	$	7,741,069	$	(20,943	)	$	2,753	$	0		$	7,722,879	$	0

| 10 |

| --- | | | | | | | | | | | | | | | Ending Balance | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Beginning | | | | | | | | | | Ending | | Individually | | | | Balance | | | | | | | | | | Balance | | Evaluated | | | 2021 | 1/1/2021 | | Charge-offs | | | Recoveries | | Provision | | | 6/30/2021 | | for Impairment | | | Residential Real Estate | $ | 494,346 | $ | 0 | | $ | 12,885 | $ | 105,765 | | $ | 612,996 | $ | 0 | | Commercial Real Estate | | 2,764,964 | | 0 | | | 0 | | 209,848 | | | 2,974,812 | | 0 | | Construction & Land Dev | | 228,880 | | 0 | | | 0 | | (81,133 | ) | | 147,747 | | 0 | | Agricultural Real Estate | | 1,432,239 | | 0 | | | 0 | | (11,552 | ) | | 1,420,687 | | 0 | | Commercial | | 1,169,473 | | 0 | | | 4,039 | | (67,523 | ) | | 1,105,989 | | 0 | | Agricultural | | 756,559 | | 0 | | | 0 | | (18,292 | ) | | 738,267 | | 18,200 | | Consumer and other | | 18,826 | | (19 | ) | | 1,603 | | (3,383 | ) | | 17,027 | | 1,015 | | Unallocated | | 803,148 | | 0 | | | 0 | | (133,730 | ) | | 669,418 | | 0 | | Total | $ | 7,668,435 | $ | (19 | ) | $ | 18,527 | $ | 0 | | $ | 7,686,943 | $ | 19,215 |

Nonaccrual loans totaled $0.2 million and $0.5 million at June 30, 2022 and December 31, 2021, respectively. They were comprised of 1-4 family residential real estate loans totaling $112,000, an agricultural real estate loan totaling $65,000 and a commercial loan totaling $51,000 as of June 30, 2022 and 1-4 family residential real estate loans totaling $289,000 and agricultural real estate loans totaling $161,000 as of December 31, 2021. There were no loans past due ninety days or more and still accruing at June 30, 2022 or December 31, 2021. A schedule of loans by the number of days past due (including nonaccrual loans) along with a schedule of credit quality indicators for loans as of June 30, 2022 and December 31, 2021is summarized as follows:

Age Analysis of Past Due Financing Receivables

	30-89 Days		90 Days		Total				Total
June 30, 2022	Past Due		& Over		Past Due		Current		Loans
Residential Real Estate	$	0	$	78,509	$	78,509	$	104,516,160	$	104,594,669
Commercial Real Estate		2,561,265		0		2,561,265		162,568,128		165,129,393
Construction & Land Dev		0		0		0		14,990,563		14,990,563
Agricultural Real Estate		0		0		0		73,440,463		73,440,463
Commercial		0		50,690		50,690		72,019,847		72,070,537
Agricultural		0		0		0		27,487,325		27,487,325
Consumer and other		0		0		0		7,891,665		7,891,665
Total	$	2,561,265	$	129,199	$	2,690,464	$	462,914,151	$	465,604,615
	30-89 Days		90 Days		Total				Total
---	---	---	---	---	---	---	---	---	---	---
December 31, 2021	Past Due		& Over		Past Due		Current		Loans
Residential Real Estate	$	0	$	66,599	$	66,599	$	88,305,890	$	88,372,489
Commercial Real Estate		0		0		0		163,456,468		163,456,468
Construction & Land Dev		0		0		0		26,678,745		26,678,745
Agricultural Real Estate		0		0		0		77,848,753		77,848,753
Commercial		0		0		0		80,678,804		80,678,804
Agricultural		0		0		0		33,447,807		33,447,807
Consumer and other		0		200		200		8,863,131		8,863,331
Total	$	0	$	66,799	$	66,799	$	479,279,598	$	479,346,397

| 11 |

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Credit Quality Indicators

			Special
June 30, 2022	Non-Classified		Mention		Substandard		Doubtful		Total
Residential Real Estate	$	102,993,931	$	1,164,430	$	403,217	$	33,091	$	104,594,669
Commercial Real Estate		152,685,004		5,921,399		6,522,990		0		165,129,393
Construction & Land Dev		14,990,563		0		0		0		14,990,563
Agricultural Real Estate		58,547,581		11,737,068		3,090,363		65,451		73,440,463
Commercial		61,555,515		6,660,412		3,803,920		50,690		72,070,537
Agricultural		25,395,833		2,059,358		32,134		0		27,487,325
Consumer and other		7,868,960		22,705		0		0		7,891,665
Total	$	424,037,387	$	27,565,372	$	13,852,624	$	149,232	$	465,604,615
			Special
---	---	---	---	---	---	---	---	---	---	---
December 31, 2021	Non-Classified		Mention		Substandard		Doubtful		Total
Residential Real Estate	$	86,449,154	$	1,294,062	$	606,214	$	23,059	$	88,372,489
Commercial Real Estate		151,181,246		6,688,763		5,586,459		0		163,456,468
Construction & Land Dev		26,678,745		0		0		0		26,678,745
Agricultural Real Estate		57,594,628		14,791,550		5,389,329		73,246		77,848,753
Commercial		68,883,170		7,212,506		4,583,128		0		80,678,804
Agricultural		28,514,669		3,789,582		1,143,556		0		33,447,807
Consumer and other		8,825,929		37,202		0		200		8,863,331
Total	$	428,127,541	$	33,813,665	$	17,308,686	$	96,505	$	479,346,397

During the period ended June 30, 2022, there was one commercial loan modified as a troubled debt restructuring (“TDR”) to a borrower with a recorded investment of $68,000 prior to modification and $51,000 after modification. During the year ended December 31, 2021, there were three agricultural real estate loans to one borrower with a recorded investment of $2.1 million both prior to and following the modification modified as TDRs. During the periods ended June 30, 2022 and December 31, 2021, there were no loans that were previously modified as a TDR that subsequently defaulted.

NOTE 4 – MORTGAGE SERVICING RIGHTS

Mortgage servicing rights (“MSRs”) are recognized based on the fair value of the servicing right on the date the corresponding mortgage loan is sold. An estimate of DBI’s MSRs is determined using assumptions that market participants would use in estimating future net servicing income, including estimates of prepayment speeds, discount rate, default rates, cost to service, escrow account earnings, contractual servicing fee income, ancillary income and late fees. Subsequent to the date of transfer, DBI has elected to measure its MSRs under the amortization method. Under this method, MSRs are amortized in proportion to, and over the period of, estimated net servicing income.

DBI has recorded MSRs related to loans sold without recourse to FNMA. DBI sells conforming, fixed-rate, closed-end, residential real estate mortgages to FNMA. The unpaid principal balances of residential mortgage loans serviced for FNMA were $162.1 million and $163.0 million at June 30, 2022 and December 31, 2021, respectively.

The change in amortized MSRs and the related valuation allowance is presented below:

	June 30,			December 31,
	2022			2021
Mortgage servicing rights, beginning of period	$	1,083,140		$	828,720
Additions from originated servicing		116,817			506,086
Amortization expense		(174,591	)		(461,247	)
Change in valuation allowance		33,904			209,581
Mortgage servicing rights, end of period	$	1,059,270		$	1,083,140

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DBI evaluates mortgage servicing rights for impairment on a quarterly basis. There was a valuation allowance for amortized MSRs of $1,415 and $35,319 as of June 30, 2022 and December 31, 2021, respectively. Impairment is determined by stratifying MSRs into groupings based on predominant risk characteristics, such as interest rate and loan type. If, by individual stratum, the carrying amount of the MSRs exceeds fair value, a valuation reserve is established. The valuation reserve is adjusted as the fair value changes. At both June 30, 2022 and December 31, 2021, fair value was determined using a discount rate of 9.0%. At June 30, 2022 and December 31, 2021, estimates of prepayment speeds ranged from 4.61% to 15.25% and 7.75% to 29.64%, respectively.

NOTE 5 – BORROWINGS

As of June 30, 2022, DSB had available and unused federal funds lines of credit with one correspondent institution of $18.0 million, as well as an unused $20.0 million line at the Federal Reserve Bank’s discount window. Federal funds purchased generally mature within one day from the transaction date. There were no federal funds purchased outstanding as of June 30, 2022 or December 31, 2021.

Long-term debt consisted of the following:

	June 30, 2022					December 31, 2021
	Rate			Amount		Rate			Amount
Federal Home Loan Bank:
Fixed rate advance		1.79	%	$	864,874		1.79	%	$	932,844

The outstanding Federal Home Loan Bank advance matures in 2023.

The notes payable to the FHLB are secured by residential mortgages with a carrying amount of $95.0 million and $83.7 million, as of June 30, 2022 and December 31, 2021, respectively along with $ $0.7 million of FHLB stock for both periods.

DBI has a revolving line of credit of $20 million with a correspondent bank that had no balance drawn as of June 30, 2022 or December 31, 2021. This line has an interest rate tied to the Wall Street Journal Prime Rate less 100 basis points and matures in October 2023. The interest rate on the line of credit would have been 3.75 percent at June 30, 2022 if DBI had any outstanding borrowings. DBI is subject to a maximum non-performing loan covenant for this borrowing as well as a maximum limitation as a percentage of capital on the outstanding balance of the line.

As of June 30, 2022 DBI had a total of $88.0 million of unused lines of credit with banks to be drawn upon as needed for long-term debt subject to borrowing guidelines.

NOTE 6 – STOCK BASED COMPENSATION

In 2016, the Board approved the Long-Term Incentive Plan (the “Plan”) for executive officers. In 2019, the Plan was amended to include awards for the directors, as well. The Plan allows for the issuance of restricted stock to executive officers and directors that are subject to a service period restriction. The Plan initially allowed for the issuance of up to 36,000 shares of restricted stock. An additional 36,000 shares were authorized in 2020.

Nonvested Shares	Shares			Weighted-<br><br>Average Grant-<br><br>Date Fair Value
Nonvested at January 1, 2022		23,388		$	24.07
Granted		8,454			24.14
Vested		(8,084	)		24.02
Nonvested at June 30, 2022		23,758		$	24.41

The fair value as of the date of the grant was $204,080, or $24.14 per share, and $234,581, or $24.75 per share, for awards granted in 2022 and 2021, respectively. At June 30, 2022 there was unrecognized compensation expense of $332,469 which will be fully recognized in 2022.

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NOTE 7 – COMMITMENTS AND CREDIT RISK

DBI and its subsidiaries are parties to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of their customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of financial position. The contract or notional amounts of those instruments reflect the extent of involvement DBI and its subsidiaries have in particular classes of financial instruments.

	Contract or
	Notional Amount		Secured
	June 30, 2022		Portion
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$	119,787,693	$	118,921,585
Standby letters of credit and financial guarantees written		1,124,370		1,124,370
	Contract or
---	---	---	---	---
	Notional Amount		Secured
	December 31, 2021		Portion
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit	$	121,732,704	$	120,836,384
Standby letters of credit and financial guarantees written		890,670		890,670

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. DBI and its subsidiaries evaluate each customer’s creditworthiness on a case-by-case basis. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties. As of June 30, 2022, variable rate commitments totaled $76.6 million.

Standby letters of credit are conditional commitments issued by DSB to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support commercial business transactions. When a customer fails to perform according to the terms of the agreement, DSB honors drafts drawn by the third party in amounts up to the contract amount. A majority of the letters of credit expire within one year. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial and residential properties. All letters of credit are secured.

NOTE 8 – RELATED PARTY TRANSACTIONS

At June 30, 2022 and December 31, 2021, certain DBI subsidiary executive officers, directors and companies in which they have a ten percent or more beneficial interest were indebted to DBI and its subsidiaries. Total indebtedness outstanding was $2.1 million and $2.4 million as of June 30, 2022 and December 31, 2021, respectively. All such loans were made in the ordinary course of business and at rates and terms similar to those granted to other borrowers.

	12/31/2021						6/30/2022
	Beginning		New				Ending
$(000)s	Balance		Loans		Payments		Balance
Aggregate related party loans	$	2,444	$	4,375	$	4,743	$	2,076
	12/31/2020						12/31/2021
---	---	---	---	---	---	---	---	---
	Beginning		New				Ending
$(000)s	Balance		Loans		Payments		Balance
Aggregate related party loans	$	2,797	$	2,635	$	2,988	$	2,444

Deposit balances with DBI’s executive officers, directors and affiliated companies in which they are principal owners were $13.9 million and $12.5 million at June 30, 2022 and December 31, 2021, respectively.

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NOTE 9 – FAIR VALUE MEASUREMENT

Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in a transaction between market participants on the measurement date. Some assets and liabilities are measured on a recurring basis while others are measured on a non-recurring basis, as required by U.S. GAAP, which also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. The three levels of inputs defined in the standard that may be used to measure fair value are as follows:

•                Level1: Quoted prices for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

•               Level2: 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, and other inputs that are observable or can be corroborated by observable market data.

•                Level3: Significant unobservable inputs that are supported by little, if any, market activity. These unobservable inputs reflect estimates that market participants would use in pricing the assets or liability.

In instances whereby inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. DBI’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset and liability.

It is DBI’s policy to recognize transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers during the first six months of 2022 or the year ended December 31, 2021.

Assets Recorded at Fair Value on a RecurringBasis

Investment securities available for sale are recorded at fair value on a recurring basis. The fair value measurement of most of DBI’s AFS securities is currently determined by an independent provider using Level 2 inputs. The measurement is based upon quoted prices for similar assets, if available. If quoted prices are not available, fair values are measured using matrix pricing models, or other model-based valuation techniques requiring observable inputs other than quoted prices such as yield curves, prepayment speed and default rates.

Assets measured at fair value on a recurring basis, are summarized in the table below:

	June 30, 2022
	Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Fair Value
U.S. Government Treasuries	$	0	$	6,749,199	$	0	$	6,749,199
U.S. Government-sponsored agency MBS		0		10,592,498		0		10,592,498
State and local governments		0		11,461,255		0		11,461,255
Asset-backed securities		0		728,005		0		728,005
Total securities available for sale	$	0	$	29,530,957	$	0	$	29,530,957
	December 31, 2021
---	---	---	---	---	---	---	---	---
	Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Fair Value
U.S. Government Treasuries	$	0	$	7,333,222	$	0	$	7,333,222
U.S. Government-sponsored agency MBS		0		12,920,055		0		12,920,055
State and local governments		0		15,399,015		0		15,399,015
Asset-backed securities		0		810,158		0		810,158
Total securities available for sale	$	0	$	36,462,450	$	0	$	36,462,450

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Assets Recorded at Fair Value on a NonrecurringBasis

Other investments do not have readily determinable fair values. DBI carries the securities at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the security by the same investee. When an observable price change in an orderly transaction occurs during the year, the investment is classified as nonrecurring Level 1 within the valuation hierarchy.

A loan is considered impaired when, based on current information or events, it is probable that not all amounts due will be collected according to the contractual terms of the loan agreement. Impairment is measured based on the fair value of the underlying collateral. The collateral value is determined based on appraisals and other market valuations for similar assets. The value of impaired loans is typically 65% - 80% of appraised value. Under FASB ASC Topic820, “Fair Value Measurements and Disclosures,” the fair value of impaired loans is reported before selling costs of the related collateral, while FASB ASC Topic 310, “Receivables,” requires that impaired loans be reported on the balance sheet net of estimated selling costs. Therefore, significant estimated selling costs would result in the reported fair value of impaired loans being greater than the measurement value of impaired loans as maintained on the balance sheet. In most instances, selling costs were estimated for real estate-secured collateral and included broker commissions, legal and title transfer fees and closing costs. Given the valuation technique and significant unobservable inputs utilized to determine the fair value, impaired loans are classified as nonrecurring Level 3 assets.

There were no assets measured at fair value on a nonrecurring basis as of June 30, 2022. Assets measured at fair value on a nonrecurring basis as of December 31, 2021, are summarized in the following table:

	December 31, 2021
	Fair Value Measurements Using
Description	Level 1		Level 2		Level 3		Fair Value
Other investments	$	416,249	$	0	$	0	$	416,249
Impaired loans		0		0		200		200
Total Assets	$	416,249	$	0	$	200	$	416,449

The tables below summarize fair value of financial assets and liabilities at June 30, 2022 and December 31, 2021.

	June 30, 2022
	Carrying		Fair		Fair Value Hierarchy Level
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and federal funds sold	$	166,110,292	$	166,110,292	$	166,110,292	$	0	$	0
Investment securities		29,530,957		29,530,957		0		29,530,957		0
Loans, net of ALLL		457,852,846		455,524,854		0		0		455,524,854
Loans held for sale		65,496		65,496		0		65,496		0
Mortgage servicing rights		1,059,270		1,059,270		0		0		1,059,270
Other investments		3,079,177		3,079,177		0		0		3,079,177
Accrued interest receivable		1,176,719		1,176,719		0		1,176,719		0
TOTAL	$	658,874,757	$	656,546,765	$	166,110,292	$	30,773,172	$	459,663,301
Financial Liabilities
Deposits	$	609,416,396	$	607,347,906	$	514,204,033	$	93,143,873	$	0
Borrowings		864,874		856,658		0		856,658		0
Accrued interest payable		165,641		165,641		0		165,641		0
TOTAL	$	610,446,911	$	608,370,205	$	514,204,033	$	94,166,172	$	0

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	December 31, 2021
	Carrying		Fair		Fair Value Hierarchy Level
(In thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial Assets
Cash and federal funds sold	$	151,155,222	$	151,155,222	$	151,155,222	$	0	$	0
Investment securities		36,462,450		36,462,450		0		36,462,450		0
Loans, net of ALLL		471,315,561		471,310,578		0		0		471,310,578
Loans held for sale		82,401		84,960		0		84,960		0
Mortgage servicing rights		1,083,140		1,083,140		0		0		1,083,140
Other investments		3,724,977		3,724,977		416,249		0		3,308,728
Accrued interest receivable		1,304,890		1,304,890		0		1,304,890		0
TOTAL	$	665,128,641	$	665,126,217	$	151,571,471	$	37,852,300	$	475,702,446
Financial Liabilities
Deposits	$	614,497,253	$	615,925,949	$	507,346,558	$	108,579,391	$	0
Borrowings		932,844		963,151		0		963,151		0
Accrued interest payable		166,199		166,199		0		166,199		0
TOTAL	$	615,596,296	$	617,055,299	$	507,346,558	$	109,708,741	$	0

NOTE 10 – REGULATORY MATTERS

DSB is subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on DSB’s financial statements. Under capital adequacy guidelines and regulatory framework for prompt corrective action, DSB must meet specific capital guidelines that involve quantitative measures of DSB’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. DSB’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require DSB to maintain minimum amounts and ratios (set forth in the table below) of Tier 1 and Total capital to risk-weighted assets and of Tier 1 capital to average assets. In addition, DSB is also required to maintain minimum amounts and ratios of Common Equity Tier 1 capital to risk-weighted assets. It is management’s opinion, as of December 31, 2020, that DSB meets all applicable capital adequacy requirements. DBI will be subject to the same minimum amounts and ratios as DSB once total assets exceed $3 billion.

As of December 31, 2020, the most recent notification from the Federal Deposit Insurance Corporation categorized DSB as well-capitalized under the regulatory framework for prompt corrective action. To be categorized well-capitalized DSB must maintain minimum total risk-based, tier 1 risk-based and tier 1 leverage ratios as set forth in the table below. These tables do not include the 2.5 percent capital conservation buffer requirement. A Bank with a capital conservation buffer greater than 2.5 percent of risk-weighted assets would not be restricted by payout limitations. However, if the 2.5 percent threshold is not met, the Bank would be subject to increased limitations on capital distributions and discretionary bonus payments to executive officers as the capital conservation buffer approaches zero. Capital ratios for DBI are provided for information purposes only as there are no regulatory capital requirements for the holding company.

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											To Be Well Capitalized
											Under Prompt
						Minimum For Capital					Corrective
	Amount					Adequacy Purposes:					Action Provision:
As of June 30, 2022	Amount		Ratio			Amount		Ratio			Amount		Ratio
Denmark Bancshares, Inc.
Total Capital (to Risk-Weighted Assets)	$	75,473,463		15.0	%		N/A		N/A			N/A		N/A
Tier 1 Capital (to Risk-Weighted Assets)	$	69,179,777		13.8	%		N/A		N/A			N/A		N/A
Tier 1 Capital (to Average Assets)*	$	69,179,777		10.2	%		N/A		N/A			N/A		N/A
Denmark State Bank
Common Equity Tier 1 Capital (to Risk-Weighted Assets)	$	63,150,751		13.2	%	$	21,608,053		>4.5	%	$	31,211,632		>6.5	%
Total Capital (to Risk-Weighted Assets)	$	69,174,230		14.4	%	$	38,414,316		>8.0	%	$	48,017,896		>10.0	%
Tier 1 Capital (to Risk-Weighted Assets)	$	63,150,751		13.2	%	$	28,810,737		>6.0	%	$	38,414,316		>8.0	%
Tier 1 Capital (to Average Assets)*	$	63,150,751		9.3	%	$	27,057,905		>4.0	%	$	33,822,381		>5.0	%
As of December 31, 2021
Denmark Bancshares, Inc.
Total Capital (to Risk-Weighted Assets)	$	74,162,766		14.6	%		N/A		N/A			N/A		N/A
Tier 1 Capital (to Risk-Weighted Assets)	$	67,804,105		13.4	%		N/A		N/A			N/A		N/A
Tier 1 Capital (to Average Assets)*	$	67,804,105		10.2	%		N/A		N/A			N/A		N/A
Denmark State Bank
Common Equity Tier 1 Capital (to Risk-Weighted Assets)	$	60,433,556		12.4	%	$	21,951,716		>4.5	%	$	31,708,035		>6.5	%
Total Capital (to Risk-Weighted Assets)	$	66,551,543		13.6	%	$	39,025,273		>8.0	%	$	48,781,592		>10.0	%
Tier 1 Capital (to Risk-Weighted Assets)	$	60,433,556		12.4	%	$	29,268,955		>6.0	%	$	39,025,273		>8.0	%
Tier 1 Capital (to Average Assets)*	$	60,433,556		9.1	%	$	26,659,975		>4.0	%	$	33,324,969		>5.0	%

*Average assets are based on the most recent quarter’s adjusted average total assets.

Wisconsin law provides that state chartered banks may declare and pay dividends out of undivided profits but only after provision has been made for all expenses, losses, required reserves, taxes and interest accrued or due from the bank. Payment of dividends in some circumstances may require the written consent of the Wisconsin Department of Financial Institutions –Division of Banking (“WDFI”).

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Exhibit 99.4

UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIALINFORMATION

The following unaudited pro forma condensed combined consolidated financial statements are based on the historical consolidated financial statements of Bank First Corporation (“Bank First”) and Denmark Bancshares, Inc. (“Denmark”) and are adjusted to give effect to the merger of Denmark with and into Bank First on August 12, 2022 (the “Merger”). The unaudited pro forma condensed combined consolidated balance sheet as of December 31, 2021 is presented as if the merger had occurred on December 31, 2021. The unaudited pro forma condensed combined consolidated balance sheet as of June 30, 2022 is presented as if the merger had occurred on June 30, 2022. The unaudited pro forma condensed combined consolidated statements of income for the year ended December 31, 2021 and for the six month period ended June 30, 2022 are presented as if the merger had occurred on January 1, 2021.

The unaudited pro forma condensed combined consolidated financial statements give effect to the acquisition of Denmark as business combinations under GAAP. Accordingly, all assets and liabilities were recorded at estimated fair value. Pro forma adjustments are included only to the extent they are (i) directly attributable to the acquisition, (ii) factually supportable and (iii) with respect to the unaudited pro forma condensed combined consolidated statement of income, expected to have a continuing impact on the combined results. The pro forma adjustments are based on estimates made for the purpose of preparing these pro forma statements and are described in the accompanying notes. Bank First’s management believes that the estimates used in these pro forma financial statements are reasonable under the circumstances.

The pro forma adjustments included herein are subject to change as additional information becomes available and additional analyses are performed. The final allocation of the purchase price will be determined after further valuation analyses under GAAP are performed with respect to the fair values of certain tangible and intangible assets and liabilities as of the date of acquisition. The final adjustments may be materially different from the unaudited pro forma adjustments presented herein. In addition, the pro forma financial statements do not include the effects of any potential cost savings which management believes will result from combining certain operating procedures.

Bank First anticipates that the acquisition of Denmark will provide the combined company with the ability to better serve its customers, reach new customers and reduce operating expenses. In addition, certain subjective estimates have been utilized in determining the pro forma adjustments applied to the historical results of operations of Denmark. The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of expected cost savings or opportunities to earn additional revenue and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had Bank First and Denmark been combined during these periods.

The unaudited pro forma condensed combined consolidated financial statements are provided for informational purposes only. The unaudited pro forma condensed combined consolidated financial statements are not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the mergers been completed as of the dates indicated or that may be achieved in the future. The preparation of the unaudited pro forma condensed combined consolidated financial statements and related adjustments required management to make certain assumptions and estimates. The unaudited pro forma condensed combined consolidated financial information has been derived from, and should be read in conjunction with, the historical consolidated financial statements and related notes included in Bank First’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and Bank First’s Quarterly Report on Form 10-Q for the six months ended June 30, 2022, as well as Denmark’s historical consolidated financial statements and related notes for the year ended December 31, 2021 and for the six months ended June 30, 2022 which are included as Exhibit 99.2 and Exhibit 99.3, respectively, to this Current Report filed on Form 8-K/A.

BANK FIRST CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATEDBALANCE SHEET (in Thousands)

AS OF JUNE 30, 2022

	Bank First			Denmark			Combined			Pro Forma Adjustments			Pro Forma Combined
Assets
Cash and Cash equivalents	$	43,985		$	166,110		$	210,095		$	(10,395	)(a)	$	199,700
Securities Held-to-Maturity		33,867			-			33,867			-			33,867
Securities Available-for-Sale		292,426			30,882			323,308			(256	)(b)		323,052
Loans Held for Sale		742			65			807			-			807
Loans Receivable, Net of Unearned Income		2,387,618			465,576			2,853,194			(8,197	)(c)		2,844,997
Allowance for Loan Losses		(22,699	)		(7,723	)		(30,422	)		7,723	(d)		(22,699	)
Loans Receivable, Net		2,364,919			457,853			2,822,772			(474	)		2,822,298
Premises and Equipment		50,608			5,304			55,912			-			55,912
Cash Value of Life Insurance		32,275			13,196			45,471			-			45,471
Other Real Estate Owned		-			-			-			-			-
Goodwill		55,357			-			55,357			54,379	(e)		109,736
Core Deposit Intangible, net		3,448			-			3,448			14,751	(f)		18,199
Mortgage Servicing Rights		6,977			1,061			8,038			-			8,038
Other Assets		76,423			7,027			83,450			-			83,450
Total Assets	$	2,961,027		$	681,498		$	3,642,525		$	58,005		$	3,700,530
Liabilities
Noninterest Bearing Deposits	$	819,868		$	161,368		$	981,236		$	-		$	981,236
Interest Bearing Deposits		1,781,609			448,048			2,229,657			235	(g)		2,229,892
Total Deposits		2,601,477			609,416			3,210,893			235			3,211,128
Securities sold under repurchase agreements		16,125			-			16,125			-			16,125
Borrowings		19,235			865			20,100			-			20,100
Other Liabilities		10,028			3,428			13,456			3,726	(h)		17,182
Total Liabilities		2,646,865			613,709			3,260,574			3,961			3,264,535
Shareholders' Equity
Total Shareholders' Equity		314,162			67,789			381,951			54,044	(i)		435,995
Total Liabilities and Shareholders' Equity	$	2,961,027		$	681,498		$	3,642,525		$	58,005		$	3,700,530

Notes

a.	Includes the impact of an estimated $6.4 million (net of tax) in transaction expenses remaining to be incurred as of June 30,<br>2022, and $4.0 million in cash consideration.
b.	Reflects the fair value adjustment for current market value of purchased portfolio investments.
---	---
c.	Reflects an estimate of fair value adjustments for credit quality and interest rates related to Denmark's loan portfolio which are<br>required under purchase accounting rules.
---	---
d.	Reflects the reversal of Denmark's loan loss reserve as required under purchase accounting rules.
---	---
e.	It is anticipated that this acquisition will create an additional $54.4 million in goodwill, subject to ongoing impairment analysis.
---	---
f.	It is anticipated that this acquisition will create an additional $14.8 million in core deposit intangible. We anticipate amortizing<br>this over a ten year period.
---	---
g.	Reflects an estimate of fair value adjustments for interest rates related to Denmark's time deposits.
---	---
h.	It is anticipated that the entries required by purchase accounting rules will cause a deferred tax liability of $3.7 million.
---	---
i.	Reflects $6.4 million needed to pay remaining transaction expenses and $4.0 million for the cash component of the acquisition consideration.<br>Also reflects the equity impact of the other fair value adjustments required by purchase accounting rules.
---	---

BANK FIRST CORPORATION AND SUBSIDIARIESUNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED BALANCE SHEET (in Thousands)AS OF DECEMBER 31, 2021

	Bank First			Denmark			Combined			Pro Forma Adjustments			Pro Forma Combined
Assets
Cash and Cash equivalents	$	296,860		$	151,155		$	448,015		$	(12,695	)(a)	$	435,320
Securities Held-to-Maturity		5,911			-			5,911			-			5,911
Securities Available-for-Sale		212,689			36,462			249,151			(256	)(b)		248,895
Loans Held for Sale		786			82			868			-			868
Loans Receivable, Net of Unearned Income		2,235,514			479,057			2,714,571			(8,197	)(c)		2,706,374
Allowance for Loan Losses		(20,315	)		(7,741	)		(28,056	)		7,741	(d)		(20,315	)
Loans Receivable, Net		2,215,199			471,316			2,686,515			(456	)		2,686,059
Premises and Equipment		49,461			5,578			55,039			-			55,039
Cash Value of Life Insurance		31,897			13,019			44,916			-			44,916
Other Real Estate Owned		150			-			150			-			150
Goodwill		55,357			-			55,357			54,379	(e)		109,736
Core Deposit Intangible, net		4,035			-			4,035			14,751	(f)		18,786
Mortgage Servicing Rights		5,016			1,083			6,099			-			6,099
Other Assets		60,191			8,949			69,140			-			69,140
Total Assets	$	2,937,552		$	687,644		$	3,625,196		$	55,723		$	3,680,919
Liabilities
Noninterest Bearing Deposits	$	799,936		$	155,292		$	955,228		$	-		$	955,228
Interest Bearing Deposits		1,728,504			459,205			2,187,709			235	(g)		2,187,944
Total Deposits		2,528,440			614,497			3,142,937			235			3,143,172
Securities sold under repurchase agreements		41,122			-			41,122			-			41,122
Borrowings		25,511			933			26,444			-			26,444
Other Liabilities		19,826			4,188			24,014			3,726	(h)		27,740
Total Liabilities		2,614,899			619,618			3,234,517			3,961			3,238,478
Shareholders' Equity
Total Shareholders' Equity		322,653			68,026			390,679			51,762	(i)		442,441
Total Liabilities and Shareholders' Equity	$	2,937,552		$	687,644		$	3,625,196		$	55,723		$	3,680,919

Notes

a.	Includes the impact of an estimated $8.7 million (net of tax) in transaction expenses remaining to be incurred as of December 31,<br>2021, and $4.0 million in cash consideration.
b.	Reflects the fair value adjustment for current market value of purchased portfolio investments.
---	---
c.	Reflects an estimate of fair value adjustments for credit quality and interest rates related to Denmark's loan portfolio which are<br>required under purchase accounting rules.
---	---
d.	Reflects the reversal of Denmark's loan loss reserve as required under purchase accounting rules.
---	---
e.	It is anticipated that this acquisition will create an additional $54.4 million in goodwill, subject to ongoing impairment analysis.
---	---
f.	It is anticipated that this acquisition will create an additional $14.8 million in core deposit intangible. We anticipate amortizing<br>this over a ten year period.
---	---
g.	Reflects an estimate of fair value adjustments for interest rates related to Denmark's time deposits.
---	---
h.	It is anticipated that the entries required by purchase accounting rules will cause a deferred tax liability of $3.7 million.
---	---
i.	Reflects $8.7 million needed to pay remaining transaction expenses and $4.0 million for the cash component of the acquisition consideration.<br>Also reflects the equity impact of the other fair value adjustments required by purchase accounting rules.
---	---

BANK FIRST CORPORATION AND SUBSIDIARIESUNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED CONDENSED INCOME STATEMENT(in Thousands, except share and per share amounts)FOR THE SIX MONTHS ENDED JUNE 30, 2022

	Bank First			Denmark			Pro Forma Adjustments				Pro Forma Combined
Interest Income	$	50,040		$	10,656		$	1,025		(a)	$	61,721
Interest Expense		(4,270	)		(844	)		76		(b)		(5,038	)
Net Interest Income		45,770			9,812			1,101				56,683
Provision for Loan Losses		(1,700	)		-			-				(1,700	)
Noninterest Income		10,785			1,506			-				12,291
Noninterest Expense (e)		(25,950	)		(8,243	)		(3,997	)	(c),(d)		(38,190	)
Income before Income Tax Expense		28,905			3,075			(2,897	)			29,084
Income Tax Expense		(7,068	)		(776	)		724		(f)		(7,120	)
Net Income	$	21,837		$	2,299		$	(2,172	)		$	21,964
Weighted average common shares outstanding (basic and diluted)		7,557,909			3,123,543			1,586,526		(g)		9,144,435
Basic and diluted earnings per common share	$	2.89		$	0.74						$	2.40

Notes

a.	Adjustment to interest income is based on estimate of accretion of fair market valuation of acquired loans, assuming a four year average<br>maturity of the portfolio.
b.	Adjustment to interest expense is based on accretion of the fair market valuation of time deposits recognized over the weighted life<br>of the portfolio.
---	---
c.	Estimate of amortization of the core deposit intangible of $1.3 million based on a life of ten years utilizing the sum-of-the-year's<br>digits amortization method.
---	---
d.	Represents $2.6 million of merger related expenses anticipated to be incurred by Bank First after the merger close.
---	---
e.	While it is anticipated that this transaction will yield opportunities for cost savings through operating synergies, these have not<br>been incorporated into the pro forma adjustments.
---	---
f.	Income taxes were adjusted for the impact of purchase accounting adjustments and merger related expenses being subject to taxability<br>and tax deductibility at Bank First's estimated statutory effective tax rate of 27%, further adjusted for the non-deductibility of certain<br>merger related expenses for tax purposes.
---	---
g.	Estimated shares to be issued to Denmark shareholders as part of consideration.
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BANK FIRST CORPORATION AND SUBSIDIARIESUNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED CONDENSED INCOME STATEMENT(in Thousands, except share and per share amounts)FOR THE YEAR ENDED DECEMBER 31, 2021

	Bank First			Denmark			Pro Forma Adjustments				Pro Forma Combined
Interest Income	$	98,386		$	22,866		$	2,049		(a)	$	123,301
Interest Expense		(8,304	)		(2,605	)		152		(b)		(10,757	)
Net Interest Income		90,082			20,261			2,201				112,544
Provision for Loan Losses		(3,100	)		-			-				(3,100	)
Noninterest Income		23,518			4,842			-				28,360
Noninterest Expense (e)		(50,533	)		(16,370	)		(5,338	)	(c), (d)		(72,241	)
Income before Income Tax Expense		59,967			8,733			(3,137	)			65,563
Income Tax Expense		(14,523	)		(2,235	)		784		(f)		(15,974	)
Net Income	$	45,444		$	6,498		$	(2,353	)		$	49,589
Weighted average common shares outstanding (basic and diluted)		7,680,896			3,138,393			1,586,526		(g)		9,267,422
Basic and diluted earnings per common share	$	5.92		$	2.07						$	5.35

Notes

a.	Adjustment to interest income is based on estimate of accretion of fair market valuation of acquired loans, assuming a four year average<br>maturity of the portfolio.
b.	Adjustment to interest expense is based on accretion of the fair market valuation of time deposits recognized over the weighted life<br>of the portfolio.
---	---
c.	Estimate of amortization of the core deposit intangible of $2.7 million based on a life of ten years utilizing the sum-of-the-year's<br>digits amortization method.
---	---
d.	Represents $2.6 million of merger related expenses anticipated to be incurred by Bank First after the merger close.
---	---
e.	While it is anticipated that this transaction will yield opportunities for cost savings through operating synergies, these have not<br>been incorporated into the pro forma adjustments.
---	---
f.	Income taxes were adjusted for the impact of purchase accounting adjustments and merger related expenses being subject to taxability<br>and tax deductibility at Bank First's estimated statutory effective tax rate of 27%, further adjusted for the non-deductibility of certain<br>merger related expenses for tax purposes.
---	---
g.	Estimated shares to be issued to Denmark shareholders as part of consideration.
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