General

Management's discussion and analysis of the financial condition and results of
operations at and for the three and nine months ended September 30, 2022 and
2021 is intended to assist in understanding the financial condition and results
of operations of the Company. The information contained in this section should
be read in conjunction with the unaudited consolidated financial statements and
the notes thereto, appearing in Part I, Item 1 of this quarterly report on Form
10-Q and with the audited consolidated financial statements and notes thereto at
and for the year ended December 31, 2021, appearing in the Annual Report on Form
10-K for the fiscal year ended December 31, 2021.

Caution Regarding Forward-Looking Statements

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

? statements of our objectives, intentions and expectations;

? statements regarding our business plans, prospects, growth and

strategies;

? statements regarding the quality of assets in our loan and investment portfolios;

and

? estimates of our risks and future costs and benefits.


These forward-looking statements are based on our current beliefs and
expectations and are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are beyond our
control. In addition, these forward-looking statements are subject to
assumptions with respect to future business strategies and decisions that are
subject to change. We are under no duty to and do not take any obligation to
update any forward-looking statements after the date of this Form 10-Q except as
may be required by applicable law or regulation.

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

? risks associated with generalized inflation or deflation;

? risks of global labor pressures and continued global supply chain disruptions;

changes in interest rates generally, including changes in

differences between short-term and long-term and deposit interest rates

? interest rates, which may affect our net interest margin and sources of funding,

and our ability to originate portfolio loans and sell into the secondary sector

market;

adverse changes in the financial industry, securities, credit and

? local real estate markets (including property values), or in secondary

mortgage markets;

? risks related to the valuation of mortgage management rights, in particular

changes in prepayment periods due to changes in interest rates;

? the use of estimates to determine the fair value of certain of our assets, which

may turn out to be incorrect and lead to significant declines in valuations;

the extent, duration and severity of the COVID-19 pandemic and its effects on our

? business and operations, our customers, including their ability to make timely

loan repayments, our service providers, and on the economy and financial markets;


 ? Government action in response to the COVID-19 pandemic and its effect on our
   business and operations;


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? our ability to manage our operations under current economic conditions

nationally and in our market area;

? we may experience increased charges in the future;

? we may lose customers to our competitors;

significant increases in our loan losses, in particular due to our

? inability to resolve classified and non-performing assets or reduce risk

associated with our loans, and management’s assumptions in determining the

the adequacy of the allowance for loan losses;

credit risks of lending activities, including changes in the level and trend of

? delinquencies and loan write-offs and in our provision for loan losses and

provision for loan losses;

? competition among depository institutions and other financial institutions;

? our ability to successfully implement our business plan and grow our

franchising to improve profitability;

? our ability to attract and maintain deposits, and obtain FHLB-Cincinnati

advances;

fluctuations in demand for loans, which may be affected by the number of

? unsold homes, land and other properties in our market areas and by lower

the value of real estate in our market area;

? changes in consumer spending, borrowing and saving habits;

? risks related to a high concentration of loans secured by real estate located

in our market area;

the results of reviews by our regulators, including the possibility that

our regulators may, among other things, ask us to increase our allocation

? for loan losses, depreciate assets, change our regulatory capital position,

limit our ability to borrow funds or maintain or increase deposits, or prohibit

prevent us from paying dividends, which could adversely affect our dividends and

earnings;

? changes in the level of government support for housing finance;

? our ability to successfully enter new markets and capitalize on growth

Opportunities;

changes in laws or government regulations or policies affecting

institutions that could lead to, among other things, an increase in deposits

? insurance premiums and contributions, increased capital requirements, and

increased regulatory fees and compliance costs, and the resources available to us

available to deal with these changes;

changes in accounting policies and practices, as they may be adopted by the bank

? regulatory bodies, Financial Accounting Standards Boardthe titles

and Exchange fee and the Public Company Accounting Oversight Council;

changes to our compensation and benefit plans, and our ability to retain

? members of our senior management team and to meet staffing needs in response

to request products or to implement our strategic plans;

? delinquent loans and changes in the underlying cash flows of our borrowers;

? our ability to control costs and expenses, in particular those related to

operating as a publicly traded company;

? the risk of failure or security breach of the IT systems on which we depend

or other cybersecurity risks;


 ? the ability of key third-party service providers to perform their obligations
   to us;


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? changes in the financial condition or future prospects of issuers of securities

that we have;

other economic, competitive, governmental, regulatory and operational factors

? affecting our operations, prices, products and services described elsewhere in

this quarterly report and in our annual report on Form 10-K for the year ended

December 31, 2021.

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

Critical accounting policies

There are no material changes to critical accounting policies disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021.

                         Coronavirus (COVID-19) Impact

In March 2020, the COVID-19 coronavirus was identified as a global pandemic and
began affecting the health of large populations around the world. As a result of
the spread of COVID-19, economic uncertainties arose which can ultimately affect
the financial position, results of operations and cash flows of the Company as
well as the Company's customers. In response to economic concerns over COVID-19,
in March 2020 the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
was passed into law by Congress. The CARES Act included relief for individual
Americans, health care workers, small businesses and certain industries hit hard
by the COVID-19 pandemic. The 2021 Consolidated Appropriations Act, passed by
Congress in December 2020, extended certain provisions of the CARES Act
affecting the Company into 2021.

The CARES Act included several provisions designed to help financial
institutions like the Company in working with their customers. Section 4013 of
the CARES Act, as extended until January 1, 2022, allowed a financial
institution to elect to suspend generally accepted accounting principles and
regulatory determinations with respect to qualifying loan modifications related
to COVID-19 that would otherwise be categorized as a troubled debt restructuring
(TDR).

The Company has taken advantage of this provision to extend certain payment
modifications to loan customers in need. As of December 31, 2021, the Company
had no loans that were modified under the CARES Act guidance, that remain on
modified terms.

Comparison of the financial situation at September 30, 2022 and December 31, 2021

Total Assets. Total assets were $292.3 million at September 30, 2022, an
increase of $40.8 million, or 16.2% from December 31, 2021. The increase was
primarily due to an increase in loans, net of allowances, of $47.8 million,
partially offset by a decrease in cash and cash equivalents of $4.5 million and
a decrease in loans held for sale of $3.2 million. The increase in loans, net of
allowances, was primarily due to the shift in demand from 30-year and 15-year
fixed rate loans to adjustable-rate loan products. As a result, lower rate
adjustable-rate mortgages (ARM loans), particularly 5/1, 7/1 and 10/1 ARMs were
more attractive to borrowers during the nine months ended September 30, 2022.
The Company, generally, does not sell ARM loans but maintains them in the loan
portfolio.

Total asset growth, and loan growth in particular, are not anticipated to
continue to increase at the pace experienced during the nine months ended
September 30, 2022, given expected continued market interest rates. The Company
has adjusted mortgage pricing to increase secondary market sales while slowing
loan portfolio growth to match funding capacity.

Cash and Cash Equivalents. Cash and cash equivalents decreased $4.5 million, or
20.8%, to $17.3 million at September 30, 2022, from $21.9 million at December
31, 2021. The decrease in cash and cash equivalents was primarily attributable
to funding the net increase in loans, net of allowances.

Available-for-Sale Debt Securities. Available-for-sale debt securities, which
consisted entirely of U.S. government-sponsored mortgage-backed securities,
decreased $1.1 million or 13.9%, to $6.8 million at September 30, 2022 from $7.9
million at December 31, 2021, due primarily to the principal repayments on the
securities and the $509,000 increase in the unrealized loss during the nine
months ended September 30, 2022.

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Net Loans. Net loans increased $47.8 million, or 24.4%, to $243.3 million at
September 30, 2022 from $195.5 million December 31, 2021. The increase in loans
was primarily attributable to a $34.8 million or 49.5%, increase in one to four
family owner-occupied mortgage loans. Nonresidential mortgage loans increased
$8.3 million, or 19.9%. Multifamily loans increased $4.5 million, or 8.3%. One
to four family nonowner-occupied mortgage loans increased $2.9 million, or
28.0%. The increase in one to four family residential loans is due to the shift
in loan originations from fixed rate loans sold to the secondary market to 5/1,
7/1 and 10/1 adjustable-rate mortgages. The shift from the origination of fixed
rate loans to be sold in the secondary market to adjustable-rate loans to be
held in our portfolio is expected to negatively impact our ability to generate
gains on the sales of loans. However, the increase in the origination of
adjustable-rate mortgages is expected to positively impact our interest income
in a rising interest rate environment. The undisbursed portion of construction
loans increased $4.4 million, or 36.6%, to $16.6 million. The undisbursed
portions of the loans are expected to be disbursed in the next six to eighteen
months as construction is completed. However, residential construction loan
disbursements have been slower than expected due to supply chain and labor
shortage issues.

Loans Held for Sale. We currently sell certain fixed-rate, 15- and 30-year term,
one-to-four family mortgage loans. We have sold loans on both a
servicing-released and servicing-retained basis to: the FHLB-Cincinnati, through
its mortgage purchase program; Freddie Mac; and certain private sector
third-party buyers. Loans held for sale decreased $3.2 million, or 39.5%, to
$4.9 million at September 30, 2022 from $8.1 million at December 31, 2021.
Market interest rates increased during the period which had a negative impact on
our ability to originate loans for sale in the secondary market. Continued
increases in market interest rates is expected to continue and hamper our
ability to generate gains on sales of loans.

During the nine months ended September 30, 2022, we had proceeds of $107.0
million from sales of one-to- four family residential loans, on both a
servicing-retained and servicing-released basis. Our volume of loan sales
declined by $112.5 million, or 51.2%, from $219.4 million for the nine months
ended September 30, 2021 to $107.0 million for the nine months ended September
30, 2022.

Assets held for sale. During the quarter ended June 30, 2022, the Company filed
notice with the Office of the Comptroller of the Currency ("OCC") that the
Covington, Kentucky branch location would close on August 12, 2022. On that
date, the deposit accounts of the Covington branch were transferred to the
Florence, Kentucky location. The Company has accepted a purchase offer for the
property and the transaction is expected to be completed in November 2022. The
Covington branch location is carried at the lower of cost or market with a value
of $691,451.

Mortgage Servicing Rights. We recognize mortgage servicing rights when loans are
sold on a servicing-retained basis, which are initially, and subsequently,
carried at fair value based upon independent third-party appraisals. The fair
value of our mortgage servicing rights, based upon the most recent independent
appraisal, increased $899,000, or 40.3%, to $3.1 million at September 30, 2022,
from $2.2 million at December 31, 2021, primarily due to slower prepayment speed
assumptions. Generally, estimated mortgage prepayment speeds decrease when
market interest rates increase, resulting in an increase in the fair value of
mortgage servicing rights. A slowdown in mortgage refinance activity would be
expected to have a favorable impact on the fair value of our mortgage servicing
rights. The balance of residential mortgage loans serviced primarily for Freddie
Mac and the FHLB of Cincinnati decreased to $269.6 million at September 30, 2022
compared to $282.0 at December 31, 2021. New mortgage servicing rights recorded
for the nine months ended September 30, 2022 were $119,700. The change in fair
value of mortgage servicing rights was an increase of $779,400 for the nine
months ended September 30, 2022. The appraised value of the mortgage servicing
rights increased 37 basis points to 1.16% at September 30, 2022 from 0.79% at
December 31, 2021.

Deposits. Deposits increased $23.8 million, or 11.6%, to $228.3 million at
September 30, 2022 from $204.5 million at December 31, 2021. The increase in
deposits was primarily due to an increase of $23.3 million, or 28.0%, in
certificates of deposit, primarily obtained through the National CD Rateline
deposit listing service. The increase in National CD Rateline funds was used
primarily to fund loan growth during the nine months ended September 30, 2022.
Demand deposits increased $366,000, or 0.8% and savings deposits were stable at
$75.7 million.

Borrowings. Federal Home Loan Bank advances increased $20.0 million at September
30, 2022. The Company had no outstanding borrowings at December 31, 2021. The
increase in FHLB advance borrowing was used to fund the increase in loans.

Stockholders' Equity. Stockholders' equity decreased $3.2 million, or 7.5%, to
$39.7 million at September 30, 2022 from $42.9 million at December 31, 2021. The
decrease was primarily due to a one-time, special dividend of $1.00 per share,
totaling $3.0 million, paid to shareholders during the nine months ended
September 30, 2022 and share repurchases totaling $1.6 million. Accumulated
other comprehensive loss increased $350,000 due to increased unrealized losses
in the fair value of the investment

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portfolio due to the increase in market interest rates. Investment losses are
primary concentrated in one monthly floating rate security tied to the secured
overnight funding rate (SOFR). All other investment securities are monthly
adjustable-rate securities tied to the one-month T-Bill, one month LIBOR or the
one-year Treasury index. These decreases were partially offset by net income of
$1.3 million for the nine months ended September 30, 2022.

Comparison of operating results for the three months ended September 30, 2022
and September 30, 2021

General. The Company recorded net income of $868,000 for the quarter ended
September 30, 2022, an increase of $962,000 compared to a net loss of $95,000
for the quarter ended September 30, 2021. The increase in net income was due
primarily to a $227,000 increase in net interest income and a $1.2 million
decrease in noninterest expense, partially offset by a $153,000 decrease in
noninterest income, a $21,000 increase in the provision for loan losses and a
$247,000 increase in the provision for income taxes.

Interest and Dividend Income. Interest income increased $460,000, or 20.4%, to
$2.7 million for the quarter ended September 30, 2022 compared to the comparable
quarter in 2021. Interest income on portfolio loans increased $356,000, or
16.6%, to $2.5 million for the three months ended September 30, 2022. The
average balance of portfolio loans during the three months ended September 30,
2022 increased $48.4 million to $242.8 million. The increase in average
portfolio loans outstanding was concentrated in one to four residential,
nonresidential mortgage loans and multifamily loans. The average yield on loans
decreased 29 basis points to 4.12% for the three months ended September 30, 2022
from 4.41% for the three months ended September 30, 2021. The average balance of
loans held for sale decreased $8.1 million, or 59.7%, during the quarter ended
September 30, 2022 compared to the same quarter in 2021.

Interest income on other interest-earning assets increased $80,000, or 533.3%,
to $95,000 for the three months ended September 30, 2022 compared to the same
period in 2021. The yield on other interest-bearing assets increased 228 basis
points to 2.70% for the three months ended September 30, 2022. The average
balance on other interest-earning assets decreased $275,000 to $14.1 million.
The balance on Federal Home Loan Bank Stock increased to $4.2 million. The
dividend rate paid on FHLB stock was 5.00% at September 30, 2022. Interest
income on securities, other interest-bearing assets and FHLB stock has been
favorably impacted by the increase in short-term market interest rates. The
investment securities portfolio is composed of monthly adjustable-rate
securities tied to the one-month T-Bill, one month LIBOR or the one-year
Treasury index.

Interest Expense. Total interest expense increased $233,000, or 73.2%, to
$551,000 for the quarter ended September 30, 2022 from $318,000 for the quarter
ended September 30, 2021. Interest expense on borrowings increased $28,000, or
37.8%. Interest expense on deposits increased $205,000, or 84.0%, to $449,000
for the quarter ended September 30, 2022 compared to the quarter ended September
30, 2021. The increase in deposit interest expense between the comparable
quarters in 2022 from 2021 was primarily due to a 23 basis point increase in the
average cost of deposits and a $51.4 million increase in the average balance of
deposits during the third quarter of 2022 compared to the same quarter in 2021.

Interest expense on savings accounts increased $125,000 during the quarter ended
September 30, 2022 compared to the quarter ended September 30, 2021, due to an
increase of $23.6 million in average savings balances. The average cost of
savings accounts increased 57 basis points to 0.76% during the quarter ended
September 30, 2022. The increase in balances was primarily attributable to
deposit relationships established by two local municipalities. The average cost
of interest-bearing demand deposits was 15 basis points for the quarter ended
September 30, 2022 compared to 16 basis points for the quarter ended September
30, 2021. The average balances in interest-bearing demand accounts increased
$4.8 million during the three months ended September 30, 2022 compared to
September 30, 2021. Interest expense on certificates of deposit increased
$79,000, or 38.3%. The average cost of certificates increased 7 basis points to
1.13%. The average balance of certificates of deposit increased $23.0 million to
$100.6 million for the three months ended September 30, 2022 compared to the
same period ended September 30, 2021.

Interest expense on FHLB advances increased $28,000, or 37.8%, to $102,000 for
the quarter ended September 30, 2022 from the quarter ended September 30, 2021.
The average balance of advances decreased $11.4 million, or 38.9%, for the
quarter ended September 30, 2022. The average cost of FHLB borrowings increased
176 basis points to 2.77% for the quarter ended September 30, 2022.

Net Interest Income. Net interest income increased $227,000, or 11.7%, for the
quarter ended September 30, 2022 compared to the same quarter in 2021. The
interest rate spread decreased to 3.04% for the quarter ended September 30, 2022
compared to 3.18% for the quarter ended September 30, 2021. The net interest
margin decreased 12 basis points to 3.18% for the quarter ended September 30,
2022, compared to 3.30% for the quarter ended September 30, 2021.

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Provision for Loan Losses. Based on our analysis, we recorded a provision for
loan losses of $21,000 for the three months ended September 30, 2022. The
allowance for loan losses was $1.8 million, or 0.70% of total loans, at
September 30, 2022, compared to $1.7 million, or 0.81% of total loans, at
September 30, 2021. Given the growth in the loan portfolio during the nine
months ended September 30, 2022, an increase in the allowance was warranted.
Total past due loans were $54,000, or 0.02% of loans at September 30, 2022. The
Company had no net charge-offs during the three-month period ended September 30,
2022. As a percentage of nonperforming loans, the allowance for loan losses was
3,416.3% at September 30, 2022.

The credit quality of the Bank's loan portfolio remained consistent, as measured
by low levels of nonperforming and delinquent loans, classified loans and
impaired loans. As of September 30, 2022, we had no loans deferring loan
payments under a forbearance agreement. Management continues to monitor the loan
portfolio closely in recognition of the prevailing economic uncertainties.

The allowance for loan losses reflects the estimate we believe to be adequate to
cover probable losses which were inherent in the loan portfolio at September 30,
2022. While we believe the estimates and assumptions used in our determination
of the adequacy of the allowance are reasonable, such estimates and assumptions
could be proven incorrect in the future, and the actual amount of future
provisions may exceed the amount of past provisions, and the increase in future
provisions that may be required may adversely impact our financial condition and
results of operations. In addition, bank regulatory agencies periodically review
our allowance for loan losses and may require an increase in the provision for
possible loan losses or the recognition of further loan charge-offs, based on
judgments different than those of management.

Non-Interest Income. Non-interest income decreased $153,000, or 7.2%, to $2.0
million for the quarter ended September 30, 2022 from $2.1 million for the
comparable quarter in 2021. The gain on sale of loans decreased $1.5 million, or
69.6%, to $641,000 for the quarter ended September 30, 2022 from $2.1 million
for the comparable quarter in 2021. The volume of loans sold during the three
months ended September 30, 2022 totaled $33.2 million, a decrease of $38.4
million, or 53.6%, from the $71.6 million loan sales volume during the three
months ended September 30, 2021. Net mortgage derivative income was $315,000 for
the quarter ended September 30, 2022, compared to net mortgage derivative
expense of $31,000 for the quarter ended September 30, 2021. The increase in
market interest rates negatively impacted gain on sale of loans in the quarter
ended September 30, 2022 and is likely to have a continuing negative impact on
noninterest income for the remainder of 2022.

Net mortgage servicing fees increased $932,000 for the three months ended
September 30, 2022 compared to the same period in 2021. The fair value of
mortgage servicing rights increased $533,000 for the quarter ended September 30,
2022 compared to a decrease in the fair value of $399,000 for the comparable
quarter in 2021. The change in fair value of mortgage servicing rights is highly
dependent on estimated changes in mortgage prepayment speeds. Generally,
estimated mortgage prepayment speeds decrease when market interest rates
increase, resulting in an increase in the fair value of mortgage servicing
rights. The value of the mortgage servicing rights was increased by the
recognition of $18,000 in new mortgage servicing rights for the quarter ended
September 30, 2022 compared to $200,000 in new mortgage servicing rights for the
quarter ended September 30, 2021. The increase in market interest rates is
likely to have a positive impact on the value of mortgage servicing rights as
loan prepayments slow, however, increasing market interest rates are likely to
decrease mortgage origination volumes and negatively impact the level of new
mortgage servicing rights.

Non-Interest Expense. Non-interest expense decreased $1.2 million, or 27.8%, to
$3.0 million for the quarter ended September 30, 2022, from the comparable
quarter in 2021, primarily due to the decrease of $763,000 in FHLB advance
prepayment penalties incurred during the comparable period in 2021. Salaries and
employee benefits decreased $294,000, or 13.5%, to $1.9 million for the quarter
ended September 30, 2022 from $2.2 million for the comparable quarter in 2021,
due primarily to decreased loan officer commission expense and mortgage banking
staff reductions. Loan costs decreased $44,000, or 22.5% due to lower mortgage
origination volumes. Advertising expense decreased $49,000, or 48.1%, due
primarily to fewer checking account marketing and direct-mail marketing campaign
expenses. Professional fees increased $35,000, primarily due to legal fees
expensed for a lawsuit challenging Ohio sales tax on data processing services.

Federal Income Taxes. The provision for federal income taxes increased $247,000
for the three months ended September 30, 2022, compared to the same period in
2021. The increase was due primarily to a $1.2 million increase in pretax
earnings period-to-period. The effective tax rates were 21.6% and 7.5% for the
three months ended September 30, 2022 and 2021, respectively. The effective tax
rate for the three months ended September 30, 2021 was decreased by a tax
accrual adjustment.

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Average Balances and Yields. The following tables set forth average balance
sheets, average yields and costs, and certain other information for the periods
indicated. No tax-equivalent yield adjustments have been made. Any adjustments
necessary to present yields on a tax-equivalent basis are insignificant. All
average balances are monthly average balances. Management does not believe that
the use of month-end balances instead of daily average balances has caused any
material differences in the information presented. Non-accrual loans were
included in the computation of average balances only. The yields set forth below
include the effect of deferred fees, discounts, and premiums that are amortized
or accreted to interest income or interest expense.

                                                                       For 

three months ended September 30,

                                                                  2022                                         2021
                                                   Average                                      Average
                                                 Outstanding                    Average       Outstanding                    Average
                                                   Balance        Interest     Yield/Rate       Balance        Interest     Yield/Rate

Interest-earning assets:
Loans                                           $     242,778    $    2,499          4.12 %  $     194,341    $    2,143          4.41 %
Loans held for sale                                     5,455            60          4.40           13,537            84          2.48
Securities                                              6,904            45          2.61            8,829            14          0.63
Fed Funds                                               2,862            18          2.52            4,305             1          0.09
Other (1)                                              14,062            95          2.70           14,337            15          0.42
Total interest-earning assets                         272,061         2,717

3.99 235,349 2,257 3.84 Non-interest bearing assets

                            15,390                                       15,612
Total assets                                    $     287,451                                $     250,961

Interest-bearing liabilities:
Savings                                         $      78,956           151          0.76    $      55,336            26          0.19
Interest-bearing demand                                35,525            13          0.15           30,699            12          0.16
Certificates of deposit                               100,630           285
         1.13           77,666           206          1.06
Total deposits                                        215,111           449          0.83          163,701           244          0.60
FHLB borrowings                                        18,000           102          2.27           29,441            74          1.01
Total interest-bearing liabilities                    233,111           551          0.95          193,142           318          0.66
Non-interest-bearing demand                            12,735                                       17,566
Other non-interest-bearing liabilities                  4,100                                        5,508
Total non- interest-bearing liabilities                16,835                                       23,074
Total equity                                           37,505                                       34,745
Total liabilities and total equity              $     287,451                                $     250,961
Net interest income                                              $    2,166                                   $    1,939
Net interest rate spread (2)                                                         3.04 %                                       3.18 %
Net interest-earning assets (3)                 $      38,950                                $      42,207
Net interest margin (4)                                                              3.18 %                                       3.30 %
Average interest-earning assets to
interest-bearing liabilities                                                       116.71 %                                     121.85 %


(1) Consisting of FHLB-Cincinnati stock, FHLB DDA, certificates of deposit and cash

reservations.

The net interest rate spread represents the difference between the weighted average yield (2) of interest-bearing assets and the weighted average rate of

interest-bearing liabilities.

(3) Net interest-earning assets represent total interest-earning assets less

total interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average total

interest-bearing assets.

Interest on loans includes loan fee income of $39,000 for the three months ended
September 30, 2022 and $210,000 of loan fee income for the three months ended
September 30, 2021.

Comparison of operating results for the nine months ended September 30, 2022 and
September 30, 2021

General. The Company recorded net income of $1.3 million for the nine months
ended September 30, 2022, a decrease of $26,000, or 2.0%, from the nine-month
period ended September 30, 2021. The decrease in net income was due to a $3.0
million

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decrease in noninterest income, primarily due to a $4.7 million decrease in gain
on sale of loans, and a $155,000 increase in the provision for loan losses,
partially offset by a $1.3 million increase in net interest income and a $1.9
million decrease in noninterest expense.

Interest and Dividend Income. Interest income increased $939,000, or 15.4%, to
$7.0 million for the nine months ended September 30, 2022 compared to September
30, 2021. Interest income on portfolio loans increased $841,000, or 14.6%, to
$6.6 million as of September 30, 2022. The average balance of portfolio loans
during the nine months ended September 30, 2022 increased $40.0 million to
$222.6 million, compared to the nine months ended September 30, 2021. The
increase in average portfolio loans outstanding was primarily concentrated in
one to four family owner-occupied mortgage loans, nonresidential mortgage loans,
multifamily loans, and land and construction loans. The average yield on loans
decreased 25 basis points to 3.94% for the nine months ended September 30, 2022
from 4.19% for the nine months ended September 30, 2021. The average balance of
loans held for sale decreased $7.0 million during the nine months ended
September 30, 2022 compared to the same nine month period in 2021, while the
average yield on loans held for sale increased 147 basis points, to 4.02% for
the nine months ended September 30, 2022 from 2.55% for the same nine months in
2021.

Interest income on securities increased $26,000, or 46.0%, for the nine months
ended September 30, 2022. The yield on securities increased 67 basis points due
to higher market interest rates. The average balance of securities decreased
$1.6 million to $7.3 million at September 30, 2022. The investment securities
portfolio is composed of monthly adjustable-rate securities tied to the one
month T-Bill, one month LIBOR or the one year Treasury index. Interest income on
other interest-earning assets increased $122,000, or 282.4%. The yield on other
interest-bearing assets increased 123 basis points due to a higher dividend rate
paid on FHLB stock and the increase in short term interest rates.

Interest Expense. Total interest expense decreased $313,000, or 23.7%, to $1.0
million for the nine months ended September 30, 2022 from $1.3 million for the
nine months ended September 30, 2021. Interest expense on deposit accounts
decreased $102,000, or 12.9%, to $894,000 for the nine months ended September
30, 2022 compared to the nine months ended September 30, 2021. The decrease in
deposit expense between comparable periods in 2022 from 2021 was primarily due
to an 11 basis point decrease in the average cost of deposits primarily due to
lower market interest rates.

Interest expense on savings increased $177,000, or 236.0%, during the nine
months ended September 30, 2022 compared to the nine months ended September 30,
2021, due to an increase in the average balance of savings accounts of $24.6
million. The average cost of savings accounts increased 24 basis points compared
to the same period ended September 30, 2021. Interest expense on
interest-bearing demand accounts increased $5,000, or 15.2%. The average cost of
interest-bearing demand deposits increased 1 basis point to 15 basis points. The
average balances in interest-bearing demand accounts increased $3.9 million
during the nine months ended September 30, 2022 compared to the same period
ended September 30, 2021. Interest expense on certificates of deposit decreased
$79,000, or 11.6%. The average cost of certificates decreased 47 basis points to
0.89%. The average balance of certificates of deposit increased $24.2 million to
$90.8 million for the nine months ended September 30, 2022 compared to the same
period ended September 30, 2021.

Interest expense on FHLB advances decreased $416,000, or 78.4%, to $114,000 for
the nine months ended September 30, 2022 from the nine months ended September
30, 2021. The average balance of advances decreased $26.0 million, or 76.1%, for
the nine months ended September 30, 2022. The average cost of FHLB borrowings
decreased 21 basis points to 1.86% for the nine months ended September 30, 2022
from 2.07% for the same period in 2021.

Net Interest Income. Net interest income increased $1.3 million, or 26.3%, for
the nine months ended September 30, 2022 compared to the same period in 2021.
The interest rate spread increased to 3.06% for the nine months ended September
30, 2022 compared to 2.62% for the nine months ended September 30, 2021. The net
interest margin increased 38 basis points to 3.17% at September 30, 2021
compared to 2.79% at September 30, 2021.

Provision for Loan Losses. Based on our analysis of the factors described in
"Critical Accounting Policies - Allowance for Loan Losses" we recorded a
provision for loan losses of $155,000 for the nine months ended September 30,
2022. The allowance for loan losses was $1.8 million, or 0.70% of total loans,
at September 30, 2022, compared to $1.7 million, or 0.81% of total loans, at
September 30, 2021. The Company had no net charge-offs during the nine-month
period ended September 30, 2021. Given the growth in the loan portfolio during
the nine months ended September 30,2022, an increase in the allowance was
warranted. Total past due loans were $54,000, or 0.02% of loans at September 30,
2022. The Company had net recoveries of $6,000 during the nine-month

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period ended September 30, 2022. As a percentage of nonperforming loans, the allowance for loan losses was 3,416.3% at September 30, 2022.

The credit quality of the Bank's loan portfolio remained consistent with recent
periods, as measured by low levels of nonperforming and delinquent loans,
classified loans and impaired loans. As of September 30, 2022, we had no loans
deferring loan payments under a forbearance agreement. Management continues to
monitor its loan portfolio closely in recognition of the prevailing economic
uncertainties.

The allowance for loan losses reflects the estimate we believe to be adequate to
cover probable losses which were inherent in the loan portfolio at September 30,
2022. While we believe the estimates and assumptions used in our determination
of the adequacy of the allowance are reasonable, such estimates and assumptions
could be proven incorrect in the future, and the actual amount of future
provisions may exceed the amount of past provisions, and the increase in future
provisions that may be required may adversely impact our financial condition and
results of operations. In addition, bank regulatory agencies periodically review
our allowance for loan losses and may require an increase in the provision for
possible loan losses or the recognition of further loan charge-offs, based on
judgments different than those of management.

Non-Interest Income. Non-interest income decreased $3.0 million, or 39.6%, to
$4.6 million for the nine months ended September 30, 2022 from $7.7 million for
the comparable period in 2021. The gain on sale of loans decreased $4.7 million,
or 68.2%, to $2.2 million for the nine months ended September 30, 2022 from $6.9
million for the comparable nine months in 2021. The volume of loans sold during
the nine months ended September 30, 2022 totaled $107.0 million, a decrease of
$112.4 million, or 51.3%, from the $219.4 million loan sales volume during the
nine months ended September 30, 2021.

Mortgage derivative income was $247,000 for the nine months ended September 30, 2022compared to a charge on mortgage derivatives of $160,000 for September 30, 2021.

Mortgage servicing fee income increased $1.2 million, or 1,137.4%, primarily due
to an increase in the value of mortgage service rights during the nine months
ended September 30, 2022 compared to the same period in 2021. The value of
mortgage servicing rights increased $779,000 for the nine months ended September
30, 2022 compared to a decrease in the fair value of $369,000 for the comparable
period in 2021. The change in fair value of mortgage servicing rights is highly
dependent on estimated changes in mortgage prepayment speeds. Generally,
estimated mortgage prepayment speeds decrease when market interest rates
increase, resulting in an increase in the fair value of mortgage servicing
rights. With the increase in interest rates initiated by the Federal Reserve
Board in 2022, a decrease in the mortgage prepayment speed assumption has had a
favorable impact on the fair value of our mortgage servicing rights during 2022.
The recognition of new mortgage servicing rights was $120,000 for the nine
months ended September 30, 2022 compared to $861,000 for the nine months ended
September 30, 2021.

Non-Interest Expense. Non-interest expense decreased $1.9 million, or 17.9%, to
$8.8 million for the nine months ended September 30, 2022, compared to $10.8
million for the same period in 2021. Salaries and employee benefits decreased
$1.1 million, or 16.1%, to $5.5 million for the nine months ended September 30,
2022 from $6.6 million for the comparable period in 2021, due primarily to
decreased mortgage lending and servicing support staff, decreased loan officer
commission expense, and related decreased payroll tax expense and 401(k)
matching contributions. FHLB advance prepayment penalties of $763,000 recognized
in the nine-month period ended September 30, 2021 did not recur in 2022. Loan
costs decreased $176,000, or 29.7%, due to the decreased loan volume. Occupancy
and equipment expense decreased $71,000, or 12.1%, due primarily to branch
security upgrades and laptop computer replacement expenses incurred in the nine
months ended September 30, 2021. During the nine months ended September 30,
2022, the Company filed notice with the OCC that the Covington, Kentucky branch
location would be closed on August 12, 2022. At that date, all deposit accounts
were transferred to the Florence, Kentucky location. The Company has accepted a
purchase offer for the real estate property. The transaction is expected to
close in November 2022. These decreases were partially offset by a $47,000, or
16.1%, increase in professional fees and a $48,000 loss on sales of foreclosed
assets. Professional fees increased, primarily due to legal fees expensed for a
lawsuit challenging Ohio sales tax on data processing services.

Federal Income Taxes. The provision for federal income taxes was $361,000 for
the nine months ended September 30, 2022, compared to tax expense of $353,000
for September 30, 2021, a decrease of $8,800, or 2.5%. The effective tax rates
were 22.0% and 21.2% for the nine months ended September 30, 2022 and 2021,
respectively.

Average Balances and Yields. The following tables set forth average balance
sheets, average yields and costs, and certain other information for the periods
indicated. No tax-equivalent yield adjustments have been made. Any adjustments
necessary to

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  Table of Contents

present yields on a tax-equivalent basis are insignificant. All average balances
are monthly average balances. Management does not believe that the use of
month-end balances instead of daily average balances has caused any material
differences in the information presented. Non-accrual loans were included in the
computation of average balances only. The yields set forth below include the
effect of deferred fees, discounts, and premiums that are amortized or accreted
to interest income or interest expense.

                                                                        For 

nine months ended September 30,

                                                                  2022                                          2021
                                                  Average                                      Average
                                                 Outstanding                    Average       Outstanding                    Average
                                                   Balance         Interest    Yield/Rate       Balance         Interest    Yield/Rate

Interest-earning assets:
Loans                                          $      222,569    $    6,584          3.94 %  $     182,548    $    5,743          4.19 %
Loans held for sale                                     5,539           167          4.02           12,573           240          2.55
Securities                                              7,288            83          1.52            8,903            57          0.85
Fed Funds                                               3,592            25          0.93            6,304             1          0.02
Other (1)                                              14,017           165          1.57           17,097            43          0.34
Total interest-earning assets                         253,005         7,024

3.70 227,425 6,084 3.57 Non-interest bearing assets

                            15,395                                       15,549
Total assets                                   $      268,400                                $     242,974

Interest-bearing liabilities:
Savings                                        $       77,926           252          0.43    $      53,293            75          0.19
Interest-bearing demand                                34,707            38          0.15           30,840            33          0.14
Certificates of deposit                                90,805           604
         0.89           66,556           683          1.36
Total deposits                                        203,438           894          0.59          150,689           791          0.70
FHLB borrowings                                         8,175           114          1.86           34,163           530          2.07
Total interest-bearing liabilities                    211,613         1,008

0.64 184,852 1,321 0.95 Unpaid demand

                            15,282                                       17,979
Other non-interest-bearing liabilities                  4,239                                        5,299
Total non-interest-bearing liabilities                 19,521                                       23,278
Total equity                                           37,266                                       34,844
Total liabilities and total equity             $      268,400                                $     242,974
Net interest income                                              $    6,016                                   $    4,763
Net interest rate spread (2)                                                         3.06 %                                       2.62 %
Net interest-earning assets (3)                $       41,392                                $      42,573
Net interest margin (4)                                                              3.17 %                                       2.79 %
Average interest-earning assets to
interest-bearing liabilities                                                       119.56 %                                     123.03 %


(5) Consisting of FHLB-Cincinnati stock, FHLB DDA, certificates of deposit and cash

reservations.

The net interest rate spread represents the difference between the weighted average yield (6) of interest-bearing assets and the weighted average rate of

interest-bearing liabilities.

(7) Net interest-earning assets represent total interest-earning assets less

total interest-bearing liabilities.

(8) Net interest margin represents net interest income divided by total

interest-bearing assets.


Interest on loans includes loan fee income of $17,000 for the nine months ended
September 30, 2022 and $199,000 of loan fee income for the nine months ended
September 30, 2021.

Management of Market Risk

General. Our most significant form of market risk is interest rate risk because,
as a financial institution, the majority of our assets and liabilities are
monetary in nature and sensitive to changes in interest rates. Therefore, a
principal part of our operations is to manage interest rate risk and limit the
exposure of our financial condition and results of operations to changes in
market interest rates.

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  Table of Contents

Our Asset/Liability Committee is responsible for evaluating the interest rate
risk inherent in our assets and liabilities, for determining the level of risk
that is appropriate, given our business strategy, operating environment,
capital, liquidity and performance objectives, and for managing this risk
consistent with the policy and guidelines approved by our board of directors.

Our asset/liability management strategy attempts to manage the impact of changes
in interest rates on net interest income, our primary source of earnings. Among
the techniques we use to manage interest rate risk are:

the origin of non-residential and multi-family real estate loans, and, to a lesser extent

to some extent construction, consumer and business loans, all of which tend to

? have shorter terms and higher interest rates than one- to four-family households

residential real estate loans, and that generate customer relationships that

may result in larger non-interest bearing checking accounts;

selling substantially all of our new longer term fixed rate securities

to four-family residential mortgages and retaining shorter-term loans

? single-four-family residential real estate at fixed and adjustable rates

loans we originate, subject to market conditions and periodic review of

our asset/liability management needs;

increase our reliance on core deposits, including checking accounts and

? savings accounts, which are less sensitive to interest rates than certificates of

to pay; and

? the purchase of floating and floating rate mortgage-backed securities for

investment portfolio.


Our Board of Directors is responsible for the review and oversight of our
Asset/Liability Committee, which is comprised of our executive management team
and other essential operational staff. This committee is charged with developing
and implementing an asset/liability management plan, and meets at least
quarterly to review pricing and liquidity needs and assess our interest rate
risk. We currently utilize a third-party modeling program, prepared on a
quarterly basis, to evaluate our sensitivity to changing interest rates, given
our business strategy, operating environment, capital, liquidity and performance
objectives, and for managing this risk consistent with the guidelines approved
by the Board of Directors.

Liquidity and Capital Resources. Liquidity is the ability to meet financial
obligations that arise in the ordinary course of business. Liquidity is
primarily needed to meet the borrowing and deposit withdrawal requirements of
our customers and to fund current and planned expenditures. The Bank's primary
sources of funds are deposits, principal and interest payments on loans and
securities, proceeds from the sale of loans, and proceeds from the sale or
maturities of securities. In addition, the Bank may borrow from the FHLB. At
September 30, 2022, the Bank had $20.0 million in advances outstanding from the
FHLB. At September 30, 2022, the Bank had collateral based capacity to borrow an
additional $39.7 million. The Bank had additional lines of credit with three
commercial banks totaling $11.5 million. Additionally, the Bank has contingent
funding sources with CDARS and the StoneCastle's Federally Insured Cash Account
(FICA) program.

While maturities and scheduled amortization of loans and securities are
predictable sources of funds, deposit flows and loan prepayments are greatly
influenced by general interest rates, economic conditions, and competition. Our
most liquid assets are cash and short term investments including
interest-bearing demand deposits. The levels of these assets are dependent on
our operating, financing, lending, and investing activities during any given
period.

Our cash flows are comprised of three primary classifications: cash flows from
operating activities, investing activities, and financing activities. Net cash
provided by operating activities was $4.5 million and $3.3 million for the nine
months ended September 30, 2022 and 2021, respectively. Net cash used in
investing activities, which consists primarily of disbursements for loan
originations and the purchase of securities, offset by principal collections on
loans, proceeds from maturing securities and pay downs on mortgage-backed
securities, was $48.1 million and $30.7 million for the nine months ended
September 30, 2022 and 2021, respectively. Net cash provided by financing
activities, consisting primarily of the activity in deposit accounts and FHLB
advances, was $39.1 million and $10.2 million for the nine months ended
September 30, 2022 and 2021, respectively.

We are committed to maintaining a strong liquidity position. We monitor our
liquidity position on a daily basis. We anticipate that we will have sufficient
funds to meet our current funding commitments. Based on our deposit retention
experience and current pricing strategy, we anticipate that a significant
portion of maturing time deposits will be retained. We also anticipate continued
participation in the National CD Rateline Program as a wholesale source of
certificates of deposit, and continued use of FHLB-Cincinnati advances.

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Contents

Cincinnati Bancorp, Inc. is a separate legal entity from the Bank and must
provide for its own liquidity to pay any dividend to its stockholders, to fund
repurchases of its common stock, and for other corporate purposes. The Company's
primary source of liquidity is dividend payments, if any, received from the
Bank. The Bank's ability to pay dividends is subject to regulatory restrictions.
At September 30, 2022, Cincinnati Bancorp, Inc. (on an unconsolidated,
stand-alone basis) had liquid assets of $1.5 million.

At September 30, 2022, the Bank exceeded all of its regulatory capital
requirements with a Tier 1 leverage capital level of $38.1 million, or 13.3% of
adjusted total assets, which is above the well-capitalized required level of
$14.4 million, or 5.0%; total risk-based capital of $40.0 million, or 17.1% of
risk-weighted assets, which is above the well-capitalized required level of
$23.3 million, or 10.0% of risk-weighted assets; and common equity tier 1 risk
based capital of $38.1 million, or 16.3%, of risk-weighted assets, which is
above the well-capitalized required level of $15.2 million, or 6.5%. At December
31, 2021, the Bank exceeded all of its regulatory capital requirements with a
Tier 1 leverage capital level of $37.0 million, or 14.7% of adjusted total
assets, which is above the well-capitalized required level of $12.6 million, or
5.0%; and total risk-based capital of $38.7 million, or 20.0% of risk-weighted
assets, which is above the well-capitalized required level of $19.3 million, or
10.0% of risk-weighted assets. Accordingly, the Bank was categorized as well
capitalized at September 30, 2022, and December 31, 2021. Management is not
aware of any conditions or events since the most recent notification that would
change the Bank's category.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations
Commitments. As a financial services provider, we routinely are a party to
various financial instruments with off-balance-sheet risks, such as commitments
to extend credit and unused lines of credit. While these contractual obligations
represent our future cash requirements, a significant portion of commitments to
extend credit may expire without being drawn upon. Such commitments are subject
to the same credit policies and approval process accorded to loans we make. At
September 30, 2022, we had outstanding commitments to originate fixed-rate loans
of $4.5 million, unfunded lines of credit of $25.4 million and forward sale
commitments of $9.4 million. We had commitments to originate loans for portfolio
of $2.7 million and undisbursed portion of loans of $16.6 million at September
30, 2022. We anticipate that we will have sufficient funds available to meet our
current lending commitments. Time deposits that are scheduled to mature in one
year or less from September 30, 2022 totaled $63.6 million. Management expects
that a substantial portion of the maturing time deposits will be renewed.
However, if a substantial portion of these deposits is not retained, we may
utilize Federal Home Loan Bank advances or raise interest rates on deposits to
attract new accounts, which may result in higher levels of interest expense.

Contractual Obligations. In the ordinary course of our operations, we enter into
certain contractual obligations. Such obligations include data processing
services, operating leases for premises and equipment, agreements with respect
to borrowed funds and deposit liabilities.

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