OTC: CCFN

The Bank is a state-chartered,
nonmember bank, whose deposits are insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (“FDIC”).
The Bank is a full-service commercial bank providing a range of services and products, including time and demand deposit accounts, consumer,
commercial and mortgage loans to individuals and small to medium-sized businesses in its Northcentral Pennsylvania market area. The Bank
also operates a full-service trust department and offers brokerage services through a third-party networking agreement. At December 31,
2025, the Bank had twenty-two branch banking offices located in the Pennsylvania counties of Clinton, Columbia, Lycoming, Montour and
Northumberland.

Management has determined that
the Corporation has one reportable segment, “Community Banking.” All of the Corporation’s activities are interrelated,
and each activity is dependent and assessed based on how each of the activities of the Corporation supports the others. The Corporation
considers its branch banking offices to be a single reporting segment, because these branches have similar:

· economic characteristics,

· products and services,

· operating processes,

· delivery systems,

· customer bases, and

· regulatory oversight.

As of December 31, 2025, the Corporation
had 253 employees on a full-time equivalent basis. The Corporation and the Bank are not parties to any collective bargaining agreement
and employee relations are considered to be good.

The Bank

The Bank’s legal headquarters
are located at 1199 Lightstreet Road, Bloomsburg, Columbia County, Pennsylvania 17815. The Bank is a locally managed community bank that
seeks to provide personal attention and professional financial assistance to its customers. The Bank serves the needs of individuals and
small to medium-sized businesses. The Bank’s business philosophy includes offering direct access to its President and other officers
and providing friendly, informed and courteous service, local and timely decision making, flexible and reasonable operating procedures
and consistently-applied credit policies.

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Regulation and Supervision

The Corporation and the Bank operate
in a highly regulated industry and are subject to a variety of statutes, regulations, and policies, as well as ongoing regulatory supervision
and review. Significant federal statutes that apply to the Corporation and the Bank include the Gramm Leach Bliley Act (“GLB Act”),
the Bank Holding Company Act (“BHCA”), the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank
Act”), the USA Patriot Act, the Federal Reserve Act and the Federal Deposit Insurance Act. The Bank is subject primarily to the
provisions of the Federal Deposit Insurance Act and, as a state-chartered financial institution, to the Pennsylvania Banking Code of 1965.
In general, these statutes, regulations promulgated in accordance with these statutes, and interpretations of the statutes and regulations
by the banking regulatory agencies establish the eligible business activities of the Corporation and the Bank, certain acquisition
and merger restrictions, limitations on intercompany transactions, such as loans and dividends, and capital adequacy requirements, among
other things. These laws, regulations and policies are subject to frequent change and the Corporation takes measures to comply with applicable
requirements. The following summarizes some of the more significant provisions of these laws as they relate to the Corporation and the
Bank. To the extent that the following information describes statutory or regulatory provisions, it is qualified in its entirety by reference
to the particular statutory provisions. Any change in applicable law or regulation may have a material effect on the business and prospects
of the Corporation and the Bank.

Financial and Bank Holding Company Activities

As a financial holding company,
the Corporation may engage in, and acquire companies engaged in, activities that are considered “financial in nature”, as
defined by the GLB Act and Federal Reserve Board interpretations. These activities include, among other things, securities underwriting,
dealing and market-making, sponsoring mutual funds and investment companies, insurance underwriting and agency activities, and merchant
banking. If any banking subsidiary of the Corporation ceases to be “well capitalized” or “well managed” under
applicable regulatory standards, the Federal Reserve Board may, among other things, place limitations on the Corporation’s ability
to conduct the broader financial activities permissible for financial holding companies or, if the deficiencies persist, require the Corporation
to divest the banking subsidiary. In addition, if any banking subsidiary of the Corporation receives a Community Reinvestment Act rating
of less than satisfactory, the Corporation would be prohibited from engaging in any additional activities other than those permissible
for bank holding companies that are not financial holding companies. The Corporation may engage directly or indirectly in activities considered
financial in nature, either de novo or by acquisition, as long as it gives the Federal Reserve Board after-the-fact notice of the new
activities.

Interstate Banking and Branching

The federal banking agencies are
generally authorized to approve interstate bank merger transactions. The Dodd-Frank Act amended federal banking law to permit banks to
establish de novo branches in other states to the same extent as a bank chartered by that state would be so permitted. The interstate
banking and branching provisions of the federal banking laws would permit the Bank to merge with banks in other states and branch into
other states and would also permit banks from other states to acquire banks in the Bank's market area and to establish de novo branches
in the Bank’s market area.

Control Acquisitions

The Change in Bank Control Act
prohibits a person or group of persons from acquiring “control” of a bank holding company, unless the Federal Reserve Board
has been notified and has not objected to the transaction.

Under a rebuttable presumption
established by the Federal Reserve Board, the acquisition of 10% or more of a class of voting stock of a bank holding company with a class
of securities registered under Section 12 of the Exchange Act would, under the circumstances set forth in the presumption, constitute
acquisition of control of the bank holding company. In addition, a company is required to obtain the approval of the Federal Reserve Board
under the Bank Holding Company Act before acquiring 25% (5% in the case of an acquirer that is a bank holding company) or more of any
class of outstanding voting stock of a bank holding company, or otherwise obtaining control or a “controlling influence” over
that bank holding company.

Liability for Banking Subsidiaries

Under Federal Reserve Board policy,
a bank holding company is expected to act as a source of financial and managerial strength to each of its subsidiary banks and to commit
resources to their support. This support may be required at times when the bank holding company may not have the resources to provide
it. Similarly, under the cross-guarantee provisions of the Federal Deposit Insurance Act, the FDIC can hold any FDIC-insured depository
institution liable for any loss suffered or anticipated by the FDIC in connection with (1) the “default” of a commonly controlled
FDIC-insured depository institution; or (2) any assistance provided by the FDIC to a commonly controlled FDIC-insured depository institution
“in danger of default”.

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Capital Requirements

The federal banking agencies approved
final capital rules in July 2013 that substantially amend the existing capital rules for banks and bank holding companies. The new rules
reflect, in part, certain standards initially adopted by the Basel Committee on Banking and Supervision in December 2010 (commonly known
as Basel III), as well as requirements contemplated by the Dodd-Frank Act.

The new rules include a new minimum
ratio of common equity tier 1 capital to risk-weighted assets of 4.5% and a common equity tier 1 capital conservation buffer of 2.5% of
risk-weighted assets, raise the minimum ratio of tier 1 capital to risk-weighted assets from 4% to 6% and include a minimum leverage ratio
of 4%. Both the Corporation and the Bank comply with these ratios. The new rules also implement strict eligibility criteria for regulatory
capital instruments and improve the methodology for calculating risk-weighted assets to enhance risk sensitivity.

During 2018, the FRB raised the
threshold of its "Small Bank Holding Company" exemption to the application of consolidated capital requirements for qualifying
small bank holding companies from $1 billion to $3 billion of consolidated assets. Consequently, qualifying bank holding companies having
less than $3 billion of consolidated assets are not subject to the consolidated capital requirements unless otherwise directed by the
FRB. As of December 31, 2025, the Corporation qualifies as a small bank holding company and, while it complies with the consolidated capital
requirements, it is not subject to regulation in accordance with the consolidated capital requirements.

Additional information concerning
the Corporation and the Bank with respect to capital requirements is incorporated by reference from Note 13, “Regulatory Matters,”
of the “Notes to Consolidated Financial Statements” included under Item 8 of this report, and from the “Capital Resources”
section of the “Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations,”
included under Item 7 of this report.

FDICIA

The Federal Deposit Insurance
Corporation Improvement Act of 1991 (“FDICIA”), and the regulations promulgated under FDICIA, among other things, established
five capital categories for insured depository institutions – well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized – and requires federal bank regulatory agencies to implement systems for “prompt
corrective action” for insured depository institutions that do not meet minimum capital requirements based on these categories.
Unless a bank is well capitalized, it is subject to restrictions on its ability to offer brokered deposits and on certain other aspects
of its operations. An undercapitalized bank must develop a capital restoration plan and its parent bank holding company must guarantee
the bank’s compliance with the plan up to the lesser of 5% of the bank’s assets at the time it became undercapitalized and
the amount needed to comply with the plan. As of December 31, 2025, the Bank was considered well capitalized based on the guidelines implemented
by the bank’s regulatory agencies.

Dividend and Share Repurchase Restrictions

The Corporation is a legal entity
separate and distinct from the Bank. The Corporation’s revenues (on a parent company only basis) and its ability to pay dividends
to its shareholders, or repurchase shares from its shareholders, are almost entirely dependent upon the receipt of dividends from the
Bank. The right of the Corporation, and consequently the rights of its creditors and shareholders to participate in any distribution of
the assets or earnings of any subsidiary through the payment of such dividends or otherwise is necessarily subject to the prior claims
of creditors of the subsidiary (including depositors) except to the extent that claims of the Corporation, in its capacity as a creditor,
may be recognized. Additionally, the ability of the Bank to pay dividends to the Corporation is subject to Pennsylvania state law and
various regulatory restrictions.

The declaration of cash dividends
on the Corporation’s common stock, or the repurchase of shares of its common stock, is at the discretion of its board of directors,
and any decision to declare a dividend, or repurchase shares, is based on a number of factors, including, but not limited to, earnings,
prospects, financial condition, regulatory capital levels, applicable covenants under any credit agreements, notes and other contractual
restrictions, Pennsylvania law, federal bank regulatory law, and other factors deemed relevant.

Deposit or Preference Statute

In the “liquidation or other
resolution” of an institution by any receiver, U.S. federal law provides that deposits and certain claims for administrative expenses
and employee compensation against the insured depository institution would be afforded a priority over the general unsecured claims against
that institution, including federal funds and letters of credit.

Other Federal Laws and Regulations

The Corporation’s operations
are subject to additional federal laws and regulations applicable to financial institutions, including, without limitation:

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· Privacy provisions of the GLB Act and related regulations, which require us to maintain privacy policies
intended to safeguard customer financial information, to disclose the policies to our customers and to allow customers to “opt out”
of having their financial service providers disclose their confidential financial information to non-affiliated third parties, subject
to certain exceptions;

· Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial
records and prescribes procedures for complying with administrative subpoenas of financial records;

· Consumer protection rules for the sale of insurance products by depository institutions, adopted pursuant
to the requirements of the GLB Act; and

· USA Patriot Act, which requires financial institutions to take certain actions to help prevent, detect
and prosecute international money laundering and the financing of terrorism.

Sarbanes-Oxley Act of 2002

On July 30, 2002, the Sarbanes-Oxley
Act of 2002 was enacted. The Sarbanes-Oxley Act represents a comprehensive revision of laws affecting corporate governance, accounting
obligations and corporate reporting. The Sarbanes-Oxley Act is applicable to all companies, such as the Corporation, with equity securities
registered or that file reports under the Securities Exchange Act of 1934. In particular, the Sarbanes-Oxley Act established: (i) new
requirements for audit committees, including independence, expertise, and responsibilities; (ii) additional responsibilities regarding
financial statements for the chief executive officer and chief financial officer; (iii) new standards for auditors and regulation of audits;
(iv) increased disclosure and reporting obligations for the company and its directors and executive officers; and (v) new and increased
civil and criminal penalties for violations of the securities laws. Many of the provisions were effective immediately while other provisions
became effective over a period of time and are subject to rulemaking by the SEC.

FDIC Insurance and Assessments

Journey Bank is fully insured
by the FDIC up to the deposit insurance limit of $250,000 per depositor, per FDIC insured institution, and per ownership category, in
accordance with applicable laws and regulations. The assessment rate paid by each FDIC member institution is based on its relative risks
of default as measured by regulatory capital ratios and other factors. Specifically, the assessment rate is based on the institution’s
capitalization risk category and supervisory subgroup category. An institution’s capitalization risk category is based on the institution’s
capitalization and supervisory ratings. An institution’s supervisory subgroup category is based on the FDIC’s assessment of
the financial condition of the institution and the probability that FDIC intervention or other corrective action will be required. The
FDIC may terminate insurance of deposits upon a finding that an institution has engaged in unsafe and unsound practices, is in an unsafe
or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.

The base for deposit insurance
assessments is average consolidated total assets less average tangible equity. Assessment rates are calculated using formulas that take
into account the risk of the institution being assessed.

The FDIC may increase or decrease
the assessment rate schedule in order to manage the Deposit Insurance Fund (“DIF”) to prescribed statutory target levels.
An increase in the risk category for a subsidiary bank or in the assessment rates could have an adverse effect on such bank’s and,
consequently, the holding company’s earnings. The FDIC may terminate deposit insurance if it determines the institution involved
has engaged in or is engaging in unsafe or unsound banking practices, is in an unsafe or unsound condition, or has violated applicable
laws, regulations or orders.

On May 11, 2023, the FDIC proposed
a special assessment to make up for losses to the deposit insurance fund caused by the decision of bank regulators to declare a systemic
exception in the failures of Silicon Valley Bank and Signature Bank. Starting with the first quarter of 2024, the FDIC would impose a
special assessment on the amount of an independent bank’s estimated uninsured deposits in excess of $5 billion as of December, 2022.
Banks with less than $5 billion in assets, such as Journey Bank, would not be subject to the special assessment.

Dodd-Frank Wall Street Reform and Consumer Protection
Act

On July 21, 2010, the Dodd-Frank
Act was signed into law. The Dodd-Frank Act is intended to affect a fundamental restructuring of federal banking regulation. Among other
things, the Dodd-Frank Act creates a new Financial Stability Oversight Council to identify systemic risks in the financial system and
gives federal regulators new authority to take control of and liquidate financial firms. The Dodd-Frank Act additionally creates a new
independent federal regulator to administer federal consumer protection laws. To date, the following provisions of the Dodd-Frank
Act are considered to be of the greatest significance to the Corporation:

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●
expands the authority of the FRB to examine bank holding companies and their subsidiaries, including insured depository institutions;

●
requires a bank holding company to be well capitalized and well managed to receive approval of an interstate bank acquisition;

●
provides mortgage reform provisions regarding a customer’s ability to pay and making more loans subject to provisions for higher-cost loans and new disclosures;

●
created the Consumer Financial Protection Bureau (the “CFPB”) that has rulemaking authority for a wide range of consumer protection laws that apply to all banks and has broad powers to supervise and enforce consumer protection laws;

●
made permanent the $250,000 limit for federal deposit insurance at all insured depository institutions;

●
includes additional corporate governance and executive compensation requirements on companies subject to the Exchange Act;

●
permits FDIC-insured banks to pay interest on business demand deposits;

●
requires that holding companies and other companies that directly or indirectly control an insured depository institution serve as a source of financial strength;

●
created the Financial Stability Oversight Council with authority to identify institutions and practices that might pose a systemic risk; and

●
permits national and state banks to establish interstate branches to the same extent as the branch host state allows establishment of in-state branches.

Consumer Financial Protection
Bureau and Consumer Lending Regulation. The Dodd-Frank Act created the CFPB, which is granted broad rulemaking, supervisory and
enforcement powers under various federal consumer financial protection laws, including the Equal Credit Opportunity Act, Truth in Lending
Act (“TILA”), Real Estate Settlement Procedures Act (“RESPA”), Fair Credit Reporting Act, Fair Debt Collection
Practices Act, Consumer Financial Privacy provisions of the Gramm-Leach-Bliley Act, and certain other statutes. The CFPB has examination
and primary enforcement authority with respect to depository institutions with $10 billion or more in assets. Smaller institutions
are subject to rules promulgated by the CFPB but continue to be examined and supervised by federal banking regulators for consumer
compliance purposes. The CFPB has authority to prevent unfair, deceptive or abusive practices in connection with the offering of consumer
financial products. For example, the Dodd-Frank Act authorizes the CFPB to establish certain minimum standards for the origination of
residential mortgages including, in certain circumstances, a determination of the borrower’s ability to repay. In addition, the
Dodd-Frank Act allows certain borrowers to raise certain defenses to foreclosure if they receive any loan other than a “qualified
mortgage” as defined by the CFPB. The Dodd-Frank Act permits states to adopt consumer protection laws and standards that are more
stringent than those adopted at the federal level and, in certain circumstances, permits state attorneys general to enforce compliance
with both the state and federal laws and regulations.

The CFPB’s rulemaking, examination
and enforcement authority has and will continue to significantly affect financial institutions offering consumer financial products and
services, including the Corporation and the Bank. These regulatory activities may limit the types of financial services and products the
Bank may offer, which in turn may reduce the Corporation’s revenues.

Community Reinvestment Act

The Community Reinvestment Act
requires the FDIC to evaluate the Bank’s performance in helping to meet the credit needs of the entire community it serves, including
low- and moderate-income neighborhoods, consistent with safe and sound banking operations, and to take this record into consideration
when evaluating certain applications, such as applications to establish, relocate or close branch offices and applications in connection
with mergers and other acquisition transactions. The Bank achieved a rating of “outstanding” on its most recent CRA examination
dated December 5, 2022. On October 23, 2023, the FDIC and the other federal banking agencies approved changes to their CRA regulations.
The new CRA regulations were to become effective on January 1, 2026. On July 16, 2025, the FDIC and the other federal banking agencies
issued a joint notice of proposed rulemaking to amend their CRA regulations by rescinding the CRA
rule issued in October 2023 and replacing it with the 1995 CRA regulations.

Commercial Real Estate Concentrations

Lending operations of commercial
banks may be subject to enhanced scrutiny by federal banking regulators based on a bank’s concentration of commercial real estate
loans. On December 6, 2006, the federal banking regulators issued final guidance to remind financial institutions of the risk posed by
commercial real estate, or CRE, lending concentrations, and on December 18, 2015, the federal bank regulators issued additional guidance
on prudent risk management for CRE lending. CRE loans generally include land development, construction loans, and loans secured by multifamily
property, and nonfarm, nonresidential real property where the primary source of repayment is derived from rental income associated with
the property. The guidance prescribes the following guidelines for examiners to help identify institutions that are potentially exposed
to significant CRE risk and may warrant greater supervisory scrutiny:

●
total reported loans for construction, land development and other land, or C&D, represent 100% or more of the institution’s total capital; or

●
Total CRE loans represent 300% or more of the institution’s total capital, and the outstanding balance of the institution’s

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CRE loan portfolio has increased over 50% or more.

As of December 31, 2025, the Bank
did not exceed either guideline threshold.

Environmental

The Corporation has no material
ongoing costs related to compliance with federal, state, or local environmental laws. From time to time, the Bank originates loans with
special environmental considerations. The Bank’s lending policy outlines policies and procedures related to loans with special environmental
considerations, including the need to obtain phase I/II environmental assessments. Generally, the cost of these assessments is covered
by the borrower.

Future Legislation

Changes to the laws and regulations
to which the Corporation and the Bank are subject can affect the operating environment of both the Corporation and the Bank in substantial
and unpredictable ways. The Corporation cannot accurately predict whether those changes in laws and regulations will occur, and, if those
changes occur, the ultimate effect they would have upon the financial condition or results of operations of the Corporation. This is also
true of federal legislation particularly given the current volatile environment.

Human Capital Resources

We recognize the importance
of human capital resources as a cornerstone of our business. The Corporation’s key human capital management objectives are to attract
and retain highly qualified individuals that fit our values and culture. The Corporation is an Equal Opportunity and Affirmative Action
Employer. We recruit, employ, train, compensate, and promote without regard to race, religion, creed, color, national origin, age, gender,
sexual orientation, gender identity, marital status, disability, veteran status, or any other basis protected by applicable federal, state
or local law.

Available Information

The Corporation
files reports, proxy and information statements and other information electronically with the SEC. The SEC maintains an Internet
site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the
SEC. The SEC’s website address is https://www.sec.gov. The Corporation makes its Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K and amendments thereto available through its website at https://www.journeybank.com.
The information contained on our website is not included as a part of, or incorporated by reference in, this Annual Report on Form 10-K.
These reports may also be obtained free of charge as soon as practicable after filing or furnishing them to the SEC upon request by sending
an email to investorrelations@journeybank.com. Information may also be obtained via written request to Muncy Columbia Financial
Corporation, Attention: Chief Financial Officer, 1199 Lightstreet Road, Bloomsburg, PA 17815.