HAWTHORN BANCSHARES, INC.

Previous wording

Crucial to the Company’s community banking strategy is growth in its commercial banking services, retail mortgage lending and retail banking services. Through the branch network of its subsidiary bank, Hawthorn Bank (the "Bank"), the Company, with $1.9 billion in assets at June 30, 2025, provides a broad range of commercial and personal banking services. The Bank's specialties include commercial banking for small and mid-sized businesses, including equipment, operating, commercial real estate, Small Business Administration ("SBA") loans, and personal banking services including real estate mortgage lending, installment and consumer loans, certificates of deposit, individual retirement and other time deposit accounts, checking accounts, savings accounts, and money market accounts. The Company also provides other financial services through its Wealth Management business, including trust services, estate planning, investment and asset management services and a comprehensive suite of cash management services. Beginning with the first quarter of 2025, the Company's Wealth Management business is now reported as a separate reporting segment, and the Company now operates two reporting segments, consisting of the Bank and the Wealth Management business. The geographic areas in which the Company provides products and services include the Missouri communities in and surrounding Jefferson City, Columbia, Clinton, Warsaw, Springfield, and the greater Kansas City metropolitan area.

Current wording

Crucial to the Company’s community banking strategy is growth in its commercial banking services, retail mortgage lending and retail banking services. Through the branch network of its subsidiary bank, Hawthorn Bank (the “Bank”), the Company, with $1.93 billion in assets at September 30, 2025, provides a broad range of commercial and personal banking services. The Bank's specialties include commercial banking for small and mid-sized businesses, including equipment, operating, commercial real estate, Small Business Administration (“SBA”) loans, and personal banking services including real estate mortgage lending, installment and consumer loans, certificates of deposit, individual retirement and other time deposit accounts, checking accounts, savings accounts, and money market accounts. The Company also provides other financial services through its Wealth Management business, including trust services, estate planning, investment and asset management services and a comprehensive suite of cash management services. Beginning with the first quarter of 2025, the Company's Wealth Management business is reported as a separate reporting segment, and the Company operates two reporting segments, consisting of the Bank and the Wealth Management business. The geographic areas in which the Company provides products and services include the Missouri communities in and surrounding Jefferson City, Columbia, Clinton, Warsaw, Springfield, and the greater Kansas City metropolitan area.

Previous wording

(2)Efficiency ratio is calculated as non-interest expense as a percentage of revenue. Total revenue is calculated as net interest income plus non-interest income.

Current wording

(1)Efficiency ratio is calculated as non-interest expense as a percentage of revenue. Total revenue is calculated as net interest income plus non-interest income.

Previous wording

(1)Book value per share is calculated using weighted average shares

Current wording

(2)Book value per share is calculated using weighted average shares.

Previous wording

(3)Tier 1 leverage ratio is calculated by dividing Tier 1 capital by average total consolidated assets

Current wording

(1)Tier 1 leverage ratio is calculated by dividing Tier 1 capital by average total consolidated assets.

Previous wording

Consolidated net incomewas $6.1 million, or $0.88 per diluted share, and $11.5 million, or $1.65 per diluted share, for the three and six months ended June 30, 2025, respectively, compared to $4.6 million, or $0.66 per diluted share, and $9.1 million, or $1.29 per diluted share, for the three and six months ended June 30, 2024. For the three and six months ended June 30, 2025, the return on average assets was 1.36% and 1.28%, respectively, the return on average stockholders’ equity was 15.85% and 15.08%, respectively, and the efficiency ratio was 62.3% and 64.43%, respectively.

Current wording

Consolidated net incomewas $6.1 million, or $0.88 per diluted share, and $17.6 million, or $2.53 per diluted share, for the three and nine months ended September 30, 2025, respectively, compared to $4.6 million, or $0.66 per diluted share, and $13.7 million, or $1.95 per diluted share, for the three and nine months ended September 30, 2024, respectively. For the three and nine months ended September 30, 2025, the return on average assets was 1.33% and 1.30%, respectively, the return on average stockholders’ equity was 15.21% and 15.13%, respectively, and the efficiency ratio was 62.30% and 63.68%, respectively.

Previous wording

Net interest incomewas $16.1 million and $31.4 million for the three and six months ended June 30, 2025 compared to $14.2 million and $28.9 million for the three and six months ended June 30, 2024. Net interest margin, on a fully taxable equivalent ("FTE") basis, was 3.89% and 3.78% for the three and six months ended 2025, compared to 3.33% and 3.36% for the three and six months ended June 30, 2024. The change to net interest margin on a fully taxable equivalent basis is discussed in greater detail under the Average Balance Sheet Dataand Rate and Volume Analysis sections.

Current wording

Net interest incomewas $16.9 million and $48.3 million for the three and nine months ended September 30, 2025, respectively, compared to $14.3 million and $43.2 million for the three and nine months ended September 30, 2024, respectively. Net interest margin, on a fully taxable equivalent (“FTE”) basis, was 3.97% and 3.85% for the three and nine months ended September 30, 2025, respectively, compared to 3.36% for both the three and nine months ended September 30, 2024. The change to net interest margin on a fully taxable equivalent basis is discussed in greater detail under the Average Balance Sheet Dataand Rate and Volume Analysis sections.

Previous wording

Non-interest incomewas $3.5 million and $7.0 million for the three and six months ended June 30, 2025, respectively, compared to $4.0 million and $7.0 million for the three and six months ended June 30, 2024, respectively. These changes are discussed in greater detail under the Non-interest Income and Expense section.

Current wording

Non-interest incomewas $3.7 million and $10.7 million for the three and nine months ended September 30, 2025, respectively, compared to $3.8 million and $10.8 million for the three and nine months ended September 30, 2024, respectively. These changes are discussed in greater detail under the Non-interest Income and Expense section.

Previous wording

Non-interest expense was $12.3 million and $24.8 million for the three and six months ended June 30, 2025, respectively, compared to $12.0 million and $24.6 million for the three and six months ended June 30, 2024, respectively. These changes are discussed in greater detail under the Non-interest Income and Expense section.

Current wording

Non-interest expense was $12.8 million and $37.6 million for the three and nine months ended September 30, 2025, respectively, compared to $12.0 million and $36.6 million for the three and nine months ended September 30, 2024, respectively. These changes are discussed in greater detail under the Non-interest Income and Expense section.

Previous wording

Cash and cash equivalents – Cash and cash equivalents increased $49.3 million to $100.3 million as of June 30, 2025 compared to $51.0 million as of December 31, 2024 and increased $24.5 million compared to $75.8 million as of June 30, 2024. See the Liquidity Management sectionfor further discussion.

Current wording

Cash and cash equivalents – Cash and cash equivalents increased $48.9 million to $99.9 million as of September 30, 2025 compared to $51.0 million as of December 31, 2024, and increased $45.7 million compared to $54.2 million as of September 30, 2024. See the Liquidity Management sectionfor further discussion.

Previous wording

Loans – Loans held for investment decreased $3.3 million to $1.46 billion as of June 30, 2025 compared to $1.47 billion as of December 31, 2024 and decreased $35.6 million compared to $1.50 billion as of June 30, 2024.

Current wording

Loans – Loans held for investment increased $47.8 million to $1.51 billion as of September 30, 2025 compared to $1.47 billion as of December 31, 2024, and increased $47.3 million compared to $1.47 billion as of September 30, 2024.

Previous wording

Asset quality – Non-performing assets totaled $5.2 million, or 0.35% of total loans, at June 30, 2025 compared to $4.2 million, or 0.29% of total loans, at December 31, 2024 and $8.1 million, or 0.54% of total loans, at June 30, 2024.

Current wording

Asset quality – Non-performing assets totaled $7.3 million, or 0.48% of total loans, at September 30, 2025 compared to $4.2 million, or 0.29% of total loans, at December 31, 2024 and $8.5 million, or 0.58% of total loans, at September 30, 2024.

Previous wording

In the second quarter 2025, the Company had net loan charge-offs of $0.05 million, or 0.01%, of average loans, compared to net loan charge-offs $1.98 million, or 0.53% of average loans, in the prior year quarter.

Current wording

In the third quarter of 2025, the Company had net loan charge-offs of $0.04 million, or 0.01% of average loans, compared to net loan charge-offs $0.6 million, or 0.17% of average loans, in the same prior year quarter.

Previous wording

The allowance for credit losses was $21.6 million, or 1.47%, of loans outstanding at June 30, 2025 compared to $22.0 million, or 1.50%, of loans outstanding at December 31, 2024, and $22.0 million, or 1.47% of loans outstanding at June 30, 2024. These changes are discussed in greater detail under the Lending and Credit Management section.

Current wording

The allowance for credit losses was $21.9 million, or 1.45% of loans outstanding, at September 30, 2025 compared to $22.0 million, or 1.50% of loans outstanding, at December 31, 2024, and $21.9 million, or 1.50% of loans outstanding at September 30, 2024. These changes are discussed in greater detail under the Lending and Credit Management section.

Previous wording

Deposits – Total deposits decreased $15.2 million to $1.52 billion as of June 30, 2025 compared to $1.53 billion as of December 31, 2024, and decreased $32.3 million compared to $1.55 billion as of June 30, 2024.

Current wording

Deposits – Total deposits decreased $7.3 million to $1.53 billion as of September 30, 2025 compared to $1.53 billion as of December 31, 2024, and increased $22.4 million compared to $1.50 billion as of September 30, 2024.

Previous wording

Federal Home Loan Bank ("FHLB") advances and other borrowings– Total FHLB advances and other borrowings increased $58.6 million to $140.1 million as of June 30, 2025, compared to $81.5 million as of December 31, 2024, and increased $41.0 million compared to $99.1 million as of June 30, 2024.

Current wording

Federal Home Loan Bank (“FHLB”) advances and other borrowings– Total FHLB advances and other borrowings increased $95.6 million to $177.1 million as of September 30, 2025, compared to $81.5 million as of December 31, 2024, and increased $80.6 million compared to $96.5 million as of September 30, 2024.

Previous wording

Capital – The Company maintains its “well capitalized” regulatory capital position. At June 30, 2025, capital ratios were as follows: total risk-based capital to risk-weighted assets 15.12%; tier 1 capital to risk-weighted assets 13.87%; tier 1 leverage 11.87%; and common equity to assets 8.35%.

Current wording

Capital – The Company maintains its “well capitalized” regulatory capital position. At September 30, 2025, capital ratios were as follows: total risk-based capital to risk-weighted assets 14.90%; tier 1 capital to risk-weighted assets 13.65%; tier 1 leverage 11.97%; and stockholders’ equity to assets 8.54%.

Previous wording

Net interest income is the largest source of revenue resulting from the Company’s lending, investing, borrowing, and deposit gathering activities. It is affected both by changes in the level of interest rates and changes in the amounts and mix of interest-earning assets and interest-bearing liabilities. The following table presents average balance sheet data, net interest income, average yields of earning assets, average costs of interest-bearing liabilities, net interest spread and net interest margin on a FTE basis for each of the three and six month periods ended June 30, 2025 and 2024, respectively. The average balances used in this table and other statistical data were calculated using average daily balances.

Current wording

Net interest income is the largest source of revenue resulting from the Company’s lending, investing, borrowing, and deposit gathering activities. It is affected both by changes in the level of interest rates and changes in the amounts and mix of interest earning assets and interest bearing liabilities. The following tables present average balance sheet data, net interest income, average yields of earning assets, average costs of interest bearing liabilities, net interest spread and net interest margin on an FTE basis for each of the three and nine month periods ended September 30, 2025 and 2024, respectively. The average balances used in this table and other statistical data were calculated using average daily balances.

Previous wording

(1)Interest income and yields are presented on a FTE basis using the federal statutory income tax rate of 21%, net of nondeductible interest expense, for both the three months ended June 30, 2025 and 2024. Such adjustments totaled $0.38 million and $0.20 million for the three months ended June 30, 2025 and 2024, respectively.

Current wording

(1)Interest income and yields are presented on an FTE basis using the federal statutory income tax rate of 21%, net of nondeductible interest expense, for both the three andnine months ended September 30, 2025 and 2024. Such adjustments totaled $0.4 million and $0.2 million for the three months ended September 30, 2025 and 2024, respectively, compared to $1.0 million and $0.6 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

The following table summarizes the changes in net interest income on a FTE basis, by major category of interest earning assets and interest-bearing liabilities, identifying changes related to volumes and rates for the three and six months ended June 30, 2025 compared to the three and six months ending ended June 30, 2024, respectively. The change in interest due to the combined rate/volume variance has been allocated to rate and volume changes in proportion to the absolute dollar amounts of change in each.

Current wording

The following table summarizes the changes in net interest income on an FTE basis, by major category of interest earning assets and interest bearing liabilities, identifying changes related to volumes and rates for the three and nine months ended September 30, 2025 compared to the three and nine months ending ended September 30, 2024, respectively. The change in interest due to the combined rate/volume variance has been allocated to rate and volume changes in proportion to the absolute dollar amounts of change in each.

Previous wording

(1)Interest income and yields are presented on a FTE basis using the federal statutory income tax rate of 21%, net of nondeductible interest expense, for the three and six months ended June 30, 2025 and 2024, respectively. Such adjustments totaled $0.38 million and$0.62 million for the three and six months ended June 30, 2025, respectively, compared to $0.20 million and $0.40 million for the three and six months ended June 30, 2024, respectively.

Current wording

(1)Interest income and yields are presented on an FTE basis using the federal statutory income tax rate of 21%, net of nondeductible interest expense, for both the three and nine months ended September 30, 2025 and 2024, respectively. Such adjustments totaled $0.4 million and $1.0 million for the three and nine months ended September 30, 2025, respectively, compared to $0.2 million and $0.6 million for the three and nine months ended September 30, 2024, respectively.

Previous wording

Financial results for the quarter ended June 30, 2025 compared to the quarter ended June 30, 2024, reflected an increase in net interest income on an FTE basis, of $2.2 million, or 15.0%, and financial results for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 reflected an increase in net interest income on an FTE basis, of $2.7 million, or 9.3%. Measured as a percentage of average earning assets, the net interest margin (expressed on an FTE basis) increased to 3.89% for the quarter ended June 30, 2025 compared to 3.33% for the quarter ended June 30, 2024, and increased to 3.78% for the six months ended June 30, 2025 compared to 3.36% for the six months ended June 30, 2024.

Current wording

Financial results for the quarter ended September 30, 2025 compared to the quarter ended September 30, 2024, reflected an increase in net interest income on an FTE basis of $2.7 million, or 18.9%, and financial results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 reflected an increase in net interest income on an FTE basis of $5.5 million, or 12.5%. Measured as a percentage of average earning assets, the net interest margin (expressed on an FTE basis) increased to 3.97% for the quarter ended September 30, 2025 compared to 3.36% for the quarter ended September 30, 2024, and increased to 3.85% for the nine months ended September 30, 2025 compared to 3.36% for the nine months ended September 30, 2024.

Previous wording

Average interest-earning assets decreased $45.6 million, or 2.6%, to $1.71 billion for the six months ended June 30, 2025 compared to $1.75 billion for the six months ended June 30, 2024, and average interest-bearing liabilities decreased $60.6 million, or 4.7%, to $1.24 billion for the six months ended June 30, 2025 compared to $1.30 billion for the six months ended June 30, 2024.

Current wording

Average interest earning assets decreased $28.4 million, or 1.6%, to $1.71 billion for the nine months ended September 30, 2025 compared to $1.74 billion for the nine months ended September 30, 2024, and average interest bearing liabilities decreased $52.8 million, or 4.1%, to $1.24 billion for the nine months ended September 30, 2025 compared to $1.29 billion for the nine months ended September 30, 2024.

Previous wording

Total interest income (expressed on an FTE basis) was $24.3 million and $48.0 million for the three and six months ended June 30, 2025, respectively compared to $23.8 million and $48.0 million for the three and six months ended June 30, 2024, respectively. The Company’s rates earned on interest earning assets were 5.72% and 5.66% for the three and six months ended June 30, 2025, respectively, compared to 5.50% for both the three and six months ended June 30, 2024.

Current wording

Total interest income (expressed on an FTE basis) was $25.4 million and $73.4 million for the three and nine months ended September 30, 2025, respectively, compared to $24.0 million and $72.0 million for the three and nine months ended September 30, 2024, respectively. The Company’s rates earned on interest earning assets were 5.84% and 5.72% for the three and nine months ended September 30, 2025, respectively, compared to 5.56% and 5.52% for the three and nine months ended September 30, 2024, respectively.

Previous wording

Average loans outstanding decreased $59.0 million, or 3.9%, to $1.45 billion for the quarter ended June 30, 2025 compared to $1.51 billion for the quarter ended June 30, 2024. The average yield on loans increased to 5.98% for the quarter ended June 30, 2025 compared to 5.75% for the quarter ended June 30, 2024.

Current wording

Average loans outstanding decreased $7.5 million, or 0.5%, to $1.48 billion for the quarter ended September 30, 2025 compared to $1.49 billion for the quarter ended September 30, 2024. The average yield on loans increased to 6.12% for the quarter ended September 30, 2025 compared to 5.83% for the quarter ended September 30, 2024.

Previous wording

Average loans outstanding decreased $59.2 million, or 3.9%, to $1.46 billion for the six months ended June 30, 2025 compared to $1.52 billion for the six months ended June 30, 2024. The average yield on loans increased to 5.93% for the six months ended June 30, 2025 compared to 5.75% for the six months ended June 30, 2024. See the Lending and Credit Management section for further discussion of changes in the composition of the lending portfolio.

Current wording

Average loans outstanding decreased $41.8 million, or 2.8%, to $1.47 billion for the nine months ended September 30, 2025 compared to $1.51 billion for the nine months ended September 30, 2024. The average yield on loans increased to 6.00% for the nine months ended September 30, 2025 compared to 5.78% for the nine months ended September 30, 2024. See the Lending and Credit Management section for further discussion of changes in the composition of the lending portfolio.

Previous wording

Average securities increased $39.5 million, or 21.7%, to $221.7 million for the quarter ended June 30, 2025 compared to $182.2 million for the quarter ended June 30, 2024. The average yield on securities increased to 4.09% for the quarter ended June 30, 2025 compared to 3.35% for the quarter ended June 30, 2024.

Current wording

Average securities increased $26.5 million, or 13.8%, to $218.7 million for the quarter ended September 30, 2025 compared to $192.3 million for the quarter ended September 30, 2024. The average yield on securities increased to 4.01% for the quarter ended September 30, 2025 compared to 3.32% for the quarter ended September 30, 2024.

Previous wording

Average securities increased $38.6 million, or 21.1%, to $222.0 million for the six months ended June 30, 2025 compared to $183.3 million for the six months ended June 30, 2024. The average yield on securities increased to 3.93% for the six months ended June 30, 2025 compared to 3.29% for the six months ended June 30, 2024. See the Liquidity Management section for further discussion.

Current wording

Average securities increased $34.6 million, or 18.5%, to $220.9 million for the nine months ended September 30, 2025 compared to $186.3 million for the nine months ended September 30, 2024. The average yield on securities increased to 3.95% for the nine months ended September 30, 2025 compared to 3.30% for the nine months ended September 30, 2024. See the Liquidity Management section for further discussion.

Previous wording

Total interest expense was $7.8 million and $15.9 million for the three and six months ended June 30, 2025, respectively, compared to $9.4 million and $18.7 million for the three and six months ended June 30, 2024, respectively. The Company’s rates paid on interest bearing liabilities were 2.55% and 2.60% for the three and six months ended June 30, 2025, respectively, compared to 2.94% and 2.89% for the three and six months ended June 30, 2024, respectively. See the Liquidity Management section for further discussion.

Current wording

Total interest expense was $8.1 million and $24.1 million for the three and nine months ended September 30, 2025, respectively, compared to $9.5 million and $28.2 million for the three and nine months ended September 30, 2024, respectively. The Company’s rates paid on interest bearing liabilities were 2.61% and 2.60% for the three and nine months ended September 30, 2025, respectively, compared to 2.96% and 2.92% for the three and nine months ended September 30, 2024, respectively. See the Liquidity Management section for further discussion.

Previous wording

Interest expense on deposits was $6.5 million and $13.3 million for the three and six months ended June 30, 2025, respectively, compared to $7.6 million and $15.0 million for the three and six months ended June 30, 2024, respectively.

Current wording

Interest expense on deposits was $6.6 million and $19.9 million for the three and nine months ended September 30, 2025, respectively, compared to $7.7 million and $22.8 million for the three and nine months ended September 30, 2024, respectively.

Previous wording

Average interest-bearing deposits decreased $20.2 million, or 1.8%, to $1.11 billion for the quarter ended June 30, 2025 compared to $1.13 billion for the quarter ended June 30, 2024. The average cost of deposits decreased to 2.35% for the quarter ended June 30, 2025 compared to 2.69% for the quarter ended June 30, 2024.

Current wording

Average interest bearing deposits decreased $24.2 million, or 2.2%, to $1.10 billion for the quarter ended September 30, 2025 compared to $1.13 billion for the quarter ended September 30, 2024. The average cost of deposits decreased to 2.36% for the quarter ended September 30, 2025 compared to 2.74% for the quarter ended September 30, 2024.

Previous wording

Average interest-bearing deposits decreased $20.0 million, or 1.8%, to $1.12 billion for the six months ended June 30, 2025 compared to $1.14 billion for the six months ended June 30, 2024. The average cost of deposits decreased to 2.40% for the six months ended June 30, 2025 compared to 2.65% for the six months ended June 30, 2024.

Current wording

Average interest bearing deposits decreased $21.4 million, or 1.9%, to $1.11 billion for the nine months ended September 30, 2025 compared to $1.14 billion for the nine months ended September 30, 2024. The average cost of deposits decreased to 2.38% for the nine months ended September 30, 2025 compared to 2.68% for the nine months ended September 30, 2024.

Previous wording

Interest expense on borrowings was $1.3 million and $2.6 million for the three and six months ended June 30, 2025, respectively, compared to $1.8 million and $3.7 million for the three and six months ended June 30, 2024, respectively.

Current wording

Interest expense on borrowings was $1.6 million and $4.2 million for the three and nine months ended September 30, 2025, respectively, compared to $1.7 million and $5.4 million for the three and nine months ended September 30, 2024, respectively.

Previous wording

Average borrowings decreased $45.6 million, or 29.5%, to $108.7 million for the quarter ended June 30, 2025 compared to $154.3 million for the quarter ended June 30, 2024. The average cost of borrowings decreased to 4.65% for the quarter ended June 30, 2025 compared to 4.73% for the quarter ended June 30, 2024.

Current wording

Average borrowings decreased $13.0 million, or 8.8%, to $135.8 million for the quarter ended September 30, 2025 compared to $148.8 million for the quarter ended September 30, 2024. The average cost of borrowings decreased to 4.61% for the quarter ended September 30, 2025 compared to 4.67% for the quarter ended September 30, 2024.

Previous wording

Average borrowings decreased $40.6 million, or 25.8%, to $116.8 million for the six months ended June 30, 2025 compared to $157.4 million for the six months ended June 30, 2024. The average cost of borrowings decreased to 4.51% for the six months ended June 30, 2025 compared to 4.67% for the six months ended June 30, 2024.

Current wording

Average borrowings decreased $31.3 million, or 20.3%, to $123.2 million for the nine months ended September 30, 2025 compared to $154.5 million for the nine months ended September 30, 2024. The average cost of borrowings decreased to 4.55% for the nine months ended September 30, 2025 compared to 4.67% for the nine months ended September 30, 2024.

Previous wording

The following table shows the principal components of non-interest income.

Current wording

The following table shows the principal components of non-interest income for the three and nine months ended September 30, 2025 and 2024.

Previous wording

Total non-interest income decreased $0.5 million, or 11.3%, to $3.5 million for the quarter ended June 30, 2025 compared to $4.0 million for the quarter ended June 30, 2024, and remained unchanged at $7.0 million for the six months ended June 30, 2025 and June 30, 2024. Compared to the prior year quarter, the decrease was primarily due to lower gains on sales of mortgage loans and lower net gains on sales of other real estate owned, offset by increases in earnings on bank-owned life insurance and an increase in service charges and other fees.

Current wording

Total non-interest income decreased $0.1 million, or 1.8%, to $3.7 million for the quarter ended September 30, 2025 compared to $3.8 million for the quarter ended September 30, 2024, and decreased $0.1 million, or 0.7%, to $10.7 million from $10.8 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. Compared to the prior year quarter, the decrease was primarily due to lower gains on sales of mortgage loans and lower net gains (losses) on sales of other real estate owned, offset by increases in wealth management revenue and service charges and other fees.

Previous wording

Earnings on bank-owned life insurancewas $0.5 million for both quarters ended June 30, 2025 and June 30, 2024, and increased to $1.0 million for the six months ended June 30, 2025 compared to $0.6 million for the six months ended June 30, 2024. The Company purchased $35.0 million in bank-owned life insurance policies in the first quarter of 2024. The earnings generated from these polices are primarily derived from the investment returns on the cash value component.

Current wording

Earnings on bank-owned life insurancewas $0.5 million for both quarters ended September 30, 2025 and September 30, 2024, and increased to $1.5 million for the nine months ended September 30, 2025 compared to $1.2 million for the nine months ended September 30, 2024. The Company purchased $35.0 million in bank-owned life insurance policies in the first quarter of 2024. The earnings generated from these policies are primarily derived from the investment returns on the cash value component.

Previous wording

Gain on sales of mortgage loans decreased to $0.1 million for the quarter ended June 30, 2025 compared to $0.4 million for the quarter ended June 30, 2024, and decreased to $0.2 million for the six months ended June 30, 2025 compared to $0.7 million for the six months ended June 30, 2024. The Company sold mortgage loans totaling $1.7 million and $2.9 million for the three and six months ended June 30, 2025, respectively, compared to $21.7 million and $38.0 million for the three and six months ended June 30, 2024, respectively.

Current wording

Gain on sales of mortgage loans was $0.1 million for both quarters ended September 30, 2025 and September 30, 2024, and decreased to $0.3 million for the nine months ended September 30, 2025 compared to $0.8 million for the nine months ended September 30, 2024. The Company sold mortgage loans totaling $2.2 million and $5.1 million for the three and nine months ended September 30, 2025, respectively, compared to $7.0 million and $45.0 million for the three and nine months ended September 30, 2024, respectively.

Previous wording

The following table shows the principal components of non-interest expense.

Current wording

The following table shows the principal components of non-interest expense for the three and nine months ended September 30, 2025 and 2024.

Previous wording

*Efficiency ratio is calculated as non-interest expense as a percent of revenue. Total revenue is calculated as net interest income plus non-interest income.

Current wording

(1)Efficiency ratio is calculated as non-interest expense as a percent of revenue. Total revenue is calculated as net interest income plus non-interest income.