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 $1.86 billion in assets at March 31, 2026, 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.

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 $1.77 billion in assets at June 30, 2026, 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

The Wealth Management segment was immaterial to the Company’s total consolidated operating results for the periods presented in this report. Accordingly, for presentation purposes, the financial information and discussion below is presented on an aggregated basis, except as otherwise noted. Refer to Note 15, “Segment Information,” in the Company’s consolidated financial statements of further details regarding the financial results of each segment.

Current wording

The Wealth Management segment was immaterial to the Company’s total consolidated operating results for the periods presented in this report. Accordingly, for presentation purposes, the financial information and discussion below is presented on an aggregated basis, except as otherwise noted. Refer to Note 15, “Segment Information,” in the Company’s consolidated financial statements for further details regarding the financial results of each segment.

Previous wording

Consolidated net incomewas $5.7 million, or $0.83 per diluted share for the three months ended March 31, 2026, compared to $5.4 million, or $0.77 per diluted share, for the three months ended March 31, 2025. For the three months ended March 31, 2026, the return on average assets was 1.26%, the return on average stockholders’ equity was 13.07%, and the efficiency ratio was 64.29%.

Current wording

Consolidated net incomewas $7.3 million, or $1.06 per diluted share, and $13.1 million, or $1.89 per diluted share, for the three and six months ended June 30, 2026, respectively, compared to $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. For the three and six months ended June 30, 2026, the return on average assets was 1.63% and 1.45%, respectively, the return on average stockholders’ equity was 16.39% and 14.74%, respectively, and the efficiency ratio was 60.73% and 62.44%, respectively.

Previous wording

Net interest incomewas $17.1 million for the three months ended March 31, 2026, compared to $15.3 million for the three months ended March 31, 2025. Net interest margin, on a fully taxable equivalent (“FTE”) basis, was 4.07% for the three months ended March 31, 2026, compared to 3.67% for the three months ended March 31, 2025. The change to net interest margin on an FTE basis is discussed in greater detail under the Average Balance Sheet Dataand Rate and Volume Analysis sections.

Current wording

Net interest incomewas $17.3 million and $34.4 million for the three and six months ended June 30, 2026, respectively, compared to $16.1 million and $31.4 million for the three and six months ended June 30, 2025, respectively. Net interest margin, on a fully taxable equivalent (“FTE”) basis, was 4.16% and 4.11% for the three and six months ended June 30, 2026, respectively, compared to 3.89% and 3.78% for the three and six months ended June 30, 2025, respectively. The change to net interest margin on an FTE basis is discussed in greater detail under the Average Balance Sheet Dataand Rate and Volume Analysis sections.

Previous wording

Non-interest incomewas $3.1 million for the three months ended March 31, 2026, compared to $3.5 million for the three months ended March 31, 2025. These changes are discussed in greater detail under the Non-interest Income and Expense section.

Current wording

Non-interest incomewas $5.4 million and $8.5 million for the three and six months ended June 30, 2026, respectively, compared to $3.5 million and $7.0 million for the three and six months ended June 30, 2025, respectively. These changes are discussed in greater detail under the Non-interest Income and Expense section.

Previous wording

Non-interest expense was $13.0 million for the three months ended March 31, 2026, compared to $12.5 million for the three months ended March 31, 2025. These changes are discussed in greater detail under the Non-interest Income and Expense section.

Current wording

Non-interest expense was $13.7 million and $26.7 million for the three and six months ended June 30, 2026, respectively, compared to $12.3 million and $24.8 million for the three and six months ended June 30, 2025, 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 decreased $2.4 million to $101.9 million as of March 31, 2026 compared to $104.3 million as of December 31, 2025, and decreased $0.3 million compared to $102.3 million as of March 31, 2025. See the Liquidity Management sectionfor further discussion.

Current wording

Cash and cash equivalents – Cash and cash equivalents decreased $71.6 million to $32.7 million as of June 30, 2026 compared to $104.3 million as of December 31, 2025, and decreased $67.6 million compared to $100.3 million as of June 30, 2025. See the Liquidity Management sectionfor further discussion.

Previous wording

Loans – Loans held for investment decreased $32.6 million to $1.45 billion as of March 31, 2026 compared to $1.49 billion as of December 31, 2025, and decreased $16.2 million compared to $1.47 billion as of March 31, 2025.

Current wording

Loans – Loans held for investment decreased $70.4 million to $1.42 billion as of June 30, 2026 compared to $1.49 billion as of December 31, 2025, and decreased $46.5 million compared to $1.46 billion as of June 30, 2025.

Previous wording

Asset quality – Non-performing assets totaled $6.9 million, or 0.47% of total loans, at March 31, 2026 compared to $7.0 million, or 0.47% of total loans, at December 31, 2025 and $3.1 million, or 0.21% of total loans, at March 31, 2025.

Current wording

Asset quality – Non-performing assets totaled $7.5 million, or 0.53% of total loans, at June 30, 2026 compared to $7.0 million, or 0.47% of total loans, at December 31, 2025 and $5.2 million, or 0.35% of total loans, at June 30, 2025.

Previous wording

In the first quarter of 2026, the Company had net loan charge-offs of $0.06 million, or 0.02% of average loans, compared to net loan recoveries of $0.02 million, or 0.01% of average loans, in the same prior year quarter.

Current wording

In the second quarter of 2026, the Company had net loan charge-offs of $0.14 million, or 0.04% of average loans, compared to net loan charge-offs of $0.05 million, or 0.01% of average loans, in the same prior year quarter.

Previous wording

The allowance for credit losses was $20.9 million, or 1.44% of loans outstanding, at March 31, 2026 compared to $21.1 million, or 1.42% of loans outstanding, at December 31, 2025, and $21.8 million, or 1.48% of loans outstanding, at March 31, 2025. These changes are discussed in greater detail under the Lending and Credit Management section.

Current wording

The allowance for credit losses was $20.7 million, or 1.46% of loans outstanding, at June 30, 2026 compared to $21.1 million, or 1.42% of loans outstanding, at December 31, 2025, and $21.6 million, or 1.47% of loans outstanding, at June 30, 2025. These changes are discussed in greater detail under the Lending and Credit Management section.

Previous wording

Deposits – Total deposits decreased $35.8 million to $1.52 billion as of March 31, 2026 compared to $1.55 billion as of December 31, 2025, and decreased $25.6 million compared to $1.54 billion as of March 31, 2025.

Current wording

Deposits – Total deposits decreased $66.0 million to $1.49 billion as of June 30, 2026 compared to $1.55 billion as of December 31, 2025, and decreased $29.8 million compared to $1.52 billion as of June 30, 2025.

Previous wording

Federal Home Loan Bank (“FHLB”) advances and other borrowings– Total FHLB advances and other borrowings decreased $7.7 million to $94.4 million as of March 31, 2026, compared to $102.1 million as of December 31, 2025, and decreased $29.7 million compared to $124.1 million as of March 31, 2025.

Current wording

Federal Home Loan Bank (“FHLB”) advances and other borrowings– Total FHLB advances and other borrowings decreased $72.7 million to $29.4 million as of June 30, 2026, compared to $102.1 million as of December 31, 2025, and decreased $110.7 million compared to $140.1 million as of June 30, 2025.

Previous wording

Capital – The Company maintains its “well-capitalized” regulatory capital position. At March 31, 2026, capital ratios were as follows: total risk-based capital to risk-weighted assets 15.84%; tier 1 capital to risk-weighted assets 14.59%; tier 1 leverage 12.34%; and stockholders’ equity to assets 9.45%.

Current wording

Capital – The Company maintains its “well-capitalized” regulatory capital position. At June 30, 2026, capital ratios were as follows: total risk-based capital to risk-weighted assets 16.40%; tier 1 capital to risk-weighted assets 15.15%; tier 1 leverage 12.91%; and stockholders’ equity to assets 10.31%.

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 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 month periods ended March 31, 2026 and 2025, 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 six month periods ended June 30, 2026 and 2025, respectively. The average balances used in this table and other statistical data were calculated using average daily balances.

Previous 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 months ended March 31, 2026 compared to the three months ended March 31, 2025. 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 six months ended June 30, 2026 compared to the three and six months ended June 30, 2025. 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

Financial results for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025, reflected an increase in net interest income on an FTE basis of $1.9 million, or 12.4%. Measured as a percentage of average earning assets, the net interest margin (expressed on an FTE basis) increased to 4.07% for the quarter ended March 31, 2026 compared to 3.67% for the quarter ended March 31, 2025.

Current wording

Financial results for the quarter ended June 30, 2026 compared to the quarter ended June 30, 2025, reflected an increase in net interest income on an FTE basis of $1.1 million, or 6.5%. Measured as a percentage of average earning assets, the net interest margin (expressed on an FTE basis) increased to 4.16% for the quarter ended June 30, 2026 compared to 3.89% for the quarter ended June 30, 2025 and increased to 4.11% for the six months ended June 30, 2026 compared to 3.78% for the six months ended June 30, 2025.

Previous wording

Average interest earning assets increased $23.0 million, or 1.3%, to $1.74 billion for the quarter ended March 31, 2026 compared to $1.72 billion for the quarter ended March 31, 2025, and average interest bearing liabilities decreased $15.9 million, or 1.3%, to $1.24 billion for the quarter ended March 31, 2026 compared to $1.26 billion for the quarter ended March 31, 2025.

Current wording

Average interest earning assets increased $8.7 million, or 0.5%, to $1.72 billion for the six months ended June 30, 2026 compared to $1.71 billion for the six months ended June 30, 2025, and average interest bearing liabilities decreased $21.2 million, or 1.7%, to $1.22 billion for the six months ended June 30, 2026 compared to $1.24 billion for the six months ended June 30, 2025.

Previous wording

Total interest income (expressed on an FTE basis) was $24.8 million for the three months ended March 31, 2026, compared to $23.7 million for the three months ended March 31, 2025. The Company’s rates earned on interest earning assets were 5.77% for the three months ended March 31, 2026, compared to 5.60% for the three months ended March 31, 2025.

Current wording

Total interest income (expressed on an FTE basis) was $24.7 million and $49.4 million for the three and six months ended June 30, 2026, respectively, compared to $24.3 million and $48.0 million for the three and six months ended June 30, 2025, respectively. The Company’s rates earned on interest earning assets were 5.83% and 5.80% for the three and six months ended June 30, 2026, respectively, compared to 5.72% and 5.66% for the three and six months ended June 30, 2025, respectively.

Previous wording

Interest income on loans held for investment (expressed on an FTE basis) was $22.3 million for the three months ended March 31, 2026, compared to $21.3 million for the three months ended March 31, 2025.

Current wording

Interest income on loans held for investment (expressed on an FTE basis) was $22.0 million and $44.2 million for the three and six months ended June 30, 2026, respectively, compared to $21.7 million and $42.9 million for the three and six months ended June 30, 2025, respectively.

Previous wording

Average loans outstanding increased $11.7 million, or 0.8%, to $1.48 billion for the quarter ended March 31, 2026 compared to $1.47 billion for the quarter ended March 31, 2025. The average yield on loans increased to 6.11% for the quarter ended March 31, 2026 compared to 5.89% for the quarter ended March 31, 2025. 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 $7.5 million, or 0.5%, to $1.45 billion for the six months ended ended June 30, 2026 compared to $1.46 billion for the six months ended June 30, 2025. The average yield on loans increased to 6.15% for the six months ended June 30, 2026 compared to 5.93% for the six months ended June 30, 2025. See the Lending and Credit Management section for further discussion of changes in the composition of the lending portfolio.

Previous wording

Interest income on available-for-sale securities(expressed on an FTE basis) was $1.9 million for the three months ended March 31, 2026, compared to $2.1 million for the three months ended March 31, 2025.

Current wording

Interest income on available-for-sale securities(expressed on an FTE basis) was $2.1 million and $4.1 million for the three and six months ended June 30, 2026, respectively, compared to $2.3 million and $4.3 million for the three and six months ended June 30, 2025, respectively.

Previous wording

Average securities decreased $11.1 million, or 5.0%, to $211.2 million for the quarter ended March 31, 2026 compared to $222.3 million for the quarter ended March 31, 2025. The average yield on securities decreased to 3.73% for the quarter ended March 31, 2026 compared to 3.76% for the quarter ended March 31, 2025. See the Liquidity Management section for further discussion.

Current wording

Average securities decreased $0.8 million, or 0.3%, to $220.9 million for the quarter ended June 30, 2026 compared to $221.7 million for the quarter ended June 30, 2025. The average yield on securities decreased to 3.90% for the quarter ended June 30, 2026 compared to 4.09% for the quarter ended June 30, 2025.

Previous wording

Total interest expense was $7.3 million for the three months ended March 31, 2026, compared to $8.2 million for the three months ended March 31, 2025. The Company’s rates paid on interest bearing liabilities were 2.39% for the three months ended March 31, 2026, compared to 2.64% for the three months ended March 31, 2025. See the Liquidity Management section for further discussion.

Current wording

Total interest expense was $7.1 million and $14.4 million for the three and six months ended June 30, 2026, respectively, compared to $7.8 million and $15.9 million for the three and six months ended June 30, 2025, respectively. The Company’s rates paid on interest bearing liabilities were 2.38% for both the three and six months ended June 30, 2026, respectively, compared to 2.55% and 2.60% for the three and six months ended June 30, 2025, respectively. See the Liquidity Management section for further discussion.

Previous wording

Interest expense on deposits was $5.9 million for the three months ended March 31, 2026, compared to $6.8 million for the three months ended March 31, 2025.

Current wording

Interest expense on deposits was $5.7 million and $11.6 million for the three and six months ended June 30, 2026, respectively, compared to $6.5 million and $13.3 million for the three and six months ended June 30, 2025, respectively.

Previous wording

Average interest bearing deposits decreased $24.0 million, or 2.1%, to $1.11 billion for the quarter ended March 31, 2026 compared to $1.13 billion for the quarter ended March 31, 2025. The average cost of deposits decreased to 2.15% for the quarter ended March 31, 2026 compared to 2.44% for the quarter ended March 31, 2025.

Current wording

Average interest bearing deposits decreased $40.4 million, or 3.6%, to $1.07 billion for the quarter ended June 30, 2026 compared to $1.11 billion for the quarter ended June 30, 2025. The average cost of deposits decreased to 2.13% for the quarter ended June 30, 2026 compared to 2.35% for the quarter ended June 30, 2025.

Previous wording

Interest expense on borrowings was $1.4 million for both the three months ended March 31, 2026 and March 31, 2025.

Current wording

Interest expense on borrowings was $1.4 million and $2.8 million for the three and six months ended June 30, 2026, respectively, compared to $1.3 million and $2.6 million for the three and six months ended June 30, 2025, respectively.

Previous wording

Average borrowings increased $8.1 million, or 6.5%, to $133.2 million for the quarter ended March 31, 2026 compared to $125.0 million for the quarter ended March 31, 2025. The average cost of borrowings decreased to 4.33% for the quarter ended March 31, 2026 compared to 4.38% for the quarter ended March 31, 2025.

Current wording

Average borrowings increased $14.0 million, or 12.8%, to $122.7 million for the quarter ended June 30, 2026 compared to $108.7 million for the quarter ended June 30, 2025. The average cost of borrowings decreased to 4.61% for the quarter ended June 30, 2026 compared to 4.65% for the quarter ended June 30, 2025.

Previous wording

The following table shows the principal components of non-interest income for the three months ended March 31, 2026 and 2025.

Current wording

The following table shows the principal components of non-interest income for the three and six months ended June 30, 2026 and 2025.

Previous wording

Service charges and other fees decreased $0.1 million, or 10.3%, to $0.8 million for the quarter ended March 31, 2026 compared to $0.9 million for the quarter ended March 31, 2025. The decrease for the three months ended March 31, 2026 wasprimarily attributable to a decrease in overall service charges on accounts and lower NSF charges.

Current wording

Service charges and other fees decreased $0.1 million, or 13.3%, to $0.8 million for the quarter ended June 30, 2026 compared to $0.9 million for the quarter ended June 30, 2025, and decreased $0.2 million, or 11.8%, to $1.6 million for the six months ended June 30, 2026 compared to $1.9 million for the six months ended June 30, 2025. The decrease for the three and six months ended June 30, 2026 was primarily attributable to a decrease in overall service charges on accounts and lower NSF charges.

Previous wording

Wealth management revenue increased $0.1 million, or 30.2%, to $0.6 million for the quarter ended March 31, 2026 compared to $0.5 million for the quarter ended March 31, 2025. The increase for the three month period was primarily attributable to continued growth in accounts.

Current wording

Wealth management revenue increased $0.1 million, or 20.7%, to $0.7 million for the quarter ended June 30, 2026 compared to $0.5 million for the quarter ended June 30, 2025, and increased $0.3 million, or 25.0% to $1.3 million for the six months ended June 30, 2026 compared to $1.0 million for the six months ended June 30, 2025. The increase for the three and six months ended June 30, 2026 was primarily attributable to continued growth in accounts.

Previous wording

The following table shows the principal components of non-interest expense for the three months ended March 31, 2026 and 2025.

Current wording

The following table shows the principal components of non-interest expense for the three and six months ended June 30, 2026 and 2025.

Previous wording

Income taxes as a percentage of earnings before income taxes as reported in the consolidated financial statements were 19.5% for the three months ended March 31, 2026, compared to 18.4% for the three months ended March 31, 2025. The effective tax rate for each of the three months ended March 31, 2026 and 2025 was lower than the U.S. federal statutory rate of 21% primarily due to tax-free revenues.

Current wording

Income taxes as a percentage of earnings before income taxes as reported in the consolidated financial statements was 18.0% and 18.6% for the three and six months ended June 30, 2026, respectively, compared to 18.3% for both the three and six months ended June 30, 2025. The effective tax rate for each of the three and six months ended June 30, 2026 and 2025 was lower than the U.S. federal statutory rate of 21% primarily due to tax-free revenues.

Previous wording

Interest earned on the loan portfolio is a primary source of interest income for the Company. Net loans represented 78.4% of total assets as of March 31, 2026 compared to 78.5% as of December 31, 2025.

Current wording

Interest earned on the loan portfolio is a primary source of interest income for the Company. Net loans represented 79.9% of total assets as of June 30, 2026 compared to 78.5% as of December 31, 2025.

Previous wording

General reserves are recorded for collectively analyzed loans using a consistent methodology. Two different models are used for calculating the general reserve. The Discounted Cash Flow model considers quantitative peer group historic loss experience, forecasts over the estimated life of the loan pools, industry data, and qualitative or environmental factors, such as: lending policies and procedures; economic conditions; the nature, volume and terms of the portfolio; lending staff and management; past due loans; the loan review system; collateral values; concentrations of credit; and external factors. The Remaining Life model applies a long-term average loss rate calculated using peer data that is adjusted for qualitative or environmental factors such as those previously noted. The model used depends on the loan portfolio segment. Management believes, but there can be no assurance, that these procedures keep management informed of potential problem loans. At March 31, 2026 and December 31, 2025, the ACL on loans included a qualitative adjustment of approximately $10.0 million and $10.3 million, respectively.

Current wording

General reserves are recorded for collectively analyzed loans using a consistent methodology. Two different models are used for calculating the general reserve. The Discounted Cash Flow model considers quantitative peer group historic loss experience, forecasts over the estimated life of the loan pools, industry data, and qualitative or environmental factors, such as: lending policies and procedures; economic conditions; the nature, volume and terms of the portfolio; lending staff and management; past due loans; the loan review system; collateral values; concentrations of credit; and external factors. The Remaining Life model applies a long-term average loss rate calculated using peer data that is adjusted for qualitative or environmental factors such as those previously noted. The model used depends on the loan portfolio segment. Management believes, but there can be no assurance, that these procedures keep management informed of potential problem loans. At June 30, 2026 and December 31, 2025, the ACL on loans included a qualitative adjustment of approximately $9.4 million and $10.3 million, respectively.

Previous wording

Total non-performing assets were $6.9 million, or 0.47% of total loans, at March 31, 2026 compared to $7.0 million, or 0.47% of total loans, at December 31, 2025.

Current wording

Total non-performing assets were $7.5 million, or 0.53% of total loans, at June 30, 2026 compared to $7.0 million, or 0.47% of total loans, at December 31, 2025.

Previous wording

Total non-accrual loans at March 31, 2026 decreased $0.1 million, or 0.8%, to $6.8 million compared to $6.8 million at December 31, 2025. There were $0.01 million in loans past due 90 days and still accruing interest at March 31, 2026 compared to $0.03 million at December 31, 2025. Other real estate and repossessed assets were $0.1 million at both March 31, 2026 and December 31, 2025.

Current wording

Total non-accrual loans at June 30, 2026 decreased $0.3 million, or 5.0%, to $6.5 million compared to $6.8 million at December 31, 2025. There were $0.16 million in loans past due 90 days and still accruing interest at June 30, 2026 compared to $0.03 million at December 31, 2025. Other real estate and repossessed assets were $0.8 million and $0.1 million at June 30, 2026 and December 31, 2025, respectively.

Previous wording

The allowance for credit losses was $20.9 million, or 1.44% of loans outstanding, at March 31, 2026 compared to $21.1 million, or 1.42% of loans outstanding, at December 31, 2025. The ratio of the allowance for credit losses to non-performing loans was 308.25% at March 31, 2026, compared to 307.52% at December 31, 2025.

Current wording

The allowance for credit losses was $20.7 million, or 1.46% of loans outstanding, at June 30, 2026 compared to $21.1 million, or 1.42% of loans outstanding, at December 31, 2025. The ratio of the allowance for credit losses to non-performing loans was 311.50% at June 30, 2026, compared to 307.52% at December 31, 2025.

Previous wording

The Company recognized provision for credit losses of $0.1 million for the three months ended March 31, 2026, compared to a $0.3 million release of credit losses for the three months ended March 31, 2025.

Current wording

The Company recognized provision for credit losses of $0.2 million and $0.3 million for the three and six months ended June 30, 2026, respectively, compared to release of provision for credit losses $0.1 million and $0.4 million for the three and six months ended June 30, 2025, respectively.

Previous wording

The Company’s net charge-offs were $0.06 million for the three months ended March 31, 2026, compared to $0.02 million of net charge-offs for the three months ended March 31, 2025.

Current wording

The Company’s net charge-offs were $0.1 million and $0.2 million for the three and six months ended June 30, 2026, respectively, compared to $0.05 million and $0.03 million of net charge-offs for the three and six months ended June 30, 2025, respectively.