HAWTHORN BANCSHARES, INC.

Previous wording

This report contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, strategy, future performance and business of Hawthorn Bancshares, Inc., and its subsidiaries (collectively, the “Company”, “we”, “our”, or “us”), including, without limitation statements that are not historical in nature, and statements preceded by, followed by or that include the words believes, expects, may, will, should, could, anticipates, estimates, intends, plans, hopes or similar expressions. Forward-looking statements are not guarantees of future performance or results. They involve risks, uncertainties and assumptions. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, such possible events or factors such as: changes in economic conditions generally or in the Company's market area, changes in policies by regulatory agencies, governmental legislation and regulation, tariffs and trade disruptions, fluctuations in interest rates, changes in liquidity requirements, demand for loans in the Company’s market area, changes in accounting and tax principles, estimates made on income taxes, competition with other entities that offer financial services, cybersecurity threats, economic or other disruptions caused by acts of terrorism, war or other conflicts, changes in geopolitical conditions, natural disasters, such as hurricanes, wild fires, freezes, flooding and other man-made disasters, health emergencies, epidemics or pandemics, climate changes or other catastrophic events and such other factors as described in the forward-looking statements under the caption Risk Factors in Item 1A. of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”), and in other reports filed by us with the Securities and Exchange Commission (“SEC”) from time to time. Other factors that have not been identified in this report could also have this effect. You are cautioned not to put undue reliance on any forward-looking statement, which speak only as of the date they were made. Except as required by law, the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in its business, results of operations or financial condition over time. During the quarter ended June 30, 2026, there were no material changes to the Risk Factors disclosed in the Company’s 2025 Form 10-K.

Current wording

This report contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, strategy, future performance and business of Hawthorn Bancshares, Inc., and its subsidiaries (collectively, the “Company”, “we”, “our”, or “us”), including, without limitation statements that are not historical in nature, and statements preceded by, followed by or that include the words believes, expects, may, will, should, could, anticipates, estimates, intends, plans, hopes or similar expressions. Forward-looking statements are not guarantees of future performance or results. They involve risks, uncertainties and assumptions. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, such possible events or factors such as: changes in economic conditions generally or in the Company's market area, changes in policies by regulatory agencies, governmental legislation and regulation, tariffs and trade disruptions, fluctuations in interest rates, changes in liquidity requirements, demand for loans in the Company’s market area, changes in accounting and tax principles, estimates made on income taxes, competition with other entities that offer financial services, cybersecurity threats, economic or other disruptions caused by acts of terrorism, war or other conflicts, changes in geopolitical conditions, natural disasters, such as hurricanes, wildfires, freezes, flooding and other man-made disasters, health emergencies, epidemics or pandemics, climate changes or other catastrophic events and such other factors as described in the forward-looking statements under the caption Risk Factors in Item 1A. of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”), and in other reports filed by us with the Securities and Exchange Commission (“SEC”) from time to time. Other factors that have not been identified in this report could also have this effect. You are cautioned not to put undue reliance on any forward-looking statement, which speak only as of the date they were made. Except as required by law, the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in its business, results of operations or financial condition over time. During the quarter ended September 30, 2026, there were no material changes to the Risk Factors disclosed in the Company’s 2025 Form 10-K.

Previous wording

Certain accounting policies are considered most critical to the understanding of the Company’s financial condition and results of operations. These critical accounting policies and estimates require management’s most difficult, subjective and complex judgments about matters that are inherently uncertain. Because these estimates and judgments are based on current circumstances, they may change over time or prove to be inaccurate based on actual experiences. In the event that different assumptions or conditions were to prevail, and depending upon the severity of such changes, the possibility of a materially different financial condition and/or results of operations could reasonably be expected. The Company has identified certain accounting policies as “critical accounting policies and estimates,” consisting of those related to the allowance for credit losses, as described in the section captioned “Critical Accounting Policies and Estimates” incorporated by reference in Item 7, Management’s Discussion and Analysis of Financial Condition and results of Operations included in the 2025 Form 10-K. There have been no changes in the Company's application of critical accounting policies and estimates since December 31, 2025.

Current wording

Certain accounting policies and estimates are considered most critical to the understanding of the Company’s financial condition and results of operations. These critical accounting policies and estimates require management’s most difficult, subjective and complex estimates and judgments about matters that are inherently uncertain. Because these estimates and judgments are based on current circumstances, they may change over time or prove to be inaccurate based on actual experiences. In the event that different assumptions or conditions were to prevail, and depending upon the severity of such changes, the possibility of a materially different financial condition and/or results of operations could reasonably be expected. The Company has identified certain accounting policies and estimates as “critical accounting policies and estimates,” consisting of those related to the allowance for credit losses, as described in the section captioned “Critical Accounting Policies and Estimates” incorporated by reference in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2025 Form 10-K. There have been no changes in the Company's application of critical accounting policies and estimates since December 31, 2025, except as noted below regarding the accounting for business combinations.

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 $1.77 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.

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 $2.14 billion in assets at September 30, 2026, provides a broad range of commercial and personal banking and other financial 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 central, southern, northwest Missouri, and also the Kansas City metropolitan area, including one branch in Kansas.

Previous wording

The success of the Company's growth strategy depends primarily on the ability of its banking subsidiary to generate an increasing level of loans and deposits at acceptable risk levels and on acceptable terms without significant increases in non-interest expenses relative to revenues generated. The Company's financial performance also depends, in part, on its ability to manage various portfolios and to successfully introduce additional financial products and services by expanding new and existing customer relationships, utilizing improved technology, and enhancing customer satisfaction. Furthermore, the success of the Company's growth strategy depends on its ability to maintain sufficient regulatory capital levels during periods in which general economic conditions are unfavorable and despite economic conditions being beyond its control.

Current wording

The success of the Company's growth strategy depends primarily on the ability of the Bank to generate an increasing level of loans and deposits at acceptable risk levels and on acceptable terms without significant increases in non-interest expenses relative to revenues generated. The Company's financial performance also depends, in part, on its ability to manage various portfolios and to successfully introduce additional financial products and services by expanding new and existing customer relationships, utilizing improved technology, and enhancing customer satisfaction. Furthermore, the success of the Company's growth strategy depends on its ability to maintain sufficient regulatory capital levels during periods in which general economic conditions are unfavorable and despite economic conditions being beyond its control.

Previous 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.

Current wording

Consolidated net incomewas $7.1 million, or $1.01 per diluted share, and $20.1 million, or $2.90 per diluted share, for the three and nine months ended September 30, 2026, respectively, compared to $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. Adjusted consolidated net income(1) was $8.6 million, or $1.23 per diluted share, and $22.2 million, or $3.20 per diluted share, for the three and nine months ended September 30, 2026, respectively, compared to $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. For the three and nine months ended September 30, 2026, the return on average assets was 1.48% and 1.46%, respectively, the return on average stockholders’ equity was 14.91% and 14.80%, respectively, and the efficiency ratio was 65.00% and 63.33%, respectively. For the three and nine months ended September 30, 2026, the adjusted return on average assets(1) was 1.80% and 1.61%, respectively, the adjusted return on average stockholders’ equity(1) was 18.17% and 16.33%, respectively, and the adjusted efficiency ratio(1) was 55.64% and 59.04%, respectively.

Previous 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.

Current wording

Net interest incomewas $19.3 million and $53.7 million for the three and nine months ended September 30, 2026, respectively, compared to $16.9 million and $48.3 million for the three and nine months ended September 30, 2025, respectively. Net interest margin, on a fully taxable equivalent (“FTE”) basis, was 4.41% and 4.21% for the three and nine months ended September 30, 2026, respectively, compared to 3.97% and 3.85% for the three and nine months ended September 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 $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.

Current wording

Non-interest incomewas $3.7 million and $12.2 million for the three and nine months ended September 30, 2026, respectively, compared to $3.7 million and $10.7 million for the three and nine months ended September 30, 2025, respectively. These changes are discussed in greater detail under the Non-interest Income and Expense section.

Previous wording

Non-interest expense was $13.7 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.

Current wording

Non-interest expense was $14.9 million and $41.7 million for the three and nine months ended September 30, 2026, respectively, compared to $12.8 million and $37.6 million for the three and nine months ended September 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 $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.

Current wording

Cash and cash equivalents – Cash and cash equivalents decreased $70.5 million to $33.8 million as of September 30, 2026, compared to $104.3 million as of December 31, 2025, and decreased $66.1 million compared to $99.9 million as of September 30, 2025. See the Liquidity Management sectionfor further discussion.

Previous 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.

Current wording

Loans – Loans held for investment increased $203.3 million to $1.69 billion as of September 30, 2026, compared to $1.49 billion as of December 31, 2025, and increased $176.1 million compared to $1.51 billion as of September 30, 2025. The increases are mainly attributed to $290.0 million of acquired loans from the FSC acquisition.

Previous 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.

Current wording

Asset quality – Non-performing assets totaled $9.9 million, or 0.59% of total loans, at September 30, 2026, compared to $7.0 million, or 0.47% of total loans, at December 31, 2025 and $7.3 million, or 0.48% of total loans, at September 30, 2025.

Previous 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.

Current wording

In the third quarter of 2026, the Company had net loan charge-offs of $0.07 million, or 0.02% of average loans, compared to net loan charge-offs of $0.04 million, or 0.01% of average loans, in the same prior year quarter.

Previous 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.

Current wording

The allowance for credit losses was $24.4 million, or 1.45% of loans outstanding, at September 30, 2026, compared to $21.1 million, or 1.42% of loans outstanding, at December 31, 2025, and $21.9 million, or 1.45% of loans outstanding, at September 30, 2025. These changes are discussed in greater detail under the Lending and Credit Management section.

Previous 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.

Current wording

Deposits – Total deposits increased $236.8 million to $1.79 billion as of September 30, 2026, compared to $1.55 billion as of December 31, 2025, and increased $265.0 million compared to $1.53 billion as of September 30, 2025. The increases are mainly attributed to $325.3 million of acquired deposits from the FSC acquisition.

Previous 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.

Current wording

Federal Home Loan Bank (“FHLB”) advances and other borrowings– Total FHLB advances and other borrowings decreased $27.8 million to $74.3 million as of September 30, 2026, compared to $102.1 million as of December 31, 2025, and decreased $102.8 million compared to $177.1 million as of September 30, 2025.

Previous 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%.

Current wording

Capital – The Company maintains its “well-capitalized” regulatory capital position. At September 30, 2026, capital ratios were as follows: total risk-based capital to risk-weighted assets 14.29%; tier 1 capital to risk-weighted assets 13.04%; common equity tier 1 capital to risk-weighted assets 10.15%; tier 1 leverage 12.59%; and stockholders’ equity to assets 8.92%.

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 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.

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, 2026 and 2025, 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 an FTE basis using the federal statutory income tax rate of 21%, net of nondeductible interest expense, for both the three months ended June 30, 2026 and 2025. Such adjustments totaled $0.3 million and $0.4 million for the three months ended June 30, 2026 and 2025, 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 months ended September 30, 2026 and 2025. Such adjustments totaled $0.4 million for both the three months ended September 30, 2026 and 2025.

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 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.

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, 2026, compared to the three and nine months ended September 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

(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 each of the three and six months ended June 30, 2026 and 2025. Such adjustments totaled $0.3 million and $0.7 million for the three and six months ended June 30, 2026, respectively, compared to $0.4 million and $0.6 million for the three and six months ended June 30, 2025, 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 each of the three and nine months ended September 30, 2026 and 2025. Such adjustments totaled $0.4 million and $1.0 million for the three and nine months ended September 30, 2026, respectively, compared to $0.4 million and $1.0 million for the three and nine months ended September 30, 2025, respectively.

Previous 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.

Current wording

Financial results for the quarter ended September 30, 2026, compared to the quarter ended September 30, 2025, reflected an increase in net interest income on an FTE basis of $2.4 million, or 13.9%. Measured as a percentage of average earning assets, the net interest margin (expressed on an FTE basis) increased to 4.41% for the quarter ended September 30, 2026, compared to 3.97% for the quarter ended September 30, 2025, and increased to 4.21% for the nine months ended September 30, 2026, compared to 3.85% for the nine months ended September 30, 2025.

Previous 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.

Current wording

Average interest earning assets increased $20.9 million, or 1.2%, to $1.74 billion for the nine months ended September 30, 2026, compared to $1.71 billion for the nine months ended September 30, 2025, and average interest bearing liabilities decreased $9.2 million, or 0.7%, to $1.23 billion for the nine months ended September 30, 2026, compared to $1.24 billion for the nine months ended September 30, 2025.

Previous 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.

Current wording

Total interest income (expressed on an FTE basis) was $27.1 million and $76.6 million for the three and nine months ended September 30, 2026, respectively, compared to $25.4 million and $73.4 million for the three and nine months ended September 30, 2025, respectively. The Company’s rates earned on interest earning assets were 6.08% and 5.90% for the three and nine months ended September 30, 2026, respectively, compared to 5.84% and 5.72% for the three and nine months ended September 30, 2025, respectively.

Previous 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.

Current wording

Interest income on loans held for investment (expressed on an FTE basis) was $24.2 million and $68.5 million for the three and nine months ended September 30, 2026, respectively, compared to $22.8 million and $65.7 million for the three and nine months ended September 30, 2025, respectively.

Previous wording

Average loans outstanding decreased $26.5 million, or 1.8%, to $1.43 billion for the quarter ended June 30, 2026 compared to $1.45 billion for the quarter ended June 30, 2025. The average yield on loans increased to 6.18% for the quarter ended June 30, 2026 compared to 5.98% for the quarter ended June 30, 2025.

Current wording

Average loans outstanding increased $20.9 million, or 1.4%, to $1.50 billion for the quarter ended September 30, 2026, compared to $1.48 billion for the quarter ended September 30, 2025. The average yield on loans increased to 6.42% for the quarter ended September 30, 2026, compared to 6.12% for the quarter ended September 30, 2025.

Previous 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.

Current wording

Average loans outstanding remained consistent at $1.47 billion for the nine months ended September 30, 2026 and September 30, 2025. The average yield on loans increased to 6.24% for the nine months ended September 30, 2026, compared to 6.00% for the nine months ended September 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 $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.

Current wording

Interest income on available-for-sale securities(expressed on an FTE basis) was $2.6 million and $6.7 million for the three and nine months ended September 30, 2026, respectively, compared to $2.2 million and $6.5 million for the three and nine months ended September 30, 2025, respectively.

Previous wording

Average securities decreased $5.9 million, or 2.6%, to $216.1 million for the six months ended June 30, 2026 compared to $222.0 million for the six months ended June 30, 2025. The average yield on securities decreased to 3.82% for the six months ended June 30, 2026 compared to 3.93% for the six months ended June 30, 2025. See the Liquidity Management section for further discussion.

Current wording

Average securities increased $6.0 million, or 2.7%, to $226.9 million for the nine months ended September 30, 2026, compared to $220.9 million for the nine months ended September 30, 2025. The average yield on securities decreased to 3.93% for the nine months ended September 30, 2026, compared to 3.95% for the nine months ended September 30, 2025. See the Liquidity Management section for further discussion.

Previous 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.

Current wording

Total interest expense was $7.5 million and $21.9 million for the three and nine months ended September 30, 2026, respectively, compared to $8.1 million and $24.1 million for the three and nine months ended September 30, 2025, respectively. The Company’s rates paid on interest bearing liabilities were 2.37% and 2.38% for the three and nine months ended September 30, 2026, respectively, compared to 2.61% and 2.60% for the three and nine months ended September 30, 2025, respectively. See the Liquidity Management section for further discussion.

Previous 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.

Current wording

Interest expense on deposits was $6.1 million and $17.7 million for the three and nine months ended September 30, 2026, respectively, compared to $6.6 million and $19.9 million for the three and nine months ended September 30, 2025, respectively.

Previous 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.

Current wording

Average interest bearing deposits increased $35.6 million, or 3.2%, to $1.14 billion for the quarter ended September 30, 2026, compared to $1.10 billion for the quarter ended September 30, 2025. The average cost of deposits decreased to 2.13% for the quarter ended September 30, 2026, compared to 2.36% for the quarter ended September 30, 2025.

Previous wording

Average interest bearing deposits decreased $32.3 million, or 2.9%, to $1.09 billion for the six months ended June 30, 2026 compared to $1.12 billion for the six months ended June 30, 2025. The average cost of deposits decreased to 2.14% for the six months ended June 30, 2026 compared to 2.40% for the six months ended June 30, 2025.

Current wording

Average interest bearing deposits remained consistent at $1.11 billion for both the nine months ended September 30, 2026 and September 30, 2025. The average cost of deposits decreased to 2.14% for the nine months ended September 30, 2026, compared to 2.38% for the nine months ended September 30, 2025.

Previous 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.

Current wording

Interest expense on borrowings was $1.4 million and $4.2 million for the three and nine months ended September 30, 2026, respectively, compared to $1.6 million and $4.2 million for the three and nine months ended September 30, 2025, respectively.

Previous wording

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

Current wording

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

Previous wording

Total non-interest income increased $1.8 million, or 51.7%, to $5.4 million for the quarter ended June 30, 2026 compared to $3.5 million for the quarter ended June 30, 2025, and increased $1.5 million, or 21.0% to $8.5 million for the six months ended June 30, 2026 compared to $7.0 million for the six months ended June 30, 2025. The increase for the three and six months ended June 30, 2026 was primarily due to gains recorded on other real estate owned and premises and equipment held for sale.

Current wording

Total non-interest income remained consistent at $3.7 million for both the quarter ended September 30, 2026 and September 30, 2025, and increased $1.5 million, or 13.6%, to $12.2 million for the nine months ended September 30, 2026, compared to $10.7 million for the nine months ended September 30, 2025. The changes for the nine months ended September 30, 2026 were primarily due to gains recorded on other real estate owned and premises and equipment held for sale.

Previous 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.

Current wording

Service charges and other fees decreased $0.05 million, or 5.3%, to $0.9 million for the quarter ended September 30, 2026, compared to $0.9 million for the quarter ended September 30, 2025, and decreased $0.3 million, or 9.6%, to $2.5 million for the nine months ended September 30, 2026, compared to $2.8 million for the nine months ended September 30, 2025. The decrease for the three and nine months ended September 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 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.

Current wording

Wealth management revenue increased $0.1 million, or 13.7%, to $0.7 million for the quarter ended September 30, 2026, compared to $0.7 million for the quarter ended September 30, 2025, and increased $0.3 million, or 20.6% to $2.0 million for the nine months ended September 30, 2026, compared to $1.7 million for the nine months ended September 30, 2025. The increase for the three and nine months ended September 30, 2026 was primarily attributable to continued growth in new and existing accounts.

Previous wording

Gains on other real estate owned were $0.3 million for the quarter ended June 30, 2026 compared to losses of $0.2 million for the quarter ended June 30, 2025, and gains of $0.3 million for the six months ended June 30, 2026 compared to losses of $0.2 million for the six months ended June 30, 2025. The increase for the three and six months ended June 30, 2026 is primarily attributed to a large sale of other real estate owned during the quarter ended June 30, 2026.

Current wording

Gains (losses) on other real estate owned were $0.1 million for the quarter ended September 30, 2026, compared to none for the quarter ended September 30, 2025, and gains of $0.4 million for the nine months ended September 30, 2026, compared to losses of $0.2 million for the nine months ended September 30, 2025. The increase for the three and nine months ended September 30, 2026 is primarily attributed to a sale of other real estate owned during the three and nine months ended September 30, 2026.

Previous wording

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

Current wording

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

Previous wording

Salaries increased $0.8 million, or 14.1%, to $6.2 million for the quarter ended June 30, 2026 compared to $5.4 million for the quarter ended June 30, 2025, and increased $0.8 million, or 7.1%, to $11.5 million for the six months ended June 30, 2026 compared to $10.8 million for the six months ended June 30, 2025. The increase for the three and six months ended June 30, 2026 is attributed to incentive payouts paid during the periods and increases in number of full-time equivalent employees.

Current wording

Salaries increased $0.01 million, or 0.2%, to $5.8 million for the quarter ended September 30, 2026, compared to $5.7 million for the quarter ended September 30, 2025, and increased $0.8 million, or 4.7%, to $17.3 million for the nine months ended September 30, 2026, compared to $16.5 million for the nine months ended September 30, 2025. The increase for the three and nine months ended September 30, 2026 is attributed to increases in number of full-time equivalent employees.