OHIO VALLEY BANC CORP

Previous wording

Certain statements contained in this quarterly report on Form 10-Q (the “report”) and other publicly available documents incorporated herein by reference constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as defined in the Private Securities Litigation Reform Act of 1995. Such statements are often, but not always, identified by the use of such words as “believes,” “anticipates,” “expects,” “intends,” “plan,” “goal,” “seek,” “project,” “estimate,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and other similar expressions. Such statements involve various important assumptions, risks, uncertainties, and other factors, many of which are beyond our control, particularly with regard to developments related to the current economic and geopolitical landscape, and which could cause actual results to differ materially from those expressed in such forward looking statements. However, it is difficult to predict the effect of known factors, and Ohio Valley Banc Corp. (“Ohio Valley”) cannot anticipate all factors that could affect future results. Important factors that could cause actual results to differ materially from expectations expressed in or implied in forward looking statements include, but are not limited to: the effects of fluctuating interest rates on our customers’ operations and financial condition; changes in political, economic or other factors, such as inflation rates, recessionary or expansive trends, taxes, tariffs, the effects of implementation of legislation and the continuing economic uncertainty in various parts of the world; competitive pressures; the level of defaults and prepayment on loans made by Ohio Valley and its direct and indirect subsidiaries (collectively, the “Company”); unanticipated litigation, claims, or assessments; fluctuations in the cost of obtaining funds to make loans; and regulatory changes. Additional detailed information concerning such factors is available in the Company’s filings with the Securities and Exchange Commission, under the Exchange Act, including the disclosure under the heading “Item 1A. Risk Factors” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and elsewhere in this document (including, without limitation, in conjunction with the forward looking statements themselves and under the heading “Critical Accounting Estimates”). All forward looking statements are qualified in their entirety by these and other cautionary statements that the Company makes from time to time in its other SEC filings and public communications. Readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. The Company undertakes no obligation and disclaims any duty to update or revise any forward looking statements, whether as a result of new inf…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Certain statements contained in this quarterly report on Form 10-Q (the “report”) and other publicly available documents incorporated herein by reference constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as defined in the Private Securities Litigation Reform Act of 1995. Such statements are often, but not always, identified by the use of such words as “believes,” “anticipates,” “expects,” “intends,” “plans,” “goals,” “seeks,” “projects,” “estimates,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and other similar expressions. Such statements involve various important assumptions, risks, uncertainties, and other factors, many of which are beyond our control, particularly with regard to developments related to the current economic and geopolitical landscape, and which could cause actual results to differ materially from those expressed in such forward looking statements. However, it is difficult to predict the effect of known factors, and Ohio Valley Banc Corp. (“Ohio Valley”) cannot anticipate all factors that could affect future results. Important factors that could cause actual results to differ materially from expectations expressed in or implied in forward looking statements include, but are not limited to: the effects of fluctuating interest rates on our customers’ operations and financial condition; changes in political, economic or other factors, such as inflation rates, recessionary or expansive trends, taxes, tariffs, the effects of implementation of legislation and the continuing economic uncertainty in various parts of the world; competitive pressures; the level of defaults and prepayment on loans made by Ohio Valley and its direct and indirect subsidiaries (collectively, the “Company”); unanticipated litigation, claims, or assessments; fluctuations in the cost of obtaining funds to make loans; and regulatory changes. Additional detailed information concerning such factors is available in the Company’s filings with the Securities and Exchange Commission, under the Exchange Act, including the disclosure under the heading “Item 1A. Risk Factors” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and elsewhere in this document (including, without limitation, in conjunction with the forward looking statements themselves and under the heading “Critical Accounting Estimates”). All forward looking statements are qualified in their entirety by these and other cautionary statements that the Company makes from time to time in its other SEC filings and public communications. Readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. The Company undertakes no obligation and disclaims any duty to update or revise any forward looking statements, whether as a result of ne…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

FINANCIAL RESULTS OVERVIEW: Net income totaled $4,297 during the first quarter of 2026, a decrease of $109 from the same period in 2025. Earnings per share for the first quarter of 2026 finished at $.91 per share, compared to $.94 per share during the first quarter of 2025. Lower net earnings had a corresponding impact on the Company’s annualized net income to average asset ratio, or return on assets, which decreased 12 basis points to 1.08% during the first quarter of 2026, compared to the same period in 2025. In addition, the Company’s net income to average equity ratio, or return on equity, decreased 165 basis points to 10.17% during the first quarter of 2026, compared to the same period in 2025.

Current wording

FINANCIAL RESULTS OVERVIEW: Net income totaled $2,927 during the second quarter of 2026, a decrease of $1,283 from the same period in 2025. Earnings per share for the second quarter of 2026 finished at $.62 per share, compared to $.89 per share during the second quarter of 2025. Net income totaled $7,224 during the first six months of 2026, a decrease of $1,392 from the same period in 2025. Earnings per share during the first six months of 2026 finished at $1.53 per share, compared to $1.83 per share during the first six months of 2025. Lower net earnings had a corresponding impact on the Company’s annualized net income to average asset ratio, or return on assets, which decreased 42 basis points to 0.70% during the second quarter of 2026, and decreased 27 basis points to 0.89% during the first six months of 2026, compared to the same periods in 2025. In addition, the Company’s net income to average equity ratio, or return on equity, decreased 397 basis points to 6.82% during the second quarter of 2026, and decreased 282 basis points to 8.48% during the first six months of 2026, compared to the same periods in 2025.

Previous wording

During the three months ended March 31, 2026, net interest income increased $1,748, or 13.3%, over the same period in 2025. This increase was primarily related to a $120,686 increase in average earning assets, led mostly by a 14.0% increase in average loans. The growth in average loans was related to the commercial and residential real estate lending segments. The emphasis on higher-yielding loan growth during the first quarter of 2026 contributed to lower average securities and interest-bearing deposits with banks, which decreased 5.5% and 14.3%, respectively, compared to the same period in 2025. The decrease in average securities was also impacted by a reduced need for securities to be pledged as collateral to secure public fund deposits. Earnings were further enhanced by a higher net interest margin, which finished at 4.01% at March 31, 2026 compared to 3.85% at March 31, 2025. Margin growth was related to an increase in the yield on earning assets, which outpaced the increase in average costs associated with the Company’s funding sources. The improvement to earning asset yields was directly related to the growth in higher-yielding loans and a 59 basis point improvement in the average yield on securities. The growth in average securities yield was largely impacted by several bond transactions that occurred in 2025 that replaced lower-yielding taxable securities with similar taxable securities at higher rates of return. The cost of funding sources increased primarily within the Company’s Negotiable Order of Withdrawal (“NOW”) and savings accounts, while the average cost on certificates of deposit (“CDs”) decreased.

Current wording

During the three and six months ended June 30, 2026, net interest income increased $863, or 5.9%, and $2,611, or 9.4%, over the same periods in 2025. The increases were primarily related to a $177,570 and $149,285 increase in average earning assets during the quarterly and year-to-date periods. This was led mostly by a 14.7% and 14.4% increase in average loans during the three and six months ended June 30, 2026 compared to the same periods in 2025. The growth in average loans was related to the commercial and residential real estate lending segments. The emphasis on higher-yielding loan growth during the first half of 2026 contributed to lower average securities during the three and six months ended June 30, 2026. The decrease in average securities was also impacted by a reduced need for securities to be pledged as collateral to secure public fund deposits. Net interest earnings were negatively affected by a lower net interest margin, which decreased 24 basis points during the second quarter of 2026, and decreased 4 basis points during the first half of 2026, compared to the same periods in 2025. Margin contraction, especially during the quarter, was largely impacted by the effects of an $817 market discount on purchased loans that was recorded to interest income during the second quarter of 2025 compared to no market discount income during 2026. Margin decreases were also impacted by the cost of funding sources increasing at a greater pace than the yield on earning assets. The cost of funding sources increased as the composition of funding sources shifted to higher cost certificates of deposit (“CDs”) from promotional offerings, and higher money market accounts from individual and business customers.

Previous wording

During the three months ended March 31, 2026, the Company’s provision for credit loss expense increased $1,206 when compared to the same period in 2025. The increase resulted primarily from a $2,031 specific allocation on two collateral dependent loans. This increase in reserves was partially offset by a decrease in certain qualitative risk factors and lower net charge offs.

Current wording

During the three and six months ended June 30, 2026, the Company’s provision for credit loss expense increased $2,607 and $3,813, when compared to the same periods in 2025. The increase resulted primarily from $4,531 and $6,561 in specific allocations on two collateral dependent loans during the three and six months ended June 30, 2026. These increases in reserves were partially offset by a net decrease in modeled loss rates and a decrease in certain qualitative risk factors and lower net charge offs.

Previous wording

During the three months ended March 31, 2026, noninterest expense increased $483, or 4.5%, over the same period in 2025. Noninterest expense was impacted mostly by salaries and employee benefits, which increased $335 due to annual merit increases and higher health insurance premiums. Also increasing was software expense, which was up $132 over 2025, resulting from the investment in software to enhance internal processes. Noninterest expense was further impacted by a $58 increase in FDIC insurance expense related to a higher assessment base and an increase in the assessment rate in relation to higher nonperforming loans.

Current wording

During the three and six months ended June 30, 2026, noninterest expense increased $196, or 1.8%, and $679, or 3.1%, over the same periods in 2025. Noninterest expense was impacted mostly by salaries and employee benefits, which increased $359 and $694 during the three and six months ended June 30, 2026 over the same periods in 2025 due to annual merit increases and higher health insurance premiums. Other noninterest expense was up $251 and $278 during the three and six months ended June 30, 2026 over the same periods in 2025 due to higher state taxes, loan costs, and other miscellaneous expenses associated with troubled credits. Also increasing was software expense and FDIC insurance, which were collectively up $151 and $341 during the three and six months ended June 30, 2026 over the same periods in 2025. Software costs increased due to the investment in software to enhance internal processes, while FDIC premiums increased due to a higher assessment base and an increase in the assessment rate in relation to higher nonperforming loans. Partially offsetting increases in noninterest expense were lower data processing expenses, which decreased $605 and $619 during the three and six months ended June 30, 2026 over the same periods in 2025. This was due to a $544 recovery from a vendor in the second quarter of 2026 for a billing error.

Previous wording

The $190 decrease in the Company’s provision for income taxes during the three months ended March 31, 2026, compared to the same period in 2025, was largely due to the decrease in operating income affected by the factors mentioned above, as well as a decrease in the effective tax rate.

Current wording

The $319 and $509 decreases in the Company’s provision for income taxes during the three and six months ended June 30, 2026, compared to the same periods in 2025, were largely due to the decrease in operating income affected by the factors mentioned above, as well as a decrease in the effective tax rate.

Previous wording

At March 31, 2026, total assets were $1,677,502, an increase of $94,848 from year-end 2025. The increase in assets was primarily the result of a $78,020 increase in interest-bearing deposits with banks, and an $18,796 increase in loans. The increase in interest-bearing deposits with banks was primarily associated with balances maintained at the Federal Reserve Bank (“Federal Reserve”) that were impacted by the first quarter growth in both interest- and noninterest-bearing deposit liabilities.

Current wording

At June 30, 2026, total assets were $1,661,436, an increase of $78,782 from year-end 2025. The increase in assets was primarily the result of a $50,096 increase in loans, and a $31,513 increase in interest-bearing deposits with banks. Loan growth was led by a 5.7% increase in the Company’s commercial loan portfolio, and a 4.5% increase in the Company’s residential real estate loan portfolio. The increase in interest-bearing deposits with banks was primarily associated with balances maintained at the Federal Reserve Bank (“FRB”) that were impacted by the year-to-date growth in both interest- and noninterest-bearing deposit liabilities.

Previous wording

At March 31, 2026, total liabilities were $1,506,222, up $93,825 from year-end 2025. Contributing most to this increase were higher interest-bearing deposit balances, up $75,378 from year-end 2025, consisting of higher balances from time deposits (+11.3%) and savings, NOW and money market balances (+3.8%), while noninterest-bearing demand deposits increased 5.9% from year-end 2025.

Current wording

At June 30, 2026, total liabilities were $1,488,050, up $75,653 from year-end 2025. Contributing most to this increase were higher interest-bearing deposit balances, up $73,604 from year-end 2025, consisting of higher balances from time deposits (+8.8%) and savings, negotiable order of withdrawal ("NOW") and money market balances (+5.8%), while noninterest-bearing demand deposits increased 1.6% from year-end 2025.

Previous wording

At March 31, 2026, total shareholders' equity was $171,280, up $1,023 from December 31, 2025. This increase consisted of year-to-date net income being partially offset by an after-tax increase in net unrealized losses on AFS securities and year-to-date cash dividends paid. Regulatory capital ratios of the Company remained higher than the "well capitalized" minimums.

Current wording

At June 30, 2026, total shareholders' equity was $173,386, up $3,129 from December 31, 2025. This increase consisted of year-to-date net income being partially offset by year-to-date cash dividends paid and an after-tax increase in net unrealized losses on AFS securities. Regulatory capital ratios of the Company remained higher than the "well capitalized" minimums.

Previous wording

At March 31, 2026, cash and cash equivalents were $125,327, an increase of $79,430, or 173.1%, from December 31, 2025. The increase came primarily from interest-bearing deposits with banks, which were up $78,020, or 251.3%, from year-end 2025. The Company’s interest-bearing FRB clearing account contributed most to the increase in interest-bearing deposits with banks, representing 87% of cash and cash equivalents at March 31, 2026. The Company utilizes its interest-bearing FRB clearing account to manage excess funds, as well as to assist in funding earning asset growth. The increase in excess funds during the first three months of 2026 resulted primarily from growth in total deposits, which were up 7.1% from year-end 2025. The interest rate paid on both the required and excess reserve balances of the FRB is based on the targeted federal funds rate established by the Federal Open Market Committee (“FOMC”). During the first quarter of 2026, the FOMC took no action to reduce the targeted federal funds rate, which remains at a target range of 3.50% to 3.75%. The interest-bearing deposit balances in the FRB are 100% secured by the U.S. Government.

Current wording

At June 30, 2026, cash and cash equivalents were $78,084, an increase of $32,187, or 70.1%, from December 31, 2025. The increase came primarily from interest-bearing deposits with banks, which were up $31,513, or 101.5%, from year-end 2025. The Company’s interest-bearing FRB clearing account contributed most to the increase in interest-bearing deposits with banks, representing 80% of cash and cash equivalents at June 30, 2026. The Company utilizes its interest-bearing FRB clearing account to manage excess funds, as well as to assist in funding earning asset growth. The increase in excess funds during the first half of 2026 resulted primarily from growth in total deposits, which were up 5.9% from year-end 2025. The interest rate paid on both the required and excess reserve balances of the FRB is based on the targeted federal funds rate established by the Federal Open Market Committee (“FOMC”). During the first half of 2026, the FOMC took no action to reduce the targeted federal funds rate, which remains at a target range of 3.50% to 3.75%. The interest-bearing deposit balances in the FRB are 100% secured by the U.S. Government.

Previous wording

The balance of total securities decreased $2,484, or 1.0% from year-end 2025. The decrease came mostly from U.S. Government agency (“Agency”) mortgage-backed and U.S. Government securities, which were collectively down $2,441, or 1.0%, from year-end 2025. During the first three months of 2026, total purchases, net of maturities, for both Agency mortgage-backed and U.S. Government securities totaled $9,677. This was completely offset by $9,681 in principal repayments coming mostly from Agency mortgage-backed securities. The monthly repayment of principal has been the primary advantage of Agency mortgage-backed securities as compared to other types of investment securities, which deliver proceeds upon maturity or call date. At March 31, 2026, the Company’s investment securities portfolio was comprised mostly of Agency mortgage-backed securities at 62.3% of total investments, while U.S. Government securities represented 33.6%.

Current wording

The balance of total investment securities decreased $3,342, or 1.3% from year-end 2025. The decrease came mostly from U.S. Government and U.S. Government agency (“Agency”) mortgage-backed securities, which were collectively down $3,654, or 1.5%, from year-end 2025. During the first half of 2026, total purchases, net of maturities, for both U.S. Government and Agency mortgage-backed securities totaled $17,152. This was completely offset by $19,189 in principal repayments coming mostly from Agency mortgage-backed securities. The monthly repayment of principal has been the primary advantage of Agency mortgage-backed securities as compared to other types of investment securities, which deliver proceeds upon maturity or call date. At June 30, 2026, the Company’s investment securities portfolio was comprised mostly of Agency mortgage-backed securities at 63.0% of total investments, while U.S. Government securities represented 32.7%.

Previous wording

Included in the factors mentioned above were changes in net unrealized losses associated with AFS securities. During the first three months of 2026, an increase in long-term market rates led to a $2,810 decrease in the fair value associated with the Company’s AFS securities at March 31, 2026. The fair value of an investment security moves inversely to interest rates, so as rates increased, the fair value decreased, causing the unrealized loss in the portfolio to increase. These changes in rates are typical and do not impact earnings of the Company as long as the securities are held to full maturity.

Current wording

Included in the factors mentioned above were changes in net unrealized losses associated with AFS debt securities. During the first half of 2026, an increase in long-term market rates led to a $2,352 decrease in the fair value associated with the Company’s AFS securities at June 30, 2026. The fair value of an investment security moves inversely to interest rates, so as rates increased, the fair value decreased, causing the unrealized loss in the portfolio to increase. These changes in rates are typical and do not impact earnings of the Company as long as the securities are held to full maturity.

Previous wording

Residential real estate loans consist of loans to individuals for the purchase of 1-4 family primary residences with repayment primarily through wage or other income sources of the individual borrower. The Company’s loss exposure to these loans is dependent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination.

Current wording

Residential real estate loans consist of loans to individuals for the purchase of 1-4 family primary residences with repayment primarily through wage or other income sources of the individual borrower. The Company’s loss exposure to these loans is dpendent on local market conditions for residential properties as loan amounts are determined, in part, by the fair value of the property at origination.

Previous wording

The Company’s loan balances increased to $1,214,814 at March 31, 2026, representing an increase of $18,796, or 1.6%, as compared to $1,196,018 at December 31, 2025. The increase in loans came primarily from both the commercial and residential real estate portfolios, as well as the commercial and industrial portfolio, while partially being offset by a decrease in the consumer loan portfolio from year-end 2025.

Current wording

The Company’s loan balances increased to $1,246,114 at June 30, 2026, representing an increase of $50,096, or 4.2%, as compared to $1,196,018 at December 31, 2025. The increase in loans came primarily from both the commercial and residential real estate portfolios, as well as the commercial and industrial portfolio, while partially being offset by a decrease in the consumer loan portfolio from year-end 2025.

Previous wording

The Company’s commercial loan portfolio increased $17,964, or 2.8%, from year-end 2025. The most significant driver of this increase was higher loan balances within the commercial real estate portfolio, which increased $14,206, or 3.0%, from year-end 2025. At March 31, 2026, commercial real estate loans represented the largest segment of the Company’s total loan portfolio at 39.9%. The increase from year-end 2025 came primarily from new originations within the nonowner-occupied and construction loan segments.

Current wording

The Company’s commercial loan portfolio increased $36,479, or 5.7%, from year-end 2025. The most significant driver of this increase was higher loan balances within the commercial real estate portfolio, which increased $37,711, or 8.0%, from year-end 2025. At June 30, 2026, commercial real estate loans represented the largest segment of the Company’s total loan portfolio at 40.7%. The increase from year-end 2025 came primarily from new originations within the nonowner-occupied and construction loan segments.

Previous wording

Commercial loans were also positively impacted by an increase in the commercial and industrial portfolio, which was up $3,758, or 2.2%, from year-end 2025. The growth was impacted by an increase in larger loan originations during the quarter. While management believes lending opportunities exist in the Company’s markets, future commercial lending activities will depend upon economic and other related conditions, such as general demand for loans in the Company’s primary markets, interest rates offered by the Company, and the effects of competitive pressure and normal underwriting considerations. Management will continue to place emphasis on its commercial lending, which generally yields a higher return on investment as compared to other types of loans.

Current wording

The growth in commercial loans was partially offset by a decrease in the commercial and industrial portfolio, which was down $1,232, or 0.7%, from year-end 2025. The decrease was impacted by an increase in principal repayments during the first half of 2026. While management believes lending opportunities exist in the Company’s markets, future commercial lending activities will depend upon economic and other related conditions, such as general demand for loans in the Company’s primary markets, interest rates offered by the Company, and the effects of competitive pressure and normal underwriting considerations. Management will continue to place emphasis on its commercial lending, which generally yields a higher return on investment compared to other types of loans.

Previous wording

At March 31, 2026, residential real estate loans represented the second largest segment of the Company’s total loan portfolio at 34.9%. During 2026, mortgage rates remained elevated relative to variable rate options, which provided the Company with less opportunities to originate and sell long-term fixed-rate residential mortgages to the Federal Home Loan Mortgage Corporation. Due to the elevated mortgage rates, mortgage customers were selecting more in-house variable rate mortgage products than long-term fixed rate products, which enhanced the growth in the portfolio. As a result, residential real estate loans increased $5,841, or 1.4%, from year-end 2025.

Current wording

At June 30, 2026, residential real estate loans represented the second largest segment of the Company’s total loan portfolio at 35.1%. During 2026, mortgage rates remained elevated relative to variable rate options, which provided the Company with fewer opportunities to originate and sell long-term fixed-rate residential mortgages to the Federal Home Loan Mortgage Corporation. Due to the elevated mortgage rates, mortgage customers were selecting more in-house variable rate mortgage products than long-term fixed rate products, which enhanced the growth in the portfolio. As a result, residential real estate loans increased $19,013, or 4.5%, from year-end 2025.

Previous wording

The increases in the Company’s commercial and residential real estate loan portfolios at March 31, 2026 were partially offset by a decrease in the Company’s consumer loan portfolio, which was down $5,009, or 3.6%, from year-end 2025. This change was impacted by a $3,411, or 6.4%, decrease in other consumer loans from year-end 2025, impacted by principal repayments and payoffs. Decreases in consumer loans also came from a $2,876, or 7.7%, decrease in automobile loans. This was directly impacted by management’s strategy to place more emphasis on higher yielding loan portfolios (i.e. commercial, and to a smaller extent, residential real estate). Indirect automobile loans bear additional costs from dealers that partially offset interest revenue and lower the rate of return. As a result, the Company exited the indirect lending business for automobiles and recreational vehicles in 2024. Decreases in consumer loans were partially offset by a $1,278, or 2.5%, increase in home equity lines of credit.

Current wording

The increases in the Company’s commercial and residential real estate loan portfolios at June 30, 2026 were partially offset by a decrease in the Company’s consumer loan portfolio, which was down $5,396, or 3.8%, from year-end 2025. This change was impacted by a $5,412, or 14.5%, decrease in automobile loans. This was directly impacted by management’s strategy to place more emphasis on higher yielding loan portfolios (i.e. commercial, and to a smaller extent, residential real estate). Indirect automobile loans bear additional costs from dealers that partially offset interest revenue and lower the rate of return. As a result, the Company exited the indirect lending business for automobiles and recreational vehicles in 2024. Decreases in consumer loans also came from a $4,185, or 7.9%, decrease in other consumer loans from year-end 2025, impacted by principal repayments and payoffs. Decreases in consumer loans were partially offset by a $4,201, or 8.3%, increase in home equity lines of credit.

Previous wording

For AFS debt securities, the Company evaluates the securities at each measurement date to determine whether the decline in the fair value below the amortized costs basis is due to credit-related factors or noncredit-related factors. Upon adoption of ASC 326 on January 1, 2023, and as of March 31, 2026, the Company determined that all AFS securities that experienced a decline in fair value below the amortized cost basis were due to non-credit related factors. Therefore, no ACL was recorded, and no provision expense was recognized during the three months ended March 31, 2026.

Current wording

For AFS debt securities, the Company evaluates the securities at each measurement date to determine whether the decline in the fair value below the amortized costs basis is due to credit-related factors or noncredit-related factors. As of June 30, 2026, the Company determined that all AFS securities that experienced a decline in fair value below the amortized cost basis were due to non-credit related factors. Therefore, no ACL was recorded, and no provision expense was recognized during the six months ended June 30, 2026.

Previous wording

As of March 31, 2026, the ACL for loans totaled $12,943, or 1.07%, of total loans. As of December 31, 2025, the ACL for loans totaled $11,519, or 0.96%, of total loans. The $1,424, or 12.4%, increase in the ACL wasimpacted by a $2,031 increase in specific reserves on loans individually evaluated for impairment from year-end 2025. During the first quarter of 2026, the Company individually evaluated the commercial real estate loans of two borrowers for expected credit loss. After measuring the fair value of the loans’ collateral to the loans’ recorded investment, the Company identified $2,031 in expected losses based on the impairment associated with the borrowers’ collateral. This resulted in a corresponding charge to provision expense to establishthe specific allocation within the ACL at March 31, 2026. The increase in the ACL was also impacted by additional reserves associated with loan growth of $18,796 during the first quarter of 2026 compared to an $18,529 decrease in loan balances during the first quarter of 2025. These increases in specific and general reserves were partially offset bythe improvements in certain qualitative risk factors that included improved portfolio terms, such as reduced exposure to variable rate loans repricing higher and a positive net charge-off trend for consumer loans due to exiting indirect lending, along with improved general economic conditions. The Company also experienceda decrease in modeled loss rates due to the improvements in GDP and unemployment projections.

Current wording

As of June 30, 2026, the ACL for loans totaled $16,610, or 1.33%, of total loans. As of December 31, 2025, the ACL for loans totaled $11,519, or 0.96%, of total loans. The $5,091, or 44.2%, increase in the ACL wasimpacted by a $6,561 increase in specific reserves on loans individually evaluated for impairment from year-end 2025. During the first half of 2026, the Company individually evaluated the commercial loans of two borrowers for expected credit loss. Of the two stressed loan relationships, one is a commercial and industrial loan to an automobile dealership and the other is a commercial real estate loan for the construction of a hotel. After measuring the fair value of the loans’ collateral to the loans’ recorded investment, the Company identified $6,561 in expected losses based on the impairment associated with the borrowers’ collateral. This resulted in a corresponding charge to provision expense to establishthe specific allocation within the ACL at June 30, 2026. The Company considers the specific allocations to be related to this specific group of loan relationships and not reflective of a broader deterioration in portfolio credit quality.

Previous wording

The Company experienced higher delinquency levels as compared to year-end 2025. Nonperforming loans to total loans increased to 1.64% at March 31, 2026, compared to 1.40% at December 31, 2025, while nonperforming assets to total assets increased to 1.19% at March 31, 2026, compared to 1.06% at December 31, 2025. The increase in nonperforming loans was primarily related to one commercial loan being placed on nonaccrual status during the first quarter of 2026. The loan is secured by commercial real estate and was identified as having collateral impairment, which required a specific allocation of the ACL at March 31, 2026.

Current wording

The Company experienced higher delinquency levels as compared to year-end 2025. Nonperforming loans to total loans increased to 1.44% at June 30, 2026, compared to 1.40% at December 31, 2025, while nonperforming assets to total assets increased to 1.08% at June 30, 2026, compared to 1.06% at December 31, 2025. The increase in nonperforming loans was primarily related to one commercial loan being placed on nonaccrual status during the first quarter of 2026. The loan is secured by commercial real estate and was identified as having collateral impairment, which required a specific allocation of the ACL at June 30, 2026.

Previous wording

Deposits are used as part of the Company’s liquidity management strategy to meet obligations for depositor withdrawals, fund the borrowing needs of loan customers, and fund ongoing operations. Deposits continue to be the most significant source of funds used by the Company to support earning assets. Total deposits at March 31, 2026 increased $94,007, or 7.1%, from year-end 2025. The increase in deposits came primarily from interest-bearing deposit balances, which were up by $75,378, or 7.4%, from year-end 2025, while noninterest-bearing deposits increased $18,629, or 5.9%, from year-end 2025.

Current wording

Deposits are used as part of the Company’s liquidity management strategy to meet obligations for depositor withdrawals, fund the borrowing needs of loan customers, and fund ongoing operations. Deposits continue to be the most significant source of funds used by the Company to support earning assets. Total deposits at June 30, 2026 increased $78,761, or 5.9%, from year-end 2025. The increase in deposits came primarily from interest-bearing deposit balances, which were up by $73,604, or 7.2%, from year-end 2025, while noninterest-bearing deposits increased $5,157, or 1.6%, from year-end 2025.

Previous wording

The increase in interest-bearing deposits came primarily from time deposit balances, which increased $55,323, or 11.3%, from year-end 2025, $47,575 of which was a result of an increase in retail time deposits. The Company targeted growth in retail CDs by promoting a special CD rate during the first quarter of 2026 to assist in funding loan growth. The Company also utilized more wholesale CDs to help fund earning asset demand, which increased $7,748 from year-end 2025.

Current wording

The increase in interest-bearing deposits came primarily from time deposit balances, which increased $43,136, or 8.8%, from year-end 2025, $58,854 of which was a result of an increase in retail time deposits. The Company targeted growth in retail CDs by promoting a special CD rate during the first half of 2026 to assist in funding loan growth. This resulted in the Company utilizing less wholesale CDs to help fund earning asset demand, which decreased $15,718 from year-end 2025.

Previous wording

Savings and money market balances also increased $8,053, or 2.6%, from year-end 2025. The increase came primarily from money market accounts, which increased $4,913 from year-end 2025, impacted mostly by increases in the Company’s tiered money market product (Money Fund) that was introduced in 2023 and offers a higher rate on tiered deposit balances. Savings account balances increased $3,140 impacted mostly by the Company’s statement savings account product.

Current wording

Savings and money market balances also increased $25,971, or 8.4%, from year-end 2025. The increase came primarily from money market accounts, which increased $24,264 from year-end 2025, impacted mostly by increases in the Company’s tiered money market product (Money Fund) that was introduced in 2023 and offers a higher rate on tiered deposit balances to both individual and business customers. Savings account balances increased $1,707 impacted mostly by the Company’s statement savings account product.

Previous wording

Further increases in interest-bearing deposits came from NOW account balances, which increased $12,002, or 5.5%, from year-end 2025. The increase was largely from a $12,671 increase in the Company’s municipal NOW product balances, particularly within the Gallia County, Ohio, and Mason County, West Virginia, market areas.

Current wording

Further increases in interest-bearing deposits came from NOW account balances, which increased $4,497, or 2.1%, from year-end 2025. The increase was largely from a $4,733 increase in the Company’s municipal NOW product balances, particularly within the Gallia County, Ohio, and Mason County, West Virginia, market areas.

Previous wording

Other borrowed funds were $43,529 at March 31, 2026, a decrease of $1,319, or 2.9%, from year-end 2025. The decrease was related to the scheduled principal amortization for applicable FHLB advances. While deposits continue to be the primary source of funding for growth in earning assets, management will continue to utilize various wholesale funding sources to help manage interest rate sensitivity and liquidity.

Current wording

Other borrowed funds were $41,822 at June 30, 2026, a decrease of $3,026, or 6.7%, from year-end 2025. The decrease was related to the scheduled principal amortization for applicable FHLB advances. While deposits continue to be the primary source of funding for growth in earning assets, management will continue to utilize various wholesale funding sources to help manage interest rate sensitivity and liquidity.

Previous wording

Total shareholders' equity at March 31, 2026 increased $1,023, or 0.6%, to finish at $171,280, as compared to $170,257 at December 31, 2025. This was primarily from year-to-date net income partially offset by cash dividends paid and a decrease in accumulated other comprehensive income. The decrease in accumulated other comprehensive income was related to the $2,190, net of tax, market depreciation of AFS securities due to an increase in market interest rates.

Current wording

Total shareholders' equity at June 30, 2026 increased $3,129, or 1.8%, to finish at $173,386, as compared to $170,257 at December 31, 2025. This was primarily from year-to-date net income partially offset by cash dividends paid and a decrease in accumulated other comprehensive income. The decrease in accumulated other comprehensive income was related to the $1,833, net of tax, market depreciation of AFS securities due to an increase in market interest rates.

Previous wording

The following discussion focuses, in more detail, on the consolidated results of operations of the Company for the three months ended March 31, 2026, compared to the same period in 2025. This discussion should be read in conjunction with the interim consolidated financial statements and the notes included in this Form 10‑Q.

Current wording

The following discussion focuses, in more detail, on the consolidated results of operations of the Company for the three and six months ended June 30, 2026, compared to the same period in 2025. This discussion should be read in conjunction with the interim consolidated financial statements and the notes included in this Form 10‑Q.

Previous wording

The most significant portion of the Company's revenue, net interest income, results from properly managing the spread between interest income on earning assets and interest expense incurred on interest-bearing liabilities. During the three months ended March 31, 2026, net interest income increased $1,748, or 13.3%, compared to the same period in 2025. The quarterly improvement during 2026 came from average earning asset growth and the net interest margin. The average growth was impacted by a composition shift into higher-yielding loans which contributed to margin improvement, combined with a decrease in the average cost on CDsthat helped minimize the higher average costs paid on deposits and borrowings.

Current wording

The most significant portion of the Company's revenue, net interest income, results from properly managing the spread between interest income on earning assets and interest expense incurred on interest-bearing liabilities. During the three and six months ended June 30, 2026, net interest income increased $863, or 5.9%, and $2,611, or 9.4%, compared to the same periods in 2025, respectively. The quarterly and year-to-date improvements during 2026 came from average earning asset growth, partially offset by a decrease in the net interest margin. Average asset growth was impacted primarily by loans and interest-bearing deposits with banks, while the margin fell as our funding expenses outpaced the returns on our earning assets.

Previous wording

Total interest and fee income recognized on the Company’s earning assets increased $2,709, or 16.2%, during the first quarter of 2026, compared to the same period in 2025. The earnings growth was impacted by interest on loans, which increased $2,737, or 17.3%, compared to the same period in 2025. This improvement was impacted by increases in both average loan balances and loan yields. Overall, average loans increased $146,436 during the first quarter of 2026, primarily from the commercial and residential real estate loan portfolios due to higher commercial loan volume and a consumer preference for short-term, variable rate residential real estate loans. Loan revenue improvement also came from average loan yields increasing 12 basis points to 6.65% during the first quarter of 2026, compared to the same period in 2025. The loan yield increase was mostly impacted by the commercial and residential real estate loan portfolios.

Current wording

Total interest and fee income recognized on the Company’s earning assets increased $2,439, or 11.6%, during the second quarter of 2026, and $5,114, or 12.5%, during the six months ended June 30, 2026, compared to the same periods in 2025. The earnings growth was impacted by interest on loans, which increased $1,995, or 11.6%, and $4,732, or 14.3%, during the three and six months ended June 30, 2026, compared to the same periods in 2025. This improvement was mostly impacted by average loan balances, which increased $156,821 during the second quarter of 2026 and $151,658 during the first half of 2026. Balance increases came primarily from the commercial and residential real estate loan portfolios due to higher commercial loan volume and a consumer preference for short-term, variable rate residential real estate loans. The effects of average loan growth on revenue improvement were partially offset by average loan yields decreasing 21 basis points to 6.61% during the second quarter of 2026 and decreasing 5 basis points to 6.63% during the first half of 2026, compared to the same periods in 2025. The loan yield decreases came primarily from the income recognition of an $817 market discount on one purchased commercial and industrial loan that paid off during the second quarter of 2025. While the market discount benefited loan yields in 2025, the Company recognized no market discount income on purchased loans during the same periods in 2026, causing loan yields to decrease. At June 30, 2026, the Company had one purchased commercial and industrial loan remaining with an unrecognized market discount of $1,052.

Previous wording

Total interest income from interest-bearing deposits with banks decreased $244, or 29.5%, during the first quarter of 2026, compared to the same period in 2025. This was largely from average balance decreases with the Company’s interest-bearing FRB clearing account, which decreased $11,360 during the three months ended March 31, 2026, compared to the same period in 2025. FRB clearing balances were used to assist in funding loan growth, which contributed to the average balance decrease of FRB funds during 2026. Further impacting lower interest income from the FRB clearing account were short-term rate decreases during 2025. Between September and December 2025, the FRB took action to reduce the rate associated with the FRB clearing account by 75 basis points due to inflationary pressures, which lowered the target federal funds rate to a range of 3.50% to 3.75% going into 2026. These decreases in interest rates had a negative impact on the FRB clearing account’s interest earnings during the first quarter of 2026.

Current wording

Total interest income from interest-bearing deposits with banks increased $327, or 51.2%, during the second quarter of 2026, and increased $83, or 5.7%, during the first half of 2026, compared to the same periods in 2025. This was largely from average balance increases with the Company’s interest-bearing FRB clearing account, which increased $44,629 and $16,789 during the three and six months ended June 30, 2026, compared to the same periods in 2025. Balances in the FRB clearing account increased primarily from interest-bearing deposit growth and net proceeds from securities, which provided more than enough FRB clearing deposits to help fund loan growth during 2026. Interest income from the FRB clearing account was negatively impacted by short-term rate decreases during 2025. Between September and December 2025, the FRB took action to reduce the rate associated with the FRB clearing account by 75 basis points due to inflationary pressures, which lowered the target federal funds rate to a range of 3.50% to 3.75% going into 2026. These decreases in interest rates had a negative impact on the FRB clearing account’s interest earnings during the three and six months ended June 30, 2026.

Previous wording

Total interest on securities increased $218, or 10.0%, during the first quarter of 2026, compared to the same period in 2025. The earnings growth was primarily related to an increase in the average yield on taxable securities. This was impacted by the Company’s decision to sell $36,950 in taxable securities yielding 1.35% during the second half of 2025 and replace them with similar taxable securities yielding 4.52% with longer durations. As a result, the average yield on taxable securities increased 60 basis points to 3.79% during the first quarter of 2026, compared to the same period in 2025. The yield improvement from taxable securities completely offset the negative impact of lower average securities balances, which decreased $14,634, or 5.4%, during the first quarter of 2026. Average securities have decreased due to the Company’s emphasis on growing higher-yielding loans during the first quarter of 2026, as well as a lower need for securities to be pledged as collateral to secure public fund NOW accounts from a year ago, particularly with the Bank’s public fund NOW account deposits with the Ohio Treasurer (the “Treasurer”) as part of the Ohio Homebuyer Plus program. Securities pledged as collateral to secure the Treasurer deposit balances totaled $58,955 at March 31, 2026, compared to $96,707 at March 31, 2025.

Current wording

Total interest on securities increased $101, or 4.3%, during the second quarter of 2026, and $319, or 7.1%, during the first half of 2026, compared to the same periods in 2025. The earnings growth was primarily related to an increase in the average yield on taxable securities. This was impacted by the Company’s decision to sell $36,950 in taxable securities yielding 1.35% during the second half of 2025 and replace them with similar taxable securities yielding 4.52% with longer durations. As a result, the average yield on taxable securities increased 53 basis points to 3.81% during the second quarter of 2026, and 56 basis points to 3.80% during the first half of 2026, compared to the same periods in 2025. The yield improvement from taxable securities completely offset the negative impact of lower average securities balances, which decreased $24,118, or 8.7%, during the second quarter of 2026, and $19,402, or 7.1%, during the first half of 2026, compared to the same periods in 2025. Average securities have decreased largely due to the Company’s emphasis on growing higher-yielding loans during 2026, as well as a lower need for securities to be pledged as collateral to secure public fund NOW accounts from a year ago, particularly with the Bank’s public fund NOW account deposits with the Ohio Treasurer (the “Treasurer”) as part of the Ohio Homebuyer Plus program. Securities pledged as collateral to secure the Treasurer deposit balances totaled $59,044 at June 30, 2026, compared to $81,123 at June 30, 2025.

Previous wording

Total interest expense incurred on the Company’s interest-bearing liabilities increased $927, or 13.9%, during the first quarter of 2026, compared to the same period in 2025. The increase was impacted by a $100,539, or 10.2%, increase in average interest-bearing liabilities, coming mostly from higher time, savings, and money market deposit balances. The increase in time deposit balances was impacted by the Company’s strategy to raise additional retail deposits during the first quarter of 2026 by offering special CD rate offerings during that time. The increase in savings and money market account balances were mostly impacted by deposit growth within the Company’s tiered money market product (Money Fund) that offered competitive rates. These increases were partially offset by a decrease in average NOW account balances, which came largely from lower public fund balances from a year ago.

Current wording

Total interest expense incurred on the Company’s interest-bearing liabilities increased $1,576, or 24.2%, during the second quarter of 2026, and $2,503, or 19.0%, during the first half of 2026, compared to the same periods in 2025. The increases were impacted by average interest-bearing liability growth during both periods, coming mostly from higher time, savings, and money market deposit balances. The increase in time deposit balances was impacted by the Company’s strategy to raise additional retail deposits during 2026 by offering special CD rate offerings. The increase in savings and money market account balances were mostly impacted by deposit growth within the Company’s tiered money market product (Money Fund) that offered competitive rates to both individual and business customers. These increases were partially offset by a decrease in average NOW account balances, which came largely from lower public fund balances from a year ago.

Previous wording

The growth in interest expense from higher average interest-bearing liabilities was further impacted by a higher average cost on average interest-bearing liabilities during 2026. The average rates on the Company’s savings, NOW, and money market balances increased 7 basis points to 1.47% during the first quarter of 2026, as product rates on tiered money market accounts adjusted upward, while public fund NOW account balances shifted to a new higher-costing cash sweep product offered by the Bank. While product rates on various savings, NOW, and money market products increased, the Company experienced a decrease in the weighted average cost of its time deposit balances. Prior to 2025, market competition for deposits had resulted in higher rates on short-term CD offerings. Since then, product rates on retail CDs have decreased during 2025 and into 2026. The Company’s strategy to fund loan growth by raising additional retail deposits through special CD rate offerings was in effect during the second half of 2025. This has allowed a large portion of these short-term retail CDs to renew at lower rates during the first quarter of 2026. As a result of the rate repricings on retail CDs, the average cost associated with time deposits decreased by 30 basis points to 4.04% during the first three months of 2026, compared to the same period in 2025. This helped to reduce the expense impacts of higher average deposit balances, and the average rate increases in specific savings, NOW and money market products.

Current wording

The growth in interest expense from higher average interest-bearing liabilities was further impacted by a higher average cost on average interest-bearing liabilities during 2026. The average rates on the Company’s savings, NOW, and money market balances increased 16 basis points to 1.57% during the second quarter of 2026, and increased 12 basis points during the first half of 2026, as product rates on tiered money market accounts adjusted upward, while public fund NOW account balances shifted to a new higher-costing cash sweep product offered by the Bank. While product rates on various savings, NOW, and money market products increased, the Company experienced a decrease in the weighted average cost of its time deposit balances. Prior to 2025, market competition for deposits had resulted in higher rates on short-term CD offerings. Since then, product rates on retail CDs have decreased during 2025 and into 2026. The Company’s strategy to fund loan growth by raising additional retail deposits through special CD rate offerings was in effect during the second half of 2025. This has allowed a large portion of these short-term retail CDs to renew at lower rates during the three and six months ended June 30, 2026. As a result of the rate repricings on retail CDs, the average cost associated with time deposits decreased by 16 basis points to 3.96% during the second quarter of 2026 and decreased 23 basis points to 4.00% during the first half of 2026, compared to the same periods in 2025. This helped to reduce the expense impacts of higher average deposit balances, and the average rate increases in specific savings, NOW and money market products.

Previous wording

The Company’s net interest margin is defined as fully tax-equivalent net interest income as a percentage of average earning assets. During the first quarter of 2026, the Company’s net interest margin increased 16 basis points to 4.01%, compared to 3.85% during the first quarter of 2025. Positive contributions to margin growth came from the Company’s average earning assets, which increased 8.6% during the first quarter of 2026, mostly from higher-yielding loans. Margin improvement was also positively impacted by a 12 basis point increase in the average yield on loans, while the average cost of time deposits, which was the primary funding source of earning assets during the first quarter of 2026, decreased 30 basis points to help limit the rise in interest expense. The Company’s primary focus is to invest its funds into higher yielding assets, particularly loans, as opportunities arise. However, if loan balances do not continue to expand and remain a larger component of overall earning assets, the Company will face pressure within its net interest income and margin improvement.

Current wording

The Company’s net interest margin is defined as fully tax-equivalent net interest income as a percentage of average earning assets. During 2026, the Company’s net interest margin decreased 24 basis points to 3.92% during the second quarter of 2026 and decreased 4 basis points to 3.97% during the first half of 2026, compared to the same periods in 2025. The decrease in the net interest margin was related to the average cost of funding sources increasing at a greater pace than the yield on earning assets. Comparing the first half of 2026 to the first half of 2025, the yield on average earning assets improved 9 basis points in relation to the growth in higher yielding loans that now comprise a larger percentage of earning assets, along with the yield on taxable securities. However, included in the yield on earning assets for the second quarter and first half of 2025 was the $817 market discount on purchased loans compared to no market discount income during the same periods in 2026, resulting in a 6 basis point decrease to the earning asset yield during the second quarter of 2026. During both the three and six months ended June 30, 2026, the average cost of funds increased as the composition of funding sources shifted to higher cost deposit sources, such as CDs and money market accounts that were offered pursuant to certain promotional offerings mentioned above. These promotional offerings were utilized to fund loan growth and to maintain an appropriate liquidity position. As a result, the average cost of funds increased 21 basis points during the second quarter of 2026 and increased 16 basis points during the first half of 2026, compared to the same periods in 2025. The Company’s primary focus is to invest its funds into higher yielding assets, particularly loans, as opportunities arise. However, if loan balances do not continue to expand and remain a larger component of overall earning assets, the Company will face pressure within its net interest income and margin improvement.

Previous wording

Provision for credit losses is recorded to achieve an ACL that is adequate to absorb estimated losses inherent in the Company’s loan portfolio, unfunded loans, and HTM debt securities. Management performs, on a quarterly basis, a detailed analysis of the ACL that encompasses asset portfolio composition, asset quality, loss experience and other relevant economic factors. For the three months ended March 31, 2026, the Company’s provision for credit losses expense totaled $1,622, an increase of $1,206 over the three months ended March 31, 2025.

Current wording

Provision for credit losses is recorded to achieve an ACL that is adequate to absorb estimated losses inherent in the Company’s loan portfolio, unfunded loans, and HTM debt securities. Management performs, on a quarterly basis, a detailed analysis of the ACL that encompasses asset portfolio composition, asset quality, loss experience and other relevant economic factors. For the three months ended June 30, 2026, the Company’s provision for credit losses expense totaled $3,755, an increase of $2,607 over the three months ended June 30, 2025. For the six months ended June 30, 2026, the Company’s provision for credit losses expense totaled $5,377, an increase of $3,813 over the six months ended June 30, 2025.

Previous wording

The provision for credit loss expense for the first quarter of 2026 was primarily related to the establishment of a specific allocation of $2,031 on two loan relationships that were deemed to be collateral dependent. In addition, provision for credit loss expense was required to cover net charge-offs of $278 and higher general reserves for the $18,796 increase in loans since December 31, 2025. These increases in reserves were partially offset by the improvements in certain qualitative risk factors that included improved portfolio terms, such as reduced exposure to variable rate loans repricing higher and a positive net charge-off trend for consumer loans due to exiting indirect lending, along with improved general economic conditions.

Current wording

The increases in provision for credit loss expense during both periods were primarily related to the establishment of specific allocations totaling $4,531 and $6,561 during the three and six months ended June 30, 2026 on two commercial loan relationships that were deemed to be collateral dependent. In addition, provision for credit loss expense was required to cover higher general reserves for the increase in loans during 2026. These increases in reserves were partially offset by the improvements in certain qualitative risk factors that contributed to a $1,234 decrease in reserves during the second quarter of 2026, and a $2,242 decrease in reserves during the first half of 2026, compared to the same periods in 2025. Factors contributing to lower qualitative risk included improved portfolio terms, such as reduced exposure to variable rate loans repricing higher and a positive net charge-off trend for consumer loans due to exiting indirect lending, along with lower modeled loss rates in relation to the improvement in unemployment projections. The Company also experienced less net charge-offs, which contributed to a $168 and $315 decrease in provision expense during the three and six months ended June 30, 2026.

Previous wording

Credit loss expense during the quarter was also impacted by unfunded commitments on off-balance sheet liabilities, which decreased $20 during the first quarter of 2026, compared to the same period in 2025. The impact came mostly from lower loss rates on commercial lines during the first quarter of 2026.

Current wording

Credit loss expense during 2026 was also impacted by unfunded commitments on off-balance sheet liabilities, which decreased $175 and $195 during thethree and six months ended June 30, 2026, compared to the same periods in 2025. The impact came mostly from lower loss rates on commercial lines during both periods.

Previous wording

Noninterest expense increased $483, or 4.5%, during the three months ended March 31, 2026, compared to the same period in 2025. The Company’s largest noninterest expense, salaries and employee benefits, increased $335, or 5.6%, during the three months ended March 31, 2026, compared to the same period in 2025. The expense increase was primarily related to annual merit increases and to health insurance premiums.

Current wording

Noninterest expense increased $196, or 1.8%, during the three months ended June 30, 2026, and increased $679, or 3.1%, during the six months ended June 30, 2026, compared to the same periods in 2025. Contributing most to the increase was the Company’s largest noninterest expense, salaries and employee benefits, which increased $359, or 5.8%, during the three months ended June 30, 2026, and $694, or 5.7%, during the six months ended June 30, 2026, compared to the same periods in 2025. The expense increase was primarily related to annual merit increases and higher health insurance premiums.

Previous wording

Higher noninterest expense also came from software expense, which increased $132 during the first quarter of 2026, compared to the same period in 2025. Higher costs in this category were the result of the investment in software to enhance internal processes.

Current wording

Higher noninterest expense also came from software expense, which increased $74 and $206 during the three and six months ended June 30, 2026. Higher costs in this category were the result of the investment in software to enhance internal processes.