MetroCity Bankshares, Inc.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
MCBS$36.05-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001104659-26-092674
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001104659-26-123380
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 127 current paragraphs.
57 unchanged; 62 reworded; 8 added; 7 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 77 previous and 78 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
We recorded net income of $24.3 million for the three months ended September 30, 2026 compared to $17.3 million for the three months ended September 30, 2025, an increase of $7.0 million, or 40.7%. This increase was due to an $11.8 million increase in net interest income, and a $2.9 million decrease in income taxes, offset by a $5.4 million increase in noninterest expense, a $471,000 reduction in credit-loss recovery and a $1.8 million decrease in noninterest income.
Current report
Interest expense for the three months ended September 30, 2026 increased $4.0 million, or 17.8%, to $26.2 million compared to interest expense of $22.2 million for the three months ended September 30, 2025, primarily due to a $562.8 million increase in average interest-bearing deposit balances, offset by a $49.6 million decrease in the average borrowings
Current report
Other noninterest income decreased by $694,000, or 85.9%, to $114,000 for the three months ended September 30, 2026 compared to $808,000 for the three months ended September 30, 2025. Other noninterest income was $1.6 million for the nine months ended September 30, 2026 compared to $2.5 million for the same period in 2025, a decrease of $923,000, or 36.3%. Also included in other noninterest income are fair value gains/losses on our equity securities, which totaled $743,000 (loss) and $908,000 (loss) for the three and nine months ended September 30, 2026, respectively, compared to $124,000 (gain) and $305,000 (gain) for the three and nine months ended September 30, 2025. These equity securities consist of the Company's investment in a mutual fund holding high-quality fixed income securities, which supports affordable housing in the Company's markets and qualifies under the Community Reinvestment Act. Under GAAP, changes in the fair value of this investment are recognized in earnings, even though the underlying holdings are bonds. This investment remains an important part of the Bank's community development strategy, particularly following the completion of our recent merger.
Current report
Noninterest expense for the nine months ended September 30, 2026 was $61.4 million compared to $42.6 million for the nine months ended September 30, 2025, an increase of $18.9 million or 44.3%.
Current report
Advertising expenses for the three and nine months ended September 30, 2026 was $310,000 and $711,000, compared to $161,000 and $477,000 for the three and nine months ended September 30, 2025.
Current report
Other expenses for the three months ended September 30, 2026 were $4.8 million compared to $3.5 million for the three months ended September 30, 2025, an increase of $1.4 million, or 39.1%. Other expenses for the nine months ended September 30, 2026 were $15.0 million compared to $9.9 million for the nine months ended September 30, 2025 an
Current report
The decrease in the effective income tax rate for the quarter was primarily driven by the utilization of tax credits during the current period.
Current report
of $964.7 million at the Federal Home Loan Bank, $629.5 million at the Federal Reserve Discount Window, and $67.5 million under fed funds lines with various other financial institutions.
Removed paragraphs (7)
Previous report
We recorded net income of $22.1 million for the three months ended June 30, 2026 compared to $16.8 million for the three months ended June 30, 2025, an increase of $5.3 million, or 31.5%. This increase was due to an increase in net interest income of $11.9 million, and a decrease in provision for credit losses of $921,000, offset by increases in noninterest expense of $5.8 million and income tax expense of $1.7 million.
Previous report
June 30, 2026 was $12.2 million, an increase of $923,000, or 8.2%, compared to $11.2 million for the six months ended June 30, 2025
Previous report
Other noninterest income decreased by $129,000, or 13.4%, to $834,000 for the three months ended June 30, 2026 compared to $963,000 for the three months ended June 30, 2025. Other noninterest income was $1.5 million for the six months ended June 30, 2026 compared to $1.7 million for the same period in 2025, a decrease of $229,000 , or 13.2%. The largest component of other noninterest income is the income on bank owned life insurance which totaled $641,000 and $1.3 million for three and six months ended June 30, 2026, respectively compared to $620,000 and $1.2 million for the three and six months ended June 30, 2025 respectively. Also included in other noninterest income are fair value gains/losses on our equity securities, which totaled $82,000 (loss) and $165,000 (loss) for the three and six months ended June 30, 2026, respectively, compared to $41,000 (gain) and $181,000 (gain) for the three and six months ended June 30, 2025.
Previous report
Noninterest expense for the six months ended June 30, 2026 was $41.4 million compared to $27.9 million for the six months ended June 30, 2025, an increase of $13.5 million or 48.3%.
Previous report
These increases were primarily driven by higher personnel, occupancy, and data processing costs, as well as $1.9 million of merger related expenses. Excluding merger related expenses, noninterest expense reflects the full quarter impact of the acquisition and is expected to stabilize as integration activities progress and operational efficiencies are realized.
Previous report
Advertising expenses for the three and six months ended June 30, 2026 remained relatively flat compared to the same periods in 2025.
Previous report
collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan.
Reworded paragraphs (62)
Previous wording
The purpose of this discussion and analysis is to focus on significant changes in the financial condition of MetroCity Bancshares, Inc. and our wholly owned subsidiary, Metro City Bank, from December 31, 2025 through June 30, 2026 and on our results of operations for the three and six months ended June 30, 2026 and 2025. This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K, and information presented elsewhere in this Quarterly Report on Form 10-Q, particularly the unaudited consolidated financial statements and related notes appearing in Item 1.
Current wording
The purpose of this discussion and analysis is to focus on significant changes in the financial condition of MetroCity Bankshares, Inc. and our wholly owned subsidiary, Metro City Bank, from December 31, 2025 through September 30, 2026 and on our results of operations for the three and nine months ended September 30, 2026 and 2025. This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K, and information presented elsewhere in this Quarterly Report on Form 10-Q, particularly the unaudited consolidated financial statements and related notes appearing in Item 1.
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements reflect our current views with respect to, among other things, future events, and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “strive,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates, and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements reflect our current views with respect to, among other things, future events, and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “strive,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized”, or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates, and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
Previous wording
Our accounting and reporting estimates conform with U.S. GAAP and general practices within the financial services industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We consider accounting estimates that can (1) be replaced by other reasonable estimates and/or (2) changes to an estimate from period to period that have a material impact on the presentation of our financial condition, changes in financial condition or results of operations as well as (3) those estimates that require significant and complex assumptions about matters that are highly uncertain to be critical accounting estimates. We consider our critical accounting policies to include the allowance for credit losses, servicing assets, fair value of financial instruments and income taxes.
Current wording
Our accounting and reporting estimates conform with U.S. GAAP and general practices within the financial services industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We consider accounting estimates to be critical when (1) other reasonable estimates could be used and/or (2) changes to an estimate from period to period could have a material impact on the presentation of our financial condition, changes in financial condition or results of operations as well as (3) when those estimates require significant and complex assumptions about matters that are highly uncertain. We consider our critical accounting policies to include the allowance for credit losses, servicing assets, fair value of financial instruments and income taxes.
Previous wording
A consequence of lending activities is that we may incur credit losses. The amount of such losses will vary depending upon the risk characteristics of the loan lease portfolio as affected by economic conditions such as rising interest rates and the financial performance of borrowers.
Current wording
A consequence of lending activities is that we may incur credit losses. The amount of such losses will vary depending upon the risk characteristics of the loan portfolio as affected by economic conditions such as rising interest rates and the financial performance of borrowers.
Previous wording
MetroCity Bankshares, Inc. is a bank holding company headquartered in the Atlanta metropolitan area. We operate through our wholly-owned banking subsidiary, Metro City Bank, a Georgia state-chartered commercial bank that was founded in 2006. We currently operate 27 full-service branch locations and two loan production offices in multi-ethnic communities in Alabama, Florida, Georgia, New York, New Jersey, Texas, California, and Virginia. As of June 30, 2026, we had total assets of $4.52 billion, total loans of $3.93 billion, total deposits of $3.49 billion and total shareholders’ equity of $567.9 million.
Current wording
MetroCity Bankshares, Inc. is a bank holding company headquartered in the Atlanta metropolitan area. We operate through our wholly-owned banking subsidiary, Metro City Bank, a Georgia state-chartered commercial bank that was founded in 2006. We currently operate 27 full-service branch locations and two loan production offices in multi-ethnic communities in Alabama, Florida, Georgia, New York, New Jersey, Texas, California, and Virginia. As of September 30, 2026, we had total assets of $4.60 billion, total loans, net, of $3.93 billion, total deposits of $3.56 billion and total shareholders’ equity of $583.9 million.
Previous wording
The following table sets forth unaudited selected financial data for the most recent five quarters. This data should be read in conjunction with the unaudited consolidated financial statements and accompanying notes included in Item 1 and the information contained in this Item 2.
Current wording
The following table sets forth unaudited selected financial data for the most recent five quarters and the nine-month periods ended September 30, 2026 and 2025. This data should be read in conjunction with the unaudited consolidated financial statements and accompanying notes included in Item 1 and the information contained in this Item 2.
Previous wording
This Form 10-Q includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information includes “return on average equity”, which excludes average accumulated other comprehensive income and merger-related expenses and tangible book value per share , which excludes goodwill and core deposit intangibles and “operating efficiency ratio” which excludes merger expenses from noninterest expense. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP and are not necessarily comparable to non-GAAP measures that may be presented by other companies.
Current wording
This Form 10-Q includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information includes “adjusted return on average shareholders’ equity”, which excludes average accumulated other comprehensive income or loss from average shareholders’’ equity and adds back merger-related expenses, net of tax, to net income and tangible book value per share , which excludes goodwill and core deposit intangibles from shareholders’’ equity and “operating efficiency ratio” which excludes merger-related expenses from noninterest expense. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP and are not necessarily comparable to non-GAAP measures that may be presented by other companies.
Previous wording
The following table reconciles the non-GAAP financial measurement for return on average equity, tangible book value per share and operating efficiency ratio to their respective most directly comparable GAAP measurements for three and six months ended June 30, 2026 and 2025:
Current wording
The following table reconciles the non-GAAP financial measurement for return on average equity, tangible book value per share and operating efficiency ratio to their respective most directly comparable GAAP measurements for the three and nine months ended September 30, 2026 and 2025:
Previous wording
For the six months ended June 30, 2026 we recorded net income of $44.5 million compared to $33.1 million for the six months ended June 30, 2025, an increase of $11.3 million, or 34.2%. This increase was due to an increase in net interest income of $25.8 million an increase in noninterest income of $923,000, and a decrease in provision for credit losses of $1.9 million, offset by an increase in noninterest expense of $13.5 million, and an increase in income tax expense of $3.8 million.
Current wording
For the nine months ended September 30, 2026 we recorded net income of $68.7 million compared to $50.4 million for the nine months ended September 30, 2025, an increase of $18.4 million, or 36.4%. This increase was due to a $37.6 million increase in net interest income, and a $1.4 million increase in credit-loss recovery, offset by an $18.9 million increase in noninterest expense, an $871,000 decrease in noninterest income, and an $885,000 increase in income tax expense.
Previous wording
Basic and diluted earnings per common share for the three months ended June 30, 2026 was $0.77 and $0.76, respectively, compared to $0.66 and $0.65 for the basic and diluted earnings per common share for the three months ended June 30, 2025. For the six months ended June 30, 2026, basic and diluted earnings per common share was $1.55 and $1.53, respectively, compared to $1.30 and $1.29 for the same period in 2025, respectively.
Current wording
Basic and diluted earnings per common share for the three months ended September 30, 2026 was $0.84 and $0.84, respectively, compared to $0.68 and $0.67 for the basic and diluted earnings per common share for the three months ended September 30, 2025. For the nine months ended September 30, 2026, basic and diluted earnings per common share was $2.39 and $2.37, respectively, compared to $1.98 and $1.96 for the same period in 2025, respectively.
Previous wording
Interest income totaled $70.4 million for the three months ended June 30, 2026, an increase of $16.4 million, or 30.3%, from the three months ended June 30, 2025, primarily due to an increase in average balance of gross loans of $847.8 million, and an increase in average balance of investments of $30.1 million, and a 26 basis point increase in the loan yield, along with $1.4 million in accretion income on purchase credit deteriorated loans from the First IC merger that occurred in fourth quarter of 2025. The increase in average loans is due to an increase of $646.3 million in average commercial real estate loans, and an increase of $153.4 million in average residential real estate loans.* *
Current wording
Interest income totaled $69.7 million for the three months ended September 30, 2026, an increase of $15.7 million, or 29.1%, from the three months ended September 30, 2025, primarily due to an increase in the average balance of gross loans of $766.9 million, an increase in the average balance of investments of $44.8 million, and a 33 basis point increase in the loan yield, along with $949,000 in accretion income on purchased credit deteriorated loans from the First IC merger that occurred in the fourth quarter of 2025. The increase in average loans is due to an increase of $607.9 million in average commercial real estate loans, and an increase of $104.7 million in average residential real estate loans.* *
Previous wording
Interest income totaled $141.4 million for the six months ended June 30, 2026 compared to $106.6 million for the same period in 2025, an increase of $34.8 million, or 32.7%, primarily due to a 30 basis point increase in the loan yield, along with $2.3 million in accretion income on purchase credit deteriorated loans from the First IC merger that occurred in fourth quarter of 2025 coupled with an increase in average loan balances of $853.0 million, as well as an increase in the average total investment balance of $108.6 million, offset by a decrease of 58 basis points in the yield on average total investments. The increase in average loans is due to an increase of $579.7 million in average commercial real estate loans, an increase of $25.0 million in average construction and development loans, an increase of $15.7 million in average commercial and industrial loans, and $232.1 million increase in average residential mortgage loans. As compared to the six months ended June 30, 2025, the yield on average interest-earning assets increased by 21 basis points to 6.54% from 6.33% with the yield on average loans increasing by 30 basis points and the yield on average total investments decreasing by 58 basis points.
Current wording
Interest income totaled $211.1 million for the nine months ended September 30, 2026 compared to $160.6 million for the same period in 2025, an increase of $50.6 million, or 31.5%, primarily due to a 31 basis point increase in the loan yield, along with $3.2 million in accretion income on purchased credit deteriorated loans from the First IC merger that occurred in the fourth quarter of 2025 coupled with an increase in average loan balances of $823.3 million, as well as an increase in the average total investment balance of $87.1 million, offset by a decrease of 57 basis points in the yield on average total investments. The increase in average loans is due to an increase of $588.6 million in average commercial real estate loans, an increase of $31.0 million in average construction and development loans, an increase of $14.2 million in average commercial and industrial loans, and an $189.2 million increase in average residential mortgage loans. As compared to the nine months ended September 30, 2025, the yield on average interest-earning assets increased by 23 basis points to 6.53% from 6.30%.
Previous wording
Interest expense for the three months ended June 30, 2026 increased $4.5 million, or 20.5%, to $26.4 million compared to interest expense of $21.9 million for the three months ended June 30, 2025, primarily due to a $578.2 million increase in average deposit balances and offset with a $16.0 million decrease in the average borrowings balance. Average time deposits and money market deposits increased by $383.3 million and $79.6 million, respectively, and average interest-bearing demand deposits and savings accounts increased by $115.4 million primarily from the First IC merger in fourth quarter of 2025.
Current wording
balance. Average time deposits and money market deposits increased by $355.3 million and $115.3 million, respectively, and average interest-bearing demand deposits and savings accounts increased by $92.2 million primarily from the First IC merger in the fourth quarter of 2025.
Previous wording
Interest expense totaled $52.9 million for the six months ended June 30, 2026, an increase of $9.0 million, or 20.6%, compared to the same period in 2025, primarily due to a $636.4 million increase in average interest-bearing deposit balances. Average borrowings outstanding for June 30, 2026 increased by $15.0 million compared to the same period in 2025.
Current wording
Interest expense totaled $79.0 million for the nine months ended September 30, 2026, an increase of $13.0 million, or 19.7%, compared to the same period in 2025, primarily due to a $611.6 million increase in average interest-bearing deposit balances. Average borrowings outstanding for the nine months ended September 30, 2026 decreased by $6.8 million compared to the same period in 2025.
Previous wording
The Company currently has effective interest rate derivative agreements totaling $750.0 million that are designated as cash flow hedges of our deposit accounts indexed to the Federal Funds Effective rate. The weighted average pay rate for these interest rate derivatives is 1.70%. At June 30, 2026, the Company had interest rate swap agreements with aggregate notional amounts of $300.0 million and interest rate cap agreements with aggregate notional amounts of $450.0 million, all designated as cash flow hedges of deposit accounts indexed to the Federal Funds Effective Rate. The Company has determined these hedging relationships to be highly effective since inception. During the three months ended June 30, 2026, we recorded a $1.5 million credit to interest expense from the benefit received on these interest-rate derivatives, compared to $4.2 million credit during the three months ended June 30, 2025. Based on the Federal Funds Effective rate as of June 30, 2026 (3.63%), the Company would estimate to record a credit to interest expense of approximately $1.9 million for the remainder of 2026 from the benefit received on these interest rate derivatives, however actual results may vary based on changes in market and hedge performance. See Note 9 of our consolidated financial statements as of June 30, 2026 included elsewhere in this Form 10-Q, for additional information on these interest rate derivatives.
Current wording
The Company currently has effective interest rate derivative agreements totaling $650.0 million that are designated as cash flow hedges of our deposit accounts indexed to the Federal Funds Effective Rate. At September 30, 2026, the Company had interest rate swap agreements with aggregate notional amounts of $200.0 million and interest rate cap agreements with aggregate notional amounts of $450.0 million, all designated as cash flow hedges of deposit accounts indexed to the Federal Funds Effective Rate. The Company has determined these hedging relationships to be highly effective since inception. During the three months ended September 30, 2026, we recorded a $1.5 million credit to interest expense from the benefit received on these interest-rate derivatives, compared to a $3.8 million credit during the three months ended September 30, 2025. Based on the Federal Funds Effective Rate as of September 30, 2026 (3.88%), the Company estimates that it will record a credit to interest expense of approximately $680,000 for the remainder of 2026 from the benefit received on these interest rate derivatives, however actual results may vary based on changes in market conditions and hedge performance. See Note 9 of our consolidated financial statements as of September 30, 2026 included elsewhere in this Form 10-Q, for additional information on these interest rate derivatives.
Previous wording
The net interest margin for the three months ended June 30, 2026 increased by 34 basis points to 4.11% from 3.77% for the three months ended June 30, 2025, primarily due to a 23 basis points increase in the yield on average interest-bearing assets of $4.30 billion, offset by three basis point decrease in the cost of average interest-earning liabilities of $3.2 billion. Average earning assets for the three months ended June 30, 2026 increased by $877.9 million from the three months ended June 30, 2025, due to a $847.8 million increase in average loans and a $30.1 million increase in average total investments. Average interest-bearing liabilities for the three months ended June 30, 2026 increased by $562.2 million from the three months ended June 30, 2025, driven by increases in average interest-bearing deposits of $578.3 million offset by a decrease in average borrowings of $16.0 million
Current wording
The net interest margin for the three months ended September 30, 2026 increased by 39 basis points to 4.07% from 3.68% for the three months ended September 30, 2025, primarily due to a 28 basis point increase in the yield on average interest-earning assets of $4.24 billion, and a six basis point decrease in the cost of average interest-bearing liabilities of $3.1 billion. Average earning assets for the three months ended September 30, 2026 increased by $811.7 million from the three months ended September 30, 2025, due to a $766.9 million increase in average loans and a $44.8 million increase in average total investments. Average interest-bearing liabilities for the three months ended September 30, 2026 increased by $513.1 million from the three months ended September 30, 2025, driven by increases in average interest-bearing deposits of $562.8 million offset by a decrease in average borrowings of $49.6 million.
Previous wording
The net interest margin for the six months ended June 30, 2026 increased by 38 basis points to 4.10% from 3.72% for the six months ended June 30, 2025, primarily due to a 21 basis point increase in the yield on average interest-bearing assets of $4.4 billion, and a 14 basis point decrease in the cost of average interest-bearing liabilities of $3.2 billion. Average earning assets increased by $961.6 million, due to a $108.6 million increase in average total investments and a $853.0 million increase in average loans. Average interest-bearing liabilities increased by $651.4 million, primarily driven by a $636.4 million increase in average interest-bearing deposit balances and an increase in average borrowings of $15.0 million.
Current wording
The net interest margin for the nine months ended September 30, 2026 increased by 38 basis points to 4.09% from 3.71% for the nine months ended September 30, 2025, primarily due to a 23 basis point increase in the yield on average interest-earning assets of $4.3 billion, and an 11 basis point decrease in the cost of average interest-bearing liabilities of $3.2 billion. Average earning assets increased by $910.4 million, due to an $87.1 million increase in average total investments and a $823.3 million increase in average loans. Average interest-bearing liabilities increased by $604.8 million, primarily driven by a $611.6 million increase in average interest-bearing deposit balances offset by a decrease in average borrowings of $6.8 million.
Previous wording
Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition, and the shape of the interest rate yield curve. The increase in our net interest margin is primarily driven by a reduction of funding cost, reflecting improved deposit pricing and the benefit of interest rate derivative hedges, partially offset by modest compression in asset yields.
Current wording
Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition, and the shape of the interest rate yield curve. The year-over-year increase in our net interest margin is primarily driven by higher yields on average interest-earning assets and lowere costs of average interest-bearing liablilities.
Previous wording
The following tables present, for the three and six months ended June 30, 2026 and 2025, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin.
Current wording
The following tables present, for the three and nine months ended September 30, 2026 and 2025, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin.
Previous wording
Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table sets forth the effects of changing rates and volumes on our net interest income during the period shown. Information is provided with respect to (i) effects on interest income attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Change applicable to both volumes and rate have been allocated to volume.
Current wording
Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table sets forth the effects of changing rates and volumes on our net interest income during the periods shown. Information is provided with respect to (i) effects on interest income attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Changes applicable to both volume and rate have been allocated to volume.
Previous wording
The provision for credit losses reflects our internal calculation and judgment of the appropriate amount of the allowance for credit losses. We maintain the allowance for credit losses at levels we believe are appropriate to cover our estimate of expected credit losses over the life of loans in the portfolio as of the end of the reporting period. The allowance for credit losses is determined through detailed quarterly analyses of our loan portfolio. The allowance for credit losses is based on our loss experience, changes in the economic environment, reasonable and supportable forecasts, as well as an ongoing assessment of credit quality and environmental factors not reflective in historical loss rates. Additional qualitative factors that are considered in determining the amount of the allowance for credit losses are concentrations of credit risk (geographic, large borrower, and industry), changes in underwriting standards, changes in collateral value, experience and depth of lending staff, trends in delinquencies, and the volume and terms of loans.
Current wording
The provision for credit losses reflects our internal calculation and judgment of the appropriate amount of the allowance for credit losses. We maintain the allowance for credit losses at levels we believe are appropriate to cover our estimate of expected credit losses over the life of loans in the portfolio as of the end of the reporting period. The allowance for credit losses is determined through detailed quarterly analyses of our loan portfolio. The allowance for credit losses is based on our loss experience, changes in the economic environment, reasonable and supportable forecasts, as well as an ongoing assessment of credit quality and environmental factors not reflected in historical loss rates. Additional qualitative factors that are considered in determining the amount of the allowance for credit losses are concentrations of credit risk (geographic, large borrower, and industry), changes in underwriting standards, changes in collateral value, experience and depth of lending staff, trends in delinquencies, and the volume and terms of loans.
Previous wording
We recorded a recovery for credit losses of $792,000 during the three months ended June 30, 2026 compared to a provision for credit losses of $129,000 recorded during the three months ended June 30, 2025. The recovery for credit loss recorded during the three months ended June 30, 2026 was primarily driven by lower loan balances and reduced reserves on individually analyzed loans. Our ACL as a percentage of gross loans for the periods ended June 30, 2026, December 31, 2025 and June 30, 2025 was 0.66%, 0.68% and 0.60%, respectively. Our ACL as a percentage of gross loans is relatively lower than our peers due to our high percentage of residential mortgage loans, which tend to have lower allowance for credit loss ratios compared to other commercial or consumer loans due to their low LTVs.
Current wording
We recorded a recovery for credit losses of $72,000 during the three months ended September 30, 2026 compared to a recovery for credit losses of $543,000 recorded during the three months ended September 30, 2025. We recorded a recovery for credit losses of $1.7 million during the nine months ended September 30, 2026 compared to a recovery for credit losses of $279,000 recorded during the nine months ended September 30, 2025. The recovery for credit losses recorded during the three and nine months ended September 30, 2026 was primarily driven by lower loan balances. Our ACL as a percentage of gross loans for the periods ended September 30, 2026, December 31, 2025 and September 30, 2025 was 0.65%, 0.68% and 0.60%, respectively. Our ACL as a percentage of gross loans is relatively lower than that of our peers due to our high percentage of residential mortgage loans, which tend to have lower allowance for credit loss ratios compared to other commercial or consumer loans due to their low LTVs.
Previous wording
Noninterest income for the three months ended June 30, 2026 was $5.8 million, an increase of $22,000, or 0.4%, compared to $5.7 million for the three months ended June 30, 2025. Noninterest income for the six months ended
Current wording
Noninterest income for the three months ended September 30, 2026 was $4.4 million, a decrease of $1.8 million, or 29.0%, compared to $6.2 million for the three months ended September 30, 2025. Noninterest income for the nine months ended September 30, 2026 was $16.5 million, a decrease of $871,000, or 5.0%, compared to $17.4 million for the nine months ended September 30, 2025.
Previous wording
The following table sets forth the major components of our noninterest income for three and six months ended June 30, 2026 and 2025.
Current wording
The following table sets forth the major components of our noninterest income for the three and nine months ended September 30, 2026 and 2025.
Previous wording
Service charges on deposit accounts increased $453,000, or 89.7%, to $958,000 for the three months ended June 30, 2026 compared to $505,000 for the three months ended June 30, 2025. Service charges on deposit accounts were $1.8 million for the six months ended June 30, 2026 compared to $1.0 million for the same period in 2025, an increase of $801,000, or 79.7%. These increases were primarily attributable to higher service charges on business checking accounts, analysis fees, overdraft fees, and charge back fees as a result of the First IC acquisition that occurred in fourth quarter of 2025.
Current wording
Service charges on deposit accounts increased $378,000, or 68.6%, to $929,000 for the three months ended September 30, 2026 compared to $551,000 for the three months ended September 30, 2025. Service charges on deposit accounts were $2.7 million for the nine months ended September 30, 2026 compared to $1.6 million for the same period in 2025, an increase of $1.2 million, or 75.8%. These increases were primarily attributable to higher service charges on business checking accounts, analysis fees, overdraft fees, and charge back fees as a result of the First IC acquisition that occurred in the fourth quarter of 2025.
Previous wording
Other service charges, commissions, and fees decreased $192,000, or 11.9%, to $1.4 million for the three months ended June 30, 2026 compared to $1.6 million for the three months ended June 30, 2025. Other service charges, commissions, and fees decreased 207,000, or 6.4%, to $3.0 million for the six months ended June 30, 2026 compared to $3.2 million for the six months ended June 30, 2025. These increases were attributable to higher origination and processing fees earned from our origination of residential mortgage loans. Mortgage loan originations totaled $75.4 million and $177.3 million during the three and six months ended June 30, 2026, compared to $93.2 million and $184.3 million during the same periods in 2025.
Current wording
Other service charges, commissions, and fees decreased $839,000, or 35.3%, to $1.5 million for the three months ended September 30, 2026 compared to $2.4 million for the three months ended September 30, 2025. Other service charges, commissions, and fees decreased $1.0 million or 18.7%, to $4.5 million for the nine months ended September 30, 2026 compared to $5.6 million for the nine months ended September 30, 2025. These decreases were attributable to lower origination and processing fees earned from our origination of residential mortgage loans. Mortgage loan originations totaled $85.1 million and $262.4 million during the three and nine months ended September 30, 2026, compared to $168.6 million and $352.8 million during the same periods in 2025.
Previous wording
Gain on sale of residential mortgage loans totaled $0 for the three and six months ended June 30, 2026. Gain on sale of residential mortgage loans totaled $579,000 and 978,000 for the three and six months ended June 30, 2025, as we sold$54.3 million and $94.4 million in residential mortgage loans during these period with an average premium of 1.09% and 1.08%, respectively.
Current wording
Gain on sale of residential mortgage loans totaled $0 for the three and nine months ended September 30, 2026. Gain on sale of residential mortgage loans totaled $166,000 and $1.1 million for the three and nine months ended September 30, 2025, as we sold$18.2 million and $112.6 million in residential mortgage loans during these periods with an average premium of 1.06% and 1.08%, respectively.
Previous wording
Gain on sale of SBA loans totaled $1.5 million for the three months ended June 30, 2026 compared to $643,000 for the three months ended June 30, 2025. We sold $27.1 million in SBA loans during the three months ended June 30, 2026 with average premiums of 8.21%. We sold $20.7 million in SBA loans during the three months ended June 30, 2025 with average premiums of 5.66%. Gain on sale of SBA loans totaled $2.6 million for the six months ended June 30, 2026 compared to $1.3 million for the same period in 2025. We sold $46.8 million in SBA loans during the six months ended
Current wording
Gain on sale of SBA loans totaled $685,000 for the three months ended September 30, 2026 compared to $558,000 for the three months ended September 30, 2025. We sold $9.7 million in SBA loans during the three months ended September 30, 2026 with average premiums of 8.16%. We sold $13.4 million in SBA loans during the three months ended September 30, 2025 with average premiums of 6.13%. Gain on sale of SBA loans totaled $3.3 million for the nine months ended September 30, 2026 compared to $1.9 million for the same period in 2025. We sold $56.5 million in SBA loans during the nine months ended September 30, 2026 with average premiums of 8.02% compared to $50.7 million sold during the same period in 2025 with average premiums of 5.89%.
Previous wording
Mortgage loan servicing income, net of amortization, decreased by $510,000, or 65.3%, to $271,000 during the three months ended June 30, 2026 compared to $781,000 for the three months ended June 30, 2025. Mortgage loan servicing income, net of amortization, decreased by $822,000, or 58.9%, to $577,000 for the six months ended June 30, 2026 compared to $1.4 million for the six months ended June 30, 2025. The changes in mortgage loan servicing income were primarily due to decreases in servicing fees, increases in mortgage servicing amortization, and decreases in capitalized mortgage servicing assets. Our total residential mortgage loan servicing portfolio was $463.5 million at June 30, 2026 compared to $559.1 million at June 30, 2025.
Current wording
Mortgage loan servicing income, net of amortization, decreased by $282,000, or 54.7%, to $234,000 during the three months ended September 30, 2026 compared to $516,000 for the three months ended September 30, 2025. Mortgage loan servicing income, net of amortization, decreased by $1.1 million, or 57.7%, to $811,000 for the nine months ended September 30, 2026 compared to $1.9 million for the nine months ended September 30, 2025. The changes in mortgage loan servicing income were primarily due to decreases in servicing fees, increases in mortgage servicing amortization, and decreases in capitalized mortgage servicing assets. Our total residential mortgage loan servicing portfolio was $429.5 million at September 30, 2026 compared to $538.7 million at September 30, 2025.
Previous wording
SBA servicing income increased by $86,000, or 13.4%, to $728,000 for the three months ended June 30, 2026 compared to $642,000 for the three months ended June 30, 2025. SBA servicing income increased $1.0 million, or 69.3% to $2.6 million for the six months ended June 30, 2026, compared to $1.6 million for the same period of 2025. Our total SBA and USDA loan servicing portfolio was $682.2 million as of June 30, 2026 compared to $480.9 million as of June 30, 2025. Included in SBA servicing income for three and six months ended June 30, 2026 was $814,000 and $2.1 million in SBA servicing fees compared to $1.0 million and $2.0 million, respectively for the three and six months ended June 30, 2025, respectively. Our SBA servicing rights are carried at fair value and the inputs used to calculate fair value change from period to period. During the three and six months ended June 30, 2026, fair value decreased by $86,000 and increased by $580,000 on our SBA servicing rights, respectively compared to the same periods in 2025 fair value decreased by $344,000 and $451,000 on our SBA servicing rights.
Current wording
SBA servicing income decreased by $340,000, or 28.3%, to $863,000 for the three months ended September 30, 2026 compared to $1.2 million for the three months ended September 30, 2025. SBA servicing income increased $738,000, or 26.8% to $3.5 million for the nine months ended September 30, 2026, compared to $2.8 million for the same period of 2025. Our total SBA and USDA loan servicing portfolio was $676.2 million as of September 30, 2026 compared to $460.7 million as of September 30, 2025. Included in SBA servicing income for the three and nine months ended September 30, 2026 was $1.1 million and $3.1 million in SBA servicing fees, respectively, compared to $1.0 million and $3.0 million, for the three and nine months ended September 30, 2025, respectively. Our SBA servicing rights are carried at fair value and the inputs used to calculate fair value change from period to period. During the three and nine months ended September 30, 2026, fair value decreased by $218,000 and increased by $361,000 on our SBA servicing rights, respectively compared to an increase of $165,000 and a decrease of $286,000 during the same periods in 2025, respectively.
Previous wording
Noninterest expense for the three months ended June 30, 2026 was $20.0 million compared to $14.1 million for the three months ended June 30, 2025, an increase of $5.8 million, or 41.4%.
Current wording
Noninterest expense for the three months ended September 30, 2026 was $20.0 million compared to $14.7 million for the three months ended September 30, 2025, an increase of $5.4 million, or 36.6%.
Previous wording
The following table sets forth the major components of our noninterest expense for the three and six months ended June 30, 2026 and 2025
Current wording
The following table sets forth the major components of our noninterest expense for the three and nine months ended September 30, 2026 and 2025.
Previous wording
Salaries and employee benefits expense for the three months ended June 30, 2026 was $11.3 million compared to $8.5 million for the three months ended June 30, 2025, an increase of $2.8 million, or 32.6%. Salaries and employee benefits expense for the six months ended June 30, 2026 was $22.9 million compared to $17.0 million for the six months ended June 30, 2025, an increase of $5.8 million, or 34.0%. These increases were primarily attributable to higher employee salaries and incentives, and employee insuranceas a result of the First IC acquisition that occurred in fourth quarter of 2025.
Current wording
Salaries and employee benefits expense for the three months ended September 30, 2026 was $11.7 million compared to $9.0 million for the three months ended September 30, 2025, an increase of $2.8 million, or 31.2%. Salaries and employee benefits expense for the nine months ended September 30, 2026 was $34.6 million compared to $26.0 million for the nine months ended September 30, 2025, an increase of $8.6 million, or 33.1%. These increases were primarily attributable to higher employee salaries and incentives, and employee insuranceas a result of the First IC acquisition that occurred in fourth quarter of 2025.
Previous wording
Occupancy and equipment expense for the three months ended June 30, 2026 was $2.3 million, an increase of $948,000, or 68.7%, compared to the three months ended June 30, 2025. Occupancy and equipment expense for the six months ended June 30, 2026 was $4.8 million, an increase of $2.0 million, or 70.3%, compared to the six months ended June 30, 2025. These increases were primarily due to higher property taxes, utilities, maintenance expense, rent expense, and depreciation expense from the acquisition of First IC that occurred in fourth quarter of 2025.
Current wording
Occupancy and equipment expense for the three months ended September 30, 2026 was $2.4 million, an increase of $1.0 million, or 72.1%, compared to the three months ended September 30, 2025. Occupancy and equipment expense for the nine months ended September 30, 2026 was $7.2 million, an increase of $3.0 million, or 70.9%, compared to the nine months ended September 30, 2025. These increases were primarily due to higher property taxes, utilities, maintenance expense, rent expense, and depreciation expense from the acquisition of First IC that occurred in fourth quarter of 2025.
Previous wording
Data processing expense for the three months ended June 30, 2026 was $535,000 compared to $329,000 for the three months ended June 30, 2025, an increase of $206,000, or 62.6%. Data processing expense for the six months ended June 30, 2026 was $1.2 million, an increase of $543,000, or 80.6%, compared to the six months ended June 30, 2025. These increases were primarily due to the continued growth in our loans and deposits from the acquisition of First IC that occurred in fourth quarter of 2025, as well as enhancements to our existing systems.
Current wording
Data processing expense for the three months ended September 30, 2026 was $636,000 compared to $394,000 for the three months ended September 30, 2025, an increase of $242,000, or 61.4%. Data processing expense for the nine months ended September 30, 2026 was $1.9 million, an increase of $785,000, or 73.5%, compared to the nine months ended September 30, 2025. These increases were primarily due to the continued growth in our loans and deposits from the acquisition of First IC that occurred in fourth quarter of 2025, as well as enhancements to our existing systems.
Previous wording
Merger-related expenses for the three months ended June 30, 2026 was $270,000 compared to $333,000 for the three months ended June 30, 2025. Merger-related expenses for the six months ended June 30, 2026 was $1.9 million compared to $595,000 for the six months ended June 30, 2025. The increase for the six months is related to the acquisition of First IC being completed in fourth quarter of 2025 with legal fees, integration fees, and conversion expenses in the first quarter of 2026.
Current wording
Merger-related expenses for the three months ended September 30, 2026 was $117,000 compared to $301,000 for the three months ended September 30, 2025. Merger-related expenses for the nine months ended September 30, 2026 was $2.1 million compared to $896,000 for the nine months ended September 30, 2025. The increase for the nine months is related to the acquisition of First IC being completed in the fourth quarter of 2025 with legal fees, integration fees, and conversion expenses in the first quarter of 2026.
Previous wording
Other expenses for the three months ended June 30, 2026 were $5.3 million compared to $3.4 million for the three months ended June 30, 2025, an increase of $1.9 million, or 57.4%. Other expenses for the six months ended June 30, 2026 were $10.2 million compared to $6.5 million for the six months ended June 30, 2025 an increase of $3.7 million, or 57.7%. This increase was primarily due to core deposit amortization, additional banking costs from First IC merger, FDIC insurance premiums, security expenses, and loan-related expenses.
Current wording
increase of $5.1 million, or 51.2%. This increase was primarily due to core deposit amortization, additional banking costs from First IC merger, FDIC insurance premiums, security expenses, and loan-related expenses.
Previous wording
Income tax expense for the three months ended June 30, 2026 and 2025 was $8.5 million and $6.8 million, respectively. The Company’s effective tax rates were 27.7% and 28.9% for the three months ended June 30, 2026 and 2025, respectively.
Current wording
Income tax expense for the three months ended September 30, 2026 and 2025 was $3.7 million and $6.6 million, respectively. The Company’s effective tax rates were 13.1% and 27.6% for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
Income tax expense for the six months ended June 30, 2026 and 2025 was $16.4 million and $12.6 million, respectively. The Company’s effective tax rates were 27.0% and 27.6% for the six months ended June 30, 2026 and 2025, respectively.
Current wording
Income tax expense for the nine months ended September 30, 2026 and 2025 was $20.1 million and $19.2 million, respectively. The Company’s effective tax rates were 22.6% and 27.6% for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Total assets decreased $248.4 million, or 5.2%, to $4.52 billion at June 30, 2026 as compared to $4.77 billion at December 31, 2025. The decrease in total assets was primarily attributable to decreases of $117.0 million in cash and cash equivalents, $21.0 million in securities, $93.1 million in loans, net, $8.4 million in loans held for sale, and $6.5 million in Federal Home Loan Bank stock.
Current wording
Total assets decreased $170.6 million, or 3.6%, to $4.60 billion at September 30, 2026 as compared to $4.77 billion at December 31, 2025. The decrease in total assets was primarily attributable to decreases of $66.7 million in cash and cash equivalents, $24.0 million in securities, $95.4 million in loans, net, $9.7 million in loans held for sale, and $6.5 million in Federal Home Loan Bank stock, offset by a $35.2 million increase in other assets, primarily related to an increase in income taxes receivable resulting from the utilization of tax credits during the quarter.
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Previous report — wording carried elsewhere
June 30, 2026 with average premiums of 7.99% compared to $37.3 million sold during the same period in 2025 with average premiums of 5.80%.
Previous report — wording carried elsewhere
compared to fair-value adjustments for the three and six months ended June 30, 2025 of $28,000 and negative $15,000, respectively, on our mortgage servicing asset. See Note 6 of our consolidated financial statements as of June 30, 2026, included elsewhere in this Form 10-Q, for additional information on the activity for mortgage loan servicing rights for the three and six months ended June 30, 2026 and 2025.