Hoyne Bancorp, Inc.

Previous wording

This discussion and analysis is intended to assist in the understanding of our financial performance through a discussion of our financial condition as of June 30, 2026 (unaudited) and as compared to our financial condition as of December 31, 2025 and our results of operations for the three and six month periods ended June 30, 2026 and 2025 (unaudited). This section should be read in conjunction with the unaudited consolidated financial statements and notes thereto appearing in Part 1 Item 1 of this Quarterly Report on Form 10-Q.

Current wording

This discussion and analysis is intended to assist in the understanding of our financial performance through a discussion of our financial condition as of September 30, 2026 (unaudited) and as compared to our financial condition as of December 31, 2025 and our results of operations for the three and nine month periods ended September 30, 2026 and 2025 (unaudited). This section should be read in conjunction with the unaudited consolidated financial statements and notes thereto appearing in Part 1 Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Our primary sources of funds consist of attracting deposits from the general public and using those funds and other sources to originate loans to our customers and invest in securities. As of June 30, 2026, we had total assets of $480.0 million, including $282.3 million in net loans and $100.9 million of investment securities available-for-sale, and investment securities held-to-maturity of $25.9 million, total deposits of $312.6 million and total stockholders’ equity of

Current wording

Our primary sources of funds consist of attracting deposits from the general public and using those funds and other sources to originate loans to our customers and invest in securities. As of September 30, 2026, we had total assets of $479.0 million, including $294.4 million in net loans and $94.9 million of investment securities available-for-sale, and investment securities held-to-maturity of $24.7 million, total deposits of $309.0 million and total stockholders’ equity of

Previous wording

$161.1 million. For the three months ended June 30, 2026, we had a net income of $96,000 compared to a net income of $118,000 for the three months ended June 30, 2025. For the six months ended June 30, 2026, we had a net loss of $22,000 compared to a net loss of $47,000 for the six months ended June 30, 2025.

Current wording

$159.2 million. For the three months ended September 30, 2026, we had a net income of $183,000 compared to a net income of $70,000 for the three months ended September 30, 2025. For the nine months ended September 30, 2026, we had a net income of $161,000 compared to a net income of $31,000 for the nine months ended September 30, 2025.

Previous wording

Our results of operations depend, to a large extent, on net interest income, which is the difference between the income earned on our loan and investment portfolios and interest expense on deposits and borrowings. Our net interest income is largely determined by our net interest spread, which is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, and the relative amounts of interest-earning assets and interest-bearing liabilities. Results of operations are also affected by our provisions for loan losses, fee income and other noninterest income and noninterest expense. Noninterest expense principally consists of compensation, office occupancy and equipment expense, data processing, advertising and business promotion and other expenses. We expect that our noninterest expenses will increase as we continue to grow and expand our operations. In addition, our compensation expense will increase due to the new stock benefit plans we intend to implement in the next 12 to 18 months. Our results of operations and financial condition are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, changes in accounting guidance, government policies and actions of regulatory authorities.

Current wording

Our results of operations depend, to a large extent, on net interest income, which is the difference between the income earned on our loan and investment portfolios and interest expense on deposits and borrowings. Our net interest income is largely determined by our net interest spread, which is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, and the relative amounts of interest-earning assets and interest-bearing liabilities. Results of operations are also affected by our provisions for credit losses, fee income and other noninterest income and noninterest expense. Noninterest expense principally consists of compensation, office occupancy and equipment expense, data processing, advertising and business promotion and other expenses. We expect that our noninterest expenses will increase as we continue to grow and expand our operations. In addition, our compensation expense will increase due to the new stock benefit plans we intend to implement in the next 6 months. Our results of operations and financial condition are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, changes in accounting guidance, government policies and actions of regulatory authorities.

Previous wording

Total Assets. Total assets decreased $9.4 million or 1.9% to $480.0 million as of June 30, 2026 compared to $489.4 million as of December 31, 2025. The decrease resulted primarily from decreases in cash and cash equivalents of $22.2 million, investment securities available-for-sale of $5.8 million, and investment securities held to maturity of $2.5 million. These decreases were offset by increases in loans receivable, net of $14.3 million, Bank Owned Life Insurance of $5.4 million, and other assets of $1.1 million.

Current wording

Total Assets. Total assets decreased $10.4 million or 2.1% to $479.0 million as of September 30, 2026 compared to $489.4 million as of December 31, 2025. The decrease resulted primarily from decreases in cash and cash equivalents of $29.4 million, investment securities available-for-sale of $11.8 million, and investment securities held to maturity of $3.6 million. These decreases were offset by increases in loans receivable, net of $26.4 million, Bank Owned Life Insurance of $5.6 million, and other assets of $1.0 million.

Previous wording

Cash and Cash Equivalents. Cash and cash equivalents decreased $22.2 million, or 46.7%, to $25.4 million as of June 30, 2026 compared to $47.6 million as of December 31, 2025. The decrease was primarily the result of funding commercial loan originations and purchasing additional BOLI to enhance the yield on interest earning assets.

Current wording

Cash and Cash Equivalents. Cash and cash equivalents decreased $29.4 million, or 61.8%, to $18.2 million as of September 30, 2026 compared to $47.6 million as of December 31, 2025. The decrease was primarily the result of $27.4 million in net loan growth and purchasing $5.0 million of additional BOLI to enhance the yield on interest earning assets.

Previous wording

Investment Securities Available-for-Sale. Investment securities available-for-sale decreased $5.8 million, or 5.4%, to $100.9 million as of June 30, 2026, from $106.7 million as of December 31, 2025 as a result of maturities and paydowns. The resulting liquidity was used to fund loan portfolio originations.

Current wording

Investment Securities Available-for-Sale. Investment securities available-for-sale decreased $11.8 million, or 11.1%, to $94.9 million as of September 30, 2026, from $106.7 million as of December 31, 2025 as a result of maturities and repayments as well as the reduction in fair value due to changes in the interest rate environment. The resulting liquidity was used to fund loan portfolio originations.

Previous wording

Investment Securities Held-to-Maturity. Investment securities held-to-maturity decreased $2.5 million, or 8.6%, to $25.9 million as of June 30, 2026, from $28.4 million as of December 31, 2025 as a result of maturities and paydowns. The liquidity from the decrease was used to fund the increase in our loan portfolio.

Current wording

Investment Securities Held-to-Maturity. Investment securities held-to-maturity decreased $3.6 million, or 12.7%, to $24.7 million as of September 30, 2026, from $28.4 million as of December 31, 2025 as a result of maturities and repayments. The liquidity from the decrease was used to fund the increase in our loan portfolio.

Previous wording

Loans Receivable, Net. Loans receivable, net increased $14.3 million, or 5.4%, to $282.2 million as of June 30, 2026, from $267.9 million as of December 31, 2025. The increase includes $28.6 million in net commercial loan growth offset by a $13.8 million decrease in one to four residential loans and participations.

Current wording

Loans Receivable, Net. Loans receivable, net increased $26.4 million, or 9.9%, to $294.4 million as of September 30, 2026, from $267.9 million as of December 31, 2025. The increase includes $45.9 million in net commercial loan growth offset by a $18.5 million decrease in one to four residential loans. The decrease in one to four residential loans was due to payoffs combined with the lack of new volume.

Previous wording

Allowance for Credit Losses. As of June 30, 2026, the allowance for credit losses on loans (“ACL”) increased $270,000 or 10.1%, to $3.0 million as of June 30, 2026, from $2.7 million as of December 31, 2025, due to an increase in the provision for credit loss as a result of the growth in the commercial loan portfolio.

Current wording

Allowance for Credit Losses. As of September 30, 2026, the allowance for credit losses on loans (“ACL”) increased $280,000 or 10.4%, to $3.0 million as of September 30, 2026, from $2.7 million as of December 31, 2025, due to an increase in the provision for credit loss as a result of the growth in the commercial loan portfolio.

Previous wording

Bank Owned Life Insurance. Bank Owned Life Insurance increased $5.4 million, or 36.2%, to $20.3 million as of June 30, 2026, from $14.9 million as of December 31, 2025, due primarily to the purchase of additional policies to enhance the yield on interest earning assets.

Current wording

Bank Owned Life Insurance. Bank Owned Life Insurance increased $5.6 million, or 37.6%, to $20.6 million as of September 30, 2026, from $14.9 million as of December 31, 2025, due primarily to the purchase of additional policies to enhance the yield.

Previous wording

Premises and Equipment, Net. Premises and equipment, net decreased $83,000, or 1.1%, to $7.3 million as of June 30, 2026 from $7.4 million as of December 31, 2025, due primarily to depreciation expense.

Current wording

Premises and Equipment, Net. Premises and equipment, net decreased $74,000, or 1.0%, to $7.3 million as of September 30, 2026 from $7.4 million as of December 31, 2025, due primarily to depreciation expense.

Previous wording

Deposits. Deposits decreased $9.0 million, or 2.8%, to $312.6 million as of June 30, 2026 from $321.6 million as of December 31, 2025. The decrease was due to a decline of $18.8 million in passbook accounts and certificates of deposit offset by an increase of $9.8 million in NOW and money market accounts.

Current wording

Deposits. Deposits decreased $12.6 million, or 3.9%, to $309.0 million as of September 30, 2026 from $321.6 million as of December 31, 2025. The decrease was due to a decline of $31.1 million in passbook accounts and certificates of deposit offset by an increase of $18.5 million in NOW and money market accounts due to the participation in ICS NOW reciprocal deposits.

Previous wording

Total Stockholders’ Equity. Total stockholders’ equity for the first six months of 2026 decreased $223,000, or 0.1%, to $161.1 million from $161.4 million as of December 31, 2025. The decrease was due primarily to an increase in accumulated other comprehensive loss of $397,000 during the first six months of 2026 due to interest rate environment.

Current wording

Total Stockholders’ Equity. Total stockholders’ equity for the first nine months of 2026 decreased $2.2 million, or 1.4%, to $159.2 million from $161.4 million as of December 31, 2025. The decrease was due primarily to an increase in accumulated other comprehensive loss of $2.8 million during the first nine months of 2026 due to the interest rate environment.

Previous wording

Comparison of Operating Results for Three and Six Months Ended June 30, 2026 and June 30, 2025

Current wording

Comparison of Operating Results for Three and Nine Months Ended September 30, 2026 and September 30, 2025

Previous wording

General. For the three months ended June 30, 2026 compared to the same period in 2025, net income decreased $22,000, or 18.6%, to net income of $96,000 compared to a net income of $118,000 for the same period in 2025. The primary reason for the decrease in net income was an increase of $1.3 million in total noninterest expense, offset by an increase of $414,000 in interest income, an increase of $179,000 in noninterest income, a decrease of $650,000 in interest expense, and a decrease in tax expense of $22,000. For the six months ended June 30, 2026 compared to the same period in 2025, net loss decreased by $25,000, or 46.8%, to a net loss of $22,000 compared to a net loss of $47,000 for the same period in 2025. The primary reason for the decrease in net loss was an increase of $890,000 in interest income, a decrease of $1.3 million in interest expense, and an increase of $260,000 in noninterest income offset by an increase of $2.4 million in noninterest expense.

Current wording

General. For the three months ended September 30, 2026 compared to the same period in 2025, net income increased $113,000, or 161.4%, to net income of $183,000 compared to a net income of $70,000 for the same period in 2025. The primary reason for the increase in net income was an increase of $558,000 in total interest income, a decrease of $666,000 in interest expense and an increase of $68,000 in noninterest income, offset by an increase in noninterest expense of $1.1 million and an increase in tax expense of $58,000. For the nine months ended September 30, 2026 compared to the same period in 2025, net income increased by $130,000, or 419.4%, to a net income of $161,000 compared to a net income of $31,000 for the same period in 2025. The primary reason for the increase in net income was an increase of $1.4 million in interest income, a decrease of $1.9 million in interest expense, and an increase of $327,000 in noninterest income offset by an increase of $3.5 million in noninterest expense.

Previous wording

Interest Income. Interest income increased $414,000, or 8.3%, to $5.4 million for the three months ended June 30, 2026 compared to $5.0 million for the same period in 2025. The increase in interest income was due to a $626,000 increase in interest income on loans receivable as a result of the growth in the commercial loan portfolio. The increase was partially offset by a $114,000 decrease in interest income on investment securities due to a decrease in balances as a result of maturities and paydowns. Other interest income decreased by $98,000 due to lower average yields on cash and cash equivalents. The excess liquidity generated from the decrease in investment securities and cash account balances was used to fund the growth in the commercial loan portfolio. Interest income increased $890,000, or 9.1%, to $10.7 million for the six months ended June 30, 2026, compared to $9.8 million for the same period in 2025. The increase in interest income for the six month period was due to a $1.1 million increase in interest income on loans receivable in the commercial loan portfolio. The increase was partially offset by $237,000 decrease in interest income on investments due to a decrease in balances as a result of maturities and paydowns. Other interest income decreased by $13,000 due to lower average yields on cash and cash equivalents.

Current wording

Interest Income. Interest income increased $558,000, or 11.2%, to $5.6 million for the three months ended September 30, 2026 compared to $5.0 million for the same period in 2025. The increase in interest income was due to a $691,000 increase in interest income on loans receivable as a result of the growth in the commercial loan portfolio. The increase was partially offset by a $72,000 decrease in interest income on investment securities due to a decrease in balances as a result of maturities and repayments. Other interest income decreased by $61,000 due to lower average yields on cash and cash equivalents. The excess liquidity generated from the decrease in investment securities and cash account balances was used to fund the growth in the commercial loan portfolio. Interest income increased $1.4 million, or 9.9%, to $16.2 million for the nine months ended September 30, 2026, compared to $14.8 million for the same period in 2025. The increase in interest income for the nine month period was due to a $1.8 million increase in interest income on loans receivable in the commercial loan portfolio. The increase was partially offset by a $332,000 decrease in interest income on investments due to a decrease in balances as a result of maturities and paydowns. Other interest income decreased by $49,000 due to lower average balance on cash and cash equivalents.

Previous wording

Interest Expense on Deposits. Interest expense on deposits decreased $650,000, or 40.1%, to $983,000 for the three months ended June 30, 2026, compared to $1.6 million for the three months ended June 30, 2025. The decrease was primarily caused by the decrease in the amount of deposits and in interest rates. Interest expense on deposits decreased $1.3 million, or 38.3%, to $2.0 million for the six months ended June 30, 2026, compared to $3.3 million for the six months ended June 30, 2025. The decrease was primarily similarly caused by the decrease in deposits and interest rates.

Current wording

Interest Expense. Interest expense decreased $666,000, or 41.6%, to $920,000 for the three months ended September 30, 2026, compared to $1.6 million for the three months ended September 30, 2025. The decrease was primarily caused by the decrease in the amount of CD balances and CD rates. Interest expense decreased $1.9 million, or 38.8%, to $3.0 million for the nine months ended September 30, 2026, compared to $4.9 million for the nine months ended September 30, 2025. The decrease was primarily caused by the decrease in CD balances and CD rates during the nine month period.

Previous wording

Provision for Credit Losses. The provision for credit losses was flat at $135,000 for both the three months ended June 30, 2026 and 2025, and at $270,000 for both the six months ended June 30, 2026 and 2025. The additional provision expense was recorded primarily due to the growth in the loan portfolio.

Current wording

Provision for Credit Losses. The provision for credit losses was flat at $135,000 for both the three months ended September 30, 2026 and 2025, and at $405,000 for both the nine months ended September 30, 2026 and 2025. The additional provision expense was recorded primarily due to the growth in the commercial loan portfolio.

Previous wording

Noninterest Income. Noninterest income increased $179,000, or 82.1%, to $397,000 for the three months ended June 30, 2026, compared to $218,000 for the three months ended June 30, 2025. The increase was due primarily to the increase in customer service fees due to commercial loan fees and BOLI income. Noninterest income increased $260,000, or 62.5%, to $676,000 for the six months ended June 30, 2026 compared to $416,000 for the six months ended June 30, 2025. The increase was primarily due to the increase in customer service fees due to commercial loan fees and BOLI income.

Current wording

Noninterest Income. Noninterest income increased $68,000, or 29.3%, to $300,000 for the three months ended September 30, 2026, compared to $232,000 for the three months ended September 30, 2025. The increase was due primarily to the increase in customer service fees due to commercial loan fees and BOLI income. Noninterest income increased $327,000, or 50.5%, to $975,000 for the nine months ended September 30, 2026 compared to $648,000 for the nine months ended September 30, 2025. The increase was primarily due to the increase in customer service fees due to commercial loan fees and BOLI income.

Previous wording

Noninterest Expense. Noninterest expense increased $1.3 million, or 39.5%, to $4.5 million for the three months ended June 30, 2026 compared to $3.2 million for the three months ended June 30, 2025. The increase was primarily caused by the increase in compensation due to annual raises and bonuses, audit, consulting and legal expenses. Noninterest expense increased $2.4 million, or 35.8%, to $9.1 million for the six months ended June 30, 2026, compared to $6.7 million for the six months ended June 30, 2025. The increase was primarily caused by the increase in compensation, audit, consulting and legal expenses.

Current wording

Noninterest Expense. Noninterest expense increased $1.1 million, or 32.4%, to $4.5 million for the three months ended September 30, 2026 compared to $3.4 million for the three months ended September 30, 2025. The increase was primarily caused by the increase in compensation due to annual raises and bonuses. Noninterest expense increased $3.5 million, or 34.7%, to $13.6 million for the nine months ended September 30, 2026, compared to $10.1 million for the nine months ended September 30, 2025. The increase was primarily caused by the increase in compensation, audit, consulting and legal expenses.

Previous wording

Tax Expense (benefit). Tax expense (benefit) decreased $22,000, or 30.5%, to $50,000 for the three months ended June 30, 2026, from $72,000 for the same period in 2025. The major factor in the decrease was the lower net income between the periods. Tax benefit increased $1,000, or 20.0%, to a benefit of $6,000 for the six months ended June 30, 2026, from a benefit of $5,000 for the same period in 2025, primarily as a result of the lower net loss between the periods.

Current wording

Tax Expense (benefit). Tax expense (benefit) increased $58,000, or 232.0%, to $83,000 for the three months ended September 30, 2026, from $25,000 for the same period in 2025. The major factor in the increase was the higher net income between the periods. Tax expense increased $65,000, or 541.7%, to an expense of $77,000 for the nine months ended September 30, 2026, from an expense of $12,000 for the same period in 2025, primarily as a result of the higher net income between the periods.

Previous wording

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We also have the ability to borrow from the FHLB of Chicago and Bankers Bank. As of June 30, 2026, we had no outstanding FHLB advances, and had the capacity to borrow approximately $57.9 million from the FHLB of Chicago and $23.0 million from Bankers Bank.

Current wording

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities, and proceeds from maturities of securities. We also have the ability to borrow from the FHLB of Chicago and Bankers Bank. As of September 30, 2026, we had no outstanding FHLB advances and $5.9 million Bankers Bank advances, and had the capacity to borrow approximately $57.3 million from the FHLB of Chicago and $17.1 million additional from Bankers Bank.

Previous wording

Our cash flows are comprised of three primary classifications: cash flows provided by (used in) operating activities, investing activities, and financing activities. Net cash provided by (used in) operating activities was ($1.3 million) and $2.7 million for the six months ended June 30, 2026 and 2025, respectively. Net cash provided by (used in) investing activities, which consists primarily of changes in loans receivable, was ($11.9 million) and $5.8 million for the six months ended June 30, 2026 and 2025, respectively. Net cash provided by (used in) financing activities, which primarily

Current wording

Our cash flows are comprised of three primary classifications: cash flows provided by (used in) operating activities, investing activities, and financing activities. Net cash provided by (used in) operating activities was ($730,000) and ($25,000) for the nine months ended September 30, 2026 and 2025, respectively. Net cash provided by (used in) investing activities, which consists primarily of changes in loans receivable, was ($20.5 million) and $11.1 million for

Previous wording

As of June 30, 2026, the Bank was considered well capitalized under the regulatory framework for prompt corrective action. During the year ended December 31, 2023, the Bank elected to begin using the Community Bank Leverage Ratio Framework (the “CBLRF”). Under CBLRF, if a qualifying depository institution or depository institution holding company elects to use such measure, such institution or holding company will be considered well capitalized if its ratio of Tier 1 capital to average total consolidated assets (i.e., leverage ratio) exceeds 9.0% subject to a limited two-quarter grace period, during which the leverage ratio cannot go 100 basis points below the then- applicable threshold, and will not be required to calculate and report risk-based capital ratios. The Bank’s Tier 1 capital to average assets for the leverage ratio was 27.3% and 24.8% as of June 30, 2026 and December 31, 2025, respectively. Additionally, as of June 30, 2026, the Bank exceeded all applicable regulatory capital requirements, including the Tier 1 leverage capital level by $85.3 million, or 18.3%.

Current wording

As of September 30, 2026, the Bank was considered well capitalized under the regulatory framework for prompt corrective action. During the year ended December 31, 2023, the Bank elected to begin using the Community Bank Leverage Ratio Framework (the “CBLRF”). Under CBLRF, if a qualifying depository institution or depository institution holding company elects to use such measure, such institution or holding company will be considered well capitalized if its ratio of Tier 1 capital to average total consolidated assets (i.e., leverage ratio) exceeds 8.0% subject to a limited two-quarter grace period, during which the leverage ratio cannot go 100 basis points below the then- applicable threshold, and will not be required to calculate and report risk-based capital ratios. The Bank’s Tier 1 capital to average assets for the leverage ratio was 27.3% and 24.8% as of September 30, 2026 and December 31, 2025, respectively. Additionally, as of September 30, 2026, the Bank exceeded all applicable regulatory capital requirements, including the Tier 1 leverage capital level by $90.5 million, or 19.3%.

Previous wording

Off-Balance Sheet Arrangements*.*As of June 30, 2026, we had $71.7 million of outstanding commitments to originate loans. We had unfunded construction loans as of June 30, 2026 of $12.9 million. Certificates of deposit that are scheduled to mature in less than one year from June 30, 2026, totaled $138.2 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits are not retained, we may utilize FHLB of Chicago advances or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.

Current wording

Off-Balance Sheet Arrangements*.*As of September 30, 2026, we had $12.1 million of outstanding commitments to originate loans. We had unfunded construction loans as of September 30, 2026 of $18.7 million. Certificates of deposit that are scheduled to mature in less than one year from September 30, 2026, totaled $128.2 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits are not retained, we may utilize FHLB of Chicago advances or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.

Previous wording

The table above indicates that as of June 30, 2026, in the event of an immediate and sustained 300 basis point increase in interest rates, our net interest income for the twelve months ending June 30, 2027 would be expected to decrease by $1.0 million, or 5.2% to $18.8 million.

Current wording

The table above indicates that as of September 30, 2026, in the event of an immediate and sustained 300 basis point increase in interest rates, our net interest income for the twelve months ending September 30, 2027 would be expected to decrease by $1.1 million, or 5.2% to $19.5 million.