CF BANKSHARES INC.

Previous wording

This Quarterly Report on Form 10-Q and other reports and materials we have filed or may file with the Securities and Exchange Commission (“SEC”) contain or may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Reform Act of 1995, which are made in good faith by us. Forward-looking statements include, but are not limited to: (1) projections of revenues, income or loss, earnings or loss per common share, capital structure and other financial items; (2) plans and objectives of the management or Boards of Directors of CF Bankshares Inc. (the “Holding Company”) or CFBank, National Association (“CFBank” and, together with the Holding Company, the “Company”); (3) statements regarding future events, actions or economic performance; and (4) statements of assumptions underlying such statements. Words such as "estimate," "strategy," "may," "believe," "anticipate," "expect," "predict," "will," "intend," "plan," "targeted," and the negative of these terms, or similar expressions, are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Various risks and uncertainties may cause actual results to differ materially from those indicated by our forward-looking statements, including, without limitation, those risks detailed from time to time in our reports filed with the SEC, including those identified in “Item 1A. Risk Factors” of Part I of our Annual Report on Form 10-K filed with SEC for the year ended December 31, 2024.

Current wording

This Quarterly Report on Form 10-Q and other reports and materials we have filed or may file with the Securities and Exchange Commission (“SEC”) contain or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the meaning of the safe harbor provisions of the U.S. Private Securities Reform Act of 1995, which are made in good faith by us. Forward-looking statements include, but are not limited to: (1) projections of revenues, income or loss, earnings or loss per common share, capital structure and other financial items; (2) plans and objectives of the management or Boards of Directors of CF Bankshares Inc. (the “Holding Company”) or CFBank, National Association (“CFBank” and, together with the Holding Company, the “Company”); (3) statements regarding future events, actions or economic performance; and (4) statements of assumptions underlying such statements. Words such as "estimate," "strategy," "may," "believe," "anticipate," "expect," "predict," "will," "intend," "plan," "targeted," and the negative of these terms, or similar expressions, are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Various risks and uncertainties may cause actual results to differ materially from those indicated by our forward-looking statements, including, without limitation, those risks detailed from time to time in our reports filed with the SEC, including those identified in “Item 1A. Risk Factors” of Part I of our Annual Report on Form 10-K filed with SEC for the year ended December 31, 2024.

Previous wording

The Holding Company is a financial holding company that owns 100% of the stock of CFBank, which was formed in Ohio in 1892 and converted from a federal savings association to a national bank on December 1, 2016. Prior to December 1, 2016, the Holding Company was a registered savings and loan holding company. Effective as of December 1, 2016 and in conjunction with the conversion of CFBank to a national bank, the Holding Company became a registered bank holding company and elected financial holding company status with the Federal Reserve Board (the “Federal Reserve”). Effective as of July 27, 2020, the Company changed its name from Central Federal Corporation to CF Bankshares Inc.

Current wording

The Holding Company is a bank holding company that owns 100% of the stock of CFBank, which was formed in Ohio in 1892 and converted from a federal savings association to a national bank on December 1, 2016. Prior to December 1, 2016, the Holding Company was a registered savings and loan holding company. Effective as of December 1, 2016 and in conjunction with the conversion of CFBank to a national bank, the Holding Company became a registered bank holding company and elected financial holding company status with the Federal Reserve Board (the “Federal Reserve”). Effective as of July 27, 2020, the Holding Company changed its name from Central Federal Corporation to CF Bankshares Inc. Effective as of August 26, 2025, the Holding Company decertified its financial holding company status with the Federal Reserve.

Previous wording

General. Assets totaled $2.13 billion at June 30, 2025 and increased $68.0 million, or 3.3%, from $2.07 billion at December 31, 2024. The increase was primarily due to a $40.4 million increase in cash and cash equivalents and a $32.8 million increase in net loans and leases.

Current wording

General. Assets totaled $2.11 billion at September 30, 2025 and increased $45.5 million, or 2.2%, from $2.07 billion at December 31, 2024. The increase was primarily due to a $37.1 million increase in cash and cash equivalents and a $6.3 million increase in net loans and leases.

Previous wording

Cash and cash equivalents. Cash and cash equivalents totaled $275.7 million at June 30, 2025, and increased $40.4 million, or 17.2%, from $235.3 million at December 31, 2024. The increase in cash and cash equivalents was primarily attributed to a $54.1 million increase in deposits, and a $8.3 million increase in FHLB advances and other borrowings, partially offset by a $32.8 million increase in net loans and leases.

Current wording

Cash and cash equivalents. Cash and cash equivalents totaled $272.4 million at September 30, 2025, and increased $37.1 million, or 15.8%, from $235.3 million at December 31, 2024. The increase in cash and cash equivalents was primarily attributed to a $22.8 million increase in deposits, an $8.3 million increase in FHLB advances and other borrowings, and a $5.0 million decrease in equity securities, partially offset by a $6.3 million increase in net loans and leases.

Previous wording

Securities. Securities available for sale totaled $9.0 million at June 30, 2025, and increased $313,000, or 3.6%, compared to $8.7 million at December 31, 2024.

Current wording

Securities. Securities available for sale totaled $9.2 million at September 30, 2025, and increased $516,000, or 5.9%, compared to $8.7 million at December 31, 2024.

Previous wording

Loans held for sale. Loans held for sale totaled $1.6 million at June 30, 2025, and decreased $1.0 million, or 38.5%, from $2.6 million at December 31, 2024.

Current wording

Loans held for sale. Loans held for sale totaled $2.5 million at September 30, 2025, and decreased $139,000, or 5.3%, from $2.6 million at December 31, 2024.

Previous wording

Loans and Leases. Net loans and leases totaled $1.75 billion at June 30, 2025, and increased $32.8 million, or 1.9%, from $1.72 billion at December 31, 2024. The increase in loans and leases balances was primarily due to a $52.8 million increase in commercial and multi-family real estate loan balances, a $3.3 million increase in home equity lines of credit balances, a $3.0 million increase in commercial and industrial (C&I) loan balances, and a $2.7 million increase in construction loan balances, partially offset by a $27.9 million decrease in single-family residential loan balances and a $1.6 million increase in the allowance for credit losses on loans. The decrease in single-family residential loan balances was due primarily to the sale of two portfolios of loans in the first quarter of 2025 totaling $18.1 million.

Current wording

Loans and Leases. Net loans and leases totaled $1.73 billion at September 30, 2025, and increased $6.3 million, or 0.4%, from $1.72 billion at December 31, 2024. The increase in loans and leases balances was primarily due to a $54.3 million increase in commercial real estate loan balances, a $17.2 million increase in multi-family residential loan balances, and a $3.8 million increase in home equity lines of credit balances, partially offset by a $35.4 million decrease in single-family residential loan balances, a $32.2 million decrease in commercial and industrial (C&I) loan balances, and a $2.8 million decrease in construction loan balances. The decrease in single-family residential loan balances included the sale of two portfolios of loans in the first quarter of 2025 totaling $18.1 million.

Previous wording

Allowance for Credit Losses on Loans. The allowance for credit losses on loans (“ACL – Loans”) totaled $19.1 million at June 30, 2025, and increased $1.6 million, or 9.4%, from $17.5 million at December 31, 2024. The ratio of the ACL - Loans to total loans was 1.08% at June 30, 2025, compared to 1.00% at December 31, 2024.

Current wording

Allowance for Credit Losses on Loans. The allowance for credit losses on loans (“ACL – Loans”) totaled $16.8 million at September 30, 2025, and decreased $633,000, or 3.6%, from $17.5 million at December 31, 2024. The ratio of the ACL - Loans to total loans was 0.97% at September 30, 2025, compared to 1.00% at December 31, 2024.

Previous wording

Individually evaluated loans totaled $14.7 million at June 30, 2025, and increased $1.9 million, or 14.7%, from $12.8 million at December 31, 2024. The amount of the ACL - Loans specifically calculated for individually evaluated loans totaled $4.8 million at June 30, 2025 and $2.3 million at December 31, 2024.

Current wording

Individually evaluated loans totaled $8.0 million at September 30, 2025, and decreased $4.8 million, or 37.6%, from $12.8 million at December 31, 2024. The amount of the ACL - Loans specifically calculated for individually evaluated loans totaled $2.6 million at September 30, 2025 and $2.3 million at December 31, 2024.

Previous wording

Nonperforming loans, which include nonaccrual loans and loans at least 90 days past due but still accruing interest, totaled $16.6 million at June 30, 2025, and increased $1.6 million from $15.0 million at December 31, 2024. The increase in nonaccrual loans was primarily driven by a commercial loan, totaling $1.3 million, and a commercial real estate loan, totaling $694,000, becoming nonaccrual during the second quarter of 2025, partially offset by the transfer of a $524,000 single-family residential loan in nonaccrual at December 31, 2024, to foreclosed assets during the first quarter of 2025. The ratio of nonperforming loans to total loans was 0.94% at June 30, 2025 compared to 0.87% at December 31, 2024.

Current wording

Nonperforming loans, which include nonaccrual loans and loans at least 90 days past due but still accruing interest, totaled $10.0 million at September 30, 2025, and decreased $5.0 million from $15.0 million at December 31, 2024. The decrease in nonaccrual loans was primarily driven by a $7.0 million charge-off of two commercial loans (one relationship) during the third quarter of 2025, and the transfer of a $524,000 single-family residential loan in nonaccrual at December 31, 2024 to foreclosed assets during the first quarter of 2025, partially offset by six commercial loans, totaling $2.3 million, and a commercial real estate loan, totaling $694,000 becoming nonaccrual during 2025. The ratio of nonperforming loans to total loans was 0.57% at September 30, 2025 compared to 0.87% at December 31, 2024.

Previous wording

During the three and six months ended June 30, 2025, the Company did not modify any loans where the borrower was experiencing financial difficulty. During the three and six months ended June 30, 2024, the Company modified one commercial loan, with an amortized cost basis totaling $4.4 million, where the borrower was experiencing financial difficultly. The amortized cost basis of this loan represented 1.0% of commercial loans at June 30, 2025. The loan was modified to increase the interest rate by 75bps, extend the maturity date by 6 months, and allow for an amortization holiday and deferred interest option. The loan was not past due during the six months ended June 30, 2024.

Current wording

During the three and nine months ended September 30, 2025, the Company did not modify any loans where the borrower was experiencing financial difficulty. During the three months ended September 30, 2024, the Company did not modify any loans where the borrower was experiencing financial difficultly. During the nine months ended September 30, 2024, the Company modified one commercial loan, with an amortized cost basis totaling $4.3 million, where the borrower was experiencing financial difficultly. The amortized cost basis of this loan represented 1.0% of commercial loans at September 30, 2024. The loan was modified to increase the interest rate by 75bps, extend the maturity date by 6 months, and allow for an amortization holiday and deferred interest option. The modified loan was not past due during the nine months ended September 30, 2025.

Previous wording

The level of total criticized and classified loans decreased by $5.0 million, or 15.1%, during the six months ended June 30, 2025. Loans designated as special mention decreased $6.7 million, or 35.8%, and totaled $11.8 million at June 30, 2025, compared to $18.5 million at December 31, 2024. Loans classified as substandard increased $1.6 million, or 11.3%, and totaled $15.8 million at June 30, 2025, compared to $14.2 million at December 31, 2024. Loans designated as doubtful totaled $385,000 at both June 30, 2025 and December 31, 2024. See Note 4 to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding risk classification of loans.

Current wording

The level of total criticized and classified loans decreased by $7.2 million, or 21.8%, during the nine months ended September 30, 2025. Loans designated as special mention decreased $1.8 million, or 9.6%, and totaled $16.7 million at September 30, 2025, compared to $18.5 million at December 31, 2024. Loans classified as substandard decreased $5.4 million, or 38.2%, and totaled $8.8 million at September 30, 2025, compared to $14.2 million at December 31, 2024. Loans designated as doubtful totaled $385,000 at both September 30, 2025 and December 31, 2024. See Note 4 to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding risk classification of loans.

Previous wording

Total past due loans increased $2.7 million and totaled $15.2 million at June 30, 2025, compared to $12.5 million at December 31, 2024. Past due loans totaled 0.9% of the loan portfolio at June 30, 2025, compared to 0.7% at December 31, 2024. See Note 4 to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding loan delinquencies.

Current wording

Total past due loans decreased $6.9 million and totaled $5.6 million at September 30, 2025, compared to $12.5 million at December 31, 2024. Past due loans totaled 0.3% of the loan portfolio at September 30, 2025, compared to 0.7% at December 31, 2024. See Note 4 to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding loan delinquencies.

Previous wording

Loans that contain interest only payments may present a higher risk than those loans with an amortizing payment that includes periodic principal reductions. Interest only loans are primarily commercial lines of credit secured by business assets and inventory, and consumer home equity lines of credit secured by the borrower’s primary residence. Due to the fluctuations in business assets and inventory of our commercial borrowers, CFBank has increased risk due to a potential decline in collateral values without a corresponding decrease in the outstanding principal. Interest only commercial lines of credit totaled $126.3 million, or 29.9%, of CFBank’s commercial portfolio at June 30, 2025, compared to $131.2 million, or 31.3%, at December 31, 2024. Interest only home equity lines of credit totaled $41.9 million, or 97.8%, of the total home equity lines of credit at June 30, 2025, compared to $38.8 million, or 98.1%, at December 31, 2024.

Current wording

Loans that contain interest only payments may present a higher risk than those loans with an amortizing payment that includes periodic principal reductions. Interest only loans are primarily commercial lines of credit secured by business assets and inventory, and consumer home equity lines of credit secured by the borrower’s primary residence. Due to the fluctuations in business assets and inventory of our commercial borrowers, CFBank has increased risk due to a potential decline in collateral values without a corresponding decrease in the outstanding principal. Interest only commercial lines of credit totaled $113.0 million, or 29.2%, of CFBank’s commercial portfolio at September 30, 2025, compared to $131.2 million, or 31.3%, at December 31, 2024. Interest only home equity lines of credit totaled $42.4 million, or 97.9%, of the total home equity lines of credit at September 30, 2025, compared to $38.8 million, or 98.1%, at December 31, 2024.

Previous wording

Foreclosed assets. The Company held $524,000 in foreclosed assets at June 30, 2025 compared to none at December 31, 2024. The level of foreclosed assets and charges to foreclosed assets expense may change in the future in connection with workout efforts related to foreclosed assets, nonperforming loans and other loans with credit issues.

Current wording

Foreclosed assets. The Company held no foreclosed assets at September 30, 2025 or December 31, 2024. The Company acquired a single-family residential property during the first quarter of 2025 by obtaining a deed in lieu of foreclosure. The property, which was valued at $524,000, was sold during the quarter ended September 30, 2025. The level of foreclosed assets and charges to foreclosed assets expense may change in the future in connection with workout efforts related to foreclosed assets, nonperforming loans and other loans with credit issues.

Previous wording

Deposits. Deposits totaled $1.81 billion at June 30, 2025, an increase of $54.1 million, or 3.1%, when compared to $1.76 billion at December 31, 2024. The increase when compared to December 31, 2024 was primarily due to a $31.4 million increase in interest-bearing account balances, coupled with a $22.7 million increase in noninterest-bearing account balances.

Current wording

Deposits. Deposits totaled $1.78 billion at September 30, 2025, an increase of $22.8 million, or 1.3%, when compared to $1.76 billion at December 31, 2024. The increase when compared to December 31, 2024 was primarily due to an $18.9 million increase in interest-bearing account balances, coupled with a $4.0 million increase in noninterest-bearing account balances.

Previous wording

At June 30, 2025, approximately 29.1% of our deposit balances exceeded the FDIC insurance limit of $250,000, as compared to approximately 29.8% at December 31, 2024.

Current wording

At September 30, 2025, approximately 29.7% of our deposit balances exceeded the FDIC insurance limit of $250,000, as compared to approximately 29.8% at December 31, 2024.

Previous wording

CFBank is a participant in the Certificate of Deposit Account Registry Service® (CDARS) and Insured Cash Sweep (ICS) programs offered through IntraFi. IntraFi works with a network of banks to offer products that can provide FDIC insurance coverage in excess of $250,000 through these innovative products. Brokered deposits, including CDARS and ICS deposits that qualify as brokered, totaled $462.1 million at June 30, 2025, and increased $41.3 million, or 9.8%, from $420.8 million at December 31, 2024. Customer balances in the CDARS reciprocal and ICS reciprocal programs, which do not qualify as brokered, totaled $269.3 million at June 30, 2025, and decreased $2.4 million, or 0.9%, from $271.7 million at December 31, 2024.

Current wording

CFBank is a participant in the Certificate of Deposit Account Registry Service® (CDARS) and Insured Cash Sweep (ICS) programs offered through IntraFi. IntraFi works with a network of banks to offer products that can provide FDIC insurance coverage in excess of $250,000 through these innovative products. Brokered deposits, including CDARS and ICS deposits that qualify as brokered, totaled $411.6 million at September 30, 2025, and decreased $9.2 million, or 2.2%, from $420.8 million at December 31, 2024. Customer balances in the CDARS reciprocal and ICS reciprocal programs, which do not qualify as brokered, totaled $274.6 million at September 30, 2025, and increased $2.9 million, or 1.1%, from $271.7 million at December 31, 2024.

Previous wording

FHLB advances and other debt. FHLB advances and other debt totaled $100.9 million at June 30, 2025, an increase of $8.3 million, or 8.9%, when compared to $92.7 million at December 31, 2024. The increase was primarily due to a $10 million increase in the outstanding balance on the Holding Company's credit facility.

Current wording

FHLB advances and other debt. FHLB advances and other debt totaled $101.0 million at September 30, 2025, an increase of $8.3 million, or 8.9%, when compared to $92.7 million at December 31, 2024. The increase was primarily due to a $10 million increase in the outstanding balance on the Holding Company's credit facility.

Previous wording

The Holding Company has a credit facility with a third-party bank. Prior to April 30, 2025, the credit facility was $35 million with a revolving feature until May 21, 2024, at which time the outstanding balance was converted to a 10-year term note on a graduated 10-year amortization. Borrowings on the credit facility bore interest at a fixed rate of 3.85% until May 21, 2026, at which time the interest rate then converted to a floating rate equal to PRIME with a floor of 3.25%. Effective April 30, 2025, an additional $10 million revolving line of credit was added to the credit facility and the interest rate was amended to reset the fixed rate to 6.00% until May 21, 2026, at which time the rate will then convert to a floating rate equal to PRIME. The $10 million revolving line of credit matures on April 30, 2027. The revolving line of credit provided an additional $10 million that was injected as additional Tier 1 capital into CFBank during the second quarter of 2025. At June 30, 2025, the Company had an outstanding balance, net of unamortized debt issuance costs, of $42.9 million on the credit facility.

Current wording

The Holding Company has a credit facility with a third-party bank. Prior to April 30, 2025, the credit facility had a borrowing limit of $35 million with a revolving feature until May 21, 2024, at which time the outstanding balance was converted to a 10-year term note on a graduated 10-year amortization. Borrowings on the credit facility bore interest at a fixed rate of 3.85% until May 21, 2026, at which time the interest rate then would convert to a floating rate equal to PRIME with a floor of 3.25%. Effective April 30, 2025, an additional $10 million revolving line of credit was added to the credit facility and the interest rate was amended to reset the fixed rate to 6.00% until May 21, 2026, at which time the rate will convert to a floating rate equal to PRIME. The $10 million revolving line of credit matures on April 30, 2027. The revolving line of credit provided an additional $10 million that was injected as additional Tier 1 capital into CFBank during the second quarter of 2025. At September 30, 2025, the Company had an outstanding balance, net of unamortized debt issuance costs, of $43.0 million on the credit facility.

Previous wording

Subordinated debentures. Subordinated debentures totaled $15.0 million at June 30, 2025 and December 31, 2024. In December 2018, the Holding Company entered into subordinated note purchase agreements with certain qualified institutional buyers and completed a private placement of $10.0 million of fixed-to-floating rate subordinated notes, resulting in net proceeds of $9,6 million after deducting unamortized debt issuance costs of approximately $388,000. In 2003, the Holding Company issued subordinated debentures in exchange for the proceeds of a $5.0 million trust preferred securities offering issued by a trust formed by the Holding Company. The terms of the subordinated debentures allow for the Holding Company to defer interest payments for a period not to exceed five years. Interest payments on the subordinated debentures were current at June 30, 2025 and December 31, 2024.

Current wording

Subordinated debentures. Subordinated debentures totaled $15.0 million at September 30, 2025 and December 31, 2024. In December 2018, the Holding Company entered into subordinated note purchase agreements with certain qualified institutional buyers and completed a private placement of $10.0 million of fixed-to-floating rate subordinated notes, resulting in net proceeds of $9.6 million after deducting unamortized debt issuance costs of approximately $388,000. In 2003, the Holding Company issued subordinated debentures in exchange for the proceeds of a $5.0 million trust preferred securities offering issued by a trust formed by the Holding Company. The terms of the subordinated debentures allow for the Holding Company to defer interest payments for a period not to exceed five years. Interest payments on the subordinated debentures were current at September 30, 2025 and December 31, 2024.

Previous wording

Stockholders’ equity. Stockholders’ equity totaled $177.0 million at June 30, 2025, an increase of $8.6 million, or 5.1%, from $168.4 million at December 31, 2024. The increase in stockholders’ equity during the six months ended June 30, 2025 was primarily attributed to net income, partially offset by $909,000 in dividend payments.

Current wording

Stockholders’ equity. Stockholders’ equity totaled $179.3 million at September 30, 2025, an increase of $10.9 million, or 6.4%, from $168.4 million at December 31, 2024. The increase in stockholders’ equity during the nine months ended September 30, 2025 was primarily attributed to net income, partially offset by $1.4 million in dividend payments.

Previous wording

General. Net income for the six months ended June 30, 2025 totaled $9.5 million (or $1.45 per diluted common share) compared to net income of $4.8 million (or $0.74 per diluted common share) for the six months ended June 30, 2024. The increase in net income was primarily the result of an increase in net interest income, a decrease in provision for credit losses expense and an increase in noninterest income, partially offset by an increase in noninterest expense.

Current wording

General. Net income for the three months ended September 30, 2025 totaled $2.3 million (or $0.36 per diluted common share) compared to net income of $4.2 million (or $0.65 per diluted common share) for the three months ended September 30, 2024. The decrease in net income was primarily the result of an increase in provision for credit losses expense, partially offset by increases in net interest income and noninterest income

Previous wording

Net interest income totaled $14.0 million for the quarter ended June 30, 2025 and increased $2.6 million, or 23.2%, compared to net interest income of $11.4 million for the quarter ended June 30, 2024. The increase was primarily due to a $1.6 million, or 8.9%, decrease in interest expense, coupled with a $1.0 million, or 3.6%, increase in interest income. The decrease in interest expense was attributed to a 41bps decrease in the average cost of funds on interest-bearing liabilities, partially offset by a $1.4 million, or 0.09%, increase in average interest-bearing liabilities. The increase in interest income was primarily attributed to a $76.5 million, or 4.0%, increase in average interest-earning assets outstanding, partially offset by a 3bps decrease in the average yield on interest-earning assets. The net interest margin of 2.83% for the quarter ended June 30, 2025 increased 44bps compared to the net interest margin of 2.39% for the second quarter of 2024.

Current wording

Net interest income totaled $13.8 million for the quarter ended September 30, 2025 and increased $2.3 million, or 20.3%, compared to net interest income of $11.5 million for the quarter ended September 30, 2024. The increase was primarily due to a $2.0 million, or 10.6%, decrease in interest expense, coupled with a $373,000, or 1.2%, increase in interest income. The decrease in interest expense was attributed to a 58bps decrease in the average cost of funds on interest-bearing liabilities, partially offset by a $30.8 million, or 2.0%, increase in average interest-bearing liabilities. The increase in interest income was primarily attributed to a $94.5 million, or 5.0%, increase in average interest-earning assets outstanding, partially offset by a 22bps decrease in the average yield on interest-earning assets. The net interest margin of 2.76% for the quarter ended September 30, 2025 increased 35bps compared to the net interest margin of 2.41% for the third quarter of 2024.

Previous wording

Interest expense totaled $16.4 million for the quarter ended June 30, 2025, and decreased $1.6 million, or 8.9%, compared to $17.9 million for the quarter ended June 30, 2024. The decrease in interest expense was primarily attributed to a 50bps decrease in the average rate of interest-bearing deposits, partially offset by a $21.0 million, or 1.5%, increase in average interest-bearing deposits.

Current wording

Interest expense totaled $16.6 million for the quarter ended September 30, 2025, and decreased $2.0 million, or 10.6%, compared to $18.5 million for the quarter ended September 30, 2024. The decrease in interest expense was primarily attributed to a 71bps decrease in the average rate of interest-bearing deposits, partially offset by a $38.7 million, or 2.7%, increase in average interest-bearing deposits.

Previous wording

Noninterest income. Noninterest income for the quarter ended June 30, 2025 totaled $1.6 million and increased $362,000, or 29.7%, compared to $1.2 million for the quarter ended June 30, 2024. The increase was primarily due to a $196,000 increase in Swap fee income, a $119,000 increase in gain on sales of residential mortgage loans, and a $98,000 increase in service charges on deposit accounts.

Current wording

Noninterest income. Noninterest income for the quarter ended September 30, 2025 totaled $1.7 million and increased $112,000, or 7.0%, compared to $1.6 million for the quarter ended September 30, 2024. The increase was primarily due to a $99,000 increase in gain on sales of residential mortgage loans, and a $41,000 increase in service charges on deposit accounts.

Previous wording

Noninterest expense. Noninterest expense for the quarter ended June 30, 2025 totaled $7.8 million and increased $662,000, or 9.3%, compared to $7.1 million for the quarter ended June 30, 2024. The increase in noninterest expense was primarily due to a $384,000 increase in salaries and employee benefits and a $309,000 increase in professional fee expense. The increase in salaries and employee benefits was primarily driven by higher salary expense due to increased FTEs and expense accruals related to staff incentives and deferred compensation incentives in the second quarter of 2025 when compared to the second quarter of 2024. The increase in professional fee expense was predominantly due to increased recruiting expenses in the second quarter of 2025 when compared to the second quarter of 2024.

Current wording

Noninterest expense. Noninterest expense for the quarter ended September 30, 2025 totaled $7.7 million and increased $500,000, or 6.9%, compared to $7.2 million for the quarter ended September 30, 2024. The increase in noninterest expense was primarily due to a $261,000 increase in salaries and employee benefits and a $174,000 increase in professional fee expense. The increase in salaries and employee benefits was primarily driven by increased salary expense and accruals related to staff incentives and deferred compensation incentives in the third quarter of 2025 when compared to the third quarter of 2024. The increase in professional fee expense was predominantly due to increased recruiting expenses in the third quarter of 2025 when compared to the third quarter of 2024.

Previous wording

Income tax expense. Income tax expense was $1.4 million for the quarter ended June 30, 2025, an increase of $1.1 million, or 476.0%, compared to $237,000 for the quarter ended June 30, 2024. The effective tax rate for the quarter ended June 30, 2025 was approximately 21.3%, as compared to approximately 12.3% for the quarter ended June 30, 2024.

Current wording

Income tax expense. Income tax expense was $373,000 for the quarter ended September 30, 2025, a decrease of $704,000, or 65.4%, compared to $1.1 million for the quarter ended September 30, 2024. The effective tax rate for the quarter ended September 30, 2025 was approximately 13.8%, as compared to approximately 20.4% for the quarter ended September 30, 2024. The decline in the effective tax rate for the quarter ended September 30, 2025 was driven by the impact of low-income housing and historic tax credit investments.

Previous wording

Comparison of the Results of Operations for the Six Months Ended June 30, 2025 and 2024.

Current wording

Comparison of the Results of Operations for the Nine Months Ended September 30, 2025 and 2024.

Previous wording

General. Net income for the three months ended June 30, 2025 totaled $5.0 million (or $0.77 per diluted common share) compared to net income of $1.7 million (or $0.26 per diluted common share) for the three months ended June 30, 2024. The increase in net income was primarily the result of an increase in net interest income, a decrease in provision for credit losses expense and an increase in noninterest income, partially offset by an increase in noninterest expense.

Current wording

General. Net income for the nine months ended September 30, 2025 totaled $11.8 million (or $1.81 per diluted common share) compared to net income of $9.0 million (or $1.38 per diluted common share) for the nine months ended September 30, 2024. The increase in net income was primarily the result of an increase in net interest income and an increase in noninterest income, partially offset by an increase in provision for credit losses expense and an increase in noninterest expense.

Previous wording

Net interest income totaled $26.9 million for the six months ended June 30, 2025 and increased $4.2 million, or 18.8%, compared to net interest income of $22.7 million for the six months ended June 30, 2024. The increase was primarily due to a $3.1 million, or 8.7%, decrease in interest expense, coupled with a $1.2 million, or 2.0%, increase in interest income. The decrease in interest expense was attributed to a 39bps decrease in the average cost of funds on interest-bearing liabilities. The increase in interest income was primarily attributed to a $58.5 million, or 3.1%, increase in average interest-earning assets outstanding, partially offset by a 7bps decrease in the average yield on interest-earning assets. The net interest margin of 2.74% for the six months ended June 30, 2025 increased 37bps compared to the net interest margin of 2.37% for the six months ended June 30, 2024.

Current wording

Net interest income totaled $40.7 million for the nine months ended September 30, 2025 and increased $6.6 million, or 19.3%, compared to net interest income of $34.1 million for the nine months ended September 30, 2024. The increase was primarily due to a $5.1 million, or 9.3%, decrease in interest expense, coupled with a $1.5 million, or 1.7%, increase in interest income. The decrease in interest expense was attributed to a 45bps decrease in the average cost of funds on interest-bearing liabilities. The increase in interest income was primarily attributed to a $70.6 million, or 3.7%, increase in average interest-earning assets outstanding, partially offset by a 12bps decrease in the average yield on interest-earning assets. The net interest margin of 2.74% for the nine months ended September 30, 2025 increased 36bps compared to the net interest margin of 2.38% for the nine months ended September 30, 2024.

Previous wording

Interest income totaled $59.6 million for the six months ended June 30, 2025, and increased $1.2 million, or 2.0%, compared to $58.4 million for the six months ended June 30, 2024. The increase in interest income was primarily attributed to a $62.6 million, or 3.7%, increase in average loans and leases outstanding and loans held for sale, coupled with a 5bps increase in the average rate of loans and leases.

Current wording

Interest income totaled $89.9 million for the nine months ended September 30, 2025, and increased $1.5 million, or 1.7%, compared to $88.4 million for the nine months ended September 30, 2024. The increase in interest income was primarily attributed to a $52.3 million, or 3.1%, increase in average loans and leases outstanding and loans held for sale, coupled with a 1bps increase in the average yield on loans and leases.

Previous wording

Interest expense totaled $32.6 million for the six months ended June 30, 2025, and decreased $3.1 million, or 8.7%, compared to $35.7 million for the six months ended June 30, 2024. The decrease in interest expense was primarily attributed to a 46bps decrease in the average rate of interest-bearing deposits, partially offset by a $16.3 million, or 1.1%, increase in average interest-bearing deposits.

Current wording

Interest expense totaled $49.2 million for the nine months ended September 30, 2025, and decreased $5.1 million, or 9.3%, compared to $54.3 million for the nine months ended September 30, 2024. The decrease in interest expense was primarily attributed to a 54bps decrease in the average rate of interest-bearing deposits, partially offset by a $23.9 million, or 1.7%, increase in average interest-bearing deposits.

Previous wording

Provision for credit losses. There was $2.0 million in provision for credit losses expense for the six months ended June 30, 2025, which reflected a decrease of $2.8 million, compared to a $4.8 million provision for the six months ended June 30, 2024. Net charge-offs for the six months ended June 30, 2025 totaled $74,000 compared to net charge-offs of $2.1 million for the six months ended June 30, 2024.

Current wording

Provision for credit losses. There was $7.1 million in provision for credit losses expense for the nine months ended September 30, 2025, which reflected an increase of $1.7 million, compared to a $5.4 million provision for the nine months ended September 30, 2024. Net charge-offs for the nine months ended September 30, 2025 totaled $7.2 million compared to net charge-offs of $5.4 million for the nine months ended September 30, 2024.

Previous wording

The following table presents information regarding net charge-offs (recoveries) for the six months ended June 30, 2025 and 2024

Current wording

The following table presents information regarding net charge-offs (recoveries) for the nine months ended September 30, 2025 and 2024

Previous wording

Noninterest income. Noninterest income for the six months ended June 30, 2025 totaled $2.8 million and increased $663,000, or 31.2%, compared to $2.1 million for the six months ended June 30, 2024. The increase was primarily due to a $366,000 increase in other noninterest income, a $206,000 increase in service charges on deposit accounts, and a $196,000 increase in swap fee income, partially offset by a $185,000 decrease in net gains on sales of commercial loans.

Current wording

Noninterest income. Noninterest income for the nine months ended September 30, 2025 totaled $4.5 million and increased $775,000, or 20.8%, compared to $3.7 million for the nine months ended September 30, 2024. The increase was primarily due to a $341,000 increase in other noninterest income, a $247,000 increase in service charges on deposit accounts, and a $242,000 increase in net gains on sales of residential mortgage loans, partially offset by a $185,000 decrease in net gains on sales of commercial loans.

Previous wording

Noninterest expense. Noninterest expense for the six months ended June 30, 2025 totaled $15.7 million and increased $1.4 million, or 10.0%, compared to $14.3 million for the six months ended June 30, 2024. The increase in noninterest expense was primarily due to a $1.1 million increase in salaries and employee benefits and a $433,000 increase in professional fee expense. The increase in salaries and employee benefits was primarily driven by higher expense accruals related to staff incentives and deferred compensation incentives and increased FTEs. The increase in professional fee expense was predominantly due to increased recruiting expenses and legal fees.

Current wording

Noninterest expense. Noninterest expense for the nine months ended September 30, 2025 totaled $23.4 million and increased $1.9 million, or 9.0%, compared to $21.5 million for the nine months ended September 30, 2024. The increase in noninterest expense was primarily due to a $1.3 million increase in salaries and employee benefits and a $607,000 increase in professional fee expense. The increase in salaries and employee benefits was primarily driven by increased salary expense and accruals related to staff incentives and deferred compensation incentives. The increase in professional fee expense was predominantly due to increased recruiting expenses and legal fees.

Previous wording

Income tax expense. Income tax expense was $2.5 million for the six months ended June 30, 2025, an increase of $1.6 million, or 169.7%, compared to $932,000 for the six months ended June 30, 2024. The effective tax rate for the six months ended June 30, 2025 was approximately 21.0%, as compared to approximately 16.4% for the six months ended June 30, 2024.

Current wording

Income tax expense. Income tax expense was $2.9 million for the nine months ended September 30, 2025, an increase of $878,000, or 43.7%, compared to $2.0 million for the nine months ended September 30, 2024. The effective tax rate for the nine months ended September 30, 2025 was approximately 19.7%, as compared to approximately 18.3% for the nine months ended September 30, 2024.

Previous wording

We believe there have been no significant changes during the six months ended June 30, 2025 to the items that we disclosed as our critical accounting policies and estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

We believe there have been no significant changes during the nine months ended September 30, 2025 to the items that we disclosed as our critical accounting policies and estimates in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

Cash, unpledged securities and deposits in other financial institutions increased $43.7 million, or 18.4%, to $281.6 million at June 30, 2025, compared to $237.9 million at December 31, 2024.

Current wording

Cash, unpledged securities and deposits in other financial institutions increased $40.9 million, or 17.2%, to $278.8 million at September 30, 2025, compared to $237.9 million at December 31, 2024.