WILSON BANK HOLDING CO

Previous wording

“suspect,” “anticipate,” “seek,” “plan,” “estimate” and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical fact may also be considered forward-looking. Such forward-looking statements involve known and unknown risks and uncertainties, including, but not limited to those described in the 2024 Form 10-K, and also include, without limitation, (i) deterioration in the financial condition of borrowers resulting in significant increases in credit losses and provisions for these losses, (ii) deterioration in the real estate market conditions in the Company’s market areas including demand for residential real estate loans as a result of elevated rates on residential real estate mortgage loans, (iii) the impact of U.S. and global economic conditions, trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom, and geopolitical instability, (iv) the impact of increased competition with other financial institutions, including pricing pressures on loans and deposits, and the resulting impact on the Company's results, including as a result of compression to net interest margin, (v) adverse conditions in local or national economies, including the economy in the Company’s market areas, including as a result of the impact of escalating geopolitical tensions, political uncertainty, inflationary pressures and the elevated rate environment, supply chain disruptions and labor shortages on our customers and on their businesses, (vi) the sale of investment securities in a loss position before their value recovers, including as a result of asset liability management strategies or in response to liquidity needs, (vii) fluctuations or differences in interest rates on earning assets and interest bearing liabilities from those that the Company is modeling or anticipating, including as a result of the Bank's inability to maintain deposit rates or defer increases to those rates in an elevated rate environment or lower rates in a falling rate environment, (viii) the ability to grow and retain low-cost core deposits, (ix) the impact of changes in interest rates on the value of the Company's mortgage servicing rights, (x) significant downturns in the business of one or more large customers, (xi) the inability of the Company to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels, or regulatory requests or directives, (xii) changes in state or Federal regulations, policies, or legislation applicable to banks and other financial service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy, (xiii) changes in capital levels and loan underwriting, credit review or loss reserve policies associated with economic conditions, examinat…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The Company cautions investors that future financial and operating results may differ materially from those projected in forward-looking statements made by, or on behalf of, the Company. The words “expect,” “intend,” “should,” “may,” “could,” “believe,” “suspect,” “anticipate,” “seek,” “plan,” “estimate” and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical fact may also be considered forward-looking. Such forward-looking statements involve known and unknown risks and uncertainties, including, but not limited to those described in the 2024 Form 10-K, and also include, without limitation, (i) deterioration in the financial condition of borrowers resulting in significant increases in credit losses and provisions for these losses, (ii) deterioration in the real estate market conditions in the Company’s market areas including demand for residential real estate loans as a result of elevated rates on residential real estate mortgage loans, (iii) the impact of U.S. and global economic conditions, trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom, and geopolitical instability, (iv) the impact of increased competition with other financial institutions, including pricing pressures on loans and deposits, and the resulting impact on the Company's results, including as a result of compression to net interest margin, (v) adverse conditions in local or national economies, including the economy in the Company’s market areas, including as a result of the impact of escalating geopolitical tensions, political uncertainty, inflationary pressures and the elevated rate environment, supply chain disruptions and labor shortages on our customers and on their businesses, (vi) risks associated with a prolonged shutdown of the United States federal government, including adverse effects on the national or local economies and adverse effects from a shutdown of the U.S. Small Business Administration's loan program, (vii) the sale of investment securities in a loss position before their value recovers, including as a result of asset liability management strategies or in response to liquidity needs, (viii) fluctuations or differences in interest rates on earning assets and interest bearing liabilities from those that the Company is modeling or anticipating, including as a result of the Bank's inability to maintain deposit rates or defer increases to those rates in an elevated rate environment or lower rates in a falling rate environment, (ix) the ability to grow and retain low-cost core deposits, (x) the impact of changes in interest rates on the value of the Company's mortgage servicing rights, (xi) significant downturns in the business of one or more large customers, (xii) the inability of the Company to comply with regulatory capital requirements, including those resulting from ch…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Net earnings of the Company for the three months ended June 30, 2025 were $19,115,000 an increase of $2,978,000, or 18.45%, from net earnings of $16,137,000 for the three months ended June 30, 2024. Net earnings of the Company increased$6,602,000, or 22.84%, to$35,507,000 for thesix months ended June 30, 2025, from$28,905,000 in thef irst half of 2024. The increase in net earnings for the three and six months ended June 30, 2025 was primarily due to an increase in net interest income and non-interest income, partially offset by increases in non-interest expense and provision for credit losses.

Current wording

Net earnings of the Company for the three months ended September 30, 2025 were $17,871,000 an increase of $5,185,000, or 40.87%, from net earnings of $12,686,000 for the three months ended September 30, 2024. Net earnings of the Company increased$11,787,000, or 28.34%, to$53,378,000 for thenine months ended September 30, 2025, from$41,591,000 in thef irst nine months of 2024. The increase in net earnings for the three months ended September 30, 2025 was primarily due to an increase in net interest income and a decrease in provision for credit losses, partially offset by a decrease in non-interest income and an increase in non-interest expense. The increase in net earnings for the nine months ended September 30, 2025 was primarily due to increases in net interest income and non-interest income, partially offset by increases in provision for credit losses and non-interest expense.

Previous wording

The increase in net interest income for the three and six months ended June 30, 2025 when compared to the comparable periods in 2024 was primarily due to an increase in average interest earning asset balances, an increase in the average yield earned on earning assets, and a decrease in the cost of funds, partially offset by an increase in average interest bearing deposit balances.

Current wording

The increase in net interest income for the nine months ended September 30, 2025 when compared to the comparable period in 2024 was primarily due to an increase in average interest earning asset balances, an increase in the average yield earned on earning assets, and a decrease in the cost of funds, partially offset by an increase in average interest bearing deposit balances.

Previous wording

The changes in non-interest income and non-interest expenses are discussed in more detail below in the sections of this report titled, "Non-Interest Income" and "Non-Interest Expense". The changes in provision for credit losses is discussed in more detail below in the section of this report titled "Provision For Credit Losses".

Current wording

The changes in non-interest income and non-interest expenses are discussed in more detail below in the sections of this report titled, "Non-Interest Income" and "Non-Interest Expense". The changes in provision for credit losses are discussed in more detail below in the section of this report titled "Provision For Credit Losses".

Previous wording

Return on average assets ("ROA") and return on average shareholders' equity ("ROE") are common benchmarks for bank profitability and in the case of the Company are calculated by taking our annualized net earnings for the relevant period and dividing that amount by our average assets and average equity for the relevant periods, respectively. ROA and ROE measure a company’s return on investment in a format that is easily comparable to other financial institutions. ROA is particularly important to the Company as it serves as the basis for certain employee bonuses. The ROA for the three and six months ended June 30, 2025 was 1.38% and 1.31%, respectively, while the ROA for the three and six months ended June 30, 2024 was 1.31% and 1.19%, respectively. The ROE for the three and six months ended June 30, 2025 was 14.69% and 14.04%, respectively, while the ROE for the three and six months ended June 30, 2024 was 14.84% and 13.39%, respectively. The increase in ROA for the three and six months ended June 30, 2025 and the increase in ROE for the six months ended June 30, 2025 was primarily due to an increase in net interest income resulting from an increase in earning assets, partially offset by increases in non-interest expense and provision for credit losses. While net earnings and shareholder's equity both increased for the second quarter of 2025 when compared to the same period of 2024, the decrease in ROE is due to the growth in shareholder's equity outpacing the growth in net earnings in such quarter.

Current wording

Return on average assets ("ROA") and return on average shareholders' equity ("ROE") are common benchmarks for bank profitability and in the case of the Company are calculated by taking our annualized net earnings for the relevant period and dividing that amount by our average assets and average equity for the relevant periods, respectively. ROA and ROE measure a company’s return on investment in a format that is easily comparable to other financial institutions. ROA is particularly important to the Company as it serves as the basis for certain employee bonuses. The ROA for the three and nine months ended September 30, 2025 was 1.23% and 1.28%, respectively, while the ROA for the three and nine months ended September 30, 2024 was 0.99% and 1.12%, respectively. The ROE for the three and nine months ended September 30, 2025 was 13.06% and 13.70%, respectively, while the ROE for the three and nine months ended September 30, 2024 was 10.66% and 12.42%, respectively. The increases in ROA and ROE for the three and nine month periods ended September 30, 2025, were primarily driven by higher net interest income due to growth in earning assets, partially offset by higher non-interest expenses. For the three month period ended September 30, 2025, further contributing to the improvement when compared to the comparable 2024 period was a lower provision for credit losses, while for the nine month period ended September 30, 2025, there was an increase in provision for credit losses.

Previous wording

In July 2025, the Bank opened a loan production office in Nolensville, Tennessee. The Bank entered into a lease for the location for the new loan production office. The costs associated with this expansion, including lease expenses, are not expected to be significant.

Current wording

In July 2025, the Bank opened a loan production office in Nolensville, Tennessee in a leased location. The costs associated with this expansion, including lease expenses, are not expected to be significant.

Previous wording

The average balances, interest, and average rates of our assets and liabilities for thethree and six months ended June 30, 2025 and 2024 are presented in the following table (dollars in thousands):

Current wording

The average balances, interest, and average rates of our assets and liabilities for thethree and nine months ended September 30, 2025 and 2024 are presented in the following table (dollars in thousands):

Previous wording

Loan fees of $4,163,000 are included in interest income for the period ended June 30, 2025. Loan fees of $4,309,000 are included in interest income for the period ended June 30, 2024.

Current wording

Loan fees of $4,512,000 are included in interest income for the period ended September 30, 2025. Loan fees of $4,444,000 are included in interest income for the period ended September 30, 2024.

Previous wording

Loan fees of $7,737,000 are included in interest income for the period ended June 30, 2025. Loan fees of $6,901,000 are included in interest income for the period ended June 30, 2024.

Current wording

Loan fees of $12,249,000 are included in interest income for the period ended September 30, 2025. Loan fees of $11,345,000 are included in interest income for the period ended September 30, 2024.

Previous wording

The components of our loan yield, a key driver to our net interest margin for thethree and six months ended June 30, 2025 and 2024, were as follows:

Current wording

The components of our loan yield, a key driver to our net interest margin for thethree and nine months ended September 30, 2025 and 2024, were as follows:

Previous wording

Net interest margin for the three months ended June 30, 2025 and 2024 was 3.73% and 3.34%, respectively. Net interest margin for the six months ended June 30, 2025 and 2024 was 3.63% and 3.24%, respectively. The increase in net interest margin for the first half of 2025 was primarily due to the increase in average interest earning asset balances, an increase in the yield earned on loans and securities, and a decrease in cost of funds, partially offset by increased deposit balances and a decrease in the yield earned on accounts with depository institutions and federal funds sold. The yield on loans increased during the three and six months ended June 30, 2025 when compared to the comparable periods in 2024 due to the origination of loans at a higher rate than the previous portfolio rate. The net interest spread was 3.33% and 2.92% for the three months ended June 30, 2025 and 2024. The net interest spread was 3.24% and 2.82% for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Net interest margin for the three months ended September 30, 2025 and 2024 was 3.62% and 3.39%, respectively. Net interest margin for the nine months ended September 30, 2025 and 2024 was 3.63% and 3.29%, respectively. The increase in net interest margin for the three months ended September 30, 2025 was primarily due to the increase in average interest earning asset balances, an increase in the yield earned on securities, and a decrease in the cost of funds, partially offset by a decrease in the yield earned on loans and accounts with depository institutions and increased deposit balances. The increase in net interest margin for the first nine months of 2025 was primarily due to the increase in average interest earning asset balances, an increase in the yield earned on loans and securities, and a decrease in cost of funds, partially offset by increased deposit balances and a decrease in the yield earned on accounts with depository institutions. The yield earned on loans increased during the nine months ended September 30, 2025 when compared to the comparable period in 2024 due to the origination of loans at a higher rate than the previous portfolio rate; however, the yield earned on loans decreased slightly for the three months ended September 30, 2025 compared to the same period in the prior year due to a lower yield earned on origination and other fees. The net interest spread was 3.22% and 2.94% for the three months ended September 30, 2025 and 2024. The net interest spread was 3.23% and 2.87% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Net interest income represents the amount by which interest earned on various earning assets exceeds interest paid on deposits and other interest-bearing liabilities and is the most significant component of the Company’s earnings. Net interest income, excluding tax equivalent adjustments relating to tax exempt securities and loans, for the three and six months ended June 30, 2025 totaled$48,938,000 and $93,517,000, respectively. Net interest income, excluding tax equivalent adjustments relating to tax exempt securities and loans, for the three and six months ended June 30, 2024 totaled $38,460,000 and $74,021,000, respectively.

Current wording

Net interest income represents the amount by which interest earned on various earning assets exceeds interest paid on deposits and other interest-bearing liabilities and is the most significant component of the Company’s earnings. Net interest income, excluding tax equivalent adjustments relating to tax exempt securities and loans, for the three and nine months ended September 30, 2025 totaled$49,487,000 and $143,004,000, respectively. Net interest income, excluding tax equivalent adjustments relating to tax exempt securities and loans, for the three and nine months ended September 30, 2024 totaled $41,015,000 and $115,036,000, respectively.

Previous wording

The increase in net interest income for the three and six months ended June 30, 2025 compared to the comparable periods in 2024 was primarily due to an increase in the volume of average interest-earning assets, which along with an increase in the average yield on loans and securities, contributed to an increase in interest income on loans, and an increase in interest and dividends earned on securities, partially offset by an increase in interest expense resulting from an increase in the volume of average interest-bearing deposits.

Current wording

The increase in net interest income for the three months ended September 30, 2025 compared to the comparable period in 2024 was primarily due to an increase in the volume of average interest-earning assets, an increase in the yield earned on securities, and higher account balances with depository institutions, partially offset by an increase in interest expense resulting from an increase in the volume of average interest-bearing deposits. The increase in net interest income for the nine months ended September 30, 2025 compared to the first nine months of 2024 was primarily due to an increase in the volume of average interest-earning assets, increases in the yield earned on loans and securities, and a decrease in our cost of funds, partially offset by an increase in interest expense resulting from an increase in the volume of average interest-bearing deposits.

Previous wording

The ratio of average interest-earning assets to total average assets for thethree and six months ended June 30, 2025 was 96.2%, compared to 95.7% for the three and six months ended June 30, 2024.

Current wording

The ratio of average interest-earning assets to total average assets for thethree and nine months ended September 30, 2025 was 96.2%, compared to 96.0% and 95.8% for the three and nine months ended September 30, 2024, respectively.

Previous wording

Interest expense increased in the three and six months ended June 30, 2025 when compared to the comparable periods in 2024 due to an increase in the volume of average interest-bearing deposits offset in part by a reduction in the average interest rate we are paying on deposit accounts. Though we have been able to lower the rates we pay on deposits as the Federal Reserve began cutting rates in September 2024, if competitive pressures increase, the Federal Reserve does not cut the federal funds rate any further or loan growth outpaces deposit growth, we may have to once again raise the rates we pay on deposits which would negatively impact our net interest margin. Even if rates remain at current levels or the Federal Reserve begins to cut rates again, we expect interest expense to continue to increase due to an increase in overall deposit balances.

Current wording

Interest expense increased in the three and nine months ended September 30, 2025 when compared to the comparable periods in 2024 due to an increase in the volume of average interest-bearing deposits offset in part by a reduction in the average interest rate we are paying on most of our deposit accounts. We have generally been able to lower the rates we pay on deposits as the Federal Reserve has lowered short-term interest rates; however, if competitive pressures increase, if the Federal Reserve does not cut the federal funds rate any further or loan growth outpaces deposit growth, we may have to once again raise the rates we pay on deposits which would negatively impact our net interest margin. During the three and nine month periods ended September 30, 2025, we have offered promotions on certain of our savings products to incentivize increases in those balances. Even if rates remain at current levels or the Federal Reserve continues to cut rates, we expect interest expense to continue to increase due to an increase in overall deposit balances.

Previous wording

2024 and December 18, 2024. The Company believes that short-term interest rates will remain at or near their current levels throughout 2025, and in such rate environment, expansion of the Company's net interest margin will be dependent upon, in part, whether the Company is forced to maintain deposit rates at their current levels or further increase them for the reasons noted above. However, if short-term interest rates decline further the Company's net interest margin and earnings could be negatively impacted if the yields on loans decrease faster than the Company is able to lower deposit rates, including as a result of loan growth outpacing our ability to add lower cost core deposits or competitive pressures in our markets limiting our ability to reduce the rates we pay on deposits, particularly given that our loan portfolio primarily consists of variable rate loans. Alternatively, if the Company is able to reprice its deposits more quickly than it reprices the rates it earns on loans in such a falling rate environment, then the Company expects its net interest margin would expand.

Current wording

The direction and speed with which short-term interest rates move has an impact on our net interest income. The Federal Reserve influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is significantly affected by changes in the prime interest rate. The prime interest rate decreased by 150 basis points between September 18, 2024 and October 30, 2025, as the Federal Reserve cut the target rate for the federal funds rate by 150 basis points during that time, including one 25 basis point cut on September 18, 2025 and one 25 basis point cut on October 30, 2025. The Company believes that short-term interest rates could decrease further into 2026, as there is a possibility that the Federal Reserve makes an additional cut to the federal funds rate in December 2025. In such a rate environment, expansion of the Company's net interest margin will be dependent upon, in part, whether the Company can lower deposit rates quicker than the rates it earns on loans and other interest-earning assets reprice. However, if short-term interest rates decline further the Company's net interest margin and earnings could be negatively impacted if the yields on loans and other interest-earning assets decrease faster than the Company is able to lower deposit rates, including as a result of loan growth outpacing our ability to add lower cost core deposits or competitive pressures in our markets limiting our ability to reduce the rates we pay on deposits, particularly given that our loan portfolio primarily consists of variable rate loans.

Previous wording

The provision for credit losses-loans of $2,507,000 for the three months ended June 30, 2025 was primarily driven by our branch acquisition, deterioration in the national and local economic outlook, and loan growth. There was no provision for the three months ended June 30, 2024 primarily due to an improved economic outlook offsetting loan growth reserve requirements.

Current wording

The provision for credit losses-loans of $1,373,000 for the three months ended September 30, 2025 was primarily driven by credit deterioration, the national and local economic outlook, and loan growth. There was a provision of $3,563,000 for the three months ended September 30, 2024 primarily due to loan growth and a single commercial real estate credit deterioration.

Previous wording

The provision for credit losses-loans of $4,740,000 for the six months ended June 30, 2025 was primarily driven by loan growth and deterioration in the national and local economic outlook. There was no provision for the six months ended June 30, 2024 primarily due to an improved national economic outlook offset marginally by increased local property type specific risk.

Current wording

The provision for credit losses-loans of $6,113,000 for the nine months ended September 30, 2025 was primarily driven by loan growth, credit deterioration, and worsening national and local economic outlook. There was a provision of $3,563,000 for the nine months ended September 30, 2024 primarily due to increases in loan balances and a single commercial real estate credit deterioration.

Previous wording

As discussed below under Financial Condition-Loans, loan growth was higher for the six months ended June 30, 2025 compared to the same period for 2024. Loan growth for the six months ended June 30, 2025 was $196,056,000, while loan growth for the six months ended June 30, 2024 was $161,883,000.

Current wording

Loan growth was lower for the nine months ended September 30, 2025 compared to the same period for 2024. Loan growth for the nine months ended September 30, 2025 was $277,069,000, while loan growth for the nine months ended September 30, 2024 was $393,851,000.

Previous wording

There was a provision for credit losses-off balance sheet exposures of $123,000 for the three months ended June 30, 2025 related to increased loan commitments. A net benefit to the provision for credit losses-off balance sheet exposures of $270,000 for the six months ended June 30, 2025, was primarily due to an updated expected line utilization and an increase in our unconditionally cancellable commitments. There was no provision or benefit for the credit losses-off balance sheet exposures for the three and six months ended June 30, 2024.

Current wording

There was a provision for credit losses-off balance sheet exposures of $27,000 for the three months ended September 30, 2025 related to increased loan commitments. A net benefit to the provision for credit losses-off balance sheet exposures of $243,000 for the nine months ended September 30, 2025, was primarily due to an updated expected line utilization and an increase in our unconditionally cancellable commitments. There was a benefit of $563,000 for the credit losses-off balance sheet exposures for the three and nine months ended September 30, 2024.

Previous wording

The following detail provides a breakdown of the provision for credit loss-loans expense and net (charge-offs) recoveries as of and for the six months ended June 30, 2025 and 2024:

Current wording

The following detail provides a breakdown of the provision for credit loss-loans expense and net (charge-offs) recoveries as of and for the nine months ended September 30, 2025 and 2024:

Previous wording

The provision for credit losses-loans charged to operating expense requires us to estimate all expected credit losses over the remaining life of our loan portfolio. Other factors which, in management’s judgment, deserve current recognition in estimating expected credit losses include growth and composition of the loan portfolio, review of specific problem loans, the relationship of the allowance for credit losses to outstanding loans, adverse situations and/or current economic conditions that may affect our borrowers' ability to repay and the estimated value of any underlying collateral.

Current wording

The provision for credit losses-loans charged to operating expense requires us to estimate all expected credit losses over the remaining life of our loan portfolio. Factors which, in management’s judgment, deserve current recognition in estimating expected credit losses include growth and composition of the loan portfolio, review of specific problem loans, the relationship of the allowance for credit losses to outstanding loans, adverse situations and/or current economic conditions that may affect our borrowers' ability to repay and the estimated value of any underlying collateral.

Previous wording

There was no provision for credit losses on available-for-sale securities for the three and six months ended June 30, 2025 and 2024, respectively.

Current wording

There was no provision for credit losses on available-for-sale securities for the three and nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Our non-interest income is composed of several components, some of which vary significantly between quarterly and annual periods. The following is a summary of our non-interest income for the three and six months ended June 30, 2025 and 2024 (in thousands):

Current wording

Our non-interest income is composed of several components, some of which vary significantly between quarterly and annual periods. The following is a summary of our non-interest income for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

The increase in non-interest income for the three months ended June 30, 2025 when compared to the comparable period in 2024 is primarily attributable to a decrease in loss on sale of securities and increased service charges on deposit accounts, partially offset by decreases in gain on sale of loans and debit and credit card interchange income. The increase in non-interest income for the six months ended June 30, 2025 when compared to the comparable period in 2024 is primarily attributable to increases in brokerage income, gain on sale of securities, and service charges on deposit accounts, partially offset by decreases in gain on sale of loans and debit and credit card interchange income.

Current wording

The decrease in non-interest income for the three months ended September 30, 2025 when compared to the comparable period in 2024 is primarily attributable to an increase in loss on sale of securities, a decrease in the gain on sale of loans, and a decrease in debit and credit card interchange income, partially offset by an increase in brokerage income and an increase service charges on deposit accounts. The increase in non-interest income for the nine months ended September 30, 2025 when compared to the comparable period in 2024 is primarily attributable to increases in brokerage income, service charges on deposit accounts, and income on BOLI and annuity contracts, partially offset by decreases in debit and credit card interchange income, gain on sale of loans, and an increase in the loss on sale of securities.

Previous wording

The increase in brokerage income for the six months ended June 30, 2025 was primarily due to multiple client acquisitions and estate planning cases resulting in an increase of overall production and market share, the successful addition of new advisor relationships, and the positive performance of financial markets in a variety of diversified areas.

Current wording

The increase in brokerage income for the three and nine months ended September 30, 2025 was primarily due to multiple client acquisitions and estate planning cases resulting in an increase of overall production and market share, the successful addition of new advisor relationships, and the positive performance of financial markets in a variety of diversified areas.

Previous wording

The increase in service charges on deposit accounts for the three and six months ended June 30, 2025 was primarily due to increases in overdraft and insufficient funds charges, ATM transaction volume, and treasury service charges.

Current wording

The increase in service charges on deposit accounts for the three and nine months ended September 30, 2025 was primarily due to increases in insufficient funds charges and treasury service charges.

Previous wording

The decrease in gain on sale of loans for the three and six months ended June 30, 2025 was primarily driven by the Company’s decision to retain servicing rights on loans sold in 2025. In contrast, servicing rights were not retained on loans sold in the first half of 2024. Additionally, the decline was impacted by rising mortgage interest rates experienced in the second quarter of 2025.

Current wording

The decrease in gain on sale of loans for the three and nine months ended September 30, 2025 was primarily driven by the Company’s decision to retain servicing rights on certain loans sold in 2025. In contrast, servicing rights were not retained on loans sold in the first nine months of 2024. Also contributing to the decrease in the third quarter of 2025 compared to the third quarter of 2024 was the declining mortgage rate environment experienced in the third quarter of 2024 which positively impacted the fair value of our interest rate lock commitments.

Previous wording

The decrease in net debit and credit card interchange income for the three and six months ended June 30, 2025 was primarily due to an increase in the pricing structure from our core processor.

Current wording

The decrease in net debit and credit card interchange income for the three and nine months ended September 30, 2025 was primarily due to an increase in the pricing structure from our core processor.

Previous wording

Non-interest expense consists primarily of employee costs, occupancy expenses, furniture and equipment expenses, advertising and public relations expenses, data processing expenses, director’s fees, audit, legal and consulting fees, FDIC insurance and other operating expenses. The following is a summary of our non-interest expense for the three and six months ended June 30, 2025 and 2024 (in thousands):

Current wording

Non-interest expense consists primarily of employee costs, occupancy expenses, furniture and equipment expenses, advertising and public relations expenses, data processing expenses, director’s fees, audit, legal and consulting fees, FDIC insurance and other operating expenses. The following is a summary of our non-interest expense for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

The increase in non-interest expense for the three and six months ended June 30, 2025 when compared to the comparable periods in 2024 is primarily attributable to increases in salaries and employee benefits, other operating expenses, data processing expense, audit, legal and consulting expenses, FDIC insurance, and advertising and public relations expense.

Current wording

The increase in non-interest expense for the three and nine months ended September 30, 2025 when compared to the comparable periods in 2024 is primarily attributable to increases in salaries and employee benefits, other operating expenses, data processing expense, FDIC insurance, and advertising and public relations expense.

Previous wording

The increase in salaries and benefits for the three and six months ended June 30, 2025 was primarily driven by several factors tied to the Company’s continued operational expansion, including an increase in the number of employees necessary to support higher business volumes and strategic initiatives reflecting the Company's operational growth. Also contributing to the increase was higher incentive compensation expenses, attributable to increased loan production and a higher accrual for annual bonuses based on performance metrics and projected year-end payouts.

Current wording

The increase in salaries and benefits for the three and nine months ended September 30, 2025 was primarily driven by several factors tied to the Company’s continued operational expansion, including an increase in the number of employees necessary to support higher business volumes and strategic initiatives reflecting the Company's operational growth. Also contributing to the increase was higher incentive compensation expenses and a higher accrual for annual bonuses based on performance metrics and projected year-end payouts.

Previous wording

The increase in other operating expenses in the three and six months ended June 30, 2025 was primarily due to an increase in credit card expense, an increase in expenses related to employee recruitment, and an increase in expenses related to employee education.

Current wording

The increase in other operating expenses in the three and nine months ended September 30, 2025 was primarily due to an increase in credit card expense, an increase in expenses related to employee recruitment, a telecom conversion, expenses related to the Cookeville branch acquisition, and an increase in expenses related to employee education.

Previous wording

The increase in data processing expense in the three and six months ended June 30, 2025 primarily due to implementation of additional information security solutions, replacement of technology equipment, and an increase in the overall number of customers. The Company anticipates that data processing expenses will continue to increase as the Company's operations grow, the demand for digital products and services from customers increases, and the cyber threat environment grows.

Current wording

The increase in data processing expense in the three and nine months ended September 30, 2025 was primarily due to implementation of additional information security solutions, replacement of technology equipment, and an increase in the overall number of customers. The Company anticipates that data processing expenses will continue to increase as the Company's operations grow, the demand for digital products and services from customers increases, and the cyber threat environment grows.

Previous wording

The increase in FDIC insurance in the three and six months ended June 30, 2025 was primarily due to the bank's growth throughout 2024.

Current wording

The increase in FDIC insurance in the three and nine months ended September 30, 2025 was primarily due to the bank's growth throughout 2024 and 2025.

Previous wording

The increase in advertising and public relations expense in the three and six months ended June 30, 2025 was primarily due to the opening of new branches in the second half of 2024 and the first six months of 2025, including the branch office we acquired in Cookeville, Tennessee on April 25, 2025, and the associated advertising costs.

Current wording

The increase in advertising and public relations expense in the three and nine months ended September 30, 2025 was primarily driven by continued efforts to support the opening of new branches in the second half of 2024 and the first nine months of 2025. Additional expenses during the period were incurred for branding initiatives and talent acquisition campaigns aimed at staffing the new locations and enhancing visibility in their respective markets.

Previous wording

The efficiency ratio is a common and comparable KPI used in the banking industry. The Company uses this metric to monitor how effective management is at using our internal resources. It is calculated by dividing our non-interest expense by our net interest income plus non-interest income. The efficiency ratio for the six months ended June 30, 2025 and 2024 was 53.89% and 58.45%, respectively. The efficiency ratio for the three months ended June 30, 2025 and 2024 was 52.39% and 56.10%, respectively. The improvement in the efficiency ratio for the three and six months ended June 30, 2025 compared to the comparable periods in 2024 was primarily due to increases in net interest income, outpacing the increases in non-interest expense.

Current wording

The efficiency ratio is a common and comparable KPI used in the banking industry. The Company uses this metric to monitor how effective management is at using our internal resources. It is calculated by dividing our non-interest expense by our net interest income plus non-interest income. The efficiency ratio for the nine months ended September 30, 2025 and 2024 was 54.50% and 58.68%, respectively. The efficiency ratio for the three months ended September 30, 2025 and 2024 was 55.71% and 59.12%, respectively. The improvement in the efficiency ratio for the three and nine months ended September 30, 2025 compared to the comparable periods in 2024 was primarily due to the increase in net interest income outpacing the increase in non-interest expense.

Previous wording

The Company's income tax expense for the three months ended June 2025 was $5,793,000, an increase of $1,303,000 from $4,490,000 for the three months ended June 2024. The Company’s income tax expense was $10,974,000 for the six months ended June 30, 2025, an increase of $2,597,000 from $8,377,000 for the comparable period in 2024. The percentage of income tax expense to net income before taxes was 23.24% and 21.71% for the three months ended June 30, 2025 and 2024, respectively. The percentage of income tax expense to net income before taxes was 23.60% and 22.43% for the six months ended June 30, 2025 and 2024, respectively. Our effective tax rate represents our blended federal and state rate of 26.14% affected by the impact of anticipated favorable permanent differences between our book and taxable income such as share-based compensation, bank-owned life insurance, income earned on tax-exempt securities and loans, and certain federal and state tax credits, offset in part by the limitation on deductibility of meals and entertainment expense and non-deductible executive compensation.

Current wording

The Company's income tax expense for the three months ended September 2025 was $5,285,000, an increase of $1,620,000 from $3,665,000 for the three months ended September 2024. The Company’s income tax expense was $16,259,000 for the nine months ended September 30, 2025, an increase of $4,217,000 from $12,042,000 for the comparable period in 2024. The percentage of income tax expense to net income before taxes was 22.82% and 22.38% for the three months ended September 30, 2025 and 2024, respectively. The percentage of income tax expense to net income before taxes was 23.34% and 22.41% for the nine months ended September 30, 2025 and 2024, respectively. Our effective tax rate represents our blended federal and state rate of 26.14% affected by the impact of anticipated favorable permanent differences between our book and taxable income such as share-based compensation, bank-owned life insurance, income earned on tax-exempt securities and loans, and certain federal and state tax credits, offset in part by the limitation on deductibility of meals and entertainment expense and non-deductible executive compensation.

Previous wording

The Company’s total assets increased $273,125,000, or 5.10%, to $5,631,784,000 at June 30, 2025 from $5,358,659,000 at December 31, 2024. Loans, net of allowance for credit losses, totaled $4,234,091,000 at June 30, 2025, a 4.74% increase compared to $4,042,392,000 at December 31, 2024. In 2025, management is targeting owner-occupied commercial real estate, residential real estate lending and consumer lending as areas of focus. Total liabilities increased by 4.55% to $5,100,828,000 at June 30, 2025 compared to $4,878,956,000 at December 31, 2024.

Current wording

The Company’s total assets increased $478,259,000, or 8.92%, to $5,836,918,000 at September 30, 2025 from $5,358,659,000 at December 31, 2024. Loans, net of allowance for credit losses, totaled $4,313,946,000 at September 30, 2025, a 6.72% increase compared to $4,042,392,000 at December 31, 2024. In 2025, management is targeting owner-occupied commercial real estate, residential real estate lending and consumer lending as areas of focus. Total liabilities increased by 8.29% to $5,283,192,000 at September 30, 2025 compared to $4,878,956,000 at December 31, 2024.

Previous wording

Overall, the Bank's loan demand and related new loan production remained steady throughout the Bank's markets in the first half of 2025, yielding a year-to-date total loan growth net of deferred loan fees of 4.79%. Total loan growth net of deferred loan fees for the first half of 2025 was $196,056,000. Contributing to the Company's loan growth in the first half of 2025 were the continued population growth and corporate relocations in the Bank's primary market areas and increased marketing efforts. The increase in residential 1-4 family real estate loans is attributable to the Bank successfully growing its residential portfolio through enhanced marketing efforts directed at homebuilders in the Bank's market areas, and the increase the Company is seeing in the investor sector of 1-4 family. The increase in commercial and multi-family real estate and 1-4 family equity lines of credit is primarily attributable to continued economic growth and expansion in the Bank's primary market areas. The Company anticipates that loan growth will be steady throughout the rest of 2025.

Current wording

Overall, the Bank's loan demand and related new loan production remained steady throughout the Bank's markets in the first nine months of 2025, yielding a year-to-date total loan growth net of deferred loan fees of 6.77%. Total loan growth net of deferred loan fees for the first nine months of 2025 was $277,069,000. Contributing to the Company's loan growth in the first nine months of 2025 were the continued population growth and corporate relocations in the Bank's primary market areas and increased marketing efforts. The increase in residential 1-4 family real estate loans is attributable to the Bank successfully growing its residential portfolio through enhanced marketing efforts in the Bank's market areas, and the increase the Company is seeing in the investor sector of 1-4 family. The increase in commercial and multi-family real estate and 1-4 family equity lines of credit is primarily attributable to continued economic growth and expansion in the Bank's primary market areas. The Company anticipates that loan growth will be steady into 2026.