FB Bancorp, Inc. /MD/

Previous wording

Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those set forth in Item 1A of the Company's Annual Report on Form 10-K, as supplemented by its Quarterly Reports on Form 10-Q, and those related to the economic environment, particularly in the market areas in which the Company operates, inflation and unemployment, competitive products and pricing, real estate values, fiscal and monetary policies of the U.S. Government, tariffs, the effects of the recent turmoil in the banking industry, changes in accounting policies and practices that may be adopted by the regulatory agencies and the accounting standards setters, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, potential goodwill impairment, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets, the availability of and costs associated with sources of liquidity, and the impact of a potential shutdown of the federal government.

Current wording

Forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, those set forth in Item 1A of the Company's Annual Report on Form 10-K, as supplemented by its Quarterly Reports on Form 10-Q, and those related to the economic environment, particularly in the market areas in which the Company operates, inflation and unemployment, competitive products and pricing, real estate values, fiscal and monetary policies of the U.S. Government, tariffs, the potential effects of the recent federal government shutdowns, changes in accounting policies and practices that may be adopted by the regulatory agencies and the accounting standards setters, changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, potential goodwill impairment, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets, the availability of and costs associated with sources of liquidity, and the impact of a potential shutdown of the federal government.

Previous wording

Core deposits totaled $469.3 million, or 56.9% of total deposits, at June 30, 2025. We have expanded our deposit and lending activities into the Baton Rouge and Lafayette, Louisiana markets over the last several years, including the hiring of Market Area Presidents and lending teams and the establishment of a branch office in Lafayette, Louisiana, and we anticipate that these efforts will continue.

Current wording

loan growth at costs consistent with improving our interest rate spread and net interest margin. Core deposits totaled $468.2 million, or 55.7% of total deposits, at September 30, 2025. We have expanded our deposit and lending activities into the Baton Rouge and Lafayette, Louisiana markets over the last several years, including the hiring of Market Area Presidents and lending teams and the establishment of a branch office in Lafayette, Louisiana, and we anticipate that these efforts will continue.

Previous wording

The following tables set forth selected historical financial and other data of Fidelity Bank for the periods and at the dates indicated. The information at June 30, 2025, and for the three and six months ended June 30, 2025 and 2024, is not audited but, in the opinion of management, includes all adjustments necessary for a fair presentation. These adjustments are standard and recurring. The results of operations for the six months ended June 30, 2025 are not necessarily indicative of the results of operations that may be expected or realized for the entire year. The information at December 31, 2024 is derived in part from, and should be read together with, the audited financial statements and related notes beginning at page F-1 of the Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 27, 2025.

Current wording

The following tables set forth selected historical financial and other data of Fidelity Bank for the periods and at the dates indicated. The information at September 30, 2025, and for the three and nine months ended September 30, 2025 and 2024, is not audited but, in the opinion of management, includes all adjustments necessary for a fair presentation. These adjustments are standard and recurring. The results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the results of operations that may be expected or realized for the entire year. The information at December 31, 2024 is derived in part from, and should be read together with, the audited financial statements and related notes beginning at page F-1 of the Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 27, 2025.

Previous wording

Total Assets. Total assets were $1.25 billion at June 30, 2025, an increase of $25.7 million, or 2.1%, from $1.22 billion at December 31, 2024. The increase was primarily due to a $19.9 million increase in net loans held for investment and a $16.1 million increase in available-for-sale investments, partially offset by a decrease in cash equivalents of $12.8 million. The increase in net loans held for investment and available-for-sale investments were funded by an increase in total deposits of $24.6 million.

Current wording

Total Assets. Total assets were $1.26 billion at September 30, 2025, an increase of $43.2 million, or 3.5%, from $1.22 billion at December 31, 2024. The increase was primarily due to a $15.4 million increase in net loans held for sale and a $54.2 million increase in available-for-sale investments, partially offset by a decrease in cash equivalents of $33.1 million. The increase in net loans held for sale and available-for-sale investments were funded by an increase in total deposits of $39.2 million.

Previous wording

Cash and Cash Equivalents. Cash levels decreased by $12.8 million, or 12.9%, to $86.1 million at June 30, 2025 from $98.8 million at December 31, 2024.

Current wording

Cash and Cash Equivalents. Cash levels decreased by $33.1 million, or 33.5%, to $65.7 million at September 30, 2025 from $98.8 million at December 31, 2024. The decrease in cash is due to funding earning assets such as investments and loans and a decrease in other borrowings of $10.1 million, or 13.7%.

Previous wording

Loans Held for Investment, Net. Loans held for investment, net, increased by $19.9 million, or 2.7%, to $770.5 million at June 30, 2025 from $750.7 million at December 31, 2024. During the six months ended June 30, 2025, loan originations (excluding loans held for sale) totaled $71.0 million. The increase in net loans held for investment came primarily from the following: residential construction loans increased $6.0 million, or 17.5%, commercial real estate loans increased $13.3 million, or 5.5%, and other commercial loans, which consists of business lines of credit, equipment loans and various non-real estate commercial loans increased $9.0 million, or 9.5%. The net increase was partially offset by the following: residential mortgage loans (excluding residential construction loans) decreased $9.6 million, or 3.8%, and other consumer loans decreased $3.0 million, or 11.4%.

Current wording

Loans Held for Investment, Net. Loans held for investment, net, increased by $3.1 million, or 0.4%, to $753.8 million at September 30, 2025 from $750.7 million at December 31, 2024. During the nine months ended September 30, 2025, loan originations (excluding loans held for sale) totaled $99.2 million. The increase in net loans held for investment came primarily from the following: residential construction loans increased $6.0 million, or 17.6%, commercial real estate loans increased $17.1 million, or 7.1%, and home equity loans increased $4.6 million, or 4.6%. The net increase was partially offset by the following: residential mortgage loans (excluding residential construction loans) decreased $16.7 million, or 6.6%, and other commercial loans decreased $5.6 million, or 5.9%.

Previous wording

Deposits. Deposits increased by $24.1 million, or 3.0%, to $824.8 million at June 30, 2025 from $800.7 million at December 31, 2024, due primarily to a $20.5 million increase in interest-bearing deposits. Core deposits (defined as all deposits other than certificates of deposit) decreased $15.5 million, or 3.2%, to $469.3 million at June 30, 2025 from $484.9 million at December 31, 2024. Certificates of deposit, excluding wholesale and brokered, increased $47.2 million, or 22.5%, to $257.1 million at June 30, 2025 from $209.9 million at December 31, 2024. This certificate of deposit growth came from both existing and new business within the communities we serve. Wholesale and brokered certificates of deposit decreased $7.6 million, or 7.2%, to $98.4 million at June 30, 2025 from $106.0 million at December 31, 2024. Such deposits generally tend to be at higher yields than other types of deposits and generally do not represent direct customer relationships, but were utilized, in part, to supplement funding of loan growth over time.

Current wording

Deposits. Deposits increased by $39.2 million, or 4.9%, to $839.9 million at September 30, 2025 from $800.7 million at December 31, 2024, due primarily to a $50.4 million, or 24.0%, increase in certificates of deposits (“CDs”). This increase in CDs came from the local market and migration of existing customer deposits from other lower yielding deposit offerings from the Company. Core deposits (defined as all deposits other than certificates of deposit) decreased $16.7 million, or 3.4%, to $468.2 million at September 30, 2025 from $484.9 million at December 31, 2024. Wholesale and brokered certificates of deposit increased $5.4 million, or 5.1%, to $111.4 million at September 30, 2025 from $106.0 million at December 31, 2024. Such deposits generally tend to be at higher yields than other types of deposits and generally do not represent direct customer relationships, but were utilized, in part, to supplement funding of loan growth over time.

Previous wording

Other Borrowings. Borrowings decreased $7.0 million, or 9.5%, from $73.5 million at December 31, 2024 to $66.5 million at June 30, 2025. Borrowings have been paid down significantly over the last three quarters due to proceeds from the stock conversion and growth in total deposits.

Current wording

Other Borrowings. Borrowings decreased $10.1 million, or 13.7%, from $73.5 million at December 31, 2024 to $63.4 million at September 30, 2025. Borrowings have been paid down significantly over the last year due to proceeds from the stock conversion and growth in total deposits.

Previous wording

Total Equity. Total equity increased $5.8 million, or 1.8%, to $332.1 million at June 30, 2025 from $326.3 million at December 31, 2024. The increase resulted primarily from a $3.9 million decrease in accumulated other comprehensive loss. Accumulated other comprehensive loss is solely related to unrealized gains and losses on securities available for sale. Also contributing to the total equity increase was $1.6 million in retained earnings.

Current wording

Total Equity. Total equity increased $11.9 million, or 3.7%, to $338.2 million at September 30, 2025 from $326.3 million at December 31, 2024. The increase resulted primarily from a $8.7 million decrease in accumulated other comprehensive loss. Accumulated other comprehensive loss is solely related to unrealized gains and losses on securities available for sale. Also contributing to the total equity increase was $2.7 million in retained earnings.

Previous wording

General. Net income of $1.6 million was recorded for the six months ended June 30, 2025, compared to a net income of $42,000 for the six months ended June 30, 2024. The increase in net income was primarily due to an increase of $4.2 million, or 19.1%, in net interest income and a decrease of $717,000, or 2.2%, in non-interest expenses, partially offset by the reduction of $2.3 million in gains from the sale of mortgage servicing rights that occurred only in the six months ended June 30, 2024.

Current wording

General. Net income of $1.1 million was recorded for the three months ended September 30, 2025, compared to a net loss of $895,000 for the three months ended September 30, 2024. The increase in net income was primarily due to an increase of $2.2 million, or 18.9%, in net interest income, a decrease of $568,000, or 5.3%, in salaries and employee benefits and a decrease of $435 thousand, or 61.1%, in net hedging activity expense, partially offset by the reduction of $334,000 in gains from the sale of mortgage servicing rights that occurred only in the three months ended September 30, 2024.

Previous wording

Interest Income. Interest income increased $3.3 million, or 10.7%, to $34.5 million for the six months ended June 30, 2025, compared to $31.1 million for the six months ended June 30, 2024. This increase was primarily attributable to a $2.4 million, or 9.5%, increase in interest and fees on loans, both held for investment and held for sale.

Current wording

Interest and Divident Income. Interest income increased $1.3 million, or 8.0%, to $18.3 million for the three months ended September 30, 2025, compared to $16.9 million for the three months ended September 30, 2024. This increase was primarily attributable to a $781,000, or 5.6%, increase in interest and fees on loans, both held for investment and held for sale, and a $483,000, or 21.3%, increase in interest and dividends on investments.

Previous wording

The average balance of loans held for investment during the three months ended June 30, 2025 increased by $67.2 million, or 9.5%, while the average yield on these loans increased to 7.21% for the three months ended June 30, 2025 from 7.19% for the three months ended June 30, 2024. The increase in average yield on loans was due to the increasing interest rate environment as well as growth in our loan portfolio, particularly the commercial and residential construction portfolios.

Current wording

The average balance of loans held for investment during the three months ended September 30, 2025 increased by $34.1 million, or 4.7%, while the average yield on these loans increased to 7.35% for the three months ended September 30, 2025 from 7.28% for the three months ended September 30, 2024. The increase in average yield on loans was due to the increasing interest rate environment as well as growth in our loan portfolio, particularly the commercial and residential construction portfolios.

Previous wording

The average balance of loans held for sale during the three months ended June 30, 2025 decreased by $5.6 million, or 18.8%, while the average yield on these loans decreased to 6.51% for the three months ended June 30, 2025 from 6.64% for the three months ended June 30, 2024.

Current wording

The average balance of loans held for sale during the three months ended September 30, 2025 decreased by $1.5 million, or 4.5%, while the average yield on these loans increased to 6.44% for the three months ended September 30, 2025 from 6.13% for the three months ended September 30, 2024.

Previous wording

The average balance of investment securities increased by $9.5 million, or 3.8%, to $259.3 million for the three months ended June 30, 2025 from $249.7 million for the three months ended June 30, 2024, while the average yield on investment securities decreased to 3.70% for the three months ended June 30, 2025 from 3.77% for the three months ended June 30, 2024.

Current wording

The average balance of investment securities increased by $36.0 million, or 14.6%, to $283.1 million for the three months ended September 30, 2025 from $247.0 million for the three months ended September 30, 2024, while the average yield on investment securities increased to 3.85% for the three months ended September 30, 2025 from 3.64% for the three months ended September 30, 2024.

Previous wording

Interest Expense. Total interest expense decreased $599,000, or 12.1%, to $4.3 million for the three months ended June 30, 2025, from $4.9 million for the three months ended June 30, 2024. The decrease was primarily due to a decrease in interest expense on other borrowed funds of $1.5 million, partially offset by an increase of $948 thousand in interest on deposits for the three months ended June 30, 2025. The decrease in interest on other borrowed funds was primarily due to a decrease in interest-bearing borrowing average balances of $130.1 million, or 68.9%, for the three months ended June 30, 2025 compared to the same period ended June 30, 2024. The Company retired over $100 million in borrowings in the fourth quarter of 2024 and into the first quarter of 2025 primarily using the proceeds of the Company’s stock conversion. Interest on deposits increased due to an increase in average balances and rate for the three months ended June 30, 2025 compared to the same period in 2024.

Current wording

Interest Expense. Total interest expense decreased $818,000, or 14.9%, to $4.7 million for the three months ended September 30, 2025, from $5.5 million for the three months ended September 30, 2024. The decrease was primarily due to a decrease in interest expense on other borrowed funds of $1.8 million, partially offset by an increase of $949 thousand in interest on deposits for the three months ended September 30, 2025. The decrease in interest on other borrowed funds was primarily due to a decrease in interest-bearing borrowing average balances of $141.5 million, or 67.5%, for the three months ended September 30, 2025 compared to the same period ended September 30, 2024. The Company retired over $100 million in borrowings in the fourth quarter of 2024 and into the first quarter of 2025 primarily using the proceeds of the Company’s stock conversion. Interest on deposits increased $949,000, or 31.3%, due to an increase in average balances and rates for the three months ended September 30, 2025 compared to the same period in 2024.

Previous wording

Net Interest Income. Net interest income increased $2.3 million, or 20.6%, to $13.2 million for the three months ended June 30, 2025, compared to $10.9 million for the three months ended June 30, 2024. The increase is a result of average interest-earning asset growth of $118.3 million, or 11.6%, partially offset by a decrease in yield to 6.19% for the three months ending June 30, 2025 compared to 6.25% in the same period in 2024. Also contributing to the increase in net interest income was the decrease in interest expense of $599,000, or 12.1%, to $4.3 million for the three months ended June 30, 2025, from $4.9 million for the three months ended June 30, 2024.

Current wording

Net Interest Income. Net interest income increased $2.2 million, or 18.9%, to $13.6 million for the three months ended September 30, 2025, compared to $11.4 million for the three months ended September 30, 2024. The increase is a result of average interest-earning asset growth of $81.5 million, or 7.6%, and an increase in yield to 6.25% for the three months ending September 30, 2025 compared to 6.23% in the same period in 2024. Also contributing to the increase in net interest income was the decrease in interest expense of $818,000, or 14.9%, to $4.7 million for the three months ended September 30, 2025, from $5.5 million for the three months ended September 30, 2024.

Previous wording

Provision for Credit Losses. Based on management’s analysis of the factors described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Use of Critical Accounting Estimates — Allowance for Credit Losses,” there was a $453,000 provision for credit losses for the three months ended June 30, 2025 compared to a $275,000 provision for the same period ended June 30, 2024. The increase in the provision for credit losses was due primarily to growth in loans held for investment.

Current wording

Provision for Credit Losses. Based on management’s analysis of the factors described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Use of Critical Accounting Estimates — Allowance for Credit Losses,” there was a $413,000 provision for credit losses for the three months ended September 30, 2025 compared to a $300,000 provision for the same period ended September 30, 2024. The increase in the provision for credit losses was due primarily to growth in loans held for investment and an increase in nonperforming loans.

Previous wording

Total non-performing loans were $13.0 million at June 30, 2025, compared to $9.8 million at June 30, 2024 with 72.5% of this increase coming from one- to four-family residential loans. One- to four-family residential loans historically have lower loss rates compared to other Company loan types. Classified loans totaled $19.5 million at June 30, 2025, compared to $13.0 million at June 30, 2024, and total loans past due greater than 30 days were $19.0 million and $14.1 million at those respective dates. Special mention loans were $0.9 million at June 30, 2025 compared to $5.3 million at June 30, 2024. As a percentage of non-performing loans, the allowance for credit losses was 47.2% at June 30, 2025 compared to 59.0% at June 30, 2024.

Current wording

Total non-performing loans were $14.6 million at September 30, 2025, compared to $11.0 million at September 30, 2024 with 38.2% of this increase coming from one- to four-family residential loans. One- to four-family residential loans historically have lower loss rates compared to other Company loan types. Classified loans totaled $20.5 million at September 30, 2025, compared to $12.7 million at September 30, 2024, and total loans past due greater than 30 days were $17.3 million and $15.4 million at those respective dates. Special mention loans were $1.4 million at September 30, 2025 compared to $3.5 million at September 30, 2024. As a percentage of non-performing loans, the allowance for credit losses was 42.9% at September 30, 2025 compared to 53.0% at September 30, 2024.

Previous wording

Non-interest Income. Non-interest income totaled $4.9 million for the three months ended June 30, 2025, a decrease of $2.3 million, or 32.2%, from $7.3 million for the three months ended June 30, 2024. The decrease was primarily due to a decrease of $2.3 million in gains from the sale of mortgage servicing rights that occurred only in the three months ended June 30, 2024.

Current wording

Non-interest Income. Non-interest income totaled $5.1 million for the three months ended September 30, 2025, a decrease of $223,000, or 4.2%, from $5.4 million for the three months ended September 30, 2024. The decrease was primarily due to a decrease of $334,000 in gains from the sale of mortgage servicing rights that occurred only in the three months ended September 30, 2024.

Previous wording

Non-interest Expense. Non-interest expense decreased $272,000, or 1.6%, to $16.6 million for the three months ended June 30, 2025, compared to $16.8 million for the three months ended June 30, 2024. The decrease was primarily due to a $449,000, or 4.3%, decrease in salaries and employee benefits and a $346,000, or 50.1%, decrease in advertising and marketing. The decrease in salaries and employee benefits was primarily caused by reductions in staffing levels within the mortgage banking segment to continue improvement in the segment’s profitability. The number of full-time equivalent employees was 324 at June 30, 2025 compared to 368 at June 30, 2024. Partially offsetting the decreases in non-interest expenses is an increase of $279,000 in hedging activity net. Hedging activity is a direct result of interest rate movements in the secondary market of mortgage loans held for sale.

Current wording

Non-interest Expense. Non-interest expense decreased $651,000, or 3.7%, to $17.0 million for the three months ended September 30, 2025, compared to $17.6 million for the three months ended September 30, 2024. The decrease was primarily due to a $568,000, or 5.3%, decrease in salaries and employee benefits and a $435,000, or 61.1%, decrease in net hedging activities. The decrease in salaries and employee benefits was primarily caused by reductions in staffing levels within the mortgage banking segment to continue improvement in the segment’s profitability. The number of full-time equivalent employees was 321 at September 30, 2025 compared to 352 at September 30, 2024. Partially offsetting the decreases in non-interest expenses is an increase of $184,000 in occupancy and equipment. This is due to the addition of the full service branch in Lafayette and increased costs related to equipment repair and servicing.

Previous wording

Provision for Income Taxes. The provision for income taxes was $219,000 for the three months ended June 30, 2025, compared to a provision of $243,000 for the three months ended June 30, 2024. The changes are a direct reflection of net income before income taxes for each period and not a material change in the Bank's effective tax rates.

Current wording

Provision (Benefit) for Income Taxes. The provision for income taxes was $256,000 for the three months ended September 30, 2025, compared to a benefit of $247,000 for the three months ended September 30, 2024. The changes are a direct reflection of net income before income taxes for each period and not a material change in the Bank's effective tax rates.

Previous wording

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

Current wording

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

Previous wording

Interest and Divident Income. Interest income increased $1.7 million, or 10.4%, to $17.5 million for the three months ended June 30, 2025, compared to $15.9 million for the three months ended June 30, 2024. This increase was primarily attributable to a $1.1 million, or 8.6%, increase in interest and fees on loans, both held for investment and held for sale.

Current wording

Interest and Dividend Income. Interest income increased $4.7 million, or 9.7%, to $52.7 million for the nine months ended September 30, 2025, compared to $48.0 million for the nine months ended September 30, 2024. This increase was primarily attributable to a $3.2 million, or 8.1%, increase in interest and fees on loans, both held for investment and held for sale.

Previous wording

The average balance of loans held for investment during the six months ended June 30, 2025 increased by $69.5 million, or 9.9%, while the average yield on these loans increased to 7.13% for the six months ended June 30, 2025 from 7.10% for the six months ended June 30, 2024. The increase in average yield on loans was due to the increasing interest rate environment as well as growth in our loan portfolio, particularly the commercial and residential construction portfolios.

Current wording

The average balance of loans held for investment during the nine months ended September 30, 2025 increased by $60.4 million, or 8.5%, while the average yield on these loans increased to 7.22% for the nine months ended September 30, 2025 from 7.19% for the nine months ended September 30, 2024. The increase in average yield on loans was due to the increasing interest rate environment as well as growth in our loan portfolio, particularly the commercial and residential construction portfolios.

Previous wording

The average balance of loans held for sale during the six months ended June 30, 2025 decreased by $5.3 million, or 18.9%, while the average yield on these loans increased to 7.00% for the six months ended June 30, 2025 from 6.23% for the six months ended June 31, 2024.

Current wording

The average balance of loans held for sale during the nine months ended September 30, 2025 decreased by $2.9 million, or 10.1%, while the average yield on these loans increased to 6.50% for the nine months ended September 30, 2025 from 6.45% for the nine months ended September 30, 2024.

Previous wording

The average balance of investment securities increased by $5.6 million, or 2.2%, to $254.3 million for the six months ended June 30, 2025 from $248.7 million for the six months ended June 30, 2024, while the average yield on investment securities decreased to 3.72% for the six months ended June 30, 2025 from 3.76% for the six months ended June 31, 2024.

Current wording

The average balance of investment securities increased by $15.8 million, or 6.4%, to $263.9 million for the nine months ended September 30, 2025 from $248.1 million for the nine months ended September 30, 2024, while the average yield on investment securities increased to 3.77% for the nine months ended September 30, 2025 from 3.72% for the nine months ended September 30, 2024.

Previous wording

Interest Expense. Total interest expense decreased $848,000, or 9.1%, to $8.5 million for the six months ended June 30, 2025, from $9.3 million for the six months ended June 30, 2024. The decrease was primarily due to a decrease in interest expense on other borrowed funds of $2.7 million, partially offset by an increase of $1.8 million in interest expense on deposits for the six months ended June 30, 2025. The decrease in interest on other borrowed funds was primarily due to a decrease in interest-bearing borrowing average balances of $117.0 million, or 64.3%, for the six months ended June 30, 2025 compared to the same period ended June 30, 2024. The Company retired over $100 million in borrowings in the fourth quarter of 2024 and into the first quarter of 2025 primarily using the proceeds of the Company’s stock conversion. Interest on deposits increased due to an increase in average balances and rate for the six months ended June 30, 2025 compared to the same period in 2024.

Current wording

Interest Expense. Total interest expense decreased $1.7 million, or 11.3%, to $13.1 million for the nine months ended September 30, 2025, from $14.8 million for the nine months ended September 30, 2024. The decrease was primarily due to a decrease in interest expense on other borrowed funds of $4.5 million, partially offset by an increase of $2.8 million in interest expense on deposits for the nine months ended September 30, 2025. The decrease in interest on other borrowed funds was primarily due to a decrease in interest-bearing borrowing average balances of $122.9 million, or 65.1%, for the nine months ended September 30, 2025 compared to the same period ended September 30, 2024. The Company retired over $100 million in borrowings in the fourth quarter of 2024 and into the first quarter of 2025 primarily using the proceeds of the Company’s stock conversion. Interest on deposits increased due to an increase in average balances and rates for the nine months ended September 30, 2025 compared to the same period in 2024.

Previous wording

Net Interest Income. Net interest income increased $4.2 million, or 19.1%, to $26.0 million for the six months ended June 30, 2025, compared to $21.8 million for the six months ended June 30, 2024. The increase is a result of interest-earning asset growth of $118.1 million, or 11.6%, partially offset by a decrease in yield to 6.14% for the six months ending June 30, 2025 compared to 6.17% in the same period in 2024. Also contributing to the increase in net interest income was the decrease in interest expense of $848,000, or 9.1%, to $8.5 million for the six months ended June 30, 2025, from $9.3 million for the six months ended June 30, 2024.

Current wording

Net Interest Income. Net interest income increased $6.3 million, or 19.1%, to $39.6 million for the nine months ended September 30, 2025, compared to $33.2 million for the nine months ended September 30, 2024. The increase is a result of interest-earning asset growth of $108.6 million, or 10.5%, partially offset by a decrease in yield to 6.18% for the nine months ending September 30, 2025 compared to 6.22% in the same period in 2024. Also contributing to the increase in net interest income was the decrease in interest expense of $1.7 million, or 11.3%, to $13.1 million for the nine months ended September 30, 2025, from $14.8 million for the nine months ended September 30, 2024.

Previous wording

Provision for Credit Losses. Based on an analysis of the factors described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Use of Critical Accounting Estimates — Allowance for Credit Losses,” there was a $838,000 provision for credit losses for the six months ended June 30, 2025 compared to a $520,000 provision for the same period ended June 30, 2024. The increase in the provision for credit losses was due primarily to growth in loans held for investment.

Current wording

Provision for Credit Losses. Based on an analysis of the factors described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Use of Critical Accounting Estimates — Allowance for Credit Losses,” there was a $1.3 million provision for credit losses for the nine months ended September 30, 2025 compared to a $820,000 provision for the same period ended September 30, 2024. The increase in the provision for credit losses was due primarily to growth in loans held for investment and an increase in nonperforming loans.

Previous wording

Total non-performing loans were $13.0 million at June 30, 2025, compared to $9.8 million at June 30, 2024 with 72.5% of this increase coming from one- to four-family residential loans. One- to four-family residential loans historically have lower loss rates compared to other Company loan types. Classified loans totaled $19.5 million at June 30, 2025, compared to $13.0 million at June 30, 2024, and total loans past due greater than 30 days were $19.0 million and $14.1 million at those respective dates. Special mention loans were $0.9 million at June 30, 2025 compared to $5.3 million at June 30, 2024. As a percentage of non-performing loans, the allowance for credit losses was 47.2% at June 30, 2025 compared to 59.0% at June 30, 2024.

Current wording

Total non-performing loans were $14.6 million at September 30, 2025, compared to $11.0 million at September 30, 2024 with 38.2% of this increase coming from one- to four-family residential loans. One- to four-family residential loans historically have lower loss rates compared to other Company loan types. Classified loans totaled $20.5 million at September 30, 2025, compared to $12.7 million at September 30, 2024, and total loans past due greater than 30 days were $17.3 million and $15.4 million at those respective dates. Special mention loans were $1.4 million at September 30, 2025 compared to $3.5 million at September 30, 2024. As a percentage of non-performing loans, the allowance for credit losses was 42.9% at September 30, 2025 compared to 53.0% at September 30, 2024.

Previous wording

Non-interest Income. Non-interest income totaled $9.3 million for the six months ended June 30, 2025, a decrease of $2.7 million, or 22.1%, from $12.0 million for the six months ended June 30, 2024. The decrease was primarily due to a decrease of $2.3 million in gains from the sale of mortgage servicing rights that occurred only in the six months ended June 30, 2024.

Current wording

Non-interest Income. Non-interest income totaled $14.5 million for the nine months ended September 30, 2025, a decrease of $2.9 million, or 16.6%, from $17.3 million for the nine months ended September 30, 2024. The decrease was primarily due to a decrease of $2.6 million in gains from the sale of mortgage servicing rights that occurred only in the nine months ended September 30, 2024.

Previous wording

Non-interest Expense. Non-interest expense decreased $717,000, or 2.2%, to $32.5 million for the six months ended June 30, 2025, compared to $33.2 million for the six months ended June 30, 2024. The decrease was primarily due to a $975,000, or 4.8%, decrease in salaries and employee benefits. This was primarily caused by reductions in staffing levels within the mortgage banking segment to improve the segment’s profitability. The number of full-time equivalent employees was 324 at June 30, 2025 compared to 368 at June 30, 2024. Also contributing to non-interest expense reduction was a decrease of $673,000, or 54.8%, in advertising and marketing expense for the six months ended June 30, 2025 compared to the same period ended June 30, 2024. Hedging activity, net, increased $802,000, from a net benefit of $131,000 for the six months ended June 30, 2024 to a net expense of $671,000 for the six months ended June 30, 2025. Hedging activity is a direct result of interest rate movements in the secondary market of mortgage loans held for sale.

Current wording

Non-interest Expense. Non-interest expense decreased $1.4 million, or 2.7%, to $49.5 million for the nine months ended September 30, 2025, compared to $50.9 million for the nine months ended September 30, 2024. The decrease was primarily due to a $1.5 million, or 4.9%, decrease in salaries and employee benefits. This was primarily caused by reductions in staffing levels within the mortgage banking segment to improve the segment’s profitability. The number of full-time equivalent employees was 321 at September 30, 2025 compared to 352 at September 30, 2024. Also contributing to non-interest expense reduction was a decrease of $786,000, or 48.2%, in advertising and marketing expense for the nine months ended September 30, 2025 compared to the same period ended September 30, 2024. Hedging activity, net, increased $367,000, or 63.2%, for the nine months ended September 30, 2025 compared to the same period ended September 30, 2024. Hedging activity is a direct result of interest rate movements in the secondary market of mortgage loans held for sale.

Previous wording

Provision for Income Taxes. The provision for income taxes was $392,000 for the six months ended June 30, 2025, compared to a provision of $13,000 for the six months ended June 30, 2024. The changes are a direct reflection of net income before income taxes for each period and not a material change in the Bank's effective tax rates.

Current wording

Provision (Benefit) for Income Taxes. The provision for income taxes was $648,000 for the nine months ended September 30, 2025, compared to a benefit of $234,000 for the nine months ended September 30, 2024. The changes are a direct reflection of net income before income taxes for each period and not a material change in the Bank's effective tax rates.

Previous wording

The table above indicates that at June 30, 2025, we would have experienced a 9.57% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 8.06% increase in EVE in the event of an instantaneous 200 basis point decrease in market interest rates. Each of the estimated percentages of change in EVE in the table above are within the Board of Directors’ guidelines.

Current wording

The table above indicates that at September 30, 2025, we would have experienced a 9.53% decrease in EVE in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 7.22% increase in EVE in the event of an instantaneous 200 basis point decrease in market interest rates. Each of the estimated percentages of change in EVE in the table above are within the Board of Directors’ guidelines.

Previous wording

The table above indicates that at June 30, 2025, we would have experienced a 3.00% increase in NII in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 8.80% decrease in NII in the event of an instantaneous 200 basis point decrease in market interest rates. Each of the estimated decreases in the percentage of change in the net interest income in the table above are within the Board of Directors’ guidelines.

Current wording

The table above indicates that at September 30, 2025, we would have experienced a 1.80% increase in NII in the event of an instantaneous parallel 200 basis point increase in market interest rates and a 8.50% decrease in NII in the event of an instantaneous 200 basis point decrease in market interest rates. Each of the estimated decreases in the percentage of change in the net interest income in the table above are within the Board of Directors’ guidelines.

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, proceeds from maturities of securities and sales of mortgage loans. We also have the ability to borrow from the Federal Home Loan Bank of Dallas and the Federal Reserve Board’s Bank Discount Window. At June 30, 2025, we had $66.5 million of outstanding borrowings from the Federal Home Loan Bank of Dallas. At June 30, 2025, we had the capacity to borrow an additional $371 million from the Federal Home Loan Bank of Dallas and an additional $142 million from the Federal Reserve Board discount window.

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, proceeds from maturities of securities and sales of mortgage loans. We also have the ability to borrow from the Federal Home Loan Bank of Dallas and the Federal Reserve Board’s Bank Discount Window. At September 30, 2025, we had $63.4 million of outstanding borrowings from the Federal Home Loan Bank of Dallas, with the capacity to borrow an additional $377 million, and an additional $143 million from the Federal Reserve Board discount window.

Previous wording

At June 30, 2025, Fidelity Bank’s Tier 1 leverage capital was $255.6 million, or 20.3% of adjusted assets. Accordingly, it was categorized as well-capitalized at June 30, 2025. Management is not aware of any conditions or events since the most recent notification that would change our category. For further information, see Note 8 of the financial statements included elsewhere in this document.

Current wording

At September 30, 2025, Fidelity Bank’s Tier 1 leverage capital was $256.7 million, or 20.1% of adjusted assets. Accordingly, it was categorized as well-capitalized at September 30, 2025. Management is not aware of any conditions or events since the most recent notification that would change our category. For further information, see Note 8 of the financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

Off-Balance Sheet Arrangements. At June 30, 2025, we had $233.7 million of outstanding commitments to originate loans, which included $194.9 million in revolving lines of credit, $21.8 million in residential construction loans and $17.0 million in commercial construction loans and lines of credit. At June 30, 2025, none of our revolving lines of credit related to commercial real estate loans. Certificates of deposit that are scheduled to mature in less than one year from June 30, 2025 totaled $225.6 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize Federal Home Loan Bank of Dallas 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. At September 30, 2025, we had $278.2 million of outstanding commitments to originate loans, which included $220.9 million in revolving lines of credit, $23.6 million in residential construction loans and $33.7 million in commercial construction loans and lines of credit. At September 30, 2025, none of our revolving lines of credit related to commercial real estate loans. Certificates of deposit that are scheduled to mature in less than one year from September 30, 2025 totaled $216.8 million. Management expects that a substantial portion of the maturing certificates of deposit will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize Federal Home Loan Bank of Dallas advances or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.

Previous wording

For a discussion of the impact of recent accounting pronouncements, see Note 1 of the notes to our financial statements included elsewhere in this document.

Current wording

For a discussion of the impact of recent accounting pronouncements, see Note 1 of the notes to our consolidated financial statements included elsewhere in this document.