FB Bancorp, Inc. /MD/

Previous wording

At December 31, 2024, commercial real estate loans totaled $241.1 million, or 31.8% of the Company’s loan portfolio. Commercial real estate loans generally have large balances and depend on the underlying collateral. Because the repayment of commercial real estate loans depends on the successful management and operation of the borrower’s properties or related businesses, their repayment can be affected by adverse conditions in the local real estate market or economy. A downturn in the real estate market or the local economy could adversely impact the value of properties securing the loan or the revenues from the borrower’s business, thereby increasing the risk of non-performing loans. The Company intends to increase its commercial real estate loan portfolios which may increase the corresponding risks and potential for losses from these loans.

Current wording

At December 31, 2025, commercial real estate loans totaled $248.7 million, or 33.4% of the Company’s loan portfolio. Commercial real estate loans generally have large balances and depend on the underlying collateral. Because the repayment of commercial real estate loans depends on the successful management and operation of the borrower’s properties or related businesses, their repayment can be affected by adverse conditions in the local real estate market or economy. A downturn in the real estate market or the local economy could adversely impact the value of properties securing the loan or the revenues from the borrower’s business, thereby increasing the risk of non-performing loans. The Company intends to increase its commercial real estate loan portfolios which may increase the corresponding risks and potential for losses from these loans.

Previous wording

At December 31, 2024, commercial loans totaled $95.0 million, or 12.5% of the Company’s loan portfolio. Unlike residential real estate loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flows of the borrower’s business, and the collateral securing these loans may fluctuate in value. Further, any collateral securing commercial loans may depreciate over time, may be difficult to appraise and may fluctuate in value. As a result, the availability of funds for the repayment of commercial loans may depend substantially on the success of the business itself. The Company intends to increase its commercial loan portfolios and as it increases, the corresponding risks and potential for losses from these loans may also increase.

Current wording

At December 31, 2025, commercial loans totaled $92.2 million, or 12.4% of the Company’s loan portfolio. Unlike residential real estate loans, which generally are made on the basis of the borrower’s ability to make repayment from his or her employment or other income, and which are secured by real property whose value tends to be more easily ascertainable, commercial loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flows of the borrower’s business, and the collateral securing these loans may fluctuate in value. Further, any collateral securing commercial loans may depreciate over time, may be difficult to appraise and may fluctuate in value. As a result, the availability of funds for the repayment of commercial loans may depend substantially on the success of the business itself. The Company intends to increase its commercial loan portfolios and as it increases, the corresponding risks and potential for losses from these loans may also increase.

Previous wording

The Company continues to seek to grow and diversify its loan portfolio prudently by increasing the origination of commercial real estate and commercial loans in an effort to increase the overall loan portfolio yield. Pursuant to this strategy, Fidelity Bank’s average balance of loans held for investment during the year ended December 31, 2024, increased by $103.6 million, or 16.9%, compared to the same period in 2023. While to date, the Company has not incurred any losses with regard to loans originated during this period, this portion of the loan portfolio is unseasoned and does not provide the Company with a significant payment history pattern from which to judge future collectability, especially in the event of a future period of declining and unfavorable or recessionary economic conditions. As a result, it may be difficult to predict the future performance of this part of the Company’s loan portfolio. These more recently originated loans may have delinquency or charge-off levels above the Company’s historical experience, which could adversely affect its future financial performance. Further, commercial real estate and commercial loans generally have larger balances and involve a greater risk than one- to four-family residential mortgage loans. Accordingly, if the Company makes any errors in judgment in the collectability of these loans, any resulting charge-offs may be larger on a per loan basis than those incurred historically with its residential mortgage loan or consumer loan portfolios.

Current wording

The Company continues to seek to grow and diversify its loan portfolio prudently by increasing the origination of commercial real estate and commercial loans in an effort to increase the overall loan portfolio yield. Pursuant to this strategy, Fidelity Bank’s average balance of loans held for investment during the year ended December 31, 2025, increased by $48.7 million, or 6.8%, compared to the same period in 2024. While to date, the Company has not incurred any losses with regard to loans originated during this period, this portion of the loan portfolio is unseasoned and does not provide the Company with a significant payment history pattern from which to judge future collectability, especially in the event of a future period of declining and unfavorable or recessionary economic conditions. As a result, it may be difficult to predict the future performance of this part of the Company’s loan portfolio. These more recently originated loans may have delinquency or charge-off levels above the Company’s historical experience, which could adversely affect its future financial performance. Further, commercial real estate and commercial loans generally have larger balances and involve a greater risk than one- to four-family residential mortgage loans. Accordingly, if the Company makes any errors in judgment in the collectability of these loans, any resulting charge-offs may be larger on a per loan basis than those incurred historically with its residential mortgage loan or consumer loan portfolios.

Previous wording

The Company primarily serves individuals and businesses located in the Southern Louisiana and the New Orleans metropolitan area, the Florida panhandle, and Mississippi. At December 31, 2024, approximately $423 million, or 56%, of loans held for investment were originated in the New Orleans and North Shore New Orleans metropolitan area. These loans are primarily secured by real estate in these market areas. Therefore, our success is largely dependent on the economic conditions, including employment levels, population growth, income levels, savings trends and government policies in these market areas. Although the Company’s loan portfolio has very limited exposure to commercial office space in downtown New Orleans, increased vacancies in this market resulting in depressed prices could further effect on the New Orleans metropolitan area. Moreover, the continued trend of hybrid and remote work would likely result in increased vacancy rates in commercial office space throughout the New Orleans metropolitan area which could also negatively affect the demand for retail occupancy and sales in surrounding areas, any of which could adversely affect the value of the properties used as collateral for such loans. Similarly, weaker economic conditions caused by recessions, unemployment, inflation, a decline in real estate values or other factors beyond the Company’s control may adversely affect the ability of its borrowers to service their debt obligations and could result in higher loan and lease losses and lower net income for the Company.

Current wording

The Company primarily serves individuals and businesses located in the Southern Louisiana and the New Orleans metropolitan area, the Florida panhandle, and Mississippi. At December 31, 2025, approximately $486.1 million, or 65.3%, of loans held for investment were originated in the New Orleans and North Shore New Orleans metropolitan area. These loans are primarily secured by real estate in these market areas. Therefore, our success is largely dependent on the economic conditions, including employment levels, population growth, income levels, savings trends and government policies in these market areas. Although the Company’s loan portfolio has very limited exposure to commercial office space in downtown New Orleans, increased vacancies in this market resulting in depressed prices could further effect on the New Orleans metropolitan area. Moreover, the continued trend of hybrid and remote work would likely result in increased vacancy rates in commercial office space throughout the New Orleans metropolitan area which could also negatively affect the demand for retail occupancy and sales in surrounding areas, any of which could adversely affect the value of the properties used as collateral for such loans. Similarly, weaker economic conditions caused by recessions, unemployment, inflation, a decline in real estate values or other factors beyond the Company’s control may adversely affect the ability of its borrowers to service their debt obligations and could result in higher loan and lease losses and lower net income for the Company.

Previous wording

We monitor interest rate risk through the use of simulation models, including estimates of the amounts by which the fair value of our assets and liabilities (our economic value of equity or “EVE”) and our net interest income would change in the event of a range of assumed changes in market interest rates. At December 31, 2024, we estimate that we would experience a 6.20% decrease in EVE in the event of an instantaneous 200 basis point increase in interest rates, and a 2.07% increase in EVE in the event of an instantaneous 200 basis point decrease in market rates.

Current wording

We monitor interest rate risk through the use of simulation models, including estimates of the amounts by which the fair value of our assets and liabilities (our economic value of equity or “EVE”) and our net interest income would change in the event of a range of assumed changes in market interest rates. At December 31, 2025, we estimate that we would experience a 11.74% decrease in EVE in the event of an instantaneous 200 basis point increase in interest rates, and a 10.02% increase in EVE in the event of an instantaneous 200 basis point decrease in market rates.

Previous wording

Fidelity Bank is subject to extensive regulation, supervision and examination by the LOFI and the FDIC. FB Bancorp will be subject to extensive regulation, supervision and examination by the Federal Reserve Board. Such regulation and supervision govern the activities in which an institution and its holding company may engage and are intended primarily for the protection of the federal deposit insurance fund and the depositors of Fidelity Bank, rather than for our stockholders. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets, and determination of the adequacy of the level of our allowance for credit losses. These regulations, along with existing tax, accounting, securities, insurance and monetary laws, rules, standards, policies, and interpretations, control the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations. Further, changes in accounting standards can be both difficult to predict and involve judgment and discretion in their interpretation by the Company and our independent accounting firm. These changes could materially impact, potentially even retroactively, how we report our financial condition and results of operations.

Current wording

Fidelity Bank is subject to extensive regulation, supervision and examination by the LOFI and the FDIC. FB Bancorp is subject to extensive regulation, supervision and examination by the Federal Reserve Board. Such regulation and supervision govern the activities in which an institution and its holding company may engage and are intended primarily for the protection of the federal deposit insurance fund and the depositors of Fidelity Bank, rather than for our stockholders. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets, and determination of the adequacy of the level of our allowance for credit losses. These regulations, along with existing tax, accounting, securities, insurance and monetary laws, rules, standards, policies, and interpretations, control the methods by which financial institutions conduct business, implement strategic initiatives and tax compliance, and govern financial reporting and disclosures. Any change in such regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations. Further, changes in accounting standards can be both difficult to predict and involve judgment and discretion in their interpretation by the Company and our independent accounting firm. These changes could materially impact, potentially even retroactively, how we report our financial condition and results of operations.

Previous wording

FB Bancorp qualifies as an “emerging growth company” under the JOBS Act. For as long as it continues to be an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to public companies that are not to emerging growth companies, including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation. As an emerging growth company, FB Bancorp also will not be subject to Section 404(b) of the Sarbanes-Oxley Act of 2002, which would require that our independent auditors audit our internal control over financial reporting. In addition, as an emerging growth company, we have elected to take advantage of the extended transition periods for adopting new or revised financial accounting standards until the date they are required to be adopted by private companies (however, if any new or revised financial accounting standards would not apply to private companies, we would not be able to delay their adoption). Accordingly, our financial statements may not be comparable to those of public companies that adopt new or revised financial accounting standards as of an earlier date. Investors may find our common stock less attractive since we have chosen to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and the price of our common stock may be more volatile.

Current wording

FB Bancorp qualifies as an “emerging growth company” under the JOBS Act. For as long as it continues to be an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to public companies that are not to emerging growth companies, including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation. As an emerging growth company, FB Bancorp also will not be subject to Section 404(b) of the Sarbanes-Oxley Act of 2002, which would require that our independent auditors to audit our internal control over financial reporting. In addition, as an emerging growth company, we have elected to take advantage of the extended transition periods for adopting new or revised financial accounting standards until the date they are required to be adopted by private companies (however, if any new or revised financial accounting standards would not apply to private companies, we would not be able to delay their adoption). Accordingly, our financial statements may not be comparable to those of public companies that adopt new or revised financial accounting standards as of an earlier date. Investors may find our common stock less attractive since we have chosen to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and the price of our common stock may be more volatile.

Previous wording

Due to the geographic regions in which we operate, which are primarily coastal areas, we are exposed to risks created by severe weather events that may negatively affect our revenues, costs, and liabilities, despite efforts we undertake to plan for these events. Hurricanes and other natural disasters have historically impacted spending and credit performance in the areas affected as well as the ability to obtain, and the associated costs. of, flood insurance. Other disasters or catastrophic events in the future, and the impact of such events on Fidelity Bank and its customers, the banking industry or the overall economy could have a negative effect on our business, results of operations and real property. These environmental risks can also directly affect our residential lending and investment portfolios, and more broadly, could materially impact our results of operations, financial condition, and liquidity.

Current wording

Due to the geographic regions in which we operate, which are primarily coastal areas, we are exposed to risks created by severe weather events that may negatively affect our revenues, costs, and liabilities, despite efforts we undertake to plan for these events. Hurricanes and other natural disasters have historically impacted spending and credit performance in the areas affected as well as the ability to obtain flood insurance. Other disasters or catastrophic events in the future, and the impact of such events on Fidelity Bank and its customers, the banking industry or the overall economy could have a negative effect on our business, results of operations and real property. These environmental risks can also directly affect our residential lending and investment portfolios, and more broadly, could materially impact our results of operations, financial condition, and liquidity.