WILSON BANK HOLDING CO
For the period ended Jun 30, 2026. Filed Aug 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 7, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001193125-26-215041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001193125-26-340404
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 125 previous paragraphs and 142 current paragraphs.
51 unchanged; 70 reworded; 14 added; 3 removed; 1 previous and 7 current paragraphs rearranged.
Tables are not compared: 14 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
The non-performing loan ratio is calculated by taking the total of our loans that are 90 days or more past due and accruing interest and nonaccrual loans and dividing that sum by our total loans.
Current report
Notes:
Current report
The increase in net interest income for the three and six months ended June 30, 2026, compared to the corresponding periods in 2025, was primarily attributable to growth in average interest-earning assets, higher yields on securities, and a lower cost of funds, partially offset by an increase in average interest-bearing deposits. The increase for the six month period was further supported by higher loan yields, while the increase for the three month period was partially offset by lower loan yields.
Current report
The direction and speed of changes in short-term interest rates, as well as competitive pricing conditions in our markets, affect our net interest income and net interest margin. The Federal Reserve influences general market rates, including the rates offered by financial institutions on loans and deposits. Our loan portfolio is particularly sensitive to changes in the prime interest rate. The prime interest rate decreased by 175 basis points between September 18, 2024 and December 31, 2025, corresponding with a 175-basis-point reduction in the Federal Reserve’s target range for the federal funds rate. The target range remained unchanged during the first half of 2026. Management expects short-term interest rates to remain at or near current levels for the remainder of 2026. However, continued changes in economic conditions, including the pace of inflation and labor market trends, could cause the Federal Reserve to adjust the federal funds target range.
Current report
If short-term rates remain stable, competitive pricing pressure would likely be the primary driver of changes in net interest margin. During the second quarter, competition required the Company to reduce rates on certain loans and, late in the quarter, to begin raising rates on certain deposits to attract and retain funding as loan growth outpaced deposit growth. Margin compression could result if such competitive pressures increase resulting in a further decline in asset yields while deposit costs continue to rise. Looking forward, management expects net interest income to continue to benefit from balance sheet growth, although preserving or expanding net interest margin may become more challenging if competition for deposits and loans continues to intensify. Future margin performance will depend on, among other factors, the Company’s ability to generate lower-cost core deposits, maintain loan growth, and manage deposit pricing and loan yields in a competitive environment. Unanticipated changes in short-term interest rates could also place additional pressure on the Company's net interest margin and earnings.
Current report
On May 16, 2025 Moody's Investors Services downgraded the United States credit rating to Aa1 from Aaa primarily over concerns of the increased federal debt, continuing deficits, the resulting increase in interest costs and the potential inability of the government to respond to future economic events.
Current report
The downgrade could potentially lead to higher interest rates which would likely impact financial market stability and volatility. Management will continue to evaluate the impact of the change in the rating and incorporate the information into its current risk management and financial analysis.
Current report
The provision for credit losses-loans of $3,569,000 for the six months ended June 30, 2026 was primarily driven by loan growth, declining local economic conditions, and deterioration in the collateral values of individually measured loans. The provision 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.
Current report
There was a provision for credit losses-off balance sheet exposures of $716,000 for the six months ended June 30, 2026 primarily driven by increased loan commitments. There was a benefit for credit losses-off balance sheet exposures of $270,000 for the six months ended June 30, 2025.
Current report
The decrease in gain on sale of loans for the three and six months ended June 30, 2026 when compared to the three and six months ended June 30, 2025 was primarily attributable to higher mortgage interest rates, which reduced the value of residential mortgage loans sold during the periods.
Current report
The increase in loss on sale of other real estate for the three and six months ended June 30, 2026 when compared to the three and six months ended June 30, 2025 was primarily due to the sale of a foreclosed residential property.
Current report
The increase in audit, legal and consulting expenses in the three and six months ended June 30, 2026, compared with the comparable periods in 2025 was primarily due to higher independent audit fees and consulting costs related to the implementation of a new human capital management system.
Current report
The increase in advertising and public relations expense in the three and six months ended June 30, 2026 when compared to the comparable periods in 2025 was primarily due to higher costs associated with marketing products and services, reflecting the impact of inflationary and broader economic conditions on advertising and related vendor expenses. In addition, the Bank increased its marketing and customer acquisition efforts across its footprint during the three and six months ended June 30, 2026 to support strategic deposit and loan growth initiatives. These investments were made to strengthen customer acquisition, maintain existing market share, and enhance the Bank's competitive position in both new and existing markets.
Current report
Included in non-performing loans at June 30, 2026 were $6.4 million of modified loans associated with four residential 1-4 family real estate loan relationships, two construction, land development and farmland loan relationships, and one commercial real estate loan relationship. These loans represented 61.2% of the loans modified within the twelve months prior to June 30, 2026.
Removed paragraphs (3)
Previous report
The increase in net interest income for the three months ended March 31, 2026 compared to the comparable period in 2025 was primarily due to an increase in the volume of average interest-earning assets, an increase in the yield earned on loans and securities, and a decrease in interest expense resulting from the decrease in the cost of funds, partially offset by an increase in the volume of average interest-bearing deposits.
Previous report
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 175 basis points between September 18, 2024 and December 31, 2025, as the Federal Reserve cut the target rate for the federal funds rate by 175 basis points during that time. In the first quarter of 2026, the target rate for the Federal funds rate was unchanged. The Company believes that short-term interest rates could decrease further throughout 2026 though elevated levels of inflation and the affect on the economic environment from the conflict in Iran could cause the Federal Reserve to keep short-term rates at current levels. In such a downward rate environment, should it materialize, 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 downward. 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 report
The increase in other operating expenses in the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was primarily due to an increase in expenses related to employee engagement and education, and costs associated with the preparation and mailing of our annual report to shareholders.
Reworded paragraphs (70)
Previous 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 2025 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 from geopolitical instability, including as a result of the conflict in Iran (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, including the conflict in Iran, 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…
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 2025 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 from geopolitical instability, including as a result of the conflict in Iran, (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, including the conflict in Iran, 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 Compan…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Accounting policies related to the allowance for credit losses on financial instruments including loans and off-balance-sheet credit exposures are considered to be critical as these policies involve considerable subjective judgment and estimation by management. In the case of loans, the allowance for credit losses is a contra-asset valuation account, calculated in accordance with ASC 326, that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. In the case of off-balance-sheet credit exposures, the allowance for credit losses is a liability account, calculated in accordance with ASC 326, reported as a component of accrued interest payable and other liabilities in our consolidated balance sheets. The amount of each allowance account represents management's best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. Relevant available information includes historical credit loss experience, current conditions and reasonable and supportable forecasts. While historical credit loss experience provides the basis for the estimation of expected credit losses, adjustments to historical loss information may be made for differences in current portfolio-specific risk characteristics, environmental conditions or other relevant factors. While management utilizes its best judgment and information available, the ultimate adequacy of our allowance accounts is dependent upon a variety of factors beyond our control, including the performance of our portfolios, the economy, changes in interest rates and the view of the regulatory authorities toward classification of assets. The ACL process is continually reviewed and updated as needed based on quarterly reviews, new data, and/or calculation improvements with material impacts disclosed as appropriate. For additional information regarding critical accounting policies, refer to Note 1 - Summary of Significant Accounting Policies and Note 2 - Loans and Allowance for Credit Losses in the notes to consolidated financial statements contained elsewhere in this Quarterly Report.
Current wording
Accounting policies related to the ACL on financial instruments including loans and off-balance-sheet credit exposures are considered to be critical as these policies involve considerable subjective judgment and estimation by management. In the case of loans, the ACL is a contra-asset valuation account, calculated in accordance with ASC 326, that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. In the case of off-balance-sheet credit exposures, the ACL is a liability account, calculated in accordance with ASC 326, reported as a component of accrued interest payable and other liabilities in our consolidated balance sheets. The amount of each allowance account represents management's best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. Relevant available information includes historical credit loss experience, current conditions and reasonable and supportable forecasts. While historical credit loss experience provides the basis for the estimation of expected credit losses, adjustments to historical loss information may be made for differences in current portfolio-specific risk characteristics, environmental conditions or other relevant factors. While management utilizes its best judgment and information available, the ultimate adequacy of our allowance accounts is dependent upon a variety of factors beyond our control, including the performance of our portfolios, the economy, changes in interest rates and the view of the regulatory authorities toward classification of assets. The ACL process is continually reviewed and updated as needed based on quarterly reviews, new data, and/or calculation improvements with material impacts disclosed as appropriate. For additional information regarding critical accounting policies, refer to Note 1 - Summary of Significant Accounting Policies and Note 2 - Loans and Allowance for Credit Losses in the notes to consolidated financial statements contained elsewhere in this Quarterly Report.
Previous wording
Net earnings of the Company for the three months ended March 31, 2026 were $22,261,000, an increase of $5,869,000, or 35.80%, from net earnings of $16,392,000 for the three months ended March 31, 2025. The increase in net earnings for the three months ended March 31, 2026 was primarily due to an increase in net interest income, and non-interest income, partially offset by an increase in non-interest expense and provision for credit losses.
Current wording
Net earnings of the Company for the three months ended June 30, 2026 were $20,810,000, an increase of $1,695,000, or 8.87%, from net earnings of $19,115,000 for the three months ended June 30, 2025. Net earnings of the Company increased $7,564,000, or 21.30%, to $43,071,000 for the six months ended June 30, 2026, from $35,507,000 for the six months ended June 30, 2025. The increase in net earnings for the three and six months ended June 30, 2026 was primarily due to an increase in net interest income, non-interest income, and a decrease in provision for credit losses, partially offset by an increase in non-interest expense.
Previous wording
The increase in net interest income for the three months ended March 31, 2026 when compared to the comparable period in 2025 was primarily due to an increase in average interest earning asset balances 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 three and six months ended June 30, 2026 when compared to the comparable periods in 2025 was primarily due to an increase in average interest earning asset balances and a decrease in the cost of funds, partially offset by an increase in average interest bearing deposit balances and a slight decrease in the yield earned on earning assets.
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 a particularly important performance metric to the Company as it serves as the basis for certain employee bonuses. The ROA for the three months ended March 31, 2026 was 1.53%, while the ROA for the three months ended March 31, 2025 was 1.23%. The ROE for the three months ended March 31, 2026 was 15.18%, while the ROE for the three months ended March 31, 2025 was 13.35%. The increases in ROA and ROE for the first quarter of 2026 were primarily driven by higher net interest income.
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 a particularly important performance metric to the Company as it serves as the basis for certain employee bonuses. The ROA for the three and six months ended June 30, 2026 was 1.39% and 1.46%, respectively, while the ROA for the three and six months ended June 30, 2025 was 1.38% and 1.31%, respectively. The ROE for the three and six months ended June 30, 2026 was 13.76% and 14.46%, respectively, while the ROE for the three and six months ended June 30, 2025 was 14.69% and 14.04%, respectively. The increase in ROA for the three and six months ended June 30, 2026 and the increase in ROE for the six months ended June 30, 2026 was primarily due to an increase in net interest income resulting from the increase in earning assets and a decrease in provision for credit losses, partially offset by an increase in non-interest expense. While net earnings and shareholder's equity both increased for the three months ended June 30, 2026 when compared to the same period of 2025, the decrease in ROE between the periods is due to the growth in average shareholders' equity outpacing the growth in net earnings in the second quarter of 2026.
Previous wording
Effective January 1, 2026, Wilson Bank entered into a definitive agreement with an unaffiliated third party to divest of its credit card business. The transaction closed in January 2026; however, Wilson Bank will continue to subservice the credit cards until April 2027. In connection with the sale, credit card balances totaling $6.7 million were moved out of our portfolio and a premium of $1.1 million was recognized into income, based upon the sales agreement with the purchaser. The reserve for credit card points in the amount of $1.2 million was reversed and an additional expense of $120,000 for such points was recognized on the settlement date.
Current wording
Effective January 1, 2026, Wilson Bank entered into a definitive agreement with an unaffiliated third party to divest of its credit card business. The transaction closed in January 2026; however, Wilson Bank will continue to subservice the credit cards until April 2027. In connection with the sale, credit card balances totaling $6.7 million were moved out of our portfolio and a premium of $1.1 million was recognized into income, based upon the sales agreement with the purchaser. The reserve for credit card points in the amount of $1.2 million was reversed and an additional expense of $120,000 for such points was recognized on the settlement date. The sale allows the Bank to redirect operational resources toward core lending activities and strategic initiatives in an effort to better position the Bank for future growth and improved operating efficiency, while also enhancing the Bank's ability to offer additional credit card products to its customers.
Previous wording
The average balances, interest, and average rates of our assets and liabilities for thethree months ended March 31, 2026 and 2025 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 six months ended June 30, 2026 and 2025 are presented in the following table (dollars in thousands):
Previous wording
Loan fees of $3,618,000 are included in interest income for the period ended March 31, 2026. Loan fees of $3,574,000 are included in interest income for the period ended March 31, 2025.
Current wording
Loan fees of $4,457,000 are included in interest income for the period ended June 30, 2026. Loan fees of $4,163,000 are included in interest income for the period ended June 30, 2025.
Previous wording
The components of our loan yield, a key driver to our net interest margin for thethree months ended March 31, 2026 and 2025, were as follows:
Current wording
The components of our loan yield, a key driver to our net interest margin for thethree and six months ended June 30, 2026 and 2025, were as follows:
Previous wording
Net interest margin for the three months ended March 31, 2026 and 2025 was 3.92% and 3.53%, respectively. The increase in net interest margin for the three months ended March 31, 2026 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 the cost of funds, partially offset by a decrease in the yield on accounts with depository institutions and increased average interest-bearing deposit balances. While market short-term interest rates declined overall in 2025, the Bank experienced upward loan rate yields within the portfolio as existing loan volume originated in prior years repriced to current market rates, and, in most cases, new loans were originated at higher contractual interest rates than the previous portfolio rate. The net interest spread was 3.54% and 3.13% for the three months ended March 31, 2026 and 2025, respectively.
Current wording
Net interest margin for the three months ended June 30, 2026 and 2025 was 3.86% and 3.73%, respectively. Net interest margin for the six months ended June 30, 2026 and 2025 was 3.89% and 3.63%, respectively. The increase in net interest margin for the three and six months ended June 30, 2026 when compared to the comparable periods in 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, and for the six months ended June 30, 2026, an increase in the yield earned on loans. The increase in net interest margin was partially offset by a decrease in the yield on accounts with depository institutions and increased average interest-bearing deposit balances, and for the three months ended June 30, 2026, a decrease in the yield earned on loans. The yield earned on loans for the three and six months ended June 30, 2026 was 6.80% and 6.87%, respectively, while the yield earned on loans for the three and six months ended June 30, 2025 was 6.88% and 6.82%, respectively. The increase in the yield earned on loans for the six months ended June 30, 2026 reflected the repricing of loans originated in prior years to current market rates and additional state tax credit loans. During the three months ended June 30, 2026, a higher proportion of variable rate loans repriced downward to current market rates and new loans were originated at lower rates compared to the previous portfolio yield as a result of increasing competitive pressures, more than offsetting the effect of upward repricing. As a result the yield earned on loans declined compared to the same period in 2025. The net interest spread was 3.49% and 3.33% for the three months ended June 30, 2026 and 2025, respectively. The net interest spread was 3.52% and 3.24% for the six months ended June 30, 2026 and 2025, 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 months ended March 31, 2026 totaled$53,828,000 compared to $44,579,000 for the three months ended March 31, 2025.
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 six months ended June 30, 2026 totaled$54,433,000 and $108,261,000, respectively, compared to $48,938,000 and $93,517,000 for the three and six months ended June 30, 2025, respectively.
Previous wording
The ratio of average interest-earning assets to total average assets for thethree months ended March 31, 2026 was 96.4%, compared to 96.2% for the three months ended March 31, 2025.
Current wording
The ratio of average interest-earning assets to total average assets for thethree and six months ended June 30, 2026 was 96.4%, compared to 96.2% for the three and six months ended June 30, 2025.
Previous wording
Fees earned on loans totaled $3,618,000 and $3,574,000 in the first three months of 2026 and 2025, respectively. The increase in fees earned on loans for the first quarter of 2026 when compared to the first quarter of 2025 was attributable to an increase in origination fees offset by a decrease in prepayment fees. The total amount of state income tax credits and tax-exempt loan interest included in our loan yields were $1,071,000 and $643,000 for the three-month periods ended March 31, 2026 and 2025, respectively. The increase in interest and dividends earned on securities in the first three months of 2026 when compared to comparable period in 2025 resulted from higher yields earned on the securities purchased throughout 2025 as management invested liquid funds into the securities portfolio, as well as management's decision to restructure a portion of the securities portfolio in 2025, and invest the proceeds in higher yielding securities. The increase in interest earned on interest bearing deposits during the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was primarily a result of higher deposit balances, partially offset by a decrease in rates earned on these deposits as a result of the Federal Reserve lowering rates.
Current wording
Fees earned on loans totaled $4,457,000 and $4,163,000 for the three months ended June 30, 2026 and 2025, respectively. Fees earned on loans totaled $8,075,000 and $7,737,000 for the six months ended June 30, 2026 and 2025, respectively. The increase in fees earned on loans for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 was attributable to an increase in origination fees, late fees, and fees for letters of credit. For the six month period ended June 30, 2026 the increase was partially offset by a decrease in prepayment fees. The total amount of state income tax credits and tax-exempt loan interest included in our loan yields for the three and six months ended June 30, 2026 was $1,214,000 and $2,284,000, respectively, compared to $756,000 and $1,399,000 for the three and six months ended June 30, 2025, respectively. The increase in interest and dividends earned on securities in the three and six months ended June 30, 2026 when compared to comparable periods in 2025 is due to the growth in the securities portfolio over such periods and the higher yields earned on the securities purchased throughout 2025, and in the first half of 2026, as management invested liquid funds into the securities portfolio, as well as management's decision to restructure a portion of the securities portfolio in 2025 and invest the proceeds of such restructuring in higher yielding securities. The increase in interest earned on interest bearing deposits during the six months ended June 30, 2026 when compared to the six months ended June 30, 2025 was primarily a result of higher average deposit balances, partially offset by a decrease in rates earned on these deposits as a result of the Federal Reserve lowering rates. The decrease in interest earned on interest bearing deposits during the three months ended June 30, 2026 when compared to the three months ended June 30, 2025 was primarily a result of a decrease in rates earned on these deposits, partially offset by an increase in average deposit balances.
Previous wording
Interest expense decreased in the three months ended March 31, 2026 when compared to the comparable period in 2025 due to a decrease in the average rate paid on interest-bearing deposits, partially offset by the increase in volume of average interest-bearing deposits. 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 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 continues to cut rates, we expect interest expense to increase due to an increase in overall deposit balances.
Current wording
Interest expense decreased in the three and six months ended June 30, 2026 when compared to the comparable periods in 2025 due to a decrease in the average rate paid on interest-bearing deposits, partially offset by the increase in volume of average interest-bearing deposits. We have generally been able to lower the rates we pay on deposits as the Federal Reserve has lowered short-term interest rates; however, competitive pressures have begun to increase. Although the Federal Reserve has not adjusted the federal funds rate any further since December 2025, loan growth is outpacing deposit growth, and as a result we began to raise the rates we pay on deposits late in the second quarter of 2026. We expect interest expense to increase due to an increase in overall deposit balances and an increase in cost of funds due to competitive pressures in our markets.
Previous wording
The provision for credit losses represents a charge to earnings necessary to establish an allowance for credit losses that, in management's evaluation is adequate to provide coverage for all expected credit losses. The determination of the amount of the allowance for credit losses ("ACL") is complex and involves a high degree of judgment and subjectivity. Refer to Note 1, "Summary of Significant Accounting Policies" in the notes to our consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for a detailed discussion regarding ACL methodology.
Current wording
The provision for credit losses represents a charge to earnings necessary to establish an ACL that, in management's evaluation is adequate to provide coverage for all expected credit losses. The determination of the amount of the ACL is complex and involves a high degree of judgment and subjectivity. Refer to Note 1, "Summary of Significant Accounting Policies" in the notes to our consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for a detailed discussion regarding ACL methodology.
Previous wording
The provision for credit losses-loans of $2,541,000 for the three months ended March 31, 2026 was primarily driven by deterioration in collateral values on some individually measured loans, the national economic outlook, and loan growth. There was a provision of $2,233,000 for the three months ended March 31, 2025 primarily due to loan growth and a single commercial real estate credit deterioration.
Current wording
The provision for credit losses-loans of $1,028,000 for the three months ended June 30, 2026 was primarily driven by loan growth while improved national economic results were offset by declining local economic conditions, and a single deterioration in the collateral value of an individually measured loan. There was a provision of $2,507,000 for the three months ended June 30, 2025 primarily driven by a branch acquisition, deterioration in the national and local economic outlook, and loan growth.
Previous wording
There was a provision for credit losses-off balance sheet exposures of $144,000 for the three months ended March 31, 2026 related to increased loan commitments. There was a benefit of $393,000 for the credit losses-off balance sheet exposures for the three months ended March 31, 2025.
Current wording
There was a provision for credit losses-off balance sheet exposures of $572,000 for the three months ended June 30, 2026 related to increased loan commitments. There was a provision of $123,000 for the credit losses-off balance sheet exposures for the three months ended June 30, 2025.
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 three months ended March 31, 2026 and 2025:
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 six months ended June 30, 2026 and 2025:
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. 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 ACL 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 months ended March 31, 2026 and 2025, respectively.
Current wording
There was no provision for credit losses on available-for-sale securities for the three and six months ended June 30, 2026 and 2025, 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 months ended March 31, 2026 and 2025 (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 six months ended June 30, 2026 and 2025 (in thousands):
Previous wording
The increase in non-interest income for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 is primarily attributable to the premium earned on the sale of the Company's credit card portfolio, an increase in service charges on deposit accounts and an increase in brokerage income, partially offset by a decrease in debit and credit card interchange income.
Current wording
The increase in non-interest income for the three months ended June 30, 2026 when compared to the three months ended June 30, 2025 is primarily attributable to the increase in brokerage income and service charges on deposit accounts partially offset by a decrease in gain on sale of loans and an increase in loss on sale of other real estate. The increase in non-interest income for the six months ended June 30, 2026 when compared to the six months ended June 30, 2025 is primarily attributable to the premium on credit card portfolio sale, increase in brokerage income, and service charges on deposit accounts offset by a decrease in gain on sale of loans, debit and credit interchange income, and an increase in loss on sale of other real estate.
Previous wording
The increase in brokerage income for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was due to continued client acquisitions resulting in an increase of overall production and market share.
Current wording
The increase in brokerage income for the three and six months ended June 30, 2026 when compared to the three and six months ended June 30, 2025 was due to continued client acquisitions resulting in an increase of overall production and market share coupled with the continued growth and positive returns of the investment markets.
Previous wording
The increase in service charges on deposit accounts for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was primarily due to an increase in overdraft fees.
Current wording
The increase in service charges on deposit accounts for the three and six months ended June 30, 2026 when compared to the three and six months ended June 30, 2025 was primarily due to an increase in overdraft fees.
Previous wording
In connection with the sale of our credit card portfolio a premium of $1.1 million was recognized into income, based upon the sales agreement with the third party to whom we sold the portfolio.
Current wording
In connection with the sale of our credit card portfolio a premium of $1.1 million was recognized into income for the six months ended June 30, 2026, based upon the sales agreement with the third party to whom we sold the portfolio.
Previous wording
The decrease in debit and credit card interchange income for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was due to the sale of the Company's credit card portfolio mentioned above.
Current wording
The decrease in debit and credit card interchange income for the six months ended June 30, 2026 when compared to the six months ended June 30, 2025 was due to the sale of the Company's credit card portfolio mentioned above.
Previous wording
Non-interest expense consists primarily of employee costs, occupancy expenses, furniture and equipment expenses, advertising and public relations expenses, data processing expenses, directors' 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 months ended March 31, 2026 and 2025 (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, directors' 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, 2026 and 2025 (in thousands):
Previous wording
The increase in non-interest expense for the three months ended March 31, 2026 when compared to the comparable period in 2025 is primarily attributable to increases in salaries and employee benefits, occupancy expense, data processing expense, and other operating expense, partially offset by a reduction in FDIC insurance.
Current wording
The increase in non-interest expense for the three and six months ended June 30, 2026 when compared to the comparable periods in 2025 was primarily attributable to increases in salaries and employee benefits, occupancy expense, data processing expense, audit, legal and consulting, and advertising & public relations expense, partially offset by a reduction in FDIC insurance.
Previous wording
The increase in salaries and benefits in the three months ended March 31, 2026 when compared to the three months ended March 31, 2025, was primarily attributable to normal annual salary increases, an increased number of employees, promotions, the implementation of a higher minimum starting wage, and an increased bonus accrual based on higher projected earnings.
Current wording
The increase in salaries and benefits in the three and six months ended June 30, 2026 when compared to the comparable periods in 2025 was primarily attributable to normal annual salary increases, an increased number of employees, promotions, the implementation of a higher minimum starting wage, and an increased bonus accrual based on higher projected earnings.
Previous wording
The increase in occupancy expense in the three months ended March 31, 2026 when compared to the three months ended March 31, 2025, was primarily attributable to expense related to the remodel of multiple properties.
Current wording
The increase in occupancy expense in the three months and six months ended June 30, 2026 when compared to the comparable periods in 2025 was primarily attributable to expense related to the remodel of multiple branches.
Previous wording
The increase in data processing expense in the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was primarily due to implementation of additional information security solutions, replacement of technology equipment, additional software licensing needs, 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 and employee base grows, the demand for digital products and services from employees and customers increases, and the cyber threat environment grows.
Current wording
The increase in data processing expense in the three and six months ended June 30, 2026 when compared to the comparable periods in 2025 was primarily due to implementation of additional information security solutions, additional software licensing needs, 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 and employee base grows, the demand for digital products and services from employees and customers increases, and the cyber threat environment grows.
Previous wording
The decrease in FDIC insurance in the three months ended March 31, 2026 compared to the three months ended March 31, 2025, was primarily attributable to a decrease in our FDIC assessment rate.
Current wording
The decrease in FDIC insurance in the three months and six months ended June 30, 2026 when compared to the comparable periods in 2025 was primarily attributable to a decrease in our FDIC assessment rate.
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 three months ended March 31, 2026 and 2025 was 50.08% and 55.54%, respectively. The improvement in the efficiency ratio for the three months ended March 31, 2026 compared to the comparable period in 2025 was primarily due to the increase in net interest income outpacing the increase 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 three months ended June 30, 2026 and 2025 was 54.80% and 52.39%, respectively, while the efficiency ratio for the six months ended June 30, 2026 and 2025 was 52.44% and 53.89%, respectively. The improvement in the efficiency ratio for the six months ended June 30, 2026 compared to the comparable period in 2025 was primarily due to the increase in net interest income outpacing the increase in non-interest expense. The efficiency ratio for the three months ended June 30, 2026 trended higher compared to the comparable period in 2025 as a result of the increase in non-interest expense outpacing the increase in net interest income.
Previous wording
The Company's income tax expense for the three months ended March 31, 2026 was $6,725,000, an increase of $1,544,000 from $5,181,000 for the three months ended March 31, 2025. The percentage of income tax expense to net income before taxes was 23.20% and 24.01% for the three months ended March 31, 2026 and 2025, 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 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 June 30, 2026 was $6,453,000, an increase of $660,000 from $5,793,000 for the three months ended June 30, 2025. Income tax expense for the six months ended June 30, 2026 was $13,178,000, an increase of $2,204,000 from $10,974,000 for the six months ended June 30, 2025. The percentage of income tax expense to net income before taxes was 23.67% and 23.24% for the three months ended June 30, 2026 and 2025, respectively, while it was 23.43% and 23.60% for the six months ended June 30, 2026 and 2025, 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 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 $112,324,000, or 1.91%, to $5,991,280,000 at March 31, 2026 from $5,878,956,000 at December 31, 2025. Loans, net of allowance for credit losses, totaled $4,336,852,000 at March 31, 2026, a 0.95% increase compared to $4,296,095,000 at December 31, 2025. In 2026, management is targeting owner-occupied commercial real estate, residential real estate lending and small business lending as areas of focus. Total liabilities increased by 1.88% to $5,396,686,000 at March 31, 2026 compared to $5,297,271,000 at December 31, 2025.
Current wording
The Company’s total assets increased $101,389,000, or 1.72%, to $5,980,345,000 at June 30, 2026 from $5,878,956,000 at December 31, 2025. Loans, net of ACL, totaled $4,422,772,000 at June 30, 2026, a 2.95% increase compared to $4,296,095,000 at December 31, 2025. In 2026, management is targeting owner-occupied commercial real estate, residential real estate lending and small business lending as areas of focus. Total liabilities increased by 1.32% to $5,367,324,000 at June 30, 2026 compared to $5,297,271,000 at December 31, 2025.
Previous wording
Total loan growth net of deferred loan fees for the first quarter of 2026 was $42,970,000, which was up 0.99% from December 31, 2025. Contributing to the Company's loan growth in the first three months of 2026 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 loans is primarily attributable to continued economic growth and expansion in the Bank's primary market areas.
Current wording
Total loan growth net of deferred loan fees for the first half of 2026 was $129,446,000, or 2.97%, from December 31, 2025. Contributing to the Bank loan growth in the first half of 2026 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 Bank is seeing in the investor sector of 1-4 family. The increase in commercial and multi-family real estate loans is primarily attributable to continued economic growth and expansion in the Bank's primary market areas.
Previous wording
Because construction loans remain a meaningful portion of our portfolio, the Bank has implemented an additional layer of monitoring as it seeks to avoid advancing funds that exceed the present value of the collateral securing the loan. The responsibility for monitoring percentage of completion and distribution of funds tied to these completion percentages is now monitored and administered by a Credit Administration Department independent of the lending function. The Bank continues to seek to diversify its real estate portfolio as it seeks to lessen concentrations in any one type of loan.
Current wording
Because construction loans remain a meaningful portion of our portfolio, the Bank has implemented an additional layer of monitoring as it seeks to avoid advancing funds that exceed the present value of the collateral securing the loan. The responsibility for monitoring percentage of completion and distribution of funds tied to these completion percentages is with the Credit Administration Department, which is independent of the lending function. The Bank continues to seek to diversify its real estate portfolio as it seeks to lessen concentrations in any one type of loan.
Previous wording
The current expected credit losses (CECL) methodology requires us to estimate all expected credit losses over the remaining life of our loan portfolio when calculating our allowance for credit losses for loans. The provision for credit losses for loans represents a charge to earnings necessary to establish an allowance for credit losses that, in management’s evaluation, is adequate to provide coverage for all expected credit losses on loans.
Current wording
The current expected credit losses ("CECL") methodology requires us to estimate all expected credit losses over the remaining life of our loan portfolio when calculating our ACL for loans. The provision for credit losses for loans represents a charge to earnings necessary to establish an ACL that, in management’s evaluation, is adequate to provide coverage for all expected credit losses on loans.
Previous wording
The allowance for credit losses for loans represents the portion of the loan's amortized cost basis that we do not expect to collect due to credit losses over the loan's life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions considering macroeconomic forecasts. Loan losses are charged against the allowance when we believe the un-collectability of a loan balance is reasonably assured. Subsequent recoveries, if any, are credited to the allowance. The allowance for credit losses for loans is based on the loan's amortized cost basis, excluding accrued interest receivables, as we promptly charge off accrued interest receivable determined to be uncollectible. We determine the appropriateness of the allowance through quarterly discounted cash flow modeling of the loan portfolio which considers lending-related commitments and other relevant factors, including macroeconomic forecasts and historical loss rates. In future quarters, we may update information and forecasts that may cause significant changes in the estimate in those future quarters.
Current wording
The ACL for loans represents the portion of the loan's amortized cost basis that we do not expect to collect due to credit losses over the loan's life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions considering macroeconomic forecasts. Loan losses are charged against the allowance when we believe the uncollectibility of a loan balance is reasonably assured. Subsequent recoveries, if any, are credited to the allowance. The ACL for loans is based on the loan's amortized cost basis, excluding accrued interest receivables, as we promptly charge off accrued interest receivable determined to be uncollectible. We determine the appropriateness of the allowance through quarterly discounted cash flow modeling of the loan portfolio which considers lending-related commitments and other relevant factors, including macroeconomic forecasts and historical loss rates. In future quarters, we may update information and forecasts that may cause significant changes in the estimate in those future quarters.
Previous wording
Our allowance for credit losses for loans at March 31, 2026 reflects an amount deemed appropriate to adequately cover all expected future losses as of the date the allowance is determined based on our allowance for credit losses for loans assessment methodology. The allowance for credit losses for loans (net of charge-offs and recoveries) increased to $57,247,000 at March 31, 2026 from $55,034,000 at December 31, 2025, primarily due to a worsening economic outlook, deterioration in collateral values on some individually measured loans, and loan growth. The allowance for credit losses for loans was 1.30% of total loans outstanding at March 31, 2026 compared to 1.26% at December 31, 2025. The internally classified loans as a percentage of the allowance for credit losses for loans were 99.5% and 116.1% respectively, at March 31, 2026 and December 31, 2025. The decrease was primarily a result of improving credits in the commercial real estate segments.
Current wording
Our ACL for loans at June 30, 2026 reflects an amount deemed appropriate to adequately cover all expected future losses as of the date the allowance is determined based on our ACL for loans assessment methodology. The ACL for loans (net of charge-offs and recoveries) increased to $57,803,000 at June 30, 2026 from $55,034,000 at December 31, 2025, primarily driven by loan growth, declining local economic conditions, and deterioration in the collateral values of individually measured loans. The ACL for loans was 1.29% of total loans outstanding at June 30, 2026 compared to 1.26% at December 31, 2025. The allowance coverage ratio of non-performing loans was 204.0% and 194.3%, at June 30, 2026 and December 31, 2025, respectively. The improvement was primarily a result of the increase in our ACL.
Showing the first 40 of 70 pairs. Open the source sections for the rest.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
The non-performing asset ratio is calculated by taking the total of our loans that are 90 days or more past due and accruing interest, nonaccrual loans and other real estate owned and dividing that sum by our total assets outstanding.
Current report — wording carried from elsewhere
Loan fees of $8,075,000 are included in interest income for the period ended June 30, 2026. Loan fees of $7,737,000 are included in interest income for the period ended June 30, 2025.
Current report — wording carried from elsewhere
State income tax credits related to incentive loans at below market rates and tax exempt loans to municipalities.
Current report — wording carried from elsewhere
The tax equivalent adjustment has been computed using a 21% Federal tax rate.
Current report — wording carried from elsewhere
Annualized net interest income on a tax equivalent basis divided by average interest-earning assets.
Current report — wording carried from elsewhere
Average interest rate on interest-earning assets less average interest rate on interest-bearing liabilities.
Current report — wording carried from elsewhere
In estimating expected credit losses as of June 30, 2026, we utilized then available forecasts of macroeconomic variables over our reasonable and supportable horizon based on the review of a variety of forecasts of the U.S. economy provided by Moody's Analytics.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
On January 26, 2026 the Company's Board of Directors authorized an $8.0 million share repurchase program that commenced upon expiration of the previous program, which expired on March 31, 2026. This authorization remains in effect through March 31, 2027. As of this filing, the Company has not repurchased shares under the current repurchase program.