FIRST US BANCSHARES, INC.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
View on SEC.govAbout this filing
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.
Sep 30, 2026 · Filed Nov 5, 2026
FUSB$16.450.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001193125-26-337583
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001193125-26-449380
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 114 previous paragraphs and 122 current paragraphs.
67 unchanged; 36 reworded; 19 added; 10 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 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 (19)
Current report
Inflation remained elevated, with heightened energy costs contributing to renewed price pressures. The Consumer Price Index increased 3.7% during the twelve months ended September 30, 2026, compared with 3.4% during the twelve months ended August 31, 2026. Excluding food and energy, consumer prices increased 2.6% over the twelve months ended September 30, 2026. At its September 2026 meeting, the Federal Open Market Committee (the “FOMC”) increased the target range for the federal funds rate by 25 basis points from 3.75% to 4.00%. The FOMC cited continued economic expansion and elevated inflation in explaining its decision. The timing, magnitude and direction of future monetary policy actions remain uncertain.
Current report
Market interest rates, including U.S. Treasury yields, generally increased during the nine months ended September 30, 2026. The yield on the 10-year U.S. Treasury increased from approximately 4.18% at December 31, 2025 and 4.44% at June 30, 2026 to approximately 5.29% at September 30, 2026. Higher market rates may provide opportunities to improve yields on newly originated loans and investments, but may also increase funding costs, constrain borrowing demand and adversely affect the fair values of fixed-rate assets. The effects on the Company depend, in part, on the timing and extent of asset and liability repricing and changes in the composition of its balance sheet.
Current report
Uncertainty also remained elevated with respect to U.S. fiscal and trade policy, including the effects of elevated national debt, tariffs, and the potential for additional policy changes. Reports from businesses across Federal Reserve Districts continued to identify energy, transportation, insurance and tariff-related costs as sources of pressure on operating margins and customer pricing. Consumer spending remained uneven, with greater resilience among higher-income households and continued price sensitivity among other consumers. Geopolitical developments, including disruptions associated with conflicts in the Middle East and Europe, continued to create uncertainty regarding energy supplies, global commerce and economic activity. These conditions may affect business investment, consumer demand and the ability of borrowers to absorb higher costs.
Current report
In the Company’s local markets, competitive pressures for both loans and deposits remained elevated during the third quarter of 2026. Commercial lending activity remained measured as business customers assessed borrowing costs and broader economic and policy uncertainty. Expected project payoffs, particularly in multi-family residential and construction lending, contributed to a decline in total loans during the third quarter of 2026. These decreases were partially offset by continued growth in the Company’s indirect consumer portfolio.
Current report
The Company’s indirect lending platform continued to focus on borrowers at the higher end of the credit spectrum, with collateral primarily consisting of boats, recreational vehicles, campers, horse trailers and cargo trailers. Indirect consumer loans increased by $35.8 million, or 9.4%, during the nine months ended September 30, 2026, compared to December 31, 2025. The portfolio carried a weighted-average credit score at the time of funding of 785 as of September 30, 2026. Although this credit profile supports the Company’s underwriting strategy, demand for discretionary purchases and borrowers’ repayment capacity remain sensitive to employment conditions, household financial pressures and changes in the broader economy.
Current report
The Company’s net interest margin improved to 3.66% during the third quarter of 2026, compared with 3.56% during the second quarter, reflecting higher yields on loans and investment securities while average deposit costs remained relatively stable. Nevertheless, deposit competition, changes in market interest rates and differences in the timing of asset and liability repricing continue to present challenges to sustaining margin improvement. Management continues to monitor economic conditions, credit performance, collateral values and funding needs, while emphasizing disciplined pricing, underwriting and liquidity management. Adverse changes in economic conditions, credit quality, loan demand, competitive dynamics, deposit pricing, geopolitical developments, trade or fiscal policy, or interest rates could negatively affect the Company’s financial condition and results of operations.
Current report
Total loans decreased by $8.0 million, or 0.9%, as of September 30, 2026, compared to December 31, 2025. The decrease reflected substantial payoffs of real estate loans, including construction, multi-family and commercial real estate, partially offset by growth in indirect consumer loans. The commercial lending team remains strategically focused on building and maintaining commercial lending relationships that are expected to support future loan growth. Average total loans for the nine months ended September 30, 2026 were $854.3 million, an increase of $2.7 million, or 0.3%, compared to the corresponding period of 2025.
Current report
The Company’s indirect lending platform focuses on borrowers at the higher end of the credit spectrum, as reflected in the portfolio’s weighted average credit score at the time of funding of 785 as of September 30, 2026. Indirect consumer loans increased by $35.8 million, or 9.4%, during the nine months ended September 30, 2026, compared to December 31, 2025. Collateral primarily consists of boats, recreational vehicles, campers, horse trailers and cargo trailers.
Current report
The average yield on total loans was 5.94% for the nine months ended September 30, 2026, compared to 6.07% for the corresponding period of 2025.
Current report
Interest expense increased by $21 thousand during the nine months ended September 30, 2026 compared to the corresponding period of 2025. Changes in average balances increased interest expense by $499 thousand, primarily reflecting higher average balances of money market and savings deposits, partially offset by lower average balances of time deposits and borrowings. Changes in average rates reduced interest expense by $478 thousand, reflecting lower rates on demand deposits, money market and savings deposits, and borrowings, partially offset by higher rates on time deposits.
Current report
The Company’s net interest income increased by $530 thousand during the nine months ended September 30, 2026 compared to the corresponding period of 2025, with $514 thousand attributable to changes in average balances and $16 thousand attributable to changes in average yields and rates. Net interest margin decreased to 3.53% during the nine months ended September 30, 2026, compared to 3.57% during the corresponding period of 2025, reflecting lower loan yields that were partially offset by higher investment securities yields and lower deposit costs. Management continues to pursue opportunities to improve net interest margin; however, significant changes in market interest rates, particularly over a short period of time, could adversely affect the Company’s net interest income and net interest margin.
Current report
Non-interest expense totaled $22.7 million for the nine months ended September 30, 2026, compared to $21.8 million for the corresponding period of 2025, reflecting an increase of $0.9 million, or 4.1%. The increase resulted primarily from cost-of-living increases associated with salaries and employee benefits, increases in occupancy expense associated with expansion of the Company’s banking center footprint, as well as inflationary increases in various other expense categories. While management is focused on efforts to streamline business processes and improve the Company’s efficiency levels, the current inflationary environment is expected to put continued upward pressure on non-interest expense.
Current report
Net unrealized losses in the available-for-sale portfolio totaled $8.0 million, or 3.94% of the portfolio’s amortized cost, as of September 30, 2026, compared to $1.0 million, or 0.57% of amortized cost, as of December 31, 2025. The increase in net unrealized losses reflected changes in the interest rate environment, particularly increases in market rates in the mid- to long-term portion of the Treasury yield curve.
Current report
The Company purchased $46.4 million of securities classified as available-for-sale during the third quarter of 2026. These purchases increased the amount of securities exposed to subsequent changes in market interest rates. The newly acquired securities had net unrealized losses as of September 30, 2026, contributing to the increase in the portfolio’s overall net unrealized losses. Accordingly, the increase in dollar losses should also be considered in the context of a larger portfolio: available-for-sale securities at amortized cost increased by $33.3 million, or 19.7%, to $202.3 million as of September 30, 2026, compared to $169.0 million as of December 31, 2025. Net unrealized losses within the available-for-sale portfolio were reported, net of tax, in accumulated other comprehensive loss.
Current report
The Company’s total loan portfolio decreased by $8.0 million, or 0.9%, as of September 30, 2026, compared to December 31, 2025. The decrease reflected substantial payoffs of real estate loans, including construction, multi-family and commercial real estate, partially offset by growth in indirect consumer loans. The commercial lending team remains strategically focused on building and maintaining commercial lending relationships that are expected to support future loan growth. Average total loans for the nine months ended September 30, 2026 were $854.3 million, an increase of $2.7 million, or 0.3%, compared to the corresponding period of 2025.
Current report
The Company’s indirect lending platform focuses on borrowers at the higher end of the credit spectrum, as reflected in the portfolio’s weighted average credit score at the time of funding of 785 as of September 30, 2026. Indirect consumer loans increased by $35.8 million, or 9.4%, during the nine months ended September 30, 2026, compared to December 31, 2025. Collateral primarily consists of boats, recreational vehicles, campers, horse trailers and cargo trailers.
Current report
The average yield on total loans was 5.94% for the nine months ended September 30, 2026, compared to 6.07% for the corresponding period of 2025.
Current report
Total deposits decreased by $12.9 million, or 1.3%, during the nine months ended September 30, 2026, to $1.015 billion. This decrease reflected a $21.9 million reduction in wholesale brokered deposits, partially offset by a $9.0 million, or 1.0%, increase in all other deposits. The reduction in wholesale brokered deposits assisted management’s efforts to reduce overall deposit costs while maintaining an appropriate level of core funding.
Current report
For the nine months ended September 30, 2026, the average rate on total deposits was 2.05%, compared to 2.10% for the corresponding period of 2025.
Removed paragraphs (10)
Previous report
Market interest rates, including U.S. Treasury yields, remained volatile and generally increased during the first six months of 2026, with increases accelerating following the inception of the military conflict with Iran in February 2026. The yield on the 10-year U.S. Treasury increased from approximately 4.18% at December 31, 2025 to approximately 4.44% at June 30, 2026, after reaching higher levels during May. This increase in longer-term rates reflected resilient economic data, despite elevated inflation expectations, supply disruptions resulting from the conflict in the Middle East, tariff-related price pressures, and changing market expectations regarding the timing and direction of future monetary policy actions. Kevin Warsh assumed the role of chairman of the Federal Reserve and Chairman of the Federal Open Market Committee (the "FOMC") in May 2026. In this role, Chairman Warsh has created five task forces to reexamine all aspects of monetary policy decision making, including the nature and level of communication by the FOMC, management of the Federal Reserve’s balance sheet, data used by the FOMC, productivity and the job market, and inflation. The timing, magnitude and effects of any changes in the policies or priorities of the Federal Reserve or the FOMC cannot be predicted with certainty at this time. At both its June and July 2026 meetings, the Federal Reserve maintained the target range for the federal funds rate at 3.50% to 3.75% and continued to indicate that inflation remained elevated relative to its long-term objective.
Previous report
Uncertainty also remained elevated with respect to U.S. fiscal and trade policy, including the current and potential effects of tariffs implemented or announced by the Trump administration and the possibility of additional policy changes. Tariffs, higher energy costs, and other supply-related pressures may affect inflation, consumer demand, business investment, and global supply chains. Geopolitical risks, including the conflict involving Iran, continued unrest elsewhere in the Middle East, and the ongoing war in Ukraine, also contributed to broader global economic uncertainty. These factors may continue to affect business sentiment, commodity and energy markets, supply chains, financial markets, and overall economic activity.
Previous report
In the Company’s local markets, competitive pressures for both loans and deposits remained elevated during the six months ended June 30, 2026. Commercial lending activity remained measured as business customers continued to assess the effects of elevated borrowing costs, interest rate movements, geopolitical developments, trade policy, and broader economic uncertainty on their operations and investment decisions. Consumer spending trends remained mixed on a macroeconomic basis; however, the Company continued to experience growth in consumer indirect lending, primarily within higher-credit-quality segments.
Previous report
The competitive environment, together with elevated funding costs and ongoing economic, geopolitical, trade, and policy uncertainty, continues to present challenges to maintaining and improving the Company’s net interest margin. Management continues to closely monitor these conditions and believes the Company remains well positioned to respond to a range of economic outcomes. However, adverse changes in economic conditions, credit quality, loan demand, competitive dynamics, deposit pricing, geopolitical developments, trade or fiscal policy, or interest rate movements could negatively affect the Company’s financial condition and results of operations.
Previous report
Non-interest expense totaled $15.0 million for the six months ended June 30, 2026, compared to $14.4 million for the six months ended June 30, 2025. The increased expense resulted primarily from inflationary increases in various expense categories, as well as increased occupancy expenses associated with expansion of the Company’s banking center footprint.
Previous report
Total loans increased by $7.6 million, or 0.9%, as of June 30, 2026, compared to December 31, 2025. Loan growth in the construction and consumer indirect categories was partially offset by decreases in other categories, most notably in non-residential commercial real estate. The decrease in commercial real estate loans resulted primarily from the payoff of real estate projects that were anticipated in the normal course of the project life cycle. The growth in the construction category was consistent with economic growth in the Company’s service territories, while the growth in the indirect category was consistent with typical seasonal trends. The indirect lending platform focuses on consumer lending at the higher end of the credit spectrum. Collateral financed in the indirect portfolio primarily includes boats, recreational vehicles, campers, horse trailers and cargo trailers. The weighted average credit score of indirect loans funded was 785 as of June 30, 2026.
Previous report
The Company remains focused on efforts in multiple commercial and consumer loan categories, seeking to enhance diversification while growing the portfolio. For the six months ended June 30, 2026, average total loan balances increased by $11.3 million, or 1.3%, compared to the six months ended June 30, 2025.
Previous report
Interest expense increased by $0.4 million, comparing the six months ended June 30, 2026 to the six months ended June 30, 2025. The increase resulted primarily from an increase in volume associated with money market accounts, and to a lesser extent, increased rates on both money market and time deposits. These increases were partially offset by reductions in average balances of time deposits and borrowings, as well as rates associated with demand deposits, time deposits and borrowings.
Previous report
The Company’s net interest income and net interest margin during the six months ended June 30, 2026 continued to be impacted by variability in the interest rate environment. Notably, between September and December 2025, the federal funds rate was reduced by 75 basis points, and generally, the Company’s interest-earning assets repriced downward more quickly than interest-bearing liabilities, reducing the Company’s net interest margin to 3.46% during the six months ended June 30, 2026, compared to 3.56% during the six months ended June 30, 2025. While management is continuing efforts to improve net interest margin, the results of these efforts cannot be fully predicted. Should market interest rates increase or decrease at significant levels, particularly over a short period of time, the Company’s net interest margin and net interest income could be negatively impacted.
Previous report
Net unrealized losses in the available-for-sale portfolio totaled $2.9 million as of June 30, 2026, compared to $1.0 million as of December 31, 2025. The increase in unrealized losses in the portfolio resulted from changes in the interest rate environment, in particular, increases in market rates, particularly in the mid- to long-term part of the Treasury curve between December 31, 2025 and June 30, 2026, as well as the sale of two residential mortgage-backed securities during the period. Management elected to sell these securities in an effort to realize gains, while providing cash flows that assisted in the reduction of wholesale brokered deposits. Net unrealized losses within the available-for-sale portfolio were recognized, net of tax, in accumulated other comprehensive loss.
Reworded paragraphs (36)
Previous wording
The Bank conducts a general commercial banking business and offers banking services such as demand, savings, individual retirement account and time deposits, personal and commercial loans, safe deposit box services and remote deposit capture. The Bank operates and serves its customers through 16 full-service banking offices located in Birmingham, Butler, Calera, Centreville, Daphne, Gilbertown, Grove Hill, Harpersville, Jackson, Thomasville, Tuscaloosa and Woodstock, Alabama; Knoxville and Powell, Tennessee; and Rose Hill, Virginia; as well as loan production offices in Mobile, Alabama and the Chattanooga, Tennessee area. The Bank provides a wide range of commercial banking services to small- and medium-sized businesses, property managers, business executives, professionals and other individuals. The Bank also performs indirect lending through third-party retailers and currently conducts this lending in 17 states, including Alabama, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Virginia. The Bank is the Company’s only reportable operating segment upon which management makes decisions regarding how to allocate resources and assess performance.
Current wording
The Bank conducts a general commercial banking business and offers banking services such as demand, savings, individual retirement account and time deposits, personal and commercial loans, safe deposit box services and remote deposit capture. The Bank operates and serves its customers through 16 full-service banking offices located in Birmingham, Butler, Calera, Centreville, Daphne, Gilbertown, Grove Hill, Harpersville, Jackson, Thomasville, Tuscaloosa and Woodstock, Alabama; Knoxville and Powell, Tennessee; and Rose Hill, Virginia; as well as a loan production office in Mobile, Alabama. The Bank provides a wide range of commercial banking services to small- and medium-sized businesses, property managers, business executives, professionals and other individuals. The Bank also performs indirect lending through third-party retailers and currently conducts this lending in 17 states, including Alabama, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Virginia. The Bank is the Company’s only reportable operating segment upon which management makes decisions regarding how to allocate resources and assess performance.
Previous wording
The emphasis of this discussion is a comparison of assets, liabilities and shareholders’ equity as of June 30, 2026 to December 31, 2025, while comparing income and expense for the six months ended June 30, 2026 and 2025. All yields and ratios presented and discussed herein are recorded and presented on the accrual basis and not on the tax-equivalent basis, unless otherwise indicated.
Current wording
The emphasis of this discussion is a comparison of assets, liabilities and shareholders’ equity as of September 30, 2026 to December 31, 2025, while comparing income and expense for the nine months ended September 30, 2026 and 2025. All yields and ratios presented and discussed herein are recorded and presented on the accrual basis and not on the tax-equivalent basis, unless otherwise indicated.
Previous wording
During the six months ended June 30, 2026, the banking industry continued to operate in an environment characterized by elevated economic uncertainty, inflation remaining above the Federal Reserve’s long-term objective, and generally stable labor market conditions. U.S. economic activity continued to expand during the first half of 2026. According to the U.S. Bureau of Economic Analysis’ advance estimate released on July 30, 2026, real gross domestic product ("GDP") increased at an annual rate of 1.5% during the second quarter of 2026, compared with 2.1% during the first quarter of 2026. This modest second-quarter growth reflected increases in consumer spending, investments and exports that were partially offset by decreased government spending.
Current wording
During the nine months ended September 30, 2026, the banking industry continued to operate in an environment characterized by elevated economic uncertainty, persistent inflationary pressures, rising market interest rates and generally stable unemployment levels. U.S. economic activity continued to expand. According to the U.S. Bureau of Economic Analysis’ advance estimate released on October 29, 2026, real gross domestic product (“GDP”) increased at an annual rate of 3.4% during the third quarter of 2026, compared with revised growth of 2.2% and 2.5% during the second and first quarters of 2026, respectively. Third quarter growth reflected increases in investments, and consumer and government spending, partially offset by a decrease in exports. This is in comparison to second-quarter growth that reflected increases in consumer spending, investment and exports, partially offset by increased imports. Labor market conditions remained relatively stable, although hiring was subdued, with the unemployment rate at 4.2% in September 2026.
Previous wording
The Company earned net income of $1.8 million, or $0.31 per diluted common share, during the three months ended June 30, 2026, compared to $0.2 million, or $0.03 per diluted common share, for the three months ended June 30, 2025. For the six months ended June 30, 2026, net income totaled $3.7 million, or $0.64 per diluted share, compared to $1.9 million, or $0.32 per diluted share, for the six months ended June 30, 2025. The increase in net income comparing both the three months and six months ended June 30, 2026 to the corresponding periods of 2025 resulted primarily from a decrease in the Company’s provision for credit losses on loans and leases, and to a lesser extent, realized gains on the sale of investment securities recorded during the 2026 periods. These increases in net income were partially offset by increases in non-interest expense comparing the six months ended June 30, 2026 to the six months ended June 30, 2025.
Current wording
The Company earned net income of $2.0 million, or $0.36 per diluted share, during the three months ended September 30, 2026, compared to $1.9 million, or $0.32 per diluted share, for the three months ended September 30, 2025. For the nine months ended September 30, 2026, net income totaled $5.7 million, or $1.00 per diluted share, compared to $3.9 million, or $0.64 per diluted share, for the nine months ended September 30, 2025. Net income for the three months ended September 30, 2026 remained relatively stable compared to the corresponding period of 2025, with higher net interest income and non-interest income largely offset by higher non-interest expense. The increase in net income for the nine months ended September 30, 2026 compared to the corresponding period of 2025 resulted primarily from a decrease in the provision for credit losses, along with higher net interest income and non-interest income, partially offset by higher non-interest expense.
Previous wording
Summarized condensed consolidated statements of operations are included below for the three and six months ended June 30, 2026 and 2025.
Current wording
Summarized condensed consolidated statements of operations are included below for the three and nine months ended September 30, 2026 and 2025.
Previous wording
The discussion that follows summarizes the most significant activity that drove changes in the Company’s operating results during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025.
Current wording
The discussion that follows summarizes the most significant activity that drove changes in the Company’s operating results during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025.
Previous wording
Net interest income increased by $0.3 million, or 1.9%, comparing the six months ended June 30, 2026 to the six months ended June 30, 2025. The increase resulted from growth in average interest-earning asset balances comparing the two periods. Average interest-earning assets increased by $48.2 million, or 4.6%, comparing the six months ended June 30, 2026 to the corresponding period of 2025. Earning asset growth was reflected in total loans, investment securities, federal funds sold and interest-bearing deposits with other financial institutions. The increase in interest income was partially offset by volume-related increases in interest expense associated with interest-bearing liabilities. While the increase in earning assets was favorable to the Company’s net interest income, net interest margin decreased as the average yield on interest-earnings assets declined at a faster pace than the average rate on interest-bearing liabilities. Net interest margin was 3.46% for the six months ended June 30, 2026, compared to 3.56% for the six months ended June 30, 2025.
Current wording
Net interest income increased by $0.5 million, or 1.9%, comparing the nine months ended September 30, 2026 to the nine months ended September 30, 2025. The increase resulted primarily from growth in average interest-earning assets, which increased by $33.0 million, or 3.1%, comparing the two periods. Earning asset growth was primarily attributable to higher average balances of investment securities and interest-bearing deposits with other financial institutions. The increase in interest income was partially offset by a modest increase in interest expense, as the effect of higher average interest-bearing deposit balances was largely offset by lower average deposit rates and reduced borrowing costs. While earning asset growth supported the increase in net interest income, net interest margin decreased as the average yield on interest-earning assets declined from 5.63% to 5.52%, while the average cost of total funding liabilities declined from 2.15% to 2.09%. Net interest margin was 3.53% for the nine months ended September 30, 2026, compared to 3.57% for the nine months ended September 30, 2025.
Previous wording
For the six months ended June 30, 2026, the Company recorded a provision for credit losses of $1.2 million, compared to $3.2 million for the six months ended June 30, 2025. The decreased provision comparing the first half of 2026 to the corresponding period of 2025 resulted primarily from provisioning for specifically identified commercial loans in 2025. The credit issues associated with additional provisioning on these loans were resolved later in 2025, and accordingly, the same level of provisioning was not repeated during the six months ended June 30, 2026. As of June 30, 2026, the Company’s allowance for credit losses ("ACL") on loans and leases as a percentage of total loans was 1.26%, compared to 1.25% as of December 31, 2025.
Current wording
For the nine months ended September 30, 2026, the Company recorded a provision for credit losses of $1.8 million, compared to $3.8 million for the nine months ended September 30, 2025. The year-over-year decrease resulted primarily from provisioning for specifically identified commercial loans in 2025. The credit issues associated with the additional provisioning on these loans were resolved by the end of 2025 and, accordingly, the same level of provisioning was not repeated during the nine months ended September 30, 2026. The Company’s ACL on loans and leases totaled $11.0 million, or 1.30% of total loans, as of September 30, 2026, compared to $10.7 million, or 1.25%, as of December 31, 2025. The increase in the ACL as a percentage of total loans during the nine-months ended September 30, 2026 reflected changes in loan portfolio composition, including more prominent growth in indirect consumer loans, which require higher credit allowances than other loan categories, as well as updated economic forecast data released during the third quarter of 2026. While management believes that the ACL is adequate to absorb credit losses within the Company’s loan portfolio, inherent uncertainty exists regarding the ultimate impact of geopolitical and economic matters, including prospective inflation, unemployment levels, tariffs and consumer affordability.
Previous wording
Non-interest income totaled $2.2 million for the six months ended June 30, 2026, compared to $1.7 million for the six months ended June 30, 2025. The increase resulted primarily from $0.5 million in gains on sale of investment securities during the six months ended June 30, 2026 that did not occur during the corresponding period of 2025.
Current wording
Non-interest income totaled $3.1 million for the nine months ended September 30, 2026, compared to $2.6 million for the nine months ended September 30, 2025. The increase resulted primarily from $0.5 million in gains on sale of investment securities during the nine months ended September 30, 2026 that did not occur during the corresponding period of 2025.
Previous wording
Non-interest expense totaled $15.0 million during the six months ended June 30, 2026, compared to $14.4 million during the six months ended June 30, 2025. The increased expense resulted primarily from an increase in occupancy expenses associated with expansion of the Company’s banking center footprint, as well as inflationary increases in various other expense categories.
Current wording
Non-interest expense totaled $22.7 million for the nine months ended September 30, 2026, compared to $21.8 million for the corresponding period of 2025, reflecting an increase of $0.9 million, or 4.1%. The increase resulted primarily from cost-of-living increases associated with salaries and employee benefits, increases in occupancy expense associated with expansion of the Company’s banking center footprint, as well as inflationary increases in various other expense categories.
Previous wording
As of June 30, 2026, the Company’s assets totaled $1,147.6 million, compared to $1,154.8 million as of December 31, 2025, a decrease of 0.6%.
Current wording
As of September 30, 2026, the Company’s assets totaled $1,164.8 million, compared to $1,154.8 million as of December 31, 2025, an increase of 0.9%.
Previous wording
Nonperforming assets, including loans in non-accrual status, other real estate owned, and repossessed assets, totaled $1.9 million as of June 30, 2026, an increase from $1.6 million as of December 31, 2025. As a percentage of total assets, nonperforming assets increased to 0.17% as of June 30, 2026, compared to 0.14% as of December 31, 2025. Net charge-offs as a percentage of average loans totaled 0.27% during the six months ended June 30, 2026, compared to 0.47% during the six months ended June 30, 2025. The decrease in net charge-offs comparing the six months ended June 30, 2026, to the six months ended June 30, 2025 was due to the partial charge off in the six months ended June 30, 2025 of one individually evaluated commercial loan totaling $1.2 million that was not repeated in the six months ended June 30, 2026.
Current wording
Nonperforming assets, including loans in non-accrual status, other real estate owned, and repossessed assets, totaled $1.7 million as of September 30, 2026, compared to $1.6 million as of December 31, 2025. As a percentage of total assets, nonperforming assets represented 0.14% of total assets as of both September 30, 2026 and December 31, 2025. For the nine months ended September 30, 2026, annualized net charge-offs as a percentage of average loans were 0.25%, compared to 0.52% for the corresponding period of 2025. The year-over-year improvement reflected, in part, the absence of a $2.2 million charge-off recorded for an individually evaluated commercial loan in 2025.
Previous wording
Total deposits decreased by $30.0 million, or 2.9%, during the six months ended June 30, 2026. Included in this decrease were $20.1 million in wholesale brokered time deposits that matured and were not replaced. The remaining decrease was comprised of reductions of $19.2 million in retail time deposits and $4.0 million in non-interest-bearing demand deposits, partially offset by an increase in interest-bearing demand deposits of $13.3 million. The decrease in wholesale deposits, as well as other interest-bearing time deposits, assisted management’s efforts to reduce overall deposit costs, while maintaining an appropriate level of core funding. Core deposits, which exclude time deposits of $250 thousand or more and all wholesale brokered deposits, totaled $835.2 million, or 83.7% of total deposits, as of June 30, 2026, compared to $838.3 million, or 81.6% of total deposits, as of December 31, 2025.
Current wording
Total deposits were $1.015 billion as of September 30, 2026, reflecting a decrease of $12.9 million, or 1.3%, compared to December 31, 2025. The decrease reflected a $21.9 million reduction in wholesale brokered deposits, partially offset by an increase of $9.0 million, or 1.0%, in all other deposits. The reduction in wholesale brokered deposits supported management’s efforts to reduce overall deposit costs while maintaining an appropriate level of core funding. Non-interest-bearing deposits increased by $8.5 million to $162.3 million, or 16.0% of total deposits, as of September 30, 2026, compared to $153.8 million, or 15.0% of total deposits, as of December 31, 2025. Core deposits, which exclude time deposits of $250 thousand or more and all wholesale brokered deposits, totaled $844.6 million, or 83.2% of total deposits, as of September 30, 2026, compared to $838.3 million, or 81.6% of total deposits, as of December 31, 2025. The average rate on total deposits decreased to 2.05% for the nine months ended September 30, 2026, compared to 2.10% for the corresponding period of 2025.
Previous wording
As of June 30, 2026, the Company held cash, federal funds sold and securities purchased under reverse repurchase agreements totaling $63.8 million, or 5.6% of total assets, compared to $78.4 million, or 6.8% of total assets, as of December 31, 2025. Investment securities, including both the available-for-sale and held-to-maturity portfolios, totaled $166.0 million as of June 30, 2026, compared to $168.5 million as of December 31, 2025. During the six months ended June 30, 2026, the Company purchased $25.4 million of investment securities at market rates in existence at the time of purchase. In addition, the Company sold investment securities with a principal balance totaling $7.1 million and recorded a gain on sale totaling $0.5 million during the six months ended June 30, 2026. These purchases and sales, combined with the maturity and paydown of investment securities at lower rates, have led to continued improvement in yield on the portfolio. The average yield on investment securities, including both available-for-sale and held to maturity securities, totaled 3.92% for the six months ended June 30, 2026, compared to 3.45% for the six months ended June 30, 2025. As of June 30, 2026, the expected average life of securities in the investment portfolio was 3.6 years, compared to 3.7 years as of December 31, 2025.
Current wording
As of September 30, 2026, the Company held cash, federal funds sold and securities purchased under reverse repurchase agreements totaling $66.4 million, or 5.7% of total assets, compared to $78.4 million, or 6.8% of total assets, as of December 31, 2025. Investment securities, including both the available-for-sale and held-to-maturity portfolios, totaled $194.7 million as of September 30, 2026, compared to $168.5 million as of December 31, 2025. During the nine months ended September 30, 2026, the Company purchased $71.4 million in investment securities. These purchases, combined with the maturity and paydown of investment securities at lower rates, have led to continued improvement in yield on the portfolio. For the nine months ended September 30, 2026, the average yield on investment securities was 4.00%, compared to 3.52% for the corresponding period of 2025. As of September 30, 2026, the expected average life of securities in the investment portfolio was 4.0 years, compared to 3.7 years as of December 31, 2025.
Previous wording
As of June 30, 2026, shareholders’ equity totaled $104.3 million, or 9.09% of total assets, compared to $105.6 million, or 9.15% of total assets, as of December 31, 2025. While earnings, net of dividends paid, increased shareholders’ equity during the six months ended June 30, 2026, the increase was fully offset by share repurchases, combined with an increase in the Company’s accumulated other comprehensive loss resulting from the increasing interest rate environment and the sale of investment securities in gain positions during the period.
Current wording
As of September 30, 2026, shareholders’ equity totaled $96.6 million, or 8.29% of total assets, compared to $105.6 million, or 9.15% of total assets, as of December 31, 2025. While earnings, net of dividends paid, increased shareholders’ equity during the nine months ended September 30, 2026, the increase was fully offset by share repurchases during the period, combined with an increase in the Company’s accumulated other comprehensive loss resulting from increases in market interest rates comparing September 30, 2026 to December 31, 2025.
Previous wording
During both the six months ended June 30, 2026 and 2025, the Company declared cash dividends totaling $0.14 per share on its common stock.
Current wording
During both the nine months ended September 30, 2026 and 2025, the Company declared cash dividends totaling $0.21 per share on its common stock.
Previous wording
During the six months ended June 30, 2026, the Company completed the repurchase of 237,500 shares of its common stock at a weighted average price of $15.33 per share. The repurchases were completed under the Company’s previously announced share repurchase program, which was most recently expanded during the fourth quarter of 2025. As of June 30, 2026, 1,547,313 shares remained available for repurchase under the program.
Current wording
During the nine months ended September 30, 2026, the Company completed the repurchase of 627,500 shares of its common stock at a weighted average price of $16.02 per share. The repurchases were completed under the Company’s previously announced share repurchase program, which was most recently expanded during the fourth quarter of 2025. As of September 30, 2026, 1,157,313 shares remained available for repurchase under the program.
Previous wording
During the six months ended June 30, 2026, the Bank continued to maintain capital ratios at higher levels than required to be considered a “well-capitalized” institution under applicable banking regulations. As of June 30, 2026, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 10.85%. Its total capital ratio was 12.02%, and its Tier 1 leverage ratio was 9.16%.
Current wording
During the nine months ended September 30, 2026, the Bank continued to maintain capital ratios at higher levels than required to be considered a “well-capitalized” institution under applicable banking regulations. As of September 30, 2026, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 11.00%. Its total capital ratio was 12.20%, and its Tier 1 leverage ratio was 9.16%.
Previous wording
The following tables show the average balances of each principal category of assets, liabilities and shareholders’ equity for the three and six months ended June 30, 2026 and 2025. Additionally, the tables provide an analysis of interest revenue or expense associated with each category, along with the accompanying yield or rate percentage. Net interest margin is calculated for each period presented as net interest income divided by average total interest-earning assets.
Current wording
The following tables show the average balances of each principal category of assets, liabilities and shareholders’ equity for the three and nine months ended September 30, 2026 and 2025. Additionally, the tables provide an analysis of interest revenue or expense associated with each category, along with the accompanying yield or rate percentage. Net interest margin is calculated for each period presented as net interest income divided by average total interest-earning assets.
Previous wording
Interest income increased by $0.7 million, comparing the six months ended June 30, 2026 to the six months ended June 30, 2025. The increase in interest income resulted from a $1.1 million increase attributable to growth in average interest-earning assets, partially offset by a $0.4 million decrease attributable to lower average yields on interest-earning assets. With the exception of investment securities, yields in all earning asset categories declined comparing the six months ended June 30, 2026 to the six months ended June 30, 2025, as short-term interest rates generally declined comparing the two periods.
Current wording
Interest income increased by $551 thousand during the nine months ended September 30, 2026 compared to the corresponding period of 2025. The increase resulted from a $1.0 million increase attributable to growth in average interest-earning assets, partially offset by a $461 thousand decrease attributable to changes in average yields. With the exception of investment securities, average yields declined in each earning asset category compared to the corresponding period of 2025.
Previous wording
For the six months ended June 30, 2026, the Company recorded a provision for credit losses of $1.2 million, compared to $3.2 million for the six months ended June 30, 2025. The decreased provision comparing the first six months of 2026 to the corresponding period of 2025 resulted primarily from provisioning for specifically identified commercial loans in 2025. The credit issues associated with additional provisioning on these loans were resolved later in 2025 and, accordingly, the same level of provisioning was not repeated during the six months ended June 30, 2026. Net charge-offs totaled $1.1 million and $2.0 million for the six months ended June 30, 2026 and 2025, respectively.
Current wording
For the nine months ended September 30, 2026, the provision for credit losses totaled $1.8 million, compared to $3.8 million for the corresponding period of 2025. The decreased provision comparing the first nine months of 2026 to the corresponding period of 2025 resulted primarily from provisioning for specifically identified commercial loans in 2025. The credit issues associated with the additional provisioning on these loans were resolved later in 2025 and, accordingly, the same level of provisioning was not repeated during the nine months ended September 30, 2026. Net charge-offs totaled $1.6 million and $3.3 million for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
As of June 30, 2026, the Company’s ACL as a percentage of total loans and leases was 1.26%, compared to 1.25% as of December 31, 2025. Comparing June 30, 2026 to December 31, 2025, the ACL was increased by changes in economic forecasting associated with the Company’s credit forecasting model, including the expected impact of higher inflation and a higher Federal funds rate. While we believe that the methodologies and calculations that have been used in the determination of the ACL are adequate, the determination of the appropriateness of the ACL is complex and requires judgment by management about the effects of matters that are inherently uncertain. Factors beyond our control, such as changes in economic forecasts related to the national economy, changes in consumer behavior, or economic deterioration in service areas in which the Company operates, may negatively and materially affect asset quality and the adequacy of the ACL, as well as the resulting provision for credit losses.
Current wording
As of September 30, 2026, the Company’s ACL as a percentage of total loans and leases was 1.30%, compared to 1.25% as of December 31, 2025. Comparing September 30, 2026 to December 31, 2025, the increase in the ACL reflected changes in loan portfolio composition, including more prominent growth in indirect consumer loans, which require higher credit allowances than other loan categories, as well as changes in economic forecasting associated with the Company’s credit forecasting model, including the expected impact of higher inflation and a higher Federal funds rate. While we believe that the methodologies and calculations that have been used in the determination of the ACL are adequate, the determination of the appropriateness of the ACL is complex and requires judgment by management about the effects of matters that are inherently uncertain. Factors beyond our control, such as changes in economic forecasts related to the national economy, changes in consumer behavior, or economic deterioration in service areas in which the Company operates, may negatively and materially affect asset quality and the adequacy of the ACL, as well as the resulting provision for credit losses.
Previous wording
Non-interest income increased to $2.2 million for the six months ended June 30, 2026, compared to $1.7 million for the six months ended June 30, 2025, primarily due to gains on the sale of investment securities totaling $0.5 million during the 2026 period. Management continues to evaluate opportunities to add non-interest revenue streams and grow existing streams; however, with the exception of sales of investment securities which cannot be predicted with certainty, significant variation in non-interest income is not expected in the near term.
Current wording
Non-interest income increased to $3.1 million for the nine months ended September 30, 2026, compared to $2.6 million for the nine months ended September 30, 2025, primarily due to gains on the sale of investment securities totaling $0.5 million during the 2026 period. Management continues to evaluate opportunities to add non-interest revenue streams and grow existing streams; however, with the exception of sales of investment securities which cannot be predicted with certainty, significant variation in non-interest income is not expected in the near term.
Previous wording
The provision for income taxes was $1.0 million and $0.6 million for the six months ended June 30, 2026 and 2025, respectively. The Company’s effective tax rate was 21.3% and 22.6%, respectively, for the same periods.
Current wording
The provision for income taxes was $1.6 million and $1.1 million for the nine months ended September 30, 2026 and 2025, respectively. The Company’s effective tax rate was 21.6% and 22.9%, respectively, for the same periods.
Previous wording
The investment securities portfolio is used by management to provide liquidity, to generate interest income and for use as collateral for public deposits and wholesale funding. Risk and return can be adjusted by altering the duration, composition and/or balance of the portfolio. The expected average life of securities in the investment portfolio was 3.6 years and 3.7 years as of June 30, 2026 and December 31, 2025, respectively.
Current wording
The investment securities portfolio is used by management to provide liquidity, to generate interest income and for use as collateral for public deposits and wholesale funding. Risk and return can be adjusted by altering the duration, composition and/or balance of the portfolio. The expected average life of securities in the investment portfolio was 4.0 years and 3.7 years as of September 30, 2026 and December 31, 2025, respectively.
Previous wording
Available-for-sale securities are recorded at estimated fair value, with unrealized gains or losses recognized, net of taxes, in accumulated other comprehensive loss, a separate component of shareholders’ equity. As of June 30, 2026, available-for-sale securities totaled $165.6 million, or 99.8% of the total investment portfolio, compared to $168.1 million, or 99.7% of the total investment portfolio, as of December 31, 2025. Available-for-sale securities consisted of residential and commercial mortgage-backed securities, U.S. Treasury securities, corporate bonds, obligations of U.S. government-sponsored agencies, and obligations of state and political subdivisions.
Current wording
Available-for-sale securities are recorded at estimated fair value, with unrealized gains or losses recognized, net of taxes, in accumulated other comprehensive loss, a separate component of shareholders’ equity. As of September 30, 2026, available-for-sale securities totaled $194.4 million, or 99.8% of the total investment portfolio, compared to $168.1 million, or 99.7% of the total investment portfolio, as of December 31, 2025. Available-for-sale securities consisted of residential and commercial mortgage-backed securities, U.S. Treasury securities, corporate bonds, obligations of U.S. government-sponsored agencies, and obligations of state and political subdivisions.
Previous wording
The Company’s total loan portfolio increased by $7.6 million, or 0.9%, as of June 30, 2026, compared to December 31, 2025. The tables below summarize loan balances by portfolio category, as well as the ACL, as of the end of each of the most recent five quarters as of June 30, 2026:
Current wording
The tables below summarize loan balances by portfolio category, as well as the ACL, as of the end of each of the most recent five quarters as of September 30, 2026:
Previous wording
(1) Non-owner occupied office consists of 15 loans with an average loan size of $2.2 million. The properties are located in Tuscaloosa, AL, Birmingham, AL, and Chattanooga, TN.
Current wording
(1) Non-owner occupied office consisted of 15 loans with an average loan size of $2.2 million as of September 30, 2026. As of December 31, 2025, non-owner occupied office consisted of 16 loans with an average loan size of $2.1 million. For both dates presented, the properties were located in Tuscaloosa, AL, Birmingham, AL, and Chattanooga, TN.
Previous wording
Total deposits decreased by $30.0 million, or 2.9%, during the six months ended June 30, 2026. Included in this decrease were $20.1 million in wholesale brokered time deposits that matured and were not replaced. The remaining decrease was comprised of reductions of $19.2 million in retail time deposits and $4.0 million in non-interest-bearing demand deposits, partially offset by an increase in interest-bearing demand deposits of $13.3 million. The decrease in wholesale deposits, as well as other interest-bearing time deposits, assisted management’s efforts to reduce overall deposit costs, while maintaining an appropriate level of core funding. Core deposits, which exclude time deposits of $250 thousand or more and all wholesale brokered deposits, totaled $835.2 million, or 83.7% of total deposits, as of June 30, 2026, compared to $838.3 million, or 81.6% of total deposits, as of December 31, 2025. The average rate on deposits totaled 2.08% during the six months ended June 30, 2026, compared to 2.07% during the six months ended June 30, 2025. While deposit costs increased slightly comparing the two six-month periods, the more recent trend in 2026 was favorable. Deposit costs decreased to 1.98% during the three months ended June 30, 2026, compared to 2.18% during the three months ended March 31, 2026, and 2.08% during the three months ended June 30, 2025.
Current wording
Non-interest-bearing demand deposits totaled $162.3 million, or 16.0% of total deposits, as of September 30, 2026, compared to $153.8 million, or 15.0% of total deposits, as of December 31, 2025. Core deposits, which exclude time deposits of $250 thousand or more and all wholesale brokered deposits, totaled $844.6 million, or 83.2% of total deposits, as of September 30, 2026, compared to $838.3 million, or 81.6% of total deposits, as of December 31, 2025.
Previous wording
Other interest-bearing liabilities that are used by the Company as an alternative source of funds consist of federal funds purchased, securities sold under agreements to repurchase, FHLB advances, and subordinated debt. As of June 30, 2026, other interest-bearing liabilities totaled 4.1% of total interest-bearing liabilities, compared to 1.2% as of December 31, 2025.
Current wording
Other interest-bearing liabilities that are used by the Company as an alternative source of funds consist of federal funds purchased, securities sold under agreements to repurchase, FHLB advances, and subordinated debt. As of September 30, 2026, other interest-bearing liabilities totaled 4.6% of total interest-bearing liabilities, compared to 1.2% as of December 31, 2025.
Previous wording
As of June 30, 2026, shareholders’ equity totaled $104.3 million, or 9.09% of total assets, compared to $105.6 million, or 9.15% of total assets, as of December 31, 2025. While earnings, net of dividends paid, increased shareholders’ equity during the six months ended June 30, 2026, the increase was fully offset by share repurchases, combined with an increase in the Company’s accumulated other comprehensive loss resulting from the increasing interest rate environment and the sale of investment securities in gain positions during the period. During both the six months ended June 30, 2026 and 2025, the Company declared cash dividends totaling $0.14 per share on its common stock.
Current wording
As of September 30, 2026, shareholders’ equity totaled $96.6 million, or 8.29% of total assets, compared to $105.6 million, or 9.15% of total assets, as of December 31, 2025. While earnings, net of dividends paid, increased shareholders’ equity during the nine months ended September 30, 2026, the increase was fully offset by share repurchases during the period, combined with an increase in the Company’s accumulated other comprehensive loss resulting from increases in market interest rates comparing September 30, 2026 to December 31, 2025. During both the nine months ended September 30, 2026 and 2025, the Company declared cash dividends totaling $0.21 per share on its common stock. In addition, during the nine months ended September 30, 2026, the Company completed the repurchase of 627,500 shares of its common stock at a weighted average price of $16.02 per share. The repurchases were completed under the Company’s previously announced share repurchase program. As of September 30, 2026, 1,157,313 shares remained available for repurchase under the program.
Previous wording
The asset portion of the balance sheet provides liquidity primarily from the following sources: (1) excess cash and interest-bearing deposits in banks, (2) federal funds sold and securities purchased under reverse repurchase agreements, (3) principal payments and maturities of loans and (4) principal payments and maturities from the investment portfolio. Loans maturing or repricing in one year or less amounted to $133.2 million as of June 30, 2026 and $274.7 million as of December 31, 2025. Investment securities forecasted to mature or reprice in one year or less were estimated to be $22.6 million and $27.5 million as of June 30, 2026 and December 31, 2025, respectively.
Current wording
The asset portion of the balance sheet provides liquidity primarily from the following sources: (1) excess cash and interest-bearing deposits in banks, (2) federal funds sold and securities purchased under reverse repurchase agreements, (3) principal payments and maturities of loans and (4) principal payments and maturities from the investment portfolio. Loans maturing or repricing in one year or less amounted to $157.1 million as of September 30, 2026 and $274.7 million as of December 31, 2025. Investment securities forecasted to mature or reprice in one year or less were estimated to be $22.5 million and $27.5 million as of September 30, 2026 and December 31, 2025, respectively.
Previous wording
Although some securities in the investment portfolio have final maturities exceeding 10 years, a substantial percentage of the portfolio provides monthly principal and interest payments and consists of securities that are readily marketable and easily convertible into cash on short notice. The investment securities portfolio had an estimated average life of 3.6 years and 3.7 years as of June 30, 2026 and December 31, 2025, respectively. However, management does not rely solely upon the investment portfolio to generate cash flows to fund loans, capital expenditures, dividends, debt repayment and other cash requirements. These activities are also funded by cash flows from loan payments, as well as increases in deposits and short-term borrowings.
Current wording
Although some securities in the investment portfolio have final maturities exceeding 10 years, a substantial percentage of the portfolio provides monthly principal and interest payments and consists of securities that are readily marketable and easily convertible into cash on short notice. The investment securities portfolio had an estimated average life of 4.0 years and 3.7 years as of September 30, 2026 and December 31, 2025, respectively. However, management does not rely solely upon the investment portfolio to generate cash flows to fund loans, capital expenditures, dividends, debt repayment and other cash requirements. These activities are also funded by cash flows from loan payments, as well as increases in deposits and short-term borrowings.
Previous wording
The Company had outstanding borrowings under FHLB advances of $20.0 million as of June 30, 2026, while as of December 31, 2025, the Company had no balances outstanding under FHLB advances. The Company's use of FHLB advances varies depending on fluctuations in deposits and other funding sources, as well as their use in interest rate hedging strategies. The Company had up to $309.6 million and $324.1 million in remaining unused credit from the FHLB (subject to available collateral, which may include eligible investment securities and loans) as of June 30, 2026 and December 31, 2025, respectively.
Current wording
The Company had outstanding borrowings under FHLB advances of $25.0 million as of September 30, 2026, while as of December 31, 2025, the Company had no balances outstanding under FHLB advances. The Company's use of FHLB advances varies depending on fluctuations in deposits and other funding sources, as well as their use in interest rate hedging strategies. The Company had up to $299.3 million and $324.1 million in remaining unused credit from the FHLB (subject to available collateral, which may include eligible investment securities and loans) as of September 30, 2026 and December 31, 2025, respectively.
Previous wording
The Company also has access to the FRB’s discount window. The discount window allows borrowing on pledged collateral that includes eligible investment securities and loans. The Company maintains pledges of its consumer indirect loan portfolio and selected investment securities with the FRB as collateral to provide immediate access to funding through the discount window. As of June 30, 2026, the Company had $5.0 million in outstanding federal funds purchased from the FRB's discount window, while there were no outstanding federal funds purchased from the discount window as of December 31, 2025. As of June 30, 2026 and December 31, 2025 the Company had $191.6 million and $210.9 million, respectively, in unused borrowing capacity with the FRB’s discount window.
Current wording
The Company also has access to the FRB’s discount window. The discount window allows borrowing on pledged collateral that includes eligible investment securities and loans. The Company maintains pledges of its consumer indirect loan portfolio and selected investment securities with the FRB as collateral to provide immediate access to funding through the discount window. As of September 30, 2026, the Company had $5.0 million in outstanding federal funds purchased from the FRB's discount window, while there were no outstanding federal funds purchased from the discount window as of December 31, 2025. As of September 30, 2026 and December 31, 2025 the Company had $221.4 million and $210.9 million, respectively, in secured unused borrowing capacity with the FRB’s discount window.
Previous wording
The Company’s readily available liquidity position decreased to $409.9 million as of June 30, 2026, compared to $467.2 million as of December 31, 2025, due to a number of factors, including a reduction in cash and cash equivalents commensurate with efforts to improve balance sheet efficiency, combined with increased usage of secured short-term borrowings as of June 30, 2026. While readily available liquidity decreased comparing June 30, 2026 to December 31, 2025, the Company maintained ample access to liquidity relative to estimated uninsured deposits. Excluding wholesale brokered deposits, as of June 30, 2026, the Company had approximately 27 thousand deposit accounts with an average balance of approximately $32.2 thousand per account. Estimated uninsured deposits (calculated as deposit amounts per deposit holder in excess of $250 thousand, the maximum amount of federal deposit insurance, and excluding deposits secured by pledged assets) totaled $176.7 million, or 17.6% of total deposits, as of June 30, 2026. As of December 31, 2025, estimated uninsured deposits totaled $218.0 million, or 21.2% of total deposits. Management believes the Company’s on-balance sheet and other readily available liquidity sources as presented in the table above provide strong indicators of the Company’s ability to fund obligations in a stressed liquidity environment, particularly when considered relative to the Company’s uninsured deposit levels. Furthermore, in addition to the liquidity sources noted in the table above, the Company has access to additional sources of liquidity that generally could be obtained over a period of time. For example, the Company has access to unsecured brokered deposits through the wholesale funding markets.
Current wording
The Company’s readily available liquidity position decreased to $463.9 million as of September 30, 2026, compared to $467.2 million as of December 31, 2025, due to a number of factors, including a reduction in cash and cash equivalents commensurate with efforts to improve balance sheet efficiency, combined with increased usage of secured short-term borrowings as of September 30, 2026. While readily available liquidity decreased comparing September 30, 2026 to December 31, 2025, the Company maintained ample access to liquidity relative to estimated uninsured deposits. Excluding wholesale brokered deposits, as of September 30, 2026, the Company had approximately 27 thousand deposit accounts with an average balance of approximately $32.9 thousand per account. Estimated uninsured deposits (calculated as deposit amounts per deposit holder in excess of $250 thousand, the maximum amount of federal deposit insurance, and excluding deposits secured by pledged assets) totaled $190.0 million, or 18.7% of total deposits, as of September 30, 2026. As of December 31, 2025, estimated uninsured deposits totaled $218.0 million, or 21.2% of total deposits. Management believes the Company’s on-balance sheet and other readily available liquidity sources as presented in the table above provide strong indicators of the Company’s ability to fund obligations in a stressed liquidity environment, particularly when considered relative to the Company’s uninsured deposit levels. Furthermore, in addition to the liquidity sources noted in the table above, the Company has access to additional sources of liquidity that generally could be obtained over a period of time. For example, the Company has access to unsecured brokered deposits through the wholesale funding markets.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
In addition, during the six months ended June 30, 2026, the Company completed the repurchase of 237,500 shares of its common stock at a weighted average price of $15.33 per share. The repurchases were completed under the Company’s previously announced share repurchase program. As of June 30, 2026, 1,547,313 shares remained available for repurchase under the program.