WILSON BANK HOLDING CO

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 Compan…

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 or rising 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 …

Excerpt shortened here; the source contains the full paragraph.

Previous 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.

Current wording

Net earnings of the Company for the three months ended September 30, 2026 were $22,276,000, an increase of $4,405,000, or 24.65%, from net earnings of $17,871,000 for the three months ended September 30, 2025. Net earnings of the Company increased $11,969,000, or 22.42%, to $65,347,000 for the nine months ended September 30, 2026, from $53,378,000 for the nine months ended September 30, 2025. The increase in net earnings for the three and nine months ended September 30, 2026 was primarily due to an increase in net interest income and non-interest income, partially offset by increases in non-interest expense and provision for credit losses.

Previous 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.

Current wording

The increase in net interest income for the three and nine months ended September 30, 2026 when compared to the comparable periods in 2025 was primarily due to an increase in average interest earning asset balances and the rate they earned, and a decrease in the cost of funds, partially offset by an increase in average interest bearing deposit balances.

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 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.

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 nine months ended September 30, 2026 was 1.45% and 1.46%, respectively, while the ROA for the three and nine months ended September 30, 2025 was 1.23% and 1.28%, respectively. The ROE for the three and nine months ended September 30, 2026 was 14.54% and 14.49%, respectively, while the ROE for the three and nine months ended September 30, 2025 was 13.06% and 13.70%, respectively. The increases in ROA and ROE for the three and nine months ended September 30, 2026 when compared to the three and nine months ended September 30, 2025 were primarily due to an increase in net interest income resulting from the increase in earning assets and the rate they earned, and the decrease in the cost of funds, partially offset by increases in non-interest expense, interest-bearing deposit balances and provision for credit losses.

Previous 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):

Current wording

The average balances, interest, and average rates of our assets and liabilities for thethree and nine months ended September 30, 2026 and 2025 are presented in the following table (dollars in thousands):

Previous 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.

Current wording

Loan fees of $5,338,000 are included in interest income for the period ended September 30, 2026. Loan fees of $4,512,000 are included in interest income for the period ended September 30, 2025.

Previous wording

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 wording

Loan fees of $13,413,000 are included in interest income for the period ended September 30, 2026. Loan fees of $12,249,000 are included in interest income for the period ended September 30, 2025.

Previous 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:

Current wording

The components of our loan yield, a key driver to our net interest margin for thethree and nine months ended September 30, 2026 and 2025, were as follows:

Previous 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.

Current wording

Net interest margin for the three months ended September 30, 2026 and 2025 was 3.93% and 3.62%, respectively. Net interest margin for the nine months ended September 30, 2026 and 2025 was 3.91% and 3.63%, respectively. The increase in net interest margin for the three and nine months ended September 30, 2026 when compared to the comparable periods in 2025 was primarily due to the increase in average interest earning asset balances, increases in the yields earned on securities and loans, and a decrease in the cost of funds. The increase in net interest margin was partially offset by increased average interest bearing deposit balances and a decrease in the yield earned on accounts with depository institutions, and for the three month period, decreases in the average balance on accounts with depository institutions. The yield earned on loans for the three and nine months ended September 30, 2026 was 6.87%, while the yield earned on loans for the three and nine months ended September 30, 2025 was 6.79% and 6.81%, respectively. The increase in the yield earned on loans for the three and nine months ended September 30, 2026 reflected additional state tax credit loans and an increase in fees earned on loans, partially offset by a decrease in the average yield on contractual interest rates. During the three months ended September 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. The net interest spread was 3.56% and 3.22% for the three months ended September 30, 2026 and 2025, respectively. The net interest spread was 3.54% and 3.23% for the nine months ended September 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 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.

Current wording

Net interest income represents the amount by which interest earned on various earning assets exceeds interest paid on deposits and other interest-bearing liabilities and is the most significant component of the Company’s earnings. Net interest income, excluding tax equivalent adjustments relating to tax exempt securities and loans, for the three and nine months ended September 30, 2026 totaled$56,293,000 and $164,554,000, respectively, compared to $49,487,000 and $143,004,000 for the three and nine months ended September 30, 2025, respectively.

Previous wording

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 wording

The increase in net interest income for the three and nine months ended September 30, 2026, compared to the corresponding periods in 2025, was primarily attributable to growth in average interest-earning assets, higher yields earned on securities and loans, and a lower cost of funds, partially offset by an increase in average interest-bearing deposits.

Previous wording

The ratio of average interest-earning assets to total average assets for thethree and six months ended June 30, 2026 was 96.4%, compared to 96.2% for the three and six months ended June 30, 2025.

Current wording

The ratio of average interest-earning assets to total average assets for thethree and nine months ended September 30, 2026 was 96.4%, compared to 96.2% for the three and nine months ended September 30, 2025.

Previous 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.

Current wording

Fees earned on loans totaled $5,338,000 and $4,512,000 for the three months ended September 30, 2026 and 2025, respectively. Fees earned on loans totaled $13,413,000 and $12,249,000 for the nine months ended September 30, 2026 and 2025, respectively. The increase in fees earned on loans for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025 was attributable to an increase in origination fees and prepayment fees. The total amount of state income tax credits and tax-exempt loan interest included in our loan yields for the three and nine months ended September 30, 2026 was $1,725,000 and $4,009,000, respectively, compared to $865,000 and $2,264,000 for the three and nine months ended September 30, 2025, respectively.

Previous 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.

Current wording

Interest expense decreased in the three and nine months ended September 30, 2026 compared to the comparable periods in 2025 due to a lower average rate paid on interest-bearing deposits, partially offset by higher average interest-bearing deposit balances. Prior reductions in short-term interest rates allowed us to lower deposit rates; however, increased competitive pressures and loan growth outpacing deposit growth prompted us to begin raising the rates we pay on certain deposit accounts late in the second quarter and in the third quarter of 2026. The Federal Reserve raised the target range for the federal funds rate by 25 basis points in September 2026. This increase will likely put additional upward pressure on our cost of funds. We expect interest expense to increase as a result of higher deposit balances and higher funding costs associated with the rate increase and continued competition in our markets.

Previous wording

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 wording

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 increased by 25 basis points in September 2026, corresponding with the increase in the target range for the federal funds rate. At its October 28, 2026 meeting, the Federal Reserve maintained the target range for the federal funds rate, noting that economic activity continued to expand at a strong pace while inflation remained elevated. We believe future decisions of the Federal Reserve regarding short-term interest rates will depend on economic data and other factors, and the timing and direction of future rate changes are uncertain.

Previous wording

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 wording

In addition to short-term interest rates, competitive pricing pressures are also expected to remain a primary driver of our net interest margin. Beginning in the second quarter of 2026 and continuing in the third quarter, competitive pressure contributed to the Company's decisions to raise rates on certain deposits to attract and retain funding as loan growth outpaced deposit growth. Margin compression could result if such competitive pressures intensify, resulting in a decline in asset yields while deposit costs continue to rise, or if the increase in deposit costs outpaces the increase in asset yields. 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.

Previous 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.

Current wording

The provision for credit losses-loans of $2,455,000 for the three months ended September 30, 2026 was primarily driven by loan growth, deterioration in a specialized loan product offered by the Bank, the outstanding balances of which are not significant, and significant deterioration in the valuation of a single individually measured loan. There was a provision of $1,373,000 for the three months ended September 30, 2025 primarily driven by credit deterioration, the national and local economic outlook, and loan growth.

Previous wording

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 wording

The provision for credit losses-loans of $6,024,000 for the nine months ended September 30, 2026 was primarily driven by loan growth, deterioration in a specialized loan product offered by the Bank, the outstanding balances of which are not significant, and significant deterioration in the valuation of a single individually measured loan. The provision of $6,113,000 for the nine months ended September 30, 2025 was primarily driven by loan growth, credit deterioration, declining local economic conditions, and worsening national and local economic outlook.

Previous 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.

Current wording

There was a benefit for credit losses-off balance sheet exposures of $255,000 for the three months ended September 30, 2026 primarily related to decreasing loan commitments, compared to a provision of $27,000 for the credit losses-off balance sheet exposures for the three months ended September 30, 2025.

Previous wording

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 wording

There was a provision for credit losses-off balance sheet exposures of $461,000 for the nine months ended September 30, 2026 primarily driven by increased loan commitments, compared to a benefit for credit losses-off balance sheet exposures of $243,000 for the nine months ended September 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 six months ended June 30, 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 nine months ended September 30, 2026 and 2025:

Previous 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.

Current wording

There was no provision for credit losses on available-for-sale securities for the three and nine months ended September 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 and six months ended June 30, 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 nine months ended September 30, 2026 and 2025 (in thousands):

Previous 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.

Current wording

Non-interest income increased for the three and nine months September 30, 2026 when compared to the same periods in 2025, primarily because the comparable periods in 2025 included a loss on sale of securities associated with the restructuring of a portion of the Company's securities portfolio. Increases in brokerage income, service charges on deposit accounts, and an increase in gain (loss) on sale of fixed assets also positively impacted non-interest income, which was negatively impacted by a decrease in gain on sale of loans. For the nine months ended September 30, 2026, the increase in non-interest income also included the premium on the sale of our credit card portfolio, partially offset by a decrease in debit and credit card interchange income and a loss on sale of other real estate.

Previous 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.

Current wording

The increase in brokerage income for the three and nine months ended September 30, 2026 when compared to the three and nine months ended September 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 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.

Current wording

The increase in service charges on deposit accounts for the three and nine months ended September 30, 2026 when compared to the three and nine months ended September 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 for the six months ended June 30, 2026, 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 nine months ended September 30, 2026, based upon the sales agreement with the third party to whom we sold the portfolio.

Previous wording

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 wording

The decrease in gain on sale of loans for the three and nine months ended September 30, 2026 when compared to the three and nine months ended September 30, 2025 was primarily attributable to the increase in mortgage interest rates experienced so far in 2026, particularly in the third quarter, which reduced the value of residential mortgage loans sold during the periods.

Previous 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.

Current wording

The decrease in debit and credit card interchange income for the nine months ended September 30, 2026 when compared to the nine months ended September 30, 2025 was due to the sale of the Company's credit card portfolio mentioned above.

Previous wording

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 wording

The increase in loss on sale of other real estate for the nine months ended September 30, 2026 when compared to the nine months ended September 30, 2025 was primarily due to the sale of foreclosed residential properties.

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 and six months ended June 30, 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 nine months ended September 30, 2026 and 2025 (in thousands):

Previous 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.

Current wording

The increase in non-interest expense for the three and nine months ended September 30, 2026 when compared to the comparable periods in 2025 was primarily attributable to increases in salaries and employee benefits, data processing expense, audit, legal and consulting expenses, and occupancy expense, partially offset by a reduction in FDIC insurance costs.

Previous 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.

Current wording

The increase in salaries and benefits in the three and nine months ended September 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 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.

Current wording

The increase in data processing expense in the three and nine months ended September 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 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 wording

The increase in audit, legal and consulting expenses in the three and nine months ended September 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.

Previous 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.

Current wording

The increase in occupancy expense in the three months and nine months ended September 30, 2026 when compared to the comparable periods in 2025 was primarily attributable to expenses related to the remodel of multiple branches, an increase in lease expense, and an increase in anticipated property taxes as a result of an increase in property tax rates and an increase in the assessed values of certain of our properties.

Previous 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.

Current wording

The decrease in FDIC insurance in the three months and nine months ended September 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 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.

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 September 30, 2026 and 2025 was 52.63% and 55.71%, respectively, while the efficiency ratio for the nine months ended September 30, 2026 and 2025 was 52.51% and 54.50%, respectively. The improvement in the efficiency ratio for the three and nine months ended September 30, 2026 compared to the comparable periods in 2025 was primarily due to the increase in net interest income outpacing the increase in non-interest expense.

Previous wording

The Company's income tax expense for the three months ended June 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.

Current wording

The Company's income tax expense for the three months ended September 30, 2026 was $6,457,000, an increase of $1,172,000 from $5,285,000 for the three months ended September 30, 2025. Income tax expense for the nine months ended September 30, 2026 was $19,635,000, an increase of $3,376,000 from $16,259,000 for the nine months ended September 30, 2025. The percentage of income tax expense to net income before taxes was 22.47% and 22.82% for the three months ended September 30, 2026 and 2025, respectively, while it was 23.10% and 23.34% for the nine months ended September 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 $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.

Current wording

The Company’s total assets increased $237,198,000, or 4.03%, to $6,116,154,000 at September 30, 2026 from $5,878,956,000 at December 31, 2025. Loans, net of ACL, totaled $4,490,170,000 at September 30, 2026, a 4.52% increase compared to $4,296,095,000 at December 31, 2025. In 2026, management has targeted commercial real estate, residential real estate lending and small business lending as areas of focus. These areas will remain a focus in 2027. Total liabilities increased by 4.14% to $5,516,753,000 at September 30, 2026 compared to $5,297,271,000 at December 31, 2025.