PCB BANCORP
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
PCB$30.04-0.4%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.
0001423869-26-000027
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.
0001423869-26-000036
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 164 previous paragraphs and 157 current paragraphs.
101 unchanged; 51 reworded; 5 added; 10 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 30 previous and 29 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 (5)
Current report
•Gain on sale of loans was $1.6 million for the three months ended September 30, 2026 compared with $1.6 million for the three months ended September 30, 2025;
Current report
(6) Annualized.
Current report
Professional fees increased primarily due to increases in legal fees related to a legal settlement during the three months ended September 30, 2026 and internal audit fees.
Current report
Other expenses increased primarily due to an increase in legal settlements related expenses, partially offset by a decrease in office operating expense. Other expenses included $146 thousand and $140 thousand in loan related expenses, $411 thousand and $467 thousand in office operating expense, and $200 thousand and $191 thousand in armed guard expense for the three months ended September 30, 2026 and 2025, respectively.
Current report
The decrease for the three months ended September 30, 2026 was primarily due to a decrease in loans held-for-investment, partially offset by an increase in nonaccrual loans held-for-investment. The increase for the nine months ended September 30, 2026 was primarily due to an increase in loans held-for-investment, as well as the increase in nonaccrual loans held-for-investment.
Removed paragraphs (10)
Previous report
•Gain on sale of loans was $1.2 million for the three months ended June 30, 2026 compared with $1.5 million for the three months ended June 30, 2025;
Previous report
Marketing and business promotion decreased primarily due to a decrease in advertising.
Previous report
Other expenses included $229 thousand and $224 thousand in loan related expenses, $846 thousand and $1.1 million in office operating expense, and $385 thousand and $362 thousand in armed guard expense for the six months ended June 30, 2026 and 2025, respectively. During the six months ended June 30, 2025, the Company recognized an impairment on operating lease assets of $228 thousand for a sublease contract and recognition of contingent liabilities for legal settlements of $183 thousand.
Previous report
The increases for the three and six months ended June 30, 2026 were primarily due to an increase in loans held-for-investment.
Previous report
The Series C Preferred Stock accrued no dividend for the first 24 months following the investment date. Thereafter, the dividend rate is adjusted based on the qualified lending growth criteria listed in the terms of the ECIP investment with the annual dividend rate up to 2%. After the tenth anniversary of the investment date, the dividend rate will be fixed based on the average annual amount of lending in years 2 through 10. Dividends are payable quarterly in arrears on March 15, June 15, September 15, and December 15.
Previous report
Established by the Consolidated Appropriations Act, 2021, the ECIP was created to encourage low- and moderate-income community financial institutions and minority depository institutions to provide loans, grants, and forbearance for small businesses, minority-owned businesses, and consumers, especially low-income and underserved communities, including persistent poverty counties, that may be disproportionately impacted by the economic effect of the COVID-19 pandemic by providing direct and indirect capital investments in low- and moderate-income community financial institutions.
Previous report
The Series C Preferred Stock may be redeemed at the option of the Company on or after the fifth anniversary of issuance (or earlier in the event of loss of regulatory capital treatment), subject to the approval of the appropriate federal banking regulator and in accordance with the federal banking agencies’ regulatory capital regulations.
Previous report
On January 16, 2025, the Company entered into an ECIP Securities Purchase Option Agreement (the “Option Agreement”) with the U.S. Treasury, which grants the Company the conditional option to repurchase the Series C Preferred Stock during the first 15 years following the Company’s issuance of the Series C Preferred Stock. The Option Agreement provides that if the Company meets certain conditions, the Company or the Company’s qualifying designee may repurchase the Series C Preferred Stock, potentially at a substantial discount (the “Repurchase Option”). The purchase price for the Preferred Stock under the Option Agreement is based on a formula equal to the present value of the Preferred Stock, calculated as set forth in the Option Agreement, together with any accrued and unpaid dividends thereon and could represent a discount from the Series C Preferred Stock’s liquidation amount.
Previous report
The purchase option may not be exercised during the ECIP Period unless and until the Company meets at least one of the Threshold Conditions: (1) an average of at least 60% of the Company’s loan originations qualify as “Deep Impact Lending” over any 16 consecutive quarters, (2) an average of at least 85% of the Company’s total originations qualify as “Qualified Lending” over any 24 quarters or (3) the Series C Preferred Stock has a dividend rate of no more than 0.5% at each of six consecutive “Reset Dates,” in each case as defined in the Option Agreement and the terms of the Series C Preferred. In addition to satisfying a Threshold Condition, the Option Agreement requires that the Company meet certain other eligibility conditions in order to exercise the purchase option in the future, including compliance with the terms of the original ECIP purchase agreement and the terms of the Series C Preferred Stock, maintaining qualification as either a certified community development financial institution or a minority depository institution and satisfying other legal and regulatory criteria.
Previous report
The earliest possible date by which a Threshold Condition may be met is June 30, 2026. However, the Company does not currently meet any of the Threshold Conditions necessary to exercise the purchase option, and there can be no assurance whether and when the Threshold Conditions will be met.
Reworded paragraphs (51)
Previous wording
The following is management’s discussion and analysis of the major factors that influenced the Company’s results of operations and financial condition as of and for the three and six months ended June 30, 2026. This analysis should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and with the unaudited consolidated financial statements and notes (unaudited) thereto set forth in this Quarterly Report on Form 10-Q.
Current wording
The following is management’s discussion and analysis of the major factors that influenced the Company’s results of operations and financial condition as of and for the three and nine months ended September 30, 2026. This analysis should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and with the unaudited consolidated financial statements and notes (unaudited) thereto set forth in this Quarterly Report on Form 10-Q.
Previous wording
Within the various economic scenarios considered as of June 30, 2026, the quantitative estimate of the ACL would increase by approximately $21.4 million under sole consideration of a more adverse downside scenario. The quoted sensitivity calculation reflects the sensitivity of the modeled ACL estimate to macroeconomic forecast data, but does not necessarily reflect the nature and extent of future changes in the ACL for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.
Current wording
Within the various economic scenarios considered as of September 30, 2026, the quantitative estimate of the ACL would increase by approximately $20.2 million under sole consideration of a more adverse downside scenario. The quoted sensitivity calculation reflects the sensitivity of the modeled ACL estimate to macroeconomic forecast data, but does not necessarily reflect the nature and extent of future changes in the ACL for reasons including increases or decreases in qualitative adjustments, changes in the risk profile and size of the portfolio, changes in the severity of the macroeconomic scenario and the range of scenarios under management consideration.
Previous wording
•Net income available for common shareholders was $10.4 million for the three months ended June 30, 2026, an increase of $1.4 million, or 16.0%, from $9.0 million for the three months ended June 30, 2025;
Current wording
•Net income available for common shareholders was $12.1 million for the three months ended September 30, 2026, an increase of $0.8 million, or 7.0%, from $11.3 million for the three months ended September 30, 2025;
Previous wording
▪Recorded a provision for credit losses of $926 thousand for the three months ended June 30, 2026 compared with $1.8 million for the three months ended June 30, 2025;
Current wording
▪Recorded a reversal for credit losses of $705 thousand for the three months ended September 30, 2026 compared with $381 thousand for the three months ended September 30, 2025;
Previous wording
▪ACL on loans to loans held-for-investment ratio was 1.18% at June 30, 2026 compared with 1.18% at December 31, 2025;
Current wording
▪ACL on loans to loans held-for-investment ratio was 1.20% at September 30, 2026 compared with 1.18% at December 31, 2025;
Previous wording
•Net interest income was $27.5 million for the three months ended June 30, 2026 compared with $26.0 million for the three months ended June 30, 2025. Net interest margin was 3.33% for the three months ended June 30, 2026 compared with 3.33% for the three months ended June 30, 2025;
Current wording
•Net interest income was $28.8 million for the three months ended September 30, 2026 compared with $27.0 million for the three months ended September 30, 2025. Net interest margin was 3.35% for the three months ended September 30, 2026 compared with 3.28% for the three months ended September 30, 2025;
Previous wording
•Total assets were $3.47 billion at June 30, 2026, an increase of $188.4 million, or 5.7%, from $3.28 billion at December 31, 2025;
Current wording
•Total assets were $3.54 billion at September 30, 2026, an increase of $255.9 million, or 7.8%, from $3.28 billion at December 31, 2025;
Previous wording
•Loans held-for-investment were $2.93 billion at June 30, 2026, an increase of $111.6 million, or 4.0%, from $2.82 billion at December 31, 2025; and
Current wording
•Loans held-for-investment were $2.84 billion at September 30, 2026, an increase of $24.5 million, or 0.9%, from $2.82 billion at December 31, 2025; and
Previous wording
•Total deposits were $2.92 billion at June 30, 2026, an increase of $127.2 million, or 4.6%, from $2.80 billion at December 31, 2025.
Current wording
•Total deposits were $3.08 billion at September 30, 2026, an increase of $281.2 million, or 10.1%, from $2.80 billion at December 31, 2025.
Previous wording
(1) Average balance includes both loans held-for-sale and loans held-for-investment, as well as nonaccrual loans. Net amortization of deferred loan fees of $357 thousand and $414 thousand, respectively, and net accretion of discount on loans of $584 thousand and $610 thousand, respectively, are included in the interest income for the three months ended June 30, 2026 and 2025.
Current wording
(1) Average balance includes both loans held-for-sale and loans held-for-investment, as well as nonaccrual loans. Net amortization of deferred loan fees of $579 thousand and $433 thousand, respectively, and net accretion of discount on loans of $759 thousand and $563 thousand, respectively, are included in the interest income for the three months ended September 30, 2026 and 2025.
Previous wording
(1) Average balance includes both loans held-for-sale and loans held-for-investment, as well as nonaccrual loans. Net amortization of deferred loan fees of $710 thousand and $680 thousand, respectively, and net accretion of discount on loans of $1.1 million and $1.5 million, respectively, are included in the interest income for the six months ended June 30, 2026 and 2025.
Current wording
(1) Average balance includes both loans held-for-sale and loans held-for-investment, as well as nonaccrual loans. Net amortization of deferred loan fees of $1.3 million and $1.1 million, respectively, and net accretion of discount on loans of $1.9 million and $2.0 million, respectively, are included in the interest income for the nine months ended September 30, 2026 and 2025.
Previous wording
Net interest income increased primarily due to a 6.7% increase in average balance of interest-earning assets and a 42 basis point decrease in average cost, partially offset by a 7.6% increase in average balance of interest-bearing liabilities and a 23 basis point decrease in average yield.
Current wording
Net interest income increased primarily due to a 4.5% increase in average balance of interest-earning assets and a 33 basis point decrease in average cost, partially offset by a 5.0% increase in average balance of interest-bearing liabilities and a 15 basis point decrease in average yield.
Previous wording
Interest and fees on loans increased primarily due to a 3.7% increase in average balance, partially offset by an 18 basis point decrease in average yield. The decrease in average yield was primarily due to decreases in market rates, net accretion of discount on loans and net amortization of deferred loan fees.
Current wording
Interest and fees on loans increased primarily due to a 4.3% increase in average balance, partially offset by a 13 basis point decrease in average yield. The decrease in average yield was primarily due to a decrease in market rates, partially offset by increases in net accretion of discount on loans and net amortization of deferred loan fees.
Previous wording
Interest on investment securities increased primarily due to an 18.3% increase in average balance and a 15 basis point increase in average yield. The increase in average yield was primarily due to a higher yield on newly purchased investment securities. For the three months ended June 30, 2026 and 2025, the average yield on total investment securities was 4.03% and 3.88%, respectively.
Current wording
Interest on investment securities increased primarily due to a 28.4% increase in average balance and a 36 basis point increase in average yield. The increase in average yield was primarily due to a higher yield on newly purchased investment securities. For the three months ended September 30, 2026 and 2025, the average yield on total investment securities was 4.21% and 3.85%, respectively.
Previous wording
Interest income on other interest-earning assets decreased primarily due to a 94 basis point decrease in average yield, partially offset by a 24.3% increase in average balance. For the three months ended June 30, 2026 and 2025, the average yield on total other interest-earning assets was 3.79% and 4.73%, respectively.
Current wording
Interest income on other interest-earning assets decreased primarily due to a 46 basis point decrease in average yield and a 5.0% decrease in average balance. The decrease in interest rate on cash held at the Federal Reserve Bank was offset by an increase in dividends received on FHLB stock. For the three months ended September 30, 2026 and 2025, the average yield on total other interest-earning assets was 4.15% and 4.61%, respectively.
Previous wording
Interest expense on deposits decreased primarily due to a 37 basis point decrease in average cost of interest-bearing deposits, partially offset by a 6.4% increase in average balance of interest-bearing deposits. The decrease in average cost was primarily due to a decrease in market rates. For the three months ended June 30, 2026 and 2025, average cost on total interest-bearing deposits was 3.76% and 4.13%, respectively, and average cost on total deposits were 3.05% and 3.32%, respectively.
Current wording
Interest expense on deposits decreased primarily due to a 32 basis point decrease in average cost of interest-bearing deposits, partially offset by a 5.1% increase in average balance of interest-bearing deposits. The decrease in average cost was primarily due to a decrease in market rates. For the three months ended September 30, 2026 and 2025, average cost on total interest-bearing deposits was 3.77% and 4.09%, respectively, and average cost on total deposits were 3.07% and 3.32%, respectively.
Previous wording
Interest expense on other borrowings increased primarily due to a 75.3% increase in average balance, partially offset by a 64 basis point decrease in average cost.
Current wording
Interest expense on other borrowings decreased primarily due to a 2.6% decrease in average balance and a 60 basis point decrease in average cost.
Previous wording
Net interest income increased primarily due to a 5.8% increase in average balance of interest-earning assets and a 38 basis point decrease in average cost, partially offset by a 6.4% increase in average balance of interest-bearing liabilities and a 25 basis point decrease in average yield.
Current wording
Net interest income increased primarily due to a 5.9% increase in average balance of interest-earning assets and a 38 basis point decrease in average cost, partially offset by a 6.7% increase in average balance of interest-bearing liabilities and a 21 basis point decrease in average yield.
Previous wording
Interest and fees on loans increased primarily due to a 5.4% increase in average balance, partially offset by a 21 basis point decrease in average yield. The decrease in average yield was primarily due to decreases in market rates and net accretion of discount on loans, partially offset by an increase in net amortization of deferred loan fees.
Current wording
Interest and fees on loans increased primarily due to a 5.0% increase in average balance, partially offset by a 19 basis point decrease in average yield. The decrease in average yield was primarily due to decreases in market rates and net accretion of discount on loans, partially offset by an increase in net amortization of deferred loan fees.
Previous wording
Interest on investment securities increased primarily due to a 14.1% increase in average balance and an 11 basis point increase in average yield. The increase in average yield was primarily due to a higher yield on newly purchased investment securities. For the six months ended June 30, 2026 and 2025, the average yield on total investment securities was 4.00% and 3.89%, respectively.
Current wording
Interest on investment securities increased primarily due to a 19.0% increase in average balance and a 21 basis point increase in average yield. The increase in average yield was primarily due to a higher yield on newly purchased investment securities. For the nine months ended September 30, 2026 and 2025, the average yield on total investment securities was 4.08% and 3.87%, respectively.
Previous wording
Interest income on other interest-earning assets increased primarily due to an 18.5% increase in average balance, partially offset by a 48 basis point decrease in average yield. The decrease in interest rate on cash held at the Federal Reserve Bank was offset by an increase in dividends received on FHLB stock. For the six months ended June 30, 2026 and 2025, the average yield on total other interest-earning assets was 4.26% and 4.74%, respectively.
Current wording
Interest income on other interest-earning assets decreased primarily due to a 47 basis point decrease in average yield, partially offset by an 8.0% increase in average balance. The decrease in interest rate on cash held at the Federal Reserve Bank was offset by an increase in dividends received on FHLB stock. For the nine months ended September 30, 2026 and 2025, the average yield on total other interest-earning assets was 4.21% and 4.68%, respectively.
Previous wording
Interest expense on deposits decreased primarily due to a 41 basis point decrease in average cost of interest-bearing deposits, partially offset by a 6.4% increase in average balance of interest-bearing deposits. The decrease in average cost was primarily due to a decrease in market rates. For the six months ended June 30, 2026 and 2025, average cost on total interest-bearing deposits was 3.79% and 4.20%, respectively, and average cost on total deposits were 3.07% and 3.38%, respectively.
Current wording
Interest expense on deposits decreased primarily due to a 38 basis point decrease in average cost of interest-bearing deposits, partially offset by a 6.0% increase in average balance of interest-bearing deposits. The decrease in average cost was primarily due to a decrease in market rates. For the nine months ended September 30, 2026 and 2025, average cost on total interest-bearing deposits was 3.78% and 4.16%, respectively, and average cost on total deposits were 3.07% and 3.36%, respectively.
Previous wording
Interest expense on other borrowings increased primarily due to a 7.1% increase in average balance, partially offset by a 63 basis point decrease in average cost.
Current wording
Interest expense on other borrowings increased primarily due to a 46.7% increase in average balance, partially offset by a 63 basis point decrease in average cost.
Previous wording
Provision for credit losses for the three and six months ended June 30, 2026 was primarily due to growth in loans held-for-investment. See further discussion in “Loans Held-For-Investment and Allowance for Credit Losses.”
Current wording
Reversal for credit losses for the three months ended September 30, 2026 was primarily due to a decrease in loans held-for-investment, partially offset by an increase in nonaccrual loans held-for-investment. Provision for credit losses for the nine months ended September 30, 2026 was primarily due to an increase in loans held-for-investment, as well as the increase in nonaccrual loans held-for-investment. See further discussion in “Loans Held-For-Investment and Allowance for Credit Losses.”
Previous wording
Loan servicing income increased primarily due to a decrease in servicing asset amortization, partially offset by a decrease in servicing fee income. Servicing asset amortization was $441 thousand and $490 thousand, respectively, for the three months ended June 30, 2026 and 2025.
Current wording
Loan servicing income decreased primarily due to an increase in servicing asset amortization and a decrease in servicing fee income. Servicing asset amortization was $565 thousand and $528 thousand, respectively, for the three months ended September 30, 2026 and 2025.
Previous wording
Gain on sale of loans decreased primarily due to a decrease in sale volume, partially offset by an increase in level of premium on SBA loans in the secondary market. The Company sold SBA loans of $17.1 million with a gain of $1.2 million and a certain commercial property loan of $1.1 million with a loss of $37 thousand during the three months ended June 30, 2026. The sold commercial property loan was transferred to loans held-for-sale from loans held-for-investment during the three months ended March 31, 2026. During the three months ended June 30, 2025, the Company sold SBA loans of $26.9 million with a gain of $1.5 million.
Current wording
Gain on sale of loans increased primarily due to an increase in level of premium on SBA loans in the secondary market, partially offset by a decrease in sale volume. The Company sold SBA loans of $23.0 million with a gain of $1.6 million during the three months ended September 30, 2026. During the three months ended September 30, 2025, the Company sold SBA loans of $29.0 million with a gain of $1.6 million.
Previous wording
Other income primarily included wire transfer fees of $181 thousand and $173 thousand, respectively, and debit card interchange fees of $109 thousand and $117 thousand, respectively, for the three months ended June 30, 2026 and 2025.
Current wording
Other income primarily included wire transfer fees of $195 thousand and $180 thousand, respectively, and debit card interchange fees of $127 thousand and $100 thousand, respectively, for the three months ended September 30, 2026 and 2025.
Previous wording
Loan servicing income increased primarily due to a decrease in servicing asset amortization, partially offset by a decrease in servicing fee income. Servicing asset amortization was $858 thousand and $1.0 million, respectively, for the six months ended June 30, 2026 and 2025.
Current wording
Loan servicing income increased primarily due to a decrease in servicing asset amortization, partially offset by a decrease in servicing fee income. Servicing asset amortization was $1.4 million and $1.6 million, respectively, for the nine months ended September 30, 2026 and 2025.
Previous wording
Gain on sale of loans increased primarily due to an increase in level of premium on SBA loans in the secondary market, partially offset by a decrease in sale volume. The Company sold SBA loans of $38.9 million with a gain of $2.6 million and a certain commercial property loan of $1.1 million with a loss of $37 thousand during the six months ended June 30, 2026. The sold commercial property loan was transferred to loans held-for-sale from loans held-for-investment during the three months ended March 31, 2026. During the six months ended June 30, 2025, the Company sold SBA loans of $43.6 million with a gain of $2.4 million.
Current wording
Gain on sale of loans increased primarily due to an increase in level of premium on SBA loans in the secondary market, partially offset by a decrease in sale volume. The Company sold SBA loans of $62.0 million with a gain of $4.3 million and a certain commercial property loan of $1.1 million with a loss of $37 thousand during the nine months ended September 30, 2026. The sold commercial property loan was transferred to loans held-for-sale from loans held-for-investment during the three months ended March 31, 2026. During the nine months ended September 30, 2025, the Company sold SBA loans of $72.6 million with a gain of $4.0 million.
Previous wording
Other income primarily included wire transfer fees of $350 thousand and $326 thousand, respectively, and debit card interchange fees of $211 thousand and $203 thousand, respectively, for the six months ended June 30, 2026 and 2025.
Current wording
Other income primarily included wire transfer fees of $545 thousand and $506 thousand, respectively, and debit card interchange fees of $338 thousand and $303 thousand, respectively, for the nine months ended September 30, 2026 and 2025.
Previous wording
Salaries and employee benefits increased primarily due to increases in salaries, bonus and vacation accruals, and group insurance. The number of full-time equivalent employees was 274 at June 30, 2026 compared to 266 at June 30, 2025.
Current wording
Salaries and employee benefits increased primarily due to increases in wages, incentives tied to sales of SBA loans, vacation accrual and group insurance, partially offset by an increase in direct loan origination cost, which offsets and defers the recognition of salaries and benefits expense. The number of full-time equivalent employees was 276 at September 30, 2026 compared to 270 at September 30, 2025.
Previous wording
Salaries and employee benefits increased primarily due to increases in salaries, bonus and vacation accruals, and group insurance. The number of full-time equivalent employees was 274 at June 30, 2026 compared to 266 at June 30, 2025.
Current wording
Salaries and employee benefits increased primarily due to increases in wages, incentives tied to sales of SBA loans, vacation accrual and group insurance, partially offset by an increase in direct loan origination cost, which offsets and defers the recognition of salaries and benefits expense. . The number of full-time equivalent employees was 276 at September 30, 2026 compared to 270 at September 30, 2025.
Previous wording
Professional fees decreased primarily due to additional professional fees incurred related to evaluating the accounting for a preferred stock purchase option during the three months ended June 30, 2025.
Current wording
Professional fees increased primarily due to increases in legal fees and internal audit during the nine months ended September 30, 2026, partially offset by additional professional fees incurred related to evaluating the accounting for a preferred stock purchase option during the nine months ended September 30, 2025.
Previous wording
Other expenses included $143 thousand and $132 thousand in loan related expenses, $476 thousand and $613 thousand in office operating expense, and $205 thousand and $179 thousand in armed guard expense for the three months ended June 30, 2026 and 2025, respectively. During the three months ended June 30, 2025, the Company recognized an impairment on operating lease assets of $82 thousand for a sublease contract.
Current wording
Other expenses decreased primarily due to impairments on operating lease assets of $238 thousand for sublease contracts and a decrease in office operating expense, partially offset by an increase in legal settlement related expenses. Other expenses included $375 thousand and $364 thousand in loan related expenses, $1.3 million and $1.6 million in office operating expense, and $585 thousand and $553 thousand in armed guard expense for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Income tax expense was $4.2 million and $3.6 million, respectively, and the effective tax rate was 28.3% and 28.4%, respectively, for the three months ended June 30, 2026 and 2025. For the six months ended June 30, 2026 and 2025, income tax expense was $8.4 million and $6.7 million, respectively, and the effective tax rate was 28.4% and 28.4%, respectively.
Current wording
Income tax expense was $4.8 million and $4.5 million, respectively, and the effective tax rate was 28.4% and 28.2%, respectively, for the three months ended September 30, 2026 and 2025. For the nine months ended September 30, 2026 and 2025, income tax expense was $13.2 million and $11.1 million, respectively, and the effective tax rate was 28.4% and 28.3%, respectively.
Previous wording
The fair value of total investment securities available-for-sale were $184.3 million at June 30, 2026, an increase of $24.3 million, or 15.2%, from $160.0 million at December 31, 2025. The increase was primarily due to purchases of $41.0 million, partially offset by principal paydowns of $14.8 million, net premium amortization of $72 thousand, and a decrease in fair value of securities available-for-sale of $1.8 million.
Current wording
The fair value of total investment securities available-for-sale were $190.2 million at September 30, 2026, an increase of $30.2 million, or 18.9%, from $160.0 million at December 31, 2025. The increase was primarily due to purchases of $66.9 million, partially offset by principal paydowns of $26.5 million, net premium amortization of $114 thousand, and a decrease in fair value of securities available-for-sale of $10.0 million.
Previous wording
As of June 30, 2026 and December 31, 2025, 96.1% and 95.5%, respectively, of the Company's securities available-for-sale at amortized cost basis were issued by U.S. government agency and U.S. GSEs. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell these securities before their anticipated recovery, the Company determined that these securities with unrealized losses did not warrant an ACL as of June 30, 2026 and December 31, 2025.
Current wording
As of September 30, 2026 and December 31, 2025, 95.2% and 95.5%, respectively, of the Company's securities available-for-sale at amortized cost basis were issued by U.S. government agency and U.S. GSEs. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not have the intent to sell these securities and it is likely that it will not be required to sell these securities before their anticipated recovery, the Company determined that these securities with unrealized losses did not warrant an ACL as of September 30, 2026 and December 31, 2025.
Previous wording
Loans held-for-sale were $2.9 million at June 30, 2026, a decrease of $9.1 million, or 75.7%, from $12.1 million at December 31, 2025. The decrease was primarily due to sales of $40.0 million and pay-offs and pay-downs of $258 thousand, partially offset by new funding of $30.0 million and a nonaccrual loan transferred from loans held-for-investment of $1.1 million.
Current wording
Loans held-for-sale were $2.3 million at September 30, 2026, a decrease of $9.8 million, or 80.8%, from $12.1 million at December 31, 2025. The decrease was primarily due to sales of $63.0 million and pay-offs and pay-downs of $310 thousand, partially offset by new funding of $52.5 million and a nonaccrual loan transferred from loans held-for-investment of $1.1 million.
Previous wording
Loans held-for-investment were $2.93 billion at June 30, 2026, an increase of $111.6 million, or 4.0%, from $2.82 billion at December 31, 2025. The increase was primarily due to new funding of term loans of $290.9 million, partially offset by pay-downs and pay-offs of term loans of $154.5 million, net decrease of lines of credit of $23.6 million, charge-offs of $94 thousand, and a nonaccrual loan transferred to loans held-for-sale of $1.1 million.
Current wording
Loans held-for-investment were $2.84 billion at September 30, 2026, an increase of $24.5 million, or 0.9%, from $2.82 billion at December 31, 2025. The increase was primarily due to new funding of term loans of $416.5 million, partially offset by pay-downs and pay-offs of term loans of $329.6 million, net decrease of lines of credit of $61.2 million, charge-offs of $130 thousand, and a nonaccrual loan transferred to loans held-for-sale of $1.1 million.
Previous wording
Qualitative adjustment factors increased for the three and six months ended June 30, 2026 primarily due to updates to risk status ratings that reflected changes in credit quality across loan segments. More specifically, the increases in nonaccrual and classified loans within the commercial and industrial and business property loan segments were the primary contributors to the increase in the overall qualitative reserve.
Current wording
Qualitative adjustment factors increased for the three and nine months ended September 30, 2026 primarily due to updates to risk status ratings that reflected changes in credit quality across loan segments. More specifically, the increases in nonaccrual and classified loans within the commercial property and business property loan segments were the primary contributors to the increase in the overall qualitative reserve.
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Previous report — wording carried elsewhere
Professional fees decreased primarily due to additional professional fees incurred related to evaluating the accounting for a preferred stock purchase option during the six months ended June 30, 2025.
Previous report — wording carried elsewhere
Quantitatively measured expected credit loss reserve decreased for the six months ended June 30, 2026 primarily due to improvement in the forecasted national unemployment rate. The Company utilizes the year-over-year percentage change in real GDP and the national unemployment rate based on forward-looking year-end projections published by the Federal Open Market Committee (“FOMC”). Using these forecasted year-end rates as anchors, the Company extrapolates quarterly rates for application in its loss model, which determines probability of default (“PD”) and loss given default (“LGD”) rates.