MainStreet Bancshares, Inc.

Previous wording

The following discussion and analysis is intended as a review of significant factors affecting the Company’s consolidated financial condition and results of operations for the periods indicated. This discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and the related notes and the Company’s Annual Report on Form 10-K, which contains audited consolidated financial statements of the Company as of and for the year ended December 31, 2025, previously filed with the SEC on March 13, 2026. Results for the three months ended March 31, 2026 are not necessarily indicative of results for the year ending December 31, 2026 or any future period.

Current wording

The following discussion and analysis is intended as a review of significant factors affecting the Company’s consolidated financial condition and results of operations for the periods indicated. This discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and the related notes and the Company’s Annual Report on Form 10-K, which contains audited consolidated financial statements of the Company as of and for the year ended December 31, 2025, previously filed with the SEC on March 13, 2026. Results for the three and six months ended June 30, 2026 are not necessarily indicative of results for the year ending December 31, 2026 or any future period.

Previous wording

MainStreet Bank is a community commercial bank incorporated in and chartered by the Commonwealth of Virginia. The Bank is a member of the Federal Reserve Bank of Richmond, and its deposits are insured by the FDIC. The Bank opened for business on May 26, 2004, and is headquartered in Fairfax, Virginia. We currently operate seven Bank branches; located in Herndon, Fairfax, McLean, Clarendon, Leesburg, and Middleburg in Virginia, and one in Washington D.C. The Bank has two subsidiaries, both limited liability companies, that it uses to hold real estate acquired through foreclosure.

Current wording

MainStreet Bank is a community commercial bank incorporated in and chartered by the Commonwealth of Virginia. The Bank is a member of the Federal Reserve Bank of Richmond, and its deposits are insured by the FDIC. The Bank opened for business on May 26, 2004, and is headquartered in Fairfax, Virginia. We currently operate seven Bank branches; located in Herndon, Fairfax, McLean, Clarendon, Leesburg, and Middleburg in Virginia, and one in Washington D.C. The Bank has one subsidiary, a limited liability company, that it uses to hold real estate acquired through foreclosure.

Previous wording

The Company's business is focused core banking where we offer a full range of banking services to individuals, small to medium-sized businesses and professionals through both traditional and electronic delivery.

Current wording

The Company's business is focused on core banking where we offer a full range of banking services to individuals, small to medium-sized businesses, and professionals through both traditional and electronic delivery.

Previous wording

We were the first community bank in the Washington, D.C. metropolitan area to offer a full online business banking solution, including remote check scanners on a business customer’s desktop. We offer mobile banking apps for iPhones, iPads and Android devices that provide for remote deposit of checks. In addition, we were the first bank headquartered in the Commonwealth of Virginia to offer CDARS, the Certificate of Deposit Account Registry Service. We offer our customers a suite of reciprocal deposit options through IntraFI, an innovative reciprocal deposit placement service that offers FDIC insurance on deposits up to $265 million. We believe that enhanced electronic delivery systems and technology increase profitability through greater productivity and cost control and allow us to offer new and better products and services.

Current wording

We were the first community bank in the Washington, D.C. metropolitan area to offer a full online business banking solution, including remote check scanners on a business customer’s desktop. We offer mobile banking apps for iPhones, iPads and Android devices that provide for remote deposit of checks. In addition, we were the first bank headquartered in the Commonwealth of Virginia to offer CDARS, the Certificate of Deposit Account Registry Service. We offer our customers a suite of reciprocal deposit options through placement services that offer additional FDIC insurance on deposits. We believe that enhanced electronic delivery systems and technology increase profitability through greater productivity and cost control and allow us to offer new and better products and services.

Previous wording

Our critical accounting policies involving significant judgments and assumptions used in the preparation of the consolidated financial statements as of March 31, 2026, have remained unchanged since our Annual Report on Form 10-K for the year ended December 31, 2025 was filed, unless noted herein. Any changes are discussed under "Recently Adopted Accounting Developments" in Note 1 of the Notes to Consolidated Financial Statements.

Current wording

Our critical accounting policies involving significant judgments and assumptions used in the preparation of the consolidated financial statements as of June 30, 2026, have remained unchanged since our Annual Report on Form 10-K for the year ended December 31, 2025 was filed.

Previous wording

Total interest income decreased $1.7 million or 5.3%, to $31.3 million for the three months ended March 31, 2026 from $33.0 million for the three months ended March 31, 2025, on a tax equivalent basis. The decrease was primarily the result of a decrease in interest and fees on loans of$1.6 million. Total average interest-earning assets increased $13.3 million, to$2.05 billion for the three months ended March 31, 2026 from$2.04 billion for the same period in 2025 primarily because of an increase of$25.3 million in the average balance of loans offset by a decrease of $9.5 million in the average balance of federal funds sold and interest bearing deposits at other financial institutions and a$2.4 million decrease in the average balance of investment securities. The average yield on our interest-earning assets decreased 38 basis points to 6.19% for the three months ended March 31, 2026 as compared to 6.57% for the three months ended March 31, 2025 primarily due to market conditions. For the three months ended March 31, 2026, the Company reversed $610,000 in accrued interest income in relation to loans placed on non-accrual, as compared to $104,000 for the three months ended March 31, 2025. During the three months ended March 31, 2026, $206,000 of accrued interest reversed in 2025 was recovered and $80,000 of interest was received related to a refund of federal income taxes, for a net adjustment of $324,000 to interest income.

Current wording

Total interest income decreased $2.2 million or 6.4%, to $32.2 million for the three months ended June 30, 2026 from $34.4 million for the three months ended June 30, 2025, on a tax equivalent basis. The decrease was primarily the result of a decrease in interest and fees on loans of$1.7 million, which was impacted by the collection of $1.3 million of accrued interest on a fully repaid non-accrual loan duringthe three months ended June 30, 2025. Total average interest-earning assets increased$64.3 million, to$2.08 billion for the three months ended June 30, 2026 from$2.02 billion for the same period in 2025 primarily because of an increase of$100.2 million in the average balance of loans offset by a decrease of $32.8 million in the average balance of federal funds sold and interest bearing deposits at other financial institutions and a$3.0 million decrease in the average balance of investment securities. The average yield on our interest-earning assets decreased 64 basis points to 6.20% for the three months ended June 30, 2026 as compared to 6.84% for thethree months ended June 30, 2025, which was impacted by the collection of $1.3 million of accrued interest on a fully repaid non-accrual loan duringthe three months ended June 30, 2025. For the three months ended June 30, 2026, the Company reversed$108,000 in accrued interest income in relation to loans placed on non-accrual, as compared to$128,000 for thethree months ended June 30, 2025. During the three months ended June 30, 2026, $34,000 of accrued interest reversed in 2025 was recovered, for a net adjustment of $74,000 to interest income.

Previous wording

Interest and fees on loans decreased $1.6 million, to$29.5 million for the three months ended March 31, 2026 from$31.1 million for the same period in 2025. There was a 44 basis point decrease in the average loans yields, which was 6.42% for the three months ended March 31, 2026 compared to 6.86% for thethree months ended March 31, 2025. The average balance of loans increased$25.3 million for the three months ended March 31, 2026 as compared to thethree months ended March 31, 2025.

Current wording

Interest and fees on loans decreased $1.7 million, to$30.7 million for the three months ended June 30, 2026 from$32.4 million for the same period in 2025. There was a 73 basis point decrease in the average loans yields, which was 6.42% for the three months ended June 30, 2026 compared to 7.15% for thethree months ended June 30, 2025. Both of these decreases were primarily impacted by the collection of $1.3 million of accrued interest on a fully repaid non-accrual loan duringthe three months ended June 30, 2025. The average balance of loans increased$100.2 million for the three months ended June 30, 2026 as compared to thethree months ended June 30, 2025. The weighted average interest rate of loans originated during the three months ended June 30, 2026 was 7.00%.

Previous wording

Interest income on federal funds sold and interest-earning deposits decreased by $0.17 million to $1.00 million for the three months ended March 31, 2026, from $1.17 million for the three months ended March 31, 2025. The average balance of interest-earning deposits and federal funds sold decreased $9.5 million to $102.2 million for the three months ended March 31, 2026 from $111.7 million for the same period in 2025. The average yield on federal funds sold and interest-earning deposits decreased to 3.95% for the three months ended March 31, 2026 from 4.24% for the same period in 2025.

Current wording

Interest income on federal funds sold and interest-earning deposits decreased by $0.5 million to $0.6 million for the three months ended June 30, 2026, from $1.1 million for the three months ended June 30, 2025. The average balance of interest-earning deposits and federal funds sold decreased $32.8 million to $75.5 million for the three months ended June 30, 2026 from $108.3 million for the same period in 2025. The average yield on federal funds sold and interest-earning deposits decreased to 3.40% for the three months ended June 30, 2026 from 4.24% for the same period in 2025.

Previous wording

Interest on investment securities was$0.8 million for the three months ended March 31, 2026 and $0.8 million for the three months ended March 31, 2025 on a fully tax-equivalent basis. Interest on investments in U.S. Government Agencies and U.S. Municipals was $0.4 million for the three months ended March 31, 2026 and $0.4 million for the three months ended March 31, 2025. Interest on mortgage-backed securities was $0.1 million and $0.1 million for the three months ended March 31, 2026 and March 31, 2025. Subordinated debt interest income was $0.2 million for the three months ended March 31, 2026, and $0.1 million for the three months ended March 31, 2025. The average yield on taxable securities increased 20 basis points, to 3.41% and the average yield on tax-exempt securities increased 23 basis points, to 4.07% on a tax equivalent basis for the three months ended March 31, 2026, from 3.84%, respectively, for the same period in 2025. Due to the increase in average yield, interest on investment securities increased despite the average balance of investment securities decreasing by$2.4 million, to$85.9 million for the three months ended March 31, 2026, from$88.3 million for thethree months ended March 31, 2025.

Current wording

Interest on investment securities was$0.8 million for the three months ended June 30, 2026 and $0.8 million for the three months ended June 30, 2025 on a fully tax-equivalent basis. Interest on investments in U.S. Government Agencies and U.S. Municipals was $0.4 million for the three months ended June 30, 2026 and $0.4 million for the three months ended June 30, 2025. Interest on mortgage-backed securities was$0.1 million and$0.1 million for the three months ended June 30, 2026 and June 30, 2025. Subordinated debt interest income was$0.2 million for the three months ended June 30, 2026, and$0.1 million for thethree months ended June 30, 2025. The average yield on taxable securities increased 18 basis points, to 3.45% and the average yield on tax-exempt securities increased 23 basis points, to 4.06% on a tax equivalent basis for the three months ended June 30, 2026, compared tothe same period in 2025. Due to the increase in average yield, interest on investment securities increased despite the average balance of investment securities decreasing by$3.0 million, to$85.3 million for the three months ended June 30, 2026, from$88.3 million for thethree months ended June 30, 2025.

Previous wording

Total interest expense decreased $2.7 million to$13.7 million for the three months ended March 31, 2026 from$16.5 million for thethree months ended March 31, 2025, primarily due to a$2.7 million decrease in interest expense on interest bearing deposits and a$0.1 million decrease in total interest expense paid on borrowings.

Current wording

Total interest expense decreased $1.6 million to$13.9 million for the three months ended June 30, 2026 from$15.5 million for thethree months ended June 30, 2025, primarily due to a$1.8 million decrease in interest expense on interest bearing deposits and offset by a$0.1 million increase in total interest expense paid on borrowings.

Previous wording

Interest expense on deposits decreased $2.7 million to$12.9 million for the three months ended March 31, 2026 from$15.6 million for thethree months ended March 31, 2025 primarily as a result of a decrease in yields on cost of funds. Theincrease in average balance of interest-bearing deposits was$4.9 million to$1.52 billion during the three months ended March 31, 2026 as compared to$1.52 billion for thethree months ended March 31, 2025. Theincrease in the average balance of interest-bearing deposits was primarily a result of a$67.1 million increase in the average balance of savings and NOW deposits and a$8.2 million increase in interest-bearing demand deposits, offset by a$46.0 million decrease in the average balance of money market deposit accounts and a$24.4 million decrease in the average balance of time deposits, during the three months ended March 31, 2026 as compared to thethree months ended March 31, 2025. The average cost of interest-bearing deposits was 3.45% for the three months ended March 31, 2026, compared to 4.17% for thethree months ended March 31, 2025. The average rate paid on money market deposits decreased 69 basis points to 3.29% for the three months ended March 31, 2026 from 3.98% for thethree months ended March 31, 2025. The average rate paid on interest-bearing demand deposits decreased 79 basis points to 3.02% for the three months ended March 31, 2026 from 3.81% for thethree months ended March 31, 2025 primarily due to the interest rate environment and our ability to reprice these deposits. The average rate paid on savings and NOW deposits decreased 15 basis points to 1.17% for the three months ended March 31, 2026 from 1.32% for thethree months ended March 31, 2025. The average cost of time deposits decreased by 58 basis points to 4.01% for the three months ended March 31, 2026 as compared to 4.59% for thethree months ended March 31, 2025. The average balance of non-interest bearing demand deposits and other liabilities increased $15.8 million to$369.5 million for the three months ended March 31, 2026, compared to$353.7 million for thethree months ended March 31, 2025. Theincrease was primarily the result of an increase non-interest bearing demand deposits.

Current wording

Interest expense on deposits decreased $1.8 million to$12.9 million for the three months ended June 30, 2026 from$14.7 million for thethree months ended June 30, 2025 primarily as a result of a decrease in yields on cost of funds. Theaverage balance of interest-bearing deposits increased by$40.0 million to$1.54 billion during the three months ended June 30, 2026 as compared to$1.50 billion for thethree months ended June 30, 2025. Theincrease in the average balance of interest-bearing deposits was primarily a result of a$59.5 million increase in the average balance of money market deposit accounts and a$22.0 million increase in the average balance of savings and NOW deposits, offset by a$43.0 million decrease in the average balance of time deposits, during the three months ended June 30, 2026 as compared to thethree months ended June 30, 2025. The average cost of interest-bearing deposits was 3.38% for the three months ended June 30, 2026, compared to 3.94% for thethree months ended June 30, 2025. The average rate paid on money market deposits decreased 60 basis points to 3.34% for the three months ended June 30, 2026 from 3.94% for thethree months ended June 30, 2025. The average rate paid on interest-bearing demand deposits decreased 55 basis points to 3.03% for the three months ended June 30, 2026 from 3.58% for thethree months ended June 30, 2025. The average rate paid on savings and NOW deposits decreased 12 basis points to 1.20% for the three months ended June 30, 2026 from 1.32% for thethree months ended June 30, 2025. The average cost of time deposits decreased by 52 basis points to 3.87% for the three months ended June 30, 2026 as compared to 4.39% for thethree months ended June 30, 2025. The average balance of non-interest bearing demand deposits and other liabilities increased $24.3 million to$378.9 million for the three months ended June 30, 2026, compared to$354.6 million for thethree months ended June 30, 2025.

Previous wording

The provision for credit losses on loans was $0 for the three months ended March 31, 2026 and March 31, 2025. There was no provision for credit losses on loans for the three months ended March 31, 2026 due to increases in collateral dependent loans, which were individually evaluated and determined not to require an allowance for credit losses, and charge-offs incurred offset by loan growth for the period. During the three months ended March 31, 2026, there were$0.3 million charge-offs incurred and recoveries of$23,000 were received. During the three months ended March 31, 2025, there were$0.0 charge-offs incurred and recoveries of$10,000 were received. Loan originations, which totaled approximately$33.2 million for the three months ended March 31, 2025 increased $2.0 million to$35.2 million for the three months ended March 31, 2026.

Current wording

The provision for credit losses on loans was $0.2 million for the three months ended June 30, 2026 given loan growth during the period, compared to a recovery of credit losses on loans of $0.5 million for the three months ended June 30, 2025. Loan originations, which totaled approximately$50.9 million for the three months ended June 30, 2025 increased $57.6 million to$108.5 million for the three months ended June 30, 2026. During the three months ended June 30, 2026, there were no charge-offs incurred and recoveries of$14,000 were received. During the three months ended June 30, 2025, there were$0.6 million in charge-offs incurred and recoveries of$0.7 million were received.

Previous wording

Therecovery of credit losses on off-balance sheet credit exposure was$0.1 million for the three months ended March 31, 2026 compared to arecovery of credit losses of$0.0 for thethree months ended March 31, 2025. Therecovery of credit losses on off-balance sheet credit exposure for the three months ended March 31, 2026 was primarily related to decreases in expected utilization rates.

Current wording

Theprovision for credit losses on off-balance sheet credit exposure was$0.3 million for the three months ended June 30, 2026 compared to arecovery of credit losses of$15,000 for thethree months ended June 30, 2025. Theprovision for credit losses on off-balance sheet credit exposure for the three months ended June 30, 2026 was primarily related to increases in unfunded commitment levels and fluctuations in utilization rates.

Previous wording

Non-interest expense decreased $1.6 million, or 11.5%, to$12.7 million for the three months ended March 31, 2026, from$14.3 million for the three months ended March 31, 2025 primarily because of continued expense management efforts across the Company. Salaries and employee benefits decreased$0.8 million to$7.6 million for the three months ended March 31, 2026, from$8.4 million for the three months ended March 31, 2025 due to less full time employees compared to last year. Outside services, which includes professional fees for attorneys, accountants, consultants, and cloud services, decreased $0.7 million to$0.5 million for the three months ended March 31, 2026, from$1.2 million for the three months ended March 31, 2025. Furniture and equipment expenses decreased approximately$0.3 million to$0.8 million for the three months ended March 31, 2026, from$1.0 million for the three months ended March 31, 2025. Advertising and marketing decreased approximately $0.2 million to $0.3 million for the three months ended March 31, 2026, from $0.5 million for the three months ended March 31, 2025. These decreases were offset by an increase in other real estate owned expenses of $0.2 million for the three months ended March 31, 2026, compared to $0 for the three months ended March 31, 2025.

Current wording

Non-interest expense decreased $2.2 million, or 15.1%, to$12.5 million for the three months ended June 30, 2026, from$14.7 million for the three months ended June 30, 2025 primarily because of continued expense management efforts across the Company. Salaries and employee benefits decreased$0.8 million to$7.5 million for the three months ended June 30, 2026, from$8.3 million for the three months ended June 30, 2025 due to a decrease in full time employees compared to last year. Outside services, which includes professional fees for attorneys, accountants, consultants, and cloud services, decreased $0.8 million to$0.4 million for the three months ended June 30, 2026, from$1.3 million for the three months ended June 30, 2025. Furniture and equipment expenses decreased approximately$0.4 million to$0.8 million for the three months ended June 30, 2026, from$1.1 million for the three months ended June 30, 2025. FDIC insurance expense decreased $0.4 million to $0.5 million for the three months ended June 30, 2026, from $0.9 million for the three months ended June 30, 2025, due to the stabilized level of deposits compared to the temporary surge experienced at the end of 2025. Advertising and marketing expense decreased $0.1 million to $0.4 millionfor the three months ended June 30, 2026, from $0.5 million for the three months ended June 30, 2025. Other operating expenses increased $0.4 million to $1.6 million for the three months ended June 30, 2026, from $1.2 million primarily due to workout expenses as we work through a small number of problem credits.

Previous wording

Income tax expense increased $0.6 million or 84.5%, to$1.3 million for the three months ended March 31, 2026 from$0.7 million for the three months ended March 31, 2025. Theincrease in federal income tax expense for the three months ended March 31, 2026 compared to the same period a year ago was driven by theincrease in income before income taxes of$2.3 million, to income before income tax of$5.4 million for the three months ended March 31, 2026 compared to income before income tax expense of$3.1 million for the same period in the prior year. The Company accrues taxes based on an estimated tax rate basis using inputs and assumptions about pre-tax income. As the inputs and assumptions change, the estimated tax accruals will change throughout the year. The Company also invests in projects that have tax credit benefits in order to help reduce its overall tax liability, timing of these tax credits are layered into our overall assessment. The Company has included assessments in income tax expense for potential state tax liabilities which totaled$149,000 for the three months ended March 31, 2026 and$79,000 for thethree months ended March 31, 2025. For the three months ended March 31, 2026, the Company had an effective income tax expense rate of 23.48%, compared to 21.75% for the three months ended March 31, 2025.

Current wording

Income tax expense increased $0.3 million or 27.5%, to$1.4 million for the three months ended June 30, 2026 from$1.1 million for the three months ended June 30, 2025. Theincrease in federal income tax expense for the three months ended June 30, 2026 compared to the same period a year ago was driven by increased estimated tax rates and theincrease in income before income taxes of$0.4 million, to income before income tax of$6.0 million for the three months ended June 30, 2026 compared to income before income tax expense of$5.7 million for the same period in the prior year. The Company accrues taxes based on an estimated tax rate basis using inputs and assumptions about pre-tax income. As the inputs and assumptions change, the estimated tax accruals will change throughout the year. The Company also invests in projects that have tax credit benefits in order to help reduce its overall tax liability, timing of these tax credits are layered into our overall assessment. At June 30, 2026, these tax credits exceed the total tax liability and therefore, are not fully utilized, which causes the effective income tax expense rate to increase. For the three months ended June 30, 2026, the Company had an effective income tax expense rate of 22.52%, compared to 18.82% for the three months ended June 30, 2025. The Company has included assessments in income tax expense for potential state tax liabilities which totaled$0.2 million for the three months ended June 30, 2026 and$0.1 million for thethree months ended June 30, 2025.

Previous wording

Total interest income decreased$1.7 million for the three months ended March 31, 2026 from the same period in 2025. The decrease was primarily the result of a decrease in interest and fees on loans of$1.6 million due to changes in interest rates. Total interest expense decreased $2.7 million for thethree months ended March 31, 2026 from the same period in 2025 due to fluctuations in deposit interest expense described below. Net interest income increased $1.0 million for the three months ended March 31, 2026 from the same period in 2025. The recovery of credit losses was $0.1 million for the three months ended March 31, 2026 compared to no provision for credit losses for the three months ended March 31, 2025. Non-interest income decreased $0.5 million for the three months ended March 31, 2026 from the same period in 2025. The decrease in non-interest income was primarily due to a $0.7 million loss on sale of other real estate owned. Non-interest expense decreased by$1.6 million for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to decreases in salaries and employee benefits, outside services, furniture and equipment, and advertising and marketing expenses. Net income increased $1.6 million to$4.1 million for the three months ended March 31, 2026 from$2.5 million for the three months ended March 31, 2025. The increase in net income was primarily driven by the decrease in deposit interest expense as well as a decrease in non-interest expense.

Current wording

Total interest income decreased $3.9 million for the six months ended June 30, 2026 from the same period in 2025. The decrease was primarily the result of adecrease in interest and fees on loans of$3.3 million, which was primarily due to interest rate changes and was also impacted by the collection of $1.3 million of accrued interest on a fully repaid non-accrual loan during thesix months ended June 30, 2025. Total interest expense decreased $4.4 million for thesix months ended June 30, 2026 from the same period in 2025 due to decreases in deposit interest expense described below. Net interest income increased $0.4 million for thesix months ended June 30, 2026 from the same period in 2025. The provision for credit losses was $0.5 million for thesix months ended June 30, 2026 compared to a recovery of credit losses of$0.5 million for thesix months ended June 30, 2025. Non-interest income decreased $0.7 million for thesix months ended June 30, 2026 from the same period in 2025. Thedecrease in non-interest income was primarily due to a$0.7 million loss on sale of other real estate owned. Non-interest expense decreased by$3.9 million for thesix months ended June 30, 2026 compared to the same period in 2025, primarily due to decreases in salaries and employee benefits, outside services, furniture and equipment, advertising and marketing, and FDIC insurance expenses. Net income increased $1.7 million to$8.8 million for thesix months ended June 30, 2026 from$7.0 million for thesix months ended June 30, 2025.

Previous wording

Net interest income increased approximately$1.0 million, or 6.0%, to$17.6 million for the three months ended March 31, 2026 from$16.6 million for thethree months ended March 31, 2025, on a tax equivalent basis. Our net interest-earning assets increased $14.5 million to$459.2 million for the three months ended March 31, 2026 from$444.7 million for thethree months ended March 31, 2025. The interest rate spread increased by 31 basis points to 2.69% for the three months ended March 31, 2026 from 2.38% for thethree months ended March 31, 2025, on a tax equivalent basis. The net interest margin increased by 17 basis point from 3.30% for thethree months ended March 31, 2025 to 3.47% for the three months ended March 31, 2026 on a tax equivalent basis. Refer to “Use of Certain Non-GAAP Financial Measures,” below, for a reconciliation of adjusted net interest margin.

Current wording

Net interest income increased approximately$0.4 million, or 1.2%, to$35.9 million for thesix months ended June 30, 2026 from$35.4 million for thesix months ended June 30, 2025, on a tax equivalent basis. Our net interest-earning assets increased $10.1 million to$462.6 million for thesix months ended June 30, 2026 from$452.4 million for thesix months ended June 30, 2025. The interest rate spread increased by 11 basis points to 2.72% for thesix months ended June 30, 2026 from 2.61% for thesix months ended June 30, 2025, on a tax equivalent basis. The net interest margin decreased by 2 basis points from 3.52% for thesix months ended June 30, 2025 to 3.50% for thesix months ended June 30, 2026 on a tax equivalent basis. Refer to “Use of Certain Non-GAAP Financial Measures,” below, for a reconciliation of adjusted net interest margin.

Previous wording

Non-interest income decreased $0.5 million, or 56.7%, to$0.4 million for the three months ended March 31, 2026 from$0.9 million for the three months ended March 31, 2025. Thedecrease in non-interest income was primarily due to a$0.7 million loss on the sale of other real estate owned during thethree months ended March 31, 2026. This is offset by an increase of $0.2 million in other non-interest income due to a prepayment fee recognized during the three months ended March 31, 2026. The Company continues to focus on increasing non-interest income as it continues to add services that strategically benefit our customers.

Current wording

Non-interest income decreased $0.7 million, or 35.1%, to$1.3 million for thesix months ended June 30, 2026 from$2.0 million for thesix months ended June 30, 2025. Thedecrease in non-interest income was primarily due to a$0.7 million loss on the sale of other real estate owned during thesix months ended June 30, 2026. Additionally, the gain on retirement of subordinated debt of $128,000 and gain on equity securities of $103,000 that took place during thesix months ended June 30, 2025 were not recurring in thesix months ended June 30, 2026. These decreases are offset by an increase of $0.1 million in other non-interest income due to a prepayment fee recognized during thesix months ended June 30, 2026. The Company continues to focus on increasing non-interest income as it continues to add services that strategically benefit our customers.

Previous wording

Total assets increased $10.6 million, or 0.5%, to$2.22 billion at March 31, 2026 from$2.21 billion at December 31, 2025. Theincrease was primarily the result of anincrease in net loans of$9.1 million as of March 31, 2026, anincrease in cash and cash equivalents of$5.4 million, offset by adecrease of$1.0 million in accrued interest and other receivables, adecrease of$0.9 million in investment securities discussed below, and adecrease of$1.4 million in other assets.

Current wording

Total assets increased $30.4 million, or 1.4%, to$2.24 billion at June 30, 2026 from$2.21 billion at December 31, 2025. Theincrease was primarily the result of anincrease in net loans of$86.5 million as of June 30, 2026, offset by adecrease in cash and cash equivalents of$53.5 million, adecrease of$1.3 million in other assets, adecrease of$0.9 million in investment securities discussed below, and a decrease in other real estate owned of $0.8 million.

Previous wording

Investment securities decreased $0.9 million, or 1.3%, from$71.8 million at December 31, 2025 to$70.8 million at March 31, 2026. Thedecrease was primarily due to one call and scheduled paydowns on available-for-sale securities. At March 31, 2026, our held-to-maturity portion of the securities portfolio, at amortized cost, was$13.8 million, and our available-for-sale portion of the securities portfolio, at fair value, was$57.0 million compared to our held-to-maturity portion of the securities portfolio of$13.8 million and our available-for-sale portion of the securities portfolio of$58.0 million at December 31, 2025.

Current wording

Investment securities decreased $0.9 million, or 1.2%, from$71.8 million at December 31, 2025 to$70.9 million at June 30, 2026. Thedecrease was primarily due to calls, maturities, and scheduled paydowns on available-for-sale securities. At June 30, 2026 and December 31, 2025, our held-to-maturity portion of the securities portfolio, at amortized cost, was$13.8 million. At June 30, 2026, the available-for-sale portion of the securities portfolio, at fair value, was$57.1 million compared to $58.0 million at December 31, 2025.

Previous wording

Net loans increased $9.1 million, or 0.5%, to$1.85 billion at March 31, 2026 from$1.84 billion at December 31, 2025. Residential real estate loans increased $6.7 million, or 1.5%, to$448.3 million at March 31, 2026 from$441.6 million at December 31, 2025. Commercial real estate loans increased by$9.8 million from$1.01 billion at December 31, 2025 to$1.02 billion at March 31, 2026. Commercial and industrial loans decreased by$6.2 million from$107.0 million at December 31, 2025 to$100.8 million at March 31, 2026. Construction and land development loans decreased $1.7 million to$299.0 million at March 31, 2026 from$300.7 million at December 31, 2025. Consumer loans increased by$84,000 from$1.1 million at December 31, 2025 to$1.2 million at March 31, 2026.

Current wording

Net loans increased $86.5 million, or 4.7%, to$1.93 billion at June 30, 2026 from$1.84 billion at December 31, 2025. Residential real estate loans increased $23.8 million to$465.4 million at June 30, 2026 from$441.6 million at December 31, 2025. Commercial real estate loans increased by$56.1 million from$1.01 billion at December 31, 2025 to$1.07 billion at June 30, 2026. Commercial and industrial loans decreased by$5.6 million from$107.0 million at December 31, 2025 to$101.4 million at June 30, 2026. Construction and land development loans increased $12.2 million to$312.9 million at June 30, 2026 from$300.7 million at December 31, 2025. Consumer loans increased by$131,000 from$1.1 million at December 31, 2025 to$1.3 million at June 30, 2026.

Previous wording

The federal banking Agencies issued guidance in 2006 which addresses institutions with increased concentrations of commercial real estate (CRE) loans. The guidance does not establish specific CRE lending limits; rather, it promotes sound risk management practices and appropriate levels of capital that will enable institutions to continue to pursue CRE lending in a safe and sound manner. In developing this guidance, the Agencies recognized that different types of CRE lending present different levels of risk, and that consideration should be given to the lower risk profiles and historically superior performance of certain types of CRE, such as well-structured multifamily housing finance, when compared to others, such as speculative office space construction. As discussed under “CRE Concentration Assessments,” institutions are encouraged to segment their CRE portfolios to acknowledge these distinctions for risk management purposes. The guidance focuses on those CRE loans for which the cash flow from the real estate is the primary source of repayment rather than loans to a borrower for which real estate collateral is taken as a secondary source of repayment or through an abundance of caution. Thus, for the purposes of the guidance, CRE loans include those loans with risk profiles sensitive to the condition of the general CRE market (for example, market demand, changes in capitalization rates, vacancy rates, or rents). CRE loans are land development and construction loans (including 1- to 4-family residential and commercial construction loans) and other land loans. CRE loans also include loans secured by multifamily property, and nonfarm nonresidential property where the primary source of repayment is derived from rental income associated with the property (that is, loans for which 50 percent or more of the source of repayment comes from third party, nonaffiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property. Excluded from the scope of this Guidance are loans secured by nonfarm nonresidential properties where the primary source of repayment is the cash flow from the ongoing operations and activities conducted by the party, or affiliate of the party, who owns the property.

Current wording

The federal banking Agencies issued guidance in 2006 which addresses institutions with increased concentrations of commercial real estate (CRE) loans. The guidance does not establish specific CRE lending limits; rather, it promotes sound risk management practices and appropriate levels of capital that will enable institutions to continue to pursue CRE lending in a safe and sound manner. In developing this guidance, the Agencies recognized that different types of CRE lending present different levels of risk, and that consideration should be given to the lower risk profiles and historically superior performance of certain types of CRE, such as well-structured multifamily housing finance, when compared to others, such as speculative office space construction. Institutions are encouraged to segment their CRE portfolios to acknowledge these distinctions for risk management purposes. The guidance focuses on those CRE loans for which the cash flow from the real estate is the primary source of repayment rather than loans to a borrower for which real estate collateral is taken as a secondary source of repayment or through an abundance of caution. Thus, for the purposes of the guidance, CRE loans include those loans with risk profiles sensitive to the condition of the general CRE market (for example, market demand, changes in capitalization rates, vacancy rates, or rents). CRE loans are land development and construction loans (including 1- to 4-family residential and commercial construction loans) and other land loans. CRE loans also include loans secured by multifamily property, and nonfarm nonresidential property where the primary source of repayment is derived from rental income associated with the property (that is, loans for which 50 percent or more of the source of repayment comes from third party, nonaffiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property. Excluded from the scope of this Guidance are loans secured by nonfarm nonresidential properties where the primary source of repayment is the cash flow from the ongoing operations and activities conducted by the party, or affiliate of the party, who owns the property.

Previous wording

The Company holds a concentration in commercial real estate loans. As of March 31, 2026, construction, land development and other land loans represented 100.1% of consolidated risk-based capital. Total commercial real estate loans as defined by the Agency guidance represented 367.6% of consolidated risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio by 39.0%.

Current wording

The Company holds a concentration in commercial real estate loans. As of June 30, 2026, construction, land development and other land loans represented 103.5% of consolidated risk-based capital. Total commercial real estate loans as defined by the Agency guidance represented 379.3% of consolidated risk-based capital. During the prior 36 months, the Company has experienced an increase in its commercial real estate portfolio by 47%. At June 30, 2026, CRE loans as defined by the Agency guidance represented 59% of total loans, an increase of $54.5 million from December 31, 2025.

Previous wording

Our risk management process begins with a robust underwriting program. The underwriting and risk rating of all loans is completed by an underwriting team that is independent of the originating lender(s). The underwriting analysis of commercial real estate loans includes pre-origination stress testing utilizing the portfolio stress testing methods to fully understand the potential exposure before we originate the credit. Once originated, each loan receives ongoing quarterly stress tests to evaluate the risk profile over the life of the credit.

Current wording

Our risk management process begins with a robust underwriting program. The underwriting and risk rating of all loans is completed by an underwriting team that is independent of the originating lender(s). The underwriting analysis of commercial real estate loans includes pre-origination stress testing utilizing the portfolio stress testing methods to fully understand the potential exposure before we originate the credit. Once originated, management actively monitors concentration, and each loan receives ongoing quarterly stress tests to evaluate the risk profile over the life of the credit.

Previous wording

Past due loans excluding non-performing loans, were$17.8 million as of March 31, 2026 compared to $33.3 million as of December 31, 2025. As of March 31, 2026, criticized loans increased $0.5 million and classified loans increased $27.1 million when compared to December 31, 2025, to a balance of$111.0 million and$111.3 million, respectively. The majority of classified loans is made up of 7 relationships that experienced increases in operating costs, vacancies, and liquidity tightening as a result of the prolonged impacts of the federal government shut down, Washington D.C. government policies, and sustained elevated interest rates. Non-performing loans were$53.8 million at March 31, 2026, an increase of $22.3 million compared to $31.5 million at December 31, 2025. Approximately 46% of this balance is attributable to two relationships and the remaining 54% is confined to eight relationships that experienced liquidity constraints. Additionally, as interest rates rose significantly starting March 2022 and largely sustained despite recent rate cuts, management believes in taking a proactive approach to risk management in the loan portfolio, particularly as credits are due to reprice in a new rate environment. The Company routinely charges off potential exposure as identified and analyzed, and executes the best course of action expected to minimize any further loss exposure. All classified loans andnon-performing loans are considered individually evaluated and have strong collateral positions, with satisfactory loan-to-value (LTVs) ratios. As such, the increase in classified loans and non-performing loans resulted in a decrease to the allowance for credit losses which was offset by loan growth during the three months ended March 31, 2026.

Current wording

Past due loans excluding non-performing loans, were$15.5 million as of June 30, 2026 compared to$33.3 million as of December 31, 2025. As of June 30, 2026, criticized loans increased $5.1 million and classified loans increased $31.5 million when compared to December 31, 2025, to a balance of$115.6 million and$115.7 million, respectively. The majority of classified loans is made up of seven relationships that experienced increases in operating costs, vacancies, and liquidity tightening as a result of the prolonged impacts of the federal government shut down, Washington D.C. government policies, and sustained elevated interest rates. Non-performing loans were$61.3 million at June 30, 2026, anincrease of$29.8 million compared to$31.5 million at December 31, 2025. Approximately 40% of this balance is attributable to two relationships and the remaining 60% is confined to eleven relationships that experienced liquidity constraints. Additionally, as interest rates rose significantly starting March 2022 and largely sustained despite recent rate cuts, management believes in taking a proactive approach to risk management in the loan portfolio, particularly as credits are due to reprice in a new rate environment. The Company routinely charges off potential exposure as identified and analyzed, and executes the best course of action expected to minimize any further loss exposure. All classified loans and non-performing loans are considered individually evaluated and have strong collateral positions, with good loan-to-value (LTVs) ratios. While non-performing loans increased during the quarter, the levels remain manageable and management is diligently working towards positive resolutions.

Previous wording

Deposits increased $15.5 million, or 0.8% to$1.91 billion at March 31, 2026 from$1.90 billion at December 31, 2025. Our core deposits decreased $1.1 million, or 0.1%, to$1.40 billion at March 31, 2026 from$1.40 billion at December 31, 2025. Non-interest bearing demand deposits decreased $19.6 million, or 5.2%, to$359.1 million at March 31, 2026 from$378.7 million at December 31, 2025. Interest-bearing demand deposits increased $1.3 million, or 1.1%, to$120.7 million at March 31, 2026 from$119.4 million at December 31, 2025. Time deposits decreased $29.4 million, or 3.8%, to$750.4 million at March 31, 2026 from$779.8 million at December 31, 2025. Money market deposits increased $46.5 million, or 9.3%, to$545.8 million at March 31, 2026 from$499.3 million at December 31, 2025. Savings and NOW deposits increased $16.8 million or 13.8% from$121.9 million at December 31, 2025 to$138.7 million at March 31, 2026.

Current wording

Deposits increased $35.1 million, or 1.8% to$1.93 billion at June 30, 2026 from$1.90 billion at December 31, 2025. Our core deposits decreased $8.8 million, or 0.6%, to$1.39 billion at June 30, 2026 from$1.40 billion at December 31, 2025. Non-interest bearing demand deposits decreased $14.8 million, or 3.9%, to$363.9 million at June 30, 2026 from$378.7 million at December 31, 2025. Interest-bearing demand deposits decreased $5.3 million, or 4.4%, to$114.1 million at June 30, 2026 from$119.4 million at December 31, 2025. Time deposits decreased $10.9 million, or 1.4%, to$768.9 million at June 30, 2026 from$779.8 million at December 31, 2025. Money market deposits increased $43.4 million, or 8.7%, to$542.7 million at June 30, 2026 from$499.3 million at December 31, 2025. Savings and NOW deposits increased $22.9 million or 18.8% from$121.9 million at December 31, 2025 to$144.8 million at June 30, 2026.

Previous wording

The Company uses wholesale deposits as a funding source in addition to customer deposits. Wholesale deposits provide a diversified and stable source of funding during times of market volatility. As of March 31, 2026, the Company had$515.1 million of total wholesale deposit balances, anincrease of$16.6 million compared to December 31, 2025, which totaled$498.5 million.

Current wording

The Company uses wholesale deposits as a funding source in addition to customer deposits. Wholesale deposits provide a diversified and stable source of funding during times of market volatility. As of June 30, 2026, the Company had$542.5 million of total wholesale deposit balances, anincrease of$44.0 million compared to December 31, 2025, which totaled$498.5 million.

Previous wording

The Company utilizes additional wholesale demand deposits to provide liquidity and more effectively balance our interest rate sensitivity. During the three months ended March 31, 2026 and 2025, total wholesale deposit funding accounted for approximately 35.7% and 36.8% of our interest expense.

Current wording

The Company utilizes additional wholesale demand deposits to provide liquidity and more effectively balance our interest rate sensitivity. During the six months ended June 30, 2026 and 2025, total wholesale deposit funding accounted for approximately 36.3% of our interest expense.

Previous wording

Each quarter the Bank files a bank call report with the FDIC, which has a specific way it defines wholesale brokered deposits. As of March 31, 2026, the Company had$497.3 million of wholesale deposits outstanding, as defined by FDIC, anincrease of$17.3 million from$480.0 at December 31, 2025. In addition, pursuant to rule 12 CFR 337.6(e), well-capitalized and well-rated institutions are not required to treat reciprocal deposits as wholesale deposits up to the lesser of 20 percent of their total liabilities or $5 billion. Reciprocal core deposits exceeding this threshold must be reported additionally as wholesale deposits for call report purposes only. As of March 31, 2026, the Company additionally reported$138.5 million in reciprocal deposits considered wholesale for call report purposes only, bringing regulatory defined wholesale deposits to$635.8 million as of March 31, 2026. As of December 31, 2025, the Company additionally reported$145.2 million in reciprocal deposits considered wholesale for call report purposes only, bringing regulatory defined wholesale deposits to$625.2 million as of December 31, 2025. As of March 31, 2026 and December 31, 2025, all of the Company's reciprocal deposits were core deposits from customers who placed their deposits in the reciprocal network for additional FDIC insurance coverage.

Current wording

Each quarter the Bank files a bank call report with the FDIC, which has a specific way it defines wholesale brokered deposits. As of June 30, 2026, the Company had$534.6 million of wholesale deposits outstanding, as defined by FDIC, anincrease of$54.6 million from$480.0 million at December 31, 2025. In addition, up until July 11, 2026, pursuant to rule 12 CFR 337.6(e), well-capitalized and well-rated institutions were not required to treat reciprocal deposits as wholesale deposits up to the lesser of 20 percent of their total liabilities or $5 billion. Reciprocal core deposits exceeding this threshold were reported additionally as wholesale deposits for call report purposes only. As of June 30, 2026, the Company additionally reported$112.1 million in reciprocal deposits considered wholesale for call report purposes only, bringing regulatory defined wholesale deposits to$646.7 million as of June 30, 2026. As of December 31, 2025, the Company additionally reported$145.2 million in reciprocal deposits considered wholesale for call report purposes only, bringing regulatory defined wholesale deposits to$625.2 million as of December 31, 2025. As of June 30, 2026 and December 31, 2025, all of the Company's reciprocal deposits were core deposits from customers who placed their deposits in the reciprocal network for additional FDIC insurance coverage. On July 11, 2026, the 21st Century ROAD to Housing Act (H.R. 6644) became law. This act changed the threshold from 20 percent of total liabilities to 50 percent of the first $1 billion of total liabilities, 40 percent of the next $1 billion to $10 billion of total liabilities, and 30 percent of total liabilities in excess of $10 billion.

Previous wording

Liquidity Management. Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Deposits are the primary source of funds for lending and investing activities. The Company uses wholesale deposits in addition to customer deposits, as funding sources. Scheduled payments, as well as prepayments, and maturities from portfolios of loans and investment securities also provide a stable source of funds. FHLB secured advances, other secured borrowings, federal funds purchased, and other short-term unsecured borrowed funds, as well as longer-term debt issued through the capital markets, all provide supplemental liquidity sources. Additional liquidity can be obtained through the Federal Reserve Bank discount window. The Company’s funding activities are monitored and governed through the Company’s asset/liability management process. MainStreet Bank had no federal funds purchased outstanding and an additional secured borrowing capacity of$682.4 million as of March 31, 2026. Additionally, at March 31, 2026, we had the ability to borrow up to$144.0 million from other financial institutions.

Current wording

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Deposits are the primary source of funds for lending and investing activities. The Company uses wholesale deposits in addition to customer deposits, as funding sources. Scheduled payments, as well as prepayments, and maturities from portfolios of loans and investment securities also provide a stable source of funds. FHLB secured advances, other secured borrowings, federal funds purchased, and other short-term unsecured borrowed funds, as well as longer-term debt issued through the capital markets, all provide supplemental liquidity sources. Additional liquidity can be obtained through the Federal Reserve Bank discount window. The Company’s funding activities are monitored and governed through the Company’s asset/liability management process. MainStreet Bank had no federal funds purchased outstanding and had an additional secured borrowing capacity of$666.0 million as of June 30, 2026. Additionally, at June 30, 2026, we had the ability to borrow up to$144.0 million from other financial institutions.

Previous wording

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and cash equivalents, which include federal funds sold, interest-earning deposits in other banks, and other cash due from banks. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At March 31, 2026, cash and cash equivalents totaled$168.1 million. Finally, securities classified as available-for-sale, which provide additional sources of liquidity, totaled$57.0 million at March 31, 2026.

Current wording

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions, and competition. Our most liquid assets are cash and cash equivalents, which include federal funds sold, interest-earning deposits in other banks, and other cash due from banks. The levels of these assets are dependent on our operating, financing, lending and investing activities during any given period. At June 30, 2026, cash and cash equivalents totaled$109.3 million. Finally, securities classified as available-for-sale, which provide additional sources of liquidity, totaled$57.1 million at June 30, 2026.

Previous wording

Our cash flows are provided by and used in three primary activities: operating activities, investing activities, and financing activities. Net cash provided by operating activities was$6.6 million and$1.5 million for thethree months ended March 31, 2026 and March 31, 2025, respectively. There were no sales of securities in thethree months ended March 31, 2026 or forthree months ended March 31, 2025. Net cash used in investing activities was$8.6 million and$4.4 million for thethree months ended March 31, 2026 and March 31, 2025, respectively. Net cash provided by financing activities was$7.4 million and used in financing activities was$2.2 million for thethree months ended March 31, 2026 and 2025, respectively.

Current wording

Our cash flows are provided by and used in three primary activities: operating activities, investing activities, and financing activities. Net cash provided by operating activities was$11.5 million and$2.6 million for thesix months ended June 30, 2026 and June 30, 2025, respectively. There were no sales of securities in thesix months ended June 30, 2026 or forsix months ended June 30, 2025. Net cash used in investing activities was$85.8 million and net cash provided by investing activities was$37.1 million for thesix months ended June 30, 2026 and June 30, 2025, respectively. Net cash provided by financing activities was$20.7 million and used in financing activities was$114.2 million for thesix months ended June 30, 2026 and 2025, respectively.

Previous wording

We are committed to maintaining a strong liquidity position. We monitor our liquidity position daily. We anticipate that we have sufficient funds to meet our current funding commitments. Certificates of deposit due within one year of March 31, 2026, totaled$658.0 million of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other deposits, Federal Home Loan Bank advances and commitments from other financial institutions. Depending on market conditions, we may be required to pay higher rates on such deposits or borrowings than we currently pay. We believe, however, based on experience that a significant portion of such deposits will remain with us. We can attract and retain deposits by adjusting the interest rates offered.

Current wording

We are committed to maintaining a strong liquidity position. We monitor our liquidity position daily. We anticipate that we have sufficient funds to meet our current funding commitments. Certificates of deposit due within one year of June 30, 2026, totaled$669.3 million of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other deposits, Federal Home Loan Bank advances and commitments from other financial institutions. Depending on market conditions, we may be required to pay higher rates on such deposits or borrowings than we currently pay. We believe, however, based on experience that a significant portion of such deposits will remain with us. We can attract and retain deposits by adjusting the interest rates offered.

Previous wording

Under the Basel III Capital Rules, a comprehensive capital framework for U.S. banking organizations, the Bank must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer for 2025 and 2024 is 2.50%. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of Total capital, Common Equity Tier 1 capital, and Tier 1 capital (as defined in the regulations) to risk weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). As of March 31, 2026, the Bank met all capital adequacy requirements to which it is subject.

Current wording

Under the Basel III Capital Rules, a comprehensive capital framework for U.S. banking organizations, the Bank must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer is 2.50%. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of Total capital, Common Equity Tier 1 capital, and Tier 1 capital (as defined in the regulations) to risk weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). As of June 30, 2026, the Bank met all capital adequacy requirements to which it is subject.

Previous wording

Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. At March 31, 2026, we had outstanding loan commitments of$186.8 million and$391,000 in outstanding stand-by letters of credit. We anticipate that we will have sufficient funds available to meet our current lending commitments.

Current wording

Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. At June 30, 2026, we had outstanding loan commitments of$256.2 million and$271,000 in outstanding stand-by letters of credit. We anticipate that we will have sufficient funds available to meet our current lending commitments.

Previous wording

Management believes that the use of these non-GAAP measures provides meaningful information about operating performance by enhancing comparability with other financial periods and other financial institutions. The non-GAAP measures used by management enhance comparability by excluding the effects of items that do not reflect ongoing operating performance, including non-recurring gains or charges. These non-GAAP financial measures should not be considered an alternative to, or more important than, U.S. GAAP-basis financial measures, and other bank holding companies may define or calculate these or similar measures differently. A reconciliation of the non-GAAP financial measures used by the Company to evaluate and measure the Company’s performance to the most directly comparable U.S. GAAP financial measures is presented below.

Current wording

Management believes that the use of these non-GAAP measures provides meaningful information about operating performance by enhancing comparability with other financial periods and other financial institutions. The non-GAAP measures used by management enhance comparability by excluding the effects of items that do not reflect ongoing operating performance, including nonrecurring gains or charges. These non-GAAP financial measures should not be considered an alternative to, or more important than, U.S. GAAP-basis financial measures, and other bank holding companies may define or calculate these or similar measures differently. A reconciliation of the non-GAAP financial measures used by the Company to evaluate and measure the Company’s performance to the most directly comparable U.S. GAAP financial measures is presented below.