FIRST NORTHERN COMMUNITY BANCORP

Previous wording

Significant results and developments during the second quarter and year-to-date 2026 included:

Current wording

Significant results and developments during the third quarter and year-to-date 2026 included:

Previous wording

The Company recorded net income of $10,634,000 for the six months ended June 30, 2026, representing an increase of $1,497,000, or 16.4%, from net income of $9,137,000 for the same period in 2025. The Company recorded net income of $4,728,000 for the three months ended June 30, 2026, representing a decrease of $738,000, or 13.5%, from net income of $5,466,000 for the same period in 2025.

Current wording

The Company recorded net income of $16,836,000 for the nine months ended September 30, 2026, representing an increase of $1,686,000, or 11.1%, from net income of $15,150,000 for the same period in 2025. The Company recorded net income of $6,202,000 for the three months ended September 30, 2026, representing an increase of $189,000, or 3.1%, from net income of $6,013,000 for the same period in 2025.

Previous wording

The following tables present a summary of the results for the three and six months ended June 30, 2026 and 2025, and a summary of financial condition at June 30, 2026 and December 31, 2025.

Current wording

The following tables present a summary of the results for the three and nine months ended September 30, 2026 and 2025, and a summary of financial condition at September 30, 2026 and December 31, 2025.

Previous wording

Following is an analysis of changes in interest income and expense (dollars in thousands) for the three months ended June 30, 2026 over the three months ended June 30, 2025, the six months ended June 30, 2026 over the six months ended June 30, 2025, and the three months ended June 30, 2026 over the three months ended March 31, 2026. Changes not solely due to interest rate or volume have been allocated proportionately to interest rate and volume.

Current wording

Following is an analysis of changes in interest income and expense (dollars in thousands) for the three months ended September 30, 2026 over the three months ended September 30, 2025, the nine months ended September 30, 2026 over the nine months ended September 30, 2025, and the three months ended September 30, 2026 over the three months ended June 30, 2026. Changes not solely due to interest rate or volume have been allocated proportionately to interest rate and volume.

Previous wording

The assets of the Company set forth in the Unaudited Condensed Consolidated Balance Sheets reflect a $32,119,000, or 22.1%, decrease in cash and cash equivalents, a $1,688,000, or 0.3%, increase in investment securities available-for-sale, a $41,625,000, or 4.0%, increase in net loans held-for-investment, and a $3,107,000, or 5.0%, increase in interest receivable and other assets from December 31, 2025 to June 30, 2026. The decrease in cash and cash equivalents was primarily due to an increase in loans due to net loan originations, which was partially offset by an increase in deposit balances. The increase in investment securities was due to purchases of available-for-sale securities, which was partially offset by paydowns and maturities of available-for-sale securities. The increase in net loans held-for-investment was primarily due to net originations of commercial loans, which was partially offset by net payoffs of commercial real estate, agriculture, residential mortgage and consumer loans. The increase in interest receivable and other assets was primarily due to the increase in deferred tax assets due to the increase in unrealized losses on investment securities.

Current wording

The assets of the Company set forth in the Unaudited Condensed Consolidated Balance Sheets reflect a $22,376,000, or 15.4%, decrease in cash and cash equivalents, a $3,053,000, or 0.5%, increase in investment securities available-for-sale, a $81,984,000, or 7.8%, increase in net loans held-for-investment, and a $14,800,000, or 23.7%, increase in interest receivable and other assets from December 31, 2025 to September 30, 2026. The decrease in cash and cash equivalents was primarily due to an increase in loans due to net loan originations, which was partially offset by an increase in deposit balances. The increase in investment securities was due to purchases of available-for-sale securities, which was partially offset by paydowns and maturities of available-for-sale securities. The increase in net loans held-for-investment was primarily due to net originations of commercial loans, which was partially offset by net payoffs of commercial real estate, agriculture, residential mortgage and consumer loans. The increase in interest receivable and other assets was primarily due to the increase in deferred tax assets due to the increase in unrealized losses on investment securities.

Previous wording

The liabilities of the Company set forth in the Unaudited Condensed Consolidated Balance Sheets reflect an increase in total deposits of $12,744,000, or 0.8%, from December 31, 2025 to June 30, 2026. The overall increase in total deposits was primarily due to seasonal fluctuations due to changes in market conditions and monetary policy.

Current wording

The liabilities of the Company set forth in the Unaudited Condensed Consolidated Balance Sheets reflect an increase in total deposits of $81,348,000, or 4.8%, from December 31, 2025 to September 30, 2026. The overall increase in total deposits was primarily due to organic deposit growth and seasonal fluctuations due to changes in market conditions and monetary policy.

Previous wording

The Federal Open Market Committee kept the Federal Reserve's benchmark rate range at 3.50% to 3.75% during the six months ended June 30, 2026.

Current wording

The Federal Open Market Committee increased the Federal Reserve's benchmark rate range to 3.75% to 4.00% during the three months ended September 30, 2026.

Previous wording

Interest income on loans for the six months ended June 30, 2026 was up 2.3% from the same period in 2025, increasing from $28,231,000 to $28,871,000, and was down 0.5% for the three months ended June 30, 2026 over the same period in 2025, decreasing from $14,629,000 to $14,549,000. The increase in interest income on loans for the six months ended June 30, 2026 as compared to the same period a year ago was primarily due to a 4 basis point increase in yield on loans coupled with an increase in average balances of loans. The decrease in interest income on loans for the three months ended June 30, 2026 compared to the same period a year ago was primarily due to a 17 basis point decrease in yield on loans, which was partially offset by an increase in average balance of loans.

Current wording

Interest income on loans for the nine months ended September 30, 2026 was up 7.0% from the same period in 2025, increasing from $42,820,000 to $45,836,000, and was up 16.3% for the three months ended September 30, 2026 over the same period in 2025, increasing from $14,589,000 to $16,965,000. The increase in interest income on loans for the nine months ended September 30, 2026 as compared to the same period a year ago was primarily due to a 25 basis point increase in yield on loans coupled with an increase in average balances of loans. The increase in interest income on loans for the three months ended September 30, 2026 compared to the same period a year ago was primarily due to a 63 basis point increase in yield on loans coupled with an increase in average balance of loans. The increase in loan yield was partially due to the recognition of interest income on nonaccrual loans totaling $1,874,000 during the three and nine months ended September 30, 2026, due to the resolution of a longstanding nonaccrual lending relationship.

Previous wording

Interest income on certificates of deposit for the six months ended June 30, 2026 was down 32.7% from the same period in 2025, decreasing from $318,000 to $214,000, and was down 31.9% for the three months ended June 30, 2026 over the same period in 2025, decreasing from $157,000 to $107,000. The decrease in interest income on certificates of deposit for the six months ended June 30, 2026 as compared to the same period a year ago was primarily due to an 8 basis point decrease in yield on certificates of deposit coupled with a decrease in average balances of certificates of deposit. The decrease in interest income on certificates of deposit for the three months ended June 30, 2026 as compared to the same period a year ago was primarily due to a 16 basis point decrease in yield on certificates of deposit coupled with a decrease in average balances of certificates of deposit.

Current wording

Interest income on certificates of deposit for the nine months ended September 30, 2026 was down 29.6% from the same period in 2025, decreasing from $470,000 to $331,000, and was down 23.0% for the three months ended September 30, 2026 over the same period in 2025, decreasing from $152,000 to $117,000. The decrease in interest income on certificates of deposit for the nine months ended September 30, 2026 as compared to the same period a year ago was primarily due to an 8 basis point decrease in yield on certificates of deposit coupled with a decrease in average balances of certificates of deposit. The decrease in interest income on certificates of deposit for the three months ended September 30, 2026 as compared to the same period a year ago was primarily due to a 9 basis point decrease in yield on certificates of deposit coupled with a decrease in average balances of certificates of deposit.

Previous wording

Interest income on interest-bearing due from banks for the six months ended June 30, 2026 was up 22.7% from the same period in 2025, increasing from $1,737,000 to $2,131,000, and was up 2.4% for the three months ended June 30, 2026 over the same period in 2025, increasing from $1,010,000 to $1,034,000. The increase in interest income on interest-bearing due from banks for the six months ended June 30, 2026 as compared to the same period a year ago was primarily due to an increase in average balances of interest-bearing due from banks, which was partially offset by a 70 basis point decrease in yield on interest-bearing due from banks. The increase in interest income on interest-bearing due from banks for the three months ended June 30, 2026 as compared to the same period a year ago was primarily due to an increase in average balances of interest-bearing due from banks, which was partially offset by a 67 basis point decrease in yield on interest-bearing due from banks.

Current wording

Interest income on interest-bearing due from banks for the nine months ended September 30, 2026 was up 11.7% from the same period in 2025, increasing from $2,808,000 to $3,136,000, and was down 6.2% for the three months ended September 30, 2026 over the same period in 2025, decreasing from $1,071,000 to $1,005,000. The increase in interest income on interest-bearing due from banks for the nine months ended September 30, 2026 as compared to the same period a year ago was primarily due to an increase in average balances of interest-bearing due from banks, which was partially offset by a 62 basis point decrease in yield on interest-bearing due from banks. The decrease in interest income on interest-bearing due from banks for the three months ended September 30, 2026 as compared to the same period a year ago was primarily due to a 55 basis point decrease in yield on interest-bearing due from banks, which was partially offset by an increase in average balances of interest-bearing due from banks.

Previous wording

Interest income on investment securities available-for-sale for the six months ended June 30, 2026 was up 6.3% from the same period in 2025, increasing from $9,269,000 to $9,848,000, and was up 9.7% for the three months ended June 30, 2026 over the same period in 2025, increasing from $4,528,000 to $4,967,000. The increase in interest income on investment securities for the six months ended June 30, 2026 as compared to the same period a year ago was primarily due to a 16 basis point increase in investment yields coupled with an increase in average investment securities. The increase in interest income on investment securities for the three months ended June 30, 2026 as compared to the same period a year ago was primarily due to a 21 basis point increase in investment yields coupled with an increase in average investment securities.

Current wording

Interest income on investment securities available-for-sale for the nine months ended September 30, 2026 was up 9.1% from the same period in 2025, increasing from $13,756,000 to $15,004,000, and was up 14.9% for the three months ended September 30, 2026 over the same period in 2025, increasing from $4,487,000 to $5,156,000. The increase in interest income on investment securities for the nine months ended September 30, 2026 as compared to the same period a year ago was primarily due to a 21 basis point increase in investment yields coupled with an increase in average investment securities. The increase in interest income on investment securities for the three months ended September 30, 2026 as compared to the same period a year ago was primarily due to a 28 basis point increase in investment yields coupled with an increase in average investment securities.

Previous wording

Interest income on other earning assets for the six months ended June 30, 2026 was up 34.9% from the same period in 2025, increasing from $522,000 to $704,000, and was down 40.4% for the three months ended June 30, 2026 over the same period in 2025, decreasing from $250,000 to $149,000. This income is primarily derived from dividends received from the Federal Home Loan Bank (FHLB). The increase in interest income on other earning assets for the six months ended June 30, 2026 as compared to the same period a year ago was primarily due to a special cash dividend issued by the FHLB during the first quarter of 2026. The decrease in interest income on other earning assets for the three months ended June 30, 2026 as compared to the same period a year ago was primarily due to a special cash dividend issued by the FHLB in the second quarter of 2026 compared to the quarterly cash dividend received in the second quarter of 2025. Other than the special cash dividend, no quarterly cash dividend was issued by the FHLB in the second quarter of 2026.

Current wording

Interest income on other earning assets for the nine months ended September 30, 2026 was up 27.1% from the same period in 2025, increasing from $767,000 to $975,000, and was up 10.6% for the three months ended September 30, 2026 over the same period in 2025, increasing from $245,000 to $271,000. This income is primarily derived from dividends received from the Federal Home Loan Bank (FHLB). The increase in interest income on other earning assets for the nine months ended September 30, 2026 as compared to the same period a year ago was primarily due to special cash dividends paid by the FHLB during the first and third quarters of 2026. The increase in interest income on other earning assets for the three months ended September 30, 2026 as compared to the same period a year ago was primarily due to a special cash dividend paid by the FHLB in the third quarter of 2026.

Previous wording

The Company had no Federal Funds sold balances during the three and six months ended June 30, 2026 and June 30, 2025.

Current wording

The Company had no Federal Funds sold balances during the three and nine months ended September 30, 2026 and September 30, 2025.

Previous wording

Interest expense on interest-bearing liabilities for the six months ended June 30, 2026 was up 5.3% from the same period in 2025, increasing from $7,181,000 to $7,558,000, and was up 4.9% for the three months ended June 30, 2026 over the same period in 2025, increasing from $3,621,000 to $3,800,000. The increase in interest expense for the six months ended June 30, 2026 as compared to the same period a year ago was primarily due to an increase in average balance of interest-bearing liabilities coupled with a 2 basis point increase in average interest-bearing deposit yield. The increase in interest expense for the three months ended June 30, 2026 as compared to the same period a year ago was primarily due to an increase in average balance of interest-bearing liabilities coupled with a 1 basis point increase in average interest-bearing deposit yield.

Current wording

Interest expense on interest-bearing liabilities for the nine months ended September 30, 2026 was up 7.6% from the same period in 2025, increasing from $10,878,000 to $11,706,000, and was up 12.2% for the three months ended September 30, 2026 over the same period in 2025, increasing from $3,697,000 to $4,148,000. The increase in interest expense for the nine months ended September 30, 2026 as compared to the same period a year ago was primarily due to an increase in average balance of interest-bearing liabilities coupled with a 3 basis point increase in average interest-bearing deposit yield. The increase in interest expense for the three months ended September 30, 2026 as compared to the same period a year ago was primarily due to an increase in average balance of interest-bearing liabilities coupled with a 6 basis point increase in average interest-bearing deposit yield.

Previous wording

Provision for credit losses for the six months ended June 30, 2026 was up 5.9% from the same period in 2025, increasing from $850,000 to $900,000. Provision for credit losses for the three months ended June 30, 2026 was $600,000, compared to $0 for the same period in 2025. The increase in provision for credit losses from the prior year was primarily due to an increase in reserves on pooled loans due to an increase in qualitative factors.

Current wording

Provision for credit losses for the nine months ended September 30, 2026 was up 5.9% from the same period in 2025, increasing from $850,000 to $900,000. The increase in provision for credit losses from the prior year was primarily due to an increase in net charge-offs. No provision for credit losses for each of the three month periods ended September 30, 2026 and September 30, 2025.

Previous wording

Non-interest income was up 17.2% for the six months ended June 30, 2026 from the same period in 2025, increasing from $2,990,000 to $3,503,000, and was up 14.7% for the three months ended June 30, 2026 over the same period in 2025, increasing from $1,537,000 to $1,763,000. The increase was primarily driven by an increase in investment and brokerage services income due to the Beacon Wealth client acquisition in the fourth quarter of 2025.

Current wording

Non-interest income was up 10.6% for the nine months ended September 30, 2026 from the same period in 2025, increasing from $4,648,000 to $5,139,000, and was down 1.3% for the three months ended September 30, 2026 over the same period in 2025, decreasing from $1,658,000 to $1,636,000. The increase in non-interest income for the nine months ended September 30, 2026 as compared to the same period a year ago was primarily driven by an increase in investment and brokerage services income due to the Beacon Wealth client acquisition in the fourth quarter of 2025. The decrease in non-interest income for the three months ended September 30, 2026 as compared to the same period a year ago was primarily driven by an increase in realized losses on sales of available-for-sale securities, which was partially offset by an increase in investment and brokerage services income.

Previous wording

Non-interest expenses was up 2.2% for the six months ended June 30, 2026 from the same period in 2025, increasing from $22,483,000 to $22,986,000. The increase was primarily due to increases in salaries and employee benefits, data processing, and amortization of intangible assets, which was partially offset by decreases in occupancy and equipment expense and other expenses. The increase in salaries and employee benefits was primarily due to an increase in full-time equivalent employees. The increase in data processing was primarily due to an increase in costs of service contracts. The increase in amortization of intangible assets was due to the acquisition of a customer-related intangible asset during the fourth quarter of 2025. The decrease in occupancy and equipment expense was primarily due to the prior year upgrades to facilities which were not repeated in the current year. The decrease in other expenses was primarily due to decreases in legal and consulting fees.

Current wording

Non-interest expenses was up 3.7% for the nine months ended September 30, 2026 from the same period in 2025, increasing from $34,406,000 to $35,692,000. The increase was primarily due to increases in salaries and employee benefits, data processing, and amortization of intangible assets, which was partially offset by a decrease in occupancy and equipment expense. The increase in salaries and employee benefits was primarily due to an increases in full-time equivalent employees and contingent compensation accrual. The increase in data processing was primarily due to an increase in costs of service contracts and costs related to the Company's system upgrade. The increase in amortization of intangible assets was due to the acquisition of a customer-related intangible asset during the fourth quarter of 2025. The decrease in occupancy and equipment expense was primarily due to the prior year upgrades to facilities which were not repeated in the current year.

Previous wording

Non-interest expenses was up 9.7% for the three months ended June 30, 2026 over the same period in 2025, increasing from $10,893,000 to $11,954,000. The increase was primarily due to increases in salaries and employee benefits, data processing, and other expenses, which was partially offset by a decrease in occupancy and equipment. The increase in salaries and employee benefits was primarily due to an increase in full-time equivalent employees. The increase in data processing was primarily due to an increase in costs of service contracts. The increase in other expenses was primarily due to increases in consulting fees and loan collection expenses. The decrease in occupancy and equipment expense was primarily due to the prior year upgrades to facilities which were not repeated in the current year.

Current wording

Non-interest expenses was up 6.6% for the three months ended September 30, 2026 over the same period in 2025, increasing from $11,923,000 to $12,706,000. The increase was primarily due to increases in salaries and employee benefits and data processing, which was partially offset by a decrease in occupancy and equipment. The increase in salaries and employee benefits was primarily due to an increases in full-time equivalent employees and contingent compensation accrual. The increase in data processing was primarily due to an increase in costs of service contracts. The decrease in occupancy and equipment expense was primarily due to the prior year upgrades to facilities which were not repeated in the current year.

Previous wording

The following table sets forth other non-interest expenses by category for the three and six months ended June 30, 2026 and 2025.

Current wording

The following table sets forth other non-interest expenses by category for the three and nine months ended September 30, 2026 and 2025.

Previous wording

The Company’s tax rate, the Company’s income before taxes and the amount of tax relief provided by non-taxable earnings affect the Company’s provision for income taxes. Provision for income taxes decreased 6.5% for the six months ended June 30, 2026 from the same period in 2025, decreasing from $3,416,000 to $3,193,000, and decreased 30.2% for the three months ended June 30, 2026 from the same period in 2025, decreasing from $2,131,000 to $1,487,000. The effective tax rate was 23.1% and 27.2% for the six months ended June 30, 2026 and June 30, 2025, respectively. The effective tax rate was 23.9% and 28.1% for the three months ended June 30, 2026 and June 30, 2025, respectively. The decrease in the effective tax rate was primarily due to low income housing tax credits recognized during the six months ended June 30, 2026, coupled with the execution of a tax planning strategy that involved purchasing investment tax credits tied to alternative energy projects. The investment tax credits were acquired at a discount and the majority was recognized as a reduction to income tax expense in the third quarter of 2025, with the remaining credits recognized in the first quarter of 2026.

Current wording

The Company’s tax rate, the Company’s income before taxes and the amount of tax relief provided by non-taxable earnings affect the Company’s provision for income taxes. Provision for income taxes increased 32.7% for the nine months ended September 30, 2026 from the same period in 2025, increasing from $3,985,000 to $5,287,000, and increased 268.0% for the three months ended September 30, 2026 from the same period in 2025, increasing from $569,000 to $2,094,000. The effective tax rate was 23.9% and 20.8% for the nine months ended September 30, 2026 and September 30, 2025, respectively. The effective tax rate was 25.2% and 8.6% for the three months ended September 30, 2026 and September 30, 2025, respectively. In 2025, the Company executed a tax planning strategy that involved purchasing investment tax credits tied to alternative energy projects. The investment tax credits were acquired at a discount and the majority was recognized as a reduction to income tax expense in the third quarter of 2025, with the remaining credits recognized in the first quarter of 2026. The Company also recognized low income housing tax credits during the three and nine months ended September 30, 2026.

Previous wording

Non-accrual loans amounted to $4,567,000 at June 30, 2026 and were comprised of two commercial loans totaling $289,000, two commercial real estate loans totaling $894,000, four agriculture loans totaling $2,758,000, three residential mortgage loans totaling $156,000 and four consumer loans totaling $470,000. Non-accrual loans amounted to $6,030,000 at December 31, 2025 and were comprised of one commercial loan totaling $139,000, one commercial real estate loan totaling $657,000, four agriculture loans totaling $4,423,000, three residential mortgage loans totaling $174,000 and five consumer loans totaling $637,000.

Current wording

Non-accrual loans amounted to $3,400,000 at September 30, 2026 and were comprised of one commercial real estate loan totaling $614,000, three agriculture loans totaling $2,203,000, four residential mortgage loans totaling $253,000 and three consumer loans totaling $330,000. Non-accrual loans amounted to $6,030,000 at December 31, 2025 and were comprised of one commercial loan totaling $139,000, one commercial real estate loan totaling $657,000, four agriculture loans totaling $4,423,000, three residential mortgage loans totaling $174,000 and five consumer loans totaling $637,000.

Previous wording

As the following table illustrates, total non-performing assets, net of guarantees of the State of California and U.S. Government, including its agencies and its government-sponsored agencies, decreased $1,431,000, or 22.6%, to $4,892,000 during the first six months of 2026. Non-performing assets, net of guarantees, represented 0.3% of total assets at June 30, 2026.

Current wording

As the following table illustrates, total non-performing assets, net of guarantees of the State of California and U.S. Government, including its agencies and its government-sponsored agencies, decreased $2,457,000, or 38.9%, to $3,866,000 during the first nine months of 2026. Non-performing assets, net of guarantees, represented 0.2% of total assets at September 30, 2026.

Previous wording

Excluding non-performing loans, loans totaling $17,717,000 and $18,259,000 were classified as substandard or doubtful loans, representing potential problem loans at June 30, 2026 and December 31, 2025, respectively. Management believes that the allowance for credit losses at June 30, 2026 and December 31, 2025 appropriately reflected expected credit losses in the loan portfolio at that date. The ratio of the allowance for credit losses to total loans was 1.34% and 1.36% at June 30, 2026 and December 31, 2025, respectively.

Current wording

Excluding non-performing loans, loans totaling $16,676,000 and $18,259,000 were classified as substandard or doubtful loans, representing potential problem loans at September 30, 2026 and December 31, 2025, respectively. Management believes that the allowance for credit losses at September 30, 2026 and December 31, 2025 appropriately reflected expected credit losses in the loan portfolio at that date. The ratio of the allowance for credit losses to total loans was 1.26% and 1.36% at September 30, 2026 and December 31, 2025, respectively.

Previous wording

Other real estate owned (“OREO”) consists of property that the Company has acquired by deed in lieu of foreclosure or through foreclosure proceedings, and property that the Company does not hold title to but is in actual control of, known as in-substance foreclosure. OREO can also consist of Company-owned properties that the Company has determined are no longer intended for use or future development. The estimated fair value of the property is determined prior to transferring the balance to OREO. The balance transferred to OREO is the estimated fair value of the property less estimated cost to sell. Impairment may be deemed necessary to bring the book value of the loan equal to the appraised value. Appraisals or loan officer evaluations are then conducted periodically thereafter charging any additional impairment to the appropriate expense account. The Company had OREO totaling $1,241,000 for each of the periods ended June 30, 2026 and December 31, 2025. As of June 30, 2026 and December 31, 2025, OREO represented land, transferred from premises and equipment, that the Company determined is no longer intended for future development and is actively marketing for sale.

Current wording

Other real estate owned (“OREO”) consists of property that the Company has acquired by deed in lieu of foreclosure or through foreclosure proceedings, and property that the Company does not hold title to but is in actual control of, known as in-substance foreclosure. OREO can also consist of Company-owned properties that the Company has determined are no longer intended for use or future development. The estimated fair value of the property is determined prior to transferring the balance to OREO. The balance transferred to OREO is the estimated fair value of the property less estimated cost to sell. Impairment may be deemed necessary to bring the book value of the loan equal to the appraised value. Appraisals or loan officer evaluations are then conducted periodically thereafter charging any additional impairment to the appropriate expense account. The Company had OREO totaling $1,241,000 as of September 30, 2026 and December 31, 2025. As of September 30, 2026 and December 31, 2025, OREO represented land, transferred from premises and equipment, that the Company determined is no longer intended for future development and is actively marketing for sale.

Previous wording

The following table summarizes the ACL of the Company during the six months ended June 30, 2026 and 2025, and for the year ended December 31, 2025:

Current wording

The following table summarizes the ACL of the Company during the nine months ended September 30, 2026 and 2025, and for the year ended December 31, 2025:

Previous wording

Approximately 44% and 40% of our deposits were uninsured as of June 30, 2026 and December 31, 2025, respectively.

Current wording

Approximately 45% and 40% of our deposits were uninsured as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

Asset liquidity sources consist of the repayments and maturities of loans, selling of loans, short-term money market investments, maturities of securities and sales of securities from the available-for-sale portfolio. These activities are generally summarized as investing activities in the Condensed Consolidated Statements of Cash Flows. For the six months ended June 30, 2026, net liquidity used in investing activities totaled $51,179,000.

Current wording

Asset liquidity sources consist of the repayments and maturities of loans, selling of loans, short-term money market investments, maturities of securities and sales of securities from the available-for-sale portfolio. These activities are generally summarized as investing activities in the Condensed Consolidated Statements of Cash Flows. For the nine months ended September 30, 2026, net liquidity used in investing activities totaled $112,860,000.

Previous wording

The Company’s available-for-sale investment securities plus cash and cash equivalents in excess of reserve requirements and certificates of deposit totaled $743,229,000 on June 30, 2026, which was 38.6% of assets at that date. This was a decrease of $29,748,000 from $772,977,000 and 40.4% of assets as of December 31, 2025. The Company’s investment securities are generally shorter term in nature to provide ongoing cash flows for liquidity needs and/or reinvestment for interest rate risk management. On June 30, 2026, the effective duration of our investment securities was 3.15 with projected principal cashflow of $81,777,000 for the remainder of 2026 available for reinvestment or liquidity needs. The Company had no held-to-maturity securities as of June 30, 2026 and December 31, 2025.

Current wording

The Company’s available-for-sale investment securities plus cash and cash equivalents in excess of reserve requirements and certificates of deposit totaled $754,040,000 as of September 30, 2026, which was 37.9% of assets at that date. This was a decrease of $18,937,000 from $772,977,000 and 40.4% of assets as of December 31, 2025. The Company’s investment securities are generally shorter term in nature to provide ongoing cash flows for liquidity needs and/or reinvestment for interest rate risk management. On September 30, 2026, the effective duration of our investment securities was 3.26 with projected principal cashflow of $41,266,000 for the remainder of 2026 available for reinvestment or liquidity needs. The Company had no held-to-maturity securities as of September 30, 2026 and December 31, 2025.

Previous wording

Liquidity may also be impacted from liabilities through changes in deposits and borrowings outstanding. These activities are included under financing activities in the Condensed Consolidated Statements of Cash Flows. As of June 30, 2026 and December 31, 2025, the Company had $0 in borrowings outstanding. For the six months ended June 30, 2026, net liquidity provided by financing activities totaled $11,338,000, primarily due to a net increase in deposits. While these sources of funds are expected to continue to provide significant amounts of funds in the future, their mix, as well as the possible use of other sources, will depend on future economic and market conditions.

Current wording

Liquidity may also be impacted from liabilities through changes in deposits and borrowings outstanding. These activities are included under financing activities in the Condensed Consolidated Statements of Cash Flows. As of September 30, 2026 and December 31, 2025, the Company had $0 in borrowings outstanding. For the nine months ended September 30, 2026, net liquidity provided by financing activities totaled $78,101,000, primarily due to a net increase in deposits. While these sources of funds are expected to continue to provide significant amounts of funds in the future, their mix, as well as the possible use of other sources, will depend on future economic and market conditions.

Previous wording

Liquidity is also provided or used through the results of operating activities. For the six months ended June 30, 2026, net cash provided by operating activities totaled $7,722,000, primarily as a result of net income during the six months ended June 30, 2026.

Current wording

Liquidity is also provided or used through the results of operating activities. For the nine months ended September 30, 2026, net cash provided by operating activities totaled $12,383,000, primarily as a result of net income during the nine months ended September 30, 2026.

Previous wording

Liquidity is measured by various ratios, in management’s opinion, the most common being the ratio of net loans to deposits (including loans held-for-sale). This ratio was 64.6% and 62.6% as of June 30, 2026 and December 31, 2025, respectively.

Current wording

Liquidity is measured by various ratios, in management’s opinion, the most common being the ratio of net loans to deposits (including loans held-for-sale). This ratio was 64.4% and 62.6% as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

To meet unanticipated funding requirements, the Company maintains short-term unsecured lines of credit with other banks which totaled $130,000,000 at June 30, 2026. Additionally, the Company has a line of credit with the FHLB, with a remaining borrowing capacity at June 30, 2026 of $339,691,000; credit availability is subject to certain collateral requirements.

Current wording

To meet unanticipated funding requirements, the Company maintains short-term unsecured lines of credit with other banks which totaled $130,000,000 at September 30, 2026. Additionally, the Company has a line of credit with the FHLB, with a remaining borrowing capacity at September 30, 2026 of $350,274,000; credit availability is subject to certain collateral requirements.

Previous wording

In August of 2020, the Federal banking agencies adopted the final version of the community bank leverage ratio framework rule (the “CBLR”), implementing two interim final rules adopted in April of 2020. The rule provides an optional, simplified measure of capital adequacy. Under the optional CBLR framework, the CBLR was 8.5% through calendar year 2021 and is 9% thereafter. The rule is applicable to all non-advanced approaches FDIC-supervised institutions with less than $10 billion in total consolidated assets. Banks not electing the CBLR framework will continue to be subject to the generally applicable risk-based capital rule. On April 23, 2026, the US federal banking regulators issued a final rule implementing changes to the CBLR framework intended to encourage additional community banks to opt into the CBLR framework. The final rule, which is effective July 1, 2026, reduces the CBLR requirement from 9% to 8% and extends the grace period for qualifying institutions that fall below the 8% ratio to return to compliance from the current two quarters to four quarters (subject to a limit of eight quarters in the previous five-year period). At the present time, the Company and the Bank do not intend to elect to use the CBLR framework.

Current wording

In August of 2020, the Federal banking agencies adopted the final version of the community bank leverage ratio framework rule (the “CBLR”), implementing two interim final rules adopted in April of 2020. The rule provides an optional, simplified measure of capital adequacy. Under the optional CBLR framework, the CBLR was 8.5% through calendar year 2021 and is 9% thereafter. The rule is applicable to all non-advanced approaches FDIC-supervised institutions with less than $10 billion in total consolidated assets. Banks not electing the CBLR framework will continue to be subject to the generally applicable risk-based capital rule. On April 23, 2026, the US federal banking regulators issued a final rule implementing changes to the CBLR framework intended to encourage additional community banks to opt into the CBLR framework. The final rule, which was effective July 1, 2026, reduces the CBLR requirement from 9% to 8% and extends the grace period for qualifying institutions that fall below the 8% ratio to return to compliance from the current two quarters to four quarters (subject to a limit of eight quarters in the previous five-year period). At the present time, the Company and the Bank do not intend to elect to use the CBLR framework.