FIRST COMMUNITY BANKSHARES INC /VA/
For the period ended Sep 30, 2026. Filed Nov 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 6, 2026
FCBC$45.48+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001437749-26-026523
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001437749-26-035498
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 99 previous paragraphs and 104 current paragraphs.
58 unchanged; 36 reworded; 10 added; 4 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 26 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
On October 27, 2026, the Company entered into an Agreement and Plan of Merger (the “Main Street Agreement”) with Main Street Financial Services Corp., a West Virginia corporation (“Main Street”), under which the Company will acquire Main Street. Main Street is a bank holding company head quartered in Wooster, Ohio. As of September 30, 2026, Main Street reported total assets of approximately $1.6 million, deposits of approximately $1.4 billion and shareholders' equity of approximately $137 million. Upon completion of the transaction and subject to customary closing conditions, including shareholder and regulatory approvals, Main Street will cease to exist, and the Company will survive and continue to exist as a Virginia corporation. Agreement details are described in Note 16, "Subsequent Events" of Part I, of this Quarterly Report on Form 10-Q.
Current report
Net income for the third quarter of 2026 was $15.42 million, an increase of $3.16 million, or 25.74%, from $12.27 million for the third quarter of 2025. The increase was primarily attributable to higher net interest income and noninterest income. Interest income increased $4.51 million, or 12.62%, driven primarily by a $2.32 million increase in interest and fees on loans and a $1.15 million increase in income from taxable securities. Noninterest income increased $1.76 million, or 16.14%, primarily from a pre-tax gain of $902 thousand from the sale of bank property. These increases were partially offset by a $1.66 million, or 6.32%, increase in noninterest expense, primarily due to higher salaries and employee benefits expense of $955 thousand, increased other operating expense of $471 thousand, and higher amortization of intangible assets of $401 thousand.
Current report
Nine-Month Comparison.
Current report
Net interest income, which represents the Company's primary source of earnings, is reviewed by management on both a GAAP basis and a fully taxable equivalent ("FTE") basis (non-GAAP). Management believes presentation of net interest income on an FTE basis enhances comparability of income arising from taxable and tax-exempt sources and is a standard industry measure used by investors, analysts, and banking institutions in evaluating net interest margin, net interest rate spread and operating performance. For additional information, see "Non-GAAP Financial Measures" below.
Current report
Three*-*Month Comparison. The Company recorded a provision for credit losses of $680 thousand in the third quarter of 2026, compared to no provision in the prior-year quarter. The increase was primarily related to loan growth, as the loan portfolio increased $146.11 million from the prior-year period, driven largely by the Hometown acquisition completed in the first quarter of 2026.
Current report
In addition to results presented in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company uses certain non-GAAP financial measures that management believes provide investors with meaningful supplemental information regarding the Company's operating performance and facilitate comparisons with other financial institutions. The non-GAAP financial measures presented in this report include fully tax-equivalent ("FTE") net interest income, net interest margin, and net interest rate spread; adjusted net income; adjusted return on average assets ("ROA"); adjusted return on average equity ("ROE"); average tangible common equity; and return on average tangible common equity.
Current report
Management believes that presenting net interest income, net interest margin, and net interest rate spread on an FTE basis enhances comparability between taxable and tax-exempt revenue streams and is a widely used industry methodology for evaluating net interest performance. The FTE adjustment reflects the tax-equivalent value of income earned on certain tax-exempt loans and investments using the federal statutory tax rate of 21%.
Current report
Adjusted net income, adjusted ROA, and adjusted ROE exclude merger-related expenses and other significant non-recurring items that management considers outside the normal course of banking operations. Management believes these adjustments provide a clearer view of the Company's core operating performance and facilitate period-to-period comparisons.
Current report
Average tangible common equity represents total shareholders equity less intangible assets and is a commonly used measure to evaluate capital strength. Return on average tangible common equity measures earnings relative to tangible common equity and assists management and investors in assessing the quality, adequacy, and effectiveness of the Company's capital structure. These measures, together with other financial and operating metrics, are used by management to evaluate performance and capital adequacy.
Current report
While management believes these non-GAAP financial measures enhance investors understanding of the Companys business and operating results, they should be considered supplemental to, and not a substitute for, financial measures prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be comparable to similarly titled measures reported by other financial institutions.
Removed paragraphs (4)
Previous report
Net income for the second quarter of 2026 reached a record $22.51 million, an increase of $7.87 million over the previous quarterly record of $14.64 million reported in the third quarter of 2023, and $10.27 million, or 83.84%, higher than net income of $12.25 million in the second quarter of 2025. The increase was primarily attributable to a $10.38 million pre-tax gain on the sale of the Company's ownership in Bearing Insurance. This was partially offset by a $2.11 million, or 8.29%, increase in noninterest expense, driven primarily by higher salaries and benefits of $778 thousand, or 5.42%, other operating expenses of $627 thousand, or 18.70%, and service fees of $383 thousand, or 15.47%.
Previous report
Six-Month Comparison.
Previous report
Three*-*Month Comparison. The provision charged to operations increased $768 thousand in the second quarter of 2026 compared to the same quarter of 2025. In the second quarter of 2026, the Company recorded a $411 thousand provision for credit losses for loans and a $72 thousand provision for credit losses on loan commitments. This compares to a $292 thousand recovery of provision for credit losses on loans and a $7 thousand provision for credit losses on loan commitments recorded in the second quarter of 2025. The increase in the overall provision was primarily attributable to significant loan recoveries totaling $1.04 million recognized in 2025.
Previous report
In addition to financial statements prepared in accordance with GAAP, we use certain non-GAAP financial measures that management believes provide investors with important information useful in understanding our operational performance and comparing our financial measures with other financial institutions. The non-GAAP financial measures presented in this report includes net interest income on a FTE basis and average tangible common equity. We believe FTE basis is the preferred industry measurement of net interest income and provides better comparability between taxable and tax-exempt amounts. We use this non-GAAP financial measure to monitor net interest income performance and to manage the composition of our balance sheet. The FTE basis adjusts for the tax benefits of income from certain tax-exempt loans and investments using the federal statutory rate of 21%. Average tangible common equity is calculated as GAAP total shareholders’ equity minus total intangible assets. Tangible common equity can thus be considered a more conservative valuation of the Company. When considering net income, a return on average tangible common equity can be calculated. Management provides a return on average equity to facilitate the understanding of as well as to assess the quality and composition of the Company’s capital structure. This measure, along with others, is used by management to analyze capital adequacy and performance. While we believe certain non-GAAP financial measures enhance understanding of our business and performance, they are supplemental and not a substitute for, or more important than, financial measures prepared on a GAAP basis. Our non-GAAP financial measures may not be comparable to those reported by other financial institutions. The reconciliations of non-GAAP to GAAP measures are presented below.
Reworded paragraphs (36)
Previous wording
First Community Bankshares, Inc. (the “Company”) is a financial holding company, headquartered in Bluefield, Virginia, that provides banking products and services through its wholly owned subsidiary First Community Bank (the “Bank”), a Virginia-chartered banking institution. As of June 30, 2026, the Bank operated 61 branches in Virginia, West Virginia, North Carolina and Tennessee. As of June 30, 2026, full-time equivalent employees, calculated using the number of hours worked, totaled 614. Our primary source of earnings is net interest income, the difference between interest earned on assets and interest paid on liabilities, which is supplemented by fees for services, commissions on sales, and various deposit service charges. We fund our lending and investing activities primarily through the retail deposit operations of our branch banking network. We invest our funds primarily in loans to retail and commercial customers and various investment securities. Our common stock is traded on the NASDAQ Global Select Market under the symbol FCBC.
Current wording
First Community Bankshares, Inc. (the “Company”) is a financial holding company, headquartered in Bluefield, Virginia, that provides banking products and services through its wholly owned subsidiary First Community Bank (the “Bank”), a Virginia-chartered banking institution. As of September 30, 2026, the Bank operated 61 branches in Virginia, West Virginia, North Carolina and Tennessee. As of September 30, 2026, full-time equivalent employees, calculated using the number of hours worked, totaled 605. Our primary source of earnings is net interest income, the difference between interest earned on assets and interest paid on liabilities, which is supplemented by fees for services, commissions on sales, and various deposit service charges. We fund our lending and investing activities primarily through the retail deposit operations of our branch banking network. We invest our funds primarily in loans to retail and commercial customers and various investment securities. Our common stock is traded on the NASDAQ Global Select Market under the symbol FCBC.
Previous wording
The Bank offers trust management, estate administration, and investment advisory services through its Trust Division and wholly owned subsidiary First Community Wealth Management Inc. (“FCWM”). The Trust Division manages inter vivos trusts and trusts under will, develops and administers employee benefit and individual retirement plans, and manages and settles estates. Fiduciary fees for these services are charged on a schedule related to the size, nature, and complexity of the account. Revenues consist primarily of investment advisory fees and commissions on assets under management and administration. As of June 30, 2026, the Trust Division and FCWM managed and administered $1.83 billion in combined assets under various fee-based arrangements as fiduciary or agent.
Current wording
The Bank offers trust management, estate administration, and investment advisory services through its Trust Division and wholly owned subsidiary First Community Wealth Management Inc. (“FCWM”). The Trust Division manages inter vivos trusts and trusts under will, develops and administers employee benefit and individual retirement plans, and manages and settles estates. Fiduciary fees for these services are charged on a schedule related to the size, nature, and complexity of the account. Revenues consist primarily of investment advisory fees and commissions on assets under management and administration. As of September 30, 2026, the Trust Division and FCWM managed and administered $1.82 billion in combined assets under various fee-based arrangements as fiduciary or agent.
Previous wording
As described in the Company's Quarterly Report on Form 10Q for the quarter ended March 31, 2026, on January 23, 2026, the Company completed its previously announced merger (the "Merger") with Hometown Bancshares, Inc., a West Virginia corporation headquartered in Middlebourne, West Virginia ("Hometown"), pursuant to an Agreement and Plan of Merger (the "Agreement") dated July 19, 2025, by and between the company and Hometown. At the Effective Time, Hometown merged with and into the Company, with the Company as the surviving corporation in the Merger.
Current wording
As described in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, on January 23, 2026, the Company completed its previously announced merger (the " Hometown Merger") with Hometown Bancshares, Inc., a West Virginia corporation headquartered in Middlebourne, West Virginia ("Hometown"), pursuant to an Agreement and Plan of Merger (the "Agreement") dated July 19, 2025, by and between the company and Hometown. Hometown merged with and into the Company, with the Company as the surviving corporation in the Hometown Merger. Acquisition details are described in Note 2, "Acquisitions" of Part I, of this Quarterly Report on Form 10-Q.
Previous wording
Highlights of our results of operations for the three and six months ended June 30, 2026, and financial condition as of June 30, 2026, include the following:
Current wording
Highlights of our results of operations for the three and nine months ended September 30, 2026, and financial condition as of September 30, 2026, include the following:
Previous wording
Net income increased $10.48 million, or 43.53%, in the six months ended June 30, 2026, compared to the same period in 2025. The increase was primarily attributable to a $10.38 million pre-tax gain on the sale of the Company's interest in Bearing Insurance and a $6.39 million, or 10.49%, increase of net interest income after the provision for credit losses. These increases were partially offset by a $5.90 million, or 11.71%, increase in noninterest expense and a $3.24 million, or 46.11%, increase in income tax expense. The increase in noninterest expense was primarily driven by $2.31 million in merger-related expenses associated with the completed Hometown acquisition, a $1.81 million, or 6.54%, increase in salaries and employee benefits, and a $688 thousand, or 13.87%, increase in service fees.
Current wording
Net income for the nine months of 2026, reached a record $49.96 million, surpassing the previous nine-month record of $40.61 million reported in 2021 and increasing $13.63 million compared with the first nine months of 2025. The increase was primarily attributable to a $10.38 million pre-tax gain on the sale of the Company's interest in Bearing Insurance and a $10.28 million, or 11.14%, increase of net interest income after the provision for credit losses. These gains were offset by a $7.56 million, or 9.86%, increase in noninterest expense and a $4.07 million, or 38.13%, increase in income tax expense. Higher noninterest expense was primarily driven by increases in salaries and employee benefits, merger related expenses, other operating expenses, and amortization of intangibles.
Previous wording
Net interest income, our largest contributor to earnings, is analyzed on a fully taxable equivalent (“FTE”) basis, a non-GAAP financial measure. For additional information, see “Non-GAAP Financial Measures” below. The following tables present the consolidated average balance sheets and net interest analysis on a FTE basis for the dates indicated:
Current wording
The following tables present the consolidated average balance sheets and net interest analysis on an FTE basis for the dates indicated:
Previous wording
Three*-*Month Comparison. Net interest income represented 60.95% of total net interest and noninterest income in the second quarter of 2026, compared to 74.78% in the same quarter of 2025. On a GAAP basis, net interest income increased $4.22 million, or 13.76%, while on a fully taxable equivalent ("FTE") basis, it increased $4.27 million, or 13.87%. The FTE net interest margin increased one basis point, and the net interest spread increased nine basis points, or 2.27%. These improvements were primarily driven by growth in average interest- earning assets and lower funding costs.
Current wording
Three*-*Month Comparison. Net interest income represented 73.93% of total net interest and noninterest income in the third quarter of 2026, compared to 74.19% in the same quarter of 2025. On a GAAP basis, net interest income increased $4.57 million, or 14.60%, while on a fully taxable equivalent ("FTE") basis, it increased $4.62 million, or 14.72%. The FTE net interest margin increased three basis points, and the net interest spread increased ten basis points, or 2.46%. These improvements were primarily driven by growth in average interest- earning assets and lower funding costs.
Previous wording
Average earning assets increased by $382.18 million, or 13.52%, in the second quarter of 2026 compared to the same time period in 2025. The increase was primarily attributable to the acquisition of Hometown, completed in the previous quarter. Although the average yield on earning assets declined seven basis points, interest income increased by $4.27 million, or 12.03%, driven by higher average asset volumes. The average loan-to-deposit ratio decreased to 81.05% from 88.93% in the second quarter of 2025. Non-cash accretion income totaled $372 thousand, compared to $430 thousand in the prior-year period.
Current wording
Average earning assets increased by $390.91 million, or 13.89%, in the third quarter of 2026 compared to the same time period in 2025. The increase was primarily attributable to the acquisition of Hometown, completed in a previous quarter. Although the average yield on earning assets declined 5 basis points, interest income increased by $4.56 million, or 12.74%, driven by higher average asset volumes. The average loan-to-deposit ratio decreased to 81.71% from 88.78% in the third quarter of 2025. Non-cash accretion income totaled $156 thousand, compared to $405 thousand in the prior-year period.
Previous wording
Average interest-bearing liabilities, consisting of interest-bearing deposits and borrowings, increased by $296.09 million, or 16.61% in the second quarter of 2026 compared to the same time period in 2025. Despite the increase in average interest-bearing liabilities, interest expense increased by only $3 thousand, or 0.06%, as the cost of funds declined by 15 basis points, or 14.15%, compared to the same quarter in 2025. The minimal increase in interest expense was primarily driven by a 16-basis point, or 14.95%, reduction in the average rate paid on interest-bearing deposits.
Current wording
The average balance of interest-bearing liabilities, consisting of interest-bearing deposits and borrowings, increased by $279.07 million, or 15.79% during the third quarter of 2026 compared to the third quarter of 2025. Despite the increase in funding balances, interest expense declined due to a 15-basis point, or 15.15%, reduction in the average rate paid on interest-bearing deposits, resulting in a lower overall cost of funds.
Previous wording
Six-Month Comparison. Net interest income represented 66.85% of total net interest and noninterest income in the six months ended June 30, 2026, compared to 74.77% in the same period of 2025. On a GAAP basis, net interest income increased $7.21million, or 11.83%, while on a fully taxable equivalent ("FTE") basis, it increased $7.32 million, or 11.96%. The FTE net interest margin increased three basis points, and the net interest spread increased nine basis points, or 2.27%. These improvements were primarily driven by higher average interest-earning assets primarily attributable to the Hometown acquisition, as well as lower funding costs.
Current wording
Nine-Month Comparison. Net interest income represented 69.14% of total net interest and noninterest income in the nine months ended September 30, 2026, compared to 74.57% in the same period of 2025. On a GAAP basis, net interest income increased $11.78 million, or 12.77%, while on a fully taxable equivalent ("FTE") basis, it increased $11.94 million, or 12.90%. The FTE net interest margin increased 3 basis points, and the net interest spread increased 10 basis points, or 2.51%. These improvements were primarily driven by higher average interest-earning assets primarily attributable to the Hometown acquisition, as well as lower funding costs.
Previous wording
Average earning assets increased $322.94 million, or 11.40%, driven by increases of $143.71 million in interest-bearing deposits, $112.05 million in securities available-for-sale and $67.18 million in loans. Although the average yield on earning assets declined seven basis points, interest income rose $6.94 million, or 9.80%, reflecting higher asset volumes. The average loan-to-deposit ratio decreased to 82.09% from 89.68% for the six months ended June 30, 2025. Non-cash accretion income totaled $861 thousand compared to $986 thousand in the prior-year period.
Current wording
Average earning assets increased $345.84 million, or 12.24%, driven by increases of $148.60 million in interest-bearing deposits, $112.45 million in securities available-for-sale and $84.79 million in loans. Although the average yield on earning assets declined 6 basis points, interest income grew $11.50 million, or 10.79%, reflecting higher asset volumes. The average loan-to-deposit ratio decreased to 81.96% for the nine months ended September 30, 2026, compared to 89.38% for the same period in 2025. Non-cash accretion income totaled $1.02 thousand compared to $1.39 thousand in the prior-year period.
Previous wording
Average interest-bearing liabilities, consisting of interest-bearing deposits and borrowings, increased $251.74 million, or 14.10%. However, due to a 17-basis point, or 15.74%, decline in cost of funds, interest expense decreased $381 thousand compared to the same period in 2025. The largest contributor to this reduction was interest-bearing deposits, where interest expense decreased $403 thousand, or 4.20%, driven by an 18-basis point decline in yield.
Current wording
Average interest-bearing liabilities, consisting of interest-bearing deposits and borrowings, increased $260.95 million, or 14.66%, compared to the same period in 2025. However, interest expense decreased $443 thousand as the cost of funds declined 16 basis points to 0.89% from 1.05% in the prior-year period. The decrease was primarily attributable to interest-bearing deposits, where a 16-basis point reduction in the average rate paid contributed to a $479 thousand, or 3.42%, decline in interest expense.
Previous wording
Six-Month Comparison. The provision charged to operations increased $825 thousand in the six months ended June 30, 2026, compared to the same period of 2025. During the six months ended June 30, 2026, the Company recorded a $711 thousand provision for credit losses for loans and a $150 thousand provision for credit losses on loan commitments. This compares to a $58 thousand provision for credit losses on loans and a $22 thousand recovery of provision for credit losses on loan commitments recorded in the six months ended June 30, 2025. The increase in the overall provision was primarily attributable to significant loan recoveries totaling $1.64 million recognized in 2025.
Current wording
Nine-Month Comparison. The provision charged to operations increased $1.50 million in the nine months ended September 30, 2026, compared to the same period of 2025. The Company recorded a $1.39 million provision for credit losses on loans and a $150 thousand provision for credit losses on unfunded commitments during the first nine months of 2026, compared to a $58 thousand provision for credit losses on loans and a $22 thousand recovery of provision for credit losses on unfunded loan commitments during the same period in 2025. The increase in total provision expense was primarily driven by growth in the loan portfolio, primarily attributable to loans acquired through the Hometown acquisition.
Previous wording
Three*-*Month Comparison. Noninterest income comprised 39.05% of total net interest and noninterest income in the second quarter of 2026 compared to 25.22% in the same quarter of 2025. Noninterest income increased $12.00 million, or 116.06%, compared to the second quarter of 2025. The increase was primarily attributable to a $10.38 million pre-tax gain on the sale of the Company's ownership interest in Bearing Insurance.
Current wording
Three*-*Month Comparison. Noninterest income comprised 26.07% of total net interest and noninterest income in the third quarter of 2026 compared to 25.81% in the same quarter of 2025. Noninterest income increased $1.76 million, or 16.14%, compared to the third quarter of 2025. The increase was primarily attributable to a $902 thousand pre-tax gain on the sale of bank property and growth in other service charges and fees of $565 thousand.
Previous wording
Six-Month Comparison. Noninterest income comprised 33.15% of total net interest and noninterest income in the six months ended June 30, 2026, compared to 25.23% in the same period of 2025. Noninterest income increased $13.23 million, or 64.32%, compared to the same period of 2025. The increase was primarily attributable to a $10.38 million pre-tax gain on the sale of the Company's ownership interest in Bearing Insurance and a $1.28 million, or 18.02% increase in other service charges and fees.
Current wording
Nine-Month Comparison. Noninterest income comprised 30.86% of total net interest and noninterest income in the nine months ended September 30, 2026, compared to 25.43% in the same period of 2025. Noninterest income increased $14.99 million, or 47.64%, compared to the same period of 2025. The increase was primarily attributable to a $10.38 million pre-tax gain on the sale of the Company's ownership interest in Bearing Insurance, a $1.85 million, or 16.85% growth in other service charges and fees and a $902 thousand pre-tax gain on the sale of bank property.
Previous wording
Three*-*Month Comparison. Noninterest expense increased $2.11 million, or 8.29%, in the second quarter of 2026 compared to the same quarter of 2025. The increase was primarily attributable to increases in salaries and employee benefits of $778 thousand, or 5.42%, other operating expense of $627 thousand, or 18.70%, and service fees of $383 thousand, or 15.47%.
Current wording
Three*-*Month Comparison. Noninterest expense increased $1.66 million, or 6.32%, in the third quarter of 2026 compared to the same quarter of 2025. The increase was primarily attributable to increases in salaries and employee benefits of $955 thousand, or 6.65%, other operating expense of $471 thousand, or 13.95%, and amortization of intangibles of $401 thousand, or 92.61%.
Previous wording
Six-Month Comparison. Noninterest expense increased $5.90 million, or 11.71%, in the six months ended June 30, 2026, compared to the same period of 2025. The increase was primarily attributable to increases of $2.31 million in merger expense, $1.81 million in salaries and employee benefits, and $688 thousand in services fees. The merger expense was related to the acquisition of Hometown, which was completed in the first quarter of 2026.
Current wording
Nine-Month Comparison. Noninterest expense increased $7.56 million, or 9.86%, in the nine months ended September 30, 2026, compared to the same period of 2025. The increase was primarily attributable to increases of $2.76 million in salaries and employee benefits, $1.52 million in merger expense, and $1.10 million in other operating expense. The merger expense was related to the acquisition of Hometown, which was completed in the first quarter of 2026.
Previous wording
Three-Month Comparison. Income tax expense increased $3.07 million, or 85.84%. The effective tax rate increased to 22.82% in the second quarter of 2026 from 22.63% in the same quarter of 2025.
Current wording
Three-Month Comparison. Income tax expense increased $828 thousand, or 22.74%. The effective tax rate decreased to 22.47% in the third quarter of 2026 from 22.89% in the same quarter of 2025.
Previous wording
Six-Month Comparison. Income tax expense increased $3.24 million, or 46.11%. The effective tax rate increased to 22.91% in the six months ended June 30, 2026, from 22.60% in the same period of 2025.
Current wording
Nine-Month Comparison. Income tax expense increased $4.07 million, or 38.13%. The effective tax rate increased to 22.77% in the nine months ended September 30, 2026, from 22.70% in the same period of 2025.
Previous wording
The following table reconciles net interest income and margin, as presented in our consolidated statements of income, to net interest income and net interest margin, on a FTE basis for the periods indicated:
Current wording
The following table reconciles net interest income and margin, as presented in our consolidated statements of income, to net interest income and net interest margin, on an FTE basis for the periods indicated:
Previous wording
Total assets as of June 30, 2026, increased $348.08 million, or 10.68%, from December 31, 2025. Total liabilities increased $309.52 million, or 11.22%, and stockholders' equity increased $38.55 million, or 7.70%. The primary driver of the changes in balance sheet components was the acquisition of Hometown in the first quarter of 2026. The acquisition resulted in an increase in stockholders' equity of $35.07 million. Total assets of $393.81 million and total liabilities of $360.46 million were acquired in the transaction. Excluding the impact of the Hometown transaction, total assets decreased $132.60 million and liabilities decreased $50.93 million compared to December 31, 2025.
Current wording
Total assets as of September 30, 2026, increased $374.04 million, or 11.47%, from December 31, 2025. Total liabilities increased $329.31 million, or 11.94%, and stockholders' equity increased $44.72 million, or 8.93%. The primary driver of the changes in balance sheet components was the acquisition of Hometown in the first quarter of 2026. The acquisition resulted in an increase in stockholders' equity of $35.07 million. Total assets of $393.81 million and total liabilities of $360.46 million were acquired in the transaction. Excluding the impact of the Hometown transaction, total assets decreased $19.77 million and liabilities decreased $31.15 million compared to December 31, 2025.
Previous wording
Available-for-sale debt securities as of June 30, 2026, increased $106.36 million, or 80.16%, compared to December 31, 2025. The increase was primarily attributable to securities acquired as part of the Hometown acquisition.
Current wording
Available-for-sale debt securities as of September 30, 2026, increased $202.63 million, or 152.71%, compared to December 31, 2025. The increase was primarily attributable to purchases of investment securities associated with the Company's participation in a state pooled collateral program.
Previous wording
The market value of debt securities available-for-sale as a percentage of amortized cost was 95.63% as of June 30, 2026, compared to 92.95% as of December 31, 2025.
Current wording
The market value of debt securities available-for-sale as a percentage of amortized cost was 95.60% as of September 30, 2026, compared to 92.95% as of December 31, 2025.
Previous wording
Total loans as of June 30, 2026, increased $145.00 million, or 6.26%, compared to December 31, 2025, and was primarily due to the Hometown acquisition with the fair value of loans acquired totaling $171.04 million.
Current wording
Total loans as of September 30, 2026, increased $162.66 million, or 7.03%, compared to December 31, 2025. The increase was attributable to the Hometown acquisition.
Previous wording
Nonperforming assets as of June 30, 2026, increased $2.99 million, or 21.16%, from December 31, 2025, and modified loans increased $993 thousand, or 40.66%. As of June 30, 2026, nonaccrual loans were largely attributed to single family owner occupied (45.13%), single family non-owner occupied (16.87%) and commercial and industrial (14.35%). Certain loans included in the nonaccrual category have been written down to estimated realizable value or assigned specific reserves in the allowance for credit losses based on management’s estimate of loss at ultimate resolution.
Current wording
Nonperforming assets as of September 30, 2026, increased $1.72 million, or 12.16%, from December 31, 2025, and modified loans increased $976 thousand, or 39.97%. As of September 30, 2026, nonaccrual loans were largely attributed to single family owner occupied (42.71%), single family non-owner occupied (14.44%) and commercial and industrial (13.17%). Certain loans included in the nonaccrual category have been written down to estimated realizable value or assigned specific reserves in the allowance for credit losses based on management’s estimate of loss at ultimate resolution.
Previous wording
Delinquent loans, comprised of loans 30 days or more past due and nonaccrual loans, totaled $28.50 million as of June 30, 2026, an increase of $650 thousand, or 2.33%, compared to $27.85 million as of December 31, 2025. Delinquent loans as a percent of total loans totaled 1.16% as of June 30, 2026, which includes past due loans (0.48%) and nonaccrual loans (0.68%).
Current wording
Delinquent loans, comprised of loans 30 days or more past due and nonaccrual loans, totaled $28.85 million as of September 30, 2026, an increase of $1.00 million, or 3.61%, compared to $27.85 million as of December 31, 2025. Delinquent loans as a percent of total loans totaled 1.16% as of September 30, 2026, which includes past due loans (0.53%) and nonaccrual loans (0.64%).
Previous wording
When restructuring loans for borrowers experiencing financial difficulty, we generally make concessions with respect to interest rates, loan terms, or amortization terms. Total loans modified as of June 30, 2026, were $3.43 million. As of June 30, 2026, $937 thousand of these loans were 30-89 days past due. Modified loans past due 90 days or more totaled $42 thousand and are included in the total for nonaccrual loans.
Current wording
When restructuring loans for borrowers experiencing financial difficulty, we generally make concessions with respect to interest rates, loan terms, or amortization terms. Total loans modified as of September 30, 2026, were $3.42 million. As of September 30, 2026, $586 thousand of these loans were 30-89 days past due. Modified loans past due 90 days or more totaled $414 thousand and are included in the total for nonaccrual loans.
Previous wording
Other real estate owned ("OREO") is carried at the lesser of estimated net realizable value or cost. No OREO property was held by the Company as of March 31, 2026, or December 31, 2025. The following table presents the changes in OREO during the periods indicated:
Current wording
Other real estate owned ("OREO") is carried at the lesser of estimated net realizable value or cost. The following table presents the changes in OREO during the periods indicated:
Previous wording
As of June 30, 2026, the balance of the ACL totaled $32.65 million, or 1.33%, of total loans. This compares to $30.76 million as of December 31, 2025, reflecting an increase of $1.89 million, or 6.15%. The increase in the ACL is primarily driven by the Hometown acquisition, which resulted in a $3.21 million addition for acquired loans. The increase was offset by net charge-offs of $2.03 million.
Current wording
As of September 30, 2026, the balance of the ACL totaled $32.64 million, or 1.32%, of total loans. This compares to $30.76 million as of December 31, 2025, reflecting an increase of $1.88 million, or 6.10%. The increase in the ACL is primarily driven by the Hometown acquisition, which resulted in a $3.21 million addition for acquired loans. The increase was offset by net charge-offs of $2.73 million.
Previous wording
As of June 30, 2026, the Company had an allowance for unfunded commitments of $505 thousand, which was recorded in Other Liabilities on the Balance Sheet. During the first six months of 2026, the Company recorded a $150 thousand provision for credit losses on loan commitments, compared to a $22 thousand recovery of provision for credit losses on loan commitments recorded during the same period in 2025.
Current wording
As of September 30, 2026, the Company had an allowance for unfunded commitments of $505 thousand, which was recorded in Other Liabilities on the Balance Sheet. During the first nine months of 2026, the Company recorded a $150 thousand provision for credit losses on loan commitments, compared to a $22 thousand recovery of provision for credit losses on loan commitments recorded during the same period in 2025.
Previous wording
Total deposits as of June 30, 2026, increased $331.26 million, or 12.34%, compared to December 31, 2025. The largest increases occurred in interest-bearing demand deposits of $136.95 million, or 20.01%, and money-market and savings deposits of $109.81 million, or 12.14%. The growth was primarily attributable to the acquisition of Hometown, which contributed $357.72 million in deposits. Excluding the impact of the Hometown acquisition, total deposits decreased $26.46 million, or 0.99%.
Current wording
Total deposits as of September 30, 2026, increased $343.55 million, or 12.79%, compared to December 31, 2025. The largest increases occurred in interest-bearing demand deposits of $131.14 million, or 19.17%, and money-market and savings deposits of $136.35 million, or 15.08%. The growth was primarily attributable to the acquisition of Hometown, which contributed $357.72 million in deposits. Excluding the impact of the Hometown acquisition, total deposits decreased $14.17 million, or 0.53%.
Previous wording
Total borrowings in the form of retail repurchase agreements as of June 30, 2026, increased $1.71 million, or 140.86%, compared to December 31, 2025. The increase is primarily attributable to the Hometown acquisition, which included $1.31 million in securities sold under agreements to repurchase.
Current wording
Total borrowings in the form of retail repurchase agreements as of September 30, 2026, increased $1.23 million, or 100.99%, compared to December 31, 2025. The increase is primarily attributable to the Hometown acquisition, which included $1.31 million in securities sold under agreements to repurchase. Excluding the impact of the Hometown acquisition, borrowings decreased $88 thousand, or 7.25%.
Previous wording
As a financial holding company, the Company’s primary source of liquidity is dividends received from the Bank, which are subject to certain regulatory limitations. Other sources of liquidity include cash, investment securities, and borrowings. As of June 30, 2026, the Company’s cash reserves totaled $22.43 million. The Company’s cash reserves provide adequate working capital to meet obligations for the next twelve months.
Current wording
As a financial holding company, the Company’s primary source of liquidity is dividends received from the Bank, which are subject to certain regulatory limitations. Other sources of liquidity include cash, investment securities, and borrowings. As of September 30, 2026, the Company’s cash and cash equivalent reserves totaled $39.49 million. The Company’s cash reserves provide adequate working capital to meet obligations for the next twelve months.
Previous wording
In addition to cash on hand and deposits with other financial institutions, we rely on customer deposits, cash flows from loans and investment securities, and lines of credit from the FHLB and the Federal Reserve Bank (“FRB”) Discount Window to meet potential liquidity demands. These sources of liquidity are immediately available to satisfy deposit withdrawals, customer credit needs, and our operations. Secondary sources of liquidity include approved lines of credit with correspondent banks and unpledged available-for-sale securities. As of June 30, 2026, our unencumbered cash totaled $591.91 million, unused borrowing capacity from the FHLB totaled $303.35 million, available credit from the FRB Discount Window totaled $6.91 million, available lines from correspondent banks totaled $100.00 million, and unpledged available-for-sale securities totaled $80.99 million.
Current wording
In addition to cash on hand and deposits with other financial institutions, we rely on customer deposits, cash flows from loans and investment securities, and lines of credit from the FHLB and the Federal Reserve Bank (“FRB”) Discount Window to meet potential liquidity demands. These sources of liquidity are immediately available to satisfy deposit withdrawals, customer credit needs, and our operations. Secondary sources of liquidity include approved lines of credit with correspondent banks and unpledged available-for-sale securities. As of September 30, 2026, our unencumbered cash totaled $502.35 million, unused borrowing capacity from the FHLB totaled $301.57 million, available credit from the FRB Discount Window totaled $6.88 million, available lines from correspondent banks totaled $100.00 million, and unpledged available-for-sale securities totaled $110.18 million.
Previous wording
We are committed to effectively managing our capital to protect our depositors, creditors, and shareholders. Failure to meet certain capital requirements may result in actions by regulatory agencies that could have a material impact on our operations. Total stockholders’ equity as of June 30, 2026, increased $38.55 million, or 7.70%, to $539.10 million from $500.55 million as of December 31, 2025. The increase was primarily attributable to the acquisition of Hometown, in connection with which the Company issued 1.03 million shares of common stock, resulting in a $35.07 million increase in capital. Stockholders' equity was further increased by net income of $34.54 million. These increases were partially offset by $11.80 million of common stock dividends declared and $20.33 million of common stock repurchases. Book value per share increased $1.22 to $28.52 as of June 30, 2026, compared to $27.30 on December 31, 2025.
Current wording
We are committed to effectively managing our capital to protect our depositors, creditors, and shareholders. Failure to meet certain capital requirements may result in actions by regulatory agencies that could have a material impact on our operations. Total stockholders’ equity as of September 30, 2026, increased $44.72 million, or 8.93%, to $545.27 million from $500.55 million as of December 31, 2025. The increase was primarily attributable to the acquisition of Hometown, in which the Company issued 1.03 million shares of common stock, resulting in a $35.07 million increase in capital. Stockholders' equity was further increased by net income of $49.96 million. These increases were partially offset by $18.05 million of common stock dividends declared and $20.33 million of common stock repurchases. Book value per share increased $1.53 to $28.83 as of September 30, 2026, compared to $27.30 on December 31, 2025.
Previous wording
As of June 30, 2026, the Federal Open Market Committee had set the benchmark federal funds rate to a range of 350 to 375 basis points. The following table presents the sensitivity of net interest income from immediate and sustained rate shocks in various interest rate scenarios over a twelve-month period for the periods indicated:
Current wording
As of September 30, 2026, the Federal Open Market Committee had set the benchmark federal funds rate to a range of 375 to 400 basis points. The following table presents the sensitivity of net interest income from immediate and sustained rate shocks in various interest rate scenarios over a twelve-month period for the periods indicated:
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Acquisition details are described in Note 2, "Acquisitions and Divestitures" of Part I, of this Quarterly Report on Form 10Q.