AMES NATIONAL CORP

Previous wording

The Company had net income of $5.9 million, or $0.67 per share, for the three months ended June 30, 2026, compared to net income of $4.5 million, or $0.51 per share, for the three months ended June 30, 2025. The Company had net income of $11.9 million, or $1.34 per share, for the six months ended June 30, 2026, compared to net income of $8.0 million, or $0.89 per share, for the six months ended June 30, 2025. The increase in earnings is primarily due to an increase in net interest income. Net interest income increased due to higher yields and average balances on investments, combined with a lower cost of funds driven by declining market rates and reduced borrowings.

Current wording

The Company had net income of $7.0 million, or $0.80 per share, for the three months ended September 30, 2026, compared to net income of $4.6 million, or $0.51 per share, for the three months ended September 30, 2025. The Company had net income of $18.9 million, or $2.14 per share, for the nine months ended September 30, 2026, compared to net income of $12.5 million, or $1.41 per share, for the nine months ended September 30, 2025. The increase in earnings is primarily due to an increase in net interest income. Net interest income increased due to higher yields and average balances on investments, combined with a declining cost of funds driven by lower market rates and reduced borrowings.

Previous wording

For the three months ended June 30, 2026 and 2025, the Company's net interest margin adjusted for tax exempt income was 3.18% and 2.65%, respectively. Net interest income, prior to the adjustment for tax-exempt income, for the three months ended June 30, 2026 totaled $16.4 million compared to $13.5 million for the three months ended June 30, 2025.

Current wording

For the three months ended September 30, 2026 and 2025, the Company's net interest margin adjusted for tax exempt income was 3.38% and 2.83%, respectively. Net interest income, prior to the adjustment for tax-exempt income, for the three months ended September 30, 2026 totaled $17.0 million compared to $14.0 million for the three months ended September 30, 2025.

Previous wording

For the three months ended June 30, 2026, interest income increased $1.8 million, or 8.4%, when compared to the same period in 2025. The increase is primarily due to higher yield and average balances on the investment portfolio.

Current wording

For the three months ended September 30, 2026, interest income increased $1.8 million, or 8.2%, when compared to the same period in 2025. The increase is primarily due to higher yield and average balances on the investment portfolio and improved yield on the loan portfolio. Interest income recognized on nonaccrual loans for the three months ended September 30, 2026 and 2025 was approximately $171 thousand and $54 thousand, respectively.

Previous wording

Interest expense decreased $1.1 million, or 14.0%, for the three months ended June 30, 2026 when compared to the same period in 2025. The lower interest expense for the period is primarily due to a decrease in market rates and reduced borrowings.

Current wording

Interest expense decreased $1.1 million, or 14.5%, for the three months ended September 30, 2026 when compared to the same period in 2025. The lower interest expense for the period is primarily due to lower market rates and reduced borrowings.

Previous wording

A credit loss expense of $208 thousand was recognized for the three months ended June 30, 2026 as compared to a credit loss expense of $108 thousand for the three months ended June 30, 2025. Net loan charge-offs for the three months ended June 30, 2026 totaled $255 thousand compared to net loan charge-offs of $1.1 million for the three months ended June 30, 2025. The credit loss expense in 2026 and 2025 was primarily due charge-offs in the commercial loan portfolio.

Current wording

A credit loss expense of $66 thousand was recognized for the three months ended September 30, 2026 as compared to a credit loss expense of $627 thousand for the three months ended September 30, 2025. Net loan charge-offs for the three months ended September 30, 2026 totaled $745 thousand compared to net loan recoveries of $344 thousand for the three months ended September 30, 2025. The credit loss expense in 2026 was primarily due to charge-offs in the commercial real estate and operating loan portfolios, partially offset by a decrease in specific reserves. The credit loss expense in 2025 was primarily due to an increase in specific reserves for loans in those same portfolios. The charge-offs in the third quarter of 2026 were on commercial real estate and operating loans for which specific reserves had previously been established.

Previous wording

Noninterest expense for the three months ended June 30, 2026 totaled $11.2 million compared to $10.4 million recorded for the three months ended June 30, 2025, an increase of 7.8%. The increase reflects higher professional fees, salaries and benefits. The increase in professional fees was primarily due to $300 thousand of consultant fees for certain contract negotiations during the three months ended June 30, 2026. The consultant fees are expected to continue throughout 2026 as negotiations are in process. The increase in salaries and benefits was driven by anticipated bonus payouts as Company performance thresholds are met, in addition to normal increases in salaries and benefits. The efficiency ratio was 58.52% for the second quarter of 2026 as compared to 64.34% in the second quarter of 2025. The efficiency ratio continues to improve as net interest margin increases.

Current wording

Noninterest expense for the three months ended September 30, 2026 totaled $11.2 million compared to $10.2 million recorded for the three months ended September 30, 2025, an increase of 9.6%. The increase reflects higher professional fees, salaries and benefits. The increase in professional fees was primarily due to $600 thousand of consultant fees for certain contract negotiations during the three months ended September 30, 2026. The consultant fees are expected to continue throughout 2026 as negotiations are in process. The increase in salaries and benefits was driven by anticipated bonus payouts as Company performance thresholds are met, in addition to normal increases in salaries and benefits. The efficiency ratio was 54.97% for the third quarter of 2026 as compared to 61.76% in the third quarter of 2025. The efficiency ratio continues to improve as net interest margin increases.

Previous wording

Income tax expense for the three months ended June 30, 2026 totaled $1.8 million compared to $1.1 million recorded for the three months ended June 30, 2025. The effective tax rate was 23% and 20% for the three months ended June 30, 2026 and 2025, respectively. The increase in income tax expense and effective tax rate was primarily due to higher net income and lower New Markets Tax Credits. The final year of tax credits was 2025 for a majority of the New Markets Tax Credit projects.

Current wording

Income tax expense for the three months ended September 30, 2026 totaled $2.1 million compared to $1.2 million recorded for the three months ended September 30, 2025. The effective tax rate was 23% and 20% for the three months ended September 30, 2026 and 2025, respectively. The increase in income tax expense and effective tax rate was primarily due to higher net income and lower New Markets Tax Credits. The final year of tax credits was 2025 for a majority of the New Markets Tax Credit projects.

Previous wording

Income Statement Review for the Six Months ended June 30, 2026 and 2025

Current wording

Income Statement Review for the Nine Months ended September 30, 2026 and 2025

Previous wording

The following highlights a comparative discussion of the major components of net income and their impact for the six months ended June 30, 2026 and 2025:

Current wording

The following highlights a comparative discussion of the major components of net income and their impact for the nine months ended September 30, 2026 and 2025:

Previous wording

For the six months ended June 30, 2026 and 2025, the Company's net interest margin adjusted for tax exempt income was 3.10% and 2.59%, respectively. Net interest income, prior to the adjustment for tax-exempt income, for the six months ended June 30, 2026 totaled $31.8 million compared to $26.4 million for the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2026 and 2025, the Company's net interest margin adjusted for tax exempt income was 3.19% and 2.67%, respectively. Net interest income, prior to the adjustment for tax-exempt income, for the nine months ended September 30, 2026 totaled $48.8 million compared to $40.4 million for the nine months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2026, interest income increased $2.9 million, or 6.8%, when compared to the same period in 2025. The increase is primarily due to higher yield and average balances on the investment portfolio.

Current wording

For the nine months ended September 30, 2026, interest income increased $4.7 million, or 7.2%, when compared to the same period in 2025. The increase is primarily due to higher yield and average balances on the investment portfolio and improved yield on the loan portfolio. Interest income recognized on nonaccrual loans for the nine months ended September 30, 2026 and 2025 was approximately $202 thousand and $56 thousand, respectively.

Previous wording

Interest expense decreased $2.5 million, or 15.7%, for the six months ended June 30, 2026 when compared to the same period in 2025. The lower interest expense for the period is primarily due to a decrease in market rates and reduced borrowings.

Current wording

Interest expense decreased $3.7 million, or 15.3%, for the nine months ended September 30, 2026 when compared to the same period in 2025. The lower interest expense for the period is primarily due to lower market rates and reduced borrowings.

Previous wording

A credit loss benefit of ($139) thousand was recognized for the six months ended June 30, 2026 as compared to a credit loss expense of $1.1 million for the six months ended June 30, 2025. Net loan charge-offs for the six months ended June 30, 2026 totaled $223 thousand compared to net loan charge-offs of $1.2 million for the six months ended June 30, 2025. The credit loss benefit in 2026 was primarily due to a decline in loan balances. The credit loss expense in 2025 was primarily due to charge-offs in the commercial loan portfolio.

Current wording

A credit loss benefit of ($73) thousand was recognized for the nine months ended September 30, 2026 as compared to a credit loss expense of $1.7 million for the nine months ended September 30, 2025. Net loan charge-offs for the nine months ended September 30, 2026 totaled $968 thousand compared to net loan charge-offs of $812 thousand for the nine months ended September 30, 2025. The credit loss benefit in 2026 was primarily due to a decline in loan balances. The credit loss expense in 2025 was primarily due to an increase in specific reserves in the commercial real estate and operating loan portfolios.

Previous wording

Noninterest income for the six months ended June 30, 2026 totaled $5.5 million compared to $5.2 million for the six months ended June 30, 2025, an increase of 5.8%. The increase is primarily due to an increase in wealth management income due to growth in assets under management and an increase in estate and trust fees.

Current wording

Noninterest income for the nine months ended September 30, 2026 totaled $9.0 million compared to $7.7 million for the nine months ended September 30, 2025, an increase of 15.9%. The increase is primarily due to an increase in wealth management income and other noninterest income. The increase in wealth management income is primarily due to estate and trust fees earned from several estates that concluded administration during 2026, as well as continued growth in assets under management. The increase in other noninterest income is primarily due to $235 thousand of insurance proceeds received in connection with storm-related property damage.

Previous wording

Noninterest expense for the six months ended June 30, 2026 totaled $22.0 million compared to $20.6 million recorded for the six months ended June 30, 2025, an increase of 6.9%. The increase reflects higher professional fees, salaries and benefits. The increase in professional fees was primarily due to $600 thousand of consultant fees for certain contract negotiations during the six months ended June 30, 2026. The consultant fees are expected to continue throughout 2026 as negotiations are in process. The increase in salaries and benefits was driven by anticipated bonus payouts as Company performance thresholds are met, in addition to normal increases in salaries and benefits. The efficiency ratio was 59.09% for the six months ended June 30, 2026 as compared to 65.34% in the six months ended June 30, 2025. The efficiency ratio continues to improve as net interest margin increases.

Current wording

Noninterest expense for the nine months ended September 30, 2026 totaled $33.3 million compared to $30.9 million recorded for the nine months ended September 30, 2025, an increase of 7.8%. The increase reflects higher professional fees, salaries and benefits. The increase in professional fees was primarily due to $1.2 million of consultant fees for certain contract negotiations during the nine months ended September 30, 2026. The consultant fees are expected to continue throughout 2026 as negotiations are in process. The increase in salaries and benefits was driven by anticipated bonus payouts as Company performance thresholds are met, in addition to normal increases in salaries and benefits. The efficiency ratio was 57.63% for the nine months ended September 30, 2026 as compared to 64.10% in the nine months ended September 30, 2025. The efficiency ratio continues to improve as net interest margin increases.

Previous wording

Income tax expense for the six months ended June 30, 2026 totaled $3.5 million compared to $1.9 million recorded for the six months ended June 30, 2025. The effective tax rate was 23% and 19% for the six months ended June 30, 2026 and 2025, respectively. The increase in income tax expense and effective tax rate was primarily due to higher net income and lower New Markets Tax Credits. The final year of tax credits was 2025 for a majority of the New Markets Tax Credit projects.

Current wording

Income tax expense for the nine months ended September 30, 2026 totaled $5.6 million compared to $3.1 million recorded for the nine months ended September 30, 2025. The effective tax rate was 23% and 20% for the nine months ended September 30, 2026 and 2025, respectively. The increase in income tax expense and effective tax rate was primarily due to higher net income and lower New Markets Tax Credits. The final year of tax credits was 2025 for a majority of the New Markets Tax Credit projects.

Previous wording

As of June 30, 2026, total assets were $2.12 billion, a $10.6 million decrease compared to December 31, 2025. This decrease in assets is primarily due to a decrease in the loan portfolio and interest-bearing deposits in financial institutions, partially offset by an increase in securities available-for-sale.

Current wording

As of September 30, 2026, total assets were $2.08 billion, a $51.4 million decrease compared to December 31, 2025. This decrease in assets is primarily due to a decrease in interest-bearing deposits in financial institutions and the loan portfolio, partially offset by an increase in securities available-for-sale.

Previous wording

The investment portfolio totaled $695 million as of June 30, 2026, an increase of $39 million from the December 31, 2025 balance of $656 million. The increase in securities available-for-sale is primarily due to purchases in excess of maturities.

Current wording

The investment portfolio totaled $671 million as of September 30, 2026, an increase of $15 million from the December 31, 2025 balance of $656 million. The increase in securities available-for-sale is primarily due to purchases in excess of maturities and partially offset by an increase in unrealized losses in the investment portfolio.

Previous wording

On a quarterly basis, the investment portfolio is reviewed for credit losses. As of June 30, 2026, gross unrealized losses of $27.9 million, are due to the interest rate environment and are not considered credit-related. Certain bonds in the investment portfolio may incur credit losses and could negatively affect the Company’s net income. As a result of the Company’s favorable liquidity position, the Company does not have the intent to sell securities with an unrealized loss at the present time. In addition, management believes it is more likely than not that the Company will hold these securities until recovery of their fair value to cost basis and expects full principal and interest to be collected. Therefore, the Company does not have an allowance for credit losses on these investments as of June 30, 2026.

Current wording

On a quarterly basis, the investment portfolio is reviewed for credit losses. As of September 30, 2026, gross unrealized losses of $43.6 million, are due to the interest rate environment and are not considered credit-related. Certain bonds in the investment portfolio may incur credit losses and could negatively affect the Company’s net income. As a result of the Company’s favorable liquidity position, the Company does not have the intent to sell securities with an unrealized loss at the present time. In addition, management believes it is more likely than not that the Company will hold these securities until recovery of their fair value to cost basis and expects full principal and interest to be collected. Therefore, the Company does not have an allowance for credit losses on these investments as of September 30, 2026.

Previous wording

The loan portfolio, net of the allowance for credit losses, totaled $1.25 billion and $1.28 billion as of June 30, 2026 and December 31, 2025, respectively. The decrease is primarily due to payoffs in the commercial real estate and agricultural loan portfolios.

Current wording

The loan portfolio, net of the allowance for credit losses, totaled $1.26 billion and $1.28 billion as of September 30, 2026 and December 31, 2025, respectively. The decrease is primarily due to payoffs in the agricultural and multi-family loan portfolios.

Previous wording

Deposits totaled $1.853 billion and $1.855 billion as of June 30, 2026 and December 31, 2025, respectively. The decrease in deposits is primarily due to a decrease in retail and commercial interest-bearing deposits, partially offset by an increase in public funds. Securities sold under agreements to repurchase decreased to $30.9 million as of June 30, 2026 compared to $38.8 million as of December 31, 2025. Securities sold under agreements to repurchase and deposit balances fluctuate as customers’ liquidity needs vary and could be impacted by prevailing market interest rates, competition, and economic conditions. Approximately 14% of deposits are tied to external indexes as of June 30, 2026. Deposit interest expense related to these deposits can be more volatile than other deposit products in a changing interest rate environment.

Current wording

Deposits totaled $1.83 billion and $1.85 billion as of September 30, 2026 and December 31, 2025, respectively. The decrease in deposits is primarily due to a decrease in retail and commercial noninterest-bearing checking and time deposits, partially offset by an increase in public funds. Securities sold under agreements to repurchase decreased to $33.3 million as of September 30, 2026 compared to $38.8 million as of December 31, 2025. Securities sold under agreements to repurchase and deposit balances fluctuate as customers’ liquidity needs vary and could be impacted by prevailing market interest rates, competition, and economic conditions. Approximately 14% of deposits are tied to external indexes as of September 30, 2026. Deposit interest expense related to these deposits can be more volatile than other deposit products in a changing interest rate environment.

Previous wording

The Company’s credit risk is historically centered in the loan portfolio, which totaled $1.25 billion and $1.28 billion as of June 30, 2026 and December 31, 2025, respectively. Net loans comprise 59% of total assets as of June 30, 2026. The objective in managing loan portfolio risk is to reduce the risk of loss resulting from a customer’s failure to perform according to the terms of an agreement and to quantify and manage credit risk on a portfolio basis. The Company’s level of problem loans (consisting of nonaccrual loans and loans past due 90 days or more) as a percentage of total loans was 1.55% at June 30, 2026, as compared to 1.19% at December 31, 2025. The Company’s level of problem loans as a percentage of total loans at June 30, 2026 of 1.55% is higher as compared to the Iowa State Average peer group of FDIC insured institutions as of March 31, 2026, of 0.60%, most recent available.

Current wording

The Company’s credit risk is historically centered in the loan portfolio, which totaled $1.26 billion and $1.28 billion as of September 30, 2026 and December 31, 2025, respectively. Net loans comprise 61% of total assets as of September 30, 2026. The objective in managing loan portfolio risk is to reduce the risk of loss resulting from a customer’s failure to perform according to the terms of an agreement and to quantify and manage credit risk on a portfolio basis. The Company’s level of problem loans (consisting of nonaccrual loans and loans past due 90 days or more) as a percentage of total loans was 1.3% at September 30, 2026, as compared to 1.19% at December 31, 2025. The Company’s level of problem loans as a percentage of total loans at September 30, 2026 of 1.3% is higher as compared to the Iowa State Average peer group of FDIC insured institutions as of June 30, 2026, of 0.62%, most recent available.

Previous wording

Substandard-Impaired loans totaled $19.1 million as of June 30, 2026 and have increased $4.5 million as compared to the substandard-impaired loans of $14.6 million as of December 31, 2025. The increase is primarily due to one relationship in the agricultural loan portfolio.

Current wording

Substandard-Impaired loans totaled $16.5 million as of September 30, 2026 and have increased $1.9 million as compared to the substandard-impaired loans of $14.6 million as of December 31, 2025. The increase is primarily due to one relationship in the agricultural loan portfolio.

Previous wording

Loans past due 90 days or more that are still accruing interest are reviewed no less frequently than quarterly to determine if there continues to be a strong reason that the credit should not be placed on nonaccrual. As of June 30, 2026, nonaccrual loans totaled $19.6 million and $35 thousand of loans past due 90 days and still accruing. This compares to nonaccrual loans of $15.1 million and $328 thousand of loans past due 90 days and still accruing as of December 31, 2025. There was no other real estate owned as of June 30, 2026 and $204 thousand of other real estate owned as of December 31, 2025.

Current wording

Loans past due 90 days or more that are still accruing interest are reviewed no less frequently than quarterly to determine if there continues to be a strong reason that the credit should not be placed on nonaccrual. As of September 30, 2026, nonaccrual loans totaled $17.0 million and $27 thousand of loans past due 90 days and still accruing. This compares to nonaccrual loans of $15.1 million and $328 thousand of loans past due 90 days and still accruing as of December 31, 2025. There was no other real estate owned as of September 30, 2026 and $204 thousand of other real estate owned as of December 31, 2025.

Previous wording

Loans past due 30 days or more totaled $22.5 million as of June 30, 2026, compared to $7.3 million as of December 31, 2025. The increase is primarily related to one agricultural operating loan relationships classified as substandard-impaired and one commercial real estate loan relationship that matured and is being restructured.

Current wording

Loans past due 30 days or more totaled $10.0 million as of September 30, 2026, compared to $7.3 million as of December 31, 2025. The increase is primarily related to one agricultural operating loan relationship classified as substandard-impaired.

Previous wording

Substandard loans totaled $50.7 million as of June 30, 2026 and have increased $8.5 million as compared to the substandard loans of $42.2 million as of December 31, 2025. The increase is primarily due to one large relationship secured by 1-4 family residential properties and weakening in the multi-family portfolio, partially offset by payoffs in the commercial real estate portfolio.

Current wording

Substandard loans totaled $52.0 million as of September 30, 2026 and have increased $9.8 million as compared to the substandard loans of $42.2 million as of December 31, 2025. The increase is primarily due to one large relationship secured by 1-4 family residential properties and weakening in the multi-family portfolio.

Previous wording

The watch and special mention loans classified as agricultural real estate and operating totaled $38.2 million as of June 30, 2026 as compared to $30.7 million as of December 31, 2025. The substandard and substandard-impaired loans in these categories totaled $9.4 million and $9.8 million as of June 30, 2026 and December 31, 2025, respectively. The change is primarily due to variable yields, weather impacts and commodity prices affecting agricultural loans.

Current wording

The watch and special mention loans classified as agricultural real estate and operating totaled $37.1 million as of September 30, 2026 as compared to $30.7 million as of December 31, 2025. The substandard and substandard-impaired loans in these categories totaled $8.1 million and $9.8 million as of September 30, 2026 and December 31, 2025, respectively. The change is primarily due to variable yields, weather impacts and commodity prices affecting agricultural loans. Subsequent to September 30, 2026, a substandard-impaired and nonaccrual agricultural operating loan relationship of $3 million was paid in full. Approximately $300 thousand of nonaccrual interest was collected and recognized in October 2026.

Previous wording

The watch and special mention loans classified as commercial real estate totaled $34.3 million as of June 30, 2026 as compared to $39.0 million as of December 31, 2025. The substandard and substandard-impaired commercial real estate loans totaled $21.7 million and $26.8 million as of June 30, 2026 and December 31, 2025, respectively. The decrease is primarily due to payoffs of substandard loans.

Current wording

The watch and special mention loans classified as commercial real estate totaled $34.1 million as of September 30, 2026 as compared to $39.0 million as of December 31, 2025. The substandard and substandard-impaired commercial real estate loans totaled $22.6 million and $26.8 million as of September 30, 2026 and December 31, 2025, respectively. The decrease is primarily due to payoffs of substandard loans.

Previous wording

The allowance for credit losses as a percentage of outstanding loans was 1.36% as of June 30, 2026 ​and December 31, 2025.The allowance for credit losses totaled $17.3 million and $17.7 million as of June 30, 2026 and December 31, 2025, respectively. The decrease in the allowance for credit losses is primarily due to a decrease in loan balances.

Current wording

The allowance for credit losses as a percentage of outstanding loans was 1.31% and 1.36% as of September 30, 2026 ​and December 31, 2025, respectively. The allowance for credit losses totaled $16.7 million and $17.7 million as of September 30, 2026 and December 31, 2025, respectively. The decrease in the allowance for credit losses is primarily due to a decline in specific reserves and outstanding loan balances.

Previous wording

Liquid assets of cash on hand, balances due from other banks and interest-bearing deposits in financial institutions as of June 30, 2026 and December 31, 2025 totaled $107.2 million and $126.8 million, respectively, and management believes these sources provide an adequate level of liquidity given current economic conditions.

Current wording

Liquid assets of cash on hand, balances due from other banks and interest-bearing deposits in financial institutions as of September 30, 2026 and December 31, 2025 totaled $75.2 million and $126.8 million, respectively, and management believes these sources provide an adequate level of liquidity given current economic conditions.

Previous wording

Other sources of liquidity available to the Banks as of June 30, 2026 include outstanding lines of credit with the FHLB of Des Moines, Iowa of $304.1 million, with $16.5 million of outstanding FHLB advances. Federal funds borrowing capacity at correspondent banks was $106.9 million, with no outstanding federal fund purchase balances as of June 30, 2026. The Company had securities sold under agreements to repurchase totaling $30.9 million as of June 30, 2026.

Current wording

Other sources of liquidity available to the Banks as of September 30, 2026 include outstanding lines of credit with the FHLB of Des Moines, Iowa of $321.5 million, with $1.5 million of outstanding FHLB advances. Federal funds borrowing capacity at correspondent banks was $106.8 million, with no outstanding federal fund purchase balances as of September 30, 2026. The Company had securities sold under agreements to repurchase totaling $33.3 million as of September 30, 2026.

Previous wording

Total investments as of June 30, 2026 were $695 million compared to $656 million as of December 31, 2025. These investments provide the Company with liquidity since all of the investments are classified as available-for-sale as of June 30, 2026. The Company has $401.6 million of unpledged securities available-for-sale and interest-bearing deposits as of June 30, 2026. The investment portfolio serves an important role in the overall context of balance sheet management in terms of balancing capital utilization and liquidity. The decision to purchase or sell securities is based upon the current assessment of economic and financial conditions, including the interest rate environment, liquidity and credit considerations. The portfolio’s scheduled maturities and payments represent a significant source of liquidity.

Current wording

Total investments as of September 30, 2026 were $671 million compared to $656 million as of December 31, 2025. These investments provide the Company with liquidity since all of the investments are classified as available-for-sale as of September 30, 2026. The Company has $391.9 million of unpledged securities available-for-sale and interest-bearing deposits as of September 30, 2026. The investment portfolio serves an important role in the overall context of balance sheet management in terms of balancing capital utilization and liquidity. The decision to purchase or sell securities is based upon the current assessment of economic and financial conditions, including the interest rate environment, liquidity and credit considerations. The portfolio’s scheduled maturities and payments represent a significant source of liquidity.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2026 totaled $11.8 million compared to $11.1 million for the six months ended June 30, 2025. The increase of $666 thousand in cash provided by operating activities was primarily due to higher net interest income.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2026 totaled $16.9 million compared to $13.9 million for the nine months ended September 30, 2025. The increase of $3 million in cash provided by operating activities was primarily due to higher net interest income.

Previous wording

Net cash provided by (used in) investing activities for the six months ended June 30, 2026 was ($12.2) million compared to $43.4 million for the six months ended June 30, 2025. The decrease of $55.5 million in cash provided by investing activities was primarily due to purchases of securities available-for-sale, partially offset by a decrease in loans.

Current wording

Net cash provided by (used in) investing activities for the nine months ended September 30, 2026 was ($12.6) million compared to $48.4 million for the nine months ended September 30, 2025. The decrease of $61 million in cash provided by investing activities was primarily due to purchases of securities available-for-sale.

Previous wording

Net cash (used in) financing activities for the six months ended June 30, 2026 totaled ($19.2) million compared to ($60.5) million for the six months ended June 30, 2025. The decrease of $41.4 million in cash used in financing activities was primarily due to a smaller decline in deposits and lower repayments of other borrowings as the Company has continued to reduce borrowings. As of June 30, 2026, the Company did not have any external debt financing, off-balance sheet financing arrangements, or derivative instruments linked to its stock.

Current wording

Net cash (used in) financing activities for the nine months ended September 30, 2026 totaled ($55.9) million compared to ($55.4) million for the nine months ended September 30, 2025. The increase of $531 thousand in cash used in financing activities was primarily due to a larger decline in deposits, partially offset by a smaller decrease in securities sold under agreements to repurchase. As of September 30, 2026, the Company did not have any external debt financing, off-balance sheet financing arrangements, or derivative instruments linked to its stock.

Previous wording

The Company’s liquidity on an unconsolidated basis is heavily dependent upon dividends paid to the Company by the Banks. The Banks provide adequate liquidity to pay the Company’s expenses and stockholder dividends. Dividends paid by the Banks to the Company amounted to $9.3 million and $6.35 million for the six months ended June 30, 2026 and 2025, respectively. Various federal and state statutory provisions limit the amounts of dividends banking subsidiaries are permitted to pay to their holding companies without regulatory approval. Federal Reserve policy further limits the circumstances under which bank holding companies may declare dividends. For example, a bank holding company should not continue its existing rate of cash dividends on its common stock unless its net income is sufficient to fully fund each dividend and its prospective rate of earnings retention appears consistent with its capital needs, asset quality and overall financial condition. In addition, the Federal Reserve and the FDIC have issued policy statements, which provide that insured banks and bank holding companies should generally pay dividends only out of current operating earnings. Federal and state banking regulators may also restrict the payment of dividends by order.

Current wording

The Company’s liquidity on an unconsolidated basis is heavily dependent upon dividends paid to the Company by the Banks. The Banks provide adequate liquidity to pay the Company’s expenses and stockholder dividends. Dividends paid by the Banks to the Company amounted to $14.4 million and $9.7 million for the nine months ended September 30, 2026 and 2025, respectively. Various federal and state statutory provisions limit the amounts of dividends banking subsidiaries are permitted to pay to their holding companies without regulatory approval. Federal Reserve policy further limits the circumstances under which bank holding companies may declare dividends. For example, a bank holding company should not continue its existing rate of cash dividends on its common stock unless its net income is sufficient to fully fund each dividend and its prospective rate of earnings retention appears consistent with its capital needs, asset quality and overall financial condition. In addition, the Federal Reserve and the FDIC have issued policy statements, which provide that insured banks and bank holding companies should generally pay dividends only out of current operating earnings. Federal and state banking regulators may also restrict the payment of dividends by order.

Previous wording

The Company, on an unconsolidated basis, has interest-bearing deposits totaling $4.8 million as of June 30, 2026.

Current wording

The Company, on an unconsolidated basis, has interest-bearing deposits totaling $7.2 million as of September 30, 2026.

Previous wording

The Company’s total stockholders’ equity as of June 30, 2026 totaled $213.1 million and was $5.2 million higher than the $207.9 million recorded as of December 31, 2025. The increase in stockholders’ equity was primarily the result of retention of net income in excess of dividends. At June 30, 2026 and December 31, 2025, stockholders’ equity as a percentage of total assets was 10.0% and 9.7%, respectively. The capital levels of the Company currently exceed applicable regulatory guidelines to be considered “well capitalized” as of June 30, 2026. Unrealized losses on the investment portfolio are excluded from regulatory capital.

Current wording

The Company’s total stockholders’ equity as of September 30, 2026 totaled $205.8 million and was $2.1 million lower than the $207.9 million recorded as of December 31, 2025. The decrease in stockholders’ equity was primarily the result of an increase in unrealized losses on the investment portfolio, partially offset by retention of net income in excess of dividends. At September 30, 2026 and December 31, 2025, stockholders’ equity as a percentage of total assets was 9.9% and 9.7%, respectively. The capital levels of the Company currently exceed applicable regulatory guidelines to be considered “well capitalized” as of September 30, 2026. Unrealized losses on the investment portfolio are excluded from regulatory capital.