FIRST COMMUNITY CORP /SC/

Notes to Consolidated Financial Statements (Unaudited)

Note 1 -Nature of Business and Basis of Presentation

Basis of Presentation

In the opinion of management, the accompanying unaudited consolidated balance sheets, and the consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows of First Community Corporation (the “Company”) and its wholly owned subsidiary, First Community Bank (the “Bank”) (collectively, the “Company”) state fairly, in all material respects, the Company’s financial position at March 31, 2026 and December 31, 2025, and the Company’s results of operations for the three months ended March 31, 2026 and 2025, and cash flows for the three months ended March 31, 2026 and 2025. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

In the opinion of management, all adjustments necessary to state fairly the consolidated financial position and consolidated results of operations have been made. All such adjustments are of a normal, recurring nature. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements and notes thereto are presented in accordance with the instructions for Quarterly Reports on Form 10-Q. The information included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 should be referred to in connection with these unaudited interim financial statements.

Significant accounting policies not previously presented in the Annual Report on Form 10-K for the year ended December 31, 2025

Acquired Loans

Acquired loans are accounted for at fair value as of the date of acquisition. For both purchased credit deteriorated loans and purchased seasoned loans, the gross-up method is used. Under this method, the loans are recorded at fair value and an increase to the allowance for credit losses – loans, is booked at the date of acquisition. The gross-up, or difference between fair value and unpaid principal balance at the acquisition date is amortized or accreted to interest income over the life of the loan.

Business Combinations

Acquisitions of businesses are accounted for using the acquisition method of accounting. In accordance with applicable accounting guidance, the Company recognizes assets acquired and liabilities assumed at their respective fair values as of the date of acquisition, with the related transaction costs expensed in the period incurred. The Company uses third party valuation specialists to assist in the determination of fair value of certain assets and liabilities at the merger date, including loans and intangible assets. While the Company uses our best estimates and assumptions to accurately value assets acquired and liabilities assumed on the acquisition date, the estimates are inherently uncertain. For further discussion of our methodology for estimating the fair value of acquired assets and assumed liabilities in connection with our acquisition of Signature Bank of Georgia, see Note 2, “Business Combination”.

Purchased Transferable Tax Credits

The Company may purchase transferable tax credits from third-parties pursuant to relevant transferability provisions. Purchased tax credits are accounted for in accordance with ASC 740, Income Taxes. Purchased transferable tax credits are recorded as an income tax-related asset at the amount of cash consideration paid at the date the Company obtains control of the credits. The asset is subsequently recognized as a reduction of income tax expense in the period in which the credits are utilized to offset the Company’s federal income tax liability.

Purchased credits do not give rise to deferred tax assets or liabilities and are not amortized. The Company evaluates the realizability of purchased credits each reporting period based on expected taxable income and statutory expiration dates. If it is more likely than not that any portion of the purchased credits will not be realized, the carrying amount is reduced and a corresponding charge is recorded within the provision for income taxes in the consolidated statements of income. The Company assesses whether any uncertain tax positions exist related to the eligibility or utilization of purchased credits under the guidance in ASC 740-10. Any such amounts are recorded as liabilities for unrecognized tax benefits when appropriate. Cash paid for the acquisition of purchased transferable credits is presented within Operating activities in the Consolidated Statements of Cash Flows.

Recently Issued Accounting Pronouncements

The following is a summary of recent authoritative pronouncements:

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This amendment is intended to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes. It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-09 in 2025.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This ASU was clarified by the January 2025 issuance of ASU 2025-01, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date.” Combined, these ASUs require disaggregated disclosure of income statement expenses for public business entities. The ASUs require new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense caption. The prescribed categories include, among other things, employee compensation, depreciation, and intangible asset amortization. Additionally, entities must disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. Both ASUs are effective for our fiscal years, beginning after December 15, 2026, and for interim periods, beginning after December 15, 2027, though early adoption is permitted. The Company is assessing ASU 2024-03 and ASU 2025-01, and their adoption is not expected to have a significant impact on our financial position, results of operations or cash flows.

In November 2025, the FASB issued ASU 2025-08, Financial Instruments – Credit Losses (Topic 326): Purchased Loans. These amendments are intended to improve comparability and consistency in acquisition reporting for purchased loans. The amendments eliminate day-one current expected credit loss double counting, define purchased seasoned loans, expand the gross-up approach to include purchased seasoned loans, other than credit cards, clarify interest income recognition for purchased loans, and allow entities to measure expected credit losses using amortized cost rather than unpaid principal balance. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2026. Early adoption is permitted, and the Company early-adopted these amendments in 2026.

Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Note 2 –Business Combination

On January 8, 2026 (the “Acquisition Date”), First Community Bank acquired all of the outstanding common stock of Signature Bank of Georgia (“SGBG”) in an all-stock transaction. In connection with the transaction, the Company issued 1,658,339 shares of its common stock to the shareholders of SGBG. Pursuant to the Agreement and Plan of Merger, dated as of July 13, 2025, SGBG merged with and into First Community Bank, with First Community Bank continuing as the surviving bank.

Each outstanding share of SGBG common stock was converted into the right to receive 0.6410 shares of Company common stock. Total consideration for the acquisition was approximately $49.7 million, consisting entirely of Company common stock, based on the Company’s common stock price of $29.99 per share.

The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with FASB ASC Topic 805,Business Combinations. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the Acquisition Date.

The following table summarizes the preliminary estimated fair values of the assets acquired, liabilities assumed and consideration transferred in connection with the SGBG acquisition as of the Acquisition Date:

The goodwill arising from the acquisition reflects the Company’s increased market share and related synergies expected to result from combining the operations of First Community Bank and SGBG. In accordance with ASC 350,Intangibles-Goodwill and Other, goodwill will not be amortized, but will be tested for impairment at least annually. Of the $14.8 million in goodwill arising from the acquisition, $5.8 million was assigned to the Government Guaranteed Lending segment and $9.0 million was assigned to the Commercial and Retail Banking segment. The fair value of the acquired identifiable intangible assets was $2.6 million, consisting primarily of a core deposit intangible.

The fair value of the acquired assets and liabilities reflected in the table above is preliminary pending receipt of the final valuation for certain assets and liabilities. During the measurement period, which may last up to twelve months following the Acquisition Date, the Company will continue to review information relating to facts and circumstances that existed as of the Acquisition Date and, if necessary, will adjust the preliminary fair value estimates of the acquired assets and liabilities. The Company expects that certain adjustments to the preliminary fair value estimates may be recorded after March 31, 2026, through the 12-month measurement period.

The following is a description of the methods used to determine the fair values of significant assets acquired and liabilities assumed.

**Cash and due from banks and interest-bearing bank balances –**The carrying amount of these assets approximates fair value based on the short-term nature of these assets.

**Investment securities –**The available-for-sale investment securities portfolio was valued using third-party pricing services for those securities retained and valued using the actual sales prices for those securities that were sold during the first quarter of 2026. Only one security, valued at approximately $1.0 million, was retained; the Company sold the remaining 96% of the securities acquired in the days following the acquisition.

**Loans held-for-investment –**A valuation of the acquired loan portfolio was performed by a third party as of the Acquisition Date to assess the fair value. The fair value of loans was determined using a discounted cash flow methodology that considered the loans’ underlying characteristics including account type, remaining terms, annual interest rates or coupon, interest types, past delinquencies, timing of principal and interest payments, current market rates, loan to value ratios, loss exposure and remaining balance. Loans were aggregated by similar risk characteristics in applying the valuation methodology.

At the Acquisition Date, of the $195.7 million of loans acquired from SGBG, $18.4 million were accounted for as purchased credit deteriorated (“PCD”) loans. The remaining loans were accounted for as purchased seasoned (“PSL”) loans. The following tables provide a summary of PCD and PSL loans purchased as part of the SGBG acquisition as of the acquisition date:

**Intangible Assets –**A valuation of intangible assets, primarily composed of core deposit intangibles, was performed by a third party as of the Acquisition Date to assess the fair value. Core deposit intangibles represent the value of relationships with deposit customers and the related cost savings derived from available core deposits relative to an alternative funding source. The fair value of the core deposit intangible was estimated using a net cost savings method, a variation of the income approach. This approach considers expected client attrition rates, average life and balance inflation, alternative cost of funds, the interest cost and net maintenance cost associated with the client deposit base, and a discount rate used to discount the future economic benefits of the core deposit intangible asset to present value. Intangible assets will be amortized on a straight-line method over a period of 10 years.

**Deposits –**The fair value for demand and savings deposits is the amount payable on demand at the Acquisition Date. The fair value for time deposits was valued by a third party using a discounted cash flow calculation that applied interest rates currently being offered to the contractual interest rates on such time deposits.

The results of operations of SGBG are included in the Company’s consolidated results of operations beginning on the Acquisition Date. Transaction costs incurred in connection with the acquisition were expensed as incurred. Additional transaction and integration costs will be expensed in future periods as incurred.

The following table presents supplemental pro forma information as if the acquisition had occurred at the beginning of 2025. The unaudited pro forma information reflects adjustments made to exclude acquisition-related adjustments for interest income on loans and securities acquired, amortization of intangibles arising from the transaction, interest expense on deposits acquired, and the related income tax effects. The pro forma financial information does not include the potential impacts of possible business model changes, current market conditions, revenue enhancements, expense efficiencies, or other factors. The pro forma information is theoretical in nature and not necessarily indicative of future consolidated results of operations of the Company or the consolidated results of operations which would have resulted had the Company acquired SGBG at the beginning of 2025.

**Correction of Certain Amounts Previously Reported in Earnings Release –**On April 22, 2026, the Company issued an earnings release announcing its financial results for the three months ended March 31, 2026. During the preparation of this Quarterly Report on Form 10-Q, the Company identified certain corrections to the preliminary purchase accounting for the Company’s acquisition of SGBG, which closed on January 8, 2026. The corrections related primarily to the calculation of deferred tax assets and the resulting allocation of the preliminary fair value of the assets acquired among goodwill, other intangible assets and other assets. The purchase accounting for the acquisition remains preliminary and subject to adjustment during the measurement period as the Company completes its valuation of the assets acquired and liabilities assumed and obtains additional information regarding facts and circumstances that existed as of the acquisition date. The corrections are reflected in the unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q.

The corrections did not affect the Company’s total assets, total liabilities, total shareholders’ equity, net income, or basic or diluted earnings per share as reflected in the earnings release. The corrections resulted in immaterial changes to certain regulatory capital ratios and certain non-GAAP financial measures included in the earnings release, including tangible book value per common share, tangible common equity to tangible assets and return on average tangible common equity. The following table summarizes certain affected amounts reflected in the April 22, 2026 earnings release compared to the corrected amounts reflected in this Quarterly Report on Form 10-Q:

The Company evaluated the corrections and determined they were not material to the previously issued earnings release. The corrected amounts are reflected throughout this Quarterly Report on Form 10-Q.

Note 3 -Earnings Per Common Share

Basic earnings per share is calculated by dividing net income by the weighted-average shares of common stock outstanding during the period, excluding non-vested restricted shares. Dilutive earnings per share is calculated by dividing net income by the weighted-average shares of common stock outstanding during the period plus the maximum dilutive effect on common stock issuable upon exercise of stock options or vesting of restricted stock units. Stock options and unvested restricted stock units are considered common stock equivalents and are only included in the calculation of dilutive earnings per common share if the effect is dilutive.

The following reconciles the numerator and denominator of the basic and diluted earnings per common share computation:

Note 4 -Investment Securities

The amortized cost and estimated fair values of investment securities are summarized below.

AVAILABLE-FOR-SALE:

HELD-TO-MATURITY:

There wereno gross realized gains or gross realized losses from the sale of available-for-sale investment securities during the three months ended March 31, 2026 and 2025, respectively.

For available-for-sale securities, management evaluates all investments in an unrealized loss position on a quarterly basis, or more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value, and the entire loss is recorded in earnings.

If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an allowance for credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an allowance for credit loss is recognized in other comprehensive income.

Changes in the allowance for credit loss are recorded as provision for (or release of) credit loss expense. Losses are charged against the allowance for credit loss when management believes an available-for-sale security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. At March 31, 2026 and December 31, 2025, there was no allowance for credit loss related to the available-for-sale securities portfolio.

The following tables show gross unrealized losses and fair values of available-for-sale securities for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous loss position, as of March 31, 2026.

The following table shows gross unrealized losses by fair values of available-for-sale securities, aggregated by investment category and length of time that individual securities have been in a continuous loss position as of December 31, 2025.

The following table shows a roll forward of the allowance for credit losses on held to maturity securities for the three months ended March 31, 2026 and 2025.

At March 31, 2026, the Company had no securities held-to-maturity that were past due 30 days or more as to principal or interest payments. The Company had no securities held-to-maturity classified as non-accrual at March 31, 2026.

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. The held-to-maturity portfolio consists of mortgage-backed and municipal securities. Securities are generally rated BBB- or higher. Securities are analyzed individually to establish an allowance for credit losses on held-to-maturity securities.

The estimate of expected credit losses is primarily based on the ratings assigned to the securities by debt rating agencies and the average of the annual historical loss rates associated with those ratings. The Company then multiplies those loss rates, as adjusted for any modifications to reflect current conditions and reasonable and supportable forecasts as considered necessary, by the remaining lives of each individual security to arrive at a lifetime expected loss amount. Management classifies the held-to-maturity portfolio into the following major security types: mortgage-backed securities or state and local governments.

All the mortgage-backed securities (“MBS”) held by the Company are issued by government-sponsored corporations. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses. As a result, no allowance for credit losses was recorded on held-to-maturity MBS as of March 31, 2026 and December 31, 2025. The state and local government securities held by the Company are highly rated by major rating agencies.

The Company monitors the credit quality of the debt securities held to maturity through the use of credit ratings (Moody’s) on a quarterly basis. In the event that Moody’s does not provide a rating, the comparable S&P rating is used and converted to a Moody’s rating. The following table summarizes the amortized cost of debt securities held to maturity at March 31, 2026 and December 31, 2025, aggregated by credit quality indicators.

The following tables show the amortized cost and fair value of investment securities at March 31, 2026 by expected maturity. Expected maturities differ from contractual maturities because borrowers may have the right to call or prepay the obligations with or without prepayment penalties. Mortgage-backed securities are included in the year corresponding with the remaining expected life.

Note 5 -Loans

The following table summarizes the composition of our loan portfolio. Total loans are recorded net of deferred loan fees and costs, which totaled $2.6 million and $2.3 million as of March 31, 2026 and December 31, 2025, respectively.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a monthly basis. Loans not meeting the criteria below that are analyzed individually as part of the analysis are considered as pass rated loans. The Company uses the following definitions for risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The following table presents the Company’s recorded investment in loans by credit quality indicators by year of origination as of March 31, 2026:

The following table presents the Company’s recorded investment in loans by credit quality indicators by year of origination as of December 31, 2025:

The detailed activity in the allowance for credit losses and the recorded investment in loans receivable for the three months ended March 31, 2026 and March 31, 2025, is shown below:

There were nine loans modified for borrowers experiencing financial difficulty during the three months ended March 31, 2026, and no loans modified for borrowers experiencing financial difficulty during the same period ended March 31, 2025.

The following table shows the amortized cost basis as of March 31, 2026 of the loans modified for borrowers experiencing financial difficulty segregated by loan category and describes the financial effect of the modification made for a borrower experiencing financial difficulty.

The following table depicts the performance of loans that have been modified in the last 12 months.

The following tables are by loan category and present loans past due and on non-accrual status as of March 31, 2026 and December 31, 2025.

The following table is a summary of the Company’s non-accrual loans by major categories for the periods indicated.

The Company recognized $4,600 and $11,400 of interest income on non-accrual loans during the three months ended March 31, 2026 and March 31, 2025, respectively.

During the three months ended March 31, 2026, zero and less than $1,000, respectively, of accrued interest was written off by reversing interest income.

The following table shows the collateral dependent loans that were individually evaluated at March 31, 2026.

There were no collateral dependent loans that were individually evaluated at December 31, 2025.

Unfunded Commitments

The Company maintains an allowance for off-balance sheet credit exposures such as unfunded balances for existing lines of credit, commitments to extend future credit, as well as both standby and commercial letters of credit when there is a contractual obligation to extend credit and when this extension of credit is not unconditionally cancellable (i.e., commitment cannot be cancelled at any time). The allowance for off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the allowance for credit losses on loans. The allowance for credit losses for unfunded loan commitments is separately classified on the balance sheet within Other Liabilities and was $654,000 and $531,000 at March 31, 2026 and December 31, 2025, respectively.

The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the three months ended March 31, 2026 and March 31, 2025.

Note 6 -Fair Value Measurement

US GAAP defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Fair value estimates, methods, and assumptions are set forth below.

Cash and short-term investments—The carrying amount of these financial instruments (cash and due from banks, interest-bearing bank balances, federal funds sold and securities purchased under agreements to resell) approximates fair value. All mature within 90 days and do not present unanticipated credit concerns and are classified as Level 1.

Investment Securities—Measurement is on a recurring basis based upon quoted market prices, if available. If quoted market prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for prepayment assumptions, projected credit losses, and liquidity. Level 1 securities include those traded on an active exchange, such as the New York Stock Exchange, or by dealers or brokers in active over-the-counter markets. Level 2 securities include mortgage-backed securities issued both by government sponsored enterprises and private label mortgage-backed securities. Generally, these fair values are priced from established pricing models. Level 3 securities include corporate debt obligations and asset–backed securities that are less liquid or for which there is an inactive market.

Other investments, at cost—The carrying value of other investments, such as FHLB stock, approximates fair value based on redemption provisions.

Loans Held for Sale—The Company originates fixed rate residential loans on a servicing released basis in the secondary market. Loans closed but not yet settled with an investor, are carried in the Company’s loans held for sale portfolio. These loans are fixed rate residential loans that were originated in the Company’s name and closed. Virtually all of these loans have commitments to be purchased by investors at a locked-in price with the investors on the same day that the loan was locked in with the Company’s customers. Therefore, these loans present very little market risk for the Company and are classified as Level 2. The carrying amount of these loans approximates fair value.

Loans—The valuation of loans receivable is estimated using the exit price notion which incorporates factors, such as enhanced credit risk, illiquidity risk and market factors that sometimes exist in exit prices in dislocated markets. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction. The Company’s loan portfolio is initially fair valued using a segmented approach. The Company divides its loan portfolio into the following categories: variable rate loans, individually evaluated loans and all other loans. The results are then adjusted to account for credit risk as described above.

Other Real Estate Owned (“OREO”)—OREO is carried at the lower of carrying value or fair value on a non-recurring basis. Fair value is based upon independent appraisals or management’s estimation of the collateral and is considered a Level 3 measurement.

Collateral Dependent Loans—Fair value is based upon independent appraisals or management’s estimation of the collateral and is considered a Level 3 measurement.

Derivative Financial Instruments—Fair value is estimated using discounted cash flow models where future floating cash flows are projected and discounted back. Derivative financial instruments are classified as Level 2.

Accrued Interest Receivable—The fair value approximates the carrying value and is classified as Level 1.

Deposits—The fair value of demand deposits, savings accounts, and money market accounts is the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposits is estimated by discounting the future cash flows using rates currently offered for deposits of similar remaining maturities. Deposits are classified as Level 2.

Federal Home Loan Bank Advances—Fair value is estimated based on discounted cash flows using current market rates for borrowings with similar terms and are classified as Level 2.

Short-Term Borrowings—The carrying value of short-term borrowings (securities sold under agreements to repurchase and demand notes to the Treasury) approximates fair value. These are classified as Level 2.

Junior Subordinated Debentures—The fair values of junior subordinated debentures are estimated by using discounted cash flow analyses based on incremental borrowing rates for similar types of instruments. These are classified as Level 2.

Accrued Interest Payable—The fair value approximates the carrying value and is classified as Level 1.

Commitments to Extend Credit—The fair value of these commitments is immaterial because their underlying interest rates approximate market.

The carrying amount and estimated fair value by classification level of the Company’s financial instruments as of March 31, 2026 and December 31, 2025 are as follows:

The following tables summarize quantitative disclosures about the fair value for each category of assets carried at fair value as of March 31, 2026 and December 31, 2025 that are measured on a recurring basis.

The following table summarizes quantitative disclosures about the fair value for each category of liabilities carried at fair value as of March 31, 2026 and December 31, 2025 that are measured on a recurring basis.

The following tables summarize quantitative disclosures about the fair value for each category of assets carried at fair value as of March 31, 2026 and December 31, 2025 that are measured on a non-recurring basis. There were no Level 3 financial instruments as of March 31, 2026 and December 31, 2025 measured on a recurring basis.

The Company has a large percentage of loans with real estate serving as collateral. Loans to borrowers which are experiencing financial difficulty are primarily valued on a nonrecurring basis at the fair value of the underlying real estate collateral. Such fair values are obtained using independent appraisals, which the Company considers to be Level 3 inputs. There was one loan at March 31, 2026 and no such loans at December 31, 2025. Third party appraisals are generally obtained when management determines that the borrower is experiencing financial difficulty or at the time it is transferred to OREO. This internal process consists of evaluating the underlying collateral against independently obtained comparable properties. With respect to less complex or smaller credits, an internal evaluation may be performed. Generally, the independent and internal evaluations are updated annually. Factors considered in determining the fair value include, among others, geographic sales trends, the value of comparable surrounding properties and the condition of the property.

For Level 3 assets and liabilities measured at fair value on a non-recurring basis as of March 31, 2026 and December 31, 2025, the significant unobservable inputs used in the fair value measurements were as follows:

Note 7 -Deposits

The Company’s total deposits are comprised of the following amounts at the dates indicated:

Note 8 -Reportable Segments

The Company’s reportable segments represent the distinct product lines the Company offers and are viewed separately for strategic planning by the Bank President and CEO, who is the Chief Operating Decision Maker (the “CODM”). The CODM regularly reviews the performance of the Company’sfive reportable segments, which are detailed below:

The following tables present selected financial information for the Company’s reportable business segments for the three months ended March 31, 2026 and March 31, 2025.

The table below presents total assets for the Company’s reportable business segments as of March 31, 2026 and December 31, 2025.

Note 9*** -Leases***

At March 31, 2026, the Company had operating leases for four facilities, compared to three facilities at December 31, 2025. All leases commenced prior to 2025, other than the additional lease assumed in connection with the acquisition of SGBG in 2026. The four leases have maturities ranging from May 2027 to December 2038. The following tables present information about the Company’s leases:

The following table shows future undiscounted lease payments for operating leases with initial terms of one year or more as of March 31, 2026.

Note 10*** -Accumulated Other Comprehensive Loss***

The following table presents the changes in each component of accumulated other comprehensive loss net of tax, for the three months ended March 31, 2026 and 2025.

Note 11*** -Subsequent Events***

Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date.

Management has reviewed events occurring, and no other subsequent events occurred requiring accrual or that require disclosure and have not been disclosed in the footnotes to the Company’s unaudited consolidated financial statements as of March 31, 2026.