FIRST COMMUNITY CORP /SC/

Previous wording

This report, including information included or incorporated by reference in this report, contains statements which constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may relate to, among other matters, the financial condition, results of operations, plans, objectives, future performance, and business of our company. Forward-looking statements are based on many assumptions and estimates and are not guarantees of future performance. Our actual results may differ materially from those anticipated in any forward-looking statements, as they will depend on many factors about which we are unsure, including many factors which are beyond our control. The words “may,” “approximately,” “is likely,” “would,” “could,” “should,” “will,” “expect,” “anticipate,” “predict,” “project,” “potential,” “continue,” “assume,” “believe,” “intend,” “plan,” “forecast,” “goal,” and “estimate,” as well as similar expressions, are meant to identify such forward-looking statements. Potential risks and uncertainties that could cause our actual results to differ materially from those anticipated in our forward-looking statements include, without limitation, those described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 16, 2026 and the following:

Current wording

This report, including information included or incorporated by reference in this report, contains statements which constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may relate to, among other matters, the financial condition, results of operations, plans, objectives, future performance, and business of our company, including statements regarding the anticipated timing and benefits of leadership transitions, consulting arrangements with former executives, and the expected roles and responsibilities of the company’s executive officers. Forward-looking statements are based on many assumptions and estimates and are not guarantees of future performance. Our actual results may differ materially from those anticipated in any forward-looking statements, as they will depend on many factors about which we are unsure, including many factors which are beyond our control. The words “may,” “approximately,” “is likely,” “would,” “could,” “should,” “will,” “expect,” “anticipate,” “predict,” “project,” “potential,” “continue,” “assume,” “believe,” “intend,” “plan,” “forecast,” “goal,” “positions,” “forward,” “future,” and “estimate,” as well as similar expressions, are meant to identify such forward-looking statements. Potential risks and uncertainties that could cause our actual results to differ materially from those anticipated in our forward-looking statements include, without limitation, those described under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 16, 2026 and the following:

Previous wording

The following discussion describes our results of operations for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, and analyzes our financial condition as of March 31, 2026 as compared to December 31, 2025. Like most community banks, we derive most of our income from interest we receive on our loans and investments. Our primary sources of funds for making these loans and investments are our deposits and borrowings, on which we pay interest. Consequently, one of the key measures of our success is our amount of net interest income, or the difference between the income on our interest-earning assets, such as loans and investments, and the expense on our interest-bearing liabilities, such as deposits and borrowings. Another key measure is the spread between the yield we earn on our interest-earning assets and the rate we pay on our interest-bearing liabilities. There are risks inherent in all loans, so we maintain an allowance for credit losses to absorb our estimate of expected credit losses on existing loans that may become uncollectible. We establish and maintain this allowance by recording a provision for or release of credit losses against our earnings. In the following section, we have included a detailed discussion of this process.

Current wording

The following discussion describes our results of operations for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, and analyzes our financial condition as of June 30, 2026 as compared to December 31, 2025. Like most community banks, we derive most of our income from interest we receive on our loans and investments. Our primary sources of funds for making these loans and investments are our deposits and borrowings, on which we pay interest. Consequently, one of the key measures of our success is our amount of net interest income, or the difference between the income on our interest-earning assets, such as loans and investments, and the expense on our interest-bearing liabilities, such as deposits and borrowings. Another key measure is the spread between the yield we earn on our interest-earning assets and the rate we pay on our interest-bearing liabilities. There are risks inherent in all loans, so we maintain an allowance for credit losses to absorb our estimate of expected credit losses on existing loans that may become uncollectible. We establish and maintain this allowance by recording a provision for or release of credit losses against our earnings. In the following section, we have included a detailed discussion of this process.

Previous wording

Our net income for the three months ended March 31, 2026 increased $1.5 million to $5.5 million, or $0.59 diluted earnings per common share, as compared to $4.0 million, or $0.51 diluted earnings per common share, for the three months ended March 31, 2025. The increase in net income between the two periods is primarily due to a $4.0 million increase in net interest income, a $244,000 decrease in provision for credit losses, a $808,000 increase in non-interest income, and a $747,000 decrease in income tax expense, partially offset by a $4.3 million increase in non-interest expense.

Current wording

Our net income for the three months ended June 30, 2026 increased $2.4 million to $7.6 million, or $0.80 diluted earnings per common share, as compared to $5.2 million, or $0.67 diluted earnings per common share, for the three months ended June 30, 2025. The increase in net income between the two periods is primarily due to a $4.2 million increase in net interest income and a $1.4 million increase in non-interest income, partially offset by a $363,000 increase in provision for credit losses, $2.2 million increase in non-interest expense, and a $646,000 increase in income tax expense.

Previous wording

Net interest income increased $4.0 million, or 27.7%, to $18.4 million for the three months ended March 31, 2026 from $14.4 million for the three months ended March 31, 2025. Our net interest margin improved 23 basis points to 3.35% during the three months ended March 31, 2026 compared to 3.12% during the three months ended March 31, 2025. Our net interest margin, on a taxable equivalent basis, was 3.37% for the three months ended March 31, 2026 compared to 3.13% for the three months ended March 31, 2025. Average earning assets were $2.2 billion for the three months ended March 31, 2026 and $1.9 billion in the same period of 2025.

Current wording

Net interest income increased $4.2 million, or 27.3%, to $19.5 million for the three months ended June 30, 2026 from $15.3 million for the three months ended June 30, 2025. Our net interest margin improved 31 basis points to 3.50% during the three months ended June 30, 2026 compared to 3.19% during the three months ended June 30, 2025. Our net interest margin, on a taxable equivalent basis, was 3.51% for the three months ended June 30, 2026 compared to 3.21% for the three months ended June 30, 2025. Average earning assets were $2.2 billion for the three months ended June 30, 2026 and $1.9 billion in the same period of 2025.

Previous wording

Average loans increased $272.3 million, or 22.0%, to $1.5 billion for the three months ended March 31, 2026 from $1.2 billion for the same period in 2025. Our loan (including loans held-for-sale) to deposit ratio on average during the three months ended March 31, 2026 was 76.0%, as compared to 73.0% during the same period in 2025. The yield on loans increased 23 basis points to 5.94% during the three months ended March 31, 2026 from 5.71% during the same period in 2025 due to higher rates on new and renewed loans during the period compared to interest rates on loans maturing during the period.

Current wording

Average loans increased $309.5 million, or 24.5%, to $1.6 billion for the three months ended June 30, 2026 from $1.3 billion for the same period in 2025. Our loan (including loans held-for-sale) to deposit ratio on average during the three months ended June 30, 2026 was 77.9%, as compared to 72.7% during the same period in 2025. The yield on loans increased 25 basis points to 6.02% during the three months ended June 30, 2026 from 5.77% during the same period in 2025 due to higher rates on new and renewed loans during the period compared to interest rates on loans maturing during the period.

Previous wording

Average securities for the three months ended March 31, 2026 increased $11.4 million, or 2.3%, to $503.6 million from $492.2 million during the same period in 2025. Interest-bearing deposits in other banks and fed funds sold increased $65.4 million to $206.0 million during the three months ended March 31, 2026 from $140.5 million during the same period in 2025. The increase in interest-bearing deposits in other banks and fed funds sold was due to additional cash from our acquisition of SGBG and our decision to hold excess liquidity in interest bearing deposits at the Federal Reserve Bank. The yield on our securities portfolio declined to 3.32% for the three months ended March 31, 2026 from 3.42% for the same period in 2025. The yield on our interest-bearing deposits in other banks and fed funds sold was 3.51% for the three months ended March 31, 2026 compared to 4.29% during the same period in 2025. Average fed funds sold increased to $213,000 during the three months ended March 31, 2026 from $150,000 during the same period in 2025. The yield on fed funds sold declined to 3.81% during the three months ended March 31, 2026 from 6.44% during the same period in 2025.

Current wording

Average securities for the three months ended June 30, 2026 increased $4.6 million, or 0.9%, to $510.1 million from $505.5 million during the same period in 2025. Interest-bearing deposits in other banks and fed funds sold decreased $3.5 million to $152.4 million during the three months ended June 30, 2026 from $155.9 million during the same period in 2025. The decrease in interest-bearing deposits in other banks and fed funds sold was due to loan growth outpacing deposit growth. The yield on our securities portfolio declined to 3.33% for the three months ended June 30, 2026 from 3.43% for the same period in 2025. The yield on our interest-bearing deposits in other banks and fed funds sold was 3.54% for the three months ended June 30, 2026 compared to 4.32% during the same period in 2025.

Previous wording

The cost of interest-bearing liabilities was 2.45% during the three months ended March 31, 2026 compared to 2.58% during the same period in 2025. The cost of deposits, including demand deposits, was 1.80% during the three months ended March 31, 2026 compared to 1.85% during the same period in 2025. The cost of funds, including demand deposits, was 1.85% during the three months ended March 31, 2026 compared to 1.94% during the same period in 2025. This decline was driven by a decrease in the market interest rates for deposits during the period. We continue to focus on growing our pure deposits (demand deposits, interest-bearing transaction accounts, savings deposits, money market accounts, and IRAs) plus customer cash management repurchase agreements as these accounts tend to be low-cost funding and assist us in controlling our overall cost of funds. We had $1.8 billion, $1.5 billion, and $1.5 billion in pure deposits plus customer cash management repurchase agreements at March 31, 2026, December 31, 2025 and March 31, 2025, respectively. As of March 31, 2026, we had no brokered certificates of deposit.

Current wording

The cost of interest-bearing liabilities was 2.42% during the three months ended June 30, 2026 compared to 2.56% during the same period in 2025. The cost of deposits, including demand deposits, was 1.76% during the three months ended June 30, 2026 compared to 1.82% during the same period in 2025. The cost of funds, including demand deposits, was 1.82% during the three months ended June 30, 2026 compared to 1.91% during the same period in 2025. This decline was driven by a decrease in the market interest rates for deposits during the period. We continue to focus on growing our pure deposits (demand deposits, interest-bearing transaction accounts, savings deposits, money market accounts, and IRAs) plus customer cash management repurchase agreements as these accounts tend to be low-cost funding and assist us in controlling our overall cost of funds. We had $1.8 billion, $1.5 billion, and $1.5 billion in pure deposits plus customer cash management repurchase agreements at June 30, 2026, December 31, 2025 and June 30, 2025, respectively.

Previous wording

Non-interest income during the three months ended March 31, 2026 increased $808,000 to $4.8 million from $4.0 million during the same period in 2025. The increase in non-interest income was primarily related to increases of $465,000 in investment advisory fees and non-deposit commissions and $395,000 in government guaranteed lending income, partially offset by a reduction of $78,000 in mortgage banking income.

Current wording

Non-interest income during the three months ended June 30, 2026 increased $1.4 million to $5.6 million from $4.2 million during the same period in 2025. The $1.4 million increase in non-interest income was primarily related to increases of $191,000 in mortgage banking income, $535,000 in investment advisory fees and non-deposit commissions, and $704,000 in government guaranteed lending income, partially offset by a decline of $127,000 in gain on sale of other assets. The government guaranteed lending income came from a new segment, government guaranteed lending, acquired from SGBG.

Previous wording

Mortgage banking income decreased $78,000 to $681,000 during the three months ended March 31, 2026 from $759,000 during the same period in 2025. Total production in the mortgage line of business in the first quarter of 2026 was $42.0 million, which was comprised of $25.4 million in secondary market loans, $1.9 million in adjustable-rate mortgages (ARMs), and $14.7 million in construction loans. Total fee revenue in the mortgage line of business was $681,000 in the first quarter of 2026, which includes $673,000 associated with the secondary market loans, with a gain-on-sale margin of 2.65%. This compares to production year-over-year of $43.9 million, which was comprised of $25.8 million in secondary market loans, $4.0 million in ARMs, and $14.1 million in construction loans during the first quarter of 2025. Fee revenue associated with the secondary market loans in the first quarter of 2025 was $755,000 with a gain-on-sale margin of 2.93%.

Current wording

Mortgage banking income increased $191,000 to $1.1 million during the three months ended June 30, 2026 from $879,000 during the same period in 2025. Total production in the mortgage line of business in the second quarter of 2026 was $53.8 million, which was comprised of $38.3 million in secondary market loans, $2.3 million in adjustable rate mortgages (ARMs), and $13.2 million in construction loans. Total fee revenue in the mortgage line of business was $1.1 million in the three months ended June 30, 2026, which includes $1.1 million associated with the secondary market loans, with a gain-on-sale margin of 2.78%. This compares to production year-over-year of $62.9 million, which was comprised of $31.9 million in secondary market loans, $5.7 million in ARMs, and $25.3 million in construction loans during the same period of 2025. Fee revenue associated with the secondary market loans in the three months ended June 30, 2025 was $876,000 with a gain-on-sale margin of 2.74%.

Previous wording

Investment advisory fees rose $465,000 to $2.3 million during the three months ended March 31, 2026 from $1.8 million during the same period in 2025. Total assets under management declined to $1.1 billion at March 31, 2026 from $1.2 billion at December 31, 2025, but increased from $892.8 million at March 31, 2025. Our net new assets under management were $7.9 million during the three months ended March 31, 2026. Furthermore, our investment performance for the three months ended March 31, 2026 was negative 3.6% compared to negative 4.6% for the S&P 500. Our customers’ assets under management are allocated across a range of asset classes, including equities, bonds, and cash.

Current wording

Investment advisory fees rose $535,000 to $2.3 million during the three months ended June 30, 2026 from $1.8 million during the same period in 2025. Total assets under management increased to $1.4 billion at June 30, 2026 from $1.2 billion at December 31, 2025. Our net new assets under management were $10.4 million during the three months ended June 30, 2026. Furthermore, our investment performance for the three months ended June 30, 2026 was 21.0% compared to 14.9% for the S&P 500. Our customers’ assets under management are allocated across a range of asset classes, including equities, bonds, and cash.

Previous wording

Fee revenue from the new Government Guaranteed Lending line of business was $395,000 in the first quarter of 2026. Production in this line of business in the first quarter of 2026 included $2.36 million in SBA loans. During the quarter, we sold $2.0 million in loans, which resulted in a premium of $194,000 and a gain-on-sale margin of 9.59%. Loan volume was temporarily impacted by the federal government shutdowns and Small Business Administration processing delays, which affected the processing of loans in the pipeline.

Current wording

Fee revenue from the new Government Guaranteed Lending line of business was $704,000 during the three months ended June 30, 2026. Production in this line of business in the second quarter of 2026 included $16.1 million in SBA loans. During the quarter, we sold $8.9 million in loans, which resulted in a premium of $671,000 and a gain-on-sale margin of 9.59%.

Previous wording

Other non-interest income increased $24,000 to $1.2 million during the three months ended March 31, 2026 from $1.2 million during the same period in 2025. The $24,000 increase was primarily due to increases in wire transfer fees of $18,000 and rental income of $15,000, partially offset by a decline of $22,000 in ATM debit card income.

Current wording

Other non-interest income increased $139,000 to $1.4 million during the three months ended June 30, 2026 from $1.2 million during the same period in 2025. The $139,000 increase was primarily due to increases in other non-recurring income (gain on insurance proceeds) of $80,000, rental income of $20,000, and wire transfer fees of $16,000.

Previous wording

Non-interest expense increased $4.3 million during the three months ended March 31, 2026 to $17.0 million compared to $12.8 million during the same period in 2025. The increase in non-interest expense was primarily due to increases of $1.8 million in salaries and employee benefits, $57,000 in amortization of intangibles, $1.6 million in merger expenses, and $765,000 in other expenses.

Current wording

Non-interest expense increased $2.2 million during the three months ended June 30, 2026 to $15.3 million compared to $13.1 million during the same period in 2025. The increase in non-interest expense was primarily due to increases of $1.5 million in salaries and employee benefits, $121,000 in occupancy, $269,000 in merger, and $168,000 in other non-interest expense.

Previous wording

We incurred income tax expense of $437,000 and $1.2 million for the three months ended March 31, 2026 and 2025, respectively. Our effective tax rate was 7.4% and 22.9% for the three months ended March 31, 2026 and 2025, respectively. The decrease in the effective tax rate was due to an adjustment of $878,000 due to tax credits purchased during the three months ended March 31, 2026.

Current wording

We incurred income tax expense of $2.6 million and $2.7 million for the six months ended June 30, 2026 and 2025, respectively. Our effective tax rate was 16.47% and 22.60% for the six months ended June 30, 2026 and 2025, respectively. The decrease in the effective tax rate was due to an adjustment of $878,000 due to federal tax credits purchased and an adjustment of $114,000 due to state tax credits purchased during the six months ended June 30, 2026.

Previous wording

We have a significant portion of our loan portfolio with real estate as the underlying collateral. As of March 31, 2026 and December 31, 2025, approximately 92.4% and 91.5%, respectively, of the loan portfolio had real estate collateral. When loans, whether commercial or personal, are granted, they are based on the borrower’s ability to generate repayment cash flows from income sources sufficient to service the debt. Real estate is generally taken to reinforce the likelihood of the ultimate repayment and as a secondary source of repayment. We work closely with all our borrowers who experience cash flow or other economic problems, and we believe that we have the appropriate processes in place to monitor and identify problem credits. There can be no assurance that charge-offs of loans in future periods will not exceed the allowance for credit losses as estimated at any point in time or that provisions for credit losses will not be significant to a particular accounting period. The allowance for credit losses is also subject to examination and testing for adequacy by regulatory agencies, which may consider such factors as the methodology used to determine adequacy of the allowance and the size of the allowance relative to that of peer institutions. Such regulatory agencies could require us to adjust our allowance for credit losses based on information available to them at the time of their examination.

Current wording

We have a significant portion of our loan portfolio with real estate as the underlying collateral. As of June 30, 2026 and December 31, 2025, approximately 91.7% and 91.5%, respectively, of the loan portfolio had real estate collateral. When loans, whether commercial or personal, are granted, they are based on the borrower’s ability to generate repayment cash flows from income sources sufficient to service the debt. Real estate is generally taken to reinforce the likelihood of the ultimate repayment and as a secondary source of repayment. We work closely with all our borrowers who experience cash flow or other economic problems, and we believe that we have the appropriate processes in place to monitor and identify problem credits. There can be no assurance that charge-offs of loans in future periods will not exceed the allowance for credit losses as estimated at any point in time or that provisions for credit losses will not be significant to a particular accounting period. The allowance for credit losses is also subject to examination and testing for adequacy by regulatory agencies, which may consider such factors as the methodology used to determine adequacy of the allowance and the size of the allowance relative to that of peer institutions. Such regulatory agencies could require us to adjust our allowance for credit losses based on information available to them at the time of their examination.

Previous wording

The non-performing asset ratio was 0.04% of total assets with the nominal level of $853,000 in non-performing assets at March 31, 2026 compared to 0.02% and $372,000 at December 31, 2025. Non-accrual loans increased to $311,000 at March 31, 2026 from $202,000 at December 31, 2025. We had one accruing loan past due 90 days or more totaling $374,000 at March 31, 2026 compared to $2,000 at December 31, 2025. Loans past due 30 days or more represented 0.14% of the loan portfolio at March 31, 2026 compared to 0.07% at December 31, 2025. The ratio of classified loans plus OREO and repossessed assets increased to 1.83% of total bank regulatory risk-based capital at March 31, 2026 from 0.76% at December 31, 2025.

Current wording

The non-performing asset ratio was 0.04% of total assets with the nominal level of $887,000 in non-performing assets at June 30, 2026 compared to 0.02% and $372,000 at December 31, 2025. Non-accrual loans increased to $300,000 at June 30, 2026 from $202,000 at December 31, 2025. We had four accruing loans past due 90 days or more totaling $419,000 at June 30, 2026 compared to $2,000 at December 31, 2025. Loans past due 30 days or more represented 0.26% of the loan portfolio at June 30, 2026 compared to 0.07% at December 31, 2025. The ratio of classified loans plus OREO and repossessed assets increased to 2.55% of total bank regulatory risk-based capital at June 30, 2026 from 0.76% at December 31, 2025.

Previous wording

During the three months ended March 31, 2026, we experienced net charge-offs, including overdrafts, of $5,000 and net loan recoveries, excluding overdrafts, of $4,000. In comparison, during the three months ended March 31, 2025, we experienced net recoveries, including overdrafts, of $11,000 and net loan recoveries, excluding overdrafts, of $14,000.

Current wording

During the six months ended June 30, 2026, we experienced net charge-offs, including overdrafts, of $26,000 and net loan recoveries, excluding overdrafts, of $3,000. In comparison, during the six months ended June 30, 2025, we experienced net recoveries, including overdrafts, of $1,000 and net loan recoveries, excluding overdrafts, of $19,000.

Previous wording

There were five loans totaling $685,000 (0.04% of total loans) included on non-performing status (non-accrual loans and loans past due 90 days and still accruing) at March 31, 2026. Four of these loans were on non-accrual status. The largest loan of the four is $196,000 and is secured by real estate. The balance of the remaining loans on non-accrual status is $115,000. These loans are secured by business assets. At March 31, 2026, we had one accruing loan that was past due 90 days or more. At both March 31, 2026 and December 31, 2025, we considered loan relationships exceeding $500,000 and on non-accrual status as individually assessed loans for the allowance for credit losses. At March 31, 2026 we have one individually assessed loan for $2.4 million and at December 31, 2025, we had no individually assessed loans. The specific allowance for individually assessed loans is based on the fair value of collateral method or present value of expected cash flows method. For collateral dependent loans, the fair value of collateral method is used and the fair value is determined by an independent appraisal less estimated selling costs. There was $2.0 million allowance for credit losses on our individually assessed loans at March 31, 2026 and none at December 31, 2025. At March 31, 2026, we had $2.2 million in loans that were delinquent 30 days to 89 days representing 0.14% of total loans compared to $934,000 or 0.07% of total loans at December 31, 2025.

Current wording

There were eight loans totaling $719,000 (0.05% of total loans) included on non-performing status (non-accrual loans and loans past due 90 days and still accruing) at June 30, 2026. Four of these loans were on non-accrual status. The largest loan of the four is $193,000 and is secured by real estate. The balance of the remaining loans on non-accrual status is $107,000. These loans are secured by business assets. At June 30, 2026, we had four accruing loans that were past due 90 days or more. At both June 30, 2026 and December 31, 2025, we considered loan relationships exceeding $500,000 and on non-accrual status as individually assessed loans for the allowance for credit losses. In addition to the loans meeting the criteria above, purchased loans with a specific credit mark are also individually assessed. At June 30, 2026 we have five individually assessed loans totaling $2.8 million. At December 31, 2025, we had no individually assessed loans. The specific allowance for individually assessed loans is based on the fair value of collateral method or present value of expected cash flows method. For collateral dependent loans, the fair value of collateral method is used and the fair value is determined by an independent appraisal less estimated selling costs. There was $2.4 million allowance for credit losses on our individually assessed loans at June 30, 2026 and none at December 31, 2025. At June 30, 2026, we had $3.7 million in loans that were delinquent 30 days to 89 days representing 0.24% of total loans compared to $934,000 or 0.07% of total loans at December 31, 2025.

Previous wording

Assets increased $333.8 million, or 16.2% (65.8% annualized), to $2.4 billion at March 31, 2026 from $2.1 billion at December 31, 2025. The increase in assets was primarily due to increases in cash and due from banks of $11.6 million, interest-bearing bank balances of $45.3 million, investment securities available for sale of $26.6 million, loans held-for-investment of $238.1 million, goodwill of $14.8 million, intangible assets of $2.5 million, and other assets of $8.7 million, partially offset by a decrease in investment securities held-to-maturity of $6.4 million.

Current wording

Assets increased $314.6 million, or 15.3% (30.8% annualized), to $2.4 billion at June 30, 2026 from $2.1 billion at December 31, 2025. The increase in assets was primarily due to increases in cash and due from banks of $7.8 million, investment securities available for sale of $28.5 million, loans held-for-investment of $267.3 million, goodwill of $14.8 million, intangible assets of $2.4 million, and other assets of $13.3 million, partially offset by a decrease in interest-bearing bank balances of $6.7 million and investment securities held-to-maturity of $10.2 million, and an increase in allowance for credit losses of $4.7 million. As discussed elsewhere, $195.7 million of the growth in loans held-for-investment and all of the growth in goodwill and intangible assets came from the acquisition of Signature Bank of Georgia.

Previous wording

Loans held-for-sale decreased to $6.9 million at March 31, 2026 from $10.7 million at December 31, 2025. Loans (excluding loans held-for-sale) increased $238.1 million, or 18.2% (73.7% annualized), to $1.5 billion at March 31, 2026 from $1.3 billion at December 31, 2025. Total loan production, excluding mortgage secondary market and new construction residential real estate, was $91.2 million during the three months ended March 31, 2026 compared to $53.6 million during the same period in 2025. Advances from unfunded commercial construction loans available for draws were $10.2 million during the three months ended March 31, 2026 compared to $9.0 million during the same period in 2025. Payoffs and paydowns totaled $43.7 million during the three months ended March 31, 2026 compared to $18.6 million during the same period in 2025.

Current wording

Loans held-for-sale increased to $11.9 million at June 30, 2026 from $10.7 million at December 31, 2025. Loans (excluding loans held-for-sale) increased $267.3 million, or 20.4% (41.1% annualized), to $1.6 billion at June 30, 2026 from $1.3 billion at December 31, 2025. Total loan production, excluding mortgage secondary market and new construction residential real estate, was $151.5 million during the six months ended June 30, 2026 compared to $99.9 million during the same period in 2025. Advances from unfunded commercial construction loans available for draws were $35.1 million during the six months ended June 30, 2026 compared to $23.8 million during the same period in 2025. Payoffs and paydowns totaled $95.1 million during the six months ended June 30, 2026 compared to $60.7 million during the same period in 2025.

Previous wording

Total production in the mortgage line of business in the first quarter of 2026 was $42.0 million which was comprised of $25.4 million in secondary market loans, $1.9 million in adjustable rate mortgages (ARMs), and $14.7 million in construction loans. Total production in the mortgage line of business in the first quarter of 2025 was $43.9 million which was comprised of $25.8 million in secondary market loans, $4.0 million in ARMs, and $14.1 million in construction loans. As these ARM and new construction residential real estate loans are being held on our balance sheet as loans held-for-investment, the result is additive to loan growth and interest income but results in less gain on sale fee income, which is reported in noninterest income as mortgage banking income.

Current wording

Total production in the mortgage line of business in the six months ended June 30, 2026 was $95.8 million which was comprised of $63.7 million in secondary market loans, $4.2 million in adjustable rate mortgages (ARMs), and $27.9 million in construction loans. Total mortgage production during the six months ended June 30, 2025 was $106.7 million, $57.7 million of the production was originated to be sold in the secondary market, $9.6 million of the loan production was originated as ARM loans for our loans held-for-investment portfolio, and $39.4 million of the loan production was commitments for new construction residential real estate loans. As these ARM and new construction residential real estate loans are being held on our balance sheet as loans held-for-investment, the result is additive to loan growth and interest income but results in less gain on sale fee income, which is reported in noninterest income as mortgage banking income.

Previous wording

The loan-to-deposit ratio (including loans held-for-sale) at March 31, 2026 and December 31, 2025 was 76.0% and 75.6%, respectively. The loan-to-deposit ratio (excluding loans held-for-sale) at March 31, 2026 and December 31, 2025 was 75.6% and 74.9%, respectively.

Current wording

The loan-to-deposit ratio (including loans held-for-sale) at June 30, 2026 and December 31, 2025 was 78.5% and 75.6%, respectively. The loan-to-deposit ratio (excluding loans held-for-sale) at June 30, 2026 and December 31, 2025 was 77.9% and 74.9%, respectively.

Previous wording

One of our goals as a community bank has been, and continues to be, to grow our assets through quality loan growth by providing credit to small and mid-size businesses and individuals within the markets we serve. We remain committed to meeting the credit needs of our local markets. Based on our loan portfolio as of March 31, 2026, the non-owner occupied commercial real estate loans and the construction and land development loans were approximately 314% and 67% of total risk-based capital, respectively compared to 307% and 71% at December 31, 2025. Furthermore, our three-year growth in non-owner occupied commercial real estate loans was 62% from March 31, 2023 to March 31, 2026. We have expertise and a long history in originating and managing commercial real estate loans. We have a strong credit underwriting process, which includes management and board oversight. We perform rigorous monitoring, stress testing, and reporting of these portfolios at the management and board levels, and we continue to monitor the level of the concentration in commercial real estate loans within our loan portfolio monthly.

Current wording

One of our goals as a community bank has been, and continues to be, to grow our assets through quality loan growth by providing credit to small and mid-size businesses and individuals within the markets we serve. We remain committed to meeting the credit needs of our local markets. Based on our loan portfolio as of June 30, 2026, the non-owner occupied commercial real estate loans and the construction and land development loans were approximately 314% and 70% of total risk-based capital, respectively, compared to 307% and 71% at December 31, 2025. Furthermore, our three-year growth in non-owner occupied commercial real estate loans was 55% from June 30, 2023 to June 30, 2026. We have expertise and a long history in originating and managing commercial real estate loans. We have a strong credit underwriting process, which includes management and board oversight. We perform rigorous monitoring, stress testing, and reporting of these portfolios at the management and board levels, and we continue to monitor the level of the concentration in commercial real estate loans within our loan portfolio monthly.

Previous wording

Investment securities increased $20.2 million to $512.6 million, net of allowance for credit losses on investments of $16,000, at March 31, 2026 from $492.2 million, net of allowance for credit losses on investments of $19,000, at December 31, 2025. The increase was driven primarily by purchases of mortgage-backed securities in the available-for-sale portfolio, partially offset by normal principal cash flows.

Current wording

Investment securities increased $18.6 million to $510.8 million, net of allowance for credit losses on investments of $14,000, at June 30, 2026 from $492.2 million, net of allowance for credit losses on investments of $19,000, at December 31, 2025. The increase was driven primarily by purchases of securities in the available-for-sale portfolio, and a reduction in unrealized losses on our available-for-sale securities portfolio, partially offset by normal principal cash flows.

Previous wording

On June 1, 2022, we reclassified $224.5 million in investments to held-to-maturity (HTM) from available-for-sale (AFS). These securities were transferred at fair value at the time of the transfer, which became the new cost basis for the securities held to maturity. The pretax unrealized net holding loss on the available-for-sale securities on the date of transfer totaled approximately $16.7 million and continued to be reported as a component of accumulated other comprehensive loss. This net unrealized loss is being amortized to interest income over the remaining life of the securities as a yield adjustment. There were no gains or losses recognized as a result of this transfer. The remaining pretax unrealized net holding loss on these investments was $10.2 million ($8.0 million net of tax) at March 31, 2026.

Current wording

On June 1, 2022, we reclassified $224.5 million in investments to held-to-maturity (HTM) from available-for-sale (AFS). These securities were transferred at fair value at the time of the transfer, which became the new cost basis for the securities held to maturity. The pretax unrealized net holding loss on the available-for-sale securities on the date of transfer totaled approximately $16.7 million and continued to be reported as a component of accumulated other comprehensive loss. This net unrealized loss is being amortized to interest income over the remaining life of the securities as a yield adjustment. There were no gains or losses recognized as a result of this transfer. The remaining pretax unrealized net holding loss on these investments was $9.8 million ($7.7 million net of tax) at June 30, 2026.

Previous wording

Our HTM investments totaled $188.7 million and represented approximately 37% of our total investments at March 31, 2026. Our AFS investments totaled $320.7 million or approximately 62% of our total investments at March 31, 2026. Our investments at cost totaled $3.2 million or approximately 1% of our total investments at March 31, 2026. The unrealized losses on our investment securities are related to an increase in market interest rates, which has a temporary negative impact on the fair value of our investment securities portfolio and on accumulated other comprehensive loss, which is included in shareholders’ equity.

Current wording

Our HTM investments totaled $185.0 million and represented approximately 36% of our total investments at June 30, 2026. Our AFS investments totaled $322.6 million or approximately 63% of our total investments at June 30, 2026. Our investments at cost totaled $3.3 million or approximately 1% of our total investments at June 30, 2026. The unrealized losses on our investment securities are related to an increase in market interest rates, which has a temporary negative impact on the fair value of our investment securities portfolio and on accumulated other comprehensive loss, which is included in shareholders’ equity.

Previous wording

At March 31, 2026, the estimated weighted average life of our total investment portfolio was 4.9 years, the modified duration was 4.1, the effective duration was 3.3, and the weighted average tax equivalent book yield was 3.66%.

Current wording

At June 30, 2026, the estimated weighted average life of our total investment portfolio was 5.1 years, the modified duration was 4.2, the effective duration was 3.4, and the weighted average tax equivalent book yield was 3.66%.

Previous wording

Interest bearing deposits in other banks and fed funds sold increased $45.3 million to $182.5 million at March 31, 2026 from $137.2 million at December 31, 2025 due to our decision to temporarily hold excess liquidity in interest-bearing bank deposits at the Federal Reserve Bank. This additional liquidity will be used to fund loan growth and/or reduce borrowings and brokered certificates of deposit.

Current wording

Interest-bearing deposits in other banks and fed funds sold decreased $6.7 million to $130.5 million at June 30, 2026 from $137.2 million at December 31, 2025 due to loan growth outpacing deposit growth.

Previous wording

Deposits increased $298.7 million, or 17.1% (69.2% annualized), to $2.05 billion at March 31, 2026 compared to $1.75 billion at December 31, 2025. Our pure deposits, which are defined as total deposits less certificates of deposit, increased $291 million, or 20.2% (82.1% annualized), to $1.73 billion at March 31, 2026 from $1.44 billion at December 31, 2025. We continue to focus on growing our pure deposits in order to better manage our overall cost of funds. Certificates of deposit increased $8 million to $322 million at March 31, 2026 from $314 million at December 31, 2025.

Current wording

Deposits increased $275.3 million, or 15.7% (31.7% annualized), to $2.02 billion at June 30, 2026 compared to $1.75 billion at December 31, 2025. Our pure deposits, which are defined as total deposits less certificates of deposit, increased $267 million, or 18.6% (37.4% annualized), to $1.73 billion at June 30, 2026 from $1.44 billion at December 31, 2025. We continue to focus on growing our pure deposits in order to better manage our overall cost of funds. Certificates of deposit increased $8.7 million to $322 million at June 30, 2026 from $314 million at December 31, 2025.

Previous wording

We had no brokered certificates of deposit at March 31, 2026 or December 31, 2025. Total uninsured deposits were $697.9 million and $581.3 million at March 31, 2026 and December 31, 2025, respectively. Included in uninsured deposits at March 31, 2026 and December 31, 2025 were $214.2 million and $187.5 million, respectively, of deposits of states or political subdivisions in the U.S., which are secured or collateralized, respectively. Total uninsured deposits, excluding these deposits that are secured or collateralized, totaled $483.7 million, or 23.6%, of total deposits at March 31, 2026 and $393.8 million, or 22.5%, of total deposits at December 31, 2025. The average balance of all customer deposit accounts at March 31, 2026 was $34,731. The average balance for consumer accounts was $18,525 and the average balance for non-consumer accounts was $74,558.

Current wording

We had no brokered certificates of deposit at June 30, 2026 or December 31, 2025. Total uninsured deposits were $663.6 million and $581.3 million at June 30, 2026 and December 31, 2025, respectively. Included in uninsured deposits at June 30, 2026 and December 31, 2025 were $101.9 million and $187.5 million, respectively, of deposits of states or political subdivisions in the U.S., which are secured or collateralized, respectively. Total uninsured deposits, excluding these deposits that are secured or collateralized, totaled $561.7 million, or 27.7%, of total deposits at June 30, 2026 and $393.8 million, or 22.5%, of total deposits at December 31, 2025. The average balance of all customer deposit accounts at June 30, 2026 was $34,084. The average balance for consumer accounts was $18,376 and the average balance for non-consumer accounts was $72,396.

Previous wording

The uninsured amount of time deposits in the table above at March 31, 2026 and December 31, 2025 was $49.1 million and $47.1 million, respectively.

Current wording

The uninsured amount of time deposits in the table above at June 30, 2026 and December 31, 2025 was $49.6 million and $47.1 million, respectively.

Previous wording

Borrowed funds consist of federal funds purchased, securities sold under agreements to repurchase, FHLB advances and long-term debt. Our long-term debt is the result of issuing $15.0 million in trust preferred securities. Short-term borrowings in the form of securities sold under agreements to repurchase averaged $121.9 million, $101.9 million, and $130.8 million during the three months ended March 31, 2026, December 31, 2025, and March 31, 2025, respectively. The average rates paid during these periods were 2.21%, 2.26%, and 2.52%, respectively. The balances of securities sold under agreements to repurchase were $99.8 million, $107.2 million, and $129.8 million at March 31, 2026, December 31, 2025, and March 31, 2025, respectively. The repurchase agreements all mature within one to four days and are generally originated with customers that have other relationships with us and tend to provide a stable and predictable source of funding. Federal funds purchased averaged zero, zero, and $2,000 during the three months ended March 31, 2026, December 31, 2025, and March 31, 2025, respectively. The average rates paid during these periods were 0.00%. Federal funds purchased were zero at March 31, 2026, December 31, 2025, and March 31, 2025. As a member of the FHLB, the Bank has access to advances from the FHLB for various terms and amounts. FHLB advances averaged zero during the three months ended March 31, 2026, December 31, 2025, and March 31, 2025. The average rates paid during these periods were zero. The balances of FHLB advances were zero at March 31, 2026, December 31, 2025, and March 31, 2025.

Current wording

Borrowed funds consist of federal funds purchased, securities sold under agreements to repurchase, FHLB advances and long-term debt. Our long-term debt is the result of issuing $15.0 million in trust preferred securities. Short-term borrowings in the form of securities sold under agreements to repurchase averaged $101.1 million and $101.9 million during the three months ended June 30, 2026 and December 31, 2025, respectively. The average rates paid during these periods were 2.25% and 2.26%, respectively. The balances of securities sold under agreements to repurchase were $96.5 million and $107.2 million at June 30, 2026 and December 31, 2025, respectively. The repurchase agreements all mature within one to four days and are generally originated with customers that have other relationships with us and tend to provide a stable and predictable source of funding. Federal funds purchased averaged $1,000 and zero during the three months ended June 30, 2026 and December 31, 2025, respectively. The average rates paid during these periods were 0.00%. Federal funds purchased were zero at June 30, 2026 and December 31, 2025. As a member of the FHLB, the Bank has access to advances from the FHLB for various terms and amounts. FHLB advances averaged zero during the three months ended June 30, 2026 and December 31, 2025. The balances of FHLB advances were zero at June 30, 2026 and December 31, 2025.

Previous wording

We issued $15.5 million in trust preferred securities on March 16, 2004. During the fourth quarter of 2015, we redeemed $500,000 of these securities. The remaining debt may be redeemed in full anytime with notice, and matures on March 16, 2034. The balances of trust preferred securities were $15.0 million as of March 31, 2026, December 31, 2025, and March 31, 2025. The securities accrue and pay distributions quarterly at a rate determined by an adjusted SOFR. Trust preferred securities averaged $15.0 million during the three months ended March 31, 2026, December 31, 2025, and March 31, 2025. The average rates during these periods were 6.64%, 6.89%, and 7.29%, respectively.

Current wording

We issued $15.5 million in trust preferred securities on March 16, 2004. During the fourth quarter of 2015, we redeemed $500,000 of these securities. The remaining debt may be redeemed in full anytime with notice, and it matures on March 16, 2034. The balances of trust preferred securities were $15.0 million as of June 30, 2026 and December 31, 2025. The securities accrue and pay distributions quarterly at a rate determined by an adjusted SOFR. Trust preferred securities averaged $15.0 million during the three months ended June 30, 2026 and December 31, 2025. The average rates during these periods were 6.59% and 6.89%, respectively.

Previous wording

Other liabilities declined $11.0 million to $5.1 million at March 31, 2026 from $16.1 million at December 31, 2025 primarily due to a $12.5 million reduction in accrued federal income tax payable due to the purchase of federal tax credits during the three months ended March 31, 2026.

Current wording

Other liabilities declined $10.5 million to $5.6 million at June 30, 2026 from $16.1 million at December 31, 2025 primarily due to a $12.5 million reduction in accrued federal income tax payable due to the purchase of federal tax credits during the six months ended June 30, 2026.

Previous wording

Total shareholders’ equity increased $53.3 million, or 31.8%, to $220.8 million at March 31, 2026 from $167.6 million at December 31, 2025. Shareholders’ equity was 9.2% of total assets at March 31, 2026 and 8.1% at December 31, 2025. The $53.3 million increase in shareholders’ equity was due to a $4.0 million increase in retained earnings resulting from $5.5 million in net income less $1.5 million in dividends, a $97,000 decrease due to employee and director stock awards, a $94,000 increase due to dividend reinvestment plan (DRIP) purchases, a $49.7 million increase due to the acquisition of SGBG, and a $433,000 increase in accumulated other comprehensive loss. The increase in accumulated other comprehensive loss of $433,000 during the period was due to $774,000 of comprehensive loss from unrealized losses on available-for-sale securities, partially offset by the $332,000 of comprehensive income from reclassification adjustment for amortization of unrealized losses on securities transferred from available-for-sale to held-to-maturity and the $9,000 of comprehensive income from unrealized gain on investment hedge.

Current wording

Total shareholders’ equity increased $60.4 million, or 36.1%, to $228.0 million at June 30, 2026 from $167.6 million at December 31, 2025. Shareholders’ equity was 9.6% of total assets at June 30, 2026 and 8.1% at December 31, 2025. The increase in shareholders’ equity was due to a $10.1 million increase in retained earnings resulting from $13.1 million in net income less $3.0 million in dividends, a $41,000 decrease due to share repurchases, a $272,000 increase due to employee and director stock awards, a $187,000 increase due to dividend reinvestment plan (DRIP) purchases, a $49.7 million increase due to the acquisition of SGBG, and a $177,000 increase in accumulated other comprehensive loss. The increase in accumulated other comprehensive loss of $177,000 during the period was due to $857,000 of comprehensive loss from unrealized losses on available-for-sale securities, partially offset by the $654,000 of comprehensive income from reclassification adjustment for amortization of unrealized losses on securities transferred from available-for-sale to held-to-maturity and the $380,000 of comprehensive income from unrealized gain on investment hedge.

Previous wording

On May 9, 2025, we announced that our Board of Directors approved a plan to utilize up to $7.5 million of capital to repurchase shares of our common stock (the “2025 Repurchase Plan”), which represented approximately 5.0% of total shareholders’ equity at the time of the announcement. During the first quarter of 2026, a total of 1,483 shares of the Company’s common stock were repurchased at an average price of $27.77 and a total value of $41,180. The 2025 Repurchase Plan expires at market close on May 8, 2026.

Current wording

During the first quarter of 2026, a total of 1,483 shares of the Company’s common stock were repurchased at an average price of $27.77 and a total value of $41,180 under the 2025 Repurchase Plan, which expired at market close on May 8, 2026. On May 7, 2026, we announced that our Board of Directors approved a new plan to utilize up to $7.5 million of capital to repurchase shares of our common stock (the “2026 Repurchase Plan”), which represented approximately 3.4% of total shareholders’ equity at the time of the announcement. No repurchases have been made under the 2026 Repurchase Plan through August 12, 2026. The 2026 Repurchase Plan expires at market close on May 5, 2027.

Previous wording

The Bank maintains federal funds purchased lines in the total amount of $102.5 million with four financial institutions and $10.0 million through the Federal Reserve Discount Window. We utilized none of our federal funds purchased lines at March 31, 2026 and December 31, 2025. The FHLB of Atlanta has approved a line of credit of up to 25.00% of the Bank’s total assets, which, when utilized, is collateralized by a pledge against specific investment securities and/or eligible loans. We had no FHLB advances at March 31, 2026 and at December 31, 2025. At March 31, 2026, we had remaining credit availability under this facility in excess of $597.5 million, subject to collateral requirements. Combined, we have total remaining credit availability, subject to collateral requirements, in excess of $700.0 million as compared to uninsured deposits excluding deposits of states or political subdivisions in the U.S., which are secured or collateralized, of $483.7 million.

Current wording

The Bank maintains federal funds purchased lines in the total amount of $102.5 million with four financial institutions and $10.0 million through the Federal Reserve Discount Window. We utilized none of our federal funds purchased lines at June 30, 2026 and December 31, 2025. The FHLB of Atlanta has approved a line of credit of up to 30.00% of the Bank’s total assets, which, when utilized, is collateralized by a pledge against specific investment securities and/or eligible loans. We had no FHLB advances at June 30, 2026 and at December 31, 2025. At June 30, 2026, we had remaining credit availability under this facility in excess of $720.3 million, subject to collateral requirements. Combined, we have total remaining credit availability, subject to collateral requirements, in excess of $832.8 million as compared to uninsured deposits excluding deposits of states or political subdivisions in the U.S., which are secured or collateralized, of $579.0 million.

Previous wording

Through the operations of our Bank, we have made contractual commitments to extend credit in the ordinary course of our business activities. These commitments are legally binding agreements to lend money to our customers at predetermined interest rates for a specified period of time. At March 31, 2026, we had issued commitments to extend unused credit of $261.4 million, including $73.0 million in unused home equity lines of credit, through various types of lending arrangements. At December 31, 2025, we had issued commitments to extend unused credit of $211.2 million, including $69.0 million in unused home equity lines of credit, through various types of lending arrangements. We evaluate each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by us upon extension of credit, is based on our credit evaluation of the borrower. Collateral varies but may include accounts receivable, inventory, property, plant and equipment, commercial and residential real estate. We manage the credit risk on these commitments by subjecting them to normal underwriting and risk management processes.

Current wording

Through the operations of our Bank, we have made contractual commitments to extend credit in the ordinary course of our business activities. These commitments are legally binding agreements to lend money to our customers at predetermined interest rates for a specified period of time. At June 30, 2026, we had issued commitments to extend unused credit of $258.3 million, including $78.2 million in unused home equity lines of credit, through various types of lending arrangements. At December 31, 2025, we had issued commitments to extend unused credit of $211.2 million, including $69.0 million in unused home equity lines of credit, through various types of lending arrangements. We evaluate each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by us upon extension of credit, is based on our credit evaluation of the borrower. Collateral varies but may include accounts receivable, inventory, property, plant and equipment, commercial and residential real estate. We manage the credit risk on these commitments by subjecting them to normal underwriting and risk management processes.

Previous wording

The federal banking agencies have also implemented a simplified measure of capital adequacy for qualifying community banking organizations known as the Community Bank Leverage Ratio (“CBLR”) framework. Depository institutions and their holding companies with less than $10 billion in total consolidated assets that meet certain other qualifying criteria and maintain a leverage ratio greater than 9% may elect to use the CBLR framework. Institutions that opt into the CBLR framework and maintain a qualifying leverage ratio are considered to have satisfied the generally applicable risk-based and leverage capital requirements under the Basel III rules and are deemed “well capitalized” for prompt corrective action purposes. We continue to evaluate annually whether to elect into the CBLR framework, but currently report under the traditional risk-based capital approach.

Current wording

The federal banking agencies have also implemented a simplified measure of capital adequacy for qualifying community banking organizations known as the Community Bank Leverage Ratio (“CBLR”) framework. Depository institutions and their holding companies with less than $10 billion in total consolidated assets that meet certain other qualifying criteria and maintain a leverage ratio greater than 9% may elect to use the CBLR framework. Institutions that opt into the CBLR framework and maintain a qualifying leverage ratio are considered to have satisfied the generally applicable risk-based and leverage capital requirements under the Basel III rules and are deemed “well capitalized” for prompt corrective action purposes. In April 2026, the federal banking regulatory agencies jointly finalized a rule to modify the CBLR to 8% from 9%, effective July 1, 2026. Additionally, the rule extends the length of time that certain depository institutions and depository holding companies can remain in the CBLR framework while not meeting all of the criteria for initial qualification. We continue to evaluate annually whether to elect into the CBLR framework, but currently report under the traditional risk-based capital approach.

Previous wording

As a bank holding company, our ability to declare and pay dividends is dependent on certain federal and state regulatory considerations, including the guidelines of the Federal Reserve. The Federal Reserve has issued a policy statement regarding the payment of dividends by bank holding companies. In general, the Federal Reserve’s policies provide that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the bank holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition. The Federal Reserve’s policies also require that a bank holding company serve as a source of financial strength to its subsidiary bank(s) by standing ready to use available resources to provide adequate capital funds to those banks during periods of financial stress or adversity and by maintaining the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks where necessary. In addition, under the prompt corrective action regulations, the ability of a bank holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized. These regulatory policies could affect our ability to pay dividends or otherwise engage in capital distributions. Our Board of Directors approved a cash dividend for the first quarter of 2026 of $0.16 per common share. This dividend is payable on May 19, 2026 to shareholders of record of our common stock as of May 5, 2026.

Current wording

As a bank holding company, our ability to declare and pay dividends is dependent on certain federal and state regulatory considerations, including the guidelines of the Federal Reserve. The Federal Reserve has issued a policy statement regarding the payment of dividends by bank holding companies. In general, the Federal Reserve’s policies provide that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the bank holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition. The Federal Reserve’s policies also require that a bank holding company serve as a source of financial strength to its subsidiary bank(s) by standing ready to use available resources to provide adequate capital funds to those banks during periods of financial stress or adversity and by maintaining the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks where necessary. In addition, under the prompt corrective action regulations, the ability of a bank holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized. These regulatory policies could affect our ability to pay dividends or otherwise engage in capital distributions. Our Board of Directors approved a cash dividend for the second quarter of 2026 of $0.17 per common share. This dividend is payable on August 18, 2026 to shareholders of record of our common stock as of August 4, 2026.