CB Financial Services, Inc.

Previous wording

The following discussion and analysis is presented to assist in the understanding and evaluation of our consolidated financial condition and results of operations. It is intended to complement the unaudited consolidated financial statements and notes thereto appearing elsewhere in this Form 10-Q and should be read in conjunction therewith. The detailed discussion focuses on our consolidated financial condition as of June 30, 2026, compared to the consolidated financial condition as of December 31, 2025 and the consolidated results of operations for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025.

Current wording

The following discussion and analysis is presented to assist in the understanding and evaluation of our consolidated financial condition and results of operations. It is intended to complement the unaudited consolidated financial statements and notes thereto appearing elsewhere in this Form 10-Q and should be read in conjunction therewith. The detailed discussion focuses on our consolidated financial condition as of September 30, 2026, compared to the consolidated financial condition as of December 31, 2025 and the consolidated results of operations for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025.

Previous wording

Total assets increased $108.7 million, or 7.0%, to $1.66 billion at June 30, 2026 compared to $1.55 billion at December 31, 2025.

Current wording

Total assets increased $80.3 million, or 5.2%, to $1.63 billion at September 30, 2026 compared to $1.55 billion at December 31, 2025.

Previous wording

•Cash and due from banks increased $44.4 million, or 140.1%, to $76.1 million at June 30, 2026, compared to $31.7 million at December 31, 2025, driven by deposit growth.

Current wording

•Cash and due from banks decreased $0.9 million, or 2.7%, to $30.8 million at September 30, 2026, compared to $31.7 million at December 31, 2025.

Previous wording

•Securities increased $45.7 million, or 16.3%, to $325.6 million at June 30, 2026, compared to $279.9 million at December 31, 2025. This was primarily due to $84.9 million of security purchases, partially offset by $37.9 million of maturities and repayments on amortizing securities and a $1.9 million increase in unrealized losses on the portfolio.

Current wording

•Securities increased $64.1 million, or 22.9%, to $344.0 million at September 30, 2026, compared to $279.9 million at December 31, 2025. This was primarily due to $134.7 million of security purchases, partially offset by $56.5 million of maturities and repayments on amortizing securities and a $15.1 million increase in unrealized losses on the portfolio as a result of recent increases in market interest rates.

Previous wording

•Total loans increased $17.5 million, or 1.5%, to $1.18 billion compared to $1.16 billion, and included increases in commercial real estate and construction loans of $19.6 million and $13.5 million, respectively, partially offset by decreases in consumer and residential real estate loans of $11.8 million and $2.2 million, respectively. The decrease in consumer loans resulted from the continued reduction in indirect automobile loan production since the discontinuation of this product offering as of June 30, 2023. This portfolio is expected to continue to decline as resources are allocated and production efforts are focused on higher yielding commercial products. Excluding the $11.1 million decrease in indirect automobile loans, total loans increased $28.5 million, or 2.5%. Loan production totaled $90.8 million while $64.8 million of loans were paid off since December 31, 2025.

Current wording

•Total loans remained stable at $1.16 billion for both September 30, 2026 and December 31, 2025, and included increases in commercial real estate and construction loans of $46.8 million and $6.9 million, respectively, partially offset by decreases in commercial and industrial, consumer, other and residential real estate loans of $25.5 million, $15.4 million, $7.3 million and $5.8 million, respectively. The decrease in commercial and industrial loans resulted from the payoff of a large line of credit due to the sale of the business while the decrease in consumer loans resulted from the continued reduction in indirect automobile loan production since the discontinuation of this product offering as of June 30, 2023. This portfolio is expected to continue to decline as resources are allocated and production efforts are focused on more profitable commercial products. Excluding the $15.5 million decrease in indirect automobile loans, total loans increased $15.1 million, or 1.3%. Loan production totaled $135.0 million while $107.5 million of loans were paid off since December 31, 2025.

Previous wording

•The allowance for credit losses (ACL) was $10.5 million at June 30, 2026 and $10.1 million at December 31, 2025. As a result, the ACL to total loans was 0.89% at June 30, 2026 and 0.87% at December 31, 2025. During the six months ended June 30, 2026, the Company recorded a net provision for credit losses of $259,000 including a provision for credit losses on loans of $385,000 and a recovery of provision for credit losses on unfunded commitments of $126,000.

Current wording

•The allowance for credit losses (ACL) was $10.0 million at September 30, 2026 and $10.1 million at December 31, 2025. As a result, the ACL to total loans was 0.86% at September 30, 2026 and 0.87% at December 31, 2025. During the nine months ended September 30, 2026, the Company recorded a net provision for credit losses of $190,000 including a provision for credit losses on unfunded commitments of $204,000 and a recovery of provision for credit losses on loans of $14,000.

Previous wording

•Net charge-offs for the six months ended June 30, 2026 were $50,000, or 0.01% of average loans on an annualized basis, compared to net charge-offs for the six months ended June 30, 2025 of $15,000.

Current wording

•Net charge-offs for the nine months ended September 30, 2026 were $109,000, or 0.01% of average loans on an annualized basis, compared to net recoveries for the nine months ended September 30, 2025 of $72,000, or 0.01% of average loans on an annualized basis.

Previous wording

•Nonperforming loans, which include nonaccrual loans and accruing loans past due 90 days or more, were $3.4 million at June 30, 2026 and $5.3 million at December 31, 2025. Nonperforming loans to total loans ratio was 0.29% at June 30, 2026 and 0.46% at December 31, 2025. The decrease in nonperforming loans was due to the full repayment of a $2.0 million commercial real estate loan which was placed on nonaccrual status in the fourth quarter of 2025.

Current wording

•Nonperforming loans, which include nonaccrual loans and accruing loans past due 90 days or more, were $3.2 million at September 30, 2026 and $5.3 million at December 31, 2025. Nonperforming loans to total loans ratio was 0.28% at September 30, 2026 and 0.46% at December 31, 2025. The decrease in nonperforming loans was due to the full repayment of a $2.0 million commercial real estate loan which was placed on nonaccrual status in the fourth quarter of 2025.

Previous wording

Total liabilities increased $104.2 million, or 7.5%, to $1.49 billion at June 30, 2026 compared to $1.39 billion at December 31, 2025.

Current wording

Total liabilities increased $81.8 million, or 5.9%, to $1.47 billion at September 30, 2026 compared to $1.39 billion at December 31, 2025.

Previous wording

$11.6 million, respectively, while noninterest deposits and time deposits decreased $5.1 million and $4.1 million, respectively. This growth has occurred as the Bank began onboarding Specialty Treasury clients during the first quarter of 2026. The Bank continues to focus on building core banking relationships while seeking opportunities to strategically reduce higher priced funding.

Current wording

•Excluding brokered funding, deposits increased $89.6 million, or 7.2%, to $1.33 billion as of September 30, 2026 compared to $1.24 billion at December 31, 2025. Interest-bearing demand and money market deposits increased $73.7 million and $27.7 million, respectively, while time and savings deposits decreased $10.4 million and $2.1 million, respectively. This growth has occurred as the Bank began onboarding Specialty Treasury clients during the first quarter of 2026. The Bank continues to focus on building core banking relationships while seeking opportunities to strategically reduce higher priced funding.

Previous wording

•Brokered deposits decreased $64.9 million, or 65.9%, to $33.6 million as of June 30, 2026 compared to $98.5 million at December 31, 2025, as the Bank elected to utilize lower cost FHLB borrowings instead. The remaining brokered deposits mature within three months and were utilized primarily to fund the purchase of floating rate CLO securities. At June 30, 2026, FDIC insured deposits totaled approximately 55.1% of total deposits while an additional 19.7% of total deposits were collateralized with investment securities.

Current wording

•Brokered deposits decreased $88.5 million, or 89.8%, to $10.0 million as of September 30, 2026 compared to $98.5 million at December 31, 2025, as the Bank elected to utilize lower cost FHLB borrowings instead.

Previous wording

•Short-term borrowings increased $65.0 million to $65.0 million as of June 30, 2026 as the Bank replaced maturing brokered deposits with lower cost FHLB borrowings.

Current wording

•Short-term borrowings increased $79.0 million to $79.0 million as of September 30, 2026 as the Bank replaced maturing brokered deposits with lower cost FHLB borrowings.

Previous wording

Stockholders’ equity increased $4.6 million, or 2.9%, to $162.1 million at June 30, 2026, compared to $157.5 million at December 31, 2025. The key factors positively impacting stockholders’ equity were $8.2 million of net income for the current year and $551,000 of shares issued as a result of stock option exercises, partially offset by a $1.5 million increase in accumulated other comprehensive loss resulting from the securities market interest rate changes, the payment of $2.8 million in dividends and $306,000 of treasury shares purchased under the stock repurchase program since December 31, 2025.

Current wording

Stockholders’ equity decreased $1.6 million, or 1.0%, to $156.0 million at September 30, 2026, compared to $157.5 million at December 31, 2025, primarily due to a $11.9 million increase in accumulated other comprehensive loss resulting from recent market interest rate increases, the payment of $4.3 million in dividends and $315,000 of treasury shares purchased since December 31, 2025, partially offset by $13.5 million of net income for the current year and $667,000 of shares issued as a result of stock option exercises.

Previous wording

Book value per common share (GAAP) was $31.91 at June 30, 2026 compared to $31.28 at December 31, 2025, an increase of $0.63. Tangible book value per common share (Non-GAAP) was $29.99 at June 30, 2026 compared to $29.35 at December 31, 2025, an increase of $0.64.

Current wording

Book value per common share (GAAP) was $30.67 at September 30, 2026 compared to $31.28 at December 31, 2025, a decrease of $0.61. Tangible book value per common share (Non-GAAP) was $28.76 at September 30, 2026 compared to $29.35 at December 31, 2025, a decrease of $0.59.

Previous wording

Net Interest and Dividend Income. Net interest and dividend income increased $2.0 million, or 15.9%, to $14.5 million for the three months ended June 30, 2026 compared to $12.5 million for the three months ended June 30, 2025. Net interest margin (GAAP) increased 14 basis points (bps) to 3.68% for the three months ended June 30, 2026 compared to 3.54% for the three months ended June 30, 2025. Fully Tax Equivalent (FTE) net interest margin (Non-GAAP) increased 18 bps to 3.73% for the three months ended June 30, 2026 compared to 3.55% for the three months ended June 30, 2025.

Current wording

Net interest and dividend income increased $1.9 million, or 14.5%, to $15.0 million for the three months ended September 30, 2026 compared to $13.1 million for the three months ended September 30, 2025. Net interest margin (GAAP) increased 11 basis points (bps) to 3.75% for the three months ended September 30, 2026 compared to 3.64% for the three months ended September 30, 2025. Fully Tax Equivalent (FTE) net interest margin (Non-GAAP) increased 12 bps to 3.79% for the three months ended September 30, 2026 compared to 3.67% for the three months ended September 30, 2025.

Previous wording

◦Interest income on loans increased $685,000, or 4.4%, to $16.2 million for the three months ended June 30, 2026 compared to $15.5 million for the three months ended June 30, 2025. The average balance of loans increased $54.6 million to $1.15 billion from $1.10 billion, causing a $768,000 increase in interest income on loans. Partially offsetting this increase, the average yield on loans decreased 3 bps to 5.65% from 5.68% despite a 75 bp reduction in the federal funds target rate since September 2025. While this led to the downward repricing of variable and adjustable rate loans, the impact was mostly negated by a reduction in lower yielding consumer loans due to the discontinuation of the indirect automobile loan product with the redeployment of those funds into higher yielding commercial loan products. The decrease in the average yield caused a $82,000 decrease in interest income on loans.

Current wording

•Interest income on loans increased $579,000, or 3.6%, to $16.6 million for the three months ended September 30, 2026 compared to $16.0 million for the three months ended September 30, 2025. The average balance of loans increased $37.8 million to $1.16 billion from $1.12 billion, causing a $535,000 increase in interest income on loans. Additionally, the average yield on loans increased 1 bp to 5.69% from 5.68% despite a 50 bp reduction in the federal funds target rate since September 2025. While this led to the downward repricing of variable and adjustable rate loans, the impact was mostly negated by a reduction in lower yielding consumer loans due to the discontinuation of the indirect automobile loan product with the redeployment of those funds into higher yielding commercial loan products. The increase in the average yield caused a $28,000 increase in interest income on loans.

Previous wording

◦Interest income on investment securities increased $943,000, or 33.0%, to $3.8 million for the three months ended June 30, 2026 compared to $2.9 million for the three months ended June 30, 2025 driven by an 80 bp increase in the average yield, coupled with a $41.0 million increase in average balances. The increase in yield was primarily due to the third quarter 2025 implementation of a balance sheet repositioning strategy of the Bank’s portfolio of available-for-sale investment securities in which $129.6 million in book value of lower-yielding investment securities with an average yield of 2.87% were sold for an after-tax realized loss of $9.3 million. Investment securities sold included $121.1 million of mortgage-backed securities/collateralized mortgage obligations issued by the U.S. government-sponsored agencies, $5.0 million of U.S. government agency securities and $3.5 million of municipal securities. The Bank then purchased $117.8 million of higher-yielding mortgage-backed securities/collateralized mortgage obligations issued by U.S government-sponsored agencies, municipal securities, subordinated debt investments and non-agency guaranteed securitizations with an expected tax-equivalent yield of approximately 5.43%. The increase in the average balance resulted from current year purchases.

Current wording

•Interest income on investment securities increased $1.1 million, or 38.0%, to $4.1 million for the three months ended September 30, 2026 compared to $3.0 million for the three months ended September 30, 2025 driven by a 48 bp increase in the average yield, coupled with a $72.6 million increase in average balances. The increase in yield was primarily due to the third quarter 2025 implementation of a balance sheet repositioning strategy of the Bank’s portfolio of available-for-sale investment securities in which $129.6 million in book value of lower-yielding investment securities with an average yield of 2.87% were sold for an after-tax realized loss of $9.3 million. Investment securities sold included $121.1 million of mortgage-backed securities/collateralized mortgage obligations issued by the U.S. government-sponsored agencies, $5.0 million of U.S. government agency securities and $3.5 million of municipal securities. The Bank then purchased $117.8 million of higher-yielding mortgage-backed securities/collateralized mortgage obligations issued by U.S government-sponsored agencies, municipal securities, subordinated debt investments and non-agency guaranteed securitizations with an expected tax-equivalent yield of approximately 5.43%. The increase in the average balance resulted from current year purchases.

Previous wording

◦Interest income on interest-earning deposits at other banks increased $514,000 to $845,000 for the three months ended June 30, 2026 compared to $331,000 for the three months ended June 30, 2025 driven by a $66.3 million increase in average balances, partially offset by a 56 bp decrease in the average yield. The increase in the volume was due to deposit growth while the decrease in the yield was related to the Federal Reserve’s reductions in the target federal funds rate.

Current wording

•Interest income on interest-earning deposits at other banks increased $505,000 to $798,000 for the three months ended September 30, 2026 compared to $293,000 for the three months ended September 30, 2025 driven by a $50.2 million increase in average balances and a 5 bp increase in the average yield. The increase in the volume was due to deposit growth.

Previous wording

•Interest expense increased $152,000, or 2.4%, to $6.4 million for the three months ended June 30, 2026 compared to $6.2 million for the three months ended June 30, 2025.

Current wording

Interest expense increased $353,000, or 5.7%, to $6.6 million for the three months ended September 30, 2026 compared to $6.2 million for the three months ended September 30, 2025.

Previous wording

◦Interest expense on deposits increased $219,000, or 3.8%, to $5.9 million for the three months ended June 30, 2026 compared to $5.7 million for the three months ended June 30, 2025. Average interest-bearing deposit balances increased $137.5 million, or 13.7%, to $1.14 billion as of June 30, 2026 compared to $1.01 billion as of June 30, 2025, primarily as the Bank grew core banking relationships and onboarded Specialty Treasury clients. The increase in average balances accounted for a $748,000 increase in interest expense. This was partially offset as the cost of interest-bearing deposits decreased 20 bps to 2.08% for the three months ended June 30, 2026 from 2.28% for the three months ended June 30, 2025 due to the Federal Reserve federal funds target rate decreases since September 2025. The decrease in the cost of interest-bearing deposits accounted for a $529,000 decrease in interest expense.

Current wording

•Interest expense on deposits increased $82,000, or 1.4%, to $5.9 million for the three months ended September 30, 2026 compared to $5.8 million for the three months ended September 30, 2025. Average interest-bearing deposit balances increased $113.5 million, or 11.1%, to $1.13 billion as of September 30, 2026 compared to $1.02 billion as of September 30, 2025, primarily as the Bank grew core banking relationships and onboarded Specialty Treasury clients. The increase in average balances accounted for a $622,000 increase in interest expense. This was partially offset as the cost of interest-bearing deposits decreased 20 bps to 2.06% for the three months ended September 30, 2026 from 2.26% for the three months ended September 30, 2025 due to the Federal Reserve federal funds target rate decreases since September 2025. The decrease in the cost of interest-bearing deposits accounted for a $540,000 decrease in interest expense.

Previous wording

Average Balances and Yields. The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. Average balances are derived from daily balances over the periods indicated. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. FTE yield adjustments have been made for tax exempt loan and security interest income utilizing a marginal federal income tax rate of 21.0% for the periods presented. As such, amounts will not agree to income as reported in the consolidated financial statements. The yields and costs for the periods indicated are derived by dividing annualized income or expense by the average balances of assets or liabilities, respectively, for the periods presented.

Current wording

The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. Average balances are derived from daily balances over the periods indicated. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. FTE yield adjustments have been made for tax exempt loan and security interest income utilizing a marginal federal income tax rate of 21.0% for the periods presented. As such, amounts will not agree to income as reported in the consolidated financial statements. The yields and costs for the periods indicated are derived by dividing annualized income or expense by the average balances of assets or liabilities, respectively, for the periods presented.

Previous wording

(2) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable.

Current wording

(2)Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable.

Previous wording

(3) Refer to Explanation and Use of Non-GAAP Financial Measures in this filing for the calculation of the measure and reconciliation to the most comparable GAAP measure.

Current wording

(3)Refer to Explanation and Use of Non-GAAP Financial Measures in this filing for the calculation of the measure and reconciliation to the most comparable GAAP measure.

Previous wording

(4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

Current wording

(4)Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

Previous wording

(5) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

Current wording

(5)Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

Previous wording

(6) Net interest margin represents annualized net interest income divided by average total interest-earning assets.

Current wording

(6)Net interest margin represents annualized net interest income divided by average total interest-earning assets.

Previous wording

Rate/Volume Analysis. The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. FTE yield adjustments have been made for tax exempt loan and security income utilizing a marginal federal income tax rate of 21.0%. The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. The total column represents the sum of the prior columns.

Current wording

The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. FTE yield adjustments have been made for tax exempt loan and security income utilizing a marginal federal income tax rate of 21.0%. The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. The total column represents the sum of the prior columns.

Previous wording

Provision for Credit Losses. A provision for credit losses of $17,000 was recorded for the three months ended June 30, 2026. The provision for credit losses on loans was $157,000 and was primarily due loan growth. This was partially offset by a $140,000 reversal of provision for credit losses on unfunded commitments primarily due to a decrease in unfunded commitments. This compared to a provision for credit losses of $8,000 recorded for the three months ended June 30, 2025 as the provision for credit losses on loans was a $136,000 recovery primarily due to a reduction of reserves required for individually assessed loans and changes in loan concentrations, partially offset by additional reserve required for overall loan growth and a change in qualitative factors relating to economic conditions, and the provision for credit losses on unfunded commitments was $144,000 due to an increase in unfunded commitments and an increase in funding rates.

Current wording

A recovery of provision for credit losses of $69,000 was recorded for the three months ended September 30, 2026. The Company recorded a $399,000 recovery of provision for credit losses on loans primarily due to a decline in loan principal of $17.8 million and favorable changes in portfolio concentrations and improvement for individually assessed loans. This was partially offset as the provision for credit losses on unfunded commitments was $330,000 and was primarily due to a $10.8 million increase in unfunded commitments and an increase in the loss rate for construction and land development unfunded commitments. This compared to a provision for credit losses of $259,000 recorded for the three months ended September 30, 2025 as the provision for credit losses on loans was $336,000 and was primarily due to additional reserves required for overall loan growth, changes in qualitative factors and an addition to individually assessed loans requiring specific reserves, partially offset by favorable changes in portfolio concentrations and the calculated loss rate. This was partially offset by a $77,000 recovery for credit losses on unfunded commitments due to a decrease in unfunded commitments.

Previous wording

Noninterest Expense. Noninterest expense increased $1.6 million, or 18.8%, to $10.4 million for the three months ended June 30, 2026 compared to $8.7 million for the three months ended June 30, 2025. Salaries and benefits increased $1.0 million primarily due to revenue producing treasury and commercial banking personnel additions, merit increases and higher benefit compensation costs. Data processing expense increased $379,000 due to the implementation of enhanced treasury and commercial banking platforms in late 2025 and early 2026. Pennsylvania shares tax increased $124,000 due to $179,000 of refunds received in 2025 on amended returns filed for prior years. Legal and professional fees increased $81,000 due to the timing of internal audit services and higher legal fees associated with treasury services. Contracted services increased $54,000 due to outsourced information security services.

Current wording

Noninterest expense increased $1.1 million, or 11.8%, to $10.3 million for the three months ended September 30, 2026 compared to $9.2 million for the three months ended September 30, 2025. Salaries and benefits increased $604,000 primarily due to revenue producing treasury and commercial banking personnel additions, merit increases and higher benefit compensation costs. Data processing expense increased $345,000 due to the implementation of enhanced treasury and commercial banking platforms in late 2025 and early 2026. Contracted services increased $127,000 due to outsourced information security and treasury consulting services.

Previous wording

Overview. Net income was $8.2 million for the six months ended June 30, 2026, an increase of $2.3 million compared to $5.9 million for the six months ended June 30, 2025.

Current wording

Net income was $13.5 million for the nine months ended September 30, 2026, an increase of $13.3 million compared to $164,000 for the nine months ended September 30, 2025.

Previous wording

Net Interest and Dividend Income. Net interest and dividend income increased $4.6 million, or 19.1%, to $28.4 million for the six months ended June 30, 2026 compared to $23.9 million for the six months ended June 30, 2025. Net interest margin (GAAP) increased to 3.75% for the six months ended June 30, 2026 compared to 3.40% for the six months ended June 30, 2025. Net interest margin (FTE) (Non-GAAP) increased 38 bps to 3.80% for the six months ended June 30, 2026 compared to 3.42% the six months ended June 30, 2025.

Current wording

Net interest and dividend income increased $6.5 million, or 17.5%, to $43.4 million for the nine months ended September 30, 2026 compared to $36.9 million for the nine months ended September 30, 2025. Net interest margin (GAAP) increased to 3.76% for the nine months ended September 30, 2026 compared to 3.49% for the nine months ended September 30, 2025. Net interest margin (FTE) (Non-GAAP) increased 29 bps to 3.80% for the nine months ended September 30, 2026 compared to 3.51% the nine months ended September 30, 2025.

Previous wording

◦Interest income on loans increased $2.1 million, or 7.0%, to $32.1 million during the six months ended June 30, 2026 compared to $30.0 million for the six months ended June 30, 2025. The average balance of loans increased $65.7 million to $1.15 billion for the six months ended June 30, 2026 compared to $1.09 billion for the six months ended June 30, 2025 resulting in a $1.9 million increase in interest income on loans. Additionally, the average yield on loans increased 5 bps to 5.64% for the six months ended June 30, 2026 compared to 5.59% for the six months ended June 30, 2025 resulting in a $272,000 increase in interest income on loans. The increase in the loan yield is despite a 125bp reduction in the federal funds rate since September 2024. While this led to the downward repricing of variable and adjustable rate loans, the impact was partially negated by a reduction in lower yielding consumer loans due to the discontinuation of the indirect automobile loan product with the redeployment of those funds into higher yielding commercial loan products.

Current wording

•Interest income on loans increased $2.7 million, or 5.9%, to $48.7 million during the nine months ended September 30, 2026 compared to $46.0 million for the nine months ended September 30, 2025. The average balance of loans increased $56.3 million to $1.15 billion for the nine months ended September 30, 2026 compared to $1.10 billion for the nine months ended September 30, 2025 resulting in a $2.4 million increase in interest income on loans. Additionally, the average yield on loans increased 4 bps to 5.66% for the nine months ended September 30, 2026 compared to 5.62% for the nine months ended September 30, 2025 resulting in a $331,000 increase in interest income on loans. The increase in the loan yield is despite a 50bp reduction in the federal funds rate since September 2025. While this led to the downward repricing of variable and adjustable rate loans, the impact was partially negated by a reduction in lower yielding consumer loans due to the discontinuation of the indirect automobile loan product with the redeployment of those funds into higher yielding commercial loan products.

Previous wording

◦Interest income on investment securities increased $1.6 million, or 28.1%, to $7.2 million during the six months ended June 30, 2026 compared to $5.6 million for the six months ended June 30, 2025 driven by a $24.0 million increase in average balances and a 87 bp increase in the average yield. The increase in yield was primarily due to the third quarter 2025 balance sheet repositioning strategy and resulted in a $976,000 increase in interest income while the increase in the volume resulted from current year purchases and resulted in a $837,000 increase in interest income.

Current wording

•Interest income on investment securities increased $2.7 million, or 31.5%, to $11.4 million during the nine months ended September 30, 2026 compared to $8.6 million for the nine months ended September 30, 2025 driven by a $40.4 million increase in average balances and a 74 bp increase in the average yield. The increase in yield was primarily due to the third quarter 2025 balance sheet repositioning strategy and resulted in a $1.3 million increase in interest income while the increase in the volume resulted from current year purchases and resulted in a $1.7 million increase in interest income.

Previous wording

◦Interest income on interest-earning deposits at other banks increased $257,000, to $1.0 million for the six months ended June 30, 2026 compared to $789,000 for the six months ended June 30, 2025 as average balances increased $24.5 million, partially offset as the average yield decreased 74 bps. The volume increased due to deposit growth while the average yield decrease resulted from reductions in the federal funds rate since September 2025.

Current wording

•Interest income on interest-earning deposits at other banks increased $761,000, to $1.8 million for the nine months ended September 30, 2026 compared to $1.1 million for the nine months ended September 30, 2025 as average balances increased $30.7 million, partially offset as the average yield decreased 33 bps. The volume increased due to deposit growth while the average yield decrease resulted from reductions in the federal funds rate since September 2025.

Previous wording

◦Interest expense on deposits decreased $661,000, or 5.6%, to $11.2 million for the six months ended June 30, 2026 compared to $11.8 million for the six months ended June 30, 2025. Declining market interest rates led to the repricing of interest-bearing demand, money market and time deposits and resulted in a 31 bp decrease in the average cost of interest-bearing deposits compared to the six months ended June 30, 2025. This accounted for a $1.6 million decrease in interest expense. Partially offsetting this decrease, the average balance of interest-bearing deposits increased $88.7 million resulting in a $967,000 increase in interest expense.

Current wording

•Interest expense on deposits decreased $579,000, or 3.3%, to $17.1 million for the nine months ended September 30, 2026 compared to $17.6 million for the nine months ended September 30, 2025. Declining market interest rates led to the repricing of interest-bearing demand, money market and time deposits and resulted in a 27 bp decrease in the average cost of interest-bearing deposits compared to the nine months ended September 30, 2025. This accounted for a $2.1 million decrease in interest expense. Partially offsetting this decrease, the average balance of interest-bearing deposits increased $97.1 million resulting in a $1.6 million increase in interest expense.

Previous wording

◦Interest expense on borrowed funds increased $56,000, or 6.1%, to $979,000 for the six months ended June 30, 2026 compared to $923,000 for the six months ended June 30, 2025. The average balance of borrowed funds increased $7.4 million due to FHLB short-term advances utilized during the six months ended June 30, 2026. The increase in the average balance accounted for a $151,000 increase in interest expense. Partially offsetting this increase, the average cost of borrowed funds decreased 49 bps as $20.0 million of long-term borrowings matured in June 2025 and were replaced at current market rates. The decrease in the cost accounted for a $95,000 decrease in interest expense.

Current wording

•Interest expense on borrowed funds increased $328,000, or 24.2%, to $1.7 million for the nine months ended September 30, 2026 compared to $1.4 million for the nine months ended September 30, 2025. The average balance of borrowed funds increased $14.1 million due to FHLB short-term advances utilized during the nine months ended September 30, 2026. The increase in the average balance accounted for a $434,000 increase in interest expense. Partially offsetting this increase, the average cost of borrowed funds decreased 36 bps primarily as $20.0 million of long-term borrowings matured in June 2025 and were replaced at then current market rates. The decrease in the cost accounted for a $106,000 decrease in interest expense.

Previous wording

Average Balances and Yields. The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. Average balances are derived from daily balances over the periods indicated. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. FTE yield adjustments have been made for tax exempt loan and security interest income utilizing a marginal federal income tax rate of 21% for the periods presented. As such, amounts will not agree to income as reported in the consolidated financial statements. The yields and costs for the periods indicated are derived by dividing annualized income or expense by the average balances of assets or liabilities, respectively, for the periods presented.

Current wording

The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. Average balances are derived from daily balances over the periods indicated. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. FTE yield adjustments have been made for tax exempt loan and security interest income utilizing a marginal federal income tax rate of 21% for the periods presented. As such, amounts will not agree to income as reported in the consolidated financial statements. The yields and costs for the periods indicated are derived by dividing annualized income or expense by the average balances of assets or liabilities, respectively, for the periods presented.

Previous wording

(1)Annualized based on six months ended results.

Current wording

(1)Annualized based on nine months ended results.

Previous wording

(2) Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable.

Current wording

(2)Net of the allowance for credit losses and includes nonaccrual loans with a zero yield and Loans Held for Sale if applicable.

Previous wording

(3) Refer to Explanation and Use of Non-GAAP Financial Measures in this filing for the calculation of the measure and reconciliation to the most comparable GAAP measure.

Current wording

(3)Refer to Explanation and Use of Non-GAAP Financial Measures in this filing for the calculation of the measure and reconciliation to the most comparable GAAP measure.