First Western Financial Inc

Previous wording

The following discussion and analysis is intended to assist readers in understanding our financial condition and results of operations for the three and six months ended June 30, 2025 and should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included in this Quarterly Report on Form 10-Q (this "Form 10-Q") and in our Annual Report on Form 10-K filed with the SEC on March 7, 2025. Unless we state otherwise or the context otherwise requires, references in this Form 10-Q to "we," "our," "us," "the Company," and "First Western" refer to First Western Financial, Inc. and its consolidated subsidiaries, including First Western Trust Bank, which we sometimes refer to as "the Bank" or "our Bank."

Current wording

The following discussion and analysis is intended to assist readers in understanding our financial condition and results of operations for the three and nine months ended September 30, 2025 and should be read in conjunction with our consolidated financial statements and the accompanying notes thereto included in this Quarterly Report on Form 10-Q (this "Form 10-Q") and in our Annual Report on Form 10-K filed with the SEC on March 7, 2025. Unless we state otherwise or the context otherwise requires, references in this Form 10-Q to "we," "our," "us," "the Company," and "First Western" refer to First Western Financial, Inc. and its consolidated subsidiaries, including First Western Trust Bank, which we sometimes refer to as "the Bank" or "our Bank."

Previous wording

From 2004, when we opened our first profit center, until June 30, 2025, we have expanded our footprint into fourteen full service profit centers, four loan production offices, and one trust office located across five states. As of and for the six months ended June 30, 2025, we had $3.03 billion in total assets, $47.1 million in total income before non-interest expense, and provided fiduciary and advisory services on $7.50 billion of AUM.

Current wording

From 2004, when we opened our first profit center, until September 30, 2025, we have expanded our footprint into fourteen full service profit centers, four loan production offices, and one trust office located across five states. As of and for the nine months ended September 30, 2025, we had $3.24 billion in total assets, $71.2 million in total income before non-interest expense, and provided fiduciary and advisory services on $7.43 billion of AUM.

Previous wording

The three months ended June 30, 2025 compared with the three months ended June 30, 2024. We reported Net income available to common shareholders of $2.5 million for the three months ended June 30, 2025, compared to $1.1 million of Net income available to common shareholders for the three months ended June 30, 2024, a $1.4 million, or 127.3% increase. For the three months ended June 30, 2025, our Income before income tax was $3.3 million, a $1.9 million, or 134.4% increase from the three months ended June 30, 2024. The increase was primarily driven by a $2.1 million increase in Net interest income and a $0.6 million decrease in Provision for credit losses, partially offset by a $0.7 million decrease in Non-interest income.

Current wording

The three months ended September 30, 2025 compared with the three months ended September 30, 2024. We reported Net income available to common shareholders of $3.2 million for the three months ended September 30, 2025, compared to $2.1 million of Net income available to common shareholders for the three months ended September 30, 2024, a $1.1 million, or 52.4% increase. For the three months ended September 30, 2025, our Income before income tax was $4.0 million, a $1.3 million, or 48.4% increase from the three months ended September 30, 2024. The increase was primarily driven by a $3.9 million increase in Net interest income, partially offset by a $1.8 million increase in Provision for credit losses and $0.7 million increase in Non-interest expense.

Previous wording

•The increase in Net interest income was driven by a 32 basis point increase in net interest margin, partially offset by a decline in average interest-earnings assets. The increase in net interest margin was primarily due to a 42 basis point decrease in total cost of funds as a result of the lower interest rate environment.

Current wording

•The increase in Net interest income was driven by a 22 basis point increase in net interest margin and an increase in average interest-earnings assets. The increase in net interest margin was primarily due to a 33 basis point decrease in total cost of funds as a result of the lower interest rate environment.

Previous wording

•The decrease in Provision for credit losses was primarily driven by a decrease in specific reserve provisions due to a large specific reserve recorded in the second quarter of 2024, partially offset by increases in general reserve provisions primarily due to loan growth

Current wording

•The increase in Provision for credit losses was primarily driven by loan growth and an increase in specific reserve provisions due to a specific reserve recorded in the third quarter of 2025, partially offset by favorable mix shifts within our portfolio.

Previous wording

The six months ended June 30, 2025 compared with the six months ended June 30, 2024. We reported Net income available to common shareholders of $6.7 million for the six months ended June 30, 2025, compared to $3.6 million of Net income available to common shareholders for the six months ended June 30, 2024, a $3.1 million, or 86.1% increase. For the six months ended June 30, 2025, our Income before income tax was $8.7 million, a $3.7 million, or 73.7% increase from the six months ended June 30, 2024. The increase was primarily driven by a $3.5 million increase in Net interest income and a $0.6 million decrease in Provision for credit losses, partially offset by a $0.6 million decrease in Non-interest income.

Current wording

The nine months ended September 30, 2025 compared with the nine months ended September 30, 2024. We reported Net income available to common shareholders of $9.9 million for the nine months ended September 30, 2025, compared to $5.7 million of Net income available to common shareholders for the nine months ended September 30, 2024, a $4.2 million, or 73.7% increase. For the nine months ended September 30, 2025, our Income before income tax was $12.6 million, a $5.0 million, or 64.9% increase from the nine months ended September 30, 2024. The increase was primarily driven by a $7.4 million increase in Net interest income, partially offset by a $1.2 million increase in Provision for credit losses and $0.7 million decrease in Non-interest income.

Previous wording

•The increase in Net interest income was driven by a 30 basis point increase in net interest margin, partially offset by a decline in average interest-earning assets. The increase in net interest margin was primarily due to a 36 basis point decrease in total cost of funds as a result of the lower interest rate environment.

Current wording

•The increase in Net interest income was driven by a 27 basis point increase in net interest margin and an increase in average interest-earning assets. The increase in net interest margin was primarily due to a 36 basis point decrease in total cost of funds as a result of the lower interest rate environment.

Previous wording

•The decrease in Non-interest income was primarily driven by decreases in Net gain on mortgage loans due to a decrease in origination volume, Trust and investment management fees due to a mix-shift in AUM to lower fee product categories, and Bank fees due to a large loan prepayment penalty fee collected in the first quarter of 2024, partially offset by increases in Net gain on loans accounted for under the fair value option and Net gain on other real estate owned.

Current wording

•The decrease in Non-interest income was primarily driven by decreases in Net gain on mortgage loans due to a decrease in origination volume, Trust and investment management fees primarily due to lower investment agency and managed trust fees, and Bank fees due to a large loan prepayment penalty fee collected in the first quarter of 2024, partially offset by increases in Net gain on loans accounted for under the fair value option and Net gain on other real estate owned.

Previous wording

The three months ended June 30, 2025 compared with the three months ended June 30, 2024. For the three months ended June 30, 2025, Net interest income, before the Provision for credit losses, was $17.9 million, an increase of $2.1 million, or 13.3%, compared to the three months ended June 30, 2024. The increase in Net interest income was primarily driven by a 62 basis point decrease in average rates paid on Interest-bearing deposits, partially offset by a 6 basis point decrease in average interest-earning asset yields. Net interest margin increased 32 basis points to 2.67% in the second quarter of 2025 from 2.35% reported in the second quarter of 2024.

Current wording

The three months ended September 30, 2025 compared with the three months ended September 30, 2024. For the three months ended September 30, 2025, Net interest income, before the Provision for credit losses, was $19.5 million, an increase of $3.9 million, or 25.0%, compared to the three months ended September 30, 2024. The increase was primarily driven by a $363.5 million increase in average interest-earning assets and a 22 basis point increase in net interest margin. The increase in net interest margin was primarily driven by a 33 basis point decrease in deposit costs.

Previous wording

Interest expense on Interest-bearing deposits decreased $2.6 million, or 12.7%, during the three months ended June 30, 2025 compared to the same period in 2024. Average Interest-bearing deposit rates were 3.57% for the three months ended June 30, 2025, compared to 4.19% for the three months ended June 30, 2024. The decrease in Interest-bearing deposit rates was primarily attributable to the lower interest rate environment.

Current wording

Interest expense on Interest-bearing deposits increased $1.0 million, or 4.9%, during the three months ended September 30, 2025 compared to the same period in 2024, primarily due to a $414.9 million increase in average interest-bearing deposits, partially offset by lower rates. The increase in average interest-bearing deposits was primarily driven by growth in money market deposit accounts. Average interest-bearing deposit rates were 3.63% for the three months ended September 30, 2025, compared to 4.19% for the three months ended September 30, 2024. The decrease in average interest-bearing deposit rates was primarily attributable to the lower interest rate environment.

Previous wording

The decrease in average interest-earning asset yields during the three months ended June 30, 2025 compared to the same period in 2024 was primarily driven by a $19.7 million decrease in average balance and an 81 basis point decrease in average yield on Interest-bearing deposits in other financial institutions. The average Interest-bearing deposits in other financial institutions yield was 4.46% for the three months ended June 30, 2025, compared to 5.27% for the three months ended June 30, 2024. The decrease in the Interest-bearing deposits in other financial institutions yield was primarily attributable to the lower interest rate environment.

Current wording

Total interest and dividend income increased $4.7 million, or 12.3%, during the three months ended September 30, 2025 compared to the same period in 2024, primarily due to a $363.5 million increase in average interest-earning assets, partially offset by a decrease in the average interest-earning assets yield. The increase in average interest-earning assets was primarily driven by a $178.4 million increase in average interest-bearing deposits in other financial institutions and a $133.0 million increase in average loans. The decrease in the average interest-earning assets yield was primarily driven by a 92 basis point decrease in the average yield on Interest-bearing deposits in other financial institutions, partially offset by a 4 basis point increase in the average yield on loans. The decrease in the average interest-bearing deposits in other financial institutions yield was primarily attributable to the lower interest rate environment and the increase in the average loans yield was primarily attributable to originating loans at higher yields than the average yield on the portfolio.

Previous wording

The six months ended June 30, 2025 compared with the six months ended June 30, 2024. For the six months ended June 30, 2025, Net interest income, before the Provision for credit losses, was $35.3 million, an increase of $3.5 million, or 11.0%, compared to the six months ended June 30, 2024. The increase was primarily driven by a 58 basis point decrease in average rates paid on Interest-bearing deposits, partially offset by a 4 basis point decrease in average interest-earning asset yields. Net interest margin increased 30 basis points to 2.64% for the six months ended June 30, 2025 from 2.34% reported for the six months ended June 30, 2024.

Current wording

The nine months ended September 30, 2025 compared with the nine months ended September 30, 2024. For the nine months ended September 30, 2025, Net interest income, before the Provision for credit losses, was $54.8 million, an increase of $7.4 million, or 15.6%, compared to the nine months ended September 30, 2024. The increase was primarily driven by a $99.1 million increase in average interest-earning assets and a 27 basis point increase in net interest margin. The increase in net interest margin was primarily driven by a 35 basis point decrease in deposit costs.

Previous wording

(3)Non-performing loans are included in the respective average loan balances. Income, if any, is not recognized until all principal has been repaid.

Current wording

(3)Non-accrual loans are included in the respective average loan balances. Income, if any, is not recognized until all principal has been repaid.

Previous wording

We have a dedicated problem loan resolution team comprised of associates from our credit, senior leadership, risk, and accounting teams that meets frequently to ensure that watch list and problem credits are identified early and actively managed. We work to identify potential losses in a timely manner and proactively manage the problem credits to minimize losses. For the three and six ended June 30, 2025, we recorded a $1.8 million and $1.9 million Provision for credit losses, respectively. For the three and six months ended June 30, 2024, we recorded a $2.3 million and $2.4 million Provision for credit losses, respectively. The provision recorded for the three and six months ended June 30, 2025 was primarily due to loan growth, charge-offs, an increase in specific reserves related to individually analyzed loans, and modest macroeconomic forecast deterioration, partially offset by mix shifts within our portfolio towards loans with lower loss rates.

Current wording

We have a dedicated problem loan resolution team comprised of associates from our credit, senior leadership, risk, and accounting teams that meets frequently to ensure that watch list and problem credits are identified early and actively managed. We work to identify potential losses in a timely manner and proactively manage the problem credits to minimize losses. For the three and nine ended September 30, 2025, we recorded a $2.3 million and $4.1 million Provision for credit losses, respectively. For the three and nine months ended September 30, 2024, we recorded a $0.5 million and $2.9 million Provision for credit losses, respectively. The provision recorded for the three months ended September 30, 2025 was primarily due to loan growth and specific reserves related to individually analyzed loans, partially offset by favorable mix shifts within our portfolio. The provision recorded for the nine months ended September 30, 2025 was primarily due to loan growth, charge-offs, and specific reserves related to individually analyzed loans, partially offset by favorable mix shifts within our portfolio.

Previous wording

The three months ended June 30, 2025 compared with the three months ended June 30, 2024. For the three months ended June 30, 2025 compared with the three months ended June 30, 2024, Non-interest income decreased $0.7 million, or 9.6%, to $6.3 million. The decrease in Non-interest income during the three months ended June 30, 2025 wasdriven primarilyby decreases in Net gain on mortgage loans and Trust and investment management fees, partially offset by an increase in Net gain on loans accounted for under the fair value option.

Current wording

The three months ended September 30, 2025 compared with the three months ended September 30, 2024. For the three months ended September 30, 2025 compared with the three months ended September 30, 2024, Non-interest income decreased $0.1 million, or 1.9%, to $6.8 million. The decrease in Non-interest income during the three months ended September 30, 2025 wasdriven primarilyby decreases in Risk management and insurance fees, Trust and investment management fees, and Bank fees, partially offset by an increase in Net gain on loans accounted for under the fair value option.

Previous wording

Thesix months ended June 30, 2025 compared with thesix months ended June 30, 2024. For the six months ended June 30, 2025 compared with thesix months ended June 30, 2024, Non-interest income decreased $0.6 million, or 4.2%, to $13.7 million. The decrease in Non-interest income during the six months ended June 30, 2025 was primarily driven by decreases in Net gain on mortgage loans, Trust and investment management fees, and Bank fees, partially offset by increases in Net gain on loans accounted for under the fair value option and Net gain on other real estate owned.

Current wording

Thenine months ended September 30, 2025 compared with thenine months ended September 30, 2024. For the nine months ended September 30, 2025 compared with thenine months ended September 30, 2024, Non-interest income decreased $0.7 million, or 3.4%, to $20.5 million. The decrease in Non-interest income during the nine months ended September 30, 2025 was primarily driven by decreases in Net gain on mortgage loans, Trust and investment management fees, and Bank fees, partially offset by increases in Net gain on loans accounted for under the fair value option and Net gain on other real estate owned.

Previous wording

Trust and investment management fees—The decrease in Trust and investment management fees of $0.4 million, or 7.4%, and $0.6 million, or 6.3%, for the three and six months ended June 30, 2025, respectively, was primarily attributable to mix-shift in AUM to lower fee product categories.

Current wording

Trust and investment management fees—The decrease in Trust and investment management fees of $0.7 million, or 4.9%, for the nine months ended September 30, 2025 was primarily attributable to lower investment agency and managed trust fees.

Previous wording

Net gain on mortgage loans—The decrease in Net gain on mortgage loans of $0.6 million, or 34.8%, and $0.8 million, or 26.9%, for the three and six months ended June 30, 2025, respectively, was primarily attributable to lower origination volume.

Current wording

Net gain on mortgage loans—The decrease in Net gain on mortgage loans of $0.9 million, or 19.6%, for the nine months ended September 30, 2025 was primarily attributable to lower origination volume.

Previous wording

Net gain on loans held for sale—During the six months ended June 30, 2025, the Net gain on loans held for sale of $0.2 million was due to the reversal of a write-down on a non-performing loan recorded during the three months ended December 31, 2024. This loan was previously classified as held for sale; however, during the three months ended March 31, 2025 it was transferred to held for investment and charged off through the ACL.

Current wording

Net gain on loans held for sale—During the nine months ended September 30, 2025, the Net gain on loans held for sale of $0.2 million was due to the reversal of a write-down on a non-accrual loan recorded during the three months ended December 31, 2024. This loan was previously classified as held for sale; however, during the three months ended March 31, 2025 it was transferred to held for investment and charged off through the ACL.

Previous wording

Bank fees—The decrease in Bank fees of $0.5 million, or 41.3%, for the six months ended June 30, 2025, was primarily driven by a large loan prepayment penalty fee collected in the first quarter of 2024.

Current wording

Bank fees—The decrease in Bank fees of $0.6 million, or 36.2%, for the nine months ended September 30, 2025, was primarily driven by a large loan prepayment penalty fee collected in the first quarter of 2024.

Previous wording

Risk management and insurance fees—The increase in Risk management and insurance fees of $0.1 million, or 93.7%, for the six months ended June 30, 2025, was primarily driven by an increase in insurance client agreements.

Current wording

Risk management and insurance fees—The decrease in Risk management and insurance fees of $0.2 million, or 47.4%, for the three months ended September 30, 2025, was primarily driven by a decrease in new insurance client agreements.

Previous wording

Net gain (loss) on loans accounted for under the fair value option—The increase in Net gain on loans accounted for under the fair value option of $0.3 million, or 108.3%, and $0.6 million, or 105.2%, for the three and six months ended June 30, 2025, respectively, was primarily attributable to lower charges offs and improved overall performance of the portfolio.

Current wording

Net gain (loss) on loans accounted for under the fair value option—The increase in Net gain on loans accounted for under the fair value option of $0.3 million, or 107.7%, and $0.9 million, or 105.9%, for the three and nine months ended September 30, 2025, respectively, was primarily attributable to lower charges offs and improved overall performance of the portfolio.

Previous wording

Net gain on other real estate owned—During the three months ended March 31, 2025, we sold our two largest OREO properties for a net gain of $0.5 million.

Current wording

Net gain on other real estate owned—During the first quarter of 2025, we sold two large OREO properties for a net gain of $0.5 million.

Previous wording

The three months ended June 30, 2025 compared with the three months ended June 30, 2024. For the three months ended June 30, 2025 compared with the three months ended June 30, 2024, Non-interest expense increased $0.1 million, or 0.5%, to $19.1 million. The increase in Non-interest expense during the three months ended June 30, 2025 was driven primarily by an increase in Occupancy and equipment, partially offset by a decrease in Salaries and employee benefits.

Current wording

The three months ended September 30, 2025 compared with the three months ended September 30, 2024. For the three months ended September 30, 2025 compared with the three months ended September 30, 2024, Non-interest expense increased $0.7 million, or 3.6%, to $20.1 million. The increase in Non-interest expense during the three months ended September 30, 2025 was driven primarily by an increase in Salaries and employee benefits and Data processing.

Previous wording

Occupancy and equipment—The increase in Occupancy and equipment of $0.1 million, or 6.9%, and $0.4 million, or 9.3% for the three and six months ended June 30, 2025, respectively, was driven by additional rent expense relating to multiple lease extensions and an increase in variable lease costs.

Current wording

Occupancy and equipment—The increase in Occupancy and equipment of $0.3 million, or 5.4% for nine months ended September 30, 2025 was driven by additional rent expense relating to multiple lease extensions.

Previous wording

Professional services—The decrease in Professional services of $0.7 million, or 16.0% for the six months ended June 30, 2025, was driven by decreases in legal expenses, audit fees, and FDIC insurance fees.

Current wording

Professional services—The decrease in Professional services of $0.7 million, or 11.0% for the nine months ended September 30, 2025, was driven by decreases in legal expenses, audit fees, and FDIC insurance fees.

Previous wording

Data processing—The increase in Data processing of $0.2 million, or 11.7%, for the six months ended June 30, 2025, was primarily driven by increased costs related to our trust and investment management system.

Current wording

Data processing—The increase in Data processing of $0.2 million, or 13.6%, and $0.4 million, or 12.3%, for the three and nine months ended September 30, 2025, respectively, was primarily driven by upgrades to our digital banking platform.

Previous wording

The Company recorded an income tax provision of $0.8 million and $0.3 million for the three months ended June 30, 2025 and 2024, respectively, reflecting an effective tax rate of 24.5% and 24.0%, respectively. The Company recorded an income tax provision of $2.0 million and $1.4 million for the six months ended June 30, 2025 and 2024, respectively, reflecting an effective tax rate of 22.9% and 28.1%, respectively.

Current wording

The Company recorded an income tax provision of $0.8 million and $0.5 million for the three months ended September 30, 2025 and 2024, respectively, reflecting an effective tax rate of 19.6% and 20.1%, respectively. The Company recorded an income tax provision of $2.8 million and $1.9 million for the nine months ended September 30, 2025 and 2024, respectively, reflecting an effective tax rate of 21.9% and 25.3%, respectively.

Previous wording

The Wealth Management segment reported Income before income tax of $3.1 million for the three months ended June 30, 2025, compared to $0.7 million for the same period in 2024, as well as Income before income tax of $8.5 million for the six months ended June 30, 2025, compared to $4.1 million for the same period in 2024. The majority of our assets and liabilities are on the Wealth Management segment balance sheet. The increase in Income before taxes for both the three and six month periods ended June 30, 2025 was driven primarily by an increase in Net interest income, after provision for credit losses. The increase in Net interest income, after provision for credit losses was primarily driven by a decrease in Total interest expense due to the lower interest rate environment and a decrease in provision due to a large individually analyzed specific reserve recorded in the second quarter of 2024, partially offset by a decrease in Total interest and dividend income due to a decline in average interest-earning assets.

Current wording

The Wealth Management segment reported Income before income tax of $3.5 million for the three months ended September 30, 2025, compared to $2.2 million for the same period in 2024, as well as Income before income tax of $12.0 million for the nine months ended September 30, 2025, compared to $6.3 million for the same period in 2024. The majority of our assets and liabilities are on the Wealth Management segment balance sheet. The increase in Income before taxes for both the three and nine month periods ended September 30, 2025 was driven primarily by an increase in Net interest income, after Provision for credit losses. The increase in Net interest income, after Provision for credit losses, for the both the three and nine months ended September 30, 2025 was primarily driven by increases in net interest margin and average interest-earning assets, partially offset by an increase in Provision for credit losses.

Previous wording

The Mortgage segment reported Income before income tax of $0.2 million for the three months ended June 30, 2025, compared to $0.8 million for the same period in 2024, as well as Income before income tax of $0.2 million for the six months ended June 30, 2025, compared to $0.9 million for the same period in 2024. The decrease in Income before taxes for both the three and six month periods ended June 30, 2025 was primarily driven by a decrease in Net gain on mortgage loans, which was primarily driven by lower origination volume.

Current wording

The Mortgage segment reported Income before income tax of $0.4 million for the three months ended September 30, 2025, compared to $0.4 million for the same period in 2024, as well as Income before income tax of $0.7 million for the nine months ended September 30, 2025, compared to $1.4 million for the same period in 2024. The decrease in Income before taxes for the nine month period ended September 30, 2025 was primarily driven by a decrease in Net gain on mortgage loans, which was primarily driven by lower origination volume.

Previous wording

Cash and cash equivalents decreased by $3.7 million, or 1.6%, to $232.3 million as of June 30, 2025 compared to December 31, 2024.

Current wording

Cash and cash equivalents increased by $117.7 million, or 49.5%, to $355.6 million as of September 30, 2025 compared to December 31, 2024.

Previous wording

Held-to-maturity debt securities increased by $24.1 million, or 31.8%, to $99.8 million as of June 30, 2025 compared to December 31, 2024. The increase was primarily due to the purchase of collateralized-mortgage obligation (CMO) debt securities.

Current wording

Held-to-maturity debt securities increased by $22.5 million, or 29.7%, to $98.2 million as of September 30, 2025 compared to December 31, 2024. The increase was primarily due to the purchase of collateralized-mortgage obligation (CMO) debt securities.

Previous wording

Loans, net of allowance increased by $113.9 million, or 4.7%, to $2.52 billion as of June 30, 2025 compared to December 31, 2024, primarily due to new loan production well diversified across markets and loan types.

Current wording

Loans, net of allowance increased by $162.6 million, or 6.8%, to $2.57 billion as of September 30, 2025 compared to December 31, 2024, primarily due to new loan production well diversified across markets and loan types, partially offset by payoffs.

Previous wording

Mortgage loans held for sale decreased $1.3 million, or 5.1%, to $24.2 million as of June 30, 2025 compared to December 31, 2024. The decrease was prim arily due to lower origination volumes.

Current wording

Mortgage loans held for sale decreased $3.6 million, or 14.3%, to $21.8 million as of September 30, 2025 compared to December 31, 2024. The decrease was prim arily due to the timing of loan originations and sales.

Previous wording

Other assets increased by $6.5 million, or 7.2%, to $96.3 million as of June 30, 2025 compared to December 31, 2024. The increase was primarily due to the purchase of FHLB stock.

Current wording

Other assets increased by $4.6 million, or 5.3%, to $92.6 million as of September 30, 2025 compared to December 31, 2024. The increase was primarily due to low-income housing tax credit and investment fund contributions.

Previous wording

Deposits increased $14.9 million, or 0.6%, to $2.53 billion as of June 30, 2025 compared to December 31, 2024. Money market deposit accounts increased $119.4 million, or 7.9%, to $1.63 billion as of June 30, 2025 compared to December 31, 2024. Time deposit accounts decreased $74.4 million, or 15.8%, from December 31, 2024 to $397.0 million as of June 30, 2025. Interest checking accounts decreased $15.4 million, or 11.1%, to $124.0 million from December 31, 2024 to June 30, 2025.

Current wording

Deposits increased $334.7 million, or 13.3%, to $2.85 billion as of September 30, 2025 compared to December 31, 2024, primarily driven by increases in money market deposit accounts, partially offset by a decrease in time deposit accounts. Money market deposit accounts increased $474.7 million, or 31.4%, to $1.99 billion as of September 30, 2025 compared to December 31, 2024. Time deposit accounts decreased $121.9 million, or 25.9%, from December 31, 2024 to $349.5 million as of September 30, 2025. Interest checking accounts decreased $17.5 million, or 12.5%, to $121.9 million from December 31, 2024 to September 30, 2025.

Previous wording

Borrowings increased $98.5 million, or 89.9%, to $208.1 million as of June 30, 2025 compared to December 31, 2024. The increase was primarily driven by net draws on the Company's FHLB line of credit as a result of interest-earning asset growth during the quarter, partially offset by $8.0 million of subordinated notes that were redeemed in the first quarter of 2025.

Current wording

Borrowings decreased $14.0 million, or 12.8%, to $95.6 million as of September 30, 2025 compared to December 31, 2024. The decrease was primarily driven by paying down the Company's FHLB line of credit as a result of deposit growth during the year and $8.0 million of subordinated notes that were redeemed in the first quarter of 2025.

Previous wording

Other liabilities decreased $12.2 million, or 28.4%, to $30.7 million as of June 30, 2025 compared to December 31, 2024. The decrease was primarily due to to payments related to participated non-performing assets resolved through the sale of two OREO properties and payment of 2024 bonuses in the first quarter of 2025.

Current wording

Other liabilities decreased $8.5 million, or 19.8%, to $34.4 million as of September 30, 2025 compared to December 31, 2024. The decrease was primarily due to to payments related to participated non-performing assets resolved and payment of 2024 bonuses in the first quarter of 2025.

Previous wording

Total shareholders’ equity increased $6.5 million, or 2.6%, from December 31, 2024 to $258.8 million as of June 30, 2025. The increase was primarily due to Net income for the year.

Current wording

Total shareholders’ equity increased $9.2 million, or 3.6%, from December 31, 2024 to $261.5 million as of September 30, 2025. The increase was primarily due to Net income for the year.

Previous wording

Debt securities we intend to hold for an indefinite period of time, but not necessarily to maturity, are classified as available-for-sale and are recorded at fair value using current market information from a pricing service, with unrealized gains and losses excluded from earnings and reported in OCI, net of tax. The carrying values of our debt securities classified as available-for-sale are adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax basis as a component of OCI in shareholders’ equity.

Current wording

Debt securities we intend to hold for an indefinite period of time, but not necessarily to maturity, are classified as available-for-sale and are recorded at fair value using current market information from a third-party pricing service, with unrealized gains and losses excluded from earnings and reported in OCI, net of tax. The carrying values of our debt securities classified as available-for-sale are adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax basis as a component of OCI in shareholders’ equity. As of September 30, 2025, investments in debt securities classified as available-for-sale totaled $49.2 million. As of December 31, 2024, the Company did not have any debt securities classified as available-for-sale.