HOME BANCORP, INC.

Previous wording

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of the Company and the Bank from December 31, 2024 through June 30, 2025 and on its results of operations for the three and six months ended June 30, 2025 and 2024. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this quarterly report on Form 10-Q, particularly the consolidated financial statements and related notes appearing in Item 1.

Current wording

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of the Company and the Bank from December 31, 2024 through September 30, 2025 and on its results of operations for the three and nine months ended September 30, 2025 and 2024. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this quarterly report on Form 10-Q, particularly the consolidated financial statements and related notes appearing in Item 1.

Previous wording

The Company reported net income for the second quarter of 2025 of $11.3 million, or $1.45 diluted EPS, up $3.2 million, or 39.6%, compared to the second quarter of 2024. Net income for the second quarter of 2024 totaled $8.1 million, or $1.02 diluted EPS. For the six months ended June 30, 2025, the Company reported net income $22.3 million, or $2.82 diluted EPS, up $5.0 million, or 28.7%, from $17.3 million, or $2.16 diluted EPS, reported for the six months ended June 30, 2024.

Current wording

The Company reported net income for the third quarter of 2025 of $12.4 million, or $1.59 diluted EPS, up $2.9 million, or 30.9%, compared to the third quarter of 2024. Net income for the third quarter of 2024 totaled $9.4 million, or $1.18 diluted EPS. For the nine months ended September 30, 2025, the Company reported net income $34.7 million, or $4.41 diluted EPS, up $7.9 million, or 29.5%, from $26.8 million, or $3.34 diluted EPS, reported for the nine months ended September 30, 2024.

Previous wording

Key components of the Company’s performance during the three and six months ended June 30, 2025 include:

Current wording

Key components of the Company’s performance during the three and nine months ended September 30, 2025 include:

Previous wording

•Assets increased $47.8 million, or 1.4%, from December 31, 2024 to $3.5 billion at June 30, 2025.

Current wording

•Assets increased $50.4 million, or 1.5%, from December 31, 2024 to $3.5 billion at September 30, 2025.

Previous wording

•The ALL totaled $33.4 million, or 1.21% of total loans, at June 30, 2025 compared to $32.9 million, or 1.21% of total loans, at December 31, 2024. The ACL, which is comprised of the allowance for loan losses plus the allowance for unfunded lending commitments, totaled $35.2 million, or 1.27% of total loans, at June 30, 2025 compared to $35.6 million, or 1.31% of total loans, at December 31, 2024.

Current wording

•The ALL totaled $32.8 million, or 1.21% of total loans, at September 30, 2025 compared to $32.9 million, or 1.21% of total loans, at December 31, 2024. The ACL, which is comprised of the allowance for loan losses plus the allowance for unfunded lending commitments, totaled $34.6 million, or 1.28% of total loans, at September 30, 2025 compared to $35.6 million, or 1.31% of total loans, at December 31, 2024.

Previous wording

•Nonperforming assets increased $9.8 million, or 62.9%, from $15.6 million, or 0.45% of total assets, at December 31, 2024 to $25.4 million, or 0.73% of total assets, at June 30, 2025. The increase in nonperforming assets was primarily due to three loan relationships classified as substandard in 2024 and moved to nonaccrual status during the 2025 period, and three loan relationships that were downgraded to substandard and moved to nonaccrual status during the 2025 period.

Current wording

•Nonperforming assets increased $15.3 million, or 98.0%, from $15.6 million, or 0.45% of total assets, at December 31, 2024 to $30.9 million, or 0.88% of total assets, at September 30, 2025. The increase in nonperforming assets was primarily due to three loan relationships classified as substandard in 2024 and moved to nonaccrual status during the 2025 period, and seven loan relationships that were downgraded to substandard and moved to nonaccrual status during the 2025 period.

Previous wording

•Total deposits amounted to $2.9 billion at June 30, 2025, an increase of $127.5 million, or 4.6%, from December 31, 2024.

Current wording

•Total deposits amounted to $3.0 billion at September 30, 2025, an increase of $194.8 million, or 7.0%, from December 31, 2024.

Previous wording

•The net interest margin was 4.04% and 3.98% for the three and six months ended June 30, 2025, respectively, up 38 bps and 33 bps from the three and six months ended June 30, 2024, respectively. The increases were primarily due to higher yields on interest-earning assets and lower funding cost.

Current wording

•The net interest margin was 4.10% and 4.02% for the three and nine months ended September 30, 2025, respectively, up 39 bps and 35 bps from the three and nine months ended September 30, 2024, respectively. The increases were primarily due to higher yields on interest-earning assets and lower funding costs.

Previous wording

•The average rate paid on total interest-bearing deposits was 2.52% for the second quarter of 2025, which was down 17 bps from the second quarter of 2024. For the six months ended June 30, 2025, the average rate paid on total interest-bearing deposits was 2.52%, down 8 bps from the six months ended June 30, 2024.

Current wording

•The average rate paid on total interest-bearing deposits was 2.57% for the third quarter of 2025, which was down 21 bps from the third quarter of 2024. For the nine months ended September 30, 2025, the average rate paid on total interest-bearing deposits was 2.54%, down 12 bps from the nine months ended September 30, 2024.

Previous wording

•Total interest expense for the second quarter of 2025 was down $787,000, or 4.9%, compared to the second quarter of 2024, primarily due to lower cost of borrowings. For the six months ended June 30, 2025, total interest expense was down $560,000, or 1.8%, from the comparable period in 2024.

Current wording

•Total interest expense for the third quarter of 2025 was $15.1 million, down $1.9 million, or 11.1%, compared to the third quarter of 2024, primarily due to lower cost of borrowings. For the nine months ended September 30, 2025, total interest expense was $45.8 million, down $2.4 million, or 5.1%, from the comparable period in 2024.

Previous wording

•Noninterest income for the second quarter of 2025 was down $39,000, or 1.0%, compared to the second quarter of 2024, primarily due to a decrease in other income (down $143,000), which was partially offset by an increase in service fees and charges (up $106,000). For the six months ended June 30, 2025, noninterest income was up $421,000, or 5.8%, from the comparable period in 2024 primarily due to an increase in gain on sale of loans (up $278,000) and service fees and charges (up $161,000), which were partially offset by a decrease in other income (down $46,000).

Current wording

•Noninterest income for the third quarter of 2025 was $3.7 million, up $46,000, or 1.2%, compared to the third quarter of 2024, primarily due to an increase in service fees and charges (up $117,000), which was partially offset by a decrease in other income (down $70,000). For the nine months ended September 30, 2025, noninterest income was $11.5 million, up $467,000, or 4.2%, from the comparable period in 2024 primarily due to an increase in service fees and charges (up $278,000) and gain on sale of loans (up $227,000), which were partially offset by a decrease in other income (down $116,000).

Previous wording

The ACL policy described above is supplemented by periodic reviews and validations performed by independent loan reviewers. The results of the reviews are reported to the Audit Committee of the Board of Directors. The establishment of the ACL is significantly affected by management judgment. There is likelihood that different amounts would be reported under different conditions or assumptions. Federal regulatory agencies, as an integral part of their examination process, periodically review our ACL. Such agencies may require management to make additional provisions for estimated losses based upon judgments different from those of management.

Current wording

ACL is significantly affected by management judgment. There is likelihood that different amounts would be reported under different conditions or assumptions. Federal regulatory agencies, as an integral part of their examination process, periodically review our ACL. Such agencies may require management to make additional provisions for estimated losses based upon judgments different from those of management.

Previous wording

At June 30, 2025, the ALL totaled $33.4 million, or 1.21% of total loans, up $516,000 from $32.9 million, or 1.21% of total loans, at December 31, 2024. During the six months ended June 30, 2025, the Company provisioned $883,000 of the allowance loan losses primarily due to loan growth. Net loan charge-offs totaled $367,000 for the six months ended June 30, 2025.

Current wording

At September 30, 2025, the ALL totaled $32.8 million, or 1.21% of total loans, down $89,000 from $32.9 million, or 1.21% of total loans, at December 31, 2024. During the nine months ended September 30, 2025, the Company provisioned $654,000 of the allowance loan losses primarily due to the mix in loans and an increase in nonperforming assets during the year. Net loan charge-offs totaled $743,000 for the nine months ended September 30, 2025.

Previous wording

At June 30, 2025 and December 31, 2024, loans identified as credit deteriorated loans and individually evaluated for expected losses were $3.7 million and $5.0 million, respectively. The following tables provide a summary of loans individually evaluated for credit losses as of the dates indicated.

Current wording

At September 30, 2025 and December 31, 2024, loans identified as credit deteriorated loans and individually evaluated for expected losses were $6.1 million and $5.0 million, respectively. The following tables provide a summary of loans individually evaluated for credit losses as of the dates indicated.

Previous wording

At June 30, 2025 and December 31, 2024, loans classified as substandard totaled $49.8 million and $35.8 million, respectively. There were no assets classified as doubtful at either date. For additional information, refer to Note 5 to the Consolidated Financial Statements.

Current wording

At September 30, 2025 and December 31, 2024, loans classified as substandard totaled $57.6 million and $35.8 million, respectively. There were no assets classified as doubtful at either date. For additional information, refer to Note 5 to the Consolidated Financial Statements.

Previous wording

Total nonperforming loans increased by $9.8 million, or 71.7%, to $23.4 million at June 30, 2025, compared to $13.6 million at December 31, 2024. The primary reason for the increase was four loan relationships with an aggregate outstanding balance of $10.5 million at June 30, 2025 that became nonperforming during 2025.

Current wording

Total nonperforming loans increased by $15.9 million, or 117.1%, to $29.5 million at September 30, 2025, compared to $13.6 million at December 31, 2024. The primary reason for the increase was ten loan relationships with an aggregate outstanding balance of $19.0 million at September 30, 2025 that became nonperforming during 2025, for which management does not anticipate any losses.

Previous wording

The Company’s investment securities portfolio totaled $394.5 million as of June 30, 2025, a decrease of $9.3 million, or 2.3%, from December 31, 2024. During the second quarters of 2025 and 2024, the Company had no gains or losses related to the sale of available-for-sale investment securities. At June 30, 2025, the Company had a net unrealized loss on its available for sale investment securities portfolio of $30.2 million, compared to a net unrealized loss of $41.0 million at December 31, 2024. The Company’s investment securities portfolio had an effective duration of 3.6 years and 3.9 years at June 30, 2025 and December 31, 2024, respectively.

Current wording

The Company’s investment securities portfolio totaled $384.4 million as of September 30, 2025, a decrease of $19.5 million, or 4.8%, from December 31, 2024. During the third quarters of 2025 and 2024, the Company had no gains or losses related to the sale of available-for-sale investment securities. At September 30, 2025, the Company had a net unrealized loss on its available for sale investment securities portfolio of $26.5 million, compared to a net unrealized loss of $41.0 million at December 31, 2024. The Company’s investment securities portfolio had an effective duration of 3.5 years and 3.9 years at September 30, 2025 and December 31, 2024, respectively.

Previous wording

The following table summarizes activity in the Company’s investment securities portfolio during the six months ended June 30, 2025.

Current wording

The following table summarizes activity in the Company’s investment securities portfolio during the nine months ended September 30, 2025.

Previous wording

Deposits totaled $2.9 billion at June 30, 2025, an increase of $127.5 million, or 4.6%, compared to December 31, 2024. The following table summarizes the changes in the Company’s deposits from December 31, 2024 to June 30, 2025.

Current wording

Deposits totaled $3.0 billion at September 30, 2025, an increase of $194.8 million, or 7.0%, compared to December 31, 2024. The following table summarizes the changes in the Company’s deposits from December 31, 2024 to September 30, 2025.

Previous wording

The average rate paid on interest-bearing deposits was 2.52% for the second quarter of 2025, down 17 bps compared to the second quarter of 2024. At June 30, 2025, certificates of deposit maturing within the next 12 months totaled $781.9 million.

Current wording

The average rate paid on interest-bearing deposits was 2.57% for the third quarter of 2025, down 21 bps compared to the third quarter of 2024. At September 30, 2025, certificates of deposit maturing within the next 12 months totaled $810.5 million.

Previous wording

The total amounts of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) were $887.9 million at June 30, 2025 and $813.6 million at December 31, 2024. Public funds in excess of the FDIC insurance limits are fully collateralized.

Current wording

The total amounts of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) were $894.8 million at September 30, 2025 and $813.6 million at December 31, 2024. Public funds in excess of the FDIC insurance limits are fully collateralized.

Previous wording

On June 30, 2022, the Company issued$55.0 million in aggregate principal amount of its 5.75% Fixed-to-Floating Rate Subordinated Notes due 2032. The Notes were issued at a price equal to 100% of the aggregate principal amount. The Notes have a stated maturity date of June 30, 2032 and bear interest at a fixed rate of 5.75% per year from and including the issue date to but excluding June 30, 2027. From June 30, 2027, the Notes will bear interest at a floating rate equal to the then current three-month term secured overnight financing rate (“SOFR”), plus 282 basis points. The Notes may be redeemed by the Company, in whole or in part, on or after June 30, 2027. The Notes are intended to qualify as Tier 2 capital for regulatory purposes.

Current wording

On June 30, 2022, the Company issued$55.0 million in aggregate principal amount of its 5.75% Fixed-to-Floating Rate Subordinated Notes due 2032 (the "Notes"). The Notes were issued at a price equal to 100% of the aggregate principal amount. The Notes have a stated maturity date of June 30, 2032 and bear interest at a fixed rate of 5.75% per year from and including the issue date to but excluding June 30, 2027. From June 30, 2027, the Notes will bear interest at a floating rate equal to the then current three-month term secured overnight financing rate (“SOFR”), plus 282 basis points. The Notes may be redeemed by the Company, in whole or in part, on or after June 30, 2027. The Notes are intended to qualify as Tier 2 capital for regulatory purposes.

Previous wording

The average balance of total FHLB advances was $114.0 million for the second quarter of 2025, up $67.5 million compared to the second quarter of 2024. We reduced our FHLB advances in 2024 primarily due to our increased utilization of BTFP loans as an alternative source of funds. BTFP borrowings were paid off in the fourth quarter of 2024 and replaced with short-term FHLB advances.

Current wording

The average balance of total FHLB advances was $39.4 million for the third quarter of 2025, down $17.3 million compared to the third quarter of 2024. We reduced our FHLB advances in 2024 primarily due to our increased utilization of BTFP loans as an alternative source of funds. BTFP borrowings were paid off in the fourth quarter of 2024 and replaced with short-term FHLB advances.

Previous wording

The Company had $75.0 million short-term FHLB advances as of June 30, 2025, down $62.2 million, or 45.3%, compared to $137.2 million as of December 31, 2024. At June 30, 2025 and December 31, 2024, the Company had $13.2 million and $38.3 million in long-term FHLB advances, respectively, and $1.2 billion and $1.1 billion in additional FHLB advances available, respectively.

Current wording

The Company had no short-term FHLB advances as of September 30, 2025, down $137.2 million compared to $137.2 million as of December 31, 2024. At September 30, 2025 and December 31, 2024, the Company had $3.1 million and $38.3 million in long-term FHLB advances, respectively, and $1.3 billion and $1.1 billion in additional FHLB advances available, respectively.

Previous wording

Total shareholders’ equity increased $12.7 million, or 3.2%, from $396.1 million at December 31, 2024 to $408.8 million at June 30, 2025. Shareholders' equity increased primarily due to net income of $22.3 million and a decrease in accumulated other comprehensive loss on available for sale investment securities, which were partially offset by cash dividends paid on the common stock and share repurchases during the six months ended June 30, 2025.

Current wording

Total shareholders’ equity increased $27.0 million, or 6.8%, from $396.1 million at December 31, 2024 to $423.0 million at September 30, 2025. Shareholders' equity increased primarily due to net income of $34.7 million and a decrease in accumulated other comprehensive loss on available for sale investment securities, which were partially offset by cash dividends paid on the common stock and share repurchases during the nine months ended September 30, 2025.

Previous wording

The Company uses its liquidity to fund existing and future loan commitments, to fund maturing certificates of deposit and demand deposit withdrawals, to invest in other interest-earning assets and to meet operating expenses. At June 30, 2025, certificates of deposit maturing within the next 12 months totaled $781.9 million. Based upon historical experience, the Company anticipates that a significant portion of the maturing certificates of deposit will be redeposited with us.

Current wording

The Company uses its liquidity to fund existing and future loan commitments, to fund maturing certificates of deposit and demand deposit withdrawals, to invest in other interest-earning assets and to meet operating expenses. At September 30, 2025, certificates of deposit maturing within the next 12 months totaled $810.5 million. Based upon historical experience, the Company anticipates that a significant portion of the maturing certificates of deposit will be redeposited with us.

Previous wording

In addition to cash flow from loan and securities payments and prepayments as well as from sales of securities available for sale, the Company has significant borrowing capacity available to fund liquidity needs. In recent years, the Company has utilized borrowings as a cost efficient addition to deposits as a source of funds. Borrowings consist of advances from the FHLB of Dallas, of which the Company is a member. Under terms of the collateral agreement with the FHLB, the Company pledges residential mortgage loans and investment securities as well as the Company’s stock in the FHLB as collateral for such advances. For the six months ended June 30, 2025, the average balance of outstanding FHLB advances was $147.2 million. At June 30, 2025, the Company had $88.2 million in total outstanding FHLB advances.

Current wording

In addition to cash flow from loan and securities payments and prepayments as well as from sales of securities available for sale, the Company has significant borrowing capacity available to fund liquidity needs. In recent years, the Company has utilized borrowings as a cost efficient addition to deposits as a source of funds. Borrowings consist of advances from the FHLB of Dallas, of which the Company is a member. Under terms of the collateral agreement with the FHLB, the Company pledges residential mortgage loans and investment securities as well as the Company’s stock in the FHLB as collateral for such advances. For the nine months ended September 30, 2025, the average balance of outstanding FHLB advances was $110.9 million. At September 30, 2025, the Company had $3.1 million in total outstanding FHLB advances.

Previous wording

Net income for the six months ended June 30, 2025 was $22.3 million, up $5.0 million, or 28.7%, compared to the six months ended June 30, 2024. Diluted EPS for the six months ended June 30, 2025 was $2.82, up $0.66 compared to the six months ended June 30, 2024.

Current wording

Net income for the nine months ended September 30, 2025 was $34.7 million, up $7.9 million, or 28.7%, compared to the nine months ended September 30, 2024. Diluted EPS for the nine months ended September 30, 2025 was $4.41, up $1.07 compared to the nine months ended September 30, 2024.

Previous wording

Net interest income is the difference between the interest income earned on interest-earning assets, such as loans and investment securities, and the interest expense paid on interest-bearing liabilities, such as deposits and borrowings. The Company’s net interest income is largely determined by our net interest spread, which is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, and the relative amounts of interest-earning assets and interest-bearing liabilities. The Company’s tax-equivalent net interest spread was 3.21% and 2.77% for the quarters ended June 30, 2025 and 2024, respectively, and 3.16% and 2.79% for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Net interest income is the difference between the interest income earned on interest-earning assets, such as loans and investment securities, and the interest expense paid on interest-bearing liabilities, such as deposits and borrowings. The Company’s net interest income is largely determined by our net interest spread, which is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, and the relative amounts of interest-earning assets and interest-bearing liabilities. The Company’s tax-equivalent net interest spread was 3.26% and 2.80% for the quarters ended September 30, 2025 and 2024, respectively, and 3.19% and 2.80% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Net interest income totaled $33.4 million for the second quarter of 2025, up $4.0 million, or 13.5%, compared to the second quarter of 2024. For the six months ended June 30, 2025, net interest income totaled $65.1 million, up $6.8 million, or 11.7%, compared to the six months ended June 30, 2024.

Current wording

Net interest income totaled $34.1 million for the third quarter of 2025, up $3.7 million, or 12.3%, compared to the third quarter of 2024. For the nine months ended September 30, 2025, net interest income totaled $99.2 million, up $10.5 million, or 11.9%, compared to the nine months ended September 30, 2024.

Previous wording

The Company’s tax-equivalent net interest margin, which is net interest income as a percentage of average interest-earning assets, was 4.04% and 3.66% for the quarters ended June 30, 2025 and 2024, respectively. For the same periods, the average loan yield was 6.50% and 6.28%, respectively.

Current wording

The Company’s tax-equivalent net interest margin, which is net interest income as a percentage of average interest-earning assets, was 4.10% and 3.71% for the quarters ended September 30, 2025 and 2024, respectively. For the same periods, the average loan yield was 6.53% and 6.43%, respectively. The net interest margin for the nine months ended September 30, 2025 and 2024 was 4.02% and 3.67%, respectively. For the same periods, the average loan yield was 6.49% and 6.30%, respectively.

Previous wording

Acquired loan discount accretion included in interest income totaled $356,000 and $490,000 for the quarters ended June 30, 2025 and 2024, respectively. The net interest margin for the six months ended June 30, 2025 and 2024 was 3.98% and 3.65%, respectively. For the same periods, the average loan yield was 6.46% and 6.23%, respectively.

Current wording

Acquired loan discount accretion included in interest income totaled $347,000 and $452,000 for the quarters ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, acquired loan discount accretion included in interest income totaled $1.1 million and $1.5 million, respectively.

Previous wording

Noninterest income for the second quarter of 2025 totaled $3.7 million, down $39,000, or 1.0%, from $3.8 million earned for the same period in 2024. Noninterest income decreased over the comparable periods primarily due to a decrease in other income (down $143,000, primarily due to the absence of derivative fee income), which was partially offset by an increase in service fees and charges (up $106,000).

Current wording

Noninterest income for the third quarter of 2025 totaled $3.7 million, up $46,000, or 1.2%, from $3.7 million earned for the same period in 2024. Noninterest income increased over the comparable period primarily due to an increase in service fees and charges (up $117,000), which was partially offset by a decrease in other income (down $70,000).

Previous wording

Noninterest income for the six months ended June 30, 2025 totaled $7.7 million, up $421,000, or 5.8%, from $7.3 million earned for the same period in 2024. Noninterest income increased over the comparable periods primarily due to an increase in gain on sale of loans (up $278,000, primarily due to gain on sale of SBA loans) and service fees and charges (up $161,000), which were partially offset by a decrease in other income (down $46,000, primarily due to the absence of derivative fee income).

Current wording

Noninterest income for the nine months ended September 30, 2025 totaled $11.5 million, up $467,000, or 4.2%, from $11.0 million earned for the same period in 2024. Noninterest income increased over the comparable period primarily due to an increase in service fees and charges (up $278,000) and gain on sale of loans (up $227,000, primarily due to gain on sale of SBA loans), which were partially offset by a decrease in other income (down $116,000, primarily due to the absence of derivative fee income).

Previous wording

Noninterest expense for the second quarter of 2025 totaled $22.4 million, up $599,000, or 2.7%, from the second quarter of 2024. Noninterest expense increased over the comparable quarters primarily due to an increase in other expenses (up $852,000, primarily due to a write off of an acquired SBA accounts receivable for guarantees), compensation and benefits (up $534,000, primarily due to increases in salaries), and foreclosed assets (up $330,000) which were partially offset by the reversal of provision for credit losses on unfunded commitments (down $836,000, primarily due to lower unfunded commitment levels) and professional services (down $185,000).

Current wording

Noninterest expense for the third quarter of 2025 totaled $22.5 million, up $273,000, or 1.2%, from the third quarter of 2024. Noninterest expense increased over the comparable quarter primarily due to an increase in compensation and benefits (up $473,000, primarily due to increases in salaries) and foreclosed assets (up $315,000), which were partially offset by a decrease in other expenses (down $206,000) and occupancy expenses (down $188,000, primarily due to a lease that ended September 2024).

Previous wording

Noninterest expense for the six months ended June 30, 2025 totaled $44.0 million, up $1.3 million, or 3.1%, from the same period in 2024. Noninterest expense increased over the comparable quarters primarily due to an increase in compensation and benefits (up $1.0 million, primarily due to increases in salaries), other expenses (up $821,000, primarily due to a write off of an acquired SBA accounts receivable for guarantees) and foreclosed assets, net (up $492,000), which were partially offset by the reversal of provision for credit losses on unfunded commitments (down $836,000, primarily due to lower unfunded commitment levels).

Current wording

Noninterest expense for the nine months ended September 30, 2025 totaled $66.5 million, up $1.6 million, or 2.4%, from the same period in 2024. Noninterest expense increased over the comparable quarter primarily due to an increase in compensation and benefits (up $1.5 million, primarily due to increases in salaries) and foreclosed assets, net (up $807,000), which were partially offset by the reversal of provision for credit losses on unfunded commitments (down $836,000, primarily due to lower unfunded commitment levels).

Previous wording

Income tax expense for the three and six months ended June 30, 2025 totaled $2.8 million and $5.7 million, respectively, compared to $2.0 million and $4.2 million for the three and six months ended June 30, 2024, respectively. Income tax expense increased over the prior comparable quarter primarily due to increased taxable earnings. The Company's effective tax rates for the second quarters of 2025 and 2024 were 20.0% and 19.5%, respectively. For the six months ended June 30, 2025 and 2024, the Company's effective tax rates were 20.3% and 19.5%, respectively.

Current wording

Income tax expense for the three and nine months ended September 30, 2025 totaled $3.2 million and $8.8 million, respectively, compared to $2.2 million and $6.4 million for the three and nine months ended September 30, 2024, respectively. Income tax expense increased over the prior comparable quarter primarily due to increased taxable earnings. The Company's effective tax rates for the third quarters of 2025 and 2024 were 20.5% and 19.2%, respectively. For the nine months ended September 30, 2025 and 2024, the Company's effective tax rates were 20.3% and 19.4%, respectively.