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 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."

Current wording

The following discussion and analysis is intended to assist readers in understanding our financial condition and results of operations for the three months ended March 31, 2026 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 February 27, 2026. 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

We offer our services through a branded network of boutique private trust bank offices, which we believe are strategically located in affluent and high-growth markets in locations across Colorado, Arizona, Wyoming, Montana, and California. Our profit centers, which are comprised of private bankers, lenders, wealth planners, and portfolio managers, under the leadership of a local chairman and/or president, are also supported centrally by teams providing management services such as operations, risk management, credit administration, marketing, technology support, human capital, and accounting/finance services, which we refer to as support centers.

Current wording

We offer our services through a branded network of boutique private trust bank offices, which we believe are strategically located in affluent and high-growth markets in locations across Colorado, Arizona, Wyoming, Montana, and California. Our profit centers, which are comprised of private bankers, lenders, wealth planners, and portfolio managers, under the leadership of a president, are also supported centrally by teams providing management services such as operations, risk management, credit administration, marketing, technology support, human capital, and accounting/finance services, which we refer to as support centers.

Previous 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.

Current wording

From 2004, when we opened our first profit center, until March 31, 2026, 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 three months ended March 31, 2026, we had $3.24 billion in total assets, $28.3 million in Total income before non-interest expense, and provided fiduciary and advisory services on $7.24 billion of AUM.

Previous wording

•Other—includes costs related to operational expenses associated with office supplies, postage, travel expenses, meals and entertainment, dues and memberships, costs to maintain or prepare other real estate owned (OREO) for sale, changes in OREO valuations subsequent to the initial acquisition when updated fair values are lower than the cost basis, director compensation and travel, and other general corporate expenses that do not fit within one of the specific non-interest expense lines described above. Other operational expenses are generally impacted by our business activities and needs.

Current wording

•Other—includes costs related to operational expenses associated with office supplies, postage, travel expenses, meals and entertainment, dues and memberships, costs to maintain or prepare OREO for sale, changes in OREO valuations subsequent to the initial acquisition when updated fair values are lower than the cost basis, director compensation and travel, and other general corporate expenses that do not fit within one of the specific non-interest expense lines described above. Other operational expenses are generally impacted by our business activities and needs.

Previous 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.

Current wording

The three months ended March 31, 2026 compared with the three months ended March 31, 2025. We reported Net income available to common shareholders of $6.2 million for the three months ended March 31, 2026, compared to $4.2 million of Net income available to common shareholders for the three months ended March 31, 2025, a $2.0 million, or 47.6% increase. For the three months ended March 31, 2026, our Income before income tax was $8.1 million, a $2.7 million, or 51.3% increase from the three months ended March 31, 2025. The increase was primarily driven by a $3.4 million increase in Net interest income and a $0.8 million decrease in Provision for credit losses, partially offset by a $0.8 million increase in Non-interest expense and a $0.7 million decrease in Non-interest income.

Previous 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.

Current wording

•The increase in Net interest income was driven by a 20 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 23 basis point decrease in total cost of funds as a result of reducing deposit rates commensurate with the short-term rate decreases in 2025 and runoff of higher cost deposit accounts.

Previous wording

•The increase in Non-interest expense was primarily driven by increases in Salaries and employee benefits due to an increase in bonus accruals as a result of balance sheet growth and improved earningsand Data processing relating to upgrades to our digital banking platform.

Current wording

•The increase in Non-interest expense was primarily driven by an increase in Salaries and employee benefits due to salary increases and an increase in bonus accruals as a result of improved earnings, partially offset by a decrease in Occupancy and equipment expense primarily due to a decrease in variable lease expenses.

Previous 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.

Current wording

The three months ended March 31, 2026 compared with the three months ended March 31, 2025. For the three months ended March 31, 2026, Net interest income, before Provision for credit losses, was $20.9 million, an increase of $3.4 million, or 19.7%, compared to the three months ended March 31, 2025. The increase was primarily driven by a 20 basis point increase in net interest margin and a $300 million increase in average interest-earning assets. The increase in net interest margin was primarily driven by a 23 basis point decrease in total cost of funds.

Previous wording

Total interest and dividend income increased $2.9 million, or 2.6%, during the nine months ended September 30, 2025 compared to the same period in 2024, primarily due to a $99.1 million increase in average interest-earning assets, partially offset by a 5 basis point decrease in the average interest-earning assets yield. The increase in average interest-earning assets was driven by increases in average interest-bearing deposits in other financial institutions, debt securities, and loans, of $61.6 million, $19.8 million, and $17.3 million, respectively. The decrease in the average interest-earning assets yield was primarily driven by an 84 basis point decrease in interest-bearing deposits in other financial institution yield due to the lower interest rate environment.

Current wording

Total interest and dividend income increased $3.9 million, or 10.5%, during the three months ended March 31, 2026 compared to the same period in 2025, primarily due to a $300 million increase in average interest-earning assets, partially offset by a 3 basis point decrease in the average interest-earning assets yield. The increase in average interest-earning assets was driven by increases in average loans of $277 million and debt securities of $62.9 million, partially offset by a decrease in average interest-bearing deposits in other financial institutions of $54.5 million. The decrease in the average interest-earning assets yield was primarily driven by an 81 basis point decrease in interest-bearing deposits in other financial institution yield due to the lower interest rate environment, partially offset by a 64 basis point increase in average debt securities yield.

Previous 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.

Current wording

Interest expense on Interest-bearing deposits increased $0.5 million, or 2.7%, during the three months ended March 31, 2026 compared to the same period in 2025, primarily due to a $297 million increase in average interest-bearing deposits, partially offset by lower deposit rates. The increase in average interest-bearing deposits was primarily driven by an increase in money market deposit accounts, partially offset by a decrease in time deposits. Average interest-bearing deposit rates were 3.23% for the three months ended March 31, 2026, compared to 3.59% for the three months ended March 31, 2025. The decrease in the average Interest-bearing deposits rate was primarily attributable to reducing deposit rates commensurate with the short-term rate decreases in 2025 and runoff of higher cost deposit accounts.

Previous wording

(1)Average balance represents daily averages, unless otherwise noted.

Current wording

(1)Average balance represents daily averages.

Previous 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.

Current wording

(2)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

(4)Mortgage loans held for sale are included in the interest-earning assets above, with interest income recognized in the Interest and dividend income on loans, including fees line in the Condensed Consolidated Statements of Income. These balances are included in the margin calculations in these tables.

Current wording

(3)Mortgage loans held for sale are included in the interest-earning assets above, with interest income recognized in the Interest and dividend income on loans, including fees line in the Condensed Consolidated Statements of Income. These balances are included in the margin calculations in these tables.

Previous wording

(5)Tax-equivalent yield adjustments are immaterial.

Current wording

(4)Tax-equivalent yield adjustments are immaterial.

Previous wording

(6)Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

Current wording

(5)Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

Previous wording

(7)Net interest income is the difference between income earned on interest-earning assets and expense paid on interest-bearing liabilities.

Current wording

(6)Net interest income is the difference between income earned on interest-earning assets and expense paid on interest-bearing liabilities.

Previous wording

(8)Net interest margin is equal to annualized net interest income divided by average interest-earning assets.

Current wording

(7)Net interest margin is equal to annualized net interest income divided by average interest-earning assets.

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 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.

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 months ended March 31, 2026, we recorded a $0.7 million Release of provision for credit losses compared to a $0.1 million Provision for credit losses for the three months ended March 31, 2025. The release of provision recorded for the three months ended March 31, 2026 was primarily driven by decreased provision on individually analyzed loans.

Previous 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.

Current wording

Thethree months ended March 31, 2026 compared with thethree months ended March 31, 2025. For the three months ended March 31, 2026 compared with thethree months ended March 31, 2025, Non-interest income decreased $0.7 million, or 9.4%, to $6.7 million. The decrease in Non-interest income during the three months ended March 31, 2026 was primarily driven by decreases in Net gain on other real estate owned, Other, and Net gain on loans held for sale, partially offset by an increase in Net gain on mortgage loans.

Previous 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.

Current wording

Net gain on mortgage loans—The increase in Net gain on mortgage loans of $0.4 million, or 36.6%, for the three months ended March 31, 2026 was primarily attributable to an increase in origination volume.

Previous 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.

Current wording

Net gain on loans held for sale—The decrease in Net gain on loans held for sale was due to a $0.2 million gain recorded in the first quarter of 2025. The gain was due to the reversal of a write-down on a non-accrual loan recorded in the fourth quarter of 2024. This loan was classified as held for sale as of December 31, 2024; however, during the first quarter of 2025, it was transferred to held for investment and charged off through the ACL.

Previous wording

Bank fees—The decrease in Bank fees of $0.6 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.

Current wording

Bank fees—The decrease in Bank fees of $0.1 million, or 27.7%, for the three months ended March 31, 2026, was primarily attributable to a decrease in Main Street Lending Program (MSLP) servicing fees as the last MSLP loan exited the Bank’s loan portfolio in the first quarter of 2025.

Previous 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.

Current wording

Net (loss) gain on other real estate owned—During the first quarter of 2025, two OREO properties were sold for a net gain of $0.5 million. During the first quarter of 2026, the last remaining OREO property was sold for a net loss of $7 thousand.

Previous 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.

Current wording

The three months ended March 31, 2026 compared with the three months ended March 31, 2025. For the three months ended March 31, 2026 compared with the three months ended March 31, 2025, Non-interest expense increased $0.8 million, or 4.1%, to $20.2 million. The increase in Non-interest expense during the three months ended March 31, 2026 was driven primarily by an increase in Salaries and employee benefits, partially offset by decreases in Occupancy and equipment and Other.

Previous wording

Salaries and employee benefits—The increase in Salaries and employee benefits of $0.4 million, or 3.9%, and $0.6 million, or 1.7% for the three and nine months ended September 30, 2025, respectively, was driven by an increase in bonus accruals a result of balance sheet growth and improved earnings.

Current wording

Salaries and employee benefits—The increase in Salaries and employee benefits of $1.5 million, or 12.7%, for the three months ended March 31, 2026 was primarily driven by an increase in average headcount and an increase in bonus accruals as a result of improved earnings.

Previous 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.

Current wording

Occupancy and equipment—The decrease in Occupancy and equipment of $0.3 million, or 14.7%, for three months ended March 31, 2026 was driven bya decrease in variable lease expenses.

Previous 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.

Current wording

Professional services—The decrease in Professional services of $0.1 million, or 6.3%, for the three months ended March 31, 2026, was driven by decreases in legal expenses and FDIC insurance fees.

Previous wording

Other—The increase in Other of $0.2 million, or 12.8%, for the three months ended September 30, 2025, was primarily driven by a wire fraud recovery in the third quarter of 2024. The decrease in Other of $0.2 million, or 4.9%, for the nine months ended September 30, 2025, was primarily driven by lower expenses related to problem assets.

Current wording

Other—The decrease in Other of $0.2 million, or 13.1%, for the three months ended March 31, 2026, was primarily driven by a fraud loss in the first quarter of 2025.

Previous 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.

Current wording

The Company recorded an income tax provision of $1.9 million and $1.2 million for the three months ended March 31, 2026 and 2025, respectively, reflecting an effective tax rate of 23.4% and 21.9%, respectively.

Previous 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.

Current wording

The Wealth Management segment reported Income before income tax of $7.8 million for the three months ended March 31, 2026, compared to $5.3 million for the same period in 2025. The majority of our assets and liabilities are on the Wealth Management segment balance sheet. The increase in Income before income taxes for the three months ended March 31, 2026 was driven primarily by an increase in Net interest income, after provision for credit losses, partially offset by an increase in Non-interest expense and a decrease in Non-interest income. The increase in Net interest income, after provision for credit losses was primarily driven by increases in net interest margin and average interest-earning assets, as well as a release of provision for credit losses primarily driven by a decreased ACL on individually analyzed loans. The increase in Non-interest expense was primarily driven by an increase in Salaries and employee benefits, partially offset by a decrease in Occupancy and equipment. The decrease in Non-interest income was primarily driven by decreases in Net gain on other real estate owned and Net gain on loans held for sale.

Previous 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.

Current wording

The Mortgage segment reported Income before income tax of $0.3 million for the three months ended March 31, 2026, compared to $21 thousand for the same period in 2025. The increase in Income before taxes for the three month period ended March 31, 2026 was primarily driven by an increase in Net gain on mortgage loans, which was primarily driven by higher origination volume, as well as an increase in Total interest and dividend income, partially offset by an increase in Salaries and employee benefits.

Previous 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.

Current wording

Held-to-maturity debt securities increased by $0.1 million, or 0.1%, to $95.0 million as of March 31, 2026 compared to December 31, 2025. The increase was primarily due to the purchase of corporate bonds, offset by principal pay downs.

Previous 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.

Current wording

Mortgage loans held for sale, at fair value decreased $11.8 million, or 29.2%, to $28.4 million as of March 31, 2026 compared to December 31, 2025. The decrease was prim arily due to the timing of loan originations and sales.

Previous wording

Other real estate owned, net decreased by $31.5 million as of September 30, 2025 compared to December 31, 2024. The decrease was due to the sale of two OREO properties during the first quarter.

Current wording

Other real estate owned, net decreased by $3.0 million as of March 31, 2026 compared to December 31, 2025. The decrease was due to the sale of the Company's last remaining OREO property in the first quarter of 2026.

Previous 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.

Current wording

Borrowings decreased $12.8 million, or 11.9%, to $94.8 million as of March 31, 2026 compared to December 31, 2025. The decrease was primarily driven by the pay down on the Company's FHLB line of credit in the first quarter of 2026.

Previous 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.

Current wording

Total shareholders’ equity increased $7.8 million, or 2.9%, from December 31, 2025 to $273.4 million as of March 31, 2026. The increase was primarily due to Net income for the quarter and a decrease in Accumulated other comprehensive loss primarily driven by an increase in cash flow hedge fair values.

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 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.

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 March 31, 2026 and December 31, 2025, investments in debt securities classified as available-for-sale totaled $41.9 million and $45.6 million, respectively.

Previous wording

Debt securities for which we have the intent and ability to hold to their maturity are classified as Held-to-maturity debt securities and are recorded at amortized cost. Debt securities HTM are carried at cost, adjusted for the amortization of premiums and the accretion of discounts using the level-yield method over the remaining period until maturity. As of September 30, 2025 and December 31, 2024, investments in debt securities classified as HTM totaled $98.2 million and $75.7 million.

Current wording

Debt securities for which we have the intent and ability to hold to their maturity are classified as HTM debt securities and are recorded at amortized cost. Debt securities HTM are carried at cost, adjusted for the amortization of premiums and the accretion of discounts using the level-yield method over the remaining period until maturity. As of March 31, 2026 and December 31, 2025, investments in debt securities classified as HTM totaled $95.0 million.

Previous wording

The following provides information regarding contractual maturities and weighted average yield for our investment securities as of the dates presented. Contractual maturities may differ from expected maturities because issuers can have the right to call or prepay obligations without penalties. Our investments are taxable securities. The weighted average yield for each range of maturities was calculated using the yield on each security within that range weighted by the amortized cost of each security as of September 30, 2025. Weighted average yields are not presented on a taxable equivalent basis.

Current wording

The following provides information regarding contractual maturities and weighted average yield for our investment securities as of the dates presented. Contractual maturities may differ from expected maturities because issuers can have the right to call or prepay obligations without penalties. Our investments are taxable securities. The weighted average yield for each range of maturities was calculated using the yield on each security within that range weighted by the amortized cost of each security. Weighted average yields are not presented on a taxable equivalent basis.

Previous wording

Management measures expected credit losses on debt securities on a collective basis by major security type. The majority of our investment portfolio consists of debt securities issued by U.S. government entities and agencies and we consider the risk of credit loss to be zero and, therefore, we do not record an ACL. The Company's non-government backed debt securities include private label CMO and MBS as well as corporate bonds. The ACL on HTM debt securities was $0.1 million as of September 30, 2025 and December 31, 2024. The ACL on AFS debt securities was $0.0 million as of September 30, 2025 and December 31, 2024.

Current wording

Management measures expected credit losses on debt securities on a collective basis by major security type. The majority of our HTM investment portfolio consists of debt securities issued by U.S. government entities and agencies and we consider the risk of credit loss to be zero and, therefore, we do not record an ACL. The Company's non-government backed debt securities include private label MBS as well as corporate bonds. The ACL on HTM debt securities was $0.1 million as of March 31, 2026 and December 31, 2025. There was no ACL on AFS debt securities as of March 31, 2026 and December 31, 2025.