HOME BANCORP, INC.
For the period ended Jun 30, 2026. Filed Aug 3, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 3, 2026
HBCP$60.94+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001628280-26-031198
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-03.
0001628280-26-051688
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 91 previous paragraphs and 94 current paragraphs.
46 unchanged; 31 reworded; 16 added; 14 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 16 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
The Company reported net income for the second quarter of 2026 of $11.6 million, or $1.48 diluted EPS, up $285,000, or 2.5%, compared to the second quarter of 2025. Net income for the second quarter of 2025 totaled $11.3 million, or $1.45 diluted EPS. For the six months ended June 30, 2026, the Company reported net income $23.0 million, or $2.93 diluted EPS, up $681,000 from $22.3 million, or $2.82 diluted EPS, reported for the six months ended June 30, 2025.
Current report
•Total loans were $2.8 billion at June 30, 2026, up $34.9 million, or 1.3%, from December 31, 2025.
Current report
•During the three and six months ended June 30, 2026, the Company provisioned $762,000 and $1,684,000, respectively, to the ALL, primarily due to loan growth and net charge-offs. During the three and six months ended June 30, 2025, the Company provisioned $489,000 and $883,000, respectively, to the ALL.
Current report
•The average rate paid on total interest-bearing deposits was 2.28% and 2.29% for the three and six months ended June 30, 2026, respectively, down 24 bps and 23 bps from the three and six months ended June 30, 2025.
Current report
•Total interest expense was $13.4 million and $26.7 million for the three and six months ended June 30, 2026, respectively, down $1.9 million, or 12.2% and down $4.1 million, or 13.2% from the three and six months ended June 30, 2025.
Current report
•Noninterest income for the second quarter of 2026 was $3.9 million, up $203,000, or 5.5%, compared to the second quarter of 2025, primarily due to increases in gain on sale of loans (up $115,000), service fees and charges (up $62,000), and other income (up $50,000), which were partially offset by a decrease in bank card fees (down $32,000). For the six months ended June 30, 2026, noninterest income was down $68,000, or 0.9%, from the comparable period in 2025 primarily due to decreases in other income (down $216,000) and gain on sale of loans (down $32,000), which were partially offset by an increase in service fees and charges (up $190,000).
Current report
•Noninterest expense for the second quarter of 2026 was $24.6 million, up $2.1 million, or 9.6%, compared to the second quarter of 2025, primarily due to an increase in compensation and benefits (up $1.7 million) and the absence of a reversal to the ACL on unfunded commitments ($970,000), which were partially offset by decreases in other expenses (down $445,000) and franchise and shares tax (down $143,000). For the six months ended June 30, 2026, noninterest expense was up $3.5 million, or 8.0%, from the comparable period in 2025 primarily due to an increase in compensation and benefits (up $2.8 million) and the absence of a reversal to the ACL on unfunded commitments ($970,000), partially offset by a decrease in franchise and shares tax (down $279,000).
Current report
Total loans at June 30, 2026 were $2.8 billion, up $34.9 million, or 1.3%, from December 31, 2025.
Current report
Total nonperforming loans decreased by $7.8 million, or 22.7%, to $26.4 million at June 30, 2026, compared to $34.2 million at December 31, 2025. The decrease was primarily attributable to three loan relationships with an aggregate outstanding balance of $12.0 million at June 30, 2026 that transferred to foreclosed assets and paydowns, which was partially offset by multiple loan relationships (with the largest relationship totaling $1.3 million) moving to nonaccrual status during 2026.
Current report
Net income for the second quarter of 2026 was $11.6 million, up $285,000, or 2.5%, compared to the second quarter of 2025. Diluted EPS for the second quarter of 2026 was $1.48, up $0.03 compared to the second quarter of 2025.
Current report
Net income for the six months ended June 30, 2026 was $23.0 million, up $681,000, compared to the six months ended June 30, 2025. Diluted EPS for the six months ended June 30, 2026 was $2.93, up $0.11 compared to the six months ended June 30, 2025.
Current report
During the three and six months ended June 30, 2026, the Company provisioned $762,000 and $1.7 million, respectively, to the ALL, primarily due to loan growth and net charge-offs. During the three and six months ended June 30, 2025, the Company provisioned $489,000 and $883,000, respectively, to the ALL, primarily due to loan growth.
Current report
Net interest income totaled $35.8 million for the second quarter of 2026, up $2.5 million, or 7.4%, compared to the second quarter of 2025. For the six months ended June 30, 2026, net interest income totaled $70.3 million, up $5.2 million, or 8.0%, compared to the six months ended June 30, 2025.
Current report
The net interest margin for the six months ended June 30, 2026 and 2025 was 4.20% and 3.98%, respectively. For the same periods, the average loan yield was 6.43% and 6.46%, respectively.
Current report
Noninterest income for the second quarter of 2026 totaled $3.9 million, up $203,000, or 5.5%, from $3.7 million earned for the same period in 2025. Noninterest income increased over the comparable period primarily due to increases in gain on sale of loans (up $115,000), service fees and charges (up $62,000), and other income (up $50,000), which were partially offset by a decrease in bank card fees (down $32,000).
Current report
Noninterest expense for the six months ended June 30, 2026 totaled $47.5 million, up $3.5 million, or 8.0%, from the same period in 2025. Noninterest expense increased over the comparable quarter primarily due to an increase in compensation and benefits (up $2.8 million) and the absence of a reversal to the ACL on unfunded commitments ($970,000), partially offset by a decrease in franchise and shares tax (down $279,000).
Removed paragraphs (14)
Previous report
The Company reported net income for the first quarter of 2026 of $11.4 million, or $1.45 diluted EPS, up $396,000, or 3.6%, compared to the first quarter of 2025. Net income for the first quarter of 2025 totaled $11.0 million, or $1.37 diluted EPS.
Previous report
•Total loans were $2.7 billion at March 31, 2026, down $15.9 million, or 0.6%, from December 31, 2025.
Previous report
•During the three months ended March 31, 2026, the Company provisioned $922,000 to the allowance for loan losses, primarily due an increase in individually impaired loan reserves, partially offset by loan reduction. During the three months ended March 31, 2025, the Company provisioned $394,000 to the allowance for loan losses.
Previous report
•The average rate paid on total interest-bearing deposits was 2.29% for the first quarter of 2026, which was down 22 bps from the first quarter of 2025.
Previous report
•Total interest expense for the first quarter of 2026 was $13.3 million, down $2.2 million, or 14.2%, compared to the first quarter of 2025, primarily due to a decrease in FHLB borrowing interest.
Previous report
•Noninterest income for the first quarter of 2026 was $3.7 million, down $271,000, or 6.8%, compared to the first quarter of 2025, primarily due to decreases in other income (down $266,000) and gain on sale of loans (down $147,000), which were partially offset by an increase in service fees and charges (up $128,000).
Previous report
•Noninterest expense for the first quarter of 2026 was $22.9 million, up $1.4 million, or 6.3%, compared to the first quarter of 2025, primarily due to increases in compensation and benefits (up $1.1 million) and other expenses (up $786,000), which were partially offset by decreases in foreclosed assets (down $173,000), franchise and shares tax (down $136,000), and occupancy expense (down $132,000).
Previous report
Total loans at March 31, 2026 were $2.7 billion, down $15.9 million, or 0.6%, from December 31, 2025.
Previous report
Total nonperforming loans increased by $1.6 million, or 4.8%, to $35.8 million at March 31, 2026, compared to $34.2 million at December 31, 2025. The increase was primarily attributable to several loan relationships, including one relationship with an outstanding balance of $1.4 million, which were placed on nonaccrual status during the quarter, partially offset by loan paydowns and payoffs. Based on the underlying collateral position and ongoing monitoring, management does not anticipate any material losses.
Previous report
We obtain most of our deposits from individuals, small businesses and public funds in our market areas. The following table presents our deposits per customer type for the periods indicated.
Previous report
Net income for the first quarter of 2026 was $11.4 million, up $396,000, or 3.6%, compared to the first quarter of 2025. Diluted EPS for the first quarter of 2026 was $1.45, up $0.08 compared to the first quarter of 2025.
Previous report
During the three months ended March 31, 2026, the Company provisioned $922,000 to the allowance for loan losses, primarily due to an increase in individually impaired loan reserves, partially offset by loan reduction. During the three months ended March 31, 2025, the Company provisioned $394,000 to the allowance for loan losses, primarily due to loan growth.
Previous report
Net interest income totaled $34.5 million for the first quarter of 2026, up $2.7 million, or 8.6%, compared to the first quarter of 2025.
Previous report
Acquired loan discount accretion included in interest income totaled $189,000 and $356,000 for the quarters ended March 31, 2026 and 2025, respectively.
Reworded paragraphs (31)
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, 2025 through March 31, 2026 and on its results of operations for the three months ended March 31, 2026 and 2025. 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, 2025 through June 30, 2026 and on its results of operations for the three and six months ended June 30, 2026 and 2025. 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
Key components of the Company’s performance during the three months ended March 31, 2026 include:
Current wording
Key components of the Company’s performance during the three and six months ended June 30, 2026 include:
Previous wording
•Assets increased $62.0 million, or 1.8%, from December 31, 2025 to $3.6 billion at March 31, 2026.
Current wording
•Assets increased $110.6 million, or 3.2%, from December 31, 2025 to $3.6 billion at June 30, 2026.
Previous wording
•The ALL totaled $33.7 million, or 1.23% of total loans, at March 31, 2026 compared to $33.1 million, or 1.21% of total loans, at December 31, 2025. The ACL, which is comprised of the allowance for loan losses plus the allowance for unfunded lending commitments, totaled $35.3 million, or 1.29% of total loans, at March 31, 2026 compared to $34.8 million, or 1.27% of total loans, at December 31, 2025.
Current wording
•The ALL totaled $34.0 million, or 1.22% of total loans, at June 30, 2026 compared to $33.1 million, or 1.21% of total loans, at December 31, 2025. The ACL, which is comprised of the ALL plus the allowance for unfunded lending commitments, totaled $35.6 million, or 1.28% of total loans, at June 30, 2026 compared to $34.8 million, or 1.27% of total loans, at December 31, 2025.
Previous wording
•Nonperforming assets increased $3.8 million, or 10.5%, from $36.1 million, or 1.03% of total assets, at December 31, 2025 to $39.9 million, or 1.12% of total assets, at March 31, 2026. The increase in nonperforming assets during the first quarter of 2026 was primarily attributable to several loan relationships, including one relationship with an outstanding balance of $1.4 million, which were placed on nonaccrual status during the quarter, partially offset by loan paydowns and payoffs.
Current wording
•Nonperforming assets ("NPAs") increased $3.1 million, or 8.6%, from $36.1 million, or 1.03% of total assets, at December 31, 2025 to $39.2 million, or 1.09% of total assets, at June 30, 2026. The increase in NPAs during the six months ended June 30, 2026 was primarily attributable to multiple loan relationships (with the largest relationship totaling $1.3 million) moving to nonaccrual status during 2026, which was partially offset by paydowns.
Previous wording
•Total deposits amounted to $3.0 billion at March 31, 2026, an increase of $54.0 million, or 1.8%, from December 31, 2025.
Current wording
•Total deposits amounted to $3.1 billion at June 30, 2026, an increase of $96.1 million, or 3.2%, from December 31, 2025.
Previous wording
•The net interest margin was 4.16% for the three months ended March 31, 2026, up 25 bps from the three months ended March 31, 2025. The increase was primarily due to a decline in the average cost of interest-bearing liabilities.
Current wording
•The net interest margin was 4.24% and 4.20% for the three and six months ended June 30, 2026, respectively, up 20 bps and 22 bps from the three and six months ended June 30, 2025. The increase was primarily due to a decline in the average cost of interest-bearing liabilities.
Previous wording
At March 31, 2026, the ALL totaled $33.7 million, or 1.23% of total loans, up $538,000 from $33.1 million, or 1.21% of total loans, at December 31, 2025. During the three months ended March 31, 2026, the Company provisioned $922,000 to the allowance loan losses primarily due to an increase in individually impaired loan reserves, partially offset by loan reduction. Net loan charge-offs totaled $384,000 for the three months ended March 31, 2026.
Current wording
At June 30, 2026, the ALL totaled $34.0 million, or 1.22% of total loans, up $852,000 from $33.1 million, or 1.21% of total loans, at December 31, 2025. During the six months ended June 30, 2026, the Company provisioned $1.7 million to the ALL primarily due to loan growth and net charge-offs. Net loan charge-offs totaled $832,000 for the six months ended June 30, 2026.
Previous wording
At March 31, 2026 and December 31, 2025, loans identified as credit deteriorated loans and individually evaluated for expected losses were $10.0 million and $6.2 million, respectively. The following tables provide a summary of loans individually evaluated for credit losses as of the dates indicated.
Current wording
At June 30, 2026 and December 31, 2025, loans identified as credit deteriorated loans and individually evaluated for expected losses were $4.5 million and $6.2 million, respectively. The following tables provide a summary of loans individually evaluated for credit losses as of the dates indicated.
Previous wording
Federal regulations and our policies require that we utilize an internal asset classification system as a means of reporting problem and potential problem assets. We have incorporated an internal asset classification system, substantially consistent with Federal banking regulations, as a part of our credit monitoring system. Federal banking regulations set forth a classification scheme for problem and potential problem assets as “substandard,” “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.
Current wording
Federal regulations and our policies require that we utilize an internal asset classification system as a means of reporting problem and potential problem assets. We have incorporated an internal asset classification system, substantially consistent with Federal banking regulations, as a part of our credit monitoring system. Federal banking regulations set forth a classification scheme for problem and potential problem assets as “substandard,” “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions and values, “highly questionable and improbable.” Assets classified as “loss”
Previous wording
At March 31, 2026 and December 31, 2025, loans classified as substandard totaled $61.5 million and $61.1 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 June 30, 2026 and December 31, 2025, loans classified as substandard totaled $68.9 million and $61.1 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
The following table sets forth the composition of the Company’s nonperforming assets as of the dates indicated.
Current wording
The following table sets forth the composition of the Company’s NPAs as of the dates indicated.
Previous wording
The Company’s investment securities portfolio totaled $386.3 million as of March 31, 2026, a decrease of $6.3 million, or 1.6%, from December 31, 2025. During the first quarters of 2026 and 2025, the Company had no gains or losses related to the sale of available for sale investment securities. At March 31, 2026, the Company had a net unrealized loss on its available for sale investment securities portfolio of $24.0 million, compared to a net unrealized loss of $23.4 million at December 31, 2025. The Company’s investment securities portfolio had an effective duration of 3.4 years and 3.3 years at March 31, 2026 and December 31, 2025, respectively.
Current wording
The Company’s investment securities portfolio totaled $409.1 million as of June 30, 2026, an increase of $16.6 million, or 4.2%, from December 31, 2025. During the second quarters of 2026 and 2025, the Company had no gains or losses related to the sale of available for sale investment securities. At June 30, 2026, the Company had a net unrealized loss on its available for sale investment securities portfolio of $25.0 million, compared to a net unrealized loss of $23.4 million at December 31, 2025. The Company’s investment securities portfolio had an effective duration of 3.4 years and 3.3 years at June 30, 2026 and December 31, 2025, respectively.
Previous wording
The following table summarizes activity in the Company’s investment securities portfolio during the three months ended March 31, 2026.
Current wording
The following table summarizes activity in the Company’s investment securities portfolio during the six months ended June 30, 2026.
Previous wording
Deposits totaled $3.0 billion at March 31, 2026, an increase of $54.0 million, or 1.8%, compared to December 31, 2025. The following table summarizes the changes in the Company’s deposits from December 31, 2025 to March 31, 2026.
Current wording
Deposits totaled $3.1 billion at June 30, 2026, an increase of $96.1 million, or 3.2%, compared to December 31, 2025. The following table summarizes the changes in the Company’s deposits from December 31, 2025 to June 30, 2026.
Previous wording
The average rate paid on interest-bearing deposits was 2.29% for the first quarter of 2026, down 22 bps compared to the first quarter of 2025. At March 31, 2026, certificates of deposit maturing within the next 12 months totaled $715.3 million.
Current wording
The average rate paid on interest-bearing deposits was 2.28% for the second quarter of 2026, down 24 bps compared to the second quarter of 2025. At June 30, 2026, certificates of deposit maturing within the next 12 months totaled $714.7 million.
Previous wording
The total amounts of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) were $919.7 million at March 31, 2026 and $885.4 million at December 31, 2025. 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 Federal Deposit Insurance Corporation ("FDIC") regulations) were $959.4 million at June 30, 2026 and $885.4 million at December 31, 2025. 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"). 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 SOFR, plus 282 bps. 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 carrying value of the Notes was $54.7 million and $54.7 million at March 31, 2026 and December 31, 2025, respectively. The subordinated debt was recorded net of issuance costs and amortized using the straight-line method over five years.
Current wording
The carrying value of the Notes was $54.8 million and $54.7 million at June 30, 2026 and December 31, 2025, respectively. The subordinated debt was recorded net of issuance costs and amortized using the straight-line method over five years.
Previous wording
The average balance of total FHLB advances was $1.9 million for the first quarter of 2026, down $178.8 million compared to the first quarter of 2025.
Current wording
The average balance of total FHLB advances was $0.0 million for the second quarter of 2026, down $114.0 million compared to the second quarter of 2025.
Previous wording
Total shareholders’ equity increased $9.3 million, or 2.1%, from $435.1 million at December 31, 2025 to $444.4 million at March 31, 2026. Shareholders' equity increased primarily due to net income of $11.4 million, which was partially offset by an increase in the accumulated other comprehensive loss on available for sale investment securities and cash dividends paid on the common stock during the three months ended March 31, 2026.
Current wording
Total shareholders’ equity increased $18.4 million, or 4.2%, from $435.1 million at December 31, 2025 to $453.5 million at June 30, 2026. Shareholders' equity increased primarily due to net income of $23.0 million, which was partially offset by an increase in the accumulated other comprehensive loss on available for sale investment securities and cash dividends paid on the common stock during the six months ended June 30, 2026.
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 March 31, 2026, certificates of deposit maturing within the next 12 months totaled $715.3 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 June 30, 2026, certificates of deposit maturing within the next 12 months totaled $714.7 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 three months ended March 31, 2026, the average balance of outstanding FHLB advances was $1.9 million. At March 31, 2026, the Company had $0.0 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 six months ended June 30, 2026, the average balance of outstanding FHLB advances was $949,000. At June 30, 2026, the Company had $0.0 million in total outstanding FHLB advances.
Previous wording
To meet the financing needs of its customers, the Company issues financial instruments which represent conditional obligations that are not recognized, wholly or in part, in the statements of financial condition. These financial instruments include commitments to extend credit and standby letters of credit. Such instruments expose the Company to varying degrees of credit and interest rate risk in much the same way as funded loans. The same credit policies are used in these commitments as for on-balance sheet instruments. At both March 31, 2026 and December 31, 2025, the Company's allowance for credit losses on unfunded commitments totaled $1.6 million and $1.6 million, respectively.
Current wording
To meet the financing needs of its customers, the Company issues financial instruments which represent conditional obligations that are not recognized, wholly or in part, in the statements of financial condition. These financial instruments include commitments to extend credit and standby letters of credit. Such instruments expose the Company to varying degrees of credit and interest rate risk in much the same way as funded loans. The same credit policies are used in these commitments as for on-balance sheet instruments. At both June 30, 2026 and December 31, 2025, the Company's ACL on unfunded commitments totaled $1.6 million.
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 3.40% and 3.10% for the quarters ended March 31, 2026 and 2025, 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 taxable equivalent ("TE") net interest spread was 3.47% and 3.21% for the quarters ended June 30, 2026 and 2025, respectively, and 3.44% and 3.16% for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
The Company’s tax-equivalent net interest margin, which is net interest income as a percentage of average interest-earning assets, was 4.16% and 3.91% for the quarters ended March 31, 2026 and 2025, respectively. For the same periods, the average loan yield was 6.41% and 6.43%, respectively.
Current wording
The Company’s TE net interest margin, which is net interest income as a percentage of average interest-earning assets, was 4.24% and 4.04% for the quarters ended June 30, 2026 and 2025, respectively. For the same periods, the average loan yield was 6.46% and 6.50%, respectively.
Previous wording
The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rate; (iii) net interest income; (iv) net interest spread; and (v) net interest margin. Information is based on average monthly balances during the indicated periods. Taxable equivalent yields are calculated using a marginal tax rate of 21%.
Current wording
The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rate; (iii) net interest income; (iv) net interest spread; and (v) net interest margin. Information is based on average monthly balances during the indicated periods. TE yields are calculated using a marginal tax rate of 21%.
Previous wording
Noninterest income for the first quarter of 2026 totaled $3.7 million, down $271,000, or 6.8%, from $4.0 million earned for the same period in 2025. Noninterest income decreased over the comparable period primarily due to decreases in other income (down $266,000) and gain on sale of loans (down $147,000), which were partially offset by an increase in service fees and charges (up $128,000).
Current wording
Noninterest income for the six months ended June 30, 2026 totaled $7.7 million, down $68,000, or 0.9%, from $7.7 million earned for the same period in 2025. Noninterest income decreased over the comparable periods primarily due to decreases in other income (down $216,000) and gain on sale of loans (down $32,000), which were partially offset by an increase in service fees and charges (up $190,000).
Previous wording
Noninterest expense for the first quarter of 2026 totaled $22.9 million, up $1.4 million, or 6.3%, from the first quarter of 2025. Noninterest expense increased over the comparable quarter primarily due to increases in compensation and benefits (up $1.1 million) and other expenses (up $786,000), which were partially offset by decreases in foreclosed assets (down $173,000), franchise and shares tax (down $136,000), and occupancy expense (down $132,000).
Current wording
Noninterest expense for the second quarter of 2026 totaled $24.6 million, up $2.1 million, or 9.6%, from the second quarter of 2025. Noninterest expense increased over the comparable quarter primarily due to an increase in compensation and benefits (up $1.7 million) and the absence of a reversal to the ACL on unfunded commitments ($970,000), which were partially offset by decreases in other expenses (down $445,000) and franchise and shares tax (down $143,000).
Previous wording
Income tax expense for the three months ended March 31, 2026 totaled $3.0 million, compared to $2.8 million for the three months ended March 31, 2025. Income tax expense increased over the prior comparable quarter primarily due to increased taxable earnings. The Company's effective tax rates for the first quarters of 2026 and 2025 were 20.9% and 20.5%, respectively.
Current wording
Income tax expense for the three and six months ended June 30, 2026 totaled $2.8 million and $5.8 million, respectively, compared to $2.8 million and $5.7 million for the three and six months ended June 30, 2025, respectively. The Company's effective tax rates for the second quarters of 2026 and 2025 were 19.4% and 20.0%, respectively. For the six months ended June 30, 2026 and 2025, the Company's effective tax rates were 20.1% and 20.3%, respectively.
Previous wording
Management considers the policies related to the allowance for credit losses as the most critical to the financial statement presentation. The total allowance for credit losses includes activity related to allowances calculated in accordance with Accounting Standards Codification 326, Credit Losses. The allowance for credit losses is established through a provision for credit losses charged to current earnings. The amount maintained in the allowance reflects management’s continuing evaluation of the credit losses expected to be recognized over the life of the loans in our portfolio. The allowance for credit losses on loans is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. For purposes of determining the allowance for credit losses, the loan portfolio is segregated by product types in order to recognize differing risk profiles among categories. Loans that do not share risk characteristics are evaluated on an individual basis and are not included in the collective evaluation. Management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. Adjustments to historical loss information are made to incorporate our reasonable and supportable forecast of future losses at the portfolio segment level, as well as any necessary qualitative adjustments, including, but not limited to, changes in current and expected future economic conditions, changes in industry experience and industry loan concentrations, changes in the volume and severity of nonperforming assets, changes in lending policies and personnel and changes in the competitive and regulatory environment of the banking industry. Loans that do not share similar risk characteristics are individually evaluated and are excluded from the pooled loan analysis.
Current wording
Management considers the policies related to the ACL as the most critical to the financial statement presentation. The total ACL includes activity related to allowances calculated in accordance with ASC 326, Credit Losses. The ACL is established through a provision for credit losses charged to current earnings. The amount maintained in the allowance reflects management’s continuing evaluation of the credit losses expected to be recognized over the life of the loans in our portfolio. The ACL on loans is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. For purposes of determining the ACL, the loan portfolio is segregated by product types in order to recognize differing risk profiles among categories. Loans that do not share risk characteristics are evaluated on an individual basis and are not included in the collective evaluation. Management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. Adjustments to historical loss information are made to incorporate our reasonable and supportable forecast of future losses at the portfolio segment level, as well as any necessary qualitative adjustments, including, but not limited to, changes in current and expected future economic conditions, changes in industry experience and industry loan concentrations, changes in the volume and severity of NPAs, changes in lending policies and personnel and changes in the competitive and regulatory environment of the banking industry. Loans that do not share similar risk characteristics are individually evaluated and are excluded from the pooled loan analysis.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.