Richmond Mutual Bancorporation, Inc.

Previous wording

Management’s discussion and analysis of financial condition of the Richmond Mutual Bancorporation, Inc. (the “Company”) at March 31, 2026, and the consolidated results of operations for the three month periods ended March 31, 2026, compared to the same periods in 2025, is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto appearing in Part I, Item 1, of this Form 10-Q.

Current wording

Management’s discussion and analysis of financial condition of the Richmond Mutual Bancorporation, Inc. (the “Company”) at June 30, 2026, and the consolidated results of operations for the three and six month periods ended June 30, 2026, compared to the same periods in 2025, is intended to assist in understanding the financial condition and results of operations of the Company. The information contained in this section should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto appearing in Part I, Item 1, of this Form 10-Q.

Previous wording

•our ability to adapt to rapid technological changes, including advancements in artificial intelligence, digital banking, and cybersecurity;

Current wording

•the ability to adapt to rapid technological changes, including advancements related to artificial intelligence ("AI"), the use of AI models in credit decisioning, customer service, and operations, including risks of model error, bias, regulatory scrutiny under fair lending laws, and third-party AI dependencies, digital banking platforms, and cybersecurity;

Previous wording

Further, statements about the potential effects of the Company’s proposed merger with The Farmers Bancorp, Frankfort, Indiana ("Farmers Bancorp") on the Company’s business, financial results, and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in the forward-looking statements due to factors and future developments which are uncertain, unpredictable and in many cases beyond the Company’s control, including the following:

Current wording

In addition, statements about the potential effects of the Company’s completed merger with The Farmers Bancorp, Frankfort, Indiana ("Farmers Bancorp") on the Company’s business, financial results, and condition may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in the forward-looking statements due to factors and future developments which are uncertain, unpredictable and in many cases beyond the Company’s control, including the following:

Previous wording

•the potential that anticipated cost savings, synergies, or revenue enhancements may not be realized to the extent anticipated, or at all, or may take longer to achieve;

Current wording

•the potential that anticipated cost savings, synergies, or revenue enhancements from the merger may not be realized or may take longer to achieve than expected;

Previous wording

•the ability to successfully integrate operations, systems, personnel, and technologies post-merger;

Current wording

•the ability to successfully integrate the operations, systems, personnel, and technologies of the combined company;

Previous wording

•diversion of management’s attention from ongoing operations and strategic initiatives;

Current wording

•diversion of management’s attention from ongoing operations and strategic initiatives as a result of integration activities;

Previous wording

•higher-than-expected transaction costs, integration costs, or unexpected events related to the transaction and subsequent integration;

Current wording

•higher-than expected transaction or integration costs; and

Previous wording

•other factors detailed in Richmond Mutual’s filings with the SEC.

Current wording

•other factors detailed in the Company's filings with the SEC.

Previous wording

The Company, a Maryland corporation, is a bank holding company for its wholly owned subsidiary, First Bank Richmond. Substantially all of the Company's business is conducted through First Bank Richmond. The Company is regulated by the Federal Reserve and the Indiana Department of Financial Institutions ("IDFI"). The Company's corporate office is located at 31 North 9th Street, Richmond, Indiana, and its telephone number is (765) 962-2581.

Current wording

The Company, a Maryland corporation, is a bank holding company for its wholly owned subsidiary, First Bank Midwest (formerly First Bank Richmond). Substantially all of the Company's business is conducted through First Bank Midwest. The Company is regulated by the Federal Reserve and the Indiana Department of Financial Institutions ("IDFI"). The Company's corporate office is located at 31 North 9th Street, Richmond, Indiana, and its telephone number is (765) 962-2581.

Previous wording

First Bank Richmond is an Indiana state-chartered commercial bank headquartered in Richmond, Indiana. The Bank was originally established in 1887 as an Indiana state-chartered mutual savings and loan association and in 1935 converted to a federal mutual savings and loan association, operating under the name First Federal Savings and Loan Association of Richmond. In 1993, the Bank converted to a state-chartered mutual savings bank and changed its name to First Bank Richmond, S.B. In 1998, the Bank, in connection with its non-stock mutual holding company reorganization, converted to a national bank charter operating as First Bank Richmond, National Association. In July 2007, Richmond Mutual Bancorporation-Delaware, the Bank’s then current holding company, acquired Mutual Federal Savings Bank headquartered in Sidney, Ohio. Mutual Federal Savings Bank was operated independently as a separately chartered, wholly owned subsidiary of Richmond Mutual Bancorporation-Delaware until 2016 when it was combined with the bank through an internal merger transaction that consolidated both banks into a single, more efficient commercial bank charter. In 2017, the Bank converted to an Indiana state-chartered commercial bank and changed its name to First Bank Richmond. The former Mutual Federal Savings Bank continues to operate in Ohio under the name Mutual Federal, a division of First Bank Richmond.

Current wording

First Bank Midwest is an Indiana state-chartered commercial bank headquartered in Richmond, Indiana. The Bank was originally established in 1887 as an Indiana state-chartered mutual savings and loan association and in 1935 converted to a federal mutual savings and loan association, operating under the name First Federal Savings and Loan Association of Richmond. In 1993, the Bank converted to a state-chartered mutual savings bank and changed its name to First Bank Richmond, S.B. In 1998, the Bank, in connection with its non-stock mutual holding company reorganization, converted to a national bank charter operating as First Bank Richmond, National Association. In July 2007, Richmond Mutual Bancorporation-Delaware, the Bank’s then current holding company, acquired Mutual Federal Savings Bank headquartered in Sidney, Ohio. Mutual Federal Savings Bank was operated independently as a separately chartered, wholly owned subsidiary of Richmond Mutual Bancorporation-Delaware until 2016 when it was combined with the bank through an internal merger transaction that consolidated both banks into a single, more efficient commercial bank charter. In 2017, the Bank converted to an Indiana state-chartered commercial bank and changed its name to First Bank Richmond. On July 1, 2026, the Company completed its merger with The Farmers Bancorp, Frankfort, Indiana ("Farmers Bancorp"), and The Farmers Bank merged with and into First Bank Richmond. Following completion of the merger, First Bank Richmond operates under the name First Bank Midwest.

Previous wording

First Bank Richmond provides a full range of banking services through its seven full- and one limited-service offices located in Cambridge City (1), Centerville (1), Richmond (5) and Shelbyville (1), Indiana and its six full-service offices located in Piqua (2), Sidney (2), Troy (1), and Columbus (1), Ohio. Administrative, trust and wealth management services are conducted through First Bank Richmond’s Corporate Office/Financial Center located in Richmond, Indiana. As an Indiana-chartered commercial bank, First Bank Richmond is subject to regulation by the IDFI and the Federal Deposit Insurance Corporation (“FDIC”).

Current wording

First Bank Midwest provides a full range of banking services through its branch locations in Cambridge City, Centerville, Fishers, Frankfort, Kirklin, Lebanon, Michigantown, Mulberry, Noblesville, Richmond, Rossville, Shelbyville, Sheridan, Tipton, and Westfield, Indiana, and its locations in Columbus, Sidney, Piqua, and Troy, Ohio. Additionally, the Bank operates a loan production office in Carmel, Indiana. Administrative, trust, and wealth management services are conducted through the Bank's Financial Center located in Richmond, Indiana, as well as its branch located in Frankfort, Indiana. As an Indiana-chartered commercial bank, the Bank is subject to regulation by the IDFI and the Federal Deposit Insurance Corporation (“FDIC”).

Previous wording

First Bank Richmond generates commercial, mortgage and consumer loans and leases and gathers deposits primarily within Wayne and Shelby Counties, Indiana and Shelby, Miami, and Franklin Counties, Ohio, which together comprises its primary market area. First Bank Richmond also operates a nationwide equipment leasing business, focusing on direct financing leases for equipment integral to small and mid-sized business operations, including technology, medical, manufacturing, industrial, construction, and transportation equipment. First Bank Richmond's trust and wealth management division provides fiduciary, investment management, and custodial services. Wealth management assets under management and administration totaled $249.9 million at March 31, 2026.

Current wording

The Bank generates commercial, mortgage and consumer loans and leases and gathers deposits primarily within its market areas in Indiana and Ohio, including the communities served by its branch locations. The Bank also operates a nationwide equipment leasing business, focusing on direct financing leases for equipment integral to small and mid-sized business operations, including technology, medical, manufacturing, industrial, construction, and transportation equipment. The Bank's trust and wealth management division provides fiduciary, investment management, and custodial services. Wealth management assets under management and administration totaled $268.9 million at June 30, 2026.

Previous wording

At March 31, 2026, on a consolidated basis, we had $1.5 billion in assets, $1.2 billion in loans and leases, net of allowance, $1.1 billion in deposits, and $144.9 million in stockholders’ equity. At March 31, 2026, First Bank Richmond’s total risk-based capital ratio was 14.62%, exceeding the 10.0% requirement for a well-capitalized institution. For the three months ended March 31, 2026, net income was $2.8 million, compared with net income of $2.0 million for the three months ended March 31, 2025.

Current wording

At June 30, 2026, on a consolidated basis, we had $1.6 billion in assets, $1.2 billion in loans and leases, net of allowance, $1.1 billion in deposits, and $148.3 million in stockholders’ equity. At June 30, 2026, the Bank’s total risk-based capital ratio was 14.24%, exceeding the 10.0% requirement for a well-capitalized institution. For the six months ended June 30, 2026, net income was $5.0 million, compared with net income of $4.6 million for the six months ended June 30, 2025.

Previous wording

On November 11, 2025, the Company entered into an Agreement and Plan of Merger (the “merger agreement”) with Farmers Bancorp, pursuant to which Farmers Bancorp will merge with and into the Company, with the Company as the surviving corporation (the “merger”). Immediately following the merger, The Farmers Bank will merge with and into First Bank Richmond, with First Bank Richmond as the surviving institution.

Current wording

On November 11, 2025, the Company entered into an Agreement and Plan of Merger (the “merger agreement”) with Farmers Bancorp, pursuant to which Farmers Bancorp was expected to merge with and into the Company, with the Company as the surviving corporation (the “merger”). On July 1, 2026, the Company completed its merger with Farmers Bancorp. Immediately thereafter, The Farmers Bank merged with and into First Bank Richmond, with First Bank Richmond as the surviving institution.

Previous wording

Under the terms of the merger agreement, holders of Farmers Bancorp common stock will receive 3.40 shares of Company common stock for each share of Farmers Bancorp common stock. The total value of the transaction will fluctuate based on the Company’s stock price prior to closing. Upon completion of the transaction, Farmers Bancorp shareholders are expected to own approximately 38% of the Company.

Current wording

Under the terms of the merger agreement, holders of Farmers Bancorp common stock received 3.40 shares of Company common stock for each share of Farmers Bancorp common stock. Upon completion of the merger, former Farmers

Previous wording

The combined company will continue to trade on the Nasdaq Capital Market under the ticker symbol "RMBI." The holding company will operate under the name "Richmond Mutual Bancorporation, Inc.," and the combined bank, subject to regulatory approval, will operate under the new name "First Bank Midwest". The administrative headquarters of the combined company will be located in Richmond, Indiana, and the administrative headquarters of the combined bank will be located in Frankfort, Indiana.

Current wording

The combined company continues to trade on the Nasdaq Capital Market under the ticker symbol "RMBI." The holding company continues to operate under the name "Richmond Mutual Bancorporation, Inc.," and the combined bank now operates under the name "First Bank Midwest." The administrative headquarters of the combined company remains in Richmond, Indiana, and the administrative headquarters of the combined bank is located in Frankfort, Indiana.

Previous wording

We prepare our consolidated financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). In doing so, we have to make estimates and assumptions. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the estimate was made, and changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We have reviewed our critical accounting estimates with the audit committee of our Board of Directors.

Current wording

We prepare our consolidated financial statements in accordance with generally accepted accounting principles in the United States ("GAAP"). In doing so, we are required to make estimates and assumptions. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the estimate was made, and changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We have reviewed our critical accounting estimates with the audit committee of our Board of Directors.

Previous wording

There have been no significant changes during the three months ended March 31, 2026 to the critical accounting estimates reported in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K. See "Critical Accounting Estimates" included in Part II, Item 7 of our 2025 Form 10-K for a further discussion of our Critical Accounting Estimates.

Current wording

There have been no significant changes during the six months ended June 30, 2026 to the critical accounting estimates reported in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Form 10-K. The completion of the merger with Farmers Bancorp on July 1, 2026 did not impact the critical accounting estimates used in the preparation of the Company's condensed consolidated financial statements as of and for the six months ended June 30, 2026. See "Critical Accounting Estimates" included in Part II, Item 7 of our 2025 Form 10-K for a further discussion of our Critical Accounting Estimates.

Previous wording

General. Total assets decreased $6.6 million, or 0.4%, to $1.5 billion at March 31, 2026 from December 31, 2025. The decrease was primarily the result of a $6.8 million, or 2.7%, decrease in investment securities, to $247.9 million, and a $2.7 million, or 0.2%, decrease in loans and leases, net of allowance for credit losses, to $1.2 billion, partially offset by a $1.7 million, or 5.0%, increase in cash and cash equivalents to $34.8 million.

Current wording

General. Total assets increased $26.2 million, or 1.7%, to $1.6 billion at June 30, 2026 from December 31, 2025. The increase was primarily the result of an increase in loans and leases, net of allowance for credit losses, of $31.0 million, or 2.6%, to $1.2 billion, partially offset by a $7.0 million, or 2.8%, decrease in investment securities to $247.6 million.

Previous wording

Investment Securities. Investment securities available for sale totaled $245.5 million and $251.9 million, while investment securities held to maturity totaled $2.4 million and $2.7 million at March 31, 2026 and December 31, 2025, respectively. The $6.4 million, or 2.5%, decrease in investment securities available for sale was primarily due to $4.0 million in maturities and principal repayments and a $3.1 million downward mark-to-market adjustment on the investment portfolio, partially offset by $955,000 in purchases of securities. The $395,000 decrease in investment securities held to maturity was the result of scheduled principal repayments and maturities. The proceeds received from the maturities and repayments of investment securities were primarily used to fund loan growth consistent with the Company's strategy to prioritize higher-yielding assets in a moderating interest rate environment.

Current wording

Investment Securities. Investment securities available for sale totaled $245.3 million and $251.9 million, while investment securities held to maturity totaled $2.4 million and $2.7 million at June 30, 2026 and December 31, 2025, respectively. The $6.6 million, or 2.6%, decrease in investment securities available for sale was primarily due to $7.0 million in maturities and principal repayments, partially offset by $955,000 in purchases of securities. The $394,000 decrease in investment securities held to maturity was the result of scheduled principal repayments and maturities. The proceeds received from the maturities and repayments of investment securities were primarily used to fund loan growth consistent with the Company's strategy to prioritize loan growth and deploy liquidity into higher-yielding assets in a moderating interest rate environment.

Previous wording

Loans and Leases. Loans and leases, net of allowance for credit losses on loans and leases, decreased $2.7 million, or 0.2%, to $1.2 billion at March 31, 2026 from December 31, 2025, resulting from decreases in residential mortgage, direct financing leases, and consumer loans of $4.8 million, $2.8 million, and $1.1 million, respectively. These decreases were partially offset by a $2.7 million increase in commercial and industrial loans, and a $2.6 million increase in construction and development loans. At March 31, 2026, loans held for sale totaled $835,000, compared to $828,000 at December 31, 2025.

Current wording

Loans and Leases. Loans and leases, net of allowance for credit losses on loans and leases, increased $31.0 million, or 2.6% from December 31, 2025, to $1.2 billion at June 30, 2026. The increase in loans and leases was attributable to increases in commercial and industrial loans, construction and development loans, commercial mortgage loans, and home equity lines of credit of $15.6 million, $14.5 million, $4.8 million, and $2.3 million, respectively. These increases were partially offset by a $2.2 million decrease in direct financing leases, a $1.3 million decrease in consumer loans, a $1.1 million decrease in multi-family loans, and a $1.0 million decrease in residential mortgage loans. At June 30, 2026, there were no loans held for sale, compared to $828,000 at December 31, 2025.

Previous wording

Nonaccrual loans and leases totaled $15.9 million at March 31, 2026, compared to $13.2 million at December 31, 2025. The increase was primarily due to one multi-family loan of $2.4 million, which was past due 90 days or more and accruing at December 31, 2025. Accruing loans and leases past due 90 days or more totaled $1.7 million and $4.2 million at March 31, 2026 and December 31, 2025, respectively. The decrease in accruing loans past due 90 days or more was primarily due to the transfer of the previously mentioned multi-family loan to nonaccrual. Nonperforming loans and leases, consisting of nonaccrual loans and leases and accruing loans and leases 90 days or more past due, totaled $17.6 million, or 1.48% of total loans and leases, at March 31, 2026, compared to $17.4 million, or 1.46% of total loans and leases, at December 31, 2025.

Current wording

Nonaccrual loans and leases totaled $20.0 million at June 30, 2026, compared to $13.2 million at December 31, 2025. The increase was primarily due to the transfer of a $2.4 million multi-family loan from past due 90 days or more and accruing status as of December 31, 2025 to nonaccrual status, and the addition of a $3.5 million multi-family loan that was placed on nonaccrual status during the second quarter of 2026 due to a troubled loan modification. Accruing loans and leases past due 90 days or more totaled $1.8 million and $4.2 million at June 30, 2026 and December 31, 2025, respectively, with the decrease primarily due to the transfer of the aforementioned multi-family loan to nonaccrual status.

Previous wording

Allowance for Credit Losses. The allowance for credit losses on loans and leases increased $274,000, or 1.7%, to $16.7 million at March 31, 2026 from December 31, 2025. At March 31, 2026, the allowance for credit losses on loans and leases totaled 1.41% of total loans and leases outstanding. At December 31, 2025, the allowance for credit losses on loans and leases totaled $16.5 million, or 1.38% of total loans and leases outstanding. Net charge-offs during the first three months of 2026 totaled $347,000, and were primarily attributable to direct financing leases, compared to net charge-offs of $395,000 during the first three months of 2025.

Current wording

Allowance for Credit Losses. The allowance for credit losses on loans and leases increased $508,000, or 3.1%, to $17.0 million at June 30, 2026 from December 31, 2025. At June 30, 2026, the allowance for credit losses on loans and leases totaled 1.39% of total loans and leases outstanding. At December 31, 2025, the allowance for credit losses on loans and leases totaled $16.5 million, or 1.38% of total loans and leases outstanding. Net charge-offs during the first half of 2026 totaled $904,000 and were primarily attributable to direct financing leases, compared to net charge-offs of $1.0 million during the first half of 2025.

Previous wording

Other Assets. Other assets increased $489,000, or 2.6%, to $19.3 million at March 31, 2026 from $18.8 million at December 31, 2025. The increase was primarily caused by an increase in the Company's deferred tax asset, reflecting higher unrealized losses in the available for sale investment portfolio.

Current wording

Other Assets. Other assets increased $533,000, or 2.8%, to $19.4 million at June 30, 2026 from $18.8 million at December 31, 2025. The increase was primarily caused by an increase in the Company's prepaid assets, resulting from new software and service implementations.

Previous wording

Deposits. Total deposits decreased $8.5 million, or 0.8%, to $1.1 billion at March 31, 2026 from December 31, 2025. The decrease in deposits primarily was due to decreases in retail (non-brokered) time deposits of $13.9 million, and savings and money market accounts of $3.1 million. These decreases were partially offset by an increase in interest-bearing demand deposits of $8.6 million. Brokered deposits totaled $236.5 million, or 21.4% of total deposits, at March 31, 2026, compared to $235.9 million, or 21.2% of total deposits, at December 31, 2025. At March 31, 2026, noninterest-bearing deposits totaled $99.4 million, or 9.0% of total deposits, compared to $100.1 million, or 9.0% of total deposits, at December 31, 2025.

Current wording

Deposits. Total deposits increased $31.8 million, or 2.8%, to $1.1 billion at June 30, 2026 from December 31, 2025. The increase in deposits primarily was due to increases in brokered time deposits of $28.3 million and savings and money market accounts of $11.0 million. These increases were partially offset by a decrease in retail (non-brokered) time deposits of $17.8 million. Brokered deposits totaled $264.3 million, or 23.0% of total deposits, at June 30, 2026, compared to $235.9 million, or 21.2% of total deposits, at December 31, 2025. At June 30, 2026, noninterest-bearing deposits totaled $100.1 million, or 8.7% of total deposits, compared to $100.1 million, or 9.0% of total deposits, at December 31, 2025.

Previous wording

As of March 31, 2026, approximately $247.9 million of our deposit portfolio, or 22.4% of total deposits, excluding collateralized public deposits, was uninsured. The uninsured amounts are estimated based on the methodologies and assumptions used for First Bank Richmond's regulatory reporting requirements.

Current wording

As of June 30, 2026, approximately $271.6 million of our deposit portfolio, or 23.7% of total deposits, was uninsured, excluding collateralized public deposits. The uninsured amounts are estimated based on the methodologies and assumptions used for First Bank Richmond's regulatory reporting requirements.

Previous wording

The available-for-sale portfolio had a net unrealized loss of $46.9 million at March 31, 2026, compared to $43.7 million at December 31, 2025. The after-tax impact of the AOCL on equity was $37.0 million at March 31, 2026, compared to $34.6 million at December 31, 2025.

Current wording

The available-for-sale portfolio had a net unrealized loss of $44.0 million at June 30, 2026, compared to $43.7 million at December 31, 2025. The after-tax impact of the AOCL on equity was $34.7 million at June 30, 2026, compared to $34.6 million at December 31, 2025.

Previous wording

The Company's equity to asset ratio was 9.54% at March 31, 2026. At March 31, 2026, First Bank Richmond's Tier 1 capital to total assets ratio was 11.10% and its capital was well in excess of all regulatory requirements.

Current wording

The Company's equity to asset ratio was 9.55% at June 30, 2026. At June 30, 2026, the Bank's Tier 1 capital to total assets ratio was 10.90% and its capital was well in excess of all regulatory requirements.

Previous wording

General. Net income for the three months ended March 31, 2026 was $2.8 million, an $817,000 or 41.5% increase from net income of $2.0 million for the three months ended March 31, 2025. Diluted earnings per share were $0.28 for the first quarter of 2026, compared to $0.20 diluted earnings per share for the first quarter of 2025. The increase in net income primarily was the result of an increase in net interest income of $1.2 million and an increase in noninterest income of $136,000, partially offset by an increase in noninterest expense of $331,000 and income tax expense of $214,000.

Current wording

General. Net income for the three months ended June 30, 2026 was $2.2 million, a $375,000 or 14.4% decrease from net income of $2.6 million for the three months ended June 30, 2025. Diluted earnings per share were $0.22 for the second quarter of 2026, compared to $0.26 diluted earnings per share for the second quarter of 2025. The decrease in net income primarily was the result of an increase in noninterest expense of $2.1 million, primarily due to merger-related expenses, partially offset by an increase in net interest income of $1.3 million and an increase in noninterest income of $500,000.

Previous wording

Interest Income. Interest income increased $294,000, or 1.4%, to $21.2 million during the quarter ended March 31, 2026, compared to $20.9 million during the quarter ended March 31, 2025. The increase was primarily driven by growth in interest income on loans and leases, partially offset by a decrease in interest income from other earning assets.

Current wording

Interest Income. Interest income increased $552,000, or 2.6%, to $21.9 million during the quarter ended June 30, 2026, compared to $21.3 million during the quarter ended June 30, 2025. The increase was primarily driven by higher interest income on loans and leases resulting from loan growth and higher yields.

Previous wording

Interest income on loans and leases increased $337,000, or 1.8%, to $19.1 million for the quarter ended March 31, 2026, from $18.8 million for the comparable quarter in 2025. The increase was primarily driven by a 10 basis point improvement in the average yield, which rose to 6.46% from 6.36%, as new loans and leases were originated at higher rates than the average yield in the existing loan and lease portfolio and existing variable rate loans adjusted upward during the period due to the overall higher interest rate environment. The average outstanding loan and lease balance was relatively stable at approximately $1.2 billion for both periods.

Current wording

Interest income on loans and leases increased $607,000, or 3.2%, to $19.8 million for the quarter ended June 30, 2026, from $19.2 million for the comparable quarter in 2025. The increase was primarily driven by an increase of $29.8 million in the average balance of loans and leases, and a four basis point improvement in the average yield. The average yield on loans and leases rose to 6.55% from 6.51%, as new loans and leases were originated at higher rates than the average yield in the existing loan and lease portfolio and some variable rate loans repriced to higher rates during the period as a result of an increase in market interest rates.

Previous wording

Interest income on investment securities, excluding FHLB stock, decreased $70,000, or 4.2%, to $1.6 million for the first quarter of 2026 from the comparable quarter in 2025. The decrease was due to a $5.3 million decrease in the average balance, primarily as a result of maturities and paydowns on securities, and a six basis point decrease in the average yield earned on investment securities. The average yield on investment securities, excluding FHLB stock, decreased to 2.46% for the first quarter of 2026, compared to 2.52% for the first quarter of 2025. The average balance of investment securities, excluding FHLB stock, decreased to $256.8 million for the quarter ended March 31, 2026, compared to $262.1 million for the quarter ended March 31, 2025.

Current wording

Interest income on investment securities, excluding FHLB stock, decreased $31,000, or 1.9%, to $1.6 million for the second quarter of 2026 from the comparable quarter in 2025. The decrease was due to a $1.1 million decrease in the average balance, primarily as a result of maturities and paydowns on securities, and a four basis point decrease in the average yield earned on investment securities. The average yield on investment securities, excluding FHLB stock, decreased to 2.52% for the second quarter of 2026, compared to 2.56% for the second quarter of 2025. The average balance of investment securities, excluding FHLB stock, decreased to $250.6 million for the quarter ended June 30, 2026, compared to $251.7 million for the quarter ended June 30, 2025.

Previous wording

Dividends on FHLB stock decreased $20,000, or 6.4%, during the quarter ended March 31, 2026, from the comparable quarter in 2025, resulting in an average yield on FHLB stock of 8.37% for the three months ended March 31, 2026, compared to 8.95% for the three months ended March 31, 2025. Interest income on cash and cash equivalents increased $47,000, or 35.9%, to $178,000 during the quarter ended March 31, 2026 from the comparable quarter in 2025, due to a $6.7 million increase in the average balance of cash and cash equivalents, partially offset by a 29 basis point decrease in the average yield.

Current wording

Dividends on FHLB stock decreased $8,000, or 2.6%, during the quarter ended June 30, 2026, from the comparable quarter in 2025, resulting in an average yield on FHLB stock of 8.66% for the three months ended June 30, 2026, compared to 8.89% for the three months ended June 30, 2025. Interest income on cash and cash equivalents decreased $15,000, or 6.3%, to $228,000 during the quarter ended June 30, 2026 from the comparable quarter in 2025, due to a 40 basis point decrease in the average yield.

Previous wording

Interest Expense. Interest expense decreased $894,000, or 8.4%, to $9.7 million for the quarter ended March 31, 2026, compared to $10.6 million for the quarter ended March 31, 2025. The decrease reflected lower funding costs across both deposit and borrowing categories.

Current wording

Interest Expense. Interest expense decreased $762,000, or 7.2%, to $9.8 million for the quarter ended June 30, 2026, compared to $10.6 million for the quarter ended June 30, 2025. The decrease reflected lower funding costs across both deposit and borrowing categories.

Previous wording

Interest expense on deposits decreased $546,000, or 7.0%, to $7.3 million for the quarter ended March 31, 2026, from $7.8 million for the comparable quarter in 2025. The decrease primarily was attributable to a 28 basis point decrease in the average rate paid on interest-bearing deposits, which fell to 2.89% from 3.17%. The average balance of interest-bearing deposits increased to $1.0 billion from $989.4 million, partially offsetting the rate-driven reduction in expense.

Current wording

Interest expense on deposits decreased $599,000, or 7.7%, to $7.2 million for the quarter ended June 30, 2026, from $7.8 million for the comparable quarter in 2025. The decrease primarily was attributable to a 32 basis point decrease in the average rate paid on interest-bearing deposits, which fell to 2.82% from 3.14%. The average balance of interest-bearing deposits increased to $1.0 billion from $995.4 million, partially offsetting the rate-driven reduction in expense.

Previous wording

Interest expense on FHLB borrowings decreased $348,000, or 12.6%, to $2.4 million in the first quarter of 2026 compared to $2.8 million for the same quarter in 2025. The decrease was primarily attributable to a $33.6 million reduction in the average balance of borrowings, which declined to $241.1 million from $274.7 million, reflecting reduced reliance on wholesale funding. The average rate paid on FHLB borrowings was relatively unchanged at 4.01%, compared to 4.03% for the comparable quarter of 2025.

Current wording

Interest expense on FHLB borrowings decreased $163,000, or 5.9%, to $2.6 million in the second quarter of 2026 compared to $2.8 million for the same quarter in 2025. The decrease was primarily attributable to an $8.5 million reduction in the average balance of FHLB borrowings, which declined to $253.6 million from $262.1 million, and a decrease in the average rate paid on FHLB borrowings of 12 basis points to 4.12%, compared to 4.24% in the second quarter of 2025.

Previous wording

Net Interest Income. Net interest income before the provision for credit losses increased $1.2 million, or 11.6%, to $11.4 million for the first quarter of 2026, compared to $10.3 million for the first quarter of 2025. This increase was due to a 32 basis point increase in the average interest rate spread and a $16.0 million increase in average net earning assets. The improved spread reflects a favorable shift in asset yields as loans and investment securities repriced to or were originated at higher market rates, paired with a decrease in funding costs.

Current wording

Net Interest Income. Net interest income before the provision for credit losses increased $1.3 million, or 12.2%, to $12.1 million for the second quarter of 2026, compared to $10.8 million for the second quarter of 2025. This increase was due to a 32 basis point increase in the average interest rate spread and a $9.4 million increase in average net earning assets. The improved spread reflects a favorable shift in asset yields as loans and investment securities repriced to or were originated at higher market rates, paired with a decrease in funding costs.

Previous wording

Net interest margin (annualized) was 3.10% for the three months ended March 31, 2026, compared to 2.79% for the three months ended March 31, 2025. The increase in net interest margin was attributable to improved asset yields, particularly on loans and leases, paired with a decrease in funding costs. The Federal Open Market Committee maintained the target range at 3.50% to 3.75% through the first quarter of 2026 following rate reductions implemented in late 2025.

Current wording

Net interest margin (annualized) was 3.22% for the three months ended June 30, 2026, compared to 2.93% for the three months ended June 30, 2025. The increase in net interest margin was attributable to improved asset yields, particularly on loans and leases, paired with a decrease in funding costs.

Previous wording

Provision for Credit Losses. A provision for credit losses of $693,000 was recorded during the three months ended March 31, 2026, compared to $731,000 for the three months ended March 31, 2025. Net charge-offs during the first quarter of 2026 were $347,000 compared to $395,000 in the first quarter of 2025. The decreased provision for credit losses during the quarter was primarily due to reduced charge-offs as compared to the prior year.

Current wording

Provision for Credit Losses. A provision for credit losses of $823,000 was recorded during the three months ended June 30, 2026, compared to $745,000 for the three months ended June 30, 2025. Net charge-offs during the second quarter of 2026 were $557,000 compared to $626,000 in the second quarter of 2025. The increased provision for credit losses during the quarter was primarily due to increases in loan and lease balances and changes in portfolio composition and credit risk factors.

Previous wording

Noninterest Income. Noninterest income increased $136,000, or 11.7%, to $1.3 million for the quarter ended March 31, 2026, compared to the same quarter in 2025. The increase resulted primarily from an increase in net gains on loan and lease sales and other income.

Current wording

Noninterest Income. Noninterest income increased $500,000, or 46.3%, to $1.6 million for the quarter ended June 30, 2026, compared to the same quarter in 2025. The increase was primarily attributable to the absence of a $157,000 net loss on sales of securities recognized during the second quarter of 2025 and an increase in other income.