First Western Financial Inc

Previous wording

The following discussion and analysis is intended to assist readers in understanding our financial condition and results of operations for the three and six months ended June 30, 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."

Current wording

The following discussion and analysis is intended to assist readers in understanding our financial condition and results of operations for the three and nine months ended September 30, 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

From 2004, when we opened our first profit center, until June 30, 2026, we have expanded our footprint into fourteen full service profit centers, two loan production offices, and one trust office located across five states. As of and for the six months ended June 30, 2026, we had $3.24 billion in total assets, $56.9 million in Total income before non-interest expense, and provided fiduciary and advisory services on $7.28 billion of AUM.

Current wording

From 2004, when we opened our first profit center, until September 30, 2026, we have expanded our footprint into fourteen full service profit centers, two loan production offices, and one trust office located across five states. As of and for the nine months ended September 30, 2026, we had $3.42 billion in total assets, $85.0 million in Total income before non-interest expense, and provided fiduciary and advisory services on $7.21 billion of AUM.

Previous wording

The three months ended June 30, 2026 compared with the three months ended June 30, 2025. We reported Net income available to common shareholders of $5.7 million for the three months ended June 30, 2026, compared to $2.5 million of Net income available to common shareholders for the three months ended June 30, 2025, a $3.2 million, or 128.0% increase. For the three months ended June 30, 2026, our Income before income tax was $7.4 million, a $4.1 million, or 124.2% increase from the three months ended June 30, 2025. The increase was primarily driven by a $3.9 million increase in Net interest income and a $2.2 million decrease in Provision for credit losses, partially offset by a $2.1 million increase in Non-interest expense.

Current wording

The three months ended September 30, 2026 compared with the three months ended September 30, 2025. We reported Net income available to common shareholders of $6.0 million for the three months ended September 30, 2026, compared to $3.2 million of Net income available to common shareholders for the three months ended September 30, 2025, a $2.8 million, or 87.5% increase. For the three months ended September 30, 2026, our Income before income tax was $7.3 million, a $3.3 million, or 82.5% increase from the three months ended September 30, 2025. The increase was primarily driven by a $3.5 million increase in Net interest income and a $1.6 million decrease in Provision for credit losses, partially offset by a $1.0 million decrease in Non-interest income and a $0.8 million increase in Non-interest expense.

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-earning assets. The increase in net interest margin was primarily due to a 25 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.

Current wording

•The increase in Net interest income was driven by a 41 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 35 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 and Technology and information systems, partially offset by a decrease in Professional services. The increase in Salaries and employee benefits was primarily due to an increase in average headcount and an increase in bonus accruals a result of balance sheet growth and improved earnings. The increase in Technology and information systems was primarily attributable to a $0.4 million nonrecurring charge related to the write-off of certain previously capitalized technology assets. The decrease in Professional services was primarily driven by decreases in legal expenses, recruiting expenses, and FDIC insurance fees.

Current wording

•The increase in Non-interest expense was primarily driven by increases in Salaries and employee benefits, partially offset by a decrease in Professional services. The increase in Salaries and employee benefits was primarily due to an increase in average headcount. The decrease in Professional services was primarily driven by decreases in legal expenses, recruiting expenses, and FDIC insurance fees.

Previous wording

The six months ended June 30, 2026 compared with the six months ended June 30, 2025. We reported Net income available to common shareholders of $11.9 million for the six months ended June 30, 2026, compared to $6.7 million of Net income available to common shareholders for the six months ended June 30, 2025, a $5.2 million, or 77.6% increase. For the six months ended June 30, 2026, our Income before income tax was $15.5 million, a $6.8 million, or 78.2% increase from the six months ended June 30, 2025. The increase was primarily driven by a $7.3 million increase in Net interest income and a $3.1 million decrease in Provision for credit losses, partially offset by a $2.9 million increase in Non-interest expense and a $0.6 million decrease in Non-interest income.

Current wording

The nine months ended September 30, 2026 compared with the nine months ended September 30, 2025. We reported Net income available to common shareholders of $17.9 million for the nine months ended September 30, 2026, compared to $9.9 million of Net income available to common shareholders for the nine months ended September 30, 2025, a $8.0 million, or 80.8% increase. For the nine months ended September 30, 2026, our Income before income tax was $22.8 million, a $10.1 million, or 81.0% increase from the nine months ended September 30, 2025. The increase was primarily driven by a $10.8 million increase in Net interest income and a $4.7 million decrease in Provision for credit losses, partially offset by a $3.7 million increase in Non-interest expense and a $1.6 million decrease in Non-interest income.

Previous wording

•The increase in Net interest income was driven by a 23 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 26 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.

Current wording

•The increase in Net interest income was driven by a 28 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 28 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 decrease in Provision for credit losses was primarily driven by a release of provision for credit losses in the six months ended June 30, 2026 versus a provision for credit losses in the six months ended June 30, 2025. The release of provision for credit losses in the six months ended June 30, 2026 was primarily driven by reductions in specific reserves due to a credit event resolution of an individually analyzed loan and pay downs, partially offset by loan growth.

Current wording

•The decrease in Provision for credit losses was primarily due to reductions in specific reserves due to credit resolution of an individually analyzed loan and pay downs, partially offset by loan growth for the nine months ended September 30, 2026. Activity during the nine months ended September 30, 2025 included a specific reserve.

Previous wording

•The increase in Non-interest expense was primarily driven by increases in Salaries and employee benefits and Technology and information systems, partially offset by decreases in Occupancy and equipment and Professional services. The increase in Salaries and employee benefits was primarily due to an increase in average headcount and an increase in bonus accruals as a result of balance sheet growth and improved earnings. The increase in Technology and information systems was primarily attributable to a $0.4 million nonrecurring charge related to the write-off of certain previously capitalized technology assets. The decrease in Occupancy and equipment was driven by a decrease in variable lease expenses. The decrease in Professional services was primarily driven by decreases in legal expenses, recruiting expenses, and FDIC insurance fees.

Current wording

•The increase in Non-interest expense was primarily driven by increases in Salaries and employee benefits and Technology and information systems, partially offset by decreases in Professional services and Occupancy and equipment. The increase in Technology and information systems was primarily attributable to a $0.4 million nonrecurring charge related to the write-off of certain previously capitalized technology assets. The increase in Salaries and employee benefits was primarily due to an increase in average headcount. The decrease in Professional services was primarily driven by decreases in legal expenses, recruiting expenses, and FDIC insurance fees. The decrease in Occupancy and equipment was driven by a decrease in variable lease expenses.

Previous wording

•The decrease in Non-interest income was primarily driven by decreases in Net gain on other real estate owned due to the sale of two OREO properties in the first quarter of 2025 at a net gain, Other primarily due to changes in interest rate swap fair values, and Net gain on loans held for sale, partially offset by an increase in Trust and investment management fees primarily driven by increases in fee income from Investment Agency and Managed Trust accounts.

Current wording

•The decrease in Non-interest income was primarily driven by decreases in Net gain on mortgage loans due to reduced margins, Net gain on other real estate owned due to the sale of two OREO properties in the first quarter of 2025 at a net gain, Other primarily due to changes in interest rate swap fair values, and Net gain on loans held for sale, partially offset by an increase in Trust and investment management fees.

Previous wording

The three months ended June 30, 2026 compared with the three months ended June 30, 2025. For the three months ended June 30, 2026, Net interest income, before the Provision for credit losses, was $21.8 million, an increase of $3.9 million, or 21.8%, compared to the three months ended June 30, 2025. The increase was primarily driven by a 23 basis point increase in net interest margin and a $322 million increase in average interest-earning assets. The increase in net interest margin was primarily driven by a 26 basis point decrease in total cost of funds.

Current wording

The three months ended September 30, 2026 compared with the three months ended September 30, 2025. For the three months ended September 30, 2026, Net interest income, before the Provision for credit losses, was $23.0 million, an increase of $3.5 million, or 17.9%, compared to the three months ended September 30, 2025. The increase was primarily driven by a 41 basis point increase in net interest margin and a $51.9 million increase in average interest-earning assets. The increase in net interest margin was primarily driven by a 35 basis point decrease in total cost of funds.

Previous wording

Total interest and dividend income increased $4.4 million, or 11.6%, during the three months ended June 30, 2026 compared to the same period in 2025, primarily due to a $322 million increase in average interest-earning assets, partially offset by a 2 basis point decrease in the average interest-earning assets yield. The increase in average interest-earning assets was primarily driven by increases in average loans of $268.6 million and debt securities of $82.3 million, partially offset by a decrease in average interest-bearings deposits in other financial institutions of $29.3 million. The decrease in the average interest-earning assets yield was primarily driven by a 74 basis point decrease in yield from interest-bearing deposits in other financial institutions due to the lower interest rate environment, partially offset by increases in average debt security and loan yields of 58 basis points and 2 basis points, respectively.

Current wording

Total interest and dividend income increased $1.2 million, or 2.8%, during the three months ended September 30, 2026 compared to the same period in 2025, primarily due to a $51.9 million increase in average interest-earning assets, and a 6 basis point increase in the average interest-earning assets yield. The increase in average interest-earning assets was primarily driven by increases in average loans of $172.3 million and average debt securities of $113.7 million, partially offset by a decrease in average interest-bearings deposits in other financial institutions of $219.8 million. The increase in the average interest-earning assets yield was primarily driven by an increase in average debt security yields of 31 basis points and improved average interest earning asset mix, offset partially by lower interest-bearing deposit yields.

Previous wording

Interest expense on Interest-bearing deposits increased $0.8 million, or 4.2%, during the three months ended June 30, 2026 compared to the same period in 2025, primarily due to a $320 million increase in average interest-bearing deposits, partially offset by lower deposit rates. The increase in average interest-bearing deposits was driven by increases in money market deposit accounts and time deposit accounts. Average interest-bearing deposit rates were 3.22% for the three months ended June 30, 2026, compared to 3.57% for the three months ended June 30, 2025. The decrease in average interest-bearing deposit rates was primarily attributable to reducing deposit rates commensurate with the short-term rate decreases in 2025 and runoff of higher cost deposit accounts.

Current wording

Interest expense on Interest-bearing deposits decreased $2.0 million, or 9.2%, during the three months ended September 30, 2026 compared to the same period in 2025, primarily due to lower deposit rates, offset partially by a $34.0 million increase in average interest-bearing deposits. The increase in average interest-bearing deposits was driven by increases in money market deposit accounts, partially offset by decreases in time deposit accounts. Average interest-bearing deposit rates were 3.25% for the three months ended September 30, 2026, compared to 3.63% for the three months ended September 30, 2025. The decrease in average interest-bearing deposit rates 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

The six months ended June 30, 2026 compared with the six months ended June 30, 2025. For the six months ended June 30, 2026, Net interest income, before Provision for credit losses, was $42.6 million, an increase of $7.3 million, or 20.7%, compared to the six months ended June 30, 2025. The increase was primarily driven by a 22 basis point increase in net interest margin and a $310.9 million increase in average interest-earning assets. The increase in net interest margin was primarily driven by a 25 basis point decrease in total cost of funds.

Current wording

The nine months ended September 30, 2026 compared with the nine months ended September 30, 2025. For the nine months ended September 30, 2026, Net interest income, before Provision for credit losses, was $65.6 million, an increase of $10.8 million, or 19.7%, compared to the nine months ended September 30, 2025. The increase was primarily driven by a 28 basis point increase in net interest margin and a $223.5 million increase in average interest-earning assets. The increase in net interest margin was primarily driven by a 28 basis point decrease in total cost of funds.

Previous wording

Total interest and dividend income increased $8.2 million, or 11.0%, during the six months ended June 30, 2026 compared to the same period in 2025, primarily due to a $311 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 $273 million and debt securities of $72.6 million, partially offset by a decrease in average interest-bearing deposits in other financial institutions of $41.8 million. The decrease in the average interest-earning assets yield was primarily driven by a 78 basis point decrease in interest-bearing deposits in other financial institutions due to the lower interest rate environment, partially offset by increases in average debt security and loan yields of 60 basis points and 1 basis point, respectively.

Current wording

Total interest and dividend income increased $9.4 million, or 8.0%, during the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to a $223.5 million increase in average interest-earning assets. The increase in average interest-earning assets was driven by increases in average loans of $239.0 million and debt securities of $86.3 million, partially offset by a decrease in average interest-bearing deposits in other financial institutions of $101.8 million.

Previous wording

Interest expense on Interest-bearing deposits increased $1.3 million, or 3.5%, during the six months ended June 30, 2026 compared to the same period in 2025, primarily due to a $308 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 3.22% for the six months ended June 30, 2026, compared to 3.58% for the six months ended June 30, 2025. The decrease in the average Interest-bearing deposits rate was primarily attributable to reducing deposit rates commensurate with short-term rate decreases in 2025 and runoff of higher cost deposit accounts.

Current wording

Interest expense on Interest-bearing deposits decreased $0.8 million, or 1.3%, during the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to lower deposit rates, offset partially by a $215.9 million increase in average interest-bearing deposits. 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 nine months ended September 30, 2026, compared to 3.60% for the nine months ended September 30, 2025. The decrease in the average Interest-bearing deposits rate was primarily attributable to reducing deposit rates commensurate with short-term rate decreases in 2025 and runoff of higher cost deposit accounts.

Previous wording

We have a dedicated problem loan resolution team comprised of associates from our credit, senior leadership, risk, and accounting teams that meets frequently to ensure that watch list and problem credits are identified early and actively managed. We work to identify potential losses in a timely manner and proactively manage the problem credits to minimize losses. For the three and six months ended June 30, 2026, we recorded a $0.5 million and $1.2 million Release of provision for credit losses, respectively, compared to a $1.8 million and $1.9 million Provision for credit losses for the three and six months ended June 30, 2025, respectively. The release of provision recorded for the six months ended June 30, 2026 was primarily driven by reductions in specific reserves due to a credit resolution of an individually analyzed loan and pay downs, partially offset by loan growth.

Current wording

We have a dedicated problem loan resolution team comprised of associates from our credit, senior leadership, risk, and accounting teams that meets frequently to ensure that watch list and problem credits are identified early and actively managed. We work to identify potential losses in a timely manner and proactively manage the problem credits to minimize losses. For the three and nine months ended September 30, 2026, we recorded a $0.6 million Provision for credit losses and a $0.6 million Release of provision for credit losses, respectively, compared to a $2.3 million and $4.1 million Provision for credit losses for the three and nine months ended September 30, 2025, respectively. The release of provision recorded for the nine months ended September 30, 2026 was primarily driven by reductions in specific reserves due to a credit resolution of an individually analyzed loan and pay downs, partially offset by loan growth.

Previous wording

The three months ended June 30, 2026 compared with the three months ended June 30, 2025. For the three months ended June 30, 2026 compared with the three months ended June 30, 2025, Non-interest income increased $0.1 million, or 1.3%, to $6.4 million. The increase in Non-interest income during the three months ended June 30, 2026 wasprimarily drivenby increases in Trust and investment management fees and Bank fees, partially offset by a decrease in Net gain on mortgage loans.

Current wording

The three months ended September 30, 2026 compared with the three months ended September 30, 2025. For the three months ended September 30, 2026 compared with the three months ended September 30, 2025, Non-interest income decreased $1.0 million, or 15.1%, to $5.8 million. The decrease in Non-interest income during the three months ended September 30, 2026 wasprimarily drivenby decreases in Net gain on mortgage loans and Risk management and insurance fees, partially offsetby increases in Trust and investment management fees.

Previous wording

Thesix months ended June 30, 2026 compared with thesix months ended June 30, 2025. For the six months ended June 30, 2026 compared with thesix months ended June 30, 2025, Non-interest income decreased $0.6 million, or 4.5%, to $13.0 million. The decrease in Non-interest income during the six months ended June 30, 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 Trust and investment management fees.

Current wording

Thenine months ended September 30, 2026 compared with thenine months ended September 30, 2025. For the nine months ended September 30, 2026 compared with thenine months ended September 30, 2025, Non-interest income decreased $1.6 million, or 8.0%, to $18.8 million. The decrease in Non-interest income during the nine months ended September 30, 2026 was primarily driven by decreases in Net gain on mortgage loans, Net gain on other real estate owned, Other, and Net gain on loans held for sale, partially offset by an increase in Trust and investment management fees.

Previous wording

Trust and investment management fees—The increase in Trust and investment management fees of $0.2 million, or 5.1%, and $0.3 million, or 3.3%, for the three and six months ended June 30, 2026, respectively, was primarily driven by increases in fee income from Investment Agency and Managed Trust accounts.

Current wording

Trust and investment management fees—The increase in Trust and investment management fees of $0.2 million, or 5.1%, and $0.5 million, or 3.9%, for the three and nine months ended September 30, 2026, respectively, was primarily driven by increases in fee income from Investment Agency and Managed Trust accounts.

Previous wording

Net gain on mortgage loans—The decrease in Net gain on mortgage loans of $0.3 million, or 23.7%, for the three months ended June 30, 2026 was primarily attributable to lower margins. The increase in Net gain on mortgage loans of $0.1 million, or 4.9%, for the six months ended June 30, 2026 was primarily attributable to higher origination volume, partially offset by lower margins.

Current wording

Net gain on mortgage loans—The decrease in Net gain on mortgage loans of $0.9 million, or 65.4%, and $0.8 million, or 22.0%, for the three and nine months ended September 30, 2026, respectively. For the three months ended September 30, 2026 compared to 2025, the decrease was primarily attributable to lower volume. For the nine months ended September 30, 2026 the decrease was driven by lower margins.

Previous wording

Net gain on loans held for sale—The decrease in Net gain on loans held for sale for the six months ended June 30, 2026 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.

Current wording

Net gain on loans held for sale—The decrease in Net gain on loans held for sale for the nine months ended September 30, 2026 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

Other—The decrease in Other of $0.3 million, or 143.9%, for the six months ended June 30, 2026 was primarily attributable to changes in interest rate swap fair values.

Current wording

Other—The decrease in Other of $0.4 million, or 105.4%, for the nine months ended September 30, 2026 was primarily attributable to changes in interest rate swap fair values.

Previous wording

The three months ended June 30, 2026 compared with the three months ended June 30, 2025. For the three months ended June 30, 2026 compared with the three months ended June 30, 2025, Non-interest expense increased $2.1 million, or 11.1%, to $21.2 million. The increase in Non-interest expense during the three months ended June 30, 2026 was driven primarily by increases in Salaries and employee benefits and Technology and information systems, partially offset by a decrease in Professional services.

Current wording

The three months ended September 30, 2026 compared with the three months ended September 30, 2025. For the three months ended September 30, 2026 compared with the three months ended September 30, 2025, Non-interest expense increased $0.8 million, or 3.8%, to $20.8 million. The increase in Non-interest expense during the three months ended September 30, 2026 was driven primarily by increases in Salaries and employee benefits and Technology and information systems, partially offset by a decrease in Professional services.

Previous wording

The six months ended June 30, 2026 compared with the six months ended June 30, 2025. For the six months ended June 30, 2026 compared with the six months ended June 30, 2025, Non-interest expense increased $2.9 million, or 7.6%, to $41.4 million. The increase in Non-interest expense during the six months ended June 30, 2026 was driven primarily by increase in Salaries and employee benefits and Technology and information systems, partially offset by decreases in Occupancy and equipment and Professional services.

Current wording

The nine months ended September 30, 2026 compared with the nine months ended September 30, 2025. For the nine months ended September 30, 2026 compared with the nine months ended September 30, 2025, Non-interest expense increased $3.7 million, or 6.3%, to $62.2 million. The increase in Non-interest expense during the nine months ended September 30, 2026 was driven primarily by increase in Salaries and employee benefits, Technology and information systems, and Data processing, partially offset by decreases in Occupancy and equipment and Professional services.

Previous wording

Salaries and employee benefits—The increase in Salaries and employee benefits of $2.0 million, or 18.3%, and $3.5 million, or 15.4% for the three and six months ended June 30, 2026, respectively, was driven by an increase in average headcount and 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 $0.8 million, or 6.9%, and $4.3 million, or 12.5% for the three and nine months ended September 30, 2026, respectively, was primarily driven by an increase in average headcount.

Previous wording

Occupancy and equipment—The decrease in Occupancy and equipment of $0.2 million, or 10.8%, and $0.5 million, or 12.4%, for the three and six months ended June 30, 2026 was driven by a decrease in variable lease expenses.

Current wording

Occupancy and equipment—The decrease in Occupancy and equipment of $0.7 million, or 10.1%, for the nine months ended September 30, 2026 was driven by a decrease in variable lease expenses.

Previous wording

Professional services—The decrease in Professional services of $0.4 million, or 19.7%, and $0.5 million, or 13.3%, for the three and six months ended June 30, 2026, respectively, was primarily driven by decreases in legal expenses, recruiting expenses, and FDIC insurance fees.

Current wording

Professional services—The decrease in Professional services of $0.3 million, or 17.6%, and $0.8 million, or 14.8%, for the three and nine months ended September 30, 2026, respectively, was primarily driven by decreases in legal expenses, recruiting expenses, and FDIC insurance fees.

Previous wording

Technology and information systems—The increase in Technology and information systems of $0.4 million, or 43.5%, and $0.4 million, or 17.5%, for the three and six months ended June 30, 2026, respectively, was primarily attributable to a $0.4 million nonrecurring charge related to the write-off of certain previously capitalized technology assets.

Current wording

Technology and information systems—The increase in Technology and information systems of $0.6 million, or 20.6%, for the nine months ended September 30, 2026, was primarily attributable to a $0.4 million nonrecurring charge related to the write-off of certain previously capitalized technology assets.

Previous wording

Data processing—The increase in Data processing of $0.2 million, or 16.6%, and $0.3 million, or 11.2%, for the three and six months ended June 30, 2026, respectively, was primarily driven by upgrades to our consumer digital banking platform.

Current wording

Data processing—The increase in Data processing of $0.3 million, or 8.9%, for the nine months ended September 30, 2026, was primarily driven by upgrades to our consumer digital banking platform.

Previous wording

Other—The decrease in Other of $0.2 million, or 7.2%, for the six months ended June 30, 2026, was primarily driven by a fraud loss in the first quarter of 2025.

Current wording

Other—The decrease in Other of $0.2 million, or 4.3%, for the nine months ended September 30, 2026, was primarily driven by a fraud loss in the first quarter of 2025.

Previous wording

The Company recorded an income tax provision of $1.7 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively, reflecting an effective tax rate of 22.6% and 24.5%, respectively. The Company recorded an income tax provision of $3.6 million and $2.0 million for the six months ended June 30, 2026 and 2025, respectively, reflecting an effective tax rate of 23.0% and 22.9%, respectively.

Current wording

The Company recorded an income tax provision of $1.3 million and $0.8 million for the three months ended September 30, 2026 and 2025, respectively, reflecting an effective tax rate of 17.8% and 19.6%, respectively. The Company recorded an income tax provision of $4.9 million and $2.8 million for the nine months ended September 30, 2026 and 2025, respectively, reflecting an effective tax rate of 21.4% and 21.9%, respectively.

Previous wording

The Wealth Management segment reported Income before income tax of $7.7 million for the three months ended June 30, 2026, compared to $3.1 million for the same period in 2025, as well as Income before income tax of $15.5 million for the six months ended June 30, 2026, compared to $8.4 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 month period ended June 30, 2026 was driven primarily by increases in Net interest income, after provision for credit losses and Non-interest income, partially offset by an increase in Non-interest expense. The increase in Income before income taxes for the six month period ended June 30, 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.

Current wording

The Wealth Management segment reported Income before income tax of $7.8 million for the three months ended September 30, 2026, compared to $3.5 million for the same period in 2025, as well as Income before income tax of $23.3 million for the nine months ended September 30, 2026, compared to $11.9 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 month period ended September 30, 2026 was driven primarily by increases in Net interest income, after provision for credit losses, partially offset by an increase in Non-interest expense. The increase in Income before income taxes for the nine month period ended September 30, 2026 was driven primarily by an increase in Net interest income, after (release of) provision for credit losses, partially offset by an increase in Non-interest expense and a decrease in Non-interest income.

Previous wording

The Mortgage segment reported Loss before income taxes of $0.3 million for the three months ended June 30, 2026, compared to $0.3 million of Income before income taxes for the same period in 2025, as well as Income before income taxes of $0.0 million for the six months ended June 30, 2026, compared to $0.3 million for the same period in 2025. The decrease in Income before taxes for the three month period ended June 30, 2026 was primarily driven by a decrease in Net gain on mortgage loans, which was primarily driven by lower margins, and an increase in Salaries and employee benefits. The decrease in Income before taxes for the six month period ended June 30, 2026 was primarily driven by an increase in Salaries and employee benefits, partially offset by an increase in Total interest and dividend income.

Current wording

The Mortgage segment reported Loss before income taxes of $0.5 million for the three months ended September 30, 2026, compared to $0.5 million of Income before income taxes for the same period in 2025. The mortgage segment reported Loss before income taxes of $0.5 million for the nine months ended September 30, 2026, compared to $0.8 million of Income before income taxes for the same period in 2025. The decrease in Income before taxes for the three month period ended September 30, 2026 was primarily driven by a decrease in Net gain on mortgage loans, which was primarily driven by lower origination volume. The decrease in Income before taxes for the nine month period ended September 30, 2026 was primarily driven by lower Net gain on mortgage loans and increases in Salaries and employee benefits.

Previous wording

Cash and cash equivalents decreased by $25.4 million, or 12.7%, to $174.9 million as of June 30, 2026 compared to December 31, 2025. The decrease was a result of increases in Debt securities and Loans and a decrease in Borrowings, partially offset by an increase in Deposits.

Current wording

Cash and cash equivalents decreased by $34.0 million, or 17.0%, to $166.2 million as of September 30, 2026 compared to December 31, 2025. The decrease was a result of increases in Debt securities and Loans, partially offset by an increase in Deposits.

Previous wording

Available-for-sale debt securities increased by $44.0 million, or 96.5%, to $89.6 million as of June 30, 2026 compared to December 31, 2025. The increase was due to the purchase of residential mortgage-backed securities issued by U.S. government agencies and sponsored enterprises, partially offset by principal pay downs.

Current wording

Available-for-sale debt securities increased by $106.9 million, or 234.5%, to $152.5 million as of September 30, 2026 compared to December 31, 2025. The increase was due to the purchase of residential mortgage-backed securities issued by U.S. government agencies and sponsored enterprises, partially offset by principal pay downs.

Previous wording

Held-to-maturity debt securities increased by $21.8 million, or 23.0%, to $116.8 million as of June 30, 2026 compared to December 31, 2025. The increase was primarily due to the purchase of corporate and municipal bonds, offset by principal pay downs.

Current wording

Held-to-maturity debt securities increased by $46.9 million, or 49.4%, to $141.9 million as of September 30, 2026 compared to December 31, 2025. The increase was primarily due to the purchase of corporate and municipal bonds, offset by principal pay downs.

Previous wording

Loans, net of allowance increased by $62.5 million, or 2.4%, to $2.69 billion as of June 30, 2026 compared to December 31, 2025, primarily due togrowth in the 1-4 family residential, Owner occupied commercial real estate, and Cash, securities, and other portfolios, partially offset by a decrease in the Non-owner occupied commercial real estate portfolio.

Current wording

Loans, net of allowance increased by $156.5 million, or 6.0%, to $2.79 billion as of September 30, 2026 compared to December 31, 2025, primarily due togrowth in the 1-4 family residential, Commercial and industrial, Owner occupied commercial real estate, and Construction and development portfolios, partially offset by a decrease in the Non-owner occupied commercial real estate portfolio.

Previous wording

Mortgage loans held for sale, at fair value decreased $15.5 million, or 38.6%, to $24.7 million as of June 30, 2026 compared to December 31, 2025. The decrease was primarily due to the timing of loan originations and sales.

Current wording

Mortgage loans held for sale, at fair value decreased $21.2 million, or 52.7%, to $19.0 million as of September 30, 2026 compared to December 31, 2025. The decrease was primarily due to lower origination volume.

Previous wording

Deposits increased $99.4 million, or 3.6%, to $2.85 billion as of June 30, 2026 compared to December 31, 2025, primarily driven by increases in Non-interest bearing deposit accounts and money market deposit accounts. Non-interest bearing deposit accounts increased $36.9 million, or 10.7%, to $381.8 million as of June 30, 2026 compared to December 31, 2025. Money market deposit accounts increased $61.7 million, or 3.2%, to $1.98 billion as of June 30, 2026 compared to December 31, 2025.

Current wording

Deposits increased $169.6 million, or 6.2%, to $2.92 billion as of September 30, 2026 compared to December 31, 2025, primarily driven by increases in Non-interest bearing deposit accounts and money market deposit accounts. Non-interest bearing deposit accounts increased $75.6 million, or 21.9%, to $420.6 million as of September 30, 2026 compared to December 31, 2025. Money market deposit accounts increased $90.5 million, or 4.7%, to $2.00 billion as of September 30, 2026 compared to December 31, 2025.