FB Financial Corp

Previous wording

The following is a discussion of our financial condition as of March 31, 2026 and December 31, 2025, and our results of operations for the three months ended March 31, 2026 and 2025, and should be read in conjunction with our audited consolidated financial statements set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, that was filed with the SEC on February 26, 2026, and with the accompanying unaudited notes to the condensed consolidated financial statements set forth in this Report.

Current wording

The following is a discussion of our financial condition as of June 30, 2026 and December 31, 2025, and our results of operations for the three and six months ended June 30, 2026 and 2025, and should be read in conjunction with our audited consolidated financial statements set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, that was filed with the SEC on February 26, 2026, and with the accompanying unaudited notes to the condensed consolidated financial statements set forth in this Report.

Previous wording

Certain statements contained in this Report that are not historical in nature may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding the Company’s future plans, results, strategies, and expectations, including expectations around changing economic markets. These statements can generally be identified by the use of the words and phrases “may,” “will,” “should,” “could,” “would,” “goal,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target,” “aim,” “predict,” “continue,” “seek,” and other variations of such words and phrases and similar expressions. These forward-looking statements are not historical facts, and are based upon management’s current expectations, estimates, and projections, many of which, by their nature, are inherently uncertain and beyond the Company’s control. The inclusion of these forward-looking statements should not be regarded as a representation by the Company or any other person that such expectations, estimates, and projections will be achieved. Accordingly, the Company cautions shareholders and investors that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements including, without limitation, (1) current and future economic conditions, including the effects of inflation, interest rate fluctuations, changes in the economy or global supply chain, supply-demand imbalances affecting local real estate prices, and high unemployment rates in the local or regional economies in which the Company operates and/or the US economy generally, (2) changes or the lack of changes in government interest rate policies and the associated impact on the Company’s business, net interest margin, and mortgage operations, (3) increased competition for deposits, (4) changes in the quality or composition of the Company’s loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment securities portfolio, (5) any deterioration in commercial real estate market fundamentals, (6) the Company’s ability to identify potential candidates for, consummate, and achieve synergies from acquisitions, including risks that cost savings and other synergies from completed or future mergers may not be realized (or may be less than or delayed from expectations), challenges in integrating acquired businesses, disruptions to customer, employee, or other rela…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Certain statements contained in this Report that are not historical in nature may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent the Company’s current expectations, plans or forecasts of its or its business segments’ future results, which may include, among other measures, revenue, liquidity, net interest income, other income, provision for credit losses, expenses, operating leverage, effective tax rate, efficiency ratio, capital measures, deposits and assets, as well as strategy, future business and economic conditions more generally, and other future matters. These statements can generally be identified by the use of the words and phrases “may,” “will,” “should,” “could,” “would,” “goal,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target,” “aim,” “predict,” “continue,” “seek,” and other variations of such words and phrases and similar expressions. These forward-looking statements are not historical facts, and are based upon management’s current expectations, estimates, and projections, many of which, by their nature, are inherently uncertain and beyond the Company’s control. The inclusion of these forward-looking statements should not be regarded as a representation by the Company or any other person that such expectations, estimates, and projections will be achieved. Accordingly, the Company cautions shareholders and investors that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict. Actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of factors could cause actual results to differ materially from those contemplated by the forward-looking statements including, without limitation, (1) current and future economic conditions, including the effects of inflation, interest rate fluctuations, changes in the economy or global supply chain, supply-demand imbalances affecting local real estate prices, and high unemployment rates in the local or regional economies in which the Company operates and/or the US economy generally, (2) changes or the lack of changes in government interest rate policies and the associated impact on the Company’s business, net interest margin, and mortgage operations, (3) increased competition for deposits, (4) changes in the quality or composition of the Company’s loan or investment portfolios, including adverse developments in borrower industries or in the repayment ability of individual borrowers or issuers of investment securities, or the impact of interest rates on the value of our investment securities portfolio, (5) any deterioration in commercial real estate market fundamentals, (6) the Company’s ability to identify potential candidates for, consummate, and achieve synergies from…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

(2)Includes $32.6 million,$27.2 million, and $28.1 million of optional rights to repurchase delinquent GNMA loans as of March 31, 2026, March 31, 2025 and December 31, 2025, respectively.

Current wording

(2)Includes $32.6 million,$21.0 million, and $28.1 million of optional rights to repurchase delinquent GNMA loans as of June 30, 2026, June 30, 2025 and December 31, 2025, respectively.

Previous wording

Tangible book value per common share and tangible common equity to tangible assets are non-GAAP measures that exclude the impact of goodwill and other intangibles used by management to evaluate capital adequacy. Because intangible assets, such as goodwill and other intangibles, vary extensively from company to company, we believe that the presentation of this information allows investors to more easily compare our capital position to other companies. The most directly comparable financial measure calculated in accordance with GAAP is book value per common share and our total shareholders’ equity to total assets.

Current wording

Tangible book value per common share and tangible common equity to tangible assets are non-GAAP measures that exclude the impact of goodwill and other intangibles used by management to evaluate capital adequacy. Because intangible assets, such as goodwill and other intangibles, vary extensively from company to company, we believe that the presentation of this information allows investors to more easily compare our capital position to other companies. The most directly comparable financial measure calculated in accordance with GAAP is book value per common share and our total common shareholders’ equity to total assets.

Previous wording

We operate through two segments, Banking and Mortgage. We generate most of our revenue in our Banking segment from interest on loans and investments, loan-related fees, trust and investment services and deposit-related fees. Our primary source of funding for our loans is customer deposits, however we have other sources of funds including unsecured credit lines, brokered CDs, and other borrowings. We generate most of our revenue in our Mortgage segment from origination fees and gains on sales in the secondary mortgage loan market, as well as from mortgage servicing revenues.

Current wording

We operate through two segments, Banking and Mortgage. We generate the majority of our revenue in our Banking segment from interest on loans and investments, loan-related fees, trust and investment services and deposit-related fees. Our primary source of funding for our loans is customer deposits, however we have other sources of funds including unsecured credit lines, brokered CDs, and other borrowings. We generate most of our revenue in our Mortgage segment from origination fees and gains on sales in the secondary mortgage loan market, as well as from mortgage servicing revenues.

Previous wording

On July 1, 2025, the Company completed its merger with Southern States Bancshares, Inc. and its wholly-owned subsidiary, Southern States Bank, with FB Financial Corporation continuing as the surviving entity. This merger strengthens the Company’s presence in existing markets, such as Birmingham and Huntsville, Alabama, while expanding the Company’s footprint further into Alabama and Georgia. The Company acquired total assets of $2.83 billion, total loans of $2.27 billion and assumed total deposits of $2.47 billion. Under the terms of the agreement, each outstanding share of Southern States common stock was converted into the right to receive 0.80 shares of the Company’s stock. Additionally, fractional shares and outstanding stock options were settled in cash. As a result, total consideration paid was $368.4 million based on the Company’s closing stock price of $45.30 per share on June 30, 2025. The merger resulted in additional goodwill of $107.8 million being recorded based on fair value estimates of total net assets acquired and liabilities assumed in the transaction.

Current wording

On July 1, 2025, the Company completed its merger with Southern States Bancshares, Inc. and its wholly-owned subsidiary, Southern States Bank, with FB Financial Corporation continuing as the surviving entity. This merger strengthened the Company’s presence in existing markets, such as Birmingham and Huntsville, Alabama, while expanding the Company’s footprint further into Alabama and Georgia. The Company acquired total assets of $2.83 billion, total loans of $2.27 billion and assumed total deposits of $2.47 billion. Under the terms of the agreement, each outstanding share of Southern States common stock was converted into the right to receive 0.80 shares of the Company’s stock. Additionally, fractional shares and outstanding stock options were settled in cash. As a result, total consideration paid was $368.4 million based on the Company’s closing stock price of $45.30 per share on June 30, 2025. The merger resulted in additional goodwill of $107.8 million being recorded based on fair value estimates of total net assets acquired and liabilities assumed in the transaction.

Previous wording

Noninterest expense increased to $95.2 million for the three months ended March 31, 2026, compared with $79.5 million for the three months ended March 31, 2025. The increase in noninterest expense was primarily driven by higher salaries, commissions and benefits of $9.0 million due to increased headcount resulting from the Southern States merger and higher performance‑based compensation. Additionally, other expense increased $3.7 million, driven in part by higher franchise tax expense. Merger-related expenses also increased during the period and included $1.4 million of core deposit intangible amortization, $1.0 million of merger and integration costs and $0.9 million in occupancy expense.

Current wording

Noninterest expense increased to $91.5 million for the three months ended June 30, 2026, compared with $81.3 million for the three months ended June 30, 2025. The increase in noninterest expense was primarily driven by higher salaries, commissions and benefits of $6.7 million due to increased headcount resulting from the Southern States merger and higher performance‑based compensation partially offset by recognition of deferred salaries related to loan originations during the period. Additionally, other expense increased $4.1 million, driven in part by higher software license and maintenance fees, franchise tax expense, and modest increases across a range of other expense categories. The merger also contributed $1.4 million of core deposit intangible amortization and higher occupancy expense, partially offset by a $2.7 million decrease in merger and integration costs.

Previous wording

Our net income increased during the three months ended March 31, 2026 to $57.5 million from $39.4 million for the three months ended March 31, 2025. Diluted earnings per common share was $1.10 and $0.84 for the three months ended March 31, 2026 and 2025, respectively. Our net income represented a ROAA of 1.43% and 1.21% for the three months ended March 31, 2026 and 2025, respectively, and a ROAE of 11.9% and 10.1% for the same periods. Our ratio of ROATCE for the three months ended March 31, 2026 and 2025 was 14.7% and 11.9%, respectively. See “GAAP reconciliation and management explanation of non-GAAP financial measures” in this Report for a discussion of tangible common equity and return on average tangible common equity.

Current wording

Our net income increased during the six months ended June 30, 2026 to $116.2 million from $42.3 million for the six months ended June 30, 2025. Diluted earnings per common share was $2.24 and $0.91 for the six months ended June 30, 2026 and 2025, respectively. Our net income represented a ROAA of 1.44% and 0.65% for the six months ended June 30, 2026 and 2025, respectively, and a ROAE of 11.9% and 5.38% for the same periods. Our ratio of ROATCE for the six months ended June 30, 2026 and 2025 was 14.7% and 6.38%, respectively. See “GAAP reconciliation and management explanation of non-GAAP financial measures” in this Report for a discussion of tangible common equity and return on average tangible common equity.

Previous wording

During the three months ended March 31, 2026, our net interest income increased to $146.0 million from $107.6 million for the three months ended March 31, 2025. Our net interest margin, on a tax-equivalent basis, increased to 3.94% for the three months ended March 31, 2026 as compared to 3.55% for the three months ended March 31, 2025. The increase in net interest income and net interest margin, on a tax-equivalent basis, reflects a $45.7 million increase in interest income, partially offset by a $7.3 million increase in interest expense.

Current wording

During the six months ended June 30, 2026, our net interest income increased to $294.9 million from $219.1 million for the six months ended June 30, 2025. Our net interest margin, on a tax-equivalent basis, increased to 3.94% for the six months ended June 30, 2026 as compared to 3.61% for the six months ended June 30, 2025. The increase in net interest income and net interest margin, on a tax-equivalent basis, was driven by a $93.0 million increase in interest income, partially offset by a $17.1 million increase in interest expense.

Previous wording

The Banking segment contributed $73.5 million of income before taxes for the current period as compared to $47.3 million for the previous period. Net interest income totaled $143.1 million during the three months ended March 31, 2026 compared to $105.8 million during the previous period. Provisions for credit losses on loans HFI and unfunded loan commitments resulted in $2.0 million of provision expense during the current period as compared to $2.2 million during the previous period. The Banking segment recorded noninterest income of $14.0 million in the current period as compared to $10.7 million in the previous period. This increase includes increases in BOLI income, service charges on deposit accounts and investment services and trust income. Noninterest expense increased to $81.6 million for the current period compared to $66.9 million for the for the previous period, primarily due to increases in salaries, commissions and benefits, amortization of core deposit intangibles, occupancy, and merger and integration costs, with the majority of these increases associated with the Southern States merger. Additionally, a franchise tax expense was recognized in the current period.

Current wording

The Banking segment contributed $71.6 million of income before taxes for the current period as compared to a loss before taxes of $6.7 million for the previous period. Net interest income totaled $145.4 million during the three months ended June 30, 2026 compared to $108.9 million during the previous period. Provisions for credit losses on loans HFI and unfunded loan commitments resulted in $9.1 million of provision expense during the current period as compared to $0.6 million during the previous period. The increase was primarily attributable to the growth in loan balances and an increase on individually evaluated reserves during the current period, as well as the benefit recognized from the change in the CECL loss estimation methodology in the previous period. The Banking segment recorded noninterest income of $14.4 million in the current period as compared to a loss of $47.7 million in the previous period. This increase was mainly attributable to a net loss on investment securities of $60.5 million from the sale of $266.5 million AFS debt securities recognized during the previous period. Noninterest expense increased to $79.1 million for the current period compared to $67.3 million for the previous period primarily due to increases in salaries, commissions and benefits, amortization of core deposit intangibles and occupancy, with the majority of these increases associated with the Southern States merger. Additionally, software license and maintenance fees, franchise tax expense, and other operating expenses increased during the period.

Previous wording

Activity in our Mortgage segment resulted income before income taxes of $0.6 million for the current period, as compared to $1.5 million of income before taxes in the prior period. Net interest income was $2.8 million for the current period and $1.9 million for the prior period. Provisions for credit losses on loans HFI and unfunded loan commitments resulted in provision expense of $1.0 million during the current period compared to $0.1 million of provision expense during the prior period. The increase in provisions for credit losses was due primarily to a change in the CECL loss estimation methodology as of June 30, 2025, which notably impacted the Company's reserves on 100% financed 1-to-4 mortgages, as well as a change in forecasts associated with home prices which impacted mortgage reserves more broadly. Mortgage banking income decreased $0.2 million to $12.3 million during the current period compared to $12.4 million in the prior period.

Current wording

Activity in our Mortgage segment resulted in income before income taxes of $1.6 million for the current period, as compared to a loss before taxes of $3.0 million in the prior period. Net interest income was $3.5 million for the current period and $2.5 million for the prior period. Provisions for credit losses on loans HFI and unfunded loan commitments resulted in provision expense of $1.0 million during the current period compared to $4.8 million during the prior period. The decrease in the provision primarily reflects the impact of the change in the CECL loss estimation methodology, which notably impacted the Company’s reserves on 100% financed 1-to-4 mortgages during the previous period and a change in forecasts associated with home prices. Mortgage banking income decreased $1.9 million to $11.2 million during the current period compared to $13.0 million in the prior period.

Previous wording

Our tax-exempt income is converted to a tax-equivalent basis by adjusting for the combined federal and blended state statutory income tax rate of 26.06% for the three months ended March 31, 2026 and 2025.

Current wording

Our tax-exempt income is converted to a tax-equivalent basis by adjusting for the combined federal and blended state statutory income tax rate of 26.06% for the three and six months ended June 30, 2026 and 2025.

Previous wording

Net interest income is the principle component of our earnings and represents the difference, or spread, between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds. Net interest income and margin are shaped by fluctuations in interest rates as well as changes in volume and mix of earning assets and interest-bearing liabilities.

Current wording

Net interest income is the primary component of our earnings and represents the difference, or spread, between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds. Net interest income and margin are shaped by fluctuations in interest rates as well as changes in volume and mix of earning assets and interest-bearing liabilities.

Previous wording

During the three months ended March 31, 2026, the U.S. Treasury yield curve continued to normalize, with modest steepening in the intermediate and longer‑term maturities as short‑term interest rates declined over the prior year and longer‑term yields remained elevated. This compares to the three months ended March 31, 2025, when the yield curve was in the early stages of normalization following initial short‑term rate reductions and an increase in longer‑term yields. The Federal Funds Target Rate range was 3.50% - 3.75% and 4.25% - 4.50% as of March 31, 2026 and March 31, 2025, respectively.

Current wording

During the three and six months ended June 30, 2026, the U.S. Treasury yield curve continued to steepen as short-term interest rates remained flat and longer-term yields increased in response to elevated inflationary pressures. In comparison, during the three and six months ended June 30, 2025, the U.S. Treasury yield curve fell given uncertainty around tariffs and economic growth. The Federal Funds Target Rate range was 3.50% - 3.75% and 4.25% - 4.50% as of June 30, 2026 and June 30, 2025, respectively.

Previous wording

Accretion on purchased loans contributed 17 basis points to the NIM for the three months ended March 31, 2026 as a result of the recent merger. There was no impact of accretion on purchased loans to the NIM for the three months ended March 31, 2025.

Current wording

Accretion on purchased loans contributed 13 basis points to the NIM for the three months ended June 30, 2026 as a result of the Southern States merger. There was no impact of accretion on purchased loans to the NIM for the three months ended June 30, 2025.

Previous wording

Net interest income increased $38.3 million to $146.8 million for the three months ended March 31, 2026 as compared to $108.4 million for the three months ended March 31, 2025. Net interest margin was 3.94% for the three months ended March 31, 2026 compared to 3.55% for the three months ended March 31, 2025. Net interest income was broadly driven by higher average balances of loans held for investment resulting primarily from the Southern States merger, along with an increase in net interest margin attributable to higher loan yields and a decline in the average cost of interest‑bearing deposits.

Current wording

Net interest income increased $75.9 million to $296.6 million for the six months ended June 30, 2026 as compared to $220.7 million for the six months ended June 30, 2025. Net interest margin was 3.94% for the six months ended June 30, 2026 compared to 3.61% for the six months ended June 30, 2025. Net interest income was driven by higher average balances of loans HFI resulting from the Southern States merger and continued loan growth, while the increase in net interest margin reflected higher loan yields and a decline in the average cost of interest-bearing deposits.

Previous wording

Interest income was $226.2 million for the three months ended March 31, 2026, compared to $180.5 million for the three months ended March 31, 2025, an increase of $45.7 million. The increase in interest income was primarily attributable to loans HFI, which increased $47.0 million to $199.1 million for the three months ended March 31, 2026 from $152.2 million for the three months ended March 31, 2025. The increase was driven by higher average balances of loans held for investment supported in part by the Southern States merger, with an incremental increase in yield. The yield on loans HFI increased 10 basis points to 6.51% for the three months ended March 31, 2026 from 6.41% for the three months ended March 31, 2025, largely due to accretion on purchased loans.

Current wording

Interest income was $456.4 million for the six months ended June 30, 2026, compared to $363.4 million for the six months ended June 30, 2025, an increase of $93.0 million. The increase in interest income was primarily attributable to loans HFI, which increased $92.8 million to $402.9 million for the six months ended June 30, 2026 from $310.1 million for the six months ended June 30, 2025. The increase was driven by higher average balances of loans HFI, reflecting the Southern States merger and continued loan growth, as well as a modest increase in yield. The yield on loans HFI increased 6 basis points to 6.49% for the six months ended June 30, 2026 from 6.43% for the six months ended June 30, 2025, largely due to accretion on purchased loans.

Previous wording

Interest expense was $79.4 million for the three months ended March 31, 2026, an increase of $7.3 million as compared to $72.1 million for the three months ended March 31, 2025. The increase was driven by higher average interest‑bearing deposit balances resulting primarily from the recent merger, partially offset by declines in the rates paid on interest‑bearing deposits.

Current wording

Interest expense was $159.9 million for the six months ended June 30, 2026, an increase of $17.1 million as compared to $142.7 million for the six months ended June 30, 2025. The increase was driven by higher average interest‑bearing deposit balances resulting primarily from the merger, partially offset by declines in the rates paid on interest‑bearing deposits.

Previous wording

Interest expense on interest-bearing deposit accounts totaled $77.9 million for the three months ended March 31, 2026, an increase of $7.6 million from the prior year, largely due to increases in average balances across most deposit categories, particularly money market deposits and customer time deposits, reflecting balance growth associated with the recent merger. Lower rates paid across these deposit categories partially offset the impact of higher average balances. The average rate paid on interest-bearing deposits was 2.80% for the three months ended March 31, 2026 compared to 3.13% for the three months ended March 31, 2025.

Current wording

Interest expense on interest-bearing deposit accounts totaled $156.6 million for the six months ended June 30, 2026, an increase of $17.8 million from the prior year, largely due to increases in average balances across most deposit categories, particularly money market deposits and customer time deposits, reflecting growth associated with the merger. Lower rates paid across these deposit categories partially offset the impact of higher average balances. The average rate paid on interest-bearing deposits was 2.80% for the six months ended June 30, 2026 compared to 3.12% for the six months ended June 30, 2025.

Previous wording

(1)Average loans are presented gross, including nonaccrual loans and overdrafts.

Current wording

(1)Average loans are presented gross, including nonaccrual loans and overdrafts (before deduction of allowance for credit losses on loans HFI).

Previous wording

equivalent basis. The net tax-equivalent adjustment amounts included in income were $0.8 million for both the three months ended March 31, 2026 and 2025.

Current wording

equivalent basis. The net tax-equivalent adjustment amounts included in income were $1.6 million for both the six months ended June 30, 2026 and 2025.

Previous wording

(3)Includes average net unrealized losses on investment securities available for sale of $43.4 million and $132.3 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

(3)Includes average net unrealized losses on investment securities available for sale of $47.2 million and $130.5 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

(4)Includes average of optional rights to repurchase government guaranteed GNMA mortgage loans previously sold that meet certain defined delinquency criteria of $32.0 million and $30.7 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

(4)Includes average of optional rights to repurchase government guaranteed GNMA mortgage loans previously sold that meet certain defined delinquency criteria of $32.6 million and $27.9 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

The tables below present the components of the changes in net interest income for the three months ended March 31, 2026 and 2025. For each major category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes due to average volume and changes due to interest rates, with the changes in both volume and interest rates allocated to these two categories based on the proportionate absolute changes in each category.

Current wording

The tables below present the components of the changes in net interest income for the six months ended June 30, 2026 and 2025. For each major category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes due to average volume and changes due to interest rates, with the changes in both volume and interest rates allocated to these two categories based on the proportionate absolute changes in each category.

Previous wording

(2)Interest income includes the effects of the tax-equivalent adjustments to increase tax-exempt interest income to a tax-equivalent basis. The net taxable-equivalent adjustment amounts included was $0.8 million for both the three months ended March 31, 2026 and 2025.

Current wording

(2)Interest income includes the effects of the tax-equivalent adjustments to increase tax-exempt interest income to a tax-equivalent basis. The net taxable-equivalent adjustment amounts included was $1.6 million for both the six months ended June 30, 2026 and 2025.

Previous wording

Mortgage banking income includes origination fees, gains and losses on the sale of mortgage loans, changes in fair value of mortgage loans and related derivatives, as well as mortgage servicing income, which includes the change in fair value of MSRs and related derivatives. Mortgage banking income was $12.3 million for the three months ended March 31, 2026, a decrease of $0.2 million compared to the prior period.

Current wording

Mortgage banking income includes origination fees, gains and losses on the sale of mortgage loans, changes in fair value of mortgage loans and related derivatives, as well as mortgage servicing income, which includes the change in fair value of MSRs and related derivatives. Mortgage banking income was $11.2 million for the three months ended June 30, 2026, a decrease of $1.9 million compared to the prior period. The decrease was primarily due to lower gains and fees from the origination and sale of mortgage loans held for sale and lower mortgage loan servicing income. These decreases were partially offset by a smaller loss on the fair value of loans held for sale and related derivatives and a smaller decline in the fair value of mortgage servicing rights.

Previous wording

Investment services and trust income is comprised of wealth management fees and trust and insurance income. This caption increased $0.6 million during the three months ended March 31, 2026 to $4.3 million as compared to $3.7 million during the three months ended March 31, 2025. This growth was driven primarily by higher fees resulting from increased assets under management in existing accounts.

Current wording

Investment services and trust income is comprised of wealth management fees and trust and insurance income. This caption increased $0.6 million during the three months ended June 30, 2026 to $4.5 million as compared to $3.9 million during the three months ended June 30, 2025.

Previous wording

Service charges on deposit accounts include overdraft fees, account analysis fees and other customer transaction-related service charges. Service charges on deposit accounts increased $0.9 million during the three months ended March 31, 2026 to $4.4 million as compared to $3.5 million during the three months ended March 31, 2025. The increase was primarily due to the increase in deposit accounts from the Southern States merger.

Current wording

Service charges on deposit accounts include overdraft fees, account analysis fees and other customer transaction-related service charges. Service charges on deposit accounts increased $1.1 million during the three months ended June 30, 2026 to $4.5 million as compared to $3.4 million during the three months ended June 30, 2025. The increase was primarily due to the increase in deposit accounts from the Southern States merger.

Previous wording

ATM and interchange fees represent income related to customers’ utilization of their debit cards and interchange income. ATM and interchange fees were $3.0 million for the three months ended March 31, 2026, compared to $2.7 million for the three months ended March 31, 2025.

Current wording

ATM and interchange fees represent income related to customers’ utilization of their debit cards and interchange income. ATM and interchange fees were $3.3 million for the three months ended June 30, 2026, compared to $2.9 million for the three months ended June 30, 2025.

Previous wording

Other income is comprised of income recognized that does not typically fit into other income categories and includes components such as BOLI income, swap fees, and equity investments income. Other income increased $1.4 million to $2.7 million during the three months ended March 31, 2026 as compared to $1.3 million during the three months ended March 31, 2025. This increase reflects higher BOLI income of $1.0 million, largely due to $0.8 million of death benefit proceeds recognized during the three months ended March 31, 2026.

Current wording

Other income is comprised of income recognized that does not typically fit into income categories and includes components such as BOLI income, swap fees, and equity investments income. Other income increased $0.2 million to $2.7 million during the three months ended June 30, 2026 as compared to $2.5 million during the three months ended June 30, 2025.

Previous wording

Net gain from investment securities was $1 thousand for the three months ended March 31, 2026 compared to $16 thousand for the three months ended March 31, 2025.

Current wording

Net gain from investment securities was $1 thousand for the six months ended June 30, 2026 compared to a net loss of $60.5 million for the six months ended June 30, 2025. The net loss from investment securities during the six months ended June 30, 2025 was the result of management's election to sell $266.5 million of AFS debt securities. Refer to the section “Other earning assets” for additional information on the sale of the AFS debt securities.

Previous wording

Net loss on sales or write-downs of premises and equipment, other real estate owned and other assets improved by $0.3 million for the three months ended March 31, 2026.

Current wording

Net loss on sales or write-downs of premises and equipment, other real estate owned and other assets improved by $0.3 million for the six months ended June 30, 2026.

Previous wording

Salaries, commissions and employee benefits expense is comprised of salaries and wages in addition to other employee benefit costs and represents the largest component of noninterest expense. Salaries, commissions and employee benefits expense increased $9.0 million, or 18.6%, to $57.3 million for the three months ended March 31, 2026 as compared to $48.4 million for the three months ended March 31, 2025. This change was driven by increases in the salaries and benefit costs due to increased headcount resulting from the Southern States merger, combined with an increase in performance-based compensation driven by improvement in the Company’s performance metrics.

Current wording

Salaries, commissions and employee benefits expense is comprised of salaries and wages in addition to other employee benefit costs and represents the largest component of noninterest expense. For the three months ended June 30, 2026, salaries and employee benefits expense increased $6.7 million, to $53.3 million as compared to $46.6 million for the three months ended June 30, 2025. The increase was primarily driven by higher compensation-related costs, including increased headcount associated with the Southern States merger and higher performance based incentive compensation, partially offset by higher deferred salary costs related to loan originations during the period.

Previous wording

Occupancy and equipment expense includes occupancy, depreciation and equipment expense. Occupancy and equipment expense of $7.5 million and $6.6 million was recognized for the three months ended March 31, 2026 and 2025. The increase was driven by the expansion of our branch network in connection with the Southern States merger.

Current wording

Occupancy and equipment expense includes occupancy, depreciation and equipment expense. Occupancy and equipment expense of $7.6 million and $6.7 million was recognized for the three months ended June 30, 2026 and 2025, respectively. The increase was primarily due to the expansion of our branch network in connection with the Southern States merger.

Previous wording

Advertising includes expenses related to sponsorships, advertising, marketing, customer relations and business development and public relations. During the three months ended March 31, 2026, advertising expense decreased $0.3 million to $2.1 million compared to $2.5 million during the three months ended March 31, 2025.

Current wording

Advertising includes expenses related to sponsorships, advertising, marketing, customer relations and business development and public relations. During the three months ended June 30, 2026, advertising expense increased $0.4 million to $2.6 million compared to $2.2 million during the three months ended June 30, 2025.

Previous wording

Data processing is comprised of all third-party core operating systems and processing charges as well as payroll processing. Data processing fees were $2.5 million for the three months ended March 31, 2026, compared to $2.3 million for the three months ended March 31, 2025.

Current wording

Data processing is comprised of all third-party core operating system and processing charges as well as payroll processing. Data processing fees were $2.4 million for the three months ended June 30, 2026, compared to $2.2 million for the three months ended June 30, 2025.

Previous wording

Legal and professional fees represent fees incurred for the various support functions, which includes legal, consulting, outsourcing and other professional related fees. Legal and professional fees were $2.0 million for both the three months ended March 31, 2026 and 2025.

Current wording

Legal and professional fees represent fees incurred for the various support functions, which includes legal, consulting, outsourcing and other professional related fees. Legal and professional fees were $1.9 million and $2.4 million for the three months ended June 30, 2026 and 2025, respectively.

Previous wording

Amortization of core deposit and other intangibles was $1.9 million for the three months ended March 31, 2026, compared to $0.7 million for the three months ended March 31, 2025. The increase was primarily due to $1.4 million of amortization associated with the core deposit intangible assumed with the merger of Southern States.

Current wording

Amortization of core deposit and other intangibles were $1.8 million for the three months ended June 30, 2026, compared to $0.6 million for the three months ended June 30, 2025. The increase was primarily due to $1.4 million of amortization associated with the core deposit intangible assumed with the merger of Southern States.

Previous wording

Merger and integration costs include costs associated with the merger, integration and conversion of business combinations. Merger and integration costs were $1.4 million for the three months ended March 31, 2026 associated with the merger with Southern States. These costs primarily include other employee-related costs and costs associated with branch consolidation, conversion and integration activities.

Current wording

Merger and integration costs include costs associated with the merger, integration and conversion of business combinations. Merger and integration costs were $2.7 million for the three months ended June 30, 2025. These costs primarily include legal and other professional fees, and costs associated with integration activities. There were no such costs for the three months ended June 30, 2026.

Previous wording

Noninterest expense increased by $15.7 million, or 19.6%, during the three months ended March 31, 2026 to $95.2 million as compared to $79.5 million in the three months ended March 31, 2025. The increase in noninterest expense was attributable to increases in salaries and employee benefits, amortization of core deposit intangible and other intangibles, merger and integration costs associated with the Southern States merger and other noninterest expense.

Current wording

Noninterest expense increased by $25.8 million, or 16.1%, during the six months ended June 30, 2026 to $186.6 million as compared to $160.8 million in the six months ended June 30, 2025. The increase in noninterest expense was attributable to increases in salaries and employee benefits, amortization of core deposit intangible and other intangibles, occupancy and other noninterest expense partially offset by a decrease in merger and integration costs associated with the Southern States merger.