FVCBankcorp, Inc.

Previous wording

The following presents management’s discussion and analysis of our consolidated financial condition at June 30, 2025 and December 31, 2024 and the results of our operations for the three and six months ended June 30, 2025 and 2024. This discussion should be read in conjunction with our unaudited consolidated financial statements and the notes thereto appearing elsewhere in this report and the audited consolidated financial statements and the notes to consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. Results of operations for the three and six month periods ended June 30, 2025 are not necessarily indicative of the results of operations for the balance of 2025, or for any other period. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations.

Current wording

The following presents management’s discussion and analysis of our consolidated financial condition at September 30, 2025 and December 31, 2024 and the results of our operations for the three and nine months ended September 30, 2025 and 2024. This discussion should be read in conjunction with our unaudited consolidated financial statements and the notes thereto appearing elsewhere in this report and the audited consolidated financial statements and the notes to consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. Results of operations for the three and nine month periods ended September 30, 2025 are not necessarily indicative of the results of operations for the balance of 2025, or for any other period. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations.

Previous wording

•the concentration of our business in and around the Washington, D.C. metropolitan area and the effects of changes in the economic, political, and environmental conditions on this market, including potential reductions in spending by the U.S. government and related reductions in the federal workforce;

Current wording

•the concentration of our business in and around the Washington, D.C. metropolitan area and the effects of changes in the economic, political, and environmental conditions on this market, including the shutdown of the U.S. governmentand potential reductions in spending by the U.S. government and related reductions in the federal workforce;

Previous wording

Results of Operations— Three and Six Months Ended June 30, 2025 and 2024

Current wording

Results of Operations— Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

We recorded net income of $5.7 million, or $0.31 diluted earnings per share, for the three months ended June 30, 2025, compared to net income of$4.2 million, or $0.23 diluted earnings per share, for the three months ended June 30, 2024, an increase of $1.5 million, or 36%. During the second quarter of 2025, we unwound $15 million of our pay-fixed/receive floating interest rate swaps and the funding associated with that hedge, resulting in a pre-tax gain of $154 thousand (which was recorded in non-interest income).

Current wording

We recorded net income of $5.6 million, or $0.31 diluted earnings per share, for the three months ended September 30, 2025, compared to net income of $4.7 million, or $0.25 diluted earnings per share, for the three months ended September 30, 2024, an increase of $910 thousand, or 19%.

Previous wording

Net interest income increased $2.1 million, or 15%, to $15.8 million for the three months ended June 30, 2025, compared to $13.7 million for the same period of 2024. Provision for credit losses totaled $105 thousandfor the three months ended June 30, 2025 compared to$206 thousand for the three months ended June 30, 2024. Noninterest income was $1.0 million and $871 thousand for the three months ended June 30, 2025 and 2024, respectively, an increase of $137 thousand, or 16%. Noninterest expense was $9.4 million for the three months ended June 30, 2025 compared to $9.0 million for the three months ended June 30, 2024, an increase of $432 thousand, or 5%.

Current wording

Net interest income increased $1.8 million, or 13%, to $16.0 millionfor the three months ended September 30, 2025, compared to $14.2 million for the same period of 2024. Provision for credit losses totaled $375 thousand for the three months ended September 30, 2025 compared to a $200 thousand release of provision for credit lossesfor the three months ended September 30, 2024. Noninterest income was $1.0 million and $815 thousand for the three months ended September 30, 2025 and 2024, respectively, an increase of $218 thousand, or 27%. Noninterest expense was $9.5 million for the three months ended September 30, 2025 compared to $9.2 million for the three months ended September 30, 2024, an increase of $277 thousand, or 3%.

Previous wording

The annualized return on average assets for the three months ended June 30, 2025 and 2024 was 1.02% and 0.77%, respectively. The annualized return on average equity for the three months ended June 30, 2025 and 2024 was 9.37% and 7.42%, respectively.

Current wording

The annualized return on average assets for the three months ended September 30, 2025 and 2024 was 1.00% and 0.85%, respectively. The annualized return on average equity for the three months ended September 30, 2025 and 2024 was 9.05% and 8.15%, respe ctively.

Previous wording

For the six months ended June 30, 2025, we recorded net income of $10.8 million, or $0.59 diluted earnings per share, compared to net income of $5.5 million, or $0.30 diluted earnings per share for the six months ended June 30, 2024. Net income for the six months ended June 30, 2024 included the surrender of certain BOLI policies with an aggregate cash surrender value of $48.0 million. Upon the surrender, we received a cash payout and were required to accrue additional income tax on the appreciation of those policies which had previously been treated as tax-exempt income. This resulted in additional statutory income tax expense of $1.6 million and tax penalties of $722 thousand. The tax penalties related to the surrender of the BOLI were recorded in income tax expense.

Current wording

For the nine months ended September 30, 2025, we recorded net income of $16.4 million, or $0.90 diluted earnings per share, compared to net income of $10.2 million, or $0.55 diluted earnings per share for the nine months ended September 30, 2024. Net income for the nine months ended September 30, 2024 included the surrender of certain BOLI policies with an aggregate cash surrender value of $48.0 million. Upon the surrender, we received a cash payout and were required to accrue additional income tax on the appreciation of those policies which had previously been treated as tax-exempt income. This resulted in additional statutory income tax expense of $1.6 million and tax penalties of $722 thousand. The tax penalties related to the surrender of the BOLI were recorded in income tax expense.

Previous wording

Net interest income for the six months ended June 30, 2025 was $30.8 million, compared to $26.5 million for the same period of 2024, an increase of $4.3 million, or 16%.

Current wording

Net interest income for the nine months ended September 30, 2025 was $46.8 million, compared to $40.7 million for the same period of 2024, an increase of $6.2 million, or 15%.

Previous wording

Commercial bank operating earnings, which exclude the aforementioned derivative gain recorded during 2025, for the three months ended June 30, 2025 and 2024 were $5.5 million and $4.2 million, respectively. For the six months ended June 30, 2025 and 2024, commercial bank operating earnings were $10.7 million and $7.9 million, respectively. See table below for additional information on commercial bank operating earnings.

Current wording

Core operating earnings (non-GAAP) exclude gains on the termination of derivative instruments recorded during 2025 and the aforementioned additional provisioning for income taxes associated with the surrender of our BOLI policies during 2024. For the nine months ended September 30, 2025 and 2024, core operating earnings were $16.3 million and $12.6 million, respectively. See table below for additional information on core operating earnings.

Previous wording

Diluted commercial bank operating earnings per share for the three months ended June 30, 2025 and 2024 were $0.30 and $0.23, respectively. For the six months ended June 30, 2025 and 2024, diluted commercial bank operating earnings per share were $0.58 and $0.43, respectively.

Current wording

Diluted core operating earnings per share for the three months ended September 30, 2025 and 2024 were $0.31 and $0.25, respectively. For the nine months ended September 30, 2025 and 2024, diluted core operating earnings per share were $0.89 and $0.68, respectively.

Previous wording

We consider commercial bank operating earnings a useful financial measure of our operating performance. Commercial bank operating earnings is determined by methods other than in accordance with GAAP. A reconciliation of non-GAAP financial measures to their most comparable financial measure in accordance with GAAP can be found in the tables below.

Current wording

We consider core operating earnings a useful financial measure of our operating performance. Core operating earnings is determined by methods other than in accordance with GAAP. A reconciliation of non-GAAP financial measures to their most comparable financial measure in accordance with GAAP can be found in the tables below.

Previous wording

Reconciliation of Net Income (GAAP) to Commercial Bank Operating Earnings (Non-GAAP)

Current wording

Reconciliation of Net Income (GAAP) to Core Operating Earnings (Non-GAAP)

Previous wording

(1)Nonaccrual loans are included in average balances and do not have a material effect on the average yield. Interest income on non-accruing loans was not material for the quarters presented. Net loan fees and late charges included in interest income on loans totaled $501 thousand and $388 thousandfor the quarters ended June 30, 2025 and 2024, respectively.

Current wording

(1)Nonaccrual loans are included in average balances and do not have a material effect on the average yield. Interest income on non-accruing loans was not material for the quarters presented. Net loan fees and late charges included in interest income on loans totaled $478 thousandand $448 thousandfor the quarters ended September 30, 2025 and 2024, respectively.

Previous wording

Net interest income totaled $15.8 million for the three months ended June 30, 2025 compared to $13.7 million for the three months ended June 30, 2024, an increase of $2.1 million, or 15%. The increase in net interest income is primarily due to a $1.5 million increase in interest income and a $630 thousand decrease in interest expense for the second quarter of 2025 compared to the same period of 2024.

Current wording

Net interest income totaled $16.0 million for the three months ended September 30, 2025 compared to $14.2 million for the three months ended September 30, 2024, an increase of $1.8 million, or 13%. The increase in net interest income is primarily due to an increase in interest income totaling $594 thousand and a decrease in interest expense totaling $1.2 million for the third quarter of 2025 compared to the same period of 2024.

Previous wording

Our net interest margin for the three months ended June 30, 2025 and 2024 was 2.90% and 2.59%, respectively, an increase of 31 basis points, or 12%. The increase in our net interest margin was a result of continued repricing of our loan renewals and newly originated loans to current market interest rates over the past year. We have also reduced the cost of our funding sources simultaneously with federal funds rate decisions during 2024. The yield on interest-earning assets increased 12 basis points to 5.39% for the three months ended June 30, 2025, compared to 5.27% for the same period of 2024, a direct result of our originating loans at higher interest rates and further diversifying our portfolio mix towards commercial and industrial loans. Our cost of funds decreased 21 basis points to 2.79% for the three months ended June 30, 2025, compared to 3.00% for the same period of 2024.

Current wording

Our net interest margin for the three months ended September 30, 2025 and 2024 was 2.91%and 2.64%, respectively, an increase of 27 basis points, or 10%. The increase in our net interest margin was a result of continued repricing of our loan renewals and newly originated loans to current market interest rates over the past year. We have also reduced the cost of our funding sources simultaneously with federal funds rate decisions during 2024 and 2025. The yield on interest-earning assets remained at 5.46%for the three months ended September 30, 2025, compared to the same period of 2024. Our cost of interest-bearing liabilities decreased 39 basis points to 3.41%for the three months ended September 30, 2025, compared to 3.80% for the same period of 2024.

Previous wording

Average interest-earning assets for the three months ended June 30, 2025 increased $58.7 million, or 3%, to $2.18 billion compared to $2.12 billion for the three months ended June 30, 2024. This increase was primarily related to an increase in interest-bearing deposits held at other financial institutions. Total interest income increased $1.5 million, or 5%, to $29.4 million for the three months ended June 30, 2025 compared to $28.0 million for the three months ended June 30, 2024. The increase in our average volume was the main driver to the increase in our interest income, contributing $1.7 million of the increase for the three months ended June 30, 2025 compared to the year ago quarter, offset by a decrease in the average rate which decreased interest income by $249 thousand.

Current wording

Average interest-earning assets for the three months ended September 30, 2025 increased $44.6 million, or 2%, to $2.19 billion compared to $2.14 billion for the three months ended September 30, 2024. This increase was primarily related to an increase in interest-bearing deposits held at other financial institutions. Total interest income increased $594 thousand, or 2%, to $29.8 million for the three months ended September 30, 2025 compared to $29.2 million for the three months ended September 30, 2024. The increase in our average volume was the main driver to the increase in our interest income, contributing $1.5 million of the increase for the three months ended September 30, 2025 compared to the year ago quarter, offset by a decrease in the average rate which decreased interest income by $878 thousand.

Previous wording

Average loans receivable decreased $20.0 million to $1.86 billion for the three months ended June 30, 2025, compared to $1.88 billion for the three months ended June 30, 2024. The yield on average loans increased 18 basis points to 5.80% for the three months ended June 30, 2025, compared to 5.62% for the three months ended June 30, 2024. The increase in our average loan yields was primarily a result of the repricing of the loan portfolio at higher interest rates. Average balances of nonperforming loans, which consist of nonaccrual loans, are included in the net interest margin calculation and did not have a material impact on our net interest margin in 2025 and 2024.

Current wording

Average loans receivable decreased $49.6 million to $1.83 billionfor the three months ended September 30, 2025, compared to $1.88 billion for the three months ended September 30, 2024. The yield on average loans increased 7 basis points to 5.90%for the three months ended September 30, 2025, compared to 5.83% for the three months ended September 30, 2024. The increase in our average loan yields was primarily a result of originating new loans at higher interest rates and the increase in the volume of commercial and industrial loans. Average balances of nonperforming loans, which consist of nonaccrual loans, are included in the net interest margin calculation and did not have a material impact on our net interest margin in 2025 and 2024.

Previous wording

Average interest-earning deposits at other financial institutions, consisting primarily of excess cash reserves maintained at the Federal Reserve, increased $93.5 million to $123.0 million for the quarter ended June 30, 2025, compared to $29.5 million for the quarter ended June 30, 2024. The increase in our cash reserves is primarily a result of the $97.5 million increase in our average total deposits year-over-year. The yield on average interest-earning deposits at other financial institutions decreased 103 basis points to 4.45% for the quarter ended June 30, 2025 compared to the same period of 2024, primarily as a result of the Federal Open Market Committee's decision to decrease its targeted federal funds rate 100 basis points during 2024.

Current wording

Average interest-earning deposits at other financial institutions, consisting primarily of excess cash reserves maintained at the Federal Reserve, increased $105.9 million to $163.9 million forthe quarter ended September 30, 2025, compared to $58.0 million for the quarter ended September 30, 2024. The increase in our cash reserves is primarily a result of the $74.8 million increase in our average total deposits year-over-year. The yield on average interest-earning deposits at other financial institutions decreased 110 basis points to 4.40% for the quarter ended September 30, 2025 compared to 5.50% for the same period of 2024, primarily as a result of the Federal Open Market Committee's decision to decrease its targeted federal funds rate 125 basis points since September 2024.

Previous wording

Total average interest-bearing liabilities increased $63.5 million to $1.60 billion for the three months ended June 30, 2025 compared to $1.54 billion for the same period of 2024. Conversely, interest expense decreased $630 thousand to $13.7 million for the three months ended June 30, 2025, compared to $14.3 million for the three months ended June 30, 2024. The cost of interest-bearing liabilities decreased 32 basis points to 3.42% for the three months ended June 30, 2025 compared to 3.74% for the three months ended June 30, 2024. The decrease in the average rate reduced interest expense by $1.0 million for the second quarter of 2025 as compared to the same period of 2024, while the increase in average volume increased interest expense $413 thousand when compared to the second quarter of 2024.

Current wording

Total average interest-bearing liabilities increased $31.3 million to $1.60 billion for the three months ended September 30, 2025 compared to $1.57 billion for the same period of 2024. Conversely, interest expense decreased $1.2 million to $13.8 million for the three months ended September 30, 2025, compared to $15.0 million for the three months ended September 30, 2024. The cost of interest-bearing liabil ities decreased 39 basis points to 3.41% for the three months ended September 30, 2025 compared to 3.80% for the three months ended September 30, 2024. The decrease in the average rate reduced interest expense by $1.6 million for the third quarter of 2025 as compared to the same period of 2024, while the increase in average volume increased interest expense $334 thousand when compared to the third quarter of 2024.

Previous wording

Total average interest-bearing deposits increased $114.2 million to $1.53 billion for the three months ended June 30, 2025 compared to $1.42 billion for the three months ended June 30, 2024. Interest expense on deposits increased $64 thousand to $13.0 million for the three months ended June 30, 2025 compared to $12.9 million for the three months ended June 30, 2024, primarily as a result of the increase in volume of average interest-bearing deposits for the three months ended June 30, 2025. The cost of interest-bearing deposits decreased 26 basis points to 3.39% for the three months ended June 30, 2025 compared to 3.65% for the same period of 2024. Average noninterest-bearing deposits decreased $16.7 million, or 4%, to $361.6 million for the three months ended June 30, 2025, compared to $378.3 million for the three months ended June 30, 2024, as customers continue to move excess funds from noninterest-bearing to interest-bearing deposit products. Average wholesale deposits decreased $2.2 million to $247.6 million for the three months ended June 30, 2025 compared to $249.8 million for the three months ended June 30, 2024. Cost of deposits (which includes noninterest- bearing deposits) was 2.74% for the three months ended June 30, 2025 compared to 2.88% for the same three month period of 2024.

Current wording

Total average interest-bearing depo sits increased $39.2 million to $1.54 billion for the three months ended September 30, 2025 compared to $1.50 billion for the three months ended September 30, 2024. Interest expense on deposits decreased $1.1 million to $13.1 millionfor the three months ended September 30, 2025 compared to $14.2 million for the three months ended September 30, 2024, primarily as a result of the decrease in interest rates of average interest-bearing deposits for the three months ended September 30, 2025. The cost of interest-bearing deposits decreased 39 basis points to 3.38% for the three months ended September 30, 2025 compared to 3.77% for the same period of 2024. Average noninterest-bearing deposits increased $6.0 million, or 2%, to $364.6 million for the three months ended September 30, 2025, compared to $358.6 million for the three months ended September 30, 2024. Average wholesale deposits decreased $14.9 million to $234.9 million for the three months ended September 30, 2025 compared to $249.9 million for the three months ended September 30, 2024. Cost of deposits (which includes noninterest-bearing deposits) was 2.73% for the three months ended September 30, 2025 compared to 3.04% for the same three month period of 2024.

Previous wording

Average other borrowed funds decreased $49.7 million to $50.0 million for the quarter ended June 30, 2025, compared to $99.8 million for the quarter ended June 30, 2024. Interest expense on other borrowed funds decreased $681 thousand for the quarter ended June 30, 2025 to $468 thousand compared to $1.1 million for the same period of 2024. The cost of other borrowed funds decreased 88 basis points to 3.75% for the three months ended June 30, 2025 compared to 4.63% for the three months ended June 30, 2024.

Current wording

Average other borrowed funds decreased $7.0 million to $50.0 million for the quarter ended September 30, 2025, compared to $57.0 million for the quarter ended September 30, 2024. Interest expenseon other borrowed funds decreased $85 thousand for the quarter ended September 30, 2025 to $478 thousand comp ared to $563 thousand for the same period of 2024. The cost of other borrowed funds decreased 15 basis points to 3.78% for the three months ended September 30, 2025 compared to 3.93% for the three months ended September 30, 2024.

Previous wording

The following table presents average balance information, interest income, interest expense and the corresponding average yields earned and rates paid for the six months ended June 30, 2025 and 2024.

Current wording

The following table presents average balance information, interest income, interest expense and the corresponding average yields earned and rates paid for the nine months ended September 30, 2025 and 2024.

Previous wording

(1)Nonaccrual loans are included in average balances and do not have a material effect on the average yield. Interest income on non-accruing loans was not material for the periods presented. Net loan fees and late charges included in interest income on loans totaled $180 thousand and $792 thousand for the six months ended June 30, 2025 and 2024, respectively.

Current wording

(1)Nonaccrual loans are included in average balances and do not have a material effect on the average yield. Interest income on non-accruing loans was not material for the periods presented. Net loan fees and late charges included in interest income on loans totaled $1.5 million and $1.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

The following table shows the effect of variations in the volume and mix of our assets and liabilities, as well as the changes in interest rates had on the interest earned from our interest-earning assets and interest incurred on our interest-bearing liabilities for the six months ended June 30, 2025 as compared to the same period of 2024.

Current wording

The following table shows the effect of variations in the volume and mix of our assets and liabilities, as well as the changes in interest rates had on the interest earned from our interest-earning assets and interest incurred on our interest-bearing liabilities for the nine months ended September 30, 2025 as compared to the same period of 2024.

Previous wording

Net interest income for the six months ended June 30, 2025 and 2024, was $30.8 million and $26.5 million, respectively, an increase of $4.3 million, or 16%. The increase in net interest income is primarily due to a $3.2 million increase in interest income and a $1.2 million decrease in interest expense for the six months ended June 30, 2025 compared to the same period of 2024.

Current wording

Net interest income for the nine months ended September 30, 2025 and 2024, was $46.8 million and $40.7 million, respectively, an increase of $6.2 million, or 15%. The increase in net interest income is primarily due to a $3.8 million increase in interest income and a $2.4 million decrease in interest expense for the nine months ended September 30, 2025 compared to the same period of 2024.

Previous wording

Our net interest margin for the six months ended June 30, 2025 and 2024 was 2.87% and 2.53%, respectively, an increase of 34 basis points, or 13%. The increase in our net interest margin was a result of continued repricing of our loan renewals and newly originated loans to current market interest rates over the past year along with the reduction in our cost of our funding sources. The yield on interest-earning assets increased 11 basis points to 5.32% for the six months ended June 30, 2025, compared to 5.21% for the same period of 2024. Our cost of funds decreased 10 basis points to 2.74% for the six months ended June 30, 2025, compared to 2.84% for the same period of 2024.

Current wording

Our net interest margin for the nine months ended September 30, 2025 and 2024 was 2.88% and 2.57%, respectively, an increase of 31 basis points, or 12%. The increase in our net interest margin was a result of continued repricing of our loan renewals and newly originated loans to current market interest rates over the past year along with the reduction in the cost of our funding sources. The yield on interest-earning assets increased 10 basis points to 5.39% for the nine months ended September 30, 2025, compared to 5.29% for the same period of 2024. Our cost of funds decreased 21 basis points to 2.80% for the nine months ended September 30, 2025, compared to 3.01% for the same period of 2024.

Previous wording

Average interest-earning assets increased $64.3 million, to $2.17 billion, for the six months ended June 30, 2025 as compared to$2.10 billion for the same period of 2024, which is primarily related to an increase in interest-bearing deposits at other financial institutions. Total interest income increased $3.2 million, or 6%, to $58.0 million for the six months ended June 30, 2025 compared to $54.8 million for the six months ended June 30, 2024. The increase in average volume was the main driver to the increase in our interest income, contributing $3.6 million of the increase for the six months ended June 30, 2025 compared to the six month period of 2024, offset by a decrease in the average rate which decreased interest income $430 thousand.

Current wording

Average interest-earning assets increased $57.7 million, to $2.17 billion, for the nine months ended September 30, 2025 as compared to $2.12 billion for the same period of 2024, which is primarily related to an increase in interest-bearing deposits at other financial institutions. Total interest income increased $3.8 million, or 4%, to $87.8 million for the nine months ended September 30, 2025 compared to $84.0 million for the nine months ended September 30, 2024. The increase in average volume was the main driver of the increase in our interest income, contributing $5.1 million of the increase for the nine months ended September 30, 2025 compared to the same nine month period of 2024, offset by a decrease in the average rate which decreased interest income by $1.3 million.

Previous wording

Average loans receivable increased $2.9 million to $1.86 billion for the six months ended June 30, 2025. Loan interest income for the six months ended June 30, 2025 increased $1.8 million compared to the same six month period of 2024, primarily as a result of the change in our loan mix towards commercial and industrial loans, which earn a higher yield than other portions of our loan portfolio. The yield on average loans increased 16 basis points to 5.72% for the six months ended June 30, 2025, compared to 5.56% for the six months ended June 30, 2024.

Current wording

Average loans receivable decreased $14.7 million to $1.85 billion for the nine months ended September 30, 2025. Loan interest income for the nine months ended September 30, 2025 increased $1.4 million compared to the same nine month period of 2024, primarily as a result of the change in our loan mix towards commercial and industrial loans, which earn a higher yield than other portions of our loan portfolio. The yield on average loans increased 15 basis points to 5.80%for the nine months ended September 30, 2025, compared to 5.65% for the nine months ended September 30, 2024.

Previous wording

Average interest-earning deposits at other financial institutions, consisting primarily of excess cash reserves maintained at the Federal Reserve, increased $77.0 million to $105.5 million for the six months ended June 30, 2025, compared to $28.5 million for the same six month period of 2024. The increase in our cash reserves is primarily a result of the $89.8 million increase in our average total deposits year-over-year. The yield on average interest-earning deposits at other financial institutions decreased 101 basis points to 4.45% for the six months ended June 30, 2025 compared to the same period of 2024, primarily as a result of the decrease in the targeted federal funds rate during 2024. Interest income earned on average deposits at other financial institutions increased $1.6 million to $2.3 million for the six months ended June 30, 2025 compared $773 thousand for the same period of 2024.

Current wording

Average interest-earning deposits at other financial institutions, consisting primarily of excess cash reserves maintained at the Federal Reserve, increased $86.8 million to $125.2 million for the nine months ended September 30, 2025, compared to $38.4 million for the same nine month period of 2024. The increase in our cash reserves is primarily a result of the $74.8 million increase in our average total deposits year-over-year. The yield on average interest-earning deposits at other financial institutions decreased 105 basis points to 4.43% for the nine months ended September 30, 2025 compared to 5.48% for the same period of 2024, primarily as a result of the decrease in the targeted federal funds rate during 2024 and 2025. Interest income earned on average deposits at other financial institutions increased $2.6 million to $4.1 million for the nine months ended September 30, 2025 compared $1.6 million for the same period of 2024.

Previous wording

Average interest-bearing liabilities increased $56.1 million to $1.59 billion for the six months ended June 30, 2025 compared to $1.54 billion for the same period of 2024. Conversely, interest expense decreased $1.2 million to $27.2 million for the six months ended June 30, 2025, compared to $28.3 million for the six months ended June 30, 2024. The decrease in the average rate reduced interest expense by $1.5 million for the six month period of 2025 as compared to the same period of 2024, while the increase in average volume increased interest expense $358 thousand when compared to the six months ended June 30, 2024.

Current wording

Average interest-bearing liabilities increased $47.8 million to $1.60 billion for the nine months ended September 30, 2025 compared to $1.55 billion for the same period of 2024. Conversely, interest expense decreased $2.4 million to $41.0 million for the nine months ended September 30, 2025, compared to $43.4 million for the nine months ended September 30, 2024. The decrease in the average rate reduced interest expense by $3.2 million for the nine month period of 2025 as compared to the same period of 2024, while the increase in average volume increased interest expense $790 thousand when compared to the nine months ended September 30, 2024.

Previous wording

Average interest-bearing deposits increased $110.8 million to $1.52 billion for the six months ended June 30, 2025 compared to $1.41 billion for the six months ended June 30, 2024. Interest expense on average interest-bearing deposits increased $316 thousand to $25.8 million for the six months ended June 30, 2025, compared to $25.4 million for the three months ended June 30, 2024. The cost of interest-bearing deposits decreased 21 basis points to 3.41% for the six months ended June 30, 2025, compared to 3.62% for the same period of 2024, which was primarily attributable to the repricing of our interest-bearing deposits to lower interest rates. Cost of deposits (which includes noninterest-bearing deposits) was 2.76% for the six months ended June 30, 2025 compared to 2.85% for the same six month period of 2024. The increase in average volume increased interest expense $1.6 million when compared to the six month period of 2024 while the decrease in the average rate reduced interest expense by $1.3 million when compared to the six months ended June 30, 2024. Average noninterest-bearing deposits decreased $21.1 million to $358.1 million for the six months ended June 30, 2025 compared to$379.2 million for the same period of 2024.

Current wording

Average interest-bearing deposits increased $86.8 million to $1.53 billionfor the nine months ended September 30, 2025 compared to $1.44 billion for the nine months ended September 30, 2024. Interest expense on average interest-bearing deposits decreased $813 thousand to $38.8 million for the nine months ended September 30, 2025, compared to $39.6 million for the nine months ended September 30, 2024. The cost of interest-bearing deposits decreased 29 basis points to 3.38% for the nine months ended September 30, 2025, compared to 3.67% for the same period of 2024, which was primarily attributable to the repricing of our interest-bearing deposits to lower interest rates. Cost of deposits (which includes noninterest-bearing deposits) was 2.75% for the nine months ended September 30, 2025 compared to 2.92% for the same nine month period of 2024. The increase in average volume of interest-bearing deposits increased interest expense $2.1 million when compared to the nine month period of 2024 while the decrease in the average rate reduced interest expense by $2.9 million when compared to the nine months ended September 30, 2024. Average noninterest-bearing deposits decreased $12.0 million to $360.3 millionfor the nine months ended September 30, 2025 compared to $372.3 million for the same period of 2024.

Previous wording

Average other borrowed funds decreased $53.8 million to $50.0 million for the six months ended June 30, 2025, compared to $103.8 million for the six months ended June 30, 2024. Interest expense on other borrowed funds decreased $1.5 million to $936 thousand for the six months ended June 30, 2025 compared to $2.4 million for the same period of 2024. The cost of other borrowed funds decreased 85 basis points to 3.77% for the six months ended June 30, 2025 compared to 4.62% for the six months ended June 30, 2024.

Current wording

Average other borrowed funds decreased $38.1 million to $50.0 million for the nine months ended September 30, 2025, compared to $88.1 million for the nine months ended September 30, 2024. Interest expense on other borrowed funds decreased $1.5 million to $1.4 million for the nine months ended September 30, 2025 compared to $2.9 million for the same period of 2024. The cost of other borrowed funds decreased 69 basis points to 3.78% for thenine months ended September 30, 2025 compared to 4.47% for the nine months ended September 30, 2024.

Previous wording

Average balances of nonperforming loans, which include nonaccrual loans, are included in the net interest margin calculation and did not have a material impact on our net interest margin for the three and six months ended June 30, 2025 and 2024.

Current wording

Average balances of nonperforming loans, which include nonaccrual loans, are included in the net interest margin calculation and did not have a material impacton our net interest margin for the three and nine months ended September 30, 2025 and 2024.

Previous wording

We recorded a provision for credit losses of $105 thousand and $305 thousand for the three and six months ended June 30, 2025, respectively, compared to $206 thousand for each of the three and six months ended June 30, 2024. The allowance for credit losses was $18.1 million at each of June 30, 2025 and December 31, 2024. Our allowance for credit losses as a percent of total loans, net of deferred fees and costs, was 0.97% at each of June 30, 2025 and December 31, 2024.

Current wording

We recorded a provision for credit lossesof $375 thousand and $680 thousand for the three and nine months ended September 30, 2025, respectively, compared to arelease of provision for credit losses totaling $200 thousand and provision for credit losses totaled$6 thousand for the three and nine months ended September 30, 2024, respectively. The increase in provision for credit losses during the three and nine months periods ended September 30, 2025 compared to the same periods of 2024 is primarily a result of net charge-offs recorded during 2025. The allowance for credit losses was $17.9 million and$18.1 million at September 30, 2025 and December 31, 2024, respectively. Our allowance for credit losses as a percent of total loans, net of deferred fees and costs, was 0.97% for each of September 30, 2025 and December 31, 2024.

Previous wording

We lend to well-established and relationship-driven borrowers, which has contributed to our track record of low historical credit losses. We continue to maintain our disciplined credit guidelines during the current rate environment. We proactively monitor the impact of changes in economic conditions, such as inflation and recessionary conditions, changes in market interest rates, and changes in government policy. Nonperforming loans, net of fees, at June 30, 2025 totaled $10.5 million, or 0.47% of total assets, compared to $12.8 million, or 0.58%, of total assets at December 31, 2024. We had noother real estate owned at June 30, 2025 and at December 31, 2024. We recorded net charge-offs of $518 thousand during the second quarter of 2025 compared to net recoveries of $5 thousand for same period of 2024. For the six months ended June 30, 2025 and 2024, we recorded net charge-offs of $379 thousand and net recoveries of $35 thousand, respectively.

Current wording

We lend to well-established and relationship-driven borrowers, which has contributed to our track record of low historical credit losses. We continue to maintain our disciplined credit guidelines during the current rate environment. We proactively monitor the impact of changes in economic conditions, such as inflation and recessionary conditions, changes in market interest rates, and changes in government policy. Nonperforming loans, net of fees, at September 30, 2025 totaled $11.1 million, or 0.48% of total assets, compared to $12.9 million, or 0.58%, of total assets at December 31, 2024. Wehad no other real estate owned at September 30, 2025 and December 31, 2024.

Previous wording

The following table provides detail for noninterest incomefor the three and six months ended June 30, 2025 and 2024.

Current wording

The following table provides detail for noninterest incomefor the three and nine months ended September 30, 2025 and 2024.

Previous wording

Noninterest income includes service charges on deposits and loans, loan swap fee income, income from our membership interest in ACM and other investments, income from our BOLI policies, and other fee income, and continues to supplement our operating results. For the three months ended June 30, 2025 and 2024, we recorded noninterest income of $1.0 million and$871 thousand, respectively, an increase of $137 thousand, or 16%. For the six months ended June 30, 2025 and 2024, we recorded noninterest income of $1.7 million and$1.3 million, respectively, an increase of $413 thousand, or 33%.

Current wording

Noninterest income includes service charges on deposits and loans, loan swap fee income, income from our membership interest in ACM and other investments, income from our BOLI policies, and other fee income, and continues to supplement our operating results. For the three months ended September 30, 2025 and 2024, we recorded noninterest income of $1.0 million and $815 thousand, respectively, an increase of $218 thousand, or 27%. Forthe nine months ended September 30, 2025 and 2024, we recorded noninterest income of $2.7 million and $2.1 million, respectively, an increase of $630 thousand, or 30%.

Previous wording

We recorded income from our minority membership interests totaling $351 thousand and $492 thousand for the three and six months ended June 30, 2025, respectively. For the three and six months ended June 30, 2024, we recorded income from our minority membership interests totaling $351 thousand and $148 thousand, respectively. This income is primarily attributable to our membership interest in ACM.

Current wording

We recorded income from our minority membership interests totaling $508 thousand and $1.0 million for the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2024, we recorded income from our minority membership interests totaling $278 thousand and $426 thousand, respectively. This income is primarily attributable to our membership interest in ACM. The increase in earnings at ACM is a direct result of continued success in executing their strategic growth and geographic diversification initiatives, resulting in a 14% increase in loan originations for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024

Previous wording

Fee income from loans was $33 thousand for the quarter ended June 30, 2025, compared to $38 thousand for the same period of 2024. Service charges on deposits were $282 thousand for the quarter ended June 30, 2025, compared to $278 thousand for the same period of 2024. Income from BOLI increased to $71 thousand for the three months ended June 30, 2025 compared to $66 thousand for same period of 2024.

Current wording

Fee income from loans was $35 thousand for the quarter ended September 30, 2025, compared to $54 thousand for the same period of 2024. Service charges on deposits were $321 thousand forthe quarter ended September 30, 2025, compared to $301 thousand for the same period of 2024. Income from BOLI increased to$73 thousand for the three months ended September 30, 2025 compared to $70 thousand for same period of 2024.

Previous wording

Fee income from loans was $110 thousand for six months ended June 30, 2025, compared to $87 thousand for the same period of 2024. Service charges on deposits were $552 thousand for the six months ended June 30, 2025, compared to $539 thousand for the same period of 2024, an increase of $13 thousand, or 2%. Income from BOLI decreased to $141 thousand for the six months ended June 30, 2025 compared to $256 thousand for same period of 2024, a result of our surrendered BOLI policies which occurred during the first quarter of 2024.

Current wording

Fee income from loans was $145 thousand for nine months ended September 30, 2025, compared to $141 thousand for the same period of 2024. Service charges on deposits were $873 thousand for the nine months ended September 30, 2025, compared to $841 thousand for the same period of 2024, an increase of $32 thousand, or 4%. Income from BOLI decreased to $215 thousand for the nine months ended September 30, 2025 compared to $326 thousand for same period of 2024, a result of our surrendered BOLI policies which occurred during the first quarter of 2024.