FVCBankcorp, Inc.

Previous 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.

Current wording

The following presents management’s discussion and analysis of our consolidated financial condition at March 31, 2026 and December 31, 2025 and the results of our operations for the three months ended March 31, 2026 and 2025. 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, 2025. Results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results of operations for the balance of 2026, 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 following factors, among others, could cause our financial performance to differ materially from that expressed in such forward-looking statements:

Current wording

The following factors, among others, could cause the financial performance of the Company to differ materially from that expressed in such forward-looking statements:

Previous wording

•general business and economic conditions, including higher inflation and its impacts, nationally or in the markets that we serve could adversely affect, among other things, real estate valuations, unemployment levels, the ability of businesses to remain viable, consumer and business confidence, and consumer or business spending, which could lead to decreases in demand for loans, deposits, and other financial services that we provide and increases in loan delinquencies and defaults;

Current wording

•general business and economic conditions, including higher inflation and its impacts, nationally or in the markets that the Company serves could adversely affect, among other things, real estate valuations, unemployment levels, the ability of businesses to remain viable, consumer and business confidence, and consumer or business spending, which could lead to decreases in demand for loans, deposits, and other financial services that the Company provides and increases in loan delinquencies and defaults;

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 the shutdown of the U.S. governmentand potential reductions in spending by the U.S. government and related reductions in the federal workforce;

Current wording

•the concentration of the Company's 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 shutdowns of the U.S. governmentand potential reductions in spending by the U.S. government and related reductions in the federal workforce;

Previous wording

•the impact of the interest rate environment on our business, financial condition and results of operation, and its impact on the composition and costs of deposits, loan demand, and the values and liquidity of loan collateral, securities, and interest sensitive assets and liabilities;

Current wording

•the impact of the interest rate environment on the Company's business, financial condition and results of operation, and its impact on the composition and costs of deposits, loan demand, and the values and liquidity of loan collateral, securities, and interest sensitive assets and liabilities;

Previous wording

•changes in our liquidity requirements could be adversely affected by changes in our assets and liabilities;

Current wording

•changes in the Company's liquidity requirements could be adversely affected by changes in its assets and liabilities;

Previous wording

•the management of risks inherent in our real estate loan portfolio, and the risk of a prolonged downturn in the real estate market, which could impair the value of loan collateral and the ability to sell collateral upon any foreclosure;

Current wording

•the management of risks inherent in the Company's real estate loan portfolio, and the risk of a prolonged downturn in the real estate market, which could impair the value of loan collateral and the ability to sell collateral upon any foreclosure;

Previous wording

•changes in market conditions, specifically declines in the commercial and residential real estate market, volatility and disruption of the capital and credit markets, and soundness of other financial institutions that we do business with;

Current wording

•changes in market conditions, specifically declines in the commercial and residential real estate market, volatility and disruption of the capital and credit markets, and soundness of other financial institutions that the Company does business with;

Previous wording

•our investment securities portfolio is subject to credit risk, market risk, and liquidity risk as well as changes in the estimates used to value the securities in the portfolio;

Current wording

•the Company's investment securities portfolio is subject to credit risk, market risk, and liquidity risk as well as changes in the estimates used to value the securities in the portfolio;

Previous wording

•declines in our common stock price or the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to record a noncash impairment charge to earnings in future periods;

Current wording

•declines in the Company's common stock price or the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to record a noncash impairment charge to earnings in future periods;

Previous wording

•potential exposure to fraud, negligence, computer theft and cyber-crime, and our ability to maintain the security of our data processing and information technology systems;

Current wording

•potential exposure to fraud, negligence, computer theft and cyber-crime, and the Company's ability to maintain the security of its data processing and information technology systems;

Previous wording

•the effect of acquisitions and partnerships we may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions;

Current wording

•the effect of acquisitions and partnerships the Company may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions;

Previous wording

•our involvement, from time to time, in legal proceedings and examination and remedial actions by regulators;

Current wording

•the Company's involvement, from time to time, in legal proceedings and examination and remedial actions by regulators;

Previous wording

•geopolitical conditions, including trade restrictions and tariffs, and acts or threats of terrorism, or actions taken by the United States or other governments in response to trade restrictions and tariffs, and acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad; and

Current wording

•geopolitical conditions, including trade restrictions and tariffs, and acts or threats of terrorism and/or military conflicts, or actions taken by the United States or other governments in response to trade restrictions and tariffs, and acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the United States and abroad; and

Previous wording

Net interest income is our primary source of revenue. We define revenue as net interest income plus noninterest income. We manage our balance sheet and interest rate risk exposure to maximize, and concurrently stabilize, net interest income. We do this by monitoring our liquidity position and the spread between the interest rates earned on interest-earning assets and the interest rates paid on interest-bearing liabilities. We attempt to minimize our exposure to interest rate risk, but are unable to eliminate it entirely. In addition to managing interest rate risk, we also analyze our loan portfolio for exposure to credit risk. Loan defaults and foreclosures are inherent risks in the banking industry, and we attempt to limit our exposure to these risks by carefully underwriting and then monitoring our extensions of credit. In addition to net interest income, noninterest income is a complementary source of revenue for us and includes, among other things, service charges on deposits and loans, income from our minority membership interest in Atlantic Coast Mortgage, LLC ("ACM"), merchant services fee income, insurance commission income, income from bank owned life insurance ("BOLI"), and gains and losses on sales of investment securities available-for-sale.

Current wording

Net interest income is our primary source of revenue. We define revenue as net interest income plus noninterest income. We manage our balance sheet and interest rate risk exposure to maximize, and concurrently stabilize, net interest income. We do this by monitoring our liquidity position and the spread between the interest rates earned on interest-earning assets and the interest rates paid on interest-bearing liabilities. We attempt to minimize our exposure to interest rate risk, but are unable to eliminate it entirely. In addition to managing interest rate risk, we also analyze our loan portfolio for exposure to credit risk. Loan defaults and foreclosures are inherent risks in the banking industry, and we attempt to limit our exposure to these risks by carefully underwriting and then monitoring our extensions of credit. In addition to net interest income, noninterest income is a complementary source of revenue for us and includes, among other things, service charges on deposits and loans, income from our minority membership interest in Atlantic Coast Mortgage ("ACM"), merchant services fee income, insurance commission income, income from bank-owned life insurance ("BOLI"), and gains and losses on sales of investment securities available-for-sale.

Previous wording

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

Current wording

Results of Operations— Three Months Ended March 31, 2026 and 2025

Previous 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%.

Current wording

We recorded net income of $6.4 million, or $0.35 diluted earnings per share, for the three months ended March 31, 2026, compared to net income of $5.2 million, or $0.28 diluted earnings per share, for the three months ended March 31, 2025, an increase of $1.2 million, or 24%.

Previous 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.

Current wording

The annualized return on average assets for the three months ended March 31, 2026 and 2025 was 1.17% and 0.94%, respectively. The annualized return on average equity for the three months ended March 31, 2026 and 2025 was 10.04% and 8.61%, respectively.

Previous 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.

Current wording

Core operating earnings (non-GAAP) for the three months ended March 31, 2026 and 2025 were $6.6 million and $5.2 million, respectively, an increase of $1.4 million, or 27%. Diluted core operating earnings per share (non-GAAP) for the three months ended March 31, 2026 and 2025 were $0.36 and $0.28, respectively.

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 $478 thousandand $448 thousandfor the quarters ended September 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 $331 thousand and $670 thousandfor the quarters ended March 31, 2026 and 2025, respectively.

Previous 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.

Current wording

Our net interest margin for the three months ended March 31, 2026 and 2025 was 3.26% and 2.83%, respectively, an increase of 43 basis points, or 15%. 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 also reduced the cost of our non-maturity funding sources simultaneously with federal funds rate decisions during 2025. The yield on interest-earning assets increased 19 basis points to 5.50% for the three months ended March 31, 2026, compared to 5.31% for the same period of 2025. Our cost of interest-bearing liabilities decreased 27 basis points to 3.19% for the three months ended March 31, 2026, compared to 3.46% for the same period of 2025. During the first quarter of 2026, we recorded $244 thousand in accelerated debt issuance costs associated with the redemption of our subordinated debt in January 2026, which decreased net interest margin by 2 basis points for the three months ended March 31, 2026.

Previous 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.

Current wording

Average interest-earning assets for the three months ended March 31, 2026 increased $14.0 million to $2.17 billion compared to $2.15 billion for the three months ended March 31, 2025. This increase was primarily related to an increase in loans receivable, which increased $65.0 million, or 3%, offset by a decrease in interest-bearing deposits at other financial institutions of $35.6 million, or 41%. Total interest income increased $1.3 million, or 4%, to $29.8 million for the three months ended March 31, 2026 compared to $28.6 million for the three months ended March 31, 2025. The increase in our average volume of interest earning assets was the main driver to the increase in our interest income, contributing $901 thousand of the increase for the three months ended March 31, 2026 compared to the year ago quarter, in addition to the average rate which increased interest income by $363 thousand.

Previous 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.

Current wording

Average loans receivable increased $65.0 million to $1.93 billion for the three months ended March 31, 2026, compared to $1.87 billion for the three months ended March 31, 2025. The yield on average loans increased 19 basis points to 5.88% for the three months ended March 31, 2026, compared to 5.69% for the three months ended March 31, 2025. The increase in our average loan yields was primarily a result of new loan originations and loans repricing to current market 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 2026 and 2025.

Previous 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.

Current wording

Average interest-earning deposits at other financial institutions, consisting primarily of excess cash reserves maintained at the Federal Reserve, decreased $35.6 million to $52.2 million for the quarter ended March 31, 2026, compared to $87.8 million for the quarter ended March 31, 2025. The decrease in our excess cash reserves is primarily due to an increase in loan originations, as average loans receivable increased $65.0 million year-over-year. The yield on average interest-earning deposits at other financial institutions decreased 70 basis points to 3.69% for the quarter ended March 31, 2026 compared to 4.39% for the same period of 2025, primarily as a result of the Federal Open Market Committee's decision to decrease its targeted federal funds rate 75 basis points during the course of 2025.

Previous 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.

Current wording

Total average interest-bearing deposits increased $32.0 million to $1.55 billion for the three months ended March 31, 2026 compared to $1.51 billion for the three months ended March 31, 2025. Interest expense on deposits decreased $1.1 million to $11.7 million for the three months ended March 31, 2026 compared to $12.8 million for the three months ended March 31, 2025, primarily as a result of the decrease in interest rates on interest-bearing deposits for the three months ended March 31, 2026. The cost of interest-bearing deposits decreased 36 basis points to 3.07% for the three months ended March 31, 2026 compared to 3.43% for the same period of 2025. Average noninterest-bearing deposits increased $827 thousand to $355.5 million for the three months ended March 31, 2026, compared to $354.6 million for the three months ended March 31, 2025. Average wholesale deposits decreased $11.1 million to $238.8 million for the three months ended March 31, 2026 compared to $249.9 million for the three months ended March 31, 2025. Cost of deposits (which includes noninterest-bearing deposits) was 2.50% for the three months ended March 31, 2026 compared to 2.78% for the same three month period of 2025, a decrease of 28 basis points, or 10%.

Previous 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.

Current wording

Average other borrowed funds decreased $34.8 million to $15.2 million for the quarter ended March 31, 2026, compared to $50.0 million for the quarter ended March 31, 2025. Interest expense on other borrowed funds decreased $320 thousand, or 68%, for the quarter ended March 31, 2026 to $148 thousand compared to $468 thousand for the same period of 2025. The cost of other borrowed funds increased 13 basis points to 3.93% for the three months ended March 31, 2026 compared to 3.80% for the three months ended March 31, 2025.

Previous wording

Provision Expense and Allowance for Credit Losses

Current wording

Provision Expense and Allowance for Credit Losses on Loans

Previous 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.

Current wording

We recorded a provision for credit losses of $168 thousand for the three months ended March 31, 2026 and $200 thousand for the three months ended March 31, 2025. The allowance for credit losses was $19.1 million and $18.9 million at March 31, 2026 and December 31, 2025, respectively. Our allowance for credit losses as a percent of total loans, net of deferred fees and costs, was 1.00% and 0.97%for March 31, 2026 and December 31, 2025, respectively. The increase in the allowance for credit losses percentage at March 31, 2026 as compared to December 31, 2025 was due to an increase in our individually evaluated reserves and a slight increase in qualitative factors.

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 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.

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 March 31, 2026 totaled $12.2 million, or 0.52% of total assets, compared to $10.7 million, or 0.47% of total assets at December 31, 2025. We had no other real estate owned at March 31, 2026 and December 31, 2025. We recorded net charge-offs of $3 thousand and net recoveries of $139 thousand for the quarters ended March 31, 2026 and 2025, respectively.

Previous wording

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

Current wording

The following table provides detail for noninterest incomefor the three months ended March 31, 2026 and 2025.

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 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%.

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 bank-owned life insurance ("BOLI") policies, and other fee income, and continues to supplement our operating results. For the three months ended March 31, 2026 and 2025, we recorded noninterest income of $883 thousand and $671 thousand, respectively, an increase of $212 thousand, or 32%.

Previous wording

The following table reflects the components of noninterest expense for the three and nine months ended September 30, 2025 and 2024.

Current wording

The following table reflects the components of noninterest expense for the three months ended March 31, 2026 and 2025.

Previous wording

Noninterest expense includes, among other things, salaries and benefits, occupancy and equipment costs, professional fees, data processing, insurance and miscellaneous expenses. Noninterest expense was $9.5 million and $9.2 million for the three months ended September 30, 2025 and 2024, respectively, an increase of $277 thousand, or 3%. Noninterest expense was $28.0 million and $26.8 million for the nine months ended September 30, 2025 and 2024, respectively, an increase of $1,089 thousand, or 4%.

Current wording

Noninterest expense includes, among other things, salaries and benefits, occupancy and equipment costs, professional fees, data processing, insurance and miscellaneous expenses. Noninterest expense was $9.9 million and $9.1 million for the three months ended March 31, 2026 and 2025, respectively, an increase of $739 thousand, or 8%.

Previous wording

For the nine months ended September 30, 2025 and 2024, salaries and benefits expense was $14.9 million and $14.1 million, respectively, an increase of $860 thousand, or 6%, which was primarily related to an increase in incentive accruals for 2025 along with the filling of open positions that were vacant in previous periods. Internet banking and software expense increased $450 thousand to $2.6 million for the nine months ended September 30, 2025, compared to $2.1 million for the same period of 2024, a result of the enhanced customer service solutions we have implemented over the past year.

Current wording

Salaries and benefits expense increased $659 thousand to $5.4 million for the three months ended March 31, 2026 compared to $4.8 million for the same period in 2025. The increase in salaries and benefits expense when compared to the year ago quarter ended March 31, 2025 was primarily due to the filling of open positions that were vacant during 2025, along with an increase in payroll taxes and other incentive accruals during the first quarter of 2026. Internet banking and software expense increased $59 thousand for the three months ended March 31, 2026 to $884 thousand, compared to $825 thousand for the same period in 2025, primarily as we continue to enhance our customer digital solutions.

Previous wording

We recorded a provision for income tax expense of $1.6 million and $1.4 million for the three months ended September 30, 2025 and 2024, respectively. The effective tax rate for the three months ended September 30, 2025 and 2024 was 22.7% and 22.6%, respectively.

Current wording

We recorded a provision for income tax expense of $1.9 million and $1.2 million for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate for the three months ended March 31, 2026 and 2025 was 22.6% and 19.2%, respectively. In 2026, the Company recorded fewer tax benefits associated with the exercise or vesting of share based compensation.

Previous wording

Commercial real estate loans totaled $994.6 million and $1.04 billion at September 30, 2025 and December 31, 2024, respectively, and were approxim ately 54% and 56% of total loans receivable at such dates, respectively. Owner-occupied commercial real estate loans were $213.6 million at September 30, 2025 compared to $188.2 million at December 31, 2024. Non-owner-occupied commercial real estate loans were $781.0 million at September 30, 2025 compared to $850.1 million at December 31, 2024. Commercial construction loans totaled $170.3 million at September 30, 2025, compared to $162.4 million at December 31, 2024 and comprised 9% of total loans receivable at September 30, 2025 and December 31, 2024. Our regulatory commercial real estate concentration (which includes non-owner-occupied real estate and construction loans) was 330% of our total risk-based capital at September 30, 2025 and 371% of our total risk-based capital at December 31, 2024. Our commercial real estate portfolio, including construction loans, is diversified by asset type and geographic concentration. We manage the portfolio in a disciplined manner and have comprehensive policies to monitor, measure, and mitigate our loan concentrations within this portfolio segment, including rigorous credit approval, monitoring and administrative practices. Additional information on the stratification of these portfolio segments can be found below under "Asset Quality".

Current wording

Commercial real estate loans totaled $1.00 billion and $1.03 billion at March 31, 2026 and 2025, respectively, and were approximately 52% and 53% of the total loans receivable at such dates, respectively. Owner-occupied commercial real estate loans were $241.8 million at March 31, 2026 compared to $266.3 million at December 31, 2025. Nonowner-occupied commercial real estate loans were $759.8 million at March 31, 2026 compared to$766.3 million at December 31, 2025. Commercial construction loans totaled $157.3 million at March 31, 2026, compared to $153.0 million at December 31, 2025 and comprised 8% of total loans receivable at such dates, respectively. Our regulatory commercial real estate concentration (which includes nonowner-occupied real estate and construction loans) was 306% of our total risk-based capital at March 31, 2026. Our commercial real estate portfolio, including construction loans, is diversified by asset type and geographic concentration. We manage this portion of our portfolio in a disciplined manner. We have comprehensive policies to monitor, measure, and mitigate our loan concentrations within this portfolio segment, including rigorous credit approval, monitoring and administrative practices. Additional information on the stratification of these portfolio segments can be found below under "Asset Quality".

Previous wording

Commercial and industrial loans increased $49.5 million to $386.1 million at September 30, 2025, an increase of 15%, from$336.7 million at December 31, 2024. The increase in commercial and industrial loans was a result of an increase in loan originations during 2025 in addition to an increase in the our warehouse lending facility which totaled $50.3 million at September 30, 2025 compared to $22.4 million at December 31, 2024. Consumer real estate loans decreased $23.3 million to $302.0 million at September 30, 2025, from $325.3 million at December 31, 2024, primarily as a result of principal repayments during 2025.

Current wording

Commercial and industrial loans increased $19.0 million to $472.4 million at March 31, 2026, an increase of 4%, from $453.4 million at December 31, 2025. The increase in commercial and industrial loans was a result of a continued increase in loan originations during 2026 in addition to an increase in the our warehouse lending facility which totaled $34.1 million at March 31, 2025 compared to $30.0 million at December 31, 2025. Consumer residential loans decreased $6.8 million to $290.2 million at March 31, 2026, from $297.0 million at December 31, 2025. The decrease in residential loans was primarily a result of principal repayments during 2026.

Previous wording

Nonperforming loans, defined as nonaccrual loans and loans contractually past due 90 days or more as to principal or interest andstill accruing, were $11.1 million and $12.9 million at September 30, 2025 and December 31, 2024, respectively, a decrease of $1.8 million, or 14%. The decrease in nonperforming loans at September 30, 2025 is primarily due to a decrease in loans past due over 90 days at September 30, 2025. Loans that we have classified as nonperforming are a result of customer specific deterioration, mostly financial in nature, that are not a result of economic, industry, or environmental causes that we might see as a pattern for possible future losses within our loan portfolio. For each of our criticized assets, we individually evaluate each loan, generally through the performance of a collateral analysis to determine the amount of allowance required. As a result of the analysis completed, we had a reserve for individually assessed loans totaling $396 thousand and $468 thousand at September 30, 2025 and December 31, 2024, respectively. Our ratio of nonperforming loans to total assets was 0.48% and 0.58% at September 30, 2025 and December 31, 2024, respectively. We had no other real estate owned and there were no loan modifications for borrowers who were experiencing financial difficulty during the nine and twelve month periods ended September 30, 2025 and December 31, 2024.

Current wording

Nonperforming loans, defined as nonaccrual loans and loans contractually past due 90 days or more as to principal or interest andstill accruing, were$12.2 million and$10.7 million at March 31, 2026 and December 31, 2025, respectively, an increase of $1.5 million, or 14%. The increase in nonperforming loans at March 31, 2026 is primarily due to an increase in loans past due over 90 days at March 31, 2026, which increased $746 thousand. Loans that we have classified as nonperforming are a result of customer specific deterioration, mostly financial in nature, that are not a result of economic, industry, or environmental causes that we might see as a pattern for possible future losses within our loan portfolio. We individually evaluate each of our criticized loans, generally through the performance of a collateral analysis to determine the amount of allowance required. As a result of the analysis completed, we had a reserve for individually assessed loans totaling $1.6 million and $1.1 million at March 31, 2026 and December 31, 2025, respectively. Our ratio of nonperforming loans to total assets was 0.52% and 0.47% at March 31, 2026 and December 31, 2025, respectively. We had no other real estate owned at March 31, 2026 and December 31, 2025. Loan modifications for borrowers who were experiencing financial difficulty at March 31, 2026 totaled $147 thousand compared to none at December 31, 2025.

Previous wording

We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. We analyze loans individually by classifying the loans as to credit risk. This analysis includes larger, non-homogeneous loans such as commercial real estate and commercial and industrial loans. This analysis is performed on an ongoing basis as new information is obtained. At September 30, 2025, we had$4.9 million in loans identified as special mention, an increase of $1.6 million from December 31, 2024. Special mention rated loans have a potential weakness that deserves our close attention; however, the borrower continues to pay in accordance with their contractual terms, unless modified and disc losed. The increase from December 31, 2024 was primarily a result of downgrading one loan relationship to special mention during 2025. Loans rated as special mention are generally considered to be well-secured, and are not individually evaluated.

Current wording

We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. We analyze loans individually by classifying the loans as to credit risk. This analysis includes larger, non-homogeneous loans such as commercial real estate and commercial and industrial loans, and is performed on an ongoing basis as new information is obtained. At March 31, 2026, we had $47.3 million in loans identified as special mention, an increase of $893 thousand from December 31, 2025. Special mention rated loans have a potential weakness that deserves our close attention; however, the borrower continues to pay in accordance with their contractual terms, unless modified and disclosed. Loans rated as special mention are generally considered to be well-secured, and are not individually evaluated. The increase from December 31, 2025 was a result of two loans downgraded to special mention totaling $1.4 million while one loan totaling $534 thousand, which was previously rated as special mention was upgraded during 2026. Six of the special mention loans are commercial real estate loans, with collateral in retail, mixed-use and multifamily, five of which are located in Washington, D.C. Of the loans located in Washington, D.C., four of the five loans have executed listing agreements and are currently either listed for sale or are in the process thereof. The Company expects that the sale of some of these properties will close prior to the end of the third quarter of 2026. These loans are well-secured with updated valuations and are not individually impaired. We believe there will be satisfactory resolution to each of these loans.

Previous wording

At September 30, 2025, we had $10.2 million in loans identified as substandard, a decrease of $1.0 million from $11.2 million at December 31, 2024, which was primarily a result of three loans being paid off in full and one loan upgraded during 2025. Substandard rated loans are inadequately protected by the current net worth and paying capacity of the obligor or of the colla teral pledged, if any. For each of these substandard loans, a liquidation analysis is completed. At September 30, 2025, reserves for individually assessed loans totaling $396 thousand were allocated within the allowance for credit losses to supplement any shortfall of collateral.

Current wording

At March 31, 2026, we had $10.9 million in loans identified as substandard, an increase of $760 thousand from December 31, 2025. The increase in substandard loans was a result of the addition of one consumer mortgage loan that is in the process of foreclosure. Substandard rated loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. For each of these substandard loans, an individual analysis is completed. At March 31, 2026, reserves for individually assessed loans totaled $1.6 million and were allocated within the allowance for credit losses to supplement any shortfall of collateral.