MetroCity Bankshares, Inc.

Previous wording

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of MetroCity Bancshares, Inc. and our wholly owned subsidiary, Metro City Bank, from December 31, 2024 through June 30, 2025 and on our results of operations for the three and six months ended June 30, 2025 and 2024. This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K, and information presented elsewhere in this Quarterly Report on Form 10-Q, particularly the unaudited consolidated financial statements and related notes appearing in Item 1.

Current wording

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of MetroCity Bancshares, Inc. and our wholly owned subsidiary, Metro City Bank, from December 31, 2024 through September 30, 2025 and on our results of operations for the three and nine months ended September 30, 2025 and 2024. This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2024 included in our Annual Report on Form 10-K, and information presented elsewhere in this Quarterly Report on Form 10-Q, particularly the unaudited consolidated financial statements and related notes appearing in Item 1.

Previous wording

On March 16, 2025, the Company and the Bank entered into an Agreement and Plan of Reorganization (the “Reorganization Agreement”) with First IC Corporation, a Georgia corporation (“First IC”), and First IC Bank, a Georgia-state chartered bank and the wholly-owned subsidiary of First IC (“First IC Bank”), whereby First IC will be merged with and into the Company and First IC Bank will be merged with and into the Bank. Each share of First IC common stock will, at the effective time of the transaction, be converted into the right to receive the pro-rata share of (1) $111,965,213 in cash and (2) 3,384,588 shares of Company common stock, each as may be adjusted in accordance with the terms of the Reorganization Agreement. At June 30, 2025, First IC had approximately $1.3 billion in total assets, $1.1 billion in total loans and $949.0 million in total deposits. The pro forma company is projected to have approximately $4.8 billion in total assets, $3.7 billion in total deposits and $4.1 billion in total loans.

Current wording

On March 16, 2025, the Company and the Bank entered into an Agreement and Plan of Reorganization (the “Reorganization Agreement”) with First IC Corporation, a Georgia corporation (“First IC”), and First IC Bank, a Georgia-state chartered bank and the wholly-owned subsidiary of First IC (“First IC Bank”), whereby First IC will be merged with and into the Company and First IC Bank will be merged with and into the Bank. Each share of First IC common stock will, at the effective time of the transaction, be converted into the right to receive the pro-rata share of (1) $111,965,213 in cash and (2) 3,384,588 shares of Company common stock, each as may be adjusted in accordance with the terms of the Reorganization Agreement. At September 30, 2025, First IC had approximately $1.2 billion in total assets, $1.1 billion in total loans and $916.1 million in total deposits. The pro forma company is projected to have approximately $4.8 billion in total assets, $3.6 billion in total deposits and $4.2 billion in total loans.

Previous wording

The merger is expected to be completed early in the fourth quarter of 2025, and remains subject to the satisfaction of customary closing conditions.

Current wording

The merger is expected to be completed later in the fourth quarter of 2025, and remains subject to the satisfaction of customary closing conditions.

Previous wording

The estimate of expected credit losses under the CECL approach is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. We then consider whether the historical loss experience should be adjusted for loan-specific risk characteristics or current conditions at the reporting date that did not exist over the period from which historical experience was used. Finally, we consider forecasts about future economic conditions that are reasonable and supportable. The allowance for unfunded commitments represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit. This allowance is estimated by loan segment at each balance sheet date under the CECL model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur.

Current wording

The reserve for credit losses consists of the allowance for credit losses (“ACL”) and the allowance for unfunded commitments. The estimate of expected credit losses under the current expected credit loss (“CECL”) methodology is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. We then consider whether the historical loss experience should be adjusted for loan-specific risk characteristics or current conditions at the reporting date that did not exist over the period from which historical experience was used. Finally, we consider forecasts about future economic conditions that are reasonable and supportable. The allowance for unfunded commitments represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit. This allowance is estimated by loan segment at each balance sheet date under the CECL model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur.

Previous wording

MetroCity Bankshares, Inc. is a bank holding company headquartered in the Atlanta metropolitan area. We operate through our wholly-owned banking subsidiary, Metro City Bank, a Georgia state-chartered commercial bank that was founded in 2006. We currently operate 20 full-service branch locations in multi-ethnic communities in Alabama, Florida, Georgia, New York, New Jersey, Texas and Virginia. As of June 30, 2025, we had total assets of $3.62 billion, total loans of $3.13 billion, total deposits of $2.69 billion and total shareholders’ equity of $436.1 million.

Current wording

MetroCity Bankshares, Inc. is a bank holding company headquartered in the Atlanta metropolitan area. We operate through our wholly-owned banking subsidiary, Metro City Bank, a Georgia state-chartered commercial bank that was founded in 2006. We currently operate 20 full-service branch locations in multi-ethnic communities in Alabama, Florida, Georgia, New York, New Jersey, Texas and Virginia. As of September 30, 2025, we had total assets of $3.63 billion, total loans of $3.20 billion, total deposits of $2.69 billion and total shareholders’ equity of $445.9 million.

Previous wording

growing metropolitan markets in the Eastern U.S. and Texas. We offer a suite of loan and deposit products tailored to meet the needs of the businesses and individuals already established in our communities, as well as first generation immigrants who desire to establish and grow their own businesses, purchase a home, or educate their children in the United States. Through our diverse and experienced management team and talented employees, we are able to speak the language of our customers and provide them with services and products in a culturally competent manner.

Current wording

We are a full-service commercial bank focused on delivering personalized service in an efficient and reliable manner to the small to medium-sized businesses and individuals in our markets, predominantly Asian-American communities in growing metropolitan markets in the Eastern U.S. and Texas. We offer a suite of loan and deposit products tailored to meet the needs of the businesses and individuals already established in our communities, as well as first generation immigrants who desire to establish and grow their own businesses, purchase a home, or educate their children in the United States. Through our diverse and experienced management team and talented employees, we are able to speak the language of our customers and provide them with services and products in a culturally competent manner.

Previous wording

The following table sets forth unaudited selected financial data for the most recent five quarters and for the six months ended June 30, 2025 and 2024.. This data should be read in conjunction with the unaudited consolidated financial statements and accompanying notes included in Item 1 and the information contained in this Item 2.

Current wording

The following table sets forth unaudited selected financial data for the most recent five quarters and for the nine months ended September 30, 2025 and 2024. This data should be read in conjunction with the unaudited consolidated financial statements and accompanying notes included in Item 1 and the information contained in this Item 2.

Previous wording

We recorded net income of $16.8 million for the three months ended June 30, 2025 compared to $16.9 million for the same period in 2024, a decrease of $111,000, or 0.7%. This decrease was due to increases in noninterest expense of $1.1 million, income tax expense of $413,000 and provision for credit losses of $257,000, offset by increases in net interest income of $1.5 million and noninterest income of $174,000.

Current wording

We recorded net income of $17.3 million for the three months ended September 30, 2025 compared to $16.7 million for the three months ended September 30, 2024, an increase of $569,000, or 3.4%. This increase was due to an increase in net interest income of $1.5 million and a decrease in provision for credit losses of $1.1 million, offset by increases in noninterest expense of $1.0 million and income tax expense of $608,000 and a decrease in noninterest income of $437,000.

Previous wording

For the six months ended June 30, 2025, we recorded net income of $33.1 million compared to $31.6 million for the six months ended June 30, 2024, an increase of $1.6 million, or 4.9%. This increase was due to an increase in net interest income of $4.9 million and an increase in noninterest income of $62,000, offset by an increase in noninterest expense of $2.5 million, an increase in provision for credit losses of $532,000 and an increase in income tax expense of $390,000.

Current wording

For the nine months ended September 30, 2025, we recorded net income of $50.4 million compared to $48.3 million for the nine months ended September 30, 2024, an increase of $2.1 million, or 4.4%. This increase was due to an increase in net interest income of $6.4 million and a decrease in provision for credit losses of $593,000, offset by increases in noninterest expense $3.5 million and income tax expense of $1.0 million and a decrease in noninterest income of $375,000.

Previous wording

Basic and diluted earnings per common share for the three months ended June 30, 2025 was $0.66 and $0.65, respectively, compared to $0.67 and $0.66 for the basic and diluted earnings per common share for the same period in 2024. For the six months ended June 30, 2025, basic and diluted earnings per common share was $1.30 and $1.29, respectively, compared to $1.25 and $1.24 for the same period in 2024, respectively.

Current wording

Basic and diluted earnings per common share for the three months ended September 30, 2025 was $0.68 and $0.67, respectively, compared to $0.66 and $0.65 for the basic and diluted earnings per common share for the three months ended September 30, 2024. For the nine months ended September 30, 2025, basic and diluted earnings per common share was $1.98 and $1.96, respectively, compared to $1.91 and $1.89 for the nine months ended September 30, 2024, respectively.

Previous wording

Interest income totaled $106.6 million for the six months ended June 30, 2025 compared to $106.5 million for the same period in 2024, an increase of $102,000, or 0.1%, primarily due to a four basis point increase in the loan yield coupled with an increase in average loan balances of $4.1 million, as well as an increase in the average total investment balance of $28.4 million, offset by a decrease of 109 basis points in the yield on average total investments. The increase in average loans is due to an increase of $67.0 million in average commercial real estate loans, an increase of $7.6 million in average construction and development loans and an increase of $5.1 million in average commercial and industrial loans, offset by a $75.7 million decrease in average residential mortgage loans. As compared to the six months ended June 30, 2024, the yield on average interest-earning assets decreased by three basis points to 6.33% from 6.36% with the yield on average loans increasing by four basis points and the yield on average total investments decreasing by 109 basis points.

Current wording

Interest income totaled $54.0 million for the three months ended September 30, 2025, an increase of $170,000, or 0.3%, from the three months ended September 30, 2024, primarily due to a $59.5 million increase in average loan balances and a $4.1 million increase in the average total investments balance, offset by an 83 basis points decrease in the total investments yield and a six basis points decrease in the loan yield. The increase in average loans is due to an increase of $72.0 million in average commercial real estate loans, an increase of $15.0 million in average construction and development loans and an increase of $7.1 million in commercial and industrial loans, offset by a decrease of $34.5 million in average residential real estate loans. As compared to the three months ended September 30, 2024, the yield on average interest-earning assets decreased by 12 basis points to 6.24% from 6.36% with the yield on average loans decreasing by six basis points and the yield on average total investments decreasing by 83 basis points.

Previous wording

Interest income totaled $54.0 million for the three months ended June 30, 2025, a decrease of $59,000, or 0.1%, from the three months ended June 30, 2024, primarily due to a 169 basis points decrease in the total investments yield, offset by a $41.4 million increase in the average total investments balance, a $5.7 million increase in average loan balances and a three basis points increase in the loan yield. The increase in average loans is due to an increase of $70.1 million in average

Current wording

Interest income totaled $160.6 million for the nine months ended September 30, 2025 compared to $160.3 million for the same period in 2024, an increase of $272,000, or 0.2%, primarily due to a $22.7 million increase in average loan balances and a $20.3 million increase in the average total investments balance, offset by a 99 basis point decrease in the

Previous wording

commercial real estate loans, an increase of $13.8 million in average construction and development loans and an increase of $2.1 million in commercial and industrial loans, offset by a decrease of $80.3 million in average residential real estate loans. As compared to the three months ended June 30, 2024, the yield on average interest-earning assets decreased by 11 basis points to 6.34% from 6.45% with the yield on average loans increasing by three basis points and the yield on average total investments decreasing by 169 basis points.

Current wording

total investments yield. The increase in average loans is due to an increase of $68.7 million in average commercial real estate loans, an increase of $10.1 million in average construction and development loans and an increase of $5.8 million in average commercial and industrial loans, offset by a $61.9 million decrease in average residential mortgage loans. As compared to the nine months ended September 30, 2024, the yield on average interest-earning assets decreased by six basis points to 6.30% from 6.36% with the yield on average loans increasing by one basis point and the yield on average total investments decreasing by 99 basis points.

Previous wording

Interest expense for the three months ended June 30, 2025 decreased $1.5 million, or 6.5%, to $21.9 million compared to interest expense of $23.4 million for the three months ended June 30, 2024, primarily due to a 38 basis points decrease in deposit costs coupled with a $22.6 million decrease in average interest-bearing deposit balances, offset by a 13 basis points increase in borrowing costs and a $56.9 million increase in the average borrowings balance. The 38 basis points decrease in deposit costs was primarily driven by an 80 basis points decrease in the cost on average time deposits and a 68 basis point decrease in the cost on average interest-bearing demand deposits and savings accounts, offset by an 18 basis points increase in the cost of average money market deposits. Average time deposits decreased by $76.1 million while average money market deposits and interest-bearing demand deposits and savings accounts increased by $34.2 million and $19.4 million, respectively. Average borrowings for the three months ended June 30, 2025 increased by $56.9 million with an increase in rate of 13 basis points compared to the three months ended June 30, 2024.

Current wording

Interest expense for the three months ended September 30, 2025 decreased $1.3 million, or 5.7%, to $22.2 million compared to interest expense of $23.5 million for the three months ended September 30, 2024, primarily due to a 33 basis points decrease in deposit costs coupled with a $10.4 million decrease in average deposit balances, offset by a $49.3 million increase in the average borrowings balance. The 33 basis points decrease in deposit costs was primarily driven by an 81 basis points decrease in the cost on average time deposits, offset by a 55 basis points increase in the cost on average interest-bearing demand deposits and savings accounts and a 15 basis points increase in the cost of average money market deposits. Average time deposits and money market deposits decreased by $71.2 million and $8.0 million, respectively, while average interest-bearing demand deposits and savings accounts increased by $68.8 million. Average borrowings for the three months ended September 30, 2025 increased by $49.3 million while borrowing costs decreased by five basis points compared to the three months ended September 30, 2024.

Previous wording

Interest expense totaled $43.8 million for the six months ended June 30, 2024, a decrease of $4.8 million, or 9.9%, compared to the same period in 2024, primarily due to a 50 basis points decrease in deposit costs coupled with a $44.8 million decrease in average interest-bearing deposit balances. Average borrowings outstanding for the six months ended June 30, 2025 increased by $51.6 million with an increase in rate of 28 basis points compared to the same period in 2024.

Current wording

Interest expense totaled $66.0 million for the nine months ended September 30, 2025, a decrease of $6.2 million, or 8.5%, compared to the same period in 2024, primarily due to a 44 basis points decrease in deposit costs coupled with a $33.3 million decrease in average interest-bearing deposit balances. Average borrowings outstanding for the nine months ended September 30, 2025 increased by $50.9 million with an increase in rate of 17 basis points compared to the same period in 2024.

Previous wording

The Company currently has effective interest rate derivative agreements totaling $950.0 million that are designated as cash flow hedges of our deposit accounts indexed to the Federal Funds Effective rate. The weighted average pay rate for these interest rate derivatives is 2.70%. During the three and six months ended June 30, 2025, we recorded a credit to interest expense of $4.2 million and $8.4 million, respectively, from the benefit received on these interest rate derivatives compared to a credit to interest expense of $6.5 million and $10.6 million recorded during the three and six month periods ended June 30, 2024. Based on the Federal Funds Effective rate as of June 30, 2025 (4.33%), the Company would estimate to record a credit to interest expense of approximately $7.4 million for the remainder of 2025 from the benefit received on these interest rate derivatives. See Note 8 of our consolidated financial statements as of June 30, 2025, included elsewhere in this Form 10-Q, for additional information on these interest rate derivatives.

Current wording

The Company currently has effective interest rate derivative agreements totaling $950.0 million that are designated as cash flow hedges of our deposit accounts indexed to the Federal Funds Effective rate. The weighted average pay rate for these interest rate derivatives is 2.70%. During the three and nine months ended September 30, 2025, we recorded a credit to interest expense of $3.8 million and $12.2 million, respectively, from the benefit received on these interest rate derivatives compared to a credit to interest expense of $6.4 million and $17.0 million recorded during the three and nine month periods ended September 30, 2024, respectively. Based on the Federal Funds Effective rate as of September 30, 2025 (4.09%), the Company would estimate to record a credit to interest expense of approximately $3.2 million for the remainder of 2025 and $7.6 million in 2026 from the benefit received on these interest rate derivatives. See Note 8 of our consolidated financial statements as of September 30, 2025, included elsewhere in this Form 10-Q, for additional information on these interest rate derivatives.

Previous wording

The net interest margin for the three months ended June 30, 2025 increased by 11 basis points to 3.77% from 3.66% for the three months ended June 30, 2024, primarily due to a 29 basis points decrease in the cost of average interest-beating liabilities of $2.59 billion, offset by an 11 basis points decrease in the yield on average interest-earning assets of $3.42 billion. Average earning assets for the three months ended June 30, 2025 increased by $47.1 million from the three months ended June 30, 2024, due to a $41.4 million increase in average total investments and a $5.7 million increase in average loans. Average interest-bearing liabilities for the three months ended June 30, 2025 increased by $34.4 million from the three months ended June 30, 2024, driven by the decrease in average interest-bearing deposits of $22.6 million, offset by a $56.9 million increase in average borrowings.

Current wording

The net interest margin for the three months ended September 30, 2025 increased by 10 basis points to 3.68% from 3.58% for the three months ended September 30, 2024, primarily due to a 27 basis points decrease in the cost of average interest-bearing liabilities of $2.57 billion, offset by a 12 basis points decrease in the yield on average interest-earning assets of $3.43 billion. Average earning assets for the three months ended September 30, 2025 increased by $63.6 million from the three months ended September 30, 2024, due to a $59.5 million increase in average loans and a $4.1 million increase in average total investments. Average interest-bearing liabilities for the three months ended September 30, 2025 increased by $38.9 million from the three months ended September 30, 2024, driven by the increase in average borrowings of $49.3 million, offset by a $10.4 million decrease in average interest-bearing deposits.

Previous wording

The net interest margin for the six months ended June 30, 2025 increased by 27 basis points to 3.72% from 3.45% for the six months ended June 30, 2024, primarily due to a 38 basis points decrease in the cost of average interest-bearing liabilities of $2.57 billion, offset by a three basis points increase in the yield on average interest-earning assets of $3.40 billion. Average earning assets increased by $32.5 million, due to a $28.4 million increase in average total investments and a $4.1 million increase in average loans. Average interest-bearing liabilities increased by $6.8 million, primarily driven by an increase in average borrowings of $51.6 million, offset by a $44.8 million decrease in average interest-bearing deposit balances.

Current wording

The net interest margin for the nine months ended September 30, 2025 increased by 21 basis points to 3.71% from 3.50% for the nine months ended September 30, 2024, primarily due to a 34 basis points decrease in the cost of average interest-bearing liabilities of $2.57 billion, offset by a six basis points decrease in the yield on average interest-earning assets of $3.41 billion. Average earning assets increased by $43.0 million, due to a $22.7 million increase in average loans and a $20.3 million increase in average total investments. Average interest-bearing liabilities increased by $17.6 million,

Previous wording

Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve. The increase in our net interest margin is primarily the result of our decreasing deposit costs, as well as the continued increase to our overall loan yield.

Current wording

Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve. The increase in our net interest margin is primarily the result of our decreasing deposit costs.

Previous wording

The following tables present, for the three and six months ended June 30, 2025 and 2024, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin.

Current wording

The following tables present, for the three and nine months ended September 30, 2025 and 2024, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin.

Previous wording

The provision for credit losses reflects our internal calculation and judgment of the appropriate amount of the allowance for credit losses. The adoption of ASU No. 2016-13,“Measurement of Credit Losses on Financial Instruments” or “CECL” has significantly changed the methodology of how we measure credit losses (see Note 1 to the consolidated financial statements in the Company’s 2024 Form 10-K for more information). We maintain the allowance for credit losses at levels we believe are appropriate to cover our estimate of expected credit losses over the life of loans in the portfolio as of the end of the reporting period. The allowance for credit losses is determined through detailed quarterly analyses of our loan portfolio. The allowance for credit losses is based on our loss experience, changes in the economic environment, reasonable and supportable forecasts, as well as an ongoing assessment of credit quality and environmental factors not reflective in historical loss rates. Additional qualitative factors that are considered in determining the amount of the allowance for credit losses are concentrations of credit risk (geographic, large borrower, and industry), changes in underwriting standards, changes in collateral value, experience and depth of lending staff, trends in delinquencies, and the volume and terms of loans.

Current wording

The provision for credit losses reflects our internal calculation and judgment of the appropriate amount of the allowance for credit losses. We maintain the allowance for credit losses at levels we believe are appropriate to cover our estimate of expected credit losses over the life of loans in the portfolio as of the end of the reporting period. The allowance for credit losses is determined through detailed quarterly analyses of our loan portfolio. The allowance for credit losses is based on our loss experience, changes in the economic environment, reasonable and supportable forecasts, as well as an ongoing assessment of credit quality and environmental factors not reflective in historical loss rates. Additional qualitative factors that are considered in determining the amount of the allowance for credit losses are concentrations of credit risk (geographic, large borrower, and industry), changes in underwriting standards, changes in collateral value, experience and depth of lending staff, trends in delinquencies, and the volume and terms of loans.

Previous wording

We recorded a provision for credit losses of $129,000 and $264,000 during the three and six months ended June 30, 2025 compared to a credit to the provision for credit losses of $128,000 and $268,000 recorded during the three and six months ended June 30, 2024. The provision expense recorded during the first half of 2025 was primarily due to the increase in general reserves allocated to our commercial real estate loans and additional provision expense recorded for our unfunded loan commitments, partially offset by the decrease in reserves allocated to our residential real estate loan portfolio and individually analyzed loans. Our ACL as a percentage of gross loans for the periods ended June 30, 2025, December 31, 2024 and June 30, 2024 was 0.60%, 0.59% and 0.58%, respectively. Our ACL as a percentage of gross loans is relatively lower than our peers due to our high percentage of residential mortgage loans, which tend to have lower allowance for credit loss ratios compared to other commercial or consumer loans due to their low LTVs.

Current wording

We recorded a credit to the provision for credit losses of $543,000 and $279,000 during the three and nine months ended September 30, 2025 compared to a provision for credit losses of $582,000 and $314,000 recorded during the three and nine months ended September 30, 2024. The credit to provision expense recorded during the nine months ended September 30, 2025 was primarily due to the decrease in reserves allocated to our individually analyzed loans, as well as the decrease in general reserves allocated to our residential mortgage loan portfolio as a large amount of residential mortgage loans were moved from loans held for investment to loans held for sale during the three months ended September 30, 2025, partially offset by the increase in reserves allocated to our commercial real estate loan portfolio and unfunded loan commitments. Our ACL as a percentage of gross loans for the periods ended September 30, 2025, December 31, 2024 and September 30, 2024 was 0.60%, 0.59% and 0.60%, respectively. Our ACL as a percentage of gross loans is relatively lower than our peers due to our high percentage of residential mortgage loans, which tend to have lower allowance for credit loss ratios compared to other commercial or consumer loans due to their low LTVs.

Previous wording

The following table sets forth the major components of our noninterest income for the three and six months ended June 30, 2025 and 2024:

Current wording

The following table sets forth the major components of our noninterest income for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Service charges on deposit accounts decreased $27,000, or 5.1%, to $505,000 for the three months ended June 30, 2025 compared to $532,000 for the same three months during 2024. Service charges on deposit accounts were $1.0 million for the six months ended June 30, 2025 compared to $979,000 for the same period in 2024, an increase of $26,000, or 2.7%. The increase during the six months ended June 30, 2025 was primarily attributable to higher analysis fees and charge back fees.

Current wording

Service charges on deposit accounts increased $20,000, or 3.8%, to $551,000 for the three months ended September 30, 2025 compared to $531,000 for the three months ended September 30, 2024. Service charges on deposit accounts were $1.6 million for the nine months ended September 30, 2025 compared to $1.5 million for the nine months ended September 30, 2024, an increase of $46,000, or 3.0%. These increases were primarily attributable to higher service charges on business checking accounts, analysis fees, overdraft fees and charge back fees.

Previous wording

Other service charges, commissions and fees increased $47,000, or 3.0%, to $1.6 million for the three months ended June 30, 2025 compared to $1.6 million for the three months ended June 30, 2024. Other service charges, commissions and fees increased $31,000, or 1.0%, to $3.2 million for the six months ended June 30, 2025 compared to $3.2 million for the six months ended June 30, 2024. These increases were mainly attributable to higher origination and processing fees earned from our origination of residential mortgage loans. Mortgage loan originations totaled $93.2 million and $184.3 million during the three and six months ended June 30, 2025, compared to $94.1 million and $188.1 million during the same periods in 2024.

Current wording

Other service charges, commissions and fees increased $461,000, or 24.1%, to $2.4 million for the three months ended September 30, 2025 compared to $1.9 million for the three months ended September 30, 2024. Other service charges, commissions and fees increased $492,000, or 9.6%, to $5.6 million for the nine months ended September 30, 2025 compared to $5.1 million for the nine months ended September 30, 2024. These increases were mainly attributable to higher origination, underwriting and processing fees earned from our origination of residential mortgage loans. Mortgage loan originations totaled $168.6 million and $352.8 million during the three and nine months ended September 30, 2025, compared to $122.4 million and $310.4 million during the three and nine months ended September 30, 2024.

Previous wording

Gain on sale of residential mortgage loans totaled $579,000 and $978,000 for the three and six months ended June 30, 2025 as we sold $54.3 million and $94.4 million in residential mortgage loans during these period with an average premium of 1.09% and 1.08%, respectively. Gain on sale of residential mortgage loans totaled $1.2 million and $1.4 million for the three and six months ended June 30, 2024 as we sold $111.4 million and $133.3 million in residential mortgage loans during these periods with an average premium of 1.05% for both periods.

Current wording

Gain on sale of residential mortgage loans totaled $166,000 and $1.1 million for the three and nine months ended September 30, 2025 as we sold $18.2 million and $112.6 million in residential mortgage loans during these periods with an average premium of 1.06% and 1.08%, respectively. Gain on sale of residential mortgage loans totaled $526,000 and $1.9 million for the three and nine months ended September 30, 2024 as we sold $54.2 million and $187.5 million in residential mortgage loans during these periods with an average premium of 1.05%.

Previous wording

Mortgage loan servicing income, net of amortization, decreased by $326,000, or 29.4%, to $781,000 during the three months ended June 30, 20254 compared to $1.1 million for the same period in 2024. Mortgage loan servicing income increased by $63,000, or 4.7%, to $1.4 million during the six months ended June 30, 2025 compared to $1.3 million for the same period in 2024. The changes in mortgage loan servicing income were primarily due to decreases in mortgage servicing amortization, capitalized mortgage servicing assets and mortgage servicing fees. Included in mortgage loan servicing income for the three and six months ended June 30, 2025 was $580,000 and $1.1 million in mortgage servicing fees compared to $590,000 and $1.2 million for the same periods in 2024 and capitalized mortgage servicing assets of $309,000 and $537,000 for the three and six months ended June 30, 2025 compared to $786,000 and $923,000 for the same periods in 2024. These amounts were offset by mortgage loan servicing asset amortization of $137,000 and $255,000 for the three and six months ended June 30, 2025 compared to $269,000 and $742,000 during the three and six months ended June 30, 2024. During the three and six months ended June 30, 2025, we recorded a fair value impairment recovery of $28,000 and a fair value impairment charge of $15,000 on our mortgage servicing assets. During the three and six months ended June 30, 2024, we did not record a fair value impairment on our mortgage servicing assets. Our total residential mortgage loan servicing portfolio was $559.1 million at June 30, 2025 compared to $529.8 million at June 30, 2024.

Current wording

Mortgage loan servicing income, net of amortization, increased by $94,000, or 22.3%, to $516,000 during the three months ended September 30, 2025 compared to $422,000 for the three months ended September 30, 2024. Mortgage loan servicing income increased by $157,000, or 8.9%, to $1.9 million during the nine months ended September 30, 2025 compared to $1.8 million for the nine months ended September 30, 2024. The changes in mortgage loan servicing income were primarily due to decreases in mortgage servicing amortization and fair value impairment on our mortgage servicing assets, offset by decreases in capitalized mortgage servicing assets and mortgage servicing fees. Included in mortgage loan servicing income for the three and nine months ended September 30, 2025 was $530,000 and $1.7 million in mortgage servicing fees compared to $580,000 and $1.7 million for the three and nine months ended September 30, 2024 and capitalized mortgage servicing assets of $126,000 and $663,000 for the three and nine months ended September 30, 2025 compared to $310,000 and $1.2 million for the three and nine months ended September 30, 2024. These amounts were offset by mortgage loan servicing asset amortization of $159,000 and $414,000 for the three and nine months ended September 30, 2025 compared to $216,000 and $957,000 during the three and nine months ended September 30, 2024. During the three and nine months ended September 30, 2025, we recorded a fair value impairment recovery of $19,000 and $4,000, respectively, on our mortgage servicing assets. During the three and nine months ended September 30, 2024, we recorded a fair value impairment of $252,000 on our mortgage servicing assets. Our total residential mortgage loan servicing portfolio was $538.7 million at September 30, 2025 compared to $556.4 million at September 30, 2024.

Previous wording

SBA servicing income increased by $82,000, or 14.6%, to $642,000 for the three months ended June 30, 2025 compared to $560,000 for the three months ended June 30, 2024. SBA servicing income was $1.6 million for the six months ended June 30, 2024 compared to $2.1 million for the same period in 2024, a decrease of $501,000, or 24.4%. Our total SBA and USDA loan servicing portfolio was $480.9 million as of June 30, 2025 compared to $486.1 million as of June 30, 2024. Included in SBA servicing income for the three and six months ended June 30, 2025 was $986,000 and $2.0 million in SBA servicing fees compared to $1.1 million and $2.2 million for the same periods in 2024. Our SBA servicing rights are carried at fair value and the inputs used to calculate fair value change from period to period. During the three months ended June 30, 2025, we recorded a $344,000 fair value charge to our SBA servicing rights compared to a $503,000 fair value charge to our SBA servicing rights during the three months ended June 30, 2024. During the six months ended June 30, 2025, we recorded a $451,000 fair value charge to our SBA servicing rights compared to a $143,000 fair value charge during the six months ended June 30, 2024.

Current wording

SBA servicing income decreased by $28,000, or 2.3%, to $1.2 million for the three months ended September 30, 2025 compared to $1.2 million for the three months ended September 30, 2024. SBA servicing income was $2.8 million for the nine months ended September 30, 2025 compared to $3.3 million for the nine months ended September 30, 2024, a decrease of $529,000, or 16.1%. Our total SBA and USDA loan servicing portfolio was $460.7 million as of September 30, 2025 compared to $487.4 million as of September 30, 2024. Included in SBA servicing income for the three and nine months ended September 30, 2025 was $1.0 million and $3.0 million in SBA servicing fees compared to $1.0 million and $3.2 million for the three and nine months ended September 30, 2024. Our SBA servicing rights are carried at fair value and the inputs used to calculate fair value change from period to period. During the three months ended September 30, 2025, we recorded a $165,000 fair value increase to our SBA servicing rights compared to a $201,000 fair value increase to our SBA servicing rights during the three months ended September 30, 2024. During the nine months ended September 30, 2025, we recorded a $286,000 fair value charge to our SBA servicing rights compared to a $58,000 fair value increase during the nine months ended September 30, 2024.

Previous wording

Other noninterest income increased by $353,000, or 57.9%, to $963,000 for the three months ended June 30, 2025 compared to $610,000 for the three months ended June 30, 2024. Other noninterest income was $1.7 million for the six months ended June 30, 2025 compared to $1.1 million for the same period in 2024, an increase of $614,000, or 54.8%. These increases were mainly due to increases in bank owned life insurance income, gains on sale of foreclosed real estate and unrealized gains on our equity securities. The largest component of other noninterest income is the income on bank owned life insurance which totaled $620,000 and $1.2 million, respectively for the three and six months ended June 30, 2025 compared to $569,000 and $1.1 million, respectively for the three and six months ended June 30, 2024. Also included in other noninterest income are fair value gains/losses on our equity securities, which totaled $41,000 (gain) and $181,000 (gain) for the three and six months ended June 30, 2025, respectively, compared to $12,000 (loss) and $59,000 (loss) for the same periods in 2024, respectively.

Current wording

Other noninterest income decreased by $99,000, or 10.9%, to $808,000 for the three months ended September 30, 2025 compared to $907,000 for the three months ended September 30, 2024. Other noninterest income was $2.5 million for the nine months ended September 30, 2025 compared to $2.0 million for the nine months ended September 30, 2024, an increase of $515,000, or 25.4%. The increase for the nine months ended September 30, 2025 was mainly due to increases in bank owned life insurance income, gains on sale of foreclosed real estate and unrealized gains on our equity securities. The largest component of other noninterest income is the income on bank owned life insurance which totaled $628,000 and $1.9 million, respectively, for the three and nine months ended September 30, 2025 compared to $609,000 and $1.7 million, respectively for the three and nine months ended September 30, 2024. Also included in other noninterest income are fair value gains/losses on our equity securities, which totaled $124,000 (gain) and $305,000 (gain) for the three and nine months ended September 30, 2025, respectively, compared to $292,000 (gain) and $233,000 (gain) for the three and nine months ended September 30, 2024, respectively.

Previous wording

The following table sets forth the major components of our noninterest expense for the three and six months ended June 30, 2025 and 2024:

Current wording

The following table sets forth the major components of our noninterest expense for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Salaries and employee benefits expense for the three months ended June 30, 2025 was $8.6 million compared to $8.0 million for the three months ended June 30, 2024, an increase of $506,000, or 6.3%. Salaries and employee benefits expense for the six months ended June 30, 2025 was $17.0 million compared to $15.4 million for the six months ended June 30, 2024, an increase of $1.6 million, or 10.6%. These increases were primarily attributable to higher employee salaries and incentives, stock-based compensation expense and employee insurance.

Current wording

Salaries and employee benefits expense for the three months ended September 30, 2025 was $9.0 million compared to $8.5 million for the three months ended September 30, 2024, an increase of $441,000, or 5.2%. Salaries and employee benefits expense for the nine months ended September 30, 2025 was $26.0 million compared to $23.9 million for the nine months ended September 30, 2024, an increase of $2.1 million, or 8.7%. These increases were primarily attributable to higher employee salaries and incentives, loan officer commissions, stock-based compensation expense and employee insurance.

Previous wording

Occupancy and equipment expense for the three months ended June 30, 2025 was $1.4 million, an increase of $46,000, or 3.4%, compared to the same period in 2024. Occupancy and equipment expense for the six months ended June 30, 2025 was $2.8 million compared to $2.7 million for the six months ended June 30, 2024, an increase of $109,000, or 4.1%. These increases were primarily due to higher property taxes, utilities, maintenance expense, rent expense, and depreciation expense.

Current wording

Occupancy and equipment expense for the three months ended September 30, 2025 was $1.4 million, a decrease of $20,000, or 1.4%, compared to the three months ended September 30, 2024. Occupancy and equipment expense for the nine months ended September 30, 2025 was $4.2 million compared to $4.1 million for the nine months ended September 30, 2024, an increase of $89,000, or 2.2%. These increases were primarily due to higher property taxes, utilities, maintenance expense, rent expense, and depreciation expense.

Previous wording

Advertising expenses for the three and six months ended June 30, 2025 remained relatively flat compared to the same periods in 2024.

Current wording

Advertising expenses for the three and nine months ended September 30, 2025 remained relatively flat compared to the same periods in 2024.

Previous wording

Other expenses for the three months ended June 30, 2025 were $3.7 million compared to $3.1 million for the three months ended June 30, 2024, an increase of $561,000, or 17.9%. Other operating expenses for the six months ended June 30, 2025 were $7.1 million compared to $6.3 million for the six months ended June 30, 2024, an increase of $767,000, or 12.2%. These increases were partially due to higher professional fees, security expense, loan related expenses and First IC merger-related expenses, offset by lower FDIC insurance premiums and other real estate owned related expenses. First IC merger related expenses were $333,000 and $596,000 for the three and six months ended June 30, 2025, respectively. We had no merger-related expenses during the three and six month periods ended June 30, 2024. Included in other expenses for the six months ended June 30, 2025 and 2024 were directors’ fees of approximately $348,000 and $324,000, respectively.

Current wording

Other expenses for the three months ended September 30, 2025 were $3.8 million compared to $3.3 million for the three months ended September 30, 2024, an increase of $494,000, or 15.1%. This increase was primarily due to higher FDIC insurance premiums, professional fees, security expenses, loan related expenses and First IC merger-related expenses, offset by lower foreclosed real estate related expenses. Other operating expenses for the nine months ended September 30, 2025 were $10.8 million compared to $9.6 million for the nine months ended September 30, 2024, an increase of $1.3 million, or 13.2%. This increase was primarily due to higher security expenses, professional fees, loan related expenses and First IC merger-related expenses, partially offset by lower FDIC insurance premiums and foreclosed real estate related expenses. First IC merger related expenses were $301,000 and $897,000 for the three and nine months ended September 30, 2025, respectively. We had no merger-related expenses during the three and nine month periods ended September 30, 2024. Included in other expenses for the nine months ended September 30, 2025 and 2024 were directors’ fees of approximately $551,000 and $477,000, respectively.

Previous wording

Income tax expense for the three months ended June 30, 2025 and 2024 was $6.8 million and $6.4 million, respectively. The Company’s effective tax rates were 28.9% and 27.5% for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Income tax expense for the three months ended September 30, 2025 and 2024 was $6.6 million and $6.0 million, respectively. The Company’s effective tax rates were 27.6% and 26.3% for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Income tax expense for the six months ended June 30, 2025 and 2024 was $12.6 million and $12.2 million, respectively. The Company’s effective tax rates were 27.6% and 27.9% for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Income tax expense for the nine months ended September 30, 2025 and 2024 was $19.2 million and $18.2 million, respectively. The Company’s effective tax rates were 27.6% and 27.4% for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Total assets increased $21.6 million, or 0.6%, to $3.62 billion at June 30, 2025 as compared to $3.59 billion at December 31, 2024. The increase in total assets was primarily attributable to increases in cash and due from banks of $37.3 million, other assets of $15.8 million, equity securities of $8.2 million, loans held for sale of $5.0 million and Federal Home Loan Bank stock of $2.4 million, partially offset by decreases in loans held for investment of $36.4 million, interest rate derivatives of $9.1 million and securities available-for-sale of $2.4 million.

Current wording

Total assets increased $35.4 million, or 1.0%, to $3.63 billion at September 30, 2025 as compared to $3.59 billion at December 31, 2024. The increase in total assets was primarily attributable to increases in loans held for sale of $237.7 million, other assets of $18.0 million, equity securities of $8.3 million, Federal Home Loan Bank stock of $2.4 million, bank owned life insurance of $1.9 million and accrued interest receivable of $1.1 million, partially offset by decreases in loans held for investment of $197.5 million, cash and due from banks of $22.4 million, interest rate derivatives of $12.4 million and securities available for sale of $2.0 million.

Previous wording

Our investment securities portfolio made up 0.93% of our total assets at June 30, 2025 compared to 0.77% at December 31, 2024.

Current wording

Our investment securities portfolio made up 0.94% of our total assets at September 30, 2025 compared to 0.77% at December 31, 2024.

Previous wording

Gross loans held for investment decreased $36.4 million, or 1.2%, to $3.13 billion as of June 30, 2025 as compared to $3.17 billion as of December 31, 2024. Our loan decrease during the six months ended June 30, 2025 was comprised of an increase of $8.6 million, or 39.8%, in construction and development loans, an increase of $41.4 million, or 5.4%, in commercial real estate loans, a decrease of $4.4 million, or 5.6%, in commercial and industrial loans, a decrease of $81.9 million, or 3.6%, in residential real estate loans and a decrease of $60,000, or 23.1%, in consumer and other loans. We had loans held for sale of $5.0 million as of June 30, 2025 compared to no loans held for sale as of December 31, 2024.

Current wording

Gross loans held for investment decreased $197.8 million, or 6.2%, to $2.97 billion as of September 30, 2025 as compared to $3.17 billion as of December 31, 2024. Our loan decrease during the nine months ended September 30, 2025 was comprised of an increase of $10.9 million, or 50.3%, in construction and development loans, an increase of $52.4 million, or 6.9%, in commercial real estate loans, a decrease of $8.8 million, or 11.2%, in commercial and industrial loans, a decrease of $252.4 million, or 11.0%, in residential real estate loans and an increase of $65,000, or 25.0%, in consumer and other loans. We had loans held for sale of $237.7 million as of September 30, 2025 compared to no loans held for sale as of December 31, 2024.

Previous wording

As of June 30, 2025 and December 31, 2024, we serviced $480.9 million and $480.0 million, respectively, in SBA and USDA loans for others. We carried a servicing asset of $6.8 million and $7.3 million at June 30, 2025 and December 31, 2024, respectively. See Note 4 of our consolidated financial statements as of June 30, 2025, included elsewhere in this Form 10-Q, for additional information on the activity for SBA and USDA loan servicing rights for the three and six months ended June 30, 2025 and 2024.

Current wording

As of September 30, 2025 and December 31, 2024, we serviced $460.7 million and $479.7 million, respectively, in SBA and USDA loans for others. We carried a servicing asset of $7.0 million and $7.3 million at September 30, 2025 and December 31, 2024, respectively. See Note 4 of our consolidated financial statements as of September 30, 2025, included elsewhere in this Form 10-Q, for additional information on the activity for SBA and USDA loan servicing rights for the three and nine months ended September 30, 2025 and 2024.