What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-14 · 335 added, 473 removed, 209 unchanged (79% of the section changed)

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Certain statements contained in this quarterly report on Form 10-Q (the “report”) and other publicly available documents

incorporated herein by reference constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended (the “Exchange Act”), and as defined in the

Private Securities Litigation Reform Act of 1995.

Such statements are often, but not always, identified by the use of such words as “believes,” “anticipates,” “expects,” “intends,” “plan,” “goal,” “seek,” “project,” “estimate,” “strategy,” “future,”

“likely,” “may,” “should,” “will,” and other similar expressions.

Such statements involve various important assumptions, risks, uncertainties, and other factors, many of which are beyond our control, particularly with regard to developments related to

the current economic and geopolitical landscape, and which could cause actual results to differ materially from those expressed in such forward looking-statements.

However, it is difficult to predict the effect of known factors, and by Ohio Valley

incorporated herein by reference constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as

defined in the Private Securities Litigation Reform Act of 1995.

“strategy,” “future,” “likely,” “may,” “should,” “will,” and other similar expressions.

Such statements involve various important assumptions, risks, uncertainties, and other factors, many of which are beyond our control, particularly with regard to

developments related to the current economic and geopolitical landscape, and which could cause actual results to differ materially from those expressed in such forward looking statements.

However, it is difficult to predict the effect of known factors,

and Ohio Valley Banc Corp.

(“Ohio Valley”) cannot anticipate all factors that could affect future results.

Important factors that could cause actual results to differ materially from expectations expressed in or implied in forward looking statements include, but are

not limited to:

Important factors that could cause actual results to differ materially from expectations expressed in or implied in forward looking statements

include, but are not limited to:

the effects of fluctuating interest rates on our customers’ operations and financial condition;

changes in political, economic or other factors, such as inflation rates, recessionary or expansive trends, taxes, tariffs, the effects of

implementation of legislation and the continuing economic uncertainty in various parts of the world;

changes in political, economic or other factors, such as inflation rates, recessionary or expansive trends, taxes, tariffs,

the effects of implementation of legislation and the continuing economic uncertainty in various parts of the world;

competitive pressures;

the level of defaults and prepayment on loans made by Ohio Valley and its direct and indirect subsidiaries (collectively, the

the level of defaults and prepayment on loans made by Ohio Valley and its direct and indirect subsidiaries

(collectively, the “Company”);

unanticipated litigation, claims, or assessments;

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and regulatory changes.

Additional detailed information concerning such factors is available in the Company’s filings with the

Securities and Exchange Commission, under the Exchange Act, including the disclosure under the heading “Item 1A.

Risk Factors” of Part I of the 2024 Annual Report for the fiscal year ended December 31, 2024 and elsewhere in this document (including,

without limitation, in conjunction with the forward looking statements themselves and under the heading “Critical Accounting Estimates”).

All forward looking statements are qualified in their entirety by these and other cautionary statements that the

Company makes from time to time in its other SEC filings and public communications.

Additional detailed information concerning such factors is available in the Company’s

filings with the Securities and Exchange Commission, under the Exchange Act, including the disclosure under the heading “Item 1A.

Risk Factors” of Part I of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and

elsewhere in this document (including, without limitation, in conjunction with the forward looking statements themselves and under the heading “Critical Accounting Estimates”).

All forward looking statements are qualified in their entirety by these and

other cautionary statements that the Company makes from time to time in its other SEC filings and public communications.

Readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof.

The Company undertakes no obligation and

disclaims any duty to update or revise any forward looking statements, whether as a result of new information, unanticipated future events or otherwise, except as required by law.

Company undertakes no obligation and disclaims any duty to update or revise any forward looking statements, whether as a result of new information, unanticipated future events or otherwise, except as required by applicable law.

BUSINESS OVERVIEW:

The following discussion on consolidated

financial statements include the accounts of Ohio Valley and its wholly-owned subsidiaries, The Ohio Valley Bank Company (the “Bank”), Loan Central, Inc., a consumer finance company (“Loan Central”), and Ohio Valley Financial Services Agency, LLC, an

financial statements includes the accounts of Ohio Valley and its wholly-owned subsidiaries, The Ohio Valley Bank Company (the “Bank”), Loan Central, Inc., a consumer finance company (“Loan Central”), and Ohio Valley Financial Services Agency, LLC, an

insurance agency.

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A TAL represents a short-term loan offered by the Bank to tax preparation customers of Loan Central.

IMPACT OF PARTICIPATING IN THE OHIO HOMEBUYER PLUS PROGRAM:

the third quarter of 2024, the Company began participating in a program offered by the Ohio Treasurer (the “Treasurer”) called Ohio Homebuyer Plus.

The program is designed to encourage Ohio residents to save for the purchase of a home.

As a participant

in the program, the Company developed the “Sweet Home Ohio” deposit account to offer participants an above-market interest rate of 5.83%, along with a deposit bonus to assist customers in achieving their home savings goals.

For each Sweet Home Ohio

account that was opened, the Company received a deposit from the Treasurer at a subsidized interest rate of 0.86%.

In relation to program changes implemented by the Treasurer post implementation, the rate on the matching funds increased to 1.79% for

the third quarter of 2025.

Accounts connected with Ohio Homebuyer Plus must be used within five years and the corresponding balance of Treasurer deposits will fluctuate based upon active customer accounts.

At September 30, 2025, the balance of Sweet

Home Ohio accounts totaled $9,049 compared to $6,775 at December 31, 2024.

At September 30, 2025, the amount of Treasurer deposits totaled $72,507 compared to $97,366 at December 31, 2024.

Since the Treasurer deposits are classified as public funds,

which are required to be collateralized, the Company invested the funds in securities to be pledged as collateral to the Treasurer.

At September 30, 2025, the balance of securities used to collateralize the Treasurer deposits totaled $66,990 compared

to $102,871 at December 31, 2024.

FINANCIAL RESULTS OVERVIEW:

Net income totaled $4,297 during the

third quarter of 2025, an increase of $311 from the same period of 2024.

Earnings per share for the third quarter of 2025 finished at $.64 per share, compared to $.58 per share during the third quarter of 2024.

Net income totaled $11,646 during the

first nine months of 2025, an increase of $3,162 from the same period of 2024.

Earnings per share during the first nine months of 2025 finished at $2.47 per share, compared to $1.79 per share during the first nine months of 2024.

Higher net earnings

also had a corresponding impact on the Company’s annualized net income to average asset ratio, or return on assets, which increased 22 basis points to 1.03% during the first nine months of 2025, compared to the same period in 2024.

In addition, the

Company’s net income to average equity ratio, or return on equity, increased 215 basis points to 9.95% during the first nine months of 2025, compared to the same period in 2024.

Earnings were positively impacted by the growth in average earning assets, which increased 7.3% and 8.8% during both the quarterly and year-to-date periods,

respectively.

The increases came primarily from loans and securities, which contributed to a 16.0% and 18.3% increase in net interest income during both the three and nine months ended September 30, 2025, compared to the same periods in 2024,

respectively.

The positive effects from higher net interest income were partially offset by increases in provision and noninterest expense combined with lower noninterest income.

Provision expense increased in large part due to a higher qualitative

risk factor, as well as growth in loans and off-balance sheet commitments.

This contributed to a 20.8% and 44.5% increase in provision expense during both the three and nine months ended September 30, 2025, compared to the same periods in 2024,

respectively.

Earnings were also negatively impacted by higher noninterest expenses and lower noninterest income, which collectively reduced income by 16.4% and 6.5% during both the three and nine months ended September 30, 2025, compared to the same

periods in 2024, respectively.

This was largely impacted by a $1,219 loss on the sale of securities realized during the third quarter of 2025.

During the three months ended September 30, 2025, net interest income increased $2,016, or 16.0%, over the same period in 2024.

During the nine months ended

September 30, 2025, net interest income increased $6,538, or 18.3%, over the same period in 2024.

Net interest income growth during both the quarterly and year-to-date periods was primarily the result of an increase in average earning assets, led by

securities and loans.

During the three months ended September 30, 2025, average securities increased $25,983 while average loans increased $76,514.

During the nine months ended September 30, 2025, average securities increased $74,685 while average

loans increased $65,448.

The growth in average securities was in large part due to the increased pledging requirements on public fund deposits as part of the Ohio Homebuyer Plus program.

The growth in average loans was related to the commercial and

residential real estate lending segments.

Earnings were further enhanced by a higher net interest margin, increasing 29 basis points during the three months ended September 30, 2025, and 32 basis points during the nine months ended September 30, 2025,

compared to the same periods in 2024, respectively.

Margin growth was related to an increase in the yield on earning assets, while the cost of funding sources decreased.

The improvement to earning asset yields was directly related to the growth in

higher-yielding securities and loans, and the accretion of an $817 market discount on purchased loans that was recognized in the second quarter of 2025.

The cost of funding sources increased only slightly as the composition of funding sources shifted

more to lower cost deposit sources, such as Negotiable Order of Withdrawal (“NOW”), savings, money market, and checking accounts.

During the three and nine months ended September 30, 2025, the Company’s provision for credit loss expense increased $192 and $824, when compared to the same

periods in 2024.

The increases resulted primarily from an elevated qualitative risk factor, as well as growth in loans and off-balance sheet commitments related to unused commercial lines.

Partially offsetting the increases to provision expense were

lower specific reserves on loans individually evaluated for impairment.

During the three and nine months ended September 30, 2025, noninterest income decreased $1,106, or 38.8%, and $1,009, or 10.9%, from the same periods in

The decreases resulted primarily mostly from a $1,219 loss on the sale of securities realized during the third quarter of 2025 that lowered noninterest income.

The Company sold $11,027 in securities that were yielding 1.32% and replaced them with

securities yielding 4.37%, which is expected to increase future interest income.

Partially offsetting the impact from the sale of securities was higher interchange income earned on debit and credit cards, which increased $91 and $151 during the three

and nine months ended September 30, 2025, when compared to the same periods in 2024.

Other noninterest income also increased $22 during the third quarter of 2025 and $43 during the first nine months of 2025, when compared to the same periods in 2024.

Increases to other noninterest income resulted mostly from lower losses related to the pending sale of premises, while fees from commercial loan servicing and mortgage application referrals increased during both the quarterly and year-to-date periods.

During the three and nine months ended September 30, 2025, noninterest expense increased $269, or 2.4%, and $532, or 1.6%, over the same periods in 2024.

Noninterest expenses were led by increases in data processing and marketing costs, which collectively increased $166, or 15.8%, and $577, or 18.7%, during the three and nine months ended September 30, 2025, over the same periods in 2024.

processing expenses were impacted by costs associated with the Company’s debit and credit card platforms.

Marketing cost increases were impacted by higher donation and advertising budgets for 2025.

Other noninterest expense also increased $203 during

the third quarter of 2025 and $162 during the first nine months of 2025, when compared to the same periods in 2024.

Increases to other noninterest expense came mostly from higher costs associated with ATM’s, employee recruiting, and interest rate swap

arrangements.

Partially offsetting increases to noninterest expense were decreases in salaries and employee benefits, which decreased $229 and $376 during the three and nine months ended September 30, 2025, when compared to the same periods in 2024.

Cost savings in salaries and employee benefits during 2025 were the direct result of a voluntary early retirement program implemented in 2024.

The changes in the remaining noninterest expense areas were minimal.

The $138 and $1,011 increase in the Company’s provision for income taxes during the three and nine months ended September 30, 2025, compared to the same

periods in 2024, was largely due to the increase in operating income affected by the factors mentioned above, as well as an increase in the effective tax rate.

At September 30, 2025, total assets were $1,570,043, an increase of $66,631 from year-end 2024.

first quarter of 2026, a decrease of $109 from the same period in 2025.

Earnings per share for the first quarter of 2026 finished at $.91 per share, compared to $.94 per share during the first quarter of 2025.

Lower net earnings had a corresponding

impact on the Company’s annualized net income to average asset ratio, or return on assets, which decreased 12 basis points to 1.08% during the first quarter of 2026, compared to the same period in 2025.

In addition, the Company’s net income to average

equity ratio, or return on equity, decreased 165 basis points to 10.17% during the first quarter of 2026, compared to the same period in 2025.

Lower earnings during the first quarter of 2026 compared to the first quarter of 2025 were primarily impacted by a $1,206 increase in provision expense

caused by the collateral impairments of two commercial loan relationships.

Lower earnings were also impacted by both noninterest income and noninterest expense.

Noninterest income during the first quarter of 2026 decreased $358 compared to the same

period in 2025, impacted primarily by lower electronic refund check and deposit fees.

Noninterest expense during the first quarter of 2026 increased $483 compared to the same period in 2025, impacted primarily by higher salaries and employee benefit

These negative factors were partially offset by growth in net interest income, which increased $1,748 during the first quarter of 2026 over the same period in 2025, in large part due to an 8.6% increase in average earning assets and a 16 basis

point improvement to the quarterly net interest margin.

Earning asset growth came largely from loans, the Company’s highest earning asset, while the yields on earning assets increased at a faster pace than the average costs on interest-bearing

During the three months ended March 31, 2026, net interest income increased $1,748, or 13.3%, over the same period in 2025.

This increase was primarily

related to a $120,686 increase in average earning assets, led mostly by a 14.0% increase in average loans.

The growth in average loans was related to the commercial and residential real estate lending segments.

The emphasis on higher-yielding loan

growth during the first quarter of 2026 contributed to lower average securities and interest-bearing deposits with banks, which decreased 5.5% and 14.3%, respectively, compared to the same period in 2025.

The decrease in average securities was also impacted by a reduced need for securities to be pledged as collateral to secure public fund deposits.

Earnings were further enhanced by a higher net interest

margin, which finished at 4.01% at March 31, 2026 compared to 3.85% at March 31, 2025.

Margin growth was related to an increase in the yield on earning assets, which outpaced the increase in average costs associated with the Company’s funding

The improvement to earning asset yields was directly related to the growth in higher-yielding loans and a 59 basis point improvement in the average yield on securities.

The growth in average securities yield was largely impacted by several

bond transactions that occurred in 2025 that replaced lower-yielding taxable securities with similar taxable securities at higher rates of return.

The cost of funding sources increased primarily within the Company’s Negotiable Order of Withdrawal

(“NOW”) and savings accounts, while the average cost on certificates of deposit (“CDs”) decreased.

During the three months ended March 31, 2026, the Company’s provision for credit loss expense increased $1,206 when compared to the same period in 2025.

increase resulted primarily from a $2,031 specific allocation on two collateral dependent loans.

This increase in reserves was partially offset by a decrease in certain qualitative risk factors and lower net charge offs.

During the three months ended March 31, 2026, noninterest income decreased $358, or 9.8%, from the same period in 2025.

The decrease was primarily from

electronic refund check and deposit fees, which decreased $540 from 2025.

This was due to the expiration of a tax processing agreement with a third party.

Also contributing to the decrease was other noninterest income, which was down $68 from 2025,

impacted by less commercial loan servicing fees.

The decreases were partially offset by a $138 increase in income from bank owned life insurance due to the receipt of life insurance proceeds and to the $86 increase in debit and credit card interchange

During the three months ended March 31, 2026, noninterest expense increased $483, or 4.5%, over the same period in 2025.

Noninterest expense was impacted

mostly by salaries and employee benefits, which increased $335 due to annual merit increases and higher health insurance premiums.

Also increasing was software expense, which was up $132 over 2025, resulting from the investment in software to enhance

internal processes.

Noninterest expense was further impacted by a $58 increase in FDIC insurance expense related to a higher assessment base and an increase in the assessment rate in relation to higher nonperforming loans.

The $190 decrease in the Company’s provision for income taxes during the three months ended March 31, 2026, compared to the same period in 2025, was largely

due to the decrease in operating income affected by the factors mentioned above, as well as a decrease in the effective tax rate.

At March 31, 2026, total assets were $1,677,502, an increase of $94,848 from year-end 2025.

The increase in assets was primarily the result of a $78,020

increase in loans, which was impacted by strong second and third quarter loan growth of a total of $87,238 that more than offset the $18,529 decrease in loans that occurred during the first quarter.

The first quarter loan decrease was related to a

$31,473 decrease in a warehouse line of credit extended to another mortgage lender.

The second and third quarter growth in loans occurred primarily in the targeted areas of commercial real estate, commercial and industrial, and residential real estate

This included a $12,777 repurchase of two commercial and industrial loans in June 2025 that had been previously participated out.

The increase in loans was primarily funded by a $57,309 increase in deposit balances and net proceeds from a $7,930

decrease in total securities from year-end 2024.

Securities decreased in part due to a lower need for securities to be pledged to the Treasurer due to a $24,859 deposit balance decrease from year-end 2024.

At September 30, 2025, total liabilities were $1,405,626, up $52,542 from year-end 2024.

Contributing most to this increase were higher interest-bearing

deposit balances, up $56,844 from year-end 2024, consisting of higher balances from time deposits (+17.6%) and savings and money market balances (+5.3%), partially offset by a decrease in NOW accounts (-10.2%).

At September 30, 2025, the Company’s

noninterest-bearing demand deposits were relatively stable, increasing $465 from year-end 2024.

At September 30, 2025, total shareholders' equity was $164,417, up $14,089 from December 31, 2024.

This increase came primarily from year-to-date net income

and an after-tax increase in net unrealized gains on AFS securities, partially offset by year-to-date cash dividends paid.

increase in interest-bearing deposits with banks, and an $18,796 increase in loans.

The increase in interest-bearing deposits with banks was primarily associated with balances maintained at the Federal Reserve Bank (“Federal Reserve”) that were

impacted by the first quarter growth in both interest- and noninterest-bearing deposit liabilities.

At March 31, 2026, total liabilities were $1,506,222, up $93,825 from year-end 2025.

Contributing most to this increase were higher interest-bearing deposit

balances, up $75,378 from year-end 2025, consisting of higher balances from time deposits (+11.3%) and savings, NOW and money market balances (+3.8%), while noninterest-bearing demand deposits increased 5.9% from year-end 2025.

At March 31, 2026, total shareholders' equity was $171,280, up $1,023 from December 31, 2025.

This increase consisted of year-to-date net income being

partially offset by an after-tax increase in net unrealized losses on AFS securities and year-to-date cash dividends paid.

Regulatory capital ratios of the Company remained higher than the "well capitalized" minimums.

Comparison of Financial Condition

at September 30, 2025 and December 31, 2024

The following discussion focuses in more detail on the consolidated financial condition of the Company at September 30, 2025 compared to December 31, 2024.

This discussion should be read in conjunction with the interim consolidated financial statements and the notes included in this Form 10‑Q.

at March 31, 2026 and December 31, 2025

The following discussion focuses in more detail on the consolidated financial condition of the Company at March 31, 2026 compared to December 31, 2025.

discussion should be read in conjunction with the interim consolidated financial statements and the notes included in this Form 10‑Q.

Cash and Cash Equivalents

At September 30, 2025, cash and cash equivalents were $89,316, an increase of $6,209, or 7.5%, from December 31, 2024.

At March 31, 2026, cash and cash equivalents were $125,327, an increase of $79,430, or 173.1%, from December 31, 2025.

The increase came primarily from

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The Company’s interest-bearing FRB clearing account contributed most to the increase in interest-bearing deposits with banks, representing 87% of cash and cash

equivalents at September 30, 2025.

equivalents at March 31, 2026.

The Company utilizes its interest-bearing FRB clearing account to manage excess funds, as well as to assist in funding earning asset growth.

The increase in excess funds during the first nine months of 2025 resulted

The increase in excess funds during the first three months of 2026 resulted

primarily from growth in total deposits, which were up 7.1% from year-end 2025.

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Committee (“FOMC”).

During the third quarter of 2025, the rate associated with the Company’s FRB clearing account decreased 25 basis points due to actions taken by the FOMC to reduce the targeted federal funds rate to a range of 4.00% to 4.25% at

September 30, 2025.

The FRB clearing account rate was reduced again by 25 basis points in October 2025 due to further actions taken by the FOMC that lowered the targeted federal funds rate to a current range of 3.75% to 4.00%.

The interest-bearing

deposit balances in the FRB are 100% secured by the U.S.

During the first quarter of 2026, the FOMC took no action to reduce the targeted federal funds rate, which remains at a target range of 3.50% to 3.75%.

The interest-bearing deposit balances in the FRB are 100% secured by the U.S.

As liquidity levels continuously vary based on consumer activities, amounts of cash and cash equivalents can vary widely at any given point

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The balance of total securities decreased $2,484, or 1.0% from year-end 2025.

As previously mentioned, the decrease in securities was impacted by the lower

need for securities to pledge to the Treasurer for deposits related to the Homebuyers Plus program.

The Company’s U.S.

Government securities portfolio decreased $63,184 from $168,030 at year-end 2024 to $104,846 at September 30, 2025, impacted by

$65,560 in maturities, net of purchases.

The Company utilized its proceeds from net maturities of U.S.

Government securities to help fund additional purchases in U.S.

Government agency (“Agency”) mortgage-backed securities, which were up $55,677, or

59.1%, from year-end 2024.

During the first nine months of 2025, purchases of Agency mortgage-backed securities totaled $78,284, while being partially offset by $17,333 in principal repayments.

The monthly repayment of principal has been the primary

advantage of Agency mortgage-backed securities as compared to other types of investment securities, which deliver proceeds upon maturity or call date.

At September 30, 2025, the Company’s investment securities portfolio was comprised mostly of Agency

mortgage-backed securities at 56.1% of total investments, while U.S.

Government securities represented 39.2%.

Furthermore, during the third quarter of 2025, the Company received proceeds of $9,808 from the sale of three Agency mortgage-backed securities totaling

These securities carrying a weighted average yield of 1.32% were replaced with similar securities at a higher weighted average yield of 4.37%.

While this sale and repurchase of securities resulted in a realized loss of $1,219 with little

change to the balance of earning assets, the Company will benefit from the shift to higher-yielding securities that is expected to increase future income and have a positive impact to the margin.

The decrease came mostly from U.S.

Government agency (“Agency”) mortgage-backed

Government securities, which were collectively down $2,441, or 1.0%, from year-end 2025.

During the first three months of 2026, total purchases, net of maturities, for both Agency mortgage-backed and U.S.

Government securities totaled $9,677.

This was completely offset by $9,681 in principal repayments coming mostly from Agency mortgage-backed securities.

The monthly repayment of principal has been the primary advantage of Agency mortgage-backed securities as compared to other types of

investment securities, which deliver proceeds upon maturity or call date.

At March 31, 2026, the Company’s investment securities portfolio was comprised mostly of Agency mortgage-backed securities at 62.3% of total investments, while U.S.

securities represented 33.6%.

Included in the factors mentioned above were changes in net unrealized losses associated with AFS securities.

During the first nine months of 2025, a

decrease in long-term market rates led to a $7,245 increase in the fair value associated with the Company’s AFS securities at September 30, 2025, of which, $1,219 was related to the realized loss on the sale of securities previously discussed.

value of an investment security moves inversely to interest rates, so as rates decreased, the fair value increased, causing the unrealized loss in the portfolio to decrease.

These changes in rates are typical and do not impact earnings of the Company

as long as the securities are held to full maturity.

During the first three months of 2026, an

increase in long-term market rates led to a $2,810 decrease in the fair value associated with the Company’s AFS securities at March 31, 2026.

The fair value of an investment security moves inversely to interest rates, so as rates increased, the fair

value decreased, causing the unrealized loss in the portfolio to increase.

These changes in rates are typical and do not impact earnings of the Company as long as the securities are held to full maturity.

The loan portfolio represents the Company’s largest asset category and is its most significant source of interest income.

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with the property or the subsequent sale of the property, such as apartment buildings, condominiums, hotels, and motels.

These loans are primarily impacted by the level of interest rates associated with the debt and to local economic conditions, which

These loans are primarily impacted by the level of interest rates associated with the debt and by local economic conditions, which

dictate occupancy rates and the amount of rent charged.

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relationships it has with certain lenders in those areas where the Company believes it can profitably participate with an acceptable level of risk.

COMMERCIAL REAL ESTATE BY INDUSTRY

As of September 30, 2025

The following table provides the composition of commercial real estate loans by industry classification (as defined by the North American Industry

Classification System).

(dollars in thousands)

Real Estate Rental and Leasing

Accommodation and Food Services

Health Care and Social Assistance

Manufacturing

Commercial and industrial loans consist of loans to corporate borrowers primarily in small to mid-sized industrial and commercial companies that include

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card receivables are also included as consumer loans.

The Company’s loan balances increased to $1,130,534 at September 30, 2025, representing an increase of $68,709, or 6.5%, as compared to $1,061,825 at

December 31, 2024.

The increase in loans came primarily from the commercial real estate and commercial and industrial portfolios, partially offset by a decrease in the consumer loan portfolio, while the residential real estate portfolio was

relatively stable from year-end 2024.

The Company’s loan balances increased to $1,214,814 at March 31, 2026, representing an increase of $18,796, or 1.6%, as compared to $1,196,018 at December

The increase in loans came primarily from both the commercial and residential real estate portfolios, as well as the commercial and industrial portfolio, while partially being offset by a decrease in the consumer loan portfolio from year-end

The Company’s commercial loan portfolio increased $17,964, or 2.8%, from year-end 2025.

The most significant driver of this increase was higher loan

balances within the commercial real estate portfolio, which increased $69,520, or 18.6%, from year-end 2024.

At September 30, 2025, commercial real estate loans represented the largest segment of the Company’s total loan portfolio at 39.1%.

increase from year-end 2025 came primarily from new originations within the owner- and nonowner-occupied loan segments.

The most significant driver of this increase was higher loan balances

within the commercial real estate portfolio, which increased $14,206, or 3.0%, from year-end 2025.

At March 31, 2026, commercial real estate loans represented the largest segment of the Company’s total loan portfolio at 39.9%.

The increase from

year-end 2025 came primarily from new originations within the nonowner-occupied and construction loan segments.

COMMERCIAL REAL ESTATE BY INDUSTRY

As of March 31, 2026

The following table provides the composition of commercial real estate loans by industry classification (as defined by the North American Industry

Classification System).

(dollars in thousands)

Real Estate Rental and Leasing

Accommodation and Food Services

Health Care and Social Assistance

Manufacturing

Commercial loans were also positively impacted by an increase in the commercial and industrial portfolio, which was up $3,758, or 2.2%, from year-end 2025.

The growth was impacted by an increase in larger loan originations during the year.

This included a $12,777 repurchase of two commercial and industrial loans in June 2025 that had been previously participated out.

While management believes lending

opportunities exist in the Company’s markets, future commercial lending activities will depend upon economic and other related conditions, such as general demand for loans in the Company’s primary markets, interest rates offered by the Company, and the

effects of competitive pressure and normal underwriting considerations.

Management will continue to place emphasis on its commercial lending, which generally yields a higher return on investment as compared to other types of loans.

The Company’s residential real estate loan portfolio was relatively stable at September 30, 2025 compared to year-end 2024, increasing just $172.

September 30, 2025, residential real estate loans represented the second largest segment of the Company’s total loan portfolio at 33.1%.

change from year-end 2024 was largely due to a $31,473 paydown in a warehouse line of credit extended to another mortgage lender.

The warehouse lending line is used by the mortgage lender to make loans for the purchase of one- to four-family

residential real estate properties.

The mortgage lender eventually sells the loan and repays the Bank.

The paydown was a result of lower mortgage volume due to higher mortgage rates and the increase in the lead bank’s internal capacity in relation to a

capital infusion.

At September 30, 2025, the balance of this line of credit was $0, but draw downs on the line of credit began again post quarter end.The future balance of the line of credit will depend on mortgage volume and the funding needs of the

lead bank, but it is expected to increase.

The remaining residential real estate loan balances increased $31,645, or 9.3%, from year-end 2024.

Through the first nine months of 2025, as mortgage rates generally remained at elevated levels during most of

the year, the Company experienced fewer opportunities to sell long-term fixed rate loans to the secondary market.

As a result of the elevated mortgage rates, mortgage customers selected more variable rate mortgage products instead of long-term fixed

rate mortgage products.

This had a direct impact on lowering loan volume within the long-term fixed rate loan portfolio and contributed to a shift into more short-term variable rate mortgages as of September 30, 2025.

The increases in the Company’s commercial and residential real estate loan portfolios at September 30, 2025 were partially offset by a decrease in the

Company’s consumer loan portfolio, which was down $14,912, or 9.5%, from year-end 2024.

This change was impacted by a $10,740, or 21.4%, decrease in automobile loans.

This was directly impacted by management’s strategy to place more emphasis on higher

yielding loan portfolios (i.e.

The growth was impacted by an increase in larger loan originations during the quarter.

While management believes lending opportunities exist in the Company’s markets, future commercial lending activities will depend upon economic and other related

conditions, such as general demand for loans in the Company’s primary markets, interest rates offered by the Company, and the effects of competitive pressure and normal underwriting considerations.

Management will continue to place emphasis on its

commercial lending, which generally yields a higher return on investment as compared to other types of loans.

At March 31, 2026, residential real estate loans represented the second largest segment of the Company’s total loan portfolio at 34.9%.

During 2026, mortgage rates remained elevated relative to

variable rate options, which provided the Company with less opportunities to originate and sell long-term fixed-rate residential mortgages to the Federal Home Loan Mortgage Corporation.

Due to the elevated mortgage rates, mortgage customers were

selecting more in-house variable rate mortgage products than long-term fixed rate products, which enhanced the growth in the portfolio.

As a result, residential real estate loans increased $5,841, or 1.4%, from year-end 2025.

The increases in the Company’s commercial and residential real estate loan portfolios at March 31, 2026 were partially offset by a decrease in the Company’s

consumer loan portfolio, which was down $5,009, or 3.6%, from year-end 2025.

This change was impacted by a $3,411, or 6.4%, decrease in other consumer loans from year-end 2025, impacted by principal repayments and payoffs.

Decreases in consumer loans

also came from a $2,876, or 7.7%, decrease in automobile loans.

This was directly impacted by management’s strategy to place more emphasis on higher yielding loan portfolios (i.e.

commercial, and to a smaller extent, residential real estate).

Indirect automobile loans bear additional costs from dealers that partially offset interest revenue and lower the rate of return.

As a result, the Company

exited the indirect lending business for automobiles and recreational vehicles during the fourth quarter of 2024.

Decreases in consumer loans also came from a $9,066, or 14.1%, decrease in other consumer loans from year-end 2024, impacted by principal

repayments and payoffs.

Decreases in consumer loans were partially offset by a $4,894, or 11.5%, increase in home equity lines of credit.

automobile loans bear additional costs from dealers that partially offset interest revenue and lower the rate of return.

As a result, the Company exited the indirect lending business for automobiles and recreational vehicles in 2024.

consumer loans were partially offset by a $1,278, or 2.5%, increase in home equity lines of credit.

Allowance for Credit Losses

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costs basis is due to credit-related factors or noncredit-related factors.

As of September 30, 2025, the Company determined that all AFS securities that experienced a decline in fair value below the amortized cost basis from year-end 2024 were due to

non-credit related factors.

Furthermore, the Company does not have the intent to sell any of these securities and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost.

no ACL was recorded, and no provision expense was recognized during the three and nine months ended September 30, 2025.

Upon adoption of ASC 326 on January 1, 2023, and as of March 31, 2026, the Company determined that all AFS securities that experienced a decline in fair value below the amortized cost basis were due to non-credit related factors.

Therefore, no ACL was recorded, and no provision expense was recognized during the three

months ended March 31, 2026.

For HTM debt securities, the Company evaluates the securities collectively by major security type at each measurement date to determine expected credit

losses based on issuer’s bond rating, historical loss, financial condition, and timely principal and interest payments.

At September 30, 2025, a $1 ACL was recognized based on a .02% cumulative default rate taken from the S&P and Moody’s bond

rating index.

The $1 ACL for HTM debt securities was unchanged from December 31, 2024, resulting in no provision expense during the three and nine months ended September 30, 2025.

losses based on the issuer’s bond rating, historical loss, financial condition, and timely principal and interest payments.

At March 31, 2026, the ACL for HTM debt securities was $1 based on a .02% cumulative default rate taken from the S&P and

Moody’s bond rating index.

This compares to an ACL of $1 at December 31, 2025.

For loans, the Company’s ACL is management’s estimate of expected lifetime credit losses, measured over the contractual life of a loan, that considers

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Expected credit losses on loans

with similar characteristics are also determined by certain qualitative factors that include national unemployment rates, national gross domestic product forecasts, changes in lending policy, quality of loan review, and delinquency status.

loans that do not share similar risk characteristics are individually evaluated for expected credit losses primarily based on foreclosure status and whether a loan is collateral dependent.

Expected credit losses on individually evaluated loans are then

determined using the present value of expected future cash flows based upon the loan’s original effective interest rate, at the loan’s observable market price, or if the loan was collateral dependent, at the fair value of the collateral.

As of September 30, 2025, the ACL for loans totaled $11,420, or 1.01%, of total loans.

As of December 31, 2024, the ACL for loans totaled $10,088, or 0.95%,

of total loans.

The $1,332, or 13.2%, increase in the ACL came primarily from loans collectively evaluated.

The increase in ACL reserves from year-end 2024 was mostly impacted by a $68,709 increase in total loans, primarily within the commercial real

estate segment.

Further increases in year-to-date reserves also came from a higher historical loss rate within the commercial and residential real estate portfolios, as well as higher qualitative risk factor adjustments within the commercial real

estate portfolio.

The increases in general reserves were partially offset by a lower historical loss rate within the consumer loan portfolio.

The Company experienced a decreasing trend in its nonperforming levels from year-end 2024.

Nonperforming loans to total loans decreased to 0.42% at September

30, 2025, compared to 0.46% at December 31, 2024, while nonperforming assets to total assets decreased to 0.30% at September 30, 2025, compared to 0.33% at December 31, 2024.

The decrease in nonperforming loans to total loans was the result of a $165

decrease in nonaccrual loans, coming mostly from the commercial real estate and consumer loan portfolios.

While nonperforming levels were down from year-end 2024, total loans past due increased $6,835, or 48.8%.

The increase in higher delinquencies

from year-end 2024 was not considered to be a trending movement, as the increase was primarily related to two commercial loans that were past due 30-59 days at September 30, 2025.

The Company has experienced an increase in loan balances deemed special mention or substabdard, particularly in the commercial real estate segment.

September 30, 2025, commercial real estate loans classified as special mention or substandard totaled $33,563, an increase of $10,266 from December 31, 2024.

The increase was largely related to two loan relationships.

One of these relationships was

downgraded to substandard and collateral dependent based on the customer’s debt service coverage ratio.

Based on the value of the collateral, no specific reserve was required.

The second loan relationship is a construction loan that was downgraded to

special mention due to the project extending past the expected completion date and exceeding estimated construction costs.

Management believes that the ACL at September 30, 2025 was appropriate to absorb expected losses in the loan portfolio.

with similar characteristics are also determined by considering certain qualitative factors that include national unemployment rates, national gross domestic product forecasts, changes in lending policy, quality of loan review, and delinquency status.

The ACL for loans that do not share similar risk characteristics are individually evaluated for expected credit losses primarily based on foreclosure status and whether a loan is collateral-dependent.

Expected credit losses on individually evaluated

loans are then determined using the present value of expected future cash flows based upon the loan’s original effective interest rate, at the loan’s observable market price, or if the loan was collateral dependent, at the fair value of the collateral.

As of March 31, 2026, the ACL for loans totaled $12,943, or 1.07%, of total

As of December 31, 2025, the ACL for loans totaled $11,519, or 0.96%, of total loans.

The $1,424, or 12.4%, increase in the ACL was impacted by a $2,031 increase in specific reserves on loans individually evaluated for impairment from

year-end 2025.

During the first quarter of 2026, the Company individually evaluated the commercial real estate loans of two borrowers for expected credit loss.

After measuring the fair value of the loans’ collateral to the loans’ recorded investment,

the Company identified $2,031 in expected losses based on the impairment associated with the borrowers’ collateral.

This resulted in a corresponding charge to provision expense to establish the specific allocation within the ACL at March 31, 2026.

The increase in the ACL was also impacted by additional reserves associated with loan growth of $18,796 during the first quarter of 2026 compared to an $18,529 decrease in loan balances during the first quarter of 2025.

These increases in specific and general reserves were partially offset by the improvements in

certain qualitative risk factors that included improved portfolio terms, such as reduced exposure to variable rate loans repricing higher and a positive net charge-off trend for consumer loans due to exiting indirect lending, along with improved

general economic conditions.

The Company also experienced a decrease in modeled loss rates due to the improvements in GDP and unemployment projections.

The Company experienced higher delinquency levels as compared to year-end 2025.

Nonperforming loans to total loans increased to 1.64% at March 31, 2026,

compared to 1.40% at December 31, 2025, while nonperforming assets to total assets increased to 1.19% at March 31, 2026, compared to 1.06% at December 31, 2025.

The increase in nonperforming loans was primarily related to one commercial loan being

placed on nonaccrual status during the first quarter of 2026.

The loan is secured by commercial real estate and was identified as having collateral impairment, which required a specific allocation of the ACL at March 31, 2026.

Management believes that the ACL at March 31, 2026 was appropriate to absorb expected losses in the loan portfolio.

Changes in the circumstances of

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Deposits continue to be the most significant source of funds used by the Company to support earning assets.

Total deposits at September 30, 2025 increased $57,309, or 4.5%, from year-end

Total deposits at March 31, 2026 increased $94,007, or 7.1%, from year-end 2025.

The increase in deposits came primarily from interest-bearing deposit balances, which were up by $75,378, or 7.4%, from year-end 2025, while noninterest-bearing deposits increased $18,629, or 5.9%, from year-end 2025.

1 unchanged sentence

The increase in interest-bearing deposits came primarily from time deposit balances, which increased $55,323, or 11.3%, from year-end

The increase came from retail time deposits, which increased $55,116 from year-end 2024.

The Company targeted growth in retail CDs by promoting a special CD rate offering during the third quarter of 2025 to assist in funding loan growth.

Company also utilized more wholesale CDs to help fund earning asset demand, which increased $14,307 from year-end 2024.

Further increases in interest-bearing deposits came from savings and money market balances, which increased $15,154, or 5.3%, from

year-end 2024.

The increase came primarily from money market accounts, which increased $11,897 from year-end 2024, impacted mostly by increases in the Company’s tiered money market product (Money Fund) that was introduced in 2023 and offers a higher

rate on tiered deposit balances.

Savings account balances increased $3,257 impacted mostly by the Company’s statement savings account product.

Partially offsetting the increases in time, savings and money market deposit balances were lower NOW account balances, which decreased

$27,733, or 10.2%, from year-end 2024.

The decrease was largely from a $24,859 decrease in the Company’s municipal NOW account with the Treasurer in relation to the Homebuyer Plus program.

Excluding this decrease in the Treasurer account balances, the

Company would have experienced a $2,874 decrease in its other municipal NOW product balances, particularly within the Gallia County, Ohio, and Mason County, West Virginia, market areas.

While facing increased competition for deposits in its market areas, the Company will continue to emphasize growth and retention in its

core deposit relationships during the remainder of 2025, reflecting the Company’s efforts to reduce its reliance on higher cost funding and improve net interest income.

2025, $47,575 of which was a result of an increase in retail time deposits.

The Company targeted growth in retail CDs by promoting a special CD rate during the first quarter of 2026 to assist in funding loan growth.

The Company also utilized more

wholesale CDs to help fund earning asset demand, which increased $7,748 from year-end 2025.

Further increases in interest-bearing deposits came from NOW account balances, which increased $12,002, or 5.5%, from year-end 2025.

increase was largely from a $12,671 increase in the Company’s municipal NOW product balances, particularly within the Gallia County, Ohio, and Mason County, West Virginia, market areas.

Savings and money market balances also increased $8,053, or 2.6%, from year-end 2025.

The increase came primarily from money market

accounts, which increased $4,913 from year-end 2025, impacted mostly by increases in the Company’s tiered money market product (Money Fund) that was introduced in 2023 and offers a higher rate on tiered deposit balances.

Savings account balances

increased $3,140 impacted mostly by the Company’s statement savings account product.

The Company expects to continue to experience increased competition for deposits in its market areas, which could challenge its net

The Company will continue to emphasize growth and retention within its core deposit relationships during 2026, reflecting the Company’s efforts to reduce its reliance on higher cost funding and improving net interest income.

Other Borrowed Funds

Other borrowed funds were $36,024 at September 30, 2025, a decrease of $3,716, or 9.4%, from year-end 2024.

The decrease was related to

the scheduled principal amortization for applicable FHLB advances.

While deposits continue to be the primary source of funding for growth in earning assets, management will continue to utilize various wholesale funding sources to help manage interest

rate sensitivity and liquidity.

Other borrowed funds were $43,529 at March 31, 2026, a decrease of $1,319, or 2.9%, from year-end 2025.

The decrease was related to the

scheduled principal amortization for applicable FHLB advances.

While deposits continue to be the primary source of funding for growth in earning assets, management will continue to utilize various wholesale funding sources to help manage interest rate

sensitivity and liquidity.

Shareholders’ Equity

Total shareholders' equity at September 30, 2025 increased $14,089, or 9.4%, to finish at $164,417, as compared to $150,328 at December

This was primarily from year-to-date net income and an increase in accumulated other comprehensive income, partially offset by cash dividends paid.

The increase in accumulated other comprehensive income was related to the $4,697, net of tax,

market appreciation of AFS securities due to a decrease in market interest rates and the recognition of a $950, net of tax, realized loss on the sale of securities that was previously unrealized.

Total shareholders' equity at March 31, 2026 increased $1,023, or 0.6%, to finish at $171,280, as compared to $170,257 at December 31,

This was primarily from year-to-date net income partially offset by cash dividends paid and a decrease in accumulated other comprehensive income.

The decrease in accumulated other comprehensive income was related to the $2,190, net of tax, market

depreciation of AFS securities due to an increase in market interest rates.

Comparison of Results of Operations

For the Three and Nine Months Ended

September 30, 2025 and 2024

The following discussion focuses, in more detail, on the consolidated results of operations of the Company for the three and nine months

ended September 30, 2025, compared to the same period in 2024.

For the Three Months Ended

March 31, 2026 and 2025

The following discussion focuses, in more detail, on the consolidated results of operations of the Company for the three months ended

March 31, 2026, compared to the same period in 2025.

This discussion should be read in conjunction with the interim consolidated financial statements and the notes included in this Form 10‑Q.

2 unchanged sentences

assets and interest expense incurred on interest-bearing liabilities.

During the three and nine months ended September 30, 2025, net interest income increased $2,016, or 16.0%, and $6,538, or 18.3%, compared to the same periods in 2024, respectively.

The quarterly and year-to-date improvement during 2025 came from average earning asset growth and the net interest margin.

The average growth was impacted by a composition shift into higher-yielding loans and securities, combined with a consumer shift

to more lower-cost deposit sources that helped minimize the higher average costs paid on deposits and borrowings.

Total interest and fee income recognized on the Company’s earning assets increased $2,142, or 11.0%, during the third quarter of 2025, and $6,645, or 11.9%,

during the nine months ended September 30, 2025, compared to the same periods in 2024, respectively.

The earnings growth was impacted by interest on loans, which increased $1,898, or 11.8%, and $4,970, or 10.8%, during the three and nine months ended

September 30, 2025, compared to the same periods in 2024, respectively.

During the three months ended March 31, 2026, net interest income increased $1,748, or 13.3%, compared to the same period in 2025.

The quarterly improvement during 2026 came from

average earning asset growth and the net interest margin.

The average growth was impacted by a composition shift into higher-yielding loans which contributed to margin improvement, combined with a decrease in the average cost on CDs that helped minimize the higher average costs paid on deposits and borrowings.

Total interest and fee income recognized on the Company’s earning assets increased $2,709, or 16.2%, during the first quarter of 2026, compared to the same

period in 2025.

The earnings growth was impacted by interest on loans, which increased $2,737, or 17.3%, compared to the same period in 2025.

This improvement was impacted by increases in both average loan balances and loan yields.

Overall, average loans increased $76,514 during the third quarter of 2025 and $65,448

during the first nine months of 2025.

Balance increases were mostly realized within the commercial and residential real estate loan portfolios due to higher commercial loan volume and a consumer preference for short-term, variable rate residential real

estate loans.

Loan revenue improvement also came from average loan yields increasing 24 basis points to 6.69% during the third quarter of 2025 and increasing 27 basis points to 6.68% during the first nine months of 2025, compared to the same periods in

A portion of the loan yield improvement came from the recognition of a market discount on two purchased commercial and industrial loans totaling $817 in the second quarter of 2025.

Loan yield increases were mostly impacted by the commercial and

residential real estate loan portfolios.

Total interest on securities increased $405, or 22.2%, during the third quarter of 2025, and $3,011, or 80.8%, during the first nine months of 2025, compared

to the same periods in 2024.

The earnings growth was primarily related to the purchase of $100,497 in U.S.

Government securities during the third quarter of 2024 as part of the Company’s participation in the state’s Homebuyer Plus program.

securities were purchased at a weighted average yield of 4.7% with maturity terms ranging from 6 to 18 months.

The security purchases were used to collateralize $100,000 in public fund deposits received by the Treasurer as part of the program.

contributed to increases in average security balances, which were up $25,983 and $74,685 during the three and nine months ended September 30, 2025, compared to the same periods in 2024.

While average securities have grown in large part due to the

security purchases from the Homebuyer Plus program, the Company has placed more emphasis on growing its higher-yielding loan portfolio during 2024 and 2025, utilizing proceeds from various maturities and repayments of securities to help fund loan

Earnings from securities were positively impacted by increases in the average yield on securities, impacted by the $100,497 purchase of U.S Government securities in the third quarter of 2024 at a weighted average yield of 4.7% that was higher

than the 2.39% average yield on the total securities portfolio at September 30, 2024.

Average security yields were also positively impacted by the elevated market rate environment during 2024 that continued into most of 2025.

As a result, average

security yields increased 32 basis points to 3.21% during the third quarter of 2025 and increased 82 basis points to 3.21% during the first nine months of 2025, compared to the same periods in 2024.

Total interest income from interest-bearing deposits with banks decreased $227, or 28.7%, during the third quarter of 2025, and decreased $1,625, or 44.5%,

during the first nine months of 2025, compared to the same periods in 2024.

This was largely from average balance decreases with the Company’s interest-bearing FRB clearing account, which decreased $4,445 and $25,933 during the three and nine months

ended September 30, 2025, compared to the same periods in 2024, respectively.

FRB clearing balances were used to assist in funding loan growth, which contributed to the average balance decrease of FRB funds during 2025.

Further impacting lower interest

income from the FRB clearing account were short-term rate decreases during 2024 and 2025.

Between September and December 2024, the FRB took action to reduce the rate associated with the FRB clearing account by 100 basis points due to inflationary

pressures, which lowered the target federal funds rate to a range of 4.25% to 4.50% going into 2025.

In 2025, the FRB again reduced the rate associated with the FRB clearing account by 25 basis points in September and another 25 basis points in

October, due to concerns of a weakening labor market.

This lowered the target federal funds rate to a range of 3.75% to 4.00% as of October 31, 2025.

The decreases in interest rates had a negative impact on the FRB clearing account’s interest earnings.

Total interest expense incurred on the Company’s interest-bearing liabilities was limited to increases of just $126, or 1.8%, during the third quarter of

2025, and $107, or 0.5%, during the first nine months of 2025, compared to the same periods in 2024.

The increase in funding expenses were directly related to the increases in average interest-bearing liabilities, primarily from deposits.

impact from higher average deposit balances was almost completely offset by a lower cost of funds as the composition of average funding sources shifted from higher cost deposit sources such as time deposits to lower cost deposit sources such as NOW,

savings, and money market deposits.

Growth in the Company’s average interest-bearing liabilities came mostly from NOW, savings and money market deposit balances, which increased $33,956 and

$84,877 during both the third quarter and first nine months of 2025, compared to the same periods in 2024.

A large portion of this growth came from lower-costing NOW and savings account balances related to the Company’s participation in the Homebuyers

Plus program.

As a result of the additions of the municipal NOW Treasurer account and new Home Sweet Home savings accounts during the second half of 2024, there was an increase in the average balance of interest-bearing deposits of $17,175 and $66,072

during the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024.

Average interest-bearing deposit growth also came from the Company’s lower-costing tiered money market product (Money Fund), which increased

$36,503 and $33,217 during the three and nine months ended September 30, 2025, compared to the same periods in 2024, respectively.

The Company also experienced a $45,308 and $19,290 increase in its average time deposits during both the third quarter and first nine months of 2025,

compared to the same periods in 2024.

The surge in average quarterly time deposit balances was the result of a special CD rate offering that began in July 2025 that was successful in raising additional retail deposits used to assist in funding loan

While the movement of higher time deposit balances had a corresponding impact to higher interest expense, the average cost associated with time deposits decreased 52 basis points to 4.15% during the first nine months of 2025.

During 2023, rate

offerings on retail CDs continued to adjust up as a result of market competition.

The Company had offered various “short-term” CD rate specials with maturity terms of less than one year to attract and retain its core deposit funding during this time.

Since then, product rates on retail CDs have decreased, which has allowed a large portion of those short-term retail CDs to renew at lower rates, or in some cases, be reinvested into lower-costing NOW, savings or money market accounts (average cost of

Furthermore, the Company’s average wholesale funding balances decreased $12,723 during the first nine months of 2025, which included the use of brokered CDs (average cost of 4.62%) and FHLB advances (average cost of 4.04%).

With the Company

utilizing the growth in its lower-cost retail deposit sources to fund earning asset growth, the reliance on higher-cost wholesale deposits to fund asset growth decreased, which contributed to lower interest expense during 2025.

As a result of the rate

repricings on retail CDs and the deposit shift into lower-cost funding sources, the Company’s total weighted average costs on interest-bearing liabilities decreased by 14 basis points from 2.13% at September 30, 2024 to 1.99% at September 30, 2025.

Overall, average

loans increased $146,436 during the first quarter of 2026, primarily from the commercial and residential real estate loan portfolios due to higher commercial loan volume and a consumer preference for short-term, variable rate residential real estate

Loan revenue improvement also came from average loan yields increasing 12 basis points to 6.65% during the first quarter of 2026, compared to the same period in 2025.

The loan yield increase was mostly impacted by the commercial and residential

real estate loan portfolios.

Total interest on securities increased $218, or 10.0%, during the first quarter of 2026, compared to the same period in 2025.

The earnings growth was

primarily related to an increase in the average yield on taxable securities.

This was impacted by the Company’s decision to sell $36,950 in taxable securities yielding 1.35% during the second half of 2025 and replace them with similar taxable

securities yielding 4.52% with longer durations.

As a result, the average yield on taxable securities increased 60 basis points to 3.79% during the first quarter of 2026, compared to the same period in 2025.

The yield improvement from taxable

securities completely offset the negative impact of lower average securities balances, which decreased $14,634, or 5.4%, during the first quarter of 2026.

Average securities have decreased due to the Company’s emphasis on growing higher-yielding loans

during the first quarter of 2026, as well as a lower need for securities to be pledged as collateral to secure public fund NOW accounts from a year ago, particularly with the Bank’s public fund NOW account deposits with the Ohio Treasurer (the

“Treasurer”) as part of the Ohio Homebuyer Plus program.

Securities pledged as collateral to secure the Treasurer deposit balances totaled $58,955 at March 31, 2026, compared to $96,707 at March 31, 2025.

Total interest income from interest-bearing deposits with banks decreased $244, or 29.5%, during the first quarter of 2026, compared to the same period in

This was largely from average balance decreases with the Company’s interest-bearing FRB clearing account, which decreased $11,360 during the three months ended March 31, 2026, compared to the same period in 2025.

FRB clearing balances were used

to assist in funding loan growth, which contributed to the average balance decrease of FRB funds during 2026.

Further impacting lower interest income from the FRB clearing account were short-term rate decreases during 2025.

Between September and

December 2025, the FRB took action to reduce the rate associated with the FRB clearing account by 75 basis points due to inflationary pressures, which lowered the target federal funds rate to a range of 3.50% to 3.75% going into 2026.

These decreases

in interest rates had a negative impact on the FRB clearing account’s interest earnings during the first quarter of 2026.

Total interest expense incurred on the Company’s interest-bearing liabilities increased $927, or 13.9%, during the first quarter of 2026, compared to the

same period in 2025.

The increase was impacted by a $100,539, or 10.2%, increase in average interest-bearing liabilities, coming mostly from higher time, savings, and money market deposit balances.

The increase in time deposit balances was impacted by

the Company’s strategy to raise additional retail deposits during the first quarter of 2026 by offering special CD rate offerings during that time.

The increase in savings and money market account balances were mostly impacted by deposit growth within

the Company’s tiered money market product (Money Fund) that offered competitive rates.

These increases were partially offset by a decrease in average NOW account balances, which came largely from lower public fund balances from a year ago.

The growth in interest expense from higher average interest-bearing liabilities was further impacted by a higher average cost on average interest-bearing

liabilities during 2026.

The average rates on the Company’s savings, NOW, and money market balances increased 7 basis points to 1.47% during the first quarter of 2026, as product rates on tiered money market accounts adjusted upward, while public fund

NOW account balances shifted to a new higher-costing cash sweep product offered by the Bank.

While product rates on various savings, NOW, and money market products increased, the Company experienced a decrease in the weighted average cost of its time

deposit balances.

Prior to 2025, market competition for deposits had resulted in higher rates on short-term CD offerings.

Since then, product rates on retail CDs have decreased during 2025 and into 2026.

The Company’s strategy to fund loan growth by

raising additional retail deposits through special CD rate offerings was in effect during the second half of 2025.

This has allowed a large portion of these short-term retail CDs to renew at lower rates during the first quarter of 2026.

As a result of

the rate repricings on retail CDs, the average cost associated with time deposits decreased by 30 basis points to 4.04% during the first three months of 2026,

compared to the same period in 2025.

This helped to reduce the expense impacts of higher average deposit balances, and the average rate increases in specific savings, NOW and money market products.

The Company’s net interest margin is defined as fully tax-equivalent net interest income as a percentage of average earning assets.

During 2025, the

Company’s third quarter net interest margin increased to 4.05%, compared to 2024’s third quarter net interest margin of 3.76%.

The Company’s year-to-date net interest margin increased to 4.03%, compared to 2024’s year-to-date net interest margin of

Positive contributions to margin growth came from the Company’s average earning assets, which increased 7.3% and 8.8% during the third quarter and first nine months of 2025, respectively, mostly from higher-yielding loans and securities.

improvement was also positively impacted by lower average costs associated with the Bank’s interest-bearing liabilities due to a deposit composition shift into more lower-cost NOW, savings, and money market account deposits.

Furthermore, the Company

has benefited from its retail CDs repricing at lower product rates, while also relying less on wholesale funding sources.

During the first quarter

of 2026, the Company’s net interest margin increased 16 basis points to 4.01%, compared to 3.85% during the first quarter of 2025.

Positive contributions to margin growth came from the Company’s average earning assets, which increased 8.6% during the

first quarter of 2026, mostly from higher-yielding loans.

Margin improvement was also positively impacted by a 12 basis point increase in the average yield on loans, while the average cost of time deposits, which was the primary funding source of

earning assets during the first quarter of 2026, decreased 30 basis points to help limit the rise in interest expense.

The Company’s primary focus is to invest its funds into higher yielding assets, particularly loans, as opportunities arise.

However, if loan balances do not continue to expand and remain a larger component of overall earning assets, the Company will face pressure within its net interest income and margin improvement.

if loan balances do not continue to expand and remain a larger component of overall earning assets, the Company will face pressure within its net interest income and margin improvement.

Provision for Credit Losses

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Management performs, on a quarterly basis, a detailed analysis of the ACL that encompasses asset portfolio composition, asset quality, loss experience and other relevant economic factors.

For the three months ended

September 30, 2025, the Company’s provision for credit losses expense totaled $1,112, an increase of $192 when compared to $920 in provision expense during the three months ended September 30, 2024.

For the nine months ended September 30, 2025, the

Company’s provision for credit losses expense totaled $2,676, an increase of $824 when compared to $1,852 in provision expense during the nine months ended September 30, 2024.

The increase in credit loss expense during the quarterly period came primarily from unfunded commitments on off-balance sheet liabilities, which increased

$243 during the three months ended September 30, 2025, and increased $361 during the first nine months of 2025, compared to the same periods in 2024.

The impact came mostly from an increase in the originations of several new commercial and industrial

lines during the second and third quarters of 2025.

The increase in credit loss expense during the year-to-date period came primarily from loans, which decreased $15 during the third quarter of 2025, but

increased $463 during the first nine months of 2025, compared to the same periods in 2024.

Provision expense on loans during 2025 was impacted primarily by a higher qualitative risk factor that increased reserves.

The qualitative risk factor was

impacted by an increase in industry risk associated with hotel and motel loans that elevated reserves during the third quarter of 2025.

Partially offsetting the increase in qualitative risk was a lower historical loan loss factor primarily impacted by

GDP and unemployment projections regressing less during 2025 compared to 2024.

Provision expense on loans during 2025 was also impacted by loan balances generally allocated for due to strong loan growth during 2025 that generated higher

general reserves and a corresponding increase to provision expense, particularly during the third quarter of 2025.

Partially offsetting increases in provision expense during 2025 was a $427 increase in specific reserves during the third quarter of 2024 compared to no

specific reserves in 2025.

This specific allocation from 2024 was associated with a collateral-dependent commercial and industrial loan relationship that required a corresponding provision expense charge of $427 to establish the specific reserve.

Further impacting provision expense were net loan charge-offs, which decreased $127 during the third quarter of 2025, but increased $283 during the first

nine months of 2025, compared to the same periods in 2024.

Lower net charge-offs during the third quarter of 2025 came mostly from the consumer loan portfolio while higher net charge-offs during the first nine months of 2025 were the result of large

recoveries collected on one commercial and industrial borrower during the second quarter of 2024.

For the three months ended March

31, 2026, the Company’s provision for credit losses expense totaled $1,622, an increase of $1,206 over the three months ended March 31, 2025.

The provision for credit loss expense for the first quarter of 2026 was primarily related to the establishment of a specific allocation of $2,031 on two loan

relationships that were deemed to be collateral dependent.

In addition, provision for credit loss expense was required to cover net charge-offs of $278 and higher general reserves for the $18,796 increase in loans since December 31, 2025.

increases in reserves were partially offset by the improvements in certain qualitative risk factors that included improved portfolio terms, such as reduced exposure to variable rate loans repricing higher and a positive net charge-off trend for

consumer loans due to exiting indirect lending, along with improved general economic conditions.

Credit loss expense during the quarter was also impacted by unfunded commitments on off-balance sheet liabilities, which decreased $20 during the first

quarter of 2026, compared to the same period in 2025.

The impact came mostly from lower loss rates on commercial lines during the first quarter of 2026.

Future provisions to the ACL will continue to be based on management’s quarterly in-depth evaluation that is discussed in further detail under the caption

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Noninterest Income

Noninterest income decreased $1,106, or 38.8%, during the three months ended September 30, 2025, and decreased $1,009, or 10.9%, during the nine months ended

September 30, 2025, compared to the same periods in 2024.

The decrease came primarily from losses associated with the sales of investment securities.

During the third quarter of 2023, the Company received proceeds of $9,808 from the sale of three

securities totaling $11,027 at a weighted average yield of 1.32%.

The lower-yielding securities were replaced with similar securities with a higher weighted average yield of 4.37%.

As a result, the realized losses on the sale of securities totaled

$1,219, which reduced noninterest income during both the three and nine months ended September 30, 2025.

While realized losses were incurred, the transactions are expected to increase future income and have a positive impact to the margin going

Partially offsetting the impact from the loss on sale of securities was growth in interchange income earned on debit and credit cards, which increased $91

and $151 during the three and nine months ended September 30, 2025, compared to the same periods in 2024, respectively.

This was due to an increase in the transaction volume associated with debit and credit cards.

The Company’s other noninterest income

also increased $22 and $43 during the three and nine months ended September 30, 2025, compared to the same periods in 2024, respectively.

Other noninterest income was primarily impacted by increases in commercial servicing fees, mortgage application

referral fees, and lower losses incurred on the sale of bank premises, which were all partially offset by decreases in swap asset revenue.

The remaining noninterest income categories did not change during the third quarter of 2025, while increasing

$16, or 0.3%, during the first nine months of 2025, compared to the same periods in 2024.

Noninterest income decreased $358, or 9.8%, during the three months ended March 31, 2026, compared to the same period in 2025.

The decrease was primarily

related to the $540 decrease in electronic refund check and deposit fees due to the expiration of a tax processing agreement with a third party.

This decrease was partially offset by a $138 increase in income from bank owned life insurance due to the

receipt of life insurance proceeds and to the $86 increase in debit and credit card interchange income.

The remaining noninterest income categories decreased $42, which came mostly from a $44 decline in commercial servicing fees.

Noninterest Expense

Noninterest expense increased $269, or 2.4%, during the three months ended September 30, 2025, and increased $532, or 1.6%, during the nine months ended

September 30, 2025, compared to the same periods in 2024.

Contributing most to the increase in noninterest expense were data processing expenses, which increased $114 and $413 during the three and nine months ended September 30, 2025, compared to the

same periods in 2024, respectively.

Higher costs in this category were primarily related to debit and credit card processing due to higher transaction volume and conversion costs for the Company’s new reward platform.

Higher noninterest expense also came from marketing expense, which increased $52 during the third quarter of 2025, and $164 during the first nine months of

Higher costs in this category were the direct result of additional expense added to both the donations and advertising budgets for 2025.

Total other noninterest expense increased $203 and $162 during the three and nine months ended September 30, 2025, compared to the same periods in 2024,

respectively.

This was impacted primarily from higher ATM costs during the third quarter of 2025, as well as increases in employee recruiting costs, all partially offset by decreases in swap asset expense.

Total occupancy and equipment expenses also increased $55 and $91 during the three and nine months ended September 30, 2025, compared to the same periods in

2024, respectively.

This was impacted by increases in various repair and maintenance costs and higher utility expenses.

The Company’s largest noninterest expense, salaries and employee benefits, decreased $229, or 3.5%, during the three months ended September 30, 2025, and

decreased $376, or 2.0%, during the nine months ended September 30, 2025, compared to the same periods in 2024.

The decreases were primarily related to the

Company’s full-time equivalent employee base being down nine employees from 264 at September 30, 2024 to 255 at September 30, 2025.

Furthermore, insurance premium costs saw a decrease in 2025, also coinciding with a smaller full-time equivalent

employee base.

The primary reason for the decrease in employee base was due to the voluntary early retirement program that was implemented in 2024.

The early retirement program was expected to reduce salary and employee benefit expense.

offsetting the year-to-date expense savings from the early retirement program were annual merit increases that were recorded in the second quarter of 2025.

The remaining noninterest expense categories increased $74 during the third quarter of 2025, and increased $78 during the first nine months of 2025, compared

to the same periods in 2024, impacted mostly by higher software and FDIC assessment costs.

The Company’s efficiency ratio is defined as noninterest expense as a percentage of fully tax-equivalent net interest income plus noninterest income.

effects from provision expense are excluded from the efficiency ratio.

Noninterest expense increased $483, or 4.5%, during the three months ended March 31, 2026, compared to the same period in 2025.

The Company’s largest

noninterest expense, salaries and employee benefits, increased $335, or 5.6%, during the three months ended March 31, 2026, compared to the same period in 2025.

The expense increase was primarily related to annual merit increases and to health

insurance premiums.

Higher noninterest expense also came from software expense, which increased $132 during the first quarter of 2026, compared to the same period in 2025.

Higher costs in this category were the result of the investment in software to enhance internal processes.

Also contributing to higher noninterest expense for the first quarter of 2026 was a $58 increase in FDIC insurance expense, as compared to the same period

The increase was related to a higher assessment base due to growth in assets and to an increase in the assessment rate in relation to the higher nonperforming loans.

The remaining noninterest expense categories decreased $42 during the first quarter of 2026, compared to the same period in 2025.

The decrease was mostly a

result of lower furniture and equipment expense (down $32), as well as a decrease in professional fees (down $27).

The Company’s efficiency ratio is a non-GAAP measurement and is defined as noninterest expense as a percentage of fully tax-equivalent net interest income

plus noninterest income.

The effects of provision expense are excluded from the efficiency ratio.

Management believes the efficiency ratio provides investors with important information regarding operational efficiency and operating performance.

Management continues to place emphasis on managing its balance sheet mix and interest rate sensitivity as well as developing more innovative ways to generate noninterest revenue.

Comparing the three and nine months ended September 30, 2025 to the same periods in 2024, the Company has benefited from an increase in average earning assets, primarily from higher-yielding loans and securities, and a decrease in average costs on

interest-bearing deposits associated with a deposit composition shift from higher-costing time deposits to lower-costing savings, NOW, money market and checking account deposits.

Also positively impacting earnings were cost savings in salaries and

employee benefits that resulted from management’s implementation of a voluntary retirement program in 2024.

This has helped to limit overhead expense to just a 2.4% increase during the third quarter of 2025, and a 1.6% increase during the first nine

months of 2025, over the same periods in 2024.

These positive effects from lower personnel costs and strong net interest margin growth has more than offset the $1,219 in realized losses from the sale of securities in the third quarter of 2025.

result, the Company’s quarterly efficiency number decreased (improved) to 69.70% during the three months ended September 30, 2025, compared to 72.01% during the three months ended September 30, 2024.

The Company’s year-to-date efficiency number also

decreased (improved) to 65.52% during the nine months ended September 30, 2025, compared to 72.27% during the nine months ended September 30, 2024.

Comparing the three months ended March 31, 2026 to the same period in

2025, the Company has benefited from an increase in average earning assets, primarily from higher-yielding loans, combined with an increase in the net interest margin to increase net interest income $1,748, or 13.3%.

The growth in net interest income

was partially offset by a decrease in noninterest income of $358, or 9.8%, primarily due to lower electronic refund check and deposit fees due to the expiration of a tax processing agreement with a third party.

In total, the net increase in these two

revenue sources was $1,390 from the first quarter of 2025.

For the three months ended March 31, 2026, noninterest expense increased $483, or 4.5%, from the same period in 2025.

The increase was largely related to the $335 increase in salaries and

employee benefits.

Based on the net increase in revenue sources outpacing the increase in noninterest expense, the Company’s efficiency ratio decreased (improved) to 61.72% during the three months ended March 31, 2026, compared to 63.95% during the

three months ended March 31, 2025.

Provision for income taxes

The Company’s income tax provision increased $138 during the three months ended September 30, 2025, and increased $1,011 during the nine months ended

September 30, 2025, compared to the same periods in 2024.

The increase in tax expense was related to increases in operating income and the effective tax rate.

During the third quarter of 2025, operating income increased 13.6% and the associated

effective tax rate increased from 17.5% in 2024 to 19.1% in 2025.

During the first nine months of 2025, operating income increased 40.5% and the associated effective tax rate increased from 17.7% in 2024 to 19.6% in 2025.

The effective rate increases

during both the quarterly and year-to-date periods of 2025 were primarily from lower tax-exempt earnings.

The Company’s income tax provision decreased $190 during the three months ended March 31, 2026, compared to the same period in 2025.

The decrease in tax

expense was primarily associated with the 4.5% decrease in operating income and a decrease in the effective tax rate from 20.6% at March 31, 2025 to 18.2% at March 31, 2026.

The effective rate decreased primarily from higher tax-exempt earnings during

the first quarter of 2026.

Capital Resources

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• Achieve a leverage ratio greater than 9.0%.

Under the CBLR framework, a QCBO must maintain a CBLR of at least 9.0%.

If the ratio falls below this threshold, the QCBO has a two-quarter

grace period to restore compliance, provided its leverage ratio remains above 8.0% during this period.

If the QCBO does not meet these requirements, it must comply with the existing Basel III capital requirements.

The federal banking agencies adopted a final rule that will

modify the CBLR framework effective July 1, 2026.

Key provisions include a decrease in the CBLR requirement from 9.0% to 8.0%, extension of the grace period to meet one or more CBLR qualifying requirements from two consecutive quarters to four

consecutive quarters, as long as the leverage ratio stays above 7.0%, and cap the extended grace period to eight quarters within a five-year period.

A QCBO failing to satisfy these requirements must comply with the existing Basel III capital requirements.

The Bank opted into the CBLR, and, therefore, is not required to comply with the Basel III capital requirements.

The numerator of the CBLR is

Tier 1 capital, as calculated under present rules.

The denominator of the CBLR is the QCBO’s average assets, calculated in accordance with the QCBO’s Call Report instructions and less assets deducted from Tier 1 capital.

The current rules and Call

Report instructions were impacted by the Company’s adoption of ASC 326 and its election to apply the 3-year CECL transition provision on January 1, 2023.

By making this election, the Bank, in accordance with Section 301 of the regulatory capital rules,

will increase it retained earnings (Tier 1 Capital) and average assets by 75% of its CECL transition amount during the first year of the transition period, 50% of its CECL transition amount during the second year, and 25% of its CECL transitional

amount during the third year of the transition period.

The Bank’s transition amount during year three of the transitional period totaled $2,276, which resulted in the add-back of $569 to both Tier 1 capital and average assets as part of the CBLR

calculation for September 30, 2025.

As of September 30, 2025, the Bank’s CBLR was 10.18%.

Cash dividends paid by the Company were $3,204 during the first nine months of 2025.

The year-to-date dividends paid totaled $0.68 per share.

March 31, 2026, the Bank’s CBLR was 10.06%.

Cash dividends paid by the Company were $1,084 during the first three months of 2026.

The year-to-date dividends paid totaled $0.23 per

Liquidity relates to the Company's ability to meet the cash demands and credit needs of its customers in the short and long-term and is provided by the

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Total cash and cash equivalents, HTM securities maturing within one year, and AFS securities, which totaled $377,398, represented 22.5% of total assets at

September 30, 2025, compared to $352,563 and 23.5% of total assets at December 31, 2024.

This decrease in liquid funds was primarily the result of the funding of loans, which increased $68,709 from year-end 2024, mostly from the commercial loan

Loan funding sources also came from an increase in net proceeds from maturities and paydowns of securities.

Increases in deposits were largely impacted by growth in time, savings, money market, and noninterest-bearing demand deposits which

increased 8.5% from year-end 2024, partially offset by lower interest-bearing demand deposits, which decreased 10.2%, from year-end 2024.

March 31, 2026 compared to $300,436 and 19.0% of total assets at December 31, 2025.

The increase in liquid funds came primarily from the $79,430 increase in cash and cash equivalents, which was related to the growth in total deposits.

From year-end

2025, total deposits increased $94,007, or 7.1%, of which a portion was utilized to fund loan growth of $18,976.

In addition to the on-balance sheet liquidity discussed above, the Bank has established multiple sources of funding to further enhance the Bank’s ability to

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The Bank has pledged collateral to the FHLB and the FRB to establish committed borrowing lines.

At September 30, 2025, the Bank could borrow an additional $116,143 from the FHLB and the borrowing line with the FRB had

availability of $44,597.

At March 31, 2026, the Bank could borrow an additional $172,606 from the FHLB and the borrowing line with the FRB had availability

For each of these sources, the Bank has established an internal limit of 85% of our borrowing capacity.

In addition to the committed borrowing lines, the Bank has access to several wholesale funding sources, such as, brokered

CDs, a $25 million federal funds purchase limit with two correspondent banks, and the ability to bid on available funds from select deposit placement services.

The Bank has established limits for each respective funding source and a collective limit on

all wholesale funding sources.

In addition to the committed borrowing lines, the Bank has access to several wholesale funding sources, such as, brokered CDs, a $25

million federal funds purchase limit with two correspondent banks, and the ability to bid on available funds from select deposit placement services.

The Bank has established limits for each respective funding source and a collective limit on all

wholesale funding sources.

The Bank’s internal limit on brokered CDs is 10% of total assets.

At September 30, 2025, the amount of brokered CDs outstanding was 3.96% of total assets, as compared to 3.25% at December 31, 2024.

At September 30, 2025,

the Bank had utilized 44.47% of its FHLB capacity, a decrease from 52.21% at December 31, 2024.

At March 31, 2026, the amount of brokered CDs outstanding was 4.15% of total assets, as compared to 3.92% at December 31, 2025.

At March 31, 2026, the Bank had

utilized 34.03% of our FHLB capacity, a decrease from 37.62% at December 31, 2025.

The collective internal limit on all wholesale funding sources is 40% of total assets.

At September 30, 2025, the Bank’s total wholesale funding sources

represented 11.86% of total assets.

Based on the collective internal wholesale funding limit, the Bank had the capacity to borrow an additional $438 million in wholesale funds and the available funding from the respective wholesale funding sources

exceeded this amount, which provides the flexibility to utilize one source more than another due to pricing or availability.

At March 31, 2026, the Bank’s total wholesale funding sources represented 11.36%

of total assets, a decrease from 11.89% at December 31, 2025.

Based on the collective internal wholesale funding limit, the Bank had the capacity to borrow an additional $476 million in wholesale funds and the available funding from the respective

wholesale funding sources exceeded this amount, which provides the flexibility to utilize one source more than another due to pricing or availability.

As part of performing liquidity stress tests, the Bank monitors and evaluates the exposure to uninsured deposits.

Of the Company’s $1,423,674 in total

deposit balances at September 30, 2025, only 37.4%, or $498,790, were deemed uninsured as per the $250 FDIC threshold.

deposit balances at March 31, 2026, only 36.5%, or $520,282, were deemed uninsured as per the $250 FDIC threshold.

A portion of these deposits are on behalf of public entity customers, which require the Bank to pledge securities or FHLB letters of

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To the extent these deposits left the Bank, the level of unpledged securities and the borrowing capacity at the FHLB would increase or could be utilized to fund the deposit

The sum of current on-balance sheet liquidity and available wholesale funding sources exceeded the balance of uninsured deposits at September 30, 2025.

The sum of current on-balance sheet liquidity and available wholesale funding sources exceeded the balance of uninsured deposits at March 31, 2026.

Included in on-balance sheet liquidity are AFS securities in an unrealized loss position.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis