What changed in this filing

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Item 1. Financial Statements

2026-08-04 compared with 2026-05-07 · 225 added, 101 removed, 617 unchanged (35% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

March 31, 2026 and December 31, 2025

June 30, 2026 and December 31, 2025

(Dollars in thousands)

27 unchanged sentences

authorized 20,000,000 shares;

issued and outstanding 5,461,490 shares at March 31, 2026 and 5,459,441 shares at December 31, 2025

issued and outstanding 5,461,490 shares at June 30, 2026 and 5,459,441 shares at December 31, 2025

Common stock held by deferred compensation trust, at cost;

151,721 shares at March 31, 2026 and 150,288 shares at December 31, 2025

140,163 shares at June 30, 2026 and 150,288 shares at December 31, 2025

Deferred compensation

6 unchanged sentences

Consolidated Statements of Earnings

Three Months Ended March 31, 2026 and 2025

Three and Six Months Ended June 30, 2026 and 2025

(Dollars in thousands, except per share amounts)

Three months ended

Six months ended

Interest income:

6 unchanged sentences

Interest expense:

Interest-bearing demand, MMDA & savings deposits

NOW, MMDA & savings deposits

Time deposits

2 unchanged sentences

Net interest income

Provision for credit losses

Net interest income after provision for credit losses

Provision for (recovery of) credit losses

Net interest income after provision for (recovery of) credit losses

Non-interest income:

13 unchanged sentences

Appraisal management fee expense

Miscellaneous

Total non-interest expense

7 unchanged sentences

Consolidated Statements of Comprehensive Income

Three Months Ended March 31, 2026 and 2025

Three and Six Months Ended June 30, 2026 and 2025

(Dollars in thousands)

Other comprehensive income :

Three months ended

Six months ended

Other comprehensive income (loss):

Unrealized holding gains (losses) on securities available for sale

1 unchanged sentence

Total other comprehensive income (loss), before income taxes

Income tax benefit related to other comprehensive income :

Income tax expense (benefit) related to other comprehensive income:

Unrealized holding gains (losses) on securities available for sale

Reclassification adjustment for losses on sales of securities available for sale included in net earnings

Reclassification adjustment for losses on securities available for sale included in net earnings

Reduction in state tax adjustment

Total income tax expense related to other comprehensive income (loss)

Total other comprehensive income, net of tax

Total income tax expense (benefit) related to other comprehensive income

Total other comprehensive income (loss), net of tax

Total comprehensive income

2 unchanged sentences

Consolidated Statements of Changes in Shareholders' Equity

Three Months Ended March 31, 2026 and 2025

Three and Six Months Ended June 30, 2026 and 2025

(Dollars in thousands)

Comprehensive

Income (Loss)

Balance, December 31, 2025

4 unchanged sentences

Balance, March 31, 2026

Cash dividends declared on common stock ($0.21 per share)

Equity incentive plan, net

Other comprehensive loss

Balance, June 30, 2026

Balance, December 31, 2024

4 unchanged sentences

Balance, March 31, 2025

Cash dividends declared on common stock ($0.20 per share)

Restricted stock units vested

Equity incentive plan, net

Other comprehensive income

Balance, June 30, 2025

See accompanying Notes to Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2026 and 2025

Six Months Ended June 30, 2026 and 2025

(Dollars in thousands)

17 unchanged sentences

Cash flows from investing activities:

Purchases of investment securities available for sale

Proceeds from calls and maturities of investment securities available for sale

6 unchanged sentences

Purchases of premises and equipment

Proceeds from bank owned life insurance

Proceeds from sale of other real estate and repossessions

2 unchanged sentences

Net change in deposits

Restricted stock units exercised

Restricted stock units vested

Cash dividends paid on common stock

5 unchanged sentences

Consolidated Statements of Cash Flows, continued

Three Months Ended March 31, 2026 and 2025

Six Months Ended June 30, 2026 and 2025

(Dollars in thousands)

3 unchanged sentences

Change in unrealized loss on investment securities available for sale, net

Initial recognition of lease right-of-use asset and lease liability

See accompanying Notes to Consolidated Financial Statements.

PEOPLES BANCORP OF NORTH CAROLINA, INC.

Notes to Consolidated Financial Statements ( Unaudited )

Notes to Consolidated Financial Statements

( Unaudited )

(1) Summary of Significant Accounting Policies

11 unchanged sentences

Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by management in deciding how to allocate resources and in assessing performance.

Management has determined that the Company has two significant operating segment:

Management has determined that the Company has two significant operating segments:

Banking Operations and CBRES, as discussed more fully in Note 9.

5 unchanged sentences

Recent Accounting Pronouncements

The following table provides a summary of Accounting Standards Updates (“ASU’s”) issued by the Financial Accounting Standards Board (“FASB”) that the Company has not adopted as of March 31, 2026, which may impact the Company’s financial statements.

The following table provides a summary of Accounting Standards Updates (“ASUs”) issued by the Financial Accounting Standards Board (“FASB”) that the Company has not adopted as of June 30, 2026, which may impact the Company’s financial statements.

Effective Date

13 unchanged sentences

The Company reports as comprehensive income all changes in shareholders’ equity during the year from sources other than shareholders.

Other comprehensive income refers to all components (revenues, expenses, gains, and losses) of comprehensive income that are excluded from net income.

The Company’s only component of other comprehensive income is unrealized gains and losses, net of income tax, on investment securities available for sale.

The following table presents the changes in accumulated other comprehensive loss for the three months ended March 31, 2026 and 2025:

Other comprehensive income (loss) refers to all components (revenues, expenses, gains, and losses) of comprehensive income (loss) that are excluded from net income.

The Company’s only component of other comprehensive income (loss) is unrealized gains and losses, net of income tax, on investment securities available for sale.

The following table presents the changes in accumulated other comprehensive loss for the three and six months ended June 30, 2026 and 2025:

For the three months ended

For the six months ended

(dollars in thousands)

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Beginning balance

Other comprehensive gain (loss) before reclassifications, net

Other comprehensive income (loss) before reclassifications, net

Amounts reclassified from accumulated other comprehensive loss, net

Reduction in state tax rate adjustment, net

Net current period other comprehensive gain (loss)

Net current period other comprehensive income (loss)

Ending balance

3 unchanged sentences

Shares held in the deferred compensation plan by the deferred compensation trust are excluded for purposes of calculating the weighted average number of shares outstanding and basic earnings per share in accordance with ASC 260-10-45-40 and ASC 260-10-45-45 through ASC 260-10-45-46.

The reconciliation of the amounts used in the computation of both basic earnings per share and diluted earnings per share for the three months ended March 31, 2026 and 2025 is as follows:

For the three months ended March 31, 2026

The reconciliation of the amounts used in the computation of both basic earnings per share and diluted earnings per share for the three and six months ended June 30, 2026 and 2025 is as follows:

For the three months ended June 30, 2026

Net Earnings (Dollars in thousands)

Weighted Average Number of Shares

Per Share Amount

Basic earnings per share

3 unchanged sentences

Diluted earnings per share

For the three months ended March 31, 2025

For the six months ended June 30, 2026

Net Earnings (Dollars in thousands)

Weighted Average Number of Shares

Per Share Amount

Basic earnings per share

3 unchanged sentences

Diluted earnings per share

For the three months ended June 30, 2025

Net Earnings (Dollars in thousands)

Weighted Average Number of Shares

Per Share Amount

Basic earnings per share

Effect of dilutive securities:

Restricted stock units - unvested

Shares held in deferred comp plan by deferred compensation trust

Diluted earnings per share

For the six months ended June 30, 2025

Net Earnings (Dollars in thousands)

Weighted Average Number of Shares

Per Share Amount

Basic earnings per share

Effect of dilutive securities:

Restricted stock units - unvested

Shares held in deferred comp plan by deferred compensation trust

Diluted earnings per share

(4) Investment Securities

Investment securities available for sale at March 31, 2026 and December 31, 2025 are as follows:

Investment securities available for sale at June 30, 2026 and December 31, 2025 are as follows:

(Dollars in thousands)

March 31, 2026

June 30, 2026

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Government sponsored enterprises

4 unchanged sentences

December 31, 2025

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Government sponsored enterprises

2 unchanged sentences

State and political subdivisions

The current fair value and associated unrealized losses on investments in securities with unrealized losses at March 31, 2026 and December 31, 2025 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.

The current fair value and associated unrealized losses on investments in securities with unrealized losses at June 30, 2026 and December 31, 2025 are summarized in the tables below, with the length of time the individual securities have been in a continuous loss position.

(Dollars in thousands)

March 31, 2026

June 30, 2026

Less than 12 Months

12 Months or More

Unrealized Losses

Government sponsored enterprises

6 unchanged sentences

12 Months or More

Unrealized Losses

Government sponsored enterprises

2 unchanged sentences

State and political subdivisions

At March 31, 2026, unrealized losses in the investment securities portfolio relating to debt securities totaled $ 37.2 million.

The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary.

From the March 31, 2026 table above, both of the U.S.

At June 30, 2026, unrealized losses in the investment securities portfolio relating to debt securities totaled $ 38.3 million.

The unrealized losses on these debt securities arose primarily due to changes in market interest rates and were not attributable to credit-related factors.

From the June 30, 2026 table above, both of the U.S.

Treasury securities, all 110 of the securities issued by state and political subdivisions, all six of the securities issued by U.S.

Government sponsored enterprises (“GSE”), 114 of the 118 GSE mortgage-backed securities, and 12 of the 15 private label mortgage-backed securities contained unrealized losses.

The Company did not have any reserves on securities at March 31, 2026, as no credit related losses were identified in the Company’s March 31, 2026 analysis.

The Company did not have any reserves on securities at June 30, 2026, as no credit related losses were identified in the Company’s June 30, 2026 analysis.

At December 31, 2025, unrealized losses in the investment securities portfolio relating to debt securities totaled $ 35.6 million.

The unrealized losses on these debt securities arose due to changing interest rates and are considered to be temporary.

The unrealized losses on these debt securities arose primarily due to changes in market interest rates and were not attributable to credit-related factors.

From the December 31, 2025 tables above, both of the U.S.

1 unchanged sentence

The Company did not have any reserves on securities at December 31, 2025, as no credit related losses were identified in the Company’s December 31, 2025 analysis.

The amortized cost and estimated fair value of investment securities available for sale, other than GSE mortgage-backed securities, at March 31, 2026, are shown below by contractual maturity.

The amortized cost and estimated fair value of investment securities available for sale, other than GSE mortgage-backed securities, at June 30, 2026, are shown below by contractual maturity.

Expected maturities of mortgage-backed securities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

March 31, 2026

June 30, 2026

(Dollars in thousands)

Amortized Cost

Due within one year

2 unchanged sentences

Due after ten years

Mortgage-backed securities

No securities available for sale were sold during the three months ended March 31, 2026.

During the three months ended March 31, 2025, proceeds from sales of securities available for sale were $ 12.7 million and resulted in gross losses of $ 47,000 and gross gains of $ 43,000 .

Securities with a fair value of approximately $ 22.5 million and $ 40.7 million at March 31, 2026 and December 31, 2025, respectively, were pledged to secure public deposits and for other purposes as required by law.

Major classifications of loans at March 31, 2026 and December 31, 2025 are summarized as follows:

GSE - Mortgage-backed securities

No securities available for sale were sold during the three and six months ended June 30, 2026.

No securities available for sale were sold during the three months ended June 30, 2025.

During the six months ended June 30, 2025, proceeds from sales of securities available for sale were $ 12.7 million and resulted in gross losses of $ 47,000 and gross gains of $ 43,000 .

Securities with a fair value of approximately $ 22.2 million and $ 40.7 million at June 30, 2026 and December 31, 2025, respectively, were pledged to secure public deposits and for other purposes as required by law.

Major classifications of loans at June 30, 2026 and December 31, 2025 are summarized as follows:

(Dollars in thousands)

7 unchanged sentences

Total net loans

The above table includes deferred costs, net of deferred fees, totaling $ 405,000 and $ 569,000 at March 31, 2026 and March 31, 2025, respectively.

The above table includes deferred costs, net of deferred fees, totaling $ 345,000 and $ 455,000 at June 30, 2026 and December 31, 2025, respectively.

The Bank makes loans and extensions of credit primarily within the Catawba Valley region of North Carolina, which encompasses Catawba, Alexander, Iredell and Lincoln counties and also in Mecklenburg, Rowan and Forsyth counties of North Carolina.

17 unchanged sentences

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The following tables present an age analysis of past due loans, by loan type, as of March 31, 2026 and December 31, 2025:

March 31, 2026

The following tables present an age analysis of past due loans, by loan type, as of June 30, 2026 and December 31, 2025:

(Dollars in thousands)

Total Current

Loans 30-89 Days Past Due

Nonaccrual Loans

Total Past Due Loans

Total Current Loans

Accruing Loans 90 or More Days Past Due

Real estate loans:

6 unchanged sentences

(Dollars in thousands)

Total Current

Loans 30-89 Days Past Due

Nonaccrual Loans

Total Past Due Loans

Total Current Loans

Accruing Loans 90 or More Days Past Due

Real estate loans:

4 unchanged sentences

Loans not secured by real estate:

The following table presents non-accrual loans as of March 31, 2026 and December 31, 2025:

March 31, 2026

The following table presents non-accrual loans as of June 30, 2026 and December 31, 2025:

June 30, 2026

Nonaccrual Loans

(Dollars in thousands)

6 unchanged sentences

December 31, 2025

Nonaccrual Loans

(Dollars in thousands)

5 unchanged sentences

Loans not secured by real estate:

No interest income was recognized on non-accrual loans for the three months ended March 31, 2026 and 2025.

No interest income was recognized on non-accrual loans for the six months ended June 30, 2026 and 2025.

A loan may be individually evaluated for determining the allowance for credit losses when it is determined that it does not share similar risk characteristics with other assets.

Non-accrual loans with an outstanding balance of $ 250,000 or greater are individually evaluated and totaled $ 814,000 and $ 430,000 at March 31, 2026 and December 31, 2025, respectively.

Non-accrual loans evaluated collectively as a pool totaled $ 4.0 million and $ 3.7 million at March 31, 2026 and December 31, 2025, respectively.

Non-accrual loans with an outstanding balance of $ 250,000 or greater are individually evaluated and totaled $ 1.5 million and $ 430,000 at June 30, 2026 and December 31, 2025, respectively.

Non-accrual loans evaluated collectively as a pool totaled $ 3.7 million at June 30, 2026 and December 31, 2025.

Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty.

3 unchanged sentences

Otherwise the difference between the balance and the collateral is charged off if deemed uncollectible.

The following table details the amortized cost of collateral dependent loans and any related allowance at March 31, 2026 and December 31, 2025.

March 31, 2026

The following table details the amortized cost of collateral dependent loans and any related allowance at June 30, 2026 and December 31, 2025.

June 30, 2026

December 31, 2025

2 unchanged sentences

(Dollars in thousands)

Amortized Cost

Credit Losses

Amortized Cost

Credit Losses

Real estate loans:

4 unchanged sentences

Loans not secured by real estate:

The following tables provide a breakdown of collateral dependent loans by collateral type and collateral coverage at March 31, 2026 and December 31, 2025.

These tables also show non-accrual loans not considered to be collateral dependent at March 31, 2026 and December 31, 2025.

March 31, 2026

(Dollars in thousands)

The following tables provide a breakdown of collateral dependent loans by collateral type and collateral coverage at June 30, 2026 and December 31, 2025.

These tables also show non-accrual loans not considered to be collateral dependent at June 30, 2026 and December 31, 2025.

June 30, 2026

Financial Assets

(Dollars in thousands)

Not Considered

8 unchanged sentences

December 31, 2025

(Dollars in thousands)

Financial Assets

(Dollars in thousands)

Not Considered

18 unchanged sentences

If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

No loans to borrowers experiencing financial difficulty were modified during the three months ended March 31, 2026 and 2025.

No loans to borrowers experiencing financial difficulty were modified during the three and six months ended June 30, 2026 and 2025.

Management uses several measures to assess and monitor the credit risks in the loan portfolio, including a loan grading system that begins upon loan origination and continues until the loan is collected or collectability becomes doubtful.

12 unchanged sentences

This continual grading process is used to monitor the credit quality of the loan portfolio and to assist management in estimating the allowance.

The provision for credit losses charged or credited to earnings is based upon management’s judgment of the amount necessary to maintain the allowance at a level appropriate to absorb probable incurred losses in the loan portfolio at the balance sheet date.

The provision for credit losses charged or credited to earnings is based upon management’s judgment of the amount necessary to maintain the allowance at a level appropriate to absorb expected credit losses in the loan portfolio at the balance sheet date.

The amount each quarter is dependent upon many factors, including growth and changes in the composition of the loan portfolio, net charge-offs, delinquencies, management’s assessment of loan portfolio quality, the value of collateral, and other macro-economic factors and trends.

The evaluation of these factors is performed quarterly by management through an analysis of the appropriateness of the allowance.

The following tables present changes in the allowance for credit losses for the three months ended March 31, 2026 and 2025.

The following tables present changes in the allowance for credit losses for the three and six months ended June 30, 2026 and 2025.

(Dollars in thousands)

4 unchanged sentences

Consumer and All Other

Three months ended March 31, 2026

Three months ended June 30, 2026

Allowance for credit losses:

3 unchanged sentences

Allowance for credit loss-loans

Allowance for credit losses on unfunded loan commitments

Allowance for credit losses loan commitments

Total allowance for credit losses

Six months ended June 30, 2026

Allowance for credit losses:

Beginning balance

Provision (recovery) for loan losses (1)

Ending balance

Allowance for credit loss-loans

Allowance for credit losses loan commitments

Total allowance for credit losses

(1) Excludes provision for credit losses related to unfunded commitments.

6 unchanged sentences

Consumer and All Other

Three months ended March 31, 2025

Three months ended June 30, 2025

Allowance for credit losses:

3 unchanged sentences

Allowance for credit loss-loans

Allowance for credit losses on unfunded loan commitments

Allowance for credit losses loan commitments

Total allowance for credit losses

Six months ended June 30, 2025

Allowance for credit losses:

Beginning balance

Provision (recovery) for loan losses (1)

Ending balance

Allowance for credit loss-loans

Allowance for credit losses loan commitments

Total allowance for credit losses

(1) Excludes provision for credit losses related to unfunded commitments.

12 unchanged sentences

This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be affected in the future.

The following table presents by credit quality indicator, loan class and year of origination, the amortized cost of the Bank’s loans as of March 31, 2026.

The following table presents by credit quality indicator, loan class and year of origination, the amortized cost of the Bank’s loans as of June 30, 2026.

Term Loans by Origination Year

(Dollars in thousands)

March 31, 2026

June 30, 2026

Real Estate Loans

12 unchanged sentences

Total loans not secured by real estate

The following table presents by credit quality indicator, loan class and year of origination, gross loan charge-offs during the three months ended March 31, 2026.

March 31, 2026

The following table presents by credit quality indicator, loan class and year of origination, gross loan charge-offs during the six months ended June 30, 2026.

June 30, 2026

Gross Loan Charge-offs by Origination Year

12 unchanged sentences

Real Estate Loans

Construction and land

Total Construction and

land development

Construction and land development

Total Construction and land development

Single family

2 unchanged sentences

Multifamily and farmland

Total multifamily and

Total multifamily and farmland

Total real estate loans

3 unchanged sentences

Total all other

Total loans not secured

by real estate

Total loans not secured by real estate

The following table presents by credit quality indicator, loan class and year of origination, gross loan charge-offs during the year ended December 31, 2025.

9 unchanged sentences

Total gross charge-offs

As of March 31, 2026, the Bank had operating right of use assets of $ 3.3 million and operating lease liabilities of $ 3.4 million.

As of June 30, 2026, the Bank had operating right of use assets of $ 3.1 million and operating lease liabilities of $ 3.2 million.

As of December 31, 2025, the Bank had operating right of use assets of $ 3.5 million and operating lease liabilities of $ 3.6 million.

3 unchanged sentences

Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of renewal rates compared to market rates, and the presence of factors that would cause a significant economic penalty to the Bank if the option is not exercised.

The following table presents lease cost and other lease information as of March 31, 2026 and 2025.

The following table presents lease cost and other lease information as of June 30, 2026 and 2025.

(Dollars in thousands)

6 unchanged sentences

Weighted-average discount rate - operating leases

The following table presents lease maturities as of March 31, 2026.

The following table presents lease maturities as of June 30, 2026.

(Dollars in thousands)

Maturity Analysis of Operating Lease Liabilities:

June 30, 2026

Imputed Interest

21 unchanged sentences

The allowance for off-balance sheet credit exposures is adjusted as a provision for credit loss expense.

The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding activity and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the allowance for credit losses on loans.

The allowance for credit losses for unfunded loan commitments of $ 1.6 million and $ 1.4 million at March 31, 2026 and December 31, 2025, respectively, is separately classified on the balance sheet within Other Liabilities.

The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the three months ended March 31, 2026 and 2025.

The estimate includes consideration of the likelihood that funding will occur, which is based on historical funding activity and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the allowance for credit losses on loans.

The allowance for credit losses for unfunded loan commitments of $ 1.6 million and $ 1.4 million at June 30, 2026 and December 31, 2025, respectively, is separately classified on the balance sheet within Other Liabilities.

The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the three and six months ended June 30, 2026 and 2025.

(Dollars in thousands)

For three months ended

For six months ended

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Beginning Balance

24 unchanged sentences

Mortgage loans held for sale are reported in the Level 2 fair value category.

Management determined that the valuation technique used at current period end and prior period end are more appropriately classified as Level 2 and has updated in the current period and prior period year end classifications to Level 2.

The fair value of loans, excluding previously presented individually evaluated loans measured at fair value on a non-recurring basis, is estimated using discounted cash flow analyses.

18 unchanged sentences

In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

The tables below present all financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy, as of March 31, 2026 and December 31, 2025.

The tables below present all financial instruments measured at fair value on a recurring basis by level within the fair value hierarchy, as of June 30, 2026 and December 31, 2025.

(Dollars in thousands)

March 31, 2026

June 30, 2026

Fair Value Measurements

Level 1 Valuation

Level 2 Valuation

Level 3 Valuation

Available for sale securities:

7 unchanged sentences

December 31, 2025

Fair Value Measurements

Level 1 Valuation

Level 2 Valuation

Level 3 Valuation

Available for sale securities:

5 unchanged sentences

Mutual funds held in deferred compensation trust

The fair value measurements for individually evaluated loans and other real estate on a non-recurring basis at March 31, 2026 and December 31, 2025 are presented below.

The fair value measurements for individually evaluated loans and other real estate on a non-recurring basis at June 30, 2026 and December 31, 2025 are presented below.

The fair value measurement process uses certified appraisals and other market-based information;

2 unchanged sentences

(Dollars in thousands)

Fair Value June 30, 2026

Fair Value December 31, 2025

Valuation Technique

Unobservable Inputs

Significant Unobservable Inputs

General Range of Significant Unobservable Input Values

Individually evaluated loans

1 unchanged sentence

Discounts to reflect current market conditions and ultimate collectability

The carrying amount and estimated fair value of financial instruments at March 31, 2026 and December 31, 2025 are as follows:

The carrying amount and estimated fair value of financial instruments at June 30, 2026 and December 31, 2025 are as follows:

(Dollars in thousands)

Fair Value Measurements at March 31, 2026

Fair Value Measurements at June 30, 2026

Carrying Amount

3 unchanged sentences

Mortgage loans held for sale

Mutual funds held in deferred

compensation trust

Mutual funds held in deferred compensation trust

Junior subordinated debentures

6 unchanged sentences

Mortgage loans held for sale

Mutual funds held in deferred

compensation trust

Mutual funds held in deferred compensation trust

Junior subordinated debentures

6 unchanged sentences

The Bank’s executive management team, which is comprised of the Bank’s Chief Executive Officer, Chief Financial Officer and executive vice presidents, is the chief operating decision maker for the Company.

The Bank’s executive management team reviews actual net income versus budgeted net income on a quarterly basis to assess segment performance.

The Bank’s executive management team reviews actual net income versus budgeted net income for the Banking Operations and CBRES operating segments on a quarterly basis to assess segment performance.

The following table presents financial information for the reportable segments.

3 unchanged sentences

(Dollars in thousands)

As of and for the three months ended March 31, 2026

As of and for the three months ended June 30, 2026

Interest income

1 unchanged sentence

Net interest income

Provision for (recovery of) credit losses

Noninterest income

Appraisal management fee income

Salaries and employee benefits

Appraisal management fee expense

Noninterest expense

Income tax expense (benefit)

Net income (loss)

As of and for the three months ended June 30, 2025

Interest income

Interest expense

Net interest income

Provision for (recovery of) credit losses

Noninterest income

Appraisal management fee income

Salaries and employee benefits

Appraisal management fee expense

Noninterest expense

Income tax expense (benefit)

Net income (loss)

As of and for the six months ended June, 2026

Interest income

Interest expense

Net interest income

Provision for credit losses

6 unchanged sentences

Net income (loss)

As of and for the three months ended March 31, 2025

As of and for the six months ended June, 2025

Interest income

10 unchanged sentences

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 1. Financial Statements