[10-Q] First US Bancshares, Inc. Quarterly Earnings Report

Rhea-AI Filing Summary

FUSB’s Q2-25 results weakened materially. Net income dropped to $0.2 M ($0.03/sh) from $2.1 M ($0.36/sh) a year ago as the Bank booked a $2.7 M provision for credit losses versus none in Q2-24. Six-month earnings fell 54 % to $1.9 M ($0.33/sh).

Core spread revenue held steady. Net interest income rose 3 % YoY to $9.5 M, with average loan growth (+6 % YTD to $871 M) offsetting a still-elevated funding cost (deposit interest expense $5.1 M, –2 %). After the provision, pre-tax income shrank 94 % to $0.2 M. Non-interest income was flat at $0.8 M; expenses lifted 2 % to $7.4 M.

Balance-sheet trends. Assets expanded 3.8 % since year-end to $1.14 B, funded partly by higher short-term borrowings ($35 M vs $10 M) and a 1.5 % rise in deposits. The allowance for credit losses increased 12 % to $11.4 M (1.31 % of loans). AOCI improved $2.3 M on unrealized securities gains, boosting tangible equity to $101.9 M (8.9 % of assets). Cash & equivalents grew to $54 M.

Capital & shareholder returns. The Board raised the quarterly dividend to $0.07 (vs $0.05) and repurchased 40 k shares. Common shares outstanding total 5.76 M.

Key takeaways: strong loan momentum and easing securities losses were overshadowed by a sharp earnings contraction driven by higher credit provisioning and modest expense creep, highlighting asset-quality headwinds and funding pressure.

Positive

• Loan portfolio grew 5.9 % YTD, led by indirect consumer and multifamily assets, supporting net interest income.
• AOCI improved $2.3 M, cutting accumulated other comprehensive loss by 52 % and strengthening tangible equity.
• Quarterly dividend raised to $0.07, signaling management’s capital confidence despite softer earnings.

Negative

• Net income plunged 93 % YoY to $0.2 M; EPS down to $0.03.
• $2.7 M credit-loss provision vs zero last year points to deteriorating asset quality.
• Short-term borrowings tripled to $35 M, indicating funding pressure.
• Operating expenses grew while revenue was flat, compressing efficiency.

Insights

Bank Equity Analyst

TL;DR: Earnings collapse as credit costs surge; loan growth and AOCI relief soften blow.

Quarterly profitability deteriorated sharply: ROA fell to 0.05 % (vs 0.78 %), driven by a $2.7 M provision that lifted the reserve to 1.31 % of loans. While loan balances rose 6 % YTD—chiefly in indirect consumer (+21 %) and multifamily CRE (+18 %)—funding mix weakened: non-interest deposits slid 3 % and short-term FHLB advances jumped to $35 M. Net interest income was resilient, but operating leverage stayed negative. Equity benefited from securities-portfolio mark-to-market gains, partially mitigating unrealized losses. Dividend hike signals confidence, yet coverage is thin (earn-out ratio 233 %). Overall, results skew negative for valuation; impact: moderate.

Credit Risk Specialist

TL;DR: Provision spike hints at emerging asset-quality stress, but reserve build prudent.

Management increased ACL by 12 % after loan growth and early risk signals. Critically, indirect consumer and CRE concentrations now exceed 60 % of loans. Non-performing metrics are not disclosed here, but proactive reserving—provision equals 24 bps of total loans—suggests rising delinquencies. Funding reliance on higher-cost deposits and FHLB borrowings could pressure margins if credit trends worsen. Capital remains adequate (≈9 % Leverage), giving cushion. From a risk standpoint, the move is protective; outlook neutral to slightly negative.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: 000-14549

First US Bancshares, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	63-0843362
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

3291 U.S. Highway 280 Birmingham, AL	35243
(Address of Principal Executive Offices)	(Zip Code)

(205) 582-1200

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	FUSB	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐		Accelerated filer	☐
Non-accelerated filer	☒		Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at August 1, 2025
Common Stock, $0.01 par value	5,759,659 shares

FIRST US BANCSHARES, INC. AND SUBSIDIARY

		PAGE
PART I. FINANCIAL INFORMATION		4
ITEM 1. FINANCIAL STATEMENTS		4
Interim Condensed Consolidated Balance Sheets at June 30, 2025 (Unaudited) and December 31, 2024		4
Interim Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)		5
Interim Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)		6
Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024 (Unaudited)		7
Interim Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (Unaudited)		9
Notes to Interim Condensed Consolidated Financial Statements (Unaudited)		10
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		41
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		58
ITEM 4. CONTROLS AND PROCEDURES		59
PART II. OTHER INFORMATION		60
ITEM 1. LEGAL PROCEEDINGS		60
ITEM 1A. RISK FACTORS		60
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		60
ITEM 5. OTHER INFORMATION		60
ITEM 6. EXHIBITS		61
Signature Page		62

2

FORWARD-LOOKING STATEMENTS

Statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). In addition, First US Bancshares, Inc. (“Bancshares” and, together with its subsidiary, the “Company”), through its senior management, from time to time makes forward-looking statements concerning its expected future operations, performance and other developments. The words “estimate,” “project,” “intend,” “anticipate,” “expect,” “believe,” “continues” and similar expressions are indicative of forward-looking statements. Such forward-looking statements are necessarily estimates reflecting the Company’s best judgment based on current information and involve a number of risks and uncertainties. Certain factors that could affect the accuracy of such forward-looking statements and cause actual results to differ materially from those projected in such forward-looking statements are identified in the Company’s filings with the Securities and Exchange Commission (the “SEC”), and forward-looking statements contained herein or in other public statements of the Company or its senior management should be considered in light of those factors. Such factors may include adverse developments in the financial services industry; the effects of any government shutdown; loan losses may be greater than anticipated; our ability to ensure that sufficient cash flow and liquid assets are available to satisfy current and future financial obligations; the increased lending risks associated with commercial real estate lending; potential weakness in the residential real estate market; liquidity risks; the impact of national and local market conditions on the Company’s business and operations; the effects of significant changes to the structure and operations of the federal government; strong competition in the banking industry; the impact of changes in interest rates and monetary policy on the Company’s performance and financial condition; the effects of fiscal challenges facing the U.S. government or any potential government shutdown; the impact of technological changes in the banking and financial service industries and potential information system failures; cybersecurity and data privacy threats; the risks and challenges presented by the development and use of artificial intelligence (“AI”); the costs of complying with extensive governmental regulation; the risk that internal controls and procedures might fail or be circumvented; the impact of changing accounting standards and tax laws on the Company’s financial results; the potential impact of climate change and related legislative and regulatory initiatives; the possibility that acquisitions may not produce anticipated results and result in unforeseen integration difficulties; the volatility of our stock price and our dependence on the soundness of other financial institutions; and other risk factors described from time to time in the Company’s public filings, including, but not limited to, the Company’s most recent Annual Report on Form 10-K. Relative to the Company’s dividend policy, the payment of cash dividends is subject to the discretion of the Board of Directors and will be determined in light of then-current conditions, including the Company’s earnings, leverage, operations, financial conditions, capital requirements and other factors deemed relevant by the Board of Directors. In the future, the Board of Directors may change the Company’s dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions.

3

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FIRST US BANCSHARES, INC. AND SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Share and Per Share Data)

		June 30,				December 31,
		2025				2024
		(Unaudited)
ASSETS
Cash and due from banks		$	9,380			$	10,633
Interest-bearing deposits in banks			44,575				36,583
Total cash and cash equivalents			53,955				47,216
Federal funds sold and securities purchased under reverse repurchase agreements			4,850				5,727
Investment securities available-for-sale, at fair value (amortized cost $159,563 and     $174,597; net of allowance for credit losses of $- and $-)			156,576				167,888
Investment securities held-to-maturity, at amortized cost, net of allowance for credit     losses of $- and $-, (fair value 2025 - $535, 2024 - $642)			561				682
Federal Home Loan Bank stock, at cost			1,741				1,256
Loans and leases held for investment			871,431				823,039
Less: allowance for credit losses on loans and leases			11,388				10,184
Net loans and leases held for investment			860,043				812,855
Premises and equipment, net of accumulated depreciation			26,479				24,803
Cash surrender value of bank-owned life insurance			17,198				17,056
Accrued interest receivable			3,867				3,588
Goodwill and core deposit intangible, net			7,447				7,484
Other real estate owned			1,298				1,509
Other assets			9,364				11,022
Total assets		$	1,143,379			$	1,101,086
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest-bearing		$	150,894			$	155,945
Interest-bearing			835,952				816,612
Total deposits			986,846				972,557
Accrued interest expense			1,981				1,751
Other liabilities			6,751				7,282
Short-term borrowings			35,000				10,000
Long-term borrowings			10,909				10,872
Total liabilities			1,041,487				1,002,462
Shareholders’ equity:
Common stock, par value $0.01 per share, 10,000,000 shares authorized; 7,920,149 and     7,840,348 shares issued, respectively; 5,755,064 and 5,696,171 shares outstanding,    respectively			79				78
Additional paid-in capital			15,619				15,540
Accumulated other comprehensive loss, net of tax			(2,065	)			(4,344	)
Retained earnings			117,988				116,865
Less treasury stock: 2,165,085 and 2,144,177 shares at cost, respectively			(29,729	)			(29,515	)
Total shareholders’ equity			101,892				98,624
Total liabilities and shareholders’ equity		$	1,143,379			$	1,101,086

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

4

FIRST US BANCSHARES, INC. AND SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Data)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2025				2024				2025				2024
		(Unaudited)								(Unaudited)
Interest income:
Interest and fees on loans		$	12,989			$	12,930			$	25,230			$	25,783
Interest on investment securities			1,335				1,108				2,747				1,973
Interest on deposits in banks			451				423				739				875
Other			79				85				156				192
Total interest income			14,854				14,546				28,872				28,823
Interest expense:
Interest on deposits			5,125				5,210				9,994				10,309
Interest on borrowings			253				160				505				298
Total interest expense			5,378				5,370				10,499				10,607
Net interest income			9,476				9,176				18,373				18,216
Provision for credit losses			2,717				—				3,245				—
Net interest income after provision for credit losses			6,759				9,176				15,128				18,216
Non-interest income:
Service and other charges on deposit accounts			278				298				566				597
Lease income			269				253				553				510
Other income, net			302				284				605				593
Total non-interest income			849				835				1,724				1,700
Non-interest expense:
Salaries and employee benefits			3,945				3,890				7,681				7,978
Net occupancy and equipment			937				954				1,812				1,848
Computer services			421				444				833				887
Insurance expense and assessments			366				414				750				805
Fees for professional services			470				364				685				705
Other expense			1,305				1,206				2,601				2,196
Total non-interest expense			7,444				7,272				14,362				14,419
Income before income taxes			164				2,739				2,490				5,497
Provision for income taxes			9				612				563				1,263
Net income		$	155			$	2,127			$	1,927			$	4,234
Basic net income per share		$	0.03			$	0.36			$	0.33			$	0.72
Diluted net income per share		$	0.03			$	0.34			$	0.32			$	0.68
Dividends per share		$	0.07			$	0.05			$	0.14			$	0.10

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

5

FIRST US BANCSHARES, INC. AND SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in Thousands)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2025				2024				2025				2024
		(Unaudited)								(Unaudited)
Net income		$	155			$	2,127			$	1,927			$	4,234
Other comprehensive income:
Unrealized holding gains on securities available-for-sale    arising during period, net of tax expense of $259, $124, $930, and $101, respectively			781				370				2,792				297
Unrealized holding losses arising during the period on    effective cash flow hedge derivatives, net of tax benefit    of $45, $0, $148 and $0, respectively			(135	)			—				(440	)			—
Reclassification adjustments on cash flow hedge derivatives realized in net income, net of tax benefit of $12, $39, $24, and $78, respectively			(37	)			(117	)			(73	)			(234	)
Other comprehensive income			609				253				2,279				63
Total comprehensive income		$	764			$	2,380			$	4,206			$	4,297

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

6

FIRST US BANCSHARES, INC. AND SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Dollars in Thousands, Except Share and Per Share Data)

For the three months ended June 30, 2025 and 2024 (Unaudited)

		Common Stock Shares Outstanding				Common Stock				Additional Paid-in Capital				Accumulated Other Comprehensive Loss				Retained Earnings				Treasury Stock, at Cost				Total Shareholders’ Equity
Balance, March 31, 2024			5,787,441			$	75			$	15,122			$	(6,621	)		$	111,777			$	(28,027	)		$	92,326
Net income			—				—				—				—				2,127				—				2,127
Net change in fair value of    securities available-for-sale,    net of tax			—				—				—				370				—				—				370
Net change in fair value of    derivative instruments, net    of tax			—				—				—				(117	)			—				—				(117	)
Dividends declared: $0.05 per    share			—				—				—				—				(289	)			—				(289	)
Reissuance of treasury stock as    compensation			11,293								(158	)											158				—
Impact of stock-based    compensation plans, net			22,520				3				236				—				—				(3	)			236
Impact of common stock share    repurchases			(77,000	)			—				—				—				—				(817	)			(817	)
Balance, June 30, 2024			5,744,254			$	78			$	15,200			$	(6,368	)		$	113,615			$	(28,689	)		$	93,836
Balance, March 31, 2025			5,739,286			$	79			$	15,308			$	(2,674	)		$	118,236			$	(29,718	)		$	101,231
Net income			—				—				—				—				155				—				155
Net change in fair value of    securities available-for-sale,    net of tax			—				—				—				781				—				—				781
Net change in fair value of    derivative instruments, net    of tax			—				—				—				(172	)			—				—				(172	)
Dividends declared: $0.07 per    share			—				—				—				—				(403	)			—				(403	)
Impact of stock-based    compensation plans, net			15,778				—				311				—				—				(11	)			300
Balance, June 30, 2025			5,755,064			$	79			$	15,619			$	(2,065	)		$	117,988			$	(29,729	)		$	101,892

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

7

FIRST US BANCSHARES, INC. AND SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Dollars in Thousands, Except Share and Per Share Data)

For the six months ended June 30, 2025 and 2024 (Unaudited)

		Common Stock Shares Outstanding				Common Stock				Additional Paid-in Capital				Accumulated Other Comprehensive Loss				Retained Earnings				Treasury Stock, at Cost				Total Shareholders’ Equity
Balance, December 31, 2023			5,735,075			$	75			$	14,972			$	(6,431	)		$	109,959			$	(27,982	)		$	90,593
Net income			—				—				—				—				4,234				—				4,234
Net change in fair value of    securities available-for-sale,    net of tax			—				—				—				297				—				—				297
Net change in fair value of    derivative instruments,    net of tax			—				—				—				(234	)			—				—				(234	)
Dividends declared: $0.10 per    share			—				—				—				—				(578	)			—				(578	)
Reissuance of treasury stock as    compensation			11,293				—				(158	)			—				—				158				—
Impact of stock-based    compensation plans, net			74,886				3				386				—				—				(48	)			341
Impact of common stock share    repurchases			(77,000	)			—				—				—				—				(817	)			(817	)
Balance, June 30, 2024			5,744,254			$	78			$	15,200			$	(6,368	)		$	113,615			$	(28,689	)		$	93,836
Balance, December 31, 2024			5,696,171			$	78			$	15,540			$	(4,344	)		$	116,865			$	(29,515	)		$	98,624
Net income			—				—				—				—				1,927				—				1,927
Net change in fair value of    securities available-for-sale,    net of tax			—				—				—				2,792				—				—				2,792
Net change in fair value of    derivative instruments,    net of tax			—				—				—				(513	)			—				—				(513	)
Dividends declared: $0.14 per    share			—				—				—				—				(804	)			—				(804	)
Reissuance of treasury stock as    compensation			31,550				—				(434	)			—				—				434				—
Impact of stock-based    compensation plans, net			67,343				1				513				—				—				(113	)			401
Impact of common stock share    repurchases			(40,000	)			—				—				—				—				(535	)			(535	)
Balance, June 30, 2025			5,755,064			$	79			$	15,619			$	(2,065	)		$	117,988			$	(29,729	)		$	101,892

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

8

FIRST US BANCSHARES, INC. AND SUBSIDIARY

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

		Six Months Ended
		June 30,
		2025				2024
		(Unaudited)
Cash flows from operating activities:
Net income		$	1,927			$	4,234
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			838				776
Provision for credit losses			3,245				—
Deferred income tax expense			119				511
Reclassification of unrealized gains on terminated derivative contracts			(97	)			(625	)
Stock-based compensation expense			381				319
Net accretion of securities			(312	)			(100	)
Amortization of intangible assets			37				74
Net loss on premises and equipment and other real estate			14				717
Changes in assets and liabilities:
Increase in cash surrender value of bank owned life insurance			(142	)			(173	)
(Increase) decrease in accrued interest receivable			(279	)			189
Decrease (increase) in other assets			268				(416	)
Increase (decrease) in accrued interest expense			230				(4	)
Decrease in other liabilities			(574	)			(2,130	)
Net cash provided by operating activities			5,655				3,372
Cash flows from investing activities:
Net decrease in federal funds sold and securities purchased under reverse repurchase agreements			877				3,955
Purchases of investment securities, available-for-sale			(9,645	)			(27,523	)
Proceeds from maturities and prepayments of investment securities, available-for-sale			24,991				19,577
Proceeds from maturities and prepayments of investment securities, held-to-maturity			121				236
Net increase in Federal Home Loan Bank stock			(485	)			(293	)
Net (increase) decrease in loans and leases held for investment			(51,052	)			1,412
Proceeds from the sale of premises and equipment, other real estate and repossessions			628				480
Purchases of premises and equipment			(2,321	)			(1,166	)
Net cash used in investing activities			(36,886	)			(3,322	)
Cash flows from financing activities:
Net increase in deposits			14,289				4,264
Net increase in short-term borrowings			25,000				5,000
Net share-based compensation transactions			20				22
Repurchases of common stock			(535	)			(817	)
Dividends paid			(804	)			(578	)
Net cash provided by financing activities			37,970				7,891
Net increase in cash and cash equivalents			6,739				7,941
Cash and cash equivalents, beginning of period			47,216				50,279
Cash and cash equivalents, end of period		$	53,955			$	58,220
Supplemental disclosures:
Cash paid for:
Interest		$	10,269			$	10,661
Income taxes			458				2,171
Non-cash transactions:
Assets acquired in settlement of loans			768				846
Reissuance of treasury stock as compensation			434				158

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

9

FIRST US BANCSHARES, INC. AND SUBSIDIARY

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.GENERAL

First US Bancshares, Inc., a Delaware corporation (“Bancshares” and, together with its subsidiary, the “Company”), is a bank holding company formed in 1983 registered under the Bank Holding Company Act of 1956, as amended (the “BHCA”). Bancshares operates one wholly owned banking subsidiary, First US Bank, an Alabama banking corporation (the “Bank”). Bancshares and the Bank are headquartered in Birmingham, Alabama.

The Bank conducts a general commercial banking business and offers banking services such as demand, savings, individual retirement account and time deposits, personal and commercial loans, safe deposit box services and remote deposit capture. The Bank operates and serves its customers through 15 full-service banking offices located in Birmingham, Butler, Calera, Centreville, Gilbertown, Grove Hill, Harpersville, Jackson, Thomasville, Tuscaloosa and Woodstock, Alabama; Knoxville and Powell, Tennessee; and Rose Hill, Virginia; as well as loan production offices in Mobile, Alabama and the Chattanooga, Tennessee area. The Bank provides a wide range of commercial banking services to small- and medium-sized businesses, property managers, business executives, professionals and other individuals. The Bank also performs indirect lending through third-party retailers and currently conducts this lending in 17 states, including Alabama, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Virginia. The Bank is the Company’s only reportable operating segment upon which management makes decisions regarding how to allocate resources and assess performance.

The unaudited interim condensed consolidated financial statements, in the opinion of management, reflect all adjustments necessary for a fair presentation of the Company’s consolidated financial position, results of operations and cash flows for the periods presented. Such adjustments are of a normal, recurring nature. The results of operations for any interim period are not necessarily indicative of results expected for the fiscal year ending December 31, 2025. While certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), management believes that the disclosures herein are adequate to make the information presented not misleading. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2024 (the "Company's 2024 Form 10-K").

2.BASIS OF PRESENTATION

Reclassification

Certain amounts in the prior period consolidated financial statements and the notes to the prior period consolidated financial statements have been reclassified to conform to the 2025 presentation. These reclassifications had no effect on the Company’s results of operations, financial position or net cash flow.

Summary of Significant Accounting Policies

Certain significant accounting policies followed by the Company are set forth in Note 2, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements in the Company’s 2024 Form 10-K.

Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding ("basic shares"). Included in basic shares are stock equivalent shares that have been accrued as of the balance sheet date as deferred compensation for members of Bancshares’ Board of Directors under the Non-Employee Directors' Deferred Compensation Plan (as defined below and discussed further in Note 9). Diluted net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding, adjusted for the effect of potentially dilutive stock awards outstanding during the period ("dilutive shares"). The dilutive shares consist of unexercised nonqualified stock options granted to employees and members of Bancshares’ Board of Directors pursuant to the Company's Incentive Plan (as defined below and discussed further in Note 10).

10

The following table reflects the weighted average shares used to calculate basic and diluted net income per share for the periods presented.

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2025				2024				2025				2024
Weighted average shares outstanding			5,745,514				5,770,960				5,729,990				5,762,892
Weighted average director stock equivalent shares			78,474				109,747				91,210				111,159
Basic shares			5,823,988				5,880,707				5,821,200				5,874,051
Dilutive shares			231,000				327,700				231,000				327,700
Diluted shares			6,054,988				6,208,407				6,052,200				6,201,751

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2025				2024				2025				2024
		(Dollars in Thousands, Except Per Share Data)
Net income		$	155			$	2,127			$	1,927			$	4,234
Basic net income per share		$	0.03			$	0.36			$	0.33			$	0.72
Diluted net income per share		$	0.03			$	0.34			$	0.32			$	0.68

Comprehensive Income

Comprehensive income consists of net income, as well as unrealized holding gains and losses that arise during the period associated with the Company’s available-for-sale securities portfolio and the effective portion of cash flow hedge derivatives. In the calculation of comprehensive income, reclassification adjustments are made for gains or losses realized in the statement of operations associated with the sale of available-for-sale securities or settlement of derivative contracts.

Accounting Standards Not Yet Adopted

The following table provides a description of recent accounting standards that have not yet been adopted as of June 30, 2025.

Standard	Description	Required Date of Adoption	Effect on Financial Statements or other significant matters
ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures	This ASU improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures.	Annual financial statements as of and for the year ending December 31, 2025	The adoption of this guidance is not likely to have a material impact. Management will continue to evaluate through date of adoption.
ASU 2024-03, Income Statement Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses	This ASU will change the disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses (for example: employee compensation, depreciation, and amortization) in expense captions	Annual financial statements as of and for the year ending December 31, 2027	The adoption of this guidance is not likely to have a material impact. Management will continue to evaluate through date of adoption.

11

3.INVESTMENT SECURITIES

Details of investment securities available-for-sale and held-to-maturity as of June 30, 2025 and December 31, 2024 were as follows:

		Available-for-Sale
		June 30, 2025
						Gross				Gross				Estimated
		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
		(Dollars in Thousands)
Mortgage-backed securities:
Residential		$	89,461			$	1,134			$	(1,638	)		$	88,957
Commercial			10,431				88				(145	)			10,374
Obligations of U.S. government-sponsored agencies			10,584				150				(409	)			10,325
Obligations of states and political subdivisions			1,305				—				(9	)			1,296
Corporate notes			17,760				45				(1,270	)			16,535
U.S. Treasury securities			30,022				—				(933	)			29,089
Total		$	159,563			$	1,417			$	(4,404	)		$	156,576

		Held-to-Maturity
		June 30, 2025
						Gross				Gross				Estimated
		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
		(Dollars in Thousands)
Mortgage-backed securities:
Commercial		$	206			$	—			$	(6	)		$	200
Obligations of U.S. government-sponsored agencies			344				—				(19	)			325
Obligations of states and political subdivisions			11				—				(1	)			10
Total		$	561			$	—			$	(26	)		$	535

		Available-for-Sale
		December 31, 2024
						Gross				Gross				Estimated
		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
		(Dollars in Thousands)
Mortgage-backed securities:
Residential		$	87,703			$	347			$	(2,768	)		$	85,282
Commercial			12,105				17				(202	)			11,920
Obligations of U.S. government-sponsored agencies			11,436				18				(620	)			10,834
Obligations of states and political subdivisions			1,577				—				(28	)			1,549
Corporate notes			17,757				58				(1,871	)			15,944
U.S. Treasury securities			44,019				—				(1,660	)			42,359
Total		$	174,597			$	440			$	(7,149	)		$	167,888

		Held-to-Maturity
		December 31, 2024
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
		(Dollars in Thousands)
Mortgage-backed securities:
Commercial		$	264			$	—			$	(10	)		$	254
Obligations of U.S. government-sponsored agencies			384				—				(27	)			357
Obligations of states and political subdivisions			34				—				(3	)			31
Total		$	682			$	—			$	(40	)		$	642

12

The scheduled maturities of investment securities available-for-sale and held-to-maturity as of June 30, 2025 are presented in the following table:

		Available-for-Sale								Held-to-Maturity
		Amortized Cost				Estimated Fair Value				Amortized Cost				Estimated Fair Value
		(Dollars in Thousands)
Maturing within one year		$	15,417			$	15,223			$	—			$	—
Maturing after one to five years			20,559				19,777				211				207
Maturing after five to ten years			60,449				57,655				258				241
Maturing after ten years			63,138				63,921				92				87
Total		$	159,563			$	156,576			$	561			$	535

For purposes of the maturity table, mortgage-backed securities, which are not due at a single maturity date, have been allocated over maturity groupings based on the weighted-average contractual maturities of underlying collateral. The mortgage-backed securities generally mature earlier than their weighted-average contractual maturities because of principal prepayments.

The following tables reflect fair value and gross unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of June 30, 2025 and December 31, 2024.

		Available-for-Sale
		June 30, 2025
		Less than 12 Months								12 Months or More
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
		(Dollars in Thousands)
Mortgage-backed securities:
Residential		$	4,707			$	(20	)		$	25,511			$	(1,618	)
Commercial			829				(3	)			4,538				(142	)
Obligations of U.S. government-sponsored agencies			—				—				4,655				(409	)
Obligations of states and political subdivisions			—				—				1,296				(9	)
Corporate notes			—				—				14,490				(1,270	)
U.S. Treasury securities			—				—				29,089				(933	)
Total		$	5,536			$	(23	)		$	79,579			$	(4,381	)

		Held-to-Maturity
		June 30, 2025
		Less than 12 Months								12 Months or More
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
		(Dollars in Thousands)
Mortgage-backed securities:
Commercial		$	—			$	—			$	200			$	(6	)
Obligations of U.S. government-sponsored agencies			—				—				325				(19	)
Obligations of states and political subdivisions			—				—				10				(1	)
Total		$	—			$	—			$	535			$	(26	)

13

		Available-for-Sale
		December 31, 2024
		Less than 12 Months								12 Months or More
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
		(Dollars in Thousands)
Mortgage-backed securities:
Residential		$	41,417			$	(424	)		$	28,520			$	(2,344	)
Commercial			3,374				(13	)			5,331				(189	)
Obligations of U.S. government-sponsored agencies			3,823				(1	)			4,457				(619	)
Obligations of states and political subdivisions			—				—				1,549				(28	)
Corporate notes			—				—				13,886				(1,871	)
U.S. Treasury securities			—				—				42,359				(1,660	)
Total		$	48,614			$	(438	)		$	96,102			$	(6,711	)

		Held-to-Maturity
		December 31, 2024
		Less than 12 Months								12 Months or More
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
		(Dollars in Thousands)
Mortgage-backed securities:
Commercial		$	—			$	—			$	254			$	(10	)
Obligations of U.S. government-sponsored agencies			—				—				357				(27	)
Obligations of states and political subdivisions			—				—				31				(3	)
Total		$	—			$	—			$	642			$	(40	)

Available-for-Sale Considerations

For any securities classified as available-for-sale that are in an unrealized loss position as of the balance sheet date, the Company assesses whether or not it intends to sell the security, or more-likely-than-not will be required to sell the security, before recovery of its amortized cost basis which would require a write-down to fair value through net income.

As of June 30, 2025, 92 available-for-sale debt securities had been in a loss position for more than 12 months, and four available-for-sale debt securities had been in a loss position for less than 12 months. As of December 31, 2024, 97 available-for-sale debt securities had been in a loss position for more than 12 months, and 16 available-for-sale debt securities had been in a loss position for less than 12 months. As of June 30, 2025, the Company had the current intent and ability to retain its investments for a period of time that management believes to be sufficient to allow for any anticipated recovery of fair value. As of June 30, 2025 and December 31, 2024, the losses for all available-for-sale securities were considered to be a direct result of the effect that the prevailing interest rate environment had on the value of debt securities and were not related to the creditworthiness of the issuers. Accordingly, no allowance for credit losses ("ACL") was considered necessary related to available-for-sale securities as of June 30, 2025 or December 31, 2024. Accrued interest receivable is excluded from the estimate of credit losses for available-for-sale securities. As of both June 30, 2025 and December 31, 2024, accrued interest receivable totaled $0.7 million with no related ACL and was reported in the accrued interest line on the accompanying consolidated balance sheets.

Held-to-Maturity Considerations

Each quarter, management evaluates the held-to-maturity investment portfolio on a collective basis by major security type to determine whether an ACL is needed. Qualitative factors are used in the Company’s credit loss assessments, including current and forecasted economic conditions, the characteristics of the debt issuer, and the historic ability of the issuer to make contractual principal and interest payments. Specifically, with regard to mortgage-backed securities or obligations of U.S. government sponsored agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are either backed by the full faith and credit of the U.S. government or the agency. With regard to obligations of states and political subdivisions, management considers issuer bond ratings, historical loss rates for given bond ratings, and whether the issuers continue to make timely principal and interest payments under contractual terms of the securities. Based on these evaluations, no ACL was recorded by the Company for the held-to-maturity investment portfolio as of June 30, 2025 or December 31, 2024. As of both June 30, 2025 and December 31, 2024, accrued interest receivable totaled $2.0 thousand with no related ACL and was reported in the accrued interest line on the accompanying consolidated balance sheets.

14

Pledged Securities

Investment securities with a carrying value of $62.6 million and $72.1 million as of June 30, 2025 and December 31, 2024, respectively, were pledged to secure public deposits and for other purposes.

4.LOANS AND LEASES

Portfolio Segments

The Company has divided the loan portfolio into the following portfolio segments based on risk characteristics:

Construction, land development and other land loans – Commercial construction, land and land development loans include loans for the development of residential housing projects, loans for the development of commercial and industrial use property, loans for the purchase and improvement of raw land and loans primarily for agricultural production that are secured by farmland. These loans are secured in whole or in part by the underlying real estate collateral and are generally guaranteed by the principals of the borrowing entity.

Secured by 1-4 family residential properties – These loans include conventional mortgage loans on one-to-four family residential properties. These properties may serve as the borrower’s primary residence, vacation home or investment property. Also included in this portfolio are home equity loans and lines of credit. This type of lending, which is secured by a first or second mortgage on the borrower’s residence, allows customers to borrow against the equity in their home.

Secured by multi-family residential properties – This portfolio segment includes mortgage loans secured by apartment buildings.

Secured by non-residential commercial real estate – This portfolio segment includes real estate loans secured by commercial and industrial properties, office or mixed-use facilities, strip shopping centers or other commercial property. These loans are generally guaranteed by the principals of the borrowing entity.

Commercial and industrial loans and leases – This portfolio segment includes loans and leases to commercial customers for use in the normal course of business. These credits may be loans, lines of credit and leases to financially strong borrowers, secured by inventories, equipment or receivables, and are generally guaranteed by the principals of the borrowing entity.

Direct consumer – This portfolio segment includes a variety of secured and unsecured personal loans, including automobile loans, loans for household and personal purposes and all other direct consumer installment loans.

Indirect consumer – This portfolio segment includes loans secured by collateral purchased by consumers at retail stores with whom the Company has an established relationship to provide financing for the retail products sold if applicable underwriting standards are met. The collateral securing these loans primarily includes boats, recreational vehicles/campers, horse trailers and cargo trailers.

As of June 30, 2025 and December 31, 2024, the composition of the loan portfolio by portfolio segment was as follows:

	June 30, 2025			December 31, 2024
Real estate loans:
Construction, land development and other land loans	$	48,101		$	65,537
Secured by 1-4 family residential properties		67,587			69,999
Secured by multi-family residential properties		118,807			101,057
Secured by non-residential commercial real estate		215,035			227,751
Commercial and industrial loans and leases (1)		40,986			44,238
Consumer loans:
Direct		4,836			4,774
Indirect		376,079			309,683
Total loans		871,431			823,039
Less: Allowance for credit losses on loans and leases		11,388			10,184
Net loans (2)	$	860,043		$	812,855

(1)Includes equipment financing leases, which totaled $14.3 million as of June 30, 2025 and $14.2 million as of December 31, 2024.

(2)Loans are presented net of unearned income and unamortized deferred fees and costs of $0.7 million and $0.8 million as of June 30, 2025 and December 31, 2024, respectively. Loans are also presented net of unamortized premiums associated with indirect loans of $15.1 million and $10.6 million as of June 30, 2025 and December 31, 2024, respectively.

Accrued interest receivable is not included in the amortized cost basis of the Company's loans held for investment ("LHFI"). As of June 30, 2025 and December 31, 2024, accrued interest receivable for LHFI totaled $3.1 million and $2.8 million, respectively, with no related ACL and was reported in the accrued interest line on the accompanying consolidated balance sheets.

15

The Company makes commercial, real estate and installment loans to its customers. Although the Company has a diversified loan portfolio, 51.6% and 56.4% of the portfolio was concentrated in loans secured by real estate as of June 30, 2025 and December 31, 2024, respectively.

Loans with a carrying value of $86.8 million and $92.6 million were pledged as collateral to secure Federal Home Loan Bank (“FHLB”) borrowings as of June 30, 2025 and December 31, 2024, respectively. In addition, loans with a carrying value of $343.9 million and $285.2 million were pledged to secure borrowings with the Federal Reserve Bank ("FRB") as of June 30, 2025 and December 31, 2024, respectively.

Related Party Loans

In the ordinary course of business, the Bank makes loans to certain officers and directors of the Company, including companies with which they are associated. These loans are made on the same terms as those prevailing for comparable transactions with unrelated parties. Management believes that such loans do not represent more than a normal risk of collectability, nor do they present other unfavorable features. The aggregate balances of such related party loans and commitments were $22.9 million and $11.4 million as of June 30, 2025 and December 31, 2024, respectively. During the six months ended June 30, 2025, there were new loans of $11.5 million to related parties, and no repayments made by related parties. During the year ended December 31, 2024, there were new loans of $1.4 million to related parties, and repayments made of $1.4 million by related parties.

Allowance for Credit Losses

Allowance for Credit Losses on Loans and Leases

The Company records the ACL on loans and leases as a contra-asset valuation account that is deducted from the amortized cost basis of loans and leases held for investment. Loans are charged off against the ACL when management believes that the uncollectibility of a loan balance is confirmed. Recoveries of previously charged off loans are also recorded to the ACL when collected. As of each quarter-end date, the Company evaluates the appropriateness of the ACL on loans and leases and adjusts the ACL through the provision for (recovery of) credit losses.

Determining the appropriateness of the ACL on loans and leases is complex and requires judgment by management about the effects of matters that are inherently uncertain. The level of the ACL is influenced by loan and lease volumes and mix, historical credit loss experience, estimated remaining life of portfolio segments, asset quality characteristics, delinquency status, and other conditions including reasonable and supportable forecasts of economic conditions and qualitative adjustment factors based on management’s understanding of various attributes that could impact life-of-loan losses as of the balance sheet date. The methodology to estimate losses includes two basic components: (1) an asset-specific component for individual loans that do not share similar risk characteristics with other loans, and (2) a pooled component for estimated expected credit losses for loans that share similar risk characteristics.

Loans that do not share risk characteristics with other loans are evaluated on an individual basis. The process for determining whether a loan should be evaluated on an individual basis begins with a determination of credit rating. All loans graded by management as substandard or worse with a total commitment of $0.5 million or more are evaluated on an individual basis. At management's discretion, other loans may be evaluated, including loans less than $0.5 million, if management determines that the loans exhibit unique risk characteristics. For loans individually evaluated, the ACL is based primarily on the fair value of the underlying collateral, less any estimated costs to sell, as applicable, utilizing independent third-party appraisals, and assessment of borrower guarantees. The fair value is compared to the amortized cost basis of the loan to determine if an ACL should be recognized.

For estimating the component of the ACL that shares similar risk characteristics, loans are segregated into pooled loan categories that share risk characteristics. Loans are designated into pooled categories based on product types, business lines, collateral, and other risk characteristics. For all pooled loan categories, the Company uses a loss-rate methodology to calculate estimated life-of-loan and lease credit losses. This methodology focuses on historical credit loss rates applied over the estimated weighted average remaining life of each loan pool, adjusted by qualitative factors, to estimate life-of-loan losses for each pool. The qualitative factors utilized include, among others, reasonable and supportable forecasts of economic data, including inflation and unemployment levels, as well as interest rates.

Allowance for Credit Losses on Unfunded Lending Commitments

The Company records an ACL on unfunded lending commitments in which the Company is exposed to credit risk via a present contractual obligation to extend credit unless the obligation is unconditionally cancellable by the Company. Unconditional lending commitments generally include unfunded term loan agreements, home equity lines of credit, lines of credit, and demand deposit account overdraft protection.

As of each quarter-end date, the Company estimates expected credit losses on unfunded lending commitments over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by the Company. The ACL on unfunded lending commitments is recorded in other liabilities, and adjustments to the ACL are recorded through the provision for (recovery of) credit losses.

16

Summary of Allowances for Credit Losses

The following tables present changes in the ACL on loans and leases, as well as unfunded lending commitments, during the six months ended June 30, 2025 and 2024:

		As of and for the Six Months Ended June 30, 2025
		Construction, Land Development, and Other				Real Estate 1-4 Family				Real Estate Multi- Family				Non- Residential Commercial Real estate				Commercial and Industrial				Direct Consumer				Indirect Consumer				Total
		(Dollars in Thousands)
Allowance for credit losses on loans and leases:
Beginning balance		$	352			$	406			$	546			$	1,428			$	1,531			$	49			$	5,872			$	10,184
Charge-offs			—				—				—				—				(1,191	)			(5	)			(1,017	)			(2,213	)
Recoveries			—				11				—				—				16				107				118				252
Provision for (recovery of) credit losses on loans and leases			(69	)			(5	)			168				177				647				(68	)			2,315				3,165
Allowance for credit losses on loans and leases		$	283			$	412			$	714			$	1,605			$	1,003			$	83			$	7,288			$	11,388
Allowance for credit losses on unfunded lending commitments:
Beginning balance		$	280			$	1			$	43			$	16			$	34			$	2			$	—			$	376
Provision for (recovery of) credit losses on unfunded lending commitments			82				—				2				(9	)			5				—				—				80
Allowance for credit losses on unfunded lending commitments		$	362			$	1			$	45			$	7			$	39			$	2			$	—			$	456

		As of and for the Six Months Ended June 30, 2024
		Construction, Land Development, and Other				Real Estate 1-4 Family				Real Estate Multi- Family				Non- Residential Commercial Real estate				Commercial and Industrial				Direct Consumer				Indirect Consumer				Total
		(Dollars in Thousands)
Allowance for credit losses on loans and leases:
Beginning balance		$	565			$	591			$	415			$	1,425			$	513			$	64			$	6,934			$	10,507
Charge-offs			—				(2	)			—				—				(97	)			(28	)			(679	)			(806	)
Recoveries			20				35				—				—				—				178				181				414
Provision for (recovery of) credit losses on loans and leases			(50	)			(78	)			343				280				(23	)			(162	)			(198	)			112
Allowance for credit losses on loans and leases		$	535			$	546			$	758			$	1,705			$	393			$	52			$	6,238			$	10,227
Allowance for credit losses on unfunded lending commitments:
Beginning balance		$	450			$	1			$	9			$	2			$	102			$	5			$	—			$	569
Provision for (recovery of) credit losses on unfunded lending commitments			(100	)			(1	)			(1	)			4				(14	)			—				—				(112	)
Allowance for credit losses on unfunded lending commitments		$	350			$	—			$	8			$	6			$	88			$	5			$	—			$	457

17

Credit Quality Indicators

The Company utilizes a credit grading system that provides a uniform framework for establishing and monitoring credit risk in the loan portfolio. Under this system, construction, land, multi-family real estate, other commercial real estate, and commercial and industrial loans are graded based on pre-determined risk metrics and categorized into one of nine risk grades. These risk grades can be summarized into categories described as pass, special mention, substandard, doubtful and loss, as described in further detail below.

•Pass (Risk Grades 1-5): Loans in this category include obligations in which the probability of default is considered low.

•Special Mention (Risk Grade 6): Loans in this category exhibit potential credit weaknesses or downward trends deserving management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Although a special mention asset has a higher probability of default than pass-rated categories, its default is not imminent.

•Substandard (Risk Grade 7): Loans in this category have defined weaknesses that jeopardize the orderly liquidation of debt. A substandard loan is inadequately protected by the current worth and paying capacity of the obligor or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy, although no loss of principal is envisioned. There is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified as substandard.

•Doubtful (Risk Grade 8): Loans classified as doubtful have all of the weaknesses found in substandard loans, with the added characteristic that the weaknesses make collection of debt in full, based on currently existing facts, conditions and values, highly questionable or improbable. Serious problems exist such that partial loss of principal is likely; however, because of certain important, reasonably specific pending factors that may work to strengthen the assets, the loans’ classification as estimated losses is deferred until a more exact status may be determined. Such pending factors may include proposed merger, acquisition or liquidation procedures, capital injection, perfection of liens on additional collateral and refinancing plans. Loans classified as doubtful may include loans to borrowers that have demonstrated a history of failing to live up to agreements.

•Loss (Risk Grade 9): Loans are classified in this category when borrowers are deemed incapable of repayment of unsecured debt. Loans to such borrowers are considered uncollectable and of such little value that continuance as active assets of the Company is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not prudent to defer writing off these assets, even though partial recovery may be realized in the future. The Company did not have any loans classified as Loss (Risk Grade 9) as of June 30, 2025 or December 31, 2024.

Because residential real estate and consumer loans are more uniform in nature, each loan is categorized into one of two risk grades, depending on whether the loan is considered to be performing or nonperforming. Performing loans are loans that are paying principal and interest in accordance with a contractual agreement. Nonperforming loans are loans that have demonstrated characteristics that indicate a probability of loss.

18

The tables below illustrate the carrying amount of loans and leases by credit quality indicator and year of origination as of June 30, 2025, as well as gross charge-offs for the six months ended June 30, 2025.

				June 30, 2025
				Loans at Amortized Cost Basis by Origination Year
				2025				2024				2023				2022				2021				Prior				Total
				(Dollars in Thousands)
Commercial:
Construction, land development and other land loans		Pass		$	958			$	5,140			$	12,376			$	19,114			$	7,957			$	182			$	45,727
		Special Mention			—				—				—				—				52				—				52
		Substandard			—				—				2,322				—				—				—				2,322
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	958			$	5,140			$	14,698			$	19,114			$	8,009			$	182			$	48,101
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Secured by multi-family residential properties		Pass		$	594			$	201			$	8,927			$	53,635			$	22,620			$	24,331			$	110,308
		Special Mention			—				—				—				8,499				—				—				8,499
		Substandard			—				—				—				—				—				—				—
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	594			$	201			$	8,927			$	62,134			$	22,620			$	24,331			$	118,807
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Secured by non-residential commercial real estate		Pass		$	11,245			$	26,039			$	16,252			$	22,156			$	35,517			$	99,121			$	210,330
		Special Mention			—				—				544				2,859				—				329				3,732
		Substandard			—				—				—				—				465				508				973
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	11,245			$	26,039			$	16,796			$	25,015			$	35,982			$	99,958			$	215,035
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Commercial and industrial loans and leases		Pass		$	2,728			$	13,684			$	4,939			$	2,841			$	4,483			$	10,625			$	39,300
		Special Mention			—				—				—				23				51				—				74
		Substandard			—				—				—				—				—				208				208
		Doubtful			—				—				1,404				—				—				—				1,404
		Loss			—				—				—				—				—				—				—
		Subtotal		$	2,728			$	13,684			$	6,343			$	2,864			$	4,534			$	10,833			$	40,986
		Current period gross charge-offs		$	—			$	—			$	1,191			$	—			$	—			$	—			$	1,191
Total commercial		Pass		$	15,525			$	45,064			$	42,494			$	97,746			$	70,577			$	134,259			$	405,665
		Special Mention			—				—				544				11,381				103				329				12,357
		Substandard			—				—				2,322				—				465				716				3,503
		Doubtful			—				—				1,404				—				—				—				1,404
		Loss			—				—				—				—				—				—				—
				$	15,525			$	45,064			$	46,764			$	109,127			$	71,145			$	135,304			$	422,929
		Current period gross charge-offs		$	—			$	—			$	1,191			$	—			$	—			$	—			$	1,191

19

				June 30, 2025
				Loans at Amortized Cost Basis by Origination Year
				2025				2024				2023				2022				2021				Prior				Total
				(Dollars in Thousands)
Consumer:
Secured by 1-4 family residential properties		Performing		$	1,832			$	4,542			$	3,224			$	16,882			$	14,214			$	26,298			$	66,992
		Non-performing			—				—				—				—				—				595				595
		Subtotal		$	1,832			$	4,542			$	3,224			$	16,882			$	14,214			$	26,893			$	67,587
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Direct		Performing		$	1,850			$	1,561			$	729			$	250			$	279			$	167			$	4,836
		Non-performing			—				—				—				—				—				—				—
		Subtotal		$	1,850			$	1,561			$	729			$	250			$	279			$	167			$	4,836
		Current period gross charge-offs		$	—			$	4			$	—			$	—			$	1			$	—			$	5
Indirect		Performing		$	97,963			$	51,381			$	64,604			$	66,807			$	50,019			$	45,300			$	376,074
		Non-performing			—				—				—				—				—				5				5
		Subtotal		$	97,963			$	51,381			$	64,604			$	66,807			$	50,019			$	45,305			$	376,079
		Current period gross charge-offs		$	—			$	83			$	128			$	396			$	163			$	247			$	1,017
Total consumer		Performing		$	101,645			$	57,484			$	68,557			$	83,939			$	64,512			$	71,765			$	447,902
		Non-performing			—				—				—				—				—				600				600
				$	101,645			$	57,484			$	68,557			$	83,939			$	64,512			$	72,365			$	448,502
		Current period gross charge-offs		$	—			$	87			$	128			$	396			$	164			$	247			$	1,022

20

The tables below illustrate the carrying amount of loans and leases by credit quality indicator and year of origination as of December 31, 2024, as well as gross charge-offs for the year ended December 31, 2024.

				December 31, 2024
				Loans at Amortized Cost Basis by Origination Year
				2024				2023				2022				2021				2020				Prior				Total
				(Dollars in Thousands)
Commercial:
Construction, land development and other land loans		Pass		$	852			$	4,626			$	45,087			$	11,931			$	41			$	450			$	62,987
		Special Mention			—				—				—				61				—				—				61
		Substandard			—				2,489				—				—				—				—				2,489
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	852			$	7,115			$	45,087			$	11,992			$	41			$	450			$	65,537
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Secured by multi-family residential properties		Pass		$	7,941			$	8,218			$	42,077			$	17,557			$	5,592			$	19,672			$	101,057
		Special Mention			—				—				—				—				—				—				—
		Substandard			—				—				—				—				—				—				—
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	7,941			$	8,218			$	42,077			$	17,557			$	5,592			$	19,672			$	101,057
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Secured by non-residential commercial real estate		Pass		$	25,251			$	24,906			$	34,930			$	36,793			$	54,527			$	49,681			$	226,088
		Special Mention			—				—				316				—				334				—				650
		Substandard			—				—				—				483				147				383				1,013
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	25,251			$	24,906			$	35,246			$	37,276			$	55,008			$	50,064			$	227,751
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	248			$	248
Commercial and industrial loans		Pass		$	13,458			$	5,562			$	3,499			$	5,189			$	2,888			$	9,963			$	40,559
		Special Mention			—				—				30				60				—				—				90
		Substandard			—				—				—				2				—				303				305
		Doubtful			—				3,284				—				—				—				—				3,284
		Loss			—				—				—				—				—				—				—
		Subtotal		$	13,458			$	8,846			$	3,529			$	5,251			$	2,888			$	10,266			$	44,238
		Current period gross charge-offs		$	—			$	—			$	54			$	—			$	43			$	24			$	121
Total commercial		Pass		$	47,502			$	43,312			$	125,593			$	71,470			$	63,048			$	79,766			$	430,691
		Special Mention			—				—				346				121				334				—				801
		Substandard			—				2,489				—				485				147				686				3,807
		Doubtful			—				3,284				—				—				—				—				3,284
		Loss			—				—				—				—				—				—				—
				$	47,502			$	49,085			$	125,939			$	72,076			$	63,529			$	80,452			$	438,583
		Current period gross charge-offs		$	—			$	—			$	54			$	—			$	43			$	272			$	369

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				December 31, 2024
				Loans at Amortized Cost Basis by Origination Year
				2024				2023				2022				2021				2020				Prior				Total
				(Dollars in Thousands)
Consumer:
Secured by 1-4 family residential properties		Performing		$	4,559			$	3,525			$	18,060			$	14,746			$	5,884			$	21,612			$	68,386
		Non-performing			—				—				—				—				—				1,613				1,613
		Subtotal		$	4,559			$	3,525			$	18,060			$	14,746			$	5,884			$	23,225			$	69,999
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	2			$	2
Direct consumer		Performing		$	2,397			$	1,077			$	430			$	487			$	283			$	100			$	4,774
		Non-performing			—				—				—				—				—				—				—
		Subtotal		$	2,397			$	1,077			$	430			$	487			$	283			$	100			$	4,774
		Current period gross charge-offs		$	—			$	—			$	1			$	42			$	3			$	16			$	62
Indirect consumer		Performing		$	54,546			$	72,461			$	74,514			$	55,904			$	41,908			$	10,350			$	309,683
		Non-performing			—				—				—				—				—				—				—
		Subtotal		$	54,546			$	72,461			$	74,514			$	55,904			$	41,908			$	10,350			$	309,683
		Current period gross charge-offs		$	21			$	95			$	278			$	531			$	329			$	127			$	1,381
Total consumer:		Performing		$	61,502			$	77,063			$	93,004			$	71,137			$	48,075			$	32,062			$	382,843
		Non-performing			—				—				—				—				—				1,613				1,613
				$	61,502			$	77,063			$	93,004			$	71,137			$	48,075			$	33,675			$	384,456
		Current period gross charge-offs		$	21			$	95			$	279			$	573			$	332			$	145			$	1,445

The following table provides an aging analysis of past due loans by class as of June 30, 2025:

		As of June 30, 2025
		30-59 Days Past Due				60-89 Days Past Due				90 Days Or Greater				Total Past Due				Current				Total Loans				Recorded Investment > 90 Days And Accruing
		(Dollars in Thousands)
Loans secured by real estate:
Construction, land development    and other land loans		$	—			$	—			$	—			$	—			$	48,101			$	48,101			$	—
Secured by 1-4 family residential    properties			31				383				—				414				67,173				67,587				—
Secured by multi-family residential    properties			—				—				—				—				118,807				118,807				—
Secured by non-residential commercial real estate			—				—				—				—				215,035				215,035				—
Commercial and industrial loans			26				—				1,407				1,433				39,553				40,986				—
Consumer loans:															—
Direct			48				—				—				48				4,788				4,836				—
Indirect			956				141				5				1,102				374,977				376,079				—
Total		$	1,061			$	524			$	1,412			$	2,997			$	868,434			$	871,431			$	—
As a percentage of total loans			0.12	%			0.06	%			0.16	%			0.34	%			99.66	%			100.00	%

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The following table provides an aging analysis of past due loans by class as of December 31, 2024:

		As of December 31, 2024
		30-59 Days Past Due				60-89 Days Past Due				90 Days Or Greater				Total Past Due				Current				Total Loans				Recorded Investment > 90 Days And Accruing
		(Dollars in Thousands)
Loans secured by real estate:
Construction, land development    and other land loans		$	—			$	—			$	—			$	—			$	65,537			$	65,537			$	—
Secured by 1-4 family residential    properties			515				—				—				515				69,484				69,999				—
Secured by multi-family residential    properties			—				—				—				—				101,057				101,057				—
Secured by non-residential commercial real estate			—				—				—				—				227,751				227,751				—
Commercial and industrial loans			3,317				—				—				3,317				40,921				44,238				—
Consumer loans:
Direct			15				—				—				15				4,759				4,774				—
Indirect			489				47				—				536				309,147				309,683				—
Total		$	4,336			$	47			$	—			$	4,383			$	818,656			$	823,039			$	—
As a percentage of total loans			0.52	%			0.01	%			0.00	%			0.53	%			99.47	%			100.00	%

The tables below present the amortized cost of loans on nonaccrual status and loans past due 90 days or more and still accruing interest as of June 30, 2025 and December 31, 2024. Also presented is the balance of loans on nonaccrual status at June 30, 2025 and December 31, 2024 for which there was no related ACL recorded.

		Loans on Non-Accrual Status
		June 30, 2025
		(Dollars in Thousands)
		Total nonaccrual loans			Nonaccrual loans with no allowance for credit losses			Loans past due 90 days or more and still accruing
Loans secured by real estate:
Construction, land development and other land loans		$	—		$	—		$	—
Secured by 1-4 family residential properties			616			383			—
Secured by multi-family residential properties			—			—			—
Secured by non-residential commercial real estate			363			—			—
Commercial and industrial loans			1,407			—			—
Consumer loans:									—
Direct			—			—			—
Indirect			61			—			—
Total loans		$	2,447		$	383		$	—

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		Loans on Non-Accrual Status
		December 31, 2024
		(Dollars in Thousands)
		Total nonaccrual loans			Nonaccrual loans with no allowance for credit losses			Loans past due 90 days or more and still accruing
Loans secured by real estate:
Construction, land development and other land loans		$	—		$	—		$	—
Secured by 1-4 family residential properties			665			404			—
Secured by multi-family residential properties			—			—			—
Secured by non-residential commercial real estate			—			—			—
Commercial and industrial loans			3,284			—			—
Consumer loans:									—
Direct			—			—			—
Indirect			—			—			—
Total loans		$	3,949		$	404		$	—

The following tables present the amortized cost basis of collateral dependent loans as of June 30, 2025 and December 31, 2024, which loans are individually evaluated to determine credit losses:

		June 30, 2025
		Real Estate				Other				Total
		(Dollars in Thousands)
Loans secured by real estate
Construction, land development and other land loans		$	2,322			$	—			$	2,322
Secured by 1-4 family residential properties			401				—				401
Secured by multi-family residential properties			—				—				—
Secured by non-residential commercial real estate			363				—				363
Commercial and industrial			—				1,444				1,444
Direct consumer			—				—				—
Total loans individually evaluated		$	3,086			$	1,444			$	4,530

		December 31, 2024
		Real Estate				Other				Total
		(Dollars in Thousands)
Loans secured by real estate
Construction, land development and other land loans		$	2,489			$	—			$	2,489
Secured by 1-4 family residential properties			1,402				—				1,402
Secured by multi-family residential properties			—				—				—
Secured by non-residential commercial real estate			383				—				383
Commercial and industrial			—				3,327				3,327
Direct consumer			—				—				—
Total loans individually evaluated		$	4,274			$	3,327			$	7,601

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

From time to time, the Company may modify the terms of loan agreements with borrowers that are experiencing financial difficulties. Modification of the terms of such loans typically include one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. No modifications in 2025 or 2024 resulted in the permanent reduction of the recorded investment in the loan.

During the six months ended June 30, 2025 and the year ended December 31, 2024, the Company did not modify any loans to borrowers experiencing financial difficulty, and there were no payment defaults on loans that were modified in the previous twelve months.

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5.OTHER REAL ESTATE OWNED AND REPOSSESSED ASSETS

Other Real Estate Owned

Other real estate and certain other assets acquired in foreclosure are reported at the net realizable value of the property, less estimated costs to sell. The following table summarizes foreclosed property activity as of the six months ended June 30, 2025 and 2024:

		June 30, 2025				June 30, 2024
		(Dollars in Thousands)
Beginning balance		$	1,509			$	602
Additions (1)			—				—
Sales proceeds			(186	)			—
Gross gains			35				—
Gross losses			—				—
Net gains			35				—
Impairment			(60	)			(60	)
Ending balance		$	1,298			$	542

(1)Additions to other real estate owned (“OREO”) may include transfers from loans, transfers from closed branches, and capitalized improvements to existing OREO properties.

Valuation adjustments are recorded in other non-interest expense and are primarily post-foreclosure write-downs that are a result of continued declining property values based on updated appraisals or other indications of value, such as offers to purchase. Net realizable value less estimated costs to sell of foreclosed residential real estate held by the Company was zero as of both June 30, 2025 and 2024. In addition, the Company held zero and $18 thousand in consumer mortgage loans collateralized by residential real estate that were in the process of foreclosure as of June 30, 2025 and 2024, respectively.

Repossessed Assets

The Company also acquires assets through the repossession of the underlying collateral of loans in default. As of June 30, 2025 and 2024, total repossessed assets were $0.5 million and $0.1 million, respectively. Repossessed assets are included in other assets in the Company's consolidated balance sheets.

6.GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is tested for impairment annually, or more often if circumstances warrant. If, as a result of impairment testing, it is determined that the fair value of goodwill is lower than its carrying amount, goodwill must be written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the consolidated financial statements. Goodwill totaled $7.4 million as of both June 30, 2025 and December 31, 2024. Goodwill impairment was neither indicated nor recorded during the six months ended June 30, 2025 or the year ended December 31, 2024.

Core deposit premiums are amortized over a seven-year period and are periodically evaluated, at least annually, as to the recoverability of their carrying value. No write-downs of core deposit premiums were recorded by the Company during the six months ended June 30, 2025 or the year ended December 31, 2024.

The Company’s goodwill and other intangible assets (carrying basis and accumulated amortization) as of June 30, 2025 and December 31, 2024 were as follows:

		June 30, 2025				December 31, 2024
		(Dollars in Thousands)
Goodwill		$	7,435			$	7,435
Core deposit intangible:
Gross carrying amount			2,048				2,048
Accumulated amortization			(2,036	)			(1,999	)
Core deposit intangible, net			12				49
Total		$	7,447			$	7,484

25

As of June 30, 2025, the Company’s estimated remaining amortization expense on intangible assets was $12 thousand. The remainder of the amortization expense will be incurred during 2025.

The net carrying amount of the Company’s core deposit premiums is not considered recoverable if it exceeds the sum of the undiscounted cash flows expected to result from use and eventual disposition. That assessment is based on the carrying amount of the intangible assets subject to amortization at the date on which it is tested for recoverability. Intangible assets subject to amortization are tested by the Company for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

7.BORROWINGS

Short-Term Borrowings

Short-term borrowings consist of federal funds purchased, securities sold under repurchase agreements, and short-term FHLB advances with original maturities of one year or less.

•Federal funds purchased, which represent unsecured lines of credit that generally mature within one to 90 days, are available to the Bank through arrangements with correspondent banks and the FRB. As of June 30, 2025 and December 31, 2024, the Bank had $15.0 million and zero, respectively, in outstanding federal funds purchased.

•Securities sold under repurchase agreements, which are secured borrowings, generally are reflected at the amount of cash received in connection with the transaction. The Bank may be required to provide additional collateral based on the fair value of the underlying securities. The Bank monitors the fair value of the underlying securities on a daily basis. There were no securities sold under repurchase agreements as of both June 30, 2025 and December 31, 2024.

•Short-term FHLB advances are secured borrowings available to the Bank as an alternative funding source. As of June 30, 2025 and December 31, 2024, the Bank had $20.0 and $10.0 million, respectively, in outstanding FHLB advances with original maturities of less than one year.

Long-Term Borrowings

FHLB Advances

The Company may use FHLB advances with original maturities of more than one year as an alternative to funding sources with similar maturities, such as certificates of deposit or other deposit programs. These advances generally offer more attractive rates than other mid-term financing options. They are also flexible, allowing the Company to quickly obtain the necessary maturities and rates that best suit its overall asset/liability strategy. FHLB advances with an original maturity of more than one year are classified as long-term. As of both June 30, 2025 and December 31, 2024, the Company did not have any long-term FHLB advances outstanding.

Subordinated Debt

On October 1, 2021, the Company completed a private placement of $11.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes that will mature on October 1, 2031 (the “Notes”). The Notes bear interest at a rate of 3.50% per annum for the first five years, after which the interest rate will be reset quarterly to a benchmark interest rate per annum which, subject to certain conditions provided in the Notes, will be equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”) plus 275 basis points. The Company used the net proceeds of the Notes for general corporate purposes, which included repurchasing of the Company’s common stock, and supporting organic growth plans, including the maintenance of the Bank's capital ratios. Net of unamortized debt issuance costs, the Notes were recorded as long-term borrowings totaling $10.9 million as of both June 30, 2025 and December 31, 2024. The table below provides additional information related to the Notes as of and for the six months ended June 30, 2025 and 2024.

		June 30,		June 30,
		2025		2024
		(Dollars in Thousands)
Balance at period-end		$10,909		$10,836
Average balance during the period		$10,903		$10,830
Maximum month-end balance during the period		$10,909		$10,836
Average rate paid during the period, including amortization of debt issuance costs		4.20%		4.20%
Weighted average remaining maturity (in years)		6.25		7.25

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Available Credit

As an additional funding source, the Company has available unused lines of credit with correspondent banks, the FRB and the FHLB. Certain of these funding sources are subject to underlying collateral. As of June 30, 2025 and December 31, 2024, the Company’s available unused lines of credit consisted of the following:

Available Unused Lines of Credit		Collateral Requirements		June 30, 2025		December 31, 2024
Correspondent banks		None		$48.0 million		$48.0 million
FHLB advances (1)		Subject to collateral		$298.0 million		$319.9 million
FRB (2)		Subject to collateral		$181.9 million		$165.1 million

(1)These amounts represent the total remaining credit the Company has from the FHLB, but this credit can only be utilized to the extent that underlying collateral exists. The total lendable collateral value of assets pledged (including loans and investment securities) associated with FHLB advances and letters of credit totaled $51.2 million and $55.4 million as of June 30, 2025 and December 31, 2024, respectively. The Company’s collateral exposure with the FHLB in the form of advances and letters of credit was $40.0 million and $10.0 million as of June 30, 2025 and December 31, 2024, respectively, leaving an excess of collateral of $11.2 million and $45.4 million available to utilize for additional credit as of the respective dates. The Company also has the ability to pledge additional assets to increase the availability of borrowings.

(2)The Company has access to the FRB's discount window, which allows borrowing on pledged collateral that includes eligible investment securities and loans under 90-day terms. The amounts shown in the table represent the Company's unused borrowing capacity as of the applicable date based on collateral pledged to the FRB's discount window.

8.INCOME TAXES

The provision for income taxes was $0.6 million and $1.3 million for the six months ended June 30, 2025 and 2024, respectively. The Company’s effective tax rate was 22.6% and 23.0%, respectively, for the same periods. The effective tax rate is impacted by recurring permanent differences, such as those associated with bank-owned life insurance and tax-exempt investment and loan income.

The Company had a net deferred tax asset of $3.2 million and $4.1 million as of June 30, 2025 and December 31, 2024, respectively. The net deferred tax asset, which is included on the interim condensed consolidated balance sheets in other assets, is impacted by changes in the fair value of securities available-for-sale and cash flow hedges, changes in net operating loss carryforwards, changes in the allowance for credit losses, and other book-to-tax temporary differences.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law. The OBBBA extends or makes permanent a number of provisions originally enacted in the 2017 Tax Cuts and Jobs Act and introduces new items affecting both individuals and businesses. Topic 740, Income Taxes, of the FASB Accounting Standards Codification requires the effects of newly enacted tax law to be recognized in the period of enactment. Because enactment occurred after the quarter-end date of June 30, 2025, we are evaluating the OBBBA’s impact on our deferred tax assets and liabilities, effective tax rate, and tax-related processes (e.g., payroll reporting for qualifying wage items). Based on preliminary analysis, we do not currently expect the OBBBA to have a material impact on our 2025 estimated annual effective tax rate or on our consolidated financial statements, but our evaluation is ongoing.

9.DEFERRED COMPENSATION PLANS

Supplemental Retirement Benefits

The Company has entered into supplemental retirement compensation benefits agreements with certain non-employee directors and former executive officers. These agreements are structured as nonqualified retirement plans for federal income tax purposes. The Company’s obligation under these agreements is accrued as deferred compensation in accordance with the terms of the individual contracts over the required service period to the date the employee is eligible to receive benefits. The Company’s deferred compensation obligation under these agreements totaled $2.5 million and $2.7 million as of June 30, 2025 and December 31, 2024, respectively.

Non-Employee Directors' Deferred Compensation Plan

Non-employee directors may elect to defer payment of all or any portion of their director fees under Bancshares’ Non-Employee Directors’ Deferred Compensation Plan (the “Deferral Plan”). The Deferral Plan permits non-employee directors to invest their directors’ fees and to receive the adjusted value of the deferred amounts in cash and/or shares of Bancshares’ common stock, as applicable. Neither Bancshares nor the Bank makes any contribution to participants’ accounts under the Deferral Plan. As of June 30, 2025 and December 31, 2024, a total of 79,591 and 108,190 shares of Bancshares common stock, respectively, were being held as stock equivalents in connection with the Deferral Plan. All deferred fees and shares of Bancshares common stock are reflected as compensation expense in the period earned. The Company

27

classifies all deferred directors’ fees allocated to be paid in shares as equity as additional paid-in capital. The Company may use issued shares or shares of treasury stock to satisfy these obligations when due.

10.STOCK AWARDS

In 2013, Bancshares’ shareholders authorized the Company to provide share-based compensation awards to eligible employees, directors and consultants of the Company and its affiliates pursuant to the 2013 Incentive Plan. Available award types included stock options, stock appreciation rights, restricted stock and restricted stock units, and performance share awards. The 2013 Incentive Plan, as amended in 2019, expired in March 2023. In April 2023, Bancshares’ shareholders approved the 2023 Incentive Plan, which authorizes the Compensation Committee of the Board of Directors to grant substantially the same types of share-based awards to eligible employees, directors and consultants. Collectively, the 2013 Incentive Plan and the 2023 Incentive Plan are herein referred to as the Company’s “Incentive Plan.” In accordance with the Incentive Plan, shares of common stock available for issuance pursuant to the grants may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares reacquired by the Company in any manner. Since the origination of the Incentive Plan, through June 30, 2025, only stock options and restricted stock have been granted. Stock-based compensation expense related to stock awards totaled $0.4 million and $0.3 for the six months ended June 30, 2025 and 2024, respectively.

Stock Options

Stock options have been granted with an exercise price equal to the market price of the Company’s common stock on the date of the grant and have vesting periods ranging from one to three years, with 10-year contractual terms. The Company recognizes the cost of services received in exchange for stock option awards based on the grant date fair value of the award, with compensation expense recognized on a straight-line basis over the award’s vesting period. The fair value of outstanding awards was determined using the Black-Scholes option pricing model. The Company did not grant any stock options during the six months ended June 30, 2025 or 2024.

The following table summarizes the Company’s stock option activity for the periods presented.

		Six Months Ended
		June 30, 2025								June 30, 2024
		Number of Shares				Weighted-Average Exercise Price				Number of Shares				Weighted-Average Exercise Price
Options:
Outstanding, beginning of period			268,250			$	10.62				411,900			$	9.77
Granted			—				—				—				—
Exercised			31,750				8.30				83,700				8.14
Expired			5,500				8.23				500				8.00
Forfeited			—				—				—				—
Options outstanding, end of period			231,000			$	11.00				327,700			$	10.19
Options exercisable, end of period			231,000			$	11.00				327,700			$	10.19

The aggregate intrinsic value of stock options outstanding (calculated as the amount by which the market value of underlying stock exceeds the exercise price of the option) was $0.5 million and $0.3 million as of June 30, 2025 and 2024, respectively.

Restricted Stock

During the six months ended June 30, 2025 and 2024, 58,924 shares and 55,300 shares, respectively, of restricted stock were granted. Restricted stock awards granted to employees had a three-year vesting period, while awards granted to non-employee directors had a one-year vesting period. The Company recognizes the cost of services received in exchange for restricted stock awards based on the grant date closing price of the stock, with compensation expense recognized on a straight-line basis over the award’s vesting period.

The following table summarizes the Company's restricted stock award activity for the periods presented.

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		Six Months Ended
		June 30, 2025								June 30, 2024
		Number of Shares				Weighted-Average Grant-Date Fair Value				Number of Shares				Weighted-Average Grant-Date Fair Value
Restricted stock awards:
Unvested shares, beginning of period			92,599			$	10.29				86,443			$	10.03
Granted			58,924				13.06				55,300				10.41
Released from restriction			56,809				10.51				47,477				9.95
Forfeited			2,768				11.77				1,500				10.41
Unvested shares, end of period			91,946			$	11.89				92,766			$	10.29

11.LEASES

The Company is involved in a number of operating leases, primarily for branch locations. Branch leases have remaining lease terms ranging from one year to nine years, some of which include options to extend the leases for up to five years, and some of which include an option to terminate the lease within one year. The Company also leases certain office facilities to third parties and classifies these leases as operating leases.

The following table provides a summary of the components of lease income and expense, as well as the reporting location in the interim condensed consolidated statements of operations, for the three and six months ended June 30, 2025 and 2024:

		Location in the Condensed		Three Months Ended								Six Months Ended
		Consolidated Statements of Operations		June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
				(Dollars in Thousands)								(Dollars in Thousands)
Operating lease income (1)		Lease income		$	269			$	253			$	553			$	510
Operating lease expense (2)		Net occupancy and equipment		$	118			$	157			$	226			$	313

(1)Operating lease income includes rental income from owned properties.

(2)Includes short-term lease costs. For the three and six months ended June 30, 2025 and 2024, short-term lease costs were nominal in amount.

The following table provides supplemental lease information for operating leases on the interim condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024:

		Location in the Condensed
		Consolidated Balance Sheets		June 30, 2025				December 31, 2024
				(Dollars in Thousands)
Operating lease right-of-use assets		Other assets		$	1,753			$	1,921
Operating lease liabilities		Other liabilities		$	1,810			$	1,972
Weighted-average remaining lease term (in years)					5.77				5.14
Weighted-average discount rate					4.31	%			4.08	%

The following table provides supplemental lease information for the interim condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024:

		Six Months Ended
		June 30, 2025				June 30, 2024
		(Dollars in Thousands)
Cash paid for amounts included in the measurement of    lease liabilities:
Operating cash flows from operating leases		$	205			$	197

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The following table is a schedule of remaining future minimum lease payments for operating leases that had an initial or remaining non-cancellable lease term in excess of one year as of June 30, 2025:

		Minimum Rental Payments
		(Dollars in Thousands)
2025		$	207
2026			419
2027			308
2028			269
2029			183
2030 and thereafter			746
Total future minimum lease payments		$	2,132
Less: Imputed interest			322
Total operating lease liabilities		$	1,810

12.DERIVATIVE FINANCIAL INSTRUMENTS

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages its exposures to business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amounts, sources, and duration of assets and liabilities. The Company uses interest rate derivative instruments to minimize unplanned fluctuations in earnings and cash flows caused by interest rate volatility. The Company’s interest rate risk management strategy generally involves modifying the repricing characteristics of certain assets and liabilities to mitigate negative impacts on net interest margin and/or cash flow. Interest rate derivative instruments utilized by the Company generally include interest rate swap contracts or option contracts, such as caps and floors. The Company’s existing credit derivatives are associated with loan participation arrangements, and are not used to manage interest rate risk in the Company’s assets or liabilities. The fair values of derivative instruments are carried in the Company’s consolidated balance sheets as assets and/or liabilities. The Company does not use derivatives for speculative purposes and generally enters into transactions that have a qualifying hedge relationship. When hedge accounting is used, derivatives are classified as either cash flow hedges or fair value hedges. The Company may also enter into derivative contracts that are not designated as hedges in order to mitigate economic risks or risks associated with volatility in connection with customer derivative transactions.

Cash Flow Hedges

In March 2025, the Company purchased an interest rate floor contract with the objective of protecting the Company against variability in expected future cash flows attributed to changes in the designated interest rate (1 Month CME Term SOFR) on the notional amount of $20.0 million based on interest receipts on loans and securities indexed to the designated interest rate. The contract was designated as a derivative instrument in cash flow hedges and is intended to mitigate the Company’s risk of loss associated with downward shifts in the designated interest rate. The contract will provide cash flow to the Company in the event the designated interest rate decreases below 3.05% before the contract’s designated termination date of March 15, 2029. As of June 30, 2025, the hedge relationship for the floor contract was designated effective, and accordingly, changes in the fair value of the contract were included as an adjustment to accumulated other comprehensive income.

In August 2024, the Company entered into two forward starting interest rate swap contracts with the objective of protecting the Company against variability in expected future cash flows attributed to changes in the designated interest rate (USD-SOFR-COMPOUND) on the designated notional of interest-bearing liabilities. Each of the contracts has a $20.0 million notional amount, or $40.0 million in the aggregate. The interest rate swaps were designated as derivative instruments in cash flow hedges. In accordance with the related contracts, the Company pays a fixed interest rate and receives a variable interest rate based on the designated interest rate, on the notional amounts. The swap contracts are scheduled to terminate on September 6, 2027 and March 15, 2028. As of June 30, 2025 and December 31, 2024, the hedge relationships for both swaps were designated effective, and accordingly, changes in the fair value of the contracts were included as an adjustment to accumulated other comprehensive income.

Derivative Contracts Not Receiving Hedge Accounting Treatment

Interest Rate Floor - In March 2024, the Company purchased an interest rate floor contract on the notional amount of $25.0 million. The floor contract protects the Company against variability in expected future cash flows attributed to changes in the designated interest rate (USD-SOFR-OIS-COMPOUND) on the $25.0 million notional amount. The contract was not designated as a hedging instrument, and accordingly, changes in the fair value of the contract are recorded as non-interest income or expense over the term of the contract. The contract is intended to mitigate the Company’s risk of loss associated with downward shifts in the designated interest rate in the event the designated interest rate decreases below 4.0% before the contract’s designated termination date of March 27, 2026.

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Credit Derivatives - During 2024, the Company entered into three credit risk participation agreements on the notional amount of $15.2 million in the aggregate. These agreements are with lead participant banks with which the Company shares participation loans. The Company is the guarantor under these agreements to provide reimbursement of losses resulting from a third-party default on the underlying swap. For participating in the agreements, the Company received one-time fees which were included in other liabilities. The derivatives are not eligible for hedge accounting treatment. Accordingly, valuation changes are recorded directly to non-interest income or expense.

Terminated Derivative Contracts

In March 2025, the Company voluntarily terminated three interest rate swap contracts, each with notional amounts of $10.0 million, or an aggregate amount of $30.0 million. Each of the swaps had previously been designated as fair value hedges with the objective of effectively converting a pool of fixed rate indirect consumer loans to a variable rate throughout the hedge durations in accordance with the portfolio layer method. The termination of the fair value hedges resulted in a nominal settlement with the counterparty.

As of June 30, 2025 and December 31, 2024, the Company had an unrealized gain of $0.2 million and $0.3 million, respectively, associated with an interest rate swap contract that was terminated in February 2023. Prior to termination, the swap was designated as a cash flow hedge on a notional of $10.0 million in interest payments associated with variable rate interest-bearing liabilities. The unrealized gain is being reclassified as an increase to net interest income over the original term of the contract which had a designated termination date of July 8, 2026.

Presentation

The table below reflects the notional amount and fair value of active derivative instruments included on the Company’s consolidated balance sheets on a net basis as of June 30, 2025 and December 31, 2024.

		As of June 30, 2025								As of December 31, 2024
						Estimated								Estimated
						Fair Value								Fair Value
		Notional Amount				Gain (Loss) (1)				Notional Amount				Gain (Loss) (1)
		(Dollars in Thousands)
Derivatives designated as hedging instruments:
Fair value hedges:
Interest rate swaps related to fixed rate indirect consumer loans		$	—			$	—			$	30,000			$	69
Total fair value hedges						$	—							$	69
Cash flow hedges:
Interest rate swaps related to interest-bearing liabilities		$	40,000			$	1			$	40,000			$	609
Interest rate floors		$	20,000				296			$	—				—
Total cash flow hedges						$	297							$	609
Total derivatives designated as hedging instruments, net						$	297							$	678
Derivatives not designated as hedging instruments:
Interest rate floors		$	25,000			$	6			$	50,000			$	18
Credit risk participation agreements		$	15,198				(75	)		$	15,198				(54	)
Total derivatives not designated as hedging instruments, net						$	(69	)						$	(36	)

(1)Derivatives in a gain position are recorded as other assets and derivatives in a loss position are recorded as other liabilities in the consolidated balance sheets.

The following table presents the net effects of derivative instruments on the Company’s interim condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024. The effects, which include the reclassification of unrealized gains on terminated swap contracts, are presented as either an increase or decrease to income before income taxes in the relevant caption of the Company’s interim condensed consolidated statements of operations.

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Location in the Condensed				Three Months Ended								Six Months Ended
Consolidated Statements of Operations				June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
				(Dollars in Thousands)								(Dollars in Thousands)
Interest income		Interest and fees on loans		$	(19	)		$	260			$	(48	)		$	520
Interest expense		Interest on deposits			140				120				237				240
Interest expense		Interest on borrowings			—				36				—				72
Non-interest income		Other non-interest income			(3	)			—				(20	)			—
Non-interest expense		Other non-interest expense			(8	)			(38	)			(12	)			(62	)
		Net increase to income before income taxes		$	110			$	378			$	157			$	770

13.OTHER OPERATING INCOME AND EXPENSE

Other Operating Income

Other operating income for the three and six months ended June 30, 2025 and 2024 consisted of the following:

		Three Months Ended								Six Months Ended
		June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
		(Dollars in Thousands)
Bank-owned life insurance		$	138			$	133			$	275			$	264
ATM fee income			98				97				182				182
Other income			66				54				148				147
Total		$	302			$	284			$	605			$	593

Other Operating Expense

Other operating expense for the three and six months ended June 30, 2025 and 2024 consisted of the following:

		Three Months Ended								Six Months Ended
		June 30, 2025				June 30, 2024				June 30, 2025				June 30, 2024
		(Dollars in Thousands)
Postage, stationery and supplies		$	140			$	136			$	289			$	314
Telephone/data communication			186				193				385				385
Collection and recoveries			96				34				166				60
Directors fees			101				85				194				181
Software amortization			107				87				215				177
Other real estate/foreclosure expense, net			24				30				44				61
Other expense			651				641				1,308				1,018
Total		$	1,305			$	1,206			$	2,601			$	2,196

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14.GUARANTEES, COMMITMENTS AND CONTINGENCIES

Credit

The Bank’s exposure to credit loss in the event of nonperformance by the other party for commitments to make loans and standby letters of credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making these commitments as it does for on-balance sheet instruments.

In the normal course of business, there are outstanding commitments and contingent liabilities, such as commitments to extend credit, letters of credit and others, that are not included in the consolidated financial statements. The financial instruments involve, to varying degrees, elements of credit and interest rate risk in excess of amounts recognized in the financial statements. A summary of these commitments and contingent liabilities is presented below:

		June 30, 2025				December 31, 2024
		(Dollars in Thousands)
Standby letters of credit		$	—			$	—
Standby performance letters of credit		$	832			$	896
Commitments to extend credit		$	136,529			$	120,703

Standby letters of credit and standby performance letters of credit are contingent commitments issued by the Bank generally to guarantee the performance of a customer to a third party. The Bank has recourse against the customer for any amount that it is required to pay to a third party under a standby letter of credit or standby performance letter of credit. Revenues are recognized over the lives of the standby letters of credit and standby performance letters of credit. As of June 30, 2025 and December 31, 2024, the potential amounts of future payments that the Bank could be required to make under its standby letters of credit and standby performance letters of credit, which represent the Bank’s total credit risk in these categories, are included in the table above.

A commitment to extend credit is an agreement to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon the extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment and income-producing commercial properties.

At each quarter end date, the Company calculates an allowance for unfunded lending commitments, including those described in the table above. The Company's allowance for unfunded commitments totaled $0.5 million and $0.4 million as of June 30, 2025 and December 31, 2024, respectively. Additional discussion related to the calculation of the allowance for unfunded commitments is included in Note 4, "Loans and Leases."

Self-Insurance

The Company is self-insured for a significant portion of employee health benefits. However, the Company maintains stop-loss coverage with third-party insurers to limit the Company’s individual claim and total exposure related to self-insurance. The Company estimates a liability for the ultimate costs to settle known claims, as well as claims incurred but not yet reported, as of the balance sheet date. The Company’s recorded estimated liability for self-insurance is based on the insurance companies' incurred loss estimates and management’s judgment, including assumptions and evaluation of factors related to the frequency and severity of claims, the Company’s claims development history and the Company’s claims settlement practices. The assessment of loss contingencies and self-insurance reserves is a highly subjective process that requires judgments about future events. Contingencies are reviewed at least quarterly to determine the adequacy of self-insurance accruals. Self-insurance accruals totaled $0.2 million as of both June 30, 2025 and December 31, 2024. The ultimate settlement of loss contingencies and self-insurance reserves may differ significantly from amounts accrued in the Company’s consolidated financial statements.

Litigation

The Company is party to certain ordinary course litigation, and intends to vigorously defend itself in all such litigation. In the opinion of the Company, based on review and consultation with legal counsel, the outcome of such ordinary course litigation should not have a material adverse effect on the Company’s consolidated financial statements or results of operations.

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15.FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows a uniform framework for estimating and classifying the fair value of financial instruments. The assumptions used in the estimation of the fair value of the Company’s financial instruments are detailed below. The following disclosures should not be considered a representation of the liquidation value of the Company, but rather represent a good-faith estimate of the increase or decrease in value of financial instruments held by the Company since purchase, origination or issuance.

Fair Value Hierarchy

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. In determining fair value, the Company uses various methods, including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair value. Assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

•Level 1 — Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange or Nasdaq. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

•Level 2 — Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities.

•Level 3 — Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer or broker-traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

The Company rarely transfers assets and liabilities measured at fair value between Level 1 and Level 2 measurements. Trading account assets and securities available-for-sale may be periodically transferred to or from Level 3 valuation based on management’s conclusion regarding the best method of pricing for an individual security. Such transfers are accounted for as if they occurred at the beginning of a reporting period. There were no such transfers during the six months ended June 30, 2025 or the year ended December 31, 2024.

Fair Value Measurements on a Recurring Basis

Securities Available-for-Sale

Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities include U.S. Treasury securities. Level 2 securities include government sponsored agency securities, mortgage-backed agency securities, obligations of states and political subdivisions and certain corporate, asset-backed and other securities. Level 2 fair values are obtained from quoted prices of securities with similar characteristics. In certain cases, where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

Derivative Agreements

Derivative agreements include those used by the Company to mitigate risk associated with changes in interest rates, as well as credit derivatives associated with risk participation agreements in certain loans. The fair value of these agreements is based on information obtained from third-party financial institutions. This information is periodically evaluated by the Company and, as necessary, corroborated against other third-party valuations. The Company classifies these derivative assets within Level 2 of the valuation hierarchy.

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The following table presents assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024.

		Fair Value Measurements as of June 30, 2025 Using
		Totals At June 30, 2025				Quoted Prices in Active Markets For Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(Dollars in Thousands)
Investment securities, available-for-sale
Mortgage-backed securities:
Residential		$	88,957			$	—			$	88,957			$	—
Commercial			10,374				—				10,374				—
Obligations of U.S. government-sponsored agencies			10,325				—				10,325				—
Obligations of states and political subdivisions			1,296				—				1,296				—
Corporate notes			16,535				—				16,535				—
U.S. Treasury securities			29,089				29,089				—				—
Derivative contracts:
Other assets - interest rate floors			302				—				302				—
Other assets - interest rate swaps			1				—				1				—
Other liabilities - credit risk participation agreements			75				—				75				—

		Fair Value Measurements as of December 31, 2024 Using
		Totals At December 31, 2024				Quoted Prices in Active Markets For Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(Dollars in Thousands)
Investment securities, available-for-sale
Mortgage-backed securities:
Residential		$	85,282			$	—			$	85,282			$	—
Commercial			11,920				—				11,920				—
Obligations of U.S. government-sponsored agencies			10,834				—				10,834
Obligations of states and political subdivisions			1,549				—				1,549				—
Corporate notes			15,944								15,944				—
U.S. Treasury securities			42,359				42,359				—				—
Derivative contracts:
Other assets - interest rate swaps			678				—				678				—
Other assets - interest rate floors			18				—				18				—
Other liabilities - credit risk participation agreements			54				—				54				—

Fair Value Measurements on a Non-recurring Basis

Collateral Dependent Loans

Loans are considered collateral dependent when, based on current information and events, it is probable that the Company will be unable to collect all principal and interest payments due under the contractual terms of the loan agreement. These loans are evaluated separately in accordance with the Company’s policies for calculating the ACL on loans and leases. The fair value of collateral dependent loans with specific allocations of the ACL on loans and leases is typically based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. Appraised values are discounted by management for estimated costs to sell and may be discounted further based on management’s knowledge of the collateral, changes in market conditions since the most recent appraisal and/or management’s knowledge of the borrower and the borrower’s

35

business. Such adjustments are usually significant and typically result in Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge of the borrower’s business, resulting in a Level 3 fair value classification. Collateral dependent loans are evaluated on a quarterly basis and adjusted accordingly.

OREO and Other Assets Held-for-Sale

OREO consists of properties obtained through foreclosure or in satisfaction of loans and is recorded at net realizable value, less estimated cost to sell. Estimates of fair value are generally based on third-party appraisals of the property and are classified within Level 3 of the fair value hierarchy. The appraisals are sometimes discounted based on management’s knowledge of the property and/or changes in market conditions from the date of the most recent appraisal. Such discounts are typically significant unobservable inputs for determining fair value.

As of June 30, 2025 and December 31, 2024, included within OREO were certain assets that were formerly included as premises and equipment but have been removed from service, and as of the balance sheet date, were designated as assets to be disposed of by sale. These include assets associated with branches of the Company that have been closed. When an asset is designated as held-for-sale, the Company ceases depreciation of the asset, and the asset is recorded at the lower of its carrying amount or fair value less estimated cost to sell. Estimates of fair value are generally based on third-party appraisals of the property and are classified within Level 3 of the fair value hierarchy. The appraisals are sometimes discounted based on management’s knowledge of the property and/or changes in market conditions from the date of the most recent appraisal. Such discounts are typically unobservable inputs for determining fair value.

The following table presents the balances of collateral dependent loans, OREO and other assets held-for-sale measured at fair value on a non-recurring basis as of June 30, 2025 and December 31, 2024:

		Fair Value Measurements as of June 30, 2025 Using
		Totals At June 30, 2025				Quoted Prices in Active Markets For Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(Dollars in Thousands)
Collateral dependent loans		$	871			$	—			$	—			$	871
OREO and other assets held-for-sale			1,298				—				—				1,298

		Fair Value Measurements as of December 31, 2024 Using
		Totals At December 31, 2024				Quoted Prices in Active Markets For Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
		(Dollars in Thousands)
Collateral dependent loans		$	2,026			$	—			$	—			$	2,026
OREO and other assets held-for-sale			1,509				—				—				1,509

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Non-recurring Fair Value Measurements Using Significant Unobservable Inputs

The following tables present information regarding assets and liabilities measured at fair value using significant unobservable inputs (Level 3) as of June 30, 2025 and December 31, 2024. The tables include the valuation techniques and the significant unobservable inputs utilized. The range of each unobservable input and the weighted average within the range utilized as of June 30, 2025 and December 31, 2024 are both included. Following the table is a description of the valuation technique and the sensitivity of the technique to changes in the significant unobservable input.

Level 3 Significant Unobservable Input Assumptions

Fair Value June 30, 2025

Valuation Technique

Unobservable Input

Quantitative Range of Unobservable Inputs (Weighted Average)

(Dollars in Thousands)

Non-recurring fair value measurements:

Collateral dependent loans

$

871

Multiple data points, including discount to appraised value of collateral based on recent market activity

Appraisal comparability adjustment (discount)

9%-10%

9.5%

OREO and other assets held-for-sale

$

1,298

Discount to appraised value of property based on recent market activity for sales of similar properties

Appraisal comparability adjustment (discount)

9%-10%

9.5%

Level 3 Significant Unobservable Input Assumptions

Fair Value December 31, 2024

Valuation Technique

Unobservable Input

Quantitative Range of Unobservable Inputs (Weighted Average)

(Dollars in Thousands)

Non-recurring fair value measurements:

Collateral dependent loans

$

2,026

Multiple data points, including discount to appraised value of collateral based on recent market activity

Appraisal comparability adjustment (discount)

9%-10%

9.5%

OREO and other assets held-for-sale

$

1,509

Discount to appraised value of property based on recent market activity for sales of similar properties

Appraisal comparability adjustment (discount)

9%-10%

9.5%

Collateral Dependent Loans

Collateral dependent loans are valued based on multiple data points indicating the fair value for each loan. The primary data point is the appraisal value of the underlying collateral, to which a discount is applied. Management establishes this discount or comparability adjustment

37

based on recent sales of similar property types. As liquidity in the market increases or decreases, the comparability adjustment and the resulting asset valuation are impacted.

OREO

OREO under a binding contract for sale is valued based on contract price. If no sales contract is pending for a specific property, management establishes a comparability adjustment to the appraised value based on historical activity, considering proceeds for properties sold versus the corresponding appraised value. Increases or decreases in realization for properties sold impact the comparability adjustment for similar assets remaining on the balance sheet.

Other Assets Held-for-Sale

Assets designated as held-for-sale that are under a binding contract are valued based on the contract price. If no sales contract is pending for a specific property, management establishes a comparability adjustment to the appraised value based on historical activity, considering proceeds for properties sold versus the corresponding appraised value. Increases or decreases in realization for properties sold impact the comparability adjustment for similar assets remaining on the balance sheet.

Fair Value of Financial Instruments

The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments:

Cash and cash equivalents: The carrying amount of cash and cash equivalents approximates fair value.

Federal funds sold and securities purchased under reverse repurchase agreements: Federal funds sold and securities purchased under reverse repurchase agreements all contain maturities of 30 days or less, and therefore, their carrying amounts approximate fair value.

Federal Home Loan Bank stock: Based on the redemption provision of the FHLB, the stock has no quoted market value and is carried at cost.

Investment securities: Fair values of investment securities are based on quoted market prices where available. If quoted market prices are not available, estimated fair values are based on market prices of comparable instruments.

Derivative instruments: The fair value of derivative instruments is based on information obtained from a third-party financial institution. This information is periodically evaluated by the Company and, as necessary, corroborated against other third-party information.

Accrued interest receivable and payable: The carrying amount of accrued interest approximates fair value.

Loans, net: The fair value of loans is estimated on an exit price basis incorporating contractual cash flow, prepayment discount spreads, credit loss and liquidity premiums.

Demand and savings deposits: The fair values of demand deposits are equal to the carrying value of such deposits. Demand deposits include non-interest-bearing demand deposits, savings accounts, NOW accounts and money market demand accounts.

Time deposits: The fair values of relatively short-term time deposits are equal to their carrying values. Discounted cash flows are used to value long-term time deposits. The discount rate used is based on interest rates currently offered by the Company on comparable deposits as to amount and term.

Short-term borrowings: These borrowings may consist of federal funds purchased, securities sold under agreements to repurchase and the floating rate borrowings from the FHLB account. Due to the short-term nature of these borrowings, fair values approximate carrying values.

Long-term debt: The fair value of this debt is estimated using discounted cash flows based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements as of the determination date.

Off-balance sheet instruments: The carrying amount of commitments to extend credit and standby letters of credit approximates fair value. The carrying amount of the off-balance sheet financial instruments is based on fees currently charged to enter into such agreements.

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The estimated fair value and related carrying or notional amounts, as well as the level within the fair value hierarchy, of the Company’s financial instruments as of June 30, 2025 and December 31, 2024 were as follows:

		June 30, 2025
		Carrying Amount				Estimated Fair Value				Level 1				Level 2				Level 3
		(Dollars in Thousands)
Assets:
Cash and cash equivalents		$	53,955			$	53,955			$	53,955			$	—			$	—
Investment securities available-for-sale			156,576				156,576				29,089				127,487				—
Investment securities held-to-maturity			561				535				—				535				—
Federal funds sold and securities purchased under reverse repurchase agreements			4,850				4,850				—				4,850				—
Federal Home Loan Bank stock			1,741				1,741				—				—				1,741
Loans, net of allowance for credit losses			860,043				816,348				—				—				816,348
Other assets - interest rate floors			302				302				—				302				—
Other assets - interest rate swaps			1				1				—				1				—
Liabilities:
Deposits			986,846				930,474				—				930,474				—
Short-term borrowings			35,000				35,000				—				35,000				—
Long-term borrowings			10,909				9,865				—				9,865				—
Other liabilities - credit risk participation agreements			75				75				—				75				—

		December 31, 2024
		Carrying Amount				Estimated Fair Value				Level 1				Level 2				Level 3
		(Dollars in Thousands)
Assets:
Cash and cash equivalents		$	47,216			$	47,216			$	47,216			$	—			$	—
Investment securities available-for-sale			167,888				167,888				42,359				125,529				—
Investment securities held-to-maturity			682				642				—				642				—
Federal funds sold			5,727				5,727				—				5,727				—
Federal Home Loan Bank stock			1,256				1,256				—				—				1,256
Loans, net of allowance for credit losses			812,855				759,870				—				—				759,870
Other assets - interest rate swaps			678				678				—				678				—
Other assets - interest rate floors			18				18				—				18				—
Liabilities:
Deposits			972,557				893,814				—				893,814				—
Short-term borrowings			10,000				10,000				—				10,000				—
Long-term borrowings			10,872				9,590				—				9,590				—
Other liabilities - credit risk participation agreements			54				54				—				54				—

16.SEGMENT REPORTING

Bancshares is a bank holding company. Bancshares operates one banking subsidiary, the Bank. The Bank reporting unit is the only reportable segment of the Company. The Bank conducts a general commercial banking business and offers banking services such as demand, savings, individual retirement account and time deposits, personal and commercial loans, safe deposit box services and remote deposit capture. The Bank provides a wide range of commercial banking services to small- and medium-sized businesses, property managers, business executives, professionals and other individuals. The Bank also performs indirect lending through third-party retailers and currently conducts this lending in 17 states. Other than this indirect lending program, the Bank derives its revenue primarily in the southeast United States. The Bank does not have any customers that produce revenues of 10% or more.

The Company's chief operating decision makers (the "CODM") consist of a group of senior executive officers of Bancshares and the Bank that includes the chief executive officer, the chief financial officer, the chief retail, operations and technology officer, the chief risk officer, the chief commercial lending officer, and the chief consumer lending officer.

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The CODM uses net income to evaluate income generated from segment assets in deciding whether to reinvest profits into the Bank segment or into other parts of the entity, such as for acquisitions or to pay dividends. Net income is used to monitor budget versus actual results. The CODM also uses net income in competitive analysis by benchmarking to the Company’s competitors. The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation.

The accounting policies of the Bank segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the Bank segment and decides how to allocate resources based on net income that also is reported on the consolidated statement of operations as consolidated net income. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets.

The table below provides information related to the Company's Bank operating segment for the three and six months ended June 30, 2025 and 2024:

		Bank Segment
		For the three months ended June 30,								For the six months ended June 30,
		2025				2024				2025				2024
		(Dollars in Thousands)								(Dollars in Thousands)
Income:
Interest income		$	14,854			$	14,546			$	28,872			$	28,823
Non-interest income			849				835				1,724				1,700
Total income			15,703				15,381				30,596				30,523
Less:
Interest expense			5,378				5,370				10,499				10,607
Provision for credit losses			2,717				—				3,245				—
Salaries and employee benefits			3,945				3,890				7,681				7,978
Net occupancy and equipment			937				954				1,812				1,848
Computer services			421				444				833				887
Insurance expense and assessments			366				414				750				805
Fees for professional services			470				364				685				705
Postage, stationery and supplies			140				136				289				314
Telephone/data communication			186				193				385				385
Collection and recoveries			96				34				166				60
Directors fees			101				85				194				181
Software amortization			107				87				215				177
Other real estate/foreclosure expense, net			24				30				44				61
Other expense (1)			651				641				1,308				1,018
Provision for income taxes			9				612				563				1,263
Total expense			15,548				13,254				28,669				26,289
Consolidated net income		$	155			$	2,127			$	1,927			$	4,234

(1) Other expense includes advertising, travel and business development, and life insurance expense.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

DESCRIPTION OF THE BUSINESS

First US Bancshares, Inc., a Delaware corporation (“Bancshares” and, together with its subsidiary, the “Company”), is a bank holding company formed in 1983 registered under the Bank Holding Company Act of 1956, as amended (the “BHCA”). Bancshares operates one wholly owned banking subsidiary, First US Bank, an Alabama banking corporation (the “Bank”). Bancshares and the Bank are headquartered in Birmingham, Alabama.

The Bank conducts a general commercial banking business and offers banking services such as demand, savings, individual retirement account and time deposits, personal and commercial loans, safe deposit box services and remote deposit capture. The Bank operates and serves its customers through 15 full-service banking offices located in Birmingham, Butler, Calera, Centreville, Gilbertown, Grove Hill, Harpersville, Jackson, Thomasville, Tuscaloosa and Woodstock, Alabama; Knoxville and Powell, Tennessee; and Rose Hill, Virginia; as well as loan production offices in Mobile, Alabama and the Chattanooga, Tennessee area. The Bank provides a wide range of commercial banking services to small- and medium-sized businesses, property managers, business executives, professionals and other individuals. The Bank also performs indirect lending through third-party retailers and currently conducts this lending in 17 states, including Alabama, Arkansas, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Virginia. The Bank is the Company’s only reportable operating segment upon which management makes decisions regarding how to allocate resources and assess performance.

Delivery of the best possible financial services to customers remains an overall operational focus of the Company. The Company recognizes that attention to detail and responsiveness to customers’ desires are critical to customer satisfaction. The Company continues to upgrade technology, both in its financial services and in the training of its 148 full-time equivalent employees (as of June 30, 2025), to ensure customer satisfaction and convenience.

The preparation of the Company’s consolidated financial statements requires management to make subjective judgments associated with critical accounting estimates. These estimates are necessary to comply with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and general banking practices. A description of the Company's critical accounting estimates, which significantly affect the determination of the Company’s consolidated financial position, results of operations and cash flows, is set forth in Part II, Item 7 - Critical Accounting Estimates in the Company's 2024 Form 10-K.

The emphasis of this discussion is a comparison of assets, liabilities and shareholders’ equity as of June 30, 2025 to December 31, 2024, while comparing income and expense for the six months ended June 30, 2025 and 2024. All yields and ratios presented and discussed herein are recorded and presented on the accrual basis and not on the tax-equivalent basis, unless otherwise indicated.

This information should be read in conjunction with the Company’s unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this report and Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in the Company's 2024 Form 10-K. As used in the following discussion, the words “we,” “us,” “our” and the “Company” refer to Bancshares and its consolidated subsidiaries, unless the context indicates otherwise.

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RECENT MARKET CONDITIONS

Economic volatility continued through the six months ended June 30, 2025 due to a number of factors, including reductions in U.S. gross domestic product (“GDP”) during the first quarter of 2025, modest increases in the inflation rate as the second quarter came to a close, and ongoing uncertainty around the ultimate impact of trade tariffs introduced by the Trump administration in April 2025. In addition, geopolitical uncertainty continued with a number of ongoing military conflicts on the global front. The U.S. inflation rate, as measured by the consumer price index, accelerated to 2.7% in June 2025, the highest level since February 2025, and remains elevated above the Federal Reserve Bank’s (“FRB”) longer run target of 2%. The U.S. unemployment rate edged down to 4.1% in June 2025. The unemployment rate has held within a narrow 4.0% - 4.2% range since May 2024. First quarter 2025 GDP reflected annualized contraction of 0.5%, a decline from previous estimates. The weaker GDP figure was largely driven by significant declines in consumer spending and an increase in imports as businesses and consumers stockpiled goods ahead of expected price increases following tariff announcements. Preliminary estimates indicated that second quarter 2025 GDP grew by an annualized rate of 3.0%. The expansion in second quarter primarily reflected a substantial reduction in imports, largely offsetting the surge of import growth in the first quarter. Throughout the first six months of 2025, the Open Market Committee of the FRB did not change the federal funds rate, keeping the rate at a level of 4.25% to 4.50%. Minutes from the Committee’s June 2025 meetings indicated a shift toward higher expectations for interest rates through 2026, and implied two 25 basis point rate cuts in 2025 and two additional in 2026. Although volatile at times, treasury rates generally trended lower during the six-month period, indicating sentiment of further rate reductions to come later in 2025 and 2026. The combination of the continued heightened inflation level, stable employment levels, and volatile GDP provides a difficult environment in which to predict future movement in the federal funds rate and treasury rates.

The impacts of new trade and other economic policies in the U.S., including tariffs and the One Big Beautiful Bill Act, along with the threat to implement additional tariffs, have created economic uncertainty which will continue to evolve and impact our business in future periods. There is a risk that these policy changes could have a negative impact on certain of our customers, causing increased difficulty in repaying their loans or other obligations which could result in a higher level of credit losses in our loan portfolios with a corresponding impact on our results of operations. In the Company’s local markets, competition for deposits has remained at elevated levels causing difficulty in lowering funding costs amid a declining interest rate environment. Uncertainty has continued with respect to commercial lending as business firms assess the potential impact of trade tariffs and the interest rate environment on their activities. However, while consumer spending has generally slowed on a macro-basis, the Company has experienced significant growth in consumer indirect lending at the higher end of the credit spectrum during the first six months of 2025. Management continues to monitor ongoing developments related to economic conditions, the federal funds rate and market interest rates. The competitive environment, combined with ongoing economic uncertainty, provides a challenging environment in which to maintain and increase the Company’s net interest margin. Should economic conditions worsen, the Company is exposed to increased credit risk from both commercial and consumer borrowers. Furthermore, should market interest rates or the federal funds rate increase or decrease at significant levels, particularly over a short period of time, the Company’s net interest margin and net interest income could be negatively impacted.

EXECUTIVE OVERVIEW

The Company earned net income of $0.2 million, or $0.03 per diluted common share, during the three months ended June 30, 2025, compared to $2.1 million, or $0.34 per diluted common share, for the three months ended June 30, 2024. For the six months ended June 30, 2025, net income totaled $1.9 million, or $0.32 per diluted share, compared to $4.2 million, or $0.68 per diluted share for the six months ended June 30, 2024. The decrease in net income during both the three months and the six months ended June 30, 2025, compared to the previous periods, resulted primarily from an increase in the Company’s provision for credit losses on loans and leases.

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Summarized condensed consolidated statements of operations are included below for the three and six months ended June 30, 2025 and 2024.

		Three Months Ended								Six Months Ended
		June 30,				June 30,				June 30,				June 30,
		2025				2024				2025				2024
		(Dollars in Thousands, Except Per Share Data)
Interest income		$	14,854			$	14,546			$	28,872			$	28,823
Interest expense			5,378				5,370				10,499				10,607
Net interest income			9,476				9,176				18,373				18,216
Provision for credit losses			2,717				—				3,245				—
Net interest income after provision for credit losses			6,759				9,176				15,128				18,216
Non-interest income			849				835				1,724				1,700
Non-interest expense			7,444				7,272				14,362				14,419
Income before income taxes			164				2,739				2,490				5,497
Provision for income taxes			9				612				563				1,263
Net income		$	155			$	2,127			$	1,927			$	4,234
Basic net income per share		$	0.03			$	0.36			$	0.33			$	0.72
Diluted net income per share		$	0.03			$	0.34			$	0.32			$	0.68
Dividends per share		$	0.07			$	0.05			$	0.14			$	0.10

The discussion that follows summarizes the most significant activity that drove changes in the Company’s operating results during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024.

Net Interest Income and Margin

Net interest income increased by $0.2 million, or 0.9%, comparing the six months ended June 30, 2025 to the six months ended June 30, 2024. Net interest margin was 3.56% for the six months ended June 30, 2025, compared to 3.67% for the six months ended June 30, 2024. The increase in net interest income comparing the two six-month periods resulted from a combination of increased average interest-earning-asset balances and decreased average rates on deposits. While net interest income increased modestly, net interest margin decreased due to the significance increase in average interest-earning assets over the period, combined with a declining interest rate environment. Average interest-earnings assets increased by $42.9 million comparing the six months ended June 30, 2025 to the six months ended June 30, 2024, driven by growth in consumer indirect loans and, to a lesser extent, investment securities.

Provision for Credit Losses

For the six months ended June 30, 2025, the Company recorded a provision for credit losses of $3.2 million. No provision for credit losses was recorded for the six months ended June 30, 2024. Of the total provision recorded during the 2025 period, $2.3 million was associated with the consumer indirect loan portfolio, while $0.9 million was associated with specific reserves added for two individually evaluated commercial loans. The increased provision associated with the consumer indirect portfolio was attributable to both significant growth in the portfolio during the six months ended June 30, 2025, as well as an increase in net charge-offs. As of June 30, 2025, the Company’s allowance for credit losses ("ACL") on loans and leases as a percentage of total loans was 1.31%, compared to 1.24% as of December 31, 2024.

Non-interest Income

Non-interest income remained relatively consistent, totaling $1.7 million for both the six months ended June 30, 2025 and 2024.

Non-interest Expense

Non-interest expense remained consistent, totaling $14.4 million for both the six months ended June 30, 2025 and 2024.

Total Assets

As of June 30, 2025, the Company’s assets totaled $1,143.4 million, compared to $1,101.1 million as of December 31, 2024, an increase of 3.8%.

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Loans

Total loans increased by $48.4 million, or 5.9%, as of June 30, 2025, compared to December 31, 2024. The increase was driven primarily by growth of $66.4 million in consumer indirect loans during the six months ended June 30, 2025. The indirect lending platform focuses on recreational and equipment consumer lending on the higher end of the credit spectrum. Collateral financed in the indirect portfolio primarily includes boats, recreational vehicles/campers, horse trailers and cargo trailers. The weighted average credit score of new indirect loans financed during the six months ended June 30, 2025 was 798, while the weighted average credit score for the entire portfolio was 781. In addition to the indirect portfolio, the Company also grew its multi-family residential real estate lending category during the six months ended June 30, 2025 by $17.8 million. Loan growth during the six months ended June 30, 2025 was partially offset by reductions of $35.8 million in other lending categories, primarily construction and non-residential commercial real estate. For the six months ended June 30, 2025, average loan balances increased by $20.4 million, or 2.5%, compared to the six months ended June 30, 2024.

Asset Quality

Nonperforming assets, including loans in non-accrual status and other real estate owned, totaled $3.7 million as of June 30, 2025, compared to $5.5 million as of December 31, 2024. As a percentage of total assets, nonperforming assets totaled 0.33% as of June 30, 2025, compared to 0.50% as of December 31, 2024. For the six months ended June 30, 2025, net charge-offs as a percentage of average loans totaled 0.47%, compared to 0.10% for the six months ended June 30, 2024. The increase in net charge-offs during the six months ended June 30, 2025 was due to a partial charge-off of one individually evaluated commercial loan of $1.2 million, as well as an increase in charge-offs associated with the indirect portfolio. For the six months ended June 30, 2025, net charge-offs associated with the indirect portfolio totaled $0.9 million, or 0.55% of average loans, compared to $0.5 million, or 0.33% of average loans, for the six months ended June 30, 2024.

Deposits

Total deposits increased by $14.3 million, or 1.5%, during the six months ended June 30, 2025, due primarily to increases in interest-bearing demand deposit accounts, as well as the addition of brokered certificates of deposit obtained to assist in the management of deposit costs. Core deposits, which exclude time deposits of $250 thousand or more and all wholesale brokered deposits, totaled $816.1 million, or 82.7% of total deposits, as of June 30, 2025, compared to $837.7 million, or 86.1% of total deposits, as of December 31, 2024.

Short-term Borrowings

As of June 30, 2025, the Company had $35.0 million in short-term borrowings outstanding, compared to $10.0 million outstanding as of December 31, 2024. The short-term borrowings were held as part of the Company’s efforts to maintain on-balance sheet liquidity levels while repricing deposits at lower rates. As of both June 30, 2025 and December 31, 2024, all outstanding short-term borrowings had remaining maturities of less than 30 days. The amount outstanding as of June 30, 2025 included $20.0 million borrowed from the Federal Home Loan Bank of Atlanta (“FHLB”) and $15.0 million borrowed from the Federal Reserve Bank’s (“FRB”) discount window. As of December 31, 2024, all short-term borrowings outstanding were borrowed exclusively from the FHLB.

Deployment of Funds

As of June 30, 2025, the Company held cash, federal funds sold and securities purchased under reverse repurchase agreements totaling $58.8 million, or 5.1% of total assets, compared to $52.9 million, or 4.8% of total assets, as of December 31, 2024. Investment securities, including both the available-for-sale and held-to-maturity portfolios, totaled $157.1 million as of June 30, 2025, compared to $168.6 million as of December 31, 2024. As of June 30, 2025, the expected average life of securities in the investment portfolio was 3.7 years, compared to 3.6 years as of December 31, 2024.

Shareholders’ Equity

Shareholders’ equity increased by $3.3 million, or 3.3%, as of June 30, 2025, compared to December 31, 2024. The increase in shareholders’ equity during the six months ended June 30, 2025 resulted primarily from earnings, net of dividends paid and repurchases of shares of the Company's common stock. In addition, shareholders' equity was positively impacted during the six months ended June 30, 2025 by reductions in the Company's accumulated other comprehensive loss resulting from changes in market interest rates, as well as the maturity of lower yielding investment securities.

Cash Dividends

During the six months ended June 30, 2025, the Company declared cash dividends totaling $0.14 per share on its common stock, compared to cash dividends totaling $0.10 per share on its common stock during the six months ended June 30, 2024.

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Share Repurchases

During the six months ended June 30, 2025, the Company completed the repurchase of 40,000 shares of its common stock at a weighted average price of $13.38 per share. The repurchases were completed under the Company’s previously announced share repurchase program. As of June 30, 2025, 872,813 shares remained available for repurchase under the program.

Regulatory Capital

During the six months ended June 30, 2025, the Bank continued to maintain capital ratios at higher levels than required to be considered a “well-capitalized” institution under applicable banking regulations. As of June 30, 2025, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 10.70%. Its total capital ratio was 11.93%, and its Tier 1 leverage ratio was 9.23%.

Liquidity

As of June 30, 2025, the Company continued to maintain funding capacity sufficient to provide adequate liquidity for loan growth, capital expenditures and ongoing operations. The Company benefits from a strong core deposit base, a liquid investment securities portfolio and access to funding from a variety of sources, including federal funds lines with other banking institutions, FHLB advances, the FRB's discount window, and brokered deposits.

Banking Center Growth

During the six months ended June 30, 2025, the Company continued its renovation of a banking center office in Daphne, Alabama that was purchased from another financial institution. This location is expected to serve as the Bank’s initial deposit gathering facility in the Daphne/Mobile area. It is currently anticipated that the location will open to the public during the first half of 2026. In addition, during the six months ended June 30, 2025, the Company purchased land in Mobile, Alabama. The Company intends to develop the land into an office complex that will house the Company’s indirect lending operation, as well as provide an additional banking center in the area.

RESULTS OF OPERATIONS

Net Interest Income

Net interest income is calculated as the difference between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds. Fluctuations in interest rates, as well as volume and mix changes in earning assets and interest-bearing liabilities, can materially impact net interest income. The Company’s earning assets consist of loans, investment securities, Federal Home Loan Bank stock, federal funds sold by the Bank, securities purchased under reverse repurchase agreements and interest-bearing deposits in banks. Interest-bearing liabilities consist of interest-bearing demand deposits and savings and time deposits, as well as short- and long-term borrowings.

The following tables show the average balances of each principal category of assets, liabilities and shareholders’ equity for the three and six months ended June 30, 2025 and 2024. Additionally, the tables provide an analysis of interest revenue or expense associated with each category, along with the accompanying yield or rate percentage. Net interest margin is calculated for each period presented as net interest income divided by average total interest-earning assets.

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		Three Months Ended												Three Months Ended
		June 30, 2025												June 30, 2024
		Average Balance				Interest				Annualized Yield/ Rate %				Average Balance				Interest				Annualized Yield/ Rate %
ASSETS
Interest-earning assets:
Loans (1)		$	857,707			$	12,989				6.07	%		$	819,590			$	12,930				6.35	%
Investment securities			154,576				1,335				3.46	%			143,112				1,108				3.11	%
Federal Home Loan Bank stock			1,320				26				7.90	%			969				19				7.89	%
Federal funds sold and securities purchased under reverse repurchase agreements			4,850				53				4.38	%			4,850				66				5.47	%
Interest-bearing deposits in banks			40,710				451				4.44	%			30,965				423				5.49	%
Total interest-earning assets			1,059,163				14,854				5.63	%			999,486				14,546				5.85	%
Noninterest-earning assets			63,179												65,794
Total assets		$	1,122,342											$	1,065,280
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
Demand deposits		$	203,734			$	438				0.86	%		$	203,784			$	424				0.84	%
Money market/savings deposits			273,185				1,743				2.56	%			247,211				1,627				2.65	%
Time deposits			356,602				2,944				3.31	%			347,010				3,159				3.66	%
Total interest-bearing deposits			833,521				5,125				2.47	%			798,005				5,210				2.63	%
Noninterest-bearing demand deposits			155,432				—				—				151,117				—				—
Total deposits			988,953				5,125				2.08	%			949,122				5,210				2.21	%
Borrowings			22,966				253				4.42	%			14,838				160				4.34	%
Total funding liabilities			1,011,919				5,378				2.13	%			963,960				5,370				2.24	%
Other noninterest-bearing liabilities			9,100												8,638
Shareholders’ equity			101,323												92,682
Total liabilities and shareholders' equity		$	1,122,342											$	1,065,280
Net interest income (2)						$	9,476											$	9,176
Net interest margin											3.59	%											3.69	%

(1)	For the purpose of these computations, non-accruing loans are included in the average loan amounts outstanding. These loans averaged $3.0 million and $2.2 million for the three months ended June 30, 2025 and 2024, respectively.
(2)	Loan fees are included in interest amounts presented. Loan fees totaled $0.2 million for both the three months ended June 30, 2025 and 2024.

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		Six Months Ended												Six Months Ended
		June 30, 2025												June 30, 2024
		Average Balance				Interest				Annualized Yield/ Rate %				Average Balance				Interest				Annualized Yield/ Rate %
ASSETS
Interest-earning assets:
Loans (1)		$	841,210			$	25,230				6.05	%		$	820,787			$	25,783				6.32	%
Investment securities			160,377				2,747				3.45	%			138,915				1,973				2.86	%
Federal Home Loan Bank stock			1,331				50				7.58	%			941				37				7.91	%
Federal funds sold and securities purchased under reverse repurchase agreements			4,850				106				4.41	%			5,729				155				5.44	%
Interest-bearing deposits in banks			33,505				739				4.45	%			31,985				875				5.50	%
Total interest-earning assets			1,041,273				28,872				5.59	%			998,357				28,823				5.81	%
Noninterest-earning assets			63,664												66,808
Total assets		$	1,104,937											$	1,065,165
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
Demand deposits		$	207,909			$	930				0.90	%		$	202,522			$	676				0.67	%
Money market/savings deposits			265,160				3,287				2.50	%			253,816				3,511				2.78	%
Time deposits			343,494				5,777				3.39	%			341,916				6,122				3.60	%
Total interest-bearing deposits			816,563				9,994				2.47	%			798,254				10,309				2.60	%
Noninterest-bearing demand deposits			155,363				—				—				150,380				—				—
Total deposits			971,926				9,994				2.07	%			948,634				10,309				2.19	%
Borrowings			23,184				505				4.39	%			14,692				298				4.08	%
Total funding liabilities			995,110				10,499				2.13	%			963,326				10,607				2.21	%
Other noninterest-bearing liabilities			9,294												9,675
Shareholders’ equity			100,533												92,164
Total liabilities and shareholders' equity		$	1,104,937											$	1,065,165
Net interest income (2)						$	18,373											$	18,216
Net interest margin											3.56	%											3.67	%

(1)	For the purpose of these computations, non-accruing loans are included in the average loan amounts outstanding. These loans averaged $3.5 million and $2.3 million for the six months ended June 30, 2025 and 2024, respectively.
(2)	Loan fees are included in interest amounts presented. Loan fees totaled $0.4 million and $0.3 million for the six months ended June 30, 2025 and 2024, respectively.

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The following tables summarize the impact of variances in volume and rate of interest-earning assets and interest-bearing liabilities on components of net interest income.

		Three Months Ended June 30, 2025												Six Months Ended June 30, 2025
		Compared to												Compared to
		Three Months Ended June 30, 2024												Six Months Ended June 30, 2024
		Increase (Decrease)												Increase (Decrease)
		Due to Change In:												Due to Change In:
		Volume				Average Yield/Rate				Net				Volume				Average Yield/Rate				Net
		(Dollars in Thousands)
Interest earned on:
Total loans		$	601			$	(542	)		$	59			$	642			$	(1,195	)		$	(553	)
Investment securities			89				138				227				305				469				774
Federal Home Loan Bank stock			7				—				7				15				(2	)			13
Federal funds sold and securities purchased under reverse repurchase agreements			—				(13	)			(13	)			(24	)			(25	)			(49	)
Interest-bearing deposits in banks			133				(105	)			28				42				(178	)			(136	)
Total interest-earning assets			830				(522	)			308				980				(931	)			49
Interest expense on:
Demand deposits			—				14				14				18				236				254
Money market/savings deposits			171				(55	)			116				157				(381	)			(224	)
Time deposits			87				(302	)			(215	)			28				(373	)			(345	)
Borrowings			88				5				93				172				35				207
Total interest-bearing liabilities			346				(338	)			8				375				(483	)			(108	)
Increase (decrease) in net interest income		$	484			$	(184	)		$	300			$	605			$	(448	)		$	157

Interest income increased by $49 thousand, comparing the six months ended June 30, 2025 to the six months ended June 30, 2024. While increased average earning-asset balances contributed $1.0 million in interest income growth, this growth was mostly offset by reductions in average yield. Amid a declining interest rate environment, average yields decreased in all interest-earning categories, except investment securities which provided the majority of interest income growth comparing the two six-month periods.

Interest expense decreased by $0.1 million, comparing the six months ended June 30, 2025 to the six months ended June 30, 2024. While a decrease in average rates paid on deposits contributed $0.5 million to the decrease in interest expense, these savings were partially offset by the impact of growth in average deposits and borrowings which increased interest expense by $0.4 million comparing the two six-month periods.

The Company’s net interest income and net interest margin during the six months ended June 30, 2025 continued to be impacted by changes in the interest rate environment that began during the latter months of 2024. Notably, between September and December 2024, the federal funds rate was reduced by 100 basis points, and generally, the Company’s earning assets repriced more quickly than interest-bearing liabilities during the latter part of 2024, reducing the Company’s net interest margin to 3.41% during the three months ended December 31 2024. During the six months ended June 30, 2025, management continued efforts to both maximize earning asset growth and reduce interest expense, resulting in an improvement in net interest margin by 12 basis points, comparing the first quarter of 2025 to the fourth quarter of 2024, and an additional six basis points, comparing the second quarter of 2025 to the first quarter of 2025. While net interest margin improved for two consecutive quarters, it remained below the levels recorded during the earlier periods of 2024. For the six months ended June 30, 2025, net interest margin was 3.56%, compared to 3.67% for the six months ended June 30, 2024. While management is continuing efforts to improve net interest margin, the results of these efforts cannot be fully predicted. Should market interest rates increase or decrease at significant levels, particularly over a short period of time, the Company’s net interest margin and net interest income could be negatively impacted.

48

Provision for Credit Losses

The Company recorded a provision for credit losses of $3.2 million during the six months ended June 30, 2025. No provision for credit losses was recorded during the six months ended June 30, 2024. Of the total provision recorded during the 2025 period, $2.3 million was associated with the consumer indirect loan portfolio, while $0.9 million was associated with specific reserves added for two individually evaluated commercial loans. The increased provision associated with the consumer indirect portfolio was attributable to both significant growth in the portfolio during the six months ended June 30, 2025, as well as an increase in net charge-offs.

Net charge-offs totaled $2.0 million and $0.4 million for the six months ended June 30, 2025 and 2024, respectively. Of the net charge-offs recorded during the six months ended June 30, 2025, $1.2 million was associated with one individually evaluated commercial loan and $0.9 million was associated with the consumer indirect loan portfolio. These net charge-offs were partially offset by $0.1 million in net recoveries associated with the consumer direct portfolio. The $1.2 million charge-off on the individually evaluated commercial loan had been fully reserved during 2024. Of the net charge-offs recorded during the six months ended June 30, 2024, $0.5 million was associated with the consumer indirect portfolio, partially offset by $0.1 million in net recoveries in the consumer direct portfolio.

As of June 30, 2025, the Company’s ACL as a percentage of total loans and leases was 1.31%, compared to 1.24% as of December 31, 2024. While we believe that the methodologies and calculations that have been used in the determination of the ACL are adequate, the determination of the appropriateness of the ACL is complex and requires judgment by management about the effects of matters that are inherently uncertain. Factors beyond our control, such as changes in economic forecasts related to the national economy, changes in consumer behavior, or economic deterioration in service areas in which the Company operates, may negatively and materially affect asset quality and the adequacy of the ACL, as well as the resulting provision for credit losses.

Non-Interest Income

Non-interest income represents fees and income derived from sources other than interest-earning assets. The following table presents the major components of non-interest income for the periods indicated:

		Three Months Ended June 30,																Six Months Ended June 30,
		2025				2024				$ Change				% Change				2025				2024				$ Change				% Change
		(Dollars in Thousands)																(Dollars in Thousands)
Service charges and other fees on deposit accounts		$	278			$	298			$	(20	)			(6.7	)%		$	566			$	597			$	(31	)			(5.2	)%
Bank-owned life insurance			138				133				5				3.8	%			275				264				11				4.2	%
Lease income			269				253				16				6.3	%			553				510				43				8.4	%
ATM fee income			98				97				1				1.0	%			182				182				—				—
Other income			66				54				12				22.2	%			148				147				1				0.7	%
Total non-interest income		$	849			$	835			$	14				1.7	%		$	1,724			$	1,700			$	24				1.4	%

49

The Company’s non-interest income remained relatively consistent, totaling $1.7 million for both the six months ended June 30, 2025 and 2024. Management continues to evaluate opportunities to add non-interest revenue streams and grow existing streams; however, significant variation in non-interest income is not expected in the near term.

Non-Interest Expense

Non-interest expense represents expenses incurred from sources other than interest-bearing liabilities. The following table presents the major components of non-interest expense for the periods indicated:

		Three Months Ended June 30,																Six Months Ended June 30,
		2025				2024				$ Change				% Change				2025				2024				$ Change				% Change
		(Dollars in Thousands)																(Dollars in Thousands)
Salaries and employee benefits		$	3,945			$	3,890			$	55				1.4	%		$	7,681			$	7,978			$	(297	)			(3.7	)%
Net occupancy and equipment			937				954				(17	)			(1.8	)%			1,812				1,848				(36	)			(1.9	)%
Computer services			421				444				(23	)			(5.2	)%			833				887				(54	)			(6.1	)%
Insurance expense and assessments			366				414				(48	)			(11.6	)%			750				805				(55	)			(6.8	)%
Fees for professional services			470				364				106				29.1	%			685				705				(20	)			(2.8	)%
Postage, stationery and supplies			140				136				4				2.9	%			289				314				(25	)			(8.0	)%
Telephone/data communications			186				193				(7	)			(3.6	)%			385				385				—				—
Collection and recoveries			96				34				62				182.4	%			166				60				106				176.7	%
Directors fees			101				85				16				18.8	%			194				181				13				7.2	%
Software amortization			107				87				20				23.0	%			215				177				38				21.5	%
Other real estate/foreclosure expense, net			24				30				(6	)			(20.0	)%			44				61				(17	)			(27.9	)%
Other expense			651				641				10				1.6	%			1,308				1,018				290				28.5	%
Total non-interest expense		$	7,444			$	7,272			$	172				2.4	%		$	14,362			$	14,419			$	(57	)			(0.4	)%

Non-interest expense totaled $14.4 million during both the six months ended June 30, 2025 and 2024. In recent years, as a result of strategic initiatives introduced by management beginning in 2021, the Company was able to reduce and then maintain non-interest expense at relatively flat levels. While this trend has continued through the six months ended June 30, 2025, the majority of efficiency improvements from the Company’s strategic initiatives have now been realized. Therefore, we would expect non-interest expense to increase over time in accordance with inflationary trends, market competition for personnel, the pace of technological change, and other factors including the Company’s ongoing growth.

Provision for Income Taxes

The provision for income taxes was $0.6 million and $1.3 million for the six months ended June 30, 2025 and 2024, respectively. The Company’s effective tax rate was 22.6% and 23.0%, respectively, for the same periods.

The effective tax rate is impacted by recurring items, such as changes in tax-exempt interest income earned from bank-qualified municipal bonds and loans and the cash surrender value of bank-owned life insurance. Management makes decisions about whether to invest in tax-exempt instruments on a case-by-case basis after considering a number of factors, including investment return, credit quality and the consistency of such investments with the Company’s overall strategy. The Company’s effective tax rate is expected to fluctuate commensurate with the level of these investments as compared to total pre-tax income.

In July 2025, the One Big Beautiful Bill Act (the "OBBBA") was signed into law, which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key provisions from the Tax Cuts and Jobs Act of 2017 and expanding certain incentives from the Inflation Reduction Act of 2022 while accelerating the phase-out of others. We do not anticipate a material impact on our income tax expense and taxes payable from the tax provisions of the OBBBA

BALANCE SHEET ANALYSIS

Investment Securities

The investment securities portfolio is used by management to provide liquidity, to generate interest income and for use as collateral for public deposits and wholesale funding. Risk and return can be adjusted by altering the duration, composition and/or balance of the portfolio. The expected average life of securities in the investment portfolio was 3.7 years and 3.6 years as of June 30, 2025 and December 31, 2024, respectively.

Available-for-sale securities are recorded at estimated fair value, with unrealized gains or losses recognized, net of taxes, in accumulated other comprehensive loss, a separate component of shareholders’ equity. As of June 30, 2025, available-for-sale securities totaled $156.6 million, or 99.6% of the total investment portfolio, compared to $167.9 million, or 99.6% of the total investment portfolio, as of December 31, 2024.

50

Available-for-sale securities consisted of residential and commercial mortgage-backed securities, U.S. Treasury securities, corporate bonds, obligations of U.S. government-sponsored agencies, and obligations of state and political subdivisions.

Held-to-maturity securities are recorded at amortized cost and represent securities that the Company both intends and has the ability to hold to maturity. As of June 30, 2025, held-to-maturity securities totaled $0.6 million, or 0.4% of the total investment portfolio, compared to $0.7 million, or 0.4% of the total investment portfolio, as of December 31, 2024. Held-to-maturity securities consisted of commercial mortgage-backed securities, obligations of U.S. government-sponsored agencies, and obligations of state and political subdivisions.

Net unrealized losses in the available-for-sale portfolio totaled $3.0 million as of June 30, 2025, compared to $6.7 million as of December 31, 2024. Net unrealized losses within the available-for-sale portfolio were recognized, net of tax, in accumulated other comprehensive loss.

As of June 30, 2025, the Company evaluated both the available-for-sale and held-to-maturity portfolios for credit losses and concluded that no credit losses were included in either portfolio and that the unrealized losses in both portfolios resulted from the prevailing interest rate environment.

Loans and Leases

The Company’s total loan portfolio increased by $48.4 million, or 5.9%, as of June 30, 2025, compared to December 31, 2024. The tables below summarize loan balances by portfolio category, as well as the ACL, as of the end of each of the most recent five quarters as of June 30, 2025:

		Quarter Ended
		2025								2024
		June 30,				March 31,				December 31,				September 30,				June 30,
		(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans		$	48,101			$	58,572			$	65,537			$	53,098			$	72,183
Secured by 1-4 family residential properties			67,587				68,523				69,999				70,067				70,272
Secured by multi-family residential properties			118,807				106,374				101,057				100,627				97,527
Secured by non-residential commercial real estate			215,035				214,065				227,751				224,611				218,386
Commercial and industrial loans			40,986				45,166				44,238				44,872				46,249
Consumer loans:
Direct			4,836				4,610				4,774				5,018				5,272
Indirect			376,079				351,025				309,683				305,015				309,237
Total loans			871,431				848,335				823,039				803,308				819,126
Allowance for credit losses on loans and leases			11,388				10,405				10,184				10,116				10,227
Net loans		$	860,043			$	837,930			$	812,855			$	793,192			$	808,899

As of June 30, 2025 and December 31, 2024, the composition of the non-residential commercial real estate loan portfolio was as follows:

	June 30, 2025										December 31, 2024
	Owner Occupied			Non-Owner Occupied			Total				Owner Occupied			Non-Owner Occupied			Total
	(Dollars in Thousands)
Office	$	7,374		$	34,686		$	42,060			$	10,093		$	36,811		$	46,904
Retail single credit tenant		613			39,942			40,555				—			41,357			41,357
Industrial		5,608			49,556			55,164				5,696			45,477			51,173
Storage		754			14,631			15,385				780			14,835			15,615
Retail services		14,699			—			14,699				15,031			—			15,031
Retail with anchor		2,667			3,582			6,249				3,075			13,628			16,703
Nursing homes		17,963			—			17,963				17,961			—			17,961
Other		12,419			10,541			22,960				11,989			11,018			23,007
Total loans	$	62,097		$	152,938		$	215,035			$	64,625		$	163,126		$	227,751

As of June 30, 2025 and December 31, 2024, the composition of the construction, land development, and other land loans loan portfolio was as follows:

51

	June 30, 2025										December 31, 2024
	Owner Occupied			Non-Owner Occupied			Total				Owner Occupied			Non-Owner Occupied			Total
	(Dollars in Thousands)
Apartments	$	—		$	42,519		$	42,519			$	—		$	61,118		$	61,118
Farmland		2,857			—			2,857				3,057			—			3,057
Other		770			1,955			2,725				440			922			1,362
Total loans	$	3,627		$	44,474		$	48,101			$	3,497		$	62,040		$	65,537

The following table classifies the Company's fixed and variable rate loans as of June 30, 2025 according to contractual maturities of: (1) one year or less, (2) after one year through five years, (3) after five years through fifteen years, and (4) after fifteen years:

		June 30, 2025
		One Year or Less				After One Year Through Five Years				After Five Years Through Fifteen Years				After Fifteen Years				Total
		(Dollars in Thousands)
Total loans:
Real estate loans:
Construction, land development and other land loans		$	27,078			$	20,992			$	31			$	—			$	48,101
Secured by 1-4 family residential properties			1,964				13,392				22,807				29,424				67,587
Secured by multi-family residential properties			51,232				65,635				405				1,535				118,807
Secured by non-residential commercial real estate			34,412				117,687				62,936				—				215,035
Commercial and industrial loans			13,056				20,590				7,340				—				40,986
Consumer loans:
Direct			1,594				3,216				26				—				4,836
Indirect			547				17,586				357,946				—				376,079
Total loans		$	129,883			$	259,098			$	451,491			$	30,959			$	871,431
Loans with fixed interest rates:
Real estate loans:
Construction, land development and other land loans		$	328			$	2,787			$	31			$	—			$	3,146
Secured by 1-4 family residential properties			911				5,901				5,086				13,548				25,446
Secured by multi-family residential properties			64				35,312				405				165				35,946
Secured by non-residential commercial real estate			18,493				55,946				54,333				—				128,772
Commercial and industrial loans			6,420				13,779				7,252				—				27,451
Consumer loans:
Direct			1,581				3,216				26				—				4,823
Indirect			547				17,586				357,946				—				376,079
Total loans with fixed interest rates		$	28,344			$	134,527			$	425,079			$	13,713			$	601,663
Loans with variable interest rates:
Real estate loans:
Construction, land development and other land loans		$	26,750			$	18,205			$	—			$	—			$	44,955
Secured by 1-4 family residential properties			1,053				7,491				17,721				15,876				42,141
Secured by multi-family residential properties			51,168				30,323				—				1,370				82,861
Secured by non-residential commercial real estate			15,919				61,741				8,603				—				86,263
Commercial and industrial loans			6,636				6,811				88				—				13,535
Consumer loans:
Direct			13				—				—				—				13
Indirect			—				—				—				—				—
Total loans with variable interest rates		$	101,539			$	124,571			$	26,412			$	17,246			$	269,768

52

Allowance for Credit Losses on Loans and Leases

The tables below summarize changes in the ACL on loans and leases for each of the most recent five quarters as of June 30, 2025:

		Quarter Ended
		2025								2024
		June 30,				March 31,				December 31,				September 30,				June 30,
		(Dollars in Thousands)
Balance at beginning of period		$	10,405			$	10,184			$	10,116			$	10,227			$	10,436
Charge-offs:
Real estate loans:
Construction, land development and other land loans			—				—				—				—				—
Secured by 1-4 family residential properties			—				—				—				—				—
Secured by multi-family residential properties			—				—				—				—				—
Secured by non-residential commercial real estate			—				—				(248	)			—				—
Commercial and industrial loans			(1,191	)			—				(8	)			(16	)			(97	)
Consumer loans:
Direct			(5	)			—				(9	)			(25	)			(6	)
Indirect			(595	)			(422	)			(332	)			(370	)			(313	)
Total charge-offs			(1,791	)			(422	)			(597	)			(411	)			(416	)
Recoveries:
Real estate loans:
Construction, land development and other land loans			—				—				—				—				20
Secured by 1-4 family residential properties			5				6				10				11				12
Secured by multi-family residential properties			—				—				—				—				—
Secured by non-residential commercial real estate			—				—				—				—				—
Commercial and industrial loans			—				16				2				—				—
Consumer loans:
Direct			50				57				51				71				78
Indirect			44				74				39				78				97
Total recoveries			99				153				102				160				207
Net charge-offs			(1,692	)			(269	)			(495	)			(251	)			(209	)
Provision for credit losses on loans and leases			2,675				490				563				140				—
Ending balance		$	11,388			$	10,405			$	10,184			$	10,116			$	10,227
Ending balance as a percentage of loans			1.31	%			1.23	%			1.24	%			1.26	%			1.25	%
Net charge-offs as a percentage of average loans			0.79	%			0.13	%			0.24	%			0.12	%			0.10	%

Allowance for Credit Losses on Unfunded Lending Commitments

The Company records an ACL on unfunded lending commitments in which the Company is exposed to credit risk via a present contractual obligation to extend credit unless the obligation is unconditionally cancellable. Unconditional lending commitments generally include unfunded term loan agreements, home equity lines of credit, lines of credit, and demand deposit account overdraft protection.

As of June 30, 2025 and December 31, 2024, the Company’s reserve for unfunded commitments, which is recorded in other liabilities in the Company’s consolidated balance sheets, totaled $0.5 million and $0.4 million, respectively.

53

Nonperforming Assets

Nonperforming assets at the end of the five most recent quarters as of June 30, 2025 were as follows:

		Quarter Ended
		2025								2024
		June 30,				March 31,				December 31,				September 30,				June 30,
		(Dollars in Thousands)
Non-accrual loans		$	2,447			$	3,668			$	3,949			$	6,051			$	2,337
Other real estate owned			1,298				1,328				1,509				538				542
Total		$	3,745			$	4,996			$	5,458			$	6,589			$	2,879
Nonperforming assets as a percentage of total loans and other real estate			0.43	%			0.59	%			0.66	%			0.83	%			0.35	%
Nonperforming assets as a percentage of total assets			0.33	%			0.44	%			0.50	%			0.60	%			0.27	%
Non-accrual loans as a percentage of total loans			0.28	%			0.43	%			0.48	%			0.75	%			0.29	%
ACL as a percentage of non-accrual loans			465.39	%			283.67	%			257.89	%			167.18	%			437.61	%

Allocation of Allowance for Credit Losses on Loans and Leases

While no portion of the ACL is in any way restricted to any individual loan or group of loans and the entire allowance is available to absorb losses from any and all loans, the following table shows an allocation of the ACL for the periods indicated:

		As of and for the Six Months Ended												As of and for the Year Ended
		June 30, 2025												December 31, 2024
		Allowance Allocation				Allowance as Percentage of Total Loans				Net Charge-offs as a Percentage of Average Loans				Allowance Allocation				Allowance as Percentage of Total Loans				Net Charge-offs as a Percentage of Average Loans
		(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans		$	283				0.59	%			—			$	352				0.54	%			-0.03	%
Secured by 1-4 family residential properties			412				0.61	%			-0.03	%			406				0.58	%			-0.07	%
Secured by multi-family residential properties			714				0.60	%			—				546				0.54	%			—
Secured by non-residential commercial real estate			1,605				0.75	%			—				1,428				0.63	%			0.11	%
Commercial and industrial loans			1,003				2.45	%			5.35	%			1,531				3.46	%			0.22	%
Consumer loans:
Direct			83				1.72	%			-4.19	%			49				1.03	%			-4.09	%
Indirect			7,288				1.94	%			0.55	%			5,872				1.90	%			0.35	%
Total		$	11,388				1.31	%			0.47	%		$	10,184				1.24	%			0.14	%

Deposits

Total deposits increased to $986.8 million as of June 30, 2025, from $972.6 million as of December 31, 2024, an increase of 1.5%. The increase was due primarily to increases in interest-bearing money market accounts, as well as the addition of brokered certificates of deposit obtained to assist in the management of deposit costs over specific terms. Core deposits, which exclude time deposits of $250 thousand or more and all brokered deposits, provide a relatively stable funding source that supports earning assets. Core deposits totaled $816.1 million, or 82.7% of total deposits, as of June 30, 2025, compared to $837.7 million, or 86.1% of total deposits, as of December 31, 2024.

Core deposits have historically been the Company’s primary source of funding and have enabled the Company to successfully meet both short-term and long-term liquidity needs. Management anticipates that core deposits will continue to be the Company’s primary source of funding in the future. Management will continue to monitor deposit levels closely to help ensure an adequate level of funding for the Company’s activities. However, various economic and competitive factors could affect this funding source in the future, including increased competition from other financial institutions in deposit gathering, national and local economic conditions and interest rate policies adopted by the FRB and other central banks.

54

The following tables present details on the composition of the Company's deposits for the periods indicated:

		As of and for the Six Months Ended
		June 30, 2025
		Number of Accounts				Average Balance Per Account				Dollars				Percentage of Total Deposits
						(Dollars in Thousands)
Non-interest-bearing demand deposits			8,897			$	17			$	150,894				15.3	%
Interest-bearing demand deposits			6,208				32				198,427				20.1	%
Money market and savings			8,045				35				284,061				28.8	%
Certificates of deposits >$250 thousand			110				469				51,579				5.2	%
Certificates of deposits $100-$250 thousand			594				144				85,239				8.6	%
Certificates of deposits <$100 thousand			4,034				24				97,471				9.9	%
Total (excluding brokered certificates of deposit)			27,888				31				867,671				87.9	%
Brokered deposits			14				8,513				119,175				12.1	%
Total			27,902			$	35			$	986,846				100.0	%

		As of and for the Year Ended
		December 31, 2024
		Number of Accounts				Average Balance Per Account				Dollars				Percentage of Total Deposits
						(Dollars in Thousands)
Non-interest-bearing demand deposits			9,050			$	17			$	155,945				16.0	%
Interest-bearing demand deposits			6,317				36				228,853				23.6	%
Money market and savings			8,462				30				252,674				26.0	%
Certificates of deposits >$250 thousand			143				437				62,495				6.4	%
Certificates of deposits $100-$250 thousand			674				142				95,374				9.8	%
Certificates of deposits <$100 thousand			4,398				24				104,820				10.8	%
Total (excluding brokered certificates of deposit)			29,044				31				900,161				92.6	%
Brokered deposits			12				6,033				72,396				7.4	%
Total			29,056			$	33			$	972,557				100.0	%

Other Interest-Bearing Liabilities

Other interest-bearing liabilities that are used by the Company as an alternative source of funds consist of federal funds purchased, securities sold under agreements to repurchase, FHLB advances, and subordinated debt. As of June 30, 2025, other interest-bearing liabilities totaled 5.2% of total interest-bearing liabilities, compared to 2.5% as of December 31, 2024.

Shareholders’ Equity

As of June 30, 2025, shareholders’ equity totaled $101.9 million, or 8.9% of total assets, compared to $98.6 million, or 9.0% of total assets, as of December 31, 2024. The increase in shareholders’ equity during the six months ended June 30, 2025 resulted primarily from earnings, net of dividends paid and repurchases of shares of the Company's common stock. In addition, shareholders' equity was positively impacted during the six months ended June 30, 2025 by reductions in the Company's accumulated other comprehensive loss resulting from changes in market interest rates, as well as the maturity of lower yielding investment securities.

During the six months ended June 30, 2025, the Company declared cash dividends totaling $0.14 per share on its common stock, compared to cash dividends totaling $0.10 per share on its common stock during the six months ended June 30, 2024.

In addition, during the six months ended June 30, 2025, the Company completed the repurchase of 40,000 shares of its common stock at a weighted average price of $13.38 per share. The repurchases were completed under the Company’s previously announced share repurchase program. As of June 30, 2025, 872,813 shares remained available for repurchase under the program. During the six months ended June 30, 2024, the Company repurchased 77,000 shares of its common stock at a weighted average price of $10.60 per share.

55

LIQUIDITY AND CAPITAL RESOURCES

The asset portion of the balance sheet provides liquidity primarily from the following sources: (1) excess cash and interest-bearing deposits in banks, (2) federal funds sold and securities purchased under reverse repurchase agreements, (3) principal payments and maturities of loans and (4) principal payments and maturities from the investment portfolio. Loans maturing or repricing in one year or less amounted to $272.2 million as of June 30, 2025 and $279.0 million as of December 31, 2024. Investment securities forecasted to mature or reprice in one year or less were estimated to be $26.1 million and $29.6 million as of June 30, 2025 and December 31, 2024, respectively.

Although some securities in the investment portfolio have final maturities exceeding 10 years, a substantial percentage of the portfolio provides monthly principal and interest payments and consists of securities that are readily marketable and easily convertible into cash on short notice. The investment securities portfolio had an estimated average life of 3.7 years and 3.6 years as of June 30, 2025 and December 31, 2024, respectively. However, management does not rely solely upon the investment portfolio to generate cash flows to fund loans, capital expenditures, dividends, debt repayment and other cash requirements. These activities are also funded by cash flows from loan payments, as well as increases in deposits and short-term borrowings.

The liability portion of the balance sheet provides liquidity through interest-bearing and non-interest-bearing deposit accounts, which represent the Company’s primary sources of funds. In addition, federal funds purchased, FHLB advances, securities sold under agreements to repurchase and short-term and long-term borrowings are additional sources of available liquidity. Liquidity management involves the continual monitoring of the sources and uses of funds to maintain an acceptable cash position. Long-term liquidity management focuses on considerations related to the total balance sheet structure. The Bank manages the pricing of its deposits to maintain a desired deposit balance.

The Company had $20.0 million and $10.0 million of outstanding borrowings under FHLB advances as of June 30, 2025 and December 31, 2024, respectively. The Company's use of FHLB advances varies depending on fluctuations in deposits and other funding sources, as well as their use in interest rate hedging strategies. The Company had up to $298.0 million and $319.9 million in remaining unused credit from the FHLB (subject to available collateral, which may include eligible investment securities and loans) as of June 30, 2025 and December 31, 2024, respectively.

The Company also has access to the FRB’s discount window. The discount window allows borrowing on pledged collateral that includes eligible investment securities and loans. The Company maintains pledges of its consumer indirect loan portfolio and selected investment securities with the FRB as collateral to provide immediate access to funding through the discount window. As of June 30, 2025 and December 31, 2024 the Company had $181.9 and $165.1 million, respectively, in borrowing capacity with the FRB’s discount window. As of June 30, 2025 and December 31, 2024, the Bank had $15.0 million and zero, respectively, in outstanding federal funds purchased from the FRB's discount window.

In addition to collateralized funding sources through the FHLB and FRB, the Company had $48.0 million in unused established unsecured lines of credit with banks as of both June 30, 2025 and December 31, 2024.

On October 1, 2021, the Company completed a private placement of $11.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes that will mature on October 1, 2031. Net of unamortized debt issuance costs, the subordinated notes were recorded as long-term borrowings totaling $10.9 million as of both June 30, 2025 and December 31, 2024.

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The table below provides information on the Company’s on-balance sheet liquidity, as well as readily available off-balance sheet sources of liquidity, as of both June 30, 2025 and December 31, 2024.

	June 30,  2025				December 31,  2024
	(Dollars in Thousands)
	(Unaudited)				(Unaudited)
Liquidity from cash, federal funds sold and securities purchased under reverse repurchase agreements:
Cash and cash equivalents	$	53,955			$	47,216
Federal funds sold and securities purchased under reverse repurchase agreements		4,850				5,727
Total liquidity from cash, federal funds sold and securities purchased under reverse repurchase agreements		58,805				52,943
Liquidity from pledgable investment securities:
Investment securities available-for sale, at fair value		156,576				167,888
Investment securities held-to-maturity, at amortized cost		561				682
Less: securities pledged		(62,626	)			(72,110	)
Less: estimated collateral value discounts		(10,311	)			(10,164	)
Liquidity from pledgable investment securities		84,200				86,296
Liquidity from unused lendable collateral (loans) at FHLB		11,175				45,388
Liquidity from unused lendable collateral (loans and securities) at FRB		181,861				165,061
Unsecured lines of credit with banks		48,000				48,000
Total readily available liquidity	$	384,041			$	397,688

The table above calculates readily available liquidity by combining cash and cash equivalents, federal funds sold, securities purchased under reverse repurchase agreements and unencumbered investment security values on the Company’s consolidated balance sheet with off-balance sheet liquidity that is readily available through unused collateral pledged to the FHLB and FRB, as well as unsecured lines of credit with other banks. Liquidity from pledgable investment securities and total readily available liquidity are non-GAAP measures used by management and regulators to analyze a portion of the Company's liquidity. Management uses these measures to evaluate the Company's liquidity position.

Pledgable investment securities are considered by management as a readily available source of liquidity since the Company has the ability to pledge the securities with the FHLB or FRB to obtain immediate funding. Both available-for-sale and held-for-maturity securities may be pledged at fair value with the FHLB and through the FRB discount window. The amounts shown as liquidity from pledgable investment securities represent total investment securities as recorded on the consolidated balance sheet, less reductions for securities already pledged and discounts expected to be taken by the lender to determine collateral value.

The unused lendable collateral value at the FHLB presented in the table represents only the amount immediately available to the Company from loans already pledged by the Company to the FHLB as of each consolidated balance sheet date presented. As of June 30, 2025 and December 31, 2024, the Company's total remaining credit availability with the FHLB was $298.0 million and $319.9 million, respectively, subject to the pledging of additional collateral which may include eligible investment securities and loans. In addition, the Company has access to additional sources of liquidity that generally could be obtained over a period of time. For example, the Company has access to unsecured brokered deposits through the wholesale funding markets. Management believes the Company’s on-balance sheet and other readily available liquidity provide strong indicators of the Company’s ability to fund obligations in a stressed liquidity environment.

Excluding wholesale brokered deposits, as of June 30, 2025, the Company had approximately 28 thousand deposit accounts with an average balance of approximately $31.1 thousand per account. Estimated uninsured deposits (calculated as deposit amounts per deposit holder in excess of $250 thousand, the maximum amount of federal deposit insurance, and excluding deposits secured by pledged assets) totaled $202.5 million, or 20.5% of total deposits, as of June 30, 2025. As of December 31, 2024, estimated uninsured deposits totaled $216.8 million, or 22.2% of total deposits.

Management believes that the Company has adequate sources of liquidity to cover its contractual obligations and commitments over the next twelve months.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary purpose of managing interest rate risk is to invest capital effectively and preserve the value created by the Company’s core banking business. This is accomplished through the development and implementation of lending, funding, pricing and hedging strategies designed to maximize net interest income performance under varying interest rate environments, subject to liquidity and interest rate risk guidelines. Effective interest rate sensitivity management ensures that both assets and liabilities respond to changes in interest rates within an acceptable timeframe, thereby minimizing the effect of such interest rate movements on short- and long-term net interest margin and net interest income.

Financial simulation models are the primary tools used by the Asset/Liability Committee of the Bank’s board of directors to measure interest rate exposure. Using a wide range of scenarios, management is provided with extensive information on the potential impact on net interest income caused by changes in interest rates. In these simulations, assumptions are made about the direction and volatility of interest rates, the slope of the yield curve and the changing composition of the Company’s balance sheet resulting from both strategic plans and customer behavior. Simulation models also incorporate management’s assumptions regarding such factors as loan and deposit growth, pricing, prepayment speeds and spreads between interest rates paid on deposits and charged on loans. Because of limitations inherent in any approach used to measure interest rate risk, simulation results are not intended as a forecast of the actual effect of a change in market interest rates on our results but rather as a means to better plan and execute appropriate asset-liability management strategies and manage our interest rate risk.

Assessing Short-Term Interest Rate Risk – Net Interest Margin Simulation

On a quarterly basis, management simulates how changes in short- and long-term interest rates will impact future profitability, as reflected by changes in the Bank’s net interest margin and net interest income. The tables below depict how, as of June 30, 2025, pre-tax net interest margin and net interest income are forecasted to change over timeframes of one year and two years under the six listed interest rate scenarios. The interest rate scenarios contemplate immediate and parallel shifts in short- and long-term interest rates.

Average Change in Net Interest Margin from Level Interest Rate Forecast (basis points, pre-tax):

		1 Year				2 Years
+1%			4				3
+2%			8				6
+3%			10				6
-1%			(9	)			(8	)
-2%			(18	)			(20	)
-3%			(30	)			(35	)

Cumulative Change in Net Interest Income from Level Interest Rate Forecast (dollars in thousands, pre-tax):

		1 Year				2 Years
+1%		$	470			$	756
+2%			907				1,391
+3%			1,117				1,432
-1%			(990	)			(1,917	)
-2%			(2,034	)			(4,547	)
-3%			(3,430	)			(8,005	)

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ITEM 4. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Bancshares maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in Bancshares’ reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to Bancshares’ management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Bancshares’ management carried out an evaluation, under the supervision and with the participation of its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Bancshares’ disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of June 30, 2025, pursuant to the evaluation of these controls and procedures required by Rule 13a-15 of the Exchange Act. Based on that evaluation, Bancshares’ management concluded, as of June 30, 2025, that Bancshares’ disclosure controls and procedures were effective at the reasonable assurance level to ensure that the information required to be disclosed in Bancshares’ periodic filings with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control Over Financial Reporting

There were no changes in Bancshares’ internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is a party to certain ordinary course litigation, and the Company intends to vigorously defend itself in all such litigation. In the opinion of the Company, based on review and consultation with legal counsel, the outcome of such ordinary course litigation should not have a material adverse effect on the Company’s consolidated financial statements or results of operations.

ITEM 1A. RISK FACTORS

A list of factors that could materially affect the Company’s business, financial condition and/or operating results is included in Part I, Item 1A, “Risk Factors” in the Company's 2024 Form 10-K. There have been no material changes to such risk factors. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company’s business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth purchases made by or on behalf of Bancshares or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) of the Exchange Act, of shares of Bancshares’ common stock during the second quarter of 2025:

Issuer Purchases of Equity Securities

Period		Total Number of Shares Purchased (1)				Average Price Paid per Share				Total Number of Shares Purchased as Part of Publicly Announced Programs (2)				Maximum Number of Shares that May Yet Be Purchased Under the Programs (2)
April 1 – April 30			670			$	13.52				—				872,813
May 1 – May 31			55			$	13.03				—				872,813
June 1 – June 30			57			$	13.06				—				872,813
Total			782			$	13.45				—				872,813

(1)Includes 782 shares that were purchased in open-market transactions by an independent trustee for Bancshares’ 401(k) Plan during the second quarter of 2025.

(2)No shares were repurchased during the second quarter of 2025 pursuant to Bancshares’ publicly announced share repurchase program, which was initially approved by the Board of Directors on January 19, 2006 and authorized the repurchase of up to 642,785 shares of common stock. Most recently, in November 2024, the Board approved the repurchase of an additional 600,000 shares under the share repurchase program and the extension of the expiration date of the program to December 31, 2025. As of June 30, 2025, Bancshares was authorized to repurchase up to 872,813 shares of common stock under the share repurchase program.

ITEM 5. OTHER INFORMATION

(a) None.

(b) None.

(c) During the period covered by this report, none of the Company’s directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934, as amended).

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ITEM 6. EXHIBITS

Exhibit No.		Description
3.1		Certificate of Incorporation of United Security Bancshares, Inc. (incorporated by reference to Exhibit 3(i) to the Quarterly Report on Form 10-Q (File No. 000-14549), filed on November 12, 1999).
3.1A		Certificate of Amendment to the Certificate of Incorporation of United Security Bancshares, Inc., effective as of October 11, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 000-14549), filed on October 11, 2016).
3.2		Amended and Restated Bylaws of First US Bancshares, Inc., effective as of January 29, 2025 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 000-14549), filed on January 30, 2025).
31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
32*		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101		The following financial statements from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL: (i) Interim Condensed Consolidated Balance Sheets, (ii) Interim Condensed Consolidated Statements of Comprehensive Income, (iii) Interim Condensed Consolidated Statements of Operations, (iv) Interim Condensed Consolidated Statements of Changes in Shareholders' Equity, (v) Interim Condensed Consolidated Statements of Cash Flows, and (vi) Notes to the Interim Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
104		The cover page from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL.

________________

*Filed herewith

61

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FIRST US BANCSHARES, INC.

DATE: August 7, 2025

By:		/s/ Thomas S. Elley
		Thomas S. Elley
		Its Senior Executive Vice President, Treasurer, Assistant Secretary and Chief Financial Officer
		(Duly Authorized Officer and Principal Financial Officer)

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FAQ

How did First US Bancshares (FUSB) perform in Q2 2025?

Net income fell to $155 k ($0.03/sh) from $2.1 M ($0.36/sh) in Q2 2024, mainly due to a $2.7 M credit-loss provision.

What drove the earnings decline at FUSB?

A $2.7 M provision for credit losses and slightly higher non-interest expense offset modest loan-driven net interest income growth.

How much did FUSB’s loans and deposits change year-to-date?

Loans increased 5.9 % to $871 M, while total deposits grew 1.5 % to $987 M by 30 Jun 2025.

What is the current dividend for FUSB shareholders?

The Board declared a $0.07 quarterly dividend, up from $0.05 a year earlier.

Is asset quality a concern for FUSB?

The sizeable provision raised the allowance to $11.4 M (1.31 % of loans); management cites forward-looking credit risk particularly in CRE and indirect consumer loans.