First US Bancshares (NASDAQ: FUSB) posts higher Q1 2026 earnings and $1.17B in assets

Rhea-AI Filing Summary

First US Bancshares, Inc. reported net income of $1,945 thousand for the three months ended March 31, 2026, up from $1,772 thousand a year earlier. Basic earnings per share rose to $0.34 from $0.30, while diluted earnings per share increased to $0.33 from $0.29.

Total assets reached $1,165,236 thousand, with loans and leases held for investment of $843,697 thousand and deposits of $1,038,849 thousand. Net interest income improved to $9,215 thousand as higher interest income offset increased funding costs. The allowance for credit losses on loans and leases totaled $10,536 thousand, and nonaccrual loans were $1,629 thousand. The company paid dividends of $0.07 per share and repurchased common stock, increasing treasury stock to $33,224 thousand.

Key Figures

Net income: $1,945 thousand Basic EPS: $0.34 per share Total assets: $1,165,236 thousand +5 more

8 metrics

Net income $1,945 thousand Three months ended March 31, 2026

Basic EPS $0.34 per share Three months ended March 31, 2026

Total assets $1,165,236 thousand As of March 31, 2026

Total loans and leases held for investment $843,697 thousand As of March 31, 2026

Total deposits $1,038,849 thousand As of March 31, 2026

Allowance for credit losses on loans and leases $10,536 thousand As of March 31, 2026

Nonaccrual loans $1,629 thousand As of March 31, 2026

Net cash from operating activities $4,103 thousand Three months ended March 31, 2026

Key Terms

allowance for credit losses, nonaccrual loans, other real estate owned, cash flow hedge derivatives, +1 more

5 terms

allowance for credit losses financial

"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."

Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.

nonaccrual loans financial

"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 March 31, 2026 and December 31, 2025."

Nonaccrual loans are loans a lender has stopped counting toward interest income because the borrower is overdue or unlikely to pay; the lender only records cash payments received and may set aside extra funds to cover potential losses. For investors, a rising number or amount of nonaccrual loans signals weaker credit quality, lower future interest revenue and larger potential write-downs — similar to pausing expected subscription income when many customers stop paying.

other real estate owned financial

"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."

Assets a lender or financial firm holds after taking back real property through foreclosure or repossession because a borrower defaulted. Think of it like a store keeping returned items it didn’t sell — these properties are not earning interest, can be costly to maintain, and may be sold at a loss or profit, so they directly affect a lender’s balance sheet, cash flow and perceived credit risk for investors.

cash flow hedge derivatives financial

"Unrealized holding gains (losses) arising during the period on effective cash flow hedge derivatives, net of tax expense (benefit) of $122 and ($103), respectively."

subordinated notes financial

"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."

Subordinated notes are loans companies issue that rank below other debts for repayment, meaning holders get paid only after higher-priority creditors if the issuer runs into trouble. Because they act like being farther back in line at a buffet, they usually offer higher interest to compensate for greater risk, so investors watch them for potential higher returns but also increased chance of loss and sensitivity to the issuer’s financial health.

10-Q Quarterly Reports: What Changes Quarter to Quarter →

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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 March 31, 2026

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 April 30, 2026
Common Stock, $0.01 par value	5,567,267 shares

FIRST US BANCSHARES, INC. AND SUBSIDIARY

		PAGE
PART I. FINANCIAL INFORMATION		4
ITEM 1. FINANCIAL STATEMENTS		4
Interim Condensed Consolidated Balance Sheets at March 31, 2026 (Unaudited) and December 31, 2025		4
Interim Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025 (Unaudited)		5
Interim Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2026 and 2025 (Unaudited)		6
Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2026 and 2025 (Unaudited)		7
Interim Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited)		8
Notes to Interim Condensed Consolidated Financial Statements (Unaudited)		9
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		41
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		56
ITEM 4. CONTROLS AND PROCEDURES		57
PART II. OTHER INFORMATION		58
ITEM 1. LEGAL PROCEEDINGS		58
ITEM 1A. RISK FACTORS		58
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		58
ITEM 5. OTHER INFORMATION		58
ITEM 6. EXHIBITS		59
Signature Page		60

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; 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 rate of growth (or lack thereof) in the economy generally and in the Company’s service areas; 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; effects of changes in the policies of monetary authorities and other government action; 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”); risks of dependence on outside third parties for the processing and handling of our records and data; 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)

		March 31,				December 31,
		2026				2025
		(Unaudited)
ASSETS
Cash and due from banks		$	9,742			$	9,401
Interest-bearing deposits in banks			56,844				64,146
Total cash and cash equivalents			66,586				73,547
Federal funds sold and securities purchased under reverse repurchase agreements			18,850				4,850
Investment securities available-for-sale, at fair value (amortized cost $183,160 and     $169,037; net of allowance for credit losses of $- and $-)			181,109				168,075
Investment securities held-to-maturity, at amortized cost, net of allowance for credit     losses of $- and $-, (fair value 2026 - $419, 2025 - $449)			436				465
Federal Home Loan Bank stock, at cost			829				791
Loans and leases held for investment			843,697				853,018
Less: allowance for credit losses on loans and leases			10,536				10,704
Net loans and leases held for investment			833,161				842,314
Premises and equipment, net of accumulated depreciation			26,262				26,284
Cash surrender value of bank-owned life insurance			17,466				17,378
Accrued interest receivable			3,963				3,916
Goodwill and core deposit intangible, net			7,435				7,435
Other real estate owned			215				256
Other assets			8,924				9,474
Total assets		$	1,165,236			$	1,154,785
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest-bearing		$	149,079			$	153,809
Interest-bearing			889,770				874,153
Total deposits			1,038,849				1,027,962
Accrued interest expense			2,780				2,526
Other liabilities			8,010				7,704
Long-term borrowings			10,963				10,945
Total liabilities			1,060,602				1,049,137
Shareholders’ equity:
Common stock, par value $0.01 per share, 10,000,000 shares authorized; 8,007,006 and     7,947,303 shares issued, respectively; 5,604,123 and 5,699,696 shares outstanding,    respectively			80				79
Additional paid-in capital			16,242				16,005
Accumulated other comprehensive loss, net of tax			(1,263	)			(780	)
Retained earnings			122,799				121,249
Less treasury stock: 2,402,883 and 2,247,607 shares at cost, respectively			(33,224	)			(30,905	)
Total shareholders’ equity			104,634				105,648
Total liabilities and shareholders’ equity		$	1,165,236			$	1,154,785

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
		March 31,
		2026				2025
		(Unaudited)
Interest income:
Interest and fees on loans		$	12,491			$	12,241
Interest on investment securities			1,687				1,412
Interest on deposits in banks			598				288
Other			164				77
Total interest income			14,940				14,018
Interest expense:
Interest on deposits			5,610				4,869
Interest on borrowings			115				252
Total interest expense			5,725				5,121
Net interest income			9,215				8,897
Provision for credit losses			254				528
Net interest income after provision for credit losses			8,961				8,369
Non-interest income:
Service and other charges on deposit accounts			283				288
Lease income			269				284
Other income, net			288				303
Total non-interest income			840				875
Non-interest expense:
Salaries and employee benefits			3,814				3,736
Net occupancy and equipment			971				875
Computer services			337				412
Insurance expense and assessments			415				384
Fees for professional services			328				215
Other expense			1,476				1,296
Total non-interest expense			7,341				6,918
Income before income taxes			2,460				2,326
Provision for income taxes			515				554
Net income		$	1,945			$	1,772
Basic net income per share		$	0.34			$	0.30
Diluted net income per share		$	0.33			$	0.29
Dividends per share		$	0.07			$	0.07

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
		March 31,
		2026				2025
		(Unaudited)
Net income		$	1,945			$	1,772
Other comprehensive (loss) income:
Unrealized (losses) holding gains on securities available-for-sale    arising during period, net of tax (benefit) expense of ($272) and $671, respectively			(817	)			2,011
Unrealized holding gains (losses) arising during the period on    effective cash flow hedge derivatives, net of tax expense (benefit)    of $122 and ($103), respectively			370				(305	)
Reclassification adjustments on cash flow hedge derivatives realized in net income, net of tax benefit of $12 and $12, respectively			(36	)			(36	)
Other comprehensive (loss) income			(483	)			1,670
Total comprehensive income		$	1,462			$	3,442

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 March 31, 2026 and 2025 (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, 2024			5,696,171			$	78			$	15,540			$	(4,344	)		$	116,865			$	(29,515	)		$	98,624
Net income			—				—				—				—				1,772				—				1,772
Net change in fair value of    securities available-for-sale,    net of tax			—				—				—				2,011				—				—				2,011
Net change in fair value of    derivative instruments, net    of tax			—				—				—				(341	)			—				—				(341	)
Dividends declared: $0.07 per    share			—				—				—				—				(401	)			—				(401	)
Reissuance of treasury stock as    compensation			31,550				—				(434	)			—				—				434				—
Impact of stock-based    compensation plans, net			51,565				1				202				—				—				(102	)			101
Impact of common stock share    repurchases			(40,000	)			—				—				—				—				(535	)			(535	)
Balance, March 31, 2025			5,739,286			$	79			$	15,308			$	(2,674	)		$	118,236			$	(29,718	)		$	101,231
Balance, December 31, 2025			5,699,696			$	79			$	16,005			$	(780	)		$	121,249			$	(30,905	)		$	105,648
Net income			—				—				—				—				1,945				—				1,945
Net change in fair value of    securities available-for-sale,    net of tax			—				—				—				(817	)			—				—				(817	)
Net change in fair value of    derivative instruments, net    of tax			—				—				—				334				—				—				334
Dividends declared: $0.07 per    share			—				—				—				—				(395	)			—				(395	)
Impact of stock-based    compensation plans, net			50,927				1				237				—				—				(118	)			120
Impact of common stock share    repurchases			(146,500	)																			(2,201	)			(2,201	)
Balance, March 31, 2026			5,604,123			$	80			$	16,242			$	(1,263	)		$	122,799			$	(33,224	)		$	104,634

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 CASH FLOWS

(Dollars in Thousands)

		Three Months Ended
		March 31,
		2026				2025
		(Unaudited)
Cash flows from operating activities:
Net income		$	1,945			$	1,772
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization			457				419
Provision for credit losses			254				528
Deferred income tax expense			336				548
Reclassification of unrealized gains on terminated derivative contracts			(48	)			(48	)
Stock-based compensation expense			189				172
Net accretion of securities			(271	)			(154	)
Amortization of intangible assets			—				19
Net loss (gain) on premises and equipment and other real estate			50				(5	)
Changes in assets and liabilities:
Increase in cash surrender value of bank owned life insurance			(88	)			(89	)
Increase in accrued interest receivable			(47	)			(175	)
Decrease (increase) in other assets			677				(73	)
Increase (decrease) in accrued interest expense			254				(53	)
Increase (decrease) in other liabilities			395				(1,106	)
Net cash provided by operating activities			4,103				1,755
Cash flows from investing activities:
Net (increase) decrease in federal funds sold and securities purchased under reverse repurchase agreements			(14,000	)			276
Purchases of investment securities, available-for-sale			(20,468	)			—
Proceeds from maturities and prepayments of investment securities, available-for-sale			6,616				9,410
Proceeds from maturities and prepayments of investment securities, held-to-maturity			29				50
Net increase in Federal Home Loan Bank stock			(38	)			(722	)
Net decrease (increase) in loans and leases held for investment			8,810				(25,690	)
Proceeds from the sale of premises and equipment, other real estate and repossessions			239				428
Purchases of premises and equipment			(474	)			(70	)
Net cash used in investing activities			(19,286	)			(16,318	)
Cash flows from financing activities:
Net increase (decrease) in deposits			10,887				(10,605	)
Net increase in short-term borrowings			—				35,000
Net share-based compensation transactions			(69	)			(71	)
Repurchases of common stock			(2,201	)			(535	)
Dividends paid			(395	)			(401	)
Net cash provided by financing activities			8,222				23,388
Net (decrease) increase in cash and cash equivalents			(6,961	)			8,825
Cash and cash equivalents, beginning of period			73,547				47,216
Cash and cash equivalents, end of period		$	66,586			$	56,041
Supplemental disclosures:
Cash paid for:
Interest		$	5,471			$	5,174
Income taxes			893				418
Non-cash transactions:
Assets acquired in settlement of loans			18				194
Reissuance of treasury stock as compensation			—				434

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

8

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, 2026. 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, 2025 (the "Company's 2025 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 2026 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 2025 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).

9

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
		March 31,
		2026				2025
Weighted average shares outstanding			5,657,375				5,716,790
Weighted average director stock equivalent shares			77,233				100,668
Basic shares			5,734,608				5,817,458
Dilutive shares			145,600				242,000
Diluted shares			5,880,208				6,059,458

		Three Months Ended
		March 31,
		2026				2025
		(Dollars in Thousands, Except Per Share Data)
Net income		$	1,945			$	1,772
Basic net income per share		$	0.34			$	0.30
Diluted net income per share		$	0.33			$	0.29

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 Recently Adopted

The following table provides a description of accounting standards recently adopted as of March 31, 2026.

Standard	Description	Required Date of Adoption	Effect on Financial Statements or other significant matters
ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements	This ASU amends certain hedge accounting guidance to improve operability and better align hedge accounting with an entity’s risk management activities. The amendments include revisions to the similar risk assessment for cash flow hedges, which may allow entities to broaden the scope of forecasted transactions designated in a hedge relationship, and clarify certain documentation and application requirements.	Quarterly financial statements as of and for the quarter ending March 31, 2026. Annual financial statements as of and for the year ending December 31, 2026. Early adoption is permitted.	The adoption of this guidance did not have a material impact.
ASU 2025-08, Financial Instruments-Credit Losses (Topic 326): Purchased Loans	This ASU expands the use of the gross‑up method to certain acquired non‑purchase credit deteriorated ("PCD") loans classified as purchased seasoned loans. The amendment eliminates Day 1 credit loss expense for these loans by requiring recognition of an initial allowance with a corresponding gross‑up of amortized cost. It also clarifies the criteria for identifying purchased seasoned loans, including special treatment for loans acquired in a business combination. Guidance for PCD assets remains unchanged, and the amendments narrow subsequent measurement differences between purchased seasoned loans and PCD assets. The ASU is applied prospectively.	Quarterly financial statements as of and for the quarter ending March 31, 2027. Annual financial statements as of and for the year ending December 31, 2027. Early adoption is permitted.	The adoption of this guidance did not have a material impact.

10

Accounting Standards Not Yet Adopted

The following table provides a description of recent accounting standards that have not yet been adopted as of March 31, 2026.

Standard	Description	Required Date of Adoption	Effect on Financial Statements or other significant matters
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.

3.INVESTMENT SECURITIES

Details of investment securities available-for-sale and held-to-maturity as of March 31, 2026 and December 31, 2025 were as follows:

		Available-for-Sale
		March 31, 2026
						Gross				Gross				Estimated
		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
		(Dollars in Thousands)
Mortgage-backed securities:
Residential		$	118,768			$	1,083			$	(1,709	)		$	118,142
Commercial			8,551				46				(157	)			8,440
Obligations of U.S. government-sponsored agencies			16,410				166				(372	)			16,204
Obligations of states and political subdivisions			1,690				46				(1	)			1,735
Corporate notes			17,766				77				(732	)			17,111
U.S. Treasury securities			19,975				—				(498	)			19,477
Total		$	183,160			$	1,418			$	(3,469	)		$	181,109

		Held-to-Maturity
		March 31, 2026
						Gross				Gross				Estimated
		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
		(Dollars in Thousands)
Mortgage-backed securities:
Commercial		$	143			$	—			$	(4	)		$	139
Obligations of U.S. government-sponsored agencies			293				—				(13	)			280
Obligations of states and political subdivisions			—				—				—				—
Total		$	436			$	—			$	(17	)		$	419

11

		Available-for-Sale
		December 31, 2025
						Gross				Gross				Estimated
		Amortized				Unrealized				Unrealized				Fair
		Cost				Gains				Losses				Value
		(Dollars in Thousands)
Mortgage-backed securities:
Residential		$	105,403			$	1,783			$	(1,408	)		$	105,778
Commercial			7,568				84				(69	)			7,583
Obligations of U.S. government-sponsored agencies			16,620				190				(306	)			16,504
Obligations of states and political subdivisions			1,690				63				(3	)			1,750
Corporate notes			17,764				110				(848	)			17,026
U.S. Treasury securities			19,992				—				(558	)			19,434
Total		$	169,037			$	2,230			$	(3,192	)		$	168,075

		Held-to-Maturity
		December 31, 2025
		Amortized Cost				Gross Unrealized Gains				Gross Unrealized Losses				Estimated Fair Value
		(Dollars in Thousands)
Mortgage-backed securities:
Commercial		$	163			$	—			$	(4	)		$	159
Obligations of U.S. government-sponsored agencies			302				—				(12	)			290
Obligations of states and political subdivisions			—				—				—				—
Total		$	465			$	—			$	(16	)		$	449

The scheduled maturities of investment securities available-for-sale and held-to-maturity as of March 31, 2026 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		$	10,451			$	10,379			$	—			$	—
Maturing after one to five years			15,727				15,343				147				144
Maturing after five to ten years			69,618				67,629				222				210
Maturing after ten years			87,364				87,758				67				65
Total		$	183,160			$	181,109			$	436			$	419

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.

12

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 March 31, 2026 and December 31, 2025.

		Available-for-Sale
		March 31, 2026
		Less than 12 Months								12 Months or More
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
		(Dollars in Thousands)
Mortgage-backed securities:
Residential		$	44,908			$	(475	)		$	20,787			$	(1,234	)
Commercial			2,223				(93	)			2,256				(64	)
Obligations of U.S. government-sponsored agencies			6,404				(32	)			4,716				(340	)
Obligations of states and political subdivisions			—				—				300				(1	)
Corporate notes			—				—				15,033				(732	)
U.S. Treasury securities			—				—				19,477				(498	)
Total		$	53,535			$	(600	)		$	62,569			$	(2,869	)

		Held-to-Maturity
		March 31, 2026
		Less than 12 Months								12 Months or More
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
		(Dollars in Thousands)
Mortgage-backed securities:
Commercial		$	—			$	—			$	139			$	(4	)
Obligations of U.S. government-sponsored agencies			—				—				280				(13	)
Obligations of states and political subdivisions			—				—				—				—
Total		$	—			$	—			$	419			$	(17	)

		Available-for-Sale
		December 31, 2025
		Less than 12 Months								12 Months or More
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
		(Dollars in Thousands)
Mortgage-backed securities:
Residential		$	24,202			$	(187	)		$	22,392			$	(1,221	)
Commercial			—				—				3,287				(69	)
Obligations of U.S. government-sponsored agencies			—				—				4,751				(306	)
Obligations of states and political subdivisions			—				—				298				(3	)
Corporate notes			—				—				14,915				(848	)
U.S. Treasury securities			—				—				19,434				(558	)
Total		$	24,202			$	(187	)		$	65,077			$	(3,005	)

		Held-to-Maturity
		December 31, 2025
		Less than 12 Months								12 Months or More
		Fair Value				Unrealized Losses				Fair Value				Unrealized Losses
		(Dollars in Thousands)
Mortgage-backed securities:
Commercial		$	—			$	—			$	159			$	(4	)
Obligations of U.S. government-sponsored agencies			—				—				290				(12	)
Obligations of states and political subdivisions			—				—				—				—
Total		$	—			$	—			$	449			$	(16	)

13

Available-for-Sale Credit 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 March 31, 2026, 80 available-for-sale debt securities had been in a loss position for more than 12 months, and 17 available-for-sale debt securities had been in a loss position for less than 12 months. As of December 31, 2025, 82 available-for-sale debt securities had been in a loss position for more than 12 months, and five available-for-sale debt securities had been in a loss position for less than 12 months. As of March 31, 2026, 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 March 31, 2026 and December 31, 2025, 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 March 31, 2026 or December 31, 2025. Accrued interest receivable is excluded from the estimate of credit losses for available-for-sale securities. As of both March 31, 2026 and December 31, 2025, accrued interest receivable totaled $0.8 million with no related ACL and was reported in the accrued interest line on the accompanying interim condensed consolidated balance sheets.

Held-to-Maturity Credit 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 March 31, 2026 or December 31, 2025. As of March 31, 2026 and December 31, 2025, accrued interest receivable totaled $2.6 thousand and $1.4 thousand, respectively, with no related ACL and was reported in the accrued interest line on the accompanying interim condensed consolidated balance sheets.

Pledged Securities

Investment securities with a carrying value of $66.1 million and $58.5 million as of March 31, 2026 and December 31, 2025, 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.

14

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 March 31, 2026 and December 31, 2025, the composition of the loan portfolio by portfolio segment was as follows:

	March 31, 2026			December 31, 2025
Real estate loans:
Construction, land development and other land loans	$	27,236		$	32,618
Secured by 1-4 family residential properties		65,460			66,996
Secured by multi-family residential properties		124,826			117,769
Secured by non-residential commercial real estate		189,408			200,699
Commercial and industrial loans and leases ("C&I") (1)		46,665			48,360
Consumer loans:
Direct		4,362			4,844
Indirect		385,740			381,732
Total loans		843,697			853,018
Less: Allowance for credit losses on loans and leases		10,536			10,704
Net loans (2)	$	833,161		$	842,314

(1)Includes equipment financing leases, which totaled $12.1 million as of March 31, 2026 and $12.6 million as of December 31, 2025.

(2)Loans are presented net of unearned income and unamortized deferred fees and costs of $0.5 million and $0.6 million as of March 31, 2026 and December 31, 2025, respectively. Loans are also presented net of unamortized premiums associated with indirect loans of $15.8 million and $15.6 million as of March 31, 2026 and December 31, 2025, respectively.

Accrued interest receivable is not included in the amortized cost basis of the Company's loans held for investment ("LHFI"). As of both March 31, 2026 and December 31, 2025, accrued interest receivable for LHFI totaled $3.1 million with no related ACL and was reported in the accrued interest line on the accompanying consolidated balance sheets.

The Company makes commercial, real estate and installment loans to its customers. Although the Company has a diversified loan portfolio, 48.2% and 49.0% of the portfolio was concentrated in loans secured by real estate as of March 31, 2026 and December 31, 2025, respectively.

Loans with a carrying value of $83.1 million and $84.4 million were pledged as collateral to secure Federal Home Loan Bank (“FHLB”) borrowings as of March 31, 2026 and December 31, 2025, respectively. In addition, loans with a carrying value of $359.1 million and $361.6 million were pledged to secure borrowings with the Federal Reserve Bank ("FRB") as of March 31, 2026 and December 31, 2025, 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 $17.4 million and $22.9 million as of March 31, 2026 and December 31, 2025, respectively. During the three months ended March 31, 2026, there were no new loans to related parties, and repayments of $5.5 million made by related parties. During the year ended December 31, 2025, there were new loans of $11.5 million to related parties, and no repayments made 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.

15

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, unemployment levels, and 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.

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 three months ended March 31, 2026 and 2025:

		As of and for the Three Months Ended March 31, 2026
		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		$	222			$	371			$	666			$	1,420			$	399			$	50			$	7,576			$	10,704
Charge-offs			—				—				—				(48	)			—				(1	)			(590	)			(639	)
Recoveries			—				5				—				—				10				32				99				146
Provision for (recovery of) credit losses on loans and leases			(89	)			(31	)			(7	)			(66	)			(65	)			(60	)			643				325
Allowance for credit losses on loans and leases		$	133			$	345			$	659			$	1,306			$	344			$	21			$	7,728			$	10,536
Allowance for credit losses on unfunded lending commitments:
Beginning balance		$	254			$	1			$	46			$	64			$	38			$	2			$	—			$	405
Provision for (recovery of) credit losses on unfunded lending commitments			(23	)			(1	)			—				(48	)			1				—				—				(71	)
Allowance for credit losses on unfunded lending commitments		$	231			$	—			$	46			$	16			$	39			$	2			$	—			$	334

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		As of and for the Three Months Ended March 31, 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			—				—				—				—				—				—				(422	)			(422	)
Recoveries			—				6				—				—				16				57				74				153
Provision for (recovery of) credit losses on loans and leases			(73	)			(57	)			(17	)			(157	)			(20	)			(59	)			873				490
Allowance for credit losses on loans and leases		$	279			$	355			$	529			$	1,271			$	1,527			$	47			$	6,397			$	10,405
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			50				—				(1	)			(9	)			—				(2	)			—				38
Allowance for credit losses on unfunded lending commitments		$	330			$	1			$	42			$	7			$	34			$	—			$	—			$	414

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.

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.

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The tables below illustrate the carrying amount of loans and leases by credit quality indicator and year of origination as of March 31, 2026, as well as gross charge-offs for the three months ended March 31, 2026.

				March 31, 2026
				Loans at Amortized Cost Basis by Origination Year
				2026				2025				2024				2023				2022				Prior				Total
				(Dollars in Thousands)
Commercial:
Construction, land development and other land loans		Pass		$	228			$	5,361			$	19,282			$	45			$	—			$	143			$	25,059
		Special Mention			—				—				—				—				—				—				—
		Substandard			—				—				—				2,177				—				—				2,177
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	228			$	5,361			$	19,282			$	2,222			$	—			$	143			$	27,236
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Secured by multi-family residential properties		Pass		$	9,993			$	1,238			$	199			$	16,913			$	59,665			$	36,818			$	124,826
		Special Mention			—				—				—				—				—				—				—
		Substandard			—				—				—				—				—				—				—
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	9,993			$	1,238			$	199			$	16,913			$	59,665			$	36,818			$	124,826
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Secured by non-residential commercial real estate		Pass		$	2,253			$	4,492			$	24,700			$	16,111			$	10,515			$	126,900			$	184,971
		Special Mention			—				—				—				532				2,829				321				3,682
		Substandard			—				—				—				—				—				755				755
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	2,253			$	4,492			$	24,700			$	16,643			$	13,344			$	127,976			$	189,408
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	48			$	48
Commercial and industrial loans and leases		Pass		$	1,831			$	13,540			$	12,455			$	4,144			$	1,956			$	12,167			$	46,093
		Special Mention			—				428				—				—				—				—				428
		Substandard			—				—				—				—				28				116				144
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	1,831			$	13,968			$	12,455			$	4,144			$	1,984			$	12,283			$	46,665
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Total commercial		Pass		$	14,305			$	24,631			$	56,636			$	37,213			$	72,136			$	176,028			$	380,949
		Special Mention			—				428				—				532				2,829				321				4,110
		Substandard			—				—				—				2,177				28				871				3,076
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
				$	14,305			$	25,059			$	56,636			$	39,922			$	74,993			$	177,220			$	388,135
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	48			$	48

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				March 31, 2026
				Loans at Amortized Cost Basis by Origination Year
				2026				2025				2024				2023				2022				Prior				Total
				(Dollars in Thousands)
Consumer:
Secured by 1-4 family residential properties		Performing		$	895			$	6,112			$	4,472			$	2,643			$	16,859			$	33,932			$	64,913
		Non-performing			—				—				—				—				—				547				547
		Subtotal		$	895			$	6,112			$	4,472			$	2,643			$	16,859			$	34,479			$	65,460
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Direct		Performing		$	434			$	2,423			$	859			$	299			$	103			$	244			$	4,362
		Non-performing			—				—				—				—				—				—				—
		Subtotal		$	434			$	2,423			$	859			$	299			$	103			$	244			$	4,362
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	1			$	1
Indirect		Performing		$	25,446			$	127,540			$	42,440			$	53,583			$	57,207			$	78,823			$	385,039
		Non-performing			—				—				—				195				7				499				701
		Subtotal		$	25,446			$	127,540			$	42,440			$	53,778			$	57,214			$	79,322			$	385,740
		Current period gross charge-offs		$	—			$	41			$	117			$	24			$	142			$	266			$	590
Total consumer		Performing		$	26,775			$	136,075			$	47,771			$	56,525			$	74,169			$	112,999			$	454,314
		Non-performing			—				—				—				195				7				1,046				1,248
				$	26,775			$	136,075			$	47,771			$	56,720			$	74,176			$	114,045			$	455,562
		Current period gross charge-offs		$	—			$	41			$	117			$	24			$	142			$	267			$	591

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The tables below illustrate the carrying amount of loans and leases by credit quality indicator and year of origination as of December 31, 2025, as well as gross charge-offs for the year ended December 31, 2025.

				December 31, 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		$	3,255			$	14,459			$	5,678			$	—			$	4			$	145			$	23,541
		Special Mention			—				6,821				—				—				18				—				6,839
		Substandard			—				—				2,238				—				—				—				2,238
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	3,255			$	21,280			$	7,916			$	—			$	22			$	145			$	32,618
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Secured by multi-family residential properties		Pass		$	1,243			$	200			$	10,351			$	68,835			$	13,600			$	23,540			$	117,769
		Special Mention			—				—				—				—				—				—				—
		Substandard			—				—				—				—				—				—				—
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	1,243			$	200			$	10,351			$	68,835			$	13,600			$	23,540			$	117,769
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Secured by non-residential commercial real estate		Pass		$	4,495			$	24,887			$	16,179			$	21,485			$	34,071			$	95,071			$	196,188
		Special Mention			—				—				536				2,839				—				324				3,699
		Substandard			—				—				—				—				449				363				812
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	4,495			$	24,887			$	16,715			$	24,324			$	34,520			$	95,758			$	200,699
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Commercial and industrial loans		Pass		$	14,634			$	13,960			$	4,396			$	2,403			$	3,510			$	9,310			$	48,213
		Special Mention			—				—				—				17				36				—				53
		Substandard			—				—				—				—				—				94				94
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
		Subtotal		$	14,634			$	13,960			$	4,396			$	2,420			$	3,546			$	9,404			$	48,360
		Current period gross charge-offs		$	—			$	—			$	2,215			$	—			$	—			$	—			$	2,215
Total commercial		Pass		$	23,627			$	53,506			$	36,604			$	92,723			$	51,185			$	128,066			$	385,711
		Special Mention			—				6,821				536				2,856				54				324				10,591
		Substandard			—				—				2,238				—				449				457				3,144
		Doubtful			—				—				—				—				—				—				—
		Loss			—				—				—				—				—				—				—
				$	23,627			$	60,327			$	39,378			$	95,579			$	51,688			$	128,847			$	399,446
		Current period gross charge-offs		$	—			$	—			$	2,215			$	—			$	—			$	—			$	2,215

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				December 31, 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		$	6,018			$	4,584			$	2,654			$	17,339			$	13,902			$	21,941			$	66,438
		Non-performing			—				—				—				—				—				558				558
		Subtotal		$	6,018			$	4,584			$	2,654			$	17,339			$	13,902			$	22,499			$	66,996
		Current period gross charge-offs		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Direct consumer		Performing		$	2,902			$	1,073			$	426			$	142			$	173			$	128			$	4,844
		Non-performing			—				—				—				—				—				—				—
		Subtotal		$	2,902			$	1,073			$	426			$	142			$	173			$	128			$	4,844
		Current period gross charge-offs		$	—			$	4			$	—			$	5			$	—			$	—			$	9
Indirect consumer		Performing		$	134,498			$	45,268			$	57,633			$	60,092			$	44,463			$	39,347			$	381,301
		Non-performing			—				—				—				43				85				303				431
		Subtotal		$	134,498			$	45,268			$	57,633			$	60,135			$	44,548			$	39,650			$	381,732
		Current period gross charge-offs		$	20			$	151			$	278			$	512			$	353			$	578			$	1,892
Total consumer:		Performing		$	143,418			$	50,925			$	60,713			$	77,573			$	58,538			$	61,416			$	452,583
		Non-performing			—				—				—				43				85				861				989
				$	143,418			$	50,925			$	60,713			$	77,616			$	58,623			$	62,277			$	453,572
		Current period gross charge-offs		$	20			$	155			$	278			$	517			$	353			$	578			$	1,901

The following table provides an aging analysis of past due loans by class as of March 31, 2026:

		As of March 31, 2026
		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		$	—			$	—			$	—			$	—			$	27,236			$	27,236			$	—
Secured by 1-4 family residential    properties			3				—				373				376				65,084				65,460				—
Secured by multi-family residential    properties			—				—				—				—				124,826				124,826				—
Secured by non-residential commercial real estate			—				—				315				315				189,093				189,408				—
Commercial and industrial loans			—				—				17				17				46,648				46,665				—
Consumer loans:															—
Direct			—				—				—				—				4,362				4,362				—
Indirect			1,247				164				687				2,098				383,642				385,740				—
Total		$	1,250			$	164			$	1,392			$	2,806			$	840,891			$	843,697			$	—
As a percentage of total loans			0.15	%			0.02	%			0.16	%			0.33	%			99.67	%			100.00	%

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The following table provides an aging analysis of past due loans by class as of December 31, 2025:

		As of December 31, 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		$	—			$	—			$	—			$	—			$	32,618			$	32,618			$	—
Secured by 1-4 family residential    properties			41				—				374				415				66,581				66,996				—
Secured by multi-family residential    properties			—				—				—				—				117,769				117,769				—
Secured by non-residential commercial real estate			—				—				363				363				200,336				200,699				—
Commercial and industrial loans			44				—				—				44				48,316				48,360				—
Consumer loans:
Direct			—				2				—				2				4,842				4,844				—
Indirect			1,244				294				412				1,950				379,782				381,732				—
Total		$	1,329			$	296			$	1,149			$	2,774			$	850,244			$	853,018			$	—
As a percentage of total loans			0.16	%			0.03	%			0.14	%			0.33	%			99.67	%			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 March 31, 2026 and December 31, 2025. Also presented is the balance of loans on nonaccrual status at March 31, 2026 and December 31, 2025 for which there was no related ACL recorded.

		Loans on Non-Accrual Status
		March 31, 2026
		(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			547			370			—
Secured by multi-family residential properties			—			—			—
Secured by non-residential commercial real estate			315			—			—
Commercial and industrial loans			66			—			—
Consumer loans:									—
Direct			—			—			—
Indirect			701			—			—
Total loans		$	1,629		$	370		$	—

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		Loans on Non-Accrual Status
		December 31, 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			558			370			—
Secured by multi-family residential properties			—			—			—
Secured by non-residential commercial real estate			363			—			—
Commercial and industrial loans			—			—			—
Consumer loans:
Direct			21			—			—
Indirect			431			—			—
Total loans		$	1,373		$	370		$	—

The following tables present the amortized cost basis of collateral dependent loans as of March 31, 2026 and December 31, 2025, which loans are individually evaluated to determine credit losses:

		March 31, 2026
		Real Estate				Other				Total
		(Dollars in Thousands)
Loans secured by real estate
Construction, land development and other land loans		$	2,177			$	—			$	2,177
Secured by 1-4 family residential properties			382				—				382
Secured by multi-family residential properties			—				—				—
Secured by non-residential commercial real estate			315				—				315
Commercial and industrial			—				37				37
Direct consumer			—				—				—
Total loans individually evaluated		$	2,874			$	37			$	2,911

		December 31, 2025
		Real Estate				Other				Total
		(Dollars in Thousands)
Loans secured by real estate
Construction, land development and other land loans		$	2,238			$	—			$	2,238
Secured by 1-4 family residential properties			385				—				385
Secured by multi-family residential properties			—				—				—
Secured by non-residential commercial real estate			363				—				363
Commercial and industrial			—				38				38
Direct consumer			—				—				—
Total loans individually evaluated		$	2,986			$	38			$	3,024

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.

During the three months ended March 31, 2026 and the year ended December 31, 2025, 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 three months ended March 31, 2026 and 2025:

		March 31, 2026				March 31, 2025
		(Dollars in Thousands)
Beginning balance		$	256			$	1,509
Additions (1)			—				—
Sales proceeds			—				(186	)
Gross gains			—				35
Gross losses			—				—
Net gains			—				35
Impairment			(41	)			(30	)
Ending balance		$	215			$	1,328

(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 March 31, 2026 and 2025. In addition, the Company held $0.4 million in consumer mortgage loans collateralized by residential real estate that were in the process of foreclosure as of March 31, 2026. The Company did not hold any consumer mortgage loans collateralized by residential real estate that were in the process of foreclosure as of March 31, 2025.

Repossessed Assets

The Company also acquires assets through the repossession of the underlying collateral of loans in default. As of March 31, 2026 and 2025, total repossessed assets were $0.4 million and $0.2 million, respectively. Repossessed assets are included in other assets in the Company's consolidated balance sheets.

6.GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill totaled $7.4 million as of both March 31, 2026 and December 31, 2025. 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 impairment was neither indicated nor recorded during the three months ended March 31, 2026 or the year ended December 31, 2025.

The Company had no other intangible assets as of March 31, 2026 or December 31, 2025. During 2025, the Company completed the amortization of previously recognized core deposit premiums. Core deposit premiums were amortized over a seven-year period and were 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 year ended December 31, 2025.

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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 both March 31, 2026 and December 31, 2025, there were no federal funds purchased outstanding.

•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 March 31, 2026 and December 31, 2025.

•Short-term FHLB advances are secured borrowings available to the Bank as an alternative funding source. As of both March 31, 2026 and December 31, 2025, the Bank had no 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 March 31, 2026 and December 31, 2025, 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 $11.0 million and $10.9 million as of March 31, 2026 and December 31, 2025, respectively. The table below provides additional information related to the Notes as of and for the three months ended March 31, 2026 and 2025.

		March 31,		March 31,
		2026		2025
		(Dollars in Thousands)
Balance at period-end		$10,963		$10,890
Average balance during the period		$10,957		$10,884
Maximum month-end balance during the period		$10,963		$10,890
Average rate paid during the period, including amortization of debt issuance costs		4.20%		4.20%
Weighted average remaining maturity (in years)		5.50		6.50

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 March 31, 2026 and December 31, 2025, the Company’s available unused lines of credit consisted of the following:

Available Unused Lines of Credit		Collateral Requirements		March 31, 2026		December 31, 2025
Correspondent banks		None		$48.0 million		$48.0 million
FHLB advances (1)		Subject to collateral		$326.5 million		$324.1 million
FRB (2)		Subject to collateral		$212.1 million		$210.9 million

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(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 $50.2 million and $50.5 million as of March 31, 2026 and December 31, 2025, respectively. The Company’s collateral exposure with the FHLB in the form of advances and letters of credit was $20.0 million as of both March 31, 2026 and December 31, 2025, leaving an excess of collateral of $30.2 million and $30.5 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 $0.5 million and $0.6 million for the three months ended March 31, 2026 and 2025, respectively. The Company’s effective tax rate was 20.9% and 23.8%, 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 $2.7 million and $2.8 million as of March 31, 2026 and December 31, 2025, 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.

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 $2.3 million and $2.4 million as of March 31, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025, a total of 78,479 and 76,817 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 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 March 31, 2026, only stock options and restricted stock have been granted. Stock-based compensation expense related to stock awards totaled $0.2 million and for the both three months ended March 31, 2026 and 2025.

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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 three months ended March 31, 2026 or 2025.

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

		Three Months Ended
		March 31, 2026								March 31, 2025
		Number of Shares				Weighted-Average Exercise Price				Number of Shares				Weighted-Average Exercise Price
Options:
Outstanding, beginning of period			181,200			$	11.29				268,250			$	10.62
Granted			—				—				—				—
Exercised			27,800				8.70				20,750				8.30
Expired			7,800				8.30				5,500				8.23
Forfeited			—				—				—				—
Options outstanding, end of period			145,600			$	11.86				242,000			$	10.88
Options exercisable, end of period			145,600			$	11.86				242,000			$	10.88

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 $0.6 million as of March 31, 2026 and 2025, respectively.

Restricted Stock

During the three months ended March 31, 2026 and 2025, 46,365 shares and 49,400 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.

		Three Months Ended
		March 31, 2026								March 31, 2025
		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			97,497			$	11.98				92,599			$	10.29
Granted			46,365				15.64				49,400				13.15
Released from restriction			48,126				11.60				50,075				10.37
Forfeited			1,668				13.80				—				—
Unvested shares, end of period			94,068			$	13.95				91,924			$	11.78

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.

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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 months ended March 31, 2026 and 2025:

		Location in the Condensed		Three Months Ended
		Consolidated Statements of Operations		March 31, 2026				March 31, 2025
				(Dollars in Thousands)
Operating lease income (1)		Lease income		$	269			$	284
Operating lease expense (2)		Net occupancy and equipment		$	123			$	109

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

(2)Includes short-term lease costs. For the three months ended March 31, 2026 and 2025, 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 March 31, 2026 and December 31, 2025:

		Location in the Condensed
		Consolidated Balance Sheets		March 31, 2026				December 31, 2025
				(Dollars in Thousands)
Operating lease right-of-use assets		Other assets		$	1,494			$	1,581
Operating lease liabilities		Other liabilities		$	1,558			$	1,643
Weighted-average remaining lease term (in years)					4.98				5.23
Weighted-average discount rate					4.31	%			4.31	%

The following table provides supplemental lease information for the interim condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025:

		Three Months Ended
		March 31, 2026				March 31, 2025
		(Dollars in Thousands)
Cash paid for amounts included in the measurement of    lease liabilities:
Operating cash flows from operating leases		$	104			$	103

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 March 31, 2026:

		Minimum Rental Payments
		(Dollars in Thousands)
2026		$	315
2027			308
2028			269
2029			183
2030			187
2031 and thereafter			559
Total future minimum lease payments		$	1,821
Less: Imputed interest			263
Total operating lease liabilities		$	1,558

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

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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 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. The Company’s existing credit derivatives are associated with loan participation arrangements, and are not used by the Company to manage interest rate risk in the Company’s assets or liabilities.

Like other financial instruments, derivatives contain an element of credit risk. This risk is measured as the expected replacement value of the contracts. Management enters into bilateral collateral and master netting agreements that provide for the net settlement of all contracts with the same counterparty. Additionally, management monitors counterparty credit risk exposure on each contract to determine appropriate limits on the Company's total credit exposure across all product types.

Cash Flow Hedges

During the fourth quarter of 2025, the Company purchased two interest rate cap 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-OIS Compound) on an aggregate notional amount of $80.0 million related to interest expense on 3-month fixed rate liabilities that will be renewed each quarter. Each contract has a notional amount of $40.0 million and was designated as a derivative instrument in cash flow hedges and is intended to mitigate the Company’s risk of loss associated with upward shifts in the designated interest rate. The contracts provide cash flow to the Company in the event the designated interest rate exceeds the respective strike rates of 3.45% and 3.60% during the contract periods of December 5, 2025 through December 5, 2028 and December 19, 2025 through December 19, 2029, respectively. As of March 31, 2026, the hedge relationships for both interest rate cap contracts were designated effective, and accordingly, changes in the fair value of the contracts were included as an adjustment to accumulated other comprehensive income.

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 March 31, 2026, 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.

Derivative Contracts Not Receiving Hedge Accounting Treatment

Customer-Related Interest Rate Swaps – The Company enters into interest rate swap contracts with certain loan customers. As of March 31, 2026, the aggregate notional amount of these contracts was $11.7 million. The swaps are intended to assist those borrowers in managing interest rate risk. To mitigate the Company’s exposure arising from these customer-related derivatives, the Company enters into corresponding offsetting interest rate swap contracts with third-party counterparties on matching notional amounts. The customer-related derivatives and the offsetting derivatives are not designated as hedging instruments, and accordingly, changes in the fair value of the contracts are recorded as non-interest income or expense. These contracts are intended to economically offset the Company’s exposure to changes in interest rates arising from the customer-related derivative activity.

Credit Derivatives - During 2024, the Company entered into three credit risk participation agreements on the notional amount of $20.7 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 initially included in other liabilities. The derivatives are not eligible for hedge accounting treatment. Accordingly, valuation changes are recorded directly to non-interest income.

Previously Terminated Hedges

During the fourth quarter of 2025, the Company voluntarily terminated two forward starting interest rate swap contracts for a nominal settlement. Each of the contracts had a $20.0 million notional amount, or $40.0 million in the aggregate. The swaps were previously designated as cash flow hedges. As a result of the terminations, the related hedge relationships were discontinued, and the amounts previously recorded in accumulated other comprehensive income were reclassified into earnings.

During the first quarter of 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.

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During the first quarter of 2023, the Company voluntarily terminated two interest rate swap contracts, each with notional amounts of $10.0 million, or an aggregate amount of $20.0 million. The swaps were previously designated as cash flow hedges. The termination resulted in a net unrealized gain totaling $1.1 million. The unrealized gain was initially recorded in accumulated other comprehensive income, net of tax, and is being reclassified to reduce interest expense over the original terms of the swap contracts. Remaining unrealized gains associated with these terminated cash flow hedges totaled $0.1 million as of both March 31, 2026 and December 31, 2025.

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 March 31, 2026 and December 31, 2025.

		As of March 31, 2026								As of December 31, 2025
						Estimated								Estimated
						Fair Value								Fair Value
		Notional Amount				Gain (Loss) (1)				Notional Amount				Gain (Loss) (1)
		(Dollars in Thousands)
Derivatives designated as hedging instruments:
Cash flow hedges:
Interest rate floors		$	20,000				164			$	20,000				166
Interest rate caps		$	80,000				1,173			$	80,000				795
Total cash flow hedges						$	1,337							$	961
Total derivatives designated as hedging instruments, net							1,337								961
Derivatives not designated as hedging instruments:
Interest rate floors		$	-			$	-			$	25,000			$	-
Credit risk participation agreements		$	20,702				(48	)		$	18,649				(46	)
Customer-related interest rate swaps		$	11,708				58			$	11,776				106
Customer-related interest rate swaps		$	11,708				(58	)		$	11,776				(106	)
Total derivatives not designated as hedging instruments, net						$	(48	)						$	(46	)

(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 months ended March 31, 2026 and 2025. 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.

Location in the Condensed				Three Months Ended
Consolidated Statements of Operations				March 31, 2026				March 31, 2025
				(Dollars in Thousands)
Interest income		Interest and fees on loans		$	(18	)		$	(29	)
Interest expense		Interest on deposits			(7	)			97
Non-interest income		Other non-interest income			(1	)			(17	)
Non-interest expense		Other non-interest expense			—				(4	)
		Net (decrease) increase to income before income taxes		$	(26	)		$	47

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13.OTHER OPERATING INCOME AND EXPENSE

Other Operating Income

Other operating income for the three months ended March 31, 2026 and 2025 consisted of the following:

		Three Months Ended
		March 31, 2026				March 31, 2025
		(Dollars in Thousands)
Bank-owned life insurance		$	141			$	137
ATM fee income			64				84
Other income			83				82
Total		$	288			$	303

Other Operating Expense

Other operating expense for the three months ended March 31, 2026 and 2025 consisted of the following:

		Three Months Ended
		March 31, 2026				March 31, 2025
		(Dollars in Thousands)
Postage, stationery and supplies		$	141			$	149
Telephone/data communication			249				199
Collection and recoveries			79				70
Directors fees			120				93
Software amortization			146				108
Other real estate/foreclosure expense, net			51				20
Other expense			690				657
Total		$	1,476			$	1,296

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:

		March 31, 2026				December 31, 2025
		(Dollars in Thousands)
Standby letters of credit		$	—			$	—
Standby performance letters of credit		$	692			$	722
Commitments to extend credit		$	106,486			$	122,365

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 March 31, 2026 and December 31, 2025, 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.

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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 $0.3 million and $0.4 million as of March 31, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025. 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 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 three months ended March 31, 2026 or the year ended December 31, 2025.

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 net fair value on a recurring basis as of March 31, 2026 and December 31, 2025.

		Fair Value Measurements as of March 31, 2026 Using
		Totals At March 31, 2026				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		$	118,142			$	—			$	118,142			$	—
Commercial			8,440				—				8,440				—
Obligations of U.S. government-sponsored agencies			16,204				—				16,204				—
Obligations of states and political subdivisions			1,735				—				1,735				—
Corporate notes			17,111				—				17,111				—
U.S. Treasury securities			19,477				19,477				—				—
Derivative contracts:
Other assets - interest rate caps			1,173				—				1,173				—
Other assets - interest rate floors			164				—				164				—
Other assets - customer-related interest rate swaps			58				—				58				—
Other liabilities - customer-related interest rate swaps			58				—				58				—
Other liabilities - credit risk participation agreements			48				—				48				—

		Fair Value Measurements as of December 31, 2025 Using
		Totals At December 31, 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		$	105,778			$	—			$	105,778			$	—
Commercial			7,583				—				7,583				—
Obligations of U.S. government-sponsored agencies			16,504				—				16,504
Obligations of states and political subdivisions			1,750				—				1,750				—
Corporate notes			17,026								17,026				—
U.S. Treasury securities			19,434				19,434				—				—
Derivative contracts:
Other assets - interest rate caps			795				—				795				—
Other assets - interest rate floors			166				—				166				—
Other assets - customer-related interest rate swaps			106				—				106				—
Other liabilities - customer-related interest rate swaps			106				—				106				—
Other liabilities - credit risk participation agreements			46				—				46				—

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

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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 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 March 31, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025:

		Fair Value Measurements as of March 31, 2026 Using
		Totals At March 31, 2026				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		$	161			$	—			$	—			$	161
OREO and other assets held-for-sale			215				—				—				215

		Fair Value Measurements as of December 31, 2025 Using
		Totals At December 31, 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		$	161			$	—			$	—			$	161
OREO and other assets held-for-sale			256				—				—				256

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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 March 31, 2026 and December 31, 2025. 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 March 31, 2026 and December 31, 2025 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 March 31, 2026

Valuation Technique

Unobservable Input

Quantitative Range of Unobservable Inputs (Weighted Average)

(Dollars in Thousands)

Non-recurring fair value measurements:

Collateral dependent loans

$

161

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

$

215

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, 2025

Valuation Technique

Unobservable Input

Quantitative Range of Unobservable Inputs (Weighted Average)

(Dollars in Thousands)

Non-recurring fair value measurements:

Collateral dependent loans

$

161

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

$

256

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

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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 consolidated 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 consolidated 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 net 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 March 31, 2026 and December 31, 2025 were as follows:

		March 31, 2026
		Carrying Amount				Estimated Fair Value				Level 1				Level 2				Level 3
		(Dollars in Thousands)
Assets:
Cash and cash equivalents		$	66,586			$	66,586			$	66,586			$	—			$	—
Investment securities available-for-sale			181,109				181,109				19,477				161,632				—
Investment securities held-to-maturity			436				419				—				419				—
Federal funds sold and securities purchased under reverse repurchase agreements			18,850				18,850				—				18,850				—
Federal Home Loan Bank stock			829				829				—				—				829
Loans, net of allowance for credit losses			833,161				793,073				—				—				793,073
Other assets - interest rate caps			1,173				1,173				—				1,173				—
Other assets - interest rate floors			164				164				—				164				—
Other assets - customer-related interest rate swaps			58				58				—				58				—
Liabilities:
Deposits			1,038,849				975,904				—				975,904				—
Long-term borrowings			10,963				10,227				—				10,227				—
Other liabilities - customer-related interest rate swaps			58				58				—				58				—
Other liabilities - credit risk participation agreements			48				48				—				48				—

		December 31, 2025
		Carrying Amount				Estimated Fair Value				Level 1				Level 2				Level 3
		(Dollars in Thousands)
Assets:
Cash and cash equivalents		$	73,547			$	73,547			$	73,547			$	—			$	—
Investment securities available-for-sale			168,075				168,075				19,434				148,641				—
Investment securities held-to-maturity			465				449				—				449				—
Federal funds sold			4,850				4,850				—				4,850				—
Federal Home Loan Bank stock			791				791				—				—				791
Loans, net of allowance for credit losses			842,314				817,766				—				—				817,766
Other assets - interest rate caps			795				795				—				795				—
Other assets - interest rate floors			166				166				—				166				—
Other assets - customer-related interest rate swaps			106				106				—				106				—
Liabilities:
Deposits			1,027,962				973,141				—				973,141				—
Long-term borrowings			10,945				10,126								10,126				—
Other liabilities - customer-related interest rate swaps			106				106				—				106				—
Other liabilities - credit risk participation agreements			46				46				—				46				—

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.

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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.

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 segment 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 months ended March 31, 2026 and 2025:

		Bank Segment
		For the three months ended March 31,
		2026				2025
		(Dollars in Thousands)
Income:
Interest income		$	14,940			$	14,018
Non-interest income			840				875
Total income			15,780				14,893
Less:
Interest expense			5,725				5,121
Provision for credit losses			254				528
Salaries and employee benefits			3,814				3,736
Net occupancy and equipment			971				875
Computer services			337				412
Insurance expense and assessments			415				384
Fees for professional services			328				215
Postage, stationery and supplies			141				149
Telephone/data communication			249				199
Collection and recoveries			79				70
Directors fees			120				93
Software amortization			146				108
Other real estate/foreclosure expense, net			51				20
Other segment items (1)			690				657
Provision for income taxes			515				554
Total expense			13,835				13,121
Segment net income		$	1,945			$	1,772

(1) Other segment items includes advertising expense, travel and business development expense, 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 153 full-time equivalent employees (as of March 31, 2026), 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 2025 Form 10-K.

The emphasis of this discussion is a comparison of assets, liabilities and shareholders’ equity as of March 31, 2026 to December 31, 2025, while comparing income and expense for the three months ended March 31, 2026 and 2025. 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 2025 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.

RECENT MARKET CONDITIONS

During the three months ended March 31, 2026, the banking industry continued to operate in an environment characterized by economic uncertainty, influenced by moderating, but still resilient, U.S. economic growth, inflation levels remaining above the Federal Reserve’s long-term objective, and a labor market that has shown signs of gradual softening. While U.S. gross domestic product (“GDP”) growth moderated from levels experienced during the middle of 2025, economic activity remained positive entering 2026, supported by consumer spending and business investment, though at a slower pace.

During the first quarter of 2026, financial markets were significantly impacted by the onset of military conflict involving Iran beginning in late February 2026. The conflict, including disruptions to energy markets and shipping routes in the Strait of Hormuz, contributed to increased volatility across global financial markets and renewed upward pressure on inflation expectations. Oil prices increased sharply during the quarter, and global supply chain disruptions intensified, contributing to heightened economic uncertainty and raising concerns regarding the potential for slower economic growth or recessionary conditions should the conflict persist.

Market interest rates, including U.S. Treasury yields, exhibited increased volatility during the first quarter of 2026 compared to the fourth quarter of 2025. While Treasury yields generally declined during the latter part of 2025 as markets anticipated monetary policy easing, yields moved higher during portions of the first quarter of 2026 in response to rising inflation expectations and geopolitical uncertainty associated with the Iran conflict. For example, the 10-year U.S. Treasury yield increased meaningfully following the onset of the conflict, reaching levels above those observed at year-end 2025, before experiencing periods of fluctuation as market sentiment shifted. The combination of moderating economic growth, inflation above target levels, geopolitical instability, and evolving expectations for monetary policy continues to create a challenging environment in which to predict future interest rate movements.

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Uncertainty remains elevated with respect to U.S. fiscal and trade policy, including the ongoing and potential impacts of tariffs implemented by the Trump administration and the possibility of additional policy changes. Geopolitical risks, including the ongoing conflict involving Iran as well as continued unrest in the Middle East and Ukraine, persist and contribute to broader global economic uncertainty. These factors may continue to impact business sentiment, energy markets, supply chains, and overall economic activity.

In the Company’s local markets, competitive pressures for both loans and deposits have remained elevated during the first quarter of 2026. Competition for deposits continues to constrain the Company’s ability to significantly reduce funding costs despite the decline in market interest rates relative to peak levels in 2025. Commercial lending activity has remained measured as business customers continue to evaluate the potential impact of interest rate movements, geopolitical developments, and broader economic uncertainty on their operations. Consumer spending trends have remained mixed on a macroeconomic basis; however, the Company has continued to experience growth in consumer indirect lending, primarily within higher credit quality segments.

The competitive environment, combined with ongoing economic, geopolitical, and policy uncertainty, continues to present a challenging operating environment for maintaining and improving the Company’s net interest margin. Management continues to closely monitor these conditions and believes the Company remains well positioned to respond to a range of economic outcomes; however, adverse changes in economic conditions, credit quality, competitive dynamics, geopolitical developments, or interest rate movements could negatively impact the Company’s financial condition and results of operations.

EXECUTIVE OVERVIEW

The Company earned net income of $1.9 million, or $0.33 per diluted common share, during the three months ended March 31, 2026, compared to $1.8 million, or $0.29 per diluted common share, for the three months ended March 31, 2025. Comparing the two periods, the increase in net income resulted primarily from increased interest income associated with growth in earning assets, as well as from a decrease in the Company’s provision for credit losses on loans and leases.

Summarized condensed consolidated statements of operations are included below for the three months ended March 31, 2026 and 2025.

		Three Months Ended
		March 31,				March 31,
		2026				2025
		(Dollars in Thousands, Except Per Share Data)
Interest income		$	14,940			$	14,018
Interest expense			5,725				5,121
Net interest income			9,215				8,897
Provision for credit losses			254				528
Net interest income after provision for credit losses			8,961				8,369
Non-interest income			840				875
Non-interest expense			7,341				6,918
Income before income taxes			2,460				2,326
Provision for income taxes			515				554
Net income		$	1,945			$	1,772
Basic net income per share		$	0.34			$	0.30
Diluted net income per share		$	0.33			$	0.29
Dividends per share		$	0.07			$	0.07

The discussion that follows summarizes the most significant activity that drove changes in the Company’s operating results during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Net Interest Income and Margin

Net interest income increased by $0.3 million, or 3.6%, comparing the three months ended March 31, 2026 to the three months ended March 31, 2025. The increase resulted from growth in average interest-earning asset balances comparing the two periods. Average interest-earning assets increased by $86.3 million, or 8.4%, comparing the three months ended March 31, 2026 to the corresponding period of 2025. Earning asset growth was reflected in total loans, investment securities, federal funds sold and interest-bearing deposits with other financial institutions. The increase in interest income was partially offset by both volume and rate-related increases in interest expense associated with interest-bearing liabilities. While the increase in earning assets was favorable to the Company’s net interest income, net interest margin decreased as the average yield on interest-earnings assets declined at a faster pace than the average rate on interest-bearing liabilities. Net interest margin was 3.37% for the three months ended March 31, 2026, compared to 3.53% for the three months ended March 31, 2025.

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Provision for Credit Losses

For the three months ended March 31, 2026, the Company recorded a provision for credit losses of $0.3 million, compared to $0.5 million for the three months ended March 31, 2025. The decrease in provisioning comparing the two periods was primarily associated with a reduction in loan growth during the first quarter of 2026 compared to the first quarter of 2025, including the impact of the Company’s reserve for unfunded lending commitments. As of both March 31, 2026 and December 31, 2025, the Company’s allowance for credit losses ("ACL") on loans and leases as a percentage of total loans was 1.25%.

Non-interest Income

Non-interest income remained relatively consistent, totaling $0.8 million for the three months ended March 31, 2026, compared to $0.9 million for the three months ended March 31, 2025.

Non-interest Expense

Non-interest expense increased to $7.3 million for the three months ended March 31, 2026, compared to $6.9 million for the three months ended March 31, 2025. The increase comparing the 2026 period to the 2025 period resulted from increases in a number of expense categories, primarily fees for professional services, occupancy, and salaries and benefits expense.

Total Assets

As of March 31, 2026, the Company’s assets totaled $1,165.2 million, compared to $1,154.8 million as of December 31, 2025, an increase of 0.9%.

Loans

Total loans decreased by $9.3 million, or 1.1%, as of March 31, 2026, compared to December 31, 2025, as growth in the multi-family residential real estate and indirect categories was offset by decreases primarily in the construction, non-residential commercial real estate and commercial and industrial (“C&I”) categories. The decrease in construction is consistent with the ebb and flow of projects in the Company's service territories. Construction loans are generally short-to-medium term loans that are expected to pay off or transfer to another loan category upon project completion. The decrease in non-residential commercial real estate was related to completed construction projects that moved into a permanent category, but were subsequently refinanced into the permanent market. The growth in the indirect category accelerated in the latter part of the first quarter of 2026, consistent with typical seasonal trends. The indirect lending platform focuses on consumer lending at 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 three months ended March 31, 2026 was 797, while the weighted average credit score for the entire portfolio was 783. While total loans decreased during the first quarter of 2026, average loan balances remained higher comparing the three months ended March 31, 2026 to the three months ended March 31, 2025, increasing by $26.7 million, or 3.2%.

Asset Quality

Nonperforming assets, including loans in non-accrual status and other real estate owned, totaled $1.8 million as of March 31, 2026, an increase from $1.6 million as of December 31, 2025. As a percentage of total assets, nonperforming assets increased to 0.16% as of March 31, 2026, compared to 0.14% as of December 31, 2025. Net charge-offs as a percentage of average loans totaled 0.23% during the three months ended March 31, 2026, compared to 0.13% during the three months ended March 31, 2025. The increase in net charge-offs comparing the two periods was due primarily to an increase in charge-offs associated with the indirect consumer portfolio.

Deposits

Total deposits increased by $10.9 million, or 1.1%, during the three months ended March 31, 2026, due primarily to an increase in interest-bearing demand deposits of $28.4 million, partially offset by a $4.7 million decrease in noninterest-bearing deposits and a $12.8 million decrease in time deposits. Core deposits, which exclude time deposits of $250 thousand or more and all wholesale brokered deposits, totaled $853.8 million, or 82.2% of total deposits, as of March 31, 2026, compared to $838.3 million, or 81.6% of total deposits, as of December 31, 2025. The average rate on deposits totaled 2.18% during the three months ended March 31, 2026, compared to 2.07% during the three months ended March 31, 2025. In the current environment, significant competitive pressure remains to acquire and maintain deposit balances.

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Cash and Investment Securities

As of March 31, 2026, the Company held cash, federal funds sold and securities purchased under reverse repurchase agreements totaling $85.4 million, or 7.3% of total assets, compared to $78.4 million, or 6.8% of total assets, as of December 31, 2025. Investment securities, including both the available-for-sale and held-to-maturity portfolios, totaled $181.5 million as of March 31, 2026, compared to $168.5 million as of December 31, 2025. During the three months ended March 31, 2026, the Company purchased $20.5 million of investment securities at market rates in existence at the time of purchase. These purchases, combined with the maturity and paydown of investment securities at lower rates, led to continued improvement in yield on the portfolio. The yield on investment securities, including both available-for-sale and held to maturity securities, totaled 3.89% during the three months ended March 31, 2026, compared to 3.44% during the three months ended March 31, 2025. As of March 31, 2026, the expected average life of securities in the investment portfolio was 3.8 years compared to 3.7 years as of December 31, 2025.

Shareholders’ Equity

As of March 31, 2026, shareholders’ equity totaled $104.6 million, or 9.0% of total assets, compared to $105.6 million, or 9.1% of total assets, as of December 31, 2025. While earnings, net of dividends paid, increased shareholders’ equity during the three months ended March 31, 2026, the increase was fully offset by share repurchases, combined with an increase in the Company’s accumulated other comprehensive loss resulting from the increasing interest rate environment during the period.

Cash Dividends

During both the three months ended March 31, 2026 and 2025, the Company declared cash dividends totaling $0.07 per share on its common stock.

Share Repurchases

During the three months ended March 31, 2026, the Company completed the repurchase of 146,500 shares of its common stock at a weighted average price of $15.03 per share. The repurchases were completed under the Company’s previously announced share repurchase program, which was expanded during the fourth quarter of 2025. As of March 31, 2026, 1,638,313 shares remained available for repurchase under the program.

Regulatory Capital

During the three months ended March 31, 2026, 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 March 31, 2026, the Bank’s common equity Tier 1 capital and Tier 1 risk-based capital ratios were each 10.85%. Its total capital ratio was 11.99%, and its Tier 1 leverage ratio was 8.85%.

Liquidity

As of March 31, 2026, 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 three months ended March 31, 2026, the Company neared completion on renovation of a banking center office in Daphne, Alabama that was purchased from another financial institution. This location will serve as the Bank’s initial deposit gathering facility in the Daphne/Mobile area, and is expected to open to the public during the second quarter of 2026.

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.

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The following tables show the average balances of each principal category of assets, liabilities and shareholders’ equity for the three months ended March 31, 2026 and 2025. 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.

		Three Months Ended												Three Months Ended
		March 31, 2026												March 31, 2025
		Average Balance				Interest				Annualized Yield/ Rate %				Average Balance				Interest				Annualized Yield/ Rate %
ASSETS
Interest-earning assets:
Loans (1)		$	851,224			$	12,491				5.95	%		$	824,531			$	12,241				6.02	%
Investment securities			175,707				1,687				3.89	%			166,241				1,412				3.44	%
Federal Home Loan Bank stock			794				12				6.13	%			1,341				24				7.26	%
Federal funds sold and securities purchased under reverse repurchase agreements			15,706				152				3.92	%			4,850				53				4.43	%
Interest-bearing deposits in banks			66,066				598				3.67	%			26,220				288				4.45	%
Total interest-earning assets			1,109,497				14,940				5.46	%			1,023,183				14,018				5.56	%
Noninterest-earning assets			63,893												64,155
Total assets		$	1,173,390											$	1,087,338
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing deposits:
Demand deposits		$	210,675			$	399				0.77	%		$	212,130			$	493				0.94	%
Money market/savings deposits			330,507				2,128				2.61	%			257,046				1,544				2.44	%
Time deposits			353,705				3,083				3.53	%			330,241				2,832				3.48	%
Total interest-bearing deposits			894,887				5,610				2.54	%			799,417				4,869				2.47	%
Noninterest-bearing demand deposits			150,438				—				—				155,294				—				—
Total deposits			1,045,325				5,610				2.18	%			954,711				4,869				2.07	%
Borrowings			10,955				115				4.26	%			23,404				252				4.37	%
Total funding liabilities			1,056,280				5,725				2.20	%			978,115				5,121				2.12	%
Other noninterest-bearing liabilities			11,320												9,489
Shareholders’ equity			105,790												99,734
Total liabilities and shareholders' equity		$	1,173,390											$	1,087,338
Net interest income (2)						$	9,215											$	8,897
Net interest margin											3.37	%											3.53	%

(1)	For the purpose of these computations, non-accruing loans are included in the average loan amounts outstanding. These loans averaged $1.4 million and $4.0 million for the three months ended March 31, 2026 and 2025, respectively.
(2)	Loan fees are included in interest amounts presented. Loan fees totaled $0.3 million and $0.2 million for the three months ended March 31, 2026 and 2025, 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 March 31, 2026												Three Months Ended March 31, 2025
		Compared to												Compared to
		Three Months Ended March 31, 2025												Three Months Ended March 31, 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		$	396			$	(146	)		$	250			$	40			$	(652	)		$	(612	)
Investment securities			80				195				275				202				345				547
Federal Home Loan Bank stock			(10	)			(2	)			(12	)			8				(2	)			6
Federal funds sold and securities purchased under reverse repurchase agreements			119				(20	)			99				(24	)			(12	)			(36	)
Interest-bearing deposits in banks			438				(128	)			310				(93	)			(71	)			(164	)
Total interest-earning assets			1,023				(101	)			922				133				(392	)			(259	)
Interest expense on:
Demand deposits			(3	)			(91	)			(94	)			14				227				241
Money market/savings deposits			441				143				584				(24	)			(316	)			(340	)
Time deposits			201				50				251				(58	)			(73	)			(131	)
Borrowings			(134	)			(3	)			(137	)			84				30				114
Total interest-bearing liabilities			505				99				604				16				(132	)			(116	)
Increase (decrease) in net interest income		$	518			$	(200	)		$	318			$	117			$	(260	)		$	(143	)

Interest income increased by $0.9 million, comparing the three months ended March 31, 2026 to the three months ended March 31, 2025. The increase in interest income resulted from a $1.0 increase attributable to growth in average interest-earning assets, partially offset by a $0.1 million decrease attributable to lower average yields on interest-earning assets. With the exception of investment securities, yields in all earning asset categories declined comparing the three months ended March 31, 2026 to the three months ended March 31, 2025 as short-term interest rates generally declined comparing the two periods.

Interest expense increased by $0.6 million, comparing the three months ended March 31, 2026 to the three months ended March 31, 2025. The increase resulted primarily from increases in both the average balance and rates paid on money market and time deposits. These increases were partially offset by reductions in both average balances and rates associated with demand deposits and borrowings.

The Company’s net interest income and net interest margin during the three months ended March 31, 2026 continued to be impacted by variability in the interest rate environment. Notably, between September and December 2025, the federal funds rate was reduced by 75 basis points, and generally, the Company’s interest-earning assets have repriced downward more quickly than interest-bearing liabilities, reducing the Company’s net interest margin to 3.37% during the three months ended March 31 2026, compared to 3.53% during the three months ended March 31, 2025. 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.

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Provision for Credit Losses

For the three months ended March 31, 2026, the Company recorded a provision for credit losses of $0.3 million, compared to $0.5 million for the three months ended March 31, 2025. The decrease in provisioning comparing the two periods was primarily associated with a reduction in loan growth during the first quarter of 2026 compared to the first quarter of 2025, including the impact of the Company’s reserve for unfunded lending commitments. Net charge-offs totaled $0.5 million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively.

As of both March 31, 2026 and December 31, 2025, the Company’s ACL as a percentage of total loans and leases was 1.25%. 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 March 31,
		2026				2025				$ Change				% Change
		(Dollars in Thousands)
Service charges and other fees on deposit accounts		$	283			$	288			$	(5	)			(1.7	)%
Bank-owned life insurance			141				137				4				2.9	%
Lease income			269				284				(15	)			(5.3	)%
ATM fee income			64				84				(20	)			(23.8	)%
Other income			83				82				1				1.2	%
Total non-interest income		$	840			$	875			$	(35	)			(4.0	)%

The Company’s non-interest income remained relatively consistent, totaling $0.8 million for the three months ended March 31, 2026, compared to $0.9 million for the three months ended March 31, 2025. 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 March 31,
		2026				2025				$ Change				% Change
		(Dollars in Thousands)
Salaries and employee benefits		$	3,814			$	3,736			$	78				2.1	%
Net occupancy and equipment			971				875				96				11.0	%
Computer services			337				412				(75	)			(18.2	)%
Insurance expense and assessments			415				384				31				8.1	%
Fees for professional services			328				215				113				52.6	%
Postage, stationery and supplies			141				149				(8	)			(5.4	)%
Telephone/data communications			249				199				50				25.1	%
Collection and recoveries			79				70				9				12.9	%
Directors fees			120				93				27				29.0	%
Software amortization			146				108				38				35.2	%
Other real estate/foreclosure expense, net			51				20				31				155.0	%
Other expense			690				657				33				5.0	%
Total non-interest expense		$	7,341			$	6,918			$	423				6.1	%

Non-interest expense totaled $7.3 million during the three months ended March 31, 2026, compared to $6.9 million during the three months ended March 31, 2025. The increase comparing the 2026 period to the 2025 period resulted from increases in a number of expense categories, primarily fees for professional services, occupancy, and salaries and benefits expense.

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Provision for Income Taxes

The provision for income taxes was $0.5 million and $0.6 million for the three months ended March 31, 2026 and 2025, respectively. The Company’s effective tax rate was 20.9% and 23.8%, 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.

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 3.8 years and 3.7 years as of March 31, 2026 and December 31, 2025, 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 March 31, 2026, available-for-sale securities totaled $181.1 million, or 99.8% of the total investment portfolio, compared to $168.1 million, or 99.7% of the total investment portfolio, as of December 31, 2025. 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 March 31, 2026, held-to-maturity securities totaled $0.4 million, or 0.2% of the total investment portfolio, compared to $0.5 million, or 0.3% of the total investment portfolio, as of December 31, 2025. 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 $2.1 million as of March 31, 2026, compared to $1.0 million as of December 31, 2025. The increase in unrealized losses in the portfolio resulted from changes in the interest rate environment, in particular, increases in market rates, particularly in the mid- to long-term part of the Treasury curve between December 31, 2025 and March 31, 2026. Net unrealized losses within the available-for-sale portfolio were recognized, net of tax, in accumulated other comprehensive loss.

As of March 31, 2026, 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.

48

Loans and Leases

The Company’s total loan portfolio decreased by $9.3 million, or 1.1%, as of March 31, 2026, compared to December 31, 2025. 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 March 31, 2026:

		Quarter Ended
		2026				2025
		March 31,				December 31,				September 30,				June 30,				March 31,
		(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans		$	27,236			$	32,618			$	38,560			$	48,101			$	58,572
Secured by 1-4 family residential properties			65,460				66,996				67,620				67,587				68,523
Secured by multi-family residential properties			124,826				117,769				112,763				118,807				106,374
Secured by non-residential commercial real estate			189,408				200,699				211,400				215,035				214,065
Commercial and industrial loans			46,665				48,360				46,562				40,986				45,166
Consumer loans:
Direct			4,362				4,844				4,999				4,836				4,610
Indirect			385,740				381,732				385,616				376,079				351,025
Total loans			843,697			$	853,018				867,520				871,431				848,335
Allowance for credit losses on loans and leases			10,536				10,704				10,700				11,388				10,405
Net loans		$	833,161			$	842,314			$	856,820			$	860,043			$	837,930

As of March 31, 2026 and December 31, 2025, the composition of the non-residential commercial real estate loan portfolio was as follows:

	March 31, 2026										December 31, 2025
	Owner Occupied			Non-Owner Occupied			Total				Owner Occupied			Non-Owner Occupied			Total
	(Dollars in Thousands)
Office	$	7,037		$	34,133		$	41,170			$	7,141		$	33,170		$	40,311
Retail single credit tenant		598			38,558			39,156				603			39,028			39,631
Industrial		5,231			42,325			47,556				5,194			42,522			47,716
Storage		713			4,723			5,436				727			15,645			16,372
Retail services		14,168			—			14,168				14,381			—			14,381
Retail with anchor		2,584			3,443			6,027				2,619			3,486			6,105
Senior housing / Assisted living		17,966			—			17,966				17,965			—			17,965
Other		10,090			7,839			17,929				10,222			7,996			18,218
Total loans	$	58,387		$	131,021		$	189,408			$	58,852		$	141,847		$	200,699

As of March 31, 2026 and December 31, 2025, the composition of the construction, land development, and other land loans loan portfolio was as follows:

	March 31, 2026										December 31, 2025
	Owner Occupied			Non-Owner Occupied			Total				Owner Occupied			Non-Owner Occupied			Total
	(Dollars in Thousands)
Apartments	$	—		$	23,441		$	23,441			$	—		$	22,722		$	22,722
Farmland		2,257			—			2,257				2,322			—			2,322
Retail		—			1,430			1,430				—			7,445			7,445
Other		—			108			108				—			129			129
Total loans	$	2,257		$	24,979		$	27,236			$	2,322		$	30,296		$	32,618

49

The following table classifies the Company's fixed and variable rate loans as of March 31, 2026 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:

		March 31, 2026
		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		$	1			$	27,235			$	—			$	—			$	27,236
Secured by 1-4 family residential properties			2,752				12,013				24,460				26,235				65,460
Secured by multi-family residential properties			67,493				55,069				422				1,842				124,826
Secured by non-residential commercial real estate			46,794				96,079				46,535				—				189,408
Commercial and industrial loans			8,481				32,858				5,326				—				46,665
Consumer loans:
Direct			1,491				2,814				57				—				4,362
Indirect			17,755				16,569				351,416				—				385,740
Total loans		$	144,767			$	242,637			$	428,216			$	28,077			$	843,697
Loans with fixed interest rates:
Real estate loans:
Construction, land development and other land loans		$	1			$	2,364			$	—			$	—			$	2,365
Secured by 1-4 family residential properties			2,078				4,101				3,952				13,306				23,437
Secured by multi-family residential properties			14,002				20,396				422				766				35,586
Secured by non-residential commercial real estate			16,201				69,745				29,201				—				115,147
Commercial and industrial loans			3,435				16,124				5,281				—				24,840
Consumer loans:
Direct			1,477				2,814				57				—				4,348
Indirect			17,755				16,569				351,416				—				385,740
Total loans with fixed interest rates		$	54,949			$	132,113			$	390,329			$	14,072			$	591,463
Loans with variable interest rates:
Real estate loans:
Construction, land development and other land loans		$	—			$	24,871			$	—			$	—			$	24,871
Secured by 1-4 family residential properties			674				7,912				20,508				12,929				42,023
Secured by multi-family residential properties			53,491				34,673				—				1,076				89,240
Secured by non-residential commercial real estate			30,593				26,334				17,334				—				74,261
Commercial and industrial loans			5,046				16,734				45				—				21,825
Consumer loans:
Direct			14				—				—				—				14
Indirect			—				—				—				—				—
Total loans with variable interest rates		$	89,818			$	110,524			$	37,887			$	14,005			$	252,234

50

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 March 31, 2026:

		Quarter Ended
		2026				2025
		March 31,				December 31,				September 30,				June 30,				March 31,
		(Dollars in Thousands)
Balance at beginning of period		$	10,704			$	10,700			$	11,388			$	10,405			$	10,184
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			(48	)			—				—				—				—
Commercial and industrial loans			—				—				(1,024	)			(1,191	)			—
Consumer loans:
Direct			(1	)			(4	)			—				(5	)			—
Indirect			(590	)			(464	)			(411	)			(595	)			(422	)
Total charge-offs			(639	)			(468	)			(1,435	)			(1,791	)			(422	)
Recoveries:
Real estate loans:
Construction, land development and other land loans			—				—				—				—				—
Secured by 1-4 family residential properties			5				9				10				5				6
Secured by multi-family residential properties			—				—				—				—				—
Secured by non-residential commercial real estate			—				49				—				—				—
Commercial and industrial loans			10				149				—				—				16
Consumer loans:
Direct			32				42				42				50				57
Indirect			99				36				45				44				74
Total recoveries			146				285				97				99				153
Net charge-offs			(493	)			(183	)			(1,338	)			(1,692	)			(269	)
Provision for credit losses on loans and leases			325				187				650				2,675				490
Ending balance		$	10,536			$	10,704			$	10,700			$	11,388			$	10,405
Ending balance as a percentage of loans			1.25	%			1.25	%			1.23	%			1.31	%			1.23	%
Net charge-offs as a percentage of average loans			0.23	%			0.08	%			0.61	%			0.79	%			0.13	%

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 March 31, 2026, the Company’s reserve for unfunded commitments, which is recorded in other liabilities in the Company’s consolidated balance sheets, totaled $0.3 million, compared to $0.4 million as of December 31, 2025.

51

Nonperforming Assets

Nonperforming assets at the end of the five most recent quarters as of March 31, 2026 were as follows:

		Quarter Ended
		2026				2025
		March 31,				December 31,				September 30,				June 30,				March 31,
		(Dollars in Thousands)
Non-accrual loans		$	1,629			$	1,373			$	1,066			$	2,447			$	3,668
Other real estate owned			215				256				1,158				1,298				1,328
Total		$	1,844			$	1,629			$	2,224			$	3,745			$	4,996
Nonperforming assets as a percentage of total loans and other real estate			0.22	%			0.19	%			0.26	%			0.43	%			0.59	%
Nonperforming assets as a percentage of total assets			0.16	%			0.14	%			0.19	%			0.33	%			0.44	%
Non-accrual loans as a percentage of total loans			0.19	%			0.16	%			0.12	%			0.28	%			0.43	%
ACL as a percentage of non-accrual loans			646.78	%			779.61	%			1003.75	%			465.39	%			283.67	%

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 Three Months Ended												As of and for the Year Ended
		March 31, 2026												December 31, 2025
		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		$	133				0.49	%			—			$	222				0.68	%			—
Secured by 1-4 family residential properties			345				0.53	%			-0.03	%			371				0.55	%			-0.04	%
Secured by multi-family residential properties			659				0.53	%			0.00	%			666				0.57	%			—
Secured by non-residential commercial real estate			1,306				0.69	%			0.09	%			1,420				0.71	%			-0.02	%
Commercial and industrial loans			344				0.74	%			-0.09	%			399				0.83	%			4.55	%
Consumer loans:
Direct			21				0.48	%			-2.69	%			50				1.03	%			-3.78	%
Indirect			7,728				2.00	%			0.53	%			7,576				1.98	%			0.50	%
Total		$	10,536				1.25	%			0.23	%		$	10,704				1.25	%			0.41	%

Net charge-offs as a percentage of average loans in the three prior full years were as follows: 0.14% (2024), 0.14% (2023), 0.16% (2022).

Deposits

Total deposits increased to $1,038.8 million as of March 31, 2026, from $1,028.0 million as of December 31, 2025, an increase of 1.1%. The increase was due primarily to an increase in interest-bearing demand deposits of $28.4 million, partially offset by a $4.7 million decrease in noninterest-bearing deposits and a $12.8 million decrease in time deposits. 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 $853.8 million, or 82.2% of total deposits, as of March 31, 2026, compared to $838.3 million, or 81.6% of total deposits, as of December 31, 2025.

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.

52

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

		As of and for the Three Months Ended
		March 31, 2026
		Number of Accounts				Average Balance Per Account				Dollars				Percentage of Total Deposits
						(Dollars in Thousands)
Non-interest-bearing demand deposits			8,746			$	17			$	149,079				14.4	%
Interest-bearing demand deposits			6,099				35				210,495				20.2	%
Money market and savings			8,262				40				331,863				31.9	%
Certificates of deposits >$250 thousand			97				485				47,063				4.5	%
Certificates of deposits $100-$250 thousand			510				142				72,495				7.0	%
Certificates of deposits <$100 thousand			3,736				24				89,910				8.7	%
Total (excluding brokered certificates of deposit)			27,450			$	33				900,905				86.7	%
Brokered deposits											137,944				13.3	%
Total										$	1,038,849				100.0	%

		As of and for the Year Ended
		December 31, 2025
		Number of Accounts				Average Balance Per Account				Dollars				Percentage of Total Deposits
						(Dollars in Thousands)
Non-interest-bearing demand deposits			8,822			$	17			$	153,809				15.0	%
Interest-bearing demand deposits			6,124				34				206,985				20.1	%
Money market and savings			8,332				37				307,007				29.9	%
Certificates of deposits >$250 thousand			110				470				51,699				5.0	%
Certificates of deposits $100-$250 thousand			537				142				76,475				7.4	%
Certificates of deposits <$100 thousand			3,900				24				94,043				9.2	%
Total (excluding brokered certificates of deposit)			27,825			$	32				890,018				86.6	%
Brokered deposits											137,944				13.4	%
Total										$	1,027,962				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 March 31, 2026, other interest-bearing liabilities totaled 3.5% of total interest-bearing liabilities, compared to 2.5% as of December 31, 2025.

Shareholders’ Equity

As of March 31, 2026, shareholders’ equity totaled $104.6 million, or 9.0% of total assets, compared to $105.6 million, or 9.1% of total assets, as of December 31, 2025. While earnings, net of dividends paid, increased shareholders’ equity during the three months ended March 31, 2026, the increase was fully offset by share repurchases, combined with an increase in the Company’s accumulated other comprehensive loss resulting from the increasing interest rate environment during the period. During both the three months ended March 31, 2026 and 2025, the Company declared cash dividends totaling $0.07 per share on its common stock.

In addition, during the three months ended March 31, 2026, the Company completed the repurchase of 146,500 shares of its common stock at a weighted average price of $15.03 per share. The repurchases were completed under the Company’s previously announced share repurchase program. As of March 31, 2026, 1,638,313 shares remained available for repurchase under the program. During the three months ended March 31, 2025, the Company repurchased 40,000 shares of its common stock at a weighted average price of $13.38 per share.

53

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 $277.6 million as of March 31, 2026 and $274.7 million as of December 31, 2025. Investment securities forecasted to mature or reprice in one year or less were estimated to be $28.5 million and $27.5 million as of March 31, 2026 and December 31, 2025, 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 3.8 years and 3.7 years as of March 31, 2026 and December 31, 2025, 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 no outstanding borrowings under FHLB advances as of both March 31, 2026 and December 31, 2025. 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 $326.5 million and $324.1 million in remaining unused credit from the FHLB (subject to available collateral, which may include eligible investment securities and loans) as of March 31, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025 the Company had $212.1 and $210.9 million, respectively, in unused borrowing capacity with the FRB’s discount window. As of both March 31, 2026 and December 31, 2025, the Bank had no 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 March 31, 2026 and December 31, 2025.

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 $11.0 million and $10.9 million as of March 31, 2026 and December 31, 2025, respectively.

54

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 March 31, 2026 and December 31, 2025.

	March 31,  2026				December 31,  2025
	(Dollars in Thousands)
	(Unaudited)				(Unaudited)
Liquidity from cash, federal funds sold and securities purchased under reverse repurchase agreements:
Cash and cash equivalents	$	66,586			$	73,547
Federal funds sold and securities purchased under reverse repurchase agreements		18,850				4,850
Total liquidity from cash, federal funds sold and securities purchased under reverse repurchase agreements		85,436				78,397
Liquidity from pledgable investment securities:
Investment securities available-for sale, at fair value		181,109				168,075
Investment securities held-to-maturity, at amortized cost		436				465
Less: securities pledged		(66,105	)			(58,497	)
Less: estimated collateral value discounts		(10,652	)			(10,671	)
Liquidity from pledgable investment securities		104,788				99,372
Liquidity from unused lendable collateral (loans) at FHLB		30,183				30,504
Liquidity from unused lendable collateral (loans and securities) at FRB		212,113				210,921
Unsecured lines of credit with banks		48,000				48,000
Total readily available liquidity	$	480,520			$	467,194

The table 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.

Excluding wholesale brokered deposits, as of March 31, 2026, the Company had approximately 27 thousand deposit accounts with an average balance of approximately $33 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 $231.0 million, or 22.1% of total deposits, as of March 31, 2026. As of December 31, 2025, estimated uninsured deposits totaled $216.8 million, or 22.2% of total deposits. Management believes the Company’s on-balance sheet and other readily available liquidity sources as presented in the table above provide strong indicators of the Company’s ability to fund obligations in a stressed liquidity environment, particularly when considered relative to the Company’ uninsured deposit levels. Furthermore, in addition to the liquidity sources noted in the table above, 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 that the Company has adequate sources of liquidity to cover its contractual obligations and commitments over the next twelve months.

55

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 March 31, 2026, 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%			7				11
+2%			13				21
+3%			17				29
-1%			(1	)			(5	)
-2%			—				(9	)
-3%			1				(11	)

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

		1 Year				2 Years
+1%		$	792			$	2,563
+2%			1,467				4,837
+3%			2,032				6,799
-1%			(127	)			(1,231	)
-2%			(10	)			(2,072	)
-3%			170				(2,564	)

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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 March 31, 2026, 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 March 31, 2026, 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 March 31, 2026 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 2025 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 first quarter of 2026:

Issuer Purchases of Equity Securities

Period		Total Number of Shares Purchased (1) (2)				Average Price Paid per Share (3)				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)
January 1 – January 31			40,525			$	14.35				40,000				1,744,813
February 1 – February 28			52,018			$	15.27				52,000				1,692,813
March 1 – March 31			54,511			$	15.29				54,500				1,638,313
Total			147,054			$	15.02				146,500				1,638,313

(1)554 shares were purchased in open-market transactions by an independent trustee for Bancshares’ 401(k) Plan during the first quarter of 2026.

(2)146,500 shares were repurchased during the first quarter of 2026 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 and 1,000,000 shares in November 2025, and the extended the program's expiration date to December 31, 2026. As of March 31, 2026, Bancshares was authorized to repurchase up to 1,638,313 shares of common stock under the share repurchase program.

(3)Average price paid per share includes shares purchased in open-market transactions by and independent trustee for Bancshares' 401(k) Plan in addition to shares repurchased pursuant to Bancshares' publicly announced 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).
10.1		2026 Cash Incentive Program (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 000-14549), filed on February 12, 2026).
10.2*		First US Bancshares, Inc. Non-Employee Director Fee Schedule
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 March 31, 2026, 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 March 31, 2026, formatted in Inline XBRL.

________________

*Filed herewith

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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: May 7, 2026

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 the first quarter of 2026?

First US Bancshares generated net income of $1,945 thousand for the quarter ended March 31, 2026, up from $1,772 thousand a year earlier. Basic earnings per share were $0.34 and diluted earnings per share were $0.33, reflecting modest profit growth.

What were First US Bancshares (FUSB) total assets and deposits as of March 31, 2026?

As of March 31, 2026, First US Bancshares reported total assets of $1,165,236 thousand. Total deposits were $1,038,849 thousand, consisting of $149,079 thousand in non-interest-bearing deposits and $889,770 thousand in interest-bearing deposits across its banking network.

How did net interest income trend for First US Bancshares (FUSB) in Q1 2026?

Net interest income increased to $9,215 thousand in the first quarter of 2026 from $8,897 thousand in 2025. Total interest income rose to $14,940 thousand, while total interest expense increased to $5,725 thousand, reflecting higher yields and higher funding costs.

What credit quality and allowance levels did First US Bancshares (FUSB) report?

The allowance for credit losses on loans and leases was $10,536 thousand at March 31, 2026, slightly down from $10,704 thousand at year-end 2025. Loans on nonaccrual status totaled $1,629 thousand, and loans past due 90 days or more and still accruing were zero.

How large is First US Bancshares (FUSB) loan portfolio and what are key segments?

Loans and leases held for investment totaled $843,697 thousand as of March 31, 2026. Indirect consumer loans were $385,740 thousand, non-residential commercial real estate loans were $189,408 thousand, and multi-family residential loans were $124,826 thousand, showing a diversified portfolio mix.

What were First US Bancshares (FUSB) shareholder returns in Q1 2026?

First US Bancshares paid a $0.07 per share cash dividend in the quarter and declared total dividends of $395 thousand. The company also repurchased common stock, recording $2,201 thousand of share repurchases, which increased treasury stock to $33,224 thousand by March 31, 2026.