MetroCity Bankshares (Nasdaq: MCBS) lifts net income to $44,445 thousand

Q: How did MetroCity Bankshares (MCBS) perform in the quarter ended June 30, 2026?

MetroCity Bankshares reported net income of $22,131 thousand for the quarter ended June 30, 2026, up from $16,826 thousand a year earlier. Diluted EPS was $0.76 , compared with $0.65 in the 2025 period, showing stronger quarterly profitability.

Q: How strong is asset quality at MetroCity Bankshares (MCBS) as of June 30, 2026?

As of June 30, 2026, nonaccrual loans totaled $17,435 thousand , down from $25,213 thousand at December 31, 2025. The allowance for credit losses was $25,818 thousand , and collateral‑dependent loans carried $2,000 thousand of allocated allowance, supporting credit coverage.

Q: What is the size of MetroCity Bankshares’ (MCBS) balance sheet and deposits?

At June 30, 2026, total assets were $4,519,954 thousand , with loans held for investment of $3,983,539 thousand . Total deposits were $3,489,357 thousand , including both non‑interest‑bearing and interest‑bearing accounts, and shareholders’ equity stood at $567,854 thousand .

Q: What funding and hedging tools is MetroCity Bankshares (MCBS) using?

At June 30, 2026, Federal Home Loan Bank advances totaled $375,000 thousand , with borrowing capacity up to $1.39 billion . The company also used interest rate swaps with $300,000 thousand notional and interest rate caps with $450,000 thousand notional as cash flow hedges .

Filing Impact

(Moderate)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

MetroCity Bankshares, Inc. delivered strong results for the quarter and six months ended June 30, 2026. Net income available to common shareholders was $22,131 thousand for the quarter and $44,445 thousand year‑to‑date, compared with $16,826 thousand and $33,123 thousand in the prior‑year periods. Diluted EPS reached $0.76 for the quarter and $1.53 for the six months. Net interest income was $44,041 thousand for the quarter and $88,528 thousand year‑to‑date, while net interest income after provision for credit losses rose to $44,833 thousand and $90,133 thousand, respectively.

Total assets were $4,519,954 thousand at June 30, 2026, with loans held for investment of $3,983,539 thousand and deposits of $3,489,357 thousand. Shareholders’ equity increased to $567,854 thousand, supported by retained earnings of $431,518 thousand. Asset quality improved, as nonaccrual loans declined to $17,435 thousand from $25,213 thousand at December 31, 2025, while the allowance for credit losses stood at $25,818 thousand. The balance sheet also reflects the December 1, 2025 acquisition of First IC Corporation, which generated $56,048 thousand of goodwill and $12,733 thousand of core deposit intangibles.

Positive

Net income for the six months ended June 30, 2026 rose to $44,445 thousand from $33,123 thousand, and diluted EPS increased to $1.53 from $1.29, indicating materially higher profitability versus the prior‑year period.
Nonaccrual loans decreased to $17,435 thousand at June 30, 2026 from $25,213 thousand at December 31, 2025, while the allowance for credit losses remained sizable at $25,818 thousand, reflecting improved reported asset quality.

Negative

None.

Filing Explained

At June 30, 2026, cash and equivalents were $266,690 thousand after financing outflows of $311,646 thousand; maximum FHLB capacity was $1.39 billion.

The Form 10-Q is an unaudited quarterly report; at June 30, 2026, it reports lower deposits and Federal Home Loan Bank advances alongside remaining borrowing capacity. This changes the disclosed funding and liquidity structure for MetroCity Bankshares, while the filing does not report a new equity financing.

The outstanding FHLB balance was $375,000 thousand, whereas maximum borrowing capacity was $1.39 billion; the latter represents potential funding access, not debt already drawn. The company also reported $138,355 thousand of commitments to extend credit and $14,199 thousand of standby letters of credit, and said many commitments may expire without being drawn.

For the six months ended June 30, 2026, financing activities used $311,646 thousand of cash, including $135,000 thousand of FHLB repayments and a $156,644 thousand decrease in deposits. Cash and cash equivalents declined from $383,676 thousand at the start of the period to $266,690 thousand at period-end.

The remaining FHLB advances are listed with maturities from April 22, 2027 through June 24, 2027. The securities line also includes $3,100 thousand of unrealized losses at period-end; the company states that it does not view these losses as credit-loss impairment and does not expect future payment defaults.

Key Figures

Net income (six months): $44,445 thousand Net income (quarter): $22,131 thousand Basic EPS (six months): $1.55 +5 more

8 metrics

Net income (six months) $44,445 thousand Six months ended June 30, 2026

Net income (quarter) $22,131 thousand Three months ended June 30, 2026

Basic EPS (six months) $1.55 Six months ended June 30, 2026

Net interest income (six months) $88,528 thousand Six months ended June 30, 2026

Total assets $4,519,954 thousand Balance sheet at June 30, 2026

Total deposits $3,489,357 thousand Deposits at June 30, 2026

Allowance for credit losses $25,818 thousand Allowance for credit losses at June 30, 2026

Nonaccrual loans $17,435 thousand Nonaccrual loans at June 30, 2026

Key Terms

allowance for credit losses, collateral-dependent loans, nonaccrual, cash flow hedges, +1 more

5 terms

allowance for credit losses financial

"The allowance for credit losses was $25.8 million as of June 30, 2026"

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.

collateral-dependent loans financial

"Collateral-dependent loans are loans for which foreclosure is probable"

nonaccrual financial

"Loans are placed on nonaccrual status as needed based on repayment status"

A nonaccrual asset is a loan or investment that a lender stops counting as earning interest because the borrower is not making scheduled payments or the lender doubts future payments. Think of it like putting a subscription on hold when you stop receiving payments; it reduces reported income and signals a higher risk that the lender may not get repaid, which can affect a bank's profits and the value of its loan portfolio.

cash flow hedges financial

"The swap agreements were designated as cash flow hedges of our deposit accounts"

A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.

interest rate cap financial

"The Company entered into interest rate cap agreements with notional amounts totaling $450,000"

An interest rate cap is a financial contract that sets a maximum interest rate on a floating-rate loan or investment, so the borrower or investor won’t pay or receive interest above that ceiling. Think of it like an insurance policy or a roof over your monthly interest bill: if market rates rise above the cap, the cap pays the difference, protecting cash flow and budgeting. Investors care because caps limit downside from rising rates and affect borrowing costs, returns and risk management decisions.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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

Available on EDGAR 08/07/2026 - 04:02 PM Accepted by SEC EDGAR 08/07/2026 - 04:01 PM

FAQ

How did MetroCity Bankshares (MCBS) perform in the quarter ended June 30, 2026?

MetroCity Bankshares reported net income of $22,131 thousand for the quarter ended June 30, 2026, up from $16,826 thousand a year earlier. Diluted EPS was $0.76, compared with $0.65 in the 2025 period, showing stronger quarterly profitability.

What were MetroCity Bankshares’ (MCBS) year-to-date earnings for 2026?

For the six months ended June 30, 2026, MetroCity Bankshares generated net income of $44,445 thousand, versus $33,123 thousand in 2025. Basic EPS was $1.55 and diluted EPS was $1.53, both higher than the prior‑year six‑month figures.

How strong is asset quality at MetroCity Bankshares (MCBS) as of June 30, 2026?

As of June 30, 2026, nonaccrual loans totaled $17,435 thousand, down from $25,213 thousand at December 31, 2025. The allowance for credit losses was $25,818 thousand, and collateral‑dependent loans carried $2,000 thousand of allocated allowance, supporting credit coverage.

What is the size of MetroCity Bankshares’ (MCBS) balance sheet and deposits?

At June 30, 2026, total assets were $4,519,954 thousand, with loans held for investment of $3,983,539 thousand. Total deposits were $3,489,357 thousand, including both non‑interest‑bearing and interest‑bearing accounts, and shareholders’ equity stood at $567,854 thousand.

How did the First IC acquisition affect MetroCity Bankshares (MCBS)?

The December 1, 2025 acquisition of First IC Corporation involved total consideration of $202,311 thousand, including $111,855 thousand in cash and $90,456 thousand in equity. It added loans, deposits and generated $56,048 thousand of goodwill and $12,733 thousand of core deposit intangibles.

What funding and hedging tools is MetroCity Bankshares (MCBS) using?

At June 30, 2026, Federal Home Loan Bank advances totaled $375,000 thousand, with borrowing capacity up to $1.39 billion. The company also used interest rate swaps with $300,000 thousand notional and interest rate caps with $450,000 thousand notional as cash flow hedges.

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2026

☐ 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 001-39068

METROCITY BANKSHARES, INC.

(Exact name of registrant as specified in its charter)

Georgia	47-2528408
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

5114 Buford Highway Doraville, Georgia	30340
(Address of principal executive offices)	(Zip Code)

(770) 455-4989

(Registrant’s telephone number, including area code)

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, par value $0.01 per share	MCBS	Nasdaq Global Select Market

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 ☒

As of August 4, 2026, the registrant had 28,781,229 shares of common stock, par value $0.01 per share, issued and outstanding.

Table of Contents

METROCITY BANKSHARES, INC.

Quarterly Report on Form 10-Q

June 30, 2026

TABLE OF CONTENTS

		Page
Part I.	Financial Information

Item l.	Financial Statements:
	Consolidated Balance Sheets as of June 30, 2026 (unaudited) and December 31, 2025	3
	Consolidated Statements of Income (unaudited) for the Three and Six Months Ended June 30, 2026 and 2025	4
	Consolidated Statements of Comprehensive Income (unaudited) for the Three and Six Months Ended June 30, 2026 and 2025	5
	Consolidated Statements of Shareholders’ Equity (unaudited) for the Three and Six Months Ended June 30, 2026 and 2025	6
	Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2026 and 2025	7
	Notes to Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	58
Item 4.	Controls and Procedures	59

Part II.	Other Information

Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	60
Item 3.	Defaults Upon Senior Securities	61
Item 4.	Mine Safety Disclosures	61
Item 5.	Other Information	61
Item 6.	Exhibits	61
	Signatures	62

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

METROCITY BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)


	June 30,		December 31,
	2026		2025
	(Unaudited)
Assets:
Cash and due from banks	$	254,368	$	370,832
Federal funds sold		12,322		12,844
Cash and cash equivalents		266,690		383,676
Equity securities		18,481		18,646
Securities available for sale		26,183		47,179
Loans held for sale		1,350		9,741
Loans, less allowance for credit losses of $25,818 and $27,843, respectively		3,930,501		4,023,554
Accrued interest receivable		20,115		20,298
Federal Home Loan Bank stock		21,112		27,565
Premises and equipment, net		29,619		29,879
Operating lease right-of-use asset		14,040		15,193
Foreclosed real estate, net		1,300		208
SBA and USDA servicing asset		11,180		10,601
Mortgage servicing asset, net		1,308		1,660
Bank owned life insurance		77,066		75,786
Goodwill		56,048		56,048
Core deposit intangibles		11,991		12,627
Interest rate derivatives		4,791		6,343
Other assets		28,179		29,396
Total assets	$	4,519,954	$	4,768,400

Liabilities:
Deposits:
Non-interest-bearing demand	$	782,972	$	780,828
Interest-bearing		2,706,385		2,865,173
Total deposits		3,489,357		3,646,001

Federal Home Loan Bank advances		375,000		510,000
Operating lease liability		14,131		15,306
Accrued interest payable		7,537		10,731
Other liabilities		66,075		42,178
Total liabilities	$	3,952,100	$	4,224,216

Shareholders’ Equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued or outstanding		—		—
Common stock, $0.01 par value, 40,000,000 shares authorized, 28,781,229 and 28,817,967 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively		288		1,159
Additional paid-in capital		136,123		138,675
Retained earnings		431,518		402,684
Accumulated other comprehensive (loss) income		(75)		1,666
Total shareholders’ equity		567,854		544,184
Total liabilities and shareholders’ equity	$	4,519,954	$	4,768,400

See accompanying notes to unaudited consolidated financial statements.

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METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands, except per share data)


		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2026			2025			2026			2025
Interest and dividend income:
Loans, including fees		$	67,312		$	50,936		$	134,451		$	101,189
Other investment income			2,972			2,970			6,702			5,096
Federal funds sold			121			143			242			283
Total interest income			70,405			54,049			141,395			106,568

Interest expense:
Deposits			22,140			17,496			44,217			35,473
FHLB advances and other borrowings			4,224			4,375			8,650			8,363
Total interest expense			26,364			21,871			52,867			43,836

Net interest income			44,041			32,178			88,528			62,732

Provision for credit losses:
Provision for loan losses			(981)			216			(1,850)			233
Provision for unfunded commitments			189			(87)			245			31
Provision for credit losses			(792)			129			(1,605)			264

Net interest income after provision for credit losses			44,833			32,049			90,133			62,468

Noninterest income:
Service charges on deposit accounts			958			505			1,806			1,005
Other service charges, commissions and fees			1,428			1,620			3,009			3,216
Gain on sale of residential mortgage loans			—			579			—			978
Mortgage servicing income, net			271			781			577			1,399
Gain on sale of SBA loans			1,536			643			2,581			1,301
SBA servicing income, net			728			642			2,633			1,555
Other income			834			963			1,506			1,735
Total noninterest income			5,755			5,733			12,112			11,189

Noninterest expense:
Salaries and employee benefits			11,344			8,554			22,845			17,047
Occupancy and equipment			2,328			1,380			4,762			2,797
Data processing			535			329			1,217			674
Advertising			178			149			401			316
Merger-related expenses			270			333			1,946			595
Other expenses			5,302			3,368			10,224			6,483
Total noninterest expense			19,957			14,113			41,395			27,912

Income before provision for income taxes			30,631			23,669			60,850			45,745
Provision for income taxes			8,500			6,843			16,405			12,622
Net income available to common shareholders		$	22,131		$	16,826		$	44,445		$	33,123

Earnings per share:
Basic		$	0.77		$	0.66		$	1.55		$	1.30
Diluted		$	0.76		$	0.65		$	1.53		$	1.29

See accompanying notes to unaudited consolidated financial statements.

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METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(Dollars in thousands)


		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2026			2025			2026			2025

Net income		$	22,131		$	16,826		$	44,445		$	33,123

Other comprehensive loss

Unrealized holding gains (losses) on securities available for sale			188			(268)			(233)			(226)
Realized gain on sale of securities available for sale			—			—			(10)			—
Net changes in fair value of cash flow hedges			(1,152)			(4,417)			(2,216)			(10,052)
Tax effect			300			1,312			718			2,686

Other comprehensive loss			(664)			(3,373)			(1,741)			(7,592)

Comprehensive income		$	21,467		$	13,453		$	42,704		$	25,531

See accompanying notes to unaudited consolidated financial statements.

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METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

(Dollars in thousands, except per share data)


											Accumulated
		Common Stock				Additional					Other
		Number of				Paid-in			Retained		Comprehensive
		Shares		Amount		Capital			Earnings		Income (Loss)			Total
Three Months Ended:
Balance, April 1, 2026		28,660,042		$	286	$	135,531		$	417,750	$	589		$	554,156
Net income		—			—		—			22,131		—			22,131
Stock based compensation expense		—			—		594			—		—			594
Vesting of restricted stock		121,187			2		(2)			—		—			—
Other comprehensive loss		—			—		—			—		(664)			(664)
Dividends declared on common stock ($0.29 per share)		—			—		—			(8,363)		—			(8,363)
Balance, June 30, 2026		28,781,229		$	288	$	136,123		$	431,518	$	(75)		$	567,854

Balance, April 1, 2025		25,402,782		$	254	$	49,645		$	369,110	$	8,960		$	427,969
Net income		—			—		—			16,826		—			16,826
Stock based compensation expense		—			—		599			—		—			599
Vesting of restricted stock		136,238			1		(1)			—		—			—
Repurchase of common stock		(1,274)			—		(31)			—		—			(31)
Other comprehensive loss		—			—		—			—		(3,373)			(3,373)
Dividends declared on common stock ($0.23 per share)		—			—		—			(5,890)		—			(5,890)
Balance, June 30, 2025		25,537,746		$	255	$	50,212		$	380,046	$	5,587		$	436,100

Six Months Ended:
Balance, January 1, 2026		28,817,967		$	1,159	$	138,675		$	402,684	$	1,666		$	544,184
Net income		—			—		—			44,445		—			44,445
Adjustment for shares issued related to the First IC acquisition		—			(871)		871			—		—			—
Stock based compensation expense		—			—		1,020			—		—			1,020
Vesting of restricted stock		121,187			2		(2)			—		—			—
Repurchase of common stock		(157,925)			(2)		(4,441)			—		—			(4,443)
Other comprehensive loss		—			—		—			—		(1,741)			(1,741)
Dividends declared on common stock ($0.54 per share)		—			—		—			(15,611)		—			(15,611)
Balance, June 30, 2026		28,781,229		$	288	$	136,123		$	431,518	$	(75)		$	567,854

Balance, January 1, 2025		25,402,782		$	254	$	49,216		$	358,704	$	13,179		$	421,353
Net income		—			—		—			33,123		—			33,123
Stock based compensation expense		—			—		1,028			—		—			1,028
Vesting of restricted stock		136,238			1		(1)			—		—			—
Repurchase of common stock		(1,274)			—		(31)			—		—			(31)
Other comprehensive loss		—			—		—			—		(7,592)			(7,592)
Dividends declared on common stock ($0.46 per share)		—			—		—			(11,781)		—			(11,781)
Balance, June 30, 2025		25,537,746		$	255	$	50,212		$	380,046	$	5,587		$	436,100

See accompanying notes to unaudited consolidated financial statements.

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METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in thousands)


		Six Months Ended June 30,
		2026			2025
Cash flow from operating activities:
Net income		$	44,445		$	33,123
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion			(789)			1,682
Provision (recovery) for credit losses			(1,605)			264
Stock based compensation expense			1,020			1,028
Unrealized (gains) losses recognized on equity securities			165			(181)
Gain on sale of securities			(10)			—
Write-down of foreclosed real estate			93			(28)
Gain on sale of residential real estate loans			—			(978)
Origination of SBA loans held for sale			(35,750)			(28,861)
Proceeds from sales of SBA loans held for sale			45,372			33,600
Gain on sale of SBA loans			(2,581)			(1,301)
Increase in cash value of bank owned life insurance			(1,280)			(1,235)
(Increase) decrease in accrued interest receivable			183			(670)
(Increase) decrease in SBA and USDA servicing rights			(579)			451
(Increase) decrease in mortgage servicing rights			352			(267)
(Increase) decrease in state tax credits			2,191			(11,455)
Increase in other assets			(255)			(1,674)
Decrease in accrued interest payable			(3,194)			(60)
Increase in other liabilities			22,948			2,924
Net cash flow provided by operating activities			70,726			26,362

Cash flow from investing activities:
Purchases of equity securities			—			(8,000)
Proceeds from maturities, calls or paydowns of securities available for sale			1,574			2,106
Proceeds from sales of securities available for sale			19,328			—
Redemption (purchase) of Federal Home Loan Bank stock			6,453			(2,442)
Proceeds from sales of residential real estate loans			—			95,338
Decrease (increase) in loans, net			97,312			(68,638)
Purchases of premises and equipment			(733)			(188)
Proceeds from sales of foreclosed real estate owned			—			1,735
Net cash flow provided by investing activities			123,934			19,911

Cash flow from financing activities:
Dividends paid on common stock			(15,559)			(11,685)
Repurchases of common stock			(4,443)			(31)
Decrease in deposits, net			(156,644)			(47,305)
Premiums paid for interest rate caps			—			(1,116)
Proceeds from Federal Home Loan Bank advances			—			100,000
Repayments of Federal Home Loan Bank advances			(135,000)			(50,000)
Net cash flow used by financing activities			(311,646)			(10,137)

Continued to following page.

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METROCITY BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in thousands)


		Six Months Ended June 30,
		2026			2025

Net change in cash and cash equivalents			(116,986)			36,136
Cash and cash equivalents at beginning of period			383,676			249,875

Cash and cash equivalents at end of period		$	266,690		$	286,011

Supplemental schedule of noncash investing and financing activities:

Transfer of loans held for investment to loans held for sale		$	1,350		$	102,786
Transfer of loan principal to foreclosed real estate, net of write-downs		$	1,185		$	2,024

Supplemental disclosures of cash flow information - Cash paid during the year for:

Interest		$	56,061		$	43,896
Income taxes		$	3,330		$	12,460

See accompanying notes to unaudited consolidated financial statements.

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METROCITY BANKSHARES, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2026

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements include the accounts of MetroCity Bankshares, Inc. (“Company”) and its wholly-owned subsidiary, Metro City Bank (the “Bank”). The Company owns 100% of the Bank. The “Company” or “our,” as used herein, includes Metro City Bank unless the context indicates that we refer only to MetroCity Bankshares, Inc.

These unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) followed within the financial services industry for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the information or notes required for complete financial statements.

The Company principally operates in one business segment, which is community banking.

In the opinion of management, all adjustments, consisting of normal and recurring items, considered necessary for a fair presentation of the consolidated financial statements for the interim periods have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts reported in prior periods have been reclassified to conform to current year presentation. These reclassifications did not have a material effect on previously reported net income, shareholders’ equity or cash flows.

Operating results for the six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2025.

The Company’s significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements for the year ended December 31, 2025, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Company’s 2025 Form 10-K”). There were no new accounting policies or changes to existing policies adopted during the first six months of 2026 which had a significant effect on the Company’s results of operations or statement of financial condition. For interim reporting purposes, the Company follows the same basic accounting policies and considers each interim period as an integral part of an annual period.

Contingencies

Due to the nature of their activities, the Company and its subsidiary are at times engaged in various legal proceedings that arise in the course of normal business, some of which were outstanding as of June 30, 2026. Although the ultimate outcome of all claims and lawsuits outstanding as of June 30, 2026 cannot be ascertained at this time, it is the opinion of management that these matters, when resolved, will not have a material adverse effect on the Company’s results of operations or financial condition.

Operating Segments

Our Chief Executive Officer is our designated chief operating decision maker. While the chief operating decision maker monitors the revenue streams of the various products and services, our operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one segment as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

The chief operating decision maker uses income before income taxes as the measure of segment profit or loss to assess the performance of and allocate resources to the Company’s one reportable operating segment. Interest income and noninterest income generated from our residential real estate and SBA loans provide the primary revenue in the operating

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segment. Interest expense, provision for credit losses, salaries, commissions and employee benefits, as well as occupancy and equipment expenses, provide the significant expenses in the operating segment. These figures are regularly provided to the chief operating decision maker and are monitored through budget-to-actual variance review.

The Company has evaluated the Accounting Standards Updates issued during 2026 to date but does not expect those updates to have a material impact on the Company’s consolidated financial statements.

NOTE 2 – BUSINESS COMBINATIONS

After the close of business on December 1, 2025, the Company completed the acquisition of First IC Corporation. (“First IC”). For each share of First IC common stock, First IC stockholders had the right to receive 0.3729 shares of the Company's common stock and $12.00 in cash, with cash paid in lieu of fractional shares. Total consideration was $202.3 million and consisted of $90.5 million of equity (3,384,066 shares) in the form of MetroCity Bankshares, Inc. common stock, plus $111.9 million in cash, including cash paid for stock option cancellations and fractional shares. The transaction qualified as a tax-free reorganization for federal income tax purposes and provided a tax-free exchange for First IC stockholders for the portion of the transaction consideration consisting of the Company’s common stock. In addition to increasing its loan and deposit base, the Company believes it will be able to provide a deeper product set to First IC customers, as well as benefit from increased operating synergies, improving the long-term operating and financial results of the Company.

The Company accounted for the First IC acquisition using the acquisition method pursuant to the Business Combinations Topic of the FASB ASC. The acquisition method requires the acquirer to recognize the assets acquired and the liabilities assumed at their fair values as of the acquisition date. The excess of consideration paid over the estimated fair value of the net assets acquired totaled $56.0 million and was recorded to goodwill, none of which is anticipated to be deductible for tax purposes. The purchase consideration allocation is considered preliminary as certain estimates related to the assets acquired and liabilities assumed are subject to continuing refinement. Valuations subject to refinement include, but are not limited to, loans, certain deposits, certain other assets, and the core deposit intangible asset. The measurement period may not exceed one year from the acquisition date.

An adjustment was made in the first quarter of 2026 for $871,000 from common stock to additional paid in capital related to shares issued in the acquisition.

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The following table summarizes the merger paid for First IC and the amounts of the estimated fair value of the assets acquired and liabilities assumed as of the date of the acquisition:


Consideration:
Cash	$	111,855
Equity		90,456
Fair value of total consideration transferred		202,311

Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents		121,008
Investment securities		31,931
Loans held for investment		1,026,049
Allowance for credit losses on purchased credit detoriated loans and purchased seasoned loans		(9,885)
Premises and equipment		12,184
Operating lease right-of-use asset		7,421
Core deposit intangibles		12,733
SBA servicing asset		3,851
Other assets		12,118
Total assets acquired		1,217,410

Deposits		960,976
Federal Home Loan Bank advances		85,000
Operating lease liability		7,543
Other liabilities		17,628
Total liabilities assumed		1,071,147

Total identifiable net assets		146,263

Goodwill	$	56,048

The selected unaudited proforma financial information is presented as if the Company had acquired First IC on January 1, 2025 and is for illustrative purposes and is not necessarily indicative of the financial results of the combined company had the acquisition actually been completed at the beginning of the period presented, nor does it indicate future results for any other interim or full-year period. The net interest income, noninterest income, net income and net income attributable to First IC for the six months ended June 30, 2025 would have been $90.6 million, $14.9 million, $40.3 million, and $6.3 million, respectively.

NOTE 3 – INVESTMENT SECURITIES

The amortized costs, gross unrealized gains and losses, and estimated fair values of securities available for sale as of June 30, 2026 and December 31, 2025 are summarized as follows:


	June 30, 2026
	Gross		Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
Obligations of U.S. Government entities and agencies	$	2,405		97		—	$	2,502
States and political subdivisions		7,948		—		(1,306)		6,642
Mortgage-backed GSE residential		18,833		—		(1,794)		17,039
Total	$	29,186	$	97	$	(3,100)	$	26,183

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	December 31, 2025
	Gross			Gross			Gross			Estimated
	Amortized			Unrealized			Unrealized			Fair
(Dollars in thousands)	Cost			Gains			Losses			Value
Obligations of U.S. Government entities and agencies	$	12,393		$	149		$	—		$	12,542
States and political subdivisions		11,574			15			(1,445)			10,144
Mortgage-backed GSE residential		25,971			20			(1,498)			24,493
Total	$	49,938		$	184		$	(2,943)		$	47,179

The amortized costs and estimated fair values of investment securities available for sale at June 30, 2026 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Securities Available for Sale
	Amortized			Estimated
(Dollars in thousands)	Cost			Fair Value
Due in one year or less	$	864		$	863
Due after one year but less than five years		375			375
Due after five years but less than ten years		—			—
Due in more than ten years		9,114			7,906
Mortgage-backed GSE residential		18,833			17,039
Total	$	29,186		$	26,183

Accrued interest receivable for securities available for sale totaled $167,000 and $214,000 as of June 30, 2026 December 31, 2025, respectively. This accrued interest receivable is included in the “accrued interest receivable” line item on the Company’s Consolidated Balance Sheets.

As of June 30, 2026 and December 31, 2025, the Company had securities pledged to the Federal Reserve Bank Discount Window with a carrying amount of $12.3 million and $12.8 million, respectively. For the six months ended June 30, 2026, the Company had proceeds from the sale of investment securities of $19.3 million which resulted in gross gains of $10,000. There were no securities sold during the three months ended June 30, 2026 and the three and six months ended June 30, 2025.

Information pertaining to securities with gross unrealized losses at June 30, 2026 and December 31, 2025 aggregated by investment category and length of time that individual securities have been in a continuous loss position, are summarized in the table below.


	June 30, 2026
	Twelve Months or Less				Over Twelve Months
	Gross		Estimated		Gross		Estimated
	Unrealized		Fair		Unrealized		Fair
(Dollars in thousands)	Losses		Value		Losses		Value
States and political subdivisions		—		375		(1,306)		6,267
Mortgage-backed GSE residential		(356)		11,374		(1,438)		5,665
Total	$	(356)	$	11,749	$	(2,744)	$	11,932


	December 31, 2025
	Twelve Months or Less				Over Twelve Months
	Gross		Estimated		Gross		Estimated
	Unrealized		Fair		Unrealized		Fair
(Dollars in thousands)	Losses		Value		Losses		Value
States and political subdivisions	$	(23)	$	1,283	$	(1,422)	$	6,177
Mortgage-backed GSE residential		(48)		12,034		(1,450)		6,228
Total	$	(71)	$	13,317	$	(2,872)	$	12,405

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At June 30, 2026 the thirty-one securities available for sale (11 municipal securities and 20 mortgage-backed securities) with an unrealized loss have depreciated 11.60% from the Company’s amortized cost basis. Eighteen of these securities have been in a loss position for greater than twelve months.

The Company does not believe that the securities available for sale that were in an unrealized loss position as of June 30, 2026 represent a credit loss impairment. As of June 30, 2026, there have been no payment defaults, nor do we currently expect any future payment defaults. Furthermore, the Company does not intend to sell these securities, and it is not more likely than not that the Company will be required to sell the investment securities before recovery of their amortized cost basis, which may be at maturity.

Equity Securities

As of June 30, 2026 and December 31, 2025, the Company had equity securities with carrying values totaling $18.5 million and $18.6 million, respectively. The equity securities consist of our investment in a market-rate bond mutual fund that invests in high quality fixed income bonds, mainly government agency securities whose proceeds are designed to positively impact community development throughout the United States. The mutual fund focuses exclusively on providing affordable housing to low- and moderate-income borrowers and renters, including those in Majority Minority Census Tracts.

During the three months ended June 30, 2026 and 2025, we recognized an unrealized loss of $82,000 and an unrealized gain of $41,000, respectively, in net income on our equity securities. During the six months ended June 30, 2026 and 2025, we recognized an unrealized loss of $165,000 and an unrealized gain of $181,000, respectively. These unrealized gains and losses are recorded in “Other Income” on the Consolidated Statements of Income.

NOTE 4 – LOANS AND ALLOWANCE FOR CREDIT LOSSES

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


		June 30,			December 31,
(Dollars in thousands)		2026			2025
Construction and development		$	69,348		$	41,796
Commercial real estate			1,463,460			1,560,728
Commercial and industrial			84,999			96,360
Residential real estate			2,365,132			2,378,311
Consumer and other			600			627
Total loans receivable		$	3,983,539		$	4,077,822
Unearned income			(9,660)			(6,621)
Loan discounts			(17,560)			(19,804)
Allowance for credit losses			(25,818)			(27,843)
Loans held for investment, net		$	3,930,501		$	4,023,554

The Company is not committed to lend additional funds to borrowers with nonaccrual or restructured loans.

In the normal course of business, the Company may sell and purchase loan participations to and from other financial institutions and related parties. Commercial loan participations are sold as needed to comply with the legal lending limits per borrower as imposed by regulatory authorities. The participations are sold without recourse and the Company imposes no transfer or ownership restrictions on the purchaser.

The Company elected to exclude accrued interest receivable from the amortized cost basis of loans disclosed throughout this note. As of June 30, 2026 and December 31, 2025, accrued interest receivable for loans totaled $20.0 million and $20.0 million, respectively, and is included in the “accrued interest receivable” line item on the Company’s Consolidated Balance Sheets.

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Allowance for Credit Losses

A summary of changes in the allowance for credit losses by portfolio segment for the three and six months ended June 30, 2026 and 2025 is as follows:


		Three Months Ended June 30, 2026
		Construction
		and			Commercial			Commercial			Residential			Consumer
(Dollars in thousands)		Development			Real Estate			and Industrial			Real Estate			and Other			Total
Allowance for credit losses:
Beginning balance		$	61		$	14,731		$	1,469		$	10,436		$	3		$	26,700
Charge-offs			—			—			—			—			—			—
Recoveries			—			96			3			—			—			99
Provision for loan losses			8			(735)			(61)			(190)			(3)			(981)
Ending balance		$	69		$	14,092		$	1,411		$	10,246		$	—		$	25,818


		Three Months Ended June 30, 2025
		Construction
		and			Commercial			Commercial			Residential			Consumer
(Dollars in thousands)		Development			Real Estate			and Industrial			Real Estate			and Other			Total
Allowance for credit losses:
Beginning balance		$	44		$	7,542		$	1,202		$	9,803		$	1		$	18,592
Charge-offs			—			(62)			—			—			—			(62)
Recoveries			—			—			2			—			—			2
Provision for loan losses			3			122			199			(109)			1			216
Ending balance		$	47		$	7,602		$	1,403		$	9,694		$	2		$	18,748


		Six Months Ended June 30, 2026
		Construction
		and			Commercial			Commercial			Residential			Consumer
(Dollars in thousands)		Development			Real Estate			and Industrial			Real Estate			and Other			Total
Allowance for credit losses:
Beginning balance		$	65		$	15,716		$	1,586		$	10,472		$	4		$	27,843
Charge-offs			—			(190)			(92)			—			—			(282)
Recoveries			—			99			8			—			—			107
Provision for loan losses			4			(1,536)			(88)			(226)			(4)			(1,850)
Ending balance		$	69		$	14,089		$	1,414		$	10,246		$	—		$	25,818


	Six Months Ended June 30, 2025
	Construction
	and		Commercial		Commercial		Residential		Consumer
(Dollars in thousands)	Development		Real Estate		and Industrial		Real Estate		and Other		Total
Allowance for credit losses:
Beginning balance	$	31	$	7,265	$	1,380	$	10,066	$	2	$	18,744
Charge-offs		—		(62)		(173)		—		—		(235)
Recoveries		—		1		5		—		—		6
Provision for loan losses		16		398		191		(372)		—		233
Ending balance	$	47	$	7,602	$	1,403	$	9,694	$	2	$	18,748

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The allowance for credit losses was $25.8 million as of June 30, 2026 compared to $27.8 million as of December 31, 2025, a decrease of $2.0 million. The decrease was primarily driven by lower loan balances and reduced reserves on individually analyzed loans.

Allowance for Unfunded Commitments

The Company records an allowance for credit losses on unfunded loan commitments, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for unfunded commitments in the Company’s Consolidated Statements of Income. The allowance for credit losses on off-balance sheet credit exposures is estimated by loan segment using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur. The allowance for unfunded commitments totaled $535,000, $287,000 and $195,000 as of June 30, 2026, December 31, 2025 and June 30, 2025, respectively, and is included in “Other Liabilities” on the Company’s Consolidated Balance Sheets.

Collateral-Dependent Loans

Collateral-dependent loans are loans for which foreclosure is probable or loans for which the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The estimated credit losses for these loans are based on the collateral’s fair value, less selling costs. In most cases, the Company records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value, less selling costs, at the time of foreclosure. As of June 30, 2026, there were $37.1 million, $11.0 million and $911,000 of collateral-dependent loans which were secured by commercial real estate, residential real estate, and commercial equipment, respectively. As of December 31, 2025, there were $46.4 million, $10.3 million and $1.4 million of collateral-dependent loans which were secured by commercial real estate, residential real estate, and commercial equipment, respectively. The allowance for credit losses allocated to these loans as of June 30, 2026 and December 31, 2025 was $2.0 million and $2.3 million, respectively.

Past Due and Nonaccrual Loans

A primary credit quality indicator for financial institutions is delinquent balances. Delinquencies are updated on a daily basis and are continuously monitored. Loans are placed on nonaccrual status as needed based on repayment status and consideration of accounting and regulatory guidelines. Nonaccrual balances are updated and reported on a daily basis.

The following summarizes the Company’s past due and nonaccrual loans, by portfolio segment, as of June 30, 2026 and December 31, 2025:


											Accruing			Total						Total
(Dollars in thousands)											Greater than			Accruing						Financing
June 30, 2026		Current			30-59 Days			60-89 Days			90 Days			Past Due			Nonaccrual			Receivables
Construction and development		$	63,832		$	—		$	4,932		$	—		$	4,932		$	—		$	68,764
Commercial real estate			1,422,724			2,919			5,657			5,088			13,664			7,085			1,443,473
Commercial and industrial			81,372			519			1,175			—			1,694			963			84,029
Residential real estate			2,342,836			—			7,230			—			7,230			9,387			2,359,453
Consumer and other			600			—			—			—			—			—			600
Total		$	3,911,364		$	3,438		$	18,994		$	5,088		$	27,520		$	17,435		$	3,956,319

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											Accruing			Total						Total
(Dollars in thousands)											Greater than			Accruing						Financing
December 31, 2025		Current			30-59 Days			60-89 Days			90 Days			Past Due			Nonaccrual			Receivables
Construction and development		$	40,319		$	800		$	—		$	—		$	800		$	—		$	41,119
Commercial real estate			1,520,769			5,446			1,485			—			6,931			14,776			1,542,476
Commercial and industrial			94,025			306			—			—			306			1,301			95,632
Residential real estate			2,341,189			17,736			3,490			—			21,226			9,136			2,371,551
Consumer and other			619			—			—			—			—			—			619
Total		$	3,996,921		$	24,288		$	4,975		$	—		$	29,263		$	25,213		$	4,051,397

The following table presents an analysis of nonaccrual loans with and without a related allowance for credit losses as of June 30, 2026 and December 31, 2025:


		Nonaccrual			Nonaccrual
(Dollars in thousands)		Loans With a			Loans Without a			Total
June 30, 2026		Related ACL			Related ACL			Nonaccrual Loans
Commercial real estate		$	1,395		$	5,690		$	7,085
Commercial and industrial			766			197			963
Residential real estate			—			9,387			9,387
Total		$	2,161		$	15,274		$	17,435


		Nonaccrual			Nonaccrual
(Dollars in thousands)		Loans With a			Loans Without a			Total
December 31, 2025		Related ACL			Related ACL			Nonaccrual Loans
Commercial real estate		$	4,601		$	10,175		$	14,776
Commercial and industrial			858			443			1,301
Residential real estate			—			9,136			9,136
Total		$	5,459		$	19,754		$	25,213

All payments received while a loan is on nonaccrual status are applied against the principal balance of the loan. The Company does not recognize interest income while loans are on nonaccrual status.

Credit Quality Indicators

The Company utilizes a ten grade loan risk rating system for its loan portfolio as follows:

●

Loans rated Pass – Loans in this category have low to average risk. There are six loan risk ratings (grades 1-6) included in loans rated Pass.

●

Loans rated Special Mention (grade 7) – Loans do not presently expose the Company to a sufficient degree of risk to warrant adverse classification, but do possess deficiencies deserving close attention.

●

Loans rated Substandard (grade 8) – Loans are inadequately protected by the current credit-worthiness and paying capability of the obligor or of the collateral pledged, if any.

●

Loans rated Doubtful (grade 9) – Loans which have all the weaknesses inherent in loans classified Substandard, with the added characteristic that the weaknesses make collections or liquidation in full, or on the basis of currently known facts, conditions and values, highly questionable or improbable.

●

Loans rated Loss (grade 10) – Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted.

Loan grades are monitored regularly and updated as necessary based upon review of repayment status and consideration of periodic updates regarding the borrower’s financial condition and capacity to meet contractual requirements.

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The following tables present the loan portfolio’s amortized cost by loan type, risk rating and year of origination as of June 30, 2026 and December 31, 2025. There were no loans with a risk rating of Doubtful or Loss at June 30, 2026 and December 31, 2025.


(Dollars in thousands)		Term Loan by Origination Year																Revolving
June 30, 2026		2026			2025			2024			2023		2022		Prior			Loans			Total Loans
Construction and development
Pass		$	616		$	41,443		$	21,303		$	—	$	4,932	$	470		$	—		$	68,764
Special Mention			—			—			—			—		—		—			—			—
Substandard			—			—			—			—		—		—			—			—
Total construction and development		$	616		$	41,443		$	21,303		$	—	$	4,932	$	470		$	—		$	68,764
Commercial real estate
Pass		$	61,477		$	296,351		$	285,804		$	190,562	$	279,200	$	252,128		$	2,335		$	1,367,857
Special Mention			—			—			—			11,899		7,191		118			—			19,208
Substandard			—			—			—			1,644		29,155		25,609			—			56,408
Total commercial real estate		$	61,477		$	296,351		$	285,804		$	204,105	$	315,546	$	277,855		$	2,335		$	1,443,473

Commercial real estate:
Current period gross write offs		$	—		$	—		$	74		$	—	$	116	$	—		$	—		$	190

Commercial and industrial
Pass		$	3,727		$	13,457		$	6,651		$	17,341	$	6,029	$	8,405		$	26,404		$	82,014
Special Mention			—			—			—			—		—		484			—			484
Substandard			—			—			—			466		463		602			—			1,531
Total commercial and industrial		$	3,727		$	13,457		$	6,651		$	17,807	$	6,492	$	9,491		$	26,404		$	84,029

Commercial and industrial:
Current period gross write offs		$	—		$	—		$	—		$	—	$	—	$	92		$	—		$	92

Residential real estate
Pass		$	174,110		$	386,665		$	125,310		$	127,019	$	612,357	$	922,064		$	—		$	2,347,525
Special Mention			—			—			—			—		—		—			—			—
Substandard			—			181			449			559		1,372		9,367			—			11,928
Total residential real estate		$	174,110		$	386,846		$	125,759		$	127,578	$	613,729	$	931,431		$	—		$	2,359,453
Consumer and other
Pass		$	506		$	—		$	—		$	—	$	—	$	—		$	94		$	600
Special Mention			—			—			—			—		—		—			—			—
Substandard			—			—			—			—		—		—			—			—
Total consumer and other		$	506		$	—		$	—		$	—	$	—	$	—		$	94		$	600

Total loans		$	240,436		$	738,097		$	439,517		$	349,490	$	940,699	$	1,219,247		$	28,833		$	3,956,319

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(Dollars in thousands)		Term Loan by Origination Year															Revolving
December 31, 2025		2025		2024			2023			2022		2021		Prior			Loans			Total Loans
Construction and development
Pass		$	11,568	$	24,045		$	141		$	4,886	$	180	$	299		$	—		$	41,119
Special Mention			—		—			—			—		—		—			—			—
Substandard			—		—			—			—		—		—			—			—
Total construction and development		$	11,568	$	24,045		$	141		$	4,886	$	180	$	299		$	—		$	41,119
Commercial real estate
Pass		$	329,091	$	290,439		$	213,509		$	299,971	$	148,006	$	177,640		$	3,020		$	1,461,676
Special Mention			—		—			14,152			6,915		—		114			—			21,181
Substandard			—		—			1,121			31,544		12,396		14,558			—			59,619
Total commercial real estate		$	329,091	$	290,439		$	228,782		$	338,430	$	160,402	$	192,312		$	3,020		$	1,542,476
Commercial and industrial
Pass		$	9,527	$	8,481		$	20,771		$	11,244	$	4,824	$	7,356		$	31,095		$	93,298
Special Mention			—		—			—			—		—		484			—			484
Substandard			—		—			553			463		196		638			—			1,850
Total commercial and industrial		$	9,527	$	8,481		$	21,324		$	11,707	$	5,020	$	8,478		$	31,095		$	95,632

Commercial and industrial:
Current period gross write offs		$	—	$	—		$	—		$	—	$	196	$	98		$	—		$	294

Residential real estate
Pass		$	417,993	$	137,770		$	148,861		$	648,433	$	686,010	$	322,444		$	—		$	2,361,511
Special Mention			—		—			—			—		—		—			—			—
Substandard			—		837			1,098			2,067		425		5,613			—			10,040
Total residential real estate		$	417,993	$	138,607		$	149,959		$	650,500	$	686,435	$	328,057		$	—		$	2,371,551
Consumer and other
Pass		$	324	$	295		$	—		$	—	$	—	$	—		$	—		$	619
Special Mention			—		—			—			—		—		—			—			—
Substandard			—		—			—			—		—		—			—			—
Total consumer and other		$	324	$	295		$	—		$	—	$	—	$	—		$	—		$	619

Total loans		$	768,503	$	461,867		$	400,206		$	1,005,523	$	852,037	$	529,146		$	34,115		$	4,051,397

Loan Modifications to Borrowers Experiencing Financial Difficulty.

Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, payment deferrals, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral.

During three and six months ended June 30, 2026, no loan modification were made to borrowers experiencing financial difficulty. During the three months ended June 30, 2025, no loan modification were made to borrowers experiencing financial difficulty.

During the six months ended June 30, 2025, there was one commercial real estate loan modification totaling $12.2 million made to a borrower experiencing financial difficulty. The borrower of this loan modification was granted P&I payment deferrals totaling $324,000 so no payments were required to be made during the deferral period, which ended in May 2025. The following table presents the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2025.

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		Six months ended June 30, 2025
		Interest						Interest					% of Total
(Dollars in thousands)		Term			Payment			Rate					Financing
		Extension			Delay			Reduction			Total		Receivable
Construction and development		$	—		$	—		$	—		$	—	—	%
Commercial real estate			—			12,200			—			12,200	0.31
Commercial and industrial			—			—			—			—	—
Residential real estate			—			—			—			—	—
Consumer and other			—			—			—			—	—
Total		$	—		$	12,200		$	—		$	12,200	—	%

The following table presents the financial effect of the loan modifications made to borrowers experiencing financial difficulty during the six months ended June 30, 2025.


		Weighted/Average			Weighted/Average			Weighted/Average
(Dollars in thousands)		Months of			Payment			Interest Rate
Three Months Ended March 31, 2025		Term Extension			Deferral			Reduction
Construction and development			—		$	—			—	%
Commercial real estate			—			289			—
Commercial and industrial			—			—			—
Residential real estate			—			—			—
Consumer and other			—			—			—
Total			—		$	289			—	%

No charge-offs of previously modified loans were recorded during the three and six months ended June 30, 2026 and 2025.

NOTE 5 – SBA AND USDA LOAN SERVICING

The Company sells the guaranteed portion of certain SBA and USDA loans it originates and continues to service the sold portion of the loan. The portion of the loans sold are not included in the financial statements of the Company. As of June 30, 2026 and December 31, 2025, the unpaid principal balances of serviced loans totaled $682.2 million and $685.5 million, respectively.

Activity for SBA and USDA loan servicing rights are as follows:


		For the Three Months Ended June 30,						For the Six Months Ended June 30,
(Dollars in thousands)		2026			2025			2026			2025
Beginning of period		$	11,267		$	7,167		$	10,601		$	7,274
Change in fair value			(87)			(344)			579			(451)
End of period, fair value		$	11,180		$	6,823		$	11,180		$	6,823

Fair value at June 30, 2026 and December 31, 2025 was determined using discount rates ranging from 4.93% to 9.88% and 5.75% to 11.09%, respectively, and prepayment speeds ranging from 6.82% to 20.53% and 6.42% to 21.78%, respectively, depending on the stratification of the specific right. Average default rates are based on the industry average for the applicable NAICS/SIC code.

Comparable market values and a valuation model that calculates the present value of future cash flows were used to estimate fair value. For purposes of fair value measurement, risk characteristics including product type and interest rate, were used to stratify the originated loan servicing rights.

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NOTE 6 – RESIDENTIAL MORTGAGE LOAN SERVICING

Residential mortgage loans serviced for others are not reported as assets. The outstanding principal of these loans at June 30, 2026 and December 31, 2025 was $463.5 million and $702.6 million, respectively.

Activity for mortgage loan servicing rights and the related valuation allowance are as follows:


(Dollars in thousands)		For the Three Months Ended June 30,						For the Six Months Ended June 30,
Mortgage loan servicing rights:		2026			2025			2026			2025
Beginning of period		$	1,484		$	1,476		$	1,660		$	1,409
Additions			—			309			—			537
Amortization expense			(176)			(137)			(352)			(255)
Valuation allowance			—			28			—			(15)
End of period, carrying value		$	1,308		$	1,676		$	1,308		$	1,676


(Dollars in thousands)		For the Three Months Ended June 30,						For the Six Months Ended June 30,
Valuation allowance:		2026			2025			2026			2025
Beginning balance		$			$	63		$	—		$	20
Additions expensed			—			—			—			43
Reductions credited to operations			—			(28)			—			(28)
Direct write-downs			—			—			—			—
Ending balance		$	—		$	35		$	—		$	35

The fair value of servicing rights was $5.6 million and $5.7 million at June 30, 2026 and December 31, 2025, respectively. Fair value at June 30, 2026 was determined by using a discount rate of 12.61%, prepayment speeds of 16.35%, and a weighted average default rate of 1.80%. Fair value at December 31, 2025 was determined by using a discount rate of 12.62%, prepayment speeds of 18.58%, and a weighted average default rate of 1.96%.

NOTE 7 – FEDERAL HOME LOAN BANK ADVANCES & OTHER BORROWINGS

Advances from the Federal Home Loan Bank (“FHLB”) at June 30, 2026 and December 31, 2025 are summarized as follows:


(Dollars in thousands)		June 30, 2026			December 31, 2025
Daily rate credit advance maturing on December 2, 2026; fixed rate of 3.88%		$	—		$	85,000
Convertible advance maturing December 4, 2026; fixed rate of 3.739%			—			50,000
Convertible advance maturing April 22, 2027; fixed rate of 4.174%			25,000			25,000
Convertible advance maturing April 23, 2027; fixed rate of 4.177%			25,000			25,000
Convertible advance maturing April 26, 2027; fixed rate of 4.193%			50,000			50,000
Convertible advance maturing May 7, 2027; fixed rate of 4.089%			100,000			100,000
Convertible advance maturing May 13, 2027; fixed rate of 4.099%			50,000			50,000
Convertible advance maturing May 14, 2027; fixed rate of 4.100%			75,000			75,000
Convertible advance maturing June 24, 2027; fixed rate of 3.993%			50,000			50,000
Total FHLB advances		$	375,000		$	510,000

The FHLB advances outstanding at all have a conversion feature that allows the FHLB to call the advances every three months. At June 30, 2026 and December 31, 2025, the Company had a line of credit with the FHLB, set as a percentage of total assets, with maximum borrowing capacity of $1.39 billion and $1.09 billion, respectively. The available borrowing amounts are collateralized by the Company’s FHLB stock and pledged residential real estate loans, which totaled $2.36 billion and $2.35 billion at June 30, 2026 and December 31, 2025, respectively.

At June 30, 2026, the Company had unsecured federal funds lines available with correspondent banks of approximately $67.5 million. There were no advances outstanding on these lines at June 30, 2026.

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At June 30, 2026 and December 31, 2025, the Company had Federal Reserve Discount Window funds available of approximately $634.0 million and $600.4 million, respectively. The funds are collateralized by a pool of construction and development, commercial real estate and commercial and industrial loans with carrying balances totaling $762.2 million and $765.7 million as of June 30, 2026 and December 31, 2025, respectively, as well as all of the Company’s municipal and mortgage-backed securities. There were no outstanding borrowings on this line as of June 30, 2026.

NOTE 8 – OPERATING LEASES

The Company has entered into various operating leases for certain branch locations with terms extending through April 2036. Generally, these leases have initial lease terms of ten years or less. Many of the leases have one or more renewal options which typically are for five years at the then fair market rental rates. We assessed these renewal options using a threshold of reasonably certain. For leases where we were reasonably certain to renew, those option periods were included within the lease term, and therefore, the measurement of the right-of-use (“ROU”) asset and lease liability. None of our leases include options to terminate the lease. Operating leases in which the Company is the lessee are recorded as operating lease ROU assets and operating lease liabilities on the Consolidated Balance Sheets. The Company currently does not have any finance leases.

Operating lease ROU assets represent the Company’s right to use an underlying asset during the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using a discount rate that represents the Company’s incremental collateralized borrowing rate provided by the FHLB at the lease commencement date. ROU assets are further adjusted for lease incentives, if any. Operating lease expense, which is comprised of amortization of the ROU asset and the implicit interest accreted on the operating lease liability, is recognized on a straight-line basis over the lease term, and is recorded in “Occupancy and Equipment” expense in the Consolidated Statements of Income.

The components of lease cost for three and six months ended June 30, 2026 and 2025 were as follows:


	Three Months Ended June 30,					Six Months Ended June 30,
(Dollars in thousands)	2026			2025		2026			2025
Operating lease cost	$	939		$	536	$	1,887		$	1,105
Variable lease cost		60			53		120			107
Short-term lease cost		78			—		155			—
Sublease income		—			—		—			—
Total net lease cost	$	1,077		$	589	$	2,162		$	1,212

Future maturities of the Company’s operating lease liabilities are summarized as follows:


(Dollars in thousands)
Twelve Months Ended:		Lease Liability
June 30, 2027		$	1,970
June 30, 2028			3,686
June 30, 2029			3,242
June 30, 2030			2,483
June 30, 2031			1,875
After June 30, 2031			3,418
Total lease payments			16,674
Less: interest discount			(2,543)
Present value of lease liabilities		$	14,131

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Supplemental Lease Information		June 30, 2026
Weighted-average remaining lease term (years)		5.6
Weighted-average discount rate		3.97	%


		Six Months Ended June 30,
(Dollars in thousands)		2026			2025
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases (cash payments)		$	1,861		$	1,102
Operating cash flows from operating leases (lease liability reduction)			1,580			951
Operating lease right-of-use assets obtained in exchange for leases entered into during the period			406			1,233

NOTE 9 – INTEREST RATE DERIVATIVES

At June 30, 2026, the Company had six separate interest rate swap agreements with notional amounts totaling $300.0 million. The interest rate swaps are two-year forward three-year term swaps (five-year total term) where cash settlements began in October 2023, January 2024 or April 2024. The swap agreements were designated as cash flow hedges of our deposit accounts that are indexed to the Federal Funds Effective Rate. The swaps are determined to be highly effective since inception and therefore no amount of ineffectiveness has been included in net income. The aggregate fair value of the swaps amounted to an unrealized gain of $3.3 million and $5.5 million and an unrealized loss of $0 and $0 at June 30, 2026 and, December 31, 2025 respectively. These unrealized gains and losses are recorded in “Interest Rate Derivatives” and “Other Liabilities” on the Consolidated Balance Sheets. The Company expects the hedges to remain highly effective during the remaining terms of the swaps.

During 2026, the Company entered into two additional interest-rate cap agreements with aggregate notional amounts totaling $200.0 million consisting of a $100.0 million cap entered into on April 10, 2026 and a $100.0 million cap entered into on June 16, 2026, with a cap rate of 4.00%. These two interest rate caps are two-year term spot caps where cash settlements began in May 2026 and June 2026. During January 2025, the Company entered into three interest rate cap agreements with notional amounts totaling $200.0 million, all with a cap rate of 4.50%. One of these interest rate caps is a two-year spot cap where cash settlements began in February 2025. The other two interest rate caps are forward starting two-year term caps where cash settlements began in June 2025 or July 2025. During October 2021, the Company entered into an interest rate cap agreement with a notional amount of $50.0 million at a cap rate of 2.50%. This interest rate cap is a two-year forward three-year term (five-year total term) where cash settlements began in November 2023. The interest rate cap agreements were designated as cash flow hedges of our deposit accounts that are indexed to the Federal Funds Effective Rate. The rate cap premium paid by the Company at inception will be amortized on a straight-line basis to deposit interest expense over the total term of the interest rate cap agreement. The aggregate fair value of the interest rate caps, inclusive of unamortized interest rate cap premiums, amounted to an unrealized gain of $1.5 million and $819,000 and an unrealized loss of $430,000 and $451,000 at June 30, 2026 and December 31, 2025, respectively. These unrealized gains and losses are recorded in “Interest Rate Derivatives” and “Other Liabilities” on the Consolidated Balance Sheets.

The Company is exposed to credit related losses in the event of the nonperformance by the counterparties to the interest rate swaps. The Company performs an initial credit evaluation and ongoing monitoring procedures for all counterparties and currently anticipates that all counterparties will be able to fully satisfy their obligation under the contracts. In addition, the Company may require collateral from counterparties in the form of cash deposits in the event that the fair value of the contracts are positive and such fair value for all positions with the counterparty exceeds the credit support thresholds specified by the underlying agreement. Conversely, the Company is required to post cash deposits as collateral in the event the fair value of the contracts are negative and are below the credit support thresholds. At June 30, 2026, there were no cash deposits pledged as collateral by the Company. At June 30, 2026, the Company had $4.5 million of restricted cash obtained from the counterparties as collateral for the significant unrealized gains on our interest rate derivatives.

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Summary information for the interest rate swaps designated as cash flow hedges is as follows:


		As of or for the			As of or for the
		Six Months Ended			Year Ended
(Dollars in thousands)		June 30, 2026			December 31, 2025
Notional amounts		$	300,000		$	575,000
Weighted-average pay rate			1.71%			1.98%
Weighted-average receive rate			3.12%			4.21%
Weighted-average maturity			5.0 years			4.5 years
Weighted-average remaining maturity			0.8 years			0.6 years
Net interest income		$	3,748		$	14,776

Summary information for the interest rate caps designated as cash flow hedges is as follows:


		As of or for the			As of or for the
		Six Months Ended			Year Ended
(Dollars in thousands)		June 30, 2026			December 31, 2025
Notional amounts		$	450,000		$	250,000
Rate cap premiums			1,503			819
Weighted-average cap rate			4.06%			4.10%
Weighted-average maturity			2.1 years			2.8 years
Weighted-average remaining maturity			1.5 year			1.2 years
Net interest income		$	(57)		$	345

NOTE 10 – LOAN COMMITMENTS AND RELATED FINANCIAL INSTRUMENTS

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit written is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. Financial instruments where contract amounts represent credit risk as of June 30, 2026 and December 31, 2025 include:


		June 30,			December 31,
(Dollars in thousands)		2026			2025
Financial instruments whose contract amounts represent credit risk:
Commitments to extend credit		$	138,355		$	120,078
Standby letters of credit			14,199			14,490

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments to extend credit includes $138.4 million of unused lines of credit and $14.2 million for standby letters of credit as of June 30, 2026. 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 Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company upon extension of credit is based on management’s credit evaluation of the counterparty.

Standby letters of credit written are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan commitments to customers.

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The Company maintains cash deposits with a financial institution that during the year are in excess of the insured limitation of the Federal Deposit Insurance Corporation. If the financial institution were not to honor its contractual liability, the Company could incur losses. Management is of the opinion that there is not material risk because of the financial strength of the institution.

NOTE 11 – FAIR VALUE

Financial Instruments Measured at Fair Value

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

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The following presents the assets and liabilities as of June 30, 2026 and December 31, 2025 which are measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall, and the financial instruments carried on the consolidated balance sheet by caption and by level in the fair value hierarchy, for which a nonrecurring change in fair value has been recorded:


		June 30, 2026
														Total Gains
(Dollars in thousands)		Total			Level 1			Level 2			Level 3			(Losses)
Assets
Recurring fair value measurements:
Securities available for sale:
Obligations of U.S. Government entities and agencies		$	2,502		$	—		$	—		$	2,502
States and political subdivisions			6,642			—			6,642			—
Mortgage-backed GSE residential			17,039			—			17,039			—
Total securities available for sale			26,183			—			23,681			2,502

Equity securities			18,481			18,481			—			—
SBA and USDA servicing asset			11,180			—			—			11,180
Interest rate derivatives			4,791			—			4,791			—
		$	60,635		$	18,481		$	28,472		$	13,682
Nonrecurring fair value measurements:
Collateral-dependent loans		$	7,601		$	—		$	—		$	7,601		$	79

Liabilities
Recurring fair value measurements:
Interest rate derivatives		$	430		$	—		$	430		$	—


		December 31, 2025
														Total Gains
(Dollars in thousands)		Total			Level 1			Level 2			Level 3			(Losses)
Assets
Recurring fair value measurements:
Securities available for sale:
Obligations of U.S. Government entities and agencies		$	12,542		$	—		$	9,947		$	2,595
States and political subdivisions			10,144			—			10,144			—
Mortgage-backed GSE residential			24,493			—			24,493			—
Total securities available for sale			47,179			—			44,584			2,595

Equity securities			18,646			18,646			—			—
SBA and USDA servicing asset			10,601			—			—			10,601
Interest rate derivatives			6,343			—			6,343			—
		$	82,769		$	18,646		$	50,927		$	13,196
Nonrecurring fair value measurements:
Collateral-dependent loans		$	1,658			—			—			1,658		$	231

Liabilities
Recurring fair value measurements:
Interest rate swaps		$	451		$	—		$	451		$	—

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The Company used the following methods and significant assumptions to estimate fair value:

Securities, Available for Sale: The Company carries securities available for sale at fair value. For securities where quoted prices are not available (Level 2), the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. The investments in the Company’s portfolio are generally not quoted on an exchange but are actively traded in the secondary institutional markets.

The Company owns certain SBA investments for which the fair value is determined using Level 3 hierarchy inputs and assumptions as the trading market for such securities was determined to be “not active.” This determination was based on the limited number of trades or, in certain cases, the existence of no reported trades. Discounted cash flows are calculated by a third party using interest rate curves that are updated to incorporate current market conditions, including prepayment vectors and credit risk. During time when trading is more liquid, broker quotes are used to validate the model.

Equity Securities: The Company carries equity securities at fair value. Equity securities are measured at fair value using quoted market prices on nationally recognized and foreign securities exchanges (Level 1).

SBA and USDA Servicing Assets: The fair values of the Company’s servicing assets are determined using Level 3 inputs. All separately recognized servicing assets and servicing liabilities are initially measured at fair value and at each reporting date and changes in fair value are reported in earnings in the period in which they occur.

Interest Rate Derivatives: Exchange-traded derivatives are valued using quoted prices and are classified within Level 1 of the valuation hierarchy. However, few classes of derivative contracts are listed on an exchange; thus, the Company’s derivative positions are valued by third parties using their valuation models and confirmed by the Company. Since the model inputs can be observed in a liquid market and the models do not require significant judgement, such derivative contracts are classified within Level 2 of the fair value hierarchy. The Company’s interest rate derivatives contracts (designated as cash flow hedges) are classified within Level 2.

Under certain circumstances we make adjustments to fair value for our assets and liabilities although they are not measured at fair value on an ongoing basis.

Collateral-dependent loans: Collateral-dependent loans are loans where repayment is expected to be provided solely by the sale of the underlying collateral and there are no other available and reliable sources of repayment. Fair value for both collateral-dependent loans are measured based on the value of the collateral securing these loans and are classified at a Level 3 in the fair value hierarchy. Collateral may include real estate, or business assets including equipment, inventory and accounts receivable. The value of real estate collateral is determined based on an appraisal by qualified licensed appraisers hired by the Company. The value of business equipment is based on an appraisal by qualified licensed appraisers hired by the Company if significant, or the equipment’s net book value on the business’ financial statements. Inventory and accounts receivable collateral are valued based on independent field examiner review or aging reports. Appraisals may utilize a single valuation approach or a combination or approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available for similar loans and collateral underlying such loans. Appraised values are reviewed by management using historical knowledge, market considerations, and knowledge of the client and client’s business.

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Changes in level 3 fair value measurements

The table below presents a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2026 and 2025.


		Obligations of
(Dollars in thousands)		U.S. Government
Three Months Ended:		Entities and Agencies
Fair value, April 1, 2026		$	2,532
Total gains included in income			—
Settlements			—
Prepayments/paydowns			(30)
Transfers in and/or out of Level 3			—
Fair value, June 30, 2026		$	2,502

Fair value, April 1, 2025		$	2,563
Total gains included in income			—
Settlements			—
Prepayments/paydowns			(29)
Transfers in and/or out of Level 3			—
Fair value, June 30, 2025		$	2,534

Six Months Ended:
Fair value, January 1, 2026		$	2,595
Total losses included in income			—
Settlements			—
Prepayments/paydowns			(93)
Transfers in and/or out of Level 3			—
Fair value, June 30, 2026		$	2,502

Fair value, January 1, 2025		$	4,467
Total gains included in income			—
Settlements			—
Prepayments/paydowns			(1,933)
Transfers in and/or out of Level 3			—
Fair value, June 30, 2025		$	2,534

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There were no gains or losses included in earnings for securities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the periods presented above. The only activity for these securities were prepayments. There were no purchases, sales, or transfers into and out of Level 3. The following table presents quantitative information about recurring Level 3 fair value measures at June 30, 2026 and December 31, 2025:


		Valuation		Unobservable		General
		Technique		Input		Range
June 30, 2026:
Recurring:
Obligations of U.S. Government entities and agencies		Discounted cash flows		Discount rate		3%-5%
SBA and USDA servicing asset		Discounted cash flows		Prepayment speed		6.82%-20.53%
				Discount rate		4.93%-9.88%
Nonrecurring:
Collateral-dependent loans		Appraised value less estimated selling costs		Estimated selling costs		6%

December 31, 2025:
Recurring:
Obligations of U.S. Government entities and agencies		Discounted cash flows		Discount rate		3%-5%
SBA and USDA servicing asset		Discounted cash flows		Prepayment speed		6.42%-21.78%
				Discount rate		5.75%-11.09%
Nonrecurring:
Collateral-dependent loans		Appraised value less estimated selling costs		Estimated selling costs		6%

The carrying amounts and estimated fair values of the Company’s financial instruments at June 30, 2026 and December 31, 2025 are as follows:


		Carrying				Estimated Fair Value at June 30, 2026
(Dollars in thousands)		Amount			Level 1			Level 2			Level 3			Total
Financial Assets:
Cash, due from banks, and federal funds sold		$	266,690		$	—		$	266,690		$	—		$	266,690
Investment securities			44,664			18,481			23,681			2,502			44,664
Loans held for sale			1,350			—			1,350			—			1,350
Loans, net			3,930,501			—			—			3,916,351			3,916,351
Accrued interest receivable			20,115			—			167			19,948			20,115
SBA and USDA servicing asset			11,180			—			—			11,180			11,180
Mortgage servicing asset			1,308			—			—			5,623			5,623
Interest rate derivatives			4,791			—			4,791			—			4,791
Financial Liabilities:
Deposits			3,489,357			—			3,482,727			—			3,482,727
Federal Home Loan Bank advances			375,000			—			375,488			—			375,488
Accrued interest payable			7,537			—			7,537			—			7,537
Interest rate derivatives			430			—			430			—			430

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		Carrying			Estimated Fair Value at December 31, 2025
(Dollars in thousands)		Amount			Level 1			Level 2			Level 3			Total
Financial Assets:
Cash, due from banks, and federal funds sold		$	383,676		$	—		$	383,676		$	—		$	383,676
Investment securities			65,825			18,646			44,584			2,595			65,825
Loans held for sale			9,741			—			9,741			—			9,741
Loans, net			4,023,554			—			—			3,964,005			3,964,005
Accrued interest receivable			20,298			—			344			19,954			20,298
SBA and USDA servicing assets			10,601			—			—			10,601			10,601
Mortgage servicing assets			1,660			—			—			5,659			5,659
Interest rate derivatives			6,343			—			6,343			—			6,343
Financial Liabilities:
Deposits			3,646,001			—			3,645,272			—			3,645,272
Federal Home Loan Bank advances			510,000			—			513,060			—			513,060
Accrued interest payable			10,731			—			10,731			—			10,731
Interest rate derivatives			451						451						451

NOTE 12 – REGULATORY MATTERS

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Under the Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (“Basel III rules”), the Bank must hold a capital conservation buffer of 2.50% above the adequately capitalized risk-based capital ratios. The net unrealized gain or loss on available for sale securities, if any, is not included in computing regulatory capital. Management believes as of June 30, 2026 the Company and Bank meet all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At June 30, 2026 and December 31, 2025 the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

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										To Be Well Capitalized
						Minimum Capital Required -				Under Prompt Corrective
		Actual				Basel III				Action Provisions:
(Dollars in thousands)		Amount			Ratio	Amount ≥		Ratio ≥		Amount ≥	Ratio ≥
As of June 30, 2026:
Total Capital (to Risk Weighted Assets)
Consolidated		$	526,241		18.05	311,473		10.5	%	N/A	N/A
Bank			526,023		18.05	305,955		10.5		291,386	10.0	%
Tier I Capital (to Risk Weighted Assets)
Consolidated			499,888		17.15	252,145		8.5	%	N/A	N/A
Bank			499,670		17.15	247,678		8.5		233,109	8.0	%
Common Tier 1 (CET1)
Consolidated			499,888		17.15	207,649		7.0	%	N/A	N/A
Bank			499,670		17.15	203,970		7.0		189,401	6.5	%
Tier 1 Capital (to Average Assets)
Consolidated			499,888		11.08	182,534		4.0	%	N/A	N/A
Bank			499,670		11.08	180,432		4.0		225,539	5.0	%

As of December 31, 2025:
Total Capital (to Risk Weighted Assets)
Consolidated		$	501,973		16.85	312,741		10.5	%	N/A	N/A
Bank			499,580		16.77	312,726		10.5		297,835	10.0	%
Tier I Capital (to Risk Weighted Assets)
Consolidated			473,843		15.91	253,171		8.5	%	N/A	N/A
Bank			471,450		15.83	253,159		8.5		238,268	8.0	%
Common Tier 1 (CET1)
Consolidated			473,843		15.91	208,494		7.0	%	N/A	N/A
Bank			471,450		15.83	208,484		7.0		193,592	6.5	%
Tier 1 Capital (to Average Assets)
Consolidated			473,843		10.00	189,572		4.0	%	N/A	N/A
Bank			471,450		9.84	191,629		4.0		239,536	5.0	%

NOTE 13 – STOCK BASED COMPENSATION

The Company adopted the MetroCity Bankshares, Inc. 2018 Stock Option Plan (the “Prior Option Plan”) effective as of April 18, 2018, and the Prior Option Plan was approved by the Company’s shareholders on May 30, 2018. The Prior Option Plan provided for awards of stock options to officers, employees and directors of the Company. The Board of Directors of the Company determined that it was in the best interests of the Company and its shareholders’to amend and restate the Prior Option Plan to provide for the grant of additional types of awards. Acting pursuant to its authority under the Prior Option Plan, the Board of Directors approved and adopted the MetroCity Bankshares, Inc. 2018 Omnibus Incentive Plan (the “2018 Incentive Plan”), which constitutes the amended and restated version of the Prior Option Plan. The Board of Directors has reserved 2,400,000 shares of Company common stock for issuance pursuant to awards granted under the 2018 Incentive Plan, any or all of which may be granted as nonqualified stock options, incentive stock options, restricted stock, restricted stock units, performance awards and other stock-based awards. In the event all or a portion of a stock award is forfeited, cancelled, expires, or is terminated before becoming vested, paid, exercised, converted, or otherwise settled in full, any unissued or forfeited shares again become available for issuance pursuant to awards granted under the 2018 Incentive Plan and do not count against the maximum number of reserved shares. In addition, shares of common stock deducted or withheld to satisfy tax withholding obligations will be added back to the share reserve and will again be available for issuance pursuant to awards granted under the plan. The 2018 Incentive Plan is administered by the Compensation Committee of our Board of Directors (the “Committee”). The determination of award recipients under the

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2018 Incentive Plan, and the terms of those awards, will be made by the Committee. At June 30, 2026, 240,000 stock options had been granted and 985,783 shares of restricted stock had been issued under the 2018 Incentive Plan.

Stock Options

A summary of stock option activity for the six months ended June 30, 2026 presented below:


				Weighted
				Average
		Shares		Exercise Price
Outstanding at January 1, 2026		169,134		$	12.70
Outstanding at June 30, 2026		169,134		$	12.70

The Company recognized no compensation expense for stock options during three and six months ended June 30, 2026 and 2025. As of June 30, 2026 and December 31, 2025, all of the cost related to the outstanding stock options had been recognized.

Restricted Stock Units

The Company has periodically issued restricted stock units to its directors, executive officers and certain employees under the 2018 Incentive Plan. Compensation expense for restricted stock is based upon the grant date fair value of the shares and is recognized over the vesting period of the units. Shares of restricted stock units issued to officers and employees vest in equal annual installments on the first three anniversaries of the grant date. Shares of restricted stock units issued to directors vest 25% on the grant date and 25% on each of the first three anniversaries of the grant date.

A summary of restricted stock activity for the six months ended June 30, 2026 is presented below:


				Weighted-
				Average Grant-
Nonvested Shares		Shares		Date Fair Value
Nonvested at January 1, 2026		178,509		$	23.99
Granted		91,985			32.66
Vested		(121,187)			23.76
Forfeited		(1,867)			24.30
Nonvested at June 30, 2026		147,440		$	29.58

During the three and six months ended June 30, 2026 and 2025, the Company recognized compensation expense for restricted stock of $594,000, $599,000, $1.0 million, and $1.0 million respectively. As of June 30, 2026 and December 31, 2025, there was $2.47 million and $3.0 million, respectively, of total unrecognized compensation cost related to nonvested shares granted under the 2018 Incentive Plan. As of June 30, 2026, the cost is expected to be recognized over a weighted-average period of 2.3 years.

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NOTE 14 – EARNINGS PER SHARE

The following table presents the calculation of basic and diluted earnings per common share for the periods indicated:


		Three Months Ended						Six Months Ended
		June 30,						June 30,
(Dollars in thousands, except per share data)		2026			2025			2026			2025
Basic earnings per share
Net Income		$	22,131		$	16,826		$	44,445		$	33,123

Weighted average common shares outstanding			28,698,662			25,445,024			28,738,875			25,424,020

Basic earnings per common share		$	0.77		$	0.66		$	1.55		$	1.30

Diluted earnings per share
Net Income		$	22,131		$	16,826		$	44,445		$	33,123

Weighted average common shares outstanding for basic earnings per common share			28,698,662			25,445,024			28,738,875			25,424,020
Add: Dilutive effects of restricted stock and options			250,538			270,182			245,842			273,163

Average shares and dilutive potential common shares			28,949,200			25,715,206			28,984,717			25,697,183

Diluted earnings per common share		$	0.76		$	0.65		$	1.53		$	1.29

There were no stock options or restricted stock excluded from the computation of diluted earnings per common share since they were antidilutive for the three and six months ended June 30, 2026 and 2025.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of MetroCity Bancshares, Inc. and our wholly owned subsidiary, Metro City Bank, from December 31, 2025 through June 30, 2026 and on our results of operations for the three and six months ended June 30, 2026 and 2025. This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K, and information presented elsewhere in this Quarterly Report on Form 10-Q, particularly the unaudited consolidated financial statements and related notes appearing in Item 1.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements reflect our current views with respect to, among other things, future events, and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “strive,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates, and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

A number of important factors could cause our actual results to differ materially from those indicated in these forward-looking statements, including those factors discussed elsewhere in this quarterly report and the following:

●

general economic and business conditions in our local markets, including conditions affecting employment levels, interest rates, inflation, tariffs or trade wars (including reduced consumer spending, supply chain issues, and adverse impacts to credit quality), a sustained increase in commodity prices, slowdowns in economic growth, the threat of recession, volatile equity capital markets, property and casualty insurance costs, collateral values, customer income, creditworthiness and confidence, spending and savings that may affect customer bankruptcies, defaults, charge-offs and deposit activity; and the impact of the foregoing on customer and client behavior (including the velocity and levels of deposit withdrawals and loan repayment);

●

changes in the interest rate environment (including changes to the federal funds rate and the impact on the level and composition of deposits (as well as the cost of, and competition for, deposits), loan demand, liquidity and the values of loan collateral, securities and market fluctuations, and interest rate sensitive assets and liabilities), and competition in our markets may result in increased funding costs or reduced earning assets yields, thus reducing our margins and net interest income;

●

uncertainties surrounding geopolitical events, trade policy, taxation policy, and monetary policy which continue to impact the outlook for future economic growth, including U.S. imposition of tariffs and consideration of responsive actions by these nations or the expansion of import fees and tariffs among a larger group of nations, which is bringing greater ambiguity to the outlook for future economic growth;

●

adverse developments or actual or perceived instability, in the banking industry and the impact of such developments on customer confidence, liquidity and regulatory responses to these developments (including increases in the cost of our deposit insurance assessments and increased regulatory scrutiny), our ability to effectively manage our liquidity risk and any growth plans and the availability of capital and funding;

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●

our ability to comply with applicable capital and liquidity requirements, including our ability to generate liquidity internally or raise capital on favorable terms, including continued access to the debt and equity capital markets;

●

the risk that a future economic downturn and contraction could have a material adverse effect on our capital, financial condition, credit quality, results of operations and future growth, including the risk that the strength of the current economic environment could be weakened by the continued impact of prolonged elevated interest rates and inflation;

●

factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our borrowers and the success of various projects that we finance;

●

concentration of our loan portfolio in real estate loans;

●

changes in the prices, values, and sales volumes of commercial and residential real estate, especially as they relate to the value of collateral supporting the Company’s loans;

●

weakness in the real estate market, including the secondary residential mortgage market, which can affect, among other things, the value of collateral securing mortgage loans, mortgage loan originations and delinquencies, profits on sales of mortgage loans, and the value of mortgage servicing rights;

●

credit and lending risks associated with our construction and development, commercial real estate, commercial and industrial, residential real estate, and SBA loan portfolios;

●

negative impacts related to our mortgage banking services, including declines in our mortgage originations or profitability due to prolonged elevated interest rates and increased competition and regulation, the Bank’s or third party’s failure to satisfy mortgage servicing obligations, loan modifications, the effects of judicial or regulatory requirements or guidance, and the possibility of the Bank being required to repurchase mortgage loans or indemnify buyers;

●

the impact of prolonged elevated interest rates on our financial projections, models, and guidance;

●

our ability to attract sufficient loans that meet prudent credit standards;

●

our ability to attract and maintain business banking relationships with well-qualified businesses, real estate developers, and investors with proven track records in our market areas;

●

our ability to successfully manage our credit risk and the sufficiency of our allowance for credit losses (“ACL”);

●

the adequacy of our reserves (including ACL) and the appropriateness of our methodology for calculating such reserves;

●

our ability to successfully execute our business strategy to achieve profitable growth;

●

the concentration of our business within our geographic areas of operation and to the general Asian American population within our primary market areas;

●

our ability to manage our growth;

●

potential delays or other problems in implementing and executing our growth, expansion and acquisition or divestment strategies, including delays in obtaining regulatory or other necessary approvals or the failure to realize any anticipated benefits or synergies from any acquisitions or growth strategies;

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●

our ability to increase our operating efficiency;

●

significant turbulence or a disruption in the capital or financial markets and the effect of a fall in stock market prices on our investment securities;

●

risks that our cost of funding could increase, in the event we are unable to continue to attract stable, low-cost deposits and reduce our cost of deposits;

●

inability of our risk management framework (including internal controls) to effectively mitigate credit risk, interest rate risk, liquidity risk, price risk, compliance risk, operational risk (including by virtue of our relationships with third-party business partners, as well as our relationships with third-party vendors and other service providers), strategic risk, reputational risk and other risks inherent to the business of banking;

●

our ability to maintain expenses in line with current projections;

●

the makeup of our asset mix and investments;

●

external economic, political and/or market factors, such as changes in monetary and fiscal policies and laws, including those that impact the value of the U.S. Dollar in relation to the currencies of other advanced and emerging market countries and the money supply, and also including the interest rate policies of the Federal Reserve, inflation or deflation, changes in the demand for loans, and fluctuations in consumer spending, borrowing and savings habits, which may have an adverse impact on our financial condition;

●

the institution and outcome of litigation and other legal proceedings against us or to which we may become subject to and the potential effect on our reputation;

●

negative publicity and the impact on our reputation; including the speed and scale at which information can spread through social media or digital channels, which could amplify adverse market or customer reactions;

●

the impact of recent and future legislative and regulatory changes and changes to supervisory, examination and enforcement priorities;

●

the potential implementation of a regulatory reform agenda under the current presidential administration that is significantly different than that of the prior administration, impacting rulemaking, supervision, examination, and enforcement priorities of the federal banking agencies;

●

examinations by our regulatory authorities;

●

continued or increasing competition from other financial institutions, credit unions, and non-bank financial services companies (including fintech companies), many of which are subject to different regulations than we are;

●

challenges arising from unsuccessful attempts to expand into new geographic markets, products, or services;

●

restraints on the ability of the Bank to pay dividends to us, which could limit our liquidity;

●

increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all;

●

inaccuracies in our assumptions about future events, which could result in material differences between our financial projections and actual financial performance;

●

changes in our management personnel or our inability to retain, motivate and hire qualified management personnel;

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●

the dependence of our operating model on our ability to attract and retain experienced and talented bankers in each of our markets, which may be impacted as a result of labor shortages;

●

our ability to identify and address cyber-security risks, fraud, and systems errors, including the impact on our reputation and the costs and effects required to address such risks, fraud, and systems errors;

●

disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems, which may be exacerbated by the continued development and implementation of generative artificial intelligence, including risks arising from reliance on third-party AI tools, model limitations, data integrity issues or regulatory uncertainty, and the cost of defending against them and any reputational or other financial risks following such a cybersecurity incident;

●

our business relationships with, and reliance upon, third parties that have strategic partnerships with us or that provide key components of our business infrastructure, including the costs of services and products provided to us by third parties, and disruptions in service, security breaches, financial difficulties with or other adverse events affecting a third-party vendor or business relationship;

●

an inability to keep pace with the rate of technological advances due to a lack of resources to invest in new technologies;

●

fraudulent and negligent acts by our clients, employees or vendors and our ability to identify and address such acts;

●

risks related to potential acquisitions;

●

the impact of any claims or legal actions to which we may be subject, including any effect on our reputation;

●

compliance with governmental and regulatory requirements, including the Dodd-Frank Act and others relating to banking, consumer protection, securities and tax matters, and our ability to maintain licenses required in connection with commercial mortgage origination, sale, and servicing operations;

●

changes in the scope and cost of Federal Deposit Insurance Corporation (“FDIC”) insurance and other coverage;

●

changes in our accounting standards;

●

changes in federal tax law or policy;

●

the effects of war or other conflicts, regime change, civil unrest, acts of terrorism, acts of God, natural disasters, health emergencies, epidemics or pandemics, climate changes, or other catastrophic events that may affect general economic conditions or cause other disruptions and/or increase costs, including, but not limited to, property and casualty and other insurance cost;

●

a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the debt ceiling and the federal budget;

●

action or inaction by the federal government, including as a result of any prolonged government shutdown (including a partial shutdown) or government intervention in the U.S. financial system; and

●

other risks and factors identified in the Company’s 2025 Form 10-K, including those identified under the heading “Risk Factors”, and detailed from time to time in our other filings with the U.S. Securities and Exchange Commission.

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The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Quarterly Report on Form 10-Q. Because of these risks and other uncertainties, our actual future results, performance or achievement, or industry results, may be materially different from the results indicated by the forward looking statements in this Quarterly Report on Form 10-Q. In addition, our past results of operations are not necessarily indicative of our future results. You are cautioned not to place undue reliance on these forward looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, changes in assumptions or otherwise, except as required by law.

Critical Accounting Policies and Estimates

Our accounting and reporting estimates conform with U.S. GAAP and general practices within the financial services industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. We consider accounting estimates that can (1) be replaced by other reasonable estimates and/or (2) changes to an estimate from period to period that have a material impact on the presentation of our financial condition, changes in financial condition or results of operations as well as (3) those estimates that require significant and complex assumptions about matters that are highly uncertain to be critical accounting estimates. We consider our critical accounting policies to include the allowance for credit losses, servicing assets, fair value of financial instruments and income taxes.

Critical accounting estimates include a high degree of uncertainty in the underlying assumptions. Management bases its estimates on historical experience, current information and other factors deemed relevant. The development, selection and disclosure of our critical accounting estimates are reviewed with the Audit Committee of the Company’s Board of Directors. Actual results could differ from these estimates. For additional information regarding critical accounting policies, refer to “Part II - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” and Note 1 of our consolidated financial statements as of December 31, 2025 in the Company’s 2025 Form 10-K. There have been no significant changes in the Company’s application of critical accounting policies since December 31, 2025.

Reserve for Credit Losses

A consequence of lending activities is that we may incur credit losses. The amount of such losses will vary depending upon the risk characteristics of the loan lease portfolio as affected by economic conditions such as rising interest rates and the financial performance of borrowers.

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

Management’s evaluation of the appropriateness of the reserve for credit losses is often the most critical of accounting estimates for a financial institution. Our determination of the amount of the reserve for credit losses is a critical accounting estimate as it requires significant reliance on the credit risk rating we assign to individual borrowers, the use of estimates and significant judgment as to the amount and timing of expected future cash flows, reliance on historical loss rates on homogenous portfolios, consideration of our quantitative and qualitative evaluation of economic factors, and the reliance on our reasonable and supportable forecasts. The reserve for credit losses attributable to each portfolio segment also

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includes an amount for inherent risks not reflected in the historical analyses. Relevant factors include, but are not limited to, concentrations of credit risk (geographic, large borrower, and industry), changes in underwriting standards, changes in collateral values, experience and depth of lending staff, trends in delinquencies, and the volume and terms of loans.

See Note 1 and Note 4 of our consolidated financial statements as of December 31, 2025 in the Company’s 2025 Form 10-K and Note 1 and Note 4 of our consolidated financial statements as of June 30, 2026, included elsewhere in this Form 10-Q, for additional information on the reserve and allowance for credit losses.

Overview

MetroCity Bankshares, Inc. is a bank holding company headquartered in the Atlanta metropolitan area. We operate through our wholly-owned banking subsidiary, Metro City Bank, a Georgia state-chartered commercial bank that was founded in 2006. We currently operate 27 full-service branch locations and two loan production offices in multi-ethnic communities in Alabama, Florida, Georgia, New York, New Jersey, Texas, California, and Virginia. As of June 30, 2026, we had total assets of $4.52 billion, total loans of $3.93 billion, total deposits of $3.49 billion and total shareholders’ equity of $567.9 million.

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

Selected Financial Data

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

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	As of or for the Three Months Ended															As of or for the Six Months Ended
	June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
(Dollars in thousands, except per share data)	2026			2026			2025			2025			2025			2026			2025
Selected income statement data:
Interest income	$	70,405		$	70,990		$	60,257		$	54,003		$	54,049		$	141,395		$	106,568
Interest expense		26,364			26,503			24,332			22,211			21,871			52,867			43,836
Net interest income		44,041			44,487			35,925			31,792			32,178			88,528			62,732
Provision for credit losses		(792)			(813)			(39)			(543)			129			(1,605)			264
Noninterest income		5,755			6,357			7,817			6,178			5,733			12,112			11,189
Noninterest expense		19,957			21,438			20,671			14,674			14,113			41,395			27,912
Income tax expense		8,500			7,905			4,971			6,569			6,843			16,405			12,622
Net income		22,131			22,314			18,139			17,270			16,826			44,445			33,123
Per share data:
Basic income per share	$	0.77		$	0.78		$	0.69		$	0.68		$	0.66		$	1.55		$	1.30
Diluted income per share	$	0.76		$	0.77		$	0.68		$	0.67		$	0.65		$	1.53		$	1.29
Dividends per share	$	0.29		$	0.25		$	0.25		$	0.25		$	0.23		$	0.54		$	0.46
Book value per share (at period end)	$	19.73		$	19.34		$	18.89		$	17.46		$	17.08		$	19.73		$	17.08
Tangible book value per share (at period end)⁽¹⁾	$	17.37		$	16.95		$	16.50		$	17.46		$	17.08		$	17.37		$	17.08
Shares of common stock outstanding		28,781,229			28,660,042			28,817,967			25,537,746			25,537,746			28,781,229			25,537,746
Weighted average diluted shares		28,949,200			29,051,061			26,806,181			25,811,422			25,715,206			28,984,717			25,697,183
Performance ratios:
Return on average assets		1.96	%		1.96	%		1.80	%		1.89	%		1.87	%		2.01	%		1.86	%
Return on average equity		16.01			16.64			15.45			15.69			15.74			16.32			15.71
Adjusted return on average equity ⁽¹⁾		16.17			17.62			17.83			16.10			16.31			16.88			16.34
Dividend payout ratio		32.55			32.49			35.08			37.23			35.01			32.52			35.56
Yield on total loans		6.75			6.74			6.42			6.37			6.49			6.74			6.44
Yield on average earning assets		6.57			6.51			6.26			6.24			6.34			6.54			6.33
Cost of average interest bearing liabilities		3.36			3.25			3.36			3.42			3.39			3.30			3.43
Cost of deposits		3.24			3.12			3.22			3.28			3.25			3.18			3.30
Net interest margin		4.11			4.08			3.73			3.68			3.77			4.10			3.72
Efficiency ratio⁽²⁾		40.08			42.16			46.71			38.65			37.23			41.13			37.76
Operating efficiency ratio⁽¹⁾⁽²⁾		39.54			38.87			38.49			37.85			36.35			39.20			36.95
Asset quality data (at period end):
Net charge-offs/(recoveries) to average loans held for investment		(0.01)	%		0.03	%		(0.00)	%		0.03	%		0.01	%		0.01	%		0.01	%
Nonperforming assets to gross loans and OREO		0.60			0.45			0.64			0.47			0.49			0.60			0.49
ACL to nonperforming loans		114.63			158.54			107.48			137.66			129.76			114.63			129.76
ACL to loans held for investment		0.65			0.66			0.68			0.60			0.60			0.65			0.60
Balance sheet and capital ratios:
Gross loans held for investment to deposits		114.16	%		111.12	%		111.84	%		110.43	%		116.34	%		114.16	%		116.34	%
Noninterest bearing deposits to deposits		22.44			22.04			21.42			20.22			20.41			22.44			20.41
Investment securities to assets		0.99			0.96			1.38			0.94			0.93			0.99			0.93
Common equity to assets		12.56			11.82			11.42			12.29			12.06			12.56			12.06
Leverage ratio		11.08			10.47			10.00			12.21			11.91			11.08			11.91
Common equity tier 1 ratio		17.15			16.52			15.90			19.93			19.91			17.15			19.91
Tier 1 risk-based capital ratio		17.15			16.52			15.90			19.93			19.91			17.15			19.91
Total risk-based capital ratio		18.05			17.44			16.84			20.74			20.78			18.05			20.78
Mortgage and SBA loan data:
Mortgage loans serviced for others	$	463,501		$	496,552		$	702,586		$	538,675		$	559,112		$	463,501		$	559,112

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Mortgage loan production	75,373	101,948	111,717	168,562	93,156	177,321	184,278
Mortgage loan sales	—	—	197,553	18,248	54,309	—	94,360
SBA loans serviced for others	682,172	699,028	685,481	460,720	480,867	682,172	480,867
SBA loan production	46,588	20,816	32,575	17,727	29,337	67,404	49,749
SBA loan sales	27,140	19,733	9,792	13,415	20,707	46,873	37,286

(1)	Non-GAAP measure, see “Explanation of Certain Unaudited Non-GAAP Financial Measures” for more information and for a reconciliation to GAAP.

(2)	Represents noninterest expense divided by total revenue (net interest income and total noninterest income).

Non-GAAP Financial Measures

This Form 10-Q includes financial information determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). This financial information includes “return on average equity”, which excludes average accumulated other comprehensive income and merger-related expenses and tangible book value per share , which excludes goodwill and core deposit intangibles and “operating efficiency ratio” which excludes merger expenses from noninterest expense. These measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP and are not necessarily comparable to non-GAAP measures that may be presented by other companies.

The following table reconciles the non-GAAP financial measurement for return on average equity, tangible book value per share and operating efficiency ratio to their respective most directly comparable GAAP measurements for three and six months ended June 30, 2026 and 2025:


	For the Three Months Ended June 30						For the Six Months Ended June 30
(Dollars in thousands)	2026			2025			2026			2025
Return on average shareholder's equity reconciliation
Average shareholders’ equity (GAAP)	$	554,588		$	428,644		$	549,191		$	425,181
Less: average accumulated other comprehensive income		(649)			(8,737)			(1,162)			(10,901)
Adjusted average shareholders’ equity (non-GAAP)	$	553,939		$	419,907		$	548,029		$	414,280

Net income (GAAP)	$	22,131		$	16,826		$	44,445		$	33,123
Add: First IC-merger related expenses (net of tax effect)		195			246			1,433			440
Adjusted net income (non-GAAP)	$	22,326		$	17,072		$	45,878		$	33,563

Return on average shareholders’ equity (GAAP)		16.01	%		15.74	%		16.32	%		15.71	%
Adjusted return on average shareholders' equity (non-GAAP)		16.17			16.31			16.88			16.34

Tangible book value per share reconciliation
Total shareholders' equity (GAAP)	$	567,854		$	436,100		$	567,854		$	436,100
Less: goodwill and core deposit intangibles		(68,039)			—			(68,039)			—
Adjusted total shareholder's equity (non-GAAP)	$	499,815		$	436,100		$	499,815		$	436,100

Shares of common stock outstanding		28,781,229			25,537,746			28,781,229			25,537,746

Book value per share (GAAP)	$	19.73		$	17.08		$	19.73		$	17.08
Tangible book value per share (non-GAAP)		17.37			17.08			17.37			17.08

Efficiency Ratio reconciliation
Efficiency ratio (GAAP)		40.08	%		37.23	%		41.13	%		37.76	%
Impact of First IC-merger related expenses included in noninterest expense		(0.54)			(0.88)			(1.93)			(0.80)
Operating efficiency ratio (non-GAAP)		39.54	%		36.35	%		39.20	%		36.95	%

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Results of Operations

We recorded net income of $22.1 million for the three months ended June 30, 2026 compared to $16.8 million for the three months ended June 30, 2025, an increase of $5.3 million, or 31.5%. This increase was due to an increase in net interest income of $11.9 million, and a decrease in provision for credit losses of $921,000, offset by increases in noninterest expense of $5.8 million and income tax expense of $1.7 million.

For the six months ended June 30, 2026 we recorded net income of $44.5 million compared to $33.1 million for the six months ended June 30, 2025, an increase of $11.3 million, or 34.2%. This increase was due to an increase in net interest income of $25.8 million an increase in noninterest income of $923,000, and a decrease in provision for credit losses of $1.9 million, offset by an increase in noninterest expense of $13.5 million, and an increase in income tax expense of $3.8 million.

Basic and diluted earnings per common share for the three months ended June 30, 2026 was $0.77 and $0.76, respectively, compared to $0.66 and $0.65 for the basic and diluted earnings per common share for the three months ended June 30, 2025. For the six months ended June 30, 2026, basic and diluted earnings per common share was $1.55 and $1.53, respectively, compared to $1.30 and $1.29 for the same period in 2025, respectively.

Interest Income

Interest income totaled $70.4 million for the three months ended June 30, 2026, an increase of $16.4 million, or 30.3%, from the three months ended June 30, 2025, primarily due to an increase in average balance of gross loans of $847.8 million, and an increase in average balance of investments of $30.1 million, and a 26 basis point increase in the loan yield, along with $1.4 million in accretion income on purchase credit deteriorated loans from the First IC merger that occurred in fourth quarter of 2025. The increase in average loans is due to an increase of $646.3 million in average commercial real estate loans, and an increase of $153.4 million in average residential real estate loans.

Interest income totaled $141.4 million for the six months ended June 30, 2026 compared to $106.6 million for the same period in 2025, an increase of $34.8 million, or 32.7%, primarily due to a 30 basis point increase in the loan yield, along with $2.3 million in accretion income on purchase credit deteriorated loans from the First IC merger that occurred in fourth quarter of 2025 coupled with an increase in average loan balances of $853.0 million, as well as an increase in the average total investment balance of $108.6 million, offset by a decrease of 58 basis points in the yield on average total investments. The increase in average loans is due to an increase of $579.7 million in average commercial real estate loans, an increase of $25.0 million in average construction and development loans, an increase of $15.7 million in average commercial and industrial loans, and $232.1 million increase in average residential mortgage loans. As compared to the six months ended June 30, 2025, the yield on average interest-earning assets increased by 21 basis points to 6.54% from 6.33% with the yield on average loans increasing by 30 basis points and the yield on average total investments decreasing by 58 basis points.

Interest Expense

Interest expense for the three months ended June 30, 2026 increased $4.5 million, or 20.5%, to $26.4 million compared to interest expense of $21.9 million for the three months ended June 30, 2025, primarily due to a $578.2 million increase in average deposit balances and offset with a $16.0 million decrease in the average borrowings balance. Average time deposits and money market deposits increased by $383.3 million and $79.6 million, respectively, and average interest-bearing demand deposits and savings accounts increased by $115.4 million primarily from the First IC merger in fourth quarter of 2025.

Interest expense totaled $52.9 million for the six months ended June 30, 2026, an increase of $9.0 million, or 20.6%, compared to the same period in 2025, primarily due to a $636.4 million increase in average interest-bearing deposit balances. Average borrowings outstanding for June 30, 2026 increased by $15.0 million compared to the same period in 2025.

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The Company currently has effective interest rate derivative agreements totaling $750.0 million that are designated as cash flow hedges of our deposit accounts indexed to the Federal Funds Effective rate. The weighted average pay rate for these interest rate derivatives is 1.70%. At June 30, 2026, the Company had interest rate swap agreements with aggregate notional amounts of $300.0 million and interest rate cap agreements with aggregate notional amounts of $450.0 million, all designated as cash flow hedges of deposit accounts indexed to the Federal Funds Effective Rate. The Company has determined these hedging relationships to be highly effective since inception. During the three months ended June 30, 2026, we recorded a $1.5 million credit to interest expense from the benefit received on these interest-rate derivatives, compared to $4.2 million credit during the three months ended June 30, 2025. Based on the Federal Funds Effective rate as of June 30, 2026 (3.63%), the Company would estimate to record a credit to interest expense of approximately $1.9 million for the remainder of 2026 from the benefit received on these interest rate derivatives, however actual results may vary based on changes in market and hedge performance. See Note 9 of our consolidated financial statements as of June 30, 2026 included elsewhere in this Form 10-Q, for additional information on these interest rate derivatives.

Net Interest Margin

The net interest margin for the three months ended June 30, 2026 increased by 34 basis points to 4.11% from 3.77% for the three months ended June 30, 2025, primarily due to a 23 basis points increase in the yield on average interest-bearing assets of $4.30 billion, offset by three basis point decrease in the cost of average interest-earning liabilities of $3.2 billion. Average earning assets for the three months ended June 30, 2026 increased by $877.9 million from the three months ended June 30, 2025, due to a $847.8 million increase in average loans and a $30.1 million increase in average total investments. Average interest-bearing liabilities for the three months ended June 30, 2026 increased by $562.2 million from the three months ended June 30, 2025, driven by increases in average interest-bearing deposits of $578.3 million offset by a decrease in average borrowings of $16.0 million

The net interest margin for the six months ended June 30, 2026 increased by 38 basis points to 4.10% from 3.72% for the six months ended June 30, 2025, primarily due to a 21 basis point increase in the yield on average interest-bearing assets of $4.4 billion, and a 14 basis point decrease in the cost of average interest-bearing liabilities of $3.2 billion. Average earning assets increased by $961.6 million, due to a $108.6 million increase in average total investments and a $853.0 million increase in average loans. Average interest-bearing liabilities increased by $651.4 million, primarily driven by a $636.4 million increase in average interest-bearing deposit balances and an increase in average borrowings of $15.0 million.

Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition, and the shape of the interest rate yield curve. The increase in our net interest margin is primarily driven by a reduction of funding cost, reflecting improved deposit pricing and the benefit of interest rate derivative hedges, partially offset by modest compression in asset yields.

Average Balances, Interest and Yields

The following tables present, for the three and six months ended June 30, 2026 and 2025, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) the interest rate spread; and (v) the net interest margin.

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		Three Months Ended June 30,
		2026								2025
		Average			Interest and			Yield /		Average			Interest and			Yield /
(Dollars in thousands)		Balance			Fees			Rate		Balance			Fees			Rate
Earning Assets:
Federal funds sold and other investments⁽¹⁾		$	250,992		$	2,320		3.71	%	$	231,803		$	2,848		4.93	%
Investment securities			47,970			773		6.46			37,040			265		2.87
Total investments			298,962			3,093		4.15			268,843			3,113		4.64
Construction and development			58,374			1,059		7.28			28,283			580		8.23
Commercial real estate			1,454,209			29,466		8.13			807,897			17,612		8.74
Commercial and industrial			88,982			2,166		9.76			71,274			1,544		8.69
Residential real estate			2,395,849			34,610		5.79			2,242,456			31,137		5.57
Consumer and other			636			11		6.94			365			63		69.23
Gross loans⁽²⁾			3,998,050			67,312		6.75			3,150,275			50,936		6.49
Total earning assets			4,297,012			70,405		6.57			3,419,118			54,049		6.34
Noninterest-earning assets			278,512								199,302
Total assets			4,575,524								3,618,420
Interest-bearing liabilities:
NOW and savings deposits			278,175			1,579		2.28			162,810			1,089		2.68
Money market deposits			1,112,349			8,324		3.00			1,032,754			6,815		2.65
Time deposits			1,349,972			12,237		3.64			966,678			9,592		3.98
Total interest-bearing deposits			2,740,496			22,140		3.24			2,162,242			17,496		3.25
Borrowings			410,165			4,224		4.13			426,173			4,375		4.12
Total interest-bearing liabilities			3,150,661			26,364		3.36			2,588,415			21,871		3.39
Noninterest-bearing liabilities:
Noninterest-bearing deposits			779,925								529,130
Other noninterest-bearing liabilities			90,350								72,231
Total noninterest-bearing liabilities			870,275								601,361
Shareholders’ equity			554,588								428,644
Total liabilities and shareholders’ equity		$	4,575,524							$	3,618,420
Net interest income					$	44,041							$	32,178
Net interest spread								3.21								2.95
Net interest margin								4.11								3.77

(1)	Includes income and average balances for term federal funds, interest-earning cash accounts, and other miscellaneous earning assets.

(2)	Average loan balances include nonaccrual loans and loans held for sale.

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		Six Months Ended June 30,
		2026								2025
		Average			Interest and			Yield /		Average		Interest and			Yield /
(Dollars in thousands)		Balance			Fees			Rate		Balance		Fees			Rate
Earning Assets:
Federal funds sold and other investments⁽¹⁾		$	284,469		$	5,201		3.69	%	$	195,840	$	4,946		5.09	%
Investment securities			54,533			1,743		6.45			34,551		433		2.53
Total investments			339,002			6,944		4.13			230,391		5,379		4.71
Construction and development			50,779			1,853		7.36			25,816		1,060		8.28
Commercial real estate			1,373,705			59,302		8.71			793,968		33,769		8.58
Commercial and industrial			87,771			3,738		8.59			72,032		3,132		8.77
Residential real estate			2,507,199			69,530		5.59			2,275,082		63,123		5.60
Consumer and other			741			28		7.62			321		105		65.96
Gross loans⁽²⁾			4,020,195			134,451		6.74			3,167,219		101,189		6.44
Total earning assets			4,359,197			141,395		6.54			3,397,610		106,568		6.33
Noninterest-earning assets			278,950								198,293
Total assets			4,638,147								3,595,903
Interest-bearing liabilities:
NOW and savings deposits			275,425			3,131		2.29			158,300		2,040		2.60
Money market deposits			1,143,953			15,830		2.76			1,021,674		13,137		2.59
Time deposits			1,383,610			25,256		3.68			986,567		20,296		4.15
Total interest-bearing deposits			2,802,988			44,217		3.18			2,166,541		35,473		3.30
Borrowings			423,182			8,650		4.12			408,186		8,363		4.13
Total interest-bearing liabilities			3,226,170			52,867		3.30			2,574,727		43,836		3.43
Noninterest-bearing liabilities:
Noninterest-bearing deposits			777,429								524,155
Other noninterest-bearing liabilities			85,357								71,840
Total noninterest-bearing liabilities			862,786								595,995
Shareholders’ equity			549,191								425,181
Total liabilities and shareholders’ equity		$	4,638,147							$	3,595,903
Net interest income					$	88,528						$	62,732
Net interest spread								3.25							2.90
Net interest margin								4.10							3.72

(1)Includes income and average balances for term federal funds, interest-earning cash accounts, and other miscellaneous earning assets.

(2) Average loan balances include nonaccrual loans and loans held for sale.

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Rate/Volume Analysis

Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table sets forth the effects of changing rates and volumes on our net interest income during the period shown. Information is provided with respect to (i) effects on interest income attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Change applicable to both volumes and rate have been allocated to volume.


		Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
		Increase (Decrease) Due to Change in:
(Dollars in thousands)		Volume			Yield/Rate			Total Change
Earning assets:
Federal funds sold and other investments⁽¹⁾		$	95		$	(623)		$	(528)
Investment securities			632			(124)			508
Total investments			727			(747)			(20)
Construction and development			205			274			479
Commercial real estate			8,365			3,489			11,854
Commercial and industrial			581			41			622
Residential real estate			6,530			(3,057)			3,473
Consumer and Other			(53)			1			(52)
Gross loans⁽²⁾			15,628			748			16,376
Total earning assets			16,355			1			16,356
Interest-bearing liabilities:
NOW and savings deposits			848			(358)			490
Money market deposits			145			1,364			1,509
Time deposits			3,263			(618)			2,645
Total interest-bearing deposits			4,256			388			4,644
Borrowings			51			(202)			(151)
Total interest-bearing liabilities			4,307			186			4,493
Net interest income		$	12,048		$	(185)		$	11,863

(1)	Includes income and average balances for term federal funds, interest-earning cash accounts, and other miscellaneous earning assets.

(2)	Average loan balances include nonaccrual loans and loans held for sale.

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			Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
			Increase (Decrease) Due to Change in:
(Dollars in thousands)			Volume			Yield/Rate			Total Change
Earning assets:
Federal funds sold and other investments⁽¹⁾		$		988		$	(733)		$	255
Investment securities				1,239			71			1,310
Total investments				2,227			(662)			1,565
Construction and development				905			(112)			793
Commercial real estate				22,406			3,127			25,533
Commercial and industrial				1,029			(423)			606
Residential real estate				8,025			(1,618)			6,407
Consumer and Other				(79)			2			(77)
Gross loans⁽²⁾				32,286			976			33,262
Total earning assets				34,513			314			34,827
Interest-bearing liabilities:
NOW and savings deposits				408			683			1,091
Money market deposits				1,158			1,535			2,693
Time deposits				1,033			3,927			4,960
Total interest-bearing deposits				2,599			6,145			8,744
Borrowings				1			286			287
Total interest-bearing liabilities				2,600			6,431			9,031
Net interest income		$		31,913		$	(6,117)		$	25,796

(1)Includes income and average balances for term federal funds, interest-earning cash accounts, and other miscellaneous earning assets.

(2)Average loan balances include nonaccrual loans and loans held for sale.

Provision for Credit Losses

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

We recorded a recovery for credit losses of $792,000 during the three months ended June 30, 2026 compared to a provision for credit losses of $129,000 recorded during the three months ended June 30, 2025. The recovery for credit loss recorded during the three months ended June 30, 2026 was primarily driven by lower loan balances and reduced reserves on individually analyzed loans. Our ACL as a percentage of gross loans for the periods ended June 30, 2026, December 31, 2025 and June 30, 2025 was 0.66%, 0.68% and 0.60%, respectively. Our ACL as a percentage of gross loans is relatively lower than our peers due to our high percentage of residential mortgage loans, which tend to have lower allowance for credit loss ratios compared to other commercial or consumer loans due to their low LTVs.

See the section captioned “Allowance for Credit Losses” elsewhere in this document for further analysis of our provision for credit losses.

Noninterest Income

Noninterest income for the three months ended June 30, 2026 was $5.8 million, an increase of $22,000, or 0.4%, compared to $5.7 million for the three months ended June 30, 2025. Noninterest income for the six months ended

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June 30, 2026 was $12.2 million, an increase of $923,000, or 8.2%, compared to $11.2 million for the six months ended June 30, 2025

The following table sets forth the major components of our noninterest income for three and six months ended June 30, 2026 and 2025.


	Three Months Ended June 30,								Six Months Ended June 30,
(Dollars in thousands)	2026		2025		$ Change		% Change		2026		2025		$ Change		% Change
Noninterest income:
Service charges on deposit accounts	$	958	$	505	$	453	89.7	%	$	1,806	$	1,005	$	801	79.7	%
Other service charges, commissions and fees		1,428		1,620		(192)	(11.9)			3,009		3,216		(207)	(6.4)
Gain on sale of residential mortgage loans		—		579		(579)	(100.0)			—		978		(978)	(100.0)
Mortgage servicing income, net		271		781		(510)	(65.3)			577		1,399		(822)	(58.8)
Gain on sale of SBA loans		1,536		643		893	138.9			2,581		1,301		1,280	98.4
SBA servicing income, net		728		642		86	13.4			2,633		1,555		1,078	69.3
Other income		834		963		(129)	(13.4)			1,506		1,735		(229)	(13.2)
Total noninterest income	$	5,755	$	5,733	$	22	0.4	%	$	12,112	$	11,189	$	923	8.2	%

Service charges on deposit accounts increased $453,000, or 89.7%, to $958,000 for the three months ended June 30, 2026 compared to $505,000 for the three months ended June 30, 2025. Service charges on deposit accounts were $1.8 million for the six months ended June 30, 2026 compared to $1.0 million for the same period in 2025, an increase of $801,000, or 79.7%. These increases were primarily attributable to higher service charges on business checking accounts, analysis fees, overdraft fees, and charge back fees as a result of the First IC acquisition that occurred in fourth quarter of 2025.

Other service charges, commissions, and fees decreased $192,000, or 11.9%, to $1.4 million for the three months ended June 30, 2026 compared to $1.6 million for the three months ended June 30, 2025. Other service charges, commissions, and fees decreased 207,000, or 6.4%, to $3.0 million for the six months ended June 30, 2026 compared to $3.2 million for the six months ended June 30, 2025. These increases were attributable to higher origination and processing fees earned from our origination of residential mortgage loans. Mortgage loan originations totaled $75.4 million and $177.3 million during the three and six months ended June 30, 2026, compared to $93.2 million and $184.3 million during the same periods in 2025.

Gain on sale of residential mortgage loans totaled $0 for the three and six months ended June 30, 2026. Gain on sale of residential mortgage loans totaled $579,000 and 978,000 for the three and six months ended June 30, 2025, as we sold $54.3 million and $94.4 million in residential mortgage loans during these period with an average premium of 1.09% and 1.08%, respectively.

Gain on sale of SBA loans totaled $1.5 million for the three months ended June 30, 2026 compared to $643,000 for the three months ended June 30, 2025. We sold $27.1 million in SBA loans during the three months ended June 30, 2026 with average premiums of 8.21%. We sold $20.7 million in SBA loans during the three months ended June 30, 2025 with average premiums of 5.66%. Gain on sale of SBA loans totaled $2.6 million for the six months ended June 30, 2026 compared to $1.3 million for the same period in 2025. We sold $46.8 million in SBA loans during the six months ended

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June 30, 2026 with average premiums of 7.99% compared to $37.3 million sold during the same period in 2025 with average premiums of 5.80%.

Mortgage loan servicing income, net of amortization, decreased by $510,000, or 65.3%, to $271,000 during the three months ended June 30, 2026 compared to $781,000 for the three months ended June 30, 2025. Mortgage loan servicing income, net of amortization, decreased by $822,000, or 58.9%, to $577,000 for the six months ended June 30, 2026 compared to $1.4 million for the six months ended June 30, 2025. The changes in mortgage loan servicing income were primarily due to decreases in servicing fees, increases in mortgage servicing amortization, and decreases in capitalized mortgage servicing assets. Our total residential mortgage loan servicing portfolio was $463.5 million at June 30, 2026 compared to $559.1 million at June 30, 2025.

SBA servicing income increased by $86,000, or 13.4%, to $728,000 for the three months ended June 30, 2026 compared to $642,000 for the three months ended June 30, 2025. SBA servicing income increased $1.0 million, or 69.3% to $2.6 million for the six months ended June 30, 2026, compared to $1.6 million for the same period of 2025. Our total SBA and USDA loan servicing portfolio was $682.2 million as of June 30, 2026 compared to $480.9 million as of June 30, 2025. Included in SBA servicing income for three and six months ended June 30, 2026 was $814,000 and $2.1 million in SBA servicing fees compared to $1.0 million and $2.0 million, respectively for the three and six months ended June 30, 2025, respectively. Our SBA servicing rights are carried at fair value and the inputs used to calculate fair value change from period to period. During the three and six months ended June 30, 2026, fair value decreased by $86,000 and increased by $580,000 on our SBA servicing rights, respectively compared to the same periods in 2025 fair value decreased by $344,000 and $451,000 on our SBA servicing rights.

Other noninterest income decreased by $129,000, or 13.4%, to $834,000 for the three months ended June 30, 2026 compared to $963,000 for the three months ended June 30, 2025. Other noninterest income was $1.5 million for the six months ended June 30, 2026 compared to $1.7 million for the same period in 2025, a decrease of $229,000 , or 13.2%. The largest component of other noninterest income is the income on bank owned life insurance which totaled $641,000 and $1.3 million for three and six months ended June 30, 2026, respectively compared to $620,000 and $1.2 million for the three and six months ended June 30, 2025 respectively. Also included in other noninterest income are fair value gains/losses on our equity securities, which totaled $82,000 (loss) and $165,000 (loss) for the three and six months ended June 30, 2026, respectively, compared to $41,000 (gain) and $181,000 (gain) for the three and six months ended June 30, 2025.

Noninterest Expense

Noninterest expense for the three months ended June 30, 2026 was $20.0 million compared to $14.1 million for the three months ended June 30, 2025, an increase of $5.8 million, or 41.4%.

Noninterest expense for the six months ended June 30, 2026 was $41.4 million compared to $27.9 million for the six months ended June 30, 2025, an increase of $13.5 million or 48.3%.

These increases were primarily driven by higher personnel, occupancy, and data processing costs, as well as $1.9 million of merger related expenses. Excluding merger related expenses, noninterest expense reflects the full quarter impact of the acquisition and is expected to stabilize as integration activities progress and operational efficiencies are realized.

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The following table sets forth the major components of our noninterest expense for the three and six months ended June 30, 2026 and 2025


	Three Months Ended June 30,								Six Months Ended June 30,
(Dollars in thousands)	2026		2025		$ Change		% Change		2026		2025		$ Change		% Change
Noninterest Expense:
Salaries and employee benefits	$	11,344	$	8,554	$	2,790	32.6	%	$	22,845	$	17,047	$	5,798	34.0	%
Occupancy and equipment		2,328		1,380		948	68.7			4,762		2,797		1,965	70.3
Data processing		535		329		206	62.6			1,217		674		543	80.6
Advertising		178		149		29	19.5			401		316		85	26.9
Merger-related expenses		270		333		(63)	(18.9)			1,946		595		1,351	227.1
Other expenses		5,302		3,368		1,934	57.4			10,224		6,483		3,741	57.7
Total noninterest expense	$	19,957	$	14,113	$	5,844	41.4	%	$	41,395	$	27,912	$	13,483	48.3	%

Salaries and employee benefits expense for the three months ended June 30, 2026 was $11.3 million compared to $8.5 million for the three months ended June 30, 2025, an increase of $2.8 million, or 32.6%. Salaries and employee benefits expense for the six months ended June 30, 2026 was $22.9 million compared to $17.0 million for the six months ended June 30, 2025, an increase of $5.8 million, or 34.0%. These increases were primarily attributable to higher employee salaries and incentives, and employee insurance as a result of the First IC acquisition that occurred in fourth quarter of 2025.

Occupancy and equipment expense for the three months ended June 30, 2026 was $2.3 million, an increase of $948,000, or 68.7%, compared to the three months ended June 30, 2025. Occupancy and equipment expense for the six months ended June 30, 2026 was $4.8 million, an increase of $2.0 million, or 70.3%, compared to the six months ended June 30, 2025. These increases were primarily due to higher property taxes, utilities, maintenance expense, rent expense, and depreciation expense from the acquisition of First IC that occurred in fourth quarter of 2025.

Data processing expense for the three months ended June 30, 2026 was $535,000 compared to $329,000 for the three months ended June 30, 2025, an increase of $206,000, or 62.6%. Data processing expense for the six months ended June 30, 2026 was $1.2 million, an increase of $543,000, or 80.6%, compared to the six months ended June 30, 2025. These increases were primarily due to the continued growth in our loans and deposits from the acquisition of First IC that occurred in fourth quarter of 2025, as well as enhancements to our existing systems.

Advertising expenses for the three and six months ended June 30, 2026 remained relatively flat compared to the same periods in 2025.

Merger-related expenses for the three months ended June 30, 2026 was $270,000 compared to $333,000 for the three months ended June 30, 2025. Merger-related expenses for the six months ended June 30, 2026 was $1.9 million compared to $595,000 for the six months ended June 30, 2025. The increase for the six months is related to the acquisition of First IC being completed in fourth quarter of 2025 with legal fees, integration fees, and conversion expenses in the first quarter of 2026.

Other expenses for the three months ended June 30, 2026 were $5.3 million compared to $3.4 million for the three months ended June 30, 2025, an increase of $1.9 million, or 57.4%. Other expenses for the six months ended June 30, 2026 were $10.2 million compared to $6.5 million for the six months ended June 30, 2025 an increase of $3.7 million, or 57.7%. This increase was primarily due to core deposit amortization, additional banking costs from First IC merger, FDIC insurance premiums, security expenses, and loan-related expenses.

Income Tax Expense

Income tax expense for the three months ended June 30, 2026 and 2025 was $8.5 million and $6.8 million, respectively. The Company’s effective tax rates were 27.7% and 28.9% for the three months ended June 30, 2026 and 2025, respectively.

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Income tax expense for the six months ended June 30, 2026 and 2025 was $16.4 million and $12.6 million, respectively. The Company’s effective tax rates were 27.0% and 27.6% for the six months ended June 30, 2026 and 2025, respectively.

Financial Condition

Total assets decreased $248.4 million, or 5.2%, to $4.52 billion at June 30, 2026 as compared to $4.77 billion at December 31, 2025. The decrease in total assets was primarily attributable to decreases of $117.0 million in cash and cash equivalents, $21.0 million in securities, $93.1 million in loans, net, $8.4 million in loans held for sale, and $6.5 million in Federal Home Loan Bank stock.

Our investment securities portfolio made up 0.99% of our total assets at June 30, 2026 compared to 1.38% at December 31, 2025.

Loans

Gross loans held for investment decreased $94.3 million, or 2.3%, to $3.98 billion as of June 30, 2026 as compared to $4.08 billion as of December 31, 2025. Our loan decrease during the six months ended June 30, 2026 was comprised of a decrease of $97.3 million, or 6.2%, in commercial real estate loans, a decrease of $11.4 million , or 11.8% in commercial and industrial loans, a decrease of $13.2 million, or 0.6% in residential real estate loans, offset by an increase of $27.6 million, or 65.9% in construction and development loans. We had loans held for sale of $1.4 million as of June 30, 2026 compared to $9.7 million in loans held for sale as of December 31, 2025.

The following table presents the ending balance of each major category in our loan portfolio held for investment at the dates indicated.


	June 30, 2026					December 31, 2025
(Dollars in thousands)	Amount			% of Total		Amount			% of Total
Construction and development	$	69,348		1.7	%	$	41,796		1.0	%
Commercial real estate		1,463,460		36.7			1,560,728		38.3	%
Commercial and industrial		84,999		2.1			96,360		2.4	%
Residential real estate		2,365,132		59.4			2,378,311		58.3	%
Consumer and other		600		—			627		—	%
Gross loans	$	3,983,539		100.0		$	4,077,822		100.0	%
Unearned income		(9,660)					(6,621)
Loan Discounts		(17,560)					(19,804)
Allowance for credit losses		(25,818)					(27,843)
Total loans, net	$	3,930,501				$	4,023,554

SBA and USDA Loan Servicing

As of June 30, 2026 and December 31, 2025, we serviced $682.2 million and $685.5 million, respectively, in SBA and USDA loans for others. We carried a servicing asset of $11.2 million and $10.6 million at June 30, 2026 and December 31, 2025, respectively. See Note 5 of our consolidated financial statements as of June 30, 2026, included elsewhere in this Form 10-Q, for additional information on the activity for SBA and USDA loan servicing rights for the three and six months ended June 30, 2026 and 2025.

Residential Mortgage Loan Servicing

As of June 30, 2026, we serviced $463.5 million in residential mortgage loans for others compared to $702.6 million as of December 31, 2025. We carried a servicing asset, net of amortization, of $1.3 million and $1.7 million at June 30, 2026 and December 31, 2025. Amortization relating to the mortgage loan servicing asset was $176,000 and $352, 000 for the three and six months ended June 30, 2026 compared to $137,000 and $255,000 three and six months ended June 30, 2025, respectively. During three and six months ended June 30, 2026 we recorded no fair value adjustments

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compared to fair-value adjustments for the three and six months ended June 30, 2025 of $28,000 and negative $15,000, respectively, on our mortgage servicing asset. See Note 6 of our consolidated financial statements as of June 30, 2026, included elsewhere in this Form 10-Q, for additional information on the activity for mortgage loan servicing rights for the three and six months ended June 30, 2026 and 2025.

Asset Quality

Nonperforming Loans

Asset quality remained strong during the second quarter of 2026 as our nonperforming loans to total loans remained low at 0.57% as of June 30, 2026. Nonperforming loans were $22.5 million at June 30, 2026 compared to $25.2 million at December 31, 2025. The decrease from December 31, 2025 to June 30, 2026 was attributable to a $7.7 million decrease in nonaccrual loans, offset by an increase in past due loans 90 days more and still accruing related to one $5.1 million loan, which is well secured and in process of collection. We did not recognize any interest income on nonaccrual loans during the three and six months ended June 30, 2026 and 2025.

The following table sets forth the allocation of our nonperforming assets among our different asset categories as of the dates indicated. Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing interest. Nonperforming assets consist of nonperforming loans plus foreclosed real estate. Nonaccrual loans at June 30, 2026 comprised of $7.1 million of commercial real estate loans, $1.0 million of commercial and industrial loans and $9.4 million of residential real estate loans. Nonaccrual loans at December 31, 2025 comprised of $14.8 million of commercial real estate loans, $1.3 million of commercial and industrial loans, and $9.1 million of residential real estate loans.


(Dollars in thousands)	June 30, 2026			December 31, 2025
Nonaccrual loans	$	17,435		$	25,213
Past due loans 90 days or more and still accruing		5,088			—
Total nonperforming loans		22,523			25,213
Foreclosed real estate		1,300			208
Total nonperforming assets	$	23,823		$	25,421
Nonperforming loans to gross loans		0.57	%		0.62	%
Nonperforming assets to total assets		0.53	%		0.53	%
Allowance for credit losses to nonperforming loans		114.63	%		110.43	%

Allowance for Credit Losses

The allowance for credit losses was $25.8 million at June 30, 2026 compared to $27.8 million at December 31, 2025, a decrease of $2.0 million. The decrease was primarily reflected lower reserves resulting from reduced loan balances and changes in reserves on individually analyzed loans.

We maintain a reserve for credit losses that consists of two components, the allowance for credit losses and the allowance for unfunded commitments. The allowance for credit losses provides for the risk of credit losses expected in our loan portfolio and is based on loss estimates derived from a comprehensive quarterly evaluation. The evaluation reflects analyses of individual borrowers for impairment coupled with analysis of historical loss experience in various loan pools that have been grouped based on similar risk characteristics, supplemented as necessary by credit judgment that considers observable trends, conditions, reasonable and supportable forecasts, and other relevant environmental and economic factors. The level of the allowance for credit losses is adjusted by recording an expense or credit through the provision for credit losses. The level of the allowance for unfunded commitments is adjusted by recording an expense or credit in provision for credit losses. The allowance for unfunded commitments had a balance of $535,000 as of June 30, 2026 compared to $195,000 as of June 30, 2025.

Loans that do not share risk characteristics are evaluated on an individual basis. For collateral dependent loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the

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collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan.

The impact of utilizing the CECL approach to calculate the allowance for credit losses will be significantly influenced by the composition, characteristics, and quality of our loan portfolio, as well as the prevailing economic conditions and forecasts utilized. Material changes to these and other relevant factors may result in greater volatility to the provision for credit losses, and therefore, greater volatility to our reported earnings. See Note 1 and Note 4 of our consolidated financial statements as of June 30, 2026, included elsewhere in this Form 10-Q, and in the Company’s 2025 Form 10-K, for additional information on the allowance for credit losses and the allowance for unfunded commitments.

It is the policy of management to maintain the allowance for credit losses at a level adequate for risks inherent in the loan portfolio. The FDIC and GA DBF also review the allowance for credit losses as an integral part of their examination process. Based on information currently available, management believes that our allowance for credit losses is adequate. However, the loan portfolio can be adversely affected if economic conditions and the real estate market in our market areas were to weaken. The effect of such events, although uncertain at this time, could result in an increase in the level of nonperforming loans and increased credit losses, which could adversely affect our future growth and profitability. No assurance of the ultimate level of credit losses can be given with any certainty.

Analysis of the Allowance for Credit Losses. The following table provides an analysis of the allowance for credit losses, provision for credit losses and net charge-offs for the periods presented below:


	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in thousands)	2026			2025			2026			2025
Balance, beginning of period	$	26,700		$	18,592		$	27,843		$	18,744
Charge-offs:
Construction and development		—			—			—			—
Commercial real estate		—			62			190			62
Commercial and industrial		—			—			92			173
Residential real estate		—			—			—			—
Consumer and other		—			—			—			—
Total charge-offs		—			62			282			235
Recoveries:
Construction and development		—			—			—			—
Commercial real estate		96			—			99			1
Commercial and industrial		3			2			8			5
Residential real estate		—			—			—			—
Consumer and other		—			—			—			—
Total recoveries		99			2			107			6
Net (recoveries)/charge-offs		(99)			60			175			229
Provision for loan losses		(981)			216			(1,850)			233
Balance, end of period	$	25,818		$	18,748		$	25,818		$	18,748
Total loans at end of period⁽¹⁾	$	3,983,539		$	3,128,881		$	3,983,539		$	3,128,881
Average loans⁽¹⁾		3,997,375			3,130,515			4,030,611			3,154,046
Net charge-offs to average loans		(0.01)	%		0.01	%		0.01	%		0.01	%
Allowance for credit losses to total loans		0.65	%		0.60	%		0.65	%		0.60	%

(1)	Excludes loans held for sale.

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Management believes the allowance for credit losses is adequate to provide for losses expected in the loan portfolio as of June 30, 2026.

Deposits

Deposits were $3.49 billion at June 30, 2026, a decrease of $156.6 million, compared to total deposits of $3.65 billion at December 31, 2025, and an increase of $800.0 million, or 29.7%, compared to total deposits of $2.69 billion at June 30, 2025. The decrease in total deposits at June 30, 2026 compared to December 31, 2025 was due to a $105.8 million decrease in brokered deposits, a $104.5 million decrease in time deposits, and a $27.1 million decrease in NOW and savings accounts, offset by a $78.6 million increase in money market accounts and a $2.1 million increase in noninterest-bearing deposits. The decrease in deposits was primarily attributable to the intentional reduction of higher-cost deposits as part of the Company's ongoing funding strategy. Management elected not to retain certain higher-rate deposit relationships as they matured or repriced in an effort to reduce funding costs and optimize the deposit mix. Noninterest-bearing deposits were $783.0 million at June 30, 2026, compared to $780.8 million at December 31, 2025 and $548.9 million at June 30, 2025. Noninterest-bearing deposits constituted 22.4% of total deposits at June 30, 2026, compared to 21.4% at December 31, 2025 and 20.4% at June 30, 2025. Interest-bearing deposits were $2.71 billion at June 30, 2026, compared to $2.87 billion at December 31, 2025 and $2.14 billion at June 30, 2025. Interest-bearing deposits constituted 77.6% of total deposits at June 30, 2026, compared to 78.6% at December 31, 2025 and 79.6% at June 30, 2025.

As of June 30, 2026 and December 31, 2025, the Company had estimated uninsured deposits of $1.16 billion and $1.09 billion, respectively. These estimates were derived using the same methodologies and assumptions used for the Bank’s regulatory reporting. Uninsured deposits were 33.1% of total deposits at June 30, 2026, compared to 29.6% at December 31, 2025. As of June 30, 2026, we had $1.72 billion of available borrowing capacity at the Federal Home Loan Bank ($1.02 billion), Federal Reserve Discount Window ($634.0 million), and various other financial institutions (fed fund lines totaling $67.5 million).

We had $642.0 million of brokered deposits, or 18.4% of total deposits, at June 30, 2026 compared to $747.8 million, or 20.5% of total deposits, at December 31, 2025. The decline in brokered deposits primarily reflected the Company's decision to allow higher-cost brokered deposits to mature without replacement, consistent with its efforts to reduce funding costs. We use brokered deposits, subject to certain limitations and requirements, as a source of funding to support our asset growth and augment the deposits generated from our branch network, which are our principal source of funding. Our level of brokered deposits varies from time to time depending on competitive interest rate conditions and other factors and tends to increase as a percentage of total deposits when the brokered deposits are less costly than issuing internet certificates of deposit or borrowing from the Federal Home Loan Bank.

We use interest rate swap and cap agreements to hedge our deposit accounts that are indexed to the Federal Funds Effective Rate. These swap agreements are designated as cash flow hedges. As of June 30, 2026, the total amount of deposits tied to the Federal Funds Effective Rate was $1.09 billion. See Note 9 of our consolidated financial statements as of June 30, 2026, included elsewhere in this Form 10-Q, for additional information.

The following tables summarize our average deposit balances and weighted average rate for the three and six months ended June 30, 2026 and 2025.


	Three months ended June 30,
	2026					2025
	Average		Weighted			Average		Weighted
(Dollars in thousands)	Balance		Average Rate			Balance		Average Rate
Noninterest-bearing demand	$	779,925		—	%	$	529,130	—	%
Interest-bearing demand deposits		266,128		2.37			153,609	2.83
Savings and money market deposits		499,680		2.38			381,825	3.68
Brokered deposits		624,716		3.50			660,130	2.01
Time deposits		1,349,972		3.64			966,678	3.98
Total interest-bearing deposits		2,740,496		3.24			2,162,242	3.25
Total deposits	$	3,520,421		2.52	%	$	2,691,372	2.61	%

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	Six months ended June 30,
	2026					2025
	Average		Weighted			Average		Weighted
(Dollars in thousands)	Balance		Average Rate			Balance		Average Rate
Noninterest-bearing demand	$	777,429		—	%	$	524,155	—	%
Interest-bearing demand deposits		263,342		2.39			149,024	2.75
Savings and money market deposits		473,346		3.94			369,711	3.65
Brokered deposits		682,690		3.20			661,239	1.96
Time deposits		1,383,610		3.68			986,567	4.15
Total interest-bearing deposits		2,802,988		3.18			2,166,541	3.30
Total deposits	$	3,580,417		2.49	%	$	2,690,696	2.66	%

The weighted average rates shown in the tables above are inclusive of the benefit received from the interest rate derivatives that hedge our deposit accounts tied to the Federal Funds Effective Rate. For the three and six months ended June 30, 2026, we recorded a credit to interest expense of $1.4 million and $3.7 million from the benefit received on these interest rate derivatives, respectively compared to a credit to interest expense of $4.2 and $8.4 million recorded during the three and six months ended June 30, 2025, respectively. These benefits resulted in reductions of 21 and 27 basis point reduction to the average interest bearing deposits weighted average rate three and six months ended June 30, 2026, respectively, compared to a 26 and 26 basis point reduction for the three and six months ended June 30, 2025, respectively.

Borrowed Funds

Other than deposits, we also utilized FHLB advances as a supplementary funding source to finance our operations. The advances from the FHLB are collateralized by residential real estate loans. At June 30, 2026 and December 31, 2025, we had maximum borrowing capacity from the FHLB of $1.4 billion and $1.09 billion, respectively. At June 30, 2026 and December 31, 2025, we had $375.0 million and $510.0 million, respectively, of outstanding advances from the FHLB.

In addition to our advances with the FHLB, we maintain federal funds agreements with our correspondent banks. Our available borrowings under these agreements were $67.5 million and $52.5 million at June 30, 2026 and December 31, 2025. We did not have any advances outstanding under these agreements as of June 30, 2026 and December 31, 2025. We also have access to the Federal Reserve’s discount window in the amount of $634.0 million and $600.4 million at June 30, 2026 and December 31, 2025, respectively. No discount window borrowings were outstanding as of June 30, 2026 and December 31, 2025. We also maintain relationships in the capital markets with brokers to issue certificates of deposit and money market accounts, if necessary.

Liquidity and Capital Resources

Liquidity

Liquidity refers to the measure of our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our operating, capital, and strategic cash flow needs, all at a reasonable cost. We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all short-term and long-term cash requirements. We manage our liquidity position to meet the daily cash flow needs of customers, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of our shareholders.

Our liquidity position is supported by management of liquid assets and access to alternative sources of funds. Our liquid assets include cash, interest-bearing deposits in correspondent banks, federal funds sold, and fair value of unpledged investment securities. Other available sources of liquidity include wholesale/brokered deposits, and additional borrowings from correspondent banks, FHLB advances, and the Federal Reserve discount window.

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Our short-term and long-term liquidity requirements are primarily met through cash flow from operations, redeployment of prepaying and maturing balances in our loan and investment portfolios and increases in customer deposits. Other alternative sources of funds will supplement these primary sources to the extent necessary to meet additional liquidity requirements on either a short-term or long-term basis.

As part of our liquidity management strategy, we open federal funds lines with our correspondent banks. As of June 30, 2026 and December 31, 2025, we had $67.5 million and $52.5 million, respectively, of unsecured federal funds lines with no amounts advanced. In addition, the Company had Federal Reserve Discount Window funds available of approximately $634.0 million and $600.4 million at June 30, 2026 and December 31, 2025, respectively. The FRB discount window line is collateralized by a pool of construction and development, commercial real estate, and commercial and industrial loans with carrying balances totaling $762.2 million as of June 30, 2026, as well as all the Company’s municipal and mortgage-backed securities. There were no outstanding borrowings on this line as of June 30, 2026 and December 31, 2025.

At June 30, 2026 and December 31, 2025, we had $375.0 million and $510.0 million, respectively, of outstanding advances from the FHLB. Based on the values of loans pledged as collateral, we had $1.0 billion and $577.9 million of additional borrowing availability with the FHLB as of June 30, 2026 and December 31, 2025, respectively. We also maintain relationships in the capital markets with brokers to issue certificates of deposit and money market accounts, if necessary.

We anticipate that our cash requirements will be funded through available cash and cash equivalents, cash flow from operations, core deposit, available borrowing capacity and, if necessary, access to wholesale funding and the capital markets.

Capital Requirements

The Company and the Bank are required under federal law to maintain certain minimum capital levels based on ratios of capital to total assets and capital to risk-weighted assets. The required capital ratios are minimums, and the federal banking agencies may determine that a banking organization, based on its size, complexity or risk profile, must maintain a higher level of capital in order to operate in a safe and sound manner. Risks such as concentration of credit risks and the risk arising from non-traditional activities, as well as the institution’s exposure to a decline in the economic value of its capital due to changes in interest rates, and an institution’s ability to manage those risks are important factors that are to be taken into account by the federal banking agencies in assessing an institution’s overall capital adequacy.

The table below summarizes the capital requirements applicable to the Company and the Bank in order to be considered “well-capitalized” from a regulatory perspective, as well as the Company’s and the Bank’s capital ratios as of June 30, 2026 and December 31, 2025. The Bank exceeded all regulatory capital requirements and was considered to be “well-capitalized” as of June 30, 2026 and December 31, 2025. As of December 31, 2025, the FDIC categorized the Bank as well-capitalized under the prompt corrective action framework. There have been no conditions or events since December 31, 2025 that management believes would change this classification. While the Company believes that it has sufficient capital to withstand an extended economic recession, its reported and regulatory capital ratios could be adversely impacted in future periods.

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					Regulatory
					Capital Ratio
					Requirements		Minimum
					including		Requirement
					fully phased-		for “Well
					in Capital		Capitalized”
					Conservation		Depository
	June 30, 2026		December 31, 2025		Buffer		Institution
Total capital (to risk-weighted assets)
Consolidated	18.05	%	16.85	%	10.50	%	N/A
Bank	18.05	%	16.77	%	10.50		10.00	%
Tier 1 capital (to risk-weighted assets)
Consolidated	17.15	%	15.91	%	8.50	%	N/A
Bank	17.15	%	15.83	%	8.50		8.00	%
CET1 capital (to risk-weighted assets)
Consolidated	17.15	%	15.91	%	7.00	%	N/A
Bank	17.15	%	15.83	%	7.00		6.50	%
Tier 1 capital (to average assets)
Consolidated	11.08	%	10.00	%	4.00	%	N/A
Bank	11.08	%	9.84	%	4.00		5.00	%

Dividends

On July 15, 2026, the Company declared a cash dividend of $0.29 per share, payable on August 7, 2026, to common shareholders of record as of July 29, 2026. Any future determination to pay dividends to holders of our common stock will depend on our results of operations, financial condition, capital requirements, banking regulations, contractual restrictions, and any other factors that our board of directors may deem relevant.

Off-Balance Sheet Arrangements

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in our consolidated balance sheet. The contractual or notional amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments.

Commitments to extend credit are agreements 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 amount does not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if we deem collateral is necessary upon extension of credit, is based on management’s credit evaluation of the counterparty.

Standby letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party and may be drawn by the beneficiary if the customer fails to perform in accordance with the underlying contractual terms.

See Note 10 of our consolidated financial statements as of June 30, 2026, included elsewhere in this Form 10-Q, for more information regarding our off-balance sheet arrangements as of June 30, 2026 and December 31, 2025.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk

Market risk represents the risk of loss due to changes in market values of assets and liabilities. We incur market risk in the normal course of business through exposures to market interest rates, equity prices, and credit spreads. We have identified interest rate risk as our primary source of market risk.

Interest Rate Risk

Interest rate risk is the risk to earnings and value arising from changes in market interest rates. Interest rate risk arises from timing differences in the repricings and maturities of interest-earning assets and interest-bearing liabilities (repricing risk), changes in the expected maturities of assets and liabilities arising from embedded options, such as borrowers’ ability to prepay home mortgage loans at any time and depositors’ ability to redeem certificates of deposit before maturity (option risk), changes in the shape of the yield curve where interest rates increase or decrease in a nonparallel fashion (yield curve risk), and changes in spread relationships between different yield curves, such as U.S. Treasuries and Federal funds Effective Rates (basis risk).

Our board of directors establishes broad policy limits with respect to interest rate risk. As part of this policy, the asset liability committee, or ALCO, establishes specific operating guidelines within the parameters of the board of directors’ policies. In general, the ALCO focuses on ensuring a stable and steadily increasing flow of net interest income through managing the size and mix of the balance sheet. The management of interest rate risk is an active process which encompasses monitoring loan and deposit flows complemented by investment and funding activities. Effective management of interest rate risk begins with understanding the dynamic characteristics of assets and liabilities and determining the appropriate interest rate risk posture given business forecasts, management objectives, market expectations, and policy constraints.

An asset sensitive position refers to a balance sheet position in which an increase in short-term interest rates is expected to generate higher net interest income, as rates earned on our interest-earning assets would reprice upward more quickly than rates paid on our interest-bearing liabilities, thus expanding our net interest margin. Conversely, a liability sensitive position refers to a balance sheet position in which an increase in short-term interest rates is expected to generate lower net interest income, as rates paid on our interest-bearing liabilities would reprice upward more quickly than rates earned on our interest-earning assets, thus compressing our net interest margin.

Interest rate risk measurement is calculated and reported to the ALCO at least quarterly. The information reported includes period-end results and identifies any policy limits exceeded, along with an assessment of the policy limit breach and the action plan and timeline for resolution, mitigation, or assumption of the risk.

Evaluation of Interest Rate Risk

We use income simulations, an analysis of core funding utilization, and economic value of equity (EVE) simulations as our primary tools in measuring and managing interest rate risk. These tools are utilized to quantify the potential earnings impact of changing interest rates over a two year simulation horizon (income simulations) as well as identify expected earnings trends given longer term rate cycles (long term simulations, core funding utilizations, and EVE simulation). A standard gap report and funding matrix will also be utilized to provide supporting detailed information on the expected timing of cashflow and repricing opportunities.

There are an infinite number of potential interest rate scenarios, each of which can be accompanied by differing economic/political/regulatory climates; can generate multiple differing behavior patterns by markets, borrowers, depositors, etc.; and can last for varying degrees of time. Therefore, by definition, interest rate risk sensitivity cannot be predicted with certainty. Accordingly, the Bank’s interest rate risk measurement philosophy focuses on maintaining an appropriate balance between theoretical and practical scenarios; especially given the primary objective of the Bank’s overall asset/liability management process is to facilitate meaningful strategy development and implementation.

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Therefore, we model a set of interest rate scenarios capturing the financial effects of a range of plausible rate scenarios, the collective impact of which will enable the Bank to clearly understand the nature and extent of its sensitivity to interest rate changes. Doing so necessitates an assessment of rate changes over varying time horizons and of varying/sufficient degrees such that the impact of embedded options within the balance sheet are sufficiently examined.

We use a net interest income simulation model to measure and evaluate potential changes in our net interest income. We run three standard and plausible simulations comparing current or flat rates with a +/- 200 basis point ramp in rates over 12 and 24 months. These rate scenarios are considered appropriate as we believe they represent a more realistic range of rate movements that could occur in the near to medium term. This analysis also provides the foundation for historical tracking of interest rate risk. The impact of interest rate derivatives, such as interest rate swaps and caps, is included in the model.

Potential changes to our net interest income in hypothetical rising and declining rate scenarios calculated as of June 30, 2026 and December 31, 2025 are presented in the following table:


		Net Interest Income Sensitivity
		12 Month Projection				24 Month Projection
(Ramp in basis points)		+200		-200		+200		-200
June 30, 2026		(1.30)	%	1.00	%	(1.20)	%	5.70	%
December 31, 2025		(1.70)	%	1.20	%	(6.60)	%	6.50	%

We also model the impact of rate changes on our Economic Value of Equity, or EVE. We base the modeling of EVE based on interest rate shocks as shocks are considered more appropriate for EVE, which accelerates future interest rate risk into current capital via a present value calculation of all future cashflows from the Bank’s existing inventory of assets and liabilities. Our simulation model incorporates interest rate shocks of + 100, 200, 300, and 400 and – 100, 200, and 300 basis points. The results of the model are presented in the table below:


		Economic Value of Equity Sensitivity
(Shock in basis points)		+400		+300		+200		+100		-100		-200		-300
June 30, 2026		(15.80)		(11.30)	%	(7.00)	%	(3.20)	%	2.10	%	3.40	%	2.00	%
December 31, 2025		(28.20)		(21.10)	%	(14.00)	%	(6.70)	%	6.40	%	12.30	%	15.90	%

Our simulation model incorporates various assumptions, which we believe are reasonable but which may have a significant impact on results such as: (i) the timing of changes in interest rates; (ii) shifts or rotations in the yield curve; (iii) re-pricing characteristics for market-rate-sensitive instruments; (iv) varying loan prepayment speeds for different interest rate scenarios; and (v) the overall growth and mix of assets and liabilities. 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.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2026. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026.

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Changes in Internal Control over Financial Reporting

During the quarter ended June 30, 2026, there was no change in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 of the Exchange Act that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company is continually monitoring and assessing changes in processes and activities to determine any potential impact on the design and operating effectiveness of internal controls over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are a party to various legal proceedings such as claims and lawsuits arising in the course of our normal business activities. Although the ultimate outcome of all claims and lawsuits outstanding as of June 30, 2026 cannot be ascertained at this time, it is the opinion of management that these matters, when resolved, will not have a material adverse effect on our business, results of operations or financial condition.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in “Part I – Item 1A – Risk Factors” of the Company’s 2025 Form 10-K, which could materially affect its business, financial position, results of operations, cash flows, or future results. Please be aware that these risks may change over time and other risks may prove to be important in the future. New risks may emerge at any time, and we cannot predict such risks or estimate the extent to which they may affect our business, financial condition or results of operations, or the trading price of our securities.

There are no material changes during the period covered by this Report to the risk factors previously disclosed in the Company’s 2025 Form 10-K.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

On October 16, 2024, the Company announced the continuation of its share repurchase program that expired on September 30, 2024 (“Prior Share Repurchase Plan”), and authorized the Company to repurchase up to 925,250 shares of the Company’s outstanding shares of common stock, which is the number of remaining shares authorized for repurchase from the Prior Share Repurchase Plan. The share repurchase program began on October 17, 2024 and ended on September 30, 2025.

On September 17, 2025, the Company announced the continuation of its share repurchase program that expired on September 30, 2025 (“2025 Prior Share Repurchase Plan”) and authorized the Company to repurchase up to 923,976 shares of the Company’s outstanding shares of common stock, which is the number of remaining shares authorized for repurchase from the 2025 Prior Share Repurchase Plan. The continuation of the share repurchase program began on October 1, 2025 and ended in second quarter 2026.

The repurchases are made in compliance with all SEC rules, including Rule 10b-18, and other legal requirements and may be made in part under Rule 10b5-1 plans, which permits share repurchases when the Company might otherwise be precluded from doing so. Repurchases can be made from time-to-time in the open market or through privately negotiated transactions depending on market and/or other conditions. The repurchase program may be modified, suspended or discontinued at any time and does not obligate the Company to purchase any shares of its common stock.

There were no common shares repurchased for the three months ended June 30, 2026.

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Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

During the second quarter of 2026, no executive officers or directors adopted Rule 10b5-1 trading plans and no directors or executive officers terminated a Rule 10b5-1 trading plan or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

Item 6. Exhibits


Exhibit No.		Description of Exhibit
2.1		Agreement and Plan of Reorganization, by and among MetroCity Bankshares, Inc., Metro City Bank, First IC Corporation, and First IC Bank, dated as of March 16, 2025 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed March 17, 2025)
3.1		Restated Articles of Incorporation of MetroCity Bankshares, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed September 4, 2019 (File No. 333-233625))
3.2		Amended and Restated Bylaws of MetroCity Bankshares, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed September 4, 2019 (File No. 333-233625))
31.1		Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File - the cover page has been formatted in Inline XBRL and contained within the Inline XBRL Instance Document in Exhibit 101

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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.

	METROCITY BANKSHARES, INC.

Date: August 7, 2026	By:	/s/ Nack Y. Paek
		Nack Y. Paek
		Chief Executive Officer

Date: August 7, 2026	By:	/s/ Farid Tan
		Farid Tan
		President and Interim Chief Financial Officer

Source: View Original Filing on SEC EDGAR