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(CUSIP NOS. 05151A AA1 / L0415A AA1)

LUXEMBOURG--(BUSINESS WIRE)--Auna S.A. (NYSE: AUNA), a public limited liability company (société anonyme) incorporated and existing under the laws of Luxembourg, having its registered office at 6, rue Jean Monnet, L-2180 Luxembourg, and registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés, Luxembourg) under number B267590 (“Auna” or the “Company”), a Latin American healthcare company with operations in Mexico, Peru and Colombia, announced today the commencement of an offer to purchase for cash of any and all of the outstanding 10.000% Senior Notes due 2029 issued by Auna (the “Notes”), upon the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated October 20, 2025 (the “Offer to Purchase”) for the consideration described below (the “Tender Offer”). All capitalized terms used herein but not defined in this announcement have the respective meanings ascribed to them in the Offer to Purchase.

Simultaneously with the Tender Offer, we are conducting a solicitation of consents (the “Consent Solicitation”) from Holders of the Notes to effect certain proposed amendments to the indenture governing the Notes dated as of December 18, 2023 (as amended and supplemented from time to time, the “Base Indenture”), by and among the Company, the guarantors party thereto (the “Guarantors”) and Citibank, N.A., as trustee, paying agent, registrar and transfer agent (the “Trustee”), under which the Notes were issued, as amended and supplemented by a first supplemental indenture dated October 18, 2024 by and among, the Company, the Guarantors and the Trustee (the “First Supplemental Indenture” and together with the Base Indenture, the “Indenture”). The Proposed Amendments (as defined below) with respect to the Indenture would eliminate substantially all of the restrictive covenants as well as certain events of default and related provisions contained therein, as further described in the Offer to Purchase (the “Proposed Amendments”). Pursuant to the terms of such Indenture, the Proposed Amendments require the consents of Holders of at least a majority in aggregate principal amount of the Notes outstanding (excluding any Notes held by the Company or its affiliates) (the “Requisite Consents”). The term “Holder” means a registered holder of Notes.

Holders that tender their Notes pursuant to the Tender Offer and in accordance with the procedures described in this Offer to Purchase will be deemed to have delivered their consent to the Proposed Amendments pursuant to the Consent Solicitation. Holders may not deliver consents to the Proposed Amendments without tendering the related Notes. If a Holder tenders Notes in the Tender Offer, such Holder will be deemed to deliver its consent, with respect to the principal amount of such tendered Notes, to the Proposed Amendments.

The following table summarizes certain payment terms of the Tender Offer and Consent Solicitation:

Title of Security

ISIN/CUSIP Numbers

Principal Outstanding Amount

Tender Offer Consideration(1)

Early Tender Payment(1)(2)

Total Consideration(1)

10.000% Senior Secured Notes due 2029

US05151AAA16/

USL0415AAA18

05151A AA1 /

L0415A AA1

U.S.$372,937,161

U.S.$1,020

U.S.$50

U.S.$1,070

The Tender Offer will expire at 5:00 p.m., New York City time, on November 18, 2025, unless extended or earlier terminated by the Company (such time and date, as it may be extended or earlier terminated with respect to the Tender Offer and related Consent Solicitation, the “Expiration Date”). Holders who validly tender (and do not validly withdraw) their Notes and deliver (and do not revoke) their related consents to the Proposed Amendments at or prior to 5:00 p.m., New York City time, October 31, 2025, unless extended by the Company (such time and date, as the same may be extended, the “Early Tender Date”), in the manner described in the Offer to Purchase will be eligible to receive the Total Consideration, which includes the Early Tender Payment with respect to the Notes, plus any Accrued Interest. Notes tendered may be withdrawn and consents delivered may be revoked at any time at or prior to 5:00 p.m., New York City time, October 31, 2025, unless extended by the Company (such time and date, as the same may be extended, the “Withdrawal Deadline”), but not thereafter, except as may be required by applicable law.

To be eligible to receive the Total Consideration set forth in the table above, Holders must validly tender and not validly withdraw their Notes at or prior to the Early Tender Date. Holders who do not validly tender their Notes at or prior to the Early Tender Date will not be paid the Early Tender Payment and will only be eligible to receive the Tender Offer Consideration. All Holders who validly tender their Notes will also receive accrued and unpaid interest on the Notes from the last interest payment date on the Notes preceding the applicable Settlement Date to, but excluding, such Settlement Date (as defined herein). In addition, in the event of a termination of the Tender Offer and Consent Solicitation, none of the Total Consideration, the Tender Offer Consideration or any Accrued Interest will be paid or become payable to the Holder of such Notes, and the Notes tendered pursuant to the Tender Offer will be promptly returned to the tendering Holders.

At the Company’s option, payment for Notes validly tendered at or prior to the Early Tender Date and accepted for purchase will be made on the early settlement date, expected to be within four business days following the Early Tender Date, or November 6, 2025, or as promptly as practicable thereafter (the “Early Settlement Date”).

If the Early Settlement Date occurs with respect to the Notes, payment for Notes validly tendered after the Early Tender Date and at or prior to the Expiration Date and accepted for purchase will be made on the final settlement date, expected to be within three business days following the Expiration Date, or November 21, 2025, or as promptly as practicable thereafter (the “Final Settlement Date”). The Notes validly tendered after the Early Tender Date but at or prior to the Expiration Date and so accepted will receive the Tender Offer Consideration, plus any Accrued Interest, on the Final Settlement Date, but not the Early Tender Payment. If no Early Settlement Date occurs, then payment for all the Notes that are validly tendered and not validly withdrawn at any time prior to the Expiration Time and that are accepted for purchase will be made on the Final Settlement Date.

Auna’s obligation to purchase Notes pursuant to the Tender Offer is subject to the satisfaction or waiver of certain conditions described in the Offer to Purchase and Consent Solicitation Statement under “The Tender Offer and Consent Solicitation—Conditions to the Tender Offer and Solicitation,” which include, (i) the receipt of the Requisite Consents and (ii) the successful consummation of a Proposed New Notes Offering and a Proposed Term Loan (each as defined in the Offer to Purchase).

Auna reserves the right, in its sole discretion, (1) to waive any and all conditions to the Tender Offer or Consent Solicitation; (2) to extend the Tender Offer or Consent Solicitation; and (3) to terminate or to otherwise amend the Tender Offer or Consent Solicitation in any respect.

At any time after the Withdrawal Deadline and before the Expiration Date, if we have received the Requisite Consents, on such date, we, each of the Guarantors of the Notes and the Trustee may execute and deliver a second supplemental indenture to the Indenture, which will give effect to the Proposed Amendments to the Notes.

Neither the Offer to Purchase nor any related documents have been filed with or reviewed by any federal or state securities commission or regulatory authority of any country. No authority has passed upon the accuracy or adequacy of the Offer to Purchase or any related documents, and it is unlawful and may be a criminal offense to make any representation to the contrary.

The Tender and Information Agent for the Tender Offer and Consent Solicitation is Global Bondholder Services Corporation. Additional contact information of the Tender and Information Agent is set forth below.

Global Bondholder Services Corporation

Any questions or requests for assistance or for copies of the Offer to Purchase may be directed to the Tender and Information Agent at one of its telephone numbers above. A Holder (or a beneficial owner that is not a Holder) may also contact the Dealer Managers and Solicitation Agents at their telephone numbers set forth below or its broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Tender Offer and Consent Solicitation.

This notice does not constitute or form part of any offer or invitation to purchase, or any solicitation of any offer to sell, the Notes or any other securities in the United States or any other country, nor shall it or any part of it, or the fact of its release, form the basis of, or be relied on or in connection with, any contract therefor. The Tender Offer and Solicitation are made only by and pursuant to the terms of the Offer to Purchase and Consent Solicitation Statement, and the information in this notice is qualified by reference to the Offer to Purchase and Consent Solicitation Statement. None of Auna, the Guarantors, the Dealer Managers and Solicitation Agents or the Tender and Information Agent makes any recommendation as to whether Holders should tender their Notes pursuant to the Tender Offer and Solicitation.

This notice is not an offer to sell or a solicitation of an offer to buy New Notes (as defined in the Offer to Purchase). Tendering Holders who wish to tender their Notes for cash and also subscribe for New Notes should quote a unique identifier code corresponding to the New Notes being subscribed (“Unique Identifier Code”), which can be obtained by contacting the Dealer Managers and Solicitation Agents. The receipt of a Unique Identifier Code in conjunction with any tender of Notes in the Tender Offer is not an allocation of the New Notes. In order to apply for the purchase of the New Notes, such tendering Holders must make a separate application in respect of the New Notes for the purchase of such New Notes. If the Proposed New Notes Offering is announced, the Company will review tender instructions received on or prior to the pricing of the New Notes, and may give priority to those investors tendering with Unique Identifier Codes in connection with the allocation of New Notes. However, no assurances can be given that any Holder that tenders its Notes will be given an allocation of New Notes at the levels it may subscribe for, or at all.

About Auna

Auna is one of Latin America’s leading healthcare platforms, with operations in Mexico, Peru, and Colombia. It prioritizes prevention and focuses on complex diseases that represent the highest healthcare spending. Its mission is to transform healthcare by delivering access to a highly integrated offering of services in low-penetration markets across Spanish-speaking Latin America.

Founded in 1989, Auna has built one of the region’s largest modern healthcare platforms, consisting of a horizontally integrated network of medical care centers and a vertically integrated portfolio of oncology and general health plans. As of June 30, 2025, Auna’s network included 31 healthcare facilities—hospitals, ambulatory centers, and prevention and wellness centers—with a total of 2,323 beds and 1.4 million health plan members.

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often are proceeded by words such as “believes,” “expects,” “may,” “anticipates,” “plans,” “intends,” “assumes,” “will” or similar expressions. The forward-looking statements contained herein include statements about the Company’s Tender Offer and Consent Solicitation and potential new financings. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Auna’s business and operations involve numerous risks and uncertainties, many of which are beyond the control of Auna, which could result in Auna’s expectations not being realized or otherwise materially affect the financial condition, results of operations and cash flows of Auna. Some of the factors that could cause future results to materially differ from recent results or those projected in forward-looking statements are described in Auna’s filings with the United States Securities and Exchange Commission, including its annual report filed on Form 20-F on April 10, 2025.

The forward-looking statements are made only as of the date hereof, and Auna does not undertake any obligation to (and expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events. In light of the risks and uncertainties described above, and the potential for variation of actual results from the assumptions on which certain of such forward-looking statements are based, investors should keep in mind that the results, events or developments disclosed in any forward-looking statement made in this document may not occur, and that actual results may vary materially from those described herein, including those described as anticipated, expected, targeted, projected or otherwise.

More News From Auna S.A.

ATLANTA--(BUSINESS WIRE)--Please replace the logo with the accompanying corrected logo.

The release reads:

COASTALSOUTH BANCSHARES, INC. REPORTS EARNINGS FOR THIRD QUARTER 2025

CoastalSouth Bancshares, Inc. (“CoastalSouth” or the “Company”) (NYSE: COSO), the holding company for Coastal States Bank (the “Bank”), today reported net income of $6.7 million, or $0.54 per diluted share, for the third quarter of 2025, compared to approximately $6.0 million, or $0.57 per diluted share, for the second quarter of 2025, and $7.9 million, or $0.75 per diluted share, for the third quarter of 2024. For the year-to-date period ending September 30, 2025, the Company reported net income of $17.8 million, or $1.58 per diluted share, compared with $16.2 million, or $1.55 per diluted share, for the same period in 2024.

Commenting on the Company’s results, President and Chief Executive Officer, Stephen R. Stone stated, “Following the completion of our initial public offering on July 2, 2025, the Company continued to deliver excellent financial performance through the third quarter of 2025. Loan production continued to be robust with over $137.3 million in new commitments originated during the third quarter of 2025 while maintaining strong asset quality metrics. Given the recent acceleration of mergers and acquisition activity in our markets, we continue to focus on recruiting new bankers to expand our presence within our markets and grow new relationships."

Third Quarter 2025 Performance Highlights:

Net income of $6.7 million or $0.54 per diluted share

Return on average assets ("ROAA") of 1.20%

Return on average equity ("ROAE") of 10.84%; Return on average tangible common equity ("ROATCE") of 11.07%1

Net interest margin of 3.58%, an increase of 12 basis points from the second quarter of 2025

Efficiency ratio of 55.69% for the third quarter of 2025

Loans held for investment ("LHFI") production of $137.3 million in commitments led to LHFI growth of $25.8 million, up 6.7% annualized from the second quarter of 2025

Book value per share growth of $0.54, or 10.5% annualized, to $20.91 at September 30, 2025; Tangible book value1 per share growth of $0.61, or 12.2% annualized, to $20.49 at September 30, 2025 from the second quarter of 2025

Total shareholders' equity to total assets of 11.10%, compared to 9.43% at June 30, 2025; Tangible common equity1 to tangible assets1 of 10.91%, compared to 9.22% at June 30, 2025

Net charge-offs to average loans held for investment of 0.03%

Nonperforming assets to total assets of 0.63%; adjusted nonperforming assets to total assets1 of 0.43%

Allowance for credit losses ("ACL") on LHFI to total LHFI of 1.16%; ACL on LHFI to nonperforming loans of 127.03%

Completed initial public offering of 2,035,000 shares on July 2, 2025 with an initial offering price of $21.50. The Company issued 1,700,000 shares for net proceeds of $30.2 million following discounts, commissions, and expenses

Redeemed $15.0 million of subordinated debt; recognized $236 thousand of accelerated debt issuance expense

Operating Highlights

Net interest income totaled $19.2 million for the third quarter of 2025, an increase of $1.1 million, or 6.2%, from $18.1 million for the second quarter of 2025 and an increase of $2.2 million, or 13.1% from the third quarter of 2024. The Company’s net interest margin expanded to 3.58% for the third quarter of 2025, a 12 basis point increase from the second quarter of 2025 and a 26 basis point increase from the third quarter of 2024.

The yield on average interest-earning assets for the third quarter of 2025 increased to 6.14% from 6.08% for the second quarter of 2025. This increase was primarily related to an overall yield increase in all categories except a 2 basis point decrease in yield on LHFI albeit with an increased average volume of approximately $37.2 million in the LHFI portfolio quarter over quarter. The yield on available-for-sale securities was positively impacted by $225 thousand of premium recognized on corporate bonds that were called ahead of maturity. Compared to the third quarter of 2024, yields on earning assets decreased 23 basis points to 6.14% from 6.37%. The decrease was primarily attributable to a 37 basis point decrease in LHFI, a 26 basis point decrease in the yield on the loans held for sale ("LHFS") portfolio, and a net decrease in other earning assets categories.

The Company’s total cost of funds was 2.79% for the third quarter of 2025, a decrease of 1 basis point and 45 basis points compared with the second quarter of 2025 and third quarter of 2024, respectively. The cost of funds was impacted by the recognition of a $236 thousand debt issuance costs which were accelerated due to redemption of the Company's subordinated debt. Deposit costs decreased 3 basis points during the third quarter of 2025 to 2.72%, compared to 2.75% in the second quarter of 2025. The cost of interest-bearing deposits decreased 4 basis points during the third quarter of 2025 to 3.23%, compared with 3.27% in the second quarter of 2025, reflecting continued repricing of certificates of deposits in the third quarter of 2025.

Noninterest income totaled $2.1 million for the third quarter of 2025, an increase of $305 thousand, or 17.0%, from the second quarter of 2025, primarily attributable to an increase in gain on sale of government guaranteed loans ("GGL"). Noninterest expense totaled $11.9 million for the third quarter of 2025, a decrease of $236 thousand, or 2.0%, from the second quarter of 2025, primarily due to lower other professional fees, offset by a net increase in other noninterest expense categories.

The Company’s effective tax rate for the third quarter of 2025 was 23.2%, compared to 15.1% for the second quarter of 2025 and 22.1% for the third quarter of 2024. The increase in effective tax rate from the second quarter of 2025 was primarily due to a higher recognition of renewable energy tax credits in the second quarter of 2025.

Balance Sheet Trends

Total assets were $2.26 billion at September 30, 2025, an increase of $156.7 million, or 7.5%, from $2.10 billion at December 31, 2024. LHFS were $231.6 million at September 30, 2025, an increase of $57.6 million, or 33.1%, from $174.0 million at December 31, 2024. Gross LHFI were $1.55 billion at September 30, 2025, an increase of $143.5 million, or 10.2%, from $1.41 billion at December 31, 2024.

Total deposits were $1.95 billion at September 30, 2025, an increase of $114.9 million, or 6.3%, from $1.83 billion at December 31, 2024. Noninterest-bearing deposits were $313.6 million at September 30, 2025, or 16.1% of total deposits, compared to $302.9 million, or 16.5% of total deposits, at December 31, 2024. Brokered certificates of deposits, a component of time deposits, were $294.9 million at September 30, 2025, as compared to $274.9 million at December 31, 2024, an increase of $20.0 million, or 7.3%.

Credit Quality

During the third quarter of 2025, the Company recorded a provision (recovery) for credit losses of $653 thousand, compared to $752 thousand and ($1.0) million during the second quarter of 2025 and third quarter of 2024, respectively. The provision expense recorded during the third quarter of 2025 was primarily due to increased loan production and current period net charge-offs, offset by other changes in loss rates and economic factors. The Company's annualized net charge-offs to average LHFI ratio was 0.03% for the third quarter of 2025 as compared to 0.06% and 0.02% during the second quarter of 2025 and third quarter of 2024, respectively.

Nonperforming assets totaled $14.2 million, or 0.63% of total assets, at September 30, 2025 compared to $15.9 million, or 0.76% of total assets at December 31, 2024. The $1.7 million decrease in nonperforming assets at September 30, 2025 from December 31, 2024 was due to the sale of other real estate owned and payments collected on nonaccrual loans during the period. Adjusted nonperforming assets2, which excludes the guaranteed portions of nonaccrual loans, was $9.7 million, or 0.43% of total assets, at September 30, 2025 compared to $11.1 million, or 0.53% of total assets, at December 31, 2024.

About CoastalSouth Bancshares, Inc.

CoastalSouth Bancshares, Inc. is a bank holding company headquartered in Atlanta, Georgia. Through our wholly owned subsidiary, Coastal States Bank, a South Carolina state-chartered commercial bank, we offer a full range of banking products and services designed for businesses, real estate professionals, and consumers looking for a deep and meaningful relationship with their bank. To learn more about Coastal States Bank, visit www.coastalstatesbank.com.

Forward-Looking Statements

Statements in this press release regarding future events and our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets, constitute “forward-looking statements” within the meaning of, and subject to the protections of, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical in nature and may be identified by references to a future period or periods by the use of the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “project,” “outlook,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” The forward-looking statements in this press release should not be relied on because they are based on current information and on assumptions that we make about future events and circumstances that are subject to a number of known and unknown risks and uncertainties that are often difficult to predict and beyond our control. As a result of those risks and uncertainties, and other factors, our actual financial results in the future could differ, possibly materially, from those expressed in or implied by the forward-looking statements contained in this press release and could cause us to make changes to our future plans.

Factors that might cause such differences include, but are not limited to: the impact of current and future economic conditions, particularly those affecting the financial services industry, including the effects of declines in the real estate market, high unemployment rates, inflationary pressures, elevated interest rates and slowdowns in economic growth, as well as the financial stress on borrowers as a result of the foregoing; potential impacts of any adverse developments in the banking industry, including any impacts on customer confidence, deposit outflows, liquidity and the regulatory response thereto; changes in the interest rate environment, including changes to the federal funds rate; changes in prices, values and sales volumes of residential and commercial real estate; competition in our markets that may result in increased funding costs or reduced earning assets yields, thus reducing margins and net interest income; interest rate fluctuations, which could have an adverse effect on the Company’s profitability; a breach in security of our information systems, including the occurrence of a cyber-attack incidents or a deficiencies in cyber security; risks related to potential acquisitions; government actions or inactions, including a prolonged shutdown of the federal government, tariffs, or trade wards (including reduced consumer spending, lower economic growth or recession, reduced demand for U.S. exports, disruptions to supply chains, and decreased demand for other banking products and services), legislation or regulatory changes which could adversely affect the ability of the consolidated Company to conduct business combinations or new operations; changes in tax laws; 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; the effects of war or other conflicts, domestic civil unrest and tyranny, and changes in the overall geopolitical landscape; and adverse results from current or future litigation, regulatory examinations or other legal and/or regulatory actions, including as a result of the Company’s participation in and execution of government programs. Therefore, the Company can give no assurance that the results contemplated in the forward-looking statements will be realized.

Additional information regarding these and other risks and uncertainties to which our business and future financial performance are subject is contained in the section titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in the Company’s final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended, filed with the Securities and Exchange Commission (the “SEC”) on July 2, 2025 (Registration No. 333-287854), relating to our initial public offering, and in other documents that we file with the SEC from time to time, which are available on the SEC’s website, http://www.sec.gov.

In addition, our actual financial results in the future may differ from those currently expected due to additional risks and uncertainties of which we are not currently aware or which we do not currently view as, but in the future may become, material to our business or operating results. Due to these and other possible uncertainties and risks, readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release or to make predictions based solely on historical financial performance.

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 review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. All forward-looking statements, express or implied, included in this press release are qualified in their entirety by this cautionary statement.

COASTALSOUTH BANCSHARES, INC. AND SUBSIDIARY

FINANCIAL TABLES

 

Financial Highlights (unaudited)

Table 1A

As of and for the Three Months Ended

As of and for the Nine Months Ended

(dollars in thousands except

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

per share amounts)

2025

2025

2025

2024

2024

2025

2024

Selected Operating Data:

Interest income

$

32,890

$

31,793

$

30,024

$

30,537

$

32,554

$

94,707

$

93,112

Interest expense

13,700

13,715

13,265

14,266

15,588

40,680

44,061

Net interest income

19,190

18,078

16,759

16,271

16,966

54,027

49,051

Provision (recovery) for credit losses

653

752

629

1,240

(1,023

)

2,034

(687

)

Noninterest income

2,100

1,795

1,881

1,958

2,961

5,776

2,556

Noninterest expense

11,856

12,092

11,419

10,335

10,830

35,367

31,733

Income tax expense

2,040

1,064

1,542

950

2,236

4,646

4,361

Net income

6,741

5,965

5,050

5,704

7,884

17,756

16,200

Adjusted net income (1)

6,749

5,965

5,050

5,704

7,884

17,764

18,854

Share and Per Share Data:

Basic earnings per share

$

0.57

$

0.58

$

0.49

$

0.56

$

0.77

$

1.64

$

1.59

Adjusted basic earnings

per share (1)

$

0.57

$

0.58

$

0.49

$

0.56

$

0.77

$

1.64

$

1.85

Diluted earnings per share

$

0.54

$

0.57

$

0.47

$

0.54

$

0.75

$

1.58

$

1.55

Adjusted diluted earnings

per share (1)

$

0.54

$

0.57

$

0.47

$

0.54

$

0.75

$

1.58

$

1.81

Book value per share

$

20.91

$

20.37

$

19.67

$

19.01

$

18.86

$

20.91

$

18.86

Tangible book value per share (1)

$

20.49

$

19.88

$

19.17

$

18.51

$

18.35

$

20.49

$

18.35

Shares of common stock outstanding

11,978,921

10,278,921

10,274,271

10,270,146

10,250,446

11,978,921

10,250,446

Weighted average diluted shares

outstanding

12,325,462

10,612,255

10,642,078

10,596,364

10,544,087

11,217,972

10,420,646

Selected Balance Sheet Data:

Total assets

$

2,255,389

$

2,221,245

$

2,190,391

$

2,098,712

$

2,129,346

$

2,255,389

$

2,129,346

Securities available-for-sale, at

fair value (2)

334,955

331,760

325,478

335,267

355,174

334,955

355,174

Gross loans held for investment

1,552,976

1,527,199

1,472,232

1,409,443

1,409,913

1,552,976

1,409,913

Loans held for sale

231,593

209,101

187,481

174,033

193,938

231,593

193,938

Allowance for credit losses

18,028

17,497

17,104

17,118

15,615

18,028

15,615

Goodwill and other intangible assets

6,186

6,190

6,199

6,386

6,451

6,186

6,451

Total deposits

1,949,672

1,968,301

1,937,693

1,834,802

1,807,315

1,949,672

1,807,315

Core deposits (1)

1,654,764

1,660,409

1,650,358

1,559,904

1,628,706

1,654,764

1,628,706

Other borrowings

25,000

14,753

20,738

41,725

96,712

25,000

96,712

Total Shareholders' equity

250,438

209,365

202,104

195,232

193,303

250,438

193,303

Financial Highlights - continued (unaudited)

Table 1B

 

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2025

2025

2025

2024

2024

2025

2024

Performance Ratios:

Pre-tax pre-provision net revenue

(PPNR) (1)

$

9,434

$

7,781

$

7,221

$

7,894

$

9,097

$

24,436

$

19,874

Return on average assets (ROAA) (2)

1.20

%

1.09

%

0.97

%

1.07

%

1.47

%

1.09

%

1.04

%

Adjusted return on average assets

(Adj. ROAA) (1)(2)

1.20

1.09

0.97

1.07

1.47

1.09

1.21

Return on average equity (2)

10.84

11.62

10.25

11.65

16.91

10.91

12.30

Adjusted return on average equity (1)(2)

10.85

11.62

10.25

11.65

16.91

10.91

14.32

Return on average tangible common

equity (ROATCE) (1)(2)

11.07

11.92

10.52

11.97

17.40

11.17

12.68

Adjusted return on average tangible

common equity (Adj. ROATCE) (1)(2)

11.08

11.92

10.52

11.97

17.40

11.18

14.76

Net interest rate spread (2)

2.83

2.76

2.67

2.42

2.48

2.76

2.50

Net interest margin (2)

3.58

3.46

3.38

3.21

3.32

3.48

3.32

Efficiency ratio

55.69

60.85

61.26

56.70

54.35

59.14

61.49

Efficiency ratio, as adjusted (1)

55.66

60.85

61.26

56.70

54.35

59.13

57.62

Noninterest income to average total

assets (2)

0.37

0.33

0.36

0.37

0.55

0.35

0.16

Noninterest income to total revenue

9.86

9.03

10.09

10.74

14.86

9.66

4.95

Adjusted noninterest income to total

adjusted revenue (1)

9.91

9.03

10.09

10.74

14.86

9.67

10.93

Noninterest expense to average total assets (2)

2.11

2.21

2.19

1.94

2.02

2.17

2.04

Average interest-earning assets to average

interest-bearing liabilities

129.16

126.50

126.31

127.90

127.59

127.34

127.63

Average equity to average total assets

11.08

9.37

9.46

9.20

8.70

9.99

8.47

Asset Quality Data:

Net charge-offs to average LHFI (2)

0.03

%

0.06

%

0.00

%

(0.02

)

%

0.02

%

0.03

%

0.02

%

Net charge-offs to total average loans (2)

0.03

0.05

0.00

(0.02

)

0.02

0.03

0.02

Total allowance for credit losses

to total LHFI

1.16

1.15

1.16

1.21

1.11

1.16

1.11

Total allowance for credit losses

to total loans

1.01

1.01

1.03

1.08

0.97

1.01

0.97

Total allowance for credit losses

to nonperforming loans

127.03

118.99

117.11

114.07

184.64

127.03

184.64

Nonperforming loans to gross LHFI

0.91

0.96

0.99

1.06

0.60

0.91

0.60

Nonperforming assets to total assets

0.63

0.66

0.70

0.76

0.44

0.63

0.44

Adjusted nonperforming assets to total

assets (1)

0.43

0.46

0.49

0.53

0.21

0.43

0.21

Balance Sheet and Capital Ratios:

Loan-to-deposit ratio

91.53

%

88.21

%

85.65

%

86.30

%

88.74

%

91.53

%

88.74

%

Noninterest bearing deposits to

total deposits

16.08

15.92

15.52

16.51

17.28

16.08

17.28

Total shareholders' equity to total assets

11.10

9.43

9.23

9.30

9.08

11.10

9.08

Tangible common equity to tangible

assets (1)

10.91

9.22

9.01

9.08

8.86

10.91

8.86

Tier 1 leverage ratio (3)

11.15

10.22

10.62

10.64

10.26

11.15

10.26

Common equity tier 1 ratio (3)

11.94

11.09

11.55

12.07

11.72

11.94

11.72

Tier 1 risk-based capital ratio (3)

11.94

11.09

11.55

12.07

11.72

11.94

11.72

Total risk-based capital ratio (3)

12.90

12.04

12.52

12.97

12.55

12.90

12.55

Other:

Number of branches

11

11

11

11

11

11

11

Number of full-time equivalent

employees

194

188

180

181

181

187

180

Quarter End Balance Sheets (unaudited)

Table 2

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)

2025

2025

2025

2024

2024

Assets

Cash and due from banks

$

20,088

$

23,245

$

19,380

$

37,320

$

17,722

Federal funds sold

6,191

20,045

79,153

30,641

43,602

Investment securities (1)

342,990

338,601

332,312

342,750

361,935

Loans held for sale (LHFS)

231,593

209,101

187,481

174,033

193,938

Loans held for investment (LHFI)

1,552,976

1,527,199

1,472,232

1,409,443

1,409,913

Allowance for credit losses on LHFI

(18,028

)

(17,497

)

(17,104

)

(17,118

)

(15,615

)

Loans held for investment, net

1,534,948

1,509,702

1,455,128

1,392,325

1,394,298

Bank-owned life insurance

47,833

47,373

46,924

46,484

46,044

Premises, furniture and equipment, net

18,186

18,166

17,837

17,796

17,882

Deferred tax asset

16,262

17,211

17,123

18,148

16,772

Goodwill & intangible assets (2)

6,186

6,190

6,199

6,386

6,451

Other assets

31,112

31,611

28,854

32,829

30,702

Total assets

$

2,255,389

$

2,221,245

$

2,190,391

$

2,098,712

$

2,129,346

Liabilities and shareholders' equity

Liabilities

Deposits

Noninterest bearing transaction accounts

$

313,604

$

313,386

$

300,678

$

302,907

$

312,290

Interest-bearing transaction accounts

198,753

209,816

191,452

181,068

183,707

Savings and money market

634,826

628,729

650,050

591,626

654,192

Time deposits

802,489

816,370

795,513

759,201

657,126

Total deposits

1,949,672

1,968,301

1,937,693

1,834,802

1,807,315

Federal Home Loan Bank of

Atlanta advances

25,000

-

-

15,000

-

Subordinated debt, net

-

14,753

14,741

14,730

14,718

Revolving commercial line of credit, net

-

-

5,997

11,995

11,994

Federal Reserve Bank - Bank Term

Funding Program ("BTFP") advances

-

-

-

-

70,000

Other liabilities

30,279

28,826

29,856

26,953

32,016

Total liabilities

2,004,951

2,011,880

1,988,287

1,903,480

1,936,043

Shareholders' equity

Voting common stock

10,449

8,107

8,102

8,098

8,078

Nonvoting common stock

1,530

2,172

2,172

2,172

2,172

Capital surplus

189,654

159,267

158,997

158,755

158,463

Accumulated income

59,750

53,009

47,044

41,994

36,290

Accumulated other comprehensive loss

(10,945

)

(13,190

)

(14,211

)

(15,787

)

(11,700

)

Total shareholders' equity

250,438

209,365

202,104

195,232

193,303

Total liabilities and shareholders' equity

$

2,255,389

$

2,221,245

$

2,190,391

$

2,098,712

$

2,129,346

Statements of Operations (unaudited)

Table 3

Three Months Ended

Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2025

2025

2025

2024

2024

2025

2024

Interest income

Interest on cash and due from banks

$

129

$

111

$

135

$

122

$

131

$

375

$

412

Interest on federal funds sold

616

698

963

870

1,045

2,277

2,881

Interest and dividends on investment

securities

4,125

3,875

3,800

3,994

4,171

11,800

12,052

Interest and fees on LHFS

3,422

3,296

2,819

3,404

2,993

9,537

6,868

Interest and fees on LHFI

24,598

23,813

22,307

22,147

24,214

70,718

70,899

Total interest income

32,890

31,793

30,024

30,537

32,554

94,707

93,112

Interest expense

Deposits

13,274

13,251

12,830

13,498

14,230

39,355

39,945

Other borrowings

426

464

435

768

1,358

1,325

4,116

Total interest expense

13,700

13,715

13,265

14,266

15,588

40,680

44,061

Net interest income

19,190

18,078

16,759

16,271

16,966

54,027

49,051

Provision (recovery) for credit losses

653

752

629

1,240

(1,023

)

2,034

(687

)

Net interest income after provision for

credit losses

18,537

17,326

16,130

15,031

17,989

51,993

49,738

Noninterest income

Mortgage banking related income

299

326

221

391

276

846

813

Interchange and card fee income

238

257

266

210

216

761

658

Service charges on deposit accounts

208

215

211

230

207

634

617

Bank-owned life insurance

461

449

440

440

437

1,350

1,224

Gain on sale of government guaranteed

loans

613

265

-

151

1,312

878

1,666

Losses on sale of available-for-sale

securities

(10

)

-

-

-

-

(10

)

(3,465

)

Other noninterest income

291

283

743

536

513

1,317

1,043

Total noninterest income

2,100

1,795

1,881

1,958

2,961

5,776

2,556

Noninterest expense

Salaries and employee benefits

6,985

6,997

6,694

6,759

6,727

20,676

19,428

Occupancy and equipment

850

814

788

762

754

2,452

2,233

Data processing

647

653

624

605

548

1,924

1,608

Other professional services

571

973

693

496

358

2,237

1,550

Software and other technology expense

788

719

703

774

671

2,210

1,968

Regulatory assessment

419

344

361

336

344

1,124

955

Other noninterest expense

1,596

1,592

1,556

603

1,428

4,744

3,991

Total noninterest expense

11,856

12,092

11,419

10,335

10,830

35,367

31,733

Net income before taxes

8,781

7,029

6,592

6,654

10,120

22,402

20,561

Income tax expense

2,040

1,064

1,542

950

2,236

4,646

4,361

Net income

$

6,741

$

5,965

$

5,050

$

5,704

$

7,884

$

17,756

$

16,200

QTD Average Balances and Yields/Rates (unaudited)

Table 4

Three Months Ended

September 30, 2025

June 30, 2025

September 30, 2024

Average

Yield/

Average

Yield/

Average

Yield/

(dollars in thousands)

Balance

Interest

Rate

Balance

Interest

Rate

Balance

Interest

Rate

Earning assets:

Cash and due from banks

$

21,058

$

129

2.43

%

$

20,762

$

111

2.14

%

$

20,317

$

131

2.57

%

Federal funds sold

52,240

616

4.68

%

62,656

698

4.47

%

76,290

1,045

5.45

%

Investment securities

339,619

4,125

4.82

%

338,635

3,875

4.59

%

353,121

4,171

4.70

%

Loans held for sale

167,424

3,422

8.11

%

167,617

3,296

7.89

%

142,205

2,993

8.37

%

Loans held for investment

1,543,363

24,598

6.32

%

1,506,211

23,813

6.34

%

1,439,835

24,214

6.69

%

Total earning assets

2,123,704

32,890

6.14

%

2,095,881

31,793

6.08

%

2,031,768

32,554

6.37

%

Noninterest-earning assets:

Allowance for credit losses on LHFI

(17,504

)

(17,110

)

(15,992

)

Bank-owned life insurance

47,569

47,119

45,798

Premises, furniture and equipment, net

18,241

18,034

17,751

Deferred tax asset

17,159

17,182

18,255

Goodwill & intangible assets

6,176

6,168

6,257

Other assets

30,633

29,442

26,648

Total noninterest-earning assets

102,274

100,835

98,717

Total assets

$

2,225,978

$

2,196,716

$

2,130,485

Interest-bearing liabilities:

Interest-bearing deposits

$

1,631,767

$

13,274

3.23

%

$

1,626,415

$

13,251

3.27

%

$

1,495,726

$

14,230

3.78

%

Federal Reserve Bank - BTFP

-

-

0.00

%

-

-

0.00

%

70,000

863

4.90

%

Federal funds purchased

-

-

0.00

%

38

1

10.56

%

-

-

0.00

%

Federal Home Loan Bank of

Atlanta advances

272

3

4.38

%

10,000

116

4.65

%

-

-

0.00

%

Revolving commercial line of credit, net

-

-

0.00

%

5,667

112

7.93

%

11,994

260

8.62

%

Subordinated debt, net

12,191

423

13.77

%

14,747

235

6.39

%

14,712

235

6.35

%

Total interest-bearing liabilities

1,644,230

13,700

3.31

%

1,656,867

13,715

3.32

%

1,592,432

15,588

3.89

%

Noninterest-bearing liabilities:

Noninterest-bearing deposits

306,133

306,330

323,377

Other liabilities

28,927

27,682

29,242

Total noninterest-bearing liabilities

335,060

334,012

352,619

Shareholders' equity

246,688

205,837

185,434

Total liabilities and shareholders' equity

$

2,225,978

$

2,196,716

$

2,130,485

Net interest income

$

19,190

$

18,078

$

16,966

Net interest spread

2.83

%

2.76

%

2.48

%

Net interest margin

3.58

%

3.46

%

3.32

%

Cost of total deposits (1)

2.72

%

2.75

%

3.11

%

Cost of total funding (1)

2.79

%

2.80

%

3.24

%

YTD Average Balances and Yields/Rates (unaudited)

Table 5

Nine Months Ended

September 30, 2025

September 30, 2024

Average

Yield/

Average

Yield/

(dollars in thousands)

Balance

Interest

Rate

Balance

Interest

Rate

Earning assets:

Cash and due from banks

$

21,509

$

375

2.33

%

$

20,762

$

412

2.65

%

Federal funds sold

67,659

2,277

4.50

%

68,963

2,881

5.58

%

Investment securities

337,852

11,800

4.67

%

351,623

12,052

4.58

%

Loans held for sale

157,409

9,537

8.10

%

107,145

6,868

8.56

%

Loans held for investment

1,493,081

70,718

6.33

%

1,424,289

70,899

6.65

%

Total earning assets

2,077,510

94,707

6.09

%

1,972,782

93,112

6.30

%

Noninterest-earning assets:

Allowance for credit losses on LHFI

(17,245

)

(15,936

)

Bank-owned life insurance

47,123

45,380

Premises, furniture and equipment, net

18,044

17,682

Deferred tax asset

17,379

19,570

Goodwill & intangible assets

6,224

6,352

Other assets

29,935

31,315

Total noninterest-earning assets

101,460

104,363

Total assets

$

2,178,970

$

2,077,145

Interest-bearing liabilities:

Interest-bearing deposits

$

1,608,583

$

39,355

3.27

%

$

1,448,419

$

39,945

3.68

%

Federal Reserve Bank - BTFP

-

-

0.00

%

67,701

2,485

4.90

%

Federal funds purchased

13

1

10.28

%

-

-

0.00

%

Federal Home Loan Bank of

Atlanta advances

3,809

131

4.60

%

1,825

77

5.64

%

Revolving commercial line of credit, net

5,141

300

7.80

%

13,043

849

8.69

%

Subordinated debt, net

13,882

893

8.60

%

14,700

705

6.41

%

Total interest-bearing liabilities

1,631,428

40,680

3.33

%

1,545,688

44,061

3.81

%

Noninterest-bearing liabilities:

Noninterest bearing deposits

301,997

325,923

Other liabilities

27,944

29,639

Total noninterest-bearing liabilities

329,941

355,562

Shareholders' equity

217,601

175,895

Total liabilities and shareholders' equity

$

2,178,970

$

2,077,145

Net interest income

$

54,027

$

49,051

Net interest spread

2.76

%

2.49

%

Net interest margin

3.48

%

3.32

%

Cost of total deposits (1)

2.75

%

3.01

%

Cost of total funding (1)

2.81

%

3.14

%

Loan Data (unaudited)

Table 6

As of the Quarter Ended

September 30, 2025

June 30, 2025

March 31, 2025

December 31, 2024

September 30, 2024

(dollars in thousands)

Amount

% of

Total

Amount

% of

Total

Amount

% of

Total

Amount

% of

Total

Amount

% of

Total

Loans held for investment ("LHFI"):

Commercial Loans

Acquisition, development and

construction

$

106,787

6.9

%

$

100,528

6.6

%

$

76,453

5.2

%

$

72,520

5.2

%

$

112,275

8.0

%

Income producing CRE

371,670

23.9

372,142

24.4

352,693

24.0

321,558

22.8

267,551

19.0

Owner-occupied CRE

96,287

6.2

91,147

6.0

90,204

6.1

94,573

6.7

95,789

6.8

Senior housing

223,719

14.4

236,474

15.5

245,292

16.7

234,081

16.6

231,260

16.4

Commercial and industrial

135,039

8.7

131,716

8.6

145,784

9.8

141,626

10.0

140,290

10.0

Retail Loans

Marine vessels

318,246

20.5

301,327

19.7

284,305

19.3

263,657

18.6

279,689

19.8

Residential mortgages

190,220

12.2

185,527

12.1

176,794

12.0

174,099

12.4

173,392

12.3

Cash value life insurance LOC

90,115

5.8

87,135

5.7

80,503

5.5

86,844

6.2

87,968

6.2

Other consumer

20,893

1.4

21,203

1.4

20,204

1.4

20,485

1.5

21,699

1.5

Gross loans held for investment

$

1,552,976

100.0

%

$

1,527,199

100.0

%

$

1,472,232

100.0

%

$

1,409,443

100.0

%

$

1,409,913

100.0

%

Core LHFI

1,492,992

1,464,200

1,406,199

1,342,073

1,341,135

Acquired LHFI (1)

59,984

62,999

66,033

67,370

68,778

Gross loans held for investment

$

1,552,976

$

1,527,199

$

1,472,232

$

1,409,443

$

1,409,913

Allowance for credit losses on LHFI

18,028

17,497

17,104

17,118

15,615

Net loans held for investment

$

1,534,948

$

1,509,702

$

1,455,128

$

1,392,325

$

1,394,298

Total loans held-for-sale

231,593

209,101

187,481

174,033

193,938

Total Loans

$

1,784,569

$

1,736,300

$

1,659,713

$

1,583,476

$

1,603,851

Nonperforming Assets (unaudited)

Table 7

As of the Quarter Ended

(dollars in thousands)

September 30, 2025

June 30, 2025

March 31, 2025

December 31, 2024

September 30, 2024

Nonaccrual loans

$

14,171

$

14,611

$

14,599

$

14,957

$

8,408

Past due loans 90 days and still accruing

21

93

6

49

49

Total nonperforming loans

$

14,192

$

14,704

$

14,605

$

15,006

$

8,457

Other real estate owned

-

-

765

864

864

Total nonperforming assets

$

14,192

$

14,704

$

15,370

$

15,870

$

9,321

Nonperforming loans to gross LHFI

0.91

%

0.96

%

0.99

%

1.06

%

0.60

%

Nonaccrual loans to total assets

0.63

%

0.66

%

0.67

%

0.71

%

0.39

%

Nonperforming assets to total assets

0.63

%

0.66

%

0.70

%

0.76

%

0.44

%

Allowance for Credit Losses (unaudited)

Table 8

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2025

2025

2025

2024

2024

2025

2024

Allowance for credit losses on LHFI

Balance, beginning of period

$

17,497

$

17,104

$

17,118

$

15,615

$

16,002

$

17,118

$

15,465

Net charge-offs/(recoveries):

Commercial Loans

Acquisition, development and

construction

-

-

-

-

-

-

-

Income producing CRE

-

-

-

-

-

-

-

Owner-occupied CRE

-

-

-

(53

)

-

-

-

Senior housing

-

-

-

-

-

-

-

Commercial and industrial

(29

)

19

1

3

30

(9

)

126

Retail Loans

Marine vessels

-

-

-

-

36

-

36

Residential mortgages

(2

)

(2

)

(2

)

(2

)

(7

)

(6

)

(13

)

Cash value life insurance LOC

-

-

-

-

-

-

-

Other consumer

156

191

16

(25

)

27

363

24

Total net charge-offs/(recoveries)

$

125

$

208

$

15

$

(77

)

$

86

$

348

$

173

Provision (recovery) for loan credit losses

656

601

1

1,426

(301

)

1,258

323

Balance, ending of period

$

18,028

$

17,497

$

17,104

$

17,118

$

15,615

$

18,028

$

15,615

Allowance for credit losses for unfunded commitments

Period beginning balance

$

3,499

$

3,348

$

2,720

$

2,906

$

3,628

$

2,720

$

3,916

(Recovery) provision for credit losses

(3

)

151

628

(186

)

(722

)

776

(1,010

)

Period ending balance

$

3,496

$

3,499

$

3,348

$

2,720

$

2,906

$

3,496

$

2,906

Balance, end of period - Allowance for credit

losses: LHFI and unfunded commitments

$

21,524

$

20,996

$

20,452

$

19,838

$

18,521

$

21,524

$

18,521

Total loans held for investment

$

1,552,976

$

1,527,199

$

1,472,232

$

1,409,443

$

1,409,913

$

1,552,976

$

1,409,913

Credit Analysis

Net charge-offs to average LHFI

0.03

%

0.06

%

0.00

%

(0.02

)%

0.02

%

0.03

%

0.02

%

Total allowance for credit losses on LHFI to

total LHFI

1.16

%

1.15

%

1.16

%

1.21

%

1.11

%

1.16

%

1.11

%

Total allowance for credit losses on LHFI to

nonaccrual loans

127.22

%

119.75

%

117.16

%

114.45

%

185.72

%

127.22

%

185.72

%

Total allowance for credit losses on LHFI to

total nonperforming loans

127.03

%

118.99

%

117.11

%

114.07

%

184.64

%

127.03

%

184.64

%

Loan Risk Ratings (1) (2) (unaudited)

Table 9

As of the Quarter Ended

(dollars in thousands)

September 30, 2025

June 30, 2025

March 31, 2025

December 31, 2024

September 30, 2024

Acquisition, development and

construction (1)

Pass

$

106,787

$

100,528

$

76,453

$

72,520

$

112,275

Special mention

-

-

-

-

-

Substandard

-

-

-

-

-

Total acquisition, development

and construction

$

106,787

$

100,528

$

76,453

$

72,520

$

112,275

Income producing CRE (1)

Pass

$

370,788

$

371,255

$

352,281

$

321,146

$

262,287

Special mention

-

-

-

-

4,852

Substandard

882

887

412

412

412

Total income producing

$

371,670

$

372,142

$

352,693

$

321,558

$

267,551

Owner-occupied CRE (1)

Pass

$

86,533

$

81,244

$

83,711

$

87,906

$

89,133

Special mention

3,579

3,612

-

-

1,838

Substandard

6,175

6,291

6,493

6,667

4,818

Total owner occupied

$

96,287

$

91,147

$

90,204

$

94,573

$

95,789

Senior housing (1)

Pass

$

205,330

$

217,971

$

208,922

$

190,084

$

184,178

Special mention

12,006

12,078

24,814

25,025

17,493

Substandard

6,383

6,425

11,556

18,972

29,589

Total senior housing

$

223,719

$

236,474

$

245,292

$

234,081

$

231,260

Commercial and industrial (2)

Pass

$

128,468

$

124,979

$

141,202

$

136,878

$

135,476

Special mention

2,402

2,199

-

36

189

Substandard

4,169

4,538

4,582

4,712

4,625

Total non-real estate

$

135,039

$

131,716

$

145,784

$

141,626

$

140,290

Marine vessels (2)

Performing

$

318,246

$

301,327

$

284,305

$

263,657

$

279,689

Nonperforming

-

-

-

-

-

Total marine vessels

$

318,246

$

301,327

$

284,305

$

263,657

$

279,689

Residential mortgages (2)

Performing

$

190,059

$

185,162

$

176,633

$

173,834

$

173,122

Nonperforming

161

365

161

265

270

Total residential mortgages

$

190,220

$

185,527

$

176,794

$

174,099

$

173,392

Cash value life insurance LOC (2)

Performing

$

90,115

$

87,135

$

80,503

$

86,844

$

87,968

Nonperforming

-

-

-

-

-

Total cash value life insurance

LOC

$

90,115

$

87,135

$

80,503

$

86,844

$

87,968

Other consumer (2)

Performing

$

20,872

$

21,203

$

20,204

$

20,442

$

21,699

Nonperforming

21

-

-

43

-

Total other consumer

$

20,893

$

21,203

$

20,204

$

20,485

$

21,699

Gross loans held for investment

$

1,552,976

$

1,527,199

$

1,472,232

$

1,409,443

$

1,409,913

Non-GAAP Financial Measures

The measures entitled return on average tangible common equity, tangible book value per share, tangible common equity, tangible assets, adjusted nonperforming assets to total assets, adjusted nonperforming assets, adjusted net income, adjusted basic earnings per share, adjusted diluted earnings per share, pre-tax, pre-provision net revenue, adjusted return on average assets, adjusted return on average equity, efficiency ratio, as adjusted, adjusted return on average tangible common equity, adjusted noninterest income to total revenue, and tangible common equity to tangible assets are not measures recognized under accounting principles generally accepted in the United States of America (“GAAP”) and therefore are considered non-GAAP financial measures. The most comparable GAAP measures to these measures are return on average shareholders’ equity, book value per share, total shareholders’ equity, total assets, total nonperforming assets to total assets, total nonperforming assets, net income, basic earnings per share, diluted earnings per share, net income, return on average assets, return on average equity, the efficiency ratio, return on average equity, noninterest income to total revenue, total common equity to total assets, respectively.

Management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures permit investors to view the Company’s performance using the same tools that management uses to evaluate the Company’s past performance and prospects for future performance. While management believes that these non-GAAP financial measures are useful in evaluating our performance, this information should be considered as supplemental and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures should be considered as additional views of the way the Company’s financial measures are affected by significant items and other factors, and since they are not required to be uniformly applied, they may not be comparable to other similarly titled measures at other companies.

Non-GAAP Reconciliations

 

 

Tangible Book Value per Share / Tangible Common Equity to Tangible Assets (unaudited)

Table 10A

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands, except per share data)

2025

2025

2025

2024

2024

2025

2024

Tangible Common Equity:

Total shareholders' equity

$

250,438

$

209,365

$

202,104

$

195,232

$

193,303

$

250,438

$

193,303

Less: Goodwill and intangibles

(6,186

)

(6,190

)

(6,199

)

(6,386

)

(6,451

)

(6,186

)

(6,451

)

Adjusted for: Mortgage servicing

rights

1,156

1,122

1,093

1,237

1,258

1,156

1,258

Tangible Common Equity

$

245,408

$

204,297

$

196,998

$

190,083

$

188,110

$

245,408

$

188,110

Common shares outstanding

11,978,921

$

10,278,921

10,274,271

10,270,146

10,250,446

11,978,921

10,250,446

Book value per common share

20.91

20.37

19.67

19.01

18.86

20.91

18.86

Tangible book value per common

share

20.49

19.88

19.17

18.51

18.35

20.49

18.35

Tangible assets:

Total assets

$

2,255,389

$

2,221,245

$

2,190,391

$

2,098,712

$

2,129,346

$

2,255,389

$

2,129,346

Less: Goodwill and intangibles

(6,186

)

(6,190

)

(6,199

)

(6,386

)

(6,451

)

(6,186

)

(6,451

)

Adjusted for: Mortgage servicing

rights

1,156

1,122

1,093

1,237

1,258

1,156

1,258

Tangible assets

$

2,250,359

$

2,216,177

$

2,185,285

$

2,093,563

$

2,124,153

$

2,250,359

$

2,124,153

Tangible common equity to

tangible assets

10.91

%

9.22

%

9.01

%

9.08

%

8.86

%

10.91

%

8.86

%

ROATCE / Adjusted ROATCE (unaudited)

Table 10B

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2025

2025

2025

2024

2024

2025

2024

Net income

$

6,741

$

5,965

$

5,050

$

5,704

$

7,884

$

17,756

$

16,200

Average shareholders' equity

246,688

205,837

199,763

194,724

185,434

217,601

175,895

Return on average shareholders'

equity (1)

10.84

%

11.62

%

10.25

%

11.65

%

16.91

%

10.91

%

12.30

%

Average Tangible Common Equity:

Average shareholders' equity

$

246,688

$

205,837

$

199,763

$

194,724

$

185,434

$

217,601

$

175,895

Less: Average goodwill and

intangibles

(6,176

)

(6,168

)

(6,328

)

(6,432

)

(6,257

)

(6,224

)

(6,352

)

Adjusted for: Average mortgage

servicing rights

1,128

1,082

1,198

1,263

1,041

1,136

1,089

Average tangible common equity

$

241,640

$

200,751

$

194,633

$

189,555

$

180,218

$

212,513

$

170,632

Return on average tangible common (1)

shareholders' equity

11.07

%

11.92

%

10.52

%

11.97

%

17.40

%

11.17

%

12.68

%

Net income

$

6,741

$

5,965

$

5,050

$

5,704

$

7,884

$

17,756

$

16,200

Adjusted for:

Loss on sale of AFS

securities, net of tax (2)

8

-

-

-

-

8

2,654

Adjusted net income

$

6,749

$

5,965

$

5,050

$

5,704

$

7,884

$

17,764

$

18,854

Average tangible common equity

$

241,640

$

200,751

$

194,633

$

189,555

$

180,218

$

212,513

$

170,632

Adjusted return on average tangible

common equity (1)

11.08

%

11.92

%

10.52

%

11.97

%

17.40

%

11.18

%

14.76

%

Non-GAAP Reconciliations

 

Efficiency Ratio, as Adjusted / Noninterest Income to Total Revenue (unaudited)

Table 10C

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2025

2025

2025

2024

2024

2025

2024

GAAP-based efficiency ratio

55.69

%

60.85

%

61.26

%

56.70

%

54.35

%

59.14

%

61.49

%

Net interest income

$

19,190

$

18,078

$

16,759

$

16,271

$

16,966

$

54,027

$

49,051

Noninterest income

2,100

1,795

1,881

1,958

2,961

5,776

2,556

Adjusted for:

Loss on sale of AFS

securities (1)

10

-

-

-

-

10

3,465

Adjusted revenue

$

21,300

$

19,873

$

18,640

$

18,229

$

19,927

$

59,813

$

55,072

Total noninterest expense

11,856

12,092

11,419

10,335

10,830

35,367

31,733

Adjusted noninterest expense

$

11,856

$

12,092

$

11,419

$

10,335

$

10,830

$

35,367

$

31,733

Efficiency ratio, as adjusted

55.66

%

60.85

%

61.26

%

56.70

%

54.35

%

59.13

%

57.62

%

Noninterest income to total revenue

9.86

%

9.03

%

10.09

%

10.74

%

14.86

%

9.66

%

4.95

%

Adjusted noninterest income to

total adjusted revenue

9.91

%

9.03

%

10.09

%

10.74

%

14.86

%

9.67

%

10.93

%

Adjusted Net Income / Adjusted Return on Average Assets (unaudited)

Table 10D

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2025

2025

2025

2024

2024

2025

2024

Net income

$

6,741

$

5,965

$

5,050

$

5,704

$

7,884

$

17,756

$

16,200

Average assets

2,225,978

2,196,716

2,111,196

2,117,357

2,130,485

2,178,970

2,077,145

Return on average assets (1)

1.20

%

1.09

%

0.97

%

1.07

%

1.47

%

1.09

%

1.04

%

Net income

$

6,741

$

5,965

$

5,050

$

5,704

$

7,884

$

17,756

$

16,200

Adjusted for:

Loss on sale of AFS

securities, net of tax (2)

8

-

-

-

-

8

2,654

Adjusted net income

$

6,749

$

5,965

$

5,050

$

5,704

$

7,884

$

17,764

$

18,854

Average assets

$

2,225,978

$

2,196,716

$

2,111,196

$

2,117,357

$

2,130,485

$

2,178,970

$

2,077,145

Adjusted return on average

assets (1)

1.20

%

1.09

%

0.97

%

1.07

%

1.47

%

1.09

%

1.21

%

Adjusted Net Income / Adjusted Return on Average Shareholders' Equity (unaudited)

Table 10E

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2025

2025

2025

2024

2024

2025

2024

Net income

$

6,741

$

5,965

$

5,050

$

5,704

$

7,884

$

17,756

$

16,200

Average shareholders' equity

246,688

205,837

199,763

194,724

185,434

217,601

175,895

Return on average

shareholders' equity (1)

10.84

%

11.62

%

10.25

%

11.65

%

16.91

%

10.91

%

12.30

%

Net income

$

6,741

$

5,965

$

5,050

$

5,704

$

7,884

$

17,756

$

16,200

Adjusted for:

Loss on sale of AFS

securities, net of tax (2)

8

-

-

-

-

8

2,654

Adjusted net income

$

6,749

$

5,965

$

5,050

$

5,704

$

7,884

$

17,764

$

18,854

Average shareholders' equity

$

246,688

$

205,837

$

199,763

$

194,724

$

185,434

$

217,601

$

175,895

Adjusted return on average

shareholders' equity (1)

10.85

%

11.62

%

10.25

%

11.65

%

16.91

%

10.91

%

14.32

%

Non-GAAP Reconciliations

 

Adjusted Net Income / Adjusted Basic EPS / Adjusted Diluted EPS (unaudited)

Table 10F

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands, except per share data)

2025

2025

2025

2024

2024

2025

2024

Net income

$

6,741

$

5,965

$

5,050

$

5,704

$

7,884

$

17,756

$

16,200

Average common shares

outstanding - basic

11,941,965

10,277,721

10,273,125

10,250,446

10,250,446

10,837,050

10,180,788

Basic earnings per share

$

0.57

$

0.58

$

0.49

$

0.56

$

0.77

$

1.64

$

1.59

Average common shares

outstanding - diluted

12,325,462

10,612,255

10,642,078

10,596,364

10,544,087

11,217,972

10,420,646

Diluted earnings per share

$

0.54

$

0.57

$

0.47

$

0.54

$

0.75

$

1.58

$

1.55

Net income

$

6,741

$

5,965

$

5,050

$

5,704

$

7,884

$

17,756

$

16,200

Adjusted for:

Loss on sale of AFS securities,

net of tax (1)

8

-

-

-

-

8

2,654

Adjusted net income

$

6,749

$

5,965

$

5,050

$

5,704

$

7,884

$

17,764

$

18,854

Adjusted basic earnings per share

$

0.57

$

0.58

$

0.49

$

0.56

$

0.77

$

1.64

$

1.85

Adjusted diluted earnings per share

$

0.54

$

0.57

$

0.47

$

0.54

$

0.75

$

1.58

$

1.81

Adjusted Nonperforming Assets to Total Assets (unaudited)

Table 10G

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2025

2025

2025

2024

2024

2025

2024

Total nonperforming assets

$

14,192

$

14,704

$

15,370

$

15,870

$

9,321

$

14,192

$

9,321

Total assets

2,255,389

2,221,245

2,190,391

2,098,712

2,129,346

2,255,389

2,129,346

GAAP-based nonperforming assets

to total assets

0.63

%

0.66

%

0.70

%

0.76

%

0.44

%

0.63

%

0.44

%

Total nonperforming assets

$

14,192

$

14,704

$

15,370

$

15,870

$

9,321

$

14,192

$

9,321

Adjusted for:

Guaranteed portions of nonaccrual

loans

4,457

4,583

4,692

4,811

4,916

4,457

4,916

Adjusted total nonperforming assets

$

9,735

$

10,121

$

10,678

$

11,059

$

4,405

$

9,735

$

4,405

Total assets

$

2,255,389

$

2,221,245

$

2,190,391

$

2,098,712

$

2,129,346

$

2,255,389

$

2,129,346

Adjusted nonperforming assets to

total assets

0.43

%

0.46

%

0.49

%

0.53

%

0.21

%

0.43

%

0.21

%

PPNR (unaudited)

Table 10H

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2025

2025

2025

2024

2024

2025

2024

Net income (GAAP-based)

$

6,741

$

5,965

$

5,050

$

5,704

$

7,884

$

17,756

$

16,200

Plus:

Income tax expense

2,040

1,064

1,542

950

2,236

4,646

4,361

Provision (recovery) for credit losses

653

752

629

1,240

(1,023

)

2,034

(687

)

Pre-tax, pre-provision net revenue

$

9,434

$

7,781

$

7,221

$

7,894

$

9,097

$

24,436

$

19,874

Core Deposits (unaudited)

Table 10I

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2025

2025

2025

2024

2024

2025

2024

Total Deposits

$

1,949,672

$

1,968,301

$

1,937,693

$

1,834,802

$

1,807,315

$

1,949,672

$

1,807,315

Less:

Brokered CDs

294,908

307,892

287,335

274,898

178,609

294,908

178,609

Core deposits (1)

$

1,654,764

$

1,660,409

$

1,650,358

$

1,559,904

$

1,628,706

$

1,654,764

$

1,628,706