Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The purpose of this discussion is to provide insight into the financial condition and results of operations of Wilson Bank Holding Company (the "Company", "our" or "we") and its bank subsidiary, Wilson Bank & Trust (the "Bank"). Encompass Home Lending LLC ("Encompass"), a company offering mortgage banking services, was 51% owned by the Bank until June 1, 2025 when the Bank sold its 51% membership interest to Encompass Home Lending Investors, LLC, the other member of Encompass. The results of Encompass through the date of sale are consolidated in the Company's financial statements included elsewhere in this Quarterly Report on Form 10-Q. This discussion should be read in conjunction with the Company's consolidated financial statements appearing elsewhere in this report. Reference should also be made to the Company's Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the "SEC") on February 27, 2026 (the "2025 Form 10-K") for a more complete discussion of factors that impact the Company's liquidity, capital and results of operations.

Forward-Looking Statements

This Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") regarding, among other things, the anticipated financial and operating results of the Company. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release any modifications or revisions to these forward-looking statements to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.

The Company cautions investors that future financial and operating results may differ materially from those projected in forward-looking statements made by, or on behalf of, the Company. The words "expect," "intend," "should," "may," "could," "believe," "suspect," "anticipate," "seek," "plan," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical fact may also be considered forward-looking. Such forward-looking statements involve known and unknown risks and uncertainties, including, but not limited to those described in the 2025 Form 10-K, and also include, without limitation, (i) deterioration in the financial condition of borrowers resulting in significant increases in credit losses and provisions for these losses, (ii) deterioration in the real estate market conditions in the Company's market areas including demand for residential real estate loans as a result of elevated rates on residential real estate mortgage loans, (iii) the impact of U.S. and global economic conditions, trade policies and tensions, including changes in, or the imposition of, tariffs and/or trade barriers and the economic impacts, volatility and uncertainty resulting therefrom and from geopolitical instability, including as a result of the conflict in Iran (iv) the impact of increased competition with other financial institutions, including pricing pressures on loans and deposits, and the resulting impact on the Company's results, including as a result of compression to net interest margin, (v) adverse conditions in local or national economies, including the economy in the Company's market areas, including as a result of the impact of escalating geopolitical tensions, including the conflict in Iran, political uncertainty, inflationary pressures and the elevated rate environment, supply chain disruptions and labor shortages on our customers and on their businesses, (vi) risks associated with a prolonged shutdown of the United States federal government, including adverse effects on the national or local economies and adverse effects from a shutdown of the U.S. Small Business Administration's loan program, (vii) the sale of investment securities in a loss position before their value recovers, including as a result of asset liability management strategies or in response to liquidity needs, (viii) fluctuations or differences in interest rates on earning assets and interest bearing liabilities from those that the Company is modeling or anticipating, including as a result of the Bank's inability to maintain deposit rates or defer increases to those rates in an elevated rate environment or lower rates in a falling rate environment, (ix) the ability to grow and retain low-cost core deposits, (x) the impact of changes in interest rates on the value of the Company's mortgage servicing rights, (xi) significant downturns in the business of one or more large customers, (xii) the inability of the Company to comply with regulatory capital requirements, including those resulting from changes to capital calculation methodologies, required capital maintenance levels, or regulatory requests or directives, (xiii) changes in state or Federal regulations, policies, or legislation applicable to banks and other financial service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy, (xiv) changes in capital levels and loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments, (xv) an inadequate allowance for credit losses, (xvi) the effectiveness of the Company's activities in improving, resolving or liquidating lower quality assets, (xvii) results of regulatory examinations, (xviii) the vulnerability of the Company's network and online banking portals, and the systems of parties with whom the Company contracts, to unauthorized access, computer viruses, phishing schemes, social engineering, fraud, spam attacks, ransomware attacks, human error, natural disasters, power loss, and other security breaches, (xix) the possibility of additional increases to compliance

costs or other operational expenses as a result of increased regulatory oversight, (xx) loss of key personnel, (xxi) adverse results (including costs, fines, reputational harm and/or other negative effects) from current or future litigation, examinations or other legal and/or regulatory actions, and (xxii) the impact of changes in corporate tax rates. These risks and uncertainties may cause the actual results or performance of the Company to be materially different from any future results or performance expressed or implied by such forward-looking statements. The Company's future operating results depend on a number of factors which were derived utilizing numerous assumptions that could cause actual results to differ materially from those projected in forward-looking statements.

Application of Critical Accounting Policies and Accounting Estimates

We follow accounting and reporting policies that conform, in all material respects, to accounting principles generally accepted in the United States and to general practices within the financial services industry. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While we base estimates on historical experience, current information, forecasted economic conditions, and other factors deemed to be relevant, actual results could differ from those estimates.

We consider accounting estimates to be critical to reported financial results if (i) the accounting estimate requires management to make assumptions about matters that are highly uncertain and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on our financial statements.

Accounting policies related to the allowance for credit losses on financial instruments including loans and off-balance-sheet credit exposures are considered to be critical as these policies involve considerable subjective judgment and estimation by management. In the case of loans, the allowance for credit losses is a contra-asset valuation account, calculated in accordance with ASC 326, that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. In the case of off-balance-sheet credit exposures, the allowance for credit losses is a liability account, calculated in accordance with ASC 326, reported as a component of accrued interest payable and other liabilities in our consolidated balance sheets. The amount of each allowance account represents management's best estimate of current expected credit losses on these financial instruments considering available information, from internal and external sources, relevant to assessing exposure to credit loss over the contractual term of the instrument. Relevant available information includes historical credit loss experience, current conditions and reasonable and supportable forecasts. While historical credit loss experience provides the basis for the estimation of expected credit losses, adjustments to historical loss information may be made for differences in current portfolio-specific risk characteristics, environmental conditions or other relevant factors. While management utilizes its best judgment and information available, the ultimate adequacy of our allowance accounts is dependent upon a variety of factors beyond our control, including the performance of our portfolios, the economy, changes in interest rates and the view of the regulatory authorities toward classification of assets. The ACL process is continually reviewed and updated as needed based on quarterly reviews, new data, and/or calculation improvements with material impacts disclosed as appropriate. For additional information regarding critical accounting policies, refer to Note 1 - Summary of Significant Accounting Policies and Note 2 - Loans and Allowance for Credit Losses in the notes to consolidated financial statements contained elsewhere in this Quarterly Report.

Selected Financial Information

The executive management and Board of Directors of the Company evaluate key performance indicators ("KPIs") on a continuing basis. These KPIs serve as benchmarks of Company performance and are used in making strategic decisions and, in some cases, are utilized for purposes of setting performance targets for our executive officers' incentive-based cash compensation. The following table represents KPIs that management has determined to be important in making decisions for the Bank:

Results of Operations

Net earnings of the Company for the three months ended March 31, 2026 were $22,261,000, an increase of $5,869,000, or 35.80%, from net earnings of $16,392,000 for the three months ended March 31, 2025. The increase in net earnings for the three months ended March 31, 2026 was primarily due to an increase in net interest income, and non-interest income, partially offset by an increase in non-interest expense and provision for credit losses.

The increase in net interest income for the three months ended March 31, 2026 when compared to the comparable period in 2025 was primarily due to an increase in average interest earning asset balances and a decrease in the cost of funds, partially offset by an increase in average interest bearing deposit balances.

The changes in non-interest income and non-interest expense are discussed in more detail below in the sections of this report titled, "Non-Interest Income" and "Non-Interest Expense". The changes in provision for credit losses are discussed in more detail below in the section of this report titled "Provision For Credit Losses".

Return on average assets ("ROA") and return on average shareholders' equity ("ROE") are common benchmarks for bank profitability and in the case of the Company are calculated by taking our annualized net earnings for the relevant period and dividing that amount by our average assets and average equity for the relevant periods, respectively. ROA and ROE measure a company's return on investment in a format that is easily comparable to other financial institutions. ROA is a particularly important performance metric to the Company as it serves as the basis for certain employee bonuses. The ROA for the three months ended March 31, 2026 was 1.53%, while the ROA for the three months ended March 31, 2025 was 1.23%. The ROE for the three months ended March 31, 2026 was 15.18%, while the ROE for the three months ended March 31, 2025 was 13.35%. The increases in ROA and ROE for the first quarter of 2026 were primarily driven by higher net interest income.

Effective January 1, 2026, Wilson Bank entered into a definitive agreement with an unaffiliated third party to divest of its credit card business. The transaction closed in January 2026; however, Wilson Bank will continue to subservice the credit cards until April 2027. In connection with the sale, credit card balances totaling $6.7 million were moved out of our portfolio and a premium of $1.1 million was recognized into income, based upon the sales agreement with the purchaser. The reserve for credit card points in the amount of $1.2 million was reversed and an additional expense of $120,000 for such points was recognized on the settlement date.

Net Interest Income

The difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities is net interest income, which is the Company's gross margin. An analysis of net interest income is more meaningful when income from tax-exempt earning assets is adjusted to a tax equivalent basis. Accordingly, the following schedule includes a tax equivalent adjustment of tax-exempt earning assets, assuming a weighted average Federal income tax rate of 21% for each period presented.

In this schedule, "change due to volume" is the change in volume multiplied by the interest rate for the prior year. "Change due to rate" is the change in interest rate multiplied by the volume for the prior year. Changes in interest income and expense not due solely to volume or rate changes have been allocated to the "change due to volume" and "change due to rate" in proportion to the relationship of the absolute dollar amounts of the change in each category.

Non-accrual loans have been included in the loan category.

The average balances, interest, and average rates of our assets and liabilities for the three months ended March 31, 2026 and 2025 are presented in the following table (dollars in thousands):

Notes:

The components of our loan yield, a key driver to our net interest margin for the three months ended March 31, 2026 and 2025, were as follows:

Net interest margin for the three months ended March 31, 2026 and 2025 was 3.92% and 3.53%, respectively. The increase in net interest margin for the three months ended March 31, 2026 was primarily due to the increase in average interest earning asset balances, an increase in the yield earned on loans and securities, and a decrease in the cost of funds, partially offset by a decrease in the yield on accounts with depository institutions and increased average interest-bearing deposit balances. While market short-term interest rates declined overall in 2025, the Bank experienced upward loan rate yields within the portfolio as existing loan volume originated in prior years repriced to current market rates, and, in most cases, new loans were originated at higher contractual interest rates than the previous portfolio rate. The net interest spread was 3.54% and 3.13% for the three months ended March 31, 2026 and 2025, respectively.

Net interest income represents the amount by which interest earned on various earning assets exceeds interest paid on deposits and other interest-bearing liabilities and is the most significant component of the Company's earnings. Net interest income, excluding tax equivalent adjustments relating to tax exempt securities and loans, for the three months ended March 31, 2026 totaled $53,828,000 compared to $44,579,000 for the three months ended March 31, 2025.

The increase in net interest income for the three months ended March 31, 2026 compared to the comparable period in 2025 was primarily due to an increase in the volume of average interest-earning assets, an increase in the yield earned on loans and securities, and a decrease in interest expense resulting from the decrease in the cost of funds, partially offset by an increase in the volume of average interest-bearing deposits.

The ratio of average interest-earning assets to total average assets for the three months ended March 31, 2026 was 96.4%, compared to 96.2% for the three months ended March 31, 2025.

Fees earned on loans totaled $3,618,000 and $3,574,000 in the first three months of 2026 and 2025, respectively. The increase in fees earned on loans for the first quarter of 2026 when compared to the first quarter of 2025 was attributable to an increase in origination fees offset by a decrease in prepayment fees. The total amount of state income tax credits and tax-exempt loan interest included in our loan yields were $1,071,000 and $643,000 for the three-month periods ended March 31, 2026 and 2025, respectively. The increase in interest and dividends earned on securities in the first three months of 2026 when compared to comparable period in 2025 resulted from higher yields earned on the securities purchased throughout 2025 as management invested liquid funds into the securities portfolio, as well as management's decision to restructure a portion of the securities portfolio in 2025, and invest the proceeds in higher yielding securities. The increase in interest earned on interest bearing deposits during the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was primarily a result of higher deposit balances, partially offset by a decrease in rates earned on these deposits as a result of the Federal Reserve lowering rates.

Interest expense decreased in the three months ended March 31, 2026 when compared to the comparable period in 2025 due to a decrease in the average rate paid on interest-bearing deposits, partially offset by the increase in volume of average interest-bearing deposits. We have generally been able to lower the rates we pay on deposits as the Federal Reserve has lowered short-term interest rates; however, if competitive pressures increase, if the Federal Reserve does not cut the federal funds rate any further or loan growth outpaces deposit growth, we may have to raise the rates we pay on deposits which would negatively impact our net interest margin. Even if rates remain at current levels or the Federal Reserve continues to cut rates, we expect interest expense to increase due to an increase in overall deposit balances.

The direction and speed with which short-term interest rates move has an impact on our net interest income. The Federal Reserve influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is significantly affected by changes in the prime interest rate. The prime interest rate decreased by 175 basis points between September 18, 2024 and December 31, 2025, as the Federal Reserve cut the target rate for the federal funds rate by 175 basis points during that time. In the first quarter of 2026, the target rate for the Federal funds rate was unchanged. The Company believes that

short-term interest rates could decrease further throughout 2026 though elevated levels of inflation and the affect on the economic environment from the conflict in Iran could cause the Federal Reserve to keep short-term rates at current levels. In such a downward rate environment, should it materialize, expansion of the Company's net interest margin will be dependent upon, in part, whether the Company can lower deposit rates quicker than the rates it earns on loans and other interest-earning assets reprice downward. However, if short-term interest rates decline further the Company's net interest margin and earnings could be negatively impacted if the yields on loans and other interest-earning assets decrease faster than the Company is able to lower deposit rates, including as a result of loan growth outpacing our ability to add lower cost core deposits or competitive pressures in our markets limiting our ability to reduce the rates we pay on deposits, particularly given that our loan portfolio primarily consists of variable rate loans.

Provision for Credit Losses

The provision for credit losses represents a charge to earnings necessary to establish an allowance for credit losses that, in management's evaluation is adequate to provide coverage for all expected credit losses. The determination of the amount of the allowance for credit losses ("ACL") is complex and involves a high degree of judgment and subjectivity. Refer to Note 1, "Summary of Significant Accounting Policies" in the notes to our consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q for a detailed discussion regarding ACL methodology.

The provision for credit losses-loans of $2,541,000 for the three months ended March 31, 2026 was primarily driven by deterioration in collateral values on some individually measured loans, the national economic outlook, and loan growth. There was a provision of $2,233,000 for the three months ended March 31, 2025 primarily due to loan growth and a single commercial real estate credit deterioration.

There was a provision for credit losses-off balance sheet exposures of $144,000 for the three months ended March 31, 2026 related to increased loan commitments. There was a benefit of $393,000 for the credit losses-off balance sheet exposures for the three months ended March 31, 2025.

The following detail provides a breakdown of the provision for credit loss-loans expense and net (charge-offs) recoveries as of and for the three months ended March 31, 2026 and 2025:

The provision for credit losses-loans charged to operating expense requires us to estimate all expected credit losses over the remaining life of our loan portfolio. Factors which, in management's judgment, deserve current recognition in estimating expected credit losses include growth and composition of the loan portfolio, review of specific problem loans, the relationship of the allowance for

credit losses to outstanding loans, adverse situations and/or current economic conditions that may affect our borrowers' ability to repay and the estimated value of any underlying collateral.

There was no provision for credit losses on available-for-sale securities for the three months ended March 31, 2026 and 2025, respectively.

Non-Interest Income

Our non-interest income is composed of several components, some of which vary significantly between quarterly and annual periods. The following is a summary of our non-interest income for the three months ended March 31, 2026 and 2025 (in thousands):

The increase in non-interest income for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 is primarily attributable to the premium earned on the sale of the Company's credit card portfolio, an increase in service charges on deposit accounts and an increase in brokerage income, partially offset by a decrease in debit and credit card interchange income.

In connection with the sale of our credit card portfolio a premium of $1.1 million was recognized into income, based upon the sales agreement with the third party to whom we sold the portfolio.

The increase in service charges on deposit accounts for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was primarily due to an increase in overdraft fees.

The increase in brokerage income for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was due to continued client acquisitions resulting in an increase of overall production and market share.

The decrease in debit and credit card interchange income for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was due to the sale of the Company's credit card portfolio mentioned above.

Non-Interest Expense

Non-interest expense consists primarily of employee costs, occupancy expenses, furniture and equipment expenses, advertising and public relations expenses, data processing expenses, directors' fees, audit, legal and consulting fees, FDIC insurance and other operating expenses. The following is a summary of our non-interest expense for the three months ended March 31, 2026 and 2025 (in thousands):

The increase in non-interest expense for the three months ended March 31, 2026 when compared to the comparable period in 2025 is primarily attributable to increases in salaries and employee benefits, occupancy expense, data processing expense, and other operating expense, partially offset by a reduction in FDIC insurance.

The increase in salaries and benefits in the three months ended March 31, 2026 when compared to the three months ended March 31, 2025, was primarily attributable to normal annual salary increases, an increased number of employees, promotions, the implementation of a higher minimum starting wage, and an increased bonus accrual based on higher projected earnings.

The increase in occupancy expense in the three months ended March 31, 2026 when compared to the three months ended March 31, 2025, was primarily attributable to expense related to the remodel of multiple properties.

The increase in data processing expense in the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was primarily due to implementation of additional information security solutions, replacement of technology equipment, additional software licensing needs, and an increase in the overall number of customers. The Company anticipates that data processing expenses will continue to increase as the Company's operations and employee base grows, the demand for digital products and services from employees and customers increases, and the cyber threat environment grows.

The increase in other operating expenses in the three months ended March 31, 2026 when compared to the three months ended March 31, 2025 was primarily due to an increase in expenses related to employee engagement and education, and costs associated with the preparation and mailing of our annual report to shareholders.

The decrease in FDIC insurance in the three months ended March 31, 2026 compared to the three months ended March 31, 2025, was primarily attributable to a decrease in our FDIC assessment rate.

The efficiency ratio is a common and comparable KPI used in the banking industry. The Company uses this metric to monitor how effective management is at using our internal resources. It is calculated by dividing our non-interest expense by our net interest income plus non-interest income. The efficiency ratio for the three months ended March 31, 2026 and 2025 was 50.08% and 55.54%, respectively. The improvement in the efficiency ratio for the three months ended March 31, 2026 compared to the comparable period in 2025 was primarily due to the increase in net interest income outpacing the increase in non-interest expense.

Income Taxes

The Company's income tax expense for the three months ended March 31, 2026 was $6,725,000, an increase of $1,544,000 from $5,181,000 for the three months ended March 31, 2025. The percentage of income tax expense to net income before taxes was 23.20% and 24.01% for the three months ended March 31, 2026 and 2025, respectively. Our effective tax rate represents our blended federal and state rate of 26.14% affected by the impact of anticipated favorable permanent differences between our book and taxable income such as share-based compensation, bank-owned life insurance, income earned on tax-exempt securities and loans, and certain

state tax credits, offset in part by the limitation on deductibility of meals and entertainment expense and non-deductible executive compensation.

Financial Condition

Balance Sheet Summary

The Company's total assets increased $112,324,000, or 1.91%, to $5,991,280,000 at March 31, 2026 from $5,878,956,000 at December 31, 2025. Loans, net of allowance for credit losses, totaled $4,336,852,000 at March 31, 2026, a 0.95% increase compared to $4,296,095,000 at December 31, 2025. In 2026, management is targeting owner-occupied commercial real estate, residential real estate lending and small business lending as areas of focus. Total liabilities increased by 1.88% to $5,396,686,000 at March 31, 2026 compared to $5,297,271,000 at December 31, 2025.

Loans

The following details the loans of the Company at March 31, 2026 and December 31, 2025:

Total loan growth net of deferred loan fees for the first quarter of 2026 was $42,970,000, which was up 0.99% from December 31, 2025. Contributing to the Company's loan growth in the first three months of 2026 were the continued population growth and corporate relocations in the Bank's primary market areas and increased marketing efforts. The increase in residential 1-4 family real estate loans is attributable to the Bank successfully growing its residential portfolio through enhanced marketing efforts in the Bank's market areas, and the increase the Company is seeing in the investor sector of 1-4 family. The increase in commercial and multi-family real estate loans is primarily attributable to continued economic growth and expansion in the Bank's primary market areas.

Because construction loans remain a meaningful portion of our portfolio, the Bank has implemented an additional layer of monitoring as it seeks to avoid advancing funds that exceed the present value of the collateral securing the loan. The responsibility for monitoring percentage of completion and distribution of funds tied to these completion percentages is now monitored and administered by a Credit Administration Department independent of the lending function. The Bank continues to seek to diversify its real estate portfolio as it seeks to lessen concentrations in any one type of loan.

Allowance for Credit Losses

The current expected credit losses (CECL) methodology requires us to estimate all expected credit losses over the remaining life of our loan portfolio when calculating our allowance for credit losses for loans. The provision for credit losses for loans represents a charge to earnings necessary to establish an allowance for credit losses that, in management's evaluation, is adequate to provide coverage for all expected credit losses on loans.

The allowance for credit losses for loans represents the portion of the loan's amortized cost basis that we do not expect to collect due to credit losses over the loan's life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions considering macroeconomic forecasts. Loan losses are charged against the allowance when we believe the un-collectability of a loan balance is reasonably assured. Subsequent recoveries, if any, are credited to the allowance. The allowance for credit losses for loans is based on the loan's amortized cost basis, excluding accrued interest receivables, as we promptly charge off accrued interest receivable determined to be uncollectible. We determine the appropriateness of the allowance through quarterly discounted cash flow modeling of the loan portfolio which considers lending-related commitments and other relevant factors, including macroeconomic forecasts and historical loss rates. In future quarters, we may update information and forecasts that may cause significant changes in the estimate in those future quarters.

Our allowance for credit losses for loans at March 31, 2026 reflects an amount deemed appropriate to adequately cover all expected future losses as of the date the allowance is determined based on our allowance for credit losses for loans assessment methodology. The allowance for credit losses for loans (net of charge-offs and recoveries) increased to $57,247,000 at March 31, 2026 from $55,034,000 at December 31, 2025, primarily due to a worsening economic outlook, deterioration in collateral values on some

individually measured loans, and loan growth. The allowance for credit losses for loans was 1.30% of total loans outstanding at March 31, 2026 compared to 1.26% at December 31, 2025. The internally classified loans as a percentage of the allowance for credit losses for loans were 99.5% and 116.1% respectively, at March 31, 2026 and December 31, 2025. The decrease was primarily a result of improving credits in the commercial real estate segments.

The following schedule provides an allocation of the allowance for credit losses for loans by portfolio segment for the Company as of March 31, 2026 and December 31, 2025:

The allowance for credit losses for loans is an amount that management believes will be adequate to absorb expected losses on existing loans that may become uncollectible as of the measurement date. The allowance for credit losses for loans as a percentage of total loans outstanding at March 31, 2026, net of deferred fees, increased from the year ended December 31, 2025. The increase was primarily driven by a deteriorating national economic factor outlook utilized within our allowance models, deterioration in collateral values on some individually measured loans, and loan growth.

We measure expected credit losses over the life of each loan utilizing two methods. For credit cards, we use the remaining life method to estimate credit losses. For all other portfolios, we use discounted cash flow models which measure probability of default and loss given default. The measurement of expected credit losses for loan segments utilizing discounted cash flow is impacted by certain macroeconomic variables. Models are adjusted to reflect the current impact of certain macroeconomic variables as well as their expected changes over a reasonable and supportable forecast period.

In estimating expected credit losses as of March 31, 2026, we utilized then available forecasts of macroeconomic variables over our reasonable and supportable horizon based on the review of a variety of forecasts of the U.S. economy provided by Moody's Analytics. Key economic variables as forecasted and utilized in our models include: (i) U.S. Gross Domestic Product ("GDP") with annual growth rates in the range of 1.2% to 2.8%; (ii) U.S. unemployment rates in the range of approximately 4.6% to 5.0%; (iii) Home Price Index annual growth rates in the range of approximately 1.1% to 1.8%; (iv) CRE Price Index annual growth rates in the range of approximately -2.3% to 0.5%; and (v) Gross Private Investment annual growth rates in the range of approximately 1.4% and 4.2%.

We adjust model results using qualitative factor ("Q-Factor") adjustments. Q-Factor adjustments are based upon management guidance, judgment and current assessment as to the impact of risks related to changes in lending policies and procedures; economic and business conditions; loan portfolio attributes and credit concentrations; and external factors, among other things, that are not already

captured within the modeling inputs, assumptions and other processes. Management reviews and assesses the potential impact of such items and adjusts the modeled expected credit loss by an aggregate adjustment percentage based upon the assessment.

Our charge-off policy for collateral dependent loans is similar to our charge-off policy for all loans in that loans are charged-off in the month when a determination is made that the loan is uncollectible. Net charge-offs increased by $78,000 to $328,000 for the three months ended March 31, 2026, compared to net charge-offs of $250,000 for the three months ended March 31, 2025. The ratio of net charge-offs to average total outstanding loans was 0.01% for the three months ended March 31, 2026 and three months ended March 31, 2025. Overall, the Bank experienced minimal charge-offs during the three months ended March 31, 2026 and it is expected that charge-offs will continue to be modest for the remainder of 2026; however, a deterioration in economic conditions may negatively impact charge-offs in the future.

We also maintain an allowance for credit losses on off-balance sheet exposures, which increased $144,000 from $2,340,000 at December 31, 2025 to $2,484,000 at March 31, 2026 as a result of increased commitments.

The level of the allowance and the amount of the provision for credit losses involve evaluation of uncertainties and matters of judgment. The Company maintains an allowance for credit losses for loans which management believes is adequate to absorb losses in the loan portfolio. A formal calculation is prepared quarterly by the Company's Chief Financial Officer to determine the adequacy of the allowance for credit losses and provided to the Board of Directors. The calculation includes an evaluation of historical default and loss experience, current and forecasted economic conditions, an evaluation of qualitative factors, industry and peer bank loan quality indicators and other factors. See the discussion above under "Application of Critical Accounting Policies and Accounting Estimates" for more information. Management believes the allowance for credit losses at March 31, 2026 to be adequate, but if forecasted economic conditions do not meet management's current expectations, the allowance for credit losses may require an increase through additional provision for credit loss expense which would negatively impact earnings.

For additional discussion regarding our allowance for credit losses, see "Provision for Credit Losses and Allowance for Credit Losses" above.

Securities

Securities increased $75,319,000, or 7.79%, to $1,041,823,000 at March 31, 2026 from $966,504,000 at December 31, 2025. The increase is primarily due to the purchase of new securities, partially offset by the run-off of our declining balance securities. The average yield, excluding tax equivalent adjustment, of the securities portfolio at March 31, 2026 was 3.13% with a weighted average life of 6.89 years, as compared to an average yield of 3.02% and a weighted average life of 7.05 years at December 31, 2025. The weighted average lives on mortgage-backed securities reflect the repayment rate used for book value calculations.

For available-for-sale debt securities in an unrealized loss position, we evaluate the securities at each measurement date to determine whether the decline in the fair value below the amortized cost basis is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized through the allowance for credit losses on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value, with a corresponding adjustment to earnings via provision for credit loss. At March 31, 2026 and December 31, 2025, we determined that the decline we experienced in fair value of available-for-sale securities below the amortized cost basis of the securities was driven by changes in interest rates and not due to credit-related factors. Therefore, there was no provision for credit loss recognized during the three months ended March 31, 2026 with respect to our available-for-sale securities, nor was there an allowance for credit losses on available-for-sale securities.

Premises and Equipment

Premises and equipment increased $283,000, or 0.45%, from December 31, 2025 to March 31, 2026. The primary reason for the increase was due to ATM software updates and replacement of certain ATMs and remodeling of certain branches, partially offset by current year depreciation of $981,000.

Deposits and Other Liabilities

Deposits increased by $93,288,000, or 1.78%, in the first quarter of 2026, primarily due to growth in market share and concerted marketing efforts to drive deposit growth which resulted in the opening of new deposit accounts. The Company had no brokered deposits at March 31, 2026 or December 31, 2025.

The average balance and weighted average interest rate paid for deposit types for the quarters ended March 31, 2026, December 31, 2025 and March 31, 2025 are detailed in the following schedule:

At March 31, 2026 and December 31, 2025, we estimate that we had approximately $1.4 billion and $1.5 billion in uninsured deposits, which are the portion of deposit amounts that exceed the FDIC insurance limit. Approximately 27% of our total deposits exceeded the FDIC deposit insurance limits at March 31, 2026. However, we offer large depositors access to the Certificate of Deposit Account Registry Service ("CDARS") and the Insured Cash Sweep ("ICS Product"), which allows us to divide customers' deposits that exceed the FDIC insurance limits into smaller amounts, below the FDIC insurance limits, and place those excess deposits in other participating FDIC insured institutions with the convenience of managing all deposit accounts through our Bank. Our total deposits in CDARS and the ICS Products increased to $279,408,000, or 5.23% of total deposits, at March 31, 2026, compared to $262,733,000, or 5.01% of total deposits, at December 31, 2025.

Principal maturities of certificates of deposit and individual retirement accounts at March 31, 2026 are as follows:

The Company has a concentration of deposit accounts with public bodies, such as state or local municipalities. The aggregate balance of these public fund deposits at March 31, 2026 and December 31, 2025 were $687,107,000 and $656,331,000, respectively, which represented 12.9% and 12.5% of total deposits, respectively.

The increase in total liabilities since December 31, 2025 was composed of a $93,288,000, or 1.78%, increase in total deposits and a $6,127,000, or 11.56%, increase in accrued interest and other liabilities. The increase in accrued interest and other liabilities since December 31, 2025 was primarily attributable to an increase reserve for income taxes and employee bonus payable, partially offset by a decrease in interest payable on deposits.

Non-Performing Assets

Non-performing loans, which included nonaccrual loans and loans 90 days past due, at March 31, 2026 totaled $22,809,000, a decrease of $5,519,000 from $28,328,000 at December 31, 2025. The decrease in non-performing loans is primarily due to a decrease in the commercial real estate segment, partially offset by increases in the residential l-4 family real estate and 1-4 family equity lines of credit segments. The decrease in non-performing loans in the commercial real estate segment is primarily due to the payoff of a single large loan relationship. The increases in the residential 1-4 family real estate and 1-4 family equity lines of credit segments were primarily due to the addition of multiple loan relationships. Management believes that it is possible that it could incur losses on its

non-performing loans but believes that these losses should not exceed the amount in the allowance for credit losses for loans already allocated to these loans, unless there is unanticipated deterioration of local real estate values.

The net non-performing asset ratio ("NPA") is used as a measure of the overall quality of the Company's assets. Our NPA ratio is calculated by taking the total of our loans that are 90 days or more past due and accruing interest, nonaccrual loans and other real estate owned and dividing that sum by our total assets outstanding. Our NPA ratio for the periods ended March 31, 2026 and December 31, 2025 was 0.39% and 0.49%, respectively. This decrease was primarily due to the payoff of the single large commercial real estate loan relationship mentioned above.

Other loans may be classified as collateral dependent when the current net worth and financial capacity of the borrower or of the collateral pledged, if any, is viewed as inadequate and it is probable that the Company will be unable to collect the scheduled payments of principal and interest due under the contractual terms of the loan agreement. Such loans generally have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt, and if such deficiencies are not corrected, there is a probability that the Company will sustain some loss. In such cases, interest income continues to accrue as long as the loan does not meet the Company's criteria for nonaccrual status. Collateral dependent loans are measured at the fair value of the collateral less estimated selling costs. If the fair value of the collateral dependent loan less estimated selling costs is less than the recorded investment in the loan, the Company shall recognize impairment by creating a valuation allowance with a corresponding charge to the provision for credit losses or by adjusting an existing valuation allowance for the collateral dependent loan with a corresponding charge or credit to the provision for credit losses.

At March 31, 2026 the Company had a recorded investment in collateral dependent loans totaling $16,248,000, a decrease of $5,865,000 from a recorded investment in collateral dependent loans totaling $22,113,000 at December 31, 2025. The decrease during the three months ended March 31, 2026 as compared to December 31, 2025 is primarily due to the payoff of the single large loan relationship mentioned above, partially offset by the addition of loans in the 1-4 family segment. Management periodically evaluates the criteria for classifying collateral dependent loans based on the risk rating and the dollar amount of the loan. As of March 31, 2026, a $839,000 valuation allowance was recorded on collateral dependent loans due to five loan relationships compared to a valuation allowance of $532,000 due to two loan relationship as of December 31, 2025. The allowance for credit losses for loans related to collateral dependent loans was measured based upon the estimated fair value of related collateral less estimated selling costs.

Total past due and nonaccrual loans at March 31, 2026 were $40,798,000 a decrease of $9,967,000 from $50,765,000 at December 31, 2025. The decrease was largely due to the payoff of the single commercial real estate loan as mentioned above.

The Company recognized $2,592,000 and reversed $236,000 out of interest income on nonaccrual loans for the three months ended March 31, 2026. The impact on net interest income from nonaccrual loans was not material to the Company's results for the three months ended March 31, 2025. At March 31, 2026 and December 31, 2025, nonaccrual loans for which no related allowance for credit losses was recorded totaled $8,337,000 and $17,482,000, respectively.

Our internally classified loans decreased $6,924,000, or 10.84%, to $56,974,000 at March 31, 2026, from $63,898,000 at December 31, 2025, primarily due to the payoff of the single large commercial real estate loan mentioned above, offset by the downgrade of multiple borrowers in the 1-4 family real estate, construction, and commercial real estate loan segments. Loans are listed as classified when information obtained about possible credit problems of the borrower has prompted management to question the ability of the borrower to comply with the repayment terms of the loan agreement. Management continues to develop and execute performance improvement plans with these borrowers and continues to believe these loans are well collateralized. If economic uncertainty remains in the market, or management's performance improvement plan proves to be unsuccessful, our classified loan balances and non-performing assets could increase further.

Liquidity and Asset Liability Management

Liquidity

The Company's management seeks to maximize net interest income by managing the Company's assets and liabilities within appropriate constraints on capital, liquidity and interest rate risk. Liquidity is a measure of our ability to meet our cash flow requirements, including inflows and outflows of cash for depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow needs. Several factors influence our liquidity needs, including depositor and borrower activity, interest rate trends, changes in the economy, maturities, re-pricing and interest rate sensitivity of our debt securities, loan portfolio and deposits. We strive to maintain appropriate levels of liquidity. We calculate our liquidity ratio by taking cash and due from banks, interest bearing deposits, federal funds sold, and available-for-sale debt securities not pledged as collateral and dividing by total assets. Our total liquidity ratios were 14.46% at March 31, 2026 and 13.32% at December 31, 2025. The increase in our liquidity ratio is primarily attributable to an increase in liquid assets primarily due to deposit growth outpacing loan growth.

The Company's primary source of liquidity is a stable core deposit base. In addition, federal funds purchased, Federal Home Loan Bank advances, and brokered deposits provide a secondary source of liquidity. These sources of liquidity are generally short-term in nature and are used to fund asset growth and meet other short-term liquidity needs. Liquidity needs can also be met from loan payments and investment security sales or maturities. While maturities and scheduled amortization of loans and debt securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions, and

competition. At March 31, 2026, the Company's liquid assets totaled $866.3 million, an increase from $782.8 million at December 31, 2025, though a portion of these liquid assets include available-for-sale securities that are in an unrealized loss position at March 31, 2026. If the Company was required to sell any of these securities, including to meet liquidity needs, while they are in an unrealized loss position, the Company would be required to recognize the loss on those securities through the income statement when they are sold. Recognition of these losses would negatively impact the Bank's and the Company's regulatory capital levels. Additionally, as of March 31, 2026, the Company had available approximately $175.4 million in unused federal funds lines of credit with regional banks and, subject to certain restrictions and collateral requirements, approximately $633.1 million of borrowing capacity with the Federal Home Loan Bank of Cincinnati to meet short term funding needs. The Company maintains a formal asset and liability management process in an effort to quantify, monitor and control interest rate risk and to assist management as management seeks to maintain stability in net interest margin under varying interest rate environments. The Company accomplishes this process through the development and implementation of lending, funding and pricing strategies designed to maximize net interest income under varying interest rate environments subject to specific liquidity and interest rate risk guidelines and competitive market conditions.

Securities classified as available-for-sale include securities intended to be used as part of the Company's asset/liability strategy and/or securities that may be sold in response to changes in interest rate, prepayment risk, or the need to fund loan demand or other liquidity needs. At March 31, 2026, securities totaling approximately $84.4 million mature or will be subject to rate adjustments within the next twelve months.

A secondary source of liquidity is the Company's loan portfolio. At March 31, 2026, loans totaling approximately $536.8 million will become due within twelve months from that date.

As for liabilities, at March 31, 2026, certificates of deposit of $250,000 or greater totaling approximately $576.1 million will become due or reprice during the next twelve months. Historically, there has been no significant reduction in immediately withdrawable accounts such as negotiable order of withdrawal accounts, money market demand accounts, demand deposit accounts and regular savings accounts. Management does not anticipate that there will be significant withdrawals from these accounts in the future.

Management believes that with present maturities, borrowing capacity with the Federal Home Loan Bank of Cincinnati and the efforts of management in its asset/liability management program, the Company should be able to meet its liquidity needs in the near term future.

Asset Liability Management

Analysis of rate sensitivity and rate gap analysis are the primary tools used to assess the direction and magnitude of changes in net interest income resulting from changes in interest rates. Included in the analysis are cash flows and maturities of financial instruments held for purposes other than trading, changes in market conditions, loan volumes and pricing and deposit volume and mix. These assumptions are inherently uncertain, and, as a result, net interest income cannot be precisely estimated nor can the impact of higher or lower interest rates on net interest income be precisely predicted. Actual results will differ due to timing, magnitude and frequency of interest rate changes and changes in market conditions and management's strategies, among other factors.

The Company also uses simulation modeling to evaluate both the level of interest rate sensitivity as well as potential balance sheet strategies. The Company's Asset Liability Committee ("ALCO") meets quarterly to analyze the interest rate shock simulation. The interest rate shock simulation model is based on a number of assumptions. The assumptions include, but are not limited to, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, reinvestment and replacement of asset and liability cash flows and balance sheet management strategies. We model instantaneous change in interest rates using a growth in the balance sheet as well as a flat balance sheet to understand the impact to earnings and capital. Based on the Company's interest rate shock simulation, the Company had a slightly asset-sensitive interest-rate risk position as of March 31, 2026, which means that in general, our assets should reprice quicker than our liabilities, and as a result net interest income should increase in a rising rate environment and decrease in a falling rate environment though the Company's net interest margin and earnings could be negatively impacted if the Company's ability to lower deposit rates (in a falling rate environment) or limit the increases to deposit rates (in a rising rate environment) is limited by other factors including as a result of competitive pressures or loan growth outpacing our ability to add lower cost core deposits. The Company also uses Economic Value of Equity ("EVE") sensitivity analysis to understand the impact of changes in interest rates on long-term cash flows, income and capital. EVE is calculated by discounting the cash flows for all balance sheet instruments under different interest rate scenarios. The EVE is a longer term view of interest rate risk because it measures the present value of the future cash flows. Presented below is the estimated impact on the Bank's net interest income and EVE as of March 31, 2026, assuming an immediate shift in interest rates:

While an instantaneous and severe shift in interest rates was used in this analysis to provide an estimate of exposure under these scenarios, we believe that a gradual shift in interest rates would have a more modest impact. Further, the earnings simulation model does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, and changing product spreads that could mitigate any potential adverse impact of changes in interest rates. Moreover, since EVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in EVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon (i.e., the current year). Further, EVE does not take into account factors such as future balance sheet growth, changes in product mix, changes in yield curve relationships, hedging strategies that we may institute, and changing product spreads that could mitigate any potential adverse impact of changes in interest rates.

Interest rate risk (sensitivity) management focuses on the earnings risk associated with changing interest rates. Management seeks to maintain profitability in both immediate and long-term earnings through funds management/interest rate risk management. The Company's rate sensitivity position has an important impact on earnings. Senior management of the Company analyzes the rate sensitivity position quarterly. Management focuses on the spread between the Company's cost of funds and interest yields generated primarily through loans and investments.

In addition to the ALCO, the Audit Committee and the Risk Oversight Committee, as well as the Chief Risk Officer are all responsible for the "risk management framework" of the Company. The ALCO meets monthly and the Audit and Risk Oversight Committees meet quarterly, with the authority to convene additional meetings, as circumstances require.

Off Balance Sheet Arrangements

At March 31, 2026, we had unfunded loan commitments outstanding of $1,244,909,000 and outstanding standby letters of credit of $153,109,000, compared to $1,202,566,000 and $150,374,000, respectively, at December 31, 2025. Because these commitments generally have fixed expiration dates and many will expire without being drawn upon, the total commitment level does not necessarily represent future cash requirements. If needed to fund these outstanding commitments, the Bank has the ability to liquidate federal funds sold or securities available-for-sale or on a short-term basis to borrow and purchase federal funds from other financial institutions. Additionally, the Bank could sell participations in these or other loans to correspondent banks. The Bank has historically been able to fund its ongoing liquidity needs through its stable core deposit base, loan payments, investment security maturities and short-term borrowings.

Capital Position and Dividends

At March 31, 2026, total shareholders' equity was $594,594,000, or 9.92% of total assets, which compares with $581,685,000, or 9.89% of total assets, at December 31, 2025. The increase in shareholders' equity during the three months ended March 31, 2026 is the result of the net effect of $387,000 related to stock option compensation and RSUs, the Company's net earnings of $22,261,000, and proceeds from the issuance of common stock related to exercise of stock options of $101,000. The increase in shareholders' equity was partially offset by cash dividends declared of $16,451,000, of which $10,859,000 was reinvested under the Company's dividend reinvestment plan, and an increase of $4,220,000 in unrealized losses on investment securities, net of applicable income taxes of $1,492,000, and the $28,000 repurchase of common stock from a limited number of the Company's shareholders.

Share Repurchase Program

On January 27, 2025, the Company's Board of Directors authorized an $8.0 million share repurchase program that commenced upon expiration of the previous program, which expired on March 31, 2025. This authorization remained in effect through March 31, 2026. The Company repurchased 350 shares of the Company's common stock at an average price of $80.45 under this repurchase program during the first quarter of 2026.

On January 26, 2026 the Company's Board of Directors authorized an $8.0 million share repurchase program that commenced upon expiration of the previous program, which expired on March 31, 2026. This authorization remains in effect through March 31, 2027. As of this filing, the Company has not repurchased shares under the current repurchase program.

Share repurchases under the authorized program may be made from time to time in privately negotiated transactions, at the discretion of the management of the Company. The approved share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares, and the program may be extended, modified, suspended or discontinued at any time. The timing of these repurchases will depend on market conditions and other requirements.