# EDGAR Filing Document

**Accession Number:** 0001981546
**File Stem:** 0001213900-25-110914
**Filing Date:** 2025-11
**Character Count:** 729642
**Document Hash:** 2f38ef17b669508e59eec9c142a61d5f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-110914.hdr.sgml**: 20251114

**ACCESSION NUMBER**: 0001213900-25-110914

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 99

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251114

**DATE AS OF CHANGE**: 20251114

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Commercial Bancgroup, Inc.
- **CENTRAL INDEX KEY:** 0001981546
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 621039469
- **STATE OF INCORPORATION:** TN
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42889
- **FILM NUMBER:** 251487166

**BUSINESS ADDRESS:**
- **STREET 1:** 6710 CUMBERLAND GAP PARKWAY
- **CITY:** HARROGATE
- **STATE:** TN
- **ZIP:** 37752
- **BUSINESS PHONE:** 423-869-5151

**MAIL ADDRESS:**
- **STREET 1:** 6710 CUMBERLAND GAP PARKWAY
- **CITY:** HARROGATE
- **STATE:** TN
- **ZIP:** 37752

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

**FORM 10-Q**

**(Mark One)**

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

**For the quarterly period ended September 30, 2025**

**OR**

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

**Commission File Number: 001-42889**

**Commercial Bancgroup, Inc.**

**(Exact Name of Registrant as Specified in its Charter)**

---

| | |
|:---|:---|
| **Tennessee** | **62-1039469** |
| **(State or other jurisdiction of<br> incorporation or organization)** | **(I.R.S. Employer<br> Identification No.)** |

---

---

| | |
|:---|:---|
| **6710 Cumberland Gap Parkway<br> Harrogate, Tennessee**  | **37752** |
| **(Address of principal executive offices)** | **(Zip Code)** |

---

**Registrant's telephone number, including area code:** **(423) 869-5151**

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

---

| | |
|:---|:---|
| **Title of each class** | **Name of each exchange on which registered** |
| **Common Stock, par value $0.01 per share** **CBK** | **The Nasdaq Stock Market LLC** |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 13, 2025, the registrant had 12,239,644 shares of common stock, $0.01 par value per share, outstanding.

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| **PART I.** | **FINANCIAL INFORMATION** |  |
| Item 1. | Financial Statements. |  |
|  | [Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024](#a_001) | 2 |
|  | [Consolidated Statements of Income (unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024](#a_002) | 3 |
|  | [Consolidated Statements of Comprehensive Income (unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024](#a_003) | 4 |
|  | [Consolidated Statements of Changes in Shareholders' Equity (unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024](#a_004) | 5 |
|  | [Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2025 and 2024](#a_005) | 6 |
|  | [Notes to Unaudited Consolidated Financial Statements](#a_006) | 8 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations.](#a_007) | 45 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk.](#a_008) | 76 |
| Item 4. | [Controls and Procedures.](#a_009) | 76 |
| [**PART II.**](#a_010) | [**OTHER INFORMATION**](#a_010) | 77 |
| Item 1. | [Legal Proceedings.](#a_011) | 77 |
| Item 1A. | [Risk Factors.](#a_012) | 77 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds.](#a_013) | 77 |
| Item 3. | [Defaults Upon Senior Securities.](#a_014) | 77 |
| Item 4. | [Mine Safety Disclosures.](#a_015) | 77 |
| Item 5. | [Other Information.](#a_016) | 77 |
| Item 6. | [Exhibits.](#a_017) | 78 |
| [Signatures](#a_018) | [Signatures](#a_018) | 79 |

---

i

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This Quarterly Report on Form 10-Q (this "Report") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include statements relating to the strategies, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth of Commercial Bancgroup, Inc., a Tennessee corporation, and its consolidated subsidiaries (collectively, the "Company," "we," "our," "us," or similar terms). These statements are often, but not always, made through the use of words or phrases such as "may," "might," "should," "could," "predict," "potential," "believe," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "strive," "projection," "goal," "target," "outlook," "aim," "would," "annualized" and "outlook," or the negative version of these words or other similar words or phrases of a future or forward-looking nature.

These forward-looking statements are not statements of historical facts and are based on assumptions and estimates that we believe to be reasonable in light of the information available to us at this time. However, these forward-looking statements are subject to significant risks and uncertainties, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date such statements are made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

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

● business and economic conditions nationally, regionally and in our target markets, particularly in Kentucky, North Carolina and Tennessee and the particular geographic areas in which we operate;

● the level of, or changes in the level of, interest rates and inflation, including the effects thereof on our earnings and financial condition and the market value of our investment and loan portfolios;

● the concentration of our loan portfolio in real estate loans and changes in the prices, values and sales volumes of commercial and residential real estate;

● the concentration of our business within our geographic areas of operation in Kentucky, North Carolina and Tennessee and neighboring markets;

● credit and lending risks associated with our commercial real estate ("CRE"), commercial, and construction and land development ("C&D") loan portfolios;

● risks associated with our focus on lending to small and mid-sized businesses;

● our ability to maintain important deposit customer relationships, maintain our reputation or otherwise avoid liquidity risks;

● changes in demand for our products and services;

● the failure of assumptions and estimates underlying the establishment of allowances for possible credit losses and other asset impairments, losses, valuations of assets and liabilities and other estimates;

● the sufficiency of our capital, including sources of such capital and the extent to which capital may be used or required;

ii

● our inability to secure and maintain a "satisfactory" rating under the Community Reinvestment Act;

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

● our inability to raise necessary capital to fund our growth strategy and operations or to meet increased required minimum regulatory capital levels;

● our ability to execute and prudently manage our growth and execute our business strategy, including expansionary activities;

● the composition of and changes in our management team and our ability to attract, incentivize and retain key personnel;

● the effects of competition from a wide variety of local, regional, national and other providers of financial, investment, trust and other wealth management services and insurance services, including the disruption effects of financial technology and other competitors who are not subject to the same regulations as the Company;

● the deterioration of our asset quality or the value of collateral securing loans;

● changes in our accounting standards;

● the effectiveness of our risk management framework, including internal controls;

● severe weather, natural disasters, pandemics, epidemics, acts of war, terrorism, or other external events, such as the transition risk associated with climate change, and other matters beyond our control;

● changes in technology or products that may be more difficult or costly, or less effective, than anticipated;

● the risks of acquisitions and other expansionary activities, including without limitation our ability to identify and consummate transactions with potential future acquisition candidates, the time and costs associated with pursuing such transactions, our ability to successfully integrate operations as part of such transactions and our ability, and possible failures, to achieve expected gains, revenue growth, expense savings and/or other synergies from such transactions;

● our ability to maintain our historical rate of growth;

● failure to keep pace with technological change or difficulties when implementing new technologies;

● systems failures or interruptions involving our risk management framework, our information technology and telecommunications systems or third-party service providers;

● our ability to identify and address unauthorized data access, cyber-crime and other threats to data security and customer privacy;

● our compliance with governmental and regulatory requirements, including the Bank Holding Company Act of 1956, as amended (the "BHC Act"), and other laws relating to banking, consumer protection, securities and tax matters, and our ability to maintain licenses required in connection with mortgage origination, sale and servicing operations;

● compliance with the Bank Secrecy Act of 1970, Office of Foreign Assets Control rules and anti-money laundering laws and regulations;

iii

● governmental monetary and fiscal policies;

● changes in laws, rules, or regulations, or interpretations thereof, or policies relating to financial institutions or accounting, tax, trade, monetary or fiscal matters;

● our ability to receive dividends from our wholly owned subsidiary bank, Commercial Bank (the "Bank"), and satisfy our obligations as they become due;

● the institution and outcome of litigation and other legal proceedings against us or to which we become subject;

● the limited experience of our management team in managing and operating a public company;

● the incremental costs of operating as a public company;

● the effect of the concentrated ownership of our common stock by Robertson Holding Company, L.P. and Unified Shares, LLC;

● our ability to meet our obligations as a public company, including our obligations under Section 404 of the Sarbanes-Oxley Act of 2002; and

● other risks and factors described under the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Registration Statement on Form S-1/A (Registration No. 333-289862) filed with the U.S. Securities and Exchange Commission (the "SEC") on September 22, 2025 (the "Registration Statement").

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Report. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions or estimates prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements.

Any forward-looking statement speaks only as of the date it is made, and we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Report. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

iv

**PART I—FINANCIAL INFORMATION**

**Item 1. Financial Statements.** 

---

| | |
|:---|:---|
|  | **Page** |
| **Consolidated Financial Statements (Unaudited)** |  |
| &nbsp;&nbsp;&nbsp;[Consolidated Balance Sheets at September 30, 2025 (unaudited) and December 31, 2024 (audited)](#a_001) | 2 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)](#a_002) | 3 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)](#a_003) | 4 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Changes in Shareholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)](#a_004) | 5 |
| &nbsp;&nbsp;&nbsp;[Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (unaudited)](#a_005) | 6 |
| &nbsp;&nbsp;&nbsp;[Notes to Consolidated Financial Statements (unaudited)](#a_006) | 8 |

---

**Commercial Bancgroup, Inc.**

***Consolidated Balance Sheets***

---

| | | |
|:---|:---|:---|
|  | **(Unaudited)**<br>**September 30,**<br>**2025** | **(Audited)**<br>**December 31,**<br>**2024** |
| **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and due from banks | $44242184 | $18991800 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal funds sold | 31841525 | 43742762 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest-bearing deposits in banks | 78703235 | 115463354 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 154786944 | 178197916 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Available-for-sale securities, at fair value | 29555603 | 47937616 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Held-to-maturity securities, at amortized cost | 131915382 | 128216954 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans, net of allowance for credit losses of $17,942,293 and $18,205,421 on September 30, 2025 and December 31, 2024, respectively | 1749250647 | 1788791583 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Premises and equipment, net | 50268024 | 50288378 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted stock, at cost | 8163700 | 8264150 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreclosed assets held for sale, net | 532953 | 831662 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest receivable | 7096937 | 7187304 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank owned life insurance | 46482172 | 45883124 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Core deposits and other intangibles | 4638230 | 5824968 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill | 8510852 | 8514092 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax asset | 1426948 | 1078881 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 21779863 | 30194510 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $**2214408255** | $**2301211138** |
| **Liabilities and Shareholders' Equity** |  |  |
| **Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Deposits |  |  |
| &nbsp;&nbsp;&nbsp;Demand | $928957598 | $976481028 |
| &nbsp;&nbsp;&nbsp;Savings, NOW and money market | 382002346 | 385614692 |
| &nbsp;&nbsp;&nbsp;Time | 469673638 | 576501235 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total deposits** | **1780633582** | **1938596955** |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | 62662527 | 3391566 |
| &nbsp;&nbsp;&nbsp;Long-term debt | 100097343 | 105772642 |
| &nbsp;&nbsp;&nbsp;Interest payable | 3410094 | 4224695 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 22451383 | 28969497 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | **1969254929** | **2080955355** |
| **Shareholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp;Common stock $0.01 par value per share; 50,000,000 shares authorized; 12,239,644 shares issued and outstanding at; September 30, 2025; 12,113,144 at December 31, 2024 | 122396 | 121131 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 8406116 | 9388181 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 237366245 | 212310977 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (741431) | (1564506) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total shareholders' equity** | **245153326** | **220255783** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and shareholders' equity** | $**2214408255** | $**2301211138** |

---

***See Notes to Unaudited Consolidated Financial Statements***

**Commercial Bancgroup, Inc.**

***Consolidated Statements of Income (Unaudited)***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| ***Interest and Dividend Income*** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Loans, including fees | $28073755 | $28718458 | $84435068 | $84968617 |
| &nbsp;&nbsp;&nbsp;Debt securities-taxable | 929519 | 607232 | 2974335 | 1915455 |
| &nbsp;&nbsp;&nbsp;Debt securities-tax-exempt | 102154 | 64595 | 328309 | 276505 |
| &nbsp;&nbsp;&nbsp;Dividends on restricted stock | 155591 | 158486 | 464028 | 515747 |
| &nbsp;&nbsp;&nbsp;Interest-bearing time deposits | 759917 | 1072326 | 3443784 | 4203304 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total interest and dividend income** | 30020936 | 30621097 | 91645524 | 91879628 |
| &nbsp;&nbsp;&nbsp;**Interest expense** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Deposits | 8653819 | 10276321 | 28665194 | 29975273 |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | 55431 | 76284 | 130043 | 164649 |
| &nbsp;&nbsp;&nbsp;Long-term debt | 1090087 | 1212795 | 3229909 | 3923504 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total interest expense** | **9799337** | **11565400** | **32025146** | **34063426** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net interest income** | **20221599** | **19055697** | **59620378** | **57816202** |
| &nbsp;&nbsp;&nbsp;Provision for credit losses | - | 323000 | - | 1823644 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net interest income after provision for credit losses** | **20221599** | **18732697** | **59620378** | **55992558** |
| ***Noninterest Income*** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Customer service fees | 735353 | 654268 | 2064670 | 2158524 |
| &nbsp;&nbsp;&nbsp;Net gains on sales of premises and equipment | 20500 | 388448 | 24959 | 411542 |
| &nbsp;&nbsp;&nbsp;Net gains on sales of foreclosed assets | 109720 | 31818 | 113270 | 150913 |
| &nbsp;&nbsp;&nbsp;ATM fees | 845782 | 883331 | 2536231 | 2432517 |
| &nbsp;&nbsp;&nbsp;Increase in bank owned life insurance | 306026 | 313393 | 949557 | 876093 |
| &nbsp;&nbsp;&nbsp;Other | 608564 | 536667 | 1603955 | 1848463 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total noninterest income** | **2625945** | **2807925** | **7292642** | **7878052** |
| ***Noninterest Expense*** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Salaries and employee benefits | 5728660 | 5604733 | 17011656 | 16851817 |
| &nbsp;&nbsp;&nbsp;Occupancy | 738481 | 935675 | 2529370 | 2650555 |
| &nbsp;&nbsp;&nbsp;Data processing | 1103542 | 1067417 | 3461901 | 3393223 |
| &nbsp;&nbsp;&nbsp;Deposit insurance premiums | 267221 | 350326 | 738209 | 875138 |
| &nbsp;&nbsp;&nbsp;Professional fees | 135786 | 328773 | 616727 | 979447 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 954748 | 1061939 | 2705755 | 3117152 |
| &nbsp;&nbsp;&nbsp;Other | 1624003 | 1174235 | 4795031 | 4277314 |
| &nbsp;&nbsp;&nbsp;**Total noninterest expense** | **10552441** | **10523098** | **31858649** | **32144646** |
| &nbsp;&nbsp;&nbsp;**Income before income taxes** | **12295103** | **11017524** | **35054371** | **31725964** |
| &nbsp;&nbsp;&nbsp;Provision for income taxes | 2828954 | 1810311 | 7997024 | 5650639 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net Income** | **9466149** | **9207213** | **27057347** | **26075325** |
| &nbsp;&nbsp;&nbsp;Less: net income attributable to noncontrolling interest | - | - | - | 275857 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net income attributable to** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Commercial Bancgroup, Inc.** | $**9466149** | $**9207213** | $**27057347** | $**25799468** |
| ***Earnings per share:*** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $0.77 | $0.75 | $2.22 | $2.14 |
| &nbsp;&nbsp;&nbsp;Diluted | $0.77 | $0.74 | $2.22 | $2.10 |

---

***See Notes to Unaudited Consolidated Financial Statements***

**Commercial Bancgroup, Inc.**

***Consolidated Statements of Comprehensive Income (Unaudited)***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| &nbsp;&nbsp;&nbsp;Net income attributable to Commercial Bancgroup, Inc. | $9466149 | $9207213 | $27057347 | $25799468 |
| Other comprehensive income: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized holding gains on securities available for sale arising during the period | 535864 | 769789 | 917176 | 491720 |
| &nbsp;&nbsp;&nbsp;Tax expense | (159558) | (188616) | (232227) | (107968) |
| &nbsp;&nbsp;&nbsp;Reclassification adjustment for accretion of unrealized holding gains included in accumulated other comprehensive income from the transfer of securities from available-for-sale to held-to-maturity | 58417 | 120324 | 186997 | 369061 |
| &nbsp;&nbsp;&nbsp;Tax expense | (15268) | (30475) | (48871) | (95482) |
| **Other comprehensive income, net of tax** | **419455** | **671022** | **823075** | **657331** |
| **Comprehensive income** | $**9885604** | $**9878235** | $**27880422** | $**26456799** |

---

***See Notes to Unaudited Consolidated Financial Statements***

**Commercial Bancgroup, Inc.**

***Consolidated Statements of Changes in Shareholders' Equity (Unaudited)***

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | <br>**Common**<br>**Stock** | <br>**Additional**<br>**Paid-In**<br>**Capital** | <br>**Retained**<br>**Earnings** | **Other**<br>**Comprehensive**<br>**Income**<br>**(Loss)** | <br>**Non-**<br>**Controlling**<br>**Interest** | <br>**TOTAL** |
| **Balance - January 1, 2024** | $122118 | $9073467 | $182903720 | $(1724275) | $5402293 | $195777323 |
| &nbsp;&nbsp;&nbsp;Net income |  |  | 25799468 |  | 275857 | 26075325 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  | 657331 |  | 657331 |
| &nbsp;&nbsp;&nbsp;Dividends paid to shareholders |  |  | (2002669) |  |  | (2002669) |
| &nbsp;&nbsp;&nbsp;Repurchase of stock (2,813 shares) | (28) | (45213) |  |  |  | (45241) |
| &nbsp;&nbsp;&nbsp;Acquisition of minority interest | - | - | - | - | (5678150) | (5678150) |
| **Balance – September 30, 2024** | $122090 | $9028254 | $206700519 | $(1066944) | $- | $214783919 |
| **Balance – January 1, 2025** | $121131 | $9388181 | $212310977 | $(1564506) | $- | $220255783 |
| &nbsp;&nbsp;&nbsp;Net income |  |  | 27057347 |  |  | 27057347 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  | 823075 |  | 823075 |
| &nbsp;&nbsp;&nbsp;Dividends paid to shareholders |  |  | (2002079) |  |  | (2002079) |
| &nbsp;&nbsp;&nbsp;Issuance of stock grants (179,688 shares) | 1797 | (1797) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Repurchase of stock (53,188 shares) | (532) | (980268) | - | - | - | (980800) |
| **Balance – September 30, 2025** | $122396 | $8406116 | $237366245 | $(741431) | $- | $245153326 |
| **Balance - June 30, 2024** | $122090 | $9028254 | $197493306 | $(1737966) | $5678150 | $210583834 |
| &nbsp;&nbsp;&nbsp;Net income |  |  | 9207213 |  |  | 9207213 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  | 671022 |  | 671022 |
| &nbsp;&nbsp;&nbsp;Acquisition of minority interest | - | - | - | - | (5678150) | (5678150) |
| **Balance – September 30, 2024** | $122090 | $9028254 | $206700519 | $(1066944) | $- | $214783919 |
| **Balance – June 30, 2025** | $122396 | $8406116 | $227900096 | $(1160886) | $- | $235267722 |
| &nbsp;&nbsp;&nbsp;Net income |  |  | 9466149 |  |  | 9466149 |
| &nbsp;&nbsp;&nbsp;Other comprehensive income | - | - | - | 419455 | - | 419455 |
| **Balance – September 30, 2025** | $122396 | $8406116 | $237366245 | $(741431) | $- | $245153326 |

---

***See Notes to Unaudited Consolidated Financial Statements***

**Commercial Bancgroup, Inc.**

***Consolidated Statements of Cash Flows (Unaudited)***

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30,** | **September 30,** |
|  | **2025** | **2024** |
| ***Operating Activities*** |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $27057347 | $26075325 |
| &nbsp;&nbsp;&nbsp;Items not requiring (providing) cash |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 1519018 | 1621255 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization and (accretion), net | (46198) | 1616030 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses |  | 1823644 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for losses on foreclosed assets | 4500 | 41750 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net gains on sales of foreclosed assets | (113270) | (150913) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net gains on sales of premises and equipment | (24959) | (411542) |
| &nbsp;&nbsp;&nbsp;Changes in |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest receivable | 90367 | 265920 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 8417887 | 5194118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | (6799212) | (8105417) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in bank owned life insurance | (949557) | (876093) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (348067) | 154289 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest payable | (814601) | 1213471 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 27993255 | 28461837 |
| ***Investing Activities*** |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of available-for-sale securities | (16929788) | (29802659) |
| &nbsp;&nbsp;&nbsp;Proceeds from, maturities and calls of available-for-sale securities | 36586565 | 33119944 |
| &nbsp;&nbsp;&nbsp;Proceeds from, maturities and calls of held-to-maturity securities | 85464673 | 28433168 |
| &nbsp;&nbsp;&nbsp;Purchases of held-to-maturity securities | (88100756) | (2240915) |
| &nbsp;&nbsp;&nbsp;Net change in loans | 39254790 | (60554058) |
| &nbsp;&nbsp;&nbsp;Purchase of premises and equipment, net | (1538105) | (2558940) |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of premises and equipment | 64400 | 577605 |
| &nbsp;&nbsp;&nbsp;Proceeds from sales of foreclosed assets | 693625 | 535431 |
| &nbsp;&nbsp;&nbsp;Death benefits received | 350509 | 109545 |
| &nbsp;&nbsp;&nbsp;Redemption of restricted stock, at cost | 100450 | 6300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) investing activities | $55946363 | $(32374579) |

---

(Continued)

***See Notes to Unaudited Consolidated Financial Statements***

**Commercial Bancgroup, Inc.**

***Consolidated Statements of Cash Flows (Unaudited)***

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30,** | **September 30,** |
|  | **2025** | **2024** |
| ***Financing Activities*** |  |  |
| &nbsp;&nbsp;&nbsp;Net (decrease) increase in deposits | $(157963373) | $73164732 |
| &nbsp;&nbsp;&nbsp;Proceeds from (repayments of) short-term borrowings | 59270961 | (1143804) |
| &nbsp;&nbsp;&nbsp;Repayments of long-term borrowings | (5675299) | (36001179) |
| &nbsp;&nbsp;&nbsp;Repurchase of stock | (980800) | (45241) |
| &nbsp;&nbsp;&nbsp;Payment of dividends | (2002079) | (2002669) |
| &nbsp;&nbsp;&nbsp;Purchase of minority interest | - | (5678150) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by financing activities | (107350590) | 28293689 |
| &nbsp;&nbsp;&nbsp;(Decrease) increase in cash and cash equivalents | (23410972) | 24380947 |
| ***Cash and cash equivalents, beginning of period*** | 178197916 | 155940735 |
| ***Cash and cash equivalents, end of period*** | $154786944 | $180321682 |
| ***Supplemental Cash Flows Information*** |  |  |
| &nbsp;&nbsp;&nbsp;Interest paid | $32839747 | $32849955 |
| &nbsp;&nbsp;&nbsp;Income taxes paid | $7816000 | $9025117 |
| ***Supplemental Disclosures of Noncash Items*** |  |  |
| &nbsp;&nbsp;&nbsp;Unrealized gain on AFS securities | $917176 | $491720 |
| &nbsp;&nbsp;&nbsp;Transfer of loans to OREO | $286146 | $320367 |

---

***See Notes to Unaudited Consolidated Financial Statements***

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

---

| | |
|:---|:---|
| **Note 1.** | **Summary of Significant Accounting Policies** |

---

*<u>Nature of operations:</u>*

 

The Company is a bank holding company incorporated in the State of Tennessee whose principal activity is the ownership and management of its wholly owned subsidiary, the Bank. The Bank is primarily engaged in providing a full range of banking and financial services to individual and corporate customers in Claiborne, Hamblen, Union, Knox, Sullivan, Washington, Williamson, Cocke and Hamblen Counties in Tennessee and Knox, Bell, Harlan, Laurel and Whitley Counties in Kentucky. Effective June of 2023, the Company acquired 76.83% of the stock of AB&T Financial Corporation ("AB&T"), which owned 100% of Alliance Bank & Trust Company ("Alliance"). Alliance provided banking and financial services to individual and corporate customers in Gastonia and Cleveland Counties in North Carolina. The acquisition of AB&T occurred in two steps and was completed on June 30, 2024, when the Company acquired the remaining minority (23.17%) ownership interest in AB&T. Alliance was merged into the operations of the Bank on July 1, 2024.

*<u>Basis of presentation:</u>*

The Company's accounting and reporting policies conform to accounting principles generally accepted in the United States ("GAAP") for interim financial information and to generally accepted practices within the banking industry. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. For further information, refer to the consolidated financial statements and footnotes thereto for the fiscal year ended December 31, 2024 in our Registration Statement.

*<u>Change in presentation due to stock reclassification and stock split:</u>*

On September 18, 2025, the Company filed with the Tennessee Secretary of State an Amended and Restated Charter providing for (i) the automatic reclassification and conversion of each outstanding share of Class B common stock, $10.00 par value per share, into 1.15 shares of common stock, $0.01 par value per share (our "common stock"), and the automatic reclassification and conversion of each outstanding share of Class C common stock, $10.00 par value per share, into 1.05 shares of common stock and (ii) effective immediately following the reclassification, a 250-for-1 forward stock split whereby each holder of common stock received 249 additional shares of common stock for each share owned as of immediately following the reclassification. All share and per share amounts set forth in the consolidated financial statements of the Company have been retroactively restated to reflect the reclassification and conversion and stock split as if they had occurred as of the earliest period presented.

In addition to the reclassification and stock split, the Company is authorized to issue 10,000,000 shares of preferred stock, $0.01 par value per share. As of September 30, 2025, no preferred shares have been issued or are outstanding. The board of directors of the Company has the authority to issue preferred stock in one or more series and to determine the rights, preferences, privileges, and restrictions of each series, including dividend rights, conversion rights, voting rights, terms of redemption, and liquidation preferences.

*<u>Principles of consolidation:</u>*

 ****

The consolidated financial statements include the accounts of the Company and the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

---

| | |
|:---|:---|
| **Note 1.** | **Summary of Significant Accounting Policies, Continued** |

---

*<u>Use of estimates:</u>*

 ****

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses ("ACL"), valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, valuation of deferred tax assets and fair values of financial instruments.

 ****

*<u>Loans:</u>*

 ****

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoffs are reported at amortized cost (net of the ACL). Amortized cost is the principal balance outstanding adjusted for unearned income, charge-offs, the ACL, any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans.

Interest receivable reported in interest receivable on the consolidated balance sheets totaled to $6,438,216 and $6,679,881 as of September 30, 2025, and December 31, 2024, respectively, and is excluded from the estimate of credit losses. Interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and amortized as a level yield adjustment over the respective term of the loan.

The accrual of interest on mortgage and commercial loans is discontinued and placed on nonaccrual status at the time the loan is 90 days delinquent unless the credit is well-secured and in process of collection. Mortgage loans are charged off at 180 days past due, and commercial loans are charged off to the extent principal or interest is deemed uncollectible. Consumer and credit card loans continue to accrue interest until they are charged off (no later than 120 days past due) unless the loan is in the process of collection. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

**Purchased Credit Deteriorated ("PCD") loans:**

The Company has purchased loans, some of which have experienced more than insignificant credit deterioration since origination. PCD loans are recorded at the amount paid. An ACL is determined using the same methodology as other loans held for investment. The initial ACL determined on a collective basis is allocated to individual loans. The sum of the loan's purchase price and ACL becomes its initial amortized cost basis. The difference between initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the ACL are recorded through credit loss expense.

 ****

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

---

| | |
|:---|:---|
| **Note 1.** | **Summary of Significant Accounting Policies, Continued** |

---

 ****

*<u>Allowance for credit losses (ACL) – loans</u>:* 

 

Under the current expected credit loss model, the ACL on loans is a valuation allowance estimated at each balance sheet date in accordance with GAAP that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans.

The Company estimates the ACL on loans based on the underlying loans' amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, and net deferred fees or costs, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the measurement of ACL.

Expected credit losses are reflected in the ACL through a charge to provision for credit losses. The Company measures expected credit losses of loans on a collective (pool) basis, when the loans share similar risk characteristics. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company.

The Company's methodologies for estimating the ACL consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions over a period that has been determined to be reasonable and supportable, to the identified pools of loans with similar risk characteristics for which the historical loss experience was observed.

**Weighted Average Remaining Maturity ("WARM") Method:**

The Company's primary methodology for estimating expected credit losses for all loan types is the WARM method. The WARM CECL (Current Expected Credit Losses) methodology uses average annual loss rate along with a simple but reasonable forecast based on a "regression" analysis of the loan history dating back 18 years. The dependent variable will be the entity's loss rate, based on changes in the Prime Lending Rate over that same period. The Company will utilize the Prime Lending Rate as the independent variable due to that being the tool most commonly utilized by the Federal Reserve to either accelerate and/or slow down the economy. Additionally, the ACL calculation includes qualitative adjustments to account for risk factors that may not be incorporated in the quantitatively derived allowance estimate. Qualitative adjustments may increase or decrease the allowance estimate.

Qualitative factors considered include: changes in lending policies and procedures, underwriting standards, collection and charge-off and recovery practices; national, regional and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments; nature and volume of the portfolio and terms of loans; experience, depth and ability of lending management; volume and severity of past due loans, the volume of non-accrual loans, and the volume and severity of adversely classified or graded loans; quality of loan review system; underlying collateral values; concentrations of credit and changes in the level of such concentrations; and the effect of other external factors such as competition and legal and regulatory requirements.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

---

| | |
|:---|:---|
| **Note 1.** | **Summary of Significant Accounting Policies, Continued** |

---

*<u>Allowance for credit losses (ACL) – loans, continued:</u>*

**ACL on Off-Balance Sheet Credit Exposures:**

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The ACL on off-balance sheet credit exposures is adjusted through credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

 ****

**Collateral-Dependent Loans:**

Loans that do not share risk characteristics are evaluated on an individual basis. For collateral-dependent loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. The Company may, in the alternative, measure the expected credit loss as the amount by which the amortized cost basis of the loan exceeds the estimated fair value of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized costs basis of the loan exceeds the fair value of the underlying collateral less estimated cost to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan.

**Charge-Offs and Recoveries:**

Loan losses are charged against the allowance when management believes the collection of a loan's principal is unlikely. Subsequent recoveries are credited to the allowance. If the loan is collateral-dependent, the loss is more easily identified and is charged-off when it is identified, usually based upon receipt of an appraisal. However, when a loan has guarantor support, and the guarantor demonstrates willingness and capacity to support the debt, the Company may carry the estimated loss as a reserve against the loan while collection efforts with the guarantor are pursued. If, after collection efforts with the guarantor are complete, the deficiency is still considered uncollectible, the loss is charged off and any further collections are treated as recoveries.

*<u>Loan commitments and financial instruments:</u>*

 ****

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of those instruments. Such financial instruments are recorded when they are funded.

The Company records an ACL on off-balance sheet credit exposures, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for unfunded commitments in the Company's statements of income. The ACL on off-balance sheet credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur as well as any third-party guarantees, and is included in other liabilities on the Company's balance sheets.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

---

| | |
|:---|:---|
| **Note 1.** | **Summary of Significant Accounting Policies, Continued** |

---

*<u>Allowance for credit losses (ACL) – securities:</u>*

***Available-for-sale Securities:***

The Company evaluates available-for-sale securities in an unrealized loss position to determine if credit losses exist. The Company first evaluates whether it intends to sell, or it is more likely than not that it will be required to sell a security before recovering its amortized cost basis. If either of these conditions exists, the security's amortized cost basis is written down to fair value through income. If either of the aforesaid conditions does not exist, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If credit loss exists, the Company recognizes an ACL, limited to the amount by which the amortized cost basis exceeds the fair value. Any impairment not recognized through an ACL is recognized in other comprehensive income, net of tax.

Changes in the allowance for credit losses are recorded as provision for credit loss expense (or reversal). Losses are charged against the allowance when management believes the collectability of an available-to-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

***Held-to-maturity Securities:***

 ****

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type and any other risk characteristics used to segment the portfolio. Interest receivable on held-to-maturity debt securities totaled $326,202 and $230,223 as of September 30, 2025 and December 31, 2024, respectively.

The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

Securities borrowed or purchased under agreements to resell, and securities loaned or sold under agreements to repurchase are treated as collateralized financial transactions. These agreements are recorded at the amount at which the securities were acquired or sold plus accrued interest. It is the Company's policy to take possession of securities purchased under resale agreements. The market value of these securities is monitored, and additional securities are obtained when deemed appropriate to ensure such transactions are adequately collateralized. The Company also monitors its exposure with respect to securities sold under repurchase agreements, and a request for the return of excess securities held by the counterparty is made when deemed appropriate.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 2. Securities

The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  |<br>**Amortized**<br>**cost** | **Gross**<br>**unrealized**<br>**gains** | **Gross**<br>**unrealized**<br>**losses** |<br>**Fair**<br>**Value** |
| Available-for-sale securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. Government and federal agency | $7125 | $- | $(17) | $7108 |
| &nbsp;&nbsp;&nbsp;U.S. Government-sponsored enterprises (GSEs) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GSE residential | 14122216 | 62089 | (603248) | 13581057 |
| &nbsp;&nbsp;&nbsp;State and political subdivisions | 16242394 | 744 | (275700) | 15967438 |
|  | $30371735 | $62833 | $(878965) | $29555603 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  |<br>**Amortized**<br>**cost** | **Gross**<br>**unrealized**<br>**gains** | **Gross**<br>**unrealized**<br>**losses** |<br>**Fair**<br>**value** |
| Available-for-sale securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. Government and federal agency | $15276583 | $- | $(7938) | $15268645 |
| &nbsp;&nbsp;&nbsp;U.S. Government-sponsored enterprises (GSEs) | 55792 |  | (263) | 55529 |
| &nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GSE residential | 17084785 | 7733 | (949087) | 16143431 |
| &nbsp;&nbsp;&nbsp;State and political subdivisions | 17253763 | 144 | (783896) | 16470011 |
|  | $49670923 | $7877 | $(1741184) | $47937616 |

---

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 2. Securities, Continued

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  |<br>**Amortized**<br>**cost** | **Gross**<br>**unrealized**<br>**Gains** | **Gross**<br>**unrealized**<br>**losses** |<br>**Fair**<br>**value** |
| Held-to-maturity securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. Government and federal agency | $31764106 | $- | $(346764) | $31417342 |
| &nbsp;&nbsp;&nbsp;U.S. Government-sponsored enterprises (GSEs) | 57620068 |  | (1244618) | 56375450 |
| &nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GSE residential | 38613499 | 96187 | (2327292) | 36382394 |
| &nbsp;&nbsp;&nbsp;State and political subdivisions | 3917709 | 6012 | (206787) | 3716934 |
|  | $131915382 | $102199 | $(4125461) | $127892120 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  |<br>**Amortized**<br>**cost** | **Gross**<br>**unrealized**<br>**gains** | **Gross**<br>**unrealized**<br>**losses** |<br>**Fair**<br>**value** |
| Held-to-maturity securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. Government and federal agency | $87467213 | $- | $(3027363) | $84439850 |
| &nbsp;&nbsp;&nbsp;U.S. Government-sponsored enterprises (GSEs) | 19270853 |  | (711256) | 18559597 |
| &nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GSE residential | 19030532 |  | (3166401) | 15864131 |
| &nbsp;&nbsp;&nbsp;State and political subdivisions | 2448356 | - | (269776) | 2178580 |
|  | $128216954 | $- | $(7174796) | $121042158 |

---

The Company uses a systematic methodology to determine its ACL for debt securities held-to-maturity considering the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the portfolio. The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the held-to-maturity portfolio. The Company monitors the held-to-maturity portfolio on a quarterly basis to determine whether a valuation account would need to be recorded. Based on management's review, the Company's held-to-maturity securities have no expected credit losses and no related ACL has been established as of each of September 30, 2025, and December 31, 2024.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 2. Securities, Continued

U.S. Government sponsored enterprises include entities such as the Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and Federal Home Loan Banks ("FHLB").

The amortized cost and fair value of available-for-sale securities and held-to-maturity securities on September 30, 2025, by contractual maturity, are shown below. Actual maturities may differ from contractual maturities of mortgage-backed securities because the mortgages underlying the securities may be called or repaid without penalty. Therefore, these securities are not included in the maturity categories in the following summary.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Available for sale** | **Available for sale** | **Held to maturity** | **Held to maturity** |
|  | **Amortized**<br>**Cost** | **Fair**<br>**Value** | **Amortized**<br>**Cost** | **Fair**<br>**Value** |
| Within one year | $3534355 | $3515508 | $56049962 | $55776053 |
| One to five years | 5997086 | 5938883 | 35771709 | 34289890 |
| Five to ten years | 4777605 | 4648763 | 98397 | 100256 |
| After ten years | 1940473 | 1871392 | 1381815 | 1343527 |
| Mortgage-backed securities | 14122216 | 13581057 | 38613499 | 36382394 |
| &nbsp;&nbsp;&nbsp;Totals | $30371735 | $29555603 | $131915382 | $127892120 |

---

The market value of securities pledged as collateral, to secure public deposits and for other purposes, was $111,968,069 and $151,890,672 on September 30, 2025 and December 31, 2024, respectively.

The book value of securities sold under agreements to repurchase amounted to $2,662,527 and $3,391,566 on September 30, 2025 and December 31, 2024, respectively.

There were no sales of available-for-sale securities during the nine months ended September 30, 2025 and 2024.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 2. Securities, Continued

The following tables show the Company's investments' gross unrealized losses and fair value of the Company's investments with unrealized losses aggregated by investment class and length of time that individual securities have been in a continuous unrealized loss position as of September 30, 2025 and December 31, 2024.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **Less than 12 months** | **Less than 12 months** | **12 months or more** | **12 months or more** | **Total** | **Total** |
|  | **Fair**<br>**Value** | **Unrealized**<br>**Loss** | **Fair**<br>**Value** | **Unrealized**<br>**Loss** | **Fair**<br>**Value** | **Unrealized**<br>**loss** |
| Available-for-sale Securities |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. Government and federal agency | $7108 | $(17) | $- | $- | $7108 | $(17) |
| &nbsp;&nbsp;&nbsp;U.S. Government-sponsored enterprises (GSEs) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GSE residential | 1310070 | (3682) | 7956677 | (599566) | 9266747 | (603248) |
| &nbsp;&nbsp;&nbsp;State and political subdivisions | 1945797 | (36871) | 12691894 | (238829) | 14637691 | (275700) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $3262975 | $(40570) | $20648571 | $(838395) | $23911546 | $(878965) |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Less than 12 months** | **Less than 12 months** | **12 months or more** | **12 months or more** | **Total** | **Total** |
|  | **Fair**<br>**Value** | **Unrealized**<br>**Loss** | **Fair**<br>**Value** | **Unrealized**<br>**Loss** | **Fair**<br>**Value** | **Unrealized**<br>**Loss** |
| Available-for-sale Securities |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. Government and federal agency | $15268645 | $(7938) | $- | $- | $15268645 | $(7938) |
| &nbsp;&nbsp;&nbsp;U.S. Government sponsored enterprises (GSEs) | 40442 | (175) | 15087 | (88) | 55529 | (263) |
| &nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GSE residential | 4146548 | (34750) | 9147669 | (914337) | 13294217 | (949087) |
| &nbsp;&nbsp;&nbsp;State and political subdivisions | 1400048 | (81299) | 15034961 | (702597) | 16435009 | (783896) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $20855604 | $(124162) | $24197717 | $(1617022) | $45053321 | $(1741184) |

---

As of September 30, 2025, the Company had 117 securities in an unrealized loss position. No ACL has been recognized on any securities in an unrealized loss position as management does not believe any of the securities are impaired due to reasons of credit quality. This is based upon an analysis of the underlying risk characteristics, including credit ratings, and other qualitative factors related to available-for-sale securities and in consideration of historical credit loss experience and internal forecasts. The issuers of these securities continue to make timely principal and interest payments under the contractual terms of the securities. Furthermore, the Company does not have the intent to sell any of the securities classified in the tables above, and believes that it is more likely than not that the Company will not have to sell any such securities before a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the securities approach their maturity dates or repricing dates or if market yields for such investments decline.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 3. Loans and Allowance for Credit Losses

*<u>Portfolio segmentation:</u>*

On September 30, 2025 and December 31, 2024, the Company's loans consist of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| Real estate secured: |  |  |
| &nbsp;&nbsp;&nbsp;Commercial | $1002191761 | $1006206845 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 201399253 | 199799772 |
| &nbsp;&nbsp;&nbsp;Residential | 376768740 | 369308057 |
| &nbsp;&nbsp;&nbsp;Other | 14830965 | 16815790 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate secured | 1595190719 | 1592130464 |
| &nbsp;&nbsp;&nbsp;Commercial | 154731736 | 201593312 |
| &nbsp;&nbsp;&nbsp;Consumer | 16009130 | 15213998 |
| &nbsp;&nbsp;&nbsp;Other | 7642452 | 6744117 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | 1773574037 | 1815681891 |
| Less |  |  |
| &nbsp;&nbsp;&nbsp;Net deferred loan fees, premiums and discounts | 6381097 | 8684887 |
| &nbsp;&nbsp;&nbsp;Allowance for credit losses | 17942293 | 18205421 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loans | $1749250647 | $1788791583 |

---

For purposes of disclosure, the loan portfolio was disaggregated into segments and then further disaggregated into classes for certain disclosures. A portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its ACL. There are four loan portfolio segments, including real estate secured, commercial, consumer and other loans. A class is generally determined based on the initial measurement attribute, risk characteristics of the loan, and an entity's method for monitoring and assessing credit risk. Classes within the real estate secured portfolio segment include commercial, construction and land development, residential, and other. Each of commercial, consumer and other loans is its own class.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 3. Loans and Allowance for Credit Losses, Continued

*<u>Portfolio segmentation, continued:</u>*

Risk characteristics relevant to each portfolio segment and class are as follows:

***Commercial real estate:*** Commercial real estate loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. Commercial real estate lending typically involves higher loan principal amounts, and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing the Company's commercial real estate portfolio are diverse in terms of type. This diversity helps reduce the Company's exposure to adverse economic events that affect any single market or industry. Management monitors and evaluates commercial real estate loans based on collateral, geography and risk grade criteria. The Company also utilizes third-party experts to provide insight and guidance about economic conditions and trends affecting market areas it serves. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner-occupied loans. Non-owner-occupied commercial real estate loans are loans secured by multifamily and commercial properties where the primary source of repayment is derived from rental income associated with the property (that is, loans for which 50% or more of the source of repayment comes from third party, nonaffiliated, rental income) or the proceeds of the sale, refinancing, or permanent financing of the property. These loans are made to finance income-producing properties such as apartment buildings, office and industrial buildings, and retail properties. Owner-occupied commercial real estate loans are loans where the primary source of repayment is the cash flow from the ongoing operations and business activities conducted by the party, or an affiliate of the party, who owns the property.

***Construction and land development:*** Loans for non-owner-occupied real estate construction or land development are generally repaid through cash flow related to the operation, sale or refinance of the property. The Company also finances construction loans for owner-occupied properties. A portion of the Company's construction and land development portfolio segment is comprised of loans secured by residential product types (residential land and single-family construction). With respect to construction loans to developers and builders that are secured by non-owner-occupied properties that the Company may originate from time to time, the Company generally requires the borrower to have an existing relationship with the Company and have a proven record of success. Construction and land development loans are underwritten utilizing feasibility studies, independent appraisal reviews, sensitivity analysis of absorption and lease rates, market sales activity, and financial analysis of the developers and property owners. Construction loans are generally based upon estimates of costs and value associated with the complete project. These estimates may be inaccurate. Construction loans often involve the disbursement of substantial funds with repayment substantially dependent on the success of the ultimate project. Sources of repayment for these types of loans may be pre-committed permanent loans from approved long-term lenders, sales of developed property or an interim loan commitment from the Company until permanent financing is obtained. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans due to their ultimate repayment being sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 3. Loans and Allowance for Credit Losses, Continued

*<u>Portfolio segmentation, continued:</u>*

***Residential real estate:*** Residential real estate loans represent loans to consumers or investors to finance a residence. These loans are typically financed on 15 to 30 year amortization terms, but generally with shorter maturities of 5 to 15 years. Many of these loans are extended to borrowers to finance their primary or secondary residence. Loans to an investor secured by a 1-4 family residence will be repaid from either the rental income from the property or from the sale of the property. This loan segment also includes home equity loans which are secured by a first or second mortgage on the borrower's residence. This allows customers to borrow against the equity in their homes. Loans in this portfolio segment are underwritten and approved based on a number of credit quality criteria including limits on maximum loan-to-value ("LTV"), minimum credit scores, and a maximum debt to income. Real estate market values as of the time the loan is made directly affect the amount of credit extended and, in addition, changes in these residential property values impact the depth of potential losses in this portfolio segment.

***Commercial:*** The commercial loan portfolio segment includes commercial loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases or other expansion projects. Collection risk in this portfolio segment is driven by the creditworthiness of underlying borrowers, particularly cash flow from customers' business operations. Commercial loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers.

***Consumer:*** The consumer loan portfolio segment includes non-real estate secured direct loans to consumers for household, family, and other personal expenditures. Consumer loans may be secured or unsecured and are usually structured with short- or medium-term maturities. These loans are underwritten and approved based on a number of consumer credit quality criteria, including limits on maximum LTV on secured consumer loans, minimum credit scores, and maximum debt to income. Many traditional forms of consumer installment credit have standard monthly payments and fixed repayment schedules of one to five years. These loans are made with either fixed or variable interest rates that are based on various indices. Installment loans fill a variety of needs, such as financing the purchase of an automobile, a boat, a recreational vehicle, or other large personal items, or for consolidating debt. These loans may be unsecured or secured by an assignment of title, as in an automobile loan, or by money in a bank account. In addition to consumer installment loans, this portfolio segment also includes secured and unsecured personal lines of credit as well as overdraft protection lines. Loans in this portfolio segment are sensitive to unemployment and other key consumer economic measures.

***Other:*** The other loan portfolio segment primarily consists of tax-exempt commercial loans, undisbursed loans of all types, and unpaid overdrafts on deposit accounts.

 ****

 

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 3. Loans and Allowance for Credit Losses, Continued

*<u>ACL on loans:</u>*

The ACL represents an allowance for expected losses over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications. The Company segregates the loan portfolio by type of loan and utilizes this segregation in evaluating exposure to risks within the portfolio.

The following tables detail activity in the ACL by portfolio segment for the nine month periods ended September 30, 2025 and September 30, 2024. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Nine months ended as of September 30, 2025**<br>*(Dollars are in thousands)* | **Beginning<br> balance** | **Charge offs** | **Recoveries** | **Provision** | **Ending<br> balance** |
| *Real estate secured:* |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial | $10380 | $(18) | $151 | $- | $10513 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 2240 |  | 202 |  | 2442 |
| &nbsp;&nbsp;&nbsp;Residential | 3471 | (121) | 44 |  | 3394 |
| &nbsp;&nbsp;&nbsp;Other | 1 | - | - | - | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total real estate secured** | 16092 | (139) | 397 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | 16350 |
| Commercial | 1776 | (314) | 4 |  | 1466 |
| Consumer | 338 | (237) | 25 |  | 126 |
| Other | (1) | - | 1 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** | $18205 | $(690) | $427 | $- | $17942 |

---

 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Nine months ended as of September 30, 2024**<br>*(Dollars are in thousands)* | **Beginning<br> balance** | **Charge offs** | **Recoveries** | **Provision** | **Ending<br> balance** |
| *Real estate secured:* |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial | $8243 | $(49) | $58 | $1658 | $9910 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 2019 |  |  | 88 | 2107 |
| &nbsp;&nbsp;&nbsp;Residential | 3449 | (53) | 9 |  | 3405 |
| &nbsp;&nbsp;&nbsp;Other | 56 | - | - | - | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total real estate secured** | 13767 | (102) | 67 | 1746 | 15478 |
| Commercial | 2164 | (74) | 54 |  | 2144 |
| Consumer | 439 | (144) | 27 | 63 | 385 |
| Other | 265 | - | - | 15 | 280 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** | $16635 | $(320) | $148 | $1824 | $18287 |

---

 

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 3. Loans and Allowance for Credit Losses, Continued

*<u>Credit quality indicators:</u>*

 

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes certain loans individually to classify the loans as to credit risk. This analysis includes loans with an outstanding balance greater than $250,000 and non-homogeneous loans, such as commercial real estate loans. This analysis is performed on an annual basis.

 

The Company uses the following definitions for risk ratings:

**Pass –** Loans in this category are considered to have a low likelihood of loss based on relevant information analyzed about the ability of the borrowers to service their debt and other factors.

**Special Mention –** Loans in this category are currently protected but are potentially weak, including the presence of adverse trends in the borrower's operations, credit quality or financial strength. Those loans constitute an undue and unwarranted credit risk but not to the point of justifying a substandard classification. The credit risk may be relatively minor yet constitute an unwarranted risk considering the circumstances. Special mention loans have potential weaknesses which may, if not checked or corrected, weaken the loan or inadequately protect the Company's credit position at some future date.

**Substandard –** A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

**Doubtful –** Loans classified as doubtful have all the weaknesses inherent in loans classified as substandard, plus the added characteristic that the weaknesses make the collection or liquidation in full on the basis of currently existing facts, conditions, and values highly questionable and improbable.

**Loss** – Loans classified as loss are considered uncollectable and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be affected in the future.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 3. Loans and Allowance for Credit Losses, Continued

*<u>Credit quality indicators, continued:</u>*

 

The following table presents the Company's recorded investment in loans by credit quality indicators by year of origination as of September 30, 2025:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2024** | **2023** | **2022** | **2021** |<br>**Prior** |<br>**Revolving**<br>**loans** | **Revolving**<br>**to term**<br>**loans** |<br>**Total** |
| **Real estate secured:** |  |  |  |  |  |  |  |  |  |
| **Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $42209782 | $88838288 | $130812019 | $283878936 | $192163484 | $249860409 | $12024989 | $- | $999787907 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  |  |  | 222637 | 1552967 |  |  | 1775604 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | 98496 |  |  |  |  | 529754 |  |  | 628250 |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Commercial | $42308278 | $88838288 | $130812019 | $283878936 | $192386121 | $251943130 | $12024989 | $- | $1002191761 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $17534 | $- | $- | $- | $- | $17534 |
| **Construction<br> and land development** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $18592099 | $63086889 | $55482964 | $15917253 | $9729395 | $9259561 | $29294597 | $- | $201362758 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  | 36495 |  |  | 36495 |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total construction and land development | $18592099 | $63086889 | $55482964 | $15917253 | $9729395 | $9296056 | $29294597 | $- | $201399253 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $- | $- | $- | $- | $- | $- |
| **Residential** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $26096837 | $32025808 | $37158786 | $60381719 | $42263245 | $137157994 | $36141494 | $- | $371225883 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  |  |  |  | 694599 | 143644 |  | 838243 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard |  | 536709 | 620180 | 393420 | 103108 | 3051197 |  |  | 4704614 |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total residential | $26096837 | $32562517 | $37778966 | $60775139 | $42366353 | $140903790 | $36285138 | $- | $376768740 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $- | $- | $120509 | $- | $- | $120509 |
| **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $50625 | $215141 | $2183566 | $1178676 | $- | $10951281 | $251676 | $- | $14830965 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other | $50625 | $215141 | $2183566 | $1178676 | $- | $10951281 | $251676 | $- | $14830965 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $- | $- | $- | $- | $- | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate loans | $87047839 | $184702835 | $226257515 | $361750004 | $244481869 | $413094257 | $77856400 | $- | $1595190719 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate loans – current period gross charge-offs | $- | $- | $- | $17534 | $- | $120509 | $- | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | $138043 |
| **Non-real estate secured** |  |  |  |  |  |  |  |  |  |
| **Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $7972157 | $15756971 | $39278148 | $26512076 | $5375970 | $20902191 | $38020890 | $- | $153818403 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  | 485725 |  |  | 247120 |  |  | 732845 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  | 42288 | 94508 | 43692 |  |  | 180488 |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total commercial | $7972157 | $15756971 | $39763873 | $26554364 | $5470478 | $21193003 | $38020890 | $- | $154731736 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $306153 | $8000 | $- | $- | $- | $314153 |
| **Consumer** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $9130646 | $3740325 | $1321982 | $390208 | $409912 | $393114 | $587481 | $- | $15973668 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  |  |  |  | 4908 |  |  | 4908 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard |  | 10863 | 3958 | 15458 |  | 275 |  |  | 30554 |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total consumer | $9130646 | $3751188 | $1325940 | $405666 | $409912 | $398297 | $587481 | $- | $16009130 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $1050 | $28473 | $4071 | $12467 | $- | $6336 | $185095 | $- | $237492 |
| **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $238308 | $5067837 | $1172969 | $- | $- | $135705 | $1027633 | $- | $7642452 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total others | $238308 | $5067837 | $1172969 | $- | $- | $135705 | $1027633 | $- | $7642452 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $- | $- | $- | $- | $- | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | $104388950 | $209278831 | $268520297 | $388710034 | $250362259 | $434821262 | $117492404 | $- | $1773574037 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current period gross charge-offs | $1050 | $28473 | $4071 | $336154 | $8000 | $126845 | $185095 | $- | $689688 |

---

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 3. Loans and Allowance for Credit Losses, Continued

*<u>Credit quality indicators, continued:</u>*

The following table presents the Company's recorded investment in loans by credit quality indicators by year of origination as of December 31, 2024:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2024** | **2023** | **2022** | **2021** | **2020** |<br>**Prior** |<br>**Revolving**<br>**loans** | **Revolving**<br>**to term**<br>**loans** |<br>**Total** |
| **Real estate secured:** |  |  |  |  |  |  |  |  |  |
| **Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $74062572 | $134177320 | $281634276 | $200968090 | $48180246 | $251402010 | $11687742 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $1002112256 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  | 217387 | 2554211 | 255730 | 578113 |  |  | 3605441 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  | 131353 |  | 45110 | 312685 |  |  | 489148 |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Commercial | $74062572 | $134177320 | $281983016 | $203522301 | $48481086 | $252292808 | $11687742 | $- | $1006206845 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $- | $- | $48560 | $- | $- | $48560 |
| **Construction<br> and land development** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $49718279 | $57789669 | $22765767 | $16986717 | $11053291 | $5665441 | $35118777 | $- | $199097941 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  |  |  | 407846 | 293985 |  |  | 701831 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total construction and land development | $49718279 | $57789669 | $22765767 | $16986717 | $11461137 | $5959426 | $35118777 | $- | $199799772 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $- | $- | $- | $- | $- | $- |
| **Residential** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $26437836 | $36617917 | $64512640 | $44308505 | $40298138 | $112643931 | $39132829 | $- | $363951796 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  |  |  |  | 720903 | 144380 |  | 865283 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | 491732 | 74062 | 515481 |  | 54639 | 3355064 |  |  | 4490978 |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total residential | $26929568 | $36691979 | $65028121 | $44308505 | $40352777 | $116719898 | $39277209 | $- | $369308057 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $4143 | $- | $48361 | $- | $- | $52504 |
| **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $222509 | $2295430 | $1603658 | $239878 | $299467 | $10861737 | $1293111 | $- | $16815790 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other | $222509 | $2295430 | $1603658 | $239878 | $299467 | $10861737 | $1293111 | $- | $16815790 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $- | $- | $- | $- | $- | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate loans | $150932928 | $230954398 | $371380562 | $265057401 | $100594467 | $385833869 | $87376839 | $- | $1592130464 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate loans –current period gross charge-offs | $- | $- | $- | $4143 | $- | $96921 | $- | $- | $101064 |
| **Non-real estate secured Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $28531060 | $53548762 | $29932635 | $12926112 | $15174653 | $12004986 | $48857733 | $- | $200975951 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  | 543282 |  |  |  |  |  |  | 543282 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard |  | 21458 |  | 36405 |  | 16216 |  |  | 74079 |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total commercial | $28531060 | $54113502 | $29932635 | $12962527 | $15174653 | $12021202 | $48857733 | $- | $201593312 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $73978 | $173 | $102504 | $- | $- | $176655 |
| **Consumer** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $9345126 | $2771310 | $1066679 | $633186 | $387000 | $351779 | $603554 | $- | $15158614 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  |  |  | 7810 |  |  |  | 7810 |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard | 642 | 17420 | 22641 |  |  | 6871 |  |  | 47574 |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total consumer | $9345768 | $2788730 | $1089320 | $633186 | $394810 | $358650 | $603554 | $- | $15213998 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $54554 | $16651 | $25950 | $363 | $53298 | $- | $- | $- | $150816 |
| **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $5036024 | $1292956 | $- | $- | $- | $165595 | $249542 | $- | $6744117 |
| &nbsp;&nbsp;&nbsp;&nbsp;Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Doubtful | - | - | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total others | $5036024 | $1292956 | $- | $- | $- | $165595 | $249542 | $- | $6744117 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current period gross charge-offs | $- | $- | $- | $- | $- | $- | $- | $- | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | $193845779 | $289149586 | $402402517 | $278653114 | $116163930 | $398379316 | $137087648 | $- | $1815681890 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current period gross charge-offs | $54554 | $16651 | $25950 | $78484 | $53471 | $199425 | $- | $- | $428535 |

---

There were no loans classified in the Loss category as of September 30, 2025 or December 31, 2024. There were no revolving loans converted to term as of September 30, 2025 or December 31, 2024.

 

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 3. Loans and Allowance for Credit Losses, Continued

*<u>Nonaccrual and past due loans:</u>*

 

A loan is placed on nonaccrual status when, in management's judgment, the collection of the interest income appears doubtful. Interest receivable that has been accrued and is subsequently determined to have doubtful collectability is charged to interest income. Interest on loans that are classified as nonaccrual is subsequently applied to principal until the loans are returned to accrual status. The Company's loan policy states that a nonaccrual loan may be returned to accrual status when (i) none of its principal and interest is due and unpaid, and the Company expects repayment of the remaining contractual principal and interest, or (ii) it otherwise becomes well secured and in the process of collection. Restoration to accrual status on any given loan must be supported by a well-documented credit evaluation of the borrower's financial condition and the prospects for full repayment. Past due loans are accruing loans whose principal or interest is past due 30 days or more.

The following table is a summary of the Company's nonaccrual loans by major categories as of the dates indicated:

 

---

| | | | |
|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **Nonaccrual**<br>**loans with**<br>**no allowance** | **Nonaccrual**<br>**loans with**<br>**an allowance** | **Total**<br>**nonaccrual**<br>**loans** |
| Real estate secured: |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial | $- | $529754 | $529754 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 36495 |  | 36495 |
| &nbsp;&nbsp;&nbsp;Residential | 4322416 | 292514 | 4614930 |
| &nbsp;&nbsp;&nbsp;Other | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate secured loans | 4358911 | 822268 | 5181179 |
| Commercial | 180489 |  | 180489 |
| Consumer | 28166 |  | 28166 |
| Other | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | $4567566 | $822268 | $5389834 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Nonaccrual**<br>**loans with**<br>**no allowance** | **Nonaccrual**<br>**loans with**<br>**an allowance** | **Total**<br>**nonaccrual**<br>**loans** |
| Real estate secured: |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial | $444038 | $- | $444038 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 6094 |  | 6094 |
| &nbsp;&nbsp;&nbsp;Residential | 4185489 | 305489 | 4490978 |
| &nbsp;&nbsp;&nbsp;Other | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate secured loans | 4635621 | 305489 | 4941110 |
| Commercial | 74078 |  | 74078 |
| Consumer | 43824 |  | 43824 |
| Other | - | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | $4753523 | $305489 | $5059012 |

---

 

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 3. Loans and Allowance for Credit Losses, Continued

*<u>Nonaccrual and past due loans, continued:</u>*

 

There was no interest income recognized on nonaccrual loans for the nine months ended September 30, 2025 or 2024.

 

*<u>Aging analysis:</u>*

 

The following table presents an aging analysis of past due loans by category as of period indicated:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **As of September 30, 25** | **Loans <br> 30-59<br> days past<br> due** | **Loans<br> 60-89<br> days past<br> due** | **Accruing<br> loans 90<br> or more<br> days past<br> due** | **Nonaccrual<br> loans** | **Total<br> noncurrent<br> loans** | **Current <br> loans** | **Total <br> loans** |
| Real estate secured: Commercial | $450100 | $- | $- | $529754 | $979854 | $1001211907 | $1002191761 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 662143 |  |  | 36495 | 698638 | 200700615 | 201399253 |
| &nbsp;&nbsp;&nbsp;Residential | 1317238 | 1744431 |  | 4614930 | 7676599 | 369092141 | 376768740 |
| &nbsp;&nbsp;&nbsp;Other | - | - | - | - | - | 14830965 | 14830965 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate secured | 2429481 | 1744431 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - | 5181179 | 9355091 | 1585835628 | 1595190719 |
| Commercial | 4530 | 98054 |  | 180489 | 283073 | 154448663 | 154731736 |
| Consumer | 116790 | 7434 |  | 28166 | 152390 | 15856740 | 16009130 |
| Other | - | - | - | - | - | 7642452 | 7642452 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | $2550801 | $1849919 | $- | $5389834 | $9790554 | $1763783483 | $1773574037 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **As of December 31, 2024** | **Loans<br> 30-59<br> days past<br> due** | **Loans<br> 60-89<br> days past<br> due** | **Accruing<br> loans 90<br> or more<br> days past<br> due** | **Nonaccrual<br> loans** | **Total<br> noncurrent<br> loans** | **Current<br> loans** | **Total<br> loans** |
| Real estate secured: Commercial | $426560 | $- | $- | $444038 | $870598 | $1005336247 | $1006206845 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 211228 | 27149 |  | 6094 | 244471 | 199555301 | 199799772 |
| &nbsp;&nbsp;&nbsp;Residential | 5346415 | 658875 |  | 4490978 | 10496268 | 358811789 | 369308057 |
| &nbsp;&nbsp;&nbsp;Other | - | - | - | - | - | 16815790 | 16815790 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate secured | 5984203 | 686024 |  | 4941110 | 11611337 | 1580519127 | 1592130464 |
| Commercial | 111514 | 306153 |  | 74078 | 491746 | 201101566 | 201593312 |
| Consumer | 114427 | 3118 | 2202 | 43824 | 163570 | 15050427 | 15213998 |
| Other | - | - | - | - | - | 6744117 | 6744117 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | $6210144 | $995295 | $2202 | $5059012 | $12266653 | $1803415238 | $1815681891 |

---

 

 

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 3. Loans and Allowance for Credit Losses, Continued

*<u>Collateral-dependent loans:</u>*

 

Collateral-dependent loans are loans where repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty. If the Company determines that foreclosure is probable, these loans are written down to the lower of cost or collateral value less estimated costs to sell. When repayment is expected to be from the operation of the collateral, the ACL is calculated as the amount by which the amortized cost basis of the financial asset exceeds the present value of expected cash flows from the operation of the collateral. The Company may, in the alternative, measure the ACL as the amount by which the amortized cost basis of the financial asset exceeded the estimated fair value of the collateral. The following table provides a summary of collateral-dependent loans by collateral type as of September 30, 2025 and December 31, 2024.

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| **Collateral type** |  |  |
| Single Family Residence | $1970922 | $1721316 |
| Commercial Real Estate | 529754 | 255730 |
| Land | - | 293985 |
|  | $2500676 | $2271031 |

---

The carrying amount of purchased credit deteriorated loans on September 30, 2025 and December 31, 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| Real estate secured: |  |  |
| &nbsp;&nbsp;&nbsp;Commercial | $3968511 | $5038501 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 2326493 | 2383036 |
| &nbsp;&nbsp;&nbsp;Residential | 1692865 | 1768090 |
| &nbsp;&nbsp;&nbsp;Other | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate secured | 7987869 | 9189627 |
| Commercial | 4343776 | 5206784 |
| Consumer | 4908 | 7810 |
| Other | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | $12336553 | $14404221 |

---

 

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 3. Loans and Allowance for Credit Losses, Continued

*<u>Modifications to borrowers experiencing financial difficulty:</u>*

The Company periodically provides modifications to borrowers experiencing financial difficulty. These modifications include either payment deferrals, term extensions, interest rate reductions, principal forgiveness or combinations of modification types. The determination of whether the borrower is experiencing financial difficulty is made on the date of the modification. When principal forgiveness is provided, the amount of principal forgiveness is charged off against the ACL with a corresponding reduction in the amortized cost basis of the loan. A modified loan is tracked for at least 12 months following the modifications granted.

On September 30, 2025 and December 31, 2024, loans modified to borrowers experiencing financial difficulty during the year were immaterial. The Company had no unfunded commitments to borrowers experiencing financial difficulty for which the Company has modified their loans on September 30, 2025 or December 31, 2024.

 

*<u>Unfunded commitments:</u>*

The Company maintains an allowance for off-balance sheet credit exposures such as unfunded balances for existing lines of credit, commitments to extend future credit, and both standby and commercial letters of credit when there is a contractual obligation to extend credit and when this extension of credit is not unconditionally cancellable (i.e., commitment cannot be cancelled at any time). The allowance for off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over their estimated life, which are the same loss rates that are used in computing the ACL on loans. The ACL for unfunded loan commitments of $70,000 at both September 30, 2025 and December 31, 2024, is separately classified on the consolidated balance sheet within other liabilities.

Note 4. Premises and Equipment

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| Land and land improvements | $17199368 | $17350753 |
| Buildings and improvements | 48220458 | 47159512 |
| Furniture, fixtures and equipment | 13550016 | 13557620 |
| Construction in progress | 389757 | 459288 |
|  | 79359599 | 78527173 |
| Less: Accumulated depreciation | (29091575) | (28238795) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $50268024 | $50288378 |

---

Depreciation expense, included in depreciation and amortization on the consolidated statements of income, for the nine months ended September 30, 2025, and 2024 amounted to $1,519,018 and $1,621,255, respectively.

Construction in progress includes capital expenditures for branch renovations and construction of a new branch. Branch renovations are substantially complete and estimated costs to complete are insignificant. Estimated costs to complete the new branch cannot be reasonably estimated as construction has not been started as information necessary for construction bids has not been completed.

 

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 5. Other Intangible Assets

*<u>Goodwill</u>:*

 

FASB ASC No. 2021-03, *"Goodwill and Other (Topic 350),"* regarding testing goodwill for impairment, provides an entity the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company performs its annual goodwill impairment test as of December 31 of each year. As of the latest impairment analysis at December 31, 2024, management determined there was no goodwill impairment. The carrying amount of goodwill on September 30, 2025 and December 31, 2024 was approximately $8,511,000 and $8,514,000, respectively.

*<u>Core Deposit Intangibles (CDI):</u>*

The carrying basis and accumulated amortization of CDIs on September 30, 2025 and December 31, 2024 were:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| Gross balance | $13061936 | $13061936 |
| Accumulated amortization | (8423706) | (7236968) |
| Carrying amount | $4638230 | $5824968 |

---

The change in CDIs during the nine months ended September 30, 2025 and the year ended December 31, 2024 is as follows:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| Beginning of year | $5824968 | $7632399 |
| Amortization | (1186738) | (1807431) |
| End of year | $4638230 | $5824968 |

---

As of September 30, 2025, the estimated amortization expense of CDI for future periods is as follows:

 

---

| | |
|:---|:---|
| Remainder of 2025 | $386494 |
| 2026 | 1412133 |
| 2027 | 963171 |
| 2028 | 784729 |
| 2029 | 435744 |
| Thereafter | 655959 |
| Total | $4638230 |

---

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 6. Short-Term Borrowings

Short-term borrowings included the following on September 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| Securities sold under repurchase agreements | $2662527 | $3391566 |
| FHLB cash management advance | 35000000 |  |
| Federal funds purchased | 25000000 | - |
| &nbsp;&nbsp;&nbsp;Total short-term borrowings | $62662527 | $3391566 |

---

As of September 30, 2025, the Company had federal funds purchased totaling $25,000,000. These borrowings had a weighted average interest rate of 4.43% and a maturity of 14 days.

As of September 30, 2025, the Company had a short-term FHLB cash management advance totaling $35,000,000. This borrowing had an interest rate of 4.26% and matures on December 29, 2025.

Securities sold under agreements to repurchase consist of obligations of the Company to other parties. The obligations are typically secured by investment securities with fair values exceeding the total balance of the agreement and such collateral is held by the Company. The weighted average rate on these arrangements as of September 30, 2025 and December 31, 2024 was 2.45% and 3.27%, respectively. The maximum amount of outstanding agreements at any month end during the nine months ended September 30, 2025 and the fiscal year ended December 31, 2024 totaled $6,632,284 and $6,046,056, respectively, and the monthly average of such agreements totaled $5,182,756 and $4,519,370 for September 30, 2025 and December 31, 2024, respectively, with an average rate paid of 2.76% and 3.53%, for the nine months ended September 30, 2025 and for the fiscal year ended December 31, 2024, respectively.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 7. Long-Term Debt

FHLB advances and notes payable consisted of the following components as of the dates indicated:

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br>**2025** | **December 31,**<br>**2024** |
| FHLB advances, principal and interest payments of at fixed interest rates from 0.69% to 5.33% | $61628245 | $65580576 |
| Notes payable to Community Trust, principal and interest payments of $667,000 due quarterly beginning January 27, 2020, at the prime rate, with the balance due January 30, 2035, secured by Commercial Bank stock | 20256416 | 21451660 |
| Trust Preferred Securities, interest payments due quarterly at SOFR plus 2.4% | 5559493 | 5507284 |
| PBD Promissory Note, payments due quarterly at 3.75%, maturing September 2026 | 12653189 | 13233122 |
| &nbsp;&nbsp;&nbsp;Total | $100097343 | $105772642 |

---

 

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 7. Long-Term Debt, Continued

The FHLB advances were secured by mortgage loans totaling $642,663,000 on September 30, 2025. The advances, requiring monthly principal and interest payments at fixed interest rates from 0.69% to 5.33%, are subject to restrictions or penalties in the event of prepayment. These advances mature at various dates between 2025 and 2041.

On January 27, 2020, the Company executed a Loan Agreement with Community Trust Bank, Inc., Pikeville, Kentucky (the "Community Trust Loan Agreement" and the loan thereunder, the "CTB Loan"), to refinance then existing holding company debt. This loan was for $28,500,000 and is repayable in quarterly principal and interest payments based on a 15-year amortization and interest of the Prime Rate, daily adjustable.

The CTB Loan requires the Company and the Bank to meet certain covenants on an annual basis. The Company and the Bank were in compliance with all the covenants for the nine months ended September 30, 2025.

With the acquisition of Citizens Bancorp, Inc. ("Citizens Bancorp") and its bank subsidiary, Citizens Bank, on January 2, 2018, the Company assumed Citizens Bank Capital Trust (the "Trust"). The Trust was formed during 2004 as a statutory trust formed under the laws of the State of Delaware and is wholly owned by the Company. In September 2004, the Trust issued variable rate preferred securities (the "Trust Preferred Securities") with an aggregate liquidation amount of $6,000,000 ($1,000 per Trust Preferred Security) to a third-party investor. Citizens Bancorp then issued variable rate junior debentures aggregating $6,186,000 to the Trust (the "Subordinated Debentures"). The Subordinated Debentures are the sole assets of the Trust. The Subordinated Debentures and the Trust Preferred Securities pay interest and dividends, respectively, on a quarterly basis, at a variable interest rate equal to the three-month SOFR plus 2.40% adjusted quarterly which was 6.75% and 6.89% on September 30, 2025 and December 31, 2024, respectively. These Subordinated Debentures will mature in 2034, at which time the Trust Preferred Securities are to be redeemed. The Subordinated Debentures and Trust Preferred Securities can be redeemed prior to maturity, in whole or in part, beginning October 7, 2009, at a redemption price of $1,000 per preferred security. The Company (as successor to Citizens Bancorp) has provided a full, irrevocable, and unconditional guarantee on a subordinated basis of the obligations of the Trust under the Trust Preferred Securities in the event of the occurrence of an event of default, as fined in such guarantee. The trust agreement contains provisions that enable the Company to defer making interest payments for a period of up to five years. However, the Company would be restricted from paying dividends on or redeeming its common stock during any deferral.

The face amount of the Subordinated Debentures was $6,186,000 on both September 30, 2025 and December 31, 2024. Unamortized discount was $626,507 and $678,716 on September 30, 2025 and December 31, 2024, respectively.

Aggregate annual maturities of long-term debt on September 30, 2025, are:

---

| | |
|:---|:---|
|  | **Debt** |
| Remainder of 2025 | $11728026 |
| 2026 | 24377433 |
| 2027 | 10595051 |
| 2028 | 9201560 |
| 2029 | 8061728 |
| Thereafter | 36133545 |
|  | $100097343 |

---

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 8. Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, banks must meet specific capital guidelines that involve quantitative measures of a bank's assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require banks to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined in the regulations) and of Tier I capital to average assets (as defined in the regulations). Management believes as of September 30, 2025 and December 31, 2024, the Bank met all capital adequacy requirements to which is subject. In addition to these requirements, the Bank is subject to an institution specific capital conservation buffer, which must exceed 2.50%, to avoid limitations on distributions and discretionary bonus payments.

As of September 30, 2025, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the Bank's capitalization.

The Bank's actual capital amounts and ratios as of September 30, 2025 and December 31, 2024 are presented in the tables below (dollars in thousands).

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | **Minimum** | **Minimum** |
|  | | | | | **to be well** | **to be well** |
|  | | | **Minimum** | **Minimum** | **capitalized under** | **capitalized under** |
|  | | | **for capital** | **for capital** | **prompt corrective** | **prompt corrective** |
|  | **Actual** | **Actual** | **adequacy purposes** | **adequacy purposes** | **action provisions** | **action provisions** |
|  | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** |
| As of September 30, 2025: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Total capital (to risk-weighted assets) | $275898 | 15.2% | $145629 | 8.0% | $182037 | 10.0% |
| &nbsp;&nbsp;&nbsp;Tier I capital (to risk-weighted assets) | $257886 | 14.2% | $109222 | 6.0% | $145629 | 8.0% |
| &nbsp;&nbsp;&nbsp;Common equity Tier 1 capital (to risk-weighted assets) | $257886 | 14.2% | $81917 | 4.5% | $118324 | 6.5% |
| &nbsp;&nbsp;&nbsp;Tier 1 capital (to average assets) | $257886 | 12.0% | $85742 | 4.0% | $107177 | 5.0% |

---

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 8. Regulatory Matters, Continued

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | | | | **Minimum** | **Minimum** |
|  | | | | | **to be well** | **to be well** |
|  | | | **Minimum** | **Minimum** | **capitalized under** | **capitalized under** |
|  | | | **for capital** | **for capital** | **prompt corrective** | **prompt corrective** |
|  | **Actual** | **Actual** | **adequacy purposes** | **adequacy purposes** | **action provisions** | **action provisions** |
|  | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** |
| As of December 31, 2024: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Total capital (to risk-weighted assets) | $253949 | 13.5% | $150920 | 8.0% | $188650 | 10.0% |
| &nbsp;&nbsp;&nbsp;Tier I capital (to risk-weighted assets) | $235674 | 12.5% | $113190 | 6.0% | $150920 | 8.0% |
| &nbsp;&nbsp;&nbsp;Common equity Tier 1 capital (to risk-weighted assets) | $235674 | 12.5% | $84892 | 4.5% | $122622 | 6.5% |
| &nbsp;&nbsp;&nbsp;Tier 1 capital (to average assets) | $235674 | 10.6% | $89209 | 4.0% | $111511 | 5.0% |

---

---

| | |
|:---|:---|
| Note 9. | **Restricted Stock Units ("RSUs")** |

---

The Company may grant RSUs to directors, employees and executives under its 2025 Omnibus Incentive Plan. RSUs represent the right to receive shares of the Company's common stock upon satisfaction of vesting conditions, which are generally based on continued service over a three-year period. RSUs do not carry voting rights or dividend entitlements until vested and settled in shares of common stock.

The fair value of RSUs is determined based on the market price of the Company's common stock on the grant date. Compensation expense related to RSUs is recognized on a straight-line basis over the requisite service period, adjusted for estimated forfeitures. The Company accounts for forfeitures as they occur.

On September 28, 2025, the Company granted 42,500 RSUs with a weighted-average grant date fair value of $24.00 per share. As of September 30, 2025, there was $1.02 million of unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted-average period of 3 years. For the quarter ended September 30, 2025, management determined compensation expense was immaterial.

Upon RSUs vesting, the Company may withhold shares to satisfy employee tax obligations. These shares are recorded as treasury stock at the fair market value on the vesting date.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 10. Disclosures About Fair Value of Assets and Liabilities

ASC 820, *Fair Value Measurements,* defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities.

---

| | |
|:---|:---|
| Level 2: | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |

---

---

| | |
|:---|:---|
| Level 3**:** | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |

---

Following is a description of the valuation methodologies and inputs used for assets and liabilities measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy.

 

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

**Note 10. Disclosures About Fair Value of Assets and Liabilities, Continued**

*<u>Available-for-sale securities:</u>*

 

Where quoted market prices are available in an active market, securities are classified within Level l of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include all of the Company's available-for-sale securities, consisting of U.S. Treasury, government agencies, municipals and mortgage-backed securities. Inputs used to estimate the fair value of Level 2 securities when pricing models are used include the security's call date, maturity date, interest rate and current market interest rates. In certain cases where Level 1 and Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

*<u>Interest rate swap agreements:</u>*

 

The fair value of interest rate swap agreements is estimated using inputs including the remaining term of the agreement and current market interest rates, that are observable or that can be corroborated by observable marked data and, therefore, are classified within Level 2 of the valuation hierarchy.

The following tables present the fair value measurements of assets and liabilities recognized in the accompanying consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fell on September 30, 2025 and December 31, 2024:

 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  |<br><br>**Fair**<br>**value** | **Quoted prices**<br>**in active**<br>**markets for**<br>**identical assets**<br>**(Level 1)** | **Significant**<br>**other**<br>**observable**<br>**inputs**<br>**(Level 2)** |<br>**Significant**<br>**unobservable**<br>**inputs**<br>**(Level 3)** |
| Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. Government and federal agency | $7108 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $7108 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; - |
| &nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GSE residential | 13581057 |  | 13581057 |  |
| &nbsp;&nbsp;&nbsp;State and political subdivision securities | 15967438 |  | 15967438 |  |
| &nbsp;&nbsp;&nbsp;Interest rate swaps | 14328164 |  | 14328164 |  |
| Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest rate swaps | 14328164 |  | 14328164 |  |

---

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 10. Disclosures About Fair Value of Assets and Liabilities, Continued

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  |<br><br>**Fair**<br>**value** | **Quoted prices**<br>**in active**<br>**markets for**<br>**identical assets**<br>**(Level 1)** | **Significant**<br>**other**<br>**observable**<br>**inputs**<br>**(Level 2)** |<br>**Significant**<br>**unobservable**<br>**inputs**<br>**(Level 3)** |
| Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. Government and federal agency | $15268645 | $&nbsp;&nbsp;&nbsp;&nbsp; - | $15268645 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |
| &nbsp;&nbsp;&nbsp;U.S. Government-sponsored enterprises (GSEs) | 55929 |  | 55929 |  |
| &nbsp;&nbsp;&nbsp;Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GSE residential | 16143431 |  | 16143431 |  |
| &nbsp;&nbsp;&nbsp;State and political subdivision securities | 16470010 |  | 16470010 |  |
| &nbsp;&nbsp;&nbsp;Interest rate swaps | 22178477 |  | 22178477 |  |
| Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest rate swaps | 22178477 |  | 22178477 |  |

---

The Company has no assets or liabilities whose fair values are measured using Level 3 inputs on a recurring basis.

Following is a description of the valuation methodologies and inputs used for assets and liabilities measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets and liabilities pursuant to the valuation hierarchy.

*<u>Collateral-dependent and individually evaluated:</u>*

 

The fair value of collateral-dependent loans was primarily measured based on the value of the collateral securing these loans and classified within Level 3 of the fair value hierarchy. Collateral may be real estate and/or business assets, including equipment, inventory, and/or accounts receivable. The Company determines the value of the collateral based on independent appraisals performed by qualified licensed appraisers. These appraisals may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Appraised values are discounted for costs to sell and may be discounted further based on management's historical knowledge, changes in market conditions from the date of the most recent appraisal, and/or management's expertise and knowledge of the customer and the customer's business. Such discounts by management are subjective and are typically significant unobservable inputs for determining fair value. These loans are reviewed and evaluated on at least a quarterly basis for additional impairment and adjusted accordingly, based on the same factors discussed above.

 

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 10. Disclosures About Fair Value of Assets and Liabilities, Continued

*<u>Foreclosed assets held for sale:</u>*

 

The fair value of foreclosed assets held for sale is estimated using the fair value method of measuring the amount of impairment. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. The fair value method is classified within Level 3 of the fair value hierarchy.

The following tables present the fair value measurement of assets and liabilities measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fell on September 30, 2025 and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** |
|  | **Fair value** | **(Level 1)** | **(Level 2)** | **(Level 3)** |
| Foreclosed assets held for sale | $- | $- | $- | $- |
| Collateral-dependent loans | $483000 | $- | $- | $483000 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** |
|  | **Fair value** | **(Level 1)** | **(Level 2)** | **(Level 3)** |
| Foreclosed assets held for sale | $73020 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp; - | $73020 |
| Collateral-dependent loans | $230000 | $- | $- | $230000 |

---

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 10. Disclosures About Fair Value of Assets and Liabilities, Continued

The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis and for which we have utilized Level 3 inputs to determine fair value on September 30, 2025 and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **Fair**<br>**value** | **Valuation**<br>**techniques<sup>(1)</sup>** | **Significant**<br>**unobservable inputs** | **Weighted**<br>**average** |
| Foreclosed assets held for sale | $- | Appraisal | Estimated costs to sell |  |
| Collateral-dependent loans | $483000 | Appraisal | Estimated costs to sell | 8% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Fair**<br>**value** | **Valuation**<br>**techniques<sup>(1)</sup>** | **Significant**<br>**unobservable inputs** | **Weighted**<br>**average** |
| Foreclosed assets held for sale | $73020 | Appraisal | Estimated costs to sell | 25% |
| Collateral-dependent loans | $230000 | Appraisal | Estimated costs to sell | 8% |

---

(1) The fair value is generally determined through independent appraisals of the underlying collateral, which may include Level 3 inputs that are not identifiable, or by using the discounted cash flow method if the loan is not collateral-dependent.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 10. Disclosures About Fair Value of Assets and Liabilities, Continued

*<u>Fair values of financial instruments:</u>*

The carrying amounts and estimated fair values of financial instruments not carried at fair value, on September 30, 2025 and December 31, 2024, are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | | **Fair value measurements** | **Fair value measurements** | **Fair value measurements** | **Fair value measurements** |
|  | **Carrying**<br>**amount** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Financial assets |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $154786944 | $154786944 | $- | $- | $154786944 |
| &nbsp;&nbsp;&nbsp;Held-to-maturity securities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. Government and federal agency | 31764106 |  | 31417342 |  | 31417342 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. Government- sponsored enterprises (GSEs) | 57620068 |  | 56375450 |  | 56375450 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed: GSE residential | 38613499 |  | 36382394 |  | 36382394 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State and political subdivisions | 3917710 | - | 3716934 | - | 3716934 |
|  | 131915382 |  | 127982120 |  | 127982120 |
| &nbsp;&nbsp;&nbsp;Loans Receivable | 1749250647 |  |  | 1712338792 | 1712338792 |
| Financial Liabilities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time Deposits | 469673638 |  | 467065165 |  | 467065165 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-Term borrowings | 100097343 |  | 105596778 |  | 105596778 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-Term borrowings | 62662527 | 62662527 |  |  | 62662527 |

---

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 10. Disclosures About Fair Value of Assets and Liabilities, Continued

*<u>Fair values of financial instruments, continued:</u>*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | | **Fair value measurements** | **Fair value measurements** | **Fair value measurements** | **Fair value measurements** |
|  | **Carrying**<br>**amount** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Financial assets |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $178197916 | $178197916 | $- | $- | $178197916 |
| &nbsp;&nbsp;&nbsp;Held-to-maturity securities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. Government and federal agency | 87467213 |  | 84439850 |  | 84439850 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;U.S. Government- sponsored enterprises (GSEs) | 19270853 |  | 18559597 |  | 18559597 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed: GSE residential | 19030532 |  | 15864131 |  | 15864131 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State and political subdivisions | 2448356 | - | 2178581 | - | 2178581 |
|  | 128216954 |  | 121042159 |  | 121042159 |
| &nbsp;&nbsp;&nbsp;Loans Receivable | 1788791583 |  |  | 1742200000 | 1742200000 |
| Financial Liabilities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time Deposits | 576501235 |  | 574604000 |  | 574604000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-Term borrowings | 105772642 |  | 109165065 |  | 109165065 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-Term borrowings | 3391566 | 3391566 |  |  | 3391566 |

---

Note 11. Significant Estimates and Concentrations

The Company originates primarily real estate, commercial, and consumer loans to customers primarily in Claiborne County, Tennessee and surrounding counties. The ability of the majority of the Company's customers to honor their contractual loan obligations is dependent on the economy in the local area.

On September 30, 2025 and December 31, 2024, 90% and 88%, respectively, of the Company's loan portfolio is concentrated in loans secured by real estate, of which a substantial portion is secured by real estate in the Company's primary market area. Accordingly, the ultimate collectability of the loan portfolio and recovery of the carrying amount of foreclosed assets is susceptible to changes in real estate conditions in the Company's primary market area. The other concentrations of credit by type of loan are set forth in Note 3.

*<u>Current economic conditions:</u>*

Management is confident that current underwriting standards have achieved sufficient loan-to-value and operating margins to meet potential changes in the economic environments in the markets we serve.

The accompanying financial statements have been prepared using values and information currently available to the Company.

Given the volatility of current economic conditions, the values of assets and liabilities recorded in the financial statements could change rapidly, resulting in material future adjustments in asset values, the ACL and capital that could negatively impact the Company's ability to meet regulatory capital requirements and maintain sufficient liquidity.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

---

| | |
|:---|:---|
| **Note 12.** | **Commitments and Contingencies** |

---

*<u>Standby letters of credit:</u>*

Standby letters of credit are irrevocable conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Financial standby letters of credit are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. Performance standby letters of credit are issued to guarantee performance of certain customers under nonfinancial contractual obligations. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loans to customers. Should the Company be obligated to perform under the standby letters of credit, the Company may seek recourse from the customer for reimbursement of amounts paid.

The Company had total outstanding standby letters of credit amounting to approximately $23,349,000 and $45,505,000 on September 30, 2025 and December 31, 2024, respectively, with terms ranging from 30 days to five years. On September 30, 2025 and December 31, 2024, the Company's deferred revenue under standby letter of credit agreements was $0.

*<u>Lines of credit:</u>*

Lines of credit are agreements to lend to a customer as long as there is no violation of any conditions established in the contract. Lines of credit generally have fixed expiration dates. Because a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management's credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on-balance-sheet instruments.

On September 30, 2025, the Company had granted unused lines of credit to borrowers aggregating approximately $280,792,000 for commercial lines and open-end consumer lines. On December 31, 2024, unused lines of credit to borrowers aggregated approximately $354,509,000 for commercial lines and open-end consumer lines.

*<u>Contingencies:</u>*

From time to time, the Company is party to litigation and other legal matters incidental to the conduct of its business. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. The Company accrues liabilities for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. As of September 30, 2025, the Company was not involved in any such matters, individually or in the aggregate, which management believes would have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 13. Derivatives Not Designated as Hedges

The Company enters into interest rate swaps with certain loan customers. The Company then enters into corresponding offsetting derivatives with third parties, which results in offsetting revenues and expenses within interest income. While these derivatives represent economic hedges, they do not qualify as hedges for accounting purposes.

The Company presents derivative positions gross on its consolidated balance sheets. The derivatives recorded on the consolidated balance sheets as of September 30, 2025 and December 31, 2024, were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** |
|  | **Notional**<br>**amount** | **Fair**<br>**value** | **Notional**<br>**amount** | **Fair**<br>**value** |
| Included in other assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest rate swaps related to customer loans | $281143360 | $14328164 | $262864970 | $22178477 |
| Included in other liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest rate swaps related to customer loans | $281143360 | $14328164 | $262864970 | $22178477 |

---

Note 14. Dividend Restrictions

The Company's principal source of funds for dividend payments is dividends received from the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. As of September 30, 2025, approximately $51,241,000 of retained earnings is available to pay dividends.

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 15. Earnings Per Share

The factors used in the earnings per share computation follow:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Basic** |  |  |  |  |
| Net income | $9466149 | $9207213 | $27057347 | $26075325 |
| &nbsp;&nbsp;&nbsp;Weighted average common shares outstanding | 12239644 | 12208881 | 12205817 | 12210006 |
| &nbsp;&nbsp;&nbsp;Basic earnings per share | $0.77 | $0.75 | $2.22 | $2.14 |
| **Diluted** |  |  |  |  |
| Net income | $9466149 | $9207213 | $27057347 | $26075325 |
| &nbsp;&nbsp;&nbsp;Weighted average common shares Outstanding for basic EPS | 12239644 | 12208881 | 12205817 | 12210006 |
| &nbsp;&nbsp;&nbsp;Add: Dilutive effects of assumed exercise of stock grants | 924 | 179688 | 311 | 179688 |
| &nbsp;&nbsp;&nbsp;Average dilutive common shares | 12240568 | 12388569 | 12206128 | 12389694 |
| &nbsp;&nbsp;&nbsp;Diluted earnings per common share | $0.77 | $0.74 | $2.22 | $2.10 |

---

Dilutive common shares represent shares that had been awarded but had not been issued to the recipien

**Commercial Bancgroup, Inc.**

***Notes to Unaudited Consolidated Financial Statements (Unaudited)***

Note 16. Subsequent Events

*<u>Initial Public Offering:</u>*

On October 3, 2025, the Company completed its initial public offering ("IPO") of 7,173,092 shares of its common stock, 1,458,334 of which were sold by the Company and 5,714,758 of which were sold by certain selling shareholders, at a price to the public of $24.00 per share. The Company received from the IPO net proceeds after deducting underwriting discounts and commissions and estimated offering expenses of approximately $30.6 million.

Our common stock began trading on the Nasdaq Capital Market under the ticker symbol "CBK" on October 2, 2025.

The Company intends to use the net proceeds from the IPO to repay the CTB Loan and redeem the Company's outstanding Subordinated Debentures and related Trust Preferred Securities, and to use the remaining proceeds, if any, for general corporate purposes.

The IPO occurred after the balance sheet date and does not impact the financial position as of September 30, 2025, but is disclosed as a subsequent event in accordance with ASC 855, Subsequent Events, due to its significance in the Company's capital structure.

*<u>Repayment of CTB Loan:</u>*

On October 7, 2025, subsequent to the balance sheet date of September 30, 2025, the Company repaid in full the CTB Loan in the amount of $20,256,416. The repayment was funded through proceeds from the IPO.

This transaction does not affect the financial position as of September 30, 2025, but is disclosed as a subsequent event in accordance with ASC 855, Subsequent Events, due to its significance in the Company's capital structure.

Besides the above, there were no subsequent events requiring disclosure or recognition in the Company's unaudited consolidated financial statements, other than those included elsewhere in this Report.

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

*The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited consolidated financial statements and related notes included elsewhere in this Report and our audited consolidated financial statements and the related notes and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the year ended December 31, 2024 included in the Registration Statement. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from our expectations. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this Report, particularly in the section entitled "Cautionary Note Regarding Forward-Looking Statements" as well as the section entitled "Risk Factors" in the Registration Statement. We assume no obligation to update any of these forward-looking statements except to the extent required by law.*

**Overview**

The Company is a bank holding company headquartered in Harrogate, Tennessee that has elected under the BHC Act to become a financial holding company. We were incorporated in Tennessee in 1975, and we operate primarily through our wholly owned subsidiary, the Bank, a Tennessee-chartered banking corporation organized in 1976. We provide banking services from 34 offices in select markets in Kentucky, North Carolina, and Tennessee, and we also operate one loan production office in Lincolnton, North Carolina. The Bank is a full-service community banking institution that offers traditional consumer and commercial products and services to serve businesses and individuals in our markets.

Our management's discussion and analysis of financial condition and results of operations is intended to provide the reader with information that will assist in the understanding of our business, results of operations, financial condition and financial statements; changes in certain key items in our financial statements from period to period; and the primary factors that we use to evaluate our business.

**Critical Accounting Policies and Estimates**

Our consolidated financial statements are prepared in accordance with GAAP and follow general practices within the banking industry. The application of these principles requires management to make estimates, assumptions and complex judgements that affect amounts presented in our consolidated financial statements. These estimates, assumptions and judgements are based on information available as of the date of the financial statements; accordingly, as this information changes, the consolidated financial statements could reflect different estimates, assumptions, and judgements. Management has identified ACL as a critical accounting policy as included in Note 1 of our consolidated financial statements as of and for the fiscal year ended December 31, 2024 included in the Registration Statement to be an accounting area that requires the most complex and subjective judgements and, as such, could be most subject to revision as new and additional information becomes available or circumstances change, including changes in the economic climate and interest rate changes. These policies, along with the disclosures presented in the other notes to the consolidated financial statements and in this analysis and discussion, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. There have been no significant changes to the accounting policies, estimates, and assumptions, or the judgments affecting the application of these policies, estimates, and assumptions, from those disclosed in the Registration Statement.

**Emerging Growth Company**

Pursuant to the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"), as an emerging growth company, we can elect to opt out of the extended transition period for adopting any new or revised accounting standards. We have elected to take advantage of the extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we may adopt the standard on the application date for private companies. We have elected to take advantage of the scaled disclosures and other relief under the JOBS Act, and we may take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us under the JOBS Act, so long as we qualify as an emerging growth company.

**Nine Months ended September 30, 2025 Highlights**

 ****

***Results of Operations***

● We had net income less non-controlling interest of $27.1 million for the nine months ended September 30, 2025, an increase of $1.3 million, or 4.9%, as compared to the nine months ended September 30, 2024. The increase was primarily the result of an increase in net interest income after provision for credit losses offset by an increase in the provision for income taxes.

● We had net income before income taxes of $35.1 million for the nine months ended September 30, 2025, an increase of $3.3 million, or 10.5%, as compared to the nine months ended September 30, 2024. The increase was primarily the result of an increase in net interest income after provision for credit losses.

● Net interest income was $59.6 million for the nine months ended September 30, 2025, an increase of $1.8 million, or 3.1%, as compared to the nine months ended September 30, 2024. The increase was primarily attributable to increased loan volume and a reduction in long-term debt interest expense.

● Noninterest income was $7.3 million for the nine months ended September 30, 2025, a decrease of $0.6 million, or 7.4%, as compared to the nine months ended September 30, 2024. The decrease was primarily the result of decreases in customer service charges due to normal fluctuations in our letters of credit fees.

● Noninterest expense was $31.9 million for the nine months ended September 30, 2025, a decrease of $0.3 million, or 0.9%, as compared to the nine months ended September 30, 2024. The decrease was primarily the result of efficiencies realized from the acquisition of AB&T.

**Three Months ended September 30, 2025 Highlights**

 ****

***Financial Condition***

● Total assets were $2.2 billion as of September 30, 2025, a decrease of $48.1 million, or 2.1%, from June 30, 2025.

● Net loans were $1.7 billion as of September 30, 2025, a decrease of $24.2 million, or 1.4%, from June 30, 2025.

● Total deposits were $1.8 billion as of September 30, 2025, a decrease of $70.6 million, or 3.8%, from June 30, 2025. This decrease was primarily driven by a $71.9 million reduction in time deposits to $469.7 million at September 30, 2025, from $541.6 million at June 30, 2025. Noninterest bearing demand deposits decreased $18.2 million, or 4.4%, to $398.8 million as of September 30, 2025, from $417.0 million as of June 30, 2025. Brokered deposits decreased $77.2 million or 61.7%, to $48.0 million as of September 30, 2025 from $125.2 million as of June 30, 2025.

● Non-brokered deposits were $1.7 billion as of September 30, 2025, an increase of $6.6 million, or 0.4%, from June 30, 2025. This increase was primarily driven by normal customer business cycles.

● Asset quality increased slightly with nonperforming assets to total assets of 0.26% as of September 30, 2025, a decrease of 0.04% from June 30, 2025. The ACL to total loans remained flat at 1.01% for the same periods of time.

● Book value per share increased $0.81, or 4.2%, to $20.03 at September 30, 2025, from $19.22 at June 30, 2025.

 ****

***Results of Operations***

● We had net income less non-controlling interest of $9.5 million for the three months ended September 30, 2025, an increase of $0.3 million, or 2.8%, from the three months ended September 30, 2024. The increase was primarily the result of an increase in net interest income after provision for credit losses offset by an increase in the provision for income taxes.

● We had net income before income taxes of $12.3 million for the three months ended September 30, 2025, an increase of $1.3 million, or 11.6%, from the three months ended September 30, 2024. The increase was primarily the result of an increase in net interest income after provision for credit losses.

● Net interest income was $20.2 million for the three months ended September 30, 2025, an increase of $1.2 million, or 6.1%, from the three months ended September 30, 2024. The increase was primarily attributable to increased loan volume and reduction in long-term debt interest expense.

● Noninterest income was $2.6 million for the three months ended September 30, 2025, a decrease of $0.2 million, or 6.5%, from the three months ended September 30, 2024. The decrease was primarily the result of decreases in customer service charges due to normal fluctuations in our letters of credit fees.

● Noninterest expense was $10.6 million for the three months ended September 30, 2025, a slight increase of $0.1 million, or 0.3%, from the three months ended September 30, 2024.

**Primary Factors Used to Evaluate Our Business**

 ****

***Results of Operations***

The most significant factors we use to evaluate our business and results of operations are net income, return on average assets ("ROAA") and return on average equity ("ROAE"). We also use net interest income, noninterest income, noninterest expense and efficiency ratio.

 ****

***Net Income***

Our net income depends substantially on net interest income, which is the difference between interest earned on interest-earning assets (usually interest-bearing cash, investment securities and loans) and the interest expense incurred in connection with interest-bearing liabilities (usually interest-bearing deposits and borrowings). Our net income also depends on noninterest income, which is income generated other than by our interest-earning assets. Other factors that influence our net income include our provisions for credit losses, income taxes, and noninterest expenses, which include our fixed and variable overhead costs and other miscellaneous operating expenses.

 ****

***Return on Average Assets***

We monitor ROAA to measure our operating performance and to determine how efficiently our assets are being used to generate net income. In determining ROAA for a given period, net income is divided by the average total assets for that period.

 ****

***Return on Average Equity***

We use ROAE to assess our effectiveness in utilizing shareholders' equity to generate net income. In determining ROAE for a given period, net income is divided by the average shareholders' equity for that period.

 ****

***Net Interest Income***

Net interest income is our principal source of net income and represents the difference between interest income and interest expense. We generate interest income from interest-earning assets that we own, including loans and investment securities. We incur interest expense from interest-bearing liabilities, including interest-bearing deposits and other borrowings, notably FHLB advances, the CTB Loan and the Subordinated Debentures. To evaluate net interest income, we measure and monitor: (i) yields on our loans and other interest-earning assets; (ii) the cost of our deposits and other funding sources; (iii) our net interest spread; and (iv) our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is a ratio of net interest income to average interest earning assets for the same period.

Changes in market interest rates and interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets, interest-bearing liabilities and noninterest-bearing liabilities, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income.

 ****

 ****

***Noninterest Income***

Noninterest income primarily consists of: (i) service charges on deposit accounts; (ii) net realized gains on the sale of premises and equipment; (iii) net realized gains on the sale of foreclosed assets; (iv) automated teller machine ("ATM") and debit card fees; (v) benefits from changes in the cash surrender value of bank owned life insurance ("BOLI"); and (vi) other miscellaneous fees and income.

Our income from service charges on deposit accounts, which includes nonsufficient funds fees, is impacted by several factors, including number of accounts, products utilized and account holder cash management behaviors. These are further impacted by deposit products utilized by customers, marketing of new products and other factors. Net realized gains on the sale of premises and equipment reflects non-recurring gains from sales of property and equipment no longer needed for operations. Net realized gains on the sale of foreclosed assets reflects net gains from the sale of real estate classified as other real estate owned ("OREO"). ATM and debit card fees includes ATM transaction fees charged to non-bank customers for the use of our ATMs and interchange income. Income on BOLI, which is non-taxable, reflects changes in the cash surrender value of our BOLI policies, which is the amount that the Bank may realize under these insurance policies. Our other miscellaneous fees and income can include items such as other service fees and other nonrecurring items. All of these can vary based on customer activity and other factors.

 ****

***Noninterest Expense***

Noninterest expense primarily consists of: (i) salaries and employee benefits; (ii) occupancy expenses; (iii) professional fees; (iv) data processing expenses; (v) Federal Deposit Insurance Corporation (the "FDIC") deposit insurance premiums; (vi) depreciation and amortization; and (vii) other operating expenses.

Salaries and employee benefits include compensation, employee benefits and employer tax expenses for our personnel. Occupancy expenses include utility expenses, property taxes, lease expense, and property maintenance related items. Professional fees include expenses for legal, accounting, consulting, and third-party internal audit and review services. Data processing expenses include expenses paid to our primary third-party data processor and other ancillary providers as well as telecommunication and data services expenses. Other operating expenses include marketing, telephone, supplies, travel and entertainment expenses, armored carrier services fees and director fees.

 ****

***Efficiency Ratio***

The efficiency ratio is defined as operating expenses divided by fee income plus tax equivalent net interest income. As a general rule, the lower a financial institution's efficiency ratio, the better the performance.

**Primary Factors Used to Evaluate Our Financial Condition**

The most significant factors we use to evaluate and manage our financial condition include asset quality, capital, liquidity, net income growth and profitability versus peer group banks.

 ****

***Asset Quality***

We monitor the quality of our assets based upon various factors, including level and severity of deterioration in borrower cash flows and asset quality. Problem assets are assessed and reported as delinquent, classified, nonperforming, nonaccrual or troubled debt restructurings. We also monitor credit concentrations. We manage the ACL to reflect loan volumes, identified credit and collateral conditions, economic conditions and other qualitative factors.

 ****

***Capital***

We monitor capital using regulatory capital ratios. Factors other than regulatory capital rules used include overall financial condition, including the trend and volume of problem assets, reserves, risks, level and quality of earnings, and anticipated growth, including acquisitions.

***Liquidity***

Deposits primarily consist of commercial and personal accounts maintained by businesses and individuals in our primary market areas. We also utilize brokered deposits (Multi-Bank Securities, Inc. and LPL Financial) and non-brokered deposits (National CD Rateline), certificates of deposits and reciprocal deposits through a third-party network that effectively allows depositors to receive insurance on amounts greater than the FDIC insurance limit, which is currently $250,000 per depositor, per FDIC-insured bank for each account ownership category. We manage liquidity based on factors that include liquid assets to loans, cash flow projections, short-term funding needs and sources, and the availability of unused funding sources. As of September 30, 2025, approximately $305.0 million was available for borrowing on committed lines with the FHLB and $77.5 million was available for purchases of federal funds from correspondents on an overnight uncommitted basis.

 ****

***Net Income Growth***

We monitor net income growth monthly, quarterly and annually. Net income growth is compared to prior month, prior year to date, and budget.

 ****

***Profitability Versus Peer Group Banks***

We monitor the Bank's profitability metrics compared to those of peer banks with comparable size and markets. Profitability metrics include ROAA, ROAE, net interest spread, and overhead efficiency ratio. Specific peer bank comparisons are provided to the board of directors of the Bank quarterly.

**Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024**

The following table shows the average outstanding balance of each principal category of our assets, liabilities and shareholders' equity, together with the average yields on our assets and average costs of our liabilities, for the periods indicated. Yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended <br> September 30, 2025** | **Three Months Ended <br> September 30, 2025** | **Three Months Ended <br> September 30, 2025** | **Three Months Ended <br> September 30, 2024** | **Three Months Ended <br> September 30, 2024** | **Three Months Ended <br> September 30, 2024** |
|  | **Average <br> Balance** | **Interest** | **Yield/Rate** | **Average <br> Balance** | **Interest** | **Yield/Rate** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **Assets:** | | | | | | |
| Interest-earnings assets: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Gross loans, net of unearned income<sup>(1)</sup> | $1767379 | $28074 | 6.4% | $1751689 | $28719 | 6.6% |
| &nbsp;&nbsp;&nbsp;Investment securities | 169679 | 1187 | 2.8% | 184653 | 830 | 1.8% |
| &nbsp;&nbsp;&nbsp;Other interest-earning assets | 76746 | 760 | 4.0% | 104949 | 1072 | 4.1% |
| &nbsp;&nbsp;&nbsp;Total interest-earning assets | $2013804 | $30021 | 6.0% | $2041291 | $30621 | 6.0% |
| Allowance for credit losses | (17971) |  |  | (18318) |  |  |
| Noninterest-earning assets | 175035 |  |  | 186879 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Assets: | $2170869 |  |  | $2209852 |  |  |
| **Liabilities and Shareholders' Equity:** |  |  |  |  |  |  |
| Interest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest-bearing demand <br> deposits | $509726 | $2806 | 2.2% | $482703 | $2932 | 2.4% |
| &nbsp;&nbsp;&nbsp;NOW, savings and money market deposits | 380421 | 1396 | 1.5% | 410769 | 1594 | 1.6% |
| &nbsp;&nbsp;&nbsp;Time deposits | 486555 | 4452 | 3.7% | 555669 | 5748 | 4.1% |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | 7354 | 55 | 3.0% | 5368 | 77 | 5.7% |
| &nbsp;&nbsp;&nbsp;FHLB advances | 61827 | 455 | 2.9% | 68315 | 455 | 2.7% |
| &nbsp;&nbsp;&nbsp;Other borrowings | 38580 | 635 | 6.6% | 40718 | 759 | 7.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing <br> liabilities | $1484463 | $9799 | 2.6% | $1563542 | $11565 | 3.0% |
| Noninterest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Noninterest-bearing deposits | $413376 |  |  | $410042 |  |  |
| &nbsp;&nbsp;&nbsp;Other liabilities | 33557 |  |  | 28855 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest-bearing <br> liabilities | $446933 |  |  | $438897 |  |  |
| &nbsp;&nbsp;&nbsp;Shareholders' equity | $239473 |  |  | $207413 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $2170869 |  |  | $2209852 |  |  |
| Net Interest Income |  | $20222 |  |  | $19056 |  |
| Net Interest Spread<sup>(2)</sup> |  |  | 3.3% |  |  | 3.0% |
| Net Interest Margin<sup>(3)</sup> |  |  | 4.0% |  |  | 3.7% |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Nine Months Ended <br> September 30, 2025** | **Nine Months Ended <br> September 30, 2025** | **Nine Months Ended <br> September 30, 2025** | **Nine Months Ended <br> September 30, 2024** | **Nine Months Ended <br> September 30, 2024** | **Nine Months Ended <br> September 30, 2024** |
|  | **Average <br> Balance** | **Interest** | **Yield/Rate** | **Average <br> Balance** | **Interest** | **Yield/Rate** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **Assets:** | | | | | | |
| Interest-earnings assets: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Gross loans, net of unearned income<sup>(1)</sup> | $1786357 | $84435 | 6.3% | $1722635 | $84969 | 6.6% |
| &nbsp;&nbsp;&nbsp;Investment securities | 180975 | 3767 | 2.8% | 197404 | 2708 | 1.8% |
| &nbsp;&nbsp;&nbsp;Other interest-earning assets | 111265 | 3444 | 4.1% | 120400 | 4203 | 4.7% |
| &nbsp;&nbsp;&nbsp;Total interest-earning assets | $2078597 | $91646 | 5.9% | $2040439 | $91880 | 6.0% |
| Allowance for credit losses | (18151) |  |  | (17418) |  |  |
| Noninterest-earning assets | 175750 |  |  | 180746 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Assets: | $2236196 |  |  | $2203767 |  |  |
| **Liabilities and Shareholders' Equity:** |  |  |  |  |  |  |
| Interest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest-bearing demand <br> deposits | $538268 | $9083 | 2.3% | $486417 | $8785 | 2.4% |
| &nbsp;&nbsp;&nbsp;NOW, savings and money market deposits | 385694 | 4318 | 1.5% | 408388 | 5097 | 1.7% |
| &nbsp;&nbsp;&nbsp;Time deposits | 533863 | 15264 | 3.8% | 537509 | 16092 | 4.0% |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | 5981 | 130 | 2.9% | 5534 | 165 | 4.0% |
| &nbsp;&nbsp;&nbsp;FHLB advances | 462965 | 1334 | 2.8% | 75015 | 1547 | 2.8% |
| &nbsp;&nbsp;&nbsp;Other borrowings | 39179 | 1896 | 6.5% | 42935 | 2377 | 7.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing <br> liabilities | $1565950 | $32025 | 2.7% | $1555798 | $34063 | 2.9% |
| Noninterest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Noninterest-bearing deposits | $405749 |  |  | $410710 |  |  |
| &nbsp;&nbsp;&nbsp;Other liabilities | 35398 |  |  | 35188 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest-bearing <br> liabilities | $441147 |  |  | $445898 |  |  |
| &nbsp;&nbsp;&nbsp;Shareholders' equity | $229099 |  |  | $202071 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $2236196 |  |  | $2203767 |  |  |
| Net Interest Income |  | $59621 |  |  | $57817 |  |
| Net Interest Spread<sup>(2)</sup> |  |  | 3.2% |  |  | 3.1% |
| Net Interest Margin<sup>(3)</sup> |  |  | 3.9% |  |  | 3.8% |

---

(1) Includes
 nonaccrual loans.

(2) Net
 interest spread is the difference between interest rates earned on interest-earning assets
 and interest rates paid on interest-bearing liabilities.

(3) Net
 interest margin is a ratio of net interest income to average interest-earning assets for
 the same period.

Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates.

The following table sets forth the effects of changing rates and volumes on our net interest income during the periods shown. Information is provided with respect to: (i) effects on interest income attributable to changes in volume (change in volume multiplied by prior rate), and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). For purposes of this table, changes attributable to both rate and volume that cannot be segregated have been proportionately allocated to both volume and rate.

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended September 30, <br> 2025 over 2024** | **Three Months Ended September 30, <br> 2025 over 2024** | **Three Months Ended September 30, <br> 2025 over 2024** |
|  | **Changes due to:** | **Changes due to:** | |
|  | **Volume** | **Rate** | **Total**<br>**Variance** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **Interest-Earning Assets:** | | | |
| Loans | $257 | $(902) | $(645) |
| Investment securities | (67) | 424 | 357 |
| Other interest earning assets | (288) | (24) | (312) |
| Total increase (decrease) in interest income | 98 | (502) | (600) |
| **Interest-Bearing Liabilities:** |  |  |  |
| NOW, savings, MMDA deposits, interest-bearing demand | 46 | (370) | (324) |
| Time deposits | (715) | (581) | (1296) |
| Short-term borrowings | 28 | (50) | (22) |
| FHLB advances | (43) | 43 | 0 |
| Other borrowings | (40) | (84) | (124) |
| Total increase (decrease) in interest expense | (723) | (1043) | (1766) |
| Increase (decrease) in net interest income | $625 | $541 | $1166 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended September 30, <br> 2025 over 2024** | **Nine Months Ended September 30, <br> 2025 over 2024** | **Nine Months Ended September 30, <br> 2025 over 2024** |
|  | **Changes due to:** | **Changes due to:** | |
|  | **Volume** | **Rate** | **Total**<br>**Variance** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **Interest-Earning Assets:** | | | |
| Loans | $3143 | $(3677) | $(534) |
| Investment securities | (225) | 1284 | 1059 |
| Other interest-earning assets | (319) | (440) | (759) |
| Total increase (decrease) in interest income | 2599 | (2833) | (234) |
| **Interest-Bearing Liabilities:** |  |  |  |
| NOW, savings, MMDA deposits, interest-bearing demand | 653 | (1134) | (481) |
| Time deposits | (109) | (719) | (828) |
| Short-term borrowings | 13 | (48) | (35) |
| FHLB advances | (249) | 36 | (213) |
| Other borrowings | (208) | (273) | (481) |
| Total increase (decrease) in interest expense | 100 | (2138) | (2038) |
| Increase (decrease) in net interest income | $2499 | $(695) | $1804 |

---

Net interest income for the three months ended September 30, 2025 was $20.2 million compared to $19.1 million for the three months ended September 30, 2024, an increase of $1.2 million, or 6.1%. The increase in net interest income was comprised of an approximately $0.6 million, or 2.0%, decrease in interest income and dividend income, and an approximately $1.8 million, or 15.3%, decrease in interest expense. The $1.8 million decrease in interest expense for the three month period ended September 30, 2025, was primarily related to a 0.4% decrease in the rates paid on interest-bearing liabilities and a decrease of $79.1 million, or 5.1%, in average interest-bearing liabilities as of September 30, 2025, compared to September 30, 2024. The decrease in average interest-bearing liabilities from September 30, 2024 to September 30, 2025 was due to decreases in our time deposit balances. For the three months ended September 30, 2025, net interest margin and net interest spread were 4.0% and 3.3%, respectively, compared to 3.7% and 3.0%, respectively, for the same period in 2024, which reflects the decrease in interest income discussed above relative to the slight decrease in interest expense.

Net interest income for the nine months ended September 30, 2025 was $59.6 million compared to $57.8 million for the nine months ended September 30, 2024, an increase of $1.8 million, or 3.1%. The increase in net interest income was comprised of an approximately $0.2 million, or 0.3%, decrease in interest income and dividend income, and an approximately $2.0 million, or 6.0%, decrease in interest expense. The $2.0 million decrease in interest expense for the nine month period ended September 30, 2025, was primarily related to a 0.2% decrease in the rates paid on interest-bearing liabilities and an increase of $10.2 million, or 0.7%, in average interest-bearing liabilities as of September 30, 2025, compared to September 30, 2024. The increase in average interest-bearing liabilities from September 30, 2024 to September 30, 2025 was due to increases in our large depositor accounts. For the nine months ended September 30, 2025, net interest margin and net interest spread were 3.8% and 3.2%, respectively, compared to 3.8% and 3.1%, respectively, for the same period in 2024, which reflects the decrease in interest income discussed above in addition to decreases in interest expense.

The decrease in interest income was attributable to a $63.7 million, or 3.7%, increase in average gross loans outstanding as of September 30, 2025, compared to September 30, 2024, and a 0.3% decrease in the yield on gross total loans. The increase in average gross loans outstanding was primarily due to organic loan growth in the Nashville-Davidson — Murfreesboro — Franklin, Tennessee MSA (the "Nashville MSA"), the Knoxville, Tennessee MSA (the "Knoxville MSA") and the Charlotte-Concord-Gastonia, North Carolina-South Carolina MSA (the "Charlotte MSA"). In addition to the decrease in interest income on loans, the decrease in interest income was attributable to a $9.1 million, or 7.6%, decrease in average other interest-earning assets as of September 30, 2025, as compared to September 30, 2024, and a 0.6% decrease in the yield on other interest-earning assets compared to the same period in 2024.

 ****

***Provision for Credit Losses***

Credit risk is inherent in the business of making loans. We establish an ACL through charges to earnings, which are shown in the statements of income as the provision for credit losses. Specifically identifiable and quantifiable known losses are promptly charged off against the allowance. The provision for credit losses is determined by conducting a quarterly evaluation of the adequacy of our ACL and charging the shortfall or excess, if any, to the current quarter's expense. This has the effect of creating variability in the amount and frequency of charges to our earnings. The provision for credit losses and level of allowance for each period are dependent upon many factors, including loan growth, net charge offs, changes in the composition of the loan portfolio, delinquencies, management's assessment of the quality of the loan portfolio, the valuation of problem loans and the general economic conditions in our market areas.

The provision for credit losses for the three months ended September 30, 2025, was $0 compared to $0.3 million for the three months ended September 30, 2024. The provision recorded for the three months ended September 30, 2024, was based on an increase in the number of loans outstanding. There were no significant net charge-offs in the three months ended September 30, 2025.

The provision for credit losses for the nine months ended September 30, 2025, was $0 compared to $1.8 million for the nine months ended September 30, 2024. The provision recorded for the nine months ended September 30, 2024, was based on an increase in the number of loans outstanding. There were no significant net charge-offs in the nine months ended September 30, 2025.

The ACL as a percentage of total loans was 1.01% at September 30, 2025, and 1.00% at December 31, 2024.

 ****

 ****

***Noninterest Income***

While interest income remains the largest single component of total revenues, noninterest income is an important contributing component. Our most significant sources of noninterest income include customer service fees, which include overdraft program fees, and bank card services and interchange fees.

Noninterest income for the three months ended September 30, 2025, was $2.6 million compared to $2.8 million for the three months ended September 30, 2024, a decrease of $0.2 million, or 7.1%. The following table sets forth the major components of our noninterest income for the three months ended September 30, 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
|  | **2025** | **2024** | **Increase <br> (Decrease)** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Noninterest income: |  |  |  |
| &nbsp;&nbsp;&nbsp;Customer service fees | $735 | $654 | $81 |
| &nbsp;&nbsp;&nbsp;Net realized gains (losses) on sales of available-for-sale securities |  |  |  |
| &nbsp;&nbsp;&nbsp;Net gains (losses) on sales of premises and equipment | 21 | 388 | (368) |
| &nbsp;&nbsp;&nbsp;Net gains (losses) on sales of foreclosed assets | 110 | 32 | 78 |
| &nbsp;&nbsp;&nbsp;Net gains on sales of loans |  |  |  |
| &nbsp;&nbsp;&nbsp;ATM and debit card fees | 846 | 883 | (38) |
| &nbsp;&nbsp;&nbsp;Increase in BOLI | 306 | 313 | (7) |
| &nbsp;&nbsp;&nbsp;Other income and fees<sup>(1)</sup> | 609 | 537 | 72 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | $2627 | $2807 | $(182) |

---

Noninterest income for the nine months ended September 30, 2025, was $7.3 million compared to $7.9 million for the nine months ended September 30, 2024, a decrease of $0.6 million, or 7.6%. The following table sets forth the major components of our noninterest income for the nine months ended September 30, 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** | **Increase <br> (Decrease)** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Noninterest income: |  |  |  |
| &nbsp;&nbsp;&nbsp;Customer service fees | $2065 | $2159 | $(94) |
| &nbsp;&nbsp;&nbsp;Net realized gains (losses) on sales of available-for-sale securities |  |  |  |
| &nbsp;&nbsp;&nbsp;Net gains (losses) on sales of premises and equipment | 25 | 412 | (387) |
| &nbsp;&nbsp;&nbsp;Net gains (losses) on sales of foreclosed assets | 113 | 151 | (38) |
| &nbsp;&nbsp;&nbsp;Net gains on sales of loans |  |  |  |
| &nbsp;&nbsp;&nbsp;ATM and debit card fees | 2536 | 2433 | 104 |
| &nbsp;&nbsp;&nbsp;Increase in BOLI | 950 | 876 | 73 |
| &nbsp;&nbsp;&nbsp;Other income and fees<sup>(1)</sup> | 1604 | 1848 | (245) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | $7293 | $7879 | $(587) |

---

(1) Other
 income and fees includes income and fees associated with miscellaneous services.

Customer service fees includes fees for overdraft privilege charges, insufficient funds charges, account analysis service fees on commercial accounts, and monthly account service fees. These fees increased $81 thousand, or 12.4%, to $735 thousand for the three months ended September 30, 2025, from $654 thousand for the three months ended September 30, 2024. This increase was primarily the result of normal fluctuations in our operations. Customer service fees decreased $0.1 million, or 4.3%, to $2.1 million for the nine months ended September 30, 2025, from $2.2 million for the nine months ended September 30, 2024. This decrease was primarily the result of normal fluctuations in our operations.

ATM and debit card fees decreased $0.04 million, or 4.3%, to $0.85 million for the three months ended September 30, 2025, from $0.88 million for the three months ended September 30, 2024. The decrease was primarily the result of changes in transactional volume that generates interchange fees. These fees increased $0.1 million, or 4.3%, to $2.5 million for the nine months ended September 30, 2025, from $2.4 million for the nine months ended September 30, 2024. The increase was primarily the result of changes in transactional volume that generates interchange fees.

The income on BOLI decreased $7 thousand, or 2.4%, to $306 thousand for the three months ended September 30, 2025, from $313 thousand for the three months ended September 30, 2024. The decrease was primarily the result of a gain on a policy due to a death benefit and an increase in earnings rates. The income on BOLI increased $0.1 million, or 8.4%, to $0.95 million for the nine months ended September 30, 2025, from $0.88 million for the nine months ended September 30, 2024. The increase was primarily the result of a gain on a policy due to a death benefit and an increase in earnings rates.

Other income and fees increased $0.07 million, or 13.4%, to $0.6 million for the three months ended September 30, 2025 from $0.5 million for the three months ended September 30, 2024. This increase was primarily due to normal fluctuations in our operations. Other income and fees decreased $0.2 million, or 13.2%, to $1.6 million for the nine months ended September 30, 2025 from $1.8 million for the nine months ended September 30, 2024. This decrease was primarily due to normal fluctuations in our operations.

 ****

***Noninterest Expense***

Noninterest expense for the three months ended September 30, 2025 was $10.6 million compared to $10.5 million for the three months ended September 30, 2024, an increase of $0.03 million, or 0.3%, which was primarily a result of efficiencies realized from the acquisition of AB&T. The following table sets forth the major components of our noninterest expense for the three months ended September 30, 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Three Months Ended September 30,** |
|  | **2025** | **2024** | **Increase <br> (Decrease)** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Noninterest expense: |  |  |  |
| &nbsp;&nbsp;&nbsp;Salaries and employee benefits | $5729 | $5605 | $124 |
| &nbsp;&nbsp;&nbsp;Occupancy expenses | 738 | 936 | 198 |
| &nbsp;&nbsp;&nbsp;Data processing | 1104 | 1067 | 36 |
| &nbsp;&nbsp;&nbsp;Deposit insurance premiums | 267 | 350 | (83) |
| &nbsp;&nbsp;&nbsp;Professional Fees | 136 | 329 | (193) |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 955 | 1062 | (107) |
| &nbsp;&nbsp;&nbsp;Other expenses<sup>(1)</sup> | 1624 | 1174 | 450 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expense | $10553 | $10523 | $29 |

---

Noninterest expense for the nine months ended September 30, 2025 was $31.9 million compared to $32.1 million for the nine months ended September 30, 2024, a decrease of $0.3 million, or 0.9%, which was primarily a result of efficiencies realized from the acquisition of AB&T. The following table sets forth the major components of our noninterest expense for the nine months ended September 30, 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** | **Increase <br> (Decrease)** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Noninterest expense: |  |  |  |
| &nbsp;&nbsp;&nbsp;Salaries and employee benefits | $17012 | $16852 | $160 |
| &nbsp;&nbsp;&nbsp;Occupancy expenses | 2529 | 2651 | (121) |
| &nbsp;&nbsp;&nbsp;Data processing | 3462 | 3393 | 69 |
| &nbsp;&nbsp;&nbsp;Deposit insurance premiums | 738 | 875 | (137) |
| &nbsp;&nbsp;&nbsp;Professional Fees | 617 | 979 | (363) |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 2706 | 3117 | (411) |
| &nbsp;&nbsp;&nbsp;Other expenses<sup>(1)</sup> | 4795 | 4277 | 518 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expense | $31859 | $32144 | $(285) |

---

(1) Other
 expenses include items such as telephone expenses, marketing and advertising expenses, debit
 card expenses, courier fees, directors' fees, and insurance.

Salaries and employee benefits primarily include: (i) amounts paid to employees for base pay, incentive compensation, and bonuses; (ii) health and other related insurance paid by the Bank on behalf of our employees; and (iii) the annual cost for any increases in the liability for non-qualified plans maintained for certain key employees. Salaries and employee benefits for the three months ended September 30, 2025 were $5.7 million, an increase of $0.1 million, or 2.2%, compared to $5.6 million for the three months ended September 30, 2024. This slight increase was primarily due to pay increases net of turnover. For the nine months ended September 30, 2025, salaries and employee benefits were $17.0 million, an increase of $0.2 million, or 0.9%, compared to $16.9 million for the nine months ended September 30, 2024. This slight increase was primarily due to pay increases net of turnover.

Occupancy expenses consist of depreciation on property, premises, equipment and software, rent expense for leased facilities, maintenance agreements on equipment, property taxes, and other expenses related to maintaining owned or leased assets. Occupancy expenses for the three months ended September 30, 2025 were $0.7 million compared to $0.9 million for the three months ended September 30, 2024, a decrease of $0.2 million, or 21.2%. The decrease was primarily attributable to normal fluctuations. Occupancy expenses for the nine months ended September 30, 2025 were $2.5 million compared to $2.7 million for the nine months ended September 30, 2024, a decrease of $0.12 million, or 4.6%. The decrease was primarily attributable to normal fluctuations.

Data processing expenses, which primarily consist of expenses for data processing services for core processing, increased $36 thousand, or 3.4%, to $1,104 thousand for the three months ended September 30, 2025 from $1,067 thousand for the three months ended September 30, 2024. For the nine months ended September 30, 2025, data processing expenses increased $0.07 million, or 2.0%, to $3.5 million from $3.4 million for same period in 2024.

Professional fees expenses, which include legal fees, audit and accounting fees, and consulting fees, decreased $0.2 million, or 58.7%, to $0.1 million for the three months ended September 30, 2025 compared to $0.3 million for the three months ended September 30, 2024. This decrease was primarily the result of the higher audit costs associated with the acquisition of AB&T in 2024. Professional fees expenses decreased $0.4 million, or 13.2%, to $0.6 million for the nine months ended September 30, 2025 compared to $1.0 million for the nine months ended September 30, 2024. This decrease was primarily the result of the higher appraisal fees and legal and audit costs associated with the acquisition of AB&T in 2024.

Depreciation and amortization for the three months ended September 30, 2025 was $1.0 million compared to $1.1 million for the three months ended September 30, 2024, a decrease of approximately $0.1 million, or 10.1%. The decrease was primarily attributable to the sale of a closed bank office and the decrease in core deposit intangibles from previous acquisitions. Depreciation and amortization for the nine months ended September 30, 2025 was $2.7 million compared to $3.1 million for the nine months ended September 30, 2024, a decrease of approximately $0.4 million, or 13.2%. The decrease was primarily attributable to the sale of a closed bank office and the decrease in core deposit intangibles from previous acquisitions.

Other expenses increased $0.04 million, or 38.3%, to 1.6 million for the three months ended September 30, 2025, compared to $1.2 million for the three months ended September 30, 2024. This increase was primarily due to increases in marketing, insurance and education expenses related to the acquisition of AB&T. Other expenses increased $0.5 million, or 12.1%, to 4.8 million for the nine months ended September 30, 2025, compared to $4.3 million for the nine months ended September 30, 2024. This increase was primarily due to increases in marketing, insurance and education expenses related to the acquisition of AB&T.

**Financial Condition**

Total assets were $2.2 billion as of September 30, 2025, a decrease of $86.8 million, or 3.8%, from December 31, 2024. This slight decrease was primarily the result of a decrease in cash due to a reduction of brokered deposit balances of $126.9 million and a reduction of gross loans of $39.5 million.

 ****

***Loan Portfolio***

Loans represent the largest portion of our earning assets, greater than the securities portfolio or any other asset category, and the quality and diversification of the loan portfolio is an important consideration when reviewing our financial condition.

We have four loan portfolio segments: (i) real estate (which is divided into four classes), (ii) commercial, (iii) consumer and (iv) other. A segment is generally determined based on the initial measurement attribute, risk characteristics of the loan, and method for monitoring and assessing credit risk. Classes within the real estate portfolio segment include (i) CRE, (ii) C&D, (iii) residential, and (iv) other.

Our loan clients primarily consist of small to medium-sized business, the owners and operators of these businesses, and other professionals, entrepreneurs and high net worth individuals. We believe owner-occupied and investment CRE loans, residential construction loans and commercial business loans provide us with higher risk-adjusted returns, shorter maturities and more sensitivity to interest rate fluctuations, and are complemented by our relatively lower risk residential real estate loans to individuals.

The following describes risk characteristics relevant to each of the loan portfolio segments:

**Real estate** — We offer various types of real estate loan products, which are divided into the classes described below. All loans within this portfolio segment are particularly sensitive to the valuation of real estate.

● C&D loans include extensions of credit to real estate developers or investors where repayment is dependent on the sale of the real estate or income generated from the real estate collateral.

● Residential loans include one-to-four-family first mortgage loans, which are repaid by various means such as a borrower's income, the sale of the property, or rental income derived from the property. These also include second lien or open-end residential real estate loans, such as home equity lines, which are typically repaid by the same means as one-to-four-family first mortgages.

● CRE loans include both owner-occupied CRE loans and other CRE loans, such as commercial loans secured by income producing properties. Owner-occupied CRE loans made to operating businesses are long-term financings of land and buildings and are repaid by cash flows generated from business operations. Real estate loans for income-producing properties such as apartment buildings, office and industrial buildings, and retail shopping centers are repaid from rent income derived from the properties.

● Other real estate loans include loans collateralized by farmland.

**Commercial** — This loan portfolio segment includes loans to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, leases, or expansion projects. Loans are repaid by business cash flows. Collection risk in this portfolio is driven by the creditworthiness of the underlying borrower, particularly cash flows from the borrower's business operations.

**Consumer** — This loan portfolio segment includes non-real estate secured direct loans to consumers for household, family, and other personal expenditures. In addition to consumer installment loans, this portfolio segment also includes secured and unsecured personal lines of credit as well as overdraft protection lines. Loans in this portfolio segment are sensitive to unemployment and other key consumer economic measures.

**Other** — This loan portfolio segment primarily consists of tax-exempt commercial loans, undisbursed loans of all types, and unpaid overdrafts on deposit accounts.

The following table presents our balances and associated percentages of the composition of loans by loan portfolio segment, excluding loans held for sale, on the dates indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Loan Portfolio Segments** | **Loan Portfolio Segments** | **Loan Portfolio Segments** | **Loan Portfolio Segments** |
|  | **As of September 30, 2025** | **As of September 30, 2025** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **Amount** | **% of<br> Total** | **Amount** | **% of <br> Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | |
| Real Estate Loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial | $1002192 | 57% | $1006207 | 56% |
| &nbsp;&nbsp;&nbsp;Construction and land development | 201399 | 11% | 199800 | 11% |
| &nbsp;&nbsp;&nbsp;Residential | 376769 | 21% | 369308 | 20% |
| &nbsp;&nbsp;&nbsp;Other | 14831 | 1% | 16816 | 1% |
| Commercial | 154732 | 9% | 201593 | 11% |
| Consumer | 16009 | 1% | 15214 | 1% |
| Other | 7642 | 0% | 6744 | 0% |
| &nbsp;&nbsp;&nbsp;Total loans | $1773574 | 100% | $1815682 | 100% |
| Deferred loan fees and discounts | 6381 |  | 8685 |  |
| Allowance for credit losses | 17942 |  | 18205 |  |
| &nbsp;&nbsp;&nbsp;Loans, net | $1749251 |  | $1788792 |  |

---

Net loans were $1.7 billion as of September 30, 2025, a decrease of $39.5 million, or 2.2%, from December 31, 2024. This decrease was primarily the result of a few large loan payoffs from long-term borrowers selling their businesses.

The following tables show the contractual maturities of our total loan principal balances, excluding loan discounts, The following table shows the contractual maturities of the Company's loans as of September 30, 2025, and December 31, 2024, respectively:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** |
|  | **Due in One Year or Less** | **Due in One Year or Less** | **Due after One Year <br> Through Five Years** | **Due after One Year <br> Through Five Years** | **Due after Five Years** | **Due after Five Years** | |
|  | **Fixed <br> Rate** | **Adjustable <br> Rate** | **Fixed <br> Rate** | **Adjustable <br> Rate** | **Fixed <br> Rate** | **Adjustable <br> Rate** |<br>**Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Real Estate: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Construction and land development | $18825 | $23744 | $8057 | $125869 | $13081 | $11823 | $201399 |
| &nbsp;&nbsp;&nbsp;Residential | 9258 | 8147 | 22618 | 35346 | 53443 | 247956 | 376769 |
| &nbsp;&nbsp;&nbsp;Commercial real estate | 126648 | 34019 | 374657 | 163784 | 22516 | 280567 | 1002192 |
| &nbsp;&nbsp;&nbsp;Other | 33 | 219 | 3317 | 9985 | 252 | 1025 | 14831 |
| Commercial | 21763 | 39239 | 31141 | 30763 | 1185 | 30640 | 154732 |
| Consumer and other | 6020 | 3327 | 11727 | 602 | 1593 | 383 | 23652 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Loans** | $**182548** | $**108696** | $**451516** | $**366350** | $**92070** | $**572394** | $**1773574** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **Due in One Year or Less** | **Due in One Year or Less** | **Due after One Year <br> Through Five Years** | **Due after One Year <br> Through Five Years** | **Due after Five Years** | **Due after Five Years** | |
|  | **Fixed <br> Rate** | **Adjustable <br> Rate** | **Fixed <br> Rate** | **Adjustable <br> Rate** | **Fixed <br> Rate** | **Adjustable <br> Rate** |<br>**Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Real Estate: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Construction and land development | $41606 | $57676 | $22821 | $70396 | $1530 | $5770 | $199800 |
| &nbsp;&nbsp;&nbsp;Residential | 5453 | 8897 | 30075 | 26906 | 57764 | 240213 | 369308 |
| &nbsp;&nbsp;&nbsp;Commercial real estate | 44743 | 36720 | 450711 | 174953 | 22664 | 276415 | 1006206 |
| &nbsp;&nbsp;&nbsp;Other | 1280 | 1 | 3060 | 10706 | 749 | 1020 | 16816 |
| Commercial | 10613 | 68649 | 52911 | 34237 | 1341 | 33843 | 201593 |
| Consumer and other | 6613 | 316 | 12465 | 556 | 1724 | 286 | 21958 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Loans** | $**110308** | $**172259** | $**572043** | $**317754** | $**85772** | $**557546** | $**1815682** |

---

The majority of our loans are priced with a fixed rate and a one-to-five-year maturity. This type of loan has historically been about 43.0% of total loans over the past two years because the majority of our commercial loans are priced with five-year balloons.

We are primarily involved in real estate, commercial, and consumer lending activities with customers throughout our markets in Kentucky, North Carolina, and Tennessee. About 89.9% and 87.7% of our total loans were secured by real property as of September 30, 2025 and December 31, 2024, respectively. We believe that these loans are not concentrated in any one single property type and that they are geographically dispersed throughout our markets. Our debtors' ability to repay their loans is substantially dependent upon the economic conditions of the markets in which we operate, which consist primarily of the Nashville MSA, Knoxville MSA, Chattanooga, and Kingsport in Tennessee and the Charlotte MSA in North Carolina.

CRE loans were 56.5% of total loans as of September 30, 2025, and represented 55.4% of total loans as of December 31, 2024. C&D loans were 11.4% of total loans as of September 30, 2025, and represented 11.0% of total loans as of December 31, 2024. The ratio of our CRE loans to total risk-based bank capital was 363% as of September 30, 2025 and 304% as of December 31, 2024. C&D loans represented 73.0% of total risk-based bank capital as of September 30, 2025 as compared to 78.7% as of December 31, 2024.

We have established concentration limits in our loan portfolio for CRE loans by loan type, including collateral and industry, among others. All loan types are within established limits other than our hotels/motels category, which has occasionally exceeded our limit of 50% of total risk-based capital. For further information on the risks associated with the concentration of our loan portfolio in certain industries, please see the risk factor titled "We have a concentration of credit exposure to borrowers in certain industries, and we also target small to medium-sized businesses and make other loans that may carry increased levels of credit risk" in the section titled "Risk Factors" in the Registration Statement. Despite this category being outside of our established limits, we believe lending risk in this category is mitigated by a significant portion of the financed properties being owner-occupied hotels/motels, meaning that the properties are run by their owners. All but one of the hotel/motel projects currently in our loan portfolio are "flag" hotels. Further, our exposure to the hotels/motels category is geographically dispersed throughout the states of Florida, Kentucky, North Carolina, South Carolina and Tennessee. We have restricted lending on lodging projects to existing clients only for the foreseeable future. Our lending concentration in the hotels/motels sector is actively managed by our senior management team, including our President and Chief Executive Officer and Chief Credit Officer.

We require all business purpose loans to be underwritten by a centralized underwriting department located in Harrogate, Tennessee. Industry-tested underwriting guidelines are used to assess a borrower's historical cash flow to determine debt service, and we further stress test the debt service under higher interest rate scenarios. Financial and performance covenants are used in commercial lending to allow us to react to a borrower's deteriorating financial condition, should that occur.

 

*Construction and Land Development.&nbsp;&nbsp;&nbsp;&nbsp;*Loans for residential construction are for single-family properties and to developers or investors. These loans are underwritten based on estimates of costs and the completed value of the project. Funds are advanced based on estimated percentage of completion for the project. Performance of these loans is affected by economic conditions as well as the ability to control the costs of the projects. This category also includes commercial construction projects.

C&D loans increased $1.6 million, or 0.8%, to $201.4 million as of September 30, 2025, from $199.8 million as of December 31, 2024. The majority of this increase was due to new loan volume. Residential C&D loans were relatively flat.

 

*Residential.&nbsp;&nbsp;&nbsp;&nbsp;*We offer one-to-four family mortgage loans on both owner-occupied primary residences and investor-owned residences, which made up approximately 89.0% of our residential loan portfolio as of September 30, 2025. Our residential loans also include home equity lines of credit, which totaled $37.0 million, or approximately 9.8% of our residential portfolio, as of September 30, 2025. By offering a full line of residential loan products, the owners of the small to medium-sized businesses that we lend to are able to use us, instead of a competitor, for financing a personal residence.

 

*Commercial Real Estate.&nbsp;&nbsp;&nbsp;&nbsp;*Our CRE loan portfolio includes loans for commercial property that is owned by real estate investors, construction loans to build owner-occupied properties, and loans to developers of CRE investment properties and residential developments. CRE loans are subject to underwriting standards and processes similar to our commercial loans. These loans are underwritten primarily based on projected cash flows for income-producing properties and collateral values for non-income-producing properties. The repayment of these loans is generally dependent on the successful operation of the properties securing the loans or the sale or refinancing of the property. Real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. The properties securing our real estate portfolio are diversified by type and geographic location. We believe this diversity helps reduce our exposure to adverse economic events that may affect any single market or industry. CRE loans were $1.0 billion as of September 30, 2025, a decrease of $4.0 million, or 0.4%, compared to December 31, 2024. This decrease was primarily driven by customer payoffs. As of September 30, 2025, our CRE portfolio was comprised of $357.4 million in non-owner occupied CRE loans and $432.5 million in owner-occupied properties and $212.1 million in multi-family properties.

 

*Commercial.&nbsp;&nbsp;&nbsp;&nbsp;*Commercial loans are underwritten after evaluating and understanding the borrower's ability to operate profitably. Underwriting standards have been designed to determine whether the borrower possesses sound business ethics and practices, to evaluate current and projected cash flows to determine the ability of the borrower to repay its obligations, and to ensure appropriate collateral is obtained to secure the loan. Commercial loans are primarily made based on the identified cash flows of the borrower and, secondarily, on the underlying collateral provided by the borrower. Most commercial loans are secured by the assets being financed or other business assets, such as real estate, accounts receivable, or inventory, and typically include personal guarantees. Owner-occupied real estate is included in commercial loans, as the repayment of these loans is generally dependent on the operations of the commercial borrower's business rather than on income-producing properties or the sale of the properties.

Commercial loans decreased $46.9 million, or 23.2%, to $154.7 million as of September 30, 2025, from $201.6 million as of December 31, 2024.

 

*Consumer and Other.&nbsp;&nbsp;&nbsp;&nbsp;*We utilize our central underwriting department for all consumer loans over $200,000 in total credit exposure regardless of collateral type. Loans below this threshold are underwritten by the responsible loan officer in accordance with our consumer loan policy. The loan policy addresses types of consumer loans that may be originated and the requisite collateral, if any, which must be perfected. We believe relatively smaller individual dollar amounts of consumer loans that are spread over numerous individual borrowers helps minimize risk.

Consumer and other loans (non-real estate loans) increased $1.7 million, or 7.7%, to $23.7 million as of September 30, 2025, from $22.0 million as of December 31, 2024.

 ****

***Loan Participations***

In the normal course of business, we periodically sell participating interests in loans to other banks and investors. All participations are sold on a proportionate basis with all cash flows divided proportionately among the participants and no party has the right to pledge or exchange the entire financial asset without the consent of all the participants. Other than standard 90-day prepayment provisions and standard representations and warranties, participating interests are sold without recourse. We also purchase loan participations from time to time.

On September 30, 2025, and December 31, 2024, loan participations sold to third parties (which are not included in the accompanying consolidated balance sheets) totaled $38.7 million and $46.3 million, respectively. We sell participations to manage our credit exposures to borrowers. On September 30, 2025, and December 31, 2024, loan participations purchased totaled $7.6 million and $7.7 million, respectively. The variances come from purchases and sales of participations in the ordinary course of business.

 ****

***Allowance for Credit Losses***

The ACL is funded as losses are estimated through a provision for credit losses charged to expense. Credit losses are charged against the allowance when management believes the collectability of a loan balance is confirmed. Confirmed losses are charged off immediately. Subsequent recoveries, if any, are credited to the allowance.

The allowance for credit losses is an amount that management believes will be adequate to absorb estimated losses relating to specifically identified loans, as well as probable credit losses inherent in the balance of the loan portfolio. The ACL is evaluated on a regular basis by management and is based upon management's periodic review of the collectability of loans in light of historical experience, the nature and volume of the loan portfolio, the overall portfolio quality, specific problem loans, current economic conditions that may affect borrowers' ability to pay, the estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. This evaluation does not include the effects of expected losses on specific loans or groups of loans that are related to future events or expected changes in economic conditions.

The Company estimates the ACL on loans based on the underlying loans' amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, and net deferred fees or costs, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. Therefore, the Company has made a policy election to exclude accrued interest from the measurement of the ACL.

Expected credit losses are reflected in the ACL through a charge to provision for credit losses. The Company measures expected credit losses on loans on a collective (pool) basis when the loans share similar risk characteristics. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless the extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company.

The Company's methodologies for estimating the ACL consider available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodologies apply historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions over a period that has been determined to be reasonable and supportable, to the identified pools of loans with similar risk characteristics for which the historical loss experience was observed.

The Company's primary methodology for estimating expected credit losses for all loan types is the WARM method. The WARM current expected credit losses methodology uses average annual loss rate along with a simple but reasonable forecast based on a "regression" analysis of loan history dating back 18 years. The dependent variable is an entity's loss rate, based on changes in the NY Prime Lending Rate over the same period. The Company utilizes the NY Prime Lending Rate as the independent variable due to it being the tool most commonly utilized by the Board of Governors of the Federal Reserve System (the "Federal Reserve") to either accelerate and/or slow down the economy. Additionally, the ACL calculation includes qualitative adjustments to account for risk factors that may not be incorporated in the quantitatively derived allowance estimate. Qualitative adjustments may increase or decrease the allowance estimate.

Qualitative factors considered include: changes in lending policies and procedures, including underwriting standards, and collection, charge-off and recovery practices; national, regional and local economic and business conditions and developments that affect the collectability of the loan portfolio, including the condition of various market segments; nature and volume of the loan portfolio and terms of loans; experience, depth and ability of lending management; volume and severity of past due loans, the volume of non-accrual loans, and the volume and severity of adversely classified or graded loans; quality of the loan review system; underlying collateral values; concentrations of credit and changes in the level of such concentrations; and the effect of other external factors such as competition and legal and regulatory requirements.

Our ACL was $17.9 million at September 30, 2025 compared to $18.2 million at December 31, 2024, a decrease of $0.3 million, or 1.4%. No additional provisions were recorded for the nine months ended September 30, 2025.

The following table provides an analysis of the ACL at the dates indicated.

---

| | | |
|:---|:---|:---|
|  | **As of <br> September 30,<br> 2025** | **As of<br> December 31,<br> 2024** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Average loans outstanding | $1767406 | $1738433 |
| Total loans outstanding at end of period | $1773574 | $1815682 |
| Allowance for credit losses at beginning of period | $18205 | $16635 |
| Charge-offs: |  |  |
| &nbsp;&nbsp;&nbsp;Commercial real estate | (18) | (49) |
| &nbsp;&nbsp;&nbsp;Construction and land development |  |  |
| &nbsp;&nbsp;&nbsp;Residential real estate | (121) | (52) |
| &nbsp;&nbsp;&nbsp;Commercial | (314) | (177) |
| &nbsp;&nbsp;&nbsp;Consumer and other | (237) | (151) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total charge-offs** | (690) | (429) |
| Recoveries: |  |  |
| &nbsp;&nbsp;&nbsp;Commercial real estate | 151 | 75 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 202 |  |
| &nbsp;&nbsp;&nbsp;Residential real estate | 44 | 9 |
| &nbsp;&nbsp;&nbsp;Commercial | 4 | 54 |
| &nbsp;&nbsp;&nbsp;Consumer and other | 26 | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total recoveries** | 427 | 170 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net (charge-offs) recoveries** | $**(263)** | $**(259)** |
| &nbsp;&nbsp;&nbsp;Provision for credit losses | $0 | $1829 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Balance at end of period | $17942 | $18205 |
| &nbsp;&nbsp;&nbsp;Ratio of allowance to end of period loans | 1.01% | 1.00% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ratio of net (charge-offs) recoveries to average loans | (0.015)% | (0.015)% |

---

Net charge-offs for the nine months ended September 30, 2025 totaled $0.3 million. Net charge-offs for the year ended December 31, 2024 totaled $0.3 million.

 ****

***Nonperforming Loans***

Loans are considered delinquent when principal or interest payments are past due 30 days or more. Delinquent loans may remain on accrual status between 30 days and 90 days past due. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Typically, the accrual of interest on loans is discontinued when principal or interest payments are past due 90 days or when, in the opinion of management, there is a reasonable doubt as to collectability in the normal course of business. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on nonaccrual loans is subsequently recognized only to the extent that cash is received and the loan's principal balance is deemed collectible. Loans are restored to accrual status when the loans become well-secured and management believes full collectability of principal and interest is probable.

Loans that do not share risk characteristics are evaluated on an individual basis. For collateral-dependent loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. The Company may, in the alternative, measure the expected credit loss as the amount by which the amortized cost basis of the loan exceeds the estimated fair value of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized costs basis of the loan exceeds the fair value of the underlying collateral less estimated costs to sell. The ACL may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan.

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated selling costs. Any write-down to fair value at the time of transfer to OREO is charged to the ACL. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell. Costs of improvements are capitalized, whereas costs related to holding OREO and subsequent write-downs to the value thereof are expensed. Any gains and losses realized at the time of disposal are reflected in income.

Real estate that we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as foreclosed assets held for sale (OREO) until sold and is initially recorded at fair value less costs to sell when acquired, establishing a new carrying value. OREO totaled approximately $0.5 million at September 30, 2025, and $0.8 million at December 31, 2024.

Nonperforming loans include nonaccrual loans and loans past due 90 days or more. Nonperforming assets consist of nonperforming loans plus OREO and collateral taken in foreclosure or similar proceedings.

Nonaccrual loans were $5.4 million at September 30, 2025. We had no loans 90 days past due and still accruing at September 30, 2025.

Total nonperforming loans increased approximately $0.3 million from December 31, 2024 to September 30, 2025. The increase was primarily the result of normal fluctuations.

The following tables present the contractual aging of the recorded investment and loan discount in current and past due loans by class of loans as of September 30, 2025, and December 31, 2024:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Contractual Aging of Recorded Investments** | **Contractual Aging of Recorded Investments** | **Contractual Aging of Recorded Investments** | **Contractual Aging of Recorded Investments** | **Contractual Aging of Recorded Investments** |
| <br>**As of September 30, 2025** | **Current** | **30 – 89 Days <br> Past Due** | **90+ Days <br> Past Due** | **Nonaccrual** | **Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Real estate mortgages: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial real estate | $1001212 | $450 | $— | $530 | $1002192 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 200701 | 662 |  | 36 | 201399 |
| &nbsp;&nbsp;&nbsp;Residential real estate | 369092 | 3062 |  | 4615 | 376769 |
| &nbsp;&nbsp;&nbsp;Other | 14831 | 0 |  | 0 | 14831 |
| Commercial | 154449 | 103 |  | 180 | 154732 |
| Consumer and other | 23499 | 124 |  | 28 | 23652 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total loans** | $**1763783** | $**4401** | $**—** | $**5390** | $**1773574** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Contractual Aging of Recorded Investments** | **Contractual Aging of Recorded Investments** | **Contractual Aging of Recorded Investments** | **Contractual Aging of Recorded Investments** | **Contractual Aging of Recorded Investments** |
| <br>**As of December 31, 2024** | **Current** | **30 – 89 Days <br> Past Due** | **90+ Days <br> Past Due** | **Nonaccrual** | **Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Real estate mortgages: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial real estate | $1005336 | $427 | $— | $444 | $1006207 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 199555 | 238 |  | 6 | 199800 |
| &nbsp;&nbsp;&nbsp;Residential real estate | 358812 | 6005 |  | 4491 | 369308 |
| &nbsp;&nbsp;&nbsp;Other | 16816 |  |  |  | 16816 |
| Commercial | 201101 | 418 |  | 74 | 201593 |
| Consumer and other | 21794 | 118 | 2 | 44 | 21958 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total loans** | $**1803415** | $**7206** | $**2** | $**5059** | $**1815682** |

---

 

 

*Nonperforming Assets*

The following table sets forth the allocation of our nonperforming assets among different asset categories as of the dates indicated. Nonperforming assets consist of nonperforming loans plus OREO and repossessed property. Nonperforming loans include nonaccrual loans and loans past due 90 days or more.

---

| | | |
|:---|:---|:---|
|  | **As of <br> September 30,<br> 2025** | **As of<br> December 31,<br> 2024** |
|  | **(Dollars in Thousands)** | **(Dollars in Thousands)** |
| Nonaccrual loans | $5390 | $5059 |
| Loans past due 90 days or more and still accruing |  | 2 |
| &nbsp;&nbsp;&nbsp;Total nonperforming loans | 5390 | 5061 |
| OREO | 533 | 832 |
| Repossessed property |  |  |
| &nbsp;&nbsp;&nbsp;Total nonperforming assets | $5923 | $5893 |
| Modified loans – nonaccrual<sup>(1)</sup> | $— | $— |
| Modified loans – accruing | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for credit losses | $17942 | $18205 |
| Total loans outstanding at end of period | $1773574 | $1815682 |
| &nbsp;&nbsp;&nbsp;Nonperforming loans to total loans | 0.30% | 0.28% |
| &nbsp;&nbsp;&nbsp;Nonperforming assets to total loans and OREO | 0.33% | 0.32% |
| Allowance for credit losses to nonperforming loans | 333% | 360% |
| Allowance for credit losses to total loans | 1.01% | 1.00% |
| Nonaccrual loans by category: |  |  |
| Real estate: |  |  |
| &nbsp;&nbsp;&nbsp;Commercial real estate | $530 | $444 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 36 | 6 |
| &nbsp;&nbsp;&nbsp;Residential and other | 4615 | 4491 |
| Commercial | 180 | 74 |
| Consumer and other | 28 | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** | $**5390** | $**5059** |

---

(1) Troubled
 debt restructured loans are excluded from nonperforming loans unless they otherwise meet
 the definition of nonaccrual loans or are more than 90 days past due.

 

 

*Modifications to Borrowers Experiencing Financial Difficulty*

On occasion, the Bank modifies loans to borrowers in financial distress by providing principal forgiveness, term extensions, interest rate reductions, or payment delays. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. In some cases, the Bank provides multiple types of concessions on one loan.

On January 1, 2023, the Company adopted Accounting Standards Update ("ASU") 2023-02— Financial Instruments — Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (ASU 2023-02). ASU 2023-02 eliminates the troubled debt restructuring (TDR) measurement and recognition guidance and requires that entities evaluate whether a modification represents a new loan or a continuation of an existing loan consistent with the accounting for other loan modifications. Additional disclosures relating to modifications to borrowers experiencing financial difficulty are required under ASU 2023-02. The Company adopted this ASU on a prospective basis.

These loans are excluded from our nonperforming loans unless they otherwise meet the definition of nonaccrual loans or are past due 90 days or more after the restructuring. The balance of these loans as of September 30, 2025 and December 31, 2024, was immaterial.

**Credit Quality**

Credit quality and trends in the loan portfolio segments are measured and monitored regularly. Detailed reports, by product, collateral, accrual status, and other applicable criteria, are reviewed by our Chief Credit Officer.

In addition to the past due and nonaccrual criteria, we also evaluate loans according to an internal risk grading system. Loans are segregated between pass, special mention, substandard, doubtful, and loss categories, which conform to regulatory definitions. A description of the general characteristics of the risk categories and definitions of those segregations follows:

**Pass** — Loans in this category are considered to have a low likelihood of loss based on relevant information analyzed about the ability of the borrowers to service their debt and other factors.

**Special Mention** — Loans in this category are currently protected but are potentially weak, including, for example, as a result of adverse trends in the borrower's operations, credit quality or financial strength. These loans constitute an undue and unwarranted credit risk but not to the point of justifying a substandard classification. The credit risk may be relatively minor yet constitute an unwarranted risk in light of the circumstances. Special mention loans have potential weaknesses which may, if not checked or corrected, weaken the loan or inadequately protect the Bank's credit position at some future date.

**Substandard** — A substandard loan is inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt, and they are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

**Doubtful** — Loans classified as doubtful have all the weaknesses inherent in loans classified as substandard, plus the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

**Loss** — Loans classified as loss are considered uncollectable and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the asset even though partial recovery may be effected in the future.

The following tables summarize the risk categories of our loan portfolio based upon the most recent analysis performed as of September 30, 2025, and December 31, 2024, respectively:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Outstanding Loan Balance by Internal Risk Grades** | **Outstanding Loan Balance by Internal Risk Grades** | **Outstanding Loan Balance by Internal Risk Grades** | **Outstanding Loan Balance by Internal Risk Grades** | **Outstanding Loan Balance by Internal Risk Grades** |
| <br>**As of September 30, 2025** | **Pass** | **Special <br> Mention** | **Substandard** | **Doubtful** | **Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Real estate: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial real estate | $999788 | $1776 | $628 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $1002192 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 201363 |  | 36 |  | 201399 |
| &nbsp;&nbsp;&nbsp;Residential | 371226 | 838 | 4705 |  | 376769 |
| &nbsp;&nbsp;&nbsp;Other | 14831 |  |  |  | 14831 |
| Commercial | 153818 | 733 | 180 |  | 154732 |
| Consumer and other | 23616 | 5 | 31 |  | 23652 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total loans** | $**1764642** | $**3352** | $**5580** | $**—** | $**1773574** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Outstanding Loan Balance by Internal Risk Grades** | **Outstanding Loan Balance by Internal Risk Grades** | **Outstanding Loan Balance by Internal Risk Grades** | **Outstanding Loan Balance by Internal Risk Grades** | **Outstanding Loan Balance by Internal Risk Grades** |
| <br>**As of December 31, 2024** | **Pass** | **Special <br> Mention** | **Substandard** | **Doubtful** | **Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Real estate: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Commercial real estate | $1002112 | $3605 | $489 | $— | $1006207 |
| &nbsp;&nbsp;&nbsp;Construction and land development | 199098 | 701 |  |  | 199800 |
| &nbsp;&nbsp;&nbsp;Residential | 363952 | 865 | 4491 |  | 369308 |
| &nbsp;&nbsp;&nbsp;Other | 16816 |  |  |  | 16816 |
| Commercial | 200976 | 543 | 74 |  | 201593 |
| Consumer and other | 21902 | 8 | 48 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; — | 21958 |
| &nbsp;&nbsp;&nbsp;**Total loans** | $**1804857** | $**5722** | $**5102** | $— | $**1815682** |

---

 ****

***Securities Portfolio***

Our securities portfolio serves the following purposes: (i) it provides liquidity to supplement cash flows from the loan and deposit activities of customers; (ii) it can be used as an interest rate risk management tool because it provides a large base of assets and we can change the maturity and interest rate characteristics more easily than those of the loan portfolio to better match changes in the deposit base and other Company funding sources; (iii) it is an alternative interest-earning asset when loan demand is weak or when deposits grow more rapidly than loans; and (iv) it provides a source of pledged assets for securing certain deposits and borrowed funds, as may be required by law or by specific agreement with a depositor or lender.

Our securities portfolio consists of securities classified as available-for-sale or held-to-maturity. In determining such classification, securities that the Company has the positive intent and ability to hold to maturity are classified as "held-to-maturity" and are carried at amortized cost. Securities not classified as held-to-maturity are classified as "available-for-sale" and recorded at fair value with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss) net of tax. Our securities portfolio consists of U.S. government and federal agency securities, U.S. government sponsored enterprise securities, mortgage-backed securities, and state and political subdivisions obligations. We determine the appropriate classification at the time of purchase. The following tables summarize the fair value of our securities portfolio as of the dates presented.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized <br> Cost** | **Fair <br> Value** | **Unrealized <br> Gain/(Loss)** | **Amortized <br> Cost** | **Fair <br> Value** | **Unrealized <br> Gain/(Loss)** |
| **Available-for-Sale** | | | | | | |
| U.S. government and federal agency | $7 | $7 | $— | $15277 | $15269 | $(8) |
| U.S. government-sponsored enterprises (GSEs) |  |  |  | 56 | 56 |  |
| Mortgage-backed securities | 14122 | 13581 | (541) | 17085 | 16143 | (942) |
| State and political subdivisions | 16243 | 15968 | 275 | 17253 | 16470 | (783) |
| **Total Available-for-Sale** | $**30372** | $**29556** | $**(816)** | $**49671** | $**47938** | $**(1733)** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized <br> Cost** | **Fair <br> Value** | **Unrealized <br> Gain/(Loss)** | **Amortized <br> Cost** | **Fair <br> Value** | **Unrealized <br> Gain/(Loss)** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **Held-to-Maturity** | | | | | | |
| U.S. government and federal agency | $31764 | $31417 | (347) | $87467 | $84440 | $(3027) |
| U.S. government-sponsored enterprises (GSEs) | 57620 | 56375 | (1245) | 19271 | 18560 | (711) |
| Mortgage-backed securities | 38613 | 36382 | (2231) | 19031 | 15864 | (3167) |
| State and political subdivisions | 3918 | 3717 | (201) | 2448 | 2179 | (269) |
| **Total Held-to-Maturity** | $**131915** | $**127892** | $**(4023)** | $**128217** | $**121043** | $**(7174)** |

---

Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. At September 30, 2025, we evaluated the securities that had an unrealized loss for other-than-temporary impairment and determined all declines in value to be temporary. We anticipate full recovery of amortized cost with respect to these securities by maturity, or sooner in the event of a more favorable market interest rate environment. We do not intend to sell these securities, and it is not probable that we will be required to sell them before recovery of the amortized cost basis, which may be at maturity.

The following tables set forth certain information regarding contractual maturities and the weighted average yields of our investment securities as of September 30, 2025, and December 31, 2024. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** |
|  | **Due in One Year <br> or Less** | **Due in One Year <br> or Less** | **Due after One Year <br> through Five Years** | **Due after One Year <br> through Five Years** | **Due after Five Years <br> through Ten Years** | **Due after Five Years <br> through Ten Years** | **Due after <br> Ten Years** | **Due after <br> Ten Years** |
|  | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **Available-for-Sale** | | | | | | | | |
| U.S. treasury securities |  |  |  |  |  |  |  |  |
| U.S. government and federal agencies |  |  | 7 |  |  |  |  |  |
| State and political subdivisions | 3534 | 2.53% | 5990 | 2.10% | 4778 | 2.07% | 1940 | 0.99% |
| Mortgage-backed securities | 62 | 0.06% | 2221 | 0.91% | 4290 | 1.16% | 7550 | 2.83% |
| **Total Available-for-Sale** | $**3596** | **2.59%** | $**8218** | **3.02%** | $**9067** | **3.23%** | $**9491** | **3.83%** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **Due in One Year <br> or Less** | **Due in One Year <br> or Less** | **Due after One Year <br> through Five Years** | **Due after One Year <br> through Five Years** | **Due after Five Years <br> through Ten Years** | **Due after Five Years <br> through Ten Years** | **Due after <br> Ten Years** | **Due after <br> Ten Years** |
|  | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **Available-for-Sale** | | | | | | | | |
| U.S. government and federal agencies | $15277 | 4.7% |  |  |  |  |  |  |
| U.S. government sponsored enterprises (GSEs) | 18 | 3.1% | 38 | 8.7% |  |  |  |  |
| State and political subdivisions | 2753 | 2.4% | 8704 | 2.7% | 4913 | 3.6% | 884 | 4.5% |
| Mortgage-backed securities | 9 | 3.3% | 2337 | 4.0% | 6140 | 2.8% | 8598 | 3.5% |
| **Total Available-for-Sale** | $**18057** | **4.3%** | $**11078** | **3.0%** | $**11053** | **3.1%** | $**9482** | **3.8%** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** |
|  | **Due in One Year <br> or less** | **Due in One Year <br> or less** | **Due after One Year <br> through Five Years** | **Due after One Year <br> through Five Years** | **Due after Five Years <br> through Ten Years** | **Due after Five Years <br> through Ten Years** | **Due after <br> Ten Years** | **Due after <br> Ten Years** |
|  | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **Held-to-Maturity** | | | | | | | | |
| U.S. government and federal agencies | $26069 | 1.71% | $5695 | 1.6% | $— | —% | $— | —% |
| U.S. government-sponsored enterprises (GSEs) | 29981 | 0.36% | 27639 | 0.9% |  | —% |  | —% |
| State and political subdivisions |  | —% | 2437 | 1.5% | 98 | 4.37% | 1382 | 0.17% |
| Mortgage-backed securities |  | —% |  | —% |  | —% | 38613 | 3.54% |
| **Total Held-to-Maturity** | $**56050** | **2.07%** | $**35771** | **1.0%** | $**98** | **4.37%** | $**39995** | **3.72%** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | **Due in One Year <br> or less** | **Due in One Year <br> or less** | **Due after One Year <br> through Five Years** | **Due after One Year <br> through Five Years** | **Due after Five Years <br> through Ten Years** | **Due after Five Years <br> through Ten Years** | **Due after <br> Ten Years** | **Due after <br> Ten Years** |
|  | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** | **Amortized <br> Cost** | **Weighted <br> Average <br> Yield** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **Held-to-Maturity** | | | | | | | | |
| U.S. government and federal agencies | $59722 | 4.7% | $27745 | 0.9% | $&nbsp;&nbsp;&nbsp;&nbsp;— | &nbsp;&nbsp;&nbsp;&nbsp;—% | $— | —% |
| U.S. government-sponsored enterprises (GSEs) | 5926 | 3.1% | 13345 | 2.5% |  | —% |  | —% |
| State and political subdivisions |  | —% | 2448 | 1.5% |  | —% |  | —% |
| Mortgage-backed securities |  | —% |  | —% |  | —% | 19031 | 1.8% |
| **Total Held-to-Maturity** | $**65648** | **4.6%** | $**43538** | **1.4%** | $**—** | **—%** | $**19031** | **1.8%** |

---

 ****

***Allowance for Credit Losses — Available-For-Sale Securities:&nbsp;&nbsp;&nbsp;&nbsp;***The Company evaluates available-for-sale securities in an unrealized loss position to determine if credit losses exist. The Company first evaluates whether it intends to sell, or it is more likely than not that it will be required to sell, a security before recovering its amortized cost basis. If either condition exists, the security's amortized cost basis is written down to fair value through income. If either aforesaid condition does not exist, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If credit loss exists, the Company recognizes an ACL, limited to the amount by which the amortized cost basis exceeds the fair value. Any impairment not recognized through an ACL is recognized in other comprehensive income (loss), net of tax.

Changes in the ACL are recorded as provision for credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectability of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

 ****

***Allowance for Credit Losses — Held-to-Maturity Securities:&nbsp;&nbsp;&nbsp;&nbsp;***Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type and any other risk characteristics used to segment the portfolio. Accrued interest receivable on held-to-maturity debt securities totaled $326,202 and $230,223 as of September 30, 2025, and December 31, 2024, respectively.

The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

Securities borrowed or purchased under agreements to resell and securities loaned or sold under agreements to repurchase are treated as collateralized financial transactions. These agreements are recorded at the amount at which the securities were acquired or sold plus accrued interest. It is the Company's policy to take possession of securities purchased under resale agreements. The market value of these securities is monitored, and additional securities are obtained when deemed appropriate to ensure such transactions are adequately collateralized. The Company also monitors its exposure with respect to securities sold under repurchase agreements, and a request for the return of excess securities held by the counterparty is made when deemed appropriate.

The Company sold no held-to-maturity securities prior to maturity during the nine months ended September 30, 2025 or the fiscal year ended December 31, 2024.

 ****

 ****

***Bank-Owned Life Insurance***

We maintain investments in BOLI policies to help control employee benefit costs, as a protection against loss of certain employees and as a tax planning strategy. We are the sole owner and beneficiary of these BOLI policies. At September 30, 2025, BOLI policies totaled $46.5 million compared to $45.8 million at December 31, 2024. The increase represents increases in the cash surrender values of the policies net of a slight reduction in the policies' total value due to an insured's death.

 ****

***Deposits***

Deposits represent our primary and most vital source of funds. We offer a variety of deposit products including demand deposits accounts, interest-bearing products, savings accounts and certificates of deposit. The Bank also acquires brokered deposits, QwickRate internet certificates of deposit, and reciprocal deposits through the Promontory network. The reciprocal deposits include both the Certificate of Deposit Account Registry Service (CDARS) and Insured Cash Sweep programs. We are a member of the Promontory network, which effectively allows depositors to receive FDIC insurance on amounts greater than the FDIC insurance limit, which is currently $250,000 per depositor, per issued bank for each account ownership category. The Promontory network allows institutions to break large deposits into smaller amounts and place them in a network of other Promontory institutions to ensure full FDIC insurance is gained on the entire deposit. Generally, internet and reciprocal deposits are not brokered deposits for regulatory purposes.

Our strong asset growth requires us to place a greater emphasis on both interest and noninterest-bearing deposits. Deposit accounts are added by loan production cross-selling, customer referrals, marketing advertisements, mobile and online banking and our involvement within our communities.

Total deposits were $1.8 billion at September 30, 2025 and $1.9 billion at December 31, 2024. As of September 30, 2025, 22.4% of total deposits was comprised of noninterest-bearing demand deposits, 51.2% of total deposits was comprised of interest-bearing non-maturity accounts and 26.4% of total deposits was comprised of time deposits. As of December 31, 2024, 20.5% of total deposits was comprised of noninterest-bearing demand deposits, 49.8% of total deposits was comprised of interest-bearing non-maturity accounts and 29.7% of total deposits was comprised of time deposits.

The following table summarizes our deposit balances as of September 30, 2025, and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of September 30,** | **As of September 30,** | **As of December 31,** | **As of December 31,** |
|  | **2025** | **2025** | **2024** | **2024** |
|  | **Balance** | **% of <br> Total** | **Balance** | **% of <br> Total** |
|  | | | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Noninterest-bearing demand deposits | $398715 | 22.4% | $397240 | 20.5% |
| Interest-bearing deposits: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest-bearing demand deposits | 530243 | 29.8% | 579240 | 29.9% |
| &nbsp;&nbsp;&nbsp;NOW, savings and money market | 382002 | 21.5% | 385615 | 20.0% |
| &nbsp;&nbsp;&nbsp;Time deposits | 469674 | 26.4% | 576501 | 29.7% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing deposits | 1381919 | 77.6% | 1541356 | 79.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | $1780634 | 100% | $1938596 | 100% |

---

The following tables set forth the maturity of time deposits as of September 30, 2025, and December 31, 2024:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of September 30, 2025 Maturity Within:** | **As of September 30, 2025 Maturity Within:** | **As of September 30, 2025 Maturity Within:** | **As of September 30, 2025 Maturity Within:** | **As of September 30, 2025 Maturity Within:** |
|  | **Three <br> Months** | **Three Months <br> Through <br> 12 Months** | **Over <br> 12 Months <br> Through <br> 3 Years** | **Over <br> 3 Years** | **Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Time deposits ($250,000 or less) | $58758 | $282091 | $19268 | $7791 | $367908 |
| Time deposits (greater than $250,000) | 26670 | 68861 | 6236 |  | 101766 |
| &nbsp;&nbsp;&nbsp;Total time deposits | $85428 | $350952 | $25504 | $7791 | $469674 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2024 Maturity Within:** | **As of December 31, 2024 Maturity Within:** | **As of December 31, 2024 Maturity Within:** | **As of December 31, 2024 Maturity Within:** | **As of December 31, 2024 Maturity Within:** |
|  | **Three <br> Months** | **Three Months <br> Through <br> 12 Months** | **Over <br> 12 Months <br> Through <br> 3 Years** | **Over <br> 3 Years** | **Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Time deposits ($250,000 or less) | $84785 | $315751 | $73074 | $8150 | $481760 |
| Time deposits (greater than $250,000) | 17909 | 68975 | 7566 | 291 | 94741 |
| &nbsp;&nbsp;&nbsp;Total time deposits | $102694 | $384726 | $80640 | $8441 | $576501 |

---

Time deposits issued in amounts of greater than $250,000 represent the type of deposit most likely to affect our future earnings because of interest rate sensitivity. The effective cost of these funds is generally higher than other time deposits because the funds are usually obtained at premium rates of interest.

 ****

***Borrowed Funds***

In addition to deposits, we utilize advances from the FHLB and other borrowings as a supplementary funding source to finance our operations.

 

*FHLB Advances.* The FHLB allows us to borrow, on both a short and long-term basis, collateralized by a blanket floating lien on first mortgage loans and CRE loans as well as FHLB stock. At September 30, 2025, and December 31, 2024, we had borrowing capacity from the FHLB of $305.0 million and $175.1 million, respectively. The increase in capacity is due to adding new collateral. We had $35 million cash management advance FHLB borrowings as of September 30, 2025 and none as of December 31, 2024. We had long-term FHLB borrowings of $61.6 million and $65.6 million as of September 30, 2025, and December 31, 2024, respectively. All of our outstanding FHLB advances have fixed rates of interest.

The following table sets forth our FHLB borrowings as of September 30, 2025, and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **As of <br> September 30,<br> 2025** | **As of<br> December 31, <br> 2024** |
|  | | **(Dollars in thousands)** |
| Long-term FHLB borrowings outstanding at end of period | $61628 | $65581 |
| Weighted average interest rate at end of period | 2.91% | 2.72% |
| Maximum month-end balance | $66202 | $97799 |
| Average balance outstanding during the period | $62760 | $72572 |
| Weighted average interest rate during the period | 2.83% | 2.73% |

---

 

*Lines of Credit.&nbsp;&nbsp;&nbsp;&nbsp;*The Bank has uncollateralized, uncommitted federal funds lines of credit with multiple banks as a source of funding for liquidity management. The total amount of the lines of credit was $102.5 million as of September 30, 2025, of which $77.5 million was available. The total amount of the lines of credit was $102.5 million as of December 31, 2024, all of which was available.

 

 

*Federal Reserve Discount Window.&nbsp;&nbsp;&nbsp;&nbsp;*The Bank has a line of credit with the Federal Reserve Discount Window collateralized with CRE loans. There were no amounts outstanding under this line of credit as of September 30, 2025, or December 31, 2024.

 

*Community Trust Bank Loan Agreement.&nbsp;&nbsp;&nbsp;&nbsp;*In April 2015, we executed the Community Trust Loan Agreement, which was later amended and restated on January 27, 2020, providing for the CTB Loan. The CTB Loan is collateralized by all of the issued and outstanding shares of the Bank. The Community Trust Loan Agreement includes various financial and nonfinancial covenants. The CTB Loan is repayable in quarterly principal and interest payments based on a variable rate per annum equal to the prime rate as reported in The Wall Street Journal, adjustable daily. The balance outstanding on the CTB Loan as of September 30, 2025 was $20.5 million. On October 7, 2025, the CTB loan was paid in full.

 

*Trust Preferred Securities.&nbsp;&nbsp;&nbsp;&nbsp;*With the acquisition of Citizens Bancorp and its bank subsidiary, Citizens Bank, in 2018, we also acquired the Trust. In September 2004, the Trust issued the Trust Preferred Securities with an aggregate liquidation amount of $6,000,000 ($1,000 per Trust Preferred Security) to a third-party investor. Citizens Bancorp then issued the Subordinated Debentures aggregating $6,186,000 to the Trust. The Subordinated Debentures are the sole assets of the Trust. The Subordinated Debentures and the Trust Preferred Securities pay interest and dividends, respectively, on a quarterly basis, at a variable interest rate equal to three-month SOFR plus 2.40% adjusted quarterly, which was 6.75% and 6.89% on September 30, 2025, and December 31, 2024, respectively. These Subordinated Debentures will mature in 2034, at which time the Trust Preferred Securities are to be redeemed. The Subordinated Debentures and the Trust Preferred Securities can be redeemed prior to maturity, in whole or in part, at a redemption price of $1,000 per Trust Preferred Security. The Company (as successor to Citizens Bancorp) has provided a full, irrevocable, and unconditional guarantee on a subordinated basis of the obligations of the Trust under the Trust Preferred Securities in the event of the occurrence of an event of default, as defined in such guarantee. The trust agreement contains provisions that enable the Company to defer making interest payments for a period of up to five years. However, the Company would be restricted from paying dividends on or redeeming its common stock during any deferral. The Company has received approval from the Federal Reserve Bank to pay the Trust Preferred Securities in full. The Company plans to notify the Trust and pay the Trust Preferred Securities full on the next distribution date on January 7, 2026.

**Liquidity and Capital Resources**

 ****

***Liquidity***

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

Interest rate sensitivity involves the relationships between rate-sensitive assets and liabilities and is an indication of the probable effects of interest rate fluctuations on our net interest income. Interest rate-sensitive assets and liabilities are those with yields or rates that are subject to change within a future time period due to maturity or changes in market rates. A model is used to project future net interest income under a set of possible interest rate movements. The Bank's Asset/Liability Committee reviews this information to determine if the projected future net interest income levels would be acceptable. We attempt to stay within acceptable net interest income levels.

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

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

The Company and the Bank are separate corporate entities. The Company's liquidity depends primarily upon dividends received from the Bank and capital and debt instruments issued by the Company. Statutory and regulatory limitations apply to the Bank's payment of dividends to the Company. See the sections titled "Dividend Policy — Dividend Restrictions" and "Supervision and Regulation — Payment of Dividends and Repurchases of Capital Instruments" in the Registration Statement. The Company relies on its liquidity to pay interest and principal on Company indebtedness, company operating expenses, and dividends to Company shareholders.

---

| | |
|:---|:---|
| **As of September 30, 2025** | |
| ***Current On-Balance Sheet (in thousands)*** | |
| Cash and cash equivalents | $154787 |
| Unpledged available-for-sale and held-to-maturity securities | 49250 |
| **Total on-balance sheet** | $**204037** |

---

---

| | |
|:---|:---|
| <br>**As of September 30, 2025** | |
| ***Available Sources of Liquidity (in thousands)*** | |
| Federal Reserve & FHLB remaining borrowing capacity | $305017 |
| Correspondent banks borrowing capacity | 77500 |
| Brokered CDs capacity | 218786 |
| **Total available sources** | $601304 |

---

***Capital Requirements***

We are subject to various regulatory capital requirements administered by the federal and state banking regulators. Failure to meet applicable regulatory capital requirements may result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under regulatory capital adequacy guidelines and the regulatory framework for "prompt corrective action" (described below), we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting policies. The capital amounts and classifications are subject to qualitative judgments by the federal banking regulators about components, risk weightings and other factors. Because the Company has total consolidated assets of less than $3 billion and otherwise qualifies for the application of the Federal Reserve's Small Bank Holding Company Policy Statement, the Company currently is not subject to federal capital adequacy guidelines on a consolidated basis. Rather, the regulatory capital requirements are applied to and assessed at the Bank. See the section titled "Supervision and Regulation" in the Registration Statement.

The tables below summarize the capital requirements applicable to the Bank in order for the Bank to satisfy the minimum capital requirements of the capital adequacy guidelines and to be considered "well-capitalized" from a regulatory perspective under the prompt corrective action framework, as well as the Company's and the Bank's capital ratios as of September 30, 2025, and December 31, 2024. The Federal Deposit Insurance Act ("FDIA") requires, among other things, that the federal banking regulators take prompt corrective action with respect to FDIC-insured depository institutions that do not meet certain minimum capital requirements. Under the FDIA, insured depository institutions are divided into five capital categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. Under applicable FDIA regulations, an institution is considered to be well capitalized if it has a common equity Tier 1 capital ratio ("CET1 capital") of at least 6.5%, a leverage ratio of at least 5%, a Tier 1 risk-based capital ratio of at least 8%, and a total risk-based capital ratio of at least 10%, and it is not subject to a directive, order or written agreement to meet and maintain specific capital levels.

The Bank exceeded all the minimum regulatory capital requirements under the federal capital adequacy guidelines (Basel III), and the Bank met all the minimum capital requirements to be considered "well-capitalized" under the prompt corrective action framework, as of the dates reflected in the tables below.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Actual** | **Actual** | **Required Minimum <br> Under Capital Adequacy <br> Guidelines** | **Required Minimum <br> Under Capital Adequacy <br> Guidelines** | **Minimum to be <br> Considered "Well <br> Capitalized" Under PCA** | **Minimum to be <br> Considered "Well <br> Capitalized" Under PCA** |
|  | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **As of September 30, 2025:** | | | | | | |
| Tier 1 capital (to average assets) (leverage) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Company | $239495 | 10.8% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $257886 | 12.0% | $85742 | 4.0% | $107777 | 5.0% |
| CET1 capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Company | $239495 | 12.8% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $257886 | 14.2% | $81917 | 4.5% | $118324 | 6.5% |
| Tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Company | $239495 | 13.7% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $257886 | 14.2% | $109222 | 6.0% | $145629 | 8.0% |
| Total capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Company | $257886 | 14.1% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $275898 | 15.2% | $145629 | 8.0% | $182037 | 10.0% |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Actual** | **Actual** | **Required Minimum <br> Under Capital Adequacy <br> Guidelines** | **Required Minimum <br> Under Capital Adequacy <br> Guidelines** | **Minimum to be <br> Considered "Well <br> Capitalized" Under PCA** | **Minimum to be <br> Considered "Well <br> Capitalized" Under PCA** |
|  | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| **As of December 31, 2024:** | | | | | | |
| Tier 1 capital (to average assets) (leverage) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Company | $214414 | 9.6% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $235674 | 10.6% | $89209 | 4.0% | $111511 | 5.0% |
| CET1 capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Company | $208976 | 11.0% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $235674 | 12.5% | $84892 | 4.5% | $122622 | 6.5% |
| Tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Company | $214414 | 11.3% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $235674 | 12.5% | $113190 | 6.0% | $150920 | 8.0% |
| Total capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Company | $232619 | 12.2% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;Bank | $253949 | 13.5% | $150920 | 8.0% | $188650 | 10.0% |

---

 ****

 ****

***Contractual Obligations***

The following tables contain supplemental information regarding our total contractual obligations at September 30, 2025, and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Payments Due at September 30, 2025** | **Payments Due at September 30, 2025** | **Payments Due at September 30, 2025** | **Payments Due at September 30, 2025** |
|  | **Within <br> One Year** | **One to <br> Five Years** | **After <br> Five Years** | **Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Time deposits | $432194 | $34610 | $2870 | $469674 |
| Short-term borrowings | 62663 |  |  | 62663 |
| Long-term borrowings | 11728 | 52235 | 30575 | 94538 |
| Subordinated debt securities |  |  | 5559 | 5559 |
| &nbsp;&nbsp;&nbsp;Total contractual obligations | $506585 | $86845 | $39004 | $632434 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Payments Due at December 31, 2024** | **Payments Due at December 31, 2024** | **Payments Due at December 31, 2024** | **Payments Due at December 31, 2024** |
|  | **Within <br> One Year** | **One to <br> Five Years** | **After <br> Five Years** | **Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Time deposits | $480868 | $92188 | $3446 | $576501 |
| Short-term borrowings | 3392 |  |  | 3392 |
| Long-term borrowings | 16385 | 51815 | 32066 | 100266 |
| Subordinated debt securities |  |  | 5507 | 5507 |
| &nbsp;&nbsp;&nbsp;Total contractual obligations | $500644 | $144003 | $41019 | $685666 |

---

We believe that we will be able to meet our contractual obligations as they come due through the maintenance of adequate cash levels. We expect to maintain adequate cash levels through profitability, loan and securities repayment and maturity activity and continued deposit gathering activities. We have in place various borrowing mechanisms for both short-term and long-term liquidity needs.

 ****

***Off-Balance Sheet Arrangements&nbsp;&nbsp;&nbsp;&nbsp;***We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in our consolidated balance sheets. Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit to our customers is represented by the contractual or notional amount of those instruments. Commitments to extend credit and standby letters of credit are not recorded as an asset or liability by us until the instrument is exercised. The contractual or notional amounts of these instruments reflect the extent of involvement we have in particular classes of financial instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. The amount and nature of collateral obtained, if deemed necessary by us upon extension of credit, is based on management's credit evaluation of the potential borrower.

Standby letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private short-term borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. We hold collateral supporting such commitments for which collateral is deemed necessary.

The following table summarizes commitments we had made as of the dates presented.

---

| | | |
|:---|:---|:---|
|  | **As of <br> September 30,**<br>**2025** | **As of<br> December 31,**<br>**2024** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** |
| Commitments to grant loans and unfunded commitments under lines of credit | $280792 | $354509 |
| Standby letters of credit | 23225 | 45505 |
| &nbsp;&nbsp;&nbsp;Total | $304017 | $400014 |

---

**Item 3. Quantitative and Qualitative Disclosures About Market Risk.**

Not required.

**Item 4. Controls and Procedures.**

 

*<u>Evaluation of Disclosure Controls and Procedures</u>*

The Company's management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of September 30, 2025. The Company's disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of September 30, 2025.

 

*<u>Changes in Internal Control over Financial Reporting</u>*

During the quarter ended September 30, 2025, there was no change in the Company's internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 of the Exchange Act that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

**PART II—OTHER INFORMATION**

**Item 1. Legal Proceedings.**

From time to time, the Company and the Bank are parties to various legal proceedings in the ordinary course of their respective businesses, including proceedings to collect loans or enforce security interests. In the opinion of management, none of these legal proceedings currently pending will, when resolved, have a material adverse effect on the business, financial condition or results of operations of the Company or the Bank.

**Item 1A. Risk Factors.**

In addition to the other information set forth in this Report, you should carefully consider the factors discussed under the section titled "Risk Factors" in the Registration Statement. These factors could materially and adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this Report. Please be aware that these risks may change over time and other risks may prove to be important in the future.

There have been no material changes to the risk factors previously disclosed in the Registration Statement.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.**

 

*<u>Recent Sales of Unregistered Securities</u>*

We entered into a three-year employment agreement with Terry L. Lee, our President and Chief Executive Officer, effective as of September 29, 2025 (the "Lee Employment Agreement"). Pursuant to the Lee Employment Agreement, Terry L. Lee was granted an award of RSUs under and subject to the Commercial Bancgroup, Inc. 2025 Omnibus Incentive Plan having a grant date value of $1,020,000 and to be settled in shares of common stock. The award will generally vest in three equal annual installments, subject to continued employment through the applicable vesting date. The issuance of these RSUs to Terry L. Lee pursuant to the Lee Employment Agreement was deemed to be exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance upon Rule 701 under the Securities Act ("Rule 701") because the issuance was pursuant to a contract relating to compensation as provided under Rule 701.

Use of Proceeds

On October 3, 2025, we completed our IPO of 7,173,000 shares of our common stock at an IPO price of $24.00 per share, with 1,458,334 shares sold by us and 5,714,758 shares sold by certain selling shareholders. We received net proceeds of approximately $30.6 million, after deducting underwriting discounts and commissions of approximately $2.3 million and estimated offering expenses, including legal, accounting, and other expenses, of approximately $2.1 million. There has been no material change in the planned use of proceeds from our IPO from that disclosed in our final prospectus dated September 30, 2025 and filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act, on October 2, 2025. On October 7, 2025, the Company used $20.5 million of its net proceeds from the IPO to fully repay the outstanding indebtedness under the Community Trust Loan Agreement.

All of the shares of our common stock issued and sold in our IPO were registered under the Securities Act pursuant to the Registration Statement, which was declared effective by the SEC on September 30, 2025. Hovde Group, LLC acted as sole book-running manager for the IPO. The IPO terminated after the sale of all securities registered pursuant to the Registration Statement.

None of the expenses associated with the IPO were paid directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10% or more of any class of our equity securities, or (iii) any of our affiliates.

**Item 3. Defaults Upon Senior Securities.**

None.

**Item 4. Mine Safety Disclosures.**

None.

**Item 5. Other Information.**

Insider Trading Arrangements

During the three months ended September 30, 2025, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

**Item 6. Exhibits.**

**List of Exhibits**

---

| | |
|:---|:---|
| **Number** | **Description** |
| 3.1\* | [Amended and Restated Charter of Commercial Bancgroup, Inc.](ea026526601ex3-1_commercial.htm) |
| 3.2\* | [Amended and Restated Bylaws of Commercial Bancgroup, Inc.](ea026526601ex3-2_commercial.htm) |
| 10.1\* | [Employment Agreement, by and among Commercial Bancgroup, Inc., Commercial Bank, and Terry L. Lee.](ea026526601ex10-1_commercial.htm) |
| 10.2\* | [Employment Agreement, by and among Commercial Bancgroup, Inc., Commercial Bank, and Philip J. Metheny.](ea026526601ex10-2_commercial.htm) |
| 10.3\* | [Employment Agreement, by and between Commercial Bank and Richard C. Sprinkle, Jr.](ea026526601ex10-3_commercial.htm) |
| 10.4 | [Form of Director and Executive Officer Indemnification Agreement (incorporated by reference to Exhibit 10.6 to Commercial Bancgroup Inc.'s Registration Statement on Form S-1/A filed with the SEC on September 22, 2025).](http://www.sec.gov/Archives/edgar/data/1981546/000121390025089852/ea023588507ex10-6_commercial.htm) |
| 10.5\* | [Commercial Bancgroup, Inc. 2025 Omnibus Incentive Plan.](ea026526601ex10-5_commercial.htm) |
| 10.6\* | [Form of Employee Restricted Stock Unit Award Agreement.](ea026526601ex10-6_commercial.htm) |
| 31.1\* | [Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ea026526601ex31-1_commercial.htm) |
| 31.2\* | [Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ea026526601ex31-2_commercial.htm) |
| 32.1\*\* | [Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ea026526601ex32-1_commercial.htm) |
| 32.2\*\* | [Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ea026526601ex32-2_commercial.htm) |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

\* Filed herewith

\*\* This exhibit shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

**SIGNATURES**

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

---

| | | |
|:---|:---|:---|
|  | **Commercial Bancgroup, Inc.** | **Commercial Bancgroup, Inc.** |
| Date: November 14, 2025 | By: | /s/ Terry L. Lee |
|  |  | Name: Terry L. Lee |
|  |  | Title: President and Chief Executive Officer |
|  | **Commercial Bancgroup, Inc.** | **Commercial Bancgroup, Inc.** |
| Date: November 14, 2025 | By: | /s/ Philip J. Metheny |
|  |  | Name: Philip J. Metheny |
|  |  | Title: Executive Vice President, Chief Financial Officer |

---

## Exhibit 3.1

**Exhibit 3.1**

**AMENDED AND RESTATED CHARTER** 

**OF** 

**COMMERCIAL BANCGROUP, INC.**

Pursuant to Section 48-20-107 of the Tennessee Business Corporation Act, Tennessee Code Annotated Section 48-11-101 *et seq*. (the " <u>Corporation Act</u>"), the charter of Commercial Bancgroup, Inc., a corporation chartered under the laws of the State of Tennessee, is hereby amended and restated in its entirety as follows:

<u>Section 1.</u> <u>Corporate Name</u>. The full corporate name of the corporation is Commercial Bancgroup, Inc. (the "<u>Company</u>").

<u>Section 2.</u> <u>Principal and Registered Offices; Registered Agent</u>. The address of both the principal office and the registered office of the Company is 6710 Cumberland Gap Parkway, Harrogate, Claiborne County, Tennessee 37752. The Company's registered agent at its registered office is Terry L. Lee, and his email address is tlee@cbtn.com.

<u>Section 3.</u> <u>Business Email Address</u>. The business email address for the Company is cb-business@cbtn.com.

<u>Section 4.</u> <u>Purpose</u>. The Company is incorporated to pursue, conduct, and engage in any or all lawful businesses and activities for or available to a corporation chartered under the Corporation Act and registered as a bank holding company, and, if applicable, that has elected to become a financial holding company, under the Bank Holding Company Act of 1956, as amended.

<u>Section 5.</u> <u>For Profit</u>. The Company is for profit.

<u>Section 6.</u> <u>Capital Stock</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The total number of shares of all classes of capital stock which the Company shall have the authority to issue is 60,000,000 shares, of which 50,000,000 shares shall be common stock, par value $0.01 per share (the "<u>Common Stock</u>"), and 10,000,000 shares shall be preferred stock, par value $0.01 per share (the "<u>Preferred Stock</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The holders of Common Stock shall have unlimited voting rights, with the holders thereof having one vote per share on all matters on which the Common Stock is entitled to vote. The holders of Common Stock shall have (i) the right to receive distributions from the Company, when, as, and if declared by the board of directors of the Company, subject to the satisfaction of any preferential distribution rights of holders of any other class or series of capital stock of the Company, and (ii) the right, together with the holders of any other class or series of capital stock of the Company who have the right to receive the net assets of the Company upon dissolution, to receive the net assets of the Company upon the dissolution of the Company, subject to the satisfaction of any preferential rights of holders of any other class or series of capital stock of the Company to receive such assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Authority is expressly granted to the board of directors of the Company to, from time to time, provide for and issue, out of the authorized but unissued shares of Preferred Stock, one or more series of Preferred Stock and, with respect to each such series, to fix by resolution the number of shares constituting such series and, within the limitations set forth in Section 48-16-101 of the Corporation Act, the designation and preferences, limitations, and relative rights of such series. All shares of any series of Preferred Stock shall be identical in all respects, and all series of Preferred Stock shall rank equally and be identical in all respects, except as otherwise provided in the resolution(s) providing for any series of Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) On the date and at the time this Amended and Restated Charter becomes effective, (i) each share of Class B common stock, par value $10.00 per share, of the Company (the "<u>Class B Stock</u>") then issued and outstanding shall automatically, without any action on the part of the holder(s) thereof, be reclassified and converted into and become 1.15 shares of Common Stock, and (ii) each share of Class C common stock, par value $10.00 per share, of the Company (the "<u>Class C Stock</u>") then issued and outstanding shall automatically, without any action on the part of the holder(s) thereof, be reclassified and converted into and become 1.05 shares of Common Stock (the "<u>Stock Reclassification</u>"). Each stock certificate that immediately prior to the effective time of the Stock Reclassification represented issued and outstanding shares of Class B Stock or Class C Stock shall thereafter represent that number of shares of Common Stock into which the shares of Class B Stock or Class C Stock, as applicable, represented by such certificate have been reclassified and converted pursuant to this <u>Section 6(d)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Effective immediately following the Stock Reclassification, each share of Common Stock that is then issued and outstanding (including shares of Common Stock into which the Class B Stock and the Class C Stock have been reclassified and converted pursuant to <u>Section 6(d)</u>) shall automatically, without any action on the part of the holder(s) thereof, be subdivided and reclassified into 250 shares of Common Stock (the "<u>Forward Stock Split</u>"). Each stock certificate that immediately prior to the effective time of the Forward Stock Split represented issued and outstanding shares of Common Stock shall thereafter represent that number of shares of Common Stock into which the shares of Common Stock represented by such certificate have been subdivided and reclassified pursuant to this <u>Section 6(e)</u>. The number of authorized shares of Common Stock, and the par value per share of the Common Stock, shall be as stated in <u>Section 6(a)</u> and shall not be affected by the Forward Stock Split.

<u>Section 7.</u> <u>Board of Directors</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All corporate powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, a board of directors. The board of directors of the Company shall consist of at least five but not more than 25 directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The terms of Company directors shall be staggered by dividing the board of directors of the Company into three classes designated Class I, Class II, and Class III, with the number of directors in each class to at all times be as equal as possible. Each director shall be elected for a term to expire at the third annual meeting of Company shareholders following the annual meeting at which such director is elected, except that (i) each director initially appointed to Class I shall serve for an initial term to expire at the first annual meeting of Company shareholders following the effective date of this Amended and Restated Charter, (ii) each director initially appointed to Class II shall serve for an initial term to expire at the second annual meeting of Company shareholders following the effective date of this Amended and Restated Charter, and (iii) each director initially appointed to Class III shall serve for an initial term to expire at the third annual meeting of Company shareholders following the effective date of this Amended and Restated Charter, and provided that the term of each director shall continue until the election and qualification of his or her successor or a decrease in the number of directors and shall be subject to and end at the director's earlier death, retirement, resignation, or removal from office.

<u>Section 8.</u> <u>Limitation of Director Liability</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No director of the Company shall be personally liable to the Company or its shareholders for monetary damages for breach of fiduciary duty as a director; *provided*, *however*, that this provision shall not eliminate or limit the liability of a director (i) for a breach of the director's duty of loyalty to the Company or its shareholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or (iii) under Section 48-18-302 of the Corporation Act with respect to unlawful distributions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Unless two-thirds of the members of the board of directors of the Company shall approve the amendment or repeal (in which case this <u>Section 8</u> may be amended or repealed by the shareholders of the Company by the affirmative vote of a majority of all votes entitled to be cast), this <u>Section 8</u> may not be amended or repealed by the shareholders of the Company without the affirmative vote of at least two-thirds of all votes entitled to be cast. Any amendment to or the repeal of this <u>Section 8</u> shall be prospective only and shall not adversely affect the limitation of the personal liability of any director of the Company with respect to actions or omissions prior to the effective date of such amendment or repeal.

<u>Section 9.</u> <u>Removal of Directors</u>. A director of the Company may be removed by the shareholders of the Company only for cause and in accordance with the bylaws of the Company. Any or all of the directors of the Company may be removed for cause by the vote of a majority of all members of the board of directors and in accordance with the bylaws of the Company. A director may be removed by the shareholders of the Company or by majority vote of all members of the board of directors only at a meeting called for the purpose of removing the director, and the meeting notice must state that the purpose, or one of the purposes, of the meeting is the removal of director(s).

<u>Section 10.</u> <u>Special Meetings of Shareholders</u>. A special meeting of the shareholders of the Company may be called by the holder(s) of 25% or more (but not less than 25%) of the issued and outstanding shares of voting stock of the Company entitled to vote on any matter proposed to be considered at such special meeting, in the manner prescribed in the bylaws of the Company.

<u>Section 11.</u> <u>Indemnification and Insurance</u>. The Company shall indemnify and advance expenses to its directors and officers, and may indemnify and advance expenses to all other persons, including employees and agents, it has the power to indemnify and advance expenses to under the Corporation Act, and may purchase and maintain insurance or furnish similar protection on behalf of its directors, officers, employees, and agents, in each case to the fullest extent permitted by the Corporation Act (even if indemnification and the advancement of expenses is permissive under the Corporation Act) and applicable federal laws and regulations, including without limitation applicable federal regulations regarding indemnification payments by a depository institution holding company, as the same may be amended from time to time.

<u>Section 12.</u> <u>Amendment of Charter and Bylaws</u>. This Amended and Restated Charter may be amended by the board of directors of the Company to the fullest extent permitted by the Corporation Act. This Amended and Restated Charter may be amended by the shareholders of the Company only by the affirmative vote of a majority of all votes entitled to be cast on the amendment, unless a greater vote is expressly required by this Amended and Restated Charter or by the Corporation Act. The bylaws of the Company may be amended by the shareholders of the Company only by the affirmative vote of a majority of all votes entitled to be cast on the amendment, unless a greater vote is required by the Corporation Act. The bylaws of the Company may be amended by the board of directors of the Company to the fullest extent permitted by the Corporation Act; *provided*, *however*, that any such amendment must be approved by the affirmative vote of a majority of all members of the board of directors, unless a greater vote is required by the Corporation Act.

<u>Section 13.</u> <u>Miscellaneous</u>. The Company shall be of perpetual duration. The Company's fiscal year shall be the calendar year. The Company's NAICS Code is 551111 (Offices of Bank Holding Companies).

<u>Section 14.</u> <u>Savings Clause</u>. In the event any provision of this Amended and Restated Charter is held to be invalid, illegal, or unenforceable, in whole or in part, in or as applied to any circumstance, the validity, legality, and enforceability of such provision in or as applied to any other circumstance and of the remaining provisions of this Amended and Restated Charter shall not be affected or impaired thereby and shall remain valid, legal, and enforceable to the fullest extent permitted by law.

Dated September 18, 2025.

---

| | |
|:---|:---|
| COMMERCIAL BANCGROUP, INC. | COMMERCIAL BANCGROUP, INC. |
| By: | /s/ Terry L. Lee |
|  | Terry L. Lee |
|  | President and Chief Executive Officer |

---

## Exhibit 3.2

**Exhibit 3.2**

**COMMERCIAL BANCGROUP, INC.**

**AMENDED AND RESTATED BYLAWS**

adopted September 19, 2025

**TABLE OF CONTENTS**

---

| | |
|:---|:---|
| Article I NAME AND OFFICES OF COMPANY | 1 |
| Article II CAPITAL STOCK | 1 |
| &nbsp;&nbsp;&nbsp;Secton 2.1. Share Certificates | 1 |
| &nbsp;&nbsp;&nbsp;Secton 2.2. Rights of Company with Respect to Record Owners | 2 |
| &nbsp;&nbsp;&nbsp;Secton 2.3. Transfers of Shares | 2 |
| Article III SHAREHOLDER MEETINGS | 2 |
| &nbsp;&nbsp;&nbsp;Secton 3.1. Place of Meetings; Meetings by Remote Communication | 2 |
| &nbsp;&nbsp;&nbsp;Secton 3.2. Annual Meetings of Shareholders | 3 |
| &nbsp;&nbsp;&nbsp;Secton 3.3. Special Meetings of Shareholders | 3 |
| &nbsp;&nbsp;&nbsp;Secton 3.4. Notice of Meetings of Shareholders | 4 |
| &nbsp;&nbsp;&nbsp;Secton 3.5. Shareholders List | 4 |
| &nbsp;&nbsp;&nbsp;Secton 3.6. Quorum | 4 |
| &nbsp;&nbsp;&nbsp;Secton 3.7. Voting of Shares | 4 |
| &nbsp;&nbsp;&nbsp;Secton 3.8. Administration of Meetings | 5 |
| &nbsp;&nbsp;&nbsp;Secton 3.9. Record Date | 5 |
| &nbsp;&nbsp;&nbsp;Secton 3.10. Proxies | 5 |
| &nbsp;&nbsp;&nbsp;Secton 3.11. Notice of Shareholder Proposals and Director Nominations | 5 |
| Article IV BOARD OF DIRECTORS | 7 |
| &nbsp;&nbsp;&nbsp;Secton 4.1. Management; Powers and Authority | 7 |
| &nbsp;&nbsp;&nbsp;Secton 4.2. Number of Directors; Term of Office; Chairperson | 7 |
| &nbsp;&nbsp;&nbsp;Secton 4.3. Removal of Directors | 8 |
| &nbsp;&nbsp;&nbsp;Secton 4.4. Director Resignations | 8 |
| &nbsp;&nbsp;&nbsp;Secton 4.5. Vacancies | 8 |
| &nbsp;&nbsp;&nbsp;Secton 4.6. Meetings of the Board | 8 |
| &nbsp;&nbsp;&nbsp;Secton 4.7. Presiding Officer | 9 |
| &nbsp;&nbsp;&nbsp;Secton 4.8. Quorum and Voting | 9 |
| &nbsp;&nbsp;&nbsp;Secton 4.9. Committees of the Board | 9 |
| &nbsp;&nbsp;&nbsp;Secton 4.10. Employee Directors | 10 |
| Article V OFFICERS | 10 |
| &nbsp;&nbsp;&nbsp;Secton 5.1. Officer Positions | 10 |
| &nbsp;&nbsp;&nbsp;Secton 5.2. Election and Term | 10 |
| &nbsp;&nbsp;&nbsp;Secton 5.3. Removal | 10 |
| &nbsp;&nbsp;&nbsp;Secton 5.4. Compensation | 10 |
| &nbsp;&nbsp;&nbsp;Secton 5.5. Chief Executive Officer | 10 |
| &nbsp;&nbsp;&nbsp;Secton 5.6. President | 10 |

---

i

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;Secton 5.7. Chief Financial Officer | 11.0 |
| &nbsp;&nbsp;&nbsp;Secton 5.8. Secretary | 11.0 |
| &nbsp;&nbsp;&nbsp;Secton 5.9. Other Officers | 11.0 |
| Article VI INDEMNIFICATION | 11.0 |
| &nbsp;&nbsp;&nbsp;Secton 6.1. Right to Indemnification | 11.0 |
| &nbsp;&nbsp;&nbsp;Secton 6.2. Claims | 12.0 |
| &nbsp;&nbsp;&nbsp;Secton 6.3. Non-Exclusivity of Rights | 12.0 |
| &nbsp;&nbsp;&nbsp;Secton 6.4. Other Indemnification | 12.0 |
| &nbsp;&nbsp;&nbsp;Secton 6.5. Insurance | 12.0 |
| Article VII FISCAL YEAR | 12.0 |
| Article VIII DISTRIBUTIONS | 13.0 |
| &nbsp;&nbsp;&nbsp;Secton 8.1. Authority | 13.0 |
| &nbsp;&nbsp;&nbsp;Secton 8.2. Record Date | 13.0 |
| Article IX CORPORATE ACTIONS | 13.0 |
| &nbsp;&nbsp;&nbsp;Secton 9.1. Execution of Instruments | 13.0 |
| &nbsp;&nbsp;&nbsp;Secton 9.2. Receipts, Checks, Drafts, Etc | 13.0 |
| &nbsp;&nbsp;&nbsp;Secton 9.3. Corporate Seal | 13.0 |
| Article X AMENDMENT OF BYLAWS | 13.0 |
| Article XI VOTING SECURITIES HELD BY COMPANY | 14.0 |
| Article XII NOTICE BY ELECTRONIC TRANSMISSION | 14.0 |
| &nbsp;&nbsp;&nbsp;Secton 12.1. Notice by Electronic Transmission | 14.0 |
| &nbsp;&nbsp;&nbsp;Secton 12.2. Definition of Electronic Transmission | 14.0 |
| Article XIII VIOLATION OF LAW OR REGULATION | 14.0 |

---

ii

**AMENDED AND RESTATED BYLAWS**

**OF**

**COMMERCIAL BANCGROUP, INC.**

Article I<u><br> NAME AND OFFICES OF COMPANY</u>

The name of the company is Commercial Bancgroup, Inc. (the "<u>Company</u>"), and the Company's principal office address shall be at such location as may be determined from time to time by the board of directors of the Company (the "<u>Board</u>"). The Company may establish and maintain offices at such other locations as may be determined from time to time by the Board.

Article II<u><br> CAPITAL STOCK</u>

<u>Secton 2.1.</u> <u>Share Certificates</u>. Shares of capital stock of the Company may be either certificated or uncertificated as determined by the Board. If shares are certificated, certificates for the shares shall be numbered consecutively, shall be entered in the books or records of the Company as issued, and shall be signed, either manually or in facsimile, by either the President or the Chief Executive Officer and either the Secretary or the Chief Financial Officer, or by such other officers as may from time to time be designated by the Board, the signature of two such officers being required. Each certificate shall state on its face the name of the Company, that the Company is organized under the laws of the State of Tennessee, the name of the person to whom it is issued, the date of the certificate's issuance, the number and class of shares, and the designation of the series, if any, the certificate represents, the par value of each share represented by the certificate, or that the shares are without par value, and such other information as the Board may from time to time require. The designation and relative rights, preferences, and limitations of shares of each class or series of capital stock of the Company and the variations in rights, preferences, and limitations determined for each series (and the authority of the Board to determine variations for future series) shall be summarized on the front or back of each certificate, or, alternatively, each certificate may conspicuously state that such information will be furnished by the Company to the holder of the certificate free of charge upon written request. Shares of capital stock of the Company not registered under the Securities Act of 1933, as amended (the "<u>Securities Act</u>"), and any applicable state securities laws, including shares issued pursuant to an exemption from registration under the Securities Act and any applicable state securities laws, shall not be sold, pledged, hypothecated, gifted, or otherwise transferred or disposed of absent registration or exemption, and a legend in substantially the following form shall be placed in the Company's stock transfer records and conspicuously noted on each certificate representing such shares:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, GIFTED, OR OTHERWISE TRANSFERRED OR DISPOSED OF ABSENT AN EFFECTIVE REGISTRATION STATEMENT COVERING THE SECURITIES UNDER, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.

Additionally, each certificate representing shares of capital stock of the Company shall bear a legend in substantially the following form:

THE COMPANY IS AUTHORIZED TO ISSUE DIFFERENT CLASSES OF SHARES AND DIFFERENT SERIES OF SHARES WITHIN A CLASS. THE COMPANY WILL, UPON WRITTEN REQUEST, FURNISH TO THE HOLDER OF THIS CERTIFICATE, IN WRITING AND WITHOUT CHARGE, A STATEMENT OF THE DESIGNATION AND RELATIVE RIGHTS, PREFERENCES, AND LIMITATIONS APPLICABLE TO EACH CLASS, AND SERIES WITHIN A CLASS, OF CAPITAL STOCK OF THE COMPANY AND THE VARIATIONS IN RIGHTS, PREFERENCES, AND LIMITATIONS APPLICABLE TO EACH SERIES (AND THE AUTHORITY OF THE COMPANY'S BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES).

<u>Secton 2.2.</u> <u>Rights of Company with Respect to Record Owners</u>. The Company shall be entitled to treat the holder of record of any shares of capital stock of the Company as the holder in fact thereof and the person exclusively entitled to vote the shares, to receive any share dividend or distribution with respect to the shares, and for all other purposes, and the Company shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not the Company has express or other notice thereof, except as otherwise provided by applicable law.

<u>Secton 2.3.</u> <u>Transfers of Shares</u>. Transfers of shares of capital stock of the Company shall be made upon the books of the Company by the record holder thereof, or by an attorney-in-fact lawfully constituted in writing, upon the surrender of the certificate(s), if any, therefor. The Board may from time to time appoint suitable agents to facilitate transfers by shareholders of shares of capital stock of the Company.

<u>Secton 2.4.</u> <u>Lost, Stolen, Destroyed, or Mutilated Certificates</u>. Any person claiming a certificate for shares of capital stock of the Company to be lost, stolen, destroyed, or mutilated shall make a written affidavit or affirmation of such fact in the manner required by the Company or its stock transfer agent and, if the Company or its stock transfer agent requires, shall give the Company and/or its stock transfer agent a bond of indemnity in such form and amount as the Company or its stock transfer agent may require, and with one or more sureties satisfactory to the Company and its stock transfer agent, whereupon an appropriate new certificate may be issued in lieu of the certificate alleged to have been lost, stolen, destroyed, or mutilated.

Article III<u><br> SHAREHOLDER MEETINGS</u>

<u>Secton 3.1.</u> <u>Place of Meetings; Meetings by Remote Communication</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board may designate any place, either within or without the State of Tennessee, as the place of meeting for any annual meeting of shareholders or for any special meeting of shareholders called by the Board, or that any such meeting will be held by means of remote communication. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal office of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, shareholders and proxyholders not physically present at a meeting of shareholders may, by means of remote communication, be deemed present in person at, and participate in and vote at, a meeting of shareholders, whether such meeting is to be held at a designated place or solely by means of remote communication; *provided* that (i) the Company shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a shareholder or proxyholder, (ii) the Company shall implement reasonable measures to provide such shareholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the Company's shareholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any shareholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Company.

<u>Secton 3.2.</u> <u>Annual Meetings of Shareholders</u>. An annual meeting of the shareholders of the Company, for the purpose of electing directors and transacting any other business that may be properly brought before the meeting, shall be held on the date and at the time determined by the Board and stated in the notice of the meeting. If the Company fails to hold an annual meeting of shareholders within the earlier of six months after the end of the Company's fiscal year or fifteen months after the last annual meeting of shareholders, any shareholder entitled to vote at an annual meeting may make a demand in writing to the Secretary of the Company that an annual meeting be held.

<u>Secton 3.3.</u> <u>Special Meetings of Shareholders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Special meetings of the shareholders of the Company may be called by (i) the Chairperson of the Board, (ii) the Chief Executive Officer, (iii) the Board, by majority vote of all members of the Board, or (iv) the holder(s) of 25% or more of the issued and outstanding shares of voting stock of the Company entitled to vote on any matter proposed to be considered at such special meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If any person(s) other than the Board call a special meeting of shareholders, the request for the meeting shall (i) be in writing, (ii) specify the general nature of the business proposed to be transacted at the meeting, and (iii) be delivered to the Secretary of the Company. Upon receipt of such a request, the Board shall determine the date and time of such special meeting, which must be scheduled to be held on a date that is within 90 days of receipt by the Secretary of the request therefor, unless a later date is required in order to allow the Company to file any documents or information required to be filed under the Securities Exchange Act of 1934, as amended (the <u>"Exchange Act"</u>). The Secretary of the Company shall prepare notice of a special meeting properly requested in accordance with these bylaws. No business may be transacted at any such special meeting other than the business specified in the notice of such meeting given to shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the case of a special meeting requested pursuant to <u>Section 3.3(b)</u>, the Chairperson shall have the power and duty (i) to determine whether any nomination or other business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in these bylaws and (ii) if any proposed nomination or business was not made or proposed in compliance with these bylaws or the stated business to be brought before the special meeting is not a proper subject for shareholder action under applicable law, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) A special meeting of shareholders requested pursuant to <u>Section 3.3(b)</u> shall not be held if (i) the Board calls for an annual meeting of shareholders to be held within 90 days of receipt by the Secretary of the request for the special meeting and the Board determines in good faith that the business of such annual meeting includes (in addition to any other business properly brought before the annual meeting) the business specified in such special meeting request; (ii) an annual or special meeting of shareholders was held during the 90-day period immediately prior to receipt by the Secretary of the request for the special meeting and the Board determines in good faith that the business of such prior annual or special meeting included (in addition to any other business properly brought before such prior annual or special meeting) the business specified in such special meeting request; or (iii) the Board determines in good faith that all of the stated business to be brought before such special meeting is not a proper subject for shareholder action under applicable law.

<u>Secton 3.4.</u> <u>Notice of Meetings of Shareholders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Written notice of the date, time, and place of each annual or special meeting of the shareholders of the Company shall be given to all shareholders entitled to notice of the meeting, at the addresses shown on the stock records of the Company for such persons, no fewer than 10 days nor more than two months prior to the date of the meeting. Notice of any special meeting of the shareholders of the Company shall state the purpose or purposes of the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notice of any meeting of shareholders shall be conclusively deemed given (i) if mailed, when deposited in the United States mail, postage prepaid, directed to a shareholder at the shareholder's address as it appears on the Company's records, (ii) if electronically transmitted, as provided in <u>Article XII</u> of these bylaws, or (iii) if otherwise given, when delivered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any shareholder entitled to notice of a meeting of shareholders may sign a written waiver of notice either before or after the time of the meeting. A shareholder's participation in or attendance at a meeting of shareholders constitutes waiver of notice thereof, unless the shareholder attends for the specific purpose of objecting to the lawfulness of the convening of the meeting.

<u>Secton 3.5.</u> <u>Shareholders List</u>. The officer or agent having charge of the stock transfer records of the Company shall prepare an alphabetical list of all shareholders entitled to notice of a meeting of shareholders, arranged by voting group and by class and series of shares if applicable, which list shall contain the address of and the number of shares held by each shareholder. The list shall be available for inspection by any shareholder beginning two business days after notice of the meeting is given, during regular business hours at the Company's principal office or another place identified in the meeting notice in the city where the meeting will be held. The list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the entire meeting and any adjournment thereof. If a meeting of shareholders is held solely by means of remote communication, the list will be open to examination by the shareholders for the duration of the meeting on a reasonably accessible electronic network, and the information required to access the list will be provided to shareholders with the notice of the meeting.

<u>Secton 3.6.</u> <u>Quorum</u>. The holders of shares representing a majority of the votes entitled to be cast on a matter to be considered at an annual or special meeting of shareholders, present in person or by proxy, shall constitute a quorum for such meeting with respect to that matter. However, if such a quorum shall not be present at any meeting of Company shareholders, either the chairperson of the meeting or the holders of a majority of the shares present, in person or by proxy, may adjourn the meeting, without notice other than the announcement at the meeting of the date, time, and place to which the meeting is adjourned. At any such adjourned meeting, any business may be transacted which could have been transacted at the meeting as originally notified. Once a share is represented for any purpose at a meeting of shareholders, it shall be deemed present for quorum purposes for the remainder of the meeting and any adjournment thereof unless a new record date is or must be set for the adjourned meeting.

<u>Secton 3.7.</u> <u>Voting of Shares</u>. Each outstanding share of capital stock of the Company, regardless of class or series, shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders, except as otherwise provided in these bylaws and except to the extent that the charter of the Company provides for more or less than one vote per share or limits or denies voting rights to the holders of shares of any class or series of capital stock. Except for the election of directors, action on a matter by a voting group will be approved if the votes cast within the voting group in favor of the action exceed the votes cast within the voting group opposing the action, unless a greater number of affirmative votes is required by the charter of the Company, these bylaws, or the Tennessee Business Corporation Act. Directors shall be elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting of shareholders at which a quorum is present.

<u>Secton 3.8.</u> <u>Administration of Meetings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Chairperson of the Board shall preside at all meetings of the shareholders of the Company. In the event of the Chairperson's absence, incapacity, or refusal to serve, any Company officer or director selected by the Board prior to the meeting may so preside.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Board shall be entitled to make such rules and/or regulations for the conduct of meetings of shareholders as it shall deem necessary, appropriate, or convenient. Subject to such rules and regulations, if any, the Chairperson shall have the right and authority to prescribe such rules, regulations, and procedures and to do all acts as, in the judgment of such Chairperson, are necessary, appropriate, or convenient for the proper conduct of any meeting of shareholders, including without limitation establishing an agenda of business for the meeting, rules and/or regulations to maintain order, restrictions on entry to the meeting after the time fixed for commencement thereof, and the date and time of the opening and closing of the polls for each matter upon which shareholders will vote at the meeting.

<u>Secton 3.9.</u> <u>Record Date</u>. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, the Board may fix in advance a record date, which shall be no more than 70 days before the meeting. If no date is fixed by the Board, the record date shall be the close of business on the business day immediately prior to the date that notice of the meeting is given to shareholders. Except as otherwise provided in the Tennessee Business Corporation Act, when a determination of shareholders entitled to notice of or to vote at any meeting of Company shareholders has been made, such determination shall be effective for any adjournment of such meeting.

<u>Secton 3.10.</u> <u>Proxies</u>. Each shareholder entitled to vote at a meeting of shareholders shall be entitled to vote by proxy, and proxies shall be provided with the notice of any meeting of shareholders. A proxy must be signed by the owner(s) of the shares to be voted under the proxy and shall be valid for 11 months from the date of the proxy, unless the proxy expressly provides for another period. An appointment of a proxy is effective when received by the Secretary of the Company or any other officer or agent authorized to tabulate votes. All proxies shall be dated and filed with the records of the meeting of Company shareholders to which they relate.

<u>Secton 3.11.</u> <u>Notice of Shareholder Proposals and Director Nominations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Shareholder Proposals*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) At a meeting of shareholders, only the business properly brought before the meeting shall be conducted. To be properly brought before an annual meeting, an item of business must be (1) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (2) otherwise properly brought before the meeting by or at the direction of the Board, or (3) otherwise properly brought before the meeting by a Company shareholder who is a shareholder of record both at the time the notice of the meeting is given to shareholders and at the time of the annual meeting, who is entitled to vote at the meeting, and who complies with the notice procedures set forth in this <u>Section 3.11</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In order for business to be properly brought before an annual meeting by a shareholder, the shareholder, in addition to any other applicable requirements, must have given timely notice in proper form to the Secretary of the Company. To be timely, a shareholder's notice must be received at the principal office of the Company (1) not later than the close of business on the 90th calendar day nor earlier than the close of business on the 120th calendar day prior to the one-year anniversary of the previous year's annual meeting, if such annual meeting is to be held on a date that is not more than 30 calendar days in advance of and not more than 70 calendar days after the one-year anniversary of the previous year's annual meeting, and (2) with respect to any other annual meeting of shareholders, the close of business on the 10th calendar day following the date of public disclosure of the date of such meeting. In no event shall the public disclosure of an adjournment or postponement of an annual meeting commence a new notice time period (or extend any notice time period). To be in proper form, a shareholder's notice to the Secretary shall be in writing and set forth (1) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (2) the name and address, as they appear on the Company's books, of the shareholder proposing such business, (3) the class and number of shares of capital stock of the Company owned beneficially or of record by the shareholder, (4) any material interest of the shareholder in such business, and (5) any other information that is required to be provided by the shareholder pursuant to Rule 14A under the Exchange Act in the shareholder's capacity as a proponent of a shareholder proposal. Notwithstanding the foregoing, in order to include information with respect to a shareholder proposal in the Company's proxy statement and form of proxy for a meeting of shareholders, a shareholder must provide notice as required by the regulations promulgated under the Exchange Act and meet the eligibility and other requirements set out in Rule 14 under the Exchange Act. Notwithstanding anything in these bylaws to the contrary, no business shall be conducted at any annual meeting of shareholders unless such business is brought before the meeting in accordance with the procedures set forth in these bylaws and the Exchange Act and the rules promulgated thereunder. In the event of a discrepancy between these bylaws and the rules promulgated under the Exchange Act, the rules promulgated under the Exchange Act shall govern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) In order for business to be properly brought by a shareholder before a special meeting of shareholders requested by any person(s) other than the Board pursuant to <u>Section 3.3(b)</u>, other than nominations of person(s) for election as a director, shareholders must comply with the procedures set forth in <u>Section 3.3</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Director Nominations*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Only persons who are nominated in accordance with the procedures set forth in this <u>Section 3.11</u> shall be eligible for election by the Company's shareholders as directors of the Company. To be properly brought before an annual meeting of shareholders, or any special meeting of shareholders called for the purpose of electing directors, nominations for the election of directors must be (1) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (2) made by or at the direction of the Board (or any duly authorized committee thereof), or (3) made by a shareholder of the Company (A) who is a shareholder of record both on the date of the giving of the notice provided for in this <u>Section 3.11</u> and on the record date for the determination of shareholders entitled to vote at such meeting and (B) who complies with the notice procedures set forth in this <u>Section 3.11(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In addition to any other applicable requirements, for a nomination to be made by a shareholder, such shareholder must have given timely notice thereof in proper written form to the Secretary of the Company. To be timely, a shareholder's notice to the Secretary must be received at the principal office of the Company (1) in accordance with <u>Section 3.11(a)(ii)</u>, in the case of an annual meeting, or (2) not later than the close of business on the 10th calendar day following the day on which notice of the date of the special meeting was given or public disclosure of the date of the special meeting was made, whichever first occurs, in the case of a special meeting of shareholders called for the purpose of electing directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To be in proper written form, a shareholder's notice to the Secretary must set forth:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) As to each person whom the shareholder proposes to nominate for election as a director, (A) the name, age, business address, and residence address of the person, (B) the principal occupation or employment of the person, (C) the class and number of shares of capital stock of the Company owned beneficially or of record by the person, (D) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination(s) are to be made by the shareholder, and (E) any other information relating to such person that is required to be disclosed in solicitations of proxies for elections of directors, or is otherwise required, in each case pursuant to Rule 14A under the Exchange Act (including without limitation such person's written consent to being named in the proxy statement, if any, as a nominee and to serving as a director if elected);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) As to the shareholder giving notice, the information required to be provided pursuant to <u>Section 3.11(a)(ii)</u>; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) If applicable, representations that the shareholder intends (A) to appear in person or by proxy at the meeting of shareholders to nominate the person(s) named in the shareholder's notice and (B) to (I) solicit proxies from holders of the Company's outstanding capital stock representing at least 67% of the voting power of shares of capital stock entitled to vote in the election of the nominee(s), and include a statement to this effect in its proxy statement and/or form of proxy, (II) otherwise comply with Rule 14a-19 promulgated under the Exchange Act, and (III) provide the Secretary of the Company, not less than seven days prior to the applicable meeting or any adjournment or postponement thereof, with reasonable documentary evidence (as determined by the Secretary in good faith) that the shareholder has complied with such representations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) No person shall be eligible for election as a director of the Company unless nominated in accordance with the procedures set forth in this <u>Section 3.11(b)</u>. If the Chairperson properly determines that a nomination was not made in accordance with the procedures set forth in this <u>Section 3.11(b)</u>, the Chairperson shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

Article IV<u><br> BOARD OF DIRECTORS</u>

<u>Secton 4.1.</u> <u>Management; Powers and Authority</u>. All corporate powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, the Board. In addition to the powers and authority conferred upon the Board by these bylaws, the Board shall have and may exercise all such powers and exercise all such authority as conferred upon or permitted to the Board by applicable law, rule or regulation, by the charter of the Company, or by the shareholders of the Company.

<u>Secton 4.2.</u> <u>Number of Directors; Term of Office; Chairperson</u>. The number of directors which shall constitute the Board shall be no fewer than five nor more than 25. The number of members of the Board may from time to time be fixed or changed, within the range set forth above, by the Board or by the shareholders of the Company. The terms of Company directors shall be staggered by dividing the Board into three classes designated Class I, Class II, and Class III, with the number of directors in each class to at all times be as equal as possible. Subject to <u>Section 4.5</u>, each director shall be elected for a term to expire at the third annual meeting of Company shareholders following the annual meeting at which such director is elected, except that (i) each director initially appointed to Class I shall serve for an initial term to expire at the first annual meeting of Company shareholders following the effective date of these bylaws, (ii) each director initially appointed to Class II shall serve for an initial term to expire at the second annual meeting of Company shareholders following the effective date of these bylaws, and (iii) each director initially appointed to Class III shall serve for an initial term to expire at the third annual meeting of Company shareholders following the effective date of these bylaws, and provided that the term of each director shall continue until the election and qualification of his or her successor or a decrease in the number of directors and shall be subject to and end at the director's earlier death, retirement, resignation, or removal from office. The Board shall select from among its members one individual to serve as Chairperson of the Board. The Chairperson of the Board shall have those powers and duties prescribed by these bylaws as well as such other powers and duties as may be prescribed by the Board.

<u>Secton 4.3.</u> <u>Removal of Directors</u>. The shareholders of the Company may remove one or more directors with cause at a meeting called for such purpose. The shareholders of the Company may not remove a director without cause. Any or all of the directors may be removed for cause by the vote of a majority of all members of the Board at a meeting called for such purpose. The notice of any such meeting, whether of the shareholders of the Company or of the Board, must state that the purpose, or one of the purposes, of the meeting is the removal of one or more directors. For purposes of this <u>Section 4.3</u>, a director may be removed for "cause" only if (a) the director has been convicted of or has pled guilty or *nolo contendere* to a felony, (b) the director has been physically or mentally incapable of performing the duties of a director, with or without reasonable accommodation, for any period of 90 consecutive days or for 120 non-consecutive days during any 365-day period, (c) the director has been adjudicated bankrupt, (d) a regulatory agency or authority having jurisdiction over the Company requests or demands the removal of the director, or (e) a majority of all members of the Board (other than the director to be removed) determines that the director has engaged in conduct materially prejudicial to the interests of the Company.

<u>Secton 4.4.</u> <u>Director Resignations</u>. A director may resign at any time by delivering written notice of resignation to the Chairperson of the Board, the Chief Executive Officer, or the Secretary. Subject to <u>Section 4.10</u>, any such resignation shall be effective when the notice of resignation is delivered, unless the notice of resignation specifies a later effective date.

<u>Secton 4.5.</u> <u>Vacancies</u>. In the event of a vacancy on the Board, including without limitation a vacancy resulting from an increase in the number of directors or the removal of a director, (a) the Company's shareholders may fill the vacancy, (b) the Board may fill the vacancy, or (c) if the directors remaining in office constitute less than a quorum of the Board, the directors remaining in office may fill the vacancy by the affirmative vote of a majority of such directors. The term of a director elected to fill a vacancy shall expire at the next meeting of Company shareholders at which directors are elected.

<u>Secton 4.6.</u> <u>Meetings of the Board</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board shall meet no less frequently than semi-annually.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Regular meetings of the Board shall be held at the principal office of the Company, or at such other location as may be determined from time to time by the Board, on such dates and at such times as the Board may from time to time determine. Special meetings of the Board may be called by the Chairperson of the Board, the Chief Executive Officer, or one-third of the directors then in office.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No notice of regular meetings of the Board need be given to directors. Notice of the date, time, and place of each special meeting of the Board shall be given to each director at least 48 hours prior to the meeting. Notice of any special meeting of the Board may be waived by a director at any time before, during, or after the meeting, *provided* that any such waiver must be in writing, signed by the director, and filed with the minutes of the subject meeting or the Company's corporate records. A director's attendance at or participation in a special meeting of the Board shall constitute a waiver of any required notice thereof unless the director, at the beginning of the meeting or promptly upon the director's arrival, objects to the holding of the meeting or the transaction of business at the meeting and does not thereafter vote for or assent to action taken at the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) A director who is present at a meeting of the Board when corporate action is taken shall be deemed to have assented to the action taken unless (i) the director objects at the beginning of the meeting, or promptly upon the director's arrival, to the holding of the meeting or the transaction of business at the meeting; (ii) the director's dissent or abstention from the action taken is entered in the minutes of the meeting; or (iii) the director delivers written notice of the director's dissent or abstention from the action taken to the presiding officer of the meeting before its adjournment or to the Company immediately after adjournment of the meeting; *provided* that the right of dissent or abstention shall not be available to a director who votes in favor of the action taken.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Directors may participate in any meeting of the Board by, and any meeting of the Board may be conducted through the use of, any means of communication by which all directors participating may simultaneously hear one another, including teleconference or video conference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Any action required or permitted to be taken at a meeting of the Board may be taken without a meeting. If all directors consent to the taking of action without a meeting, the affirmative vote of the number of directors that would be necessary to authorize or take such action at a meeting of the Board shall be the act of the Board. Any such action must be evidenced by one or more written consents describing the action taken, signed by each director, and indicating each director's vote or abstention on the action. All such written consents shall be included in the corporate minutes or filed with the corporate records reflecting the action taken.

<u>Secton 4.7.</u> <u>Presiding Officer</u>. The Chairperson of the Board shall preside at all meetings of the Board. In the event of the Chairperson's absence, incapacity, or refusal to serve, the directors present at a meeting of the Board shall select one of their number to so preside.

<u>Secton 4.8.</u> <u>Quorum and Voting</u>. A majority of the members of the Board shall constitute a quorum for the transaction of business, and all matters voted upon by the Board shall be decided by a majority vote of the directors present, assuming a quorum, unless a greater vote is required by the charter of the Company, these bylaws, or applicable law.

<u>Secton 4.9.</u> <u>Committees of the Board</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Board may, by resolution(s) adopted by a majority of its members, designate and establish from among its members one or more committees, with each such committee to consist of three or more directors all of whom shall serve at the pleasure of the Board, and to have such powers and authority as set forth in the resolution(s) establishing or the charter (if any) of the committee; *provided* that no such committee shall have the power or authority to (a) authorize distributions, except according to a formula or method prescribed by the Board; (b) fill vacancies occurring on the Board or any committee of the Board; (c) amend or repeal these bylaws or adopt new bylaws; (d) authorize or approve the reacquisition of shares of capital stock of the Company, except according to a formula or method prescribed by the Board; (e) authorize or approve the issuance or sale or contract for sale of shares of capital stock of the Company, or determine the designation and relative rights, preferences, and limitations of any class or series of shares of capital stock of the Company, except with the authorization of and within limits specifically prescribed by the Board, or (f) authorize, approve, or adopt an amendment to the charter of the Company, a plan of merger, share exchange, or consolidation, or the sale, lease, exchange, or other disposition of all or substantially all of the property or assets of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except as otherwise provided in this <u>Section 4.9</u>, the other provisions of this <u>Article IV</u> pertaining to the Board and its operation shall be applicable to any committee of the Board. Meetings of a committee of the Board may be called at any time by the Chairperson of the Board, the chairperson of the committee, or the Chief Executive Officer. Meetings of any committee of the Board may be held at such location(s), either within or outside the State of Tennessee, as such committee shall determine. Each committee of the Board may fix its own rules of procedure, including rules of procedure relative to notice of its meetings. Each committee of the Board shall keep a record of its proceedings and shall report such proceedings to the Board on a periodic basis or when otherwise requested by the Board. All action taken by a committee of the Board shall be subject to review and rejection, revision, or alteration by the Board; *provided* that the rejection, revision, or alteration by the Board of any action properly taken by a committee of the Board shall not affect the rights of persons who have in good faith relied upon such action. The Board shall have the power to at any time remove any member of any committee of the Board with or without cause and to fill vacancies occurring on and to dissolve any committee of the Board.

<u>Secton 4.10.</u> <u>Employee Directors</u>. Any director who is also an employee of the Company or any subsidiary or affiliate of the Company shall immediately tender his or her resignation from the Board upon the termination of his or her employment with the Company and its subsidiary(ies) and affiliate(s). The Board shall as promptly as reasonably practicable consider and determine whether to accept or reject any such resignation. No such tendered resignation shall be effective unless and until accepted by the Board.

Article V<u><br> OFFICERS</u>

<u>Secton 5.1.</u> <u>Officer Positions</u>. The officers of the Company shall consist of a Chief Executive Officer, a President, a Chief Financial Officer, and a Secretary (collectively, the "<u>Required Officers</u>"), and such other officers as may be appointed from time to time by the Board or by the Chief Executive Officer in accordance with this <u>Article V</u>. Any two or more offices may be held by the same person.

<u>Secton 5.2.</u> <u>Election and Term</u>. The Required Officers shall be appointed annually by the Board at the first meeting of the Board following the annual meeting of Company shareholders. The Board may from time to time appoint, or authorize the Chief Executive Officer to from time to time appoint, such other Company officers as the Board or the Chief Executive Officer determines necessary or advisable for the conduct of the business and affairs of the Company. All Company officers shall hold office until their successors shall have been appointed and shall have qualified or until their earlier death, retirement, resignation, or removal from office. The Board may require any officer, employee, or agent of the Company to give security for the faithful performance of his or her duties.

<u>Secton 5.3.</u> <u>Removal</u>. Any officer of the Company may be removed by the Board at any time with or without cause. A Company officer appointed by the Chief Executive Officer in accordance with this <u>Section 5.3</u> may also be removed at any time, with or without cause, by the Chief Executive Officer.

<u>Secton 5.4.</u> <u>Compensation</u>. The compensation of the Required Officers shall be fixed from time to time by the Board or a duly appointed committee thereof. The compensation of all other officers of the Company may be fixed by either the Board or the Chief Executive Office.

<u>Secton 5.5.</u> <u>Chief Executive Officer</u>. The Chief Executive Officer of the Company shall have those powers and duties usually appertaining to his or her office, as well as such other powers and duties as may be prescribed by the Board or these bylaws. Subject to the oversight of the Board, the Chief Executive Officer shall have general charge of the business and affairs of the Company and its operations and shall be its principal executive officer. The Chief Executive Officer shall see that all orders, resolutions, and directives of the Board are carried into effect and shall keep the Board informed on a regular basis of the status of the business, affairs, and operations of the Company.

<u>Secton 5.6.</u> <u>President</u>. The President of the Company shall have those powers and duties usually appertaining to his or her office, as well as such other powers and duties as may be prescribed by the Board or these bylaws.

<u>Secton 5.7.</u> <u>Chief Financial Officer</u>. The Chief Financial Officer of the Company shall be the principal financial officer of the Company. The Chief Financial Officer shall oversee the receipt, custody, and disbursement of corporate funds. The Chief Financial Officer shall deposit funds of the Company, or cause such funds to be deposited, in such banks or other depositories as may be authorized by or designated in the manner prescribed by the Board. The Chief Financial Officer shall have general charge of all securities of the Company. The Chief Financial Officer shall keep or cause to be kept records of all receipts and disbursements of the Company and shall render to the Board and the Chief Executive Officer such reports as to the financial condition and results of the Company as may be requested of him or her from time to time. The Chief Financial Officer may endorse (or authorize to be endorsed) all commercial documents and instruments requiring endorsements for or on behalf of the Company and may sign (or authorize to be signed) all receipts and vouchers for payments made to the Company. The Chief Financial Officer shall also have such other powers and duties as generally are incident to the position of chief financial officer or as may be assigned to the Chief Financial Officer from time to time by the Board or the Chief Executive Officer.

<u>Secton 5.8.</u> <u>Secretary</u>. The Secretary of the Company shall keep and have charge of the minutes of all meetings and other corporate proceedings of the Board and the shareholders of the Company. Except as otherwise provided by these bylaws, the Secretary shall give all notices required by these bylaws or applicable law to be given to the directors or shareholders of the Company. The Secretary shall have charge of the seal of the Company, if any, and may affix the same, or cause the same to be affixed, to any documents or instruments lawfully executed. The Secretary shall have charge of the record of shareholders of the Company and such other books, records, and papers as the Board or the Chief Executive Officer may direct. Subject to the oversight of the Board, the Secretary shall have all such other powers and duties as generally are incident to the position of secretary or as may be assigned to the Secretary from time to time by the Board or the Chief Executive Officer.

<u>Secton 5.9.</u> <u>Other Officers</u>. Any other officer appointed in accordance with this <u>Article V</u>, including without limitation any assistant secretary, shall have such powers and shall perform such duties as prescribed in these bylaws or prescribed or assigned by the Board or the Chief Executive Officer.

Article VI<u><br> INDEMNIFICATION</u>

<u>Secton 6.1.</u> <u>Right to Indemnification</u>. Each person who is made a party to or is threatened to be made a party to, or is otherwise involved in, any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (a "<u>Proceeding</u>"), by reason of the fact that he or she is or was a director or officer of the Company or is or was serving at the request of the Company as a director, officer, employee, or agent of another corporation or of a limited liability company, partnership, joint venture, trust, or other enterprise, including service with respect to employee benefit plans (an "<u>Indemnitee</u>"), provided that the basis of such Proceeding is alleged action or inaction in an official capacity as a director, officer, employee, or agent within the scope of such Indemnitee's duties and authority, shall be indemnified and held harmless by the Company to the fullest extent authorized by the Tennessee Business Corporation Act, as the same now exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than such law permitted the Company prior to such amendment), and applicable federal laws and regulations (including without limitation applicable federal regulations governing indemnification payments by a depository institution holding company, as the same may be amended from time to time), against all losses, damages, liabilities, and expenses (including without limitation attorneys' fees, court costs, judgments, fines, excise taxes, penalties, and amounts paid into settlement) reasonably incurred or suffered by such Indemnitee in connection therewith, and such indemnification shall continue as to an Indemnitee who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the Indemnitee's heirs, executors, and administrators; *provided*, *however*, that, except as provided in <u>Section 6.2</u> with respect to Proceedings to enforce rights to indemnification, the Company will indemnify an Indemnitee with respect to a Proceeding initiated or instituted by the Indemnitee only if such Proceeding (or part thereof) was authorized by the Board. The right to indemnification conferred in this <u>Article VI</u> shall be a contract right and shall include the right to be paid by the Company the expenses incurred in defending any such Proceeding in advance of its final disposition (an "<u>Advancement of Expenses</u>"); *provided*, *however*, that an Advancement of Expenses for expenses incurred by an Indemnitee in his or her capacity as a director, officer, employee, or agent shall be made only upon delivery by the Indemnitee to the Company of an undertaking by and on behalf of such Indemnitee to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that such Indemnitee is not entitled to be indemnified for such expenses under this <u>Article VI</u> or otherwise (an "<u>Undertaking</u>").

<u>Secton 6.2.</u> <u>Claims</u>. If a claim under <u>Section 6.1</u> of these bylaws is not paid in full by the Company within 30 days after receipt by the Company of written notice of such claim, except in the case of a claim for an Advancement of Expenses in which case the applicable period shall be 10 days, the Indemnitee may at any time thereafter bring suit against the Company to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, the Indemnitee also shall be entitled to be paid the expenses of prosecuting or defending such suit. In any suit (a) brought by an Indemnitee to enforce a right of indemnification hereunder (but not in a suit brought by an Indemnitee to enforce a right to an Advancement of Expenses) or (b) brought by the Company to recover an Advancement of Expenses upon a final adjudication that an Indemnitee is not entitled to be indemnified for such expenses, it shall be a defense that the Indemnitee has not met the applicable standard of conduct set forth in the Tennessee Business Corporation Act or applicable federal laws or regulations. Neither the failure of the Company (including the Board or a committee thereof, independent legal counsel, or the Company's shareholders) to have made a determination prior to the commencement of any such suit that indemnification of an Indemnitee is proper in the circumstances or that the Indemnitee has met the applicable standard of conduct set forth in the Tennessee Business Corporation Act or applicable federal laws and regulations nor an actual determination by the Company (including the Board or a committee thereof, independent legal counsel, or the Company's shareholders) that the Indemnitee has not met such applicable standard of conduct shall create a presumption that the Indemnitee has not met such applicable standard of conduct or, in the case of any such suit brought by the Indemnitee, be a defense to such suit. In any suit brought by an Indemnitee to enforce a right hereunder or by the Company to recover an Advancement of Expenses pursuant to the terms of an Undertaking, the burden of proving that the Indemnitee is not entitled to be indemnified or to such Advancement of Expenses under this <u>Article VI</u> or otherwise shall be on the Company.

<u>Secton 6.3.</u> <u>Non-Exclusivity of Rights</u>. The rights to indemnification and to the advancement of expenses conferred in this <u>Article VI</u> shall not be exclusive of any other rights which any person may have or hereafter acquire under or by these bylaws or any statute, agreement, or vote of shareholders or disinterested directors, or otherwise.

<u>Secton 6.4.</u> <u>Other Indemnification</u>. The Company may, to the extent authorized from time to time by the Board, grant all or any of the rights to indemnification and/or to the advancement of expenses afforded to directors and officers of the Company in this <u>Article VI</u> to any employees or agents of the Company.

<u>Secton 6.5.</u> <u>Insurance</u>. The Company may, but shall not be obligated to, maintain insurance, at its own expense, to protect itself and any person who is or was a director, officer, employee, or agent of the Company, or who while a director, officer, employee, or agent of the Company is or was serving at the request of the Company as a director, officer, partner, trustee, employee, or agent of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan, or other enterprise, against any losses, damages, liabilities, or expenses, whether or not the Company would have the power to indemnify such person against such losses, damages, liabilities, or expenses under this <u>Article VI</u>, the Tennessee Business Corporation Act, or applicable federal laws and regulations.

Article VII<u><br> FISCAL YEAR</u>

The fiscal year of the Company shall be the calendar year.

Article VIII<u><br> DISTRIBUTIONS</u>

<u>Secton 8.1.</u> <u>Authority</u>. To the extent consistent with applicable laws, rules, and regulations, including without limitation the Tennessee Business Corporation Act, the Board may declare, and the Company may make, such distributions to the Company's shareholders, of cash, shares of capital stock of the Company, or other property, as the Board in its discretion shall deem proper and consistent with the affairs and safe and sound operation of the Company.

<u>Secton 8.2.</u> <u>Record Date</u>. For the purpose of determining shareholders entitled to receive a distribution by the Company, the Board may fix a date, no more than 60 days prior to the date of the distribution, as the record date for such distribution. If the Board fails to set a record date for any such distribution, the record date therefor shall be the date on which the Board declares the distribution.

Article IX<u><br> CORPORATE ACTIONS</u>

<u>Secton 9.1.</u> <u>Execution of Instruments</u>. The Chief Executive Officer, the President, and the Chief Financial Officer shall have the authority, to the extent otherwise consistent with these bylaws and applicable law, to do and perform any and all corporate or official acts in carrying on the Company's business as they in their discretion deem necessary or advisable, including without limitation the authority to make, execute, acknowledge, and deliver agreements, contracts, deeds, mortgages, deeds of trust, releases, bills of sale, assignments, transfers, leases, powers of attorney or of substitution, proxies to vote stock, and other written instruments that may be necessary in relation to the purchase, sale, lease, assignment, transfer, management, or handling in any way of property of any kind held or controlled by the Company in any capacity. The Board may authorize any other officer(s) or agent(s) of the Company to enter into any contract or execute and deliver any other document or instrument in the name of and on behalf of the Company, and such authority may be general or confined to specific instances.

<u>Secton 9.2.</u> <u>Receipts, Checks, Drafts, Etc</u>. All checks, drafts, or other instruments for the payment of money, and all notes or other evidences of indebtedness issued in the name of the Company, shall be signed by such officer(s) or agent(s) of the Company as shall from time to time be determined by resolution of the Board. The Chief Executive Officer, the President, the Chief Financial Officer, and any other officer or employee of the Company designated by the Board shall be authorized and empowered to, on behalf of the Company and in its name, endorse checks, draw drafts, and give receipts for money due and payable to the Company.

<u>Secton 9.3.</u> <u>Corporate Seal</u>. The Company may, but shall not be required to, have a corporate seal. If the Company has a corporate seal, it shall be in such form as determined by the Board.

Article X<u><br> AMENDMENT OF BYLAWS</u>

These bylaws may be amended by the shareholders of the Company only by the affirmative vote of a majority of all votes entitled to be cast on the amendment, unless a greater vote is required by the charter of the Company or the Tennessee Business Corporation Act. These bylaws may be amended by the Board to the fullest extent permitted by the Tennessee Business Corporation Act; *provided* that any such amendment to these bylaws must be approved by the affirmative vote of a majority of all members of the Board, unless a greater vote is required by the Tennessee Business Corporation Act or the charter of the Company.

Article XI<u><br> VOTING SECURITIES HELD BY COMPANY</u>

Unless otherwise determined by the Board, the Chief Executive Officer shall have full power and authority to, on behalf of the Company, attend any meeting of security holders of, and to take any action on written consent of the Company as a security holder of, corporations, limited liability companies, and other entities in which the Company may hold securities. The Chief Executive Officer shall possess and may exercise, on behalf of the Company, any and all rights and powers incident to the ownership of such securities which the Company may possess. The Board may from time to time confer like powers and authority upon any other person(s).

Article XII<u><br> NOTICE BY ELECTRONIC TRANSMISSION</u>

<u>Secton 12.1.</u> <u>Notice by Electronic Transmission</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Without limiting the manner by which notice otherwise may be given effectively to shareholders pursuant to the Tennessee Business Corporation Act, the charter of the Company, or these bylaws, any notice to shareholders given by the Company shall be effective if given by a form of electronic transmission consented to by the shareholder to whom the notice is given. Any such consent to the electronic transmission of notices shall be revocable by a shareholder by written notice to the Secretary, and any such consent shall be deemed revoked if (i) the Company is unable to deliver by electronic transmission two consecutive notices given by the Company in accordance with such consent and (ii) such inability to deliver becomes known to the Secretary or to the Company's stock transfer agent, or any other person responsible for the giving of notices; *provided, however,* that the inadvertent failure to treat such inability as a revocation shall not invalidate any shareholder meeting or action.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any notice given pursuant to <u>Section 13.1(a)</u> shall be deemed effectively given (i) if given by facsimile, when directed to a facsimile number at which the shareholder has consented to receive notice; (ii) if given by electronic mail, when directed to an electronic mail address at which the shareholder has consented to receive notice; (iii) if given by a posting on an electronic network (including a website) together with separate notice to the shareholder of such posting, upon the later of such posting and the giving of such separate notice; and (iv) if given by any other form of electronic transmission, when directed to the shareholder. A certificate of the Secretary, or of the stock transfer agent or other agent of the Company, certifying that a notice has been given by a form of electronic transmission shall, in the absence of fraud, be *prima facie* evidence of the facts stated therein.

<u>Secton 12.2.</u> <u>Definition of Electronic Transmission</u>. For purposes of these bylaws, the term "electronic transmission" means any form of communication not directly involving the physical transmission of paper or another tangible medium that creates a record that may be retained, retrieved, and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated process.

Article XIII<u><br> VIOLATION OF LAW OR REGULATION</u>

If any provision of these bylaws is found to be in violation of any federal or state law or regulation, including without limitation the Tennessee Business Corporation Act, the provisions of such federal or state law or regulation shall govern the conduct of the business and affairs and governance of the Company.

[END]

## Exhibit 10.1

**Exhibit 10.1**

**EMPLOYMENT AGREEMENT**

THIS EMPLOYMENT AGREEMENT (this "***Agreement***") is made and entered into effective as of September 29, 2025 (the "***Effective Date***"), by and between Commercial Bancgroup, Inc., a Tennessee corporation ("***Company***"), and Commercial Bank, a Tennessee state-chartered bank ("***Bank***"), on the one hand, and Terry L. Lee, a resident of the State of Tennessee ("***Executive***"), on the other hand. Company and Bank are sometimes referred to herein collectively as "***Employer***." Company, Bank, and Executive are sometimes referred to herein collectively as the "***Parties***," and each is sometimes referred to herein individually as a "***Party***."

<u>R</u> <u>E</u> <u>C</u> <u>I</u> <u>T</u> <u>A</u> <u>L</u> <u>S</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Executive is currently employed as President and Chief Executive Officer of Company and Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Employer and Executive desire to enter into this Agreement to provide for Executive's continued employment with Employer upon the terms and subject to the conditions set forth herein.

<u>AGREEMENT</u>

In consideration of the premises set forth above and the mutual agreements hereinafter set forth, as well as other good and valuable consideration, the receipt and sufficiency of all of which are hereby acknowledged by the Parties, effective as of the Effective Date, the Parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Definitions</u>. When used in this Agreement, the following terms and their variant forms shall have the stated meanings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "***Affiliate***" shall mean, with respect to any entity, any other entity that controls, is controlled by, or is under common control with such entity. For this purpose, "control" means ownership of more than 50% of the ordinary voting power of the outstanding equity securities of an entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "***Bank Board***" shall mean the board of directors of Bank and, where appropriate, any committees or other designees thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "***Boards***" shall mean the Bank Board and the Company Board, collectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "***Business of Employer***" shall mean any business conducted from time to time by Employer or any Affiliate of Employer, including without limitation the business of commercial, retail, consumer, and mortgage banking.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "***Cause***" shall mean, in the context of the termination of Executive's employment by Employer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) fraud, embezzlement, misappropriation, theft, or dishonesty by Executive in the course of Executive's employment with Employer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a material violation by Executive of any written policy or code, including without limitation any code of ethics or conduct, of Employer or any Affiliate of Employer which, if susceptible to cure, is not cured by Executive within 20 days after notice to Executive of such violation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) willful misconduct, gross negligence, or gross neglect by Executive in the course of Executive's employment with Employer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a breach by Executive of any fiduciary duty of Executive to Employer or any Affiliate of Employer, or the shareholders of Employer or any Affiliate of Employer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) a breach by Executive of this Agreement which, if susceptible to cure, is not cured by Executive within 20 days after notice to Executive of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the conviction of Executive of, or a plea by Executive of nolo contendere to, a felony, or a misdemeanor involving moral turpitude, or the actual incarceration of Executive;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) conduct or behavior by Executive that the Boards in good faith determine has materially harmed or reasonably could be expected to materially harm the business or reputation of Employer or any Affiliate of Employer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) the initiation by any regulatory agency or authority of a regulatory or enforcement action against Executive, or the removal of Executive from office or permanent prohibition of Executive from participating in the affairs of Employer or any Affiliate of Employer by the Tennessee Department of Financial Institutions or by an order issued under Section 8(e) or 8(g) of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e) or (g)).

For the avoidance of doubt, the termination of Executive's employment due to or in connection with the non-renewal and expiration of the Term, or due to Disability, will not constitute termination of Executive's employment by Employer without Cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "***Change in Control***" shall mean:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the consummation of a share exchange, merger, reorganization, consolidation, or other similar corporate transaction immediately after which less than a majority of the combined voting power of the outstanding securities of Company, or the successor entity in such transaction, entitled to vote generally in the election of directors of Company, or such successor entity, is held, in the aggregate, by the holders of the securities of Company entitled to vote generally in the election of directors of Company immediately prior to such transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any Exchange Act Person becomes the "beneficial owner" (determined in accordance with Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of Company representing more than 50% of the combined voting power of the outstanding securities of Company entitled to vote generally in the election of directors of Company; *provided*, *however*, that for purposes of this clause (ii), the acquisition of additional securities by any one person who is considered to own securities of Company representing more than 50% of the combined voting power of the outstanding securities of Company entitled to vote generally in the election of directors of Company will not be considered a Change in Control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the consummation by Company, during any period of 12 consecutive months, of the sale or other disposition, to an unaffiliated third party, of assets of Company or any Affiliate of Company that have a total gross fair market value equal to or more than 80% of the gross fair market value of the total consolidated assets of Company (expressly excluding, for the avoidance of doubt, any pledge by Company or any Affiliate of Company of securities or other assets to secure indebtedness or for other general corporate or commercial purposes); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the replacement, during any period of 12 consecutive months, of a majority of the members of the Company Board with directors whose appointment or election is not endorsed by a majority of the members of the Company Board before the date of appointment or election.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "***Code***" shall mean the Internal Revenue Code of 1986, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "***Common Stock***" shall mean the common stock, par value $0.01 per share, of Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "***Company Board***" shall mean the board of directors of Company and, where appropriate, any committees or other designees thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "***Competing Business***" shall mean any person (other than Employer and its Affiliates) that is conducting any business that is the same as or substantially similar to the Business of Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "***Confidential Information***" shall mean all information not generally available to and known by the public, whether spoken, printed, electronic, or in any other form or medium, relating to the business, practices, policies, plans, prospects, operations, results of operations, financial condition or results, strategies, know-how, patents, trade secrets, inventions, intellectual property, records, suppliers, vendors, customers, clients, products, services, employees, independent contractors, personnel, systems, or internal controls of Employer or any Affiliate of Employer, or of any other person that has entrusted information to Employer or any Affiliate of Employer in confidence, as well as any other information that is marked or otherwise identified as confidential or proprietary or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and under the circumstances in which the information is known or used. The term "Confidential Information" shall include information developed by Executive in the course of Executive's employment with Employer as if Employer furnished such information to Executive in the first instance. The term "Confidential Information" shall not include information that, through no fault of Executive or person(s) acting in concert with Executive or on Executive's behalf, is generally available to and known by the public at the time of disclosure to Executive or thereafter becomes generally available to and known by the public.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) "***Disability***" shall mean the inability of Executive to perform the essential functions of Executive's employment with Employer, even with Employer's reasonable accommodation, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "***Exchange Act***" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "***Exchange Act Person***" means any natural person, entity, or group (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that "Exchange Act Person" will not include (i) Company or any Subsidiary of Company, (ii) any employee benefit plan of Company or any Subsidiary of Company or any trustee or other fiduciary holding securities under an employee benefit plan of Company or any Subsidiary of Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an entity owned, directly or indirectly, by the shareholders of Company in substantially the same proportions as their ownership of securities of Company, or (v) any natural person, entity, or group (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the owner, directly or indirectly, of securities of Company representing more than 50% of the combined voting power of Company's then outstanding securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "***Good Reason***" shall mean, in the context of the termination of Executive's employment by Executive, any of the following events without Executive's written consent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a material diminution in Executive's authority, duties, and responsibilities, as compared to Executive's authority, duties, and responsibilities as of the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a material reduction in Executive's Base Salary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a change in the location of Executive's primary office that requires Executive to regularly physically report to an office located 50 miles or more from the location of Executive's primary office as of the Effective Date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a material breach of this Agreement by Employer.

In order for Good Reason to exist, prior to Executive terminating Executive's employment for Good Reason, (A) Executive shall give notice to Employer (or its successor) of the existence of Good Reason for termination, which notice must be given by Executive to Employer (or its successor) within 60 days of the initial existence of the circumstance(s) or event(s) giving rise to Good Reason for termination and shall state with reasonable detail the circumstance(s) or event(s) giving rise to Good Reason for termination, (B) Employer (or its successor) shall have 30 days from the effective date of such notice to remedy the circumstance(s) or event(s) giving rise to Good Reason for termination, and (C) the circumstance(s) or event(s) giving rise to Good Reason for termination must go unremedied by Employer (or its successor). Additionally, Executive's employment must be terminated by Executive for Good Reason within the 12-month period immediately following the initial existence of the circumstance(s) or event(s) giving rise to Good Reason for termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) "***Post-Termination Period***" shall mean a period of 12 months (subject to extension as set forth in <u>Section 9(f))</u> following the date of termination of Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "***Restricted Area***" shall mean a radius of 50 miles from each and any banking office (whether a main office, branch office, or loan or deposit production office) operated by Bank as of the last day of Executive's employment with Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "***Separation from Service***" shall have the meaning set forth in, and whether Executive has experienced a Separation from Service shall be determined by Employer in accordance with, Treasury Regulations § 1.409A-1(h).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) "***Subsidiary***" shall mean any entity (other than Company) in an unbroken chain of entities beginning with Company if each of the entities other than the last entity in the unbroken chain owns securities possessing 50% or more of the total combined voting power of all outstanding securities of one of the other entities in such chain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Executive Duties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Position; Reporting.* Executive shall be employed as President and Chief Executive Officer of Company and Bank and shall perform and discharge faithfully the duties and responsibilities which may be assigned to Executive from time to time in connection with the conduct of the Business of Employer. The duties and responsibilities of Executive shall be commensurate with those of individuals holding similar positions at other financial institutions similarly organized and of comparable size and complexity. Executive shall report directly to the Boards. For so long as Executive is President and Chief Executive Officer of Company and Bank, Executive will be nominated for re-election to the Company Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Full-Time Status*. In addition to the duties and responsibilities specifically assigned to Executive pursuant to <u>Section 2(a)</u>, Executive shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) subject to <u>Section 2(c)</u>, during regular business hours, devote such of Executive's time, energy, attention, and skills to the performance of the duties and responsibilities of Executive's employment (reasonable vacations, approved leaves of absence, and reasonable absences due to illness excepted) as may be necessary for Executive to faithfully and industriously perform such duties and responsibilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) diligently follow and implement all reasonable and lawful policies and decisions communicated to Executive by the Boards and act in accordance with the charter, bylaws, policies, and procedures of Employer; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) timely prepare and provide to the Boards all reasonable and lawful reports and accountings as may be reasonably requested of Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Permitted Activities*. Executive shall not during the Term be engaged (whether or not during normal business hours) in any other significant business or professional activity, whether or not such activity is pursued for gain, profit, or other pecuniary advantage, that materially interferes with Executive's performance of his duties and responsibilities as President and Chief Executive Officer of Company and Bank. For the avoidance of doubt, as long as the following activities do not materially interfere with Executive's performance of his duties and responsibilities as President and Chief Executive Officer of Company and Bank, this <u>Section 2(c)</u> shall not be construed as preventing Executive from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) investing Executive's personal assets in any manner which will not require any material services (or, in the case of a Competing Business, any services) on the part of Executive in the operation or affairs of the subject entity and in which Executive's participation is primarily (or, in the case of a Competing Business, solely) that of a passive investor, *provided* that such investment activity following the Effective Date shall not result in Executive owning beneficially at any time 2% or more of any class of equity securities of any Competing Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) participating in the activities of civic and professional organizations and associations, attending and participating in banking industry or professional development conferences, authoring or publishing papers or books, or teaching, *provided* that the Boards may direct Executive in writing to cease any such activities in the event the Boards reasonably determine that Executive continuing the activities would not be in the best interests of Employer or any one or more Affiliates of Employer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) serving on the boards of directors of other companies, *provided* that such board service has been approved by the Boards, which approval will not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Term</u>. The initial term of this Agreement (the "***Initial Term***") shall commence on and as of the Effective Date and, unless this Agreement is sooner terminated in accordance with its terms, shall end on the date which is the three-year anniversary of the Effective Date. At the end of the Initial Term, and at the end of any one-year renewal terms of this Agreement, this Agreement will automatically renew for an additional, successive term of one year, unless either Employer, on the one hand, or Executive, on the other hand, gives the other written notice of its election to terminate this Agreement as of the end of the Initial Term or then-current renewal term, as applicable, at least 60 days prior to the end of the Initial Term or then-current renewal term, as applicable. The Initial Term and any and all such renewal terms are referred to herein together as the "***Term***."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Compensation</u>. During the Term of this Agreement, Employer shall compensate Executive as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Base Salary*. Executive shall be compensated at a base annual rate of $750,000 per year (the "***Base Salary***"). Such Base Salary will be payable bi-weekly and subject to customary withholdings and deductions. Executive's Base Salary will be reviewed at least annually for adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Cash Incentive Compensation.* Executive shall be eligible to participate in the annual cash incentive or bonus plans or programs of Employer in which other executive officers participate, all or some of which may be tied to annual performance metrics established by the Boards. Any cash incentive or bonus compensation ("***Cash Incentive Compensation***") earned by Executive shall be payable not later than March 15th of the calendar year following the calendar year in which the applicable substantial risk of forfeiture lapses, and otherwise in accordance with Employer's normal practices for the payment of short-term incentives. Executive's 2026 target annual Cash Incentive Compensation will be 20% of Base Salary, and this target will be reviewed at least annually for adjustment. Executive's actual Cash Incentive Compensation will be based on actual achievement of applicable performance metrics. The payment of any such Cash Incentive Compensation shall be subject to and conditioned on Executive being employed by Employer on December 31st of the year in which the same is earned (except as set forth in <u>Section 6(f)</u> in the case of the death or Disability of Executive), Executive's employment with Employer having not been terminated by Employer for Cause prior to the payment of such Cash Incentive Compensation, and the receipt of any approvals or no-objections required from or by any regulatory agency or authority having jurisdiction over Company or Bank. The Parties acknowledge that Executive may not be eligible to receive, or Employer may not be permitted to pay, Cash Incentive Compensation if Company or Bank is subject to restrictions imposed by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (the "***FDIC***"), the Tennessee Department of Financial Institutions, or any other regulatory agency or authority, or if Company or Bank is otherwise restricted from paying Cash Incentive Compensation under applicable law, rule, or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Equity Award.* Within 30 days after the Effective Date, Company shall grant to Executive, under the Commercial Bancgroup, Inc. 2025 Omnibus Incentive Plan (the "***Incentive Plan***"), an award of stock-settled restricted stock units having a grant date value of $1,020,000 (the "***RSUs***"), which RSUs shall (i) be settled in shares of Common Stock, (ii) generally vest in three equal installments on the first three anniversaries of the grant date, subject to Executive's continued employment with Employer through the applicable vesting date, and (iii) be subject to the terms and conditions of the grant agreement evidencing the same and the Incentive Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Automobile.* Employer shall provide Executive an Employer-owned or Employer-leased automobile reasonably satisfactory to Executive for use by Executive. Employer will provide Executive with a new Employer-owned or Employer-leased automobile not less frequently than every three years. Executive's use of such automobile will be subject to all motor vehicle policies that Employer may adopt from time to time. Executive shall not be entitled to receive, and Employer shall have no obligation to pay, any tax gross up in respect of this benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *Executive Physical*. Employer shall pay all costs associated with one executive physical per year for Executive at the Mayo Clinic, inclusive of, without limitation, all transportation, lodging, and testing costs; *provided*, *however*, that, for the avoidance of doubt, Executive shall not be entitled to receive, and Employer shall have no obligation to pay, any tax gross up in respect of this benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *Company Aircraft*. So long as Employer or an Affiliate of Employer owns an interest in, or leases, a private aircraft, Employer will, upon reasonable advance notice and provided that such aircraft is not required at such times for business purposes, make such aircraft available to Executive and his immediate family members, for up to 30 flight hours per year, for his and such immediate family members' personal use, in each case at no cost to Executive other than any applicable personal income taxes payable in connection therewith. An amount equal to the related benefit of such personal use of such aircraft will be included in Executive's taxable income as required by applicable provisions of the Code and the regulations promulgated thereunder. For the avoidance of doubt, Executive shall not be entitled to receive, and Employer shall have no obligation to pay, any tax gross up in respect of this benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *Business Expenses*. Subject to the reimbursement policies of Employer in effect from time to time, Employer will reimburse Executive for reasonable business expenses incurred by Executive in the performance of Executive's duties and responsibilities hereunder, including without limitation reasonable business travel and entertainment expenses incurred while acting at the request of or in service of Employer; *provided*, *however*, that, as a condition to any such reimbursement, Executive shall submit verification of the nature and amount of such expenses in accordance with Employer's reimbursement policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) *Paid Leave*. Executive shall be entitled to 25 days of paid leave per calendar year, all of which paid leave will accrue on January 1 of each year. To the extent not inconsistent with this Agreement, Executive's paid leave, including Executive's use of the same and the payout of accrued paid leave upon separation from employment, shall be subject to the terms of Employer's employee handbook and any paid leave policy of Employer in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *Other Benefits*. In addition to the benefits specifically described in this Agreement, Executive shall also be eligible to participate in such other benefits as may be made available by Employer from time to time to executive officers and/or employees of Employer generally, including, by way of example only, retirement plan and dental, vision, life, and disability insurance benefits. All such benefits will be made available and administered in accordance with the terms of any applicable written benefit plans or, if no written plan exists, Employer's standard policies and practices relating to such benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) *Claw Back of Compensation*. Any compensation received by Executive from Employer on or after the Effective Date will be subject to Company's Incentive-Based Compensation Recovery Policy, as amended and restated from time to time, and shall also be subject to cancellation, recoupment, rescission, payback, or other action in accordance with the terms of any other applicable Company clawback or recoupment, or similar, policy or any applicable law, rule, or regulation (including, for the avoidance of doubt, any applicable stock exchange rules), in each case as may be in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) *No Representations*. Executive acknowledges that Employer makes no representations with respect to the tax consequences to Executive of any of the compensation or benefits provided for under this <u>Section 4</u> or elsewhere in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Health Insurance; Life Insurance; Retirement Benefit</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) During the Term of this Agreement, Executive and his spouse shall be entitled to those health insurance benefits made available by Employer to its employees generally, on the same terms as such benefits are made available by Employer to its employees generally. Following the termination of Executive's employment, Employer shall provide Executive and his spouse with Employer-paid Medicare supplement insurance providing Executive and his spouse health insurance coverage comparable to the health insurance coverage provided to Executive and his spouse immediately prior to the termination of Executive's employment (the "***Post-Employment Medicare Supplement***"). Employer shall provide the Post-Employment Medicare Supplement to each of Executive and his spouse for so long as the applicable individual lives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Employer shall maintain, at Employer's sole expense, for the benefit of Executive a split-dollar life insurance policy on the life of Executive providing for a death benefit payable to Executive's designated beneficiary or beneficiaries of not less than $675,000. Employer's obligation to maintain such policy for the benefit of Executive shall survive and continue after the termination of Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Executive previously deferred the payment by Employer to Executive of $600,000 of compensation for services previously rendered (the "***Deferred Compensation***"). Upon Executive's Separation from Service, Employer shall pay the Deferred Compensation to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) in five equal annual installments of $120,000 each, with the first such installment to be due and payable on the first business day of the year immediately following the year in which Executive's Separation from Service occurs and the remaining four installments to be payable on the first business day of each of the next four succeeding years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Termination of Employment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Termination by Employer*. During the Term, Executive's employment may be terminated by Employer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at any time for Cause, *provided* that, before Executive's employment can be terminated for Cause, both the Company Board and the Bank Board, by vote of a majority of all of its respective members (other than Executive if Executive is then a member), must have adopted, in good faith, resolution(s) finding that there exists Cause for the termination of Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) at any time without Cause, in which event Employer shall, subject to <u>Section 29</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) a severance benefit in an amount equal to two times the sum of (A) Executive's Base Salary as of the date of termination of Executive's employment *plus* (B) the average of Executive's Cash Incentive Compensation for the two calendar years immediately preceding the calendar year in which the termination of employment occurs (the "***Standard Severance Amount***"), such Standard Severance Amount to be payable, at the option of Employer and to the extent permitted by Section 409A of the Code, either in one lump sum within 60 days after the date of termination of Executive's employment or in 26 equal bi-weekly installments in accordance with Employer's normal payroll practices, beginning with the first bi-weekly payroll date following the termination of Executive's employment (*provided*, *however*, that, in the event any portion of the Standard Severance Amount constitutes non-qualified deferred compensation (within the meaning of Section 409A of the Code), or to the extent Employer having such option is not permitted under Section 409A of the Code, the Standard Severance Amount shall be paid in one lump sum within 60 days after the date of termination of Executive's employment).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Termination by Executive*. During the Term, Executive's employment may be terminated by Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at any time for Good Reason, in which event Employer shall, subject to <u>Section 29</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) the Standard Severance Amount (*provided* that, for the avoidance of doubt, if Executive terminates for Good Reason as defined in <u>Section 1(o)(ii)</u>, the Standard Severance Amount will be determined based on Executive's Base Salary immediately prior to the diminution in Base Salary giving rise to termination for Good Reason), such Standard Severance Amount to be payable, at the option of Employer and to the extent permitted by Section 409A of the Code, either in one lump sum within 60 days after the date of termination of Executive's employment or in 26 equal bi-weekly installments in accordance with Employer's normal payroll practices, beginning with the first bi-weekly payroll date following the termination of Executive's employment (*provided*, *however*, that, in the event any portion of the Standard Severance Amount constitutes non-qualified deferred compensation (within the meaning of Section 409A of the Code), or to the extent Employer having such option is not permitted under Section 409A of the Code, the Standard Severance Amount shall be paid in one lump sum within 60 days after the date of termination of Executive's employment).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) at any time without Good Reason, *provided* that Executive shall give Employer at least 60 days prior written notice of termination, all or any part of which 60-day notice period Employer may waive for no consideration by giving written notice of the same to Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Termination Upon Disability*. During the Term, Executive's employment may be terminated by Employer upon the Disability of Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Termination Upon Death*. Executive's employment shall terminate automatically upon the death of Executive during the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *Termination by Mutual Agreement*. During the Term, Executive's employment may be terminated at any time by mutual written agreement of the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *Effect of Termination*. Upon the termination of Executive's employment, Employer shall have no further obligations to Executive or Executive's estate, heirs, beneficiaries, executors, administrators, or legal or personal representatives under or with respect to this Agreement, except for the payment of any amounts earned and owing under <u>Section 4</u> as of or for periods prior to the date of termination of Executive's employment, payments yet to be made and benefits yet to be provided under <u>Section 5</u>, and any payment(s) required by <u>Section 6(a)(ii)</u>, <u>Section 6(b)(i)</u>, or <u>Section 7</u>; *provided* that, in the event of the termination of Executive's employment due to the death or Disability of Executive, Employer shall provide to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) a pro rata portion of any Cash Incentive Compensation that would have been payable to Executive, under <u>Section 4(b)</u>, for the year in which Executive's death or Disability occurs (prorated based on the number of days elapsed in such year through the date of termination of Executive's employment), and such pro rata portion shall be paid not later than March 15th of the calendar year following the calendar year in which Executive's termination of employment occurs and otherwise in accordance with Employer's normal practices for the payment of short-term incentives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *Resignations*. Upon the termination of Executive's employment for any reason, (i) if Executive is a member of the Company Board, the Bank Board, or the board of directors (or similar governing body) of any Affiliate of Employer, Executive shall, at the request of Employer, resign from any or all such position(s), and (ii) Executive shall, at the request of Employer, resign from any officer position(s) held by Executive at any Affiliate of Employer, in each case with any and all such resignations to be effective not later than the date on which Executive's employment is terminated unless a later effective date is agreed to by Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Change in Control</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If within six months prior to or within 12 months following a Change in Control Employer (or any successor to Employer) terminates Executive's employment without Cause, Employer (or its successor) shall, subject to <u>Section 29</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) a severance benefit in an amount equal to three times the sum of (i) Executive's Base Salary as of the date of termination *plus* (ii) the average of Executive's Cash Incentive Compensation for the two calendar years immediately preceding the calendar year in which the termination of employment occurs (the "***Change in Control Severance Amount***"), said Change in Control Severance Amount to be payable in one lump sum within 60 days after the date of termination of Executive's employment; *provided* that, in the event such 60-day period spans two calendar years, the Change in Control Severance Amount shall not be payable under this <u>Section 7(a)</u> until the second calendar year. The compensation provided for in this <u>Section 7(a)</u> is, in the context of a Change in Control, intended to be in lieu of the compensation provided for in <u>Section 6(a)(ii)</u> and, if Executive becomes entitled to the compensation provided for in this <u>Section 7(a)</u>, Executive will not also be entitled to the compensation provided for in <u>Section 6(a)(ii)</u> and any compensation previously paid to Executive under <u>Section 6(a)(ii)</u> will be credited against the amount payable to Executive under this <u>Section 7(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If within six months prior to or 12 months following a Change in Control Executive terminates Executive's employment with Employer (or its successor) for Good Reason, Employer (or its successor) shall, subject to <u>Section 29</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) the Change in Control Severance Amount (*provided* that, for the avoidance of doubt, if Executive terminates for Good Reason as defined in <u>Section 1(o)(ii)</u>, the Change in Control Severance Amount will be determined based on Executive's Base Salary immediately prior to the diminution in Base Salary giving rise to termination for Good Reason), in one lump sum within 60 days after the date of termination of Executive's employment, *provided* that, in the event such 60-day period spans two calendar years, the Change in Control Severance Amount shall not be payable under this <u>Section 7(b)</u> until the second calendar year. The compensation provided for in this <u>Section 7(b)</u> is, in the context of a Change in Control, intended to be in lieu of the compensation provided for in <u>Section 6(b)(i)</u> and, if Executive becomes entitled to the compensation provided for in this <u>Section 7(b)</u>, Executive will not also be entitled to the compensation provided for in <u>Section 6(b)(i)</u> and any compensation previously paid to Executive under <u>Section 6(b)(i)</u> will be credited against the amount payable to Executive under this <u>Section 7(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Confidential Information</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Executive understands and acknowledges that, during the course of Executive's employment with Employer, Executive has had and will continue to have access to, and has learned and will continue to learn of and about, Confidential Information. Executive acknowledges and agrees that all Confidential Information of Employer or its Affiliates that Executive accesses, receives, learns of, or develops, or previously has accessed, received, learned of, or developed, while employed by Employer shall be and will remain the sole and exclusive property of Employer and its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Executive understands and acknowledges that Employer and its Affiliates have invested, and continue to invest, substantial time, money, and specialized knowledge into developing their resources, building a customer base, generating customer and potential customer lists and leads, training their employees, and generally improving their offerings in the field of banking and financial services. Executive understands and acknowledges that, as a result of these efforts, Employer and its Affiliates have created and continue to create and use Confidential Information, including highly confidential customer and prospective customer information, the confidentiality of which Employer goes to great lengths and expends significant resources to maintain, and that the Confidential Information provides Employer and its Affiliates with a competitive advantage over others in the marketplace. Executive also acknowledges and agrees that Executive is being provided and entrusted with access to Employer's customer and employee relationships and goodwill, that Employer would not provide Executive access to Confidential Information or Employer's customer or employee relationships or goodwill in the absence of Executive's execution of and compliance with this Agreement, and that Employer's Confidential Information, customer and employee relationships, and goodwill are valuable assets of Employer and are legitimate business interests that are properly subject to protection through the covenants contained in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Executive covenants and agrees (i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, communicate, or make available Confidential Information, or allow it to be disclosed, communicated, or made available, in whole or in part, to any person (including other employees of Employer or its Affiliates) not having a need to know and the authority to know and use the Confidential Information in connection with the Business of Employer; and (iii) not to access or use any Confidential Information, and not to copy any documents, records, files, media, or other resources (printed, electronic, or in any other form or medium) containing any Confidential Information, or remove any such documents, records, files, media, or other resources from the premises or control of Employer or its Affiliates, except as required in the performance by Executive of Executive's authorized employment duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Nothing in this Agreement shall be construed or enforced to prevent disclosure of Confidential Information to the extent disclosure is required by applicable law, rule, or regulation or pursuant to the valid order of a court of competent jurisdiction or government agency, *provided* that the disclosure does not exceed that in fact required by such law, rule, regulation, or order, and, *provided further*, that, unless prohibited by law, rule, regulation, or order, Executive shall promptly provide Employer written notice of any such required disclosure of Confidential Information. Additionally, nothing in this Agreement shall prohibit or restrict Executive (or any attorney for Executive) from (i) initiating communications directly with, responding to an inquiry from, providing testimony before, or otherwise participating in any investigation or proceeding that may be conducted by any government agency, regulatory authority, or self-regulatory organization, including the United States Securities and Exchange Commission and the Financial Industry Regulatory Authority, or (ii) reporting possible violations of federal, state, or local law or regulation to any government agency or regulatory authority or making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation. Executive shall not need the prior authorization of Employer to make any such reports or disclosures and shall not be required to notify Employer that Executive has made such reports or disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding any other provision of this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Executive will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law, or (B) is made in a complaint or other document filed under seal in a lawsuit or other proceeding; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If Executive files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Executive may disclose trade secrets to Executive's attorney and use the trade secret information in the court proceeding if Executive (A) files any document containing trade secrets under seal and (B) does not disclose trade secrets, except pursuant to court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Executive understands and acknowledges that Executive's obligations under this Agreement with regard to any particular Confidential Information shall commence, or shall be deemed to have commenced, immediately upon Executive first having access to such Confidential Information (whether before or after the Effective Date) and shall continue during and after Executive's employment by Employer until such time as such Confidential Information has become public knowledge other than as a result of Executive's breach of this Agreement or a breach by any person acting in concert with, at the direction of, or on behalf of Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) At any time upon request by Employer, and in any event upon the termination of Executive's employment with Employer, Executive will promptly deliver to Employer all property of Employer or its Affiliates, including without limitation all Confidential Information, vehicles, keys, access cards, credit cards, identification cards, equipment, computers, tablets, and mobile and other electronic devices, then in Executive's possession or control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Restrictive Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Non-Competition*. Executive agrees that, during the Term and, following the termination of Executive's employment with Employer, for the duration of the Post-Termination Period, Executive will not (except on behalf of or with the prior written consent of Employer) (i) either directly or indirectly, on Executive's own behalf or in the service of or on behalf of others, engage in any business, activity, enterprise, or venture competitive with the Business of Employer; (ii) either directly or indirectly, perform for any Competing Business any services that are the same as, or substantially similar to, the services Executive performs or performed for Employer; (iii) accept employment with or be employed by any person engaged in any business, activity, enterprise, or venture competitive with the Business of Employer; or (iv) work for or with, consult for, or otherwise be affiliated with or be employed by any person or group of persons proposing to establish a new bank or other financial institution; *provided* that during the Post-Termination Period these restrictions shall only apply within the Restricted Area.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Non-Solicitation of Customers*. Executive agrees that, during the Term and, following the termination of Executive's employment with Employer, for the duration of the Post-Termination Period, Executive will not directly or indirectly (except on behalf of or with the prior written consent of Employer), on Executive's own behalf or in the service of or on behalf of others, solicit or contact or attempt to solicit or contact (by mail, email, courier, facsimile, telephone, instant or text message, social media, or otherwise), or meet with (in person, via video conference, or otherwise), any customer of Employer or any Affiliate of Employer for purposes of selling, offering, or providing products or services that are competitive with those sold, offered, or provided by Employer or any Affiliate of Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Non-Solicitation of Employees*. Executive agrees that, during the Term and, following the termination of Executive's employment with Employer, for the duration of the Post-Termination Period, Executive will not directly or indirectly (except on behalf of or with the prior written consent of Employer), on Executive's own behalf or in the service of or on behalf of others, solicit, recruit, or hire, or attempt to solicit, recruit, or hire, any employee of Employer or any Affiliate of Employer, or otherwise induce or attempt to induce any such employee to terminate his or her employment with Employer or any Affiliate of Employer, regardless of whether the employee is a full-time, part-time, or temporary employee of Employer or an Affiliate of Employer or the employee's employment is pursuant to a written agreement, for a determined period, or at will.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Non-Disparagement*. Executive agrees that, both during the Term and following the termination of Executive's employment with Employer, Executive will not make any disparaging statements or remarks (written or oral) about Employer or any Affiliate of Employer or any of their respective officers, directors, employees, shareholders, agents, or representatives; *provided* that nothing in this Agreement prohibits communications necessary to respond to lawful inquiries by government or regulatory agencies, to defend against legal claims or litigation of any kind, or to enforce the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *Modification; No Hardship.* The Parties agree that the provisions of this Agreement represent a reasonable balancing of their respective interests and have attempted to limit the restrictions imposed on Executive to those necessary to protect Employer from inevitable disclosure of Confidential Information and unfair competition. The Parties agree that, if the scope or enforceability of this Agreement, or any provision hereof, is in any way disputed at any time and a court or other trier of fact determines that the scope of any provision contained in this Agreement is overbroad, then such court or other trier of fact may modify the scope of such provision so that it is enforceable to the greatest extent permitted by applicable law. Executive acknowledges and agrees that, in the event Executive's employment with Employer terminates, Executive possesses marketable skills and abilities that will enable Executive to find suitable employment without violating the covenants set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *Tolling.* Executive agrees that, in the event Executive breaches this <u>Section 9</u>, the Post-Termination Period shall be tolled during, and therefore extended by, the period of such breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *Remedies*. Executive agrees that the covenants contained in <u>Section 8</u> and <u>Section 9</u> are of the essence of this Agreement; that each of such covenants is reasonable and necessary to protect the business, legitimate interests, and assets of Employer and its Affiliates; and that irreparable loss and damage will be suffered by Employer and its Affiliates should Executive breach any of such covenants. Therefore, Executive agrees and consents that, in addition to all other remedies provided by or available at law or in equity, Employer shall be entitled to seek a temporary restraining order and temporary and permanent injunctions to prevent breaches or contemplated or threatened breaches of any of the covenants contained in <u>Section 8</u> or <u>Section 9</u> and that, in such event, Employer shall not be required to post a bond. Employer and Executive agree that all remedies available to Employer shall be cumulative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>Severability</u>. The Parties agree that each of the provisions included in this Agreement is separate, distinct, and severable from the other provisions of this Agreement and that the invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. Further, if any provision of this Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a conflict between the provision and any applicable law, rule, regulation, or public policy, the provision shall be redrawn to make the provision consistent with, and valid and enforceable under, such law, rule, regulation, or public policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>No Set-Off by Executive</u>. The existence of any claim, demand, action, or cause of action by Executive against Employer or any Affiliate of Employer, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by Employer of any of its rights under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Notices</u>. All notices and other communications required or permitted under or pertaining to this Agreement shall be in writing and shall be either personally delivered, sent by overnight courier, or mailed by first class United States Mail, return receipt requested, to the recipient at the address below indicated:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*If to Employer*: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*If to Executive*: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial Bancgroup, Inc. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to Executive, personally, at the address for |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Post Office Box 400 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive appearing in the records of Employer |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6710 Cumberland Gap Parkway |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Harrogate, Tennessee 37752 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention: Board of Directors |  |

---

or to such other address or to the attention of such other person as the recipient Party shall have specified by prior written notice to the sending Party. All such notices and other communications shall be effective (a) when personally delivered to the Party to be notified, (b) two business days after deposit with an overnight courier, addressed to the Party to be notified as set forth above, or (c) four business days after deposit in the United States Mail, first class, return receipt requested, at any time other than during a general discontinuance of postal service due to strike, lockout, or otherwise (and in the event of a general discontinuance of postal service, notices and other communications will be effective upon receipt), and addressed to the Party to be notified as set forth above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Assignment</u>. Employer may assign this Agreement and its rights hereunder and may delegate its duties and obligations under this Agreement, in each case without notice to or the consent of Executive, in connection with a Change in Control. This Agreement is a personal contract, and neither this Agreement nor the rights, interest, duties, or obligations of Executive hereunder may be assigned or delegated by Executive. Subject to the preceding provisions of this <u>Section 13</u>, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Waiver</u>. A waiver by a Party of any provision of this Agreement or of any breach of this Agreement by any other Party shall not be effective unless set forth in a written instrument signed by the Party granting such waiver, and no such waiver shall operate or be construed as a waiver of the same or any other provision or breach on any other occasion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Mediation</u>. Except with respect to <u>Section 8</u> and <u>Section 9</u>, in the event of any dispute arising out of or relating to this Agreement or a breach hereof, which dispute cannot be settled through direct discussions between the Parties, the Parties agree to first endeavor to settle the dispute in an amicable manner by non-binding, confidential mediation in Claiborne County, Tennessee before resorting to any other process for resolving the dispute.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Applicable Law and Choice of Forum</u>. This Agreement shall be governed by and construed and enforced under and in accordance with the laws of the State of Tennessee, without regard to or the application of principles of conflicts of laws. The Parties agree that any litigation, suit, action, or proceeding arising out of or related to this Agreement shall be instituted exclusively in the United States District Court for the Eastern District of Tennessee, Northern Division, or the courts of the State of Tennessee sitting in Knox County, Tennessee, and each Party irrevocably submits to the exclusive jurisdiction of and venue in such courts and waives any objection it might otherwise have to the jurisdiction of or venue in such courts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Interpretation</u>. Words used herein denoting one gender shall include all genders. Words used herein denoting the singular shall include the plural and vice versa. When used herein, the terms "herein," "hereunder," "hereby," "hereto," and "hereof," and any similar terms, refer to this Agreement. When used herein, the term "person" shall include an individual, a corporation, a limited liability company, a partnership, a joint venture, an association, a trust, and any other entity or organization, whether or not incorporated. Any captions, titles, or headings preceding the text of any section or subsection of this Agreement are solely for convenience of reference and shall not constitute part of this Agreement or affect its meaning, construction, or effect. The Parties agree that, because they have been given the opportunity to have counsel review and revise this Agreement, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to its fair meaning, and not strictly for or against any of the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Entire Agreement; No Duplication of Benefits</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement embodies the entire and final, integrated agreement of the Parties on the subject matter stated in this Agreement and supersedes all prior understandings and agreements (oral and written) of the Parties relating to the subject matter of this Agreement. Without limiting the foregoing, the Parties agree that the certain Employment Agreement for Terry L. Lee as Chief Executive Officer of Commercial Bank dated January 20, 2020, by and between Bank and Executive (the "***2020 Agreement***") is terminated and superseded by this Agreement as of the Effective Date and that, as of and after the Effective Date, (i) the 2020 Agreement shall have no further force or effect whatsoever and (ii) notwithstanding any provision of the 2020 Agreement to the contrary, neither Bank nor Executive shall have any further or continuing rights, duties, obligations, or liability of any kind or nature under the 2020 Agreement. Notwithstanding the foregoing, this <u>Section 18(a)</u> shall not relieve or release Bank or Executive from any liability or damages arising from a breach by Bank or Executive of the 2020 Agreement prior to the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No amendment or supplement to or modification of this Agreement shall be valid or binding upon any Party unless the same is set forth in a written instrument signed by all Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The severance payments and benefits provided for in this Agreement shall be in lieu of any payments or benefits pursuant any general severance policy or other severance plan maintained by Employer for the benefit of its employees generally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Counterparts</u>. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement. A signed copy or counterpart of this Agreement delivered by facsimile, email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original manually signed copy thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Rights of Third Parties</u>. Nothing herein expressed is intended, or shall be construed, to confer upon or give to any person, other than the Parties hereto and, as applicable, their respective estates, heirs, beneficiaries, successors, and permitted assigns, any rights or remedies under or by reason of this Agreement; *provided*, *however*, that the Parties agree that the Affiliates of Employer are intended third party beneficiaries of this Agreement and are entitled to enforce any rights hereunder for their benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>Legal Fees</u>. In the event of any claim, action, suit, or proceeding arising out of or relating to this Agreement, the prevailing Party shall be entitled to recover from the non-prevailing Party all reasonable fees, expenses, and disbursements, including without limitation reasonable attorneys' fees and court costs, incurred by such prevailing Party in connection with such claim, action, suit, or proceeding, in addition to any other relief to which such prevailing Party may be entitled at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>Survival</u>. The respective rights and obligations of the Parties hereunder shall survive the termination of this Agreement to the extent and for such time as necessary to carry out fully the purposes and intent of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. <u>Executive Representations</u>. Executive represents and warrants to Employer that, during the Term, neither Executive's employment with Employer nor Executive's performance of Executive's duties and responsibilities under this Agreement will conflict with or result in a breach or violation of or a default under any contract, covenant, or agreement (including without limitation any non-solicitation, non-competition, or other similar contract, covenant, or agreement) or order, judgment, or decree to which Executive is a party or subject or by which Executive is bound. Executive acknowledges and affirms that Executive has executed this Agreement voluntarily, has read this Agreement carefully, and had a full and reasonable opportunity to consider this Agreement (including an opportunity to consult with legal counsel), and that Executive has not been pressured or in any way coerced, threatened, or intimidated into signing this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. <u>Code Section 409A</u>. Notwithstanding anything in this Agreement to the contrary, the following provisions shall apply to all benefits and payments provided under this Agreement by Employer to Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The payment (or commencement of a series of payments) hereunder of any non-qualified deferred compensation (within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed until such time as Executive has also undergone a Separation from Service, at which time such non-qualified deferred compensation (calculated as of the date of Executive's termination of employment) shall be paid (or commence to be paid) to Executive as set forth in this Agreement as if Executive had undergone such termination of employment (under the same circumstances) on the date of Executive's Separation from Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If Executive is a specified employee (as determined by Employer in accordance with Section 409A of the Code and Treasury Regulations § 1.409A-3(i)(2)) as of Executive's Separation from Service with Employer, and if any payment, benefit, or entitlement provided for in this Agreement or otherwise both (i) constitutes non-qualified deferred compensation (within the meaning of Section 409A of the Code) and (ii) cannot be paid or provided in a manner otherwise expressly provided for without subjecting Executive to additional tax or interest (or both) under Section 409A of the Code, then any such payment, benefit, or entitlement that is payable during the first six months following the Separation from Service shall be paid or provided to Executive in a lump sum cash payment to be made on the earlier of (A) Executive's death and (B) the first business day of the seventh month immediately following Executive's Separation from Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any payment or benefit paid or provided under this Agreement due to a Separation from Service that is exempt from Section 409A of the Code pursuant to Treasury Regulations § 1.409A-1(b)(9)(v) will be paid or provided to Executive only to the extent that expenses are not incurred or benefits are not provided beyond the last day of Executive's second taxable year following Executive's taxable year in which the Separation from Service occurs, *provided* that Employer reimburses such expenses no later than the last day of the third taxable year following Executive's taxable year in which Executive's Separation from Service occurs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) It is the intent of the Parties that the payments, benefits, and entitlements to which Executive could become entitled in connection with Executive's employment under this Agreement be exempt from or comply with Section 409A of the Code and the regulations and other guidance promulgated thereunder, and, accordingly, this Agreement will be interpreted to be consistent with such intent. For purposes of the limitations on non-qualified deferred compensation under Section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of applying the exclusion under Section 409A of the Code for short-term deferral amounts, the separation pay exception, or any other exception or exclusion under Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Although the payments and benefits provided for hereunder are intended to be structured in a manner to avoid the imposition of any penalty taxes under Section 409A of the Code, in no event whatsoever will Employer be liable for any additional tax, interest, or penalties that may be imposed on Executive under or as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding or other obligations applicable to employers, if any, under Section 409A of the Code).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) No deferred compensation payments provided for under this Agreement shall be accelerated to Executive, except as permitted by Treasury Regulations § 1.409A-3(j)(4).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes "deferred compensation" for purposes of Section 409A of the Code be subject to offset by any other amount unless permitted by Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) All expenses described in this Agreement as eligible for reimbursement must be incurred by Executive during the Term of this Agreement to be eligible for reimbursement. Any in-kind benefits provided by Employer to Executive must be provided during the Term of this Agreement. The amount of reimbursable expenses incurred, and the amount of any in-kind benefits provided, in one taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits provided, in any other taxable year. Each category of reimbursement shall be paid as soon as administratively practicable, but in no event shall any such reimbursement be paid after the last day of the calendar year following the calendar year in which the expense was incurred. Neither rights to reimbursement nor in-kind benefits shall be subject to liquidation or exchange for other benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. <u>Code Section 280G</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event that it is determined that any payment or benefit to be made or provided to or for the benefit of Executive, whether pursuant to this Agreement or otherwise (all such payments and benefits, "***Covered Payments***"), would constitute a "parachute payment" within the meaning of Section 280G of the Code (or any successor provision thereto) and would, but for this <u>Section 25(a)</u>, be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) (the "***Excise Tax***"), then prior to any Covered Payments being made or provided a calculation shall be performed comparing (i) the Net Benefit (as defined below) to Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to Executive if the Covered Payments are reduced to the minimum extent necessary to avoid the Covered Payments being subject to the Excise Tax. If the amount calculated under clause (i) above is less than the amount calculated under clause (ii) above, the Covered Payments will be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax. The term "***Net Benefit***" shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment, and excise taxes. Any reduction of Covered Payments pursuant to this <u>Section 25(a)</u> will be made in a manner determined by Employer that is consistent with the requirements of Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All determinations and calculations under this <u>Section 25</u> shall be made by an independent regional or national accounting firm or independent tax counsel selected by Employer (the "***Determination Firm***"). All determinations and calculations of the Determination Firm shall be conclusive and binding on the Parties for all purposes. For purposes of making the determinations and calculations required by this <u>Section 25</u>, the Determination Firm may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Parties shall furnish the Determination Firm with such documents and information as the Determination Firm may reasonably request in order to make any determinations and calculations necessitated by this <u>Section 25</u>. The fees and expenses of the Determination Firm shall be borne by Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26. <u>Tax Withholding</u>. Employer may deduct and withhold from any amounts payable under this Agreement all federal, state, local, or other taxes Employer is required to deduct or withhold pursuant to applicable law, rule, regulation, or ruling.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27. <u>Regulatory Restrictions</u>. The Parties expressly acknowledge and agree that their rights and obligations under this Agreement will be subject to such conditions, restrictions, and limitations as may from time to time be imposed by applicable federal or state banking laws, rules, or regulations or the policies, orders, or directives of federal or state bank or bank holding company regulatory agencies. Without limiting the foregoing, no payment shall be made to Executive, pursuant to this Agreement or otherwise, if such payment would be in contravention of the requirements of Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(k)) or Part 359 of the FDIC's Rules and Regulations (12 C.F.R. Part 359), and Employer shall have no obligation to petition the FDIC, or any other regulatory agency or authority, for its consent or concurrence for any payment to Executive under Section 18(k) of the Federal Deposit Insurance Act or Part 359 of the FDIC's Rules and Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28. <u>Right to Contact</u>. Executive agrees that Employer shall have the right to contact any new employer, or potential employer, of Executive and apprise such person of Executive's responsibilities and obligations owed under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29. <u>Separation Pay Conditions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The obligation of Employer (or its successor) to pay, and the right of Executive to receive, the Standard Severance Amount under <u>Section 6.1(a)(ii)</u> or <u>Section 6.2(b)(i)</u>, or the Change in Control Severance Amount under <u>Section 7(a)</u> or <u>Section 7(b)</u>, shall be conditioned on and subject to Executive, within 50 days after the date of termination of Executive's employment, executing and delivering to Employer (or its successor) a separation agreement in such form as provided by Employer (or its successor) and such separation agreement becoming fully effective and irrevocable within 60 days after the date of termination of Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Additionally, as a condition to Employer's obligation to pay, and Executive's right to receive or retain, the Standard Severance Amount under <u>Section 6.1(a)(ii)</u> or <u>Section 6.2(b)(i)</u>, (i) Executive must comply with all post-employment obligations set forth in this Agreement (including without limitation Executive's obligations under <u>Section 8</u> and <u>Section 9</u>) and (ii) Employer (by written notice to Executive at the time of, or within five days after, the termination of Executive's employment) shall have the right to require Executive to, for a period of up to three months following the termination of Executive's employment, be reasonably available during normal business hours to from time to time assist Employer with the transition of Executive's duties and responsibilities.

(*Signature Page Follows*)

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement effective as of the date first written above.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COMPANY: | COMMERCIAL BANCGROUP, INC. | COMMERCIAL BANCGROUP, INC. |
|  | By: | /s/ J. Adam Robertson |
|  |  | J. Adam Robertson |
|  |  | Executive Chairperson |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BANK: | COMMERCIAL BANK | COMMERCIAL BANK |
|  | By: | /s/ J. Adam Robertson |
|  |  | J. Adam Robertson |
|  |  | Executive Chairperson |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXECUTIVE: |  |
|  | /s/ Terry L. Lee |
|  | Terry L. Lee |

---

*(Signature Page to Lee Employment Agreement)*

## Exhibit 10.2

**Exhibit 10.2**

**EMPLOYMENT AGREEMENT**

THIS EMPLOYMENT AGREEMENT (this "***Agreement***") is made and entered into effective as of September 29, 2025 (the "***Effective Date***"), by and between Commercial Bancgroup, Inc., a Tennessee corporation ("***Company***"), and Commercial Bank, a Tennessee state-chartered bank ("***Bank***"), on the one hand, and Philip J. Metheny, a resident of the State of Tennessee ("***Executive***"), on the other hand. Company and Bank are sometimes referred to herein collectively as "***Employer***." Company, Bank, and Executive are sometimes referred to herein collectively as the "***Parties***," and each is sometimes referred to herein individually as a "***Party***."

<u>R</u> <u>E</u> <u>C</u> <u>I</u> <u>T</u> <u>A</u> <u>L</u> <u>S</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Executive is currently employed as Executive Vice President, Chief Financial Officer of Company and Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Employer and Executive desire to enter into this Agreement to provide for Executive's continued employment with Employer upon the terms and subject to the conditions set forth herein.

<u>AGREEMENT</u>

In consideration of the premises set forth above and the mutual agreements hereinafter set forth, as well as other good and valuable consideration, the receipt and sufficiency of all of which are hereby acknowledged by the Parties, effective as of the Effective Date, the Parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Definitions</u>. When used in this Agreement, the following terms and their variant forms shall have the stated meanings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "***Affiliate***" shall mean, with respect to any entity, any other entity that controls, is controlled by, or is under common control with such entity. For this purpose, "control" means ownership of more than 50% of the ordinary voting power of the outstanding equity securities of an entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "***Bank Board***" shall mean the board of directors of Bank and, where appropriate, any committees or other designees thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "***Boards***" shall mean the Bank Board and the Company Board, collectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "***Business of Employer***" shall mean any business conducted from time to time by Employer or any Affiliate of Employer, including without limitation the business of commercial, retail, consumer, and mortgage banking.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "***Cause***" shall mean, in the context of the termination of Executive's employment by Employer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) fraud, embezzlement, misappropriation, theft, or dishonesty by Executive in the course of Executive's employment with Employer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a material violation by Executive of any written policy or code, including without limitation any code of ethics or conduct, of Employer or any Affiliate of Employer which, if susceptible to cure, is not cured by Executive within 20 days after notice to Executive of such violation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) willful misconduct, gross negligence, or gross neglect by Executive in the course of Executive's employment with Employer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a breach by Executive of any fiduciary duty of Executive to Employer or any Affiliate of Employer, or the shareholders of Employer or any Affiliate of Employer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) a breach by Executive of this Agreement which, if susceptible to cure, is not cured by Executive within 20 days after notice to Executive of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the conviction of Executive of, or a plea by Executive of nolo contendere to, a felony, or a misdemeanor involving moral turpitude, or the actual incarceration of Executive;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) conduct or behavior by Executive that the Chief Executive Officer of Company in good faith determines has materially harmed or reasonably could be expected to materially harm the business or reputation of Employer or any Affiliate of Employer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) the initiation by any regulatory agency or authority of a regulatory or enforcement action against Executive, or the removal of Executive from office or permanent prohibition of Executive from participating in the affairs of Employer or any Affiliate of Employer by the Tennessee Department of Financial Institutions or by an order issued under Section 8(e) or 8(g) of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e) or (g)).

For the avoidance of doubt, the termination of Executive's employment due to or in connection with the non-renewal and expiration of the Term, or due to Disability, will not constitute termination of Executive's employment by Employer without Cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "***Change in Control***" shall mean:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the consummation of a share exchange, merger, reorganization, consolidation, or other similar corporate transaction immediately after which less than a majority of the combined voting power of the outstanding securities of Company, or the successor entity in such transaction, entitled to vote generally in the election of directors of Company, or such successor entity, is held, in the aggregate, by the holders of the securities of Company entitled to vote generally in the election of directors of Company immediately prior to such transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any Exchange Act Person becomes the "beneficial owner" (determined in accordance with Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of Company representing more than 50% of the combined voting power of the outstanding securities of Company entitled to vote generally in the election of directors of Company; *provided*, *however*, that for purposes of this clause (ii), the acquisition of additional securities by any one person who is considered to own securities of Company representing more than 50% of the combined voting power of the outstanding securities of Company entitled to vote generally in the election of directors of Company will not be considered a Change in Control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the consummation by Company, during any period of 12 consecutive months, of the sale or other disposition, to an unaffiliated third party, of assets of Company or any Affiliate of Company that have a total gross fair market value equal to or more than 80% of the gross fair market value of the total consolidated assets of Company (expressly excluding, for the avoidance of doubt, any pledge by Company or any Affiliate of Company of securities or other assets to secure indebtedness or for other general corporate or commercial purposes); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the replacement, during any period of 12 consecutive months, of a majority of the members of the Company Board with directors whose appointment or election is not endorsed by a majority of the members of the Company Board before the date of appointment or election.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "***Code***" shall mean the Internal Revenue Code of 1986, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "***Company Board***" shall mean the board of directors of Company and, where appropriate, any committees or other designees thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "***Competing Business***" shall mean any person (other than Employer and its Affiliates) that is conducting any business that is the same as or substantially similar to the Business of Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "***Confidential Information***" shall mean all information not generally available to and known by the public, whether spoken, printed, electronic, or in any other form or medium, relating to the business, practices, policies, plans, prospects, operations, results of operations, financial condition or results, strategies, know-how, patents, trade secrets, inventions, intellectual property, records, suppliers, vendors, customers, clients, products, services, employees, independent contractors, personnel, systems, or internal controls of Employer or any Affiliate of Employer, or of any other person that has entrusted information to Employer or any Affiliate of Employer in confidence, as well as any other information that is marked or otherwise identified as confidential or proprietary or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and under the circumstances in which the information is known or used. The term "Confidential Information" shall include information developed by Executive in the course of Executive's employment with Employer as if Employer furnished such information to Executive in the first instance. The term "Confidential Information" shall not include information that, through no fault of Executive or person(s) acting in concert with Executive or on Executive's behalf, is generally available to and known by the public at the time of disclosure to Executive or thereafter becomes generally available to and known by the public.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "***Disability***" shall mean the inability of Executive to perform the essential functions of Executive's employment with Employer, even with Employer's reasonable accommodation, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) "***Exchange Act***" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "***Exchange Act Person***" means any natural person, entity, or group (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that "Exchange Act Person" will not include (i) Company or any Subsidiary of Company, (ii) any employee benefit plan of Company or any Subsidiary of Company or any trustee or other fiduciary holding securities under an employee benefit plan of Company or any Subsidiary of Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an entity owned, directly or indirectly, by the shareholders of Company in substantially the same proportions as their ownership of securities of Company, or (v) any natural person, entity, or group (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the owner, directly or indirectly, of securities of Company representing more than 50% of the combined voting power of Company's then outstanding securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "***Good Reason***" shall mean, in the context of the termination of Executive's employment by Executive, any of the following events without Executive's written consent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a material diminution in Executive's authority, duties, and responsibilities, as compared to Executive's authority, duties, and responsibilities as of the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a material reduction in Executive's Base Salary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a change in the location of Executive's primary office that requires Executive to regularly physically report to an office located 50 miles or more from the location of Executive's primary office as of the Effective Date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a material breach of this Agreement by Employer.

In order for Good Reason to exist, prior to Executive terminating Executive's employment for Good Reason, (A) Executive shall give notice to Employer (or its successor) of the existence of Good Reason for termination, which notice must be given by Executive to Employer (or its successor) within 60 days of the initial existence of the circumstance(s) or event(s) giving rise to Good Reason for termination and shall state with reasonable detail the circumstance(s) or event(s) giving rise to Good Reason for termination, (B) Employer (or its successor) shall have 30 days from the effective date of such notice to remedy the circumstance(s) or event(s) giving rise to Good Reason for termination, and (C) the circumstance(s) or event(s) giving rise to Good Reason for termination must go unremedied by Employer (or its successor). Additionally, Executive's employment must be terminated by Executive for Good Reason within the 12-month period immediately following the initial existence of the circumstance(s) or event(s) giving rise to Good Reason for termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "***Post-Termination Period***" shall mean a period of 12 months (subject to extension as set forth in <u>Section 8(f))</u> following the date of termination of Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) "***Restricted Area***" shall mean a radius of 50 miles from each and any banking office (whether a main office, branch office, or loan or deposit production office) operated by Bank as of the last day of Executive's employment with Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "***Separation from Service***" shall have the meaning set forth in, and whether Executive has experienced a Separation from Service shall be determined by Employer in accordance with, Treasury Regulations § 1.409A-1(h).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "***Subsidiary***" shall mean any entity (other than Company) in an unbroken chain of entities beginning with Company if each of the entities other than the last entity in the unbroken chain owns securities possessing 50% or more of the total combined voting power of all outstanding securities of one of the other entities in such chain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Executive Duties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Position; Reporting.* Executive shall be employed as Executive Vice President, Chief Financial Officer of Company and Bank and shall perform and discharge faithfully the duties and responsibilities which may be assigned to Executive from time to time in connection with the conduct of the Business of Employer. The duties and responsibilities of Executive shall be commensurate with those of individuals holding similar positions at other financial institutions similarly organized and of comparable size and complexity. Executive shall report directly to the Chief Executive Officer of Company and Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Full-Time Status*. In addition to the duties and responsibilities specifically assigned to Executive pursuant to <u>Section 2(a)</u>, Executive shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) subject to <u>Section 2(c)</u>, during regular business hours, devote substantially all of Executive's time, energy, attention, and skills to the performance of the duties and responsibilities of Executive's employment (reasonable vacations, approved leaves of absence, and reasonable absences due to illness excepted) and faithfully and industriously perform such duties and responsibilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) diligently follow and implement all reasonable and lawful policies and decisions communicated to Executive by the Boards or the Chief Executive Officer of Company and Bank and act in accordance with the charter, bylaws, policies, and procedures of Employer; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) timely prepare and provide to the Boards and the Chief Executive Officer of Company and Bank all reasonable and lawful reports and accountings as may be reasonably requested of Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Permitted Activities*. Executive shall not during the Term be engaged (whether or not during normal business hours) in any other significant business or professional activity, whether or not such activity is pursued for gain, profit, or other pecuniary advantage, *provided* that, as long as the following activities do not interfere with Executive's obligations to Employer, this <u>Section 2(c)</u> shall not be construed as preventing Executive from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) investing Executive's personal assets in any manner which will not require any services on the part of Executive in the operation or affairs of the subject entity and in which Executive's participation is solely that of a passive investor, *provided* that such investment activity following the Effective Date shall not result in Executive owning beneficially at any time 2% or more of any class of equity securities of any Competing Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) participating in the activities of civic and professional organizations and associations, attending and participating in banking industry or professional development conferences, authoring or publishing papers or books, or teaching, *provided* that the Chief Executive Officer of Company may direct Executive in writing to cease any such activities in the event the Chief Executive Officer of Company reasonably determines that Executive continuing the activities would not be in the best interests of Employer or any one or more Affiliates of Employer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) serving on the boards of directors of other companies, *provided* that such board service has been approved by the Company Board, which approval will not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>Term</u>. The initial term of this Agreement (the "***Initial Term***") shall commence on and as of the Effective Date and, unless this Agreement is sooner terminated in accordance with its terms, shall end on the date which is the three-year anniversary of the Effective Date. At the end of the Initial Term, and at the end of any one-year renewal terms of this Agreement, this Agreement will automatically renew for an additional, successive term of one year, unless either Employer, on the one hand, or Executive, on the other hand, gives the other written notice of its election to terminate this Agreement as of the end of the Initial Term or then-current renewal term, as applicable, at least 60 days prior to the end of the Initial Term or then-current renewal term, as applicable. The Initial Term and any and all such renewal terms are referred to herein together as the "***Term***."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Compensation</u>. During the Term of this Agreement, Employer shall compensate Executive as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Base Salary*. Executive shall be compensated at a base annual rate of $275,000 per year (the "***Base Salary***"). Such Base Salary will be payable bi-weekly and subject to customary withholdings and deductions. Executive's Base Salary will be reviewed at least annually for adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Cash Incentive Compensation.* Executive shall be eligible to participate in the annual cash incentive or bonus plans or programs of Employer in which other executive officers participate, all or some of which may be tied to annual performance metrics established by the Boards. Any cash incentive or bonus compensation ("***Cash Incentive Compensation***") earned by Executive shall be payable not later than March 15th of the calendar year following the calendar year in which the applicable substantial risk of forfeiture lapses, and otherwise in accordance with Employer's normal practices for the payment of short-term incentives. Executive's 2026 target annual Cash Incentive Compensation will be 10% of Base Salary, and this target will be reviewed at least annually for adjustment. Executive's actual Cash Incentive Compensation will be based on actual achievement of applicable performance metrics. The payment of any such Cash Incentive Compensation shall be subject to and conditioned on Executive being employed by Employer on December 31st of the year in which the same is earned (except as set forth in <u>Section 5(f)</u> in the case of the death or Disability of Executive), Executive's employment with Employer having not been terminated by Employer for Cause prior to the payment of such Cash Incentive Compensation, and the receipt of any approvals or no-objections required from or by any regulatory agency or authority having jurisdiction over Company or Bank. The Parties acknowledge that Executive may not be eligible to receive, or Employer may not be permitted to pay, Cash Incentive Compensation if Company or Bank is subject to restrictions imposed by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (the "***FDIC***"), the Tennessee Department of Financial Institutions, or any other regulatory agency or authority, or if Company or Bank is otherwise restricted from paying Cash Incentive Compensation under applicable law, rule, or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Business Expenses*. Subject to the reimbursement policies of Employer in effect from time to time, Employer will reimburse Executive for reasonable business expenses incurred by Executive in the performance of Executive's duties and responsibilities hereunder, including without limitation reasonable business travel and entertainment expenses incurred while acting at the request of or in service of Employer; *provided*, *however*, that, as a condition to any such reimbursement, Executive shall submit verification of the nature and amount of such expenses in accordance with Employer's reimbursement policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Paid Leave*. Executive shall be entitled to 25 days of paid leave per calendar year, all of which paid leave will accrue on January 1 of each year. To the extent not inconsistent with this Agreement, Executive's paid leave, including Executive's use of the same and the payout of accrued paid leave upon separation from employment, shall be subject to the terms of Employer's employee handbook and any paid leave policy of Employer in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *Other Benefits*. In addition to the benefits specifically described in this Agreement, Executive shall also be eligible to participate in such other benefits as may be made available by Employer from time to time to executive officers and/or employees of Employer generally, including, by way of example only, retirement plan and health, dental, vision, life, and disability insurance benefits. All such benefits will be made available and administered in accordance with the terms of any applicable written benefit plans or, if no written plan exists, Employer's standard policies and practices relating to such benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *Claw Back of Compensation*. Any compensation received by Executive from Employer on or after the Effective Date will be subject to Company's Incentive-Based Compensation Recovery Policy, as amended and restated from time to time, and shall also be subject to cancellation, recoupment, rescission, payback, or other action in accordance with the terms of any other applicable Company clawback or recoupment, or similar, policy or any applicable law, rule, or regulation (including, for the avoidance of doubt, any applicable stock exchange rules), in each case as may be in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *No Representations*. Executive acknowledges that Employer makes no representations with respect to the tax consequences to Executive of any of the compensation or benefits provided for under this <u>Section 4</u> or elsewhere in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Termination of Employment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Termination by Employer*. During the Term, Executive's employment may be terminated by Employer:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at any time for Cause, *provided* that, before Executive's employment can be terminated for Cause, the Company Board, by vote of a majority of all of its members (other than Executive if Executive is then a member), must have adopted, in good faith, resolution(s) finding that there exists Cause for the termination of Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) at any time without Cause, in which event Employer shall, subject to <u>Section 28</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) a severance benefit in an amount equal to one times the sum of (A) Executive's Base Salary as of the date of termination of Executive's employment *plus* (B) the average of Executive's Cash Incentive Compensation for the two calendar years immediately preceding the calendar year in which the termination of employment occurs (the "***Standard Severance Amount***"), such Standard Severance Amount to be payable, at the option of Employer and to the extent permitted by Section 409A of the Code, either in one lump sum within 60 days after the date of termination of Executive's employment or in 26 equal bi-weekly installments in accordance with Employer's normal payroll practices, beginning with the first bi-weekly payroll date following the termination of Executive's employment (*provided*, *however*, that, in the event any portion of the Standard Severance Amount constitutes non-qualified deferred compensation (within the meaning of Section 409A of the Code), or to the extent Employer having such option is not permitted under Section 409A of the Code, the Standard Severance Amount shall be paid in one lump sum within 60 days after the date of termination of Executive's employment).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Termination by Executive*. During the Term, Executive's employment may be terminated by Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at any time for Good Reason, in which event Employer shall, subject to <u>Section 28</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) the Standard Severance Amount (*provided* that, for the avoidance of doubt, if Executive terminates for Good Reason as defined in <u>Section 1(n)(ii)</u>, the Standard Severance Amount will be determined based on Executive's Base Salary immediately prior to the diminution in Base Salary giving rise to termination for Good Reason), such Standard Severance Amount to be payable, at the option of Employer and to the extent permitted by Section 409A of the Code, either in one lump sum within 60 days after the date of termination of Executive's employment or in 26 equal bi-weekly installments in accordance with Employer's normal payroll practices, beginning with the first bi-weekly payroll date following the termination of Executive's employment (*provided*, *however*, that, in the event any portion of the Standard Severance Amount constitutes non-qualified deferred compensation (within the meaning of Section 409A of the Code), or to the extent Employer having such option is not permitted under Section 409A of the Code, the Standard Severance Amount shall be paid in one lump sum within 60 days after the date of termination of Executive's employment).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) at any time without Good Reason, *provided* that Executive shall give Employer at least 60 days prior written notice of termination, all or any part of which 60-day notice period Employer may waive for no consideration by giving written notice of the same to Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Termination Upon Disability*. During the Term, Executive's employment may be terminated by Employer upon the Disability of Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Termination Upon Death*. Executive's employment shall terminate automatically upon the death of Executive during the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *Termination by Mutual Agreement*. During the Term, Executive's employment may be terminated at any time by mutual written agreement of the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *Effect of Termination*. Upon the termination of Executive's employment, Employer shall have no further obligations to Executive or Executive's estate, heirs, beneficiaries, executors, administrators, or legal or personal representatives under or with respect to this Agreement, except for the payment of any amounts earned and owing under <u>Section 4</u> as of or for periods prior to the date of termination of Executive's employment and any payment(s) required by <u>Section 5(a)(ii)</u>, <u>Section 5(b)(i)</u>, or <u>Section 6</u>; *provided* that, in the event of the termination of Executive's employment due to the death or Disability of Executive, Employer shall provide to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) a pro rata portion of any Cash Incentive Compensation that would have been payable to Executive, under <u>Section 4(b)</u>, for the year in which Executive's death or Disability occurs (prorated based on the number of days elapsed in such year through the date of termination of Executive's employment), and such pro rata portion shall be paid not later than March 15th of the calendar year following the calendar year in which Executive's termination of employment occurs and otherwise in accordance with Employer's normal practices for the payment of short-term incentives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *Resignations*. Upon the termination of Executive's employment for any reason, (i) if Executive is a member of the Company Board, the Bank Board, or the board of directors (or similar governing body) of any Affiliate of Employer, Executive shall, at the request of Employer, resign from any or all such position(s), and (ii) Executive shall, at the request of Employer, resign from any officer position(s) held by Executive at any Affiliate of Employer, in each case with any and all such resignations to be effective not later than the date on which Executive's employment is terminated unless a later effective date is agreed to by Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. <u>Change in Control</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If within six months prior to or within 12 months following a Change in Control Employer (or any successor to Employer) terminates Executive's employment without Cause, Employer (or its successor) shall, subject to <u>Section 28</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) a severance benefit in an amount equal to two times the sum of (i) Executive's Base Salary as of the date of termination *plus* (ii) the average of Executive's Cash Incentive Compensation for the two calendar years immediately preceding the calendar year in which the termination of employment occurs (the "***Change in Control Severance Amount***"), said Change in Control Severance Amount to be payable in one lump sum within 60 days after the date of termination of Executive's employment; *provided* that, in the event such 60-day period spans two calendar years, the Change in Control Severance Amount shall not be payable under this <u>Section 6(a)</u> until the second calendar year. The compensation provided for in this <u>Section 6(a)</u> is, in the context of a Change in Control, intended to be in lieu of the compensation provided for in <u>Section 5(a)(ii)</u> and, if Executive becomes entitled to the compensation provided for in this <u>Section 6(a)</u>, Executive will not also be entitled to the compensation provided for in <u>Section 5(a)(ii)</u> and any compensation previously paid to Executive under <u>Section 5(a)(ii)</u> will be credited against the amount payable to Executive under this <u>Section 6(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If within six months prior to or 12 months following a Change in Control Executive terminates Executive's employment with Employer (or its successor) for Good Reason, Employer (or its successor) shall, subject to <u>Section 28</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) the Change in Control Severance Amount (*provided* that, for the avoidance of doubt, if Executive terminates for Good Reason as defined in <u>Section 1(n)(ii)</u>, the Change in Control Severance Amount will be determined based on Executive's Base Salary immediately prior to the diminution in Base Salary giving rise to termination for Good Reason), in one lump sum within 60 days after the date of termination of Executive's employment, *provided* that, in the event such 60-day period spans two calendar years, the Change in Control Severance Amount shall not be payable under this <u>Section 6(b)</u> until the second calendar year. The compensation provided for in this <u>Section 6(b)</u> is, in the context of a Change in Control, intended to be in lieu of the compensation provided for in <u>Section 5(b)(i)</u> and, if Executive becomes entitled to the compensation provided for in this <u>Section 6(b)</u>, Executive will not also be entitled to the compensation provided for in <u>Section 5(b)(i)</u> and any compensation previously paid to Executive under <u>Section 5(b)(i)</u> will be credited against the amount payable to Executive under this <u>Section 6(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. <u>Confidential Information</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Executive understands and acknowledges that, during the course of Executive's employment with Employer, Executive has had and will continue to have access to, and has learned and will continue to learn of and about, Confidential Information. Executive acknowledges and agrees that all Confidential Information of Employer or its Affiliates that Executive accesses, receives, learns of, or develops, or previously has accessed, received, learned of, or developed, while employed by Employer shall be and will remain the sole and exclusive property of Employer and its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Executive understands and acknowledges that Employer and its Affiliates have invested, and continue to invest, substantial time, money, and specialized knowledge into developing their resources, building a customer base, generating customer and potential customer lists and leads, training their employees, and generally improving their offerings in the field of banking and financial services. Executive understands and acknowledges that, as a result of these efforts, Employer and its Affiliates have created and continue to create and use Confidential Information, including highly confidential customer and prospective customer information, the confidentiality of which Employer goes to great lengths and expends significant resources to maintain, and that the Confidential Information provides Employer and its Affiliates with a competitive advantage over others in the marketplace. Executive also acknowledges and agrees that Executive is being provided and entrusted with access to Employer's customer and employee relationships and goodwill, that Employer would not provide Executive access to Confidential Information or Employer's customer or employee relationships or goodwill in the absence of Executive's execution of and compliance with this Agreement, and that Employer's Confidential Information, customer and employee relationships, and goodwill are valuable assets of Employer and are legitimate business interests that are properly subject to protection through the covenants contained in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Executive covenants and agrees (i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, communicate, or make available Confidential Information, or allow it to be disclosed, communicated, or made available, in whole or in part, to any person (including other employees of Employer or its Affiliates) not having a need to know and the authority to know and use the Confidential Information in connection with the Business of Employer; and (iii) not to access or use any Confidential Information, and not to copy any documents, records, files, media, or other resources (printed, electronic, or in any other form or medium) containing any Confidential Information, or remove any such documents, records, files, media, or other resources from the premises or control of Employer or its Affiliates, except as required in the performance by Executive of Executive's authorized employment duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Nothing in this Agreement shall be construed or enforced to prevent disclosure of Confidential Information to the extent disclosure is required by applicable law, rule, or regulation or pursuant to the valid order of a court of competent jurisdiction or government agency, *provided* that the disclosure does not exceed that in fact required by such law, rule, regulation, or order, and, *provided further*, that, unless prohibited by law, rule, regulation, or order, Executive shall promptly provide Employer written notice of any such required disclosure of Confidential Information. Additionally, nothing in this Agreement shall prohibit or restrict Executive (or any attorney for Executive) from (i) initiating communications directly with, responding to an inquiry from, providing testimony before, or otherwise participating in any investigation or proceeding that may be conducted by any government agency, regulatory authority, or self-regulatory organization, including the United States Securities and Exchange Commission and the Financial Industry Regulatory Authority, or (ii) reporting possible violations of federal, state, or local law or regulation to any government agency or regulatory authority or making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation. Executive shall not need the prior authorization of Employer to make any such reports or disclosures and shall not be required to notify Employer that Executive has made such reports or disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding any other provision of this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Executive will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law, or (B) is made in a complaint or other document filed under seal in a lawsuit or other proceeding; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If Executive files a lawsuit for retaliation by Employer for reporting a suspected violation of law, Executive may disclose trade secrets to Executive's attorney and use the trade secret information in the court proceeding if Executive (A) files any document containing trade secrets under seal and (B) does not disclose trade secrets, except pursuant to court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Executive understands and acknowledges that Executive's obligations under this Agreement with regard to any particular Confidential Information shall commence, or shall be deemed to have commenced, immediately upon Executive first having access to such Confidential Information (whether before or after the Effective Date) and shall continue during and after Executive's employment by Employer until such time as such Confidential Information has become public knowledge other than as a result of Executive's breach of this Agreement or a breach by any person acting in concert with, at the direction of, or on behalf of Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) At any time upon request by Employer, and in any event upon the termination of Executive's employment with Employer, Executive will promptly deliver to Employer all property of Employer or its Affiliates, including without limitation all Confidential Information, vehicles, keys, access cards, credit cards, identification cards, equipment, computers, tablets, and mobile and other electronic devices, then in Executive's possession or control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. <u>Restrictive Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Non-Competition*. Executive agrees that, during the Term and, following the termination of Executive's employment with Employer, for the duration of the Post-Termination Period, Executive will not (except on behalf of or with the prior written consent of Employer) (i) either directly or indirectly, on Executive's own behalf or in the service of or on behalf of others, engage in any business, activity, enterprise, or venture competitive with the Business of Employer; (ii) either directly or indirectly, perform for any Competing Business any services that are the same as, or substantially similar to, the services Executive performs or performed for Employer; (iii) accept employment with or be employed by any person engaged in any business, activity, enterprise, or venture competitive with the Business of Employer; or (iv) work for or with, consult for, or otherwise be affiliated with or be employed by any person or group of persons proposing to establish a new bank or other financial institution; *provided* that during the Post-Termination Period these restrictions shall only apply within the Restricted Area.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Non-Solicitation of Customers*. Executive agrees that, during the Term and, following the termination of Executive's employment with Employer, for the duration of the Post-Termination Period, Executive will not directly or indirectly (except on behalf of or with the prior written consent of Employer), on Executive's own behalf or in the service of or on behalf of others, solicit or contact or attempt to solicit or contact (by mail, email, courier, facsimile, telephone, instant or text message, social media, or otherwise), or meet with (in person, via video conference, or otherwise), any customer of Employer or any Affiliate of Employer for purposes of selling, offering, or providing products or services that are competitive with those sold, offered, or provided by Employer or any Affiliate of Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Non-Solicitation of Employees*. Executive agrees that, during the Term and, following the termination of Executive's employment with Employer, for the duration of the Post-Termination Period, Executive will not directly or indirectly (except on behalf of or with the prior written consent of Employer), on Executive's own behalf or in the service of or on behalf of others, solicit, recruit, or hire, or attempt to solicit, recruit, or hire, any employee of Employer or any Affiliate of Employer, or otherwise induce or attempt to induce any such employee to terminate his or her employment with Employer or any Affiliate of Employer, regardless of whether the employee is a full-time, part-time, or temporary employee of Employer or an Affiliate of Employer or the employee's employment is pursuant to a written agreement, for a determined period, or at will.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Non-Disparagement*. Executive agrees that, both during the Term and following the termination of Executive's employment with Employer, Executive will not make any disparaging statements or remarks (written or oral) about Employer or any Affiliate of Employer or any of their respective officers, directors, employees, shareholders, agents, or representatives; *provided* that nothing in this Agreement prohibits communications necessary to respond to lawful inquiries by government or regulatory agencies, to defend against legal claims or litigation of any kind, or to enforce the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *Modification; No Hardship.* The Parties agree that the provisions of this Agreement represent a reasonable balancing of their respective interests and have attempted to limit the restrictions imposed on Executive to those necessary to protect Employer from inevitable disclosure of Confidential Information and unfair competition. The Parties agree that, if the scope or enforceability of this Agreement, or any provision hereof, is in any way disputed at any time and a court or other trier of fact determines that the scope of any provision contained in this Agreement is overbroad, then such court or other trier of fact may modify the scope of such provision so that it is enforceable to the greatest extent permitted by applicable law. Executive acknowledges and agrees that, in the event Executive's employment with Employer terminates, Executive possesses marketable skills and abilities that will enable Executive to find suitable employment without violating the covenants set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *Tolling.* Executive agrees that, in the event Executive breaches this <u>Section 8</u>, the Post-Termination Period shall be tolled during, and therefore extended by, the period of such breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *Remedies*. Executive agrees that the covenants contained in <u>Section 7</u> and <u>Section 8</u> are of the essence of this Agreement; that each of such covenants is reasonable and necessary to protect the business, legitimate interests, and assets of Employer and its Affiliates; and that irreparable loss and damage will be suffered by Employer and its Affiliates should Executive breach any of such covenants. Therefore, Executive agrees and consents that, in addition to all other remedies provided by or available at law or in equity, Employer shall be entitled to seek a temporary restraining order and temporary and permanent injunctions to prevent breaches or contemplated or threatened breaches of any of the covenants contained in <u>Section 7</u> or <u>Section 8</u> and that, in such event, Employer shall not be required to post a bond. Employer and Executive agree that all remedies available to Employer shall be cumulative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. <u>Severability</u>. The Parties agree that each of the provisions included in this Agreement is separate, distinct, and severable from the other provisions of this Agreement and that the invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. Further, if any provision of this Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a conflict between the provision and any applicable law, rule, regulation, or public policy, the provision shall be redrawn to make the provision consistent with, and valid and enforceable under, such law, rule, regulation, or public policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. <u>No Set-Off by Executive</u>. The existence of any claim, demand, action, or cause of action by Executive against Employer or any Affiliate of Employer, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by Employer of any of its rights under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. <u>Notices</u>. All notices and other communications required or permitted under or pertaining to this Agreement shall be in writing and shall be either personally delivered, sent by overnight courier, or mailed by first class United States Mail, return receipt requested, to the recipient at the address below indicated:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*If to Employer*: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*If to Executive*: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial Bancgroup, Inc. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to Executive, personally, at the address for |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Post Office Box 400 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive appearing in the records of Employer |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6710 Cumberland Gap Parkway |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Harrogate, Tennessee 37752 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention: Chief Executive Officer |  |

---

or to such other address or to the attention of such other person as the recipient Party shall have specified by prior written notice to the sending Party. All such notices and other communications shall be effective (a) when personally delivered to the Party to be notified, (b) two business days after deposit with an overnight courier, addressed to the Party to be notified as set forth above, or (c) four business days after deposit in the United States Mail, first class, return receipt requested, at any time other than during a general discontinuance of postal service due to strike, lockout, or otherwise (and in the event of a general discontinuance of postal service, notices and other communications will be effective upon receipt), and addressed to the Party to be notified as set forth above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. <u>Assignment</u>. Employer may assign this Agreement and its rights hereunder and may delegate its duties and obligations under this Agreement, in each case without notice to or the consent of Executive, in connection with a Change in Control. This Agreement is a personal contract, and neither this Agreement nor the rights, interest, duties, or obligations of Executive hereunder may be assigned or delegated by Executive. Subject to the preceding provisions of this <u>Section 12</u>, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. <u>Waiver</u>. A waiver by a Party of any provision of this Agreement or of any breach of this Agreement by any other Party shall not be effective unless set forth in a written instrument signed by the Party granting such waiver, and no such waiver shall operate or be construed as a waiver of the same or any other provision or breach on any other occasion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. <u>Mediation</u>. Except with respect to <u>Section 7</u> and <u>Section 8</u>, in the event of any dispute arising out of or relating to this Agreement or a breach hereof, which dispute cannot be settled through direct discussions between the Parties, the Parties agree to first endeavor to settle the dispute in an amicable manner by non-binding, confidential mediation in Claiborne County, Tennessee before resorting to any other process for resolving the dispute.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. <u>Applicable Law and Choice of Forum</u>. This Agreement shall be governed by and construed and enforced under and in accordance with the laws of the State of Tennessee, without regard to or the application of principles of conflicts of laws. The Parties agree that any litigation, suit, action, or proceeding arising out of or related to this Agreement shall be instituted exclusively in the United States District Court for the Eastern District of Tennessee, Northern Division, or the courts of the State of Tennessee sitting in Knox County, Tennessee, and each Party irrevocably submits to the exclusive jurisdiction of and venue in such courts and waives any objection it might otherwise have to the jurisdiction of or venue in such courts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. <u>Interpretation</u>. Words used herein denoting one gender shall include all genders. Words used herein denoting the singular shall include the plural and vice versa. When used herein, the terms "herein," "hereunder," "hereby," "hereto," and "hereof," and any similar terms, refer to this Agreement. When used herein, the term "person" shall include an individual, a corporation, a limited liability company, a partnership, a joint venture, an association, a trust, and any other entity or organization, whether or not incorporated. Any captions, titles, or headings preceding the text of any section or subsection of this Agreement are solely for convenience of reference and shall not constitute part of this Agreement or affect its meaning, construction, or effect. The Parties agree that, because they have been given the opportunity to have counsel review and revise this Agreement, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to its fair meaning, and not strictly for or against any of the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. <u>Entire Agreement; No Duplication of Benefits</u>. This Agreement embodies the entire and final, integrated agreement of the Parties on the subject matter stated in this Agreement and supersedes all prior understandings and agreements (oral and written) of the Parties relating to the subject matter of this Agreement. No amendment or supplement to or modification of this Agreement shall be valid or binding upon any Party unless the same is set forth in a written instrument signed by all Parties. The severance payments and benefits provided for in this Agreement shall be in lieu of any payments or benefits pursuant any general severance policy or other severance plan maintained by Employer for the benefit of its employees generally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. <u>Counterparts</u>. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement. A signed copy or counterpart of this Agreement delivered by facsimile, email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original manually signed copy thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. <u>Rights of Third Parties</u>. Nothing herein expressed is intended, or shall be construed, to confer upon or give to any person, other than the Parties hereto and, as applicable, their respective estates, heirs, beneficiaries, successors, and permitted assigns, any rights or remedies under or by reason of this Agreement; *provided*, *however*, that the Parties agree that the Affiliates of Employer are intended third party beneficiaries of this Agreement and are entitled to enforce any rights hereunder for their benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. <u>Legal Fees</u>. In the event of any claim, action, suit, or proceeding arising out of or relating to this Agreement, the prevailing Party shall be entitled to recover from the non-prevailing Party all reasonable fees, expenses, and disbursements, including without limitation reasonable attorneys' fees and court costs, incurred by such prevailing Party in connection with such claim, action, suit, or proceeding, in addition to any other relief to which such prevailing Party may be entitled at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. <u>Survival</u>. The respective rights and obligations of the Parties hereunder shall survive the termination of this Agreement to the extent and for such time as necessary to carry out fully the purposes and intent of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22. <u>Executive Representations</u>. Executive represents and warrants to Employer that, during the Term, neither Executive's employment with Employer nor Executive's performance of Executive's duties and responsibilities under this Agreement will conflict with or result in a breach or violation of or a default under any contract, covenant, or agreement (including without limitation any non-solicitation, non-competition, or other similar contract, covenant, or agreement) or order, judgment, or decree to which Executive is a party or subject or by which Executive is bound. Executive acknowledges and affirms that Executive has executed this Agreement voluntarily, has read this Agreement carefully, and had a full and reasonable opportunity to consider this Agreement (including an opportunity to consult with legal counsel), and that Executive has not been pressured or in any way coerced, threatened, or intimidated into signing this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23. <u>Code Section 409A</u>. Notwithstanding anything in this Agreement to the contrary, the following provisions shall apply to all benefits and payments provided under this Agreement by Employer to Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The payment (or commencement of a series of payments) hereunder of any non-qualified deferred compensation (within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed until such time as Executive has also undergone a Separation from Service, at which time such non-qualified deferred compensation (calculated as of the date of Executive's termination of employment) shall be paid (or commence to be paid) to Executive as set forth in this Agreement as if Executive had undergone such termination of employment (under the same circumstances) on the date of Executive's Separation from Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If Executive is a specified employee (as determined by Employer in accordance with Section 409A of the Code and Treasury Regulations § 1.409A-3(i)(2)) as of Executive's Separation from Service with Employer, and if any payment, benefit, or entitlement provided for in this Agreement or otherwise both (i) constitutes non-qualified deferred compensation (within the meaning of Section 409A of the Code) and (ii) cannot be paid or provided in a manner otherwise expressly provided for without subjecting Executive to additional tax or interest (or both) under Section 409A of the Code, then any such payment, benefit, or entitlement that is payable during the first six months following the Separation from Service shall be paid or provided to Executive in a lump sum cash payment to be made on the earlier of (A) Executive's death and (B) the first business day of the seventh month immediately following Executive's Separation from Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any payment or benefit paid or provided under this Agreement due to a Separation from Service that is exempt from Section 409A of the Code pursuant to Treasury Regulations § 1.409A-1(b)(9)(v) will be paid or provided to Executive only to the extent that expenses are not incurred or benefits are not provided beyond the last day of Executive's second taxable year following Executive's taxable year in which the Separation from Service occurs, *provided* that Employer reimburses such expenses no later than the last day of the third taxable year following Executive's taxable year in which Executive's Separation from Service occurs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) It is the intent of the Parties that the payments, benefits, and entitlements to which Executive could become entitled in connection with Executive's employment under this Agreement be exempt from or comply with Section 409A of the Code and the regulations and other guidance promulgated thereunder, and, accordingly, this Agreement will be interpreted to be consistent with such intent. For purposes of the limitations on non-qualified deferred compensation under Section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of applying the exclusion under Section 409A of the Code for short-term deferral amounts, the separation pay exception, or any other exception or exclusion under Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Although the payments and benefits provided for hereunder are intended to be structured in a manner to avoid the imposition of any penalty taxes under Section 409A of the Code, in no event whatsoever will Employer be liable for any additional tax, interest, or penalties that may be imposed on Executive under or as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding or other obligations applicable to employers, if any, under Section 409A of the Code).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) No deferred compensation payments provided for under this Agreement shall be accelerated to Executive, except as permitted by Treasury Regulations § 1.409A-3(j)(4).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes "deferred compensation" for purposes of Section 409A of the Code be subject to offset by any other amount unless permitted by Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) All expenses described in this Agreement as eligible for reimbursement must be incurred by Executive during the Term of this Agreement to be eligible for reimbursement. Any in-kind benefits provided by Employer to Executive must be provided during the Term of this Agreement. The amount of reimbursable expenses incurred, and the amount of any in-kind benefits provided, in one taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits provided, in any other taxable year. Each category of reimbursement shall be paid as soon as administratively practicable, but in no event shall any such reimbursement be paid after the last day of the calendar year following the calendar year in which the expense was incurred. Neither rights to reimbursement nor in-kind benefits shall be subject to liquidation or exchange for other benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24. <u>Code Section 280G</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event that it is determined that any payment or benefit to be made or provided to or for the benefit of Executive, whether pursuant to this Agreement or otherwise (all such payments and benefits, "***Covered Payments***"), would constitute a "parachute payment" within the meaning of Section 280G of the Code (or any successor provision thereto) and would, but for this <u>Section 25(a)</u>, be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) (the "***Excise Tax***"), then prior to any Covered Payments being made or provided a calculation shall be performed comparing (i) the Net Benefit (as defined below) to Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to Executive if the Covered Payments are reduced to the minimum extent necessary to avoid the Covered Payments being subject to the Excise Tax. If the amount calculated under clause (i) above is less than the amount calculated under clause (ii) above, the Covered Payments will be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax. The term "***Net Benefit***" shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment, and excise taxes. Any reduction of Covered Payments pursuant to this <u>Section 24(a)</u> will be made in a manner determined by Employer that is consistent with the requirements of Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All determinations and calculations under this <u>Section 24</u> shall be made by an independent regional or national accounting firm or independent tax counsel selected by Employer (the "***Determination Firm***"). All determinations and calculations of the Determination Firm shall be conclusive and binding on the Parties for all purposes. For purposes of making the determinations and calculations required by this <u>Section 24</u>, the Determination Firm may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Parties shall furnish the Determination Firm with such documents and information as the Determination Firm may reasonably request in order to make any determinations and calculations necessitated by this <u>Section 24</u>. The fees and expenses of the Determination Firm shall be borne by Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25. <u>Tax Withholding</u>. Employer may deduct and withhold from any amounts payable under this Agreement all federal, state, local, or other taxes Employer is required to deduct or withhold pursuant to applicable law, rule, regulation, or ruling.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26. <u>Regulatory Restrictions</u>. The Parties expressly acknowledge and agree that their rights and obligations under this Agreement will be subject to such conditions, restrictions, and limitations as may from time to time be imposed by applicable federal or state banking laws, rules, or regulations or the policies, orders, or directives of federal or state bank or bank holding company regulatory agencies. Without limiting the foregoing, no payment shall be made to Executive, pursuant to this Agreement or otherwise, if such payment would be in contravention of the requirements of Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(k)) or Part 359 of the FDIC's Rules and Regulations (12 C.F.R. Part 359), and Employer shall have no obligation to petition the FDIC, or any other regulatory agency or authority, for its consent or concurrence for any payment to Executive under Section 18(k) of the Federal Deposit Insurance Act or Part 359 of the FDIC's Rules and Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27. <u>Right to Contact</u>. Executive agrees that Employer shall have the right to contact any new employer, or potential employer, of Executive and apprise such person of Executive's responsibilities and obligations owed under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28. <u>Separation Pay Conditions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The obligation of Employer (or its successor) to pay, and the right of Executive to receive, the Standard Severance Amount under <u>Section 5.1(a)(ii)</u> or <u>Section 5.2(b)(i)</u>, or the Change in Control Severance Amount under <u>Section 6(a)</u> or <u>Section 6(b)</u>, shall be conditioned on and subject to Executive, within 50 days after the date of termination of Executive's employment, executing and delivering to Employer (or its successor) a separation agreement in such form as provided by Employer (or its successor) and such separation agreement becoming fully effective and irrevocable within 60 days after the date of termination of Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Additionally, as a condition to Employer's obligation to pay, and Executive's right to receive or retain, the Standard Severance Amount under <u>Section 5.1(a)(ii)</u> or <u>Section 5.2(b)(i)</u>, (i) Executive must comply with all post-employment obligations set forth in this Agreement (including without limitation Executive's obligations under <u>Section 7</u> and <u>Section 8</u>) and (ii) Employer (by written notice to Executive at the time of, or within five days after, the termination of Executive's employment) shall have the right to require Executive to, for a period of up to three months following the termination of Executive's employment, be reasonably available during normal business hours to from time to time assist Employer with the transition of Executive's duties and responsibilities.

(*Signature Page Follows*)

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement effective as of the date first written above.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COMPANY: | COMMERCIAL BANCGROUP, INC. | COMMERCIAL BANCGROUP, INC. |
|  | By: | /s/ Terry L. Lee |
|  |  | Terry L. Lee |
|  |  | President and Chief Executive Officer |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BANK: | COMMERCIAL BANK | COMMERCIAL BANK |
|  | By: | /s/ Terry L. Lee |
|  |  | Terry L. Lee |
|  |  | President and Chief Executive Officer |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXECUTIVE: |  |  |
|  | /s/ Philip J. Metheny | /s/ Philip J. Metheny |
|  | Philip J. Metheny | Philip J. Metheny |

---

(*Signature Page to Metheny Employment Agreement*)

## Exhibit 10.3

**Exhibit 10.3**

**EMPLOYMENT AGREEMENT**

THIS EMPLOYMENT AGREEMENT (this "***Agreement***") is made and entered into effective as of September 29, 2025 (the "***Effective Date***"), by and between Commercial Bank, a Tennessee state-chartered bank ("***Bank***"), and Richard C. Sprinkle, Jr., a resident of the State of Tennessee ("***Executive***"). Bank and Executive are sometimes referred to herein collectively as the "***Parties***," and each is sometimes referred to herein individually as a "***Party***."

<u>R</u> <u>E</u> <u>C</u> <u>I</u> <u>T</u> <u>A</u> <u>L</u> <u>S</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A. Executive is currently employed as Executive Vice President, Chief Credit Officer of Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; B. Bank and Executive desire to enter into this Agreement to provide for Executive's continued employment with Bank upon the terms and subject to the conditions set forth herein.

<u>AGREEMENT</u>

In consideration of the premises set forth above and the mutual agreements hereinafter set forth, as well as other good and valuable consideration, the receipt and sufficiency of all of which are hereby acknowledged by the Parties, effective as of the Effective Date, the Parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Definitions</u>. When used in this Agreement, the following terms and their variant forms shall have the stated meanings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "***Affiliate***" shall mean, with respect to any entity, any other entity that controls, is controlled by, or is under common control with such entity. For this purpose, "control" means ownership of more than 50% of the ordinary voting power of the outstanding equity securities of an entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "***Board***" shall mean the board of directors of Bank and, where appropriate, any committees or other designees thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "***Business of Employer***" shall mean any business conducted from time to time by Bank or any Affiliate of Bank, including without limitation the business of commercial, retail, consumer, and mortgage banking.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "***Cause***" shall mean, in the context of the termination of Executive's employment by Bank:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) fraud, embezzlement, misappropriation, theft, or dishonesty by Executive in the course of Executive's employment with Bank;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a material violation by Executive of any written policy or code, including without limitation any code of ethics or conduct, of Bank or any Affiliate of Bank which, if susceptible to cure, is not cured by Executive within 20 days after notice to Executive of such violation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) willful misconduct, gross negligence, or gross neglect by Executive in the course of Executive's employment with Bank;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a breach by Executive of any fiduciary duty of Executive to Bank or the shareholder(s) of Bank;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) a breach by Executive of this Agreement which, if susceptible to cure, is not cured by Executive within 20 days after notice to Executive of such breach;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the conviction of Executive of, or a plea by Executive of nolo contendere to, a felony, or a misdemeanor involving moral turpitude, or the actual incarceration of Executive;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) conduct or behavior by Executive that the Chief Executive Officer of Bank in good faith determines has materially harmed or reasonably could be expected to materially harm the business or reputation of Bank or any Affiliate of Bank; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) the initiation by any regulatory agency or authority of a regulatory or enforcement action against Executive, or the removal of Executive from office or permanent prohibition of Executive from participating in the affairs of Bank or any Affiliate of Bank by the Tennessee Department of Financial Institutions or by an order issued under Section 8(e) or 8(g) of the Federal Deposit Insurance Act (12 U.S.C. § 1818(e) or (g)).

For the avoidance of doubt, the termination of Executive's employment due to or in connection with the expiration of the Term, or due to Disability, will not constitute termination of Executive's employment by Bank without Cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) "***Change in Control***" shall mean:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the consummation of a share exchange, merger, reorganization, consolidation, or other similar corporate transaction immediately after which less than a majority of the combined voting power of the outstanding securities of Company, or the successor entity in such transaction, entitled to vote generally in the election of directors of Company, or such successor entity, is held, in the aggregate, by the holders of the securities of Company entitled to vote generally in the election of directors of Company immediately prior to such transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) any Exchange Act Person becomes the "beneficial owner" (determined in accordance with Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of Company representing more than 50% of the combined voting power of the outstanding securities of Company entitled to vote generally in the election of directors of Company; *provided*, *however*, that for purposes of this clause (ii), the acquisition of additional securities by any one person who is considered to own securities of Company representing more than 50% of the combined voting power of the outstanding securities of Company entitled to vote generally in the election of directors of Company will not be considered a Change in Control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the consummation by Company, during any period of 12 consecutive months, of the sale or other disposition, to an unaffiliated third party, of assets of Company or any Affiliate of Company that have a total gross fair market value equal to or more than 80% of the gross fair market value of the total consolidated assets of Company (expressly excluding, for the avoidance of doubt, any pledge by Company or any Affiliate of Company of securities or other assets to secure indebtedness or for other general corporate or commercial purposes); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the replacement, during any period of 12 consecutive months, of a majority of the members of the Company Board with directors whose appointment or election is not endorsed by a majority of the members of the Company Board before the date of appointment or election.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) "***Code***" shall mean the Internal Revenue Code of 1986, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) "***Company***" shall mean Commercial Bancgroup, Inc., a Tennessee corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "***Company Board***" shall mean the board of directors of Company and, where appropriate, any committees or other designees thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) "***Competing Business***" shall mean any person (other than Bank and its Affiliates) that is conducting any business that is the same as or substantially similar to the Business of Employer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) "***Confidential Information***" shall mean all information not generally available to and known by the public, whether spoken, printed, electronic, or in any other form or medium, relating to the business, practices, policies, plans, prospects, operations, results of operations, financial condition or results, strategies, know-how, patents, trade secrets, inventions, intellectual property, records, suppliers, vendors, customers, clients, products, services, employees, independent contractors, personnel, systems, or internal controls of Bank or any Affiliate of Bank, or of any other person that has entrusted information to Bank or any Affiliate of Bank in confidence, as well as any other information that is marked or otherwise identified as confidential or proprietary or that would otherwise appear to a reasonable person to be confidential or proprietary in the context and under the circumstances in which the information is known or used. The term "Confidential Information" shall include information developed by Executive in the course of Executive's employment with Bank as if Bank furnished such information to Executive in the first instance. The term "Confidential Information" shall not include information that, through no fault of Executive or person(s) acting in concert with Executive or on Executive's behalf, is generally available to and known by the public at the time of disclosure to Executive or thereafter becomes generally available to and known by the public.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) "***Disability***" shall mean the inability of Executive to perform the essential functions of Executive's employment with Bank, even with Bank's reasonable accommodation, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) "***Exchange Act***" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) "***Exchange Act Person***" means any natural person, entity, or group (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that "Exchange Act Person" will not include (i) Company or any Subsidiary of Company, (ii) any employee benefit plan of Company or any Subsidiary of Company or any trustee or other fiduciary holding securities under an employee benefit plan of Company or any Subsidiary of Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an entity owned, directly or indirectly, by the shareholders of Company in substantially the same proportions as their ownership of securities of Company, or (v) any natural person, entity, or group (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the owner, directly or indirectly, of securities of Company representing more than 50% of the combined voting power of Company's then outstanding securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) "***Good Reason***" shall mean, in the context of the termination of Executive's employment by Executive, any of the following events without Executive's written consent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a material diminution in Executive's authority, duties, and responsibilities, as compared to Executive's authority, duties, and responsibilities as of the Effective Date;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a material reduction in Executive's Base Salary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a change in the location of Executive's primary office that requires Executive to regularly physically report to an office located 50 miles or more from the location of Executive's primary office as of the Effective Date; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) a material breach of this Agreement by Bank.

In order for Good Reason to exist, prior to Executive terminating Executive's employment for Good Reason, (A) Executive shall give notice to Bank (or its successor) of the existence of Good Reason for termination, which notice must be given by Executive to Bank (or its successor) within 60 days of the initial existence of the circumstance(s) or event(s) giving rise to Good Reason for termination and shall state with reasonable detail the circumstance(s) or event(s) giving rise to Good Reason for termination, (B) Bank (or its successor) shall have 30 days from the effective date of such notice to remedy the circumstance(s) or event(s) giving rise to Good Reason for termination, and (C) the circumstance(s) or event(s) giving rise to Good Reason for termination must go unremedied by Bank (or its successor). Additionally, Executive's employment must be terminated by Executive for Good Reason within the 12-month period immediately following the initial existence of the circumstance(s) or event(s) giving rise to Good Reason for termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) "***Post-Termination Period***" shall mean a period of 12 months (subject to extension as set forth in <u>Section 8(f))</u> following the date of termination of Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) "***Restricted Area***" shall mean a radius of 50 miles from each and any banking office (whether a main office, branch office, or loan or deposit production office) operated by Bank as of the last day of Executive's employment with Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) "***Separation from Service***" shall have the meaning set forth in, and whether Executive has experienced a Separation from Service shall be determined by Bank in accordance with, Treasury Regulations § 1.409A-1(h).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) "***Subsidiary***" shall mean any entity (other than Company) in an unbroken chain of entities beginning with Company if each of the entities other than the last entity in the unbroken chain owns securities possessing 50% or more of the total combined voting power of all outstanding securities of one of the other entities in such chain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2. <u>Executive Duties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Position; Reporting.* Executive shall be employed as Executive Vice President, Chief Credit Officer of Bank and shall perform and discharge faithfully the duties and responsibilities which may be assigned to Executive from time to time in connection with the conduct of the Business of Employer. The duties and responsibilities of Executive shall be commensurate with those of individuals holding similar positions at other financial institutions similarly organized and of comparable size and complexity. Executive shall report directly to the Chief Executive Officer of Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Full-Time Status*. In addition to the duties and responsibilities specifically assigned to Executive pursuant to <u>Section 2(a)</u>, Executive shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) subject to <u>Section 2(c)</u>, during regular business hours, devote substantially all of Executive's time, energy, attention, and skills to the performance of the duties and responsibilities of Executive's employment (reasonable vacations, approved leaves of absence, and reasonable absences due to illness excepted) and faithfully and industriously perform such duties and responsibilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) diligently follow and implement all reasonable and lawful policies and decisions communicated to Executive by the Board or the Chief Executive Officer of Bank and act in accordance with the charter, bylaws, policies, and procedures of Bank; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) timely prepare and provide to the Board and the Chief Executive Officer of Bank all reasonable and lawful reports and accountings as may be reasonably requested of Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Permitted Activities*. Executive shall not during the Term be engaged (whether or not during normal business hours) in any other significant business or professional activity, whether or not such activity is pursued for gain, profit, or other pecuniary advantage, *provided* that, as long as the following activities do not interfere with Executive's obligations to Bank, this <u>Section 2(c)</u> shall not be construed as preventing Executive from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) investing Executive's personal assets in any manner which will not require any services on the part of Executive in the operation or affairs of the subject entity and in which Executive's participation is solely that of a passive investor, *provided* that such investment activity following the Effective Date shall not result in Executive owning beneficially at any time 2% or more of any class of equity securities of any Competing Business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) participating in the activities of civic and professional organizations and associations, attending and participating in banking industry or professional development conferences, authoring or publishing papers or books, or teaching, *provided* that the Chief Executive Officer of Bank may direct Executive in writing to cease any such activities in the event the Chief Executive Officer of Bank reasonably determines that Executive continuing the activities would not be in the best interests of Bank or any one or more Affiliates of Bank; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) serving on the boards of directors of other companies, *provided* that such board service has been approved by the Board, which approval will not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3. <u>Term</u>. The term of this Agreement (the "***Term***") shall commence on and as of the Effective Date and, unless this Agreement is sooner terminated in accordance with its terms, shall end at the close of business on December 31, 2026, at which time this Agreement will terminate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. <u>Compensation</u>. During the Term of this Agreement, Bank shall compensate Executive as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Base Salary*. Executive shall be compensated at a base annual rate of $275,000 per year (the "***Base Salary***"). Such Base Salary will be payable bi-weekly and subject to customary withholdings and deductions. Executive's Base Salary will be reviewed at least annually for adjustment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Cash Incentive Compensation.* Executive shall be eligible to participate in the annual cash incentive or bonus plans or programs of Company or Bank in which other executive officers participate, all or some of which may be tied to annual performance metrics established by the Board or the Company Board. Any cash incentive or bonus compensation ("***Cash Incentive Compensation***") earned by Executive shall be payable not later than March 15th of the calendar year following the calendar year in which the applicable substantial risk of forfeiture lapses, and otherwise in accordance with Bank's normal practices for the payment of short-term incentives. Executive's 2026 target annual Cash Incentive Compensation will be 10% of Base Salary, and this target will be reviewed at least annually for adjustment. Executive's actual Cash Incentive Compensation will be based on actual achievement of applicable performance metrics. The payment of any such Cash Incentive Compensation shall be subject to and conditioned on Executive being employed by Bank on December 31st of the year in which the same is earned (except as set forth in <u>Section 5(f)</u> in the case of the death or Disability of Executive), Executive's employment with Bank having not been terminated by Bank for Cause prior to the payment of such Cash Incentive Compensation, and the receipt of any approvals or no-objections required from or by any regulatory agency or authority having jurisdiction over Company or Bank. The Parties acknowledge that Executive may not be eligible to receive, or Bank may not be permitted to pay, Cash Incentive Compensation if Company or Bank is subject to restrictions imposed by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (the "***FDIC***"), the Tennessee Department of Financial Institutions, or any other regulatory agency or authority, or if Bank is otherwise restricted from paying Cash Incentive Compensation under applicable law, rule, or regulation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Automobile.* Bank shall provide Executive a Bank-owned or Bank-leased automobile reasonably satisfactory to Executive for use by Executive. Executive's use of such automobile will be subject to all motor vehicle policies that Bank may adopt from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Business Expenses*. Subject to the reimbursement policies of Bank in effect from time to time, Bank will reimburse Executive for reasonable business expenses incurred by Executive in the performance of Executive's duties and responsibilities hereunder, including without limitation reasonable business travel and entertainment expenses incurred while acting at the request of or in service of Bank; *provided*, *however*, that, as a condition to any such reimbursement, Executive shall submit verification of the nature and amount of such expenses in accordance with Bank's reimbursement policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *Paid Leave*. Executive shall be entitled to 25 days of paid leave per calendar year, all of which paid leave will accrue on January 1 of each year. To the extent not inconsistent with this Agreement, Executive's paid leave, including Executive's use of the same and the payout of accrued paid leave upon separation from employment, shall be subject to the terms of Bank's employee handbook and any paid leave policy of Bank in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *Other Benefits*. In addition to the benefits specifically described in this Agreement, Executive shall also be eligible to participate in such other benefits as may be made available by Bank from time to time to executive officers and/or employees of Bank generally, including, by way of example only, retirement plan and health, dental, vision, life, and disability insurance benefits. All such benefits will be made available and administered in accordance with the terms of any applicable written benefit plans or, if no written plan exists, Bank's standard policies and practices relating to such benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *Claw Back of Compensation*. Any compensation received by Executive will be subject to Company's Incentive-Based Compensation Recovery Policy, as amended and restated from time to time, and shall also be subject to cancellation, recoupment, rescission, payback, or other action in accordance with the terms of any other applicable Company clawback or recoupment, or similar, policy or any applicable law, rule, or regulation (including, for the avoidance of doubt, any applicable stock exchange rules), in each case as may be in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) *No Representations*. Executive acknowledges that Bank makes no representations with respect to the tax consequences to Executive of any of the compensation or benefits provided for under this <u>Section 4</u> or elsewhere in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. <u>Termination of Employment</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Termination by Bank*. During the Term, Executive's employment may be terminated by Bank:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at any time for Cause, *provided* that, before Executive's employment can be terminated for Cause, the Board, by vote of a majority of all of its members (other than Executive if Executive is then a member), must have adopted, in good faith, resolution(s) finding that there exists Cause for the termination of Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) at any time without Cause, in which event Bank shall, subject to <u>Section 28</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) a severance benefit in an amount equal to one times the sum of (A) Executive's Base Salary as of the date of termination of Executive's employment *plus* (B) the average of Executive's Cash Incentive Compensation for the two calendar years immediately preceding the calendar year in which the termination of employment occurs (the "***Standard Severance Amount***"), such Standard Severance Amount to be payable, at the option of Bank and to the extent permitted by Section 409A of the Code, either in one lump sum within 60 days after the date of termination of Executive's employment or in 26 equal bi-weekly installments in accordance with Bank's normal payroll practices, beginning with the first bi-weekly payroll date following the termination of Executive's employment (*provided*, *however*, that, in the event any portion of the Standard Severance Amount constitutes non-qualified deferred compensation (within the meaning of Section 409A of the Code), or to the extent Bank having such option is not permitted under Section 409A of the Code, the Standard Severance Amount shall be paid in one lump sum within 60 days after the date of termination of Executive's employment).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Termination by Executive*. During the Term, Executive's employment may be terminated by Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) at any time for Good Reason, in which event Bank shall, subject to <u>Section 28</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) the Standard Severance Amount (*provided* that, for the avoidance of doubt, if Executive terminates for Good Reason as defined in <u>Section 1(n)(ii)</u>, the Standard Severance Amount will be determined based on Executive's Base Salary immediately prior to the diminution in Base Salary giving rise to termination for Good Reason), such Standard Severance Amount to be payable, at the option of Bank and to the extent permitted by Section 409A of the Code, either in one lump sum within 60 days after the date of termination of Executive's employment or in 26 equal bi-weekly installments in accordance with Bank's normal payroll practices, beginning with the first bi-weekly payroll date following the termination of Executive's employment (*provided*, *however*, that, in the event any portion of the Standard Severance Amount constitutes non-qualified deferred compensation (within the meaning of Section 409A of the Code), or to the extent Bank having such option is not permitted under Section 409A of the Code, the Standard Severance Amount shall be paid in one lump sum within 60 days after the date of termination of Executive's employment).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) at any time without Good Reason, *provided* that Executive shall give Bank at least 60 days prior written notice of termination, all or any part of which 60-day notice period Bank may waive for no consideration by giving written notice of the same to Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Termination Upon Disability*. During the Term, Executive's employment may be terminated by Bank upon the Disability of Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Termination Upon Death*. Executive's employment shall terminate automatically upon the death of Executive during the Term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *Termination by Mutual Agreement*. During the Term, Executive's employment may be terminated at any time by mutual written agreement of the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *Effect of Termination*. Upon the termination of Executive's employment, Bank shall have no further obligations to Executive or Executive's estate, heirs, beneficiaries, executors, administrators, or legal or personal representatives under or with respect to this Agreement, except for the payment of any amounts earned and owing under <u>Section 4</u> as of or for periods prior to the date of termination of Executive's employment and any payment(s) required by <u>Section 5(a)(ii)</u>, <u>Section 5(b)(i)</u>, or <u>Section 6</u>; *provided* that, in the event of the termination of Executive's employment due to the death or Disability of Executive, Bank shall provide to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) a pro rata portion of any Cash Incentive Compensation that would have been payable to Executive, under <u>Section 4(b)</u>, for the year in which Executive's death or Disability occurs (prorated based on the number of days elapsed in such year through the date of termination of Executive's employment), and such pro rata portion shall be paid not later than March 15th of the calendar year following the calendar year in which Executive's termination of employment occurs and otherwise in accordance with Bank's normal practices for the payment of short-term incentives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *Resignations*. Upon the termination of Executive's employment for any reason, (i) if Executive is a member of the Board or the board of directors (or similar governing body) of any Affiliate of Bank, Executive shall, at the request of Bank, resign from any or all such position(s), and (ii) Executive shall, at the request of Bank, resign from any officer position(s) held by Executive at any Affiliate of Bank, in each case with any and all such resignations to be effective not later than the date on which Executive's employment is terminated unless a later effective date is agreed to by Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6. <u>Change in Control</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If within six months prior to or within 12 months following a Change in Control Bank (or any successor to Bank) terminates Executive's employment without Cause, Bank (or its successor) shall, subject to <u>Section 28</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) a severance benefit in an amount equal to two times the sum of (i) Executive's Base Salary as of the date of termination *plus* (ii) the average of Executive's Cash Incentive Compensation for the two calendar years immediately preceding the calendar year in which the termination of employment occurs (the "***Change in Control Severance Amount***"), said Change in Control Severance Amount to be payable in one lump sum within 60 days after the date of termination of Executive's employment; *provided* that, in the event such 60-day period spans two calendar years, the Change in Control Severance Amount shall not be payable under this <u>Section 6(a)</u> until the second calendar year. The compensation provided for in this <u>Section 6(a)</u> is, in the context of a Change in Control, intended to be in lieu of the compensation provided for in <u>Section 5(a)(ii)</u> and, if Executive becomes entitled to the compensation provided for in this <u>Section 6(a)</u>, Executive will not also be entitled to the compensation provided for in <u>Section 5(a)(ii)</u> and any compensation previously paid to Executive under <u>Section 5(a)(ii)</u> will be credited against the amount payable to Executive under this <u>Section 6(a)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If within six months prior to or 12 months following a Change in Control Executive terminates Executive's employment with Bank (or its successor) for Good Reason, Bank (or its successor) shall, subject to <u>Section 28</u>, pay to Executive (or, in the event of Executive's death, Executive's estate, heirs, or designated beneficiaries, as the case may be) the Change in Control Severance Amount (*provided* that, for the avoidance of doubt, if Executive terminates for Good Reason as defined in <u>Section 1(n)(ii)</u>, the Change in Control Severance Amount will be determined based on Executive's Base Salary immediately prior to the diminution in Base Salary giving rise to termination for Good Reason), in one lump sum within 60 days after the date of termination of Executive's employment, *provided* that, in the event such 60-day period spans two calendar years, the Change in Control Severance Amount shall not be payable under this <u>Section 6(b)</u> until the second calendar year. The compensation provided for in this <u>Section 6(b)</u> is, in the context of a Change in Control, intended to be in lieu of the compensation provided for in <u>Section 5(b)(i)</u> and, if Executive becomes entitled to the compensation provided for in this <u>Section 6(b)</u>, Executive will not also be entitled to the compensation provided for in <u>Section 5(b)(i)</u> and any compensation previously paid to Executive under <u>Section 5(b)(i)</u> will be credited against the amount payable to Executive under this <u>Section 6(b)</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7. <u>Confidential Information</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Executive understands and acknowledges that, during the course of Executive's employment with Bank, Executive has had and will continue to have access to, and has learned and will continue to learn of and about, Confidential Information. Executive acknowledges and agrees that all Confidential Information of Bank or its Affiliates that Executive accesses, receives, learns of, or develops, or previously has accessed, received, learned of, or developed, while employed by Bank shall be and will remain the sole and exclusive property of Bank and its Affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Executive understands and acknowledges that Bank and its Affiliates have invested, and continue to invest, substantial time, money, and specialized knowledge into developing their resources, building a customer base, generating customer and potential customer lists and leads, training their employees, and generally improving their offerings in the field of banking and financial services. Executive understands and acknowledges that, as a result of these efforts, Bank and its Affiliates have created and continue to create and use Confidential Information, including highly confidential customer and prospective customer information, the confidentiality of which Bank goes to great lengths and expends significant resources to maintain, and that the Confidential Information provides Bank and its Affiliates with a competitive advantage over others in the marketplace. Executive also acknowledges and agrees that Executive is being provided and entrusted with access to Bank's customer and employee relationships and goodwill, that Bank would not provide Executive access to Confidential Information or Bank's customer or employee relationships or goodwill in the absence of Executive's execution of and compliance with this Agreement, and that Bank's Confidential Information, customer and employee relationships, and goodwill are valuable assets of Bank and are legitimate business interests that are properly subject to protection through the covenants contained in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Executive covenants and agrees (i) to treat all Confidential Information as strictly confidential; (ii) not to directly or indirectly disclose, communicate, or make available Confidential Information, or allow it to be disclosed, communicated, or made available, in whole or in part, to any person (including other employees of Bank or its Affiliates) not having a need to know and the authority to know and use the Confidential Information in connection with the Business of Employer; and (iii) not to access or use any Confidential Information, and not to copy any documents, records, files, media, or other resources (printed, electronic, or in any other form or medium) containing any Confidential Information, or remove any such documents, records, files, media, or other resources from the premises or control of Bank or its Affiliates, except as required in the performance by Executive of Executive's authorized employment duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Nothing in this Agreement shall be construed or enforced to prevent disclosure of Confidential Information to the extent disclosure is required by applicable law, rule, or regulation or pursuant to the valid order of a court of competent jurisdiction or government agency, *provided* that the disclosure does not exceed that in fact required by such law, rule, regulation, or order, and, *provided further*, that, unless prohibited by law, rule, regulation, or order, Executive shall promptly provide Bank written notice of any such required disclosure of Confidential Information. Additionally, nothing in this Agreement shall prohibit or restrict Executive (or any attorney for Executive) from (i) initiating communications directly with, responding to an inquiry from, providing testimony before, or otherwise participating in any investigation or proceeding that may be conducted by any government agency, regulatory authority, or self-regulatory organization, including the United States Securities and Exchange Commission and the Financial Industry Regulatory Authority, or (ii) reporting possible violations of federal, state, or local law or regulation to any government agency or regulatory authority or making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation. Executive shall not need the prior authorization of Bank to make any such reports or disclosures and shall not be required to notify Bank that Executive has made such reports or disclosures.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding any other provision of this Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Executive will not be held criminally or civilly liable under any federal or state trade secret law for any disclosure of a trade secret that (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law, or (B) is made in a complaint or other document filed under seal in a lawsuit or other proceeding; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) If Executive files a lawsuit for retaliation by Bank for reporting a suspected violation of law, Executive may disclose trade secrets to Executive's attorney and use the trade secret information in the court proceeding if Executive (A) files any document containing trade secrets under seal and (B) does not disclose trade secrets, except pursuant to court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Executive understands and acknowledges that Executive's obligations under this Agreement with regard to any particular Confidential Information shall commence, or shall be deemed to have commenced, immediately upon Executive first having access to such Confidential Information (whether before or after the Effective Date) and shall continue during and after Executive's employment by Bank until such time as such Confidential Information has become public knowledge other than as a result of Executive's breach of this Agreement or a breach by any person acting in concert with, at the direction of, or on behalf of Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) At any time upon request by Bank, and in any event upon the termination of Executive's employment with Bank, Executive will promptly deliver to Bank all property of Bank or its Affiliates, including without limitation all Confidential Information, vehicles, keys, access cards, credit cards, identification cards, equipment, computers, tablets, and mobile and other electronic devices, then in Executive's possession or control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8. <u>Restrictive Covenants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) *Non-Competition*. Executive agrees that, during the Term and, following the termination of Executive's employment with Bank, for the duration of the Post-Termination Period, Executive will not (except on behalf of or with the prior written consent of Bank) (i) either directly or indirectly, on Executive's own behalf or in the service of or on behalf of others, engage in any business, activity, enterprise, or venture competitive with the Business of Employer; (ii) either directly or indirectly, perform for any Competing Business any services that are the same as, or substantially similar to, the services Executive performs or performed for Bank; (iii) accept employment with or be employed by any person engaged in any business, activity, enterprise, or venture competitive with the Business of Employer; or (iv) work for or with, consult for, or otherwise be affiliated with or be employed by any person or group of persons proposing to establish a new bank or other financial institution; *provided* that during the Post-Termination Period these restrictions shall only apply within the Restricted Area.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) *Non-Solicitation of Customers*. Executive agrees that, during the Term and, following the termination of Executive's employment with Bank, for the duration of the Post-Termination Period, Executive will not directly or indirectly (except on behalf of or with the prior written consent of Bank), on Executive's own behalf or in the service of or on behalf of others, solicit or contact or attempt to solicit or contact (by mail, email, courier, facsimile, telephone, instant or text message, social media, or otherwise), or meet with (in person, via video conference, or otherwise), any customer of Bank or any Affiliate of Bank for purposes of selling, offering, or providing products or services that are competitive with those sold, offered, or provided by Bank or any Affiliate of Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) *Non-Solicitation of Employees*. Executive agrees that, during the Term and, following the termination of Executive's employment with Bank, for the duration of the Post-Termination Period, Executive will not directly or indirectly (except on behalf of or with the prior written consent of Bank), on Executive's own behalf or in the service of or on behalf of others, solicit, recruit, or hire, or attempt to solicit, recruit, or hire, any employee of Bank or any Affiliate of Bank, or otherwise induce or attempt to induce any such employee to terminate his or her employment with Bank or any Affiliate of Bank, regardless of whether the employee is a full-time, part-time, or temporary employee of Bank or an Affiliate of Bank or the employee's employment is pursuant to a written agreement, for a determined period, or at will.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) *Non-Disparagement*. Executive agrees that, both during the Term and following the termination of Executive's employment with Bank, Executive will not make any disparaging statements or remarks (written or oral) about Bank or any Affiliate of Bank or any of their respective officers, directors, employees, shareholders, agents, or representatives; *provided* that nothing in this Agreement prohibits communications necessary to respond to lawful inquiries by government or regulatory agencies, to defend against legal claims or litigation of any kind, or to enforce the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) *Modification; No Hardship.* The Parties agree that the provisions of this Agreement represent a reasonable balancing of their respective interests and have attempted to limit the restrictions imposed on Executive to those necessary to protect Bank from inevitable disclosure of Confidential Information and unfair competition. The Parties agree that, if the scope or enforceability of this Agreement, or any provision hereof, is in any way disputed at any time and a court or other trier of fact determines that the scope of any provision contained in this Agreement is overbroad, then such court or other trier of fact may modify the scope of such provision so that it is enforceable to the greatest extent permitted by applicable law. Executive acknowledges and agrees that, in the event Executive's employment with Bank terminates, Executive possesses marketable skills and abilities that will enable Executive to find suitable employment without violating the covenants set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) *Tolling.* Executive agrees that, in the event Executive breaches this <u>Section 8</u>, the Post-Termination Period shall be tolled during, and therefore extended by, the period of such breach.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) *Remedies*. Executive agrees that the covenants contained in <u>Section 7</u> and <u>Section 8</u> are of the essence of this Agreement; that each of such covenants is reasonable and necessary to protect the business, legitimate interests, and assets of Bank and its Affiliates; and that irreparable loss and damage will be suffered by Bank and its Affiliates should Executive breach any of such covenants. Therefore, Executive agrees and consents that, in addition to all other remedies provided by or available at law or in equity, Bank shall be entitled to seek a temporary restraining order and temporary and permanent injunctions to prevent breaches or contemplated or threatened breaches of any of the covenants contained in <u>Section 7</u> or <u>Section 8</u> and that, in such event, Bank shall not be required to post a bond. Bank and Executive agree that all remedies available to Bank shall be cumulative.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9. <u>Severability</u>. The Parties agree that each of the provisions included in this Agreement is separate, distinct, and severable from the other provisions of this Agreement and that the invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. Further, if any provision of this Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a conflict between the provision and any applicable law, rule, regulation, or public policy, the provision shall be redrawn to make the provision consistent with, and valid and enforceable under, such law, rule, regulation, or public policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10. <u>No Set-Off by Executive</u>. The existence of any claim, demand, action, or cause of action by Executive against Bank or any Affiliate of Bank, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by Bank of any of its rights under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11. <u>Notices</u>. All notices and other communications required or permitted under or pertaining to this Agreement shall be in writing and shall be either personally delivered, sent by overnight courier, or mailed by first class United States Mail, return receipt requested, to the recipient at the address below indicated:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*If to Bank*: | *If to Executive*: |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial Bank | to Executive, personally, at the address for |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Post Office Box 400 | Executive appearing in the records of Bank |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6710 Cumberland Gap Parkway |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Harrogate, Tennessee 37752 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention: Chief Executive Officer |  |

---

or to such other address or to the attention of such other person as the recipient Party shall have specified by prior written notice to the sending Party. All such notices and other communications shall be effective (a) when personally delivered to the Party to be notified, (b) two business days after deposit with an overnight courier, addressed to the Party to be notified as set forth above, or (c) four business days after deposit in the United States Mail, first class, return receipt requested, at any time other than during a general discontinuance of postal service due to strike, lockout, or otherwise (and in the event of a general discontinuance of postal service, notices and other communications will be effective upon receipt), and addressed to the Party to be notified as set forth above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12. <u>Assignment</u>. Bank may assign this Agreement and its rights hereunder and may delegate its duties and obligations under this Agreement, in each case without notice to or the consent of Executive, in connection with a Change in Control. This Agreement is a personal contract, and neither this Agreement nor the rights, interest, duties, or obligations of Executive hereunder may be assigned or delegated by Executive. Subject to the preceding provisions of this <u>Section 12</u>, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13. <u>Waiver</u>. A waiver by a Party of any provision of this Agreement or of any breach of this Agreement by any other Party shall not be effective unless set forth in a written instrument signed by the Party granting such waiver, and no such waiver shall operate or be construed as a waiver of the same or any other provision or breach on any other occasion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 14. <u>Mediation</u>. Except with respect to <u>Section 7</u> and <u>Section 8</u>, in the event of any dispute arising out of or relating to this Agreement or a breach hereof, which dispute cannot be settled through direct discussions between the Parties, the Parties agree to first endeavor to settle the dispute in an amicable manner by non-binding, confidential mediation in Claiborne County, Tennessee before resorting to any other process for resolving the dispute.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 15. <u>Applicable Law and Choice of Forum</u>. This Agreement shall be governed by and construed and enforced under and in accordance with the laws of the State of Tennessee, without regard to or the application of principles of conflicts of laws. The Parties agree that any litigation, suit, action, or proceeding arising out of or related to this Agreement shall be instituted exclusively in the United States District Court for the Eastern District of Tennessee, Northern Division, or the courts of the State of Tennessee sitting in Knox County, Tennessee, and each Party irrevocably submits to the exclusive jurisdiction of and venue in such courts and waives any objection it might otherwise have to the jurisdiction of or venue in such courts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 16. <u>Interpretation</u>. Words used herein denoting one gender shall include all genders. Words used herein denoting the singular shall include the plural and vice versa. When used herein, the terms "herein," "hereunder," "hereby," "hereto," and "hereof," and any similar terms, refer to this Agreement. When used herein, the term "person" shall include an individual, a corporation, a limited liability company, a partnership, a joint venture, an association, a trust, and any other entity or organization, whether or not incorporated. Any captions, titles, or headings preceding the text of any section or subsection of this Agreement are solely for convenience of reference and shall not constitute part of this Agreement or affect its meaning, construction, or effect. The Parties agree that, because they have been given the opportunity to have counsel review and revise this Agreement, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to its fair meaning, and not strictly for or against any of the Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 17. <u>Entire Agreement; No Duplication of Benefits</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement embodies the entire and final, integrated agreement of the Parties on the subject matter stated in this Agreement and supersedes all prior understandings and agreements (oral and written) of the Parties relating to the subject matter of this Agreement. Without limiting the foregoing, the Parties agree that the certain Executive Employment Agreement dated May 1, 2012, by and between Bank and Executive (the "***2012 Agreement***") is terminated and superseded by this Agreement as of the Effective Date and that, as of and after the Effective Date, (i) the 2012 Agreement shall have no further force or effect whatsoever and (ii) notwithstanding any provision of the 2012 Agreement to the contrary, neither Bank nor Executive shall have any further or continuing rights, duties, obligations, or liability of any kind or nature under the 2012 Agreement. Notwithstanding the foregoing, this <u>Section 17(a)</u> shall not relieve or release Bank or Executive from any liability or damages arising from a breach by Bank or Executive of the 2012 Agreement prior to the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No amendment or supplement to or modification of this Agreement shall be valid or binding upon any Party unless the same is set forth in a written instrument signed by all Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The severance payments and benefits provided for in this Agreement shall be in lieu of any payments or benefits pursuant any general severance policy or other severance plan maintained by Bank for the benefit of its employees generally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 18. <u>Counterparts</u>. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same agreement. A signed copy or counterpart of this Agreement delivered by facsimile, email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original manually signed copy thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 19. <u>Rights of Third Parties</u>. Nothing herein expressed is intended, or shall be construed, to confer upon or give to any person, other than the Parties hereto and, as applicable, their respective estates, heirs, beneficiaries, successors, and permitted assigns, any rights or remedies under or by reason of this Agreement; *provided*, *however*, that the Parties agree that the Affiliates of Bank are intended third party beneficiaries of this Agreement and are entitled to enforce any rights hereunder for their benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 20. <u>Legal Fees</u>. In the event of any claim, action, suit, or proceeding arising out of or relating to this Agreement, the prevailing Party shall be entitled to recover from the non-prevailing Party all reasonable fees, expenses, and disbursements, including without limitation reasonable attorneys' fees and court costs, incurred by such prevailing Party in connection with such claim, action, suit, or proceeding, in addition to any other relief to which such prevailing Party may be entitled at law or in equity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 21. <u>Survival</u>. The respective rights and obligations of the Parties hereunder shall survive the termination of this Agreement to the extent and for such time as necessary to carry out fully the purposes and intent of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 22. <u>Executive Representations</u>. Executive represents and warrants to Bank that, during the Term, neither Executive's employment with Bank nor Executive's performance of Executive's duties and responsibilities under this Agreement will conflict with or result in a breach or violation of or a default under any contract, covenant, or agreement (including without limitation any non-solicitation, non-competition, or other similar contract, covenant, or agreement) or order, judgment, or decree to which Executive is a party or subject or by which Executive is bound. Executive acknowledges and affirms that Executive has executed this Agreement voluntarily, has read this Agreement carefully, and had a full and reasonable opportunity to consider this Agreement (including an opportunity to consult with legal counsel), and that Executive has not been pressured or in any way coerced, threatened, or intimidated into signing this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 23. <u>Code Section 409A</u>. Notwithstanding anything in this Agreement to the contrary, the following provisions shall apply to all benefits and payments provided under this Agreement by Bank to Executive:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The payment (or commencement of a series of payments) hereunder of any non-qualified deferred compensation (within the meaning of Section 409A of the Code) upon a termination of employment shall be delayed until such time as Executive has also undergone a Separation from Service, at which time such non-qualified deferred compensation (calculated as of the date of Executive's termination of employment) shall be paid (or commence to be paid) to Executive as set forth in this Agreement as if Executive had undergone such termination of employment (under the same circumstances) on the date of Executive's Separation from Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If Executive is a specified employee (as determined by Bank in accordance with Section 409A of the Code and Treasury Regulations § 1.409A-3(i)(2)) as of Executive's Separation from Service with Bank, and if any payment, benefit, or entitlement provided for in this Agreement or otherwise both (i) constitutes non-qualified deferred compensation (within the meaning of Section 409A of the Code) and (ii) cannot be paid or provided in a manner otherwise expressly provided for without subjecting Executive to additional tax or interest (or both) under Section 409A of the Code, then any such payment, benefit, or entitlement that is payable during the first six months following the Separation from Service shall be paid or provided to Executive in a lump sum cash payment to be made on the earlier of (A) Executive's death and (B) the first business day of the seventh month immediately following Executive's Separation from Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any payment or benefit paid or provided under this Agreement due to a Separation from Service that is exempt from Section 409A of the Code pursuant to Treasury Regulations § 1.409A-1(b)(9)(v) will be paid or provided to Executive only to the extent that expenses are not incurred or benefits are not provided beyond the last day of Executive's second taxable year following Executive's taxable year in which the Separation from Service occurs, *provided* that Bank reimburses such expenses no later than the last day of the third taxable year following Executive's taxable year in which Executive's Separation from Service occurs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) It is the intent of the Parties that the payments, benefits, and entitlements to which Executive could become entitled in connection with Executive's employment under this Agreement be exempt from or comply with Section 409A of the Code and the regulations and other guidance promulgated thereunder, and, accordingly, this Agreement will be interpreted to be consistent with such intent. For purposes of the limitations on non-qualified deferred compensation under Section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of applying the exclusion under Section 409A of the Code for short-term deferral amounts, the separation pay exception, or any other exception or exclusion under Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Although the payments and benefits provided for hereunder are intended to be structured in a manner to avoid the imposition of any penalty taxes under Section 409A of the Code, in no event whatsoever will Bank be liable for any additional tax, interest, or penalties that may be imposed on Executive under or as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code (other than for withholding or other obligations applicable to employers, if any, under Section 409A of the Code).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) No deferred compensation payments provided for under this Agreement shall be accelerated to Executive, except as permitted by Treasury Regulations § 1.409A-3(j)(4).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes "deferred compensation" for purposes of Section 409A of the Code be subject to offset by any other amount unless permitted by Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) All expenses described in this Agreement as eligible for reimbursement must be incurred by Executive during the Term of this Agreement to be eligible for reimbursement. Any in-kind benefits provided by Bank to Executive must be provided during the Term of this Agreement. The amount of reimbursable expenses incurred, and the amount of any in-kind benefits provided, in one taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits provided, in any other taxable year. Each category of reimbursement shall be paid as soon as administratively practicable, but in no event shall any such reimbursement be paid after the last day of the calendar year following the calendar year in which the expense was incurred. Neither rights to reimbursement nor in-kind benefits shall be subject to liquidation or exchange for other benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 24. <u>Code Section 280G</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) In the event that it is determined that any payment or benefit to be made or provided to or for the benefit of Executive, whether pursuant to this Agreement or otherwise (all such payments and benefits, "***Covered Payments***"), would constitute a "parachute payment" within the meaning of Section 280G of the Code (or any successor provision thereto) and would, but for this <u>Section 25(a)</u>, be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) (the "***Excise Tax***"), then prior to any Covered Payments being made or provided a calculation shall be performed comparing (i) the Net Benefit (as defined below) to Executive of the Covered Payments after payment of the Excise Tax to (ii) the Net Benefit to Executive if the Covered Payments are reduced to the minimum extent necessary to avoid the Covered Payments being subject to the Excise Tax. If the amount calculated under clause (i) above is less than the amount calculated under clause (ii) above, the Covered Payments will be reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax. The term "***Net Benefit***" shall mean the present value of the Covered Payments net of all federal, state, local, foreign income, employment, and excise taxes. Any reduction of Covered Payments pursuant to this <u>Section 24(a)</u> will be made in a manner determined by Bank that is consistent with the requirements of Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All determinations and calculations under this <u>Section 24</u> shall be made by an independent regional or national accounting firm or independent tax counsel selected by Bank (the "***Determination Firm***"). All determinations and calculations of the Determination Firm shall be conclusive and binding on the Parties for all purposes. For purposes of making the determinations and calculations required by this <u>Section 24</u>, the Determination Firm may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Parties shall furnish the Determination Firm with such documents and information as the Determination Firm may reasonably request in order to make any determinations and calculations necessitated by this <u>Section 24</u>. The fees and expenses of the Determination Firm shall be borne by Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 25. <u>Tax Withholding</u>. Bank may deduct and withhold from any amounts payable under this Agreement all federal, state, local, or other taxes Bank is required to deduct or withhold pursuant to applicable law, rule, regulation, or ruling.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 26. <u>Regulatory Restrictions</u>. The Parties expressly acknowledge and agree that their rights and obligations under this Agreement will be subject to such conditions, restrictions, and limitations as may from time to time be imposed by applicable federal or state banking laws, rules, or regulations or the policies, orders, or directives of federal or state bank or bank holding company regulatory agencies. Without limiting the foregoing, no payment shall be made to Executive, pursuant to this Agreement or otherwise, if such payment would be in contravention of the requirements of Section 18(k) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(k)) or Part 359 of the FDIC's Rules and Regulations (12 C.F.R. Part 359), and Bank shall have no obligation to petition the FDIC, or any other regulatory agency or authority, for its consent or concurrence for any payment to Executive under Section 18(k) of the Federal Deposit Insurance Act or Part 359 of the FDIC's Rules and Regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 27. <u>Right to Contact</u>. Executive agrees that Bank shall have the right to contact any new employer, or potential employer, of Executive and apprise such person of Executive's responsibilities and obligations owed under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 28. <u>Separation Pay Conditions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The obligation of Bank (or its successor) to pay, and the right of Executive to receive, the Standard Severance Amount under <u>Section 5.1(a)(ii)</u> or <u>Section 5.2(b)(i)</u>, or the Change in Control Severance Amount under <u>Section 6(a)</u> or <u>Section 6(b)</u>, shall be conditioned on and subject to Executive, within 50 days after the date of termination of Executive's employment, executing and delivering to Bank (or its successor) a separation agreement in such form as provided by Bank (or its successor) and such separation agreement becoming fully effective and irrevocable within 60 days after the date of termination of Executive's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Additionally, as a condition to Bank's obligation to pay, and Executive's right to receive or retain, the Standard Severance Amount under <u>Section 5.1(a)(ii)</u> or <u>Section 5.2(b)(i)</u>, (i) Executive must comply with all post-employment obligations set forth in this Agreement (including without limitation Executive's obligations under <u>Section 7</u> and <u>Section 8</u>) and (ii) Bank (by written notice to Executive at the time of, or within five days after, the termination of Executive's employment) shall have the right to require Executive to, for a period of up to three months following the termination of Executive's employment, be reasonably available during normal business hours to from time to time assist Bank with the transition of Executive's duties and responsibilities.

(*Signature Page Follows*)

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement effective as of the date first written above.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BANK: | COMMERCIAL BANK | COMMERCIAL BANK |
|  | By: | /s/ Terry L. Lee |
|  |  | Terry L. Lee |
|  |  | President and Chief Executive Officer |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXECUTIVE: |  |  |
|  | /s/ Richard C. Sprinkle, Jr. | /s/ Richard C. Sprinkle, Jr. |
|  | Richard C. Sprinkle, Jr. | Richard C. Sprinkle, Jr. |

---

## Exhibit 10.5

**Exhibit 10.5**

![](ex10-5_001.jpg)

**commercial bancgroup, inc.**

**2025 omnibus INCENTIVE PLAN**

September 16, 2025

**commercial bancgroup, inc.** 

**2025 OMNIBUS INCENTIVE PLAN**

<u>Section 1.</u> <u>General</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 *Purpose*. The purposes of this Plan are to attract and retain the best available personnel for the Company and its Affiliates, to provide additional incentives to such personnel, and to promote the success of the business of the Company and its Affiliates. Capitalized terms not defined in-text are defined in <u>Section 16</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 *Available Grants*. This Plan provides for the grant of the following types of Grants: (a) Incentive Stock Options, (b) Nonstatutory Stock Options, (c) Stock Appreciation Rights, (d) Restricted Stock Grants, (e) Restricted Stock Unit Grants, (f) Performance Grants, and (g) Other Grants.

<u>Section 2.</u> <u>Shares Subject to Plan</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 *Number of Shares Available*. Subject to any Capitalization Adjustments and the automatic increase provided for in <u>Section 2.2</u>, and any other applicable provisions in this Plan, the total number of Shares reserved and available for issuance pursuant to this Plan will not exceed 850,000 Shares (the "***Share Reserve***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 *Automatic Share Reserve Increase*. The Share Reserve will automatically increase on January 1st of each year, for a period of not more than ten years, commencing on January 1, 2026 and ending on (and including) January 1, 2035, by the lesser of (a) 0.5% of the total number of shares of Common Stock outstanding on December 31st of the immediately preceding calendar year and (b) such number of Shares determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 *Share Recycling*. Following the Effective Date, any Shares subject to an outstanding Grant, or any portion thereof, granted under this Plan will be returned to the Share Reserve and will be available for issuance in connection with subsequent Grants under this Plan to the extent: (a) such Grant (or such portion) is cancelled, forfeited, or settled in cash; (b) such Shares are used to pay the Exercise Price of such Grant (or such portion) or any Tax-Related Items arising in connection with the vesting, exercise, or settlement of such Grant (or such portion); (c) such Grant (or such portion) is surrendered pursuant to an Exchange Program; (d) such Grant (or such portion) expires by its terms at any time; or (e) such Grant (or such portion) or such Shares are reacquired by the Company pursuant to a forfeiture provision or repurchase right of the Company ("***Returning Shares***"). Accordingly, the Share Reserve is a limitation on the number of Shares that may be issued pursuant to this Plan and does not limit the granting of Grants given that Returning Shares can be granted subject to Grants more than once. Shares subject to Substitute Grants (as defined in <u>Section 13.2</u>) will not be deducted from the Share Reserve; *provided* that (i) Substitute Grants issued in connection with the assumption of, or in substitution for, outstanding options intended to qualify as Incentive Stock Options shall be counted against the Incentive Stock Option Limit, and (ii) Shares subject to any Substitute Grant may not be returned to the Share Reserve as Returning Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 *Incentive Stock Option Limit*. Subject to the provisions relating to Capitalization Adjustments, the maximum number of Shares that may be issued pursuant to the exercise of Incentive Stock Options is 850,000 Shares (the "***Incentive Stock Option Limit***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 *Adjustment of Shares*. After the Effective Date, if the number of outstanding Shares is changed or the value of the Shares is otherwise affected by a stock dividend, extraordinary dividend or distribution (whether in cash, shares, or other property, other than a regular cash dividend), recapitalization, stock split, reverse stock split, subdivision, combination, consolidation, reclassification, spin-off, or similar change in the capital structure of the Company or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto), without consideration (a "***Capitalization Adjustment***"), then (a) the maximum number and class of Shares or type of security reserved for issuance and future grant from the Share Reserve set forth in <u>Section 2.1</u>, including Returning Shares, (b) the Exercise Price, Purchase Price, and number and class of Shares or type of security subject to outstanding Grants, and (c) the number and class of Shares subject to the Incentive Stock Option Limit set forth in <u>Section 2.4</u>, will be proportionately adjusted, subject to any required action by the Board or the shareholders of the Company and in compliance with Applicable Laws, *provided* that fractions of a Share will not be issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6 *Source of Shares; Use of Proceeds*. The Shares issuable under this Plan will be authorized but unissued or forfeited shares, treasury shares, or shares reacquired by the Company in any manner. At all times the Company will reserve and keep available that number of Shares as is reasonably required to satisfy the requirements of all Grants granted and outstanding under this Plan. Proceeds from the sale of Shares pursuant to Grants will constitute general funds of the Company.

<u>Section 3.</u> <u>Eligibility</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 *General*. Incentive Stock Options may be granted only to Employees of the Company, a Parent (within the meaning of Section 424(e) of the Code), or a Subsidiary (within the meaning of Section 424(f) of the Code). All other Grants may be granted to Employees, Consultants, and Directors, *provided* such Consultants and Directors render *bona fide* services not in connection with the offer and sale of securities in a capital-raising transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 *Limitation on Grants to Non-Employee Directors*. The maximum number of Shares subject to Grants (and of cash subject to cash-settled Grants) granted under this Plan or otherwise during any one calendar year to any Non-Employee Director for service on the Board, taken together with any cash fees paid by the Company to such Non-Employee Director during such calendar year for service on the Board, will not exceed $1,000,000 in total value (calculating the value of any such Grants based on the grant date fair value of such Grants for financial reporting purposes).

<u>Section 4.</u> <u>Options and Stock Appreciation Rights</u>. Each Option or Stock Appreciation Right will be in such form and will contain such terms and conditions as the Committee deems appropriate. Each Stock Appreciation Right will be denominated in Share equivalents. The provisions of separate Options or Stock Appreciation Rights need not be identical; *provided*, *however*, that each Grant Agreement will conform (through incorporation of provisions hereof by reference in the applicable Grant Agreement or otherwise) to the substance of each of the following provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 *Type of Option Grant*. All Options will be separately designated as Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for Shares purchased upon the exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under Applicable Law, then the Option (or portion thereof) will be a Nonstatutory Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 *Exercise Period; Term*. Options and Stock Appreciation Rights may be exercisable within the times or upon the events determined by the Committee and as set forth in the Grant Agreement governing such Grant. No Option or Stock Appreciation Right will be exercisable after the expiration of 10 years from the date the Option or Stock Appreciation Right is granted, or such shorter period specified in the Grant Agreement. In addition, in the case of an Incentive Stock Option granted to a person who, at the time the Incentive Stock Option is granted, directly or by attribution owns more than 10% of the total combined voting power of all classes of stock of the Company or of any Parent (within the meaning of Section 424(e) of the Code) or Subsidiary (within the meaning of Section 424(f) of the Code) ("***Ten Percent Holder***"), such Option may not be exercisable after the expiration of five years from the date the Incentive Stock Option is granted. The Committee also may provide for Options or Stock Appreciation Rights to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 *Exercise Price*. The Exercise Price of an Option or Stock Appreciation Right will be such price as is determined by the Committee and set forth in the Grant Agreement; *provided* that (a) in the case of an Incentive Stock Option (i) granted to a Ten Percent Holder, the Exercise Price will be no less than 110% of the Fair Market Value on the date of grant and (ii) granted to any other Employee, the Exercise Price will be no less than 100% of the Fair Market Value on the date of grant, and (b) in the case of a Nonstatutory Stock Option or Stock Appreciation Right, if the Exercise Price is less than 100% of the Fair Market Value on the date of grant, it will otherwise be intended to comply with all Applicable Laws, including Section 409A of the Code. Notwithstanding the foregoing, an Option or Stock Appreciation Right may be granted with an Exercise Price lower than 100% of the Fair Market Value in connection with an assumption of or substitution for another award as provided in <u>Section 13.2</u> of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 *Method of Exercise*. An Option or Stock Appreciation Right will be deemed exercised only when the Company receives: (a) notice of exercise (in such form as the Plan Administrator may specify from time to time, including electronic execution through an authorized third-party administrator) from the person entitled to exercise the Option or Stock Appreciation Right; (b) in the case of an Option, full payment of the applicable Exercise Price in accordance with <u>Section 9</u> of this Plan and the applicable Grant Agreement; and (c) payment of applicable Tax Related Items, as determined by the Plan Administrator. The Company will issue (or cause to be issued) Shares issuable upon the exercise of an Option or Stock Appreciation Right promptly after the Option or Stock Appreciation right is exercised, and no adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except in connection with a Capitalization Adjustment. Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of this Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 *Settlement of a Stock Appreciation Right*. Upon exercise of a Stock Appreciation Right, a Grantee will be entitled to receive payment from the Company in an amount determined by multiplying (a) the difference between the Fair Market Value on the date of exercise over the Exercise Price, by (b) the number of Shares with respect to which the Stock Appreciation Right is exercised. At the discretion of the Committee, the payment from the Company for the Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 *Post-Termination Exercise Period*. Unless explicitly provided otherwise in a Grantee's Grant Agreement, if a Grantee's Continuous Service Status is terminated, the Grantee (or his or her legal representative, in the case of death) may exercise his or her Option or Stock Appreciation Right (to the extent such Grant was exercisable on the termination date) within the following period of time following the termination of the Grantee's Continuous Service Status:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) three months following a termination of a Grantee's Continuous Service Status by the Company or any Parent or Subsidiary without Cause or by the Grantee for any reason (other than due to death or Disability);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) six months following a termination due to the Grantee's Disability;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) 12 months following a termination due to the Grantee's death; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) 12 months following the Grantee's death, if such death occurs following the date of such termination but during the period such Grant is otherwise exercisable (as provided in clauses (a) or (b) above).

Following the termination date, to the extent the Grantee does not exercise such Grant within the applicable post-termination exercise period (or, if earlier, prior to the expiration of the maximum term of such Grant), such unexercised portion of the Grant will terminate, and the Grantee will have no further right, title, or interest in the terminated Grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 *Termination for Cause*. Except as otherwise provided in the Grant Agreement, if a Grantee's Continuous Service Status is terminated by the Company or any Parent or Subsidiary for Cause, the Grantee's Options or Stock Appreciation Rights will terminate and be forfeited immediately upon such termination of the Grantee's Continuous Service Status, and the Grantee will be prohibited from exercising any portion (including any vested portion) of such Grants on and after the date of such termination of Continuous Service Status. If a Grantee's Continuous Service Status is suspended pending an investigation of whether the Grantee's Continuous Service Status will be terminated for Cause, all of the Grantee's rights under any Option or Stock Appreciation Right, including the right to exercise such Grants, shall be suspended during the investigation period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 *Automatic Extension of Termination Date*. Except as otherwise provided in the Grant Agreement, if a Grantee's Continuous Service Status terminates for any reason other than for Cause and, at any time during the last 30 days of the applicable post-termination exercise period: (i) the exercise of the Grantee's Option or Stock Appreciation Right would be prohibited solely because the issuance of Shares upon such exercise would violate Applicable Law or (ii) the immediate sale of any Shares issued upon such exercise would violate the Trading Policy, then the applicable post-termination exercise period will be extended to the last day of the calendar month that commences following the date the Grant would otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply if any of the foregoing restrictions apply at any time during such extended exercise period, generally without limitation as to the maximum permitted number of extensions; *provided*, *however*, that in no event may such Grant be exercised after the expiration of its maximum term.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 *Non-Exempt Employees*. If an Option or Stock Appreciation Right is granted to an Employee who is a non-exempt employee for purposes of the U.S. Fair Labor Standards Act of 1938, as amended, the Option or Stock Appreciation Right will not be first exercisable for any Shares until at least six months following the date of grant of the Option or Stock Appreciation Right (although the Grant may vest prior to such date). Notwithstanding the foregoing, in accordance with the provisions of the U.S. Worker Economic Opportunity Act, any vested portion of such a Grant may be exercised earlier than six months following the date of grant of such Grant in the event of (i) the Grantee's death or Disability, (ii) a Change in Control in which such Grant is not assumed, continued, or substituted, or (iii) the Grantee's retirement (as such term may be defined in the Grant Agreement or another applicable agreement or, in the absence of any such definition, in accordance with the Company's then current employment policies and guidelines). This <u>Section 4.9</u> is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or Stock Appreciation Right will be exempt from his or her regular rate of pay.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 *Limitations on Exercise*. Options and Stock Appreciation Rights may be exercised only with respect to whole Shares. The Plan Administrator may also specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option or Stock Appreciation Right, *provided* that such minimum number will not prevent Grantee from exercising the Option or Stock Appreciation Right for the full number of Shares for which it is then exercisable. The Committee may, or may authorize the Plan Administrator to, prohibit the exercise of any Option or Stock Appreciation Right during a period of up to 30 days prior to the consummation of any pending Capitalization Adjustment or Change in Control, or any other change affecting the Shares or the Fair Market Value, for reasons of administrative convenience.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11 *Limitations on Incentive Stock Options*. To the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any Grantee during any calendar year (under all plans of the Company or any Parent (within the meaning of Section 424(e) of the Code) or Subsidiary (within the meaning of Section 424(f) of the Code) of the Company) exceeds $100,000, the excess Options will be treated as Nonstatutory Stock Options. For this purpose, Incentive Stock Options will be taken into account in the order in which they were granted, and the Fair Market Value of the Shares subject to an Incentive Stock Option will be determined as of the date of the grant of such Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12 *Modification, Extension, or Renewal*. Without shareholder approval, the Committee may modify, extend, or renew outstanding Options or Stock Appreciation Rights, and authorize the grant of new Options or Stock Appreciation Rights in substitution therefor, including in connection with an Exchange Program. Any such action may not, without the written consent of a Grantee, materially impair any of such Grantee's rights under any Grant previously granted, except that the Committee may reduce the Exercise Price of an outstanding Option or Stock Appreciation Right without the consent of a Grantee by a written notice (notwithstanding any adverse tax consequences to the Grantee arising from the repricing); *provided*, *however*, that the Exercise Price may not be reduced below the Fair Market Value on the date the action is taken to reduce the Exercise Price. Any outstanding Incentive Stock Option that is modified, extended, renewed, or otherwise altered will be treated in accordance with Section 424(h) of the Code.

**<u>Section 5.</u> <u>Restricted Stock Grants</u>. A Restricted Stock Grant is an offer by the Company to sell or issue (with no payment required, unless explicitly provided otherwise in a Grantee's Grant Agreement) Shares to a Grantee that are subject to certain specified restrictions ("*Restricted Stock*"). Each Restricted Stock Grant will be in such form and will contain such terms and conditions as the Committee shall deem appropriate. The terms and conditions of Restricted Stock Grants may change from time to time, and the terms and conditions of separate Grant Agreements need not be identical, but each Grant Agreement will conform to (through incorporation of the provisions hereof by reference in the applicable Grant Agreement or otherwise) the substance of each of the following provisions.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 *Acceptance Procedures*. Except as otherwise provided in a Grant Agreement, a Restricted Stock Grant will be accepted by the Grantee's execution and delivery of the Grant Agreement and full payment of the Purchase Price for the subject Shares to the Company (if applicable) within 30 days from the date the Grant Agreement is delivered to the Grantee. If the Grantee does not execute and deliver the Grant Agreement and make full payment for the Shares to the Company (if applicable) within such 30-day period, then the offer will terminate, unless otherwise determined by the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 *Purchase Price*. The Purchase Price for Shares issued pursuant to a Restricted Stock Grant, if any, will be determined by the Committee on the date the Restricted Stock Grant is granted, and, if permitted by Applicable Law, no cash consideration will be required in connection with payment of the Purchase Price if the Committee provides that payment shall be in the form of services previously rendered. Payment of the Purchase Price shall be made in accordance with <u>Section 9</u> of this Plan and the applicable Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 *Dividends and Other Distributions*. Grantees holding Restricted Stock Grants will be entitled to receive all dividends and other distributions paid with respect to the subject Shares, unless the Committee provides otherwise at the time the Grant is granted. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Restricted Stock Grants with respect to which they were paid, unless the Committee provides otherwise at the time the Grant is granted.

<u>Section 6.</u> <u>Restricted Stock Unit Grants</u>. An RSU Grant is a Grant covering a number of Shares that may be settled in cash or by issuance of those Shares at a date in the future. Each RSU Grant will be in such form and will contain such terms and conditions as the Committee shall deem appropriate. The terms and conditions of RSU Grants may change from time to time, and the terms and conditions of separate Grant Agreements need not be identical, but each RSU Grant will conform to (through incorporation of the provisions hereof by reference in the Grant Agreement or otherwise) the substance of each of the following provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 *Purchase Price*. Unless otherwise determined by the Committee, no Purchase Price shall apply to an RSU settled in Shares. Payment of a Purchase Price, if any, shall be made in accordance with <u>Section 9</u> of this Plan and the applicable Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 *Form and Timing of Settlement*. Payment of vested RSUs shall be made as soon as practicable after the date(s) determined by the Committee and set forth in the Grant Agreement. The Committee, in its sole discretion, may settle vested RSUs in cash, Shares, or a combination of both.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 *Dividend Equivalent Rights*. The Committee may permit Grantees holding RSUs to receive Dividend Equivalent Rights on outstanding RSUs if and when dividends are paid to shareholders on Shares. In the discretion of the Committee, such Dividend Equivalent Rights may be paid in cash or Shares and may either be paid at the same time as dividend payments are made to shareholders or delayed until Shares are issued pursuant to the underlying RSUs, and may be subject to the same vesting or performance requirements as the RSUs. If the Committee permits Dividend Equivalent Rights on RSUs, the terms and conditions for such Dividend Equivalent Rights will be set forth in the applicable Grant Agreement.

<u>Section 7.</u> <u>Performance Grants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 *Types of Performance Grants*. A Performance Grant is a Grant that may be granted, may vest, or may become eligible to vest contingent upon the attainment during a Performance Period of certain Performance Goals. Performance Grants may be granted as Options, Stock Appreciation Rights, Restricted Stock, RSUs, or Other Grants, including cash-based Grants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 *Terms of Performance Grants*. Performance Grants will be based on the attainment of Performance Goals that are established by the Committee for the relevant Performance Period. Prior to the grant of any Performance Grant, the Committee will determine and each Grant Agreement shall set forth the terms of each Performance Grant, including, without limitation: (a) the nature, length, and starting date of any Performance Period; (b) the Performance Criteria and Performance Goals that shall be used to determine the time and extent to which a Performance Grant has been earned; (c) the amount of any cash bonus or the number of Shares deemed subject to a Performance Grant; and (d) the effect of a termination of the Grantee's Continuous Service Status on a Performance Grant. Grantees may participate simultaneously with respect to Performance Grants that are subject to different Performance Periods and Performance Goals. A Performance Grant may but need not require the Grantee's completion of a specified period of service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 *Determination of Achievement*. The Committee shall determine the extent to which a Performance Grant has been earned in its sole discretion, including the manner of calculating the Performance Criteria and the measure of whether and to what degree such Performance Goals have been attained. The Committee may reduce or waive any criteria with respect to a Performance Goal, or adjust a Performance Goal (or method of calculating the attainment of a Performance Goal), to take into account unanticipated events, including changes in law and accounting or tax rules, as the Committee deems necessary or appropriate, or to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships. The Committee may also adjust or eliminate the compensation or economic benefit due upon attainment of Performance Goals in its sole discretion, subject to any limitations contained in the Grant Agreement and compliance with Applicable Law.

<u>Section 8.</u> <u>Other Grants</u>. Other forms of Grants valued in whole or in part by reference to, or otherwise based on, Shares, including the appreciation in value thereof, may be granted either alone or in addition to other Grants provided for in this Plan. Subject to the provisions of this Plan and Applicable Law, the Committee may determine the persons to whom and the time or times at which such Other Grants will be granted, the number of Shares (or the cash equivalent thereof) to be granted pursuant to such Other Grants, and all other terms and conditions of such Other Grants.

<u>Section 9.</u> <u>Payment for Purchases and Exercises</u>. Payment from a Grantee for Shares acquired pursuant to this Plan may be made in cash or cash equivalents or, where approved for the Grantee by the Committee and permitted by Applicable Law (and to the extent not otherwise set forth in the applicable Grant Agreement):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) by cancellation of indebtedness of the Company owed to the Grantee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) by surrender of Shares held by the Grantee that are clear of all liens, claims, security interests, or other encumbrances and that have a Fair Market Value on the date of surrender equal to the aggregate payment required;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) by waiver of compensation due or accrued to the Grantee for services rendered or to be rendered to the Company or an Affiliate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) by consideration received by the Company pursuant to a broker-assisted or other form of cashless exercise program implemented by the Plan Administrator in connection with this Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) by the Company withholding otherwise deliverable Shares having a Fair Market Value on the date of withholding equal to the aggregate payment required;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) by any combination of the foregoing; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) by any other method of payment permitted by Applicable Law.

The Committee or the Plan Administrator may limit the availability of any method of payment, to the extent the Committee or the Plan Administrator determines, in its discretion, that such limitation is necessary or advisable to comply with Applicable Law or facilitate the administration of this Plan. Payment of any Purchase Price or Exercise Price shall be made in accordance with any procedures established by the Plan Administrator.

<u>Section 10.</u> <u>Taxes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1 *Responsibility for Taxes*. Regardless of any action taken by the Company or any Affiliate, the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account, employment tax, stamp tax, or other tax-related items related to a Grantee's participation in this Plan and legally applicable to the Grantee, including any employer liability for which the Grantee is liable (collectively, the "***Tax***-***Related Items***"), is the Grantee's responsibility and may exceed the amount, if any, withheld by the Company or an Affiliate. If the Grantee is subject to Tax-Related Items in more than one jurisdiction, the Company or an Affiliate may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2 *Withholding Methods*. Unless otherwise provided in the Grantee's Grant Agreement, the Committee, or its delegate(s), as permitted by Applicable Law, in its sole discretion and pursuant to such procedures as it may specify from time to time and subject to the limitations of Applicable Law, may require or permit a Grantee to satisfy any applicable withholding obligations for Tax-Related Items, in whole or in part, by (without limitation): (a) requiring the Grantee to make a cash payment, (b) withholding from the Grantee's wages or other cash compensation paid to the Grantee by the Company or any Affiliate; (c) withholding from the Shares otherwise issuable pursuant to a Grant; (d) permitting the Grantee to deliver to the Company already-owned Shares, or (e) withholding from the proceeds of the sale of otherwise deliverable Shares acquired pursuant to a Grant either through a voluntary sale or through a mandatory sale arranged by the Company. By adoption of this Plan, the Committee delegates to the Plan Administrator the authority to adopt policies and procedures, in consultation with the Company's tax accountants and legal advisors, to determine the Fair Market Value of the Shares solely for purposes of withholding and reporting Tax-Related Items related to Grants granted under this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3 *Withholding Tax Rates*. The Company or an Affiliate may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including up to the maximum applicable rate in the Grantee's jurisdiction. If the obligation for Tax-Related Items is satisfied by withholding a number of Shares, for tax purposes, a Grantee is deemed to have been issued the full number of Shares, notwithstanding that a number of the Shares is held back solely for the purpose of paying the Tax-Related Items. In the event the Company withholds less than it is obligated to withhold in connection with a Grant, the Grantee will indemnify and hold the Company harmless from any liability for Tax-Related Items.

<u>Section 11.</u> <u>Restrictions on Grants and Shares</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1 *Transferability of Grants*. Except as expressly provided in this Plan or an applicable Grant Agreement or otherwise determined by the Committee or the Plan Administrator, Grants granted under this Plan will not be transferable or assignable by the Grantee, other than by will or the laws of descent and distribution. Any Options, Stock Appreciation Rights or Other Grants that are exercisable may only be exercised: (a) during the Grantee's lifetime, only by (i) the Grantee or (ii) the Grantee's guardian or legal representative and (b) after the Grantee's death, by the legal representative of the Grantee's estate or the Grantee's heirs or legatees. The Committee or the Plan Administrator may permit transfers of Grants in a manner that is not prohibited by Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2 *Shareholder Rights*. No Grantee will have any of the rights of a shareholder with respect to any Shares until the Shares are issued to the Grantee, except for any Dividend Equivalent Rights or other dividend rights permitted by an applicable Grant Agreement. After Shares are issued to a Grantee, the Grantee will be a shareholder and have all the rights of a shareholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares, subject to any repurchase or forfeiture provisions in any Restricted Stock Grant, the terms of the Trading Policy, and Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3 *Escrow; Pledge of Shares*. To enforce any restrictions on a Grantee's Shares, the Committee may require the Grantee to deposit all written or electronic certificate(s) representing Shares, together with stock powers or other instruments of transfer approved by the Plan Administrator, with the Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated, and the Plan Administrator may cause a legend or legends referencing such restrictions to be placed on the certificate(s). Any Grantee who is permitted to execute a promissory note as partial or full consideration for the purchase of Shares under this Plan may be required to pledge and deposit with the Company all or part of the Shares so purchased as collateral to secure the payment of the Grantee's obligation to the Company under the promissory note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4 *Exchange and Buyout of Grants*. Without prior shareholder approval, the Committee may conduct an Exchange Program, subject to consent of an affected Grantee (unless not required in connection with a repricing pursuant to <u>Section 4.12</u> of this Plan or under the terms of a Grant Agreement) and compliance with Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5 *Conditions Upon Issuance of Shares; Securities Matters*. The Company will be under no obligation to affect the registration pursuant to the Securities Act of any Shares to be issued hereunder or to effect similar compliance under any state, local, or non-U.S. laws. Notwithstanding any other provision of this Plan or any Grant Agreement, the Company will not be obligated, and will have no liability for failure, to issue or deliver any Shares under this Plan unless such issuance or delivery would comply with Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. The Plan Administrator may require, as a condition to the issuance of Shares pursuant to the terms hereof, that the recipient of such Shares make such covenants, agreements, and representations, and that any related certificates representing such Shares bear such legends, as the Plan Administrator, in its sole discretion, deems necessary or desirable. The exercise or settlement of any Grant granted hereunder will only be effective at such time as counsel to the Company shall have determined that the issuance and delivery of Shares pursuant to such exercise or settlement is in compliance with all Applicable Laws. The Company may, in its sole discretion, defer the effectiveness of any exercise or settlement of a Grant granted hereunder in order to allow the issuance of Shares pursuant thereto to be made pursuant to registration or an exemption from registration or other methods for compliance available under U.S. federal, state, local, or non-U.S. securities laws. The Company will inform the Grantee in writing of its decision to defer the effectiveness of the exercise or settlement of a Grant granted hereunder. During the period that the effectiveness of the exercise of a Grant has been deferred, the Grantee may, by written notice, withdraw such exercise and obtain a refund of any amount paid with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6 *Clawback/Recovery Policy*. All Grants granted under this Plan will be subject to clawback or recoupment under any clawback or recoupment policy (and any amendments thereto) adopted by the Board or the Committee or required by Applicable Law during the term of a Grantee's employment or other service with the Company that is applicable to Officers, Employees, Directors, or other service providers of the Company, regardless of whether such adoption (or amendment) is before or after the date the applicable Grant is granted. In addition, the Committee may impose such other clawback, recovery, or recoupment provisions in a Grant Agreement as the Committee determines necessary or appropriate. No recovery of compensation under such a clawback or recoupment policy will be an event giving rise to a right to voluntarily terminate employment upon a "resignation for good reason," for a "constructive termination" or any similar term under any plan or agreement with the Company.

<u>Section 12.</u> <u>General Provisions Applicable to Grants</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.1 *Vesting*. The total number of Shares subject to a Grant may vest in periodic installments that may or may not be equal. The Committee may impose such restrictions on or conditions to the vesting and/or exercisability of a Grant as determined by the Committee, all of which may vary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.2 *Termination of Continuous Service Status*. Except as otherwise provided in the applicable Grant Agreement or as determined by the Committee, if a Grantee's Continuous Service Status terminates for any reason, vesting of a Grant will cease and such portion of a Grant that has not vested will be forfeited, and the Grantee will have no further right, title, or interest in any then-unvested portion of the Grant. In addition, the Company may receive through a forfeiture condition or a repurchase right any or all of the Shares held by the Grantee under a Restricted Stock Grant that have not vested as of the date of such termination, subject to the terms of the applicable Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.3 *No Employment or Other Service Rights*. Nothing in this Plan or any Grant granted under this Plan will confer or be deemed to confer on any Grantee any right to continue in the employ of, or to continue any other relationship with, the Company or an Affiliate or limit in any way the right of the Company or an Affiliate to terminate the Grantee's employment or other relationship at any time. Furthermore, to the extent the Company is not the employer of a Grantee, the grant of a Grant will not establish or amend an employment or other service relationship between the Company and the Grantee. Nothing in this Plan or any Grant will constitute any promise or commitment by the Company or an Affiliate regarding future work assignments, future compensation, or any other term or condition of employment or service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.4 *Effect on Other Employee Benefit Plans*. The value of and income from any Grant granted under this Plan, as determined upon grant, vesting, or settlement, shall not be included as compensation, earnings, salary, or other similar terms used when calculating any Grantee's benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company's or any Affiliate's employee benefit plans.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5 *Leaves of Absence*. To the extent permitted by Applicable Law, the Committee or the Plan Administrator, in its sole discretion, may determine whether Continuous Service Status will be considered interrupted in the case of any leave of absence. Continuous Service Status as an Employee for purposes of Incentive Stock Options shall not be considered interrupted or terminated in the case of: (a) Company approved sick leave; (b) military leave; (c) any other *bona fide* leave of absence approved by the Company, *provided* that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to a written Company policy. In the case of an approved leave of absence, the Plan Administrator may make such provisions respecting suspension of vesting and crediting of service (including pursuant to a formal policy adopted from time to time by the Company) as it may deem appropriate, except that in no event may an Option or Stock Appreciation Right be exercised after the expiration of the term set forth in the applicable Grant Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.6 *Change in Time Commitment*. In the event a Grantee's regular level of time commitment in the performance of his or her services for the Company or any Affiliates is reduced (for example, and without limitation, if the Grantee is an Employee of the Company and the Employee has a change in status from full-time to part-time or takes an extended leave of absence) after the date of grant of any Grant, the Committee or the Plan Administrator, in its sole discretion, may (a) make a corresponding reduction in the number of Shares or cash amount subject to any portion of such Grant that is scheduled to vest or become payable after the date of such change in time commitment and (b) in lieu of or in combination with such a reduction, extend the vesting schedule applicable to such Grant (in accordance with Section 409A of the Code, as applicable). In the event of any such reduction, the Grantee will have no right with respect to any portion of the Grant that is so amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.7 *Electronic Delivery*. Any reference herein to a "written" agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto), or posted on the Company's intranet (or other shared electronic medium controlled by the Company to which the Grantee has access).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.8 *Deferrals*. To the extent permitted by Applicable Law, the Committee, in its sole discretion, may determine that the delivery of Shares or the payment of cash, upon the exercise, vesting, or settlement of all or a portion of any Grant, may be deferred and may establish programs and procedures for deferral elections to be made by Grantees. Deferrals by Grantees will be made in accordance with Section 409A of the Code, if applicable, and any other Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.9 *Compliance with Section 409A of the Code*. Unless otherwise expressly provided in a Grant Agreement, this Plan and Grant Agreements will be interpreted to the greatest extent possible in a manner that makes this Plan and Grants granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code. If the Committee determines that any Grant granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Grant Agreement evidencing such Grant will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent a Grant Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Grant Agreement. To the extent that any amount constituting deferred compensation under Section 409A of the Code would become payable under this Plan by reason of a Change in Control, such amount shall become payable only if the event constituting a Change in Control would also qualify as a change in ownership or effective control of the Company or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Code Section 409A. If a Grantee holding a Grant that constitutes deferred compensation under Section 409A of the Code is a specified employee within the meaning of Section 409A of the Code, no distribution or payment of any amount hereunder that is payable because of a separation from service (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid before the date that is six months following the date of such Grantee's separation from service or, if earlier, the date of the Grantee's death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses or, if earlier, the date of death, with the balance paid thereafter on the original schedule. Each payment payable under a Grant Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2). In no event will any Grantee have a right to payment or reimbursement from the Company or its Affiliates, or their successors or assigns, for any taxes imposed or other costs incurred as a result of Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.10 *Execution of Additional Documents*. The Company may require a Grantee to execute any additional documents or instruments necessary or desirable, as determined by the Plan Administrator, to carry out the purposes or intent of the Grant, or facilitate compliance with securities, tax, and/or other regulatory requirements, at the Plan Administrator's request.

<u>Section 13.</u> <u>Other Corporate Events</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.1 *Change in Control*. In the event that the Company is subject to a Change in Control, outstanding Grants acquired under this Plan shall be subject to the agreement evidencing or providing for the Change in Control, which need not treat all outstanding Grants in an identical manner. Such agreement may, without a Grantee's consent, provide for one or more of the following with respect to all outstanding Grants as of the effective date of such Change in Control:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The continuation of an outstanding Grant by the Company (if the Company is the surviving or successor Entity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The assumption of an outstanding Grant by the successor or acquiring Entity (if any) in such Change in Control (or by its parents, if any), which assumption will be binding on all selected Grantees; *provided* that the Exercise Price and the number and nature of shares issuable upon the exercise of any Option or Stock Appreciation Right, or any award that is subject to Section 409A of the Code, will be adjusted appropriately pursuant to Section 424(a) of the Code and/or Section 409A of the Code, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The substitution by the successor or acquiring Entity in such Change in Control (or by its parents, if any) of equivalent awards with substantially the same terms for such outstanding Grants (except that the Exercise Price and the number and nature of shares issuable upon exercise of any Option or Stock Appreciation Right, or any award that is subject to Section 409A of the Code, will be adjusted appropriately pursuant to Section 424(a) of the Code and/or Section 409A of the Code, as applicable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The full or partial acceleration of exercisability or vesting and accelerated expiration of an outstanding Grant and the lapse of the Company's right to repurchase or reacquire shares acquired under a Grant or lapse of forfeiture rights with respect to shares acquired under a Grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The settlement of such outstanding Grant (whether or not then vested or exercisable) in cash, cash equivalents, or securities of the successor or acquiring Entity (or its parent, if any) with a Fair Market Value equal to the required amount provided in the agreement evidencing or providing for the Change in Control, followed by the cancellation of such Grants; *provided*, *however*, that such Grant may be cancelled without consideration if such Grant has no value, as determined by the Committee in its sole discretion. Subject to compliance with Section 409A of the Code, such payment may be made in installments and may be deferred until the date or dates the Grant would have become exercisable or vested. Such payment may be subject to vesting based on the Grantee's Continuous Service Status, *provided* that the vesting schedule shall not be less favorable to the Grantee than the schedule on which the Grant would have become vested or exercisable. For purposes of this paragraph, Fair Market Value of Shares shall be determined without regard to any vesting conditions that may apply to such Shares.

The Board shall have full power and authority to assign the Company's right to repurchase or reacquire or forfeiture rights to any such successor or acquiring corporation. In addition, in the event such successor or acquiring corporation (if any) refuses to assume, convert, replace, or substitute Grants, as provided above, pursuant to a Change in Control, the Committee will notify the Grantee in writing or electronically that such Grant will be exercisable (to the extent vested and exercisable pursuant to its terms) for a period of time determined by the Committee in its sole discretion, and such Grant will terminate upon the expiration of such period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.2 *Assumption of Grants by the Company*. The Company, from time to time, may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either (a) granting Grants under this Plan in substitution of such other company's awards or (b) assuming such awards as if they had been granted under this Plan if the terms of such assumed award could be applied to a Grant granted under this Plan (a "***Substitute Grant***"). Such substitution or assumption will be permissible if the holder of the Substitute Grant would have been eligible to be granted a Grant under this Plan if the other company had applied the rules of this Plan to such grant. The Exercise Price and the number and nature of Shares issuable upon exercise or settlement of any such Substitute Grant will be adjusted appropriately pursuant to Section 424(a) of the Code and/or Section 409A of the Code, as applicable.

<u>Section 14.</u> <u>Administration</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.1 *Committee Authority*. This Plan will be administered by the Committee or by the Board acting as the Committee. Subject to the general purposes, terms, and conditions of this Plan, and any charter adopted by the Board governing the actions of the Committee, the Committee will have full power to implement and carry out this Plan. Without limitation, the Committee will have the authority to, subject to the preceding sentence:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) construe and interpret this Plan, any Grant Agreement, and any other agreement or document executed pursuant to this Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) prescribe, amend, expand, modify, and rescind or terminate rules and regulations relating to this Plan or any Grant (including the terms or conditions of any Grant);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) approve persons to receive Grants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) determine the form, terms, and conditions of Grants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) determine the number of Shares or other consideration subject to Grants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) determine the Fair Market Value in good faith and interpret the applicable provisions of this Plan and the definition of Fair Market Value in connection with circumstances that impact the Fair Market Value, if necessary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) determine whether Grants will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to other Grants under this Plan or awards under any other incentive or compensation plan of the Company or any Affiliate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) grant waivers of any conditions of this Plan or any Grant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) determine the vesting, exercisability, and payment of Grants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) correct any defect, supply any omission, or reconcile any inconsistency in this Plan, any Grant, or any Grant Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) determine whether a Grant has been earned or has vested;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) determine the terms and conditions of, and to institute, any Exchange Program;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) adopt or revise rules and/or procedures (including the adoption or revision of any subplan under this Plan) relating to the operation and administration of this Plan to facilitate compliance with the requirements of local law and procedures outside the United States (*provided* that Board approval will not be necessary for immaterial modifications to this Plan or any Grant Agreement made to ensure or facilitate compliance with the laws or regulations of the relevant foreign jurisdiction);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) delegate any of the foregoing to one or more Officers or Employees pursuant to a specific delegation as permitted by the terms of this Plan and Applicable Law; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) make all other determinations necessary or advisable in connection with the administration of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.2 *Indemnification*. To the maximum extent permitted by Applicable Law, each member of the Committee (including officers of the Company or an Affiliate of the Company, if applicable), or of the Board, as applicable, shall be indemnified and held harmless by the Company against and from (a) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under this Plan or pursuant to the terms and conditions of any Grant, except for actions taken in bad faith or failures to act in good faith, and (b) any and all amounts paid by him or her in settlement thereof, with the Company's approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her; *provided* that such member shall give the Company an opportunity, at its own expense, to handle and defend any such claim, action, suit, or proceeding before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's charter or bylaws (in each case as amended and/or restated), by contract, as a matter of law, or otherwise, or under any other power that the Company may have to indemnify or hold harmless each such person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.3 *Committee Interpretation and Discretion*. Any determination made by the Committee with respect to any Grant shall be made in its sole discretion at the time of grant of the Grant or, unless in contravention of any express term of this Plan or the Grant, at any later time, and such determination shall be final and binding on the Company and all persons having an interest in any Grant under this Plan. Any dispute regarding the interpretation of this Plan or any Grant Agreement shall be submitted by the Grantee or the Company to the Committee for review. The resolution of such a dispute by the Committee shall be final and binding on the Company and the Grantee. The Committee may delegate to the Plan Administrator or one or more Officers the authority to review and resolve disputes with respect to Grants held by Grantees who are not Insiders, and any such resolution shall be final and binding on the Company and the Grantee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.4 *Section 16 of the Exchange Act*. Grants granted to Grantees who are subject to Section 16 of the Exchange Act must be approved by a committee of the Board that at all times consists solely of two or more Non-Employee Directors. Nothing herein shall create an inference that a Grant is not validly granted under this Plan in the event Grants are not granted under this Plan by a committee of the Board that does not at all times consist solely of two or more Non-Employee Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.5 *Plan Administrator*. The Committee may appoint a Plan Administrator, who will have the authority to administer the day-to-day operations of the Plan and to make certain ministerial decisions without Committee approval as provided in this Plan or pursuant to resolutions adopted by the Committee. The Plan Administrator may not grant Grants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.6 *Failure to Comply*. In addition to the remedies of the Company elsewhere provided for herein, failure by a Grantee to comply with any of the terms and conditions of this Plan or any Grant Agreement, unless such failure is remedied by such Grantee within 10 days after having been notified of such failure by the Plan Administrator, shall be grounds for the cancellation and forfeiture of the subject Grant, in whole or in part, as the Committee, in its sole discretion, may determine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.7 *Foreign Grant Recipients*. Notwithstanding any provision of this Plan to the contrary, in order to facilitate compliance with the Applicable Laws and practices in other countries in which the Company and its Affiliates may operate or have Employees or other persons eligible for Grants, the Committee, in its sole discretion, will have the power and authority to: (a) determine which Affiliates will be covered by this Plan; (b) determine which individuals outside the United States are eligible to participate in this Plan, which may include individuals who provide services to the Company or an Affiliate under an agreement with a foreign nation or agency; (c) modify the terms and conditions of any Grant granted to individuals outside the United States or foreign nationals to comply with Applicable Laws or foreign policies, customs, and practices; (d) establish sub-plans, modify exercise procedures, and adopt other rules and/or procedures relating to the operation and administration of this Plan in jurisdictions other than the United States (including to qualify Grants for special tax treatment under the laws of jurisdictions other than the United States); *provided*, *however*, that no such sub-plans and/or modifications will increase the share limitations contained in <u>Section 2.1</u>; and (e) take any action, before or after a Grant is made, that the Committee determines to be necessary or advisable to obtain approval or comply with any local governmental regulatory exemptions or approvals. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Grants will be granted, that would violate any Applicable Law in the United States.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.8 *Non-Exclusivity of the Plan*. Neither the adoption of this Plan by the Board, the submission of this Plan to the shareholders of the Company for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including without limitation the granting of stock options and other equity awards and bonuses otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.9 *Severability*. If all or any part of this Plan or a Grant Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not serve to invalidate any portion of this Plan or the Grant Agreement not declared to be unlawful or invalid. Any section or part of a section so declared to be unlawful or invalid will, if possible, be construed in a manner that will give effect to the terms of such section or part of a section to the fullest extent possible while remaining lawful and valid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.10 *Corporate Action Constituting Grant of Grants*. Corporate action constituting a grant by the Company of a Grant to any Grantee will be deemed completed as of the date of such corporate action, unless otherwise determined by the Plan Administrator, regardless of when the instrument, certificate, or letter evidencing the Grant is communicated to, or actually received or accepted by, the Grantee. In the event that the corporate records (e.g., Board consents, resolutions, or minutes) documenting the corporate action constituting the Grant contain terms (e.g., Exercise Price, Purchase Price, vesting schedule, or number of Shares) that are inconsistent with those in the Grant Agreement or related grant documents as a result of a clerical error in the preparation of the Grant Agreement or related grant documentation, the corporate records will control, and the Grantee will have no legally binding right to the incorrect term in the Grant Agreement or related grant documentation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.11 *Expenses and Receipts*. The expenses of the Plan will be paid by the Company. Any proceeds received by the Company in connection with any Grant will be used for general corporate purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.12 *Governing Law*. This Plan and all Grants granted hereunder shall be governed by and construed in accordance with the laws of the State of Tennessee, without giving effect to that body of laws pertaining to conflict of laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.13 *Headings*. The headings in this Plan are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control.

<u>Section 15.</u> <u>Effectiveness, Amendment, and Termination of the Plan</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.1 *Effectiveness of Plan*. This Plan will come into existence and be effective on the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.2 *Amendment of Plan*. The Committee may amend this Plan or any Grant in any respect the Committee deems necessary or advisable, subject to the limitations of Applicable Law and this section and <u>Section 15.4</u>. If required by Applicable Law, the Company will seek shareholder approval of any amendment to this Plan that (a) materially increases the number of Shares available for issuance under this Plan (excluding any Capitalization Adjustment), (b) materially expands the class of individuals eligible to receive Grants under this Plan, (c) materially increases the benefits accruing to Grantees under this Plan, (d) materially reduces the price at which Shares may be issued or purchased under this Plan, (e) materially extends the term of this Plan, (f) materially expands the types of Grants available for issuance under this Plan, or (g) requires shareholder approval under Applicable Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.3 *Suspension or Termination of Plan*. This Plan shall terminate automatically on the tenth anniversary of the Effective Date. No Grant will be granted pursuant to this Plan after such date, but Grants previously granted may extend beyond such date. The Committee may at any time suspend or terminate the Plan at any earlier date. No Grants may be granted under this Plan while the Plan is suspended or after it is terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.4 *No Impairment*. No amendment, suspension, or termination of this Plan or any Grant may materially impair a Grantee's rights under any outstanding Grant, except with the written consent of the affected Grantee or as otherwise expressly permitted in this Plan. Subject to the limitations of Applicable Law, if any, the Committee may amend the terms of any one or more Grants without the affected Grantee's consent (a) to maintain the qualified status of the Grant as an Incentive Stock Option under Section 422 of the Code; (b) to change the terms of an Incentive Stock Option, if such change results in the impairment of the Grant solely because it impairs the qualified status of the Grant as an Incentive Stock Option; (c) to clarify the manner of exemption from, or to bring the Grant into compliance with, Section 409A of the Code; or (d) to facilitate compliance with other Applicable Laws.

<u>Section 16.</u> <u>Definitions</u>. As used in this Plan, the following definitions will apply to the capitalized terms indicated below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.1 "***Affiliate***" means a Parent, a Subsidiary, or any corporation or other Entity that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.2 "***Applicable Law***" means any applicable securities, federal, state, foreign, material local or municipal, or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling, or requirement issued, enacted, adopted, promulgated, implemented, or otherwise put into effect by or under the authority of any governmental or regulatory body or self-regulatory organization (including the New York Stock Exchange, Nasdaq Stock Market, and Financial Industry Regulatory Authority).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.3 "***Board***" means the board of directors of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.4 "***Cause***" will have the meaning ascribed to such term in any written agreement between the Grantee and the Company defining such term and, in the absence of such an agreement, such term means, with respect to a Grantee, the occurrence of any of the following events: (a) the Grantee's unauthorized misuse of the Company's trade secrets or proprietary information; (b) the Grantee's conviction of or plea of *nolo contendere* to a felony or a crime involving moral turpitude; (c) the Grantee's commission of an act of fraud against the Company; or (d) the Grantee's gross negligence or willful misconduct in the performance of his or her duties that has had or is likely to have a material adverse effect on the Company. For purposes of this definition, the term "Company" will be interpreted to include any Subsidiary, Parent, or Affiliate of the Company, as appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.5 "***Change in Control***" means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the consummation of a share exchange, merger, reorganization, consolidation, or other similar corporate transaction immediately after which less than a majority of the combined voting power of the outstanding securities of the Company, or the successor entity in such transaction, entitled to vote generally in the election of directors of the Company, or such successor entity, is held, in the aggregate, by the holders of the securities of the Company entitled to vote generally in the election of directors of the Company immediately prior to such transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any Exchange Act Person becomes the "beneficial owner" (determined in accordance with Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the outstanding securities of the Company entitled to vote generally in the election of directors of the Company; *provided*, *however*, that for purposes of this clause (b), the acquisition of additional securities by any one Person who is considered to own securities of the Company representing more than 50% of the combined voting power of the outstanding securities of the Company entitled to vote generally in the election of directors of the Company will not be considered a Change in Control;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the consummation by the Company, during any period of 12 consecutive months, of the sale or other disposition, to an unaffiliated third party, of assets of the Company or any Affiliate that have a total gross fair market value equal to or more than 80% of the gross fair market value of the total consolidated assets of the Company (expressly excluding, for the avoidance of doubt, any pledge by the Company or any Affiliate of securities or other assets to secure indebtedness or for other general corporate or commercial purposes); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the replacement, during any period of 12 consecutive months, of a majority of the members of the Board with directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of appointment or election

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.6 "***Code***" means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.7 "***Committee***" means the Compensation Committee of the Board, or those persons to whom administration of this Plan, or part of this Plan, has been delegated as permitted by Applicable Law and in accordance with this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.8 "***Common Stock***" means the common stock of the Company, and the common stock of any successor Entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.9 "***Company***" means Commercial Bancgroup, Inc., a Tennessee corporation, and any successor corporation thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.10 "***Consultant***" means any natural person, including an advisor or independent contractor, that is engaged to render services to the Company or an Affiliate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.11 "***Continuous Service Status***" means continued service as an Employee, Director, or Consultant. Continuous Service Status shall not be considered interrupted or terminated in the case of a transfer between locations of the Company or between the Company, its Affiliates, or their respective successors, or a change in status (for example, from an Employee to a Consultant). The Committee or the Plan Administrator, in its sole discretion, shall determine whether a Grantee's Continuous Service Status has terminated and the effective date of such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.12 "***Director***" means a member of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.13 "***Disability***" means (a) in the case of Incentive Stock Options, total and permanent disability as defined in Section 22(e)(3) of the Code, and (b) in the case of other Grants, unless the applicable Grant Agreement provides otherwise, that the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee is determining Disability for purposes of the term of an Incentive Stock Option, the Committee may rely on any determination that a Grantee is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Grantee participates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.14 "***Dividend Equivalent Right***" means the right of a Grantee, granted at the discretion of the Committee or as otherwise provided by this Plan, to receive, in respect of each Share represented by a Grant held by such Grantee, a credit for the account of such Grantee in an amount equal to the cash, stock, or other property dividends paid by the Company in respect of one Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.15 "***Effective Date***" means September 16, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.16 "***Employee***" means any person employed by the Company or any Affiliate, with the status of employment determined pursuant to such factors as are deemed appropriate by the Plan Administrator in its sole discretion, subject to any requirements of Applicable Law, including the Code. Service as a Director or payment by the Company or an Affiliate of a director's fee shall not be sufficient to constitute "employment" of such Director by the Company or any Affiliate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.17 "***Entity***" means a corporation, partnership, limited liability company, or other entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.18 "***Exchange Act***" means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.19 "***Exchange Act Person***" means any natural person, Entity, or "group" (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that "Exchange Act Person" will not include (a) the Company or any Subsidiary of the Company, (b) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (c) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (d) an Entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of securities of the Company, or (e) any natural person, Entity, or "group" (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company's then outstanding securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.20 "***Exchange Program***" means a program pursuant to which (a) outstanding Grants are surrendered, cancelled, or exchanged for cash, the same type of Grant, or a different Grant (or combination thereof) or (b) the Exercise Price of an outstanding Grant is increased or reduced.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.21 "***Exercise Price***" means (a) with respect to an Option, the price per Share at which a holder may purchase the Shares issuable upon exercise of the Option and (b) with respect to a Stock Appreciation Right, the price per share at which the Stock Appreciation Right is granted to the holder thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.22  ***"Fair Market Value***" means, as of any date, the per Share value of the Common Stock determined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If the Common Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Common Stock is listed or admitted to trading as reported in *The Wall Street Journal* or such other source as the Plan Administrator deems reliable, unless another method is approved by the Committee and subject to compliance with Applicable Law (including Section 409A of the Code).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the Common Stock is publicly traded but is neither listed nor admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported in *The Wall Street Journal* or such other source as the Plan Administrator deems reliable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If none of the foregoing is applicable, by the Board or the Committee in good faith (and in accordance with Section 409A of the Code, as applicable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.23 "***Grant***" means any award granted under this Plan, including any Option, Restricted Stock Grant, Restricted Stock Unit Grant, Stock Appreciation Right, Performance Grant, or Other Grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.24 "***Grant Agreement***" means a written or electronic agreement between the Company and a Grantee documenting the terms and conditions of a Grant. The term "Grant Agreement" will also include any other written agreement between the Company or an Affiliate and a Grantee containing additional terms and conditions of, or amendments to, a Grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.25 "***Grantee***" means a person to whom a Grant is granted pursuant to this Plan or, if applicable, any other person who holds an outstanding Grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.26 "***Incentive Stock Option***" means an Option granted pursuant to this Plan that is intended to be, and qualifies as, an "incentive stock option" within the meaning of Section 422 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.27 "***Insider***" means an Officer or Director or any other person whose transactions in the Common Stock are subject to Section 16 of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.28 "***Non-Employee Director***" means a Director who is not an Employee and who satisfies the requirements of a "non-employee director" within the meaning of Section 16 of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.29 "***Nonstatutory Stock Option***" means any Option granted pursuant to the Plan that does not qualify as an Incentive Stock Option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.30 "***Officer***" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.31 "***Option***" means a contract right to purchase Shares at a fixed Exercise Price per share, subject to certain conditions, if applicable, granted pursuant to this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.32 "***Other Grant***" means a Grant based, in whole or in part, on reference to Shares that is granted pursuant to the terms and conditions of this Plan, other than an Incentive Stock Option, a Nonstatutory Stock Options, a Stock Appreciation Right, a Restricted Stock Grant, a Restricted Stock Unit Grant, or a Performance Grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.33 "***Parent***" means, except as expressly herein limited for purposes of Incentive Stock Options, any Entity (other than the Company) in an unbroken chain of Entities ending with the Company if each of such Entities other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other Entities in such chain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.34 "***Performance Grant***" means an award that may vest or may be earned or exercised, in whole or in part, contingent upon the attainment during a Performance Period of one or more Performance Goals and which is granted pursuant to the terms and conditions of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.35 "***Performance Criteria***" means one or more objective or subjective criteria either individually, alternatively, or in any combination applied to a Grantee, the Company, any business unit, or Subsidiary that the Committee selects for purposes of establishing the Performance Goals for a Performance Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.36 "***Performance Goals***" means, for a Performance Period, the goal or goals established by the Committee for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis or with respect to one or more business units, divisions, Affiliates, or business segments, and may be in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.37 "***Performance Period***" means the period of time selected by the Committee over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Grantee's right to vesting, exercise, and/or settlement of a Grant. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.38 "***Plan***" means this Commercial Bancgroup, Inc. 2025 Omnibus Incentive Plan, as it may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.39 "***Plan Administrator***" means one or more Officers or Employees designated by the Committee to administer the day-to-day operations of this Plan and the Company's other equity incentive programs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.40 "***Purchase Price***" means the price to be paid for Shares acquired under this Plan, other than Shares acquired upon exercise of an Option or Stock Appreciation Right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.41 "***Restricted Stock Grant***" means an award of Shares that is granted pursuant to the terms and conditions of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.42 "***Restricted Stock Unit Grant***" or "***RSU Grant***" means a right to receive Shares that is granted pursuant to the terms and conditions of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.43 "***Securities Act***" means the U.S. Securities Act of 1933, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.44 "***Shares***" means shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.45 "***Stock Appreciation Right***" means a right to receive the appreciation value on the Shares subject to the subject Grant that is granted pursuant to the terms and conditions of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.46 "***Subsidiary***" means, except as expressly herein limited for purposes of Incentive Stock Options, any Entity (other than the Company) in an unbroken chain of Entities beginning with the Company if each of the Entities other than the last Entity in the unbroken chain owns securities possessing 50% or more of the total combined voting power of all outstanding securities of one of the other Entities in such chain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.47 "***Trading Policy***" means the Company's policy permitting certain individuals to sell Company securities only during certain "window" periods and/or otherwise restricting the ability of certain individuals to transfer or encumber Company securities, as in effect from time to time, and shall apply to each Grant whether such policy is implemented (or amended) before or after a Grant.

\*\*\*\*\*\*\*\*\*\*\*\*\*

## Exhibit 10.6

**Exhibit 10.6**

**COMMERCIAL BANCGROUP, INC.**

**2025 Omnibus Incentive Plan** 

**Notice of Restricted Stock Unit Grant**

Commercial Bancgroup, Inc., a Tennessee corporation (the "***Company***"), has awarded to the individual set forth below (the "***Grantee***") the number of restricted stock units (the "***Restricted Stock Units***") set forth below (this "***Grant***") under its 2025 Omnibus Incentive Plan (the "***Plan***").

---

| | |
|:---|:---|
| **Grantee Name**: | [●] |
| **Date of Grant:** | [●] |
| **Number of Restricted Stock Units:** | [●] |
| **Vesting Schedule:** | One-third (1/3) of the Restricted Stock Units shall vest on each of the first three anniversaries of the Date of Grant (each such anniversary, a "***Vesting Date***"), provided that the Grantee's Continuous Service Status has not terminated prior to the applicable Vesting Date.<br>All unvested Restricted Stock Units shall vest immediately prior to and contingent on a Change in Control, provided that the Grantee's Continuous Service Status has not terminated prior to such Change in Control.<br>In the event the Grantee's Continuous Service Status is terminated (i) by the Company without Cause, (ii) by the Company due to the Grantee's Disability, (iii) by the Grantee for Good Reason, or (iv) due to the Grantee's death, all unvested Restricted Stock Units shall vest immediately prior to such termination. For this purpose, Cause, Disability, and Good Reason have the meanings ascribed thereto in the Employment Agreement dated [●], by and among the Company and Commercial Bank, a Tennessee state-chartered bank, on the one hand, and the Grantee, on the other hand, regardless of whether such agreement hereafter is amended or terminated or expires.<br>Except as provided in the immediately preceding paragraph, if the Grantee's Continuous Service Status terminates, further vesting of this Grant shall cease, the portion of this Grant that has not then vested shall be forfeited, and the Grantee shall have no further right, title, or interest to any such forfeited portion of this Grant. |

---

Capitalized terms used but not defined in this Notice of Restricted Stock Unit Grant (the "***Notice***") or the attached Restricted Stock Unit Terms and Conditions (the "***Terms***") have the same meanings specified in the Plan. The Notice and the Terms are collectively referred to as this "***Grant Agreement***."

By accepting (whether electronically or otherwise) this Grant Agreement, the Grantee acknowledges and agrees to the following:

&nbsp;&nbsp;&nbsp;&nbsp;1. This Grant is governed by the terms and conditions of this Grant Agreement and the Plan. In the event
of a conflict between the terms of the Plan and this Grant Agreement, the terms of the Plan shall prevail.

&nbsp;&nbsp;&nbsp;&nbsp;2. The Grantee has received a copy of the Plan, this Grant Agreement, the Plan prospectus (if required under
Applicable Laws), and the Trading Policy, and represents that he or she has read these documents and is familiar with their terms. The
Grantee further acknowledges and agrees to accept as binding, conclusive, and final all decisions and interpretations of the Committee
and the Plan Administrator regarding any questions relating to this Grant and the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;3. Vesting of the Restricted Stock Units is subject to the Grantee's Continuous Service Status, which
is for an unspecified duration and may be terminated at any time, with or without Cause, and nothing in this Grant Agreement or the Plan
changes the nature of that relationship.

&nbsp;&nbsp;&nbsp;&nbsp;4. The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations
regarding participation in the Plan. The Grantee should consult with his or her own personal tax, legal, and financial advisors regarding
participation in the Plan before taking any action related to the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;5. The Grantee consents to electronic delivery and participation as set forth in the Plan and this Grant
Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;6. If the Grantee does not accept or decline this Grant within 90 days of the Date of Grant or, if earlier,
the first Vesting Date, the Company shall accept this Grant on the Grantee's behalf and the Grantee shall be deemed to have accepted
the terms and conditions of the Restricted Stock Units set forth in the Plan and this Grant Agreement. If the Grantee wishes to decline
this Grant, the Grantee should promptly notify the Senior Human Resources Executive. If the Grantee declines this Grant, the Restricted
Stock Units shall be cancelled and no benefits from the Restricted Stock Units nor any compensation or benefits in lieu of the Restricted
Stock Units shall be provided to the Grantee.

---

| | | | |
|:---|:---|:---|:---|
| **Commercial Bancgroup, Inc.** | **Commercial Bancgroup, Inc.** | **Grantee** | **Grantee** |
| By: |  | Signature: |  |
| Title: | [●] | Date: | [●] |
| Address: | 6710 Cumberland Gap Parkway |  |  |
|  | Harrogate, TN 37752 | Address: | [●] |
|  |  |  | [●] |

---

**COMMERCIAL BANCGROUP, INC.** 

**2025 Omnibus Incentive Plan** 

**Restricted Stock Unit Terms and Conditions**

1.  **<u>Grant of Restricted Stock Units</u>** . A Restricted Stock Unit is a non-voting unit of measurement
which is deemed solely for bookkeeping purposes to be equivalent to one Share. The Restricted Stock Units are used solely as a device
to determine the number of Shares to eventually be issued to the Grantee if such Restricted Stock Units vest. The Restricted Stock Units
shall not be treated as property or as a trust fund of any kind.

2.  **<u>Settlement</u>** . On or as soon as administratively practical (and in any event within thirty
(30) days) following the applicable vesting event, the Company shall deliver to the Grantee a number of Shares (either by delivering one
or more certificates for such Shares or by entering such Shares in book entry form, as determined by the Company in its discretion) equal
to the number of Restricted Stock Units subject to this Grant that vest in connection with such vesting event, subject to the satisfaction
of any applicable withholding obligations for Tax-Related Items. Restricted Stock Units representing a fractional Share shall accumulate
and vest on the next following vesting event on which the aggregate of vested Restricted Stock Units represents a whole Restricted Stock
Unit.

3.  **<u>Dividend and Voting Rights</u>** . Unless and until such time as Shares are issued in settlement
of vested Restricted Stock Units, the Grantee shall have no ownership of the Shares allocated to the Restricted Stock Units, and shall
have no rights to vote such Shares and no rights to dividends thereon.

4.  **<u>Non-Transferability of Restricted Stock Units</u>** . The Restricted Stock Units and any interest
therein shall not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of in any manner other than by will or
by the laws of descent or distribution or court order. The terms of the Plan and this Grant Agreement shall be binding upon the executors,
administrators, heirs, successors, and assigns of the Grantee.

5.  **<u>Termination.</u>** Except as set forth under "Vesting Schedule" in the Notice, if
the Grantee's Continuous Service Status terminates for any reason, all unvested Restricted Stock Units shall be forfeited to the
Company, and all rights of the Grantee to such Restricted Stock Units shall immediately terminate without payment of any consideration
to the Grantee.

6.  **<u>Taxes</u>** .

&nbsp;&nbsp;&nbsp;&nbsp;(a)  **<u>Responsibility for Taxes</u>** . By accepting this Grant, the Grantee acknowledges that, regardless
of any action taken by the Company or any Affiliate that employs the Grantee (the "  ***Employer*** "), the ultimate
liability for all Tax-Related Items is and remains the Grantee's responsibility and may exceed the amount actually withheld by the
Company or the Employer. The Grantee further acknowledges that neither the Company nor the Employer (i) makes any representations or undertakings
regarding the treatment of any Tax-Related Items in connection with any aspect of this Grant, including, but not limited to, the grant,
vesting, or settlement of this Grant, the subsequent sale of Shares acquired pursuant to such settlement, and the receipt of any dividends,
and (ii) commits to or is under any obligation to structure the terms of the grant or any other aspect of this Grant to reduce or eliminate
the Grantee's liability for Tax-Related Items or achieve any particular tax result. Further, if the Grantee is subject to Tax-Related
Items in more than one jurisdiction, as applicable, the Grantee acknowledges that the Company and/or the Employer may be required to withhold
or account for Tax-Related Items in more than one jurisdiction. The Grantee agrees to pay to the Company or the Employer any amount of
Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of the Grantee's participation
in the Plan that cannot be satisfied by the means described in this Section. The Company may refuse to issue or deliver Shares, or the
proceeds of the sale of Shares, if the Grantee fails to comply with the Grantee's obligations in connection with the Tax-Related
Items.

&nbsp;&nbsp;&nbsp;&nbsp;(b)  **<u>Withholding</u>** . Prior to the relevant taxable or tax withholding event, as applicable, the
Grantee agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this
regard, the Grantee authorizes the Company or the Employer, or their respective agents, at their discretion, to satisfy all Tax-Related
Items obligations by one or a combination of the methods set forth in <u>Section 10.2</u> of the Plan. However, the Grantee shall have
the discretion to satisfy such obligations by requiring the Company to withhold Shares to be issued upon settlement of the Restricted
Stock Units, provided the Company only withholds a number of Shares necessary to satisfy no more than the withholding amounts determined
based on the maximum permitted statutory rate applicable in the Grantee's jurisdiction. Withholding for Tax-Related Items shall
be made in accordance with <u>Section 10</u> of the Plan and such rules and procedures as may be established by the Plan Administrator,
and in compliance with the Trading Policy, if applicable. In the event the Company or the Employer withholds more than the amount of the
Tax-Related Items using one of the methods described above, the Grantee may receive a refund of any over-withheld amount in cash but shall
have no entitlement to the Shares sold or withheld.

7.  **<u>Nature of Grant</u>** . In accepting this Grant, the Grantee acknowledges, understands, and agrees
that: (a) the Plan is established voluntarily by the Company, is discretionary in nature, and may be amended, suspended, or terminated
by the Company at any time, to the extent permitted by the Plan; (b) the grant of this Grant is voluntary and occasional and does not
create any contractual or other right to receive future grants, or benefits in lieu of grants, even if grants have been made in the past;
(c) all decisions with respect to future grants, if any, shall be at the sole discretion of the Company; (d) the Grantee is voluntarily
participating in the Plan; (e) this Grant and the Shares allocated to this Grant are not intended to replace any pension rights or compensation
and are outside the scope of the Grantee's employment and/or service contract, if any; (f) this Grant and the Shares allocated to
this Grant, and the income and value of the same, are not part of normal or expected compensation for any purpose, including, without
limitation, calculating any severance, resignation, termination, redundancy, dismissal, or end-of-service payments, bonuses, long-service
awards, pension or retirement or welfare benefits, or similar payments; (g) unless otherwise provided in the Plan or by the Company in
its discretion, this Grant and the benefits evidenced by this Grant Agreement do not create any entitlement to have this Grant or any
such benefits transferred to, or assumed by, another company, or exchanged, cashed out, or substituted for, in connection with any corporate
transaction affecting the Shares; and (h) neither the Company nor any of its Affiliates shall be liable for any foreign exchange rate
fluctuation between the Grantee's local currency and the United States Dollar or the selection by the Company or any one of its
Affiliates in its sole discretion of an applicable foreign exchange rate that may affect the value of this Grant (or the calculation of
income or Tax-Related Items thereunder) or any amounts due to the Grantee pursuant to the settlement of this Grant or the subsequent sale
of the Shares allocated to this Grant.

8.  **<u>Code Section 409A</u>** . It is intended that the terms of this Grant shall not result in the imposition
of any tax liability pursuant to Section 409A of the Code, and this Grant Agreement shall be construed and interpreted consistent with
that intent. Payments pursuant to this Grant are intended to constitute separate payments for purposes of Section 409A of the Code.

9.  **<u>Data Privacy</u>** . The Grantee hereby explicitly and unambiguously consents to the collection,
use, and transfer, in electronic or other form, of the Grantee's personal data as described in this Grant Agreement and any other
grant materials for the purpose of implementing, administering, and managing the Grantee's participation in the Plan. The Grantee
understands that the Company and its Affiliates may hold certain personal information about the Grantee, including, but not limited to,
the Grantee's name, home address and telephone number, date of birth, social insurance or other identification number, salary, nationality,
job title, any Shares or directorships held in the Company, details of all grants, or any other entitlement to Shares awarded, canceled,
exercised, vested, unvested, or outstanding in the Grantee's favor ("  ***Data*** "), for the purpose of implementing,
administering, and managing the Plan. The Grantee understands that Data will be transferred to such stock plan service provider as may
be selected by the Company, presently or in the future, to assist the Company with the implementation, administration, and management
of the Plan. The Grantee understands that recipient(s) of the Data may be located in the United States or elsewhere, and that the recipient(s)'
country (e.g., the United States) may have different data privacy laws and protections than those of the Grantee's country. The
Grantee authorizes the Company, the stock plan service provider selected by the Company, and any other possible recipients which may assist
the Company, presently or in the future, with implementing, administering, and managing the Plan to receive, possess, use, retain, and
transfer the Data, in electronic or other form, for purposes of implementing, administering, and managing the Grantee's participation
in the Plan. Further, the Grantee understands that he or she is providing the consents herein on a purely voluntary basis. If the Grantee
does not consent, or if the Grantee later seeks to revoke his or her consent, or instructs the Company to cease the processing of the
Data, his or her Continuous Service Status will not be adversely affected, and the only adverse consequence of the Grantee refusing or
withdrawing consent or instructing the Company to cease processing is that the Company would not be able to grant the Grantee this Grant
or other equity awards or administer or maintain such awards. Therefore, the Grantee understands that refusing or withdrawing his or her
consent may affect the Grantee's ability to participate in the Plan. For more information on the consequences of the Grantee's
refusing to or withdrawing consent, the Grantee understands that he or she may contact his or her local human resources representative.

10.  **<u>Governing Law and Venue</u>** . This Grant shall be governed by and construed in accordance with
the laws of the State of Tennessee, without giving effect to that body of laws pertaining to conflict of laws.

11.  **<u>Entire Agreement; Enforcement of Rights; Amendment</u>** . This Grant Agreement, together with
the Plan, sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior
or contemporaneous discussions, agreements, commitments, negotiations, and arrangements between them. Except as contemplated by the Plan,
no modification of or amendment to this Grant Agreement, nor any waiver of any rights under this Grant Agreement, that would materially
impair the rights of the Grantee shall be effective unless set forth in a written instrument signed by the parties to this Grant Agreement.
The failure by either party to enforce any rights under this Grant Agreement shall not be construed as a waiver of any rights of such
party.

12.  **<u>Severability</u>** . If one or more provisions of this Grant Agreement are held to be unenforceable
under Applicable Laws, the parties agree to renegotiate such provision(s) in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision(s), then (a) such provision(s) shall be excluded from this Grant Agreement,
(b) the balance of this Grant Agreement shall be interpreted as if such provision(s) were so excluded, and (c) the balance of this Grant
Agreement shall be enforceable in accordance with its terms.

13.  **<u>Imposition of Other Requirements</u>** . The Company reserves the right to impose other requirements
on the Grantee's participation in the Plan, on this Grant, and on any Shares acquired under the Plan, to the extent the Company
determines it is necessary or advisable for legal or administrative reasons, and to require the Grantee to accept any additional agreements
or undertakings that may be necessary to accomplish the foregoing.

14.  **<u>Notices</u>** . Any notice, demand, or request required or permitted to be given under this Grant
Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email, or forty-eight
(48) hours after being deposited in the U.S. mail or a comparable foreign mail service, as certified or registered mail with postage or
shipping charges prepaid, addressed to the party to be notified at such party's address as set forth on the signature page to the
Notice, as subsequently changed by proper written notice, or if no address is specified on such signature page, (a) to the Company at
its principal executive office or (b) to the Grantee at the most recent physical or email address for the Grantee set forth in the Company's
books and records.

15.  **<u>Counterparts</u>.** This Grant Agreement may be executed in counterparts, each of which shall
be deemed an original and all of which together shall constitute one instrument. Email or other electronic execution and/or delivery of
this Grant Agreement (including but not limited to execution by electronic signature or click-through electronic acceptance) shall constitute
valid and binding execution and delivery for all purposes and shall be deemed to be, and have the effect of, a manually signed original
signature personally delivered.

16.  **<u>Successors and Assigns</u>** . The Company's rights and benefits under this Grant Agreement
shall inure to the benefit of and be enforceable by the Company's successors and assigns.

17.  **<u>Consent to Electronic Delivery and Participation</u>** . By accepting the Restricted Stock Units,
the Grantee agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third
party designated by the Company, and consents to the electronic delivery of this Grant Agreement, the Plan, account statements, Plan prospectuses
(if any), and all other documents, communications, or information related to the Restricted Stock Units and current or future participation
in the Plan. Electronic delivery may include the delivery of a link to the Company's intranet or the internet site of a third party
involved in administering the Plan, the delivery of a document via email, or such other methods of delivery selected by the Company in
its discretion. The Grantee acknowledges that the Grantee may receive from the Company a paper copy of any documents delivered electronically
at no cost if the Grantee so requests.

## Exhibit 31.1

**Exhibit 31.1**

**Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002** 

I, Terry L. Lee, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Commercial
Bancgroup, Inc.;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. [Reserved];

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: November 14, 2025 | By: | /s/ Terry L. Lee |
|  |  | Name: Terry L. Lee |
|  |  | Title: *President and Chief Executive Officer* |

---

## Exhibit 31.2

**Exhibit 31.2**

**Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002** 

I, Philip J. Metheny, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Commercial
Bancgroup, Inc.;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;b. [Reserved];

&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: November 14, 2025 | By: | /s/ Philip J. Metheny |
|  |  | Name: Philip J. Metheny |
|  |  | Title: *Executive Vice President, Chief Financial Officer* |

---

## Exhibit 32.1

**Exhibit 32.1**

**Certification of the Chief Executive Officer** 

**Pursuant to Rule 18 U.S.C. Section 1350** 

In connection with the Quarterly Report on Form 10-Q of Commercial Bancgroup, Inc. (the "Company") for the period ended September 30, 2025, as filed with the U.S. Securities and Exchange Commission (the "Report"), I, Terry L. Lee, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents,
in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: November 14, 2025 | By: | /s/ Terry L. Lee |
|  |  | Name: Terry L. Lee |
|  |  | Title: *President and Chief Executive Officer* |

---

## Exhibit 32.2

**Exhibit 32.2**

**Certification of the Chief Executive Officer** 

**Pursuant to Rule 18 U.S.C. Section 1350** 

In connection with the Quarterly Report on Form 10-Q of Commercial Bancgroup, Inc. (the "Company") for the period ended September 30, 2025, as filed with the U.S. Securities and Exchange Commission (the "Report"), I, Philip J. Metheny, Executive Vice President, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents,
in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: November 14, 2025 | By: | /s/ Philip J. Metheny |
|  |  | Name: Philip J. Metheny |
|  |  | Title: *Executive Vice President, Chief Financial Officer* |

---