# EDGAR Filing Document

**Accession Number:** 0001981546
**File Stem:** 0001213900-25-080760
**Filing Date:** 2025-8
**Character Count:** 1427513
**Document Hash:** 7ce1a061176d489a9af5b99dba92291e
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-080760.hdr.sgml**: 20250826

**ACCESSION NUMBER**: 0001213900-25-080760

**CONFORMED SUBMISSION TYPE**: S-1

**PUBLIC DOCUMENT COUNT**: 40

**FILED AS OF DATE**: 20250826

**DATE AS OF CHANGE**: 20250826

**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:** S-1
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-289862
- **FILM NUMBER:** 251257704

**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

#### As filed with the U.S. Securities and Exchange Commission on August 26, 2025.

#### Registration No. 333-

#### UNITED STATES<br>SECURITIES AND EXCHANGE COMMISSION<br> Washington, D.C. 20549

#### ––––––––––––––––––––

#### FORM S-1<br>REGISTRATION STATEMENT<br> UNDER THE SECURITIES ACT OF 1933

#### ––––––––––––––––––––

#### Commercial Bancgroup, Inc.
**(Exact name of registrant as specified in its charter)**

#### ––––––––––––––––––––

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| | | |
|:---|:---|:---|
|  **Tennessee** | **6022** | **62-1039469** |
|  **(State or other jurisdiction of** <br>**incorporation or organization)** | **(Primary Standard Industrial** <br>**Classification Code Number)** | **(I.R.S. Employer** <br>**Identification Number)** |

---

**6710 Cumberland Gap Parkway<br>Harrogate, Tennessee 37752<br>(423) 869**-5151**<br>(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)**

**Terry L. Lee<br>President and Chief Executive Officer<br>Commercial Bancgroup, Inc.<br>6710 Cumberland Gap Parkway<br>Harrogate, Tennessee 37752<br>(423) 869-5151<br>(Name, address, including zip code, and telephone number, including area code, of agent for service)**

***Copies to:***

---

| | |
|:---|:---|
|  **Adam G. Smith**<br> **David A. Bartz**<br> **K&L Gates LLP**<br> **501 Commerce Street, Suite 1500**<br> **Nashville, Tennessee 37203**<br> **(615) 780-6700** | **James J. Barresi<br>Jennifer A. Val<br>Squire Patton Boggs (US) LLP<br>1120 Avenue of the Americas, 13**<sup>th</sup> **Floor<br>New York, New York 10036<br>(212) 872**-9800 |

---

**Approximate date of commencement of proposed sale to the public:** As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

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

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

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 7(a)(2)(B) of the Securities Act. ☐

**The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement will become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.**

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[**Table of Contents**](#TOC001)

**The information in this preliminary prospectus is not complete and may be changed. Neither we nor the selling shareholders may sell these securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor is it soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.**

#### Subject to Completion, dated August 26, 2025

#### PRELIMINARY PROSPECTUS

#### Shares

#### Common Stock
This is the initial public offering (this "offering") of shares of common stock, $0.01 par value per share (our "common stock"), of Commercial Bancgroup, Inc., a Tennessee corporation and the bank holding company for Commercial Bank, a Tennessee state-chartered commercial bank.

We are offering shares of our common stock in this offering. The selling shareholders identified in this prospectus are offering an additional shares of common stock in this offering. We and the selling shareholders will be selling the shares of our common stock at the same fixed price. We will not receive any of the proceeds from the sale of the shares being sold by the selling shareholders in this offering.

Prior to this offering, there has been no established public trading market for our common stock. We have applied to list our common stock on the Nasdaq Capital Market ("Nasdaq") under the symbol "CBK." We currently estimate that the initial public offering price per share of our common stock will be between $ and $ per share. We believe that upon the completion of this offering, we will meet the standards for listing on Nasdaq, and the completion of this offering is contingent upon such listing.

**We are an "emerging growth company" and a "smaller reporting company" under applicable federal securities law and, as such, may elect to comply with certain reduced public company reporting requirements after the completion of this offering. See "Implications of Being an Emerging Growth Company and a Smaller Reporting Company."**

**Investing in our common stock involves risks. See "Risk Factors," beginning on page 23, for a discussion of certain risks that you should consider before investing in our common stock.**

**None of the U.S. Securities and Exchange Commission (the "SEC"), any state securities commission, the Federal Deposit Insurance Corporation (the "FDIC"), the Board of Governors of the Federal Reserve System nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.**

**These securities are not deposits, savings accounts or other obligations of any bank or savings association and are not insured or guaranteed by the FDIC or any other governmental agency and are subject to investment risks, including the possible loss of the entire amount you invest.**

---

| | | |
|:---|:---|:---|
|  | **Per Share** | **Total** |
|  Initial public offering price | $| $|
|  Underwriting discount<sup>(1)</sup> | $| $|
|  Proceeds to us before expenses | $| $|
|  Proceeds to the selling shareholders before expenses | $| $|

---

____________

(1) See "Underwriting" for additional information regarding the underwriting discounts and commissions and certain expenses payable to the underwriter by us.

At our request, the underwriter has reserved up to % of the shares of common stock offered by this prospectus for sale at the initial public offering price through a directed share program to directors, executive officers and employees of the Company and the Bank and other designated persons. See "Underwriting — Directed Share Program."

This is a firm commitment underwritten offering. The underwriter has the option to purchase up to an additional shares from the selling shareholders to cover over-allotments, if any, at the initial public offering price less the underwriting discount within 30 days of the date of this prospectus.

The underwriter expects to deliver the shares of our common stock to purchasers on or about , 2025 through the book-entry facilities of The Depository Trust Company.

*Sole Book*-Running *Manager*

**Hovde Group, LLC**

**The date of this prospectus is , 2025**

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[**Table of Contents**](#TOC001)

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[**Table of Contents**](#TOC001)

#### **TABLE OF CONTENTS**

---

| | |
|:---|:---|
|  | **Page** |
|  [PROSPECTUS SUMMARY](#T99500) | 1 |
|  [Selected Historical Consolidated Financial Data and Other Information](#T99501) | 17 |
|  [Non-GAAP Financial Measures](#T99502) | 20 |
|  [RISK FACTORS](#T99503) | 23 |
|  [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](#T99504) | 54 |
|  [USE OF PROCEEDS](#T99505) | 57 |
|  [DIVIDEND POLICY](#T99506) | 58 |
|  [CAPITALIZATION](#T99507) | 59 |
|  [DILUTION](#T99508) | 60 |
|  [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#T99509) | 62 |
|  [BUSINESS](#T99510) | 103 |
|  [MANAGEMENT](#T99511) | 118 |
|  [EXECUTIVE AND DIRECTOR COMPENSATION](#T99512) | 125 |
|  [CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS](#T99513) | 132 |
|  [PRINCIPAL AND SELLING SHAREHOLDERS](#T99514) | 135 |
|  [DESCRIPTION OF CAPITAL STOCK](#T99515) | 138 |
|  [SUPERVISION AND REGULATION](#T99516) | 144 |
|  [SHARES ELIGIBLE FOR FUTURE SALE](#T99517) | 157 |
|  [MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS TO NON-U.S. HOLDERS](#T99518) | 159 |
|  [UNDERWRITING](#T99519) | 163 |
|  [LEGAL MATTERS](#T99520) | 167 |
|  [EXPERTS](#T99521) | 167 |
|  [WHERE YOU CAN FIND MORE INFORMATION](#T99522) | 167 |
|  [INDEX TO THE FINANCIAL STATEMENTS](#T99523) | F-1 |

---

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#### ABOUT THIS PROSPECTUS
You should rely only on the information contained in this prospectus. Neither we, the selling shareholders nor the underwriter has authorized anyone to provide you with information different from that contained in this prospectus. If anyone provides you with additional, different or inconsistent information, you should not rely on it. Neither we, the selling shareholders nor the underwriter takes responsibility for, or can provide any assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares of our common stock offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. Neither we, the selling shareholders nor the underwriter is making an offer of shares of our common stock in any state, country or other jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus or any free writing prospectus that we provide to you is accurate as of any date other than the date of the applicable document regardless of its time of delivery or the time of any sales of our common stock. Our business, financial condition, results of operations and cash flows may have changed since the date of the applicable document.

Unless otherwise indicated, this prospectus describes the specific details regarding this offering, the terms and conditions of our common stock being offered hereby and the risks of investing in our common stock. For additional information, please see the section titled "Where You Can Find More Information."

You should not interpret the contents of this prospectus or any free writing prospectus that we authorize to be delivered to you to be legal, business, financial or tax advice. You should consult with your own advisors for that type of advice and consult with them about the legal, business, financial, tax and other issues that you should consider before investing in our common stock.

*For Investors Outside the United States:* Neither we, the selling shareholders, nor the underwriter has done anything that would permit this offering or the possession or distribution of this prospectus or any free writing prospectus in connection with this offering in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside the United States.

#### Basis of Presentation
In this prospectus, "we," "our," "us," "Commercial," or the "Company" refers to Commercial Bancgroup, Inc., a Tennessee corporation, and its consolidated subsidiaries, including Commercial Bank, a Tennessee banking corporation, unless the context indicates that we refer only to the parent company, Commercial Bancgroup, Inc. In this prospectus, "Bank" or "Commercial Bank" refers to Commercial Bank, our wholly owned bank subsidiary.

Certain monetary amounts, percentages and other figures included elsewhere in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

#### Recapitalization
As of the date of this prospectus, we have three classes of common stock outstanding: our common stock, our Class B common stock, $10.00 par value per share ("Class B Common Stock"), and our Class C common stock, $10.00 par value per share ("Class C Common Stock").

An amended and restated charter for the Company (the "A&R Charter") was approved by our board of directors (the "Board") on August 25, 2025 and by our shareholders on [•]. The A&R Charter provides for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• effective upon the effectiveness of the A&R Charter, the automatic reclassification and conversion of (i) each outstanding share of Class B Common Stock into 1.15 shares of common stock and (ii) each outstanding share of Class C Common Stock into 1.05 shares of common stock (collectively, the "Stock Reclassification"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• effective immediately following the Stock Reclassification, a 250-for-1 forward stock split of the outstanding shares of our common stock (the "Stock Split").

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The A&R Charter will be filed prior to the completion of this offering, at which time the Stock Reclassification will be effective, immediately followed by the effectiveness of the Stock Split.

The audited consolidated financial statements and related notes to those statements included elsewhere in this prospectus have been adjusted for the Stock Reclassification or the Stock Split. Unless otherwise indicated, all other share and per share data in this prospectus have been retroactively adjusted, where applicable, to reflect the Stock Reclassification and the Stock Split as if they had occurred at the beginning of the earliest period presented.

#### Industry and Market Data
This prospectus includes industry and market data, forecasts and information that we have prepared based, in part, upon data, forecasts and information that we obtained from regulatory sources, periodic industry publications, third-party studies and surveys, as well as filings of public companies in our industry, internal company surveys and other independent information publicly available to us. These sources include government and industry sources. Industry publications and surveys generally state that the information contained therein has been obtained from sources believed to be reliable. Although we believe information regarding the industry and market data to be reliable and are not aware of any inaccuracies as of the date of this prospectus, we have not independently verified this information, and this information could prove to be inaccurate or incomplete. Industry and market data could be wrong because of the method by which sources obtained their data and because information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties, including possible future corrections and updates. In addition, we do not know all of the assumptions regarding general economic conditions or growth that were used in preparing the forecasts from the sources relied upon or cited herein. Some data is also based on our good faith estimates, which are derived from management's knowledge of the industry and independent sources. We believe our internal estimates are reliable; however, they involve risks and uncertainties that are subject to change based on various factors. Forward-looking information obtained from these sources is subject to the same qualifications and the additional uncertainties regarding the other forward-looking statements in this prospectus. See "Risk Factors."

#### Trademarks
Our and our Bank's logos and other trademarks referred to and included in this prospectus belong to us. Solely for convenience, we refer to our trademarks in this prospectus without the "<sup>®</sup>," "<sup>SM</sup>"<sup>or</sup>"<sup>TM</sup>" symbols, but such references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights to our trademarks. Other service marks, trademarks and trade names referred to in this prospectus, if any, are the property of their respective owners, although for presentation convenience we may not use the "<sup>®</sup>," "<sup>SM</sup>" or "<sup>TM</sup>" symbols to identify such trademarks.

#### Implications of Being an Emerging Growth Company and a Smaller Reporting Company
We are an "emerging growth company" as defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the "Securities Act"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As an emerging growth company, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to: (i) presenting only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced "Management's Discussion and Analysis of Financial Condition and Results of Operations" disclosure in this prospectus; (ii) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"); (iii) having reduced disclosure obligations regarding executive compensation; (iv) being exempt from the requirements to hold a non-binding advisory vote on executive compensation or to seek shareholder approval of any golden parachute payments not previously approved; and (v) not being required to adopt certain accounting standards applicable to public companies until those standards would otherwise apply to private companies.

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Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to avail ourselves of this extended transition period and, as a result, we are not required to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. This may make our financial statements not comparable with those of another public company which is not an emerging growth company or which is an emerging growth company that has opted out of using the extended transition period because of the potential differences in accounting standards used. We cannot predict if investors will find our common stock less attractive as a result of our election to rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

We will remain an "emerging growth company" until the earliest to occur of: (i) the last day of our fiscal year following the fifth anniversary of this offering; (ii) the last day of our fiscal year in which our annual gross revenues are $1.235 billion or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have taken advantage of reduced disclosure regarding executive compensation arrangements and the presentation of certain historical financial information in this prospectus, and we may choose to take advantage of some but not all of these reduced disclosure obligations in future filings. If we do, the information that we provide to our shareholders may be different from what you might get from other public companies in which you hold stock.

We are also a "smaller reporting company" as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

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#### PROSPECTUS SUMMARY
*This summary highlights selected information contained in this prospectus. This summary does not contain all of the information that you should consider before investing in our common stock. You should read this entire prospectus carefully, including the "Risk Factors," "Cautionary Note Regarding Forward*-Looking *Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections, and our historical financial statements and the accompanying notes included in this prospectus, before deciding to invest in our common stock.*

#### Company Overview and History of Growth
We are a bank holding company headquartered in Harrogate, Tennessee, and have elected under the Bank Holding Company Act of 1956, as amended (the "BHC Act"), to become a financial holding company. We were incorporated in Tennessee in 1975, and we operate primarily through our wholly owned bank subsidiary, Commercial Bank, a Tennessee banking corporation organized in 1976. The Bank is a full-service community banking institution that offers traditional consumer and commercial products and services to serve businesses and individuals in select markets in Kentucky, North Carolina, and Tennessee.

Our primary service areas in Tennessee are (i) the metropolitan statistical areas (the "MSAs") of (a) Nashville-Davidson — Murfreesboro — Franklin, Tennessee (the "Nashville MSA"), (b) Knoxville, Tennessee (the "Knoxville MSA"), and (c) Kingsport-Bristol, Tennessee-Virginia and Johnson City, Tennessee (collectively, the "Tri-Cities MSA"), and (ii) Claiborne County, Cocke County, Union County, and Hamblen County, and their surrounding areas. In Kentucky, we primarily serve the communities in Southeast Kentucky, with branches in Barbourville, Corbin, Cumberland, Harlan, London, Middlesboro, and Pineville. Upon the Bank's merger with Alliance Bank & Trust Company ("Alliance") on July 1, 2024, we expanded our services to North Carolina, including parts of the Charlotte-Concord-Gastonia, North Carolina-South Carolina MSA (the "Charlotte MSA"), with branches in Shelby, Kings Mountain, Lincolnton and Gastonia. We also operate one loan production office ("LPO") in Lincolnton, North Carolina.

The Bank was founded as Commercial Bank of Claiborne County, a full-service Tennessee-chartered bank, by E. Oscar Robertson on June 9, 1976. On November 1, 1976, the Bank opened for business in Harrogate, Tennessee. Approximately three years later, on January 8, 1979, we opened our first branch in Speedwell, Tennessee.

In the following years, our growth has been driven primarily by organic expansion in existing markets and into new markets and through our strategic acquisitions. Over the last five years, we have had a total asset compound annual growth rate ("CAGR") of 8% while maintaining profitability, credit quality and prudent capital management. Please refer to the "Total Assets" chart below on page 2 of this prospectus for the annual growth in our total assets for each of the fiscal years ended December 31, 2020 through 2024 and for the six months ended June 30, 2025. The following information summarizes our growth history:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On April 23, 1986, we acquired Union County Bank's three branch locations in Maynardville and Luttrell, Tennessee through an FDIC-assisted transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On November 16, 2001, we acquired Middlesboro Federal Bank (Middlesboro, Kentucky) with its four offices located in Middlesboro, Pineville, and Cumberland, Kentucky, and in the Fountain City community of Knoxville, Tennessee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On September 8, 2008, we acquired The Union National Bank and Trust Company of Barbourville (Barbourville, Kentucky) with its five branch locations in Barbourville and Corbin, Kentucky.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• By the end of 2008, our total assets had increased to over $700 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On March 1, 2014, we opened an LPO in Nashville, Tennessee, and by December 31, 2014, we had over $18 million in outstanding loan balances in the Nashville MSA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On April 18, 2016, we acquired National Bank of Tennessee (Newport, Tennessee), which added two new branches to our network.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On August 15, 2017, we announced the acquisition of Citizens Bank (New Tazewell, Tennessee) with its three branch locations in New Tazewell, Harrogate, and Morristown, Tennessee, and an LPO in Kingsport, Tennessee, which was merged into our current Kingsport, Tennessee office.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On March 1, 2019, we transitioned our LPO in Nashville, Tennessee to a full-service branch in Brentwood, Tennessee (part of the Nashville MSA). As of March 31, 2019, we had over $110 million in outstanding loan balances in the Nashville MSA.

[**Table of Contents**](#TOC001)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On February 1, 2020, we acquired First National Bank and Trust (London, Kentucky) with its four branches in London and Corbin, Kentucky resulting in our total assets exceeding $1.5 billion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On June 1, 2023, we acquired a majority ownership interest in AB&T Financial Corporation ("AB&T") (Gastonia, North Carolina), the parent company of Alliance. On June 30, 2024, we acquired the remaining minority ownership interests in AB&T, and on July 1, 2024, Alliance merged with the Bank. The acquisition of Alliance added four branches and one LPO to our network and expanded our reach into North Carolina, including the Charlotte MSA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We expect to open a de novo branch office in Belmont, North Carolina during 2026, which will further increase our presence in the Charlotte MSA.

The following table shows our historical average assets and return on average assets ("ROAA") for each of the fiscal years identified below and for the six months ended June 30, 2025:

![](tbarchart_001.jpg)

Note: ROAA for the six months ended June 30, 2025 is presented on an annualized basis.

The following tables illustrate our balance sheet and income statement growth as of or for the years ended December 31, 2020 through 2024, and as of or for the six months ended June 30, 2025:

![](tbarchart_002.jpg)

<u> \* Year-over-Year Growth Rate for 2Q25 reflects the rate of growth as compared to the six months ended June 30, 2024. </u>   <u> \* Year-over-Year Growth Rate for 2Q25 reflects the rate of growth as compared to the six months ended June 30, 2024. </u>

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![](tbarchart_004.jpg)

<u> \* Year-over-Year Growth Rate for 2Q25 reflects the rate of growth as compared to the six months ended June 30, 2024. </u>    

![](tbarchart_003.jpg)

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| | |
|:---|:---|
|  Note: ROAA for 2Q25 is presented on an annualized basis. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; \* *Pre*-tax*, pre*-provision *ROAA is a non*-GAAP *financial measure. Please see "Non*-GAAP *Financial Measures" for a definition of pre*-tax*, pre*-provision *ROAA and a reconciliation of pre*-tax*, pre*-provision *ROAA to its most directly comparable GAAP (as defined below) financial measure.*<br> Note: Pre-Tax, Pre-Provision ROAA for 2Q25 is presented on an annualized basis. |

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As of June 30, 2025, we had total consolidated assets of $2.3 billion, loans, net of allowance for credit losses, of $1.8 billion, deposits of $1.9 billion and total shareholders' equity of $235.3 million, and operated 34 banking offices, including our principal executive office, and one LPO.

#### Recent Developments
The following financial information should be read together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes to those financial statements for prior periods, as well as "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" included elsewhere in this prospectus.

<u>***<u>Selected Financial Highlights</u>***</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total assets were $2.3 billion as of June 30, 2025, a decrease of $38.7 million, or 1.7%, from December 31, 2024.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total loans were $1.8 billion as of June 30, 2025, a decrease of $15.2 million, or 0.9%, from December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As of June 30, 2025, the Bank exceeded the minimum requirements to be well-capitalized for bank regulatory purposes, with a total risk-based capital ratio of 14.6%, a Tier 1 risk-based capital ratio of 13.6%, a common equity Tier 1 capital ratio of 13.6%, and a Tier 1 leverage ratio of 11.2%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total deposits were $1.9 billion as of June 30, 2025, a decrease of $87.3 million, or 4.5%, from December 31, 2024. This decrease was primarily driven by a $34.9 million reduction in time deposits to $541.6 million at June 30, 2025, from $576.5 million at December 31, 2024. Noninterest bearing demand deposits increased $20.4 million, or 5.1%, to $417.0 million as of June 30, 2025, from $396.6 million as of December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Asset quality improved slightly with nonperforming assets to total assets of 0.30% as of June 30, 2025, an increase of 0.04% from December 31, 2024. The allowance for credit losses to total loans remained flat at 1.00% for the same periods of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Book value per share increased $1.04, or 5.7%, to $19.22 at June 30, 2025, from $18.18 at December 31, 2024. Tangible book value per share increased $1.10, or 6.4%, to $18.22 at June 30, 2025, from $17.12 at December 31, 2024. Tangible book value per share is a non-GAAP financial measure. Please see "Non-GAAP Financial Measures" for a definition of tangible book value per share and a reconciliation of tangible book value per share to its most directly comparable GAAP financial measure.

<u>***<u>Results of Operations</u>***</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We had net income less non-controlling interest of $17.6 million for the six months ended June 30, 2025, an increase of $1.0 million, or 6.0%, from the six months ended June 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We had net income before income taxes of $22.8 million for the six months ended June 30, 2025, an increase of $2.1 million, or 9.9%, from the six months ended June 30, 2024. The increase was primarily the result of an increase in net interest income after provision for credit losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net interest income was $39.4 million for the six months ended June 30, 2025, an increase of $0.6 million, or 1.7%, from the six months ended June 30, 2024. The increase was primarily attributable to increased loan volume and reduction in long-term debt interest expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Noninterest income was $4.7 million for the six months ended June 30, 2025, a decrease of $0.4 million, or 8.0%, from the six months ended June 30, 2024. The decrease was primarily the result of decreases in customer service charges due to normal fluctuations in our letters of credit fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Noninterest expense was $21.3 million for the six months ended June 30, 2025, a decrease of $0.3 million, or 1.5%, from the six months ended June 30, 2024. The decrease was primarily the result of efficiencies realized from the acquisition of AB&T.

#### Business Strategy
Our business strategy is to grow through both acquisitions and organically in our current markets and any new markets. We have been very successful with integrating our past acquisitions, consolidations and growth in new markets. We intend to execute our strategic plan through the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Continuing Our Growth Strategy***. We intend to continue providing superior customer service while also continuing to grow our market share of deposits and loans in the markets we currently serve. We will look for strategic acquisitions that can help fill market voids while supporting balance sheet needs as the Bank continues its growth. We intend to continue the development of professional staff and executives through internal development, acquisitions and strategic external hires to support our growth and business complexities, while still maintaining our culture of superior customer service and dedication to Bank growth and expansion. We have successfully grown our balance sheet with loan growth of 43.8% and deposit growth of 37.1% between December 31, 2020 and June 30, 2025. We believe that our teams of engaged, experienced employees will continue to be an important factor in

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cultivating relationships with current and potential customers and driving growth. In addition to our employee focus, we have made significant investments in technology and risk management systems, and we believe that we have developed an infrastructure that can support significant additional growth with minimal capital investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Emphasizing Commercial Banking in Local Communities***. We intend to continue operating as a community banking organization focused on meeting the specific needs of small and medium-sized businesses and individuals in our market areas. We will continue to provide a high degree of responsiveness and a wide variety of banking products and services to our customers. We are focused on being a dominant bank in the smaller markets we serve and a competitive player in our larger metropolitan markets. Our consistent corporate message is that the success of our communities and their businesses and individuals will drive the success of the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Pursuing Growth Opportunities through Strategic Acquisitions and De Novo Expansion***. We anticipate continuing to selectively pursue strategic acquisitions and new market expansions through de novo openings to supplement organic growth in our legacy markets. Our organic growth has been complemented by synergistic acquisitions and de novo expansion. We seek to expand our operations in attractive and adjacent markets with experienced banking teams that are a cultural fit and knowledgeable of our target customer base. We may also make acquisitions or open additional offices in our existing markets. We intend to focus on acquisitions that provide meaningful financial benefits, long-term organic growth opportunities and economies of scale without compromising asset quality to the overall organization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Funding Asset Growth through Core Deposits and Relationship Banking***. We fund our loan growth primarily through low-cost core customer deposits. Our ratio of core deposits (total deposits less time deposits greater than or equal to $250,000 and brokered deposits) was 88.0% of total deposits as of June 30, 2025. Our loan to deposit ratio as of June 30, 2025 was 96.8%. The strength of our deposit franchise results from our development and maintenance of long-standing customer relationships. Our relationship managers and branch managers actively seek lending relationships with our existing depositors. We seek loan relationships with borrowers who have established cash flows and expertise in the projects financed by our loans. Most of our customers with large lending relationships ($2 million or more) with the Bank also have deposits with the Bank. Additionally, we attract deposits from our commercial customers by providing them with personal service, a broad suite of commercial banking and treasury management products and convenient services such as remote deposit capture and commercial internet banking.

The below chart demonstrates the growth in our commercial customer relationships for each of the fiscal years ended December 31, 2020 through 2024 and for the six months ended June 30, 2025:

#### Deposits by Customer Segment ($M)
![](tbarchart_005.jpg)

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Leveraging Technology to Enhance the Customer Experience and Improve Productivity***. We provide customer convenience through the use of technology and our mobile banking applications, along with our strategically placed banking locations. Since our founding, we have made significant investments in technology to offer online and mobile banking products that we believe are comparable to those offered by many similar-sized competitors and those of the nation's largest banks. We utilize Jack Henry & Associates, Inc. as a core processing service provider, whom we believe can support our growth plan. We also leverage technology solutions to manage cybersecurity risks and data privacy. In addition to customer-facing technology, significant investments have been made in the technology and software utilized by our employees. This technology and software enable our employees to be more productive by enhancing workflow and internal and external management reporting, removing unnecessary steps and reducing manual errors.

#### Competitive Strengths
We believe that the following strengths will help us execute our business strategy:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Experienced and Invested Leadership Coupled with a Distinct, Efficient, and Streamlined Customer***-Focused ***Corporate Culture***. Our Board has decades of combined business experience from a variety of backgrounds. Our directors actively participate in and support community activities, which we believe significantly benefits our business development efforts. Our executive leadership team is comprised of established industry veterans with a track record of profitable growth, operating efficiencies and strong risk management. In addition to our executive leadership team, we believe that we are supported by a deep and talented bench of market leaders, many of whom have been with us for much of our existence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Terry L. Lee*** *— President, Chief Executive Officer, and Director.* Terry L. Lee has 35 years of experience in the banking industry, all of which have been with the Bank. He has served as a member of our executive management team in various capacities since 1995 and has provided steady leadership to the Company and the Bank throughout this time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***J. Adam Robertson*** *— Executive Chairperson of the Board*. J. Adam Robertson has 24 years of experience in the banking industry, all of which have been with the Bank. He is primarily responsible for leading the Board and its strategic direction, and he also oversees our investor relations and marketing functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Philip J. Metheny*** *— Executive Vice President, Chief Financial Officer*. Philip J. Metheny has over 40 years of experience in the banking industry and joined the Bank in 2012. He is primarily responsible for overseeing our financial and accounting operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Richard C. Sprinkle, Jr.*** *— Executive Vice President, Chief Credit Officer.* Richard C. Sprinkle, Jr. has approximately 30 years of experience in the banking industry and joined the Bank in 2008. He is primarily responsible for overseeing the lending activities of the Bank.

Our corporate culture is customer-focused and disciplined, and we aim to provide highly personalized and efficient products and services that our customers find favorable in comparison to our peers. We focus on our customers and treat them like friends and family. We build trusted relationships because we act with integrity. We believe we deliver real value-add through our collaborative, high performance culture, and we strive to empower every employee to make decisions benefiting our customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• History of Successful Acquisitions and Integration***. We have pursued a strategy of disciplined organic and acquisitive growth. Since 2008, we have successfully completed five whole-bank acquisitions. Our management team has demonstrated success in identifying and integrating strategic acquisition targets that have either added density to our footprint or expanded our presence into attractive markets, to ultimately build long-term shareholder value. Following each transaction, we retained the majority of the acquired deposit and desired lending relationships, which we believe reflects the strength of our relationship-based community banking focus and the quality of our established integration processes. When negotiating a transaction, we are disciplined on price and structure in order to manage the initial tangible book value dilution and earn-back period. We believe our approach to acquisitions and our ability to offer a publicly traded stock as consideration in connection with future acquisitions after the completion of this offering will position us well to become an acquirer of choice for other institutions in our target markets.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Diversified Loan Portfolio.*** We have an attractive, commercially focused loan portfolio, with the portfolio consisting of 24% owner-occupied commercial real estate ("CRE") loans, 20% non-owner occupied CRE loans, 11% construction and land development ("C&D") loans, and 9% commercial loans at June 30, 2025. Our loan portfolio primarily consists of non-farm, non-residential real estate loans, which include owner-occupied, non-owner occupied, multi-family, C&D, and one-to-four-family residential loans. We have grown loans at a CAGR of 8% since 2020. Please refer to the "Total Net Loans" chart above on page 2 of this prospectus for the annual growth in our total net loans for each of the fiscal years ended December 31, 2020 through 2024 and for the six months ended June 30, 2025. Our loans are typically in market, except where we follow a local loan customer out of market. We typically only extend loans related to self-storage or multi-family projects if there are mitigating circumstances such as strong, liquid guarantors as a secondary source of repayment. We do not extend loans related to non-owner-occupied office space. We believe that our knowledgeable and prudent approach to commercial lending contributes to our relatively low loan losses caused by defaults.

The following table demonstrates the diversification of our commercial and owner-occupied CRE loan portfolios by industry as of June 30, 2025 (dollars in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  **Industry** | **Commercial** | **CRE-Owner-<br>Occupied** | **Total** | **% of Total** |
|  Real estate rental and leasing | $13032 | $64776 | $77808 | 13% |
|  Manufacturing | 20105 | 8102 | 28207 | 5% |
|  Finance and insurance | 45619 | 7538 | 53157 | 9% |
|  Other services (except public administration) | 4736 | 19479 | 24215 | 4% |
|  Retail trade | 1909 | 27256 | 29165 | 5% |
|  Health care and social assistance | 20605 | 18485 | 39090 | 7% |
|  Wholesale trade | 3637 | 6331 | 9968 | 2% |
|  Construction | 11601 | 13545 | 25146 | 4% |
|  Professional, scientific and technical services | 3718 | 6151 | 9870 | 2% |
|  Accommodation and food services | 4133 | 243342 | 247475 | 41% |
|  Arts, entertainment and recreation | 63 | 1927 | 1990 | 0% |
|  Other | 36532 | 16274 | 52805 | 9% |
|  **Total** | $**165690** | $**433207** | $**598897** | **100%** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Core Deposit Base.*** We have built a strong core deposit base by providing quality products and services to customers in our market areas. We offer retail deposit services through our existing branch network, as well as mobile and online banking services. Core deposits totaled $1.6 billion, or 88.0% of total deposits, and noninterest-bearing deposits totaled $417.0 million, or 22.5% of total deposits, as of June 30, 2025. Our commercial lending has led to strong core deposit growth with a 9% CAGR since 2020. Please refer to the "Core Deposits" chart below on page 8 of this prospectus for the annual growth in our core deposits for each of the fiscal years ended December 31, 2020 through 2024 and for the six months ended June 30, 2025.

![](tpiechart_001.jpg)

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![](timage_002.jpg)

<u> \* Y/Y Growth for 2Q25 reflects growth as compared to the six months ended June 30, 2024. </u>    

![](timage_003.jpg)

 \* Core deposits is a non-GAAP financial measure. Please see "Non-GAAP Financial Measures" for a definition of core deposits and a reconciliation of core deposits to its most directly comparable GAAP financial measure.<br> (1) Year-over-Year Growth Rate for 2Q25 reflects the rate of growth as compared to the six months ended June 30, 2024.<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Prudent Credit Risk Management***. We believe that we have a culture of well-developed risk management procedures at all levels of our organization. The loans in our loan portfolio primarily originate from borrowers within our footprint and are subject to a rigorous credit evaluation process that seeks to balance responsiveness with prudent underwriting and pricing practices. A centralized credit underwriting group underwrites all credit exposures, ensuring consistent application of credit standards. We have established processes to monitor our loan portfolio on a regular basis. Our management team and Board have established concentration limits by loan type, industry, and related borrowers, which are regularly reviewed in light of current conditions in our targeted market areas to mitigate developing risk areas within our loan portfolio and to ensure that the asset quality of our loan portfolio remains strong. Our commercial, CRE and consumer loans as a percentage of total loans at June 30, 2025 were 9.9%, 56.4% and 20.9%, respectively. When credit issues arise, our management team takes an active approach in handling the problem. We monitor our loan loss reserve and seek to maintain an adequate reserve for future losses.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Ability to Recruit and Retain Talented People***. We believe the success of our business model is due to our ability to attract and retain talented bankers in each of our markets. Each of our six major geographic markets is headed by a regional bank president that has the authority, working in tandem with the Bank's Central Loan Processing and Commercial Lender Support departments, to approve loans for his or her region up to a certain elevated level above commercial and consumer lenders (which loan approval limits, as well as loan policy exceptions, are monitored and enforced using the Bank's Credit Leader credit management system), hire his or her own employees consistent with the Bank's human resources ("HR") policies, terminate poor preforming employees consistent with the Bank's HR policies, influence product development, coordinate marketing efforts and be the lead executive over decision making in his or her market. This high level of responsibility and market status allows the Bank to attract and retain talented individuals in each of our markets. Regional bank presidents report directly to the President and Chief Executive Officer of the Bank, providing management oversight of the regional bank presidents and allowing a clear line of communication in decision making and keeping each market focused on both its individual goals and the overall goals of the Bank. With decisions related to talent and personnel being made on a market basis, we are able to identify key people in each market to employ and empower them to serve the Bank's growth in each market. We also focus on training and developing each employee to enable upward mobility within our organization as new job opportunities become available. We believe promoting employees from within is critical for core culture and motivating employees to develop, grow and stay with the Bank long term. Our mission of creating positive experiences for every customer, every day and our core values centered around knowledge, exceeding expectations, responsiveness, teamwork, reliability, and friendliness make us attractive for talented bankers and associates across our geographic footprint.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Scalable, Decentralized Operating Model****.* We operate each of our markets as individual markets, with an experienced market leader in charge of each market. Each of our market leaders and bankers is empowered to make local decisions up to specified limits set by our executive management based on experience and track record. We believe that the delivery by our bankers of in-market customer decisions, coupled with strong, centralized risk and credit support, allows us to best serve our customers. This operating model has been successful in our existing markets, and we believe it is highly replicable and scalable. This model can support our growth in existing and new markets either organically or through opportunistic acquisitions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Shareholder Focus.*** We started the Bank with a strategic plan to provide consistent, long-term growth and returns to our shareholders. Our tangible book value per share increased 87.8% from December 31, 2020 to June 30, 2025, during which period we also increased dividends and generated strong returns on capital. We believe that our experienced leadership team, commitment to organic and acquisitive growth, and prudent risk management will allow us to consistently build value for our shareholders.

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#### Our Markets
As of June 30, 2025, we provided banking services from 34 banking offices in Kentucky, North Carolina, and Tennessee and one LPO in North Carolina. Our markets are a mix of higher-growth areas and stable markets with strong core deposits. We have a top five deposit market share in seven counties of operation and have outperformed as to deposit growth in the majority of our markets. We find strength in the stability of our rural markets coupled with higher growth potential in metropolitan areas such as the Charlotte MSA, the Knoxville MSA, the Nashville MSA and the Tri-Cities MSA. Below is a description of our operations in our primary market areas:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **Market** | **Total <br>Population <br>2025\* <br>(Estimated)** | **Projected <br>Population <br>Change <br>2025 – 2030\* <br>(%)** | **Projected <br>Median <br>Household <br>Income <br>2030\* <br>($)** | **Projected <br>Household <br>Income <br>Change <br>2025 – 2030\* <br>(%)** | **Unemployment <br>Rate\*\* <br>(%)** |
|  ***Key Metropolitan Markets*** |  |  |  |  |  |
|  Charlotte MSA | 2882670 | 6.6 | 89900 | 10.3 | 3.3 |
|  Knoxville MSA | 968900 | 5.9 | 79167 | 10.7 | 3.2 |
|  Nashville MSA | 2153421 | 5.6 | 94359 | 10.8 | 2.9 |
|  Kingsport-Bristol, Tennessee-Virginia\*\*\* | 316084 | 2.8 | 63674 | 9.1 | 3.4 |
|  Johnson City, Tennessee\*\*\* | 217530 | 4.7 | 68275 | 10.3 | 3.9 |
|  ***Other Markets (Counties)*** |  |  |  |  |  |
|  Laurel, Kentucky | 63914 | 3.1 | 62949 | 6.3 | 5.7 |
|  Knox, Kentucky | 29742 | 0.0 | 39025 | 6.0 | 7.4 |
|  Harlan, Kentucky | 24770 | (5.5) | 41717 | 7.3 | 9.6 |
|  Whitley, Kentucky | 36887 | 1.3 | 49025 | 3.8 | 5.5 |
|  Cleveland, North Carolina | 102485 | 2.7 | 60229 | 11.5 | 3.4 |
|  Claiborne, Tennessee | 33111 | 3.3 | 52777 | 10.4 | 3.9 |
|  Cocke, Tennessee | 38232 | 5.4 | 53200 | 7.1 | 4.9 |
|  Union, Tennessee | 21243 | 6.0 | 65667 | 6.9 | 4.1 |
|  Hamblen, Tennessee | 67602 | 4.8 | 64071 | 6.2 | 3.4 |

---

\* Demographic data provided by Claritas<sup>TM</sup> based on U.S. census data and secured from S&P Global Market Intelligence. For non-census year data, Claritas uses samples and projections to estimate the demographic data. S&P Global Market Intelligence performs calculations on the underlying data provided by Claritas for some of the data presented on this page.

\*\* Source: U.S. Bureau of Labor Statistics.

\*\*\* Kingsport-Bristol, Tennessee-Virginia and Johnson City, Tennessee constitute the Tri-Cities MSA.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  **Market** | **Market <br>Rank\*\*\* <br>(Deposits)** | **Deposit <br>Market <br>Share\*\*\* <br>(%)** | **Number <br>of <br>Branches** | **Number <br>of <br>Branches** | **Market <br>Deposits\*\*\* <br>($) <br>(in millions)** | **Deposits Per <br>Branch\*\*\*<sup>(1)</sup> <br>($) <br>(in millions)** | **Year-over-<br>Year Deposit <br>Growth\*\*\*\* <br>(%)** |
|  ***Key Metropolitan Markets*** |  |  |  |  |  |  |  |
|  Charlotte MSA | 36 | 0.02 | 2 |  | 93.8 | 46.9 | (4.5) |
|  Knoxville MSA | 16 | 0.90 | 4 |  | 225.0 | 37.5 | 3.8 |
|  Nashville MSA | 60 | 0.04 | 1 |  | 34.3 | 34.3 | 42.7 |
|  Kingsport-Bristol, Tennessee-Virginia<sup>(2)</sup> | 19 | 0.60 | 1 |  | 32.5 | 32.5 | 38.2 |
|  Johnson City, Tennessee<sup>(2)</sup> | 18 | 0.10 | 1 |  | 4.5 | 4.5 | 14.3 |
|  ***Other Markets (Counties)*** |  |  |  |  |  |  |  |
|  Laurel, Kentucky | 2 | 20.68 | 5 |  | 236.4 | 47.3 | 4.3 |
|  Knox, Kentucky | 2 | 27.47 | 4 |  | 149.1 | 37.3 | (2.5) |
|  Harlan, Kentucky | 4 | 17.65 | 2 |  | 88.1 | 44.0 | 17.0 |
|  Whitley, Kentucky | 7 | 0.24 | 1 |  | 1.3 | 1.3 | 4.5 |
|  Cleveland, North Carolina | 4 | 10.79 | 2 |  | 152.9 | 76.5 | 22.5 |
|  Claiborne, Tennessee | 1 | 53.53 | 5 | \*\*\*\*\* | 561.8 | 112.4 | 28.4 |
|  Cocke, Tennessee | 3 | 23.66 | 2 |  | 179.3 | 89.6 | 2.6 |
|  Union, Tennessee | 1 | 52.83 | 2 |  | 130.3 | 65.1 | 10.1 |
|  Hamblen, Tennessee | 6 | 3.66 | 2 |  | 49.7 | 24.9 | (6.6) |

---

____________

\*\*\* *Source: FDIC; Deposit data as of 6/30/24.*

*\*\*\*\* Calculated using FDIC Deposit data as of 6/30/24.*

*\*\*\*\*\* Includes the banking facility located in our principal executive office.*

(1) Deposits per branch reflects an average for those markets with more than one branch.

(2) Kingsport-Bristol, Tennessee-Virginia and Johnson City, Tennessee constitute the Tri-Cities MSA.

*Charlotte, North Carolina.* The Charlotte MSA serves as a premier financial and economic hub within the Southeastern United States. The Charlotte MSA has an estimated population of nearly 2.9 million residents that is expected to grow by approximately 6.6% over the next five years, according to demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market. Recognized as the second-largest banking center in the nation, Charlotte boasts robust demographics, rising household incomes, and a dynamic labor market that continues to attract top talent. Charlotte hosts the corporate headquarters of major financial institutions, including Bank of America and Truist Financial, and serves as a critical nexus for the energy, healthcare, and logistics sectors. Its strategic location along the I-85 corridor, coupled with proximity to Charlotte Douglas International Airport — one of the busiest airports globally — solidifies its standing as a pivotal center for commerce and transportation. The region's vibrant quality of life, encompassing professional sports teams, a thriving cultural scene, and extensive outdoor recreation opportunities, further enhances its ability to attract and retain a highly skilled workforce. Charlotte's dominance in the financial industry, coupled with its burgeoning innovation ecosystem, creates an unparalleled opportunity for long-term growth and economic stability.

*Knoxville, Tennessee.* The Knoxville MSA constitutes a dynamic and expanding economic center in East Tennessee. The Knoxville MSA has an estimated population of nearly one million residents that is expected to grow by approximately 5.9% over the next five years, according to demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market. Known for its low cost of living, the Knoxville MSA boasts a robust business climate and has a median household income that is projected to reach approximately $79,000 by 2030, according to demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market. Strategically positioned as a hub for economic activity, the Knoxville MSA hosts key industries, including advanced manufacturing, energy production, and logistics. Knoxville is further enhanced by the presence of prominent institutions such as the University of Tennessee and Oak Ridge National Laboratory, both of which serve as significant drivers of innovation and workforce development. Knoxville's proximity to critical interstate highways and rail systems amplifies its appeal as a premier center for transportation and logistics operations. Moreover, the Knoxville MSA offers a comprehensive range of amenities, including professional sports teams, abundant outdoor recreation, and a pro-business regulatory environment.

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*Nashville, Tennessee.* The Nashville MSA represents one of the most rapidly expanding metropolitan regions within the United States. The Nashville MSA has an estimated population of approximately 2.2 million residents that is projected to increase by approximately 5.6% over the next five years, according to demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market. The Nashville MSA has favorable demographics, with its median household income projected to reach approximately $94,000 by 2030, according to demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market. Recognized as the "Music City," Nashville consistently attracts young professionals and is widely acclaimed for its vibrant cultural scene, dynamic labor market, and relative affordability. The region has garnered national recognition, with *Forbes* ranking Nashville among the Best Places for Business and Careers. Nashville's healthcare industry is a major cornerstone of its economy, contributing billions annually and employing a significant portion of the workforce. The Nashville MSA serves as the headquarters for several Fortune 500 and industry-leading corporations, including HCA Healthcare, Inc., Nissan North America Inc., and Bridgestone Americas, Inc., as well as the announced future world headquarters of Oracle Corporation. Strategically positioned as a transportation and logistics hub, the Nashville MSA provides significant economic advantages, supported by a highly skilled workforce and a business-friendly environment. Beyond its economic benefits, Nashville boasts a number of professional sports teams, a flourishing arts scene, and renowned universities, such as Vanderbilt University.

*Tri*-Cities*, Tennessee.* The Tri-Cities MSA represents a dynamic and expanding economic hub in Northeast Tennessee and Southwest Virginia. The Tri-Cities MSA has an estimated population exceeding 500,000 that is expected to grow, as well as a favorable business climate characterized by rising household incomes and low operational costs for businesses. The Tri-Cities MSA boasts a diversified economic base, anchored by critical sectors such as healthcare, manufacturing, logistics, and tourism. Key regional assets include East Tennessee State University and Ballad Health, both of which play pivotal roles in advancing the area's educational and healthcare infrastructure. The region's strategic location at the intersection of major interstate highways (I-81 and I-26) further enhances its appeal as a logistics and distribution center, offering seamless access to regional and national markets.

#### Corporate Information
Our principal executive office is located at 6710 Cumberland Gap Parkway, Harrogate, Tennessee 37752, and our telephone number is 423-869-5151. Our website address is *www.cbtn.com*. The information contained on or accessible from our website is not part of this prospectus and is not incorporated into this prospectus or the registration statement of which it forms a part.

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#### Summary of Risk Factors
You should carefully consider the risks described under "Risk Factors" beginning on page 23 of this prospectus, as well as other information included in this prospectus, including our financial statements and the notes thereto, before making an investment decision. Below is a summary of some of the principal risks we face:

*Risks Related to Our Business*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in interest rates may adversely affect our earnings and financial condition.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Increases in interest rates have in the past resulted in, and could in the future result in, unrealized losses on our investment securities portfolio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If the average interest rate we pay on our deposits increases, our cost of funds would rise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We could suffer losses from a decline in the credit quality of the assets that we hold.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may not be able to adequately measure and limit the credit risks associated with our loan portfolio, which could adversely affect our profitability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• CRE lending may expose us to increased lending risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are subject to environmental risks associated with owning real estate or collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our allowance for estimated loan losses may not be adequate to cover actual loan losses, which may require us to take a charge to earnings and adversely impact our financial condition and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our liquidity needs might adversely affect our financial condition and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may be materially and adversely affected by the creditworthiness and liquidity of other financial institutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to maintain required capital levels and adequate sources of funding and liquidity could be impacted by changes in the capital markets and deteriorating economic and market conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our business is concentrated in, and largely dependent upon, the continued growth of, and economic conditions in, the markets where we operate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Negative developments in the U.S. economy and local economies in our primary markets may adversely impact our results in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As a community bank, our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As a community banking institution, we have smaller lending limits and different lending risks than certain of our larger, more diversified competitors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our business may suffer if there are significant declines in the value of real estate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our selection of accounting policies and methods may affect our reported financial results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We currently invest in bank owned life insurance ("BOLI") and may continue to do so in the future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The internal controls that we have implemented in order to mitigate risks inherent to the business of banking might fail or be circumvented.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Changes in accounting standards could materially impact our financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The implementation of new lines of business or new products and services may subject us to additional risk.

*Risks Related to Acquisition and other Expansionary Activity*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may grow through mergers or acquisitions and other future expansionary activity, which strategy may not be successful or, if successful, may result in additional risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our "Needs to Improve" rating under the Community Reinvestment Act (the "CRA") may restrict our operations and limit our ability to pursue certain strategic opportunities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Acquisitions may disrupt our business and dilute shareholder value, and integrating acquired companies may be more difficult, costly, or time-consuming than we expect.

[**Table of Contents**](#TOC001)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our financial performance will be negatively impacted if we are unable to execute our growth strategy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our historical growth rate and performance may not be indicative of our future growth or financial results.

*Risks Related to Technology and Cybersecurity*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are dependent on our information technology and telecommunications systems and third-party servicers, and systems failures or interruptions or breaches of security could have a material adverse effect on our financial condition and results of operations, as well as cause legal or reputational harm.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We continually encounter technological change and may have fewer resources than our competitors to continue to invest in technological improvements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The adoption of artificial intelligence ("AI") tools by us and our third-party vendors and service providers may increase the risk of errors, omissions, unfair treatment or fraudulent behavior by our employees, customers or counterparties, or other third parties.

*Legal, Regulatory and Compliance Risks*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are subject to extensive regulation in the conduct of our business, which imposes additional costs on us and adversely affects our profitability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Federal and state banking agencies periodically conduct examinations of our business, including our compliance with laws and regulations, and our failure to comply with any supervisory actions to which we become subject as a result of such examinations could materially and adversely affect us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Federal, state and local consumer lending laws may restrict our ability to originate certain mortgage loans or increase our risk of liability with respect to such loans and could increase our cost of doing business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are subject to federal and state fair lending laws, and failure to comply with these laws could lead to material penalties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We face the risk of noncompliance with, and enforcement actions related to, the Bank Secrecy Act and other anti-money laundering laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• FDIC deposit insurance assessments may materially increase in the future, which would have an adverse effect on our earnings and results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Bank is, and the Company may become, subject to regulatory capital requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Federal Reserve may require us to commit capital resources to support the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may need to raise additional capital in the future, including as a result of heightened regulatory capital requirements, but that capital may not be available, or available on favorable terms, when it is needed or may be dilutive to shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company is an entity separate and distinct from the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our ability to pay dividends is subject to restriction by various laws and regulations and other factors.

*Risks Related to this Offering and an Investment in Our Common Stock*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The Company's ability to pay cash dividends is limited, and we may be unable to pay future dividends even if we desire to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have broad discretion in the use of the net proceeds from this offering, and our use of those proceeds may not yield a favorable return on your investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have shareholders who own significant portions of our common stock and those shareholders' interests may differ from those of our other shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Future sales or the availability for sale of substantial amounts of our common stock in the public market could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital through future sales of equity securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There are substantial regulatory limitations on changes of control of bank holding companies that may discourage investors from purchasing shares of our common stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An investment in our common stock is not an insured deposit and is subject to risk of loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The sale of shares of our common stock by the selling shareholders may cause the market price of our common stock to decline.

[**Table of Contents**](#TOC001)

#### The Offering
*This summary highlights information presented in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all the information you should consider before investing in our common stock. You should carefully read this entire prospectus before investing in our common stock, including "Risk Factors" and our consolidated financial statements and related notes appearing elsewhere in this prospectus.*

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| | |
|:---|:---|
|  **Common stock offered by us** | shares. |
|  **Common stock offered by the selling shareholders** | shares (excluding the underwriter's option to purchase additional shares of our common stock). |
|  **Option to purchase additional shares of common stock offered by the selling shareholders** | The selling shareholders have granted the underwriter a 30-day option to purchase up to additional shares of our common stock at the public offering price, less the underwriting discounts and commissions. |
|  **Common stock outstanding immediately after completion of this offering** | shares of common stock. |
|  **Use of proceeds** | Assuming an initial public offering price of $ per share, which is the midpoint of the offering price range set forth on the cover page of this prospectus, we estimate that the net proceeds to us from the sale of our common stock in this offering will be $, after deducting the estimated underwriting discounts and commissions and offering expenses payable by us. We intend to use the net proceeds from this offering to repay in full the outstanding indebtedness under our Amended and Restated Loan Agreement, dated January 27, 2020, with Community Trust Bank, Inc. (the "Community Trust Loan Agreement" and the loan thereunder, the "CTB Loan"), to redeem in full our outstanding Subordinated Debentures and related Trust Preferred Securities (as each such term is defined under "Management's Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition"), and to use the remaining net proceeds, if any, for general corporate purposes.<br> We will not receive any proceeds from the sale of shares by selling shareholders.<br> See "Use of Proceeds" for more information. |
|  **Dividend policy** | Our shareholders are entitled to receive dividends on common stock only if, when and as declared by our Board from funds legally available therefor under Tennessee law and as limited by our banking regulators. We have historically paid cash dividends annually to holders of our common stock; however, following this offering and subject to and at the discretion of our Board, we plan to initially not pay dividends during our first year as a public company. After the beginning of the fiscal year 2026, we intend to pay quarterly cash dividends to holders of our common stock. Nevertheless, we have no obligation to pay dividends and any future determination relating to dividends will be made at the discretion of our Board and will depend on our financial condition, liquidity, results of operations, capital levels and needs and other factors deemed relevant by our Board. See "Dividend Policy" and "Risk Factors." |

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[**Table of Contents**](#TOC001)

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| | |
|:---|:---|
|  **Directed share program** | At our request, the underwriter has reserved for sale at the initial public offering price approximately [ ]% of the shares offered hereby for the directors, executive officers and employees of the Company and the Bank and other designated persons. The number of shares available for sale to the general public will be reduced to the extent such persons purchase reserved shares. Any reserved shares not so purchased will be offered by the underwriter to the general public on the same basis as the other shares offered hereby. Directors, executive officers and employees of the Company and the Bank and other designated persons have expressed an intent to buy approximately $ of shares in this offering through the directed share program. See "Underwriting — Directed Share Program." |
|  **Proposed trading symbol** | We have applied to list our common stock with Nasdaq under the trading symbol "CBK." |
|  **Risk factors** | Investing in our common stock involves risks. See "Risk Factors," beginning on page 23, for a discussion of factors that you should carefully consider before making an investment decision. |

---

Except as otherwise indicated, all information in this prospectus relating to the number of shares of our common stock to be outstanding immediately after the completion of this offering is based on shares outstanding as of , 2025.

Except as otherwise indicated, all information in this prospectus:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• relating to share and per share data gives effect to the Stock Reclassification and the Stock Split;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• does not attribute to any director, executive officer or principal shareholder any purchase of shares of our common stock in this offering, including through the directed share program described in "Underwriting — Directed Share Program";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• assumes no exercise by the underwriter of its option to purchase additional shares of our common stock from the selling shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• assumes an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• excludes 850,000 additional shares of our common stock that are reserved for future issuance under the Commercial Bancgroup, Inc. 2025 Omnibus Incentive Plan (the "2025 Plan").

[**Table of Contents**](#TOC001)

#### Selected Historical Consolidated Financial Data and Other Information
The following table sets forth selected historical consolidated financial information for each of the periods indicated. The selected historical consolidated financial information as of and for the six months ended June 30, 2025 and 2024, except for the selected ratios, is derived from our unaudited consolidated financial statements included elsewhere in this prospectus. The selected historical consolidated financial information as of and for the years ended December 31, 2024 and 2023, except for the selected ratios, is derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected historical consolidated financial information as of and for the years ended December 31, 2022, 2021 and 2020, except for the selected ratios, is derived from our audited consolidated financial statements not included in this prospectus.

Our results of operations for any period are not necessarily indicative of the results to be expected in any future period. You should read the information set forth below in conjunction with the sections titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Capitalization," as well as our consolidated financial statements and the related notes included elsewhere in this prospectus.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **At or for the Six Months <br>Ended June 30,** | **At or for the Six Months <br>Ended June 30,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** |
|  | **2025** | **2024** | **2024** | **2023** | **2022** | **2021** | **2020** |
|  | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** |
|  **Statement of Operations Data:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest and dividend <br>income | $61625 | $61259 | $123213 | $102637 | $65320 | $59206 | $62412 |
| &nbsp;&nbsp;&nbsp; Interest expense | 22226 | 22498 | 45629 | 30536 | 8399 | 8364 | 12984 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net interest income | 39399 | 38761 | 77584 | 72101 | 56921 | 50842 | 49428 |
| &nbsp;&nbsp;&nbsp; (Recapture of) provision for credit losses |  | 1501 | 1829 | 3274 | 778 | 396 | 1914 |
| &nbsp;&nbsp;&nbsp; Noninterest income | 4667 | 5070 | 10878 | 9619 | 9201 | 7431 | 7150 |
| &nbsp;&nbsp;&nbsp; Noninterest expense | 21306 | 21622 | 46061 | 38754 | 32981 | 32603 | 37527 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income before taxes | 22759 | 20708 | 40572 | 39692 | 32364 | 25273 | 17137 |
| &nbsp;&nbsp;&nbsp; Income tax expense | 5168 | 3840 | 8886 | 8480 | 7281 | 5913 | 3833 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income | 17591 | 16868 | 31686 | 31212 | 25082 | 19360 | 13304 |
| &nbsp;&nbsp;&nbsp; Net income attributable to non-controlling interest |  | 276 | 276 | 519 |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income attributable to common <br>shareholders | $17591 | $16592 | $31410 | $30693 | $25082 | $19360 | $13304 |
|  **Balance Sheet Data:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Assets | $2262511 | $2223758 | $2301211 | $2196609 | $1741851 | $1712779 | $1614202 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash <br>equivalents | 151282 | 147975 | 178198 | 155941 | 61911 | 142013 | 145754 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities available for sale, at fair value | 30113 | 39139 | 47938 | 52041 | 35846 | 84888 | 106263 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Securities held-to-maturity, at carrying value, net of allowance for credit losses | 157452 | 145955 | 128217 | 158632 | 180067 | 161472 | 2566 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loans, net of allowance for credit losses | 1773527 | 1723475 | 1788792 | 1669846 | 1317600 | 1194311 | 1233589 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill | 8511 | 8511 | 8514 | 8511 | 741 | 877 | 877 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Core deposit intangible | 5035 | 6717 | 5825 | 7632 | 3528 | 4352 | 5179 |
| &nbsp;&nbsp;&nbsp; Liabilities | $2027243 | $2013174 | $2080955 | $2000832 | $1583404 | $1572912 | $1490607 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deposits | 1851248 | 1815917 | 1938597 | 1819923 | 1420679 | 1448821 | 1350381 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-term borrowings | 46300 | 48336 | 3392 | 6047 | 7736 | 10213 | 22069 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-term debt | 102209 | 113084 | 105773 | 143217 | 117940 | 100789 | 98222 |
| &nbsp;&nbsp;&nbsp; Shareholders' equity | 235268 | 210584 | 220256 | 195777 | 158447 | 139867 | 123595 |
| &nbsp;&nbsp;&nbsp; Tangible equity | 221722 | 195356 | 205917 | 179634 | 154179 | 134638 | 117540 |
|  **Per Share Data:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Common shares outstanding at period end | 12239644 | 12208881 | 12113144 | 12211756 | 12052088 | 12201988 | 12347463 |

---

[**Table of Contents**](#TOC001)

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **At or for the Six Months <br>Ended June 30,** | **At or for the Six Months <br>Ended June 30,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** |
|  | **2025** | **2024** | **2024** | **2023** | **2022** | **2021** | **2020** |
|  | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** |
| &nbsp;&nbsp;&nbsp; Weighted average common shares (diluted) | 12188624 | 12389694 | 12367248 | 12225390 | 12127038 | 12274725 | 12347463 |
| &nbsp;&nbsp;&nbsp; Earnings per common share, <br>diluted | $1.44 | $1.36 | $2.54 | $2.51 | $2.07 | $1.58 | $1.08 |
| &nbsp;&nbsp;&nbsp; Book value per common share at period end | $19.22 | $16.78 | $18.18 | $15.59 | $13.15 | $11.46 | $10.01 |
| &nbsp;&nbsp;&nbsp; Dividends per share | $0.16 | $0.16 | $0.17 | $0.12 | $0.12 | $0.06 | $0.06 |
|  **Performance Ratios:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Return on average equity | 15.71% | 17.12% | 15.34% | 17.62% | 16.82% | 14.70% | 11.32% |
| &nbsp;&nbsp;&nbsp; Return on average assets | 1.55% | 1.53% | 1.43% | 1.57% | 1.45% | 1.14% | 0.85% |
| &nbsp;&nbsp;&nbsp; Yield on average interest earning assets<sup>(1)</sup> | 5.84% | 6.01% | 5.96% | 5.58% | 4.07% | 3.89% | 4.42% |
| &nbsp;&nbsp;&nbsp; Yield on cash<sup>(2)</sup> | 4.18% | 4.89% | 4.92% | 4.86% | 1.58% | 0.30% | 0.82% |
| &nbsp;&nbsp;&nbsp; Yield on securities portfolio<sup>(3)</sup> | 2.76% | 1.84% | 1.83% | 1.28% | 1.07% | 1.32% | 2.04% |
| &nbsp;&nbsp;&nbsp; Yield on loan portfolio<sup>(4)</sup> | 6.28% | 6.59% | 6.52% | 6.26% | 4.86% | 4.77% | 4.99% |
| &nbsp;&nbsp;&nbsp; Cost of interest-bearing deposits<sup>(5)</sup> | 2.67% | 2.77% | 2.79% | 1.99% | 0.47% | 0.54% | 1.02% |
| &nbsp;&nbsp;&nbsp; Cost of funds<sup>(6)</sup> | 2.77% | 2.90% | 2.91% | 2.24% | 0.70% | 0.71% | 1.18% |
| &nbsp;&nbsp;&nbsp; Net interest margin<sup>(7)</sup> | 3.73% | 3.80% | 3.75% | 3.92% | 3.55% | 3.34% | 3.50% |
| &nbsp;&nbsp;&nbsp; Noninterest income as a percentage of average <br>assets | 0.41% | 0.46% | 0.49% | 0.48% | 0.53% | 0.44% | 0.46% |
| &nbsp;&nbsp;&nbsp; Noninterest expense as a percentage of average <br>assets | 1.88 | 1.96% | 2.08% | 1.95% | 1.91% | 1.92% | 2.40% |
| &nbsp;&nbsp;&nbsp; Efficiency ratio<sup>(8)</sup> | 48.35% | 49.33% | 52.07% | 47.42% | 49.88% | 55.95% | 66.33% |
|  **Liquidity & Asset Quality Ratios:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Liquidity ratio<sup>(9)</sup> | 16.71% | 16.54% | 17.03% | 18.32% | 17.55% | 24.69% | 17.08% |
| &nbsp;&nbsp;&nbsp; Loan-to-deposit ratio | 96.77% | 95.91% | 93.21% | 92.67% | 93.66% | 83.21% | 92.16% |
| &nbsp;&nbsp;&nbsp; Nonaccrual loans | $5846 | $4936 | $5059 | $4888 | $4005 | $4804 | $14541 |
| &nbsp;&nbsp;&nbsp; Loans 90 days past due and still accruing | 6 | 15 | 2 | 342 | 8 | 5 | 11 |
| &nbsp;&nbsp;&nbsp; Other real estate owned | 861 | 1089 | 832 | 1046 | 1709 | 2285 | 9287 |
| &nbsp;&nbsp;&nbsp; Non-performing assets | 6713 | 6040 | 5893 | 6276 | 5722 | 7095 | 23839 |
| &nbsp;&nbsp;&nbsp; Non-performing assets to <br>total assets | 0.30% | 0.27% | 0.26% | 0.29% | 0.33% | 0.41% | 1.48% |
| &nbsp;&nbsp;&nbsp; Net loan charge-offs | 216 | 31 | 259 | 87 | (1092) | 113 | 173 |
| &nbsp;&nbsp;&nbsp; Net loan charge-offs (recoveries) to average loans outstanding | 0.02% | 0.01% | 0.01% | 0.01% | (0.09)% | 0.01% | 0.01% |
|  **Capital Information (Commercial Bancgroup, Inc.)**<sup>(10)</sup> |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Tier 1 capital | $229716 | $204289 | $214482 | $188722 | $163940 | $142181 | $125763 |
| &nbsp;&nbsp;&nbsp; Total regulatory capital | $247705 | $222394 | $232688 | $205357 | $177000 | $153371 | $136670 |
| &nbsp;&nbsp;&nbsp; Tier 1 leverage ratio | 10.07% | 9.24% | 9.62% | 8.77% | 9.55% | 8.39% | 8.07% |
| &nbsp;&nbsp;&nbsp; Common equity Tier 1 capital ratio | 12.14% | 10.76% | 11.08% | 10.18% | 11.47% | 10.93% | 9.98% |
| &nbsp;&nbsp;&nbsp; Tier 1 risk-based capital ratio | 12.44% | 11.06% | 11.37% | 10.48% | 11.86% | 11.35% | 10.41% |
| &nbsp;&nbsp;&nbsp; Total risk-based capital ratio | 13.41% | 12.04% | 12.34% | 11.40% | 12.80% | 12.25% | 11.31% |
|  **Capital Information (Commercial Bank)**<sup>(10)</sup> |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Tier 1 capital | $249436 | $201821 | $235674 | $193842 | $183638 | $167118 | $150269 |
| &nbsp;&nbsp;&nbsp; Total regulatory capital | $267495 | $215964 | $253949 | $207918 | $196768 | $178377 | $161247 |
| &nbsp;&nbsp;&nbsp; Tier 1 leverage ratio | 11.22% | 10.59% | 10.57% | 10.33% | 10.70% | 9.85% | 9.64% |
| &nbsp;&nbsp;&nbsp; Common equity tier 1 capital ("CET1") | 13.60% | 12.47% | 12.49% | 12.35% | 13.28% | 13.33% | 12.44% |
| &nbsp;&nbsp;&nbsp; Tier 1 risk-based capital ratio | 13.60% | 12.47% | 12.49% | 12.35% | 13.28% | 13.33% | 12.44% |
| &nbsp;&nbsp;&nbsp; Total risk-based capital ratio | 14.58% | 13.34% | 13.46% | 13.24% | 14.23% | 14.23% | 13.35% |

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[**Table of Contents**](#TOC001)

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **At or for the Six Months <br>Ended June 30,** | **At or for the Six Months <br>Ended June 30,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** | **At or for the Year Ended December 31,** |
|  | **2025** | **2024** | **2024** | **2023** | **2022** | **2021** | **2020** |
|  | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** |
|  **Real Estate – Commercial and Construction Concentration:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Construction and land development loans | $189187 | $226602 | $199800 | $186764 | $170250 | $156065 | $131770 |
| &nbsp;&nbsp;&nbsp; Commercial real estate and construction loans | 751901 | 677924 | 771160 | 660527 | 547788 | 470453 | 419566 |
| &nbsp;&nbsp;&nbsp; Commercial real estate loans to total risk-based capital<sup>(11)</sup> | 281.09% | 313.91% | 303.67% | 317.69% | 278.39% | 263.74% | 260.20% |
| &nbsp;&nbsp;&nbsp; Acquisition, development and construction loans to total risk-based capital<sup>(12)</sup> | 70.73 | 104.93% | 78.68% | 89.83% | 86.52% | 87.49% | 81.72% |
|  **Composition of Loan Portfolio:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Commercial real estate | $1016229 | $918387 | $1006207 | $894265 | $633239 | $531220 | $519728 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 189187 | 226602 | 199800 | 186764 | 170250 | 156065 | 131770 |
| &nbsp;&nbsp;&nbsp; Residential real estate | 376442 | 356135 | 369308 | 359014 | 319150 | 314046 | 361560 |
| &nbsp;&nbsp;&nbsp; Commercial & industrial | 178832 | 205543 | 201593 | 220827 | 184637 | 174630 | 198774 |
| &nbsp;&nbsp;&nbsp; Consumer | 14636 | 16917 | 15214 | 16707 | 16040 | 19005 | 21903 |
| &nbsp;&nbsp;&nbsp; Other | 23063 | 22228 | 23560 | 18718 | 12147 | 14640 | 16448 |
|  **Composition of Deposits:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Demand | $926886 | $901637 | $976481 | $922117 | $757820 | $725059 | $626385  |
| &nbsp;&nbsp;&nbsp; Money market & savings | 382788 | 309909 | 385615 | 381680 | 311799 | 306709 | 251688 |
| &nbsp;&nbsp;&nbsp; Time deposits greater than or equal to $250,000 | 97209 | 92555 | 94741 | 68395 | 47202 | 51293 | 59886 |
| &nbsp;&nbsp;&nbsp; Time deposits less than $250,000 | 444365 | 451482 | 481798 | 426427 | 303858 | 365761 | 412639 |

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(1) Yield on average interest-earning assets is calculated as total interest and dividend income divided by average total interest-earning assets.

(2) Yield on cash is calculated as interest earned on interest-bearing deposits in other banks divided by average interest-bearing deposits in other banks. Interest-bearing deposits in other banks primarily consist of reserves held at the Federal Reserve, which are included in cash and cash equivalents on our balance sheets.

(3) Yield on securities portfolio is calculated as interest earned on investment securities divided by average investment securities.

(4) Yield on loan portfolio is calculated as interest earned on loans divided by average loans.

(5) Cost of interest-bearing deposits is calculated as interest paid on total interest-bearing deposits divided by average total interest-bearing deposits.

(6) Cost of funds is calculated as total interest expense divided by the sum of average total interest-bearing liabilities and average demand deposits.

(7) Net interest margin is net interest income expressed as a percentage of average interest-earning assets.

(8) Efficiency ratio is calculated as noninterest expense divided by the sum of net interest income and noninterest income. Efficiency ratio is a non-GAAP financial measure. Please see "Non-GAAP Financial Measures" for a definition of efficiency ratio and a reconciliation of efficiency ratio to its most directly comparable GAAP financial measure.

(9) Liquidity ratio is calculated as the sum of cash and cash equivalents and unpledged investment grade securities expressed as a percentage of total liabilities.

(10) Capital information is calculated in accordance with regulatory accounting principles specified by regulatory agencies for supervisory reporting purposes.

(11) CRE loans to total risk-based capital is calculated as the sum of non-owner occupied, nonfarm, nonresidential property loans, multifamily property loans, and construction and land development loans divided by total regulatory capital, in accordance with regulatory accounting principles specified by regulatory agencies for supervisory reporting purposes.

(12) Acquisition, development and construction loans to total risk-based capital is calculated as acquisition, development and construction loans divided by total regulatory capital.

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#### Non-GAAP Financial Measures
This prospectus contains "non-GAAP financial measures" within the meaning of Item 10(e) of Regulation S-K. Non-GAAP financial measures are financial measures that are not presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"). We use these non-GAAP financial measures in the internal evaluation of our performance and management of our business as well as to explain our results to shareholders and the wider investment community. The following non-GAAP financial measures appear in this prospectus:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Core deposits***. We calculate core deposits by excluding jumbo time deposits (deposits greater than or equal to $250,000) from total deposits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Core net income***. We define core net income as net income plus acquisition related expenses, net of the related tax effect of acquisition related expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Core diluted earnings per share***. We define core diluted earnings per share as core net income divided by diluted weighted average shares outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Core ROAA.*** We define core ROAA as core net income divided by average assets, with average assets based upon the average daily balance of total assets in each year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Core return on average tangible common equity.*** We define core return on average tangible common equity as core net income divided by total average shareholders' equity less average intangible assets (goodwill and core deposit intangibles).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Core efficiency ratio.*** We define core efficiency ratio as operating revenue (net interest income, plus total noninterest income, divided by noninterest expenses (less acquisition related expenses)). This ratio is an indicator used by our management to assess operating efficiencies and is intended to demonstrate how efficiently our management is controlling expenses relative to generating revenues on our core activities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Efficiency Ratio*.** We define efficiency ratio as operating expenses divided by fee income plus tax equivalent net interest income. This metric indicates how effectively the Company manages its expenses relative to its income, providing insights into cost management and profitability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Pre***-tax***, pre***-provision ***ROAA*.** We define pre-tax, pre-provision ROAA as pre-tax, pre-provision net income divided by average assets calculated based upon the average daily balance of total assets in each year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Tangible assets.*** We define tangible assets as total assets less goodwill and other intangible assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Tangible book value per share*.** We define tangible book value per share as our tangible common equity, which is shareholders' equity reduced by goodwill and other intangible assets, divided by diluted weighted average shares outstanding.

Our management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures permit investors to view our performance using the same tools that our management uses to evaluate our performance. In addition to the foregoing, our management believes that the "core" metrics described above assist users of the Company's financial statements with their financial analysis period-over-period as they exclude certain non-recurring items. While we believe that these non-GAAP financial measures are useful in evaluating our performance, these non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable or other financial measures calculated in accordance with GAAP. Moreover, the manner in which we calculate these non-GAAP financial measures may differ from that of other companies reporting measures with similar names.

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The following table provides a reconciliation of the above non-GAAP financial measures to their most directly comparable financial measure presented in accordance with GAAP.

#### Non-GAAP Financial Measures Reconciliations

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **At or for the<br>Six Months Ended <br> June 30,** | **At or for the<br>Six Months Ended <br> June 30,** | **At or for the<br>Six Months Ended <br> June 30,** | **At or for the Year Ended<br> December 31,** | **At or for the Year Ended<br> December 31,** | **At or for the Year Ended<br> December 31,** | **At or for the Year Ended<br> December 31,** |
|  | **2025** | **2024** | **2024** | **2023** | **2022** | **2021** | **2020** |
|  | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** |
|  **Pre-Tax Pre-Provision Net Income:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pre-tax income (GAAP) | $22759 | $20708 | $40572 | $39692 | $32364 | $25273 | $17137 |
| &nbsp;&nbsp;&nbsp; Add: provision for loan and lease losses |  | 1501 | 1829 | 3274 | 778 | 396 | 1914 |
| &nbsp;&nbsp;&nbsp; Pre-tax pre-provision net income (Non-GAAP) | $22759 | $22209 | $42401 | $42966 | $33142 | $25669 | $19051 |
|  **Tangible Equity:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Shareholders' equity (GAAP) | $235268 | $210584 | $220256 | $195777 | $158447 | $139867 | $123595 |
| &nbsp;&nbsp;&nbsp; Less: non-controlling interest |  | 5678 |  | 5402 |  |  |  |
| &nbsp;&nbsp;&nbsp; Less: goodwill | 8511 | 8511 | 8514 | 8511 | 741 | 877 | 877 |
| &nbsp;&nbsp;&nbsp; Less: core deposit intangible (net of tax benefit) | 3743 | 4994 | 4331 | 5637 | 1865 | 2337 | 2948 |
| &nbsp;&nbsp;&nbsp; Tangible common equity <br>(Non-GAAP) | $223013 | $191401 | $207411 | $176227 | $155841 | $136653 | $119770 |
|  **Pre-Tax Pre-Provision Return on Average Assets:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Total average assets (GAAP) | $2268859 | $2200728 | $2217423 | $1988067 | $1724190 | $1698778 | $1563664 |
| &nbsp;&nbsp;&nbsp; Pre-tax pre-provision net income (Non-GAAP) | 22759 | 22209 | 42401 | 42966 | 33142 | 25669 | 19051 |
| &nbsp;&nbsp;&nbsp; Pre-tax pre-provision return on <br>average assets (Non-GAAP) | 2.01% | 2.02% | 1.91% | 2.16% | 1.92% | 1.51% | 1.22% |
|  **Return on Average Tangible Equity:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Total average shareholders' equity (GAAP) | $223912 | $197020 | $206622 | $177112 | $149157 | $131731 | $117547 |
| &nbsp;&nbsp;&nbsp; Less: average intangible assets <br>(net of tax benefit) | 12497 | 13768 | 13497 | 8377 | 2910 | 3520 | 2589 |
| &nbsp;&nbsp;&nbsp; Less: average non controlling <br>interest |  | 5540 | 2701 | 2701 |  |  |  |
| &nbsp;&nbsp;&nbsp; Average tangible equity <br>(Non-GAAP) | 211415 | 177712 | 190424 | 166034 | 146247 | 128212 | 114958 |
| &nbsp;&nbsp;&nbsp; Net income to shareholders (Non-GAAP) | 17591 | 16592 | 31410 | 30693 | 25082 | 19360 | 13304 |
| &nbsp;&nbsp;&nbsp; Return on average tangible equity (Non-GAAP) | 16.64% | 18.67% | 16.49% | 18.49% | 17.15% | 15.10% | 11.57% |
|  **Tangible Book Value per Share (Non-GAAP):** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Tangible common equity <br>(Non-GAAP) | $223013 | $191401 | $207411 | $176227 | $155841 | $136653 | $119770 |
| &nbsp;&nbsp;&nbsp; Shares of common stock <br>outstanding | 12239644 | 12208881 | 12113144 | 12211694 | 12052088 | 12201988 | 12347463 |
| &nbsp;&nbsp;&nbsp; Tangible book value per share, <br>reported (Non-GAAP) | $18.22 | $15.68 | $17.12 | $14.43 | $12.93 | $11.20 | $9.70 |
|  **Tangible Equity to Tangible Assets:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Tangible common equity <br>(Non-GAAP) | $223013 | $191401 | $207411 | $176227 | $155841 | $136653 | $119770 |
| &nbsp;&nbsp;&nbsp; Total assets (GAAP) | 2262511 | 2223758 | 2301211 | 2196609 | 1741851 | 1712779 | 1614202 |
| &nbsp;&nbsp;&nbsp; Less: intangible assets | 13546 | 15228 | 14339 | 16143 | 4269 | 5229 | 6056 |
| &nbsp;&nbsp;&nbsp; Tangible assets (Non-GAAP) | 2248966 | 2208530 | 2286872 | 2180466 | 1737583 | 1707550 | 1608146 |
| &nbsp;&nbsp;&nbsp; Tangible equity to tangible assets (Non-GAAP) | 9.92% | 8.67% | 9.07% | 8.08% | 8.97% | 8.00% | 7.45% |
|  **Core Deposits:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Total Deposits (GAAP) | $1851248 | $1815917 | $1938597 | $1819923 | $1420679 | $1448821 | $1350381 |
| &nbsp;&nbsp;&nbsp; Less: Time deposits greater than or equal to $250,000 | 97209 | 92555 | 94566 | 78198 | 115742 | 137090 | 151016 |
| &nbsp;&nbsp;&nbsp; Less: Brokered deposits | 125223 | 160369 | 174918 | 160521 | 59442 | 77845 | 82150 |
| &nbsp;&nbsp;&nbsp; Core deposits (Non-GAAP) | $1628816 | $1562993 | $1669112 | $1581204 | $1245495 | $1233887 | $1117215 |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **At or for the<br>Six Months Ended <br> June 30,** | **At or for the<br>Six Months Ended <br> June 30,** | **At or for the<br>Six Months Ended <br> June 30,** | **At or for the Year Ended<br> December 31,** | **At or for the Year Ended<br> December 31,** | **At or for the Year Ended<br> December 31,** | **At or for the Year Ended<br> December 31,** |
|  | **2025** | **2024** | **2024** | **2023** | **2022** | **2021** | **2020** |
|  | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** | **(Dollars in thousands except per share data)** |
|  **Core Earnings per Share:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Net income (GAAP) | $17591 | $16592 | $31410 | $30693 | $25082 | $19360 | $13304 |
| &nbsp;&nbsp;&nbsp; Add: merger expenses from AB&T acquisition | 309 | 697 | 2788 | 366 | 131 |  |  |
| &nbsp;&nbsp;&nbsp; Less: tax effect | (77) | (174) | (697) | (92) | (33) |  |  |
| &nbsp;&nbsp;&nbsp; Core net income (Non-GAAP) | 17823 | 17115 | 33501 | 30968 | 25181 | 19360 | 13304 |
|  **Core Earnings per Share:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Core net income (Non-GAAP) | 17823 | 17115 | 33501 | 30968 | 25181 | 19360 | 13304 |
| &nbsp;&nbsp;&nbsp; Average shares outstanding (GAAP) | 12137138 | 12211138 | 12187788 | 12189238 | 12127038 | 12274725 | 12347463 |
| &nbsp;&nbsp;&nbsp; Core earnings per share <br>(Non-GAAP) | $1.47 | $1.40 | $2.75 | $2.54 | $2.08 | $1.58 | $1.08 |
|  **Core Return on Average Assets:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Core net income (Non-GAAP) | $17823 | $17115 | $33501 | $30968 | $25181 | $19360 | $13304 |
| &nbsp;&nbsp;&nbsp; Average assets (GAAP) | 2268859 | 2200728 | 2217423 | 1988067 | 1724190 | 1698778 | 1563664 |
| &nbsp;&nbsp;&nbsp; Core return on average assets <br>(Non-GAAP) | 1.57% | 1.55% | 1.51% | 1.56% | 1.46% | 1.14% | 0.85% |
|  **Core Return on Average Tangible Equity:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Average tangible common equity <br>(Non-GAAP) | 211415 | 177712 | 190424 | 166034 | 146247 | 128212 | 114958 |
| &nbsp;&nbsp;&nbsp; Core net income (Non-GAAP) | 17823 | 17115 | 33501 | 30968 | 25181 | 19360 | 13304 |
| &nbsp;&nbsp;&nbsp; Core return on average <br>tangible common equity (Non-GAAP) | 16.86% | 19.26% | 17.59% | 18.65% | 17.22% | 15.10% | 11.57% |
|  **Core Efficiency Ratio:** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Add: net interest income | $39399 | $38761 | $77584 | $72101 | $56921 | $50842 | $49428 |
| &nbsp;&nbsp;&nbsp; Add: noninterest income | 4667 | 5070 | 10878 | 9619 | 9201 | 7431 | 7150 |
| &nbsp;&nbsp;&nbsp; Operating revenue (GAAP) | 44065 | 43831 | 88462 | 81720 | 66123 | 58273 | 56578 |
| &nbsp;&nbsp;&nbsp; Total noninterest expenses (GAAP) | 21306 | 21622 | 46061 | 38754 | 32981 | 32603 | 37527 |
| &nbsp;&nbsp;&nbsp; Less: merger expenses from AB&T acquisition | 309 | 697 | 2788 | 366 | 131 |  |  |
| &nbsp;&nbsp;&nbsp; Core noninterest expenses <br>(Non-GAAP) | 20997 | 20925 | 43273 | 38388 | 32849 | 32603 | 37527 |
| &nbsp;&nbsp;&nbsp; Core efficiency ratio <br>(Non-GAAP) | 47.65% | 47.74% | 48.92% | 46.97% | 49.68% | 55.95% | 66.33% |

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#### RISK FACTORS
*Investing in our common stock involves a high degree of risk. Before you decide to invest in our common stock, you should carefully consider the risks described below, together with all other information included in this prospectus, including our consolidated financial statements and related notes appearing elsewhere in this prospectus. We believe the risks described below are the risks that are material to us as of the date of this prospectus. If any of the following risks actually materialize, our business, financial condition or results of operations could be materially and adversely affected. In that case, you could experience a partial or complete loss of your investment. Further, to the extent that any of the information in this prospectus constitutes forward*-looking *statements, the risk factors below also are cautionary statements identifying important factors that could cause actual results to differ materially from those expressed in any forward*-looking *statements made by us or on our behalf. See "Cautionary Note Regarding Forward*-Looking *Statements."*

#### Risks Related to Our Business
<u>***<u>Interest Rate Risks</u>***</u>

#### Changes in interest rates may adversely affect our earnings and financial condition.
Changes in interest rates may adversely affect our earnings and financial condition. Interest rates are highly sensitive to many factors beyond our control, including inflation, unemployment, changes in the money supply, international events, events in world financial markets, competition, general economic conditions, trade policies and tariffs, and monetary and fiscal policies of various governmental and regulatory authorities, including the Federal Reserve.

Our operating income and net income depend to a great extent on net interest margin (i.e., the difference between the interest yields earned on cash, loans, securities and other interest-bearing assets and the interest rates paid on interest-bearing deposits, borrowings and other liabilities). Net interest margin is affected by changes in market interest rates because different types of assets and liabilities may react differently, and at different times, to market interest rate changes. When interest-bearing liabilities mature or reprice more quickly than interest-earning assets in a period, an increase in market rates of interest could reduce net interest income. Similarly, when interest-earning assets mature or reprice more quickly than interest-bearing liabilities, falling interest rates could reduce net interest income. While we have recently benefitted from high short-term rates, the Federal Reserve began reducing its target federal funds rate in September 2024. Declining interest rates will adversely affect our net interest income. Any of these conditions would be expected to adversely affect our business, results of operations and financial condition.

Increases in interest rates will likely also adversely affect the market value of our investment and loan portfolios. If we are required to sell securities at a discount prior to their maturity, our unrealized losses would then turn into realized losses. See "Increases in interest rates have in the past resulted in, and could in the future result in, unrealized losses on our investment securities portfolio." Decreases in the market value of our loan portfolio could become realized losses if we were to sell loans or if the Bank were to be acquired. See "Increases in interest rates could result in a decrease in the market value of our loans."

We attempt to manage risk from changes in market interest rates by adjusting the rates, maturity, repricing, and balances of our different types of interest-earning assets and interest-bearing liabilities, but interest rate risk management techniques are not exact. As a result, a rapid increase or decrease in interest rates could have an adverse effect on our net interest margin and results of operations. Market interest rates for the types of products and services in our markets also may vary significantly over time based upon competition and local or regional economic factors. Our interest rate risk management process depends upon a number of assumptions which may prove to be inaccurate. There can be no assurance that we will be able to successfully manage our interest rate risk.

#### Increases in interest rates have in the past resulted in, and could in the future result in, unrealized losses in our investment securities portfolio.
We invest a portion of assets in investment securities. As of June 30, 2025, we held approximately 8.3% of our assets in an investment securities portfolio containing primarily U.S. government, municipal, and corporate bonds that are sensitive to broad economic conditions, especially interest rates. Interest rate increases have recently resulted in, and could in the future result in, unrealized losses in our investment securities portfolio, as increases in interest rates ordinarily decrease the estimated fair value of fixed income securities and result in decreased unrealized gains

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or increased unrealized losses on fixed income securities. We recognize the accumulated change in estimated fair value of these fixed income securities in net income when we realize a gain or loss upon the sale of a security. As of June 30, 2025, our net unrealized losses on securities available for sale, net of tax, totaled $1.0 million and our net unrealized losses on securities held-to-maturity, net of tax, totaled $5.5 million, which collectively equaled 3.0% of our Tier 1 capital. If we were required to sell all or a material portion of our investment securities portfolio, we may recognize significant losses that would adversely affect our business, results of operations or financial condition and reduce our regulatory capital ratios.

#### If the average interest rate we pay on our deposits increases, our cost of funds would rise.
A significant majority of our funding consists of interest-bearing deposits. As of June 30, 2025, 77.5% of our deposits consisted of interest-bearing deposits. During periods of rising interest rates, the rate of interest we pay on these deposits generally increases, which in turn increases our overall cost of funds. Additionally, during periods of higher interest rates, our customers have in the past shifted, and may in the future shift, their funds to accounts or financial institutions that offer higher interest rates. Such shifts also increase our cost of funds. If interest rates rise and our cost of funding increases, it could adversely affect our business, financial condition and results of operations and could cause our current business strategy to become unprofitable. Further, to the extent our customers withdraw their deposits and move their funds to competitors or alternative investments, we would lose a lower-cost source of funding, which would be expected to adversely affect our business, financial condition and results of operations. See "— Liquidity and Capital Risks — Our liquidity needs might adversely affect our financial condition and results of operations."

#### Increases in interest rates could result in a decrease in the market value of our loans.
As of June 30, 2025, variable rate loans, which include floating and adjustable rate structures, comprised 60.4% of our loan portfolio. Our variable rate loans primarily consist of (i) adjustable-rate residential real estate loans with initial fixed-rate periods of three, five, 10, 15 or 20 years, which, depending on the loan program, generally reprice every year after the initial fixed-rate period ends and (ii) non-owner and owner-occupied CRE loans, which, depending on the loan program, generally reprice every two years. Accordingly, a substantial part of our loan portfolio remains sensitive to interest rate changes for extended periods.

When interest rates rise, the market value of loans with longer fixed-rate periods decreases. Unlike our available-for-sale securities, our loans are carried at amortized cost on our balance sheet. As a result, increases in interest rates create unrealized losses in our loan portfolio that are not immediately reflected in our financial statements.

These unrealized losses could become realized if we were to sell loans or if the Bank were to be acquired. Additionally, the reduced market value of our loan portfolio in a rising rate environment could negatively impact the economic value of our equity, even if not immediately apparent from our reported financial results. This could potentially affect our ability to raise capital or impact our valuation in a merger or acquisition.

<u>***<u>Credit and Lending Risks</u>***</u>

***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.***

We have meaningful credit exposures to borrowers in certain industries, including commercial and residential building lessors. Economic conditions were challenging throughout 2024 and continued as such in 2025. If the economic environment in our markets further weakens, including as a result of persistent high inflation, elevated short-term interest rates, and increased geopolitical tensions around the world, including hostilities in the Middle East and the ongoing conflict in Ukraine, our exposure to these certain industries or other concentrations could result in increased deterioration in credit quality, past dues, loan charge offs and collateral value declines, which could cause our results of operations and financial condition to be negatively impacted. Changes in trade policies by the United States or other countries, such as tariffs or retaliatory tariffs, may also cause and/or exacerbate inflation and impact the ability of our borrowers to repay their loans. Furthermore, any of our large credit exposures that deteriorate unexpectedly could cause us to have to make significant additional credit loss provisions, negatively impacting our results of operations and financial condition.

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A substantial focus of our marketing and business strategy is to serve small to medium-sized businesses in our market areas. As a result, a relatively high percentage of our loan portfolio consists of commercial loans primarily to small to medium-sized businesses. At June 30, 2025, our commercial loans accounted for approximately 9.9% of our total loans. Additionally, approximately 54.3% of our CRE loans at June 30, 2025 were owner-occupied CRE loans, which are loans to businesses secured by the businesses' real estate. We expect to seek to expand the amount of these two types of loans in our portfolio during the remainder of 2025. The concentration within our loan portfolio of loans within certain industries, including the hotels/motels category (which has occasionally exceeded our internal limit of 50% of total risk-based capital), and loans within certain geographic markets makes us vulnerable to adverse conditions in these specific industries and markets. Small to medium-sized businesses frequently have smaller market shares than their competition, may be more vulnerable to economic downturns, or other operational challenges like those resulting from supply chain disruption, labor shortages or inflationary pressures on their costs, often need substantial additional capital to expand or compete and may experience substantial volatility in operating results, any of which may impair a borrower's ability to repay a loan. In addition, the success of a small or medium-sized business often depends on the management skills, talents and efforts of one or two people or a small group of people, and the death, disability or resignation of one or more of these people could have an adverse impact on the business and its ability to repay its obligations to us. If general economic conditions negatively impact the markets in which we operate and small to medium-sized businesses are adversely affected or our borrowers are otherwise harmed by adverse business developments, the ability of such businesses to repay their loans may deteriorate, and in some cases this deterioration may occur quickly, which would adversely impact our results of operations and financial condition.

Real estate C&D loans are also an important part of our business. This type of lending is generally considered to have relatively high credit risks because the principal is concentrated in a limited number of loans with repayment dependent on the successful completion and operation of the related real estate project. Real estate industry pricing dynamics in the geographical markets in which we operate can vary from year to year and, with respect to construction, can vary between project funding and project completion. Asset values to which we underwrite loans can fluctuate from year to year and impact collateral values and the ability of our borrowers to repay their loans. Like regulatory guidelines on CRE loans, federal regulators have issued guidance that imposes additional restrictions on banks with C&D loans in excess of 100% of total risk-based capital. If our level of these loans was to exceed these guidelines, our ability to make additional loans in this segment would be limited.

Weakness in residential real estate market prices as well as demand could result in price reductions in home and land values adversely affecting the value of collateral securing some of the C&D loans that we hold. Reduced demand for new residential mortgage loans as we have experienced in recent years, whether the result of higher mortgage interest rates, inflationary pressures on building costs, depressed inventory levels or other factors, could also continue to cause reduced demand for mortgage loans, which would reduce our net interest income and noninterest income levels. If economic and real estate market conditions further deteriorate in our markets, we may experience increases in non-performing loans and other real estate owned, increased losses and expenses from the management and disposition of non-performing assets, increases in provisions for credit losses, and increases in operating expenses as a result of the allocation of management time and resources to the collection and work out of loans, all of which would negatively impact our financial condition and results of operations.

#### We could suffer losses from a decline in the credit quality of the assets that we hold.
We could sustain losses if borrowers, guarantors, and related parties fail to perform in accordance with the terms of their loans. We have adopted underwriting and credit monitoring procedures and policies that we believe are appropriate to manage these risks, including centralized control of the loan approval process, the establishment and review of the allowance for credit losses, periodic assessment of the likelihood of nonperformance, tracking loan performance, and diversifying our credit portfolio. These policies and procedures, however, may not prevent unexpected losses that could materially adversely affect our financial condition and results of operations. In particular, with respect to our CRE loans, we could face credit quality risks presented by past, current, and potential economic and real estate market conditions.

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#### We may not be able to adequately measure and limit the credit risks associated with our loan portfolio, which could adversely affect our profitability.
As a part of the products and services that we offer, we make commercial and CRE loans. The principal economic risk associated with each class of loans is the creditworthiness of the borrower, which is affected by the strength of the relevant business market segment, local market conditions, and general economic conditions. Additional factors related to the credit quality of commercial loans include the quality of the management of the business and the borrower's ability both to properly evaluate changes in the supply and demand characteristics affecting its market for products and services and to effectively respond to those changes. Additional factors related to the credit quality of CRE loans include tenant occupancy rates and the quality of management of the property. A failure to effectively measure and limit the credit risks associated with our loan portfolio could have an adverse effect on our business, financial condition, and results of operations.

#### CRE lending may expose us to increased lending risks.
As of June 30, 2025, approximately 56.4% of our loan portfolio consisted of CRE loans. CRE loans are generally viewed as having more inherent risk of default than residential mortgage loans or other consumer loans. Because payments on loans secured by CRE often depend on the successful operation and management of the properties and the businesses which operate from within them, repayment of such loans may be affected by factors outside the borrower's control, such as adverse conditions in the real estate market or the economy or changes in government regulation. Further, the CRE loan balance per borrower is typically larger than that for residential mortgage loans and other consumer loans, implying higher potential losses on an individual loan basis. Because our loan portfolio contains a number of CRE loans with balances over $10 million, the deterioration of one or a few of these loans could cause a significant increase in nonaccrual loans, which could have a material adverse effect on our financial condition and results of operations.

#### We are subject to environmental risks associated with owning real estate or collateral.
The cost of cleaning up or paying damages and penalties associated with environmental problems could increase our operating expenses and result in a decline in the value of underlying collateral. When a borrower defaults on a loan secured by real property, we may purchase the property in foreclosure or accept a deed to the property surrendered by the borrower. We may also take over the management of commercial properties whose owners have defaulted on loans. We also own and lease premises where banking and other facilities are located. While our lending, foreclosure and facilities policies and guidelines are intended to exclude properties with an unreasonable risk of contamination, hazardous substances could exist on some of the properties that we may own, acquire, manage or occupy. Environmental laws could force us to clean up the properties at our expense. It may cost much more to clean a property than the property is worth, and it may be difficult or impossible to sell contaminated properties. We could also be liable for pollution generated by a borrower's operations if we take a role in managing those operations after a default.

***Our allowance for estimated loan losses may not be adequate to cover actual loan losses, which may require us to take a charge to earnings and adversely impact our financial condition and results of operations.***

We maintain an allowance for estimated loan losses that we believe is adequate to absorb any probable losses in our loan portfolio. Management determines the amount of the allowance based upon an analysis of general market conditions, the credit quality of our loan portfolio and the performance of our customers relative to their financial obligations with us. We periodically evaluate the loan portfolio and assign risk gradings to our loans, which can result in changes in the allowance for loan losses. The amount of future losses is affected by changes in economic, operating, and other conditions, including changes in interest rates, which may be beyond our control, and such losses may exceed the allowance for loan losses. Although we believe that our allowance for estimated loan losses is adequate to absorb probable losses on existing loans that may become uncollectible, there can be no assurance that the allowance will prove sufficient to cover actual loan losses in the future. If actual losses exceed the allowance, the excess losses could adversely affect our net income and capital. Any such excess could also lead to larger allowances for loan losses in future periods, which could in turn adversely affect net income and capital in those periods. If economic conditions differ substantially from the assumptions used in the estimate, or if the performance of our loan portfolio deteriorates, future losses may occur, and increases in the allowance may be necessary, either of which would have a negative effect on our financial condition and results of operations.

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Additionally, federal and state banking regulators, as part of their supervisory function, periodically review the adequacy of our allowance for estimated loan losses. These regulators may require us to establish additional allowances based on their judgment of the information available at the time of their examinations. If these regulatory agencies require us to increase our allowance for estimated loan losses, it will have a negative effect on our financial condition and results of operations.

#### We depend on the accuracy and completeness of information about customers and counterparties.
In deciding whether to extend credit or enter into other transactions with customers and counterparties, we may rely on information furnished by or on behalf of customers and counterparties, including financial statements and other financial information. We also may rely on representations of customers and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors. In deciding whether to extend credit, we may depend upon our customers' representations that their financial statements conform to GAAP and present fairly, in all material respects, the financial condition, results of operations, and cash flows of the customer. We also may rely on customer representations and certifications, or other audit or accountant reports, with respect to the businesses and financial condition of our customers. Our financial condition, results of operations, financial reporting, and reputation could be negatively affected if we rely on materially misleading, false, inaccurate, or fraudulent information.

<u>***<u>Liquidity and Capital Risks</u>***</u>

#### Our liquidity needs might adversely affect our financial condition and results of operations.
Our primary sources of liquidity are customer deposits, loan repayments and the sale or maturity of investment securities. Loan repayments are subject to credit risks. In addition, deposit levels may be affected by a number of factors, including interest rates paid by competitors, general interest rate levels, returns available to customers on alternative investments, and general economic conditions. If market interest rates rise or our competitors raise the rates they pay on deposits, our funding costs may increase, either because we raise our rates to avoid losing deposits or because we lose deposits and must rely on more expensive sources of funding. Higher funding costs could reduce our net interest margin and net interest income and could have a material adverse effect on our business, financial condition, results of operations and cash flows from operations.

We may be required to rely, from time to time, on secondary sources of liquidity to meet withdrawal demands or otherwise fund operations or support growth. We have a line of credit in place with the Federal Home Loan Bank ("FHLB") of Cincinnati that we believe, when combined with our correspondent bank lines of credit, access to the brokered certificate of deposit market, and our cash and cash equivalents, is adequate to meet our liquidity needs for the foreseeable future. However, there can be no assurance that these arrangements will be sufficient to meet future liquidity needs, particularly if loan demand grows faster than anticipated.

The Company is an entity separate and distinct from the Bank and depends on the issuance of capital stock and borrowings, as well as dividends from the Bank, for liquidity.

***We may be materially and adversely affected by the creditworthiness and liquidity of other financial institutions***.

Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. We have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial services industry, including commercial banks, brokers and dealers, investment banks, and other institutional customers. Many of these transactions expose us to credit risk in the event of a default by, or questions or concerns about the creditworthiness of, a counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized upon or is liquidated at prices not sufficient to recover the full amount of the credit or derivative exposure due to us. Any such losses could have a material adverse effect on us.

***Our ability to maintain required capital levels and adequate sources of funding and liquidity could be impacted by changes in the capital markets and deteriorating economic and market conditions.***

While the Company, as a bank holding company with less than $3 billion in total consolidated assets, is currently treated as a "small bank holding company" under Federal Reserve policy and is not subject to the Federal Reserve's consolidated risk-based capital and leverage rules at the holding company level, federal and state bank regulators

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require the Bank to maintain certain levels of capital to support operations. On June 30, 2025, the Bank's regulatory capital ratios were at "well-capitalized" levels under applicable regulatory guidelines. Growth in Bank assets (either organically or as a result of acquisitions) at rates in excess of the rate at which Bank capital is increased through retained earnings, or significant losses, including as a result of selling investment securities that are in a loss position at the time of sale, will reduce the Bank's capital ratios unless we continue to increase capital. Additionally, if the Company reaches $3 billion in total consolidated assets, we will become subject to the Federal Reserve's consolidated risk-based capital and leverage rules at the holding company level. Our failure to meet applicable capital guidelines or to satisfy certain other regulatory requirements could subject us to a variety of enforcement remedies available to federal and state regulatory authorities and would negatively impact our ability to pursue acquisitions or other expansionary activities, including the opening of new branch locations.

We may need to raise additional capital (including through the issuance of common or preferred stock or additional Tier 2 capital instruments) in the future to provide us with sufficient capital resources (or replace expiring capital instruments) and liquidity to meet our commitments and business needs or in connection with our growth or as a result of deterioration in our asset quality. Our ability to maintain capital levels, sources of funding and liquidity could be impacted by negative perceptions of our business or prospects, changes in the capital markets and deteriorating economic and market conditions. The Bank generally is required to obtain regulatory approval in order to pay dividends to the Company unless the amount of such dividends does not exceed its net income for the calendar year in which the dividends are paid plus retained net income for the preceding two years. Any restriction on the ability of the Bank to pay dividends to the Company could impact the Company's ability to continue to pay dividends on its capital stock or its ability to pay principal or interest on its indebtedness.

Unexpected changes in capital requirements resulting from regulatory actions could require us to raise capital at a time, and at a price, that might be unfavorable or could require that we forego continuing growth or reduce our current loan portfolio. We cannot assure you that access to capital will be available to us in needed amounts or on acceptable terms or at all. Any occurrence that may limit our access to the capital markets may materially and adversely affect our capital costs and our ability to raise capital and/or debt and, in turn, our liquidity. If we cannot raise additional capital when needed, our ability to expand through internal growth or acquisitions or to continue operations at then-current levels could be impaired. Factors that could adversely affect our ability to raise additional capital or other necessary funding include conditions in the capital markets, our financial performance, our credit ratings, regulatory actions and general economic conditions. Increases in our cost of capital, including increased interest or dividend requirements, could have a direct adverse impact on our operating performance and our ability to achieve our growth objectives.

<u>***<u>Operational and Market Risks</u>***</u>

#### Our business is concentrated in, and largely dependent upon, the continued growth of, and economic conditions in, the markets where we operate.
Our operations are primarily in Tennessee and Kentucky, with a recent expansion into North Carolina. Our success depends to a significant extent upon the business activity, population, income levels, deposits, and real estate activity in these areas. For further information on the local economic and demographic conditions in our markets, please see the sections titled "Prospectus Summary — Our Markets" on page 10 of this prospectus and "Business — Our Markets" on page 110 of this prospectus. Although customers' business and financial interests may extend outside of these areas, adverse economic conditions in these areas could reduce our growth rate, affect the ability of our customers to repay their loans, affect the value of collateral underlying loans and affect our ability to attract deposits. Adverse changes in the economic conditions in one or more of our local markets could negatively affect our results of operations and our profitability, could affect consumer confidence levels and may cause adverse changes in payment patterns, causing increases in delinquencies and default rates, which may impact our charge-offs and provisions for credit losses. Economic deterioration that affects household and/or corporate incomes could also result in reduced demand for credit or fee-based products and services. Any of these factors could adversely affect our financial condition, results of operations and cash flows. Because of our geographic concentration, we may be less able than other regional or national financial institutions to diversify our credit risks across multiple markets.

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#### Negative developments in the U.S. economy and local economies in our primary markets may adversely impact our results in the future.
Our financial performance is highly dependent on the business environment in the markets where we operate and in the U.S. as a whole. Unfavorable or uncertain economic and market conditions can be caused by numerous factors including declines in economic growth, business activity, investor or business confidence, or consumer sentiment, limitations on the availability or increases in the cost of credit and capital, increases in inflation or interest rates, natural disasters, international trade disputes and retaliatory tariffs, supply chain disruptions, labor shortages, terrorist attacks, global pandemics, acts of war, or a combination of these or other factors. Inflation rose sharply at the end of 2021 and continued at heightened levels throughout 2022 and much of 2023, and while inflation started to ease at the end of 2023 and throughout much of 2024, inflationary pressures remain and prices are currently expected to remain elevated for many goods and services in the near term. We believe that it is possible that we will, along with our customers, continue to experience an uneven or declining economic environment in 2025 for many of the same reasons. A worsening of business and economic conditions (including as a result of escalating geopolitical tensions around the world, including hostilities in the Middle East and the ongoing conflict in Ukraine), or persistent inflationary pressures, and actions taken by the Federal Reserve in response thereto, or supply chain disruptions or labor shortages, generally or specifically in the principal markets in which we conduct business, could have adverse effects, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a decrease in deposit balances or the demand for loans and other products and services we offer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an increase in the number of borrowers who become delinquent, file for protection under bankruptcy laws or default on their loans or other obligations to us, which could lead to higher levels of nonperforming assets, net charge-offs and provisions for credit losses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a decrease in the value of loans and other assets secured by real estate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a decrease in net interest income from our lending and deposit gathering activities; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an increase in competition from financial services companies.

There can be no assurance that economic conditions will improve in the near term or that economic conditions will not worsen. Deteriorating economic conditions could adversely affect our business, financial condition, and results of operations.

In addition, over the last several years, the federal government has shut down periodically, in some cases for prolonged periods. It is possible that the federal government may shut down again in the future, particularly in light of the country's political climate. If a prolonged government shutdown occurs, it could significantly impact business and economic conditions generally or specifically in our principal markets, which could have a material adverse effect on our results of operations and financial condition.

***As a community bank, our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance.***

Our reputation is one of the most valuable components of our business. As such, we strive to conduct business in a manner that enhances our reputation. This is done, in part, by recruiting, hiring, and retaining employees who share our core values of being an integral part of the communities we serve, delivering superior service to customers, and caring about customers and associates and maintaining our credit culture. Any damage to our reputation, whether arising from regulatory, supervisory or enforcement actions, matters affecting our financial reporting or compliance with SEC and exchange listing requirements, negative publicity, the way in which we conduct our business or other factors, could strain our existing relationships and make it difficult for us to develop new relationships. If our reputation is negatively affected, by the actions of our employees or otherwise, our business and, therefore, our operating results may be materially adversely affected.

#### As a community banking institution, we have smaller lending limits and different lending risks than certain of our larger, more diversified competitors.
We are a community banking institution that provides banking services to the local communities in the market areas in which we operate. Our ability to diversify economic risks is limited by our local markets and economies. We lend primarily to individuals and small to medium-sized businesses, which may expose us to greater lending risks

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than those of banks that lend to larger, better-capitalized businesses with longer operating histories. These small to medium-sized businesses and entrepreneurs may have fewer financial resources in terms of capital or borrowing capacity and less developed internal controls and financial reporting than larger entities. If economic conditions negatively impact our markets generally and small to medium-sized businesses are adversely affected, our financial condition and results of operations may be negatively affected. In addition, our legally mandated lending limits are lower than those of certain of our competitors that have more capital than we have. These lower lending limits may discourage borrowers with lending needs that exceed our limits from doing business with us.

#### Our business success and growth depend significantly on key management personnel and our ability to attract and retain key people.
We depend heavily upon our senior management team. Our success and growth depend, in large part, on our ability to attract and retain key people with customer relationships. We compete with other financial services companies for personnel primarily on the basis of compensation and benefits, support services and financial position. Intense competition exists for key employees with demonstrated ability, and we may be unable to hire or retain such employees. Further, we are headquartered in a small city in a relatively rural part of the country, making it difficult to recruit employees from larger metropolitan areas. The loss of the services of a member of our senior management team, or an inability to attract other experienced banking personnel, could adversely affect our business. Some of these adverse effects could include the loss of personal contacts with existing or potential customers and the loss of special technical knowledge, experience, and skills of individuals who are responsible for our operations.

Additionally, any failure to adequately plan for and manage succession of key management roles or the failure of key employees to successfully transition into new roles could have a material adverse effect on our business and results of operations. While we have succession plans in place and employment arrangements with certain key executives, these do not guarantee the services of these executives will continue to be available to us.

***We operate in a highly competitive industry and face significant competition from other financial institutions and financial services providers, which may impair our growth or profits.***

Consumer and commercial banking are highly competitive industries. Our market areas contain not only a large number of community and regional banks, but also a significant presence of the country's largest commercial banks. We compete with other state and national financial institutions, as well as savings and loan associations, savings banks, and credit unions, for deposits and loans. In addition, we compete with financial intermediaries, such as consumer finance companies, commercial finance companies, mortgage banking companies, insurance companies, securities firms, mutual funds, and several government agencies, as well as major retailers, all actively engaged in providing various types of loans and other financial services. Some of these competitors may have a longer history of successful operations in our market areas and greater ties to local businesses and more expansive banking relationships, as well as more established depositor bases, fewer regulatory constraints, and lower cost structures than us. Competitors with greater resources may possess an advantage through their ability to maintain numerous banking locations at more convenient sites, to conduct more extensive promotional and advertising campaigns, or to operate a more developed technology platform. Due to their size, many competitors may offer a broader range of products and services, as well as better pricing for certain products and services, than we can offer. For example, competitors with lower costs of capital may solicit our customers to refinance their loans with lower interest rates. Larger institutions may also have the advantage of being perceived by the public as more secure in times of financial uncertainty. Further, increased competition among financial services companies, due to the recent consolidation of certain competing financial institutions, may adversely affect our ability to market products and services. Technology has lowered barriers to entry and made it possible for banks to compete in our market areas without a retail footprint by offering competitive rates and for non-banks to offer products and services traditionally provided by banks.

The financial services industry could become even more competitive as a result of legislative, regulatory, and technological changes and continued consolidation. Banks, securities firms, and insurance companies can merge under the umbrella of a financial holding company, which can offer virtually any type of financial service, including banking, securities underwriting, insurance (both agency and underwriting), and merchant banking.

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Our ability to compete successfully depends on a number of factors, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to develop, maintain, and build upon long-term customer relationships based on quality service and high ethical standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to attract and retain qualified employees to operate our business effectively;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to expand our market position;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the scope, relevance, and pricing of products and services that we offer to meet customer needs and demands;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the rate at which we introduce new products and services relative to our competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• customer satisfaction with our level of service; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• industry and general economic trends.

Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability, which, in turn, could harm our business, financial condition, and results of operations.

#### Our business may suffer if there are significant declines in the value of real estate.
The market value of real estate can fluctuate significantly in a short period of time, including as a result of market conditions in the geographic area in which the real estate is located. If the value of the real estate serving as collateral for our loan portfolio were to decline materially, a significant part of our loan portfolio could become under-collateralized. If the loans that are collateralized by real estate become troubled during a time when market conditions are declining or have declined, we may not be able to realize the value of the security anticipated when we originated the loan, which in turn could have an adverse effect on our allowance and provision for credit losses and our financial condition, results of operations and liquidity.

Most of our foreclosed assets are comprised of real estate properties. We carry these properties at their estimated fair values less estimated selling costs. While we believe the carrying values for such assets are reasonable and appropriately reflect current market conditions, there can be no assurance that the values of such assets will not further decline prior to sale or that the amount of proceeds realized upon disposition of foreclosed assets will approximate the carrying value of such assets. If the proceeds from any such dispositions are less than the carrying value of foreclosed assets, we will record a loss on the disposition of such assets, which in turn could have an adverse effect on our results of operations.

Compared to national financial institutions, we are less able to spread the risks of unfavorable local economic conditions across a large number of diversified economies. Moreover, we cannot give any assurance that we will benefit from any market growth or the return of more favorable economic conditions in our primary market areas if the same do occur.

#### Our selection of accounting policies and methods may affect our reported financial results.
Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Our management must exercise judgment in selecting and applying many of these accounting policies and methods so they comply with GAAP and reflect management's judgment of the most appropriate manner to report our financial condition and results of operations. In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which may be reasonable under the circumstances, which may result in us reporting materially different results than would have been reported under a different alternative.

Certain accounting policies are critical to presenting our financial condition and results of operations. They require management to make difficult, subjective or complex judgments about matters that are uncertain. Materially different amounts could be reported under different conditions or using different assumptions or estimates. Because of the uncertainty of estimates involved in these matters, we may be required to do one or more of the following: significantly increase our allowance for credit losses or sustain loan losses that are significantly higher than the

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reserve provided; recognize significant impairment on goodwill and other intangible asset balances; reduce the carrying value of an asset measured at fair value; or significantly increase our accrued tax liability. Any of these could have a material adverse effect on our business, financial condition or results of operations.

#### We currently invest in BOLI and may continue to do so in the future.
BOLI policies totaled $46.5 million at June 30, 2025. BOLI is an illiquid long-term asset that provides tax savings because cash value growth and life insurance proceeds are not taxable, subject to certain exceptions. However, if we needed additional liquidity and converted the BOLI to cash, such transaction would be subject to ordinary income tax and applicable penalties. We are also exposed to the credit risk of the underlying securities in the investment portfolio and to the insurance carrier's credit risk (in a general account contract). If BOLI was exchanged to another carrier, additional fees would be incurred and a tax-free exchange could only be done for insureds that were still actively employed by us at that time. There is interest rate risk relating to the market value of the underlying investment securities associated with the BOLI in that there is no assurance that the market value of these securities will not decline. If the market value of these securities did decline, and we restructured them to obtain securities with improved yields, we may incur losses and penalties in connection with such restructuring. Investing in BOLI exposes us to liquidity, credit and interest rate risk, which could adversely affect our results of operations, financial condition, and liquidity.

#### The internal controls that we have implemented in order to mitigate risks inherent to the business of banking might fail or be circumvented.
Management regularly reviews and updates our internal controls and procedures that are designed to manage the various risks in our business, including among others, credit, market, liquidity, fraud, operational, capital, cybersecurity, compliance, strategic and reputational risk. No system of controls, however well-designed, implemented and operated, can provide absolute assurance that the objectives of the system will be met. If there were a failure of such a system, or if a system were circumvented, we could suffer unexpected losses and become subject to regulatory consequences, as a result of which our business, financial condition, results of operations or prospects could be materially adversely affected.

#### Changes in accounting standards could materially impact our financial statements.
From time to time, the Financial Accounting Standards Board or the SEC may change the financial accounting and reporting standards that govern the preparation of our financial statements. Such changes may result in us being subject to new or changing accounting and reporting standards. In addition, the bodies that interpret the accounting standards (such as banking regulators or outside auditors) may change their interpretations or positions on how these standards should be applied. These changes may be beyond our control, can be hard to predict, and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retrospectively, or apply an existing standard differently, also retrospectively, in each case resulting in a need to revise or restate prior period financial statements.

#### Severe weather, natural disasters, pandemics, epidemics, acts of war or terrorism or other external events could have significant effects on our business.
Severe weather and natural disasters, including hurricanes, tornados, droughts and floods, epidemics and pandemics, acts of war or terrorism or other external events could have a significant effect on our ability to conduct business. Such disasters could disrupt our operations or the operations of customers or third parties on which we rely. Such disasters could result in market volatility or negatively impact our customers' ability to repay outstanding loans, result in rapid deposit outflows, cause supply chain and/or distribution network disruptions, cause technology interruptions or outages, damage collateral or result in the deterioration of the value of collateral or insurance shortfalls. Although management has established disaster recovery and business continuity policies and procedures, the occurrence of any such event could have a material adverse effect on our business, which, in turn, could have a material adverse effect on our financial condition and results of operations.

Additionally, climate change concerns could result in transition risk. Changes in consumer preferences or technology and additional legislation and other legal requirements, including those associated with the transition to a low-carbon economy, could restrict the scope of our or our customers' existing businesses, amplify credit and market risks,

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disproportionately impact certain of our customers, like those that own and/or operate trucking companies, negatively impact asset values, increase expenses, including as a result of strategic planning and technology and market changes, and/or otherwise adversely impact us, our business or our customers.

Our response to climate change, our climate change strategies, policies and disclosure, and/or our ability to achieve any climate-related goals or commitments that we may make (which are subject to risks and uncertainties, many of which are outside of our control) could result in reputational harm as a result of negative public sentiment, regulatory scrutiny, litigation and reduced investor and stakeholder confidence.

#### The implementation of other new lines of business or new products and services may subject us to additional risk.
We continuously evaluate our service offerings and may implement new lines of business or offer new products and services within existing lines of business in the future. There are substantial risks and uncertainties associated with these efforts. In developing and marketing new lines of business and/or new products and services, we undergo a new product process to assess the risks of the initiative and invest significant time and resources to build internal controls, policies and procedures to mitigate those risks, including hiring experienced management to oversee the implementation of the initiative. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved and price and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business and/or a new product or service offering. Furthermore, any new line of business and/or new product or service could require the establishment of new key and other controls and have a significant impact on our existing system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business and/or new products or services could have a material adverse effect on our business and, in turn, our financial condition and results of operations.

#### Risks Related to Acquisition and Other Expansionary Activity
***We may grow through mergers or acquisitions and other future expansionary activity, which strategy may not be successful or, if successful, may result in additional risks.***

As part of our ongoing strategic plan, we may consider expansion into adjacent markets. Such expansion might take the form of the establishment of de novo branches or the acquisition of existing banks or bank branches. We face significant competition from numerous other financial services institutions, many of which will have greater financial resources or more liquid securities than we do, when considering acquisition opportunities. Accordingly, attractive acquisition opportunities may not be available to us. There can be no assurance that we will be successful in identifying or completing any future acquisitions.

There are considerable costs associated with opening new branches, and new branches generally do not generate sufficient revenues to offset costs until they have been in operation for some time. These types of expansions, including de novo expansions, involve various substantial risks, including:

*Management of Growth.* We may be unable to successfully:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintain loan quality in the context of significant loan growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identify and expand into suitable markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• obtain required regulatory and other approvals;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identify and acquire suitable sites for new banking offices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• attract sufficient deposits and capital to fund anticipated loan growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recruit seasoned professionals with significant experience and established books of business that fit within our professional culture and are able to move their customer relationships to the Bank in the time periods and amounts that we believed were possible when we hired those persons;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintain adequate common equity and regulatory capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• scale our technology platform and operational infrastructure;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• avoid diversion or disruption of our existing operations or management as well as those of an acquired institution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• integrate with our operations the operations of an acquired institution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintain adequate management personnel and systems to oversee and support such growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• maintain adequate internal audit, loan review, risk management and compliance functions; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• implement additional policies, internal controls, procedures and operating systems required to support and monitor the risk associated with such growth.

*Results of Operations.* There is no assurance that existing offices or future offices will maintain or achieve deposit levels, loan balances or other operating results necessary to avoid losses or produce profits. If we are unable to grow our revenues in amounts necessary to support a higher expense base, our results of operations will be negatively impacted. Our growth strategy necessarily entails growth in overhead expenses as we add new offices and staff. Our historical results may not be indicative of future results or results that may be achieved as we continue to evaluate opportunities to increase the number and concentration of our offices, particularly in our newer markets.

*Development of Offices.* There are considerable costs involved in opening banking offices (particularly those in new markets), and new offices generally do not generate sufficient revenues to offset their costs until they have been in operation for at least a year or more. Accordingly, any new banking offices we establish, including those we plan to establish in the markets to which we have expanded or announced plans to expand, can be expected to negatively impact our earnings for some period of time until they reach certain economies of scale. The same is true for our efforts to expand in these markets with the hiring of additional seasoned professionals with significant experience in the markets. Our expenses could be further increased if we encounter delays in opening any of our new banking offices, including as a result of supply chain disruptions and labor challenges like those affecting the construction industry over the last few years, or regulatory actions or delays. We may be unable to accomplish future office expansion plans due to a lack of available satisfactory sites, difficulties in acquiring such sites, failure or inability to receive any required regulatory approvals, increased expenses or loss of potential sites due to complexities associated with zoning and permitting processes, higher than anticipated construction or merger and acquisition costs or other factors. Finally, we have no assurance any office will be successful even after it has been established or acquired, as the case may be.

*Regulatory and Economic Factors.* Our growth and expansion plans may be adversely affected by a number of regulatory or economic developments or other events. Failure or inability to obtain required regulatory approvals, changes in laws and regulations or other regulatory developments and changes in prevailing economic conditions or other unanticipated events may prevent or adversely affect our continued growth and expansion. Such factors may cause us to alter our growth and expansion plans or slow or halt the growth and expansion process, which may prevent us from entering into new, or expanding in our existing, markets or allow competitors to gain or retain market share in our existing markets.

*Infrastructure and Controls.* We may not successfully implement improvements to, or integrate, our information and control systems, procedures and processes in an efficient or timely manner and may discover deficiencies in existing systems and controls. In particular, our systems, controls and procedures must be able to accommodate an increase in transaction volume and the infrastructure that comes with new products, offices, markets or any combination thereof. Thus, our growth strategy may divert management from our existing operations and may require us to incur additional expenditures to expand our administrative and operational infrastructure, which may adversely affect earnings, shareholder returns, and our efficiency ratio.

Failure to successfully address these and other issues related to our recent expansions or future expansionary activity could have a material adverse effect on our financial condition and results of operations and could adversely affect our ability to successfully implement our business strategy. Also, if our growth occurs more slowly than anticipated or declines, our results of operations and financial condition could be materially adversely affected.

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#### Our "Needs to Improve" rating under the CRA may restrict our operations and limit our ability to pursue certain strategic opportunities.
Financial institutions are periodically reviewed pursuant to the CRA and its implementing regulations and receive a rating based on their performance in helping to meet the credit needs of the communities they serve, including low- and moderate-income neighborhoods. During our most recent CRA examination, we received a "Needs to Improve" CRA rating, which results in restrictions on certain expansionary activities, including certain mergers and acquisitions and the establishment and relocation of bank branches. This rating has resulted, and will continue to result, in a loss of expedited processing of applications to undertake certain activities.

A "Needs to Improve" rating could have an impact on our relationships with certain states, counties, municipalities or other public agencies to the extent applicable law, regulation or policy limits whether such entities may do business with a bank that has a below "Satisfactory" CRA rating and, in general, could negatively affect our reputation, business, financial condition and results of operations. These restrictions, among others, will remain in place at least until our next CRA rating is publicly released by the Federal Reserve. The Federal Reserve may take additional enforcement action, including a possible informal or formal enforcement action and/or the assessment of civil money penalties. As a result of these limitations and conditions, we may be unable or may fail to pursue, evaluate or complete transactions that might have been strategically or competitively significant.

#### Acquisitions may disrupt our business and dilute shareholder value, and integrating acquired companies may be more difficult, costly, or time-consuming than we expect.
Our business strategy focuses on organic growth, including new hires and facilities, and growth through acquisitions of other financial institutions. Our pursuit of acquisitions may disrupt our business, and common stock that we may potentially issue as consideration in such acquisitions may dilute the book value or market value of your investment, especially since an acquisition frequently involves the payment of a premium over book and market values. In addition, we may fail to realize some or all of the anticipated benefits of completed acquisitions.

In addition, our acquisition activities could be material to our business and involve a number of significant risks, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• incurring time and expense associated with identifying and evaluating potential acquisition targets and negotiating potential transactions, resulting in management's attention being diverted from the operation of our existing business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• using inaccurate estimates and judgments to evaluate credit, operations, management, and market risks with respect to target institutions or the assets and liabilities that we seek to acquire;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• exposure to potential asset quality issues of target institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• intense competition from other banking organizations and other potential acquirers, many of which have substantially greater resources than we have;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potential exposure to unknown or contingent liabilities of banks and other businesses we may acquire, including without limitation liabilities for regulatory and compliance issues;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inability to realize the expected revenue increases, cost savings, increases in geographic or product presence, and other projected benefits of an acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• incurring time and expenses required to integrate the operations and personnel of the combined businesses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• inconsistencies in standards, procedures, and policies that would adversely affect our ability to maintain relationships with customers and employees;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• experiencing higher operating expenses relative to operating income from the new operations, creating an adverse short-term effect on our results of operations;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• losing key employees and customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the costs of, time incurred and risk of converting financial and customer data;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the poor, slow or unsuccessful integration of acquired customers into financial and customer product systems;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• potential changes in banking or tax laws or regulations that may affect target institutions; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks of marking assets and liabilities to current market values, and possible future impairment of goodwill and other intangibles resulting from acquisitions.

If difficulties arise with respect to the integration process for acquisitions, the economic benefits expected to result from those acquisitions might not occur during the timeframes we expect, or at all. As with any merger of financial institutions, there also may be business disruptions that cause us to lose customers or cause customers to move their business to other financial institutions. Failure to successfully integrate financial institutions and other businesses that we acquire could have an adverse effect on our profitability, return on equity, or return on assets or our ability to implement our strategy, any of which in turn could have a material adverse effect on our business, financial condition, and results of operation.

#### Our financial performance will be negatively impacted if we are unable to execute our growth strategy.
Our current growth strategy is to grow organically, including through new hires and facilities, supplemented with select acquisitions. Our ability to grow organically depends primarily on generating loans and deposits of acceptable risk and expense, and we may not be successful in continuing this organic growth. Our ability to identify appropriate markets for expansion, recruit and retain qualified personnel, and fund growth at a reasonable cost depends upon prevailing economic conditions, maintenance of sufficient capital, competitive factors, and changes in banking laws and regulations, among other factors. Conversely, if we grow too quickly and are unable to control costs and maintain asset quality, such growth, whether organic or through select acquisitions, could materially and adversely affect our financial condition and results of operations.

#### Our historical growth rate and performance may not be indicative of our future growth or financial results.
We may not be able to sustain our past rate of growth or grow our business at all. Consequently, our past results of operations will not necessarily be indicative of our future operations.

If the communities in which we operate do not grow, or if the prevailing economic conditions locally or nationally are less favorable than we have historically realized, then our ability to implement our business strategies may be adversely affected and our actual growth and financial performance may materially change.

Moreover, we cannot give any assurance that we will benefit from any market growth or favorable economic conditions in our market areas even if they do occur. If our senior management team is unable to provide the effective leadership necessary to implement our strategic plans, including the successful integration of any acquired financial institutions, our actual financial performance may be materially and adversely different from our expectations and goals. Additionally, to the extent that any component of our strategic plan requires regulatory approval, if we are unable to obtain necessary approvals without material adverse conditions, or at all, we will be unable to completely implement our strategy, which may adversely affect our actual growth and results of operations and financial condition. The inability to successfully implement our strategic plan could adversely affect the price of our common stock.

#### Risks Related to Technology and Cybersecurity
***We are dependent on our information technology and telecommunications systems and third-party servicers, and systems failures or interruptions or breaches of security could have a material adverse effect on our financial condition and results of operations, as well as cause legal or reputational harm.***

We are dependent upon information technologies, computer systems and networks, including those we maintain and those maintained and provided to us by third parties, to conduct operations and are reliant on technology to help increase efficiency in our business. Any of these could become unavailable or impaired due to a variety of causes,

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including storms and other natural disasters, terrorist attacks, fires, phishing schemes, social engineering, utility outages, internal or external theft or fraud, design defects, human error, misconduct or complications or failures encountered as existing systems are maintained, replaced or upgraded. For example, our financial, accounting, data processing, or other operating or security systems or infrastructure or those of third parties upon which we rely may fail to operate properly or become compromised, disabled or damaged, which could adversely affect our ability to process transactions or provide services. In the event that backup systems are utilized, they may not process data as quickly as our primary systems and we may experience data losses in the course of such recovery. We continuously update the systems on which we rely to support our operations and growth and to remain compliant with all applicable laws, rules and regulations. This updating entails significant costs and creates risks associated with implementing new systems and integrating them with existing ones, including business interruptions that may occur in the course of implementation or integration. We maintain a system of internal controls and security to mitigate the risks of many of these occurrences and maintain insurance coverage for certain risks; however, should an event, including a cyberattack (including a ransomware attack), occur that is not prevented or detected by our internal controls, causes an interruption, degradation or outage in service, causes us to pay a ransom fee, or is uninsured against or in excess of applicable insurance limits, such occurrence could have an adverse effect on our business and our reputation, which, in turn, could have a material adverse effect on our financial condition, results of operations and liquidity.

Our operations rely on the secure processing, storage and transmission of confidential, proprietary, personal and other information in our computer systems and networks. Although we take protective measures and endeavor to modify these systems as circumstances warrant, the security of our computer systems, software and networks may be vulnerable to breaches, unauthorized access, misuse, computer viruses or other malicious code and other events that could have a security impact. We provide our customers the ability to bank remotely, including over the Internet or through their mobile devices. The secure transmission of confidential information is a critical element of remote and mobile banking. Our network, and the systems of parties with whom we contract or on which we rely, as well as those of our customers and regulators, could be vulnerable to unauthorized access, computer viruses, phishing schemes, social engineering, spam attacks, ransomware attacks, human error, natural disasters, power loss and other security breaches. Sources of attacks vary and may include hackers, disgruntled employees or vendors, organized crime, terrorists, foreign governments, corporate espionage and activists. In recent periods, there continues to be a rise in electronic fraudulent activity (including wire fraud), security breaches and cyberattacks within the financial services industry, especially in the commercial banking sector due to cyber criminals targeting commercial bank accounts or seeking to infiltrate legitimate transactions. We believe these types of efforts will continue to increase in frequency and in their level of sophistication. We have established policies, processes, and procedures to identify, measure, monitor, mitigate, report, and analyze risks associated with fraud, and we continue to invest in systems, resources, and controls to detect and prevent it. There are inherent limitations, however, to our risk management strategies, systems, and controls as they currently exist or may develop in the future. We may not appropriately anticipate, monitor, or identify these risks. If our risk management framework proves ineffective in connection with any fraudulent activity, we could suffer unexpected losses, we may have to expend resources detecting and correcting failures in our systems, and we may be subject to potential claims from third parties and government agencies. We may also suffer reputational damage. Any of these consequences could adversely affect our business, financial condition, or results of operations.

Cybersecurity risks for banking organizations have significantly increased in recent years in part because of the proliferation of new technologies and the widespread use of the internet and telecommunications technologies to conduct financial transactions. Cybersecurity risks may increase in the future as we continue to increase our mobile-payment and other internet-based product offerings and expand our internal use of web-based and cloud-based products and applications. Even the most advanced internal control environment may be vulnerable to compromise. Targeted social engineering attacks are becoming more prevalent and sophisticated and are extremely difficult to prevent. AI, including generative AI machine learning and similar tools and technologies that collect, aggregate, analyze or generate data or other materials or content, is further increasing risks in this area, including by making fraud detection more difficult, particularly with detection devices that use voice recognition or authentication. The techniques used by bad actors change frequently, may not be recognized until launched and may not be recognized until well after a breach has occurred. Additionally, the existence of cyberattacks or security breaches at third parties with access to our data, such as vendors, may not be disclosed to us in a timely manner. Consistent with industry trends, we remain at risk for attempted electronic fraudulent activity, as well as attempts at security breaches and cybersecurity-related incidents. Cloud technologies are also critical to the operation of

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our systems, and our reliance on cloud technologies is growing. Service disruptions in cloud technologies or intrusion into those of our systems hosted on cloud-based technologies may lead to unauthorized access of, delays in accessing, or the loss of data that is important to our businesses and may hinder our customers' access to our products and services, which would negatively impact our operations which in turn could have a material adverse effect on our financial condition, results of operations and liquidity.

We spend significant capital and other resources to protect against the threat of security breaches and computer viruses, and we may be required to spend significant capital and other resources to alleviate problems caused by security breaches or viruses. To the extent that our activities or the activities of our vendors, regulators or customers involve the storage and transmission of confidential information, security breaches (including breaches of security of customer, vendor or regulatory systems and networks) and viruses could expose us to claims, litigation and other possible liabilities. Any inability to prevent or promptly detect security breaches or computer viruses could also cause existing customers to lose confidence in our systems and could adversely affect our reputation, results of operations and ability to attract and retain customers and businesses. In addition, a security breach could also subject us to additional regulatory scrutiny, expose us to civil litigation and possible financial liability and cause reputational damage.

We utilize both internally hosted and outsourced external vendor managed systems for our data processing needs. The failure of these systems, or the termination of a third-party software license or service agreement on which any of these systems is based, could interrupt our operations. Because our information technology and telecommunications systems interface with and depend on third-party systems, we could experience service denials if demand for such services exceeds capacity or such third-party systems fail or experience interruptions, including as a result of viruses or other attacks. If sustained or repeated, a system failure or service denial could result in a deterioration of our ability to process new and renewal loans, gather deposits and generally provide customer service, compromise our ability to operate effectively, damage our reputation, result in a loss of customer business and/or subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on our financial condition, results of operations and liquidity.

We also face the risk of operational disruption, failure, termination, or capacity constraints of any of the third parties that facilitate our business activities, including vendors, exchanges, and other financial intermediaries. Such parties could also be the source or cause of an attack on, or breach of, our operational systems, data or infrastructure, and could disclose such attack or breach to us in a delayed manner or not at all. In addition, we may be at risk of an operational failure with respect to our customers' systems. Our risk and exposure to these matters remains heightened because of, among other things, the evolving nature of these threats and the continued uncertain global and political economic environment.

As cybersecurity threats continue to evolve, we will likely expend significant additional resources to continue to modify or enhance our protective measures, investigate and remediate any information security vulnerabilities, or respond to any changes to state or federal regulations, policy statements or laws concerning data breaches, information systems or security. Any failure to maintain adequate security over our information systems, our technology-driven products and services or our customers' personal and transactional information could negatively affect our business and our reputation and result in fines, penalties, or other costs, including litigation expenses and/or additional compliance costs, all of which could have a material adverse effect on our financial condition, results of operations and liquidity. Furthermore, the public perception that a cyber-attack on our systems has been successful, whether or not this perception is correct, may damage our reputation with customers and third parties with whom we do business. A successful penetration or circumvention of system security could result in negative consequences for us, including loss of customers and business opportunities, disruption to our operations and business, misappropriation or destruction of our confidential information and/or that of our customers, or damage to our customers' and/or third parties' computers or systems, and could result in a violation of applicable privacy laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in our security measures, reputational damage, reimbursement or other compensatory costs, and additional compliance costs, and could adversely impact our financial condition, results of operations and liquidity.

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#### We continually encounter technological change and may have fewer resources than our competitors to continue to invest in technological improvements.
The banking and financial services industries are undergoing rapid technological changes with frequent introductions of new technology-driven products and services. In addition to enhancing the level of service provided to customers, the effective use of technology increases efficiency and enables financial institutions to reduce costs. Our future success will depend, in part, on our ability to address the needs of customers by using technology to provide products and services that enhance customer convenience and satisfaction and create additional efficiencies in operations. In connection with implementing new technology enhancements or products in the future, we may experience certain operational challenges (e.g., human error, system error, incompatibility, etc.) which could result in us not fully realizing the anticipated benefits from such new technology enhancements or products or require us to incur significant costs to remedy any such challenges in a timely manner.

Many of our larger competitors have substantially greater resources to invest in technological improvements and have invested significantly more than us in technological improvements. As a result, they may be able to offer additional or more convenient products or services compared to those that we will be able to provide, which would put us at a competitive disadvantage. Accordingly, we may not be able to effectively implement new technology-driven products and services or be successful in marketing such products and services to our customers, which could impair our growth and profitability.

***The adoption of AI tools by us and our third-party vendors and service providers may increase the risk of errors, omissions, unfair treatment or fraudulent behavior by our employees, customers or counterparties, or other third parties.***

Our adoption of AI for limited internal use has increased our efficiency, and we expect to continue to adopt such tools as appropriate. In addition, we expect our third-party vendors and service providers to increasingly develop and incorporate AI into their product offerings faster than we are able to do so independently. There are significant risks involved in utilizing AI and no assurance can be provided that our or our third-party vendors' or service providers' use of AI will enhance our or our third-party vendors' or service providers' products or services or produce the intended results. The adoption and incorporation of such tools can lead to concerns around safety and soundness, fair access to financial services, fair treatment of consumers and compliance with applicable laws and regulations. Such risk can result from models being poorly designed or faulty data being used, inadequate model testing or validation, narrow or limited human oversight, inadequate planning or due diligence, inappropriate or controversial data practices by developers or end-users, and other factors adversely affecting public opinion of AI and the acceptance of AI solutions. Furthermore, given the pace of rapid adoption of such tools by vendors and service providers, we may not be aware of the addition of AI solutions prior to such tools being introduced into our environment. Failure to adequately manage AI risks can result in erroneous results and decisions made by misinformation, unwanted forms of bias, unauthorized access to sensitive, confidential, proprietary or personal information and violations of applicable laws and regulations, leading to operational inefficiencies, competitive harm, reputational harm, ethical challenges, legal liability, losses, fines and other adverse impacts on our business and financial results. If we do not have sufficient rights to use the data or other material or content on which the AI tools we use rely, or to use the output of such AI tools, we also may incur liability through the violation of applicable laws and regulations, third-party intellectual property, privacy or other rights or contracts to which we are a party.

In addition, regulation of AI is rapidly evolving as federal and state legislators and regulators are increasingly focused on these powerful emerging technologies. The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectual property, data privacy and cybersecurity, consumer protection, competition, equal opportunity and fair lending laws, and are expected to be subject to increased regulation and new laws or new applications of existing laws and regulations. AI is the subject of ongoing review by various U.S. governmental and regulatory agencies, and various U.S. states are applying, or are considering applying, existing laws and regulations to AI or are considering general legal frameworks for AI. We may not be able to anticipate how to respond to these rapidly evolving frameworks, and we may need to expend resources to adjust our operations or offerings in certain jurisdictions if the legal frameworks are inconsistent across jurisdictions. Moreover, because AI technology itself is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may arise relating to the use of AI.

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#### Legal, Regulatory and Compliance Risks

#### We are subject to extensive regulation in the conduct of our business, which imposes additional costs on us and adversely affects our profitability.
The Company and the Bank are subject to extensive federal and state regulation and supervision. As a bank holding company, the Company is subject to federal regulation under the BHC Act, and the examination and reporting requirements of the Federal Reserve. Federal regulation of the banking industry, along with tax and accounting laws, regulations, rules, and standards, may limit our operations significantly and control the methods by which we conduct business, as they limit those of other banking organizations. Banking regulations are primarily intended to protect depositors, deposit insurance funds, consumer borrowers, and the banking system as a whole, and not shareholders or creditors. These regulations affect lending practices, capital structure, capital levels, investment practices, dividend policy, and overall growth, among other things. For example, federal and state consumer protection laws and regulations limit the manner in which we may offer and extend credit. In addition, the laws governing bankruptcy generally favor debtors, making it more expensive and more difficult to collect from customers who become subject to bankruptcy proceedings.

Legislation and regulation with respect to our industry has increased in recent years, and supervision and regulation may continue to expand in scope and complexity. Changes to statutes, regulations or regulatory policies, including changes in the interpretation or implementation of statutes, regulations or regulatory policies, or the issuance of new supervisory guidance, could affect us in substantial and unpredictable ways and could subject us to additional costs, restrict our growth, limit the products and services we may offer or limit the pricing for banking products or services. Establishing systems and processes to achieve compliance with applicable laws and regulations increases our costs and could limit our ability to pursue business opportunities. We also may be required to invest significant management attention and resources to evaluate and make any changes necessary to comply with new or additional laws or regulations impacting our business or that of the Bank. This allocation of resources, as well as any failure to comply with applicable requirements, may negatively impact our financial condition and results of operations.

***Federal and state banking agencies periodically conduct examinations of our business, including our compliance with laws and regulations, and our failure to comply with any supervisory actions to which we become subject as a result of such examinations could materially and adversely affect us.***

We are subject to supervision and regulation by banking agencies that periodically conduct examinations of our businesses, including our compliance with applicable laws and regulations. We and any of our nonbanking subsidiaries are subject to supervision and periodic examination by the Federal Reserve. The Bank is subject to supervision and periodic examination by the Federal Reserve and the Tennessee Department of Financial Institutions ("TDFI"). Accommodating such examinations may require management to reallocate resources, which would otherwise be used in the day-to-day operation of other aspects of our business. If, as a result of an examination, any such banking agency was to determine that the financial condition, capital resources, allowance for loan losses, asset quality, earnings prospects, management, liquidity, or other aspects of our operations had become unsatisfactory, or that we or our management were in violation of any applicable law or regulation, such banking agency may take a number of different remedial actions as it deems appropriate. These actions include the power to enjoin "unsafe or unsound" practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to change the asset composition of our portfolio or balance sheet, to assess civil monetary penalties against us or our officers or directors, to restrict or limit our branching or acquisition activity, to remove officers and directors, and, if it is concluded that existing conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance. If we become subject to any such regulatory action, it could have a material adverse effect on our business, financial condition, and results of operations. See "Supervision and Regulation."

***Federal, state and local consumer lending laws may restrict our ability to originate certain mortgage loans or increase our risk of liability with respect to such loans and could increase our cost of doing business***.

Federal, state and local laws have been adopted that are intended to eliminate certain lending practices considered "predatory." These laws prohibit practices such as steering borrowers away from more affordable products, selling unnecessary insurance to borrowers, repeatedly refinancing loans and making loans without a reasonable expectation

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that the borrowers will be able to repay the loans irrespective of the value of the underlying property. Loans with certain terms and conditions and that otherwise meet the definition of a "qualified mortgage" may be protected from liability to a borrower for failing to make the necessary determinations. In either case, we may find it necessary to tighten our mortgage loan underwriting standards in response to Consumer Financial Protection Bureau ("CFPB") rules, which may constrain our ability to make loans consistent with our business strategies. It is our policy not to make predatory loans and to determine borrowers' ability to repay, but applicable laws and related rules create the potential for increased liability with respect to our lending and loan investment activities, increase our cost of doing business and, ultimately, may prevent us from making certain loans and cause us to reduce the average percentage rate or the points and fees on loans that we do make.

***We are subject to federal and state fair lending laws, and failure to comply with these laws could lead to material penalties***.

Federal and state fair lending laws and regulations, such as the Equal Credit Opportunity Act and the Fair Housing Act, impose nondiscriminatory lending requirements on financial institutions. The U.S. Department of Justice (the "DOJ"), CFPB and other federal and state agencies are responsible for enforcing these laws and regulations. Private parties may also have the ability to challenge an institution's performance under fair lending laws in private class action litigation. A successful challenge to our performance under the fair lending laws and regulations could adversely impact our rating under the CRA and result in a wide variety of sanctions, including the payment of damages and civil money penalties, injunctive relief, and the imposition of restrictions on merger and acquisition and other expansionary activity, which could negatively impact our reputation, business, financial condition and results of operations.

#### We have a concentration in CRE lending that could cause our regulators to restrict our ability to grow.
We have a concentration in CRE loans that could cause our regulators to restrict our ability to grow. As a part of their regulatory oversight, the federal bank regulators have issued guidance with respect to a financial institution's concentrations in CRE lending activities. This guidance was issued in response to the regulators' concerns that rising CRE concentrations might expose institutions to unanticipated earnings and capital volatility in the event of adverse changes in the CRE market. This guidance provides supervisory criteria, including numerical indicators, to assist in identifying institutions with potentially significant CRE loan concentrations that may warrant greater supervisory scrutiny, and also identifies certain concentration levels that, if exceeded, will expose an institution to additional supervisory analysis with regard to the institution's CRE concentration risk. The guidance is designed to promote appropriate levels of capital and sound loan and risk management practices for institutions with a concentration of CRE loans, but the guidance does not limit CRE lending. In general, the guidance establishes the following supervisory criteria as preliminary indications of possible CRE concentration risk: (i) an institution's total C&D and other land loans represent 100% or more of total capital or (ii) the institution's total CRE loans represent 300% or more of the institution's capital, and the institution's CRE portfolio has increased by 50% or more during the prior 36 months. Pursuant to the guidance, loans secured by owner-occupied CRE are not included for purposes of the CRE concentration calculation. At June 30, 2025 and December 31, 2024, the Bank's ratios of C&D and other land loans to total risk-based capital were 70.7% and 78.7%, respectively, and its ratios of total CRE loans excluding owner-occupied CRE loans (as defined in the guidance) to total risk-based capital were 281% and 304%, respectively. The three-year growth rates for the Bank's CRE portfolio as of June 30, 2025 and December 31, 2024 were 72.3% and 75.4%, respectively. Given the level of, and recent growth in, CRE loans in our loan portfolio, our CRE loan portfolio, risk management practices, and capital levels may be subject to enhanced regulatory scrutiny. If our risk management practices relative to CRE lending or our capital levels are determined to be inadequate in light of the risks associated with our CRE loan portfolio, we may have to reduce our level of CRE lending and/or seek to increase capital to support our CRE lending function or undertake other remedial actions, any of which could have a material adverse effect on our business, financial condition and results of operations.

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#### We face the risk of noncompliance with and enforcement actions related to the Bank Secrecy Act and other anti-money laundering laws and regulations.
The Bank Secrecy Act of 1970, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 and other laws and regulations require financial institutions to, among other things, institute and maintain effective anti-money laundering programs and file suspicious activity and currency transaction reports as appropriate. The Financial Crimes Enforcement Network, established by the U.S. Department of the Treasury to administer the Bank Secrecy Act, is authorized to impose significant civil money penalties for violations of these requirements and engages in coordinated enforcement efforts with the individual federal banking regulators, as well as the DOJ, Drug Enforcement Administration and IRS. There is also increased scrutiny of compliance with the rules enforced by the Office of Foreign Assets Control ("OFAC") related to U.S. sanctions regimes. If our policies, procedures and systems are deemed deficient or the policies, procedures and systems of the financial institutions that we have already acquired or may acquire in the future are deficient, we would be subject to liability, including fines and regulatory actions such as restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including our acquisition plans, which would negatively impact our business, financial condition and results of operations. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have serious reputational consequences for us. See "Supervision and Regulation."

#### FDIC deposit insurance assessments may materially increase in the future, which would have an adverse effect on our earnings and results of operations.
The Bank is a member of the FDIC, and the deposits of the Bank's depositors are insured to the maximum amount provided by the Federal Deposit Insurance Act ("FDIA"), subject to the Bank's payment of deposit insurance premiums to the FDIC. The FDIC calculates assessment rates applicable to the Bank based on a variety of factors, including capital adequacy, asset quality, management practices, earnings performance, liquidity, and sensitivity to market risk. Any deterioration of these factors could result in an increase in the Bank's FDIC assessment rate. In addition, to maintain a strong funding position and restore the reserve ratios of the FDIC's Deposit Insurance Fund (the "DIF") following the financial crisis, the FDIC increased deposit insurance assessment rates generally and, in response to recent bank failures, charged special assessments applicable to certain FDIC-insured financial institutions. Further increases in assessment rates or special assessments may occur in the future, especially if there are significant additional financial institution failures. Any future special assessments, increases in assessment rates or required prepayments of FDIC insurance premiums could reduce our profitability or limit our ability to pursue certain business opportunities, which could have a material adverse effect on our business, financial condition and results of operations.

#### The Bank is, and the Company may become, subject to regulatory capital requirements.
Applicable regulations require the Bank to maintain specific types and amounts of capital. Various components of the capital adequacy regulations applicable to the Bank are subject to qualitative judgments by banking regulators. The Bank is currently considered "well capitalized" under the existing regulatory framework. The Bank's failure to remain in a "well capitalized" status could adversely affect customers' confidence in the Bank, which could in turn adversely affect our ability to do business. In addition, the Bank's failure to remain "well capitalized" could also result in restrictions imposed by banking regulators on the Bank's growth, acceptance of brokered deposits and deposit rates, dividends, management compensation and other activities. Lack of customer confidence in the Bank or any such regulatory restrictions could have a material adverse effect on our financial condition and results of operations. Additionally, although the Company today is treated as a "small bank holding company" under Federal Reserve policy and is not subject to the Federal Reserve's consolidated risk-based capital and leverage rules at the holding company level, if in the future the Company's total consolidated assets equal or exceed $3 billion or the Company engages in significant nonbanking activities (either directly or through a nonbank subsidiary), conducts significant off-balance sheet activities (either directly or through a nonbank subsidiary) or has a material amount of debt or equity securities (other than trust preferred securities) outstanding that are registered with the SEC, the Company will become subject to the Federal Reserve's consolidated risk-based capital and leverage rules at the holding company level, and our failure to comply with these capital requirements could subject us to a variety of regulatory enforcement actions and could materially and adversely affect our reputation, our ability to pursue acquisitions or other expansionary activities, and, generally, our business, financial condition and results of operations.

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#### The Federal Reserve may require us to commit capital resources to support the Bank.
Federal law requires a bank holding company to act as a source of financial and managerial strength to its subsidiary banks and to commit resources to support its subsidiary banks. Under the "source of strength" doctrine, the Federal Reserve may require a bank holding company to make capital injections into a troubled subsidiary bank and may charge the bank holding company with engaging in unsafe and unsound practices for a failure to commit resources to a subsidiary bank. A Bank capital injection may be required at times when we do not have the resources to provide it and, therefore, we may be required to borrow the needed funds or raise capital, even if further investment in the Bank is not otherwise warranted. In the event of a bank holding company's bankruptcy, the bankruptcy trustee will assume any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank. Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of payment over the claims of the bank holding company's general unsecured creditors, including the holders of its note obligations. Accordingly, any borrowings by the Company in order to make a required capital injection into the Bank may be difficult and expensive and may adversely impact our cash flows, financial condition, results of operations and prospects.

***We may need to raise additional capital in the future, including as a result of heightened regulatory capital requirements, but that capital may not be available, or available on favorable terms, when it is needed or may be dilutive to shareholders.***

We are required by federal and state regulatory authorities to meet certain regulatory capital requirements. Institutions that seek acquisitions, such as us, are expected to maintain capital levels substantially above the regulatory minimums. New regulations implementing minimum capital standards could require financial institutions to maintain higher minimum capital ratios and may place a greater emphasis on common equity and tangible common equity as a component of "Tier 1 capital," which consists generally of shareholders' equity and qualifying preferred stock, less certain goodwill items and other intangible assets. In order to support our operations and comply with applicable regulatory requirements, we may need to raise capital in the future. Our ability to raise additional capital will depend on various factors, including conditions in the capital markets at the time (which are outside of our control) and our financial condition and performance. The capital and credit markets have experienced significant volatility in recent years, and capital may not be available to us on reasonable terms, or at all, when needed. In some cases, the markets have produced downward pressure on stock prices and credit availability for certain issuers without regard to those issuers' underlying financial strength. If we cannot raise additional capital when needed, our financial condition and results of operations may be adversely affected and our banking regulators may subject us to regulatory enforcement actions as outlined above. Furthermore, our issuance of additional shares of common stock could dilute the economic ownership interests of our current shareholders.

#### The Company is an entity separate and distinct from the Bank.
The Company is an entity separate and distinct from the Bank. Company transactions with the Bank are limited by Sections 23A and 23B of the Federal Reserve Act and Federal Reserve Regulation W. We depend upon the Bank's earnings and dividends, the amount of which is limited by federal and state laws and regulations and regulatory policies, for cash to pay the Company's debt and corporate obligations and to pay dividends to our shareholders. If the Bank's ability to pay dividends to the Company becomes limited, the Company's liquidity and financial condition could be materially and adversely affected.

#### Our ability to pay dividends is subject to restriction by various laws and regulations and other factors.
Both the Company and the Bank are subject to various regulatory restrictions relating to the payment of dividends. In addition, the Federal Reserve has the authority to prohibit bank holding companies from engaging in unsafe or unsound practices in conducting their businesses, which in some cases can include the payment of dividends. Federal and state laws and regulations and regulatory policies impacting the ability of the Bank and the Company to pay dividends are described in greater detail in "Supervision and Regulation — Payment of Dividends and Repurchases of Capital Instruments" and "Supervision and Regulation — Prompt Corrective Action and Other Consequences of Capital Adequacy."

For the foreseeable future, the majority, if not all, of the Company's revenue will be from dividends, if any, paid to the Company by the Bank. Accordingly, our ability to pay dividends is substantially dependent on the ability of the Bank to pay dividends to us. Furthermore, the present and future dividend policy of the Bank is subject to the discretion of the Bank's board of directors (the "Bank Board").

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We cannot guarantee that the Company or the Bank will be permitted by its financial condition or applicable laws, regulations, and regulatory policy to pay dividends or that the Bank Board will elect for the Bank to pay dividends to us, nor can we guarantee the timing or amount of any dividends actually paid. See "Dividend Policy."

***The costs and effects of litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, operating results and financial condition.***

We may be involved from time to time in a variety of litigation, investigations or similar matters arising out of our business. It is inherently difficult to assess the outcome of these matters, and we may not prevail in certain proceedings or litigation. Also, our insurance may not cover all claims that may be asserted against us and indemnification rights to which we are entitled may not be honored, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. If the ultimate liability we incur in connection with any litigation, investigation or similar matter significantly exceeds our insurance coverage, it could have a material adverse effect on our business, financial condition and results of operations. In addition, premiums for insurance covering the financial and banking sectors are rising. We may not be able to obtain appropriate types or levels of insurance in the future, and we may not be able to obtain adequate replacement policies with acceptable terms or at historic rates, if at all.

#### Risks Related to this Offering and an Investment in Our Common Stock
***No prior public market exists for our common stock, and an active market for our common stock may not develop or be sustained following this offering.***

Prior to this offering, there has been no public market for our common stock. Although we have applied to list our common stock on Nasdaq, an active trading market for our common stock may not develop or be sustained following this offering. The initial public offering price for our common stock will be determined by negotiations among us, the selling shareholders, and the underwriter and may not be indicative of prices that will prevail in the open market following this offering. A public trading market having the desired characteristics of depth, liquidity and orderliness depends upon the presence in the marketplace and independent decisions of willing buyers and sellers of our common stock, over which we have no control. Without an active trading market for our common stock, shareholders may not be able to sell their shares at the volumes, prices or times desired or to sell their shares at all. Additionally, the lack of an established market could have an adverse effect on the value of our common stock. An inactive market may also impair our ability to raise capital by selling common stock and may impair our ability to expand our business through acquisitions by using our common stock as consideration, should we elect to do so.

***The Company's ability to pay cash dividends is limited, and we may be unable to pay future dividends even if we desire to do so.***

Even though our Board has approved the payment of cash dividends on our common stock in recent years, there can be no assurance as to whether or when we may pay dividends on our common stock in the future. See "Dividend Policy." Future dividends, if any, will be declared and paid at the discretion of our Board and will depend on a number of factors. Our principal source of funds used to pay cash dividends on our common stock will be dividends that we receive from the Bank. The Bank's asset quality, earnings performance, liquidity, prospects and capital levels generally will be taken into account before the Bank Board declares or pays future dividends to the Company. Our Board will also consider the Company's liquidity, prospects and capital levels when considering whether to declare and pay dividends on our common stock, and, to the extent there is available cash on hand, our Board could determine to declare and pay dividends without relying on dividend payments from the Bank.

Federal and state banking laws and regulations and state corporate laws restrict the amount of dividends we may declare and pay and that the Bank may declare and pay to the Company, which could limit our ability to pay dividends in the future even at times when we desire to do so.

In addition, the Company must make payments on its Subordinated Debentures (and the related Trust Preferred Securities) before any dividends can be paid on its common stock. We currently intend to use a portion of the proceeds from this offering to redeem our outstanding Subordinated Debentures and related Trust Preferred Securities, but we can provide no assurances as to the timing of our redemption of the Subordinated Debentures and the Trust Preferred Securities or whether they will be redeemed at all. See "Use of Proceeds." The Company may also from time to time enter into other contractual arrangements, including borrowing relationships with other financial institutions, that could limit the ability of the Company to pay dividends on its common stock in the future.

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***The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an "emerging growth company" and a "smaller reporting company."***

Following the completion of this offering, we will be required to comply with various regulatory and reporting requirements as a publicly traded company, including those of the SEC. Complying with these reporting and other regulatory requirements will be time-consuming and will result in increased costs to us and could have a negative effect on our business, financial condition and results of operations. Furthermore, as an "emerging growth company" and a "smaller reporting company," we intend to take advantage of certain reduced regulatory and reporting requirements and our costs of being a public company will likely increase further once we no longer qualify as an "emerging growth company" or a "smaller reporting company."

As a public company, we will be subject to the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act. We are inexperienced with these reporting and accounting requirements and, as such, these requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal control over financial reporting. To maintain and improve the effectiveness of our disclosure controls and procedures, we will need to commit significant resources, hire additional staff and provide additional management oversight. We will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. Sustaining our growth also will require us to commit additional management, operational and financial resources to identify new individuals to join our business and to maintain appropriate operational and financial systems to adequately support our expansion. These activities will likely divert management's attention from other business concerns, including implementing our growth strategy, which could have a material adverse effect on our business, financial condition, results of operations and future growth.

***We have broad discretion in the use of the net proceeds from this offering, and our use of those proceeds may not yield a favorable return on your investment.***

We intend to use the net proceeds from the sale of the common stock sold by us in the offering to repay in full the outstanding indebtedness under the Community Trust Loan Agreement, to redeem in full our outstanding Subordinated Debentures and related Trust Preferred Securities, and to use the remaining net proceeds, if any, for general corporate purposes. See "Use of Proceeds." We will not receive any of the proceeds from the sale of our common stock in this offering by the selling shareholders. We have not specifically allocated the amount of net proceeds that will be used for these purposes, and our management will have broad discretion over how these proceeds are used and could spend the proceeds in ways with which you may not agree. We have not established a timetable for the effective deployment of the proceeds, and we cannot predict how long it will take to deploy the proceeds. We may not be successful in using the net proceeds from this offering to increase our profitability or market value, and we cannot predict whether the proceeds will be invested to yield a favorable return.

#### Investors in this offering will experience immediate and substantial dilution.
If you purchase common stock in this offering, you will pay more for your shares than the tangible book value per share immediately prior to the completion of the offering. As a result of the offering, you will incur immediate dilution of $[•] per share, representing the difference between the assumed initial public offering price of $[•] per share (the midpoint of the price range on the cover) and our as-adjusted tangible book value of $[•] per share. Accordingly, if we were liquidated at our as-adjusted tangible book value, you would not receive the full amount of your investment. See "Dilution."

***The market price of our common stock may be subject to substantial fluctuations, which may make it difficult for you to sell your shares at the volumes, prices and times desired.***

The market price of our common stock may be highly volatile, which may make it difficult for you to resell your shares at the volumes, prices and times desired. There are many factors that may impact the market price and trading volume of our common stock, including without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• actual or anticipated fluctuations in our operating results, financial condition or asset quality;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in economic or business conditions;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effects of, and changes in, tariffs, trade, monetary and fiscal policies, including the interest rate policies of the Federal Reserve, or laws or regulations affecting us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the public reaction to our press releases, our other public announcements and our filings with the SEC;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in accounting standards, policies, guidance, interpretations or principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recommendations or lack thereof by securities analysts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• publication of research reports about us, our competitors, or the financial services industry generally, or changes in, or failure to meet, securities analysts' estimates of our financial and operating performance, or lack of research reports by industry analysts or industry analysts ceasing to cover us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in market valuations or earnings of companies that investors deem comparable to us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the trading volume of our common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future issuances of our common stock or other securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future sales of our common stock by us or our directors, executive officers or principal shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• additions or departures of key personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• perceptions in the marketplace regarding our competitors and us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes or proposed changes in laws or regulations, or differing interpretations thereof affecting our business, or enforcement of these laws or regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• new technology used, or services offered by, competitors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• additional investments from third parties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving our competitors or us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing, products and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• other news, announcements or disclosures (whether by us or others) related to us, our competitors, our core markets or the financial services industry; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• geopolitical conditions such as acts or threats of terrorism or war, pandemics, military conflicts, tariffs or trade wars.

In particular, the realization of any of the risks described in the "Risk Factors" section of this prospectus could have a material adverse effect on the market price of our common stock and cause the value of your investment to decline. The stock market and, in particular, the market for financial institution stocks have at times experienced substantial fluctuations in recent years, which in many cases have been unrelated to the operating performance and prospects of particular companies. In addition, significant fluctuations in the trading volume in our common stock may cause significant price variations to occur. Increased market volatility could have an adverse effect on the market price of our common stock, which could make it difficult for you to sell your shares at the volumes, prices and times desired.

***We have shareholders who own significant portions of our common stock and those shareholders' interests may differ from those of our other shareholders***.

A large percentage of our outstanding common stock is currently beneficially owned by each of Robertson Holding Company, L.P. ("Robertson Holding Co.") (approximately 42% prior to this offering) and Unified Shares, LLC ("Unified Shares") (approximately 24% prior to this offering). After giving effect to this offering, we expect that Robertson Holding Co. and Unified Shares will beneficially own approximately [•]% and [•]%, respectively, of our common stock outstanding immediately following this offering (without giving effect to the underwriter's option to purchase additional shares of our common stock from the selling shareholders). Because Robertson Holding Co. and Unified Shares are not acting as a "group" (within the meaning of Section 13(d) of the Exchange Act) and

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no individual, group or other company will own the requisite voting power, we do not anticipate that we will be a "controlled company" under applicable Nasdaq rules. While neither Robertson Holding Co. nor Unified Shares has Board representation or other similar rights not shared by our other shareholders, this concentration of ownership will result in Robertson Holding Co. and Unified Shares having a strong influence on corporate actions requiring shareholder approval, including the following actions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the election of our directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amendment of our charter or bylaws (to the extent shareholder approval of the amendment is required);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a merger, sale of assets or other corporate transaction (to the extent shareholder approval of the transaction is required); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any other matter submitted to our shareholders for a vote.

Although Robertson Holding Co. and Unified Shares have no plans or arrangements to form a "group," should they in the future decide to form a group together, or with another large shareholder or group of shareholders, we could become a "controlled company." Under applicable Nasdaq rules, a "controlled company" may elect not to comply with certain corporate governance requirements, which could cause our common stock to be less attractive to certain investors or otherwise harm our trading price.

The interests of Robertson Holding Co. and/or Unified Shares may differ from or conflict with the interests of our other shareholders. In addition, neither Robertson Holding Co. nor Unified Shares is subject to any contractual restrictions on its ability to acquire additional shares of our common stock. Robertson Holding Co. and/or Unified Shares may participate in the purchase of shares in this offering, and any such purchases, as well as any of their future purchases of our equity securities, including in connection with any rights offerings or any alternative equity or equity-linked offering that we may conduct, could result in Robertson Holding Co. or Unified Shares, as applicable, increasing its beneficial ownership of our common stock. This concentration of stock ownership may adversely affect the trading price for our common stock to the extent that investors perceive disadvantages in Robertson Holding Co.'s and/or Unified Shares' significant ownership of or control over the affairs of the Company.

Additionally, J. Adam Robertson and Aaron A. Robertson, the general partners of Robertson Holding Co., serve as directors of the Company and the Bank, and J. Adam Robertson also serves as Executive Chairperson of the Company and the Bank. Further, Martha S. Spurlock, a director of the Company and the Bank, is also a member and manager of Unified Shares. Notwithstanding that all of our directors are obligated to fulfill certain fiduciary duties owed to us and our shareholders, the interests of these individuals may differ from the interests of our other directors and/or holders of our common stock as a whole. As members of the Board, these individuals may have influence over matters requiring the vote of the Board, such as, for example, mergers and acquisitions, the appointment or removal of certain officers, and the Company's issuance of additional equity securities.

***The proceeds from this offering may lead to overcapitalization, potentially lowering our return on equity***.

As a result of this offering, our equity capital will increase significantly. While this capital will enhance our financial strength and support growth, it may also lead to overcapitalization. Overcapitalization occurs when the amount of equity capital exceeds the level needed to efficiently support our operations, which could lower our return on equity. If the proceeds from this offering substantially increase our equity without a corresponding increase in net income, our return on equity would decrease. A lower return on equity may make the Company less attractive to investors who focus on efficiency and profitability metrics, which could adversely affect the market price of our common stock.

***Future sales or the availability for sale of substantial amounts of our common stock in the public market could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital through future sales of equity securities.***

Sales of a substantial number of shares of our common stock in the public market following this offering, or the perception that large sales could occur, could cause the market price of our common stock to decline or limit our future ability to raise capital through an offering of equity securities.

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Upon completion of this offering, the authorized common stock of the Company will consist of 50,000,000 shares of common stock, $0.01 par value per share, of which shares will be issued and outstanding, and 10,000,000 shares of preferred stock, $0.01 par value per share, none of which will be issued and outstanding. The number of shares of common stock outstanding after this offering includes shares that we and the selling shareholders are selling in this offering (not including the additional shares of common stock that the underwriter may purchase from the selling shareholders if the underwriter exercises its option in full, which will not impact the number of shares of common stock outstanding after this offering), which will be freely transferable without restriction or further registration under the Securities Act, unless purchased by our "affiliates" within the meaning of Rule 144 under the Securities Act ("Rule 144"). Such shares will be subject to the resale limitations of Rule 144. Holders of approximately [•]% of the shares of our common stock outstanding prior to the completion of this offering, including all of our executive officers and directors and holders of approximately 5% or more of our common stock, have agreed not to sell any shares of our common stock for a period of at least 180 days from the date of the final prospectus, subject to certain exceptions. See "Underwriting." Following the expiration of the applicable lock-up period, all of these shares will be eligible for resale under Rule 144, subject to any remaining holding period requirements and, if applicable, volume limitations. The market price of our common stock may decline significantly when the restrictions on resale by our existing shareholders lapse. The remaining shares of common stock outstanding prior to the completion of this offering are not subject to lock-up agreements and substantially all of such shares have been held by our non-affiliates for at least one year and therefore may be freely sold by such persons upon the completion of this offering pursuant to an applicable exemption from registration under the Securities Act. See "Shares Eligible for Future Sale" for a discussion of the shares of our common stock that may be sold into the public market in the future.

Following the completion of this offering, we also intend to file with the SEC a registration statement on Form S-8 under the Securities Act to register the offer and sale of shares of our common stock that are issuable under the 2025 Plan. Accordingly, subject to any vesting requirements we may impose, shares registered under that registration statement will be eligible for sale in the open market immediately by persons other than our executive officers, our directors and certain employees, if applicable, and following the lock-up agreements' expiration, by our executive officers, our directors and certain employees, if applicable.

In addition, we may issue shares of our common stock or other securities from time to time as consideration for future acquisitions and investments and under compensation and incentive plans, including the 2025 Plan. If any such acquisition or investment is significant, the number of shares of our common stock, or the number or aggregate principal amount, as the case may be, of other securities, that we may issue may in turn be substantial. We may also grant registration rights covering shares of our common stock or other securities in connection with any such acquisitions and investments. Such issuances of common stock may dilute our existing shareholders.

We cannot predict the size of future issuances of our common stock or the effect, if any, that future issuances and sales of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares of our common stock issued in connection with an acquisition or under a compensation or incentive plan, including the 2025 Plan), or the perception that such sales could occur, may adversely affect prevailing market prices for our common stock and could impair our ability to raise capital through future sales of our securities.

#### The rights of our common shareholders are subordinate to the rights of the holders of any debt instruments that we may issue.
As of June 30, 2025, we had approximately $20.7 million of indebtedness outstanding under our Community Trust Loan Agreement. The CTB Loan is collateralized by all of the issued and outstanding shares of capital stock of the Bank. We also have 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 default. While we intend to use the net proceeds from this offering to pay in full the outstanding indebtedness under the Community Trust Loan Agreement and to redeem in full our outstanding Subordinated Debentures and related Trust Preferred Securities (with the remainder, if any, to be used for general corporate purposes), we may incur similar senior secured or unsecured indebtedness in the future. See "Use of Proceeds." Our existing indebtedness is, and future indebtedness that we

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may incur may be, senior to our common stock. Generally, we must make payments on our indebtedness before any dividends can be paid on our common stock, and, in the event of our bankruptcy, dissolution or liquidation, the holders of any indebtedness must be satisfied in full before any distributions can be made to the holders of our common stock. Additionally, the right of a bank holding company to participate in the assets of its subsidiary bank in the event of a bank-level liquidation or reorganization is subject to the claims of the bank's creditors, including depositors, which generally take priority over bank holding company claims. As of June 30, 2025, the Company was in compliance with all terms, obligations and covenants of the Community Trust Loan Agreement and the Subordinated Debentures and related Trust Preferred Securities.

***Our corporate governance documents and the provisions of Tennessee law to which we are subject could make a takeover more difficult, which could adversely affect the market price of our common stock.***

Our A&R Charter and our amended and restated bylaws, which will be in effect prior to the completion of this offering (the "A&R Bylaws"), could make it more difficult for a third party to acquire control of our organization or conduct a proxy contest, even if those events were perceived by many of our shareholders as beneficial to their interests. Our A&R Charter and/or A&R Bylaws include, among other things, provisions that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• enable our Board to issue additional shares of authorized but unissued capital stock, including additional shares of common stock and preferred stock, without further shareholder approval, as permitted by the Tennessee Business Corporation Act ("TBCA") and applicable Nasdaq rules;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• enable our Board to establish the terms of preferred stock, including voting rights, dividend rights, redemption features, rights on liquidation or dissolution, and other preferences, limitations and rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establish certain advance notice procedures for the nomination of candidates for election as directors and for shareholder proposals to be considered at an annual or special meeting of shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide for a staggered Board with three classes of directors, with directors in one class to be elected annually for three-year terms;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide that directors cannot be removed except for cause;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide that special meetings of our shareholders may be called only by the Chairperson of the Board, our Chief Executive Officer, majority vote of all directors then in office, or the holders of 25% or more of the issued and outstanding shares of our voting stock entitled to vote on any matter proposed to be considered at such special meeting; and

Our A&R Charter provides for noncumulative voting for directors and authorizes our Board to issue shares of common stock or preferred stock, as permitted by the TBCA and applicable Nasdaq rules, without shareholder approval and upon such terms as our Board may determine. In the event that we issue preferred stock in the future that has preference over our common stock with respect to payment of dividends or upon our liquidation, dissolution or winding up, or if we issue preferred stock with voting rights that dilute the voting power of our common stock, the rights of the holders of our common stock or the market price of our common stock could be adversely affected. In addition, certain provisions of Tennessee law, including a provision which restricts certain business combinations between a Tennessee corporation and certain affiliated shareholders, may delay, discourage or prevent an attempted acquisition or change in control of the Company. Any of the foregoing provisions may discourage potential acquisition proposals and could delay or prevent a change in control, including under circumstances in which our shareholders might otherwise receive a premium over the market price of our shares. See "Description of Our Capital Stock."

#### There are substantial regulatory limitations on changes of control of bank holding companies that may discourage investors from purchasing shares of our common stock.
With limited exceptions, federal law and regulations prohibit a person or a group of persons deemed to be "acting in concert" from, directly or indirectly, acquiring 10% or more (or 5% if the acquirer is a bank holding company) of any class of our voting stock or obtaining the ability to control in any manner the election of a majority of our

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directors or otherwise direct the management or policies of our company without prior notice or application to, and the approval of, the Federal Reserve. Companies investing in banks and bank holding companies receive additional review and may be required to file Change in Bank Control Act notices. Accordingly, prospective investors must be aware of and comply with these requirements, if applicable, in connection with any purchase of shares of our common stock. These provisions of law and regulations could discourage third parties from seeking to acquire significant interests in us or in attempting to acquire control of us, which, in turn, could materially and adversely affect the market price of our common stock.

***We are an "emerging growth company" and a "smaller reporting company" and the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.***

We are an "emerging growth company," as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies." As an emerging growth company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we are required to present only two years of audited financial statements and related information;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we are exempt from the requirement to obtain an attestation report from auditors on management's assessment of internal control over financial reporting under the Sarbanes-Oxley Act;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we are not required to comply with any new requirements adopted by the Public Company Accounting Oversight Board (the "PCAOB") requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we are permitted to provide less extensive disclosure about our executive compensation arrangements pursuant to the rules applicable to smaller reporting companies, which means we do not have to include a compensation discussion and analysis and certain other disclosures regarding our executive compensation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we are not required to allow our shareholders non-binding advisory votes on executive compensation or golden parachute arrangements.

We may take advantage of these exemptions until we are no longer an emerging growth company. We will cease to be an emerging growth company upon the earliest of: (i) the last day of the fiscal year in which we have at least $1.235 billion in annual gross revenues, (ii) the date on which we become a "large accelerated filer" as defined in Rule 12b-2 under the Exchange Act (the last day of the fiscal year in which we have more than $700 million in market value of our common stock held by non-affiliates as of the prior June 30), (iii) the date on which we issue more than $1.0 billion of non-convertible debt during the prior three-year period, or (iv) the last day of the fiscal year following the fifth anniversary of our initial public offering. We may choose to take advantage of some but not all of these reduced disclosure requirements. We have elected to adopt certain of the reduced disclosure requirements described above for purposes of the registration statement of which this prospectus is a part.

We expect to take advantage of certain of the reduced reporting and other requirements of the JOBS Act with respect to the periodic reports we will file with the SEC and proxy statements that we use to solicit proxies from our shareholders. As a result, the information that we provide to our shareholders may be different than what you might receive from other public reporting companies in which you hold equity interests.

In addition, the JOBS Act permits us to take advantage of an extended transition period for complying with new or revised accounting standards affecting public companies. We have elected to use this extended transition period, which means that the financial statements included in this prospectus, as well as any financial statements that we file in the future, may not be subject to all new or revised accounting standards generally applicable to public companies for the transition period as long as we remain an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period under the JOBS Act. As a result, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards on a non-delayed basis.

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We are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

We cannot predict whether investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile or decline.

***The accuracy of our financial statements and related disclosures could be affected if the judgments, assumptions or estimates used in our critical accounting policies are inaccurate***.

The preparation of financial statements and related disclosure in conformity with GAAP requires us to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. Our critical accounting policies, which are included in the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this prospectus, describe those significant accounting policies and methods used in the preparation of our consolidated financial statements that we consider "critical" because they require judgments, assumptions and estimates that materially affect our consolidated financial statements and related disclosures. As a result, if future events differ significantly from the judgments, assumptions and estimates in our critical accounting policies, those events could have a material impact on our consolidated financial statements and related disclosures.

#### Any deficiencies in our financial reporting or internal controls could materially and adversely affect our business and the market price of our common stock.
As a public company, our management is responsible for establishing and maintaining adequate internal control over financial reporting and for evaluating and reporting on that system of internal controls. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. We are currently in the process of enhancing our internal control over financial reporting to enable us to comply with our obligations under the federal securities laws and other applicable legal requirements. We are not currently required to comply with SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. When evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. We cannot be certain as to the timing of completion of our evaluation, testing and any remediation actions or the impact of the same on our operations. If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, our independent registered public accounting firm may issue an adverse opinion due to ineffective internal control over financial reporting and we may be subject to sanctions or investigation by regulatory authorities, such as the SEC. As a result, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

During the course of our testing, we may identify deficiencies that would have to be remediated to satisfy the SEC rules for certification of our internal control over financial reporting. A material weakness is defined by the standards issued by the PCAOB as a deficiency, or combination of deficiencies, in internal control over financial reporting that results in a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As a consequence, we would have to disclose in periodic reports we file with the SEC any material weakness in our internal control over financial reporting. The existence of a material weakness would preclude management from concluding that our internal control over financial reporting is effective and would preclude our independent auditors from expressing an unqualified opinion

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on the effectiveness of our internal control over financial reporting. In addition, disclosures of deficiencies of this type in our SEC reports could cause investors to lose confidence in our financial reporting, may negatively affect the market price of our common stock, and could result in the delisting of our securities from the securities exchange on which they trade. Moreover, effective internal controls are necessary to produce reliable financial reports and to prevent fraud. If we have deficiencies in our disclosure controls and procedures or internal control over financial reporting, it may materially and adversely affect us.

Beginning with the first Annual Report on Form 10-K we file following the date we cease to be an "emerging growth company" as defined in the JOBS Act and do not otherwise qualify as a "smaller reporting company" with less than $100.0 million in annual revenue, we will be required to include our independent registered public accounting firm's attestation report on the design and operating effectiveness of our internal control over financial reporting. This process will require significant documentation of policies, procedures and systems and review of that documentation and testing of our internal control over financial reporting by our internal auditing and accounting staff and our independent registered public accounting firm. This process will require considerable time and attention from management, which could prevent us from successfully implementing our business initiatives and improving our business, financial condition and results of operations, strain our internal resources, and increase our operating costs. We may experience higher than anticipated operating expenses and outside auditor fees during the implementation of these changes and thereafter.

***If securities analysts do not initiate or continue coverage on us, or if securities analysts publish unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline.***

The trading market for our common stock will depend, in part, on the research and reports that securities analysts publish about us and our business. We do not have any control over these securities analysts, and they may not cover us. If one or more of these analysts cease to cover us or fail to publish regular reports on us, we could lose visibility in the financial markets, which could cause the price or trading volume of our common stock to decline. If we are covered by securities analysts and are the subject of an unfavorable report, the price of our common stock may decline.

***If we fail to maintain compliance with Nasdaq listing rules, our common stock may be delisted from Nasdaq, which would result in a limited trading market for our shares and make obtaining future debt or equity financing more difficult for the Company.***

We have applied to have shares of our common stock sold in this offering listed on Nasdaq under the symbol "CBK," and the completion of this offering is contingent upon such listing. However, after the closing of this offering, there is no assurance that we will be able to continue to maintain our compliance with Nasdaq's continued listing requirements. If we fail to do so, our common stock may be delisted and cease trading on Nasdaq. As a result, selling our common stock could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts' coverage of us may be reduced. In addition, in the event our common stock is delisted, broker-dealers would face certain regulatory requirements, which may discourage them from effecting transactions in our common stock and further limit the liquidity of our common stock. These factors could result in lower prices and larger spreads in the bid and ask prices for our common stock. Such delisting from Nasdaq and continued or further declines in the share price of our common stock could also greatly impair our ability to raise additional necessary capital through equity or debt financing and could significantly increase the ownership dilution to shareholders caused by our issuing equity in financing or other transactions.

#### If our common stock is delisted from Nasdaq, it may become subject to the SEC's "penny stock" rules.
Delisting from Nasdaq may cause our common stock to become subject to the SEC's "penny stock" rules. The SEC generally defines a penny stock as an equity security that has a market price of less than $5.00 per share, or an exercise price of less than $5.00 per share, and that is not listed on a national securities exchange, such as Nasdaq, subject to certain exemptions. Therefore, if shares of our common stock were to be delisted from Nasdaq, the Company's common stock could become subject to the SEC's "penny stock" rules. These rules require, among other things, any broker engaging in a purchase or sale of subject securities to provide its customers with: (i) a risk disclosure document, (ii) disclosure of market quotations, if any, (iii) disclosure of the compensation of the broker and its salespersons in the transaction, and (iv) monthly account statements showing the market values of the subject securities held in the customers' accounts. A broker would be required to provide the bid and offer quotations and

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compensation information before effecting the transaction. This information must be contained in the customer's confirmation. Generally, brokers are less willing to effect transactions in penny stocks due to these additional delivery requirements. These requirements could make it more difficult for shareholders to purchase or sell shares of our common stock. Since the broker, not us, prepares this information, we would not be able to assure that such information is accurate, complete or current.

#### An investment in our common stock is not an insured deposit and is subject to risk of loss.
Your investment in our common stock will not be a bank deposit and, therefore, will not be insured or guaranteed by the FDIC or any other government agency. Your investment will be subject to investment risk, and your investment may lose money.

#### The sale of shares of our common stock by the selling shareholders may cause the market price of our common stock to decline.
The sale of shares of our common stock by the selling shareholders, as well as our issuance of common stock, in this offering could result in resales of our common stock by current Company shareholders concerned about the viability of their investment or the potential dilution of their shareholdings. In addition, the resale of our common stock by the selling shareholders could have the effect of depressing the market price for our common stock.

#### Our management team has limited experience managing and operating a public company.
Our management team has limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies in the United States. Our management team may not successfully or efficiently manage our transition to being a public company due to significant regulatory oversight and reporting obligations under the U.S. federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could make it more difficult for us to attract and retain qualified persons to serve on our Board, on committees of our Board, or as executive officers and/or adversely affect our business, financial condition, results of operations and prospects.

***Failure to meet the rapidly changing corporate citizenship and sustainability expectations or standards, or achieve our related goals, could adversely affect our business, results of operations, financial condition or stock price.***

There are rapidly changing discussions and regulations surrounding environmental matters, social investments and diversity, equity and inclusion (often referred to as "ESG" initiatives and programs). In recent years, investor advocacy groups and certain institutional investors have placed increasing importance on sustainability, and we may not succeed in our achievement of our initiatives or goals. Increased ESG related compliance costs could result in increases to our overall operational costs. Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, our ability to do business with certain partners, and our stock price. Future government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure. At the same time, there also exists "anti-ESG" sentiment in certain of our markets, and we may face reduced revenue, reputational harm, market restrictions or legal actions if we are targeted by groups or influential individuals who disagree with our public positions on certain social or environmental issues.

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#### CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements may include statements relating to our strategies, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth. These statements are often, but not always, made through the use of words or phrases such as "may," "can," "should," "could," "to be," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "likely," "anticipate," "seek," "strive," "estimate," "intend," "plan," "target," "project," "would" 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. Factors that could cause our actual results to differ materially from those indicated in these forward-looking statements can be found in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of this prospectus. These factors include, but are not limited to, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• credit and lending risks associated with our CRE, commercial, and C&D loan portfolios;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• risks associated with our focus on lending to small and mid-sized businesses;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in demand for our products and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our inability to secure a "satisfactory" CRA rating at our next scheduled CRA examination in October 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to execute and prudently manage our growth and execute our business strategy, including expansionary activities;

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

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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 and the Bank;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the deterioration of our asset quality or the value of collateral securing loans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in our accounting standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effectiveness of our risk management framework, including internal controls;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain our historical rate of growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• failure to keep pace with technological change or difficulties when implementing new technologies;

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

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our compliance with governmental and regulatory requirements, including 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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• compliance with the Bank Secrecy Act, OFAC rules and anti-money laundering laws and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• governmental monetary and fiscal policies;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to receive dividends from the Bank and satisfy our obligations as they become due;

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the limited experience of our management team in managing and operating a public company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the incremental costs of operating as a public company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the effect of the concentrated ownership of our common stock by Robertson Holding Co. and Unified Shares; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to meet our obligations as a public company, including our obligations under Section 404 of the Sarbanes-Oxley Act.

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The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements and the "Risk Factors" included in this prospectus. 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 prospectus. 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.

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#### USE OF PROCEEDS
Assuming an initial public offering price of $ per share, which is the midpoint of the offering price range set forth on the cover page of this prospectus, we estimate that the net proceeds to us from our sale of our common stock in this offering will be approximately $, after deducting the estimated underwriting discounts, commissions and offering expenses payable by us. We will not receive any of the proceeds from the sale of our common stock in this offering by the selling shareholders.

Each $1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) the net proceeds to us from this offering by $, assuming the number of shares we sell, as set forth on the cover page of this prospectus, remains the same, after deducting the estimated underwriting discounts, commissions and offering expenses. Similarly, each increase (decrease) of 100,000 in the number of shares of common stock offered by us would increase (decrease) the net proceeds to us from this offering by approximately $, assuming an initial offering price of $, which is the midpoint of the offering price range set forth on the cover page of this prospectus, remains the same, after deducting the estimated underwriting discounts, commissions and offering expenses.

We intend to use the net proceeds from this offering to repay in full the outstanding indebtedness under the Community Trust Loan Agreement and to redeem in full our outstanding Subordinated Debentures and related Trust Preferred Securities, and to use the remaining net proceeds, if any, for general corporate purposes.

As of June 30, 2025, we had approximately $20.7 million of outstanding indebtedness under the Community Trust Loan Agreement. The Community Trust Loan Agreement matures on January 30, 2035. The unpaid principal amount outstanding under the Community Trust Loan Agreement bears interest from April 30, 2015, based on a variable rate per annum equal to the prime rate as reported in *The Wall Street Journal*, adjustable daily.

As of June 30, 2025, the face amount of the Subordinated Debentures was $6.2 million. 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 Secured Overnight Financing Rate ("SOFR") plus 2.4% adjusted quarterly, which was 6.7% at June 30, 2025. The Subordinated Debentures will mature in 2034. The Subordinated Debentures and Trust Preferred Securities can be redeemed, in whole or in part, beginning October 7, 2009, at a redemption price of $1,000 per Trust Preferred Security.

Our management will retain broad discretion to allocate the net proceeds of this offering, and the precise amounts and timing of our use of the net proceeds of this offering will depend upon market conditions, as well as other factors. Until we deploy the proceeds of this offering for the uses described above, we expect to hold such proceeds in short-term investments.

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#### DIVIDEND POLICY
Our shareholders are entitled to receive dividends on our common stock only if, when and as declared by our Board from funds legally available therefor under Tennessee law and as limited by our banking regulators. We have historically paid cash dividends annually to holders of our common stock; however, following this offering and subject to and at the discretion of our Board, we plan to initially not pay dividends during our first year as a public company. Following that, we intend to pay quarterly cash dividends to holders of our common stock. Nevertheless, we have no obligation to pay dividends and any future determination relating to dividends will be made at the discretion of our Board and will depend on our financial condition, liquidity, results of operations, capital levels and needs and other factors deemed relevant by our Board. Therefore, there can be no assurance that in the future we will pay any dividends to holders of our common stock, or as to the amount of any future dividends.

#### Dividend Restrictions
The Company is a legal entity separate and distinct from the Bank. The Company's principal source of cash, including cash to pay dividends to its shareholders, is dividends that the Company receives from the Bank. Statutory and regulatory limitations apply to the Bank's payment of dividends to us as well as to our payment of dividends to our shareholders.

A bank holding company is required to serve as a source of strength to its subsidiary banks. Generally, under Federal Reserve policy, a bank holding company may not pay (or in some cases must defer or significantly reduce) dividends if its net income available to shareholders for the last four quarters, net of dividends paid during that period, is not sufficient to fully fund the dividends, its prospective rate of earnings retention is not consistent with its capital needs and overall financial condition, or it is not in compliance with, or is in danger of not being in compliance with, required minimum regulatory capital ratios. See "Supervision and Regulation."

Under Tennessee law, without the approval of the Commissioner of the TDFI, the Bank generally cannot pay dividends in any calendar year that exceed its net income for that year plus its retained net income for the preceding two years. The Bank is generally prohibited by the FDIA from making capital distributions (including paying dividends) if the Bank is not adequately capitalized or if the payment of the dividends would cause the Bank to become undercapitalized.

The Company's and the Bank's payment of dividends may also be affected or limited by other factors, such as requirements to maintain adequate levels of capital above regulatory guidelines. Federal and state bank regulatory agencies generally have the authority to prohibit bank holding companies and banks from engaging in unsafe or unsound practices in conducting their business. Depending on the financial condition of a bank holding company and its subsidiary bank(s), the payment of dividends by the bank holding company or its subsidiary bank(s) could under certain circumstances be deemed an unsafe or unsound practice and therefore restricted. Further, Tennessee corporations, such as the Company and the Bank, are not permitted to pay dividends if, after giving effect to the dividends, they would not be able to pay their debts as they come due in the usual course of business or if their assets would be less than the sum of their liabilities plus the amount necessary to satisfy the rights of preferred shareholders, if any, upon dissolution. Both the Company and the Bank may from time to time also be subject to contractual restrictions on their ability to pay dividends. See "Supervision and Regulation."

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#### CAPITALIZATION
The following table shows our capitalization, including regulatory capital ratios, on a consolidated basis, as of June 30, 2025:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on an actual basis; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• on a pro forma as adjusted basis, after giving effect to (i) the issuance and sale by us of shares of our common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range on the cover page of this prospectus, after deducting estimated underwriting discounts, commissions and offering expenses, and (ii) the application of the net proceeds from this offering as described in "Use of Proceeds."

The capitalization information below is for illustrative purposes only, and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of our initial public offering determined at pricing. You should read the following table in conjunction with the sections titled "Summary — Selected Historical Consolidated Financial Data and Other Information," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our consolidated financial statements and related notes appearing elsewhere in this prospectus.

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| | | |
|:---|:---|:---|
|  | **As of June 30, 2025** | **As of June 30, 2025** |
|  | **Actual** | **Pro Forma as <br>Adjusted** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  **Cash and cash equivalents**<sup>(1)</sup>**:** | $151282 | $|
|  **Debt:** |  |  |
| &nbsp;&nbsp;&nbsp; Short-term borrowings | 46300 |  |
| &nbsp;&nbsp;&nbsp; Long-term borrowings | 102209 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total borrowings | 148509 |  |
|  **Shareholders' equity:** |  |  |
| &nbsp;&nbsp;&nbsp; Preferred Stock ($0.01 par value per share), 10,000,000 shares authorized and no shares issued and outstanding (actual and pro forma, as adjusted) |  |  |
| &nbsp;&nbsp;&nbsp; Common Stock ($0.01 par value per share), 50,000,000 shares authorized, [•] shares issued and outstanding (actual); and [•] shares issued and outstanding (pro forma as adjusted) | 122 |  |
| &nbsp;&nbsp;&nbsp; Capital surplus | 8406 |  |
| &nbsp;&nbsp;&nbsp; Retained earnings | 227900 |  |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive income | (1161) |  |
|  **Total shareholders' equity** | $235267 | $|
|  **Total capitalization** | $535058 | $|

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| | |
|:---|:---|
|  | **As of June 30, 2025** |
|  | **Actual** |
|  | **(Dollars in thousands)** |
|  **Capital ratios:** |  |
| &nbsp;&nbsp;&nbsp; Common equity Tier 1 capital ratio | 12.14% |
| &nbsp;&nbsp;&nbsp; Tier 1 leverage ratio | 10.07% |
| &nbsp;&nbsp;&nbsp; Tier 1 risk-based capital ratio | 12.44% |
| &nbsp;&nbsp;&nbsp; Total risk-based capital ratio | 13.41% |

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____________

(1) A $1.00 increase (decrease) in the assumed initial public offering price of $ per share (the midpoint of the price range on the cover page of this prospectus) would increase (decrease) the as adjusted amount of our cash and cash equivalents, additional paid-in-capital, total shareholders' equity and total capitalization by $, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts, commissions and offering expenses.

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#### DILUTION
If you invest in our common stock, your ownership interest will be diluted to the extent that the initial public offering price per share of our common stock exceeds the as adjusted net tangible book value per share of our common stock immediately following this offering.

As of June 30, 2025, we had net tangible book value of approximately $223,013, or $18.22 per share. Net tangible book value per share represents the book value of our total tangible assets less the book value of our total liabilities divided by the number of shares of common stock then issued and outstanding. Net tangible book value per share is a non-GAAP financial measure. The most directly comparable GAAP financial measure to net tangible book value per share is book value per share. See our reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure under the caption "Non-GAAP Financial Measures."

After (i) giving effect to the Stock Reclassification and the Stock Split, (ii) giving effect to the sale of shares of our common stock in this offering and the use of proceeds therefrom and (iii) deducting estimated underwriting discounts and commission and estimated offering expenses payable by us, our as adjusted net tangible book value as of June 30, 2025 would have been approximately $, or $ per share of common stock. This represents an immediate [increase] in net tangible book value of $ per share to our existing shareholders and an immediate dilution of $ per share to new investors purchasing common stock in this offering, or approximately % of the assumed initial public offering price of $ per share (the midpoint of the price range on the cover page of this prospectus). Sales of shares by the selling shareholders will have no effect on our book value per share or our net tangible book value per share.

The following table illustrates the calculation of the amount of dilution per share as of June 30, 2025 that a purchaser of our common stock in this offering would incur given the assumptions above:

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| | |
|:---|:---|
|  Assumed initial public offering price per share | $|
| &nbsp;&nbsp;&nbsp; Net tangible book value per share, as of June 30, 2025 |  |
| &nbsp;&nbsp;&nbsp; [Increase] in net tangible book value per share attributable to this offering | $|
|  As adjusted net tangible book value per share after this offering | $|
|  Dilution in net tangible book value per share to new investors | $|

---

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share (the midpoint of the price range on the cover page of this prospectus) would increase (decrease) our as adjusted net tangible book value per share after this offering by $ per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts, commissions and offering expenses payable by us.

The following table summarizes the total consideration paid to us and the average price paid per share by existing shareholders and investors purchasing common stock in this offering. To the extent that any of our officers or directors or any promoters, or any persons affiliated with any of the foregoing, participated in an offering of our common stock, these individuals paid the same price as all other participants in the same offering. This information is presented on an as adjusted basis as of June 30, 2025, after giving effect to our sale of shares of our common stock in this offering at an assumed initial public offering price of $ per share (the midpoint of the price range on the cover page of this prospectus).

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| | | | |
|:---|:---|:---|:---|
|  | **Shares <br>Purchased/Issued** | **Total <br>Consideration** | **Average <br>Price <br>Per Share** |
|  | **Number** | **Percent** | **Average <br>Price <br>Per Share** |
|  | **(Dollars in thousands, except per share data)** | **(Dollars in thousands, except per share data)** | **(Dollars in thousands, except per share data)** |
|  Shareholders as of June 30, 2025% |  | $% | $|
|  New investors in this offering% |  | $% | $|
|  Total% |  | $% | $|

---

[**Table of Contents**](#TOC001)

Sales of an estimated shares of common stock by the selling shareholders in this offering will cause the number of shares held by existing shareholders to be reduced to shares, or % of the total number of shares of our common stock outstanding immediately following the completion of this offering, and will increase the number of shares held by new investors by shares, or % of the total number of shares outstanding immediately following the completion of this offering.

After giving effect to the sale of shares of common stock in this offering by the selling shareholders and us, if the underwriter's option to purchase additional shares is exercised in full, our existing shareholders would own approximately % and our new investors would own approximately % of the total number of shares of our common stock outstanding immediately after this offering.

The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering to be determined at pricing. To the extent we issue any other securities or convertible debt in the future, investors will experience further dilution.

[**Table of Contents**](#TOC001)

#### MANAGEMENT'S DISCUSSION AND ANALYSIS OF <br>FINANCIAL CONDITION AND RESULTS OF OPERATIONS
*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with "Summary — Selected Historical Consolidated Financial Data and Other Information" and our consolidated financial statements and the related notes appearing elsewhere in this prospectus. This discussion and analysis contains forward*-looking *statements that are subject to certain risks and uncertainties and are based on certain assumptions that we believe are reasonable but may not be realized. Certain risks, uncertainties and other factors, including those set forth under "Risk Factors," under "Cautionary Note Regarding Forward*-Looking *Statements" and elsewhere in this prospectus, may cause actual results to differ materially from those projected results discussed in the forward*-looking *statements appearing in this discussion and analysis. We assume no obligation to update any of these forward*-looking *statements.*

#### 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 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 LPO 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.

We have pursued a strategy of disciplined organic and acquisition-fueled growth. Since 2008, we have successfully completed five whole-bank acquisitions. Most recently, in June 2023, we acquired a majority (76.83%) ownership interest in AB&T, the parent company of Alliance, for total consideration of $23.8 million, which included cash, debt forgiveness, and shares of Class C Common Stock. Approximately 57.17% ownership interest in AB&T was acquired in exchange for a combination of cash and debt forgiveness, with the AB&T shares being valued for this purpose at two times the tangible book value per share of AB&T's common stock as of May 31, 2023. We acquired the remaining portion of the majority ownership interest in AB&T, or approximately 19.66% ownership interest, in exchange for shares of Class C Common Stock, with the shares of Class C Common Stock being issued pursuant to exemptions from registration under the federal securities laws. This exchange of shares was completed using the tangible book value per share of the Company's common stock and Class B Common Stock ($3,551.38 per share), on the one hand, and AB&T's common stock ($0.56 per share), on the other hand, as of April 30, 2023, with shares of AB&T common stock converting to shares of Class C Common Stock on a book-for-book basis at a ratio of 0.000158 shares of Class C Common Stock for each share of AB&T common stock. We acquired the remaining minority (23.17%) ownership interest in AB&T on June 30, 2024, for aggregate cash consideration of $5,678,150, or $0.74 per share of AB&T common stock. This per share price was supported by a valuation of the AB&T common stock as of June 30, 2023, commissioned by a committee of the board of directors of AB&T comprised solely of independent directors. On July 1, 2024, Alliance merged with and into the Bank. Our acquisition of Alliance added four branches and one LPO to our network and expanded our reach into North Carolina, including the Charlotte MSA.

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.

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#### Six Months ended June 30, 2025 Highlights
Highlights of our financial condition and results of operations as of and for the six months ended June 30, 2025, and other key events that occurred during the second quarter of 2025 are provided below.

#### Financial Condition
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total assets were $2.3 billion as of June 30, 2025, a decrease of $38.7 million, or 1.7%, from December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total loans were $1.8 billion as of June 30, 2025, a decrease of $15.2 million, or 0.9%, from December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As of June 30, 2025, the Bank exceeded the minimum requirements to be well-capitalized for bank regulatory purposes, with a total risk-based capital ratio of 14.6%, a Tier 1 risk-based capital ratio of 13.6%, a common equity Tier 1 capital ratio of 13.6%, and a Tier 1 leverage ratio of 11.2%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total deposits were $1.9 billion as of June 30, 2025, a decrease of $87.3 million, or 4.5%, from December 31, 2024. This decrease was primarily driven by a $34.9 million reduction in time deposits to $541.6 million at June 30, 2025, from $576.5 million at December 31, 2024. Noninterest bearing demand deposits increased $20.4 million, or 5.1%, to $417.0 million as of June 30, 2025, from $396.6 million as of December 31, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Asset quality improved slightly with nonperforming assets to total assets of 0.30% as of June 30, 2025, an increase of 0.04% from December 31, 2024. The allowance for credit losses to total loans remained flat at 1.00% for the same periods of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Book value per share increased $1.04, or 5.7%, to $19.22 at June 30, 2025, from $18.18 at December 31, 2024. Tangible book value per share increased $1.10, or 6.4%, to $18.22 at June 30, 2025, from $17.12 at December 31, 2024. Tangible book value per share is a non-GAAP financial measure. Please see "Non-GAAP Financial Measures" for a definition of tangible book value per share and a reconciliation of tangible book value per share to its most directly comparable GAAP financial measure.

#### Results of Operations
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We had net income less non-controlling interest of $17.6 million for the six months ended June 30, 2025, an increase of $1.0 million, or 6.0%, from the six months ended June 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We had net income before income taxes of $22.8 million for the six months ended June 30, 2025, an increase of $2.1 million, or 9.9%, from the six months ended June 30, 2024. The increase was primarily the result of an increase in net interest income after provision for credit losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net interest income was $39.4 million for the six months ended June 30, 2025, an increase of $0.6 million, or 1.7%, from the six months ended June 30, 2024. The increase was primarily attributable to increased loan volume and reduction in long-term debt interest expense.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Noninterest income was $4.7 million for the six months ended June 30, 2025, a decrease of $0.4 million, or 8.0%, from the six months ended June 30, 2024. The decrease was primarily the result of decreases in customer service charges due to normal fluctuations in our letters of credit fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Noninterest expense was $21.3 million for the six months ended June 30, 2025, a decrease of $0.3 million, or 1.5%, from the six months ended June 30, 2024. The decrease was primarily the result of efficiencies realized from the acquisition of AB&T.

[**Table of Contents**](#TOC001)

#### 2024 Highlights
Highlights of our financial condition and results of operations as of and for the year ended December 31, 2024, and other key events that occurred during the year ended December 31, 2024, are provided below.

#### Financial Condition
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total assets grew $104.6 million, or 4.8%, to $2.3 billion as of December 31, 2024, from $2.2 billion as of December 31, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total loans increased $120.5 million, or 7.1%, to $1.8 billion at December 31, 2024, compared to $1.7 billion at December 31, 2023. This increase was primarily the result of organic growth in the Nashville MSA, Knoxville MSA and Charlotte MSA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• As of December 31, 2024, the Bank exceeded the minimum requirements to be well-capitalized for bank regulatory purposes, with a total risk-based capital ratio of 13.5%, a Tier 1 risk-based capital ratio of 12.5%, a common equity Tier 1 capital ratio of 12.5%, and a Tier 1 leverage ratio of 10.6%.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total deposits grew $118.7 million, or 6.5%, to $1.9 billion from $1.8 billion at December 31, 2023. Included in this growth was a $60.4 million increase in time deposits to $576.5 million as of December 31, 2024 from $516.1 million as of December 31, 2023. Noninterest bearing demand deposits decreased $20.1 million, or 4.8%, to $397.7 million as of December 31, 2024, from $417.8 million as of December 31, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Asset quality remained stable with nonperforming assets to total assets of 0.3% as of both December 31, 2024 and December 31, 2023. The allowance for credit losses to total loans remained flat at 1.00% for the same periods of time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Book value per share increased $2.59, or 16.6%, to $18.18 at December 31, 2024 from $15.59 at December 31, 2023. Tangible book value per share increased $2.69, or 18.7%, to $17.12 at December 31, 2024 from $14.43 at December 31, 2023.

#### Results of Operations
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We had net income less non-controlling interest of $31.4 million for the year ended December 31, 2024, compared to net income less non-controlling interest of $30.7 million for the year ended December 31, 2023, an increase of approximately $0.7 million, or 2.3%. The increased net income less non-controlling interest was primarily the result of increases in loan volume and interest rates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net interest income was $77.6 million for the year ended December 31, 2024, which increased $5.5 million, or 7.6%, compared to $72.1 million for the year ended December 31, 2023. The increase was primarily attributable to an increase in interest income on organic loan growth in the Nashville MSA, Knoxville MSA and Charlotte MSA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Noninterest income for the year ended December 31, 2024, was $10.9 million compared to $9.6 million for the year ended December 31, 2023, an increase of $1.3 million, or 13.1%. The increase was primarily the result of net gains on sales of premises and equipment of $0.8 million, including the sale of a branch that was previously closed.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Noninterest expense for the year ended December 31, 2024 was $46.1 million compared to $38.8 million for the year ended December 31, 2023, an increase of $7.3 million, or 18.9%. The increase was primarily related to the acquisition of Alliance, including increased expenses for property, equipment, salary and benefits due to the additional branches acquired in the Charlotte MSA.

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The table below presents the supplemental revenue and earnings of AB&T since acquisition included in our consolidated income statements for the fiscal years ended as of the dates presented. The data for fiscal year 2024 includes revenue and earnings through June 30, 2024, when the AB&T acquisition was closed.

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| | | |
|:---|:---|:---|
|  | **December 31,<br> 2024** | **December 31,<br> 2023** |
|  Total Revenue | $8819725 | $9055309 |
|  Net Income | $1190239 | $2240297 |

---

#### 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 and return on average equity. 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 return on average assets for a given period, net income is divided by the average total assets for that period.

#### Return on Average Equity
We use return on average equity ("ROAE") to assess our effectiveness in utilizing shareholders' equity to generate net income. In determining return on average equity 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.

[**Table of Contents**](#TOC001)

#### 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 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 the Bank. 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) 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, legal 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 allowance for credit losses to reflect loan volumes, identified credit and collateral conditions, economic conditions and other qualitative factors.

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#### 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) 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. 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 June 30, 2025, approximately $210.2 million was available for borrowing on committed lines with the FHLB and $62.5 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 Bank Board quarterly.

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#### Results of Operations for the Six Months Ended June 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.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended <br>June 30, 2025** | **Six Months Ended <br>June 30, 2025** | **Six Months Ended <br>June 30, 2025** | **Six Months Ended <br>June 30, 2024** | **Six Months Ended <br>June 30, 2024** | **Six Months Ended <br>June 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> | $1795846 | $56361 | 6.28% | $1708108 | $56250 | 6.59% |
| &nbsp;&nbsp;&nbsp; Investment securities | 186623 | 2580 | 2.76% | 203779 | 1878 | 1.84% |
| &nbsp;&nbsp;&nbsp; Other interest-earning assets | 128525 | 2684 | 4.18% | 128126 | 3131 | 4.89% |
| &nbsp;&nbsp;&nbsp; Total interest-earning assets | $2110994 | $61625 | 5.84% | $2040013 | $61259 | 6.01% |
|  Allowance for credit losses | (18242) |  |  | (16968) |  |  |
|  Noninterest-earning assets | 176107 |  |  | 177683 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Assets: | $2268859 | 61625 |  | $2200728 |  |  |
|  **Liabilities and Shareholders' Equity:** |  |  |  |  |  |  |
|  Interest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest-bearing demand <br>deposits | $552539 | $6277 | 2.27% | $488274 | $5853 | 2.40% |
| &nbsp;&nbsp;&nbsp; NOW, savings and money market deposits | 388331 | 2922 | 1.50% | 407198 | 3503 | 1.72% |
| &nbsp;&nbsp;&nbsp; Time deposits | 557517 | 10812 | 3.88% | 528429 | 10343 | 3.91% |
| &nbsp;&nbsp;&nbsp; FHLB advances | 63534 | 879 | 2.77% | 78365 | 1093 | 2.79% |
| &nbsp;&nbsp;&nbsp; Other borrowings | 44774 | 1336 | 5.97% | 49661 | 1706 | 6.87% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total interest-bearing <br>liabilities | $1606695 | $22226 | 2.77% | $1551927 | $22498 | 2.90% |
|  Noninterest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Noninterest-bearing deposits | $401935 |  |  | $411044 |  |  |
| &nbsp;&nbsp;&nbsp; Other liabilities | 36317 |  |  | 40737 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noninterest-bearing <br>liabilities | $438252 |  |  | $451781 |  |  |
| &nbsp;&nbsp;&nbsp; Shareholders' equity | $223912 |  |  | $197020 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and shareholders' equity | $2268859 |  |  | $2200728 |  |  |
|  Net Interest Income |  | $39399 |  |  | $38761 |  |
|  Net Interest Spread<sup>(2)</sup> |  |  | 3.07% |  |  | 3.11% |
|  Net Interest Margin<sup>(3)</sup> |  |  | 3.73% |  |  | 3.80% |

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____________

(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.

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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.

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| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended June 30, <br>2025 over 2024** | **Six Months Ended June 30, <br>2025 over 2024** | **Six Months Ended June 30, <br>2025 over 2024** |
|  | **Changes due to:** | **Changes due to:** | **Total <br>Variance** |
|  | **Volume** | **Rate** | **Total <br>Variance** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  **Interest-Earning Assets:** |  |  |  |
|  Loans | $5779 | $(5557) | $222 |
|  Investment securities | (316) | 1720 | 1404 |
|  Other interest earning assets | 20 | (914) | (894) |
|  Total increase in interest income | 5482 | (4750) | 732 |
|  **Interest-Bearing Liabilities:** |  |  |  |
|  NOW, savings, MMDA deposits | 1216 | (1530) | (314) |
|  Time deposits | 1139 | (201) | 938 |
|  FHLB advances | (414) | (14) | (428) |
|  Other borrowings | (336) | (404) | (740) |
|  Total increase (decrease) in interest expense | 1605 | (2149) | (544) |
|  Increase (decrease) in net interest income | $3877 | $(2601) | $1276 |

---

Net interest income for the six months ended June 30, 2025 was $39.4 million compared to $38.8 million for the six months ended June 30, 2024, an increase of $0.6 million, or 1.7%. The increase in net interest income was comprised of an approximate $0.4 million, or 0.6%, increase in interest income and dividend income, and an approximate $0.3 million, or 1.2%, decrease in interest expense. The growth in interest income was primarily attributable to a $87.7 million, or 5.1%, increase in average gross loans outstanding as of June 30, 2025, compared to June 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 MSA, Knoxville MSA and Charlotte MSA. The $0.3 million decrease in interest expense for the period ended June 30, 2025, was primarily related to a 0.1% decrease in the rates paid on interest-bearing liabilities and an increase of $54.8 million, or 3.5%, in average interest-bearing liabilities as of June 30, 2025, compared to June 30, 2024. The increase in average interest-bearing liabilities from June 30, 2024 to June 30, 2025 was due to increases in our large depositor accounts. For the six months ended June 30, 2025, net interest margin and net interest spread were 3.7% and 3.1%, respectively, compared to 3.8% and 3.1%, respectively, for the same periods in 2024, which reflects the increases in interest income discussed above relative to the slight decrease in interest expense.

#### Provision for Credit Losses
Credit risk is inherent in the business of making loans. We establish an allowance for credit losses 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 allowance for credit losses 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.

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The provision for credit losses for the six months ended June 30, 2025, was $0 compared to $1.5 million for the six months ended June 30, 2024. For the six months ended June 30, 2025, no provisions were recorded. The provision recorded for the six months ended June 30, 2024, was based on an increase in the number of loans outstanding. There were no significant net charge-offs in the six months ended June 30, 2025.

The allowance for credit losses as a percentage of total loans was 1.0% at both June 30, 2025, and 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 six months ended June 30, 2025, was $4.7 million compared to $5.1 million for the six months ended June 30, 2024, a decrease of $0.4 million. The following table sets forth the major components of our noninterest income for the six months ended June 30, 2025 and 2024:

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| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **Increase<br> (Decrease)** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  Noninterest income: |  |  |  |
| &nbsp;&nbsp;&nbsp; Customer service fees | $1329 | $1504 | $(175) |
| &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 | 4 | 23 | (19) |
| &nbsp;&nbsp;&nbsp; Net gains (losses) on sales of foreclosed assets | 4 | 119 | (115) |
| &nbsp;&nbsp;&nbsp; Net gains on sales of loans |  |  |  |
| &nbsp;&nbsp;&nbsp; ATM and debit card fees | 1690 | 1549 | 141 |
| &nbsp;&nbsp;&nbsp; Increase in BOLI | 644 | 563 | 81 |
| &nbsp;&nbsp;&nbsp; Other income and fees<sup>(1)</sup> | 995 | 1312 | (317) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noninterest income | $4667 | $5070 | $(403) |

---

____________

(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 decreased $0.2 million, or 11.6%, to $1.3 million for the six months ended June 30, 2025, from $1.5 million for the six months ended June 30, 2024. The decrease was primarily the result of normal fluctuations in our operations.

ATM and debit card fees increased $0.1 million, or 9.1%, to $1.7 million for the six months ended June 30, 2025, from $1.5 million for the six months ended June 30, 2024. The increase was primarily the result of changes in transactional volume that generates interchange fees.

The income on BOLI increased $81 thousand, or 14.4%, to $644 thousand for the six months ended June 30, 2025, from $563 thousand for the six months ended June 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 decreased $0.3 million, or 24.1%, to $1.0 million for the six months ended June 30, 2025 from $1.3 million for the six months ended June 30, 2024. This decrease was primarily due to normal fluctuations in our operations.

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#### Noninterest Expense
Noninterest expense for the six months ended June 30, 2025 was $21.3 million compared to $21.6 million for the six months ended June 30, 2024, a decrease of $0.3 million, or 1.5%, 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 six months ended June 30, 2025 and 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **Increase<br> (Decrease)** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  Noninterest expense: |  |  |  |
| &nbsp;&nbsp;&nbsp; Salaries and employee benefits | $11283 | $11247 | $36 |
| &nbsp;&nbsp;&nbsp; Occupancy expenses | 1649 | 1715 | (66) |
| &nbsp;&nbsp;&nbsp; Data processing | 2358 | 2326 | 32 |
| &nbsp;&nbsp;&nbsp; Deposit insurance premiums | 471 | 525 | (54) |
| &nbsp;&nbsp;&nbsp; Professional Fees | 481 | 651 | (170) |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 1751 | 2055 | (304) |
| &nbsp;&nbsp;&nbsp; Other expenses<sup>(1)</sup> | 3313 | 3103 | 210 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noninterest expense | $21306 | $21622 | $(316) |

---

____________

(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 six months ended June 30, 2025 were $11.3 million, an increase of $0.1 million, or 0.3%, compared to $11.2 million for the six months ended June 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 six months ended June 30, 2025 was $1.6 million compared to $1.7 million for the six months ended June 30, 2024, a decrease of $0.1 million, or 3.8%. The decrease was primarily attributable to normal fluctuations.

Data processing expenses, which primarily consist of expenses for data processing services for core processing, increased $0.1 million, or 1.4%, to $2.4 million for the six months ended June 30, 2025 from $2.3 million for the six months ended June 30, 2024.

Professional fees expenses, which include legal fees, audit and accounting fees, and consulting fees, decreased $170 thousand, or 26.1%, to $481 thousand for the six months ended June 30, 2025 compared to $651 thousand for the six months ended June 30, 2024. This decrease was primarily the result of the higher audit costs associated with the acquisition of AB&T in 2024.

Depreciation and amortization for the six months ended June 30, 2025 was $1.8 million compared to $2.1 million for the six months ended June 30, 2024, a decrease of approximately $0.3 million, or 14.8%. 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 $0.2 million, or 6.8%, to $3.3 million for the six months ended June 30, 2025, compared to $3.1 million for the six months ended June 30, 2024. This increase was primarily due to increases in marketing, insurance and education expenses related to the acquisition of AB&T.

[**Table of Contents**](#TOC001)

#### Results of Operations for the Years Ended December 31, 2024 and 2023
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.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** | **Year Ended December 31, 2023** |
|  | **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-earning assets: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Total loans<sup>(1)</sup> | $1738433 | $113391 | 6.52% | $1522033 | $95206 | 6.26% |
| &nbsp;&nbsp;&nbsp; Investment securities | 204554 | 3747 | 1.83% | 225204 | 2882 | 1.28% |
| &nbsp;&nbsp;&nbsp; Other interest-earning assets | 123380 | 6075 | 4.92% | 93560 | 4549 | 4.86% |
| &nbsp;&nbsp;&nbsp; Total interest-earning assets | $2066367 | $123213 | 5.96% | $1840797 | $102637 | 5.58% |
|  Allowance for credit losses | (17568) |  |  | (14769) |  |  |
|  Noninterest-earning assets | 168624 |  |  | 162039 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Assets: | $2217423 |  |  | $1988067 |  |  |
|  **Liabilities and Shareholders' Equity:** |  |  |  |  |  |  |
|  Interest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest-bearing demand <br>deposits | $497662 | $11757 | 2.36% | $423956 | $7086 | 1.67% |
| &nbsp;&nbsp;&nbsp; NOW, savings and money market deposits | 403563 | 6665 | 1.65% | 352354 | 4204 | 1.19% |
| &nbsp;&nbsp;&nbsp; Time deposits | 546599 | 21931 | 4.01% | 434353 | 12802 | 2.95% |
| &nbsp;&nbsp;&nbsp; FHLB advances | 72540 | 1983 | 2.73% | 99248 | 3028 | 3.05% |
| &nbsp;&nbsp;&nbsp; Other borrowings | 47746 | 3294 | 6.90% | 50837 | 3416 | 6.72% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total interest-bearing <br>liabilities | $1568110 | $45630 | 2.91% | $1360748 | $30536 | 2.24% |
|  Noninterest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Noninterest-bearing deposits | $409405 |  |  | $404750 |  |  |
| &nbsp;&nbsp;&nbsp; Other liabilities | 33286 |  |  | 45576 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noninterest-bearing liabilities | $442691 |  |  | $450326 |  | % |
| &nbsp;&nbsp;&nbsp; Shareholders' equity | $206622 |  |  | $176993 |  | % |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and shareholders' equity | $2217423 |  |  | $1988067 |  | % |
|  Net Interest Income |  | $77583 |  |  |  |  |
|  Net Interest Spread<sup>(2)</sup> |  |  | 3.05% |  | $72101 | 3.33% |
|  Net Interest Margin<sup>(3)</sup> |  |  | 3.75% |  |  | 3.92% |

---

____________

(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

[**Table of Contents**](#TOC001)

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.

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2024 over 2023** | **Year Ended December 31, 2024 over 2023** | **Year Ended December 31, 2024 over 2023** |
|  | **Changes due to:** | **Changes due to:** | **Total <br>Variance** |
|  | **Volume** | **Rate** | **Total <br>Variance** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  **Interest Earning Assets:** |  |  |  |
|  Loans | $13536 | $4649 | $18185 |
|  Investment securities | (264) | 1129 | 865 |
|  Other interest earning assets | 1450 | 76 | 1526 |
|  Total increase in interest income | 14722 | 5854 | 20576 |
|  **Interest-Bearing Liabilities:** |  |  |  |
|  Interest bearing demand deposits | 1232 | 3439 | 4671 |
|  NOW, savings, money market deposits | 611 | 1850 | 2461 |
|  Time deposits | 3308 | 5821 | 9129 |
|  FHLB advances | (815) | (230) | (1045) |
|  Other borrowings | (208) | 86 | (122) |
|  Total increase in interest expense | 4129 | 10965 | 15094 |
|  **Increase in net interest income** | $10593 | $(5111) | $5482 |

---

Net interest income for the year ended December 31, 2024 was $77.6 million compared to $72.1 million for the year ended December 31, 2023, an increase of $5.5 million, or 7.6%. The increase in net interest income was comprised of a $20.5 million, or 20%, increase in interest income and dividend income, offset by a $15.1 million, or 49.4%, increase in interest expense. The growth in interest income was primarily attributable to a $216.4 million, or 14.2%, increase in average total loans outstanding as of December 31, 2024, compared to December 31, 2023, and by a 0.3% increase in the yield on gross total loans. The increase in average total loans outstanding was primarily due to organic loan growth in the Nashville MSA, Knoxville MSA and Charlotte MSA. The $15.1 million increase in interest expense for the year ended December 31, 2024 was primarily related to a 0.7% increase in the rate paid on interest-bearing liabilities and an increase of $207.4 million, or 15.2%, in average interest-bearing liabilities as of December 31, 2024 compared to December 31, 2023. The increase in average interest-bearing liabilities from 2023 to 2024 was primarily due to increases in our large depositor accounts. For the year ended December 31, 2024, net interest margin and net interest spread were 3.8% and 3.1%, respectively, compared to 3.9% and 3.3%, respectively, for the same periods in 2023, which reflects a higher cost of funds during 2024 primarily due to the lag in deposit repricing during the rising rate environment during 2023.

#### Provision for Credit Losses
Credit risk is inherent in the business of making loans. We establish an allowance for credit losses 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 allowance for credit losses 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 year ended December 31, 2024 was $1.8 million compared to $3.3 million for the year ended December 31, 2023. In 2024, the provisions were recorded based on increased environmental factors related to national, regional and economic conditions and changes in the volume and nature of the portfolio in the CRE loan categories. There were no significant charge-offs in 2024. In 2023, additional provisions were recorded related to the acquisition of a controlling interest of AB&T.

[**Table of Contents**](#TOC001)

The allowance for credit losses as a percentage of total loans was 1.0% and 0.9% at December 31, 2024 and 2023, respectively.

#### 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 includes overdraft program fees, and bank card services and interchange fees.

Noninterest income for the year ended December 31, 2024 was $10.8 million compared to $9.6 million for the year ended December 31, 2023, an increase of $1.2 million, or 13.1%. The following table sets forth the major components of our noninterest income for the years ended December 31, 2024 and 2023:

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| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2024** | **2023** | **Increase<br> (Decrease)** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  Noninterest income: |  |  |  |
| &nbsp;&nbsp;&nbsp; Customer service fees | $3040 | $2861 | $179 |
| &nbsp;&nbsp;&nbsp; Net realized gains (losses) on sales of available-for-sale securities | 0 | 0 | 0 |
| &nbsp;&nbsp;&nbsp; Net gains on sales of premises and equipment | 759 | 54 | 705 |
| &nbsp;&nbsp;&nbsp; Net gains on sales of foreclosed assets | 153 | 133 | 20 |
| &nbsp;&nbsp;&nbsp; Net gains (losses) on sales of loans | 0 | (174) | 174 |
| &nbsp;&nbsp;&nbsp; ATM and debit card fees | 3281 | 3323 | (42) |
| &nbsp;&nbsp;&nbsp; Increase in BOLI | 1199 | 1661 | (462) |
| &nbsp;&nbsp;&nbsp; Other income and fees<sup>(1)</sup> | 2446 | 1761 | 685 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noninterest income | $10878 | $9619 | $1259 |

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____________

(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 $0.2 million, or 6.3%, to $3.0 million for the year ended December 31, 2024, from $2.9 million for the year ended December 31, 2023.

ATM and debit card fees slightly decreased by 42 thousand, or 1.3%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The slight decrease was primarily the result of changes in transactional volume that generates interchange fees.

The income on BOLI decreased $0.5 million, or 27.8%, to $1.2 million for the year ended December 31, 2024, from $1.7 million for the year ended December 31, 2023. During the year ended December 31, 2023, the Bank had an increase in BOLI income due to a large death benefit.

Other income and fees increased $0.6 million, or 38.9%, to $2.4 million for the year ended December 31, 2024 from $1.8 million for the year ended December 31, 2023. This increase was primarily due to gains on the sale of equipment and a branch that had been previously closed.

[**Table of Contents**](#TOC001)

#### Noninterest Expense
Noninterest expense for the year ended December 31, 2024 was $46.1 million compared to $38.8 million for the year ended December 31, 2023, an increase of $7.3 million, or 18.9%, which increase primarily resulted from increases in salary and building expenses related to the acquisition of Alliance. The following table sets forth the major components of our noninterest expense for the years ended December 31, 2024 and 2023:

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| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2024** | **2023** | **Increase<br> (Decrease)** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  Noninterest expense: |  |  |  |
| &nbsp;&nbsp;&nbsp; Salaries and employee benefits | $24873 | $20746 | $4127 |
| &nbsp;&nbsp;&nbsp; Occupancy expenses | 3786 | 3361 | 425 |
| &nbsp;&nbsp;&nbsp; Professional fees | 1017 | 1296 | (279) |
| &nbsp;&nbsp;&nbsp; Data processing | 4235 | 3862 | 373 |
| &nbsp;&nbsp;&nbsp; Deposit insurance premiums | 1129 | 1035 | 94 |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 4109 | 3040 | 1069 |
| &nbsp;&nbsp;&nbsp; Other expenses<sup>(1)</sup> | 6913 | 5414 | 1499 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total noninterest expense | $46062 | $38754 | $7308 |

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____________

(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 premiums 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 increased $4.1 million, or 19.9%, from $20.7 million for the year ended December 31, 2023 to $24.9 million for the year ended December 31, 2024. The increase was primarily due to incentive compensation and additional staff compensation related to the acquisition of AB&T in 2024.

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 year ended December 31, 2024 was $3.8 million compared to $3.4 million for the year ended December 31, 2023, an increase of approximately $0.4 million, or 12.7%. The increase was primarily attributable to the addition of a new branch in the Nashville MSA.

Professional fees expenses, which include legal fees, audit and accounting fees, and consulting fees, decreased approximately $0.3 million, or 21.5%, to $1.0 million for the year ended December 31, 2024 compared to $1.3 million for the year ended December 31, 2023.

Data processing expenses, which primarily consist of expenses for data processing services for core processing, increased approximately $0.4 million, or 9.7%, to $4.2 million for 2024 compared to $3.9 million for 2023. The increase was primarily the result of growth and vendor increases.

Depreciation and amortization for the year ended December 31, 2024 was $4.1 million compared to $3.0 million for the year ended December 31, 2023, an increase of approximately $1.1 million, or 35.2%. The increase was primarily attributable to the acquisition of Alliance in 2024.

Other expenses increased $1.5 million, or 27.7%, to $6.9 million for the year ended December 31, 2024, compared to $5.4 million for the year ended December 31, 2023. The increase was primarily attributable to additional expenses related to the transaction with AB&T not recognized for the first half of 2023 due to the timing of the 2023 acquisition of a majority ownership interest in AB&T.

[**Table of Contents**](#TOC001)

#### Financial Condition
Total assets were $2.3 billion as of June 30, 2025, a decrease of $38.7 million, or 1.7%, 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 $49.7 million and a reduction of gross loans of $17.3 million. Total assets increased $104.6 million, or 4.8%, to $2.3 billion at December 31, 2024 as compared to $2.2 billion at December 31, 2023. The increase in total assets was primarily the result of 7.0% organic loan growth. Total loans increased $120.5 million, or 7.1%, to $1.8 billion at December 31, 2024, compared to $1.7 billion at December 31, 2023. The increase in total loans was due to loan growth in the Nashville MSA and Charlotte MSA. Our securities portfolio decreased $34.5 million, or 16.4%, to $176.2 million at December 31, 2024, compared to $210.7 million at December 31, 2023. The decrease in our securities portfolio is the result of decreased need for pledging. Total deposits increased $118.7 million, or 6.5%, to $1.9 billion at December 31, 2024, compared to $1.8 billion at December 31, 2023. A substantial portion of this growth was related to increases in our large depositors accounts.

#### 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 class is generally determined based on the initial measurement attribute, risk characteristic 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, as well as 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 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.

[**Table of Contents**](#TOC001)

**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:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Loan Portfolio Segments** | **Loan Portfolio Segments** | **Loan Portfolio Segments** | **Loan Portfolio Segments** | **Loan Portfolio Segments** | **Loan Portfolio Segments** |
|  | **As of June 30,** | **As of June 30,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** |
|  | **2025<br>Amount** | **% of<br>Total** | **2024<br> Amount** | **% of<br> Total** | **2023<br> Amount** | **% of<br> Total** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  Real Estate Loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Commercial | $1016229 | 57%  | $1006207 | 55% | $894265 | 53% |
| &nbsp;&nbsp;&nbsp; Construction and land development | 189187 | 11%  | 199800 | 11% | 186764 | 11% |
| &nbsp;&nbsp;&nbsp; Residential | 376442 | 21%  | 369308 | 20% | 359014 | 21% |
| &nbsp;&nbsp;&nbsp; Other | 15290 | 1%  | 16816 | 1% | 16850 | 1% |
|  Commercial | 178832 | 10%  | 201593 | 10% | 220827 | 13% |
|  Consumer | 14636 | 1%  | 15214 | 1% | 16707 | 1% |
|  Other | 7773 | 0% | 6744 | 1% | 1868 | 0% |
| &nbsp;&nbsp;&nbsp; Total loans | $1798388 | 100% | $1815682 | 100% | $1696295 | 100% |
|  Deferred loan fees and discounts | 6872 |  | 8685 |  | 9813 |  |
|  Allowance for credit losses | 17989 |  | 18205 |  | 16636 |  |
| &nbsp;&nbsp;&nbsp; Loans, net | $1773528 |  | $1788792 |  | $1669846 |  |

---

Total loans were $1.8 billion as of June 30, 2025, a decrease of $17.3 million, or 0.9%, from December 31, 2024.

Total loans increased $119.4 million, or 7.0%, to $1.8 billion as of December 31, 2024 as compared to $1.7 billion as of December 31, 2023. This increase was substantially the result of organic loan growth in the Nashville MSA, Knoxville MSA and Charlotte MSA.

The following tables show the contractual maturities of our total loan principal balances, excluding loan discounts, overdrafts and other items in the distribution between fixed and adjustable interest rate loans, as of June 30, 2025, December 31, 2024, and December 31, 2023, respectively:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 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** | **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 & land development | $18857 | $50400 | $11189 | $84784 | $15354 | $8603 | $189187 |
| &nbsp;&nbsp;&nbsp; Residential | 7020 | 7439 | 25645 | 35641 | 55186 | 245510 | 376442 |
| &nbsp;&nbsp;&nbsp; Commercial real estate | 103452 | 38093 | 379165 | 187294 | 21879 | 286345 | 1016229 |
| &nbsp;&nbsp;&nbsp; Other | 253 | 200 | 3382 | 10204 | 262 | 989 | 15290 |
|  Commercial | 8997 | 60242 | 38242 | 39363 | 1431 | 30557 | 178832 |
|  Consumer & other | 7142 | 533 | 12297 | 465 | 1716 | 257 | 22408 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Loans** | $**145720** | $**156908** | $**469921** | $**357751** | $**95827** | $**572262** | $**1798338** |

---

[**Table of Contents**](#TOC001)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **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** | **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 & 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 & other | 6613 | 316 | 12465 | 556 | 1724 | 286 | 21958 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Loans** | $**110308** | $**172259** | $**572043** | $**317754** | $**85772** | $**557546** | $**1815682** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** | **As of December 31, 2023** |
|  | **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** | **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 & land development | $48791 | $46416 | $51507 | $23494 | $5683 | $10873 | $186764 |
| &nbsp;&nbsp;&nbsp; Residential | 13167 | 5295 | 34330 | 19790 | 56957 | 229476 | 359014 |
| &nbsp;&nbsp;&nbsp; Commercial real estate | 79404 | 54544 | 370986 | 81225 | 24452 | 284654 | 894265 |
| &nbsp;&nbsp;&nbsp; Other | 52 | 136 | 3786 | 10921 | 856 | 1100 | 16850 |
|  Commercial | 24552 | 56480 | 63318 | 50382 | 2955 | 23139 | 220827 |
|  Consumer & other | 6981 | 313 | 8191 | 433 | 2432 | 224 | 18575 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Loans** | $**172948** | $**163184** | $**532117** | $**186245** | $**92336** | $**549466** | $**1696295** |

---

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 44.6% 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 88.8%, 87.7%, and 85.9% of our total loans were secured by real property as of June 30, 2025, December 31, 2024, and December 31, 2023, 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 Nashville, Knoxville, Chattanooga, and Kingsport in Tennessee and the Charlotte MSA in North Carolina.

CRE loans were 56.4% of total loans as of June 30, 2025, and represented 55.4% of total loans as of December 31, 2024. C&D loans were 10.5% of total loans as of June 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 281% as of June 30, 2025 and 304% as of December 31, 2024. C&D loans represented 70.7% of total risk-based bank capital as of June 30, 2025 as compared to 78.7% as of December 31, 2024.

CRE loans were 55.4% of total loans as of December 31, 2024 and represented 52.7% of total loans as of December 31, 2023. C&D loans were 11.0% of total loans as of December 31, 2024 and represented 11.0% of total loans as of December 31, 2023. The ratio of our CRE loans to total risk-based bank capital was 304% as of December 31, 2024 and 318% as of December 31, 2023. C&D loans represented 78.7% of total risk-based bank capital as of December 31, 2024 as compared to 89.8% as of December 31, 2023. The ratios of CRE loans and C&D loans to total risk-based

[**Table of Contents**](#TOC001)

capital as of December 31, 2024 and 2023 were each below the 300%/100% regulatory concentration guidelines with the exception of the slight overage of 304% and 318% for the 300% ratio as of December 31, 2024 and December 31, 2023, respectively. Further, these loans are geographically diversified, primarily throughout the states of Kentucky, North Carolina and Tennessee.

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." on page 24 of this prospectus. 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.* 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 decreased $10.6 million, or 5.3%, to $189.9 million as of June 30, 2025 from $199.8 million as of December 31, 2024. The majority of this decrease was due to the completion and payoff of C&D loans. Residential C&D loans were relatively flat. C&D loans increased $13.0 million, or 7.0%, to $199.8 million as of December 31, 2024 from $186.8 million as of December 31, 2023. Most of this increase was due to organic loan growth in our Nashville MSA, Knoxville MSA and Charlotte MSA. Residential construction loans were relatively flat.

*Residential.* We offer one-to-four family mortgage loans on both owner-occupied primary residences and investor-owned residences, which made up approximately 89.1% of our residential loan portfolio as of June 30, 2025. Our residential loans also include home equity lines of credit, which totaled $36.3 million, or approximately 9.7% of our residential portfolio, as of June 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.* 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.

[**Table of Contents**](#TOC001)

CRE loans were $1.0 billion as of June 30, 2025, an increase of $10.0 million, or 1.0%, compared to December 31, 2024. The increase was primarily driven by organic new loan growth and completion of C&D loans. As of June 30, 2025, our CRE portfolio was comprised of $364.4 million in non-owner occupied CRE loans and $161.4 million in commercial construction loans.

CRE loans increased $111.9 million, or 12.5%, to $1.0 billion as of December 31, 2024 from $894.3 million as of December 31, 2023. The increase was mostly driven by organic loan growth in the Nashville MSA and Charlotte MSA. As of December 31, 2024, our CRE portfolio was comprised of $366.6 million in non-owner occupied CRE loans and $168.0 million in commercial construction loans.

*Commercial.* 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 $22.8 million, or 11.3%, to $178.8 million as of June 30, 2025 from $201.6 million as of December 31, 2024. Commercial loans decreased $19.2 million, or 9%, to $201.6 million as of December 31, 2024 from $220.8 million as of December 31, 2023.

*Consumer and Other.* We utilize the 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 $0.5 million, or 2.1%, to $22.4 million as of June 30, 2025, from $22.0 million as of December 31, 2024. Consumer and other loans (non-real estate loans) increased $3.4 million, or 18.2%, to $22.0 million as of December 31, 2024, from $18.6 million as of December 31, 2023.

#### 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 June 30, 2025, December 31, 2024 and December 31, 2023, loan participations sold to third parties (which are not included in the accompanying consolidated balance sheets) totaled $46.8 million, $46.3 million and $32.3 million, respectively. We sell participations to manage our credit exposures to borrowers. On June 30, 2025, December 31, 2024 and December 31, 2023, loan participations purchased totaled $7.6 million, $7.7 million and $27.6 million, respectively. The variances come from purchases and sales of participations in the ordinary course of business.

[**Table of Contents**](#TOC001)

#### Allowance for Credit Losses
The allowance for credit losses 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 uncollectibility 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 allowance for credit losses is evaluated on a regular basis by management and is based upon management's periodic review of the uncollectibility 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 Bank estimates the allowance for credit losses 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 Bank has policies in place to reverse accrued interest in a timely manner. Therefore, the Bank has made a policy election to exclude accrued interest from the measurement of the allowance for credit losses.

Expected credit losses are reflected in the allowance for credit losses 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 Bank.

The Company's methodologies for estimating the allowance for credit losses 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 weighted average remaining maturity ("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 Federal Reserve to either accelerate and/or slow down the economy. Additionally, the allowance for credit losses 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, 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.

[**Table of Contents**](#TOC001)

Our allowance for credit losses was $18.0 million at June 30, 2025 compared to $18.2 million at December 31, 2024, a decrease of $0.2 million, or 1.2%. No additional provisions were recorded for the six months ended June 30, 2025. Our allowance for credit losses was $18.2 million at December 31, 2024 compared to $16.6 million at December 31, 2023, an increase of $1.6 million, or 9.4%. Additional provisions were recorded based on national, regional and economic conditions and changes in the volume and nature of our loan portfolio. In addition, some of the allowance for credit losses increase was due to adjustments for consideration of the concentration of loans in certain risk categories.

The following table provides an analysis of the allowance for credit losses at the dates indicated.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of <br>June 30, <br>2025** | **<br>As of December 31,** | **<br>As of December 31,** | **<br>As of December 31,** | **<br>As of December 31,** | **<br>As of December 31,** |
|  | **As of <br>June 30, <br>2025** | **2024** | **2023** | **2022** | **2021** | **2020** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  Average loans outstanding | $1795846 | $1738433 | $1522033 | $1264516 | $1186332 | $1192795 |
|  Total loans outstanding at end of period | $1798388 | $1815682 | $1696295 | $1335462 | $1209606 | $1250183 |
|  Allowance for credit losses at beginning of period | $18205 | $16635 | $13448 | $11190 | $10907 | $9166 |
|  Charge-offs: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Commercial real estate | (18) | (49) |  |  | (117) |  |
| &nbsp;&nbsp;&nbsp; Construction and land <br>development |  |  | (30) | (58) |  | (10) |
| &nbsp;&nbsp;&nbsp; Residential real estate | (121) | (52) |  | (113) | (128) | (176) |
| &nbsp;&nbsp;&nbsp; Commercial | (314) | (177) | (9) | (126) | (126) | (83) |
| &nbsp;&nbsp;&nbsp; Consumer & other | (51) | (151) | (147) | (212) | (238) | (293) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total charge-offs** | (504) | (429) | (186) | (509) | (609) | (562) |
|  Recoveries: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Commercial real estate | 43 | 75 |  |  | 2 |  |
| &nbsp;&nbsp;&nbsp; Construction & land <br>development | 202 |  | 36 | 1241 | 106 | 9 |
| &nbsp;&nbsp;&nbsp; Residential real estate | 18 | 9 |  | 303 | 251 | 107 |
| &nbsp;&nbsp;&nbsp; Commercial | 3 | 54 | 8 | 7 | 61 | 214 |
| &nbsp;&nbsp;&nbsp; Consumer & other | 22 | 32 | 55 | 50 | 76 | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total recoveries** | 288 | 170 | 99 | 1601 | 496 | 389 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net (charge-offs) recovery** | $**(216)** | $**(259)** | $**(87)** | $**1092** | $**(113)** | $**(173)** |
| &nbsp;&nbsp;&nbsp; Provision for credit losses | $— | $1829 | $3274 | $778 | $396 | $1914 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Balance at end of period | $17989 | $18205 | $16635 | $13060 | $11190 | $10907 |
| &nbsp;&nbsp;&nbsp; Ratio of allowance to end of period loans | 1.01% | 1.00% | 0.98% | 0.98% | 0.93% | 0.87% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Ratio of net (charge-offs) recovery to average loans | (0.012)% | (0.015)% | (0.006)% | 0.086% | (0.009)% | (0.015)% |

---

Net charge-offs for the six months ended June 30, 2025 totaled $0.2 million. Net charge-offs for the year ended December 31, 2024 totaled $0.3 million, an increase of $0.2 million, or 197.7%, compared to $0.1 million for the year ended December 31, 2023.

[**Table of Contents**](#TOC001)

#### 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 allowance for credit losses 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 allowance for credit losses 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 other real estate owned is charged to the allowance for credit losses. 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 other real estate owned 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 OREO until sold and is initially recorded at fair value less costs to sell when acquired, establishing a new carrying value. OREO totaled approximately $0.9 million at June 30, 2025, $0.8 million at December 31, 2024 and $1.0 million at December 31, 2023.

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 $5.8 million at June 30, 2025. We had $6.4 thousand in consumer loans 90 days past due and still accruing at June 30, 2025.

Total nonperforming loans increased approximately $0.8 million from December 31, 2024 to June 30, 2025. The increase was primarily the result of normal fluctuations. Total nonperforming loans increased approximately $0.1 million from December 31, 2023 to December 31, 2024. The increase was primarily the result of increased delinquency in our consumer mortgage loan portfolio.

[**Table of Contents**](#TOC001)

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 June 30, 2025, December 31, 2024 and December 31, 2023:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **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** |
|  **As of June 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 | $1014558 | $190 | $— | $1481 | $1016229 |
| &nbsp;&nbsp;&nbsp; Construction & land development | 188790 | 360 |  | 38 | 189187 |
| &nbsp;&nbsp;&nbsp; Residential real estate | 369299 | 2964 |  | 4179 | 376442 |
| &nbsp;&nbsp;&nbsp; Other | 15290 |  |  |  | 15290 |
|  Commercial | 177951 | 766 |  | 116 | 178832 |
|  Consumer & other | 22228 | 142 | 6 | 33 | 22408 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total loans** | $**1788114** | $**4421** | $**6** | $**5846** | $1,**798388** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **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** |
|  **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 & 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 & other | 21794 | 118 | 2 | 44 | 21958 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total loans** | $**1803415** | $**7206** | $**2** | $**5059** | $**1815682** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **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** |
|  **As of December 31, 2023** | **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 | $892431 | $1030 | $160 | $643 | $894265 |
| &nbsp;&nbsp;&nbsp; Construction & land Development | 186333 | 431 |  |  | 186764 |
| &nbsp;&nbsp;&nbsp; Residential real estate | 352458 | 2368 | 181 | 4007 | 359014 |
| &nbsp;&nbsp;&nbsp; Other | 16850 |  |  |  | 16850 |
|  Commercial | 220440 | 232 |  | 155 | 220827 |
|  Consumer & other | 18413 | 79 |  | 83 | 18575 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total loans** | $**1686926** | $**4140** | $**341** | $**4888** | $**1696295** |

---

[**Table of Contents**](#TOC001)

*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>June 30, <br>2025** | **<br>As of December 31,** | **<br>As of December 31,** | **<br>As of December 31,** | **<br>As of December 31,** | **<br>As of December 31,** |
|  | **As of <br>June 30, <br>2025** | **2024** | **2023** | **2022** | **2021** | **2020** |
|  | **(Dollars in Thousands)** | **(Dollars in Thousands)** | **(Dollars in Thousands)** | **(Dollars in Thousands)** | **(Dollars in Thousands)** | **(Dollars in Thousands)** |
|  Nonaccrual loans | $5846 | $5059 | $4888 | $4005 | $4804 | $14541 |
|  Loans past due 90 days or more and still accruing | 6 | 2 | 342 | 8 | 5 | 11 |
| &nbsp;&nbsp;&nbsp; Total nonperforming loans | 5853 | 5061 | 5230 | 4013 | 4809 | 14552 |
|  OREO | 861 | 832 | 1046 | 1709 | 2285 | 9287 |
|  Repossessed property |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Total nonperforming assets | $6714 | $5893 | $6276 | $5722 | $7095 | $23839 |
|  Modified loans – nonaccrual<sup>(1)</sup> | $— | $— | $— | $— | $— | $1504 |
|  Modified loans – accruing | $— | $— | $— | $3063 | $2121 | $759 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Allowance for credit losses | $17989 | $18205 | $16636 | $13060 | $11189 | $10907 |
|  Total loans outstanding at end of period | $1798388 | $1815682 | $1696295 | $1335462 | $1209606 | $1250183 |
| &nbsp;&nbsp;&nbsp; Nonperforming loans to total loans | 0.33% | 0.28% | 0.31% | 0.30% | 0.40% | 1.16% |
| &nbsp;&nbsp;&nbsp; Nonperforming assets to total loans and OREO | 0.37% | 0.32% | 0.37% | 0.43% | 0.59% | 1.89% |
|  Allowance for credit losses to nonperforming loans | 307% | 360% | 318% | 325% | 233% | 75% |
|  Allowance for credit losses to total loans | 1.00% | 1.00% | 0.98% | 0.98% | 0.93% | 0.87% |
|  Nonaccrual loans by category: |  |  |  |  |  |  |
|  Real estate: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Commercial real estate | $1481 | $444 | $643 | $142 | $223 | $3572 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 38 | 6 |  | 127 | 330 | 494 |
| &nbsp;&nbsp;&nbsp; Residential & other | 4179 | 4491 | 4007 | 3663 | 4081 | 8412 |
|  Commercial | 116 | 74 | 155 | 16 | 107 | 1975 |
|  Consumer & other | 33 | 44 | 83 | 56 | 63 | 87 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total** | $**5846** | $**5059** | $**4888** | $**4005** | $**4804** | $**14541** |

---

____________

(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 allowance for credit losses. In some cases, the Bank provides multiple types of concessions on one loan.

[**Table of Contents**](#TOC001)

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 June 30, 2025, December 31, 2024 and December 31, 2023, was $0.

#### 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.

[**Table of Contents**](#TOC001)

The following tables summarize the risk categories of our loan portfolio based upon the most recent analysis performed as of June 30, 2025, December 31, 2024 and December 31, 2023, 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** |
|  **As of June 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 | $1012190 | $2515 | $1524 | $— | $1016229 |
| &nbsp;&nbsp;&nbsp; Construction & land development | 189149 |  | 38 |  | 189187 |
| &nbsp;&nbsp;&nbsp; Residential and other | 371353 | 849 | 4240 |  | 376442 |
|  Other | 15290 |  |  |  | 15290 |
|  Commercial | 177969 | 747 | 116 |  | 178832 |
|  Consumer and other | 22367 | 6 | 36 |  | 22408 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total loans** | $1,**788317** | $**4118** | $**5953** | $**—** | $**1798388** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **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** |
|  **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 & land development | 199098 | 701 |  |  | 199800 |
| &nbsp;&nbsp;&nbsp; Residential and other | 380768 | 865 | 4491 |  | 386124 |
|  Commercial | 200976 | 543 | 74 |  | 201593 |
|  Consumer and other | 21902 | 8 | 48 |  | 21958 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total loans** | $**1804857** | $**5722** | $**5102** | $— | $**1815682** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **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** |
|  **As of December 31, 2023** | **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 | $892258 | $1309 | $698 | $— | $894265 |
| &nbsp;&nbsp;&nbsp; Construction & land development | 186356 | 408 |  |  | 186764 |
| &nbsp;&nbsp;&nbsp; Residential and other | 370565 | 1003 | 4296 |  | 375864 |
|  Commercial | 220657 | 15 | 155 |  | 220827 |
|  Consumer and other | 18479 | 15 | 82 |  | 18576 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total loans** | $**1688314** | $**2750** | $**5231** | $**—** | $**1696295** |

---

#### 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.

[**Table of Contents**](#TOC001)

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. 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.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **Amortized <br>Cost** | **Fair <br>Value** | **Unrealized <br>Gain/(Loss)** | **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)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  **Available-for-Sale** |  |  |  |  |  |  |  |  |  |
|  U.S. government and federal agency | $10 | $10 | $— | $15277 | $15269 | $(8) | $15060 | $15039 | $(21) |
|  U.S. government-sponsored enterprises (GSEs) |  |  |  | 56 | 56 |  | 849 | 850 | 1 |
|  Mortgage-backed securities | 15178 | 14513 | (665) | 17085 | 16143 | (942) | 22164 | 19891 | (2274) |
|  State and political subdivisions | 16251 | 15591 | (660) | 17253 | 16470 | (783) | 16815 | 16262 | (553) |
|  **Total Available-for-Sale** | $**31439** | $**30113** | $**(1326)** | $**49671** | $**47938** | $**(1733)** | $**54889** | $**52041** | $**(2848)** |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **Amortized <br>Cost** | **Fair <br>Value** | **Unrealized <br>Gain/(Loss)** | **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)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  **Held-to-Maturity** |  |  |  |  |  |  |  |  |  |
|  U.S. government and federal agency | $97623 | $95786 | (1836) | $87467 | $84440 | $(3027) | $104741 | $98512 | $(6229) |
|  U.S. government-sponsored enterprises (GSEs) | 16448 | 15995 | (454) | 19271 | 18560 | (711) | 32684 | 31568 | (1116) |
|  Mortgage-backed securities | 39458 | 36491 | (2967) | 19031 | 15864 | (3167) | 18507 | 15394 | (3113) |
|  State and political subdivisions | 3922 | 3646 | (277) | 2448 | 2179 | (269) | 2699 | 2397 | (302) |
|  **Total Held-to-Maturity** | $**157452** | $**151918** | $**(5534)** | $**128217** | $**121043** | $**(7174)** | $**158631** | $**147871** | $**(10760)** |

---

Certain securities have fair values less than amortized cost and, therefore, contain unrealized losses. At June 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.

[**Table of Contents**](#TOC001)

The following tables set forth certain information regarding contractual maturities and the weighted average yields of our investment securities as of June 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 June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 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 |  |  | 10 | 8.1 |  |  |  |  |
|  U.S. government and federal agencies |  | —% |  | —% |  |  |  |  |
|  State and political subdivisions | 3541 | 2.6% | 5510 | 2.8% | 5262 | 3.7% | 1938 | 4.9% |
|  Mortgage-backed securities | 85 | 4.1% | 2229 | 3.6% | 4935 | 2.5% | 7929 | 3.6% |
|  **Total Available-for-Sale** | $**3626** | **2.5%** | $**7749** | **3.0%** | $**10197** | **3.1%** | $**9867** | **3.8%** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **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 June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 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 | $69948 | 2.7% | $27675 | 0.9% | $— | —% | $— | —% |
|  U.S. government-sponsored enterprises (GSEs) | 2978 | 3.1% | 13470 | 2.5% |  | —% |  | —% |
|  State and political subdivisions |  | —% | 2441 | 1.5% | 98 | 4.4% | 1384 | 5.0% |
|  Mortgage-backed securities |  | —% |  | —% |  | —% | 39458 | 3.7% |
|  **Total Held-to-Maturity** | $**72926** | **2.7%** | $**43586** | **1.4%** | $**98** | **4.4%** | $**40842** | **3.7%** |

---

[**Table of Contents**](#TOC001)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **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. treasury securities | $59722 | 4.7% | $27745 | 0.9% | $— | —% | $— | —% |
|  U.S. government and federal agencies | 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:*** 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 allowance for credit losses, limited to the amount by which the amortized cost basis exceeds the fair value. Any impairment not recognized through an allowance for credit losses is recognized in other comprehensive income (loss), 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 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:*** 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 $240,678, $230,223 and $296,568 as of June 30, 2025, December 31, 2024 and December 31, 2023, 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 six months ended June 30, 2025 or the fiscal years ended December 31, 2024 and 2023.

#### 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 June 30, 2025, BOLI policies totaled $46.5 million compared to $45.8 million and $44.8 million at December 31, 2024 and 2023, respectively. 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.

[**Table of Contents**](#TOC001)

#### 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 $1.9 billion at both June 30, 2025 and December 31, 2024. Total deposits on December 31, 2024 were $1.9 billion, representing an increase of $118.8 million, or 6.5%, compared to $1.8 billion at December 31, 2023. As of June 30, 2025, 22.5% of total deposits was comprised of noninterest-bearing demand deposits, 48.2% of total deposits was comprised of interest-bearing non-maturity accounts and 29.3% 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 June 30, 2025, December 31, 2024 and December 31, 2023:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of <br>June 30, <br>2025** | **As of <br>June 30, <br>2025** | **<br>As of December 31,** | **<br>As of December 31,** | **<br>As of December 31,** | **<br>As of December 31,** |
|  | **As of <br>June 30, <br>2025** | **As of <br>June 30, <br>2025** | **2024** | **2024** | **2023** | **2023** |
|  | **Balance** | **% of <br>Total** | **Balance** | **% of <br>Total** | **Balance** | **% of <br>Total** |
|  | | | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  Noninterest-bearing demand deposits | $417015 | 22.5% | $397240 | 20.5% | $416839 | 22.9% |
|  Interest-bearing deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest-bearing demand deposits | 509870 | 27.5% | 579240 | 29.9% | 505278 | 27.8% |
| &nbsp;&nbsp;&nbsp; NOW, savings and money market | 382788 | 20.7% | 385615 | 20.0% | 381680 | 21.0% |
| &nbsp;&nbsp;&nbsp; Time deposits | 541574 | 29.3% | 576501 | 29.7% | 516126 | 28.4% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total interest-bearing deposits | 1434233 | 77.5% | 1541356 | 79.5% | 1403084 | 77.1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deposits | $1851248 | 100% | $1938596 | 100% | $1819923 | 100% |

---

The following tables set forth the maturity of time deposits as of June 30, 2025, December 31, 2024 and December 31, 2023:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of June 30, 2025 Maturity Within:** | **As of June 30, 2025 Maturity Within:** | **As of June 30, 2025 Maturity Within:** | **As of June 30, 2025 Maturity Within:** | **As of June 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) | $173738 | $243249 | $18727 | $8017 | $443730 |
|  Time deposits (greater than or equal to $250,000) | 27796 | 59362 | 10686 |  | 97844 |
| &nbsp;&nbsp;&nbsp; Total time deposits | $201534 | $302611 | $29413 | $8017 | $541574 |

---

[**Table of Contents**](#TOC001)

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **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 or equal to $250,000) | 17909 | 68975 | 7566 | 291 | 94741 |
| &nbsp;&nbsp;&nbsp; Total time deposits | $102694 | $384726 | $80640 | $8441 | $576501 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2023 Maturity Within:** | **As of December 31, 2023 Maturity Within:** | **As of December 31, 2023 Maturity Within:** | **As of December 31, 2023 Maturity Within:** | **As of December 31, 2023 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) | $73507 | $178456 | $179948 | $6438 | $438349 |
|  Time deposits (greater than or equal to $250,000) | 13982 | 53079 | 10105 | 611 | 77777 |
| &nbsp;&nbsp;&nbsp; Total time deposits | $87489 | $231535 | $190053 | $7049 | $516126 |

---

Time deposits issued in amounts of greater than or equal to $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 June 30, 2025, December 31, 2024 and December 31, 2023, we had borrowing capacity from the FHLB of $210.2 million, $175.1 million, and $45.2 million, respectively. The increase in capacity is due to adding new collateral. We had no short-term FHLB borrowings as of June 30, 2025 or December 31, 2024, and had short-term FHLB borrowings of $20.0 million as of December 31, 2023. We had long-term FHLB borrowings of $63.2, $65.6 million, and $99.0 million as of June 30, 2025, December 31, 2024 and December 31, 2023, respectively. All our outstanding FHLB advances have fixed rates of interest.

The following table sets forth our FHLB borrowings as of June 30, 2025, December 31, 2024 and December 31, 2023:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of <br>June 30,<br>2025** | **<br>As of December 31,** | **<br>As of December 31,** |
|  | **As of <br>June 30,<br>2025** | **2024** | **2023** |
|  | | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  Long-term FHLB borrowings outstanding at end of period | $63153 | $65581 | $99031 |
|  Weighted average interest rate at end of period | 2.83% | 2.72% | 3.19% |
|  Maximum month-end balance | $65182 | $97799 | $128485 |
|  Average balance outstanding during the period | $63534 | $72572 | $99201 |
|  Weighted average interest rate during the period | 2.77% | 2.73% | 3.05% |

---

*Lines of Credit.* 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 June, 2025, of which $62.5 million was available. The total amount of the lines of credit was $102.5 million as of December 31, 2024, and $102.5 million as of December 31, 2023, all of which was available at these dates.

[**Table of Contents**](#TOC001)

*Federal Reserve Discount Window.* 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 June 30, 2025, December 31, 2024 or December 31, 2023. The total amount of this line of credit was $108.2 million as of December 31, 2023. The Bank has moved the collateral from the Federal Reserve Discount Window to the FHLB line in order to take advantage of longer maturities and different rate structures. As a result, the total line of credit with the Federal Reserve Discount Window as of June 30, 2025 and December 31, 2024 is $0.

*Community Trust Bank Loan Agreement.* In April 2015, we executed a loan agreement with Community Trust Bank, Inc., which was later amended and restated pursuant to the Community Trust Loan Agreement, providing for a term loan that matures in 2035. 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 June 30, 2025 was $20.7 million.

*Trust Preferred Securities.* With the acquisition of Citizens Bancorp, Inc. ("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 (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 subordinated 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 6.74%, 6.89% and 7.76% on June 30, 2025, December 31, 2024 and December 31, 2023, 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.

#### 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 ("ALCO") 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.

[**Table of Contents**](#TOC001)

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 "Dividend Policy — Dividend Restrictions" and "Supervision and Regulation — Payment of Dividends and Repurchases of Capital Instruments." The Company relies on its liquidity to pay interest and principal on Company indebtedness, company operating expenses, and dividends to Company shareholders.

The following charts reflect changes in our on-balance-sheet liquidity and our ratio of on-balance-sheet liquidity to non-collateralized deposits between June 30, 2024 and June 30, 2025, as well as our ratios of on-balance-sheet liquidity to uninsured and uncollateralized ("UU") deposits and available, or off-balance sheet, sources of liquidity to UU deposits. These charts we believe indicate the Company's ability to fund decreases in the Bank's deposit base. We believe the risk of rapid erosion of deposits collateralized by securities is low and therefore these balances are excluded from the ratio denominator in the first chart, which shows our ability to fund normal decreases in deposits with on-balance sheet liquidity. The second chart we believe indicates the Company's ability to fund significant, unexpected withdrawals or decreases in the Bank's deposit base with available and tested off-balance sheet liquidity, including unsecured lines of credit with correspondent banks, brokered CDs, National CD Rateline, FHLB lines collateralized by certain loan portfolios, and the Federal Reserve Discount Window.

#### Ratio of On-Balance Sheet Liquidity ($M) to<br>Non-Collateralized Deposits

#### Liquidity/UU Deposits
![](tbarchart_007.jpg)

[**Table of Contents**](#TOC001)

---

| | |
|:---|:---|
|  ***Current On-Balance Sheet (in thousands)*** |  |
|  Cash and cash equivalents | $151282 |
|  Unpledged available-for-sale and held-to-maturity securities | 32808 |
|  **Total on-balance sheet** | $**184090** |

---

---

| | |
|:---|:---|
|  ***Available Sources of Liquidity (in thousands)*** |  |
|  FRB & FHLB remaining borrowing capacity | $210150 |
|  Correspondent banks borrowing capacity | 62500 |
|  Brokered CDs capacity | 290808 |
|  **Total available sources** | $**563458** |

---

#### 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 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 "Supervision and Regulation."

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 June 30, 2025, December 31, 2024 and December 31, 2023. The 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 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 June 30, 2025:** |  |  |  |  |  |  |
|  Tier 1 capital (to average assets) (leverage) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Company | $229716 | 10.7% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp; Bank | $249436 | 11.2% | $88913 | 4.0% | $111142 | 5.0% |
|  CET1 capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Company | $224174 | 12.1% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp; Bank | $249436 | 13.6% | $82537 | 4.5% | $119221 | 6.5% |

---

[**Table of Contents**](#TOC001)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **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)** |
|  Tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Company | $229716 | 12.4% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp; Bank | $249436 | 13.6% | $110050 | 6.0% | $146733 | 8.0% |
|  Total capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Company | $247705 | 13.4% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp; Bank | $267495 | 14.6% | $146733 | 8.0% | $183416 | 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% |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **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, 2023:** |  |  |  |  |  |  |
|  Tier 1 capital (to average assets) (leverage) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Company | $188721 | 8.4% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp; Bank | $193842 | 10.3% | $75070 | 4.0% | $97387 | 5.0% |
| &nbsp;&nbsp;&nbsp; Alliance | $23622 | 9.1% | $10433 | 4.0% | $13041 | 5.0% |
|  CET1 capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Company | $183353 | 8.2% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp; Bank | $193842 | 12.3% | $70645 | 4.5% | $102042 | 6.5% |
| &nbsp;&nbsp;&nbsp; Alliance | $23622 | 10.9% | $9770 | 4.5% | $14112 | 6.5% |
|  Tier 1 capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Company | $188721 | 8.4% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp; Bank | $193842 | 12.3% | $94193 | 6.0% | $125590 | 8.0% |
| &nbsp;&nbsp;&nbsp; Alliance | $23622 | 10.9% | $13026 | 6.0% | $17368 | 8.0% |

---

[**Table of Contents**](#TOC001)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **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)** |
|  Total capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Company | $205357 | 9.2% | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp; Bank | $207918 | 13.2% | $125590 | 8.0% | $156988 | 10.0% |
| &nbsp;&nbsp;&nbsp; Alliance | $26252 | 12.1% | $17368 | 8.0% | $21710 | 10.0% |

---

We have a relatively simple regulatory capital structure with the vast majority of our regulatory capital in the form of common equity Tier 1 capital, which is viewed by our regulators as the highest quality regulatory capital. The following chart depicts our regulatory capital structure for each of the fiscal years ended December 31, 2022 through 2024 and for the six months ended June 30, 2025:

![](tbarchart_008.jpg)

#### Contractual Obligations
The following tables contain supplemental information regarding our total contractual obligations at June 30, 2025, December 31, 2024 and December 31, 2023:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Payments Due at June 30, 2025** | **Payments Due at June 30, 2025** | **Payments Due at June 30, 2025** | **Payments Due at June 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 | $500227 | $38116 | $3231 | $541574 |
|  Short-term borrowings | 46300 |  |  | 46300 |
|  Long-term borrowings | 2774 | 21269 | 72624 | 96667 |
|  Subordinated debt securities |  |  | 5542 | 5542 |
| &nbsp;&nbsp;&nbsp; Total contractual obligations | $549301 | $59385 | $81397 | $690083 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **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 |

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Payments Due at December 31, 2023** | **Payments Due at December 31, 2023** | **Payments Due at December 31, 2023** | **Payments Due at December 31, 2023** |
|  | **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 | $315922 | $198803 | $1401 | $516126 |
|  Short-term borrowings | 6047 |  |  | 6047 |
|  Long-term borrowings | 52887 | 37302 | 47660 | 137849 |
|  Subordinated debt securities |  |  | 5368 | 5368 |
| &nbsp;&nbsp;&nbsp; Total contractual obligations | $374856 | $236105 | $54429 | $665390 |

---

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*** 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>June 30,<br>2025** | **<br>As of December 31,** | **<br>As of December 31,** |
|  | **As of <br>June 30,<br>2025** | **2024** | **2023** |
|  | **(Dollars in thousands)** | **(Dollars in thousands)** | **(Dollars in thousands)** |
|  Commitments to grant loans and unfunded commitments under lines of credit | $305380 | $354509 | $397396 |
|  Standby letters of credit | 22939 | 45505 | 19787 |
| &nbsp;&nbsp;&nbsp; Total | $328320 | $400014 | $417183 |

---

#### Qualitative and Quantitative Disclosures About Market Risk
As a financial institution, our primary component of market risk is interest rate volatility. Our interest rate risk policy provides management with the guidelines for effective funds management, and we have established a measurement system for monitoring our net interest rate sensitivity position. We have historically managed our sensitivity position within our established guidelines.

Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the market value of all interest-earning assets and interest-bearing liabilities, other than those which have a short term to maturity. Interest rate risk is the potential of economic losses due to future interest

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rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of current fair market values. The objective is to measure the effect on net interest income and to adjust the balance sheet to minimize the inherent risk while at the same time maximizing income.

We manage our exposure to interest rates by adjusting our balance sheet assets and liabilities in the ordinary course of business. Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets.

Our exposure to interest rate risk is managed by ALCO in accordance with policies approved by the Bank Board. ALCO formulates strategies based on appropriate levels of interest rate risk. In determining the appropriate level of interest rate risk, ALCO considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors. ALCO meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, commitments to originate loans and the maturities of investments and borrowings. Additionally, ALCO reviews liquidity, cash flow flexibility, maturities of deposits and consumer and commercial deposit activity. Management also employs methodologies to manage interest rate risk, which include an analysis of the relationships between interest-earning assets and interest-bearing liabilities and an interest rate risk simulation model and shock analyses.

We use interest rate risk simulation models and shock analyses to test the interest rate sensitivity of net interest income and fair value of equity, and the impact of changes in interest rates on other financial metrics.

Contractual maturities of and re-pricing opportunities for loans are incorporated in the models. The average lives of non-maturity deposit accounts are based on decay assumptions and are incorporated into the models. All of the assumptions used in our analyses are inherently uncertain and, as a result, the models cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the models' simulated results due to the timing, magnitude and frequency of interest rate changes as well as changes in market conditions and the application and timing of various management strategies.

On a quarterly basis, we run a simulation model for a static balance sheet and other scenarios. These models test the impact on net interest income from changes in market interest rates under various scenarios. Under the static model, rates are shocked instantaneously and ramped rates change over a 12-month and 24-month horizon based upon parallel and non-parallel yield curve shifts. Parallel shock scenarios assume instantaneous parallel movements in the yield curve compared to a flat yield curve scenario. Non-parallel simulation involves analysis of interest income and interest expense under various changes in the shape of the yield curve. Our internal policy regarding internal rate risk simulations currently specifies that, for parallel shifts of the yield curve, estimated net interest income at risk for the subsequent one-year period should not decline by more than 10% for a 100-basis point shift, 20% for a 200 basis point shift, 30% for a 300 basis point shift, and 35% for a 400 basis point shift.

The following tables summarize the simulated change in net interest income over a 12-month horizon as of the dates indicated:

---

| | | | |
|:---|:---|:---|:---|
|  | **As of <br>June 30,<br>2025** | **<br>As of December 31,** | **<br>As of December 31,** |
|  | **As of <br>June 30,<br>2025** | **2024** | **2023** |
|  | **Percent Change in Net Interest Income** | **Percent Change in Net Interest Income** | **Percent Change in Net Interest Income** |
|  +400 | 27.22% | 27.37% | <sup>(1)</sup> |
|  +300 | 20.44% | 20.49% | 19.07% |
|  +200 | 13.64% | 13.61% | 12.67% |
|  +100 | 7.19% | 7.17% | 6.70% |
| -100 | (4.61)% | (4.32)% | (4.26)% |
| -200 | (10.55)% | (10.20)% | (10.78)% |
| -300 | (11.38)% | (11.30)% | (18.08)% |
| -400 | (14.43)% | (15.43)% | <sup>(1)</sup> |

---

____________

(1) The simulated change in net interest income at a 400 basis point shift is not available for the 12 months ended December 31, 2023.

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Inflation and increases in interest rates may result from fiscal stimulus and monetary stimulus, and the Federal Reserve has indicated it is willing to permit inflation to run moderately above its 2% target for some time. Increases in interest rates may cause consumers to shift their funds to higher interest-bearing instruments and to increase the competition for and cost of deposits. If customers move money out of Bank deposits and into other investment assets or from transaction deposits to higher interest-bearing time deposits, our funding costs may increase. Additionally, any such loss of funds could result in lower loan originations and growth, which could materially and adversely affect our results of operations and financial condition. Increases in market interest rates may reduce demand for loans, including residential mortgage loan originations. At the same time, increases in rates will increase the rates we charge on variable rate loans and may increase our net interest margin. Higher interest rates would decrease the values of our existing fixed rate securities investments and could potentially adversely affect the values and liquidity of collateral securing our loans. The effects of increased rates will depend on the rates of changes in our costs of funds and interest earned on our loans and investments and the shape of the yield curve.

#### Impact of Inflation
The consolidated financial statements and related consolidated financial data presented herein have been prepared in accordance with GAAP and practices within the banking industry which require the measurement of financial position and operating results in terms of historical dollars without considering the changes in the relative purchasing power of money over time due to inflation. Unlike most industrial companies, virtually all the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution's performance than the effects of general levels of inflation.

#### 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 our most significant accounting policies in Note 1 of our consolidated financial statements to be the accounting areas that require 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.

Pursuant to 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 and 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.

The following is a discussion of the critical accounting policies and significant estimates that we believe require us to make the most complex or subjective decisions or assessments. Additional information about these policies can be found in Note 1 of our consolidated financial statements as of and for the fiscal year ended December 31, 2024.

*Basis of Presentation and Consolidation.* Our consolidated financial statements include the accounts of the Company and its wholly owned consolidated subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

*Investment Securities.* Investment securities are classified as either held-to-maturity or available-for-sale securities. In determining such classification, securities that we have 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.

Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Premiums on callable debt securities are amortized to their earliest call date. Gains and losses on the sale of available-for-sale securities are recorded on the trade date and are determined using the specific identification method.

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We have made a policy election to exclude accrued interest from the amortized cost basis of debt securities and report accrued interest in interest receivable in the consolidated balance sheets. Interest receivable on available-for-sale debt securities totaled $118,022, $124,431 and $110,332 as of June 30, 2025, December 31, 2024 and 2023, respectively.

A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a security placed on nonaccrual is reversed against interest income. There was no accrued interest related to debt securities reversed against interest income for the years ended December 31, 2024 and 2023.

*Loans.* Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost (net of the allowance for credit losses). Amortized cost is the principal balance outstanding adjusted for unearned income, charge-offs, the allowance for credit losses, any unamortized deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans. Interest receivable totaled to $6.7 million and $7.7 million as of December 31, 2024 and 2023, 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.

We have purchased loans, some of which have experienced more than insignificant credit deterioration since origination. Purchased credit deteriorated loans are recorded at the amount paid. An allowance for credit losses is determined using the same methodology as other loans held for investment. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of a loan's purchase price and allowance for credit losses 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 allowance for credit losses are recorded through credit loss expense.

*Allowance for Credit Losses.* Under the current expected credit loss model, the allowance for credit losses 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. We estimate the allowance for credit losses 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, we have policies in place to reverse accrued interest in a timely manner. Therefore, we have made a policy election to exclude accrued interest from the measurement of the allowance for credit losses.

Expected credit losses are reflected in the allowance for credit losses through a charge to provision for credit losses. We measure 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 us.

Our methodologies for estimating the allowance for credit losses 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,

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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.

Our 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. We utilize the NY Prime Lending Rate as the independent variable due to it being the tool most commonly utilized by the Federal Reserve to either accelerate and/or slow down the economy. Additionally, the allowance for credit losses 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, collection, 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.

We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. The allowance for credit losses 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.

Loans that do not share risk characteristics are evaluated on an individual basis. For collateral-dependent loans where we have determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and we expect repayment of the loan to be provided substantially through the operation or sale of the collateral, the allowance for credit losses 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. We 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 cost basis of the loan exceeds the fair value of the underlying collateral less estimated cost to sell. The allowance for credit losses may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan.

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, we 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.

#### Public Company Costs
Following the completion of this offering, we expect to incur additional costs associated with operating as a public company. We expect that these costs will include additional personnel, legal, consulting, regulatory, insurance, accounting, investor relations and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, as well as rules and regulations adopted by the SEC, the federal bank regulatory agencies, and national securities exchanges, require public companies to implement specified corporate governance practices that are currently inapplicable to us as a private company. These additional laws, rules and regulations will increase our legal, regulatory and financial compliance costs and will make some activities more time-consuming and costly.

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#### BUSINESS

#### Company Overview
We are a bank holding company headquartered in Harrogate, Tennessee, and have 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 bank subsidiary, Commercial Bank, a Tennessee banking corporation organized in 1976. The Bank is a full-service community banking institution that offers traditional consumer and commercial products and services to serve businesses and individuals in select markets in Kentucky, North Carolina, and Tennessee. As of December 31, 2024, we had total consolidated assets of $2.3 billion, loans, net of allowance for credit losses, of $1.8 billion, deposits of $1.9 billion and total shareholders' equity of $220.3 million, and operated 34 banking offices.

Our primary service areas in Tennessee are (i) the Nashville MSA, (ii) the Knoxville MSA, and (iii) the Tri-Cities MSA, and (iv) Claiborne County, Cocke County, Union County, and Hamblen County, and their surrounding areas. In Kentucky, we primarily serve the communities in Southeast Kentucky, with branches in Barbourville, Corbin, Cumberland, Harlan, London, Middlesboro, and Pineville. Upon the Bank's merger with Alliance on July 1, 2024, we expanded our services to North Carolina, including parts of the Charlotte MSA, with branches in Shelby, Kings Mountain, Lincolnton and Gastonia. We also operate one LPO in Lincolnton, North Carolina.

Through our many years of growth, our experiences have shaped our character. We continue to pursue our mission to create positive experiences for every customer, every day. Through drastic changes in technology and the economy, we have remained strong and continue to enjoy long-term, positive working relationships with our customers and communities.

#### Our History and Growth
The Bank was founded as Commercial Bank of Claiborne County, a full-service Tennessee-chartered bank, by E. Oscar Robertson on June 9, 1976. On November 1, 1976, the Bank opened for business in Harrogate, Tennessee. Approximately three years later, on January 8, 1979, we opened our first branch in Speedwell, Tennessee.

In the following years, our growth has been driven primarily by organic expansion in existing markets and into new markets and through our strategic acquisitions. Over the last five years, we have had a total asset CAGR of 8% while maintaining profitability, credit quality and prudent capital management. Please refer to the "Total Assets" chart below on page 104 of this prospectus for the annual growth in our total assets for each of the fiscal years ended December 31, 2020 through 2024 and for the six months ended June 30, 2025. The following information summarizes our growth history:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On April 23, 1986, we acquired Union County Bank's three branch locations in Maynardville and Luttrell, Tennessee through an FDIC-assisted transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On November 16, 2001, we acquired Middlesboro Federal Bank (Middlesboro, Kentucky) with its four offices located in Middlesboro, Pineville, and Cumberland, Kentucky, and in the Fountain City community of Knoxville, Tennessee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On September 8, 2008, we acquired The Union National Bank and Trust Company of Barbourville (Barbourville, Kentucky) with its five branch locations in Barbourville and Corbin, Kentucky.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• By the end of 2008, our total assets had increased to over $700 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On March 1, 2014, we opened an LPO in Nashville, Tennessee, and by December 31, 2014, we had over $18 million in outstanding loan balances in the Nashville MSA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On April 18, 2016, we acquired National Bank of Tennessee (Newport, Tennessee), which added two new branches to our network.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On August 15, 2017, we announced the acquisition of Citizens Bank (New Tazewell, Tennessee) with its three branch locations in New Tazewell, Harrogate, and Morristown, Tennessee, and an LPO in Kingsport, Tennessee, which was merged into our current Kingsport, Tennessee office.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On March 1, 2019, we transitioned our LPO in Nashville, Tennessee to a full-service branch in Brentwood, Tennessee (part of the Nashville MSA). As of March 31, 2019, we had over $110 million in outstanding loan balances in the Nashville MSA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On February 1, 2020, we acquired First National Bank and Trust (London, Kentucky) with its four branches in London and Corbin, Kentucky resulting in our total assets exceeding $1.5 billion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On June 1, 2023, we acquired a majority ownership interest in AB&T (Gastonia, North Carolina), the parent company of Alliance. On June 30, 2024, we acquired the remaining minority ownership interests in AB&T, and on July 1, 2024, Alliance merged with the Bank. The acquisition of Alliance added four branches and one LPO to our network and expanded our reach into North Carolina, including the Charlotte MSA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We expect to open a de novo branch office in Belmont, North Carolina during 2026, which will further increase our presence in the Charlotte MSA.

The following tables illustrate our balance sheet and income statement growth as of or for the years ended December 31, 2020 through 2024, and as of or for the six months ended June 30, 2025:

![](tbarchart_002.jpg)

<u> \* Year-over-Year Growth Rate for 2Q25 reflects the rate of growth as compared to the six months ended June 30, 2024. </u>   <u> \* Year-over-Year Growth Rate for 2Q25 reflects the rate of growth as compared to the six months ended June 30, 2024. </u>

<u> \* Year-over-Year Growth Rate for 2Q25 reflects the rate of growth as compared to the six months ended June 30, 2024. </u>    

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| | |
|:---|:---|
|  Note: ROAA for 2Q25 is presented on an annualized basis. | \* *Pre*-tax*, pre*-provision *ROAA is a non*-GAAP *financial measure. Please see "Non*-GAAP *Financial Measures" for a definition of pre*-tax*, pre*-provision *ROAA and a reconciliation of pre*-tax*, pre*-provision *ROAA to its most directly comparable GAAP financial measure.*<br> Note: Pre-Tax, Pre-Provision ROAA for 2Q25 is presented on an annualized basis. |

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#### Business Strategy
Our business strategy is to grow through both acquisitions and organically in our current markets and any new markets. We have been very successful with integrating our past acquisitions, consolidations and growth in new markets. We intend to execute our strategic plan through the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Continuing Our Growth Strategy***. We intend to continue providing superior customer service while also continuing to grow our market share of deposits and loans in the markets we currently serve. We will look for strategic acquisitions that can help fill market voids while supporting balance sheet needs as the Bank continues its growth. We intend to continue the development of professional staff and executives through internal development, acquisitions and strategic external hires to support our growth and business complexities, while still maintaining our culture of superior customer service and dedication to Bank growth and expansion. We have successfully grown our balance sheet with loan growth of 43.8% and deposit growth of 37.1% between December 31, 2020 and June 30, 2025. We believe that our teams of engaged, experienced employees will continue to be an important factor in cultivating relationships with current and potential customers and driving growth. In addition to our employee focus, we have made significant investments in technology and risk management systems, and we believe that we have developed an infrastructure that can support significant additional growth with minimal capital investment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Emphasizing Commercial Banking in Local Communities***. We intend to continue operating as a community banking organization focused on meeting the specific needs of small and medium-sized businesses and individuals in our market areas. We will continue to provide a high degree of responsiveness and a wide variety of banking products and services to our customers. We are focused on being a dominant bank in the smaller markets we serve and a competitive player in our larger metropolitan markets. Our consistent corporate message is that the success of our communities and their businesses and individuals will drive the success of the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Pursuing Growth Opportunities through Strategic Acquisitions and De Novo Expansion***. We anticipate continuing to selectively pursue strategic acquisitions and new market expansions through de novo openings to supplement organic growth in our legacy markets. Our organic growth has been complemented by synergistic acquisitions and de novo expansion. We seek to expand our operations in attractive and adjacent markets with experienced banking teams that are a cultural fit and knowledgeable of our target customer base. We may also make acquisitions or open additional offices in our existing markets. We intend to focus on acquisitions that provide meaningful financial benefits, long-term organic growth opportunities and economies of scale without compromising asset quality to the overall organization.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Funding Asset Growth through Core Deposits and Relationship Banking***. We fund our loan growth primarily through low-cost core customer deposits. Our ratio of core deposits (total deposits less time deposits greater than or equal to $250,000 and brokered deposits) was 88.0% of total deposits as of June 30, 2025. Our loan to deposit ratio as of June 30, 2025 was 96.8%. The strength of our deposit franchise results from our development and maintenance of long-standing customer relationships. Our relationship managers and branch managers actively seek lending relationships with our existing depositors. We seek loan relationships with borrowers who have established cash flows and expertise in the projects financed by our loans. Most of our customers with large lending relationships ($2 million or more) with the Bank also have deposits with the Bank. Additionally, we attract deposits from our commercial customers by providing them with personal service, a broad suite of commercial banking and treasury management products and convenient services such as remote deposit capture and commercial internet banking.

The below chart demonstrates the growth in our commercial customer relationships for each of the fiscal years ended December 31, 2020 through 2024 and for the six months ended June 30, 2025:

**Deposits by Customer Segment ($M)**

![](tbarchart_005.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Leveraging Technology to Enhance the Customer Experience and Improve Productivity***. We provide customer convenience through the use of technology and our mobile banking applications, along with our strategically placed banking locations. Since our founding, we have made significant investments in technology to offer online and mobile banking products that we believe are comparable to those offered by many similar-sized competitors and those of the nation's largest banks. We utilize Jack Henry & Associates, Inc. as a core processing service provider, whom we believe can support our growth plan. We also leverage technology solutions to manage cybersecurity risks and data privacy. In addition to customer-facing technology, significant investments have been made in the technology and software utilized by our employees. This technology and software enable our employees to be more productive by enhancing workflow and internal and external management reporting, removing unnecessary steps and reducing manual errors.

#### Competitive Strengths
We believe that the following strengths will help us execute our business strategy:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Experienced and Invested Leadership Coupled with a Distinct, Efficient, and Streamlined Customer***-Focused ***Corporate Culture***. Our Board has decades of combined business experience from a variety of backgrounds. Our directors actively participate in and support community activities, which we believe significantly benefits our business development efforts. Our executive leadership team is comprised of established industry veterans with a track record of profitable growth, operating

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efficiencies and strong risk management. In addition to our executive leadership team, we believe that we are supported by a deep and talented bench of market leaders, many of whom have been with us for much of our existence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Terry L. Lee*** *— President, Chief Executive Officer, and Director.* Terry L. Lee has 35 years of experience in the banking industry, all of which have been with the Bank. He has served as a member of our executive management team in various capacities since 1995 and has provided steady leadership to the Company and the Bank throughout this time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***J. Adam Robertson*** *— Executive Chairperson of the Board*. J. Adam Robertson has 24 years of experience in the banking industry, all of which have been with the Bank. He is primarily responsible for leading the Board and its strategic direction, and he also oversees our investor relations and marketing functions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Philip J. Metheny*** *— Executive Vice President, Chief Financial Officer*. Philip J. Metheny has over 40 years of experience in the banking industry and joined the Bank in 2012. He is primarily responsible for overseeing our financial and accounting operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Richard C. Sprinkle, Jr.*** — *Executive Vice President, Chief Credit Officer.* Richard C. Sprinkle, Jr. has approximately 30 years of experience in the banking industry and joined the Bank in 2008. He is primarily responsible for overseeing the lending activities of the Bank.

Our corporate culture is customer-focused and disciplined, and we aim to provide highly personalized and efficient products and services that our customers find favorable in comparison to our peers. We focus on our customers and treat them like friends and family. We build trusted relationships because we act with integrity. We believe we deliver real value-add through our collaborative, high performance culture, and we strive to empower every employee to make decisions benefiting our customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***History of Successful Acquisitions and Integration.*** We have pursued a strategy of disciplined organic and acquisitive growth. Since 2008, we have successfully completed five whole-bank acquisitions. Our management team has demonstrated success in identifying and integrating strategic acquisition targets that have either added density to our footprint or expanded our presence into attractive markets, to ultimately build long-term shareholder value. Following each transaction, we retained the majority of the acquired deposit and desired lending relationships, which we believe reflects the strength of our relationship-based community banking focus and the quality of our established integration processes. When negotiating a transaction, we are disciplined on price and structure in order to manage the initial tangible book value dilution and earn-back period. We believe our approach to acquisitions and our ability to offer a publicly traded stock as consideration in connection with future acquisitions after the completion of this offering will position us well to become an acquirer of choice for other institutions in our target markets.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **Our Acquisition History** | **Our Acquisition History** | **Our Acquisition History** | **Our Acquisition History** | **Our Acquisition History** | **Our Acquisition History** |
|  |  |  | **At Completion<sup>(1)</sup>** | **At Completion<sup>(1)</sup>** | **At Completion<sup>(1)</sup>** |
|  **Acquisition Date** | **Target Name** | **City, State** | **Assets<br> (in<br> thousands)** | **Loans <br> (in<br> thousands)** | **Deposits<br> (in<br> thousands)** |
| 2023 | AB&T Financial Corporation | Gastonia, NC | $244565 | $193859 | $223075 |
| 2020 | First National Bank and Trust | London, KY | $224912 | $128252 | $182222 |
| 2018 | Citizens Bank | New Tazewell, TN | $197347 | $170535 | $172084 |
| 2016 | National Bank of Tennessee | Newport, TN | $147915 | $51616 | $138508 |
| 2008 | The Union National Bank and Trust Company of Barbourville | Barbourville, KY | $194797 | $124299 | $171836 |
| 2001 | Middlesboro Federal Bank | Middlesboro, KY | $125730 | $99983 | $108344 |

---

____________

(1) *Target financials are based on most recent data at completion date per S&P Capital IQ Pro*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Diversified Loan Portfolio.*** We have an attractive, commercially focused loan portfolio, with the portfolio consisting of 24% owner-occupied CRE loans, 20% non-owner occupied CRE loans, 11% C&D loans, and 9% commercial loans at June 30, 2025. Our loan portfolio primarily consists of

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non-farm, non-residential real estate loans, which include owner-occupied, non-owner occupied, multi-family, C&D, and one-to-four-family residential loans. We have grown loans at a CAGR of 8% since 2020. Please refer to the "Total Net Loans" chart above on page 104 of this prospectus for the annual growth in our total net loans for each of the fiscal years ended December 31, 2020 through 2024 and for the six months ended June 30, 2025. Our loans are typically in market, except where we follow a local loan customer out of market. We typically only extend loans related to self-storage or multi-family projects if there are mitigating circumstances such as strong, liquid guarantors as a secondary source of repayment. We do not extend loans related to non-owner-occupied office space. We believe that our knowledgeable and prudent approach to commercial lending contributes to our relatively low loan losses caused by defaults.

The following table demonstrates the diversification of our commercial and owner-occupied CRE loan portfolios by industry as of June 30, 2025 (dollars in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  **Industry** | **Commercial** | **CRE-Owner-<br>Occupied** | **Total** | **% of Total** |
|  Real estate rental and leasing | $13032 | $64776 | $77808 | 13% |
|  Manufacturing | 20105 | 8102 | 28207 | 5% |
|  Finance and insurance | 45619 | 7538 | 53157 | 9% |
|  Other services (except public administration) | 4736 | 19479 | 24215 | 4% |
|  Retail trade | 1909 | 27256 | 29165 | 5% |
|  Health care and social assistance | 20605 | 18485 | 39090 | 7% |
|  Wholesale trade | 3637 | 6331 | 9968 | 2% |
|  Construction | 11601 | 13545 | 25146 | 4% |
|  Professional, scientific and technical services | 3718 | 6151 | 9870 | 2% |
|  Accommodation and food services | 4133 | 243342 | 247475 | 41% |
|  Arts, entertainment and recreation | 63 | 1927 | 1990 | 0% |
|  Other | 36532 | 16274 | 52805 | 9% |
|  **Total** | $**165690** | $**433207** | $**598897** | **100%** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Core Deposit Base.*** We have built a strong core deposit base by providing quality products and services to customers in our market areas. We offer retail deposit services through our existing branch network, as well as mobile and online banking services. Core deposits totaled $1.6 billion, or 88.0% of total deposits, and noninterest-bearing deposits totaled $417.0 million, or 22.5% of total deposits, as of June 30, 2025. Our commercial lending has led to strong core deposit growth with a 9% CAGR since 2020. Please refer to the "Core Deposits" chart below on page 109 of this prospectus for the annual growth in our core deposits for each of the fiscal years ended December 31, 2020 through 2024 and for the six months ended June 30, 2025.

![](tpiechart_001.jpg)

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![](timage_002.jpg)

<u> \* Y/Y Growth for 2Q25 reflects growth as compared to the six months ended June 30, 2024. </u>    

![](timage_003.jpg)

 *\* Core deposits is a non*-GAAP *financial measure. Please see "Non*-GAAP *Financial Measures" for a definition of core deposits and a reconciliation of core deposits to its most directly comparable GAAP financial measure.*<br> (1) Year-over-Year Growth Rate for 2Q25 reflects the rate of growth as compared to the six months ended June 30, 2024.<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Prudent Credit Risk Management***. We believe that we have a culture of well-developed risk management procedures at all levels of our organization. The loans in our loan portfolio primarily originate from borrowers within our footprint and are subject to a rigorous credit evaluation process that seeks to balance responsiveness with prudent underwriting and pricing practices. A centralized credit underwriting group underwrites all credit exposures, ensuring consistent application of credit standards. We have established processes to monitor our loan portfolio on a regular basis. Our management team and Board have established concentration limits by loan type, industry, and related borrowers, which are regularly reviewed in light of current conditions in our targeted market areas to mitigate developing risk areas within our loan portfolio and to ensure that the asset quality of our loan portfolio remains strong. Our commercial, CRE and consumer loans as a percentage of total loans at June 30, 2025 were 9.9%, 56.4% and 20.9%, respectively. When credit issues arise, our management team takes an active approach in handling the problem. We monitor our loan loss reserve and seek to maintain an adequate reserve for future losses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***• Ability to Recruit and Retain Talented People***. We believe the success of our business model is due to our ability to attract and retain talented bankers in each of our markets. Each of our six major geographic markets is headed by a regional bank president that has the authority, working in tandem with the Bank's

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Central Loan Processing and Commercial Lender Support departments, to approve loans for his or her region up to a certain elevated level above commercial and consumer lenders (which loan approval limits, as well as loan policy exceptions, are monitored and enforced using the Bank's Credit Leader credit management system), hire his or her own employees consistent with the Bank's HR policies, terminate poor preforming employees consistent with the Bank's HR policies, influence product development, coordinate marketing efforts and be the lead executive over decision making in his or her market. This high level of responsibility and market status allows the Bank to attract and retain talented individuals in each of our markets. Regional bank presidents report directly to the President and Chief Executive Officer of the Bank, providing management oversight of the regional bank presidents and allowing a clear line of communication in decision making and keeping each market focused on both its individual goals and the overall goals of the Bank. With decisions related to talent and personnel being made on a market basis, we are able to identify key people in each market to employ and empower them to serve the Bank's growth in each market. We also focus on training and developing each employee to enable upward mobility within our organization as new job opportunities become available. We believe promoting employees from within is critical for core culture and motivating employees to develop, grow and stay with the Bank long term. Our mission of creating positive experiences for every customer, every day and our core values centered around knowledge, exceeding expectations, responsiveness, teamwork, reliability, and friendliness make us attractive for talented bankers and associates across our geographic footprint.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Scalable, Decentralized Operating Model***. We operate each of our markets as individual markets, with an experienced market leader in charge of each market. Each of our market leaders and bankers is empowered to make local decisions up to specified limits set by our executive management based on experience and track record. We believe that the delivery by our bankers of in-market customer decisions, coupled with strong, centralized risk and credit support, allows us to best serve our customers. This operating model has been successful in our existing markets, and we believe it is highly replicable and scalable. This model can support our growth in existing and new markets either organically or through opportunistic acquisitions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• ***Shareholder Focus.*** We started the Bank with a strategic plan to provide consistent, long-term growth and returns to our shareholders. Our tangible book value per share increased 87.8% from December 31, 2020 to June 30, 2025, during which period we also increased dividends and generated strong returns on capital. We believe that our experienced leadership team, commitment to organic and acquisitive growth, and prudent risk management will allow us to consistently build value for our shareholders.

#### Our Markets
As of June 30, 2025, we provided banking services from 34 banking offices in Kentucky, North Carolina, and Tennessee and one LPO in North Carolina. Our markets are a mix of higher-growth areas and stable markets with strong core deposits. We have a top five deposit market share in seven counties of operation and have outperformed as to deposit growth in the majority of our markets. We find strength in the stability of our rural markets coupled with higher growth potential in metropolitan areas such as the Charlotte MSA, the Knoxville MSA, the Nashville MSA and the Tri-Cities MSA. Below is a description of our operations in our primary market areas:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **Market** | **Total<br> Population<br> 2025\*<br> (Estimated)** | **Projected<br> Population<br> Change<br> 2025 – 2030\* <br>(%)** | **Projected<br> Median<br> Household<br> Income<br> 2030\* <br>($)** | **Projected<br> Household<br> Income<br> Change<br> 2025 – 2030\* <br>(%)** | **Unemployment<br> Rate\*\*<br> (%)** |
|  ***Key Metropolitan Markets*** |  |  |  |  |  |
|  Charlotte MSA | 2882670 | 6.6 | 89900 | 10.3 | 3.3 |
|  Knoxville MSA | 968900 | 5.9 | 79167 | 10.7 | 3.2 |
|  Nashville MSA | 2153421 | 5.6 | 94359 | 10.8 | 2.9 |
|  Kingsport-Bristol, Tennessee-Virginia\*\*\* | 316084 | 2.8 | 63674 | 9.1 | 3.4 |
|  Johnson City, Tennessee\*\*\* | 217530 | 4.7 | 68275 | 10.3 | 3.9 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **Market** | **Total<br> Population<br> 2025\*<br> (Estimated)** | **Projected<br> Population<br> Change<br> 2025 – 2030\* <br>(%)** | **Projected<br> Median<br> Household<br> Income<br> 2030\* <br>($)** | **Projected<br> Household<br> Income<br> Change<br> 2025 – 2030\* <br>(%)** | **Unemployment<br> Rate\*\*<br> (%)** |
|  ***Other Markets (Counties)*** |  |  |  |  |  |
|  Laurel, Kentucky | 63914 | 3.1 | 62949 | 6.3 | 5.7 |
|  Knox, Kentucky | 29742 | 0.0 | 39025 | 6.0 | 7.4 |
|  Harlan, Kentucky | 24770 | (5.5) | 41717 | 7.3 | 9.6 |
|  Whitley, Kentucky | 36887 | 1.3 | 49025 | 3.8 | 5.5 |
|  Cleveland, North Carolina | 102485 | 2.7 | 60229 | 11.5 | 3.4 |
|  Claiborne, Tennessee | 33111 | 3.3 | 52777 | 10.4 | 3.9 |
|  Cocke, Tennessee | 38232 | 5.4 | 53200 | 7.1 | 4.9 |
|  Union, Tennessee | 21243 | 6.0 | 65667 | 6.9 | 4.1 |
|  Hamblen, Tennessee | 67602 | 4.8 | 64071 | 6.2 | 3.4 |

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____________

\* Demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market Intelligence. For non-census year data, Claritas uses samples and projections to estimate the demographic data. S&P Global Market Intelligence performs calculations on the underlying data provided by Claritas for some of the data presented on this page.

\*\* Source: U.S. Bureau of Labor Statistics.

\*\*\* Kingsport-Bristol, Tennessee-Virginia and Johnson City, Tennessee constitute the Tri-Cities MSA.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  **Market** | **Market<br> Rank\*\*\*<br> (Deposits)** | **Deposit<br> Market<br> Share\*\*\*<br> (%)** | **Number of<br> Branches** | **Number of<br> Branches** | **Market<br>Deposits\*\*\*<br>($)<br>(in millions)** | **Deposits Per<br>Branch\*\*\*<sup>(1)</sup><br>($)<br>(in millions)** | **Year-over-<br> Year Deposit<br> Growth\*\*\*\*<br> (%)** |
|  ***Key Metropolitan Markets*** |  |  |  |  |  |  |  |
|  Charlotte MSA | 36 | 0.02 | 2 |  | 93.8 | 46.9 | (4.5) |
|  Knoxville MSA | 16 | 0.90 | 4 |  | 225.0 | 37.5 | 3.8 |
|  Nashville MSA | 60 | 0.04 | 1 |  | 34.3 | 34.3 | 42.7 |
|  Kingsport-Bristol, Tennessee-Virginia<sup>(2)</sup> | 19 | 0.60 | 1 |  | 32.5 | 32.5 | 38.2 |
|  Johnson City, Tennessee<sup>(2)</sup> | 18 | 0.10 | 1 |  | 4.5 | 4.5 | 14.3 |
|  ***Other Markets (Counties)*** |  |  |  |  |  |  |  |
|  Laurel, Kentucky | 2 | 20.68 | 5 |  | 236.4 | 47.3 | 4.3 |
|  Knox, Kentucky | 2 | 27.47 | 4 |  | 149.1 | 37.3 | (2.5) |
|  Harlan, Kentucky | 4 | 17.65 | 2 |  | 88.1 | 44.0 | 17.0 |
|  Whitley, Kentucky | 7 | 0.24 | 1 |  | 1.3 | 1.3 | 4.5 |
|  Cleveland, North Carolina | 4 | 10.79 | 2 |  | 152.9 | 76.5 | 22.5 |
|  Claiborne, Tennessee | 1 | 53.53 | 5 | \*\*\*\*\* | 561.8 | 112.4 | 28.4 |
|  Cocke, Tennessee | 3 | 23.66 | 2 |  | 179.3 | 89.6 | 2.6 |
|  Union, Tennessee | 1 | 52.83 | 2 |  | 130.3 | 65.1 | 10.1 |
|  Hamblen, Tennessee | 6 | 3.66 | 2 |  | 49.7 | 24.9 | (6.6) |

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\*\*\* *Source: FDIC; Deposit data as of 6/30/24.*

*\*\*\*\* Calculated using FDIC Deposit data as of 6/30/24.*

*\*\*\*\*\*Includes the banking facility located in our principal executive office.*

(1) Deposits per branch reflects an average for those markets with more than one branch.

(2) Kingsport-Bristol, Tennessee-Virginia and Johnson City, Tennessee constitute the Tri-Cities MSA.

#### Market Characteristics and Mix
*Metropolitan markets.* Our metropolitan markets are characterized by attractive demographics and strong economies and offer substantial opportunity for future growth. Our metropolitan markets collectively have approximately $390.1 billion of total deposits and a total population in excess of 6.5 million people, with a projected weighted average annual population growth rate of 5.75% through 2030, according to demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market, as compared to a national average of

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2.40%. We compete in these markets with national and regional banks, which currently have the largest market share positions, and with community banks, which are primarily focused only on a particular geographic area or business niche. We believe we are well positioned to grow market share among our target customers of small to medium-sized businesses and the consumer base working and living in these metropolitan markets. In our experience, such customers demand the product sophistication of a larger bank but prefer the customer service, relationship focus and local connectivity of a community bank. We believe that our size, product suite and operating model offer us a competitive advantage in these markets versus our smaller competitors, many of which are focused only on specific counties or industries. In addition, our operating model, driven by local talent with strong community ties and local authority, serves as a key competitive advantage over our larger competitors. We believe that, as a result, we are well positioned to leverage our existing franchise to expand our market share in our metropolitan markets.

*Charlotte, North Carolina.* The Charlotte MSA serves as a premier financial and economic hub within the Southeastern United States. The Charlotte MSA has an estimated population of nearly 2.9 million residents that is expected to grow by approximately 6.6% over the next five years, according to demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market. Recognized as the second-largest banking center in the nation, Charlotte boasts robust demographics, rising household incomes, and a dynamic labor market that continues to attract top talent. Charlotte hosts the corporate headquarters of major financial institutions, including Bank of America and Truist Financial, and serves as a critical nexus for the energy, healthcare, and logistics sectors. Its strategic location along the I-85 corridor, coupled with proximity to Charlotte Douglas International Airport — one of the busiest airports globally — solidifies its standing as a pivotal center for commerce and transportation. The region's vibrant quality of life, encompassing professional sports teams, a thriving cultural scene, and extensive outdoor recreation opportunities, further enhances its ability to attract and retain a highly skilled workforce. Charlotte's dominance in the financial industry, coupled with its burgeoning innovation ecosystem, creates an unparalleled opportunity for long-term growth and economic stability.

*Knoxville, Tennessee*. The Knoxville MSA constitutes a dynamic and expanding economic center in East Tennessee. The Knoxville MSA has an estimated population of nearly one million residents that is expected to grow by approximately 5.9% over the next five years, according to demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market. Known for its low cost of living, the Knoxville MSA boasts a robust business climate and has a median household income that is projected to reach approximately $79,000 by 2030, according to demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market. Strategically positioned as a hub for economic activity, the Knoxville MSA hosts key industries, including advanced manufacturing, energy production, and logistics. Knoxville is further enhanced by the presence of prominent institutions such as the University of Tennessee and Oak Ridge National Laboratory, both of which serve as significant drivers of innovation and workforce development. Knoxville's proximity to critical interstate highways and rail systems amplifies its appeal as a premier center for transportation and logistics operations. Moreover, the Knoxville MSA offers a comprehensive range of amenities, including professional sports teams, abundant outdoor recreation, and a pro-business regulatory environment.

*Nashville, Tennessee.* The Nashville MSA represents one of the most rapidly expanding metropolitan regions within the United States. The Nashville MSA has an estimated population of approximately 2.2 million residents that is projected to increase by approximately 5.6% over the next five years, according to demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market. The Nashville MSA has favorable demographics, with its median household income projected to reach approximately $94,000 by 2030, according to demographic data provided by Claritas based on U.S. census data and secured from S&P Global Market. Recognized as the "Music City," Nashville consistently attracts young professionals and is widely acclaimed for its vibrant cultural scene, dynamic labor market, and relative affordability. The region has garnered national recognition, with *Forbes* ranking Nashville among the Best Places for Business and Careers. Nashville's healthcare industry is a major cornerstone of its economy, contributing billions annually and employing a significant portion of the workforce. The Nashville MSA serves as the headquarters for several Fortune 500 and industry-leading corporations, including HCA Healthcare, Inc., Nissan North America Inc., and Bridgestone Americas, Inc., as well as the announced future world headquarters of Oracle Corporation. Strategically positioned as a transportation and logistics hub,

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the Nashville MSA provides significant economic advantages, supported by a highly skilled workforce and a business-friendly environment. Beyond its economic benefits, Nashville boasts a number of professional sports teams, a flourishing arts scene, and renowned universities, such as Vanderbilt University.

*Tri*-Cities*, Tennessee.* The Tri-Cities MSA represents a dynamic and expanding economic hub in Northeast Tennessee and Southwest Virginia. The Tri-Cities MSA has an estimated population exceeding 500,000 that is expected to grow, as well as a favorable business climate characterized by rising household incomes and low operational costs for businesses. The Tri-Cities MSA boasts a diversified economic base, anchored by critical sectors such as healthcare, manufacturing, logistics, and tourism. Key regional assets include East Tennessee State University and Ballad Health, both of which play pivotal roles in advancing the area's educational and healthcare infrastructure. The region's strategic location at the intersection of major interstate highways (I-81 and I-26) further enhances its appeal as a logistics and distribution center, offering seamless access to regional and national markets.

*Community (county) markets.* Our community markets tend to offer primarily retail and small business customer opportunities and more limited competition. This leads to an attractive profitability profile and smaller ticket, more granular loan and deposit portfolios. We increased our deposits in our community markets by 17.0% from 2020 to 2024. Our community markets are standalone markets and not suburbs of larger markets. We primarily compete in these markets with community banks that have less than $1 billion in total assets. We compete effectively against these smaller community banks by providing a broader and more sophisticated set of products and capabilities while still maintaining our local service model. We believe that these markets are being deemphasized by national and regional banks. As a result, we are often the employer of choice for talented bankers in these communities. We believe that our operating model and long-term success in these markets positions us well for continued growth in our existing community markets and to take advantage of attractive opportunities in other community markets.

*Market mix.* The charts below show our branch, loan and deposit mix between our metropolitan and community markets as of June 30, 2025.

![](tpiechart_002.jpg)

<u> \* Includes the banking facility located in our principal executive office. </u>        

#### Our Customers
Our core customer profile across our footprint includes small businesses, corporate customers, CRE owners and consumers. We target business customers with substantial operating history that have annual revenues of up to $300 million. Our typical business customer would keep business deposit accounts with us, and we would look to provide banking services to the owners and employees of the business as well. We also have an active consumer lending business that includes mortgages, home equity lines of credit and small consumer finance loans. We strive to build deeper relationships by actively cross-selling incremental products to meet the banking needs of our customers. The long-standing customer relationships that we have developed throughout our history form the foundation of our attractive returns and stable growth.

#### Competition
The Bank faces substantial competition in attracting and retaining deposits and making loans to its customers in all of its principal markets. The banking and financial services industry is highly competitive, and we compete with a large number of financial institutions within our markets, including local, regional and national commercial banks and credit unions. We also compete with mortgage companies, trust companies, brokerage firms, consumer

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finance companies, mutual funds, securities firms, insurance companies, third-party payment processors, financial technology companies and other financial intermediaries for certain of our products and services. Some of our competitors are not subject to the regulatory restrictions and level of regulatory supervision to which we are subject.

Interest rates on loans and deposits, as well as prices on fee-based services, are typically significant competitive factors within the banking and financial services industry. Other important competitive factors in our industry and markets include office locations and hours, quality of customer service, community reputation, continuity of personnel and services, capacity and willingness to extend credit, and ability to offer excellent banking products and services.

Competition involves efforts to retain current customers, obtain new loans and deposits, increase the types and scope of services offered, and offer competitive interest rates on deposits and loans. Many of our competitors are much larger financial institutions that have greater financial resources than we do and compete aggressively for market share. These competitors attempt to gain market share through their financial product mix, pricing strategies and banking center locations.

While we seek to remain competitive with respect to fees charged, interest rates and pricing, we believe that our broad suite of financial solutions, our high-quality and high-touch customer service culture, our positive reputation and our longstanding community relationships will enable us to compete successfully within our markets and enhance our ability to attract and retain customers.

#### Risk Management
We believe that effective risk management and control processes are critical to our safety and soundness, our ability to predict and manage the challenges that we face and, ultimately, our long-term corporate success. Risk management refers to the policies and processes by which we identify, measure, monitor, evaluate and manage the risks we face in the course of our banking activities. Such risks include liquidity, interest rate, credit, price, operational, compliance, regulatory, strategic, financial and reputational risk exposures. We also seek to monitor our exposure to cyber risk, which generally refers to the risk arising from inadequate or failed information technology systems, vulnerabilities to internal information technology networks, engineered breaches of customer information or inadequate information technology policies and procedures. Given the rapidly changing cybersecurity landscape, we evaluate our cyber risk management practices regularly, which may include testing the security of our information technology infrastructure, incident response planning, employee training, engaging third parties to conduct independent reviews and audits, scanning for internal vulnerabilities and adopting measures designed to help our clients stay protected against cybersecurity threats.

Our Board, both directly and through its committees, is responsible for overseeing our risk management processes, as described more fully under "Management — Board Risk Management and Oversight." In addition, subject to our Audit Committee's responsibility for overseeing enterprise-wide risks related to information security and cybersecurity, the Bank Board's Risk Committee in coordination with the Bank Board's Information Technology Steering Committee (the "IT Steering Committee") oversees the Bank's cybersecurity initiatives and strives to ensure that the Bank's information technology infrastructure aligns with strategic goals while managing related risks, particularly cybersecurity threats. Under the oversight of our Audit Committee, the Bank's Risk Committee in coordination with the IT Steering Committee also reviews and updates the Bank's cybersecurity policies, evaluates information technology controls, and monitors the performance of internal and third-party IT service providers as part of its efforts to enhance the Bank's defense mechanisms.

Our senior management is responsible for implementing our risk management processes, including by assessing and managing the risks we face on a day-to-day basis, and reporting to our Board regarding our risk management processes. Our senior management is also responsible for creating and recommending to our Board for approval appropriate risk appetite metrics reflecting the aggregate levels and types of risk we are willing to accept in connection with the operation of our business and pursuit of our business objectives.

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#### Information Technology Systems
We have recently made and continue to make significant investments in our technology platforms. In 2023, we completed an upgrade to our customer online banking and mobile platforms deploying competitive technology to support consumer self-service banking behavior, including real-time options via Zelle. Additionally, we implemented Teller Capture allowing our front-line employees to efficiently process and image transactions at all of our branch locations.

In 2024, we implemented real-time payment options for FedNow and real-time payments ("RTP"). Both new RTP rails provide additional payment technology opportunities allowing our customers to take advantage of an ever-changing payments environment. During 2025, we anticipate the installation of a dedicated commercial cash management platform that is configurable and supports a broad range of customer needs, including a commercial mobile and tablet app with access to commercial products such as risk management tools, wire transfers and Automated Clearing House (ACH) origination.

#### Human Capital Management
As of June 30, 2025, the Bank had 282 full-time employees and 13 part-time employees. Our employees are not represented by a collective bargaining unit. We consider our relations with our employees to be good and have not experienced interruptions of operations due to labor disagreements.

Our people are our most important asset. To facilitate talent attraction and retention, we strive to create a safe and healthy workplace with opportunities for our employees to grow and develop in their careers.

We invest in the growth and development of our employees by providing a multi-dimensional approach to learning that fosters empowerment, intellectual growth, and professional development for our colleagues. In particular, we facilitate the educational and professional development of our employees through support to attend conferences and obtain degrees, licenses and certifications while employed by us.

We offer competitive compensation to attract and retain talented employees. Our generous total compensation package includes market-competitive salaries, bonuses, healthcare and retirement benefits, and paid time off. Employees have regular performance reviews and salary raises commensurate with performance.

#### Corporate Information
Our principal executive office is located at 6710 Cumberland Gap Parkway, Harrogate, Tennessee 37752, and our telephone number is 423-869-5151. Our website address is *www.cbtn.com*. The information contained on or accessible from our website is not part of this prospectus and is not incorporated into this prospectus or the registration statement of which it forms a part.

#### Properties
We provide banking services from 34 offices, including our principal executive office, in Kentucky, North Carolina, and Tennessee. We also operate an LPO in Lincolnton, North Carolina. Our principal executive offices and those of the Bank are located at 6710 Cumberland Gap Parkway, Harrogate, Tennessee 37752. We believe that our banking and other offices are in good condition and are suitable and adequate to our needs for the foreseeable future.

The Bank owns its principal executive office building and 31 of its branches. The Bank's remaining two branches and LPO are occupied under lease agreements with terms ranging from monthly to five years, with automatic extension options. The land for two of the Bank's owned branches is also subject to lease, with terms of five and 10 years, respectively, both of which will automatically renew upon expiration of the current term. The following table shows our branches and LPO as of June 30, 2025, and, for each, whether owned or leased:

---

| | |
|:---|:---|
|  **Office Address** | **Owned/Leased** |
|  **Principal Executive Office**<br> 6710 Cumberland Gap Parkway | Owned |
|  Harrogate, Tennessee 37752 |  |
|  **LPO**<br> 226 E. Main Street | Leased |
|  Lincolnton, North Carolina 28092 |  |

---

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---

| | |
|:---|:---|
|  **Office Address** | **Owned/Leased** |
|  **Branches**<br> ***Kentucky***<br> 312 Knox Street<br> Barbourville, Kentucky 40906 | Owned |
|  603 Knox Street<br> Barbourville, Kentucky 40906 | Owned (with land lease) |
|  1149 South US 25E<br> Barbourville, Kentucky 40906 | Owned |
|  1140 Cumberland Falls Highway<br> Corbin, Kentucky 40701 | Owned |
|  1285 Cumberland Gap Parkway<br> Corbin, Kentucky 40701 | Owned (with land lease) |
|  775 West Cumberland Gap Parkway<br>Corbin, Kentucky 40701 | Owned |
|  1701 E. Main Street<br>Cumberland, Kentucky 40823 | Owned |
|  2320 S. U.S. Highway 421<br>Harlan, Kentucky 40831 | Owned |
|  1811 North Main Street<br>London, Kentucky 40741 | Owned |
|  202 South Main Street<br>London, Kentucky 40741 | Owned |
|  1730 West Highway 192<br>London, Kentucky 40741 | Owned |
|  1431 Cumberland Avenue<br>Middlesboro, Kentucky 40965 | Owned |
|  533 Tennessee Avenue<br>Pineville, Kentucky 40977 | Owned |
|  ***Tennessee***<br> 122 Franklin Road<br> Brentwood, Tennessee 37027 | Owned |
|  1616 West Market Street<br> Johnson City, Tennessee 37604 | Leased |
|  1072 East Stone Drive<br> Kingsport, Tennessee 37660 | Owned |
|  10413 Kingston Pike<br> Knoxville, Tennessee 37922 | Owned |
|  7400 Maynardville Highway<br>Knoxville, Tennessee 37938 | Owned |
|  5320 N. Broadway<br>Knoxville, Tennessee 37918 | Owned |
|  111 Tazewell Pike<br>Luttrell, Tennessee 37779 | Owned |

---

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---

| | |
|:---|:---|
|  **Office Address** | **Owned/Leased** |
|  2600 Maynardville Highway<br>Maynardville, Tennessee 37807 | Owned |
|  155 Terrace Lane<br>Morristown, Tennessee 37813 | Owned |
|  225 West 1<sup>st</sup> North Street<br>Morristown, Tennessee 37814 | Leased |
|  1001 N. Broad Street<br>New Tazewell, Tennessee 37825 | Owned |
|  130 S. Broad Street<br>New Tazewell, Tennessee 37825 | Owned |
|  770 Cosby Highway<br>Newport, Tennessee 37821 | Owned |
|  262 East Broadway<br>Newport, Tennessee 37821 | Owned |
|  420 East Emory Road<br>Powell, Tennessee 37849 | Owned |
|  7675 Highway 63<br>Speedwell, Tennessee 37870 | Owned |
|  ***North Carolina***<br> 2227 Union Road<br> Gastonia, North Carolina 28054 | Owned |
|  292 W. Main Avenue<br> Gastonia, North Carolina 28053 | Owned |
|  1113 Shelby Road<br> Kings Mountain, North Carolina 28086 | Owned |
|  412 S. Dekalb Street<br> Shelby, North Carolina 28150 | Owned |

---

#### 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. However, given the nature, scope and complexity of the extensive legal and regulatory landscape applicable to our business, including laws and regulations governing consumer protection, fair lending, fair labor, privacy, and information security and anti-money laundering and anti-terrorism laws, we, like all banking organizations, are subject to heightened legal and regulatory compliance and litigation risk.

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#### MANAGEMENT

#### Executive Officers
The following table sets forth biographical information regarding our executive officers as of August 15, 2025.

---

| | | |
|:---|:---|:---|
|  **Name** | **Age** | **Position** |
|  Terry L. Lee | 68 | President, Chief Executive Officer, and Director of the Company and the Bank |
|  J. Adam Robertson | 51 | Director (Executive Chairperson) of the Company and the Bank |
|  Philip J. Metheny | 68 | Executive Vice President, Chief Financial Officer of the Company and the Bank |
|  Richard C. Sprinkle, Jr. | 59 | Executive Vice President, Chief Credit Officer of the Bank |

---

The biographical information and business experience of each of our executive officers documented in the table above is set forth below. There are no arrangements or understandings between any executive officer and any other person pursuant to which the executive officer was selected as an officer.

***Terry L. Lee.*** Terry L. Lee has served as (i) the President of the Company since May 2004 and the President and Chief Executive Officer of the Company since March 2025 and (ii) the Chief Executive Officer of the Bank since May 2004 and the President and Chief Executive Officer of the Bank since March 2025. He has served as a member of the Board since January 1995, and he previously served as Chairperson of the Bank Board from November 2022 to March 2025. Terry L. Lee joined the Bank in 1989 as a bookkeeper. In 1991, Terry L. Lee was promoted to Vice President of Marketing of the Bank, and, within the year, he was appointed Vice President and Loan Officer of the Bank. He was promoted to Senior Vice President and Senior Lending Officer of the Bank in 1992 and President of the Bank in January 1995. Prior to joining the Company and the Bank, Terry L. Lee held various positions, including manager of purchasing and warehousing, senior buyer, warehouse coordinator and maintenance analyst, with various subsidiaries of Cyrus Mineral Company between 1979 and 1989. Terry L. Lee served as Chairman of the Board of Directors of Alliance from 2019 to 2024. He served as Chairman of the Board of Directors of Millennium Bank from 2019 to 2023. Terry L. Lee earned his Bachelor of Arts degree from Lincoln Memorial University. He serves as trustee for Lincoln Memorial University and as a board member of the Tennessee Bankers Association. Terry L. Lee is owner and director of Mound Technologies, Inc. Terry L. Lee's extensive experience in the banking industry and leadership, along with his business acumen and management experience, well qualify him to serve on our Board.

***J. Adam Robertson.*** J. Adam Robertson has served as the Executive Chairperson of the Board since March 2025 and as a Board member since November 2022 and previously served as the Chief Executive Officer of the Company from November 2022 to March 2025. He also served as the President of the Bank from 2011 to 2025 and has been a member of the Bank Board since November 2022. J. Adam Robertson joined the Bank in August 1997. During his 28 years at the Bank, he has served in various capacities with increasing responsibilities. In addition to his duties at the Company and the Bank, J. Adam Robertson is a small business owner and developer. J. Adam Robertson is active in the Tennessee Bankers Association and serves as a director in the Independent Bankers Division. In the community, he serves on the board of First Priority Tri-States, First Priority of America, and Student Leadership University. He is a trustee at Charleston Southern University in Charleston, South Carolina. J. Adam Robertson is a graduate of Belmont University, the Southeastern School of Banking, and the Graduate School of Banking at Louisiana State University. J. Adam Robertson's experience in the banking industry and serving in the community are among his qualifications to serve on our Board.

***Philip J. Metheny, M.B.A., CPA, CISA, CITP.*** Philip J. Metheny has served as Executive Vice President, Chief Financial Officer for both the Company and the Bank since July 2018. Philip J. Metheny joined the Bank in August 2012 as the Chief Internal Auditor and Executive Vice President. In January 2018, he was appointed as Chief Risk Officer of the Bank, and in July 2018, he was appointed as Chief Financial Officer of the Company and the Bank. Prior to joining the Bank, Philip J. Metheny held positions as an internal audit director with PNC Corporation and as an assistant general auditor with National City Corporation. He also worked as a senior auditor with Touche Ross. Philip J. Metheny has over 40 years of banking industry experience. Philip J. Metheny is a licensed Certified Public Accountant (CPA) and earned his M.B.A. from Baldwin-Wallace in Berea, Ohio and his Bachelor of Business Administration in Accounting from Ohio University in Athens, Ohio. Philip J. Metheny served as a member of the Ohio University School of Accountancy Council from 2002 to 2007. He is a Certified Information Systems Auditor, Certified Financial Services Auditor and Certified Information Technology Professional.

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***Richard C. Sprinkle, Jr., M.B.A.*** Richard C. Sprinkle, Jr. has served as Executive Vice President, Chief Credit Officer of the Bank since April 2010. Richard C. Sprinkle, Jr. joined the Bank in 2008 as Executive Vice President and Regional Executive in the Bank's Eastern Region. Richard C. Sprinkle, Jr. has been employed in the banking industry for approximately 30 years. Prior to joining the Bank, he was employed with First Tennessee National Bank, where he completed a three-year Commercial Lending Officer/Relationship Manager training and apprenticeship program. Upon completion of this program, he was assigned to the Northeast Tennessee Market for First Tennessee National Corporation, where he eventually rose to senior vice president and commercial banking market manager for upper East Tennessee. Prior to attending college, Richard C. Sprinkle, Jr. served over eight years in the United States Marine Corps becoming a Platoon Sergeant in an 81mm Mortar Platoon, in Operation Desert Shield/Desert Storm and multiple other operational deployments, before receiving an Honorable Discharge due to injuries suffered in the line of duty. Richard C. Sprinkle, Jr. is a graduate of East Tennessee State University, Lincoln Memorial University and the Graduate School of Banking at Louisiana State University.

#### Board of Directors
Our Board currently consists of nine members. Pursuant to our A&R Bylaws, our Board is authorized to have not less than five nor more than 25 directors. Our A&R Charter and our A&R Bylaws provide that our Board is divided into three classes, with the number of directors in each class to, at all times, be as equal as possible. Directors will be elected to serve three-year terms, except that (i) each director initially appointed to Class I will serve for an initial term to expire at the first annual meeting of Company shareholders following this offering, (ii) each director initially appointed to Class II will serve for an initial term to expire at the second annual meeting of Company shareholders following this offering, and (iii) each director initially appointed to Class III will serve for an initial term to expire at the third annual meeting of Company shareholders following this offering, and provided that the term of each director will continue until the election and qualification of his or her successor or a decrease in the number of directors and will be subject to and end at the director's earlier death, retirement, resignation, or removal from office.

The following table sets forth certain summary information about our directors as of August 15, 2025, including their names, ages, and classes and the year in which each began serving as a Company director and as a member of the Bank Board, respectively. Each member of the Board also serves as a member of the Bank Board. There are no arrangements or understandings between any director and any other person pursuant to which the director was selected as a director.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  **Name** | **Age** | **Position with the Company** | **Director Since** | **Bank Board<br>Director Since** |
|  Terry L. Lee | 68 | President, Chief Executive Officer and Director<br> II | 1995 | 1995 |
|  J. Adam Robertson | 51 | Director (Executive Chairperson)<br> III | 2022 | 2022 |
|  Sam A. Mars III | 74 | Director<br> I | 2025 | 1980 |
|  Alan C. Neely | 59 | Director<br> II | 2023 | 1996 |
|  Aaron A. Robertson | 38 | Director<br> I | 2023 | 2023 |
|  Dennis Michael Robertson | 74 | Director<br> III | 2023 | 1995 |
|  Martha S. Spurlock | 67 | Director<br> I | 2023 | 2016 |
|  James J. Shoffner | 64 | Director<br> III | 2025 | 2021 |
|  Charles L. Yates | 70 | Director<br> II | 2025 | 2023 |

---

The biographical information and business experience of each of the directors documented in the table above is set forth below, except for Terry L. Lee and J. Adam Robertson, as the biographical information and business experience of these persons is described above in the "Executive Officers" section.

***Sam A. Mars III.*** Sam A. Mars III has served as a director of the Company since March 2025. Sam Mars earned a degree in Business Administration from the University of Tennessee in 1973, majoring in accounting. After graduation, he began his career as President and Chief Operations Officer of S.A. Mars Jr., Inc. and Mars Properties, Inc. (collectively, the "Mars Companies"), his family's wholesale oil distribution company. In 1997, the Mars Companies were sold, and the remaining family business transitioned into other industries, including hospitality, mini-storage rental, commercial real estate rental, funeral and cemetery, and the restaurant business. During the past five years, Sam Mars has been semi-retired, as well as self-employed operating various family businesses. Sam Mars' business and accounting knowledge and expertise are among his qualifications to serve as a member of our Board.

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***Alan C. Neely.*** Alan C. Neely has served as a director of the Company since March 2023. Since 2011, Alan C. Neely has been president of Five Stars Properties, a property management and home styling company. Alan C. Neely is the former president of Giles Industries, a family-owned mobile home manufacturing company. In 2006, Alan C. Neely facilitated the sale of Giles Industries to Southern Energy Homes, which was subsequently acquired by Clayton Home Building Group. He is active in the management of many areas of his family's commercial real estate property management businesses, including Alamar Enterprises, Inc., Neely Family Enterprises, LLC, Neely Family Realty Corporation, Clayton Home Building Group, Dorothy G. Neely Realty Corporation, and Five Star Properties, Inc. In his roles at Clayton Home Building Group, Alan C. Neely worked with the chief financial officer to supervise the controllers and accountants. He also supervised the controller in his role at Giles Industries. Alan C. Neely's management experience and experience in the commercial real estate industry are among his qualifications to serve as a member of our Board.

***Aaron A. Robertson.*** Aaron A. Robertson has served as a director of the Company since January 2023. He is a lifelong resident of Claiborne County, Tennessee. Aaron A. Robertson graduated from J. Frank White Academy with his high school diploma in 2005, and he graduated with an associates/master's degree in Diesel Technology from Southeast Kentucky Community & Technical College. Aaron A. Robertson has been self-employed in the farming/cattle industry since August 2009, and he has been employed with Harrogate Insurance Agency since 2011. Aaron A. Robertson is also a partner in Robertson Holding Company, L.P. and the Harrogate Restaurant Group. Aaron A. Robertson's knowledge of the Company, his experience owning and managing his own business, and his unique understanding of our markets, operations and competition are among his qualifications to serve as a member of our Board.

***Dennis Michael Robertson.*** Dennis Michael Robertson has served as a director of the Company since March 2023. He graduated from the University of Tennessee in 1973 with a Business Administration degree in accounting. While at the University of Tennessee, he was chosen as President of Alpha Beta Psi Honor Fraternity. Dennis Michael Robertson graduated with honors in 1975 from the University of Tennessee School of Law where he received his Doctor of Jurisprudence Degree and became a member of the Tennessee Bar in 1976. He began practicing law thereafter in Claiborne County, Tennessee. Dennis Michael Robertson was elected to the Tennessee House of Representatives where he served the Thirty-Fifth District for eight years from 1976 to 1984. While in the legislature, he served as the Assistant Minority Leader. After his departure from the General Assembly, he served as the Commissioner for the Eastern Division of the Tennessee Claims Commission, where he served from 1985 until 1992. At that time, Dennis Michael Robertson re-entered the private practice of law in Claiborne County, Tennessee where he has practiced ever since. Dennis Michael Robertson's legal expertise and experience serving civic organizations are among his qualifications to serve as a member of our Board.

***Martha S. Spurlock.*** Martha S. Spurlock has served as a director of the Company since March 2023 and a director of the Bank since 2016. Martha S. Spurlock has served as a manager of Unified Shares since 2014. Before retiring in 2015, Martha S. Spurlock worked as a claims service representative working on underwriters' safety claims for Underwriters Safety & Claims, a workman's compensation insurance carrier. She also has experience managing various rental properties throughout the Harrogate, Tennessee region, which has given her unique insight into local community development and a deeper understanding of the Bank's customer base. Martha S. Spurlock's experience overseeing community banking operations and her connection to the local community are among her qualifications to serve as a member of our Board.

***James J. Shoffner.*** James J. Shoffner has served as a director of the Company since March 2025. James J. Shoffner is a lifelong resident of Middlesboro, Kentucky. He is a 1997 graduate of the Kentucky Bankers Association's Kentucky School of Banking. He served on the board of directors of Middlesboro Federal Bank from 1985 to 2001. James J. Shoffner served as the chief operating officer of Middlesboro Federal Bank from 1993 to 1995 and its president from 1995 to 2001. Since 1995, he has owned the JRS Restaurant Corporation and Corbin Restaurants. James J. Shoffner has served on the Lincoln Memorial University Board of Trustees since 1997 and has served as a trustee and chairman of Appalachian Regional Healthcare. James J. Shoffner's experience in the banking industry and financial management expertise as a business owner are among his qualifications to serve as a member of our Board.

***Charles L. Yates.*** Charles L. Yates has served as a director of the Company since March 2025 and a director of the Bank since 2023. Charles L. Yates has served as the chief financial officer of Smith Enterprises since 2010. He has extensive experience in the banking industry with previous positions as a systems analyst at the

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Federal Reserve Bank of Charlotte, operations officer at Branch Bank & Trust Company and operations manager at Rock Hill National Bank. Charles L. Yates received a degree in Business Management from Sacred Heart College in 1983. Charles L. Yates' experience in the banking industry and his expertise in business operations are among his qualifications to serve as a member of our Board.

#### Family Relationships
J. Adam Robertson, Executive Chairperson of the Board, and Aaron A. Robertson, a director of the Company, are first cousins. Dennis Michael Robertson, a director of the Company, is second cousin to J. Adam Robertson and Aaron A. Robertson. Other than as discussed in this section, there are no family relationships between or among any of our directors and executive officers.

#### Corporate Governance Principles and Board Matters
We are committed to having sound corporate governance principles, which we believe are essential to running our business efficiently and maintaining our integrity in the marketplace. In connection with this offering, our Board will adopt corporate governance guidelines that will become effective upon the consummation of this offering, which will set forth the framework within which our Board, assisted by its committees, will direct the affairs of the Company. Our corporate governance guidelines will address, among other things, the composition and functions of our Board, director independence, compensation of directors, management succession and review, Board committees and selection of new directors. Upon completion of this offering, these corporate governance guidelines will be available on our corporate website at *www.cbtn.com*.

#### Director Qualifications
We believe that our directors should have the highest professional and personal ethics and values, consistent with our longstanding values and standards. They should have broad experience at the policy-making level in business, government or civic organizations. They should be committed to enhancing shareholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on their own unique experiences. Each director must represent the interests of all shareholders. When considering potential director candidates, our Board also considers a candidate's independence, character, judgment, diversity, age, skills, including financial literacy, and experience in the context of our needs and those of our Board. While we have no formal policy regarding Board diversity, our Board may consider a broad range of factors relating to the qualifications and backgrounds of director nominees, which may include personal characteristics. Our Board's priority in selecting Board members is the identification of persons who will further the interests of our shareholders through their record of professional and personal experiences and expertise relevant to our growth strategy.

#### Board Leadership Structure
Our Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairperson of the Board, even though these roles are currently held by different individuals. Our Board endorses the view that one of its primary functions is to protect shareholders' interests by providing independent oversight of management, including the Chief Executive Officer. However, the Board does not believe that mandating a particular structure, such as designating an independent lead director or having a separate Chairperson of the Board and Chief Executive Officer, is necessary to achieve effective oversight. Rather, the Board has the discretion to combine or separate these roles as it deems appropriate from time to time, which provides the Board with necessary flexibility to adjust to changed circumstances.

#### Director Independence
Our Board has determined that: (i) all of our directors, except Terry L. Lee, J. Adam Robertson, and Aaron A. Robertson, are independent within the meaning of Section 5605(a)(2) of the Nasdaq listing rules (the "Nasdaq Stock Market Rules"); (ii) Sam A. Mars, Alan C. Neely, and James J. Shoffner meet the additional test for independence for audit committee members imposed by Rule 10A-3 under the Exchange Act and Section 5605(c)(2)(A) of the Nasdaq Stock Market Rules; and (iii) Dennis Michael Robertson, Charles L. Yates and Martha S. Spurlock meet the additional test for independence for compensation committee members imposed by Section 5605(d)(2) of the Nasdaq Stock Market Rules, and are non-employee directors for purposes of Rule 16b-3. In making such

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determinations, our Board considered the relationships that each such non-employee director has with us and all other facts and circumstances that our Board deemed relevant in determining their independence, including the beneficial ownership of our common stock by each non-employee director and any previous consulting arrangements we had with any of our directors.

The six independent directors constitute a majority of the nine members of our Board.

#### Board Risk Management and Oversight
The Board has ultimate authority and responsibility for overseeing our risk management. The Board does not view risk in isolation and considers risk in virtually every business decision and as part of the Company's overall business strategy. The Board monitors, reviews and reacts to material enterprise risks identified by management. The Board receives specific reports from executive management on financial, credit, liquidity, interest rate, capital, operational, legal compliance and reputation risks and the degree of exposure to those risks. The Board helps ensure that management is properly focused on risk by, among other things, reviewing and discussing the performance of senior management and business line leaders. Board committees have responsibility for risk oversight in specific areas. The Audit Committee oversees risks related to financial reporting, internal controls over financial reporting, valuation of investment securities, internal and independent audit functions, capital adequacy, legal matters, tax matters, credit matters, cybersecurity and reputational risks relating to these areas. The Compensation Committee oversees risks related to incentive compensation, executive and director compensation, executive succession planning, talent retention, human capital, and reputational risks relating to these areas. The Nominating and Corporate Governance Committee is tasked with overseeing the nomination of director candidates and evaluation of the Board and our corporate governance principles. In addition, the Nominating and Corporate Governance Committee will oversee corporate governance-related risks, such as Board composition and effectiveness, Board succession planning, corporate governance policies, related party transactions, ethics, and reputational risks relating to these areas.

#### Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee has at any time been an officer or employee of the Company. None of our executive officers currently serve, or in the past fiscal year have served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or Compensation Committee.

#### Code of Business Conduct and Ethics
Our Code of Business Conduct and Ethics applies to all of our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. The Code of Business Conduct and Ethics provides that our directors, officers, and employees are expected to uphold the highest level of personal and professional integrity in all activities and must comply with all applicable laws, regulations and Company policies, including our Code of Business Conduct and Ethics, and is intended to comply with the Nasdaq Stock Market Rules for a code of conduct and qualify as a "code of ethics" as defined by the rules of the SEC. If we amend or grant a waiver of one or more of the provisions of our Code of Business Conduct and Ethics, we intend to satisfy the requirements under Item 5.05 of Form 8-K regarding the disclosure of amendments to or waivers from provisions of our Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting the required information on our corporate website at *www.cbtn.com*.

#### Board Committees
Our Board has established standing committees in connection with the discharge of its responsibilities. These committees include the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. Our Board also may establish such other committees as it deems appropriate, in accordance with applicable law and regulations and our corporate governance documents.

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#### Audit Committee
Our Audit Committee consists of Sam A. Mars, Alan C. Neely, and James J. Shoffner. Our Audit Committee has the responsibility for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing the design and implementation of our internal audit function;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• selecting, engaging and overseeing our independent auditors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing the integrity of our financial statements, including the annual audit, the annual audited financial statements, financial information included in our periodic reports that will be filed with the SEC and any earnings releases or presentations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing our financial reporting process and internal controls;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing our compliance with applicable laws and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing our compliance and risk management functions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing risks related to information security and cybersecurity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing our process for receipt of complaints and confidential, anonymous submissions regarding accounting, internal accounting controls or auditing matters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• overseeing the reporting of the Company's material risks from cybersecurity threats, management's process to monitor, detect, mitigate, and remediate cybersecurity incidents, and the Company's disclosure of any cybersecurity incident deemed material (any such materiality determination will be made by the Board upon recommendation of the Audit Committee) as required by the SEC or any other governmental authority, as applicable; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and investigating any possible violation of our Code of Business Conduct and Ethics or other standards of business conduct by any director or executive officer of the Company.

Rule 10A-3 promulgated by the SEC under the Exchange Act and applicable Nasdaq Stock Market Rules require our Audit Committee to be comprised entirely of independent directors. Our Board has affirmatively determined that each of the members of our Audit Committee is independent under the Nasdaq Stock Market Rules and for purposes of serving on an audit committee under applicable SEC rules. Our Board also has determined that each of our Audit Committee members qualifies as an "audit committee financial expert" as defined by the SEC. Our Board has adopted a written charter for our Audit Committee, which will be available free of charge on the Investor Relations section of our website at *www.cbtn.com*.

#### Compensation Committee
Our Compensation Committee consists of Dennis Michael Robertson, Charles L. Yates and Martha S. Spurlock. Our Compensation Committee is responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and approving goals and objectives relevant to the compensation of our executive officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• evaluating the performance of our executive officers and determining and approving the compensation levels of executive officers based on that evaluation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing and administering our equity incentive plans and executive compensation programs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reviewing, approving and submitting to the Board for approval other compensation arrangements of our executive officers, and any significant amendments or changes to such arrangements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• preparing the report of the Compensation Committee as required by Item 407(e)(5) of Regulation S-K, when applicable.

Applicable Nasdaq Stock Market Rules require the Compensation Committee to be comprised entirely of independent directors. Our Board has affirmatively determined that each of the members of our Compensation Committee is independent under the Nasdaq Stock Market Rules and for purposes of serving on a compensation

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committee under applicable SEC rules, and that each is a "non-employee director" as defined in Rule 16b-3 of the Exchange Act. To the extent that the Compensation Committee has one or more members who are not "non-employee directors" as defined in Rule 16b-3 of the Exchange Act, grants of stock or equity awards will be made by a subcommittee of the Compensation Committee consisting solely of "non-employee directors" or by our full Board. Our Board has adopted a written charter for our Compensation Committee, which will be available free of charge on the Investor Relations section of our website at *www.cbtn.com*.

#### Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee consists of Sam A. Mars, Alan C. Neely, Dennis Michael Robertson, James J. Shoffner and Charles L. Yates. Our Nominating and Corporate Governance Committee is responsible for, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• identifying individuals qualified to become Board members consistent with criteria approved by the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• selecting, or recommending that the Board select, director nominees for the next annual meeting of shareholders or to fill vacancies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• assisting the Board in fulfilling its oversight responsibilities relating to developing and implementing sound governance policies and practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recommending director committee assignments; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• developing and overseeing a process for the annual evaluation of the Board and management.

Applicable Nasdaq Stock Market Rules require director nominees to be selected, or recommended for the Board's selection, either by independent directors constituting a majority of the Board's independent directors, or by a committee consisting solely of independent directors. We have established a Nominating and Corporate Governance Committee comprised entirely of independent directors. Our Board has affirmatively determined that each of the members of our Nominating and Corporate Governance Committee is independent under the Nasdaq Stock Market Rules. Our Board has adopted a written charter for the Nominating and Corporate Governance Committee, which will be available free of charge on the Investor Relations section of our website at *www.cbtn.com*.

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#### EXECUTIVE AND DIRECTOR COMPENSATION
We have opted to comply with the scaled executive compensation disclosure rules applicable to "emerging growth companies" and "smaller reporting companies." Pursuant to applicable SEC rules, our named executive officers for the year ended December 31, 2024 ("named executive officers") were:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Terry L. Lee, our former President and current President and Chief Executive Officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• J. Adam Robertson, our former Chief Executive Officer and current Executive Chairperson; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Richard C. Sprinkle, Jr., the Bank's Chief Credit Officer.

#### Summary Compensation Table
The following table summarizes the total compensation awarded to, earned by, or paid to each of our named executive officers during the fiscal year ended December 31, 2024, determined pursuant to applicable SEC rules.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  **Name and Principal Position** | **Year** | **Salary<br>($)** | **Bonus<br>($)<sup>(1)</sup>** | **Nonequity <br>Incentive Plan <br>Compensation <br>($)<sup>(2)</sup>** | **All Other <br>Compensation <br>($)<sup>(3)</sup>** | **Total<br>($)** |
|  Terry L. Lee<br>*Former President and current President and<br>Chief Executive Officer* | 2024 | 538470 | 0 | 888027 | 42890 | 1469387 |
|  J. Adam Robertson<br>*Former Chief Executive Officer and current Executive Chairperson* | 2024 | 267411 | 120000 | 0 | 130610 | 518021 |
|  Richard C. Sprinkle, Jr.<br>*Chief Credit Officer* | 2024 | 266200 | 14974 | 0 | 24512 | 305686 |

---

____________

(1) Represents a discretionary bonus earned and paid for fiscal year ended December 31, 2024, as further described below.

(2) Represents an annual cash bonus earned and paid for fiscal year ended December 31, 2024, as further described below.

(3) The amounts in this column for fiscal year 2024 represent: (i) $18,980 for Terry L. Lee, $17,924 for J. Adam Robertson and $16,636 for Richard C. Sprinkle in matching contributions and profits sharing under our 401(k) plan; (ii) $1,735 for Terry L. Lee and $370 for J. Adam Robertson in life insurance premiums; (iii) $7,449 for Terry L. Lee and $2,686 for J. Adam Robertson for personal use of the corporate aircraft; (iv) $14,267 for J. Adam Robertson for tickets to sporting events; (v) $14,726 for Terry L. Lee, $12,659 for J. Adam Robertson and $7,876 for Richard C. Sprinkle for personal use of a company vehicle; (vi) $2,704 in tax gross-ups to pay for taxes associated with J. Adam Robertson's discretionary bonus; and (vii) an $80,000 discretionary annual bonus to J. Adam Robertson for services on the Board. The value of the foregoing benefits was determined based on the actual cost of such benefits to the Company.

#### Narrative Disclosure to the Summary Compensation Table

#### General
Our named executive officer compensation program is designed to attract, motivate and retain the key executives who drive our success. Pay that reflects performance and aligns with the interests of long-term shareholders is key to the program's design and decisions.

#### Base Salaries
We pay base salaries to our named executive officers to compensate them for their services and provide predictable income. The salaries typically reflect each named executive officer's experience, skills, knowledge and responsibilities, although market data also plays a role in setting salary levels. We do not apply specific formulas to determine changes in salaries. Instead, the salaries of our named executive officers are reviewed on an annual basis by the Compensation Committee based on our compensation philosophy and objectives.

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Base salaries were increased by approximately 5% for each named executive officer in 2024 to align with market pay levels for executives with similar duties and responsibilities. The annualized 2024 base salaries for our named executive officers were as follows:

---

| | |
|:---|:---|
|  **Named Executive Officer** | **2024 Base <br>Salary** |
|  Terry L. Lee | 538,470 |
|  J. Adam Robertson | 267,411 |
|  Richard C. Sprinkle, Jr. | 266,200 |

---

#### Annual Cash Bonuses
A key objective of our compensation philosophy is to tie a significant portion of each named executive officer's compensation to our performance. To help accomplish this objective, we provide annual cash bonus opportunities for our named executive officers based on company performance. In 2024, Terry L. Lee received a bonus based on the Bank's pre-tax net income, which is calculated as the Company's income before income taxes excluding corporate overhead expenses. The bonus was calculated as 2% of the Bank's pre-tax net income and is reflected under the "Nonequity Incentive Plan Compensation" column above. For fiscal year 2024, the Bank's pre-tax net income was $44.4 million.

J. Adam Robertson and Richard C. Sprinkle, Jr. participated in our annual discretionary bonus program. The discretionary bonus program allows us to reward performance by our named executive officers based on the Compensation Committee's subjective judgment, while retaining the flexibility to consider numerous factors affecting the Company. Based on the applicable named executive officer's performance, strategic impact and contributions to the Company's success in 2024, and the recommendations of the Company's President and Chief Executive Officer, J. Adam Robertson and Richard C. Sprinkle, Jr. earned discretionary bonuses in 2024 equal to $120,000 and $14,974, respectively.

#### Employee Benefits
Our named executive officers are eligible to participate in the same benefit plans available to all of our full-time employees, including medical, dental, vision, life, disability and accidental death insurance plans and a 401(k) plan with a matching contribution component, on the same basis as other full-time employees.

We further provide additional personal benefits to our named executive officers, including provision of Company-owned vehicles, reimbursement for life insurance premiums, and personal travel.

#### IPO-related Compensation
In connection with his efforts to prepare the Company for this offering, and to retain and encourage him to continue executing upon our critical business initiatives after this offering, Terry L. Lee will receive a cash bonus of $[•] and a restricted stock unit ("RSU") award valued at $[•] (the "IPO RSUs"), following and contingent on the closing of this offering. The IPO RSUs will vest annually over five years, subject to Terry L. Lee's continued employment with the Company.

#### Company Equity Incentive Plan
Our equity compensation program focuses the efforts of our named executive officers on the achievement of long-term objectives and aligns the interests of our named executive officers with those of our shareholders through the grant of equity awards, the value of which depends on our stock performance, to achieve strong long-term performance. We have historically granted limited equity awards to motivate and retain key executive talent and align their interests with the long-term interests of shareholders. None of our named executive officers received equity awards in fiscal year 2024.

In connection with this offering, our Board adopted and our shareholders approved the 2025 Plan, which will be effective upon completion of this offering. The 2025 Plan will terminate automatically on the tenth anniversary of the effective date, unless terminated earlier by the Company, and no grants may be granted under the 2025 Plan following such termination. The 2025 Plan provides for (a) the grant of incentive stock options, (b) nonstatutory stock options, (c) stock appreciation rights, (d) restricted stock, (e) RSUs, (f) performance grants, and (g) other grants.

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Subject to the 2025 Plan, the total number of shares reserved and available for issuance pursuant to the 2025 Plan will not exceed 850,000 shares. The share reserve will automatically increase on January 1<sup>st</sup> 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 31<sup>st</sup> of the immediately preceding calendar year and (b) such number of shares determined by the Board. Subject to the 2025 Plan, the maximum number of shares that may be issued pursuant to the exercise of incentive stock options is 850,000 shares.

Any shares subject to an outstanding grant made under the 2025 Plan will be returned to the 2025 Plan's share reserve and will be available for issuance in connection with subsequent grants under the 2025 Plan to the extent: (a) such grant is cancelled, forfeited, or settled in cash; (b) such shares are used to pay the exercise price of such grant or any taxes arising in connection with the vesting, exercise, or settlement of such grant; (c) such grant is surrendered pursuant to an exchange program (as defined in the 2025 Plan); (d) such grant expires by its terms at any time; or (e) such grant or such shares are reacquired by the Company pursuant to a forfeiture provision or repurchase right of the Company. Shares subject to substitute grants (as defined in the 2025 Plan) will not be deducted from the 2025 Plan's share reserve. Shares subject to any substitute grant may not be returned to the 2025 Plan's share reserve.

All grants granted under the 2025 Plan will be subject to clawback or recoupment under any clawback or recoupment policy, as amended, adopted by the Board or the Compensation Committee or required by applicable law. In the event that the Company is subject to a change in control, outstanding grants under the 2025 Plan will be subject to the agreement evidencing or providing for the change in control.

The 2025 Plan will be administered by the Compensation Committee or by the Board, acting subject to the 2025 Plan. Subject to the general purposes, terms, and conditions of the 2025 Plan, and any charter adopted by the Board governing the actions of the Compensation Committee, the Compensation Committee will have full power to implement and carry out the 2025 Plan, including determining the terms and conditions of, and to institute, any exchange program (including an option repricing without shareholder approval) and delegate any of its duties under the 2025 Plan to one or more officers or employees pursuant to a specific delegation as permitted by the terms of the 2025 Plan and applicable law.

The Company may amend the 2025 Plan or any grant in any respect the Company deems necessary or advisable, subject to the limitations of applicable law and the 2025 Plan.

#### Employment Agreements
*Employment Agreement with Terry L. Lee*

We intend to enter into a three-year employment agreement with Terry L. Lee, our President and Chief Executive Officer, effective upon completion of this offering (the "Lee Employment Agreement"). The Lee Employment Agreement will automatically renew for additional one-year terms unless terminated earlier pursuant to its terms.

Pursuant to the Lee Employment Agreement, Terry L. Lee will receive an annual base salary of $750,000 and will be eligible, beginning in 2026, for initial target annual cash incentive compensation of up to 20% of his base salary. The cash incentive compensation will be subject to performance metrics to be established by the Board and generally requires continued employment through December 31 of the applicable year.

Pursuant to the Lee Employment Agreement, Terry L. Lee is to be granted an award of RSUs under and subject to the 2025 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.

Pursuant to the Lee Employment Agreement, Terry L. Lee will receive certain employer-paid benefits (including the personal use of the Company-owned aircraft for up to 30 flight hours per year, an automobile, annual medical checkups, and life insurance) as well as retirement, health and welfare benefits generally available to other employees of the Company and/or the Bank.

The Lee Employment Agreement contains provisions related to payments and the provision of benefits to Terry L. Lee upon the termination of his employment, which are described below under "Potential Payments Upon Termination."

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Terry L. Lee was previously party to an employment agreement entered into in 2020, which was superseded by the Lee Employment Agreement. As it relates to the disclosure in the Summary Compensation Table and the Outstanding Equity Awards Table, the previous employment agreement provided for annualized base salary, annual bonus, medical and life insurance for Terry L. Lee and his spouse (including after termination of employment), provision of a Company-owned vehicle, personal use of the Company aircraft for up to 60 flight hours per year, and reimbursement for business expenses.

In addition, pursuant to the previous employment agreement, Terry L. Lee was granted an RSU award in 2020. The two most recent tranches of the award, covering 125 shares of Class B Common Stock each, vested effective December 31, 2024 and 2023, and were subject to his continued employment through each such date. Because the Company's equity securities, including the Class B Common Stock, are not actively traded, the Company's best estimate of the fair value of our equity securities as of these vesting dates is book value per share calculated as of June 30, 2024 and 2023, which was approximately $4,287 and $3,669 per share, respectively. The increase in book value per share from June 30, 2023 to June 30, 2024 was primarily due to an increase in total equity from the Company's retained earnings.

*Employment Agreement with Richard C. Sprinkle, Jr.*

The Bank intends to enter into an employment agreement with Richard C. Sprinkle, Jr., the Executive Vice President and Chief Credit Officer of the Bank, effective upon the completion of this offering (the "Sprinkle Employment Agreement"). The Sprinkle Employment Agreement will be effective through December 31, 2026, unless terminated earlier pursuant to its terms.

Pursuant to the Sprinkle Employment Agreement, Richard C. Sprinkle, Jr. will receive an annual base salary of $275,000 and, beginning in 2026, will be eligible for target annual cash incentive compensation of up to 10% of his base salary. The cash incentive compensation will be subject to performance metrics to be established by the Board and generally requires continued employment through December 31 of the applicable year.

Pursuant to the Sprinkle Employment Agreement, Richard C. Sprinkle, Jr. is eligible to participate in retirement and health and welfare benefits generally available to other employees of the Bank and will be provided an employer-paid automobile.

Richard C. Sprinkle, Jr. was previously party to an employment agreement entered into in 2012, which was superseded by the Sprinkle Employment Agreement. As it relates to the disclosure in the Summary Compensation Table, the previous employment agreement provided for base salary, a discretionary annual bonus, medical and life insurance, provision of a Company-owned vehicle, and reimbursement for business expenses.

#### Potential Payments Upon Termination by the Company or Upon a Change in Control
*Prior Employment Agreements*

Pursuant to their previous employment agreements, Terry L. Lee and Richard C. Sprinkle, Jr. would have been eligible to receive certain payments and benefits assuming that the relevant trigger event took place on or before December 31, 2024.

With respect to Terry L. Lee, upon a termination of his employment by the Company other than for certain misconduct, disability or death, Terry L. Lee would have received a severance payment equal to (i) the base salary and annual bonus (based on the Bank's pre-tax net income, as described above) that would otherwise have been paid to him through January 31, 2027, plus (ii) $350,000. In addition, upon his death, Terry L. Lee's spouse (or estate) would have received a severance payment equal to (i) 12 months' base salary plus (ii) an annual bonus for the year of termination. Also, upon a sale of 25% or more of the Company's voting stock, Terry L. Lee would have received a single lump sum payment of $600,000. Finally, upon any termination of employment, Terry L. Lee would have been entitled to an additional $600,000, paid in equal installments over five years, and Terry L. Lee would also have been entitled to certain redemption rights with respect to shares held by him.

With respect to Richard C. Sprinkle, Jr., upon a termination of his employment by the Bank without cause (as defined in his previous employment agreement), Richard C. Sprinkle, Jr. would have received severance equal to the base salary that would otherwise have been paid to him through the term of his previous employment agreement.

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*Current Employment Agreements* 

For a qualifying termination taking place on or following the effective dates of the Lee Employment Agreement and the Sprinkle Employment Agreement (each, an "Employment Agreement"), the Employment Agreements provide for the payments and benefits set forth below.

Upon a termination of the executive's employment by the employer without "cause" or upon resignation of employment by the executive for "good reason" (each as defined in the applicable Employment Agreement and summarized below), the executive would receive a lump sum cash payment (or, at the discretion of the employer, 26 equal bi-weekly installments) in an amount equal to two times (in the case of Terry L. Lee) or one times (in the case of Richard C. Sprinkle, Jr.) the sum of (A) the executive's base salary as of the date of termination (or, in the case of a resignation for good reason due to a material reduction in base salary, executive's base salary immediately prior to such reduction) plus (B) the average of the executive's cash incentive compensation for the two years immediately preceding the year of termination (such sum, the "Severance Amount"). The foregoing payments to the executive are subject to the executive complying with confidentiality, non-disparagement and, for 12 months following termination, restrictive covenants (including non-compete and non-solicit provisions).

Upon a termination of the executive's employment by the employer without cause or upon resignation of employment by the executive for good reason, in each case within six months prior to or 12 months following a "change in control" (as defined in the applicable Employment Agreement), the executive would receive a lump sum cash payment equal to three times (in the case of Terry L. Lee) or two times (in the case of Richard C. Sprinkle, Jr.) the Severance Amount.

The payments described above payable to the executive upon a qualifying termination of employment (including a qualifying termination outside of or in connection with a change in control) are subject to the executive executing a fully effective and irrevocable separation agreement.

For purposes of the Employment Agreements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Cause" generally means a termination of the executive's employment due to (i) fraud, embezzlement, misappropriation, theft, or dishonesty by the executive in the course of the executive's employment, (ii) a material violation by the executive of any written policy or code of the employer which (if curable) is not timely cured by the executive after notice to the executive of such violation, (iii) willful misconduct, gross negligence, or gross neglect by the executive in the course of the executive's employment, (iv) a breach by the executive of any fiduciary duty of the executive, (v) a breach by the executive of the Employment Agreement, subject to cure (if applicable), (vi) the conviction of the executive of, or a plea by the executive of nolo contendere to, a felony, or a misdemeanor involving moral turpitude, or the actual incarceration of the executive, (vii) conduct or behavior by the executive that materially harmed or reasonably could be expected to materially harm our business or reputation, or (viii) the initiation by any regulatory agency of certain actions against the executive, or the removal of the executive from office or permanent prohibition of the executive from participating in our business by the Tennessee Department of Financial Institutions or by certain orders. The termination of the executive's employment due to or in connection with the expiration of the Employment Agreement's term (and, in the case of Terry L. Lee, non-renewal), or due to the executive's disability, will not constitute termination without cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Change in control" generally means (i) the consummation of certain corporate transactions immediately after which less than a majority of the voting securities of the Company (or the successor) is held by the holders of the securities of the Company immediately prior to such transaction, (ii) any person becoming the "beneficial owner" of more than 50% of the combined voting power of the Company's voting securities, (iii) the sale or disposition of assets of the Company or an affiliate during any 12-month period with a fair market value equal to or greater than 80% of the fair market value of the Company's consolidated assets, or (iv) the replacement, during any period of 12 consecutive months, of a majority of the members of the Board with directors whose appointment or election was not endorsed by a majority of the members of the Board before the date of appointment or election.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• "Good reason" generally means a termination of the executive's employment due to (i) a material diminution in the executive's authority, duties, and responsibilities, (ii) a material reduction in the executive's base salary, (iii) a change in the location of the executive's primary office that requires the executive to regularly physically report to an office located 50 miles or more from the location of the executive's primary office, or (iv) a material breach of the Employment Agreement by the employer.

Upon the executive's termination due to death or disability, the executive's estate would receive a pro rata portion (through the date of termination) of any cash incentive compensation that would have been payable to the executive for the year in which the executive's death or disability occurs.

Pursuant to the Lee Employment Agreement, after the termination of Terry L. Lee's employment, he and his spouse would receive continued employer-paid, life-time health insurance coverage and life insurance benefits.

#### Clawback Policy
We have adopted an incentive compensation clawback policy that will become effective upon, and be subject to the completion of, this offering that complies with the listing standards of Nasdaq. As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), we maintain a clawback policy, which requires that certain incentive compensation paid to any current or former executive officer, including our named executive officers, will be subject to recoupment if (x) the incentive compensation was calculated based on financial statements that were required to be restated due to material noncompliance with financial reporting requirements, without regard to any fault or misconduct, and (y) that noncompliance resulted in overpayment of the incentive compensation within the three fiscal years preceding the fiscal year in which the restatement was required. Incentive compensation subject to the clawback policy consists of compensation that is granted, earned or vested based wholly or in part upon the attainment of a financial reporting measure (as defined in the rules implementing such requirement), including stock price and total shareholder return, on and after the completion of this offering.

#### Outstanding Equity Awards at Fiscal Year-End
The following table provides information regarding outstanding equity awards held by each of our named executive officers as of December 31, 2024.

---

| | | |
|:---|:---|:---|
|  | **Stock Awards** | **Stock Awards** |
|  **Name** | **Number of <br>shares or units <br>of stock that <br>have not vested <br>(#)** | **Market value of <br>shares or units <br>of stock that <br>have not vested <br>(#)** |
|  Terry L. Lee | 375<br><sup>(1)</sup> | 1988250<br><sup>(2)</sup> |
|  J. Adam Robertson | **—** | **—** |
|  Richard C. Sprinkle, Jr. | **—** | **—** |

---

____________

(1) Represents the remaining unvested time-based RSU awards granted in 2020. The three remaining tranches of 125 unvested time-based RSUs are scheduled to vest on January 1, 2025, 2026 and 2027.

(2) Amount is calculated by multiplying the number of shares shown in the table by $5,302, the fair market value of our Class B Common Stock (not taking into account the Stock Reclassification or Stock Split) as of December 31, 2024, as determined by a third-party appraisal.

#### Director Compensation
Our non-employee director compensation program is designed to attract, retain and reward qualified non-employee directors. Pursuant to this program, each member of our Board who is not an employee received cash and other compensation for fiscal year 2024 Board service described below.

In connection with this offering, our Board adopted, and our shareholders approved, the 2025 Plan, effective upon the completion of this offering. Pursuant to the 2025 Plan, the maximum compensation paid by the Company to a non-employee director during a calendar year for service on the Board will not exceed $1,000,000 in total value (calculating the value of any grants under the 2025 Plan based on the grant date fair value of such grants for financial reporting purposes). The Company did not grant equity awards to its non-employee directors in fiscal year 2024.

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#### 2024 Director Compensation Table

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| | | | |
|:---|:---|:---|:---|
|  **Name** | **Fees Earned or <br>Paid in Cash<br>($)** | **All Other <br>Compensation <br>($)** | **Total<br>($)** |
|  Alan C. Neely | 18000 | 0 | 18000 |
|  Aaron A. Robertson | 18000 | 146810<br><sup>(1)</sup> | 164810 |
|  Dennis Michael Robertson | 30000 | 0 | 30000 |
|  Martha S. Spurlock | 15000 | 0 | 15000 |

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____________

(1) Represents, for Aaron A. Robertson, (i) an $80,000 discretionary annual bonus, (ii) $7,396 for personal use of a company vehicle, (iii) $58,249 in salary and (iv) $1,165 in profit-sharing contributions. The discretionary bonus, the Company's provision of a vehicle for personal use, Aaron A. Robertson's salary and the profit-sharing contributions were discontinued in connection with this offering. The value of the personal use of a Company vehicle was determined based on the actual cost incurred by the Company.

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#### CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

#### Policies and Procedures Regarding Related Party Transactions
Transactions by the Company or the Bank or its subsidiaries with related parties are subject to certain regulatory requirements and restrictions, including Sections 23A and 23B of the Federal Reserve Act and Federal Reserve Regulation W. Loans to directors, executive officers and persons or groups having the power to vote more than 10% of the Company's common stock are subject to the requirements of Federal Reserve Regulation O. We have adopted policies to comply with these regulatory requirements and restrictions.

In addition, prior to completion of this offering, our Board will adopt a written policy governing the approval of related party transactions that complies with the applicable requirements of the SEC and Nasdaq concerning related party transactions. Under applicable SEC and Nasdaq rules, related party transactions are transactions in which we are a participant, the amount involved exceeds $120,000 and a related party has or will have a direct or indirect material interest. Our related parties include directors (including nominees for election as directors), executive officers, 5% shareholders and the immediate family members of these persons.

Under our policy, related party transactions will be reviewed and, if deemed appropriate, approved or ratified by our Audit Committee. Upon determination by our Audit Committee that a transaction requires review under the policy, the material facts are required to be presented to the Audit Committee. In determining whether or not to approve a related party transaction, our Audit Committee will take into account, among other relevant factors, whether the related party transaction is in our best interest, whether it involves a conflict of interest and the commercial reasonableness of the transaction. In the event that we become aware of a related party transaction that was not approved under the policy (such as before the policy was adopted), our Audit Committee will review such transaction as promptly as reasonably practical and will take such course of action as may be deemed appropriate under the circumstances. In the event a member of our Audit Committee is not disinterested with respect to the related party transaction under review, that member may not participate in the review, approval or ratification of that related party transaction.

Certain transactions are not subject to the related party transaction approval policy, including: (1) decisions on compensation or benefits relating to directors or executive officers and (2) credit extensions by us in the ordinary course of business, on substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable loans with persons not related to us and not presenting more than the normal risk of collectability or other unfavorable features.

All related party transactions, including those described below, have been made consistent with applicable law, including Federal Reserve Regulation W.

#### Related Party Transactions
The following is a description of each transaction since January 1, 2022, and each proposed transaction, in which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we have been or are to be a participant;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the amount involved exceeds or will exceed $120,000; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any of our directors, nominees for director, executive officers or beneficial holders of more than 5% of our capital stock (collectively, "principal shareholders"), or any immediate family member of or person sharing the same household with any of these individuals (other than tenants or employees), had or will have a direct or indirect material interest.

*Cumberland Ford*

Terry L. Lee, the Company's President and Chief Executive Officer and a member of the Company's Board, owns a majority of the outstanding capital stock of Cumberland Ford in Middlesboro, Kentucky. We have from time to time purchased vehicles from Cumberland Ford or engaged Cumberland Ford for vehicle repair services. We paid $70,466 to Cumberland Ford in the six months ended June 30, 2025, and $189,109, $170,705, and $199,051 in the years ended December 31, 2024, 2023, and 2022, respectively.

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*King Real Estate Services, Inc.*

The sister and brother-in-law of J. Adam Robertson, Executive Chairperson of the Board, own King Real Estate Services, Inc., a company that provides real estate appraisal services. We paid $63,700 in the six months ended June 30, 2025 to King Real Estate Services, Inc., and $126,830 and $160,923 in the years ended December 31, 2024 and 2022, respectively, for appraisals of properties related to Bank loan collateral.

We believe that the terms and conditions of the foregoing transactions are comparable to terms that would have been available from a third party unaffiliated with us.

#### Ordinary Banking Relationships
Certain of our officers, directors and principal shareholders, as well as their immediate family members and affiliates, are customers of, or have or have had transactions with, the Bank, us or our affiliates in the ordinary course of business. These transactions include deposits, loans and other financial services related transactions. Related party transactions are made in the ordinary course of business, on substantially the same terms, including interest rates and collateral (where applicable), as those prevailing at the time for comparable transactions with persons not related to us, do not involve more than a normal risk of collectability or present other features unfavorable to us and are a type that the Bank generally makes available to the public. As of the date of this prospectus, no related party loans were classified or were nonaccrual, past due, restructured or potential problem loans. We expect to continue to enter into transactions in the ordinary course of business on similar terms with our officers, directors and principal shareholders, as well as their immediate family members and affiliates.

Our policies governing affiliate and insider lending transactions to comply with Federal Reserve Regulations O and W prohibit extensions of credit to "insiders," as defined in these policies, including our executive officers and directors, unless the extension of credit:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• is made in the ordinary course of business on substantially the same terms (including interest rates and collateral) as, and following credit underwriting procedures that are not less stringent than, those prevailing at the time for comparable transactions with members of the general public;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• does not involve more than the normal risk of repayment or present other unfavorable features; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• is of a type that is generally made available by the Bank to the public.

As of December 31, 2024, we had loans and extension of credit to directors and officers totaling $69.2 million.

#### Directed Share Program
At our request, the underwriter has reserved for sale at the initial public offering price approximately [ ]% of the shares offered hereby for directors, executive officers and employees of the Company and the Bank and other designated persons. We will offer these reserved shares through a directed share program. Reserved shares purchased by our directors and executive officers will be subject to a 180-day lock-up period. The number of shares available for sale to the general public will be reduced to the extent such persons purchase the reserved shares. Any reserved shares not so purchased will be offered by the underwriter to the general public on the same basis as the other shares offered hereby. Directors, executive officers and employees of the Company and the Bank and other designated persons have expressed an intent to buy approximately $ of the shares in this offering through the directed share program. See "Underwriting — Directed Share Program."

#### Indemnification of Directors and Officers
Our A&R Charter and A&R Bylaws will provide that we must indemnify our directors and officers to the fullest extent authorized by the TBCA and applicable federal law and regulations. In addition, our A&R Charter will provide that our directors will not be liable for any breach of fiduciary duty to the fullest extent permitted by the TBCA.

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We expect to enter into indemnification agreements with each of our directors and executive officers. These agreements will require us to indemnify these individuals to the fullest extent permitted under the TBCA and applicable federal laws and regulations against losses incurred by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. We believe that the indemnification and limitation of liability provision in our A&R Charter and the indemnification agreements will facilitate our ability to continue to attract and retain qualified individuals to serve as directors and executive officers.

There is no pending litigation or proceeding naming any of our directors or officers for which indemnification is being sought, and we are not aware of any pending or threatened litigation that may result in claims for indemnification by any director or officer.

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#### PRINCIPAL AND SELLING SHAREHOLDERS
The following table presents certain information with respect to the beneficial ownership of our common stock as of August 15, 2025, after giving effect to the Stock Reclassification and the Stock Split, and as adjusted to reflect the completion of this offering, for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each of our directors and named executive officers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• all of our directors and executive officers, as a group;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each other person known to us to be the beneficial owner of more than 5% of our common stock; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• each of the selling shareholders.

We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting of the securities, or to dispose or direct the disposition of the securities, or has the right to acquire such powers within 60 days from August 15, 2025. Except as indicated by the footnotes below, we believe, based on the information furnished to us by each person named in the table below, that such persons have sole voting and investment power with respect to all shares of common stock that they beneficially own.

The percentage of beneficial ownership is based on 12,239,644 shares of our common stock outstanding as of August 15, 2025, after giving effect to the Stock Reclassification and the Stock Split, and shares to be outstanding after the completion of this offering. The table does not reflect any shares of common stock that may be purchased in this offering by the individuals listed below. See "Underwriting — Directed Share Program."

Unless otherwise noted, the address for each shareholder listed in the table below is: c/o Commercial Bancgroup, Inc., 6710 Cumberland Gap Parkway, Harrogate, Tennessee 37752.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock Beneficially <br>Owned Before Offering** | **Common Stock Beneficially <br>Owned Before Offering** |  | **Common Stock Beneficially Owned After <br>Offering** | **Common Stock Beneficially Owned After <br>Offering** | **Common Stock Beneficially Owned After <br>Offering** |
|  | **Common Stock Beneficially <br>Owned Before Offering** | **Common Stock Beneficially <br>Owned Before Offering** |  |  | **<br>If Underwriter's <br>Option Not <br>Exercised** | **If Underwriter's <br>Option <br>Exercised in <br>Full** |
|  **Name of Beneficial Owner** | **Number of <br>Shares<sup>(1)</sup>** | **Percent of <br>Class** | **Shares <br>Offered** | **Number of <br>Shares<sup>(1)</sup>** | **Percent of <br>Class** | **Percent of <br>Class** |
|  ***Directors and Named Executive Officers****:* |  |  |  |  |  |  |
|  Terry L. Lee<sup>(2)</sup> <br>*President, Chief Executive Officer, Director* | 754225 | 6.2% |  |  |  |  |
|  J. Adam Robertson<sup>(3)</sup> <br>*Executive Chairperson* | 5212349 | 42.6% |  |  |  |  |
|  Richard C. Sprinkle, Jr. *Executive Vice President, Chief <br>Credit Officer* | 21562 | \* |  |  |  |  |
|  Aaron A. Robertson<sup>(4)</sup> <br>*Director* | 5116374 | 41.8% |  |  |  |  |
|  Dennis Michael Robertson <br>*Director* | 50000 | \* |  |  |  |  |
|  Alan C. Neely<sup>(5)</sup> <br>*Director* | 997975 | 8.2% |  |  |  |  |
|  Martha S. Spurlock<sup>(6)</sup> <br>*Director* | 3178775 | 26.0% |  |  |  |  |
|  James J. Shoffner <br>*Director* |  |  |  |  |  |  |
|  Sam A. Mars III <br>*Director* | 41500 | &nbsp;&nbsp;&nbsp;&nbsp;\* |  |  |  |  |
|  Charles L. Yates<sup>(7)</sup> <br>*Director* | 143062 | 1.2% |  |  |  |  |
|  **All Directors and Executive Officers as a Group (11 persons)** | 10412635<br><sup>(8)</sup> | 85.1% |  |  |  |  |
|  ***Selling Shareholders and Greater than 5% Shareholders*** |  |  |  |  |  |  |
|  Robertson Holding Company, L.P.<sup>(9)</sup> | 5103187 | 41.7% |  |  |  |  |
|  Unified Shares LLC<sup>(10)</sup> | 2958837 | 24.2% |  |  |  |  |

---

____________

\* Represents beneficial ownership of less than 1% of the class of shares.

(1) Rounded down to the nearest whole share. Unless otherwise indicated in the footnotes, each of the shareholders named in this table has sole voting and investment power with respect to the shares of common stock shown as beneficially owned by such shareholder, except to the extent that authority is shared by spouses under applicable law.

(2) Includes (a) 254,925 shares of common stock held by Terry L. Lee, (b) 261,250 shares of common stock held by Wanda Lee, the spouse of Terry L. Lee, and (c) 238,050 shares of common stock held by Lee Holding Company, L.P. Due to Terry L. Lee's position as the general partner of Lee Holding Company, L.P., Terry L. Lee may be deemed to beneficially own the shares of common stock held directly by Lee Holding Company, L.P. Terry L. Lee disclaims any beneficial ownership of the shares of common stock held directly by Lee Holding Company, L.P. except to the extent of his pecuniary interest therein, if any.

(3) Includes (a) 105,412 shares of common stock held by J. Adam Robertson, 3,750 shares of common stock held by Cynthia D. Robertson, the spouse of J. Adam Robertson, and 5,103,187 shares of common stock held by Robertson Holding Co. Due to J. Adam Robertson's position as one of the two general partners of Robertson Holding Co., J. Adam Robertson may be deemed to beneficially own the shares of common stock held directly by Robertson Holding Co. J. Adam Robertson disclaims any beneficial ownership of the shares of common stock held directly by Robertson Holding Co. except to the extent of his pecuniary interest therein, if any.

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(4) Includes (a) 10,687 shares of common stock held by Aaron A. Robertson, 2,500 shares of common stock held by a minor child of Aaron A. Robertson, and 5,103,187 shares of common stock held by Robertson Holding Co. Due to Aaron A. Robertson's position as one of the two general partners of Robertson Holding Co., Aaron A. Robertson may be deemed to beneficially own the shares of common stock held directly by Robertson Holding Co. Aaron A. Robertson disclaims any beneficial ownership of the shares of common stock held directly by Robertson Holding Co. except to the extent of his pecuniary interest therein, if any.

(5) Includes 18,750 shares of common stock held by Alan C. Neely and 979,225 shares of common stock held by various irrevocable trusts of which Alan C. Neely serves as trustee. Alan C. Neely disclaims beneficial ownership of the shares held by the referenced trusts except to the extent of his pecuniary interest therein, if any.

(6) Includes 219,937 shares of common stock held jointly by Martha S. Spurlock and Charles Spurlock, the spouse of Martha S. Spurlock, and 2,958,837 shares of common stock held by Unified Shares. Due to Martha S. Spurlock's position as a member and manager of Unified Shares, Martha S. Spurlock may be deemed to beneficially own the shares of common stock held directly by Unified Shares. Martha S. Spurlock disclaims any beneficial ownership of the shares of common stock held directly by Unified Shares except to the extent of her pecuniary interest therein, if any.

(7) Includes 70,481 shares of common stock held by Charles L. Yates, 41,475 shares of common stock held by PCS Investments II LLC, and 31,106 shares of common stock held by the Peggy C. Smith Revocable Trust. Charles L. Yates holds the voting and dispositive power of the shares of common stock held by PCS Investments II LLC and the Peggy C. Smith Revocable Trust. Charles L. Yates disclaims any beneficial ownership of the shares of common stock held directly by PCS Investments II LLC and the Peggy C. Smith Revocable Trust except to the extent of his pecuniary interest therein, if any.

(8) J. Adam Robertson and Aaron A. Robertson are co-general partners of Robertson Holding Co. The shares of common stock held by Robertson Holding Co. are only counted once for purposes of the aggregate number of shares owned by directors and executive officers as a group.

(9) J. Adam Robertson and Aaron A. Robertson are co-general partners of Robertson Holding Co. As a co-general partner of Robertson Holding Co., each of J. Adam Robertson and Aaron A. Robertson holds the voting and dispositive power for the shares of common stock beneficially owned by Robertson Holding Co.

(10) Martha S. Spurlock, Rachel S. West, and Andra S. Ostergard are the three managers and members of Unified Shares. Any decisions by Unified Shares with respect to the shares of common stock held by it, including voting and dispositive decisions, are made by the unanimous vote of these three individuals. Accordingly, each of Martha S. Spurlock, Rachel S. West, and Andra S. Ostergard is deemed to have or share beneficial ownership of the securities held directly by Unified Shares. Each such individual disclaims any beneficial ownership of the shares of common stock held directly by Unified Shares except to the extent of her pecuniary interest therein, if any. The address of Unified Shares is 549 Londonderry Road, Harrogate, Tennessee 37752.

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#### DESCRIPTION OF CAPITAL STOCK

#### General
The following is a summary of the Company's capital stock and the material provisions of our A&R Charter and A&R Bylaws, as each is anticipated to be in effect upon the closing of this offering. This summary does not purport to be complete and is qualified in its entirety by reference to the applicable provisions of the TBCA and to our A&R Charter and A&R Bylaws, which are filed as exhibits to the registration statement of which this prospectus is a part. The authorized capital stock of the Company consists of 50,000,000 shares of common stock, $0.01 par value per share, of which [•] shares will be issued and outstanding upon completion of this offering if all shares offered are sold (after giving effect to the Stock Conversion and the Stock Split), and 10,000,000 shares of preferred stock, $0.01 par value per share, none of which are currently issued and outstanding and none of which will be issued and outstanding upon completion of this offering.

An aggregate of 850,000 shares of common stock are expected to be reserved for issuance under the 2025 Plan.

All of our outstanding shares of common stock are, and the shares of our common stock issued in this offering will be, fully paid and nonassessable. Each share of our common stock has the same relative rights as, and is identical in all respects with, each other share of our common stock.

#### Common Stock
***Voting Rights.*** The holders of common stock are entitled to one vote per share on all matters on which the common stock is entitled to vote and are not entitled to cumulative voting in the election of directors. At any meeting of the Company's shareholders, the holders of a majority of the shares entitled to vote on a matter, present in person or by proxy, will constitute a quorum for such meeting with respect to that matter. Generally, if a quorum is present, action on any matter, other than the election of directors, by our shareholders will be approved if the votes cast favoring the action exceed the votes cast opposing the action, unless a greater number of affirmative votes is required by the A&R Charter or A&R Bylaws or the TBCA.

***Dividend Rights.*** Our shareholders are entitled to receive dividends on common stock only when, as and if declared by our Board from funds legally available therefor under the TBCA and as limited by applicable banking laws and regulations and regulatory policy, subject to the satisfaction of any preferential dividend rights of holders of any other class or series of capital stock of the Company. The principal source of funds for the payment of dividends by the Company is the payment of dividends to it by the Bank. Please see "Dividend Policy — Dividend Restrictions" and "Supervision and Regulation" for a description of certain limitations and restrictions on the payment of dividends applicable to the Bank.

***Liquidation and Dissolution Rights.*** In the event of any liquidation or dissolution of the Company, the holders of our common stock are entitled to receive the net assets of the Company upon the liquidation or 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.

***Other Rights.*** The holders of our common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of holders of our preferred stock.

#### Preferred Stock
Our Board has the authority to issue preferred stock from time to time in one or more series, to establish the number of shares constituting each such series and, within the limitations set forth in the TBCA, to fix the designation and preferences, limitations, and relative rights of each such series.

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The issuance of preferred stock could have the effect of delaying, deferring or preventing a change in control of the Company without further action by our shareholders and may adversely affect the voting and other rights of the holders of common stock. At present, the Company has no plans to issue any of the preferred stock. The authority of our Board with respect to any series of preferred stock includes, without limitation:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the number of shares constituting the series;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general or specific voting rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• preferential liquidation rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• preferential cumulative or noncumulative dividend rights;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• redemption or put rights; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• conversion rights.

We may issue shares of, or rights to purchase shares of, one or more series of our preferred stock the terms of which might:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adversely affect the voting or other rights evidenced by, or amounts otherwise payable with respect to, the common stock or other series of preferred stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• discourage an unsolicited proposal to acquire us; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• facilitate a particular business combination involving us.

#### Election and Removal of Directors
Our Board will consist of between five and 25 directors, with the exact number of directors to be fixed from time to time by resolution of our Board or by our shareholders. Our directors are divided into three classes designated Class I, Class II, and Class III with staggered three-year terms. The number of directors in each class will at all times be as equal as possible. Only the directors in one class will be subject to election at each annual meeting of our shareholders, with the directors in the other classes continuing for the remainder of their respective three-year terms.

Directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. A director may be removed by our shareholders only for cause or for cause by the vote of a majority of all members of our Board, in each case only at a meeting called for such purpose.

#### Advance Notice for Shareholder Proposals or Making Director Nominations at Meetings
Our A&R Bylaws establish an advance notice procedure for shareholder proposals to be brought before a meeting of our shareholders and for nominations by shareholders of candidates for election as directors at an annual meeting or a special meeting at which directors are to be elected. Generally, and subject to any other applicable requirements, only such business may be conducted at a meeting of Company shareholders as has been brought before the meeting by, or at the direction of, our Board or by a shareholder of record who has given to our Secretary timely written notice in proper form of the shareholder's intention to bring that business before the meeting. Generally, only persons who are selected and recommended by our Board, or the committee of our Board designated to make nominations, or who are nominated by a shareholder who has given timely written notice in proper form to the Secretary of the Company, will be eligible for election as directors.

To be timely, notice of shareholder proposals or director nominations to be brought before a meeting of shareholders must be delivered to our principal office within the following time periods:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in the case of an annual meeting of our shareholders 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 anniversary of the previous year's annual meeting, not later than the close of business on the 90<sup>th</sup> calendar day nor earlier than the close of business on the 120<sup>th</sup> calendar day prior to the anniversary of the previous year's annual meeting, or in the case of any other annual meeting of our shareholders, the close of business on the 10<sup>th</sup> calendar day following the date of public disclosure of the date of such meeting; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in the case of a special meeting of shareholders called for the purpose of electing directors, not later than the close of business on the 10<sup>th</sup> 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.

The adjournment or postponement of an annual meeting, or the announcement thereof, will not commence a new time period (or extend any notice time period) for the giving of a shareholder's notice as described above.

The notice of any shareholder proposal or nomination of an individual for election as a director must set forth certain information required under our A&R Bylaws and certain proxy rules under the Exchange Act. A shareholder submitting notice of a shareholder proposal or director nomination must provide, among other things, the shareholder's name and address as they appear on our books and the class and number of shares of our capital stock owned beneficially or of record by the shareholder.

#### Amendment of Charter and Bylaws
Our A&R Charter may be amended by our Board to the fullest extent permitted by the TBCA and by our shareholders 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 the TBCA or the A&R Charter. The provision of our A&R Charter providing for limitations on the liability of our directors may only be amended upon the affirmative vote of the holders of at least two-thirds of all votes entitled to be cast.

Our shareholders may amend our A&R Bylaws only upon the affirmative vote of a majority of all votes entitled to be cast on the amendment, unless a greater vote is required by our A&R Charter or the TBCA. Additionally, our Board may amend our A&R Bylaws upon the affirmative vote of a majority of all members of the Board, unless a greater vote is required by our A&R Charter or the TBCA.

#### Ownership Limitations
The Company is a bank holding company and, as a result, the ability of persons to acquire our common stock is limited by applicable banking laws and regulations. Under certain circumstances, a person may need to obtain regulatory approval before acquiring our common stock. Generally, the BHC Act requires any other bank holding company to obtain the approval of the Federal Reserve prior to acquiring more than 5% of our outstanding common stock. Any company that owns, controls, or holds the power to vote 25% or more of our outstanding common stock, either directly or acting through one or more other persons, or that otherwise is deemed to control the Company under the BHC Act, would be subject to regulation as a bank holding company under the BHC Act. Additionally, a person other than a bank holding company may be required to seek and obtain the prior approval of the Federal Reserve under the Change in Bank Control Act before acquiring, directly or indirectly or in concert with one or more other persons, 10% or more of our outstanding common stock. See "Supervision and Regulation — Commercial Bancgroup, Inc." for additional information about the federal laws and regulations that limit the ability of other persons to acquire our common stock. Further, generally and subject to certain exceptions, the prior approval of the TDFI is required for a person to, directly or indirectly, acquire 25% or more of our outstanding common stock.

#### Special Meetings
Under our A&R Charter and A&R Bylaws, special meetings of our shareholders may only be called by the Chairperson of our Board, our Chief Executive Officer, majority vote of all directors then in office, or the holders of 25% or more of the issued and outstanding shares of our voting stock entitled to vote on any matter proposed to be considered at such special meeting.

#### Limitation of Liability of Directors and Officers
The TBCA generally provides that a corporation may indemnify any of its directors and officers against liability incurred in connection with a proceeding if: (a) such person's conduct was in good faith; (b) in the case of conduct in an official capacity with the corporation, such person reasonably believed such conduct was in the corporation's best interests, and in all other cases such person reasonably believed that such conduct was at least not opposed to the best interests of the corporation; and (c) in the case of any criminal proceeding, such person had no reasonable cause to believe such conduct was unlawful. In a proceeding brought by or in the right of the corporation, however,

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the TBCA provides that no indemnification may be made if the director or officer was adjudged to be liable to the corporation. The TBCA also provides that, in connection with any proceeding charging improper personal benefit to an officer or director, no indemnification may be made if such officer or director is adjudged liable on the basis that such personal benefit was improperly received. In cases where a director or officer is wholly successful, on the merits or otherwise, in the defense of any proceeding instigated because of his or her status as a director or officer of a corporation, the TBCA mandates that the corporation indemnify the director or officer against reasonable expenses incurred in the proceeding, unless limited by the corporation's charter. The TBCA provides that, unless a corporation's charter provides otherwise, a director or officer may apply to a court of competent jurisdiction for indemnification, and the court may order that the director or officer be indemnified, if, in consideration of all relevant circumstances, the court determines that such individual is fairly and reasonably entitled to indemnification, regardless of whether (a) such officer or director has met the standard of conduct for indemnification set forth in the TBCA or (b) such officer or director has been adjudged liable to the corporation in a proceeding by or in the right of the corporation, or on the basis that the officer or director improperly received a personal benefit in a proceeding charging improper benefit (but if the director or officer has been adjudged so liable, indemnification is limited to reasonable expenses incurred).

Our A&R Charter and A&R Bylaws provide generally that the Company will 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 TBCA, in each case to the fullest extent permitted by the TBCA (even if indemnification and the advancement of expenses is permissive under the TBCA) and applicable federal laws and regulations, including applicable federal regulations regarding indemnification payments by a depository institution holding company, as the same may be amended from time to time. The right of any director or officer of the Company to indemnification conferred in our A&R Charter or A&R Bylaws also includes the right to be paid by the Company the expenses incurred in defending any such proceeding in advance of its final disposition, provided that advancements of expenses are to be made only upon delivery by the director or officer to the Company of an undertaking by and on behalf of such person to repay all amounts so advanced if it is ultimately determined by final judicial decision that such person is not entitled to be indemnified for such expenses.

#### Anti-takeover Effect of Governing Documents and Applicable Law
Some provisions of our A&R Charter and A&R Bylaws could have the effect of delaying or deferring the removal of incumbent directors or delaying, deferring or discouraging another party from acquiring control of us, even if such removal or acquisition would be viewed by our shareholders to be in their best interests. These provisions, listed below, are intended to encourage persons seeking to acquire control of us to first negotiate with our Board. These provisions may also serve to discourage hostile takeover practices and inadequate takeover bids. We believe that these provisions are beneficial because the negotiation they encourage could result in improved terms in an unsolicited proposal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our A&R Charter provides that our Board may issue "blank check" preferred stock without shareholder approval (see "— Preferred Stock" above);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have a staggered Board, and our directors may only be removed for cause (see "— Election and Removal of Directors" above);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our A&R Bylaws establish an advance notice procedure for shareholder proposals to be brought before a meeting of our shareholders and for nominations by shareholders of candidates for election as directors at an annual meeting or a special meeting at which directors are to be elected (see "— Advance Notice for Shareholder Proposals or Making Director Nominations at Meetings"); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Special meetings of our shareholders may only be called by the Chairperson of our Board, our Chief Executive Officer, majority vote of all directors then in office, or the holders of 25% or more of the issued and outstanding shares of our voting stock entitled to vote on any matter proposed to be considered at such special meeting (see "— Special Meetings" above).

In addition to certain of the provisions in our A&R Charter and A&R Bylaws discussed above, the State of Tennessee has adopted statutes that can have an anti-takeover effect and may delay or prevent a tender offer or takeover attempt that a shareholder might consider in its best interest, including an attempt that might result in a premium over the market price for shares of our common stock.

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The Tennessee Control Share Acquisition Act generally provides that, except as discussed below, "control shares" will not have any voting rights. Control shares are shares acquired by a person under certain circumstances which, when added to the shares owned by such person, would entitle such person, upon acquisition of the shares, to exercise or direct the exercise of voting power of a corporation in the election of directors within any of the following ranges: (i) one-fifth or more but less than one-third of all voting power; (ii) one-third or more but less than a majority of all voting power; or (iii) a majority or more of all voting power. However, voting rights can be restored to control shares by resolution of a corporation's shareholders approved by the affirmative vote of the holders of a majority of the corporation's shares entitled to vote generally in the election of directors, other than shares owned by the owner of the control shares, officers of the corporation, or an employee of the corporation who is also a director of the corporation. A corporation's charter or bylaws may provide that, if voting rights are granted to control shares which give the holder thereof a majority of all voting power entitled to vote generally in the election of a corporation's directors, then the corporation's shareholders who have not voted in favor of granting such voting rights to the control shares shall be entitled to an appraisal of the fair value of their shares in accordance with the TBCA.

The Tennessee Control Share Acquisition Act is not applicable to us because neither our A&R Charter nor our A&R Bylaws contain a specific provision "opting in" to the act, as is required.

The Tennessee Investor Protection Act provides generally that, unless a Tennessee corporation's board of directors has recommended a takeover offer to shareholders, no offeror beneficially owning 5% or more of any class of equity securities of the corporation, any of which were purchased within the preceding year, may make a takeover offer for any class of equity securities of the corporation if after completion the offeror would be a beneficial owner of more than 10% of any class of outstanding equity securities of the corporation, unless the offeror, before making such purchase, (i) makes a public announcement of the offeror's intention with respect to changing or influencing the management or control of the corporation; (ii) makes a full, fair, and effective disclosure of such intention to the person(s) from whom the offeror intends to acquire such securities; and (iii) files with the Tennessee Commissioner of Commerce and Insurance (the "C&I Commissioner") and the corporation a statement signifying such intentions and containing such additional information as may be prescribed by the C&I Commissioner. The offeror must provide that any equity securities of the corporation deposited or tendered pursuant to a takeover offer may be withdrawn by an offeree at any time within seven days from the date the offer has become effective, or after 60 days from the date the offer has become effective, except as the C&I Commissioner may otherwise prescribe for the protection of investors. If the takeover offer is for less than all the outstanding equity securities of any class, and if the number of securities deposited or tendered pursuant thereto within 10 days after the offer has become effective, and copies of the offer or notice of any increase in the consideration offered are first published or sent or given to offerees, is greater than the number the offeror has offered to accept and pay for, the securities must be accepted pro rata according to the number of securities deposited or tendered by or on behalf of each offeree. If an offeror varies the terms of a takeover offer before its expiration date by increasing the consideration offered to offerees, the offeror must pay the increased consideration for all equity securities accepted, whether accepted before or after the variation in the terms of the offer.

The Tennessee Investor Protection Act does not apply to us because the act by its terms does not apply to bank holding companies subject to regulation by a federal agency.

The Tennessee Business Combination Act generally prohibits a "business combination" by a corporation or any of its subsidiaries with an "interested shareholder" within five years after the shareholder becomes an interested shareholder. A corporation or any of its subsidiaries can, however, enter into a business combination within such period if, before the interested shareholder became an interested shareholder, the corporation's board of directors approved the business combination or the transaction in which the interested shareholder became an interested shareholder. After this five-year moratorium, a business combination with an interested shareholder can be consummated only if it satisfies certain fair price criteria or is approved by the affirmative vote of the holders of two thirds (2/3) of the voting stock of the corporation not beneficially owned by the interested shareholder or affiliates or associates of the interested shareholder. For purposes of these provisions of the Tennessee Business Combination Act, a "business combination" generally includes mergers, share exchanges, certain sales, leases, and other dispositions of assets, issuances of securities, and similar transactions. An "interested shareholder" is generally any person that beneficially owns 10% or more of the voting power of any class or series of outstanding voting stock of certain Tennessee-chartered corporations.

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The Tennessee Business Combination Act applies to us because we have not opted out of the application of such act by amendment to our A&R Charter or A&R Bylaws.

The Tennessee Greenmail Act applies to a Tennessee corporation that has a class of voting stock registered or traded on a national securities exchange or registered with the SEC pursuant to Section 12(g) of the Exchange Act. Under the Tennessee Greenmail Act, a corporation may not purchase any of its shares at a price above the market value of such shares from any person who holds more than 3% of the class of securities to be purchased if such person has held such shares for less than two years, unless the purchase has been approved by the affirmative vote of a majority of the outstanding shares of each class of voting stock issued by the corporation or the corporation makes an offer, of at least equal value per share, to all holders of shares of such class.

#### Listing of and Trading Market for Common Stock
We have applied to list our common stock on Nasdaq under the symbol "CBK."

Prior to this offering, our common stock has not been actively traded and has not been listed or traded on an established public trading market, and no quotations for our common stock were reported on any market. As a result, there has been no established public trading market for our common stock. Although our shares may have been sporadically traded in private transactions, the prices at which such transactions occurred may not necessarily reflect the price that would be paid for our common stock in an active market.

We anticipate that this offering and the listing of our common stock on Nasdaq will result in a more active trading market for our common stock. However, we cannot assure you that a liquid trading market for our common stock will develop or be sustained after this offering. You may not be able to trade in our shares when you seek to purchase or sell shares, and the market price for our common stock may be more or less than the initial public offering price in this offering. See "Underwriting" for more information regarding our arrangements with the underwriter and the factors considered in setting the initial public offering price.

#### Transfer Agent and Registrar
Upon the completion of this offering, the transfer agent and registrar for the common stock will be Broadridge Corporate Issuer Solutions, LLC.

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#### SUPERVISION AND REGULATION
Bank holding companies and banks are regulated extensively under both federal and state law. The bank regulatory framework is intended primarily for the protection of depositors, the deposit insurance system, and the banking system, and not for the protection of shareholders or any other constituency.

The bank and bank holding company supervisory and regulatory framework subjects banks and bank holding companies to regular examination by their respective state and federal regulatory agencies, which results in examination reports and ratings that, while not publicly available, can affect the conduct and growth of their businesses. These examinations consider not only compliance with applicable laws and regulations, but also capital levels, asset quality and risk, management's ability and performance, earnings, liquidity, sensitivity to market risks and various other factors.

Composite regulatory ratings assigned to banks (which are commonly referred to as "CAMELS" ratings) are based on evaluations of an institution's managerial, operational, financial and compliance performance. The composite CAMELS rating is not an arithmetical formula or rigid weighting of numerical component ratings. Elements of subjectivity and examiner judgment, especially as these relate to qualitative assessments, are important elements in assigning ratings. The federal bank regulatory agencies from time to time review the CAMELS rating system and the consistency of their ratings.

Bank regulatory agencies have broad discretion to impose restrictions and limitations on the operations of a regulated entity where the agencies determine, among other things, that such operations are unsafe or unsound, are not in compliance with applicable laws or regulations or are otherwise inconsistent with applicable laws and regulations or with the supervisory policies of these agencies.

The following is a summary of material elements of the supervisory and regulatory framework applicable to the Company and the Bank. It does not describe all of the statutes, regulations and regulatory policies that apply to the Company and the Bank, nor does it restate all of the requirements of those that are described. To the extent that the following information describes statutory and regulatory provisions, it is qualified in its entirety by express reference to each of the particular statutory and regulatory provisions. A change in applicable statutes, regulations or regulatory policy may have a material effect on the business of the Company and the Bank.

#### Commercial Bancgroup, Inc.
The Company is a Tennessee corporation and is registered as a bank holding company with the Federal Reserve. Additionally, the Company has elected to be a financial holding company. In order for a bank holding company to qualify to be a financial holding company, each of its depository institution subsidiaries generally must, at the time of its election to become a financial holding company, be "well capitalized" and "well managed" and have at least a "satisfactory" rating under the CRA. The Company is subject to examination, regulation and supervision by the Federal Reserve under the BHC Act. The Company is required to file periodic reports with the Federal Reserve. As the holding company for a bank chartered under Tennessee law, we also are subject to the Tennessee Banking Act, and as a Tennessee corporation we are subject generally to the TBCA.

The BHC Act and the regulations thereunder place limitations on the activities in which a bank holding company may engage. Subject to certain exceptions (such as becoming a financial holding company), the BHC Act and its implementing regulations generally prohibit a bank holding company from acquiring direct or indirect ownership or control of voting shares of any company that is not a bank or bank holding company and from engaging directly or indirectly in any activity other than banking or managing or controlling banks. A bank holding company may, however, engage in or acquire an interest in a company that engages in activities that the Federal Reserve has determined by regulation or order to be so closely related to banking or managing or controlling banks as to be a proper incident thereto. Financial holding companies are permitted to engage, without prior Federal Reserve approval, in a broader range of banking and non-banking activities that are deemed to be financial in nature or incidental to a financial activity. These activities include securities underwriting, dealing and market making; organizing, sponsoring and managing mutual funds; insurance underwriting and agency activities; merchant banking activities; and other activities that the Federal Reserve has determined to be financial in nature.

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A financial holding company with a depository institution subsidiary that fails to maintain at least a "satisfactory" rating under the CRA generally is prohibited from engaging in any new, or acquiring control of a company engaged in, activities that are financial in nature or incidental to a financial activity. We are currently subject to this restriction as a result of the Bank's "needs to improve" CRA rating and will remain subject to this restriction until such time, if any, as the Bank's CRA rating is upgraded to at least "satisfactory." This restriction could have a material impact on the Bank's prospects for so long as it remains in place.

The BHC Act permits acquisitions by bank holding companies of banks and other bank holding companies, subject in most instances to the approval of the Federal Reserve and subject generally to the transaction not resulting in a monopoly or substantially lessening competition in any part of the United States. In considering whether to approve any such acquisition, the Federal Reserve must also take into account, among other things, the financial condition and prospects of, and the competence, experience, and integrity of management of, the constituent parties, as well as the constituent parties' record of performance under the CRA. Additionally, under Tennessee law and applicable rules of the TDFI, a bank holding company organized under Tennessee law, such as the Company, generally must make application to and receive approval from the Commissioner of the TDFI before acquiring a Tennessee state-chartered financial institution.

Under the Change in Bank Control Act and associated Federal Reserve regulations, generally, any person that, directly or indirectly or in concert with one or more other persons, seeks to acquire control of a bank holding company or a Federal Reserve member bank (such as the Bank) must give the Federal Reserve 60 days' prior written notice before acquiring control of the bank holding company or member bank. Under the applicable regulations, control is defined as the ownership or control of or power to vote 25% or more of any class of voting securities of the bank holding company or member bank. The regulations also provide for a presumption of control if a person would own, control, or hold with power to vote 10% or more (but less than 25%) of any class of voting securities of the bank holding company or member bank and either the institution has securities registered under Section 12 of the Exchange Act or no other person owns a greater percentage of that class of voting securities.

Following the completion of this offering, the Company will be subject to the registration, disclosure, reporting, and other requirements of the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder and administered by the SEC. Assuming the Company's common stock is successfully listed on Nasdaq in connection with this offering, the Company will also be subject to Nasdaq's rules for listed companies.

The Company is a legal entity separate and distinct from the Bank. Various legal limitations restrict the Bank from lending or otherwise providing financial support to the Company. See "— Transactions with Affiliates."

Various other federal and state laws, rules, and regulations (including Tennessee corporate law that applies generally to corporations incorporated under Tennessee law) regulate the Company's business and operations, including its corporate governance structure, its investment authority, its manner of doing business, its employment practices, its consumer privacy and consumer protection policies and procedures, its relationship with the Bank and its other affiliates, its ability to merge with, acquire, or be acquired by other entities, its capitalization, its payment of dividends or other distributions, and the types of businesses in which it can engage.

#### Commercial Bank
The Bank is chartered under Tennessee law. The Bank is a Federal Reserve member, which means that the Federal Reserve is the Bank's primary federal regulator. The Bank is also a member of the FDIC, and its deposits are insured, as provided by law, by the DIF. The Bank is subject to supervision, regulation, and examination by both the Federal Reserve and the TDFI. The Bank is subject to various requirements and restrictions under federal and state law, including capital adequacy requirements, requirements to maintain reserves against deposits, requirements under the CRA, restrictions on the types and amounts of loans that may be made and the interest that may be charged thereon and limitations on the types of investments that it can make, the types of activities that it can engage in, and the types of services that it can offer. The business and operations of the Bank are also affected by various consumer laws and regulations, including regulations of the CFPB and other federal and state agencies relating to equal credit opportunity, truth in lending disclosures, truth in savings disclosures, debt collection, privacy, and consumer lending practices. In addition to the impact of direct regulation, commercial banks are affected significantly by the actions of the Federal Reserve as it attempts to control the money supply and credit availability in the United States in order to influence the economy.

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Strict compliance at all times with state and federal banking laws, rules and regulations, as well as other laws, is and will continue to be required. The Bank believes that the experience of its executive management team will assist it in its continuing efforts to achieve the requisite level of compliance. Certain provisions of state law may be preempted by existing and future federal laws, rules and regulations, and no prediction can be made as to the impact of preemption on state law or the regulation of the Bank thereunder.

The Federal Reserve and the TDFI regularly examine the Bank and have the authority to approve or disapprove of certain activities of the Bank, including expansionary activities such as mergers and acquisitions to which the Bank is a party and the Bank's establishment of new branch offices. Both regulatory bodies have broad power to take enforcement action to prevent or halt the continuance of unsafe or unsound banking practices or other violations of law. The FDIC, as the insurer of the Bank's deposits, also has certain regulatory authority over and requires certain routine reporting by the Bank.

As a bank chartered under Tennessee law, the Bank is subject to the provisions of the Tennessee Banking Act and, to the extent not inconsistent with the Tennessee Banking Act, the provisions of the TBCA.

#### Enforcement Powers of Federal and State Banking Agencies
The federal and state bank regulatory agencies have broad enforcement powers, including the power to terminate deposit insurance, impose substantial fines and other civil and criminal penalties, and appoint a conservator or receiver for financial institutions. Our failure to comply with applicable laws and regulations could subject us and our officers and directors to administrative sanctions and potentially substantial civil money penalties. In addition to the grounds discussed below under "— Prompt Corrective Action and Other Consequences of Capital Adequacy," the appropriate bank regulatory agency may appoint the FDIC as conservator or receiver for a depository institution (or the FDIC may appoint itself, under certain circumstances) if any one or more of a number of circumstances exist, including if the depository institution is operating in an unsafe and unsound condition, is insolvent or is undercapitalized and has no reasonable prospect of becoming adequately capitalized, fails to become adequately capitalized when required to do so, fails to submit a timely and acceptable capital restoration plan or materially fails to implement an accepted capital restoration plan.

#### Payment of Dividends and Repurchases of Capital Instruments
The Company is a legal entity separate and distinct from the Bank. The Company's principal source of cash flow, including cash flow to pay interest on its Subordinated Debentures, to pay its other indebtedness, and to pay dividends to its shareholders, is dividends the Bank pays to the Company as the Bank's sole shareholder. Statutory and regulatory limitations apply to the Bank's payment of dividends to the Company as well as to the Company's payment of dividends to its shareholders.

Federal Reserve Supervisory Letter SR 09-4 (February 24, 2009), as revised December 21, 2015 and July 24, 2020, applies to dividend payments, stock redemptions and stock repurchases by bank holding companies. Under this Supervisory Letter, a bank holding company is expected to consult with Federal Reserve supervisory staff before:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• declaring and paying a dividend that could raise safety and soundness concerns (for example, declaring and paying a dividend that exceeds earnings for the period for which the dividend is being paid);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• redeeming or repurchasing regulatory capital instruments when the bank holding company is experiencing financial weakness; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• redeeming or repurchasing common or perpetual preferred stock if it would result in a quarter end net reduction in the amount of such equity instruments outstanding as compared to the beginning of the quarter in which the redemption or repurchase occurs.

Further, the board of directors of a bank holding company must consider various different factors when deciding whether to declare, and determining the amount of, dividends in order to ensure that dividend levels are prudent relative to the company's financial position and are not based on overly optimistic earnings scenarios, including

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any potential events which may occur prior to the payment of a dividend that could affect its ability to pay while still maintaining a strong financial position. As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company should eliminate, defer or significantly reduce dividends if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the bank holding company's net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the bank holding company's prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the bank holding company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.

The Bank is similarly subject to various restrictions on its ability to pay dividends to the Company. Under Tennessee law, a Tennessee state-chartered bank generally cannot pay dividends in any calendar year that exceed its net income for that year plus its retained net income for the prior two calendar years without prior regulatory approval. Additionally, under the FDIA, the Bank is generally prohibited from making capital distributions (including paying dividends) or paying management fees to the Company if the Bank is not adequately capitalized or if the distribution or payment would cause the Bank to become undercapitalized.

Under applicable federal capital adequacy guidelines, both banks and bank holding companies subject to the capital adequacy guidelines (the Company is not currently subject to these guidelines but may be in the future) are also subject to capital distribution (including dividend) limitations and restrictions, as well as restrictions on discretionary bonuses to executive officers, if they fail to maintain an appropriate capital conservation buffer. See "— Capital Adequacy" below. A Tennessee corporation, such as the Company and the Bank, is also not permitted to pay dividends if, after giving effect to the dividends, it would not be able to pay its debts as they come due in the usual course of business or if its assets would be less than the sum of its liabilities plus the amount necessary to satisfy the rights of preferred shareholders, if any, upon dissolution. Both the Company and the Bank may from time to time also be subject to contractual restrictions on their ability to pay dividends, such as, for example, dividend restrictions contained in agreements evidencing indebtedness of the Company or the Bank.

The Company's and the Bank's payment of dividends may also be affected or limited by other factors, such as requirements to maintain adequate levels of capital above regulatory guidelines. Federal and state bank regulatory agencies generally have the authority to prohibit bank holding companies and banks from engaging in unsafe or unsound practices in conducting their businesses. Depending on the financial condition of a bank holding company and its subsidiary bank(s), the payment of dividends by the bank holding company or its subsidiary bank(s) could under certain circumstances be deemed an unsafe or unsound practice and therefore restricted.

#### Restrictions on Acquisitions and Certain Other Activities
As a bank holding company, the Company generally must obtain the prior approval of the Federal Reserve before (i) acquiring direct or indirect ownership or control of more than 5% of the voting stock of a bank, (ii) acquiring all or substantially all of the assets of a bank, or (iii) merging or consolidating with another bank holding company. The BHC Act also generally limits the business in which a bank holding company may engage to banking, managing or controlling banks and other authorized subsidiaries, and furnishing services to or performing services for its subsidiaries. A bank holding company may, however, engage in or acquire an interest in a company that engages in activities that the Federal Reserve has determined to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.

Bank holding companies that meet certain eligibility requirements prescribed by the BHC Act and elect to operate as financial holding companies may engage in, or have ownership interests in companies engaged in, a wider range of non-banking activities, including underwriting, dealing in, or making a market in securities, insurance underwriting and sales, providing financial, investment, or economic advisory services, merchant banking, and any other activity that the Federal Reserve, in consultation with the Secretary of the Treasury, determines by regulation or order is financial in nature or incidental to any such financial activity or that the Federal Reserve determines by regulation or order to be complementary to any such financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally. The Company elected to become a financial holding company in 2017.

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The Change in Bank Control Act and associated federal regulations, generally and subject to certain exceptions, prohibit any person (individual or entity) from, directly or indirectly or in concert with one or more other persons, acquiring control of an FDIC-insured depository institution or its holding company unless the appropriate federal banking agency is given prior written notice and does not disapprove of the proposed acquisition. Control for this purpose is defined as the power, directly or indirectly, to direct the management or policies of an FDIC-insured depository institution or its holding company or to vote 25% or more of any class of voting securities of an FDIC-insured depository institution or its holding company. Additionally, it is rebuttably presumed than an acquisition of voting securities of an FDIC-insured depository institution or its holding company constitutes the acquisition of control of the institution or holding company under the Change in Bank Control Act if immediately after the transaction the acquiring person (or persons acting in concert) will own, control, or hold with the power to vote 10% or more of any class of voting securities of the institution or holding company and either (i) the institution or holding company has securities registered under Section 12 of the Exchange Act or (ii) immediately after the transaction no other person will own, control, or hold the power to vote a greater percentage of that class of voting securities.

Any corporation or other company that, directly or indirectly or acting through one or more other persons, acquires ownership or control of or the power to vote 25% or more of any class of voting securities of a bank or bank holding company (such as the Bank and the Company), that controls the election of a majority of the directors of a bank or bank holding company, or that otherwise is deemed to have the power to exercise, directly or indirectly, a "controlling influence over the management or policies" of a bank or bank holding company under the BHC Act (which control can, under certain circumstances, be found to exist even if a corporation or other company owns, controls, or has the power to vote far less than 25% of a class of voting securities of a bank or bank holding company) would be subject to regulation itself as a bank holding company under the BHC Act.

The Federal Reserve may require that a bank holding company terminate an activity or terminate control of or liquidate or divest certain subsidiaries or affiliates when the Federal Reserve believes the activity or control of the subsidiary or affiliate constitutes a significant risk to the financial safety, soundness, or stability of the bank holding company or any of its banking subsidiaries. The Federal Reserve also has the authority to regulate provisions of certain bank holding company debt. Under certain circumstances, a bank holding company must give written notice to and obtain approval from the Federal Reserve prior to purchasing or redeeming its equity securities.

Further, poor examination ratings, deficient capital ratios, regulatory concerns regarding management, controls, asset quality, earnings, liquidity, or risk management, or other factors can all potentially result in practical limitations on the ability of a bank or bank holding company to engage in new activities, grow, acquire other financial institutions or other businesses, repurchase its stock, pay dividends, or continue to conduct existing activities.

Banks organized under Tennessee law are also subject to restrictions on the types of activities that they are permitted to engage in under applicable law and regulations of the Federal Reserve, FDIC, and TDFI, which permissible activities are generally limited to the business of banking and activities that are incidental to the business of banking.

#### Source of Strength
Under applicable law and Federal Reserve policy, the Company is expected to act as a source of financial and managerial strength to, and to commit resources to support, the Bank. This support may be required at times when the Company may otherwise not be inclined to provide it.

In the event an FDIC-insured depository institution subsidiary of a bank holding company becomes subject to a capital restoration plan with its regulators, the parent bank holding company is required to guarantee performance of the plan up to 5% of the bank's assets, and such guarantee is given priority in the event of bankruptcy of the bank holding company. In addition, if a bank holding company has more than one bank or thrift subsidiary, each of the bank holding company's subsidiary depository institutions may be responsible for any losses to the DIF if an affiliated depository institution fails. As a result, a bank holding company may be required to loan money to a bank subsidiary in the form of subordinate capital notes or other instruments which qualify as capital under applicable regulations. However, any loans from a bank holding company to any such subsidiary bank likely will be unsecured and subordinated to such bank's depositors and to other creditors of the bank. See "— Prompt Corrective Action and Other Consequences of Capital Adequacy."

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#### Capital Adequacy
The federal banking agencies, including the Federal Reserve, have adopted risk-based capital requirements for assessing bank and bank holding company capital adequacy. These requirements establish minimum capital standards in relation to the relative credit risk of assets and off-balance sheet exposures. Capital is classified into two tiers. Tier 1 capital consists generally of common equity Tier 1 capital (which is generally comprised of common stock and related surplus and retained earnings, and from which goodwill and certain other intangible assets are deducted) and additional Tier 1 capital (which includes, among other things, certain types of noncumulative perpetual preferred stock). Tier 2 capital generally includes the allowance for loan and lease losses (subject to certain limitations) and certain types of subordinated debt and cumulative perpetual preferred stock. The risk-based capital guidelines require financial institutions to maintain specific, defined credit risk factors and apply them to their assets which results in risk-adjusted assets.

The federal capital adequacy guidelines impose the following minimum capital requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a ratio of common equity Tier 1 capital to total risk-weighted assets of 4.5%;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a ratio of Tier 1 capital to total risk-weighted assets of 6.0%;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a ratio of total capital to total risk-weighted assets of 8.0%; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a ratio of tier 1 capital to adjusted average total assets ("leverage ratio") of 4.0%.

In addition to these required minimum regulatory capital ratios, applicable regulations establish a capital conservation buffer with respect to the first three ratios listed above. Specifically, banking organizations must maintain a 2.5% capital conservation buffer comprised of common equity Tier 1 capital in order to avoid limitations on capital distributions (including dividend payments, discretionary payments on Tier 1 instruments, and stock repurchases) and certain discretionary bonus payments to executive officers. When including the 2.5% capital conservation buffer, a banking organization's minimum ratio of common equity Tier 1 capital to risk-weighted assets becomes 7.0%, its minimum ratio of Tier 1 capital to total risk-weighted assets becomes 8.5%, and its minimum ratio of total capital to risk-weighted assets becomes 10.5%.

These capital adequacy guidelines only establish the minimum levels of regulatory capital a banking organization must maintain, and banking regulators generally expect banks and bank holding companies to maintain capital well in excess of these minimum levels. Failure to maintain compliance with the capital adequacy guidelines could subject a bank or bank holding company to a variety of enforcement actions, including the issuance of a capital directive, the termination of a bank's deposit insurance, a prohibition on accepting brokered deposits or other restrictions on its business, and, in certain circumstances, the appointment of a receiver.

The Economic Growth, Regulatory Relief, and Consumer Protection Act (the "Regulatory Relief Act"), enacted May 24, 2018, provided for the simplification of the regulatory capital rules for certain financial institutions and their holding companies with total consolidated assets of less than $10 billion. The Regulatory Relief Act required the federal banking agencies to develop a community bank leverage ratio ("CBLR") for qualifying banks and holding companies with total consolidated assets of less than $10 billion and an appropriate risk profile. The Regulatory Relief Act mandated a minimum CBLR of not less than 8% and a CBLR not more than 10%. In October 2019, the federal banking agencies issued a final rule implementing the CBLR framework and setting the CBLR at 9%. Under the final rule, the CBLR is calculated, generally, as Tier 1 capital divided by average total consolidated assets (minus amounts deducted from Tier 1 capital). Under this final rule, which was effective January 1, 2020, a qualifying community banking organization that has opted to use the CBLR framework is considered to have met the generally applicable risk-based and leverage capital requirements, the capital ratio requirements to be considered "well capitalized" under the prompt corrective action framework (discussed below), and any other capital or leverage requirements to which the qualifying community banking organization is subject, if it maintains a CBLR greater than 9%. A qualifying community banking organization is a non-advanced approaches banking organization that has a leverage ratio greater than 9%, total consolidated assets of less than $10 billion, total off-balance sheet exposures (excluding derivatives other than sold credit derivatives and unconditionally cancelable commitments) of 25% or less of total consolidated assets, and total trading assets and trading liabilities of 5% or less of total consolidated assets. While we believe we qualify as a qualifying community banking organization, we have not opted into the CBLR framework and presently do not intend to do so, although we could elect to do so in the future.

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Bank holding companies that qualify for the Federal Reserve's Small Bank Holding Company and Savings and Loan Holding Company Policy Statement (the "Small Bank Holding Company Policy Statement") are exempt from consolidated capital requirements. The Small Bank Holding Company Policy Statement is generally applicable to bank holding companies with consolidated assets of less than $3 billion that are not engaged in significant nonbanking activities, either directly or through a nonbank subsidiary; do not conduct significant off-balance sheet activities, either directly or through a nonbank subsidiary; and do not have a material amount of debt or equity securities outstanding (other than trust preferred securities) that are registered with the SEC. The Company, which has total consolidated assets of less than $3 billion, currently qualifies for the Small Bank Holding Company Policy Statement and, therefore, is not subject to the Federal Reserve's capital adequacy guidelines on a consolidated basis at the bank holding company level. If our total consolidated assets in the future exceed $3 billion, we would no longer be able to take advantage of the Small Bank Holding Company Policy Statement and, among other things, we would no longer be exempt from consolidated capital requirements, we would be subject to more extensive regulatory reporting and examination requirements, and we would be more limited in the amount of debt we can use to finance the acquisition of other banks and bank holding companies.

#### Prompt Corrective Action and Other Consequences of Capital Adequacy
The 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 the applicable 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. An institution may be deemed to be in a capitalization category that is lower than is indicated by its actual numerical capital position if it receives an unsatisfactory examination rating. The five capital categories are defined as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An institution is "well capitalized" if it has a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 8% or greater, a common equity Tier 1 capital ratio of 6.5% or greater, and a leverage capital ratio of 5% or greater and it is not subject to any written agreement, order, capital directive or prompt corrective action directive by a federal bank regulatory agency to maintain a specific capital level for any capital measure;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An institution is "adequately capitalized" if it has a total risk-based capital ratio of 8% or greater, a Tier 1 risk-based capital ratio of 6% or greater, a common equity Tier 1 capital ratio of 4.5% or greater, and, generally, has a leverage capital ratio of 4% or greater;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An institution is "undercapitalized" if it has a total risk-based capital ratio of less than 8%, a Tier 1 risk-based capital ratio of less than 6%, a common equity Tier 1 capital ratio of less than 4.5%, or, generally, has a leverage capital ratio of less than 4%;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An institution is "significantly undercapitalized" if it has a total risk-based capital ratio of less than 6%, a Tier 1 risk-based capital ratio of less than 4%, a common equity Tier 1 capital ratio of less than 3%, or a leverage capital ratio of less than 3%; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An institution is "critically undercapitalized" if its tangible equity is equal to or less than 2% of total assets.

The federal bank regulatory agencies have the authority to require an institution to hold additional capital and have indicated that higher capital levels may be required during times when market conditions and the risk profile of the institution warrant such additional capital.

The FDIA generally prohibits an FDIC-insured depository institution from making capital distributions (including paying dividends) or paying any management fees to its holding company if the depository institution is or would thereafter be undercapitalized. Undercapitalized depository institutions are subject to restrictions on borrowing from the Federal Reserve. In addition, undercapitalized depository institutions are, among other things, subject to growth limitations and are required to submit capital restoration plans. An insured depository institution's holding company must guarantee the institution's capital plan, up to an amount equal to the lesser of 5% of the depository institution's assets at the time it becomes undercapitalized or the amount of the capital deficiency when the institution fails to comply with the plan, for the plan to be accepted by the applicable federal regulatory agency. The federal banking agencies may not accept a capital plan without determining, among other things, that the plan is based on

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realistic assumptions and is likely to succeed in restoring the depository institution to acceptable capital levels. If a depository institution fails to submit an acceptable capital plan or fails to implement its plan, it is treated as if it is significantly undercapitalized.

Significantly undercapitalized depository institutions can be subject to a number of requirements and restrictions, including orders to sell sufficient stock to become adequately capitalized, to sell to another bank or bank holding company, to reduce total assets, to restrict interest rates paid on deposits, to replace its board of directors or management or to cease accepting deposits from correspondent banks. Critically undercapitalized depository institutions are subject to the appointment of a receiver or conservator, generally within 90 days of the date on which they become critically undercapitalized, as well as other restrictions.

Business activities may be influenced by an institution's capital classification. For example, only a "well capitalized" depository institution may accept brokered deposits without prior regulatory approval and an "adequately capitalized" institution may accept such deposits only with prior regulatory approval. Such approval has historically been difficult to obtain.

#### General Regulatory Considerations
Under the Federal Deposit Insurance Corporation Improvement Act ("FDICIA"), each insured depository institution must undergo regular, periodic examinations conducted by its appropriate federal banking agency. The cost of examining an insured depository institution and its affiliates may be assessed by the appropriate federal baking agency against the institution or its affiliates as the agency deems necessary or appropriate. Insured depository institutions are required to submit periodic reports to the FDIC and their primary federal regulators, if other than the FDIC (as well as, for state-chartered institutions, their state regulators). FDICIA also requires the federal bank regulatory agencies to prescribe, by regulation, standards for all insured depository institutions and depository institution holding companies relating to, among other things, (i) internal controls, information systems and audit systems; (ii) loan documentation; (iii) credit underwriting; (iv) interest rate risk exposure; and (v) asset quality.

In response to perceived needs in financial institution regulation, Congress enacted the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"). FIRREA provides, in part, that a depository institution the deposits of which are insured by the FDIC can be held liable for any loss incurred by, or reasonably expected to be incurred by, the FDIC in connection with (i) the default of a commonly controlled FDIC-insured depository institution or (ii) any assistance provided by the FDIC to a commonly controlled FDIC-insured depository institution in danger of default.

FIRREA also provides that financial institutions and their affiliated parties (such as officers and directors) may be subject to civil money penalties for certain types of violations and misconduct. Additionally, the FDIC has been granted enhanced authority to withdraw or to suspend deposit insurance in certain cases. The federal banking regulators have not been reluctant to use the enforcement powers provided for under FIRREA. Further, banking regulators have broad power to issue cease and desist orders that may, among other things, require affirmative action to correct any harm resulting from a violation or practice, including restitution, reimbursement, indemnification or guarantees against loss. A financial institution may also be ordered to restrict its growth, dispose of certain assets, rescind agreements or contracts, employ qualified officers or employees, or take other actions determined by the ordering agency to be appropriate.

Federal and state banking laws subject banks to certain restrictions on extensions of credit to executive officers, directors, and certain principal shareholders, and their related interests. For example, such extensions of credit (i) generally must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated third parties and (ii) generally must not involve more than the normal risk of repayment or present other unfavorable features. These laws also impose certain limits on the amount of such extensions of credit and under certain circumstances require that they be approved by an institution's board of directors.

#### Community Reinvestment Act
The CRA requires each insured depository institution to be evaluated by its primary federal regulator with respect to its record of meeting the credit needs of the communities in which it operates, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of the institution. An institution's compliance with and performance under the CRA is also considered in evaluating mergers, acquisitions and applications to open branch office facilities.

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A bank's compliance with its CRA obligations is based on a performance-based evaluation system that bases CRA ratings on an institution's lending, service and investment performance. When a bank holding company applies for approval to acquire a bank or other bank holding company, the Federal Reserve will review the CRA assessment of each subsidiary bank of the applicant bank holding company, and those banks' CRA performance records may be the basis for denying the application. In connection with its assessment of CRA performance, the appropriate federal bank regulatory agency assigns each bank a rating of "outstanding," "satisfactory," "needs to improve" or "substantial noncompliance." As of its most recent CRA examination in July 2024, the Bank was rated "needs to improve."

The CRA regulations require that evidence of discriminatory, illegal or abusive lending practices be considered in the CRA evaluation. A less than satisfactory CRA rating is likely to slow, if not preclude, mergers, acquisitions, the opening of new branches and other expansionary activities.

CRA agreements with private parties must be disclosed and annual CRA reports must be made to a bank's primary federal regulator. Generally, each insured depository institution controlled by a bank holding company must have at least a "satisfactory" CRA rating in order for the bank holding company to elect to become a financial holding company. A financial holding company that controls an insured depository institution that does not have at least a "satisfactory" CRA rating is subject to certain restrictions, including, generally, being precluded from commencing, or acquiring a company engaged in, activities determined to be financial in nature or incidental to such financial activity (such as underwriting, dealing in, or making a market in securities and certain insurance activities). As a financial holding company, we are currently subject to these restrictions as a result of the Bank's "needs to improve" CRA rating. Additionally, the Bank's "needs to improve" CRA rating may adversely impact our ability to obtain the regulatory approvals required for certain expansionary activities, such as the Bank opening new branch offices and our acquisition of other financial institutions. Depending on the circumstances, these restrictions could have a material impact on our and the Bank's prospects.

The Bank has implemented several actions to improve its CRA rating. The Bank engaged an independent consulting firm to complete a formal peer analysis of similarly situated banks within the Bank's CRA assessment areas and geographic regions in which the Bank operates to identify trends, patterns and insights regarding CRA community development activities. The Bank has increased its CRA investment portfolio to be in compliance with the guidelines that were identified in the above-mentioned independent peer analysis. The Bank has also implemented additional CRA monitoring processes, completed training and professional development programs, and implemented additional data quality and documentation standards. The Bank is scheduled for its next CRA examination in October 2025, at which time we anticipate, based in part on these action items and implementations, the Bank is likely to receive at least a "satisfactory" rating.

For additional information regarding risks related to our CRA rating, see "Risk Factors — Risks Related to Acquisition and Expansion Activity — Our 'Needs to Improve' rating under the Community Reinvestment Act may restrict our operations and limit our ability to pursue certain strategic opportunities."

#### USA Patriot Act
After the terrorist attacks of September 11, 2001, Congress enacted broad anti-terrorism legislation called the United and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "USA Patriot Act"). Title III of the USA Patriot Act requires financial institutions, including the Company and the Bank, to help prevent, detect and prosecute international money laundering and the financing of terrorism. The Department of the Treasury has adopted additional requirements to further implement Title III.

This law is intended to enhance the powers of the federal government and law enforcement organizations to combat terrorism, organized crime and money laundering. The USA Patriot Act materially amended and expanded the application of the Bank Secrecy Act. It introduced several enhanced compliance measures, including the know your customer process, new suspicious activity reporting rules and enhanced anti-money laundering programs. Under the USA Patriot Act, each financial institution is required to establish and maintain an anti-money laundering compliance program that includes, at a minimum:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the development of internal policies, procedures, and controls;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the designation of a compliance officer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an ongoing employee training program; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an independent audit function to test the program's effectiveness.

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In addition, the USA Patriot Act requires bank regulatory agencies to consider the record of a bank or bank holding company in combating money laundering activities in their evaluation of bank and bank holding company merger, acquisition and branch expansion transactions.

The U.S. Treasury Department has issued regulations under the USA Patriot Act. These regulations provide that a depository institution will be deemed in compliance with the USA Patriot Act provided that it continues to comply with the Bank Secrecy Act regulations. Under these regulations, a mechanism has been established for law enforcement to communicate names of suspected terrorists and money launderers to financial institutions in return for securing the ability to promptly locate accounts and transactions involving those suspects. Financial institutions receiving names of suspects must search their account and transaction records for potential matches and report positive results to the Financial Crimes Enforcement Network ("FinCEN"). Each financial institution must designate a point of contact to receive information requests. These regulations outline how financial institutions can share information concerning suspected terrorist and money laundering activity with other financial institutions under protection from the statutory safe harbor from liability, provided each financial institution notifies FinCEN of its intent to share information.

Recent FinCEN rules require banks to know the beneficial owners of customers that are not natural persons, update customer information in order to develop a customer risk profile, and generally monitor such matters.

FinCEN has also adopted regulations intended to prevent money laundering and terrorist financing through correspondent accounts maintained by U.S. financial institutions on behalf of foreign banks. Financial institutions are required to take reasonable steps to ensure that they are not providing banking services, directly or indirectly, to foreign shell banks or others who might be engaging in terrorist activities or the financing thereof.

#### Lending Limits
Under Tennessee law, the amount of loans which a Tennessee-chartered bank (such as the Bank) may make, in the aggregate, to any one person is limited. Tennessee law generally provides that a Tennessee-chartered bank may not lend to any one person an amount in excess of 15% of the bank's capital, surplus, and undivided profits. However, a bank may lend more than 15%, but no more than 25%, of the bank's capital, surplus, and undivided profits to any one person if each loan in excess of 15% is approved in advance by the bank's board of directors. Under Tennessee law, no loan limit applies to the extent that a loan is secured by a segregated deposit account in the lending bank.

#### Commercial Real Estate Concentrations
Lending operations that involve concentrations of CRE loans are subject to enhanced scrutiny by federal banking regulators. The federal banking regulators have issued guidance with respect to the risks posed by CRE lending concentrations. CRE loans generally include C&D loans and loans secured by multifamily property and nonfarm, nonresidential real property where the primary source of repayment is derived from rental income associated with the property or the proceeds of the sale, refinancing, or permanent financing of the property, but generally do not include owner-occupied real estate. The guidance prescribes the following guidelines for examiners to help identify institutions that are potentially exposed to concentration risk and may warrant greater supervisory scrutiny (however, these guidelines are not outright limits on an institution's lending activities):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if an institution's total loans for C&D and other land represent 100% or more of the institution's total capital; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if the total of an institution's CRE loans represents 300% or more of the institution's total capital and the outstanding balance of the institution's CRE portfolio has increased by 50% or more during the prior 36 months.

At June 30, 2025, and December 31, 2024, the Bank's ratios of C&D and other land loans to total risk-based capital were 70.7% and 78.7%, respectively, and its ratios of total CRE loans excluding owner-occupied CRE loans (as defined in the guidance) to total risk-based capital were 281% and 304%, respectively. The three-year growth rates for the Bank's CRE portfolio as of June 30, 2025, and December 31, 2024, were 72.3% and 75.4%, respectively, in each case above the 50% growth rate threshold contained in the federal regulatory guidance. The recent growth in our levels of CRE loans is primarily the result of our acquisition of Alliance, not significant organic growth within the Bank's legacy loan portfolio.

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Given the level of, and recent growth in, CRE loans in our loan portfolio, our CRE loan portfolio, risk management practices, and capital levels may be subject to enhanced regulatory scrutiny. If our risk management practices relative to CRE lending or our capital levels are determined to be inadequate in light of the risks associated with our CRE loan portfolio, we may have to reduce our level of CRE lending and/or seek to increase capital to support our CRE lending function.

#### FDIC Insurance Assessments and Depositor Preference
The Bank's deposits are insured by the FDIC's DIF up to the limits provided for by applicable law, which currently are set at $250,000 per depositor, per insured bank for each account ownership category. The Bank is subject to FDIC assessments for its deposit insurance. The FDIC calculates quarterly deposit insurance assessments based on an institution's average total consolidated assets less its average tangible equity and applies one of four risk categories determined by reference to its capital levels, supervisory ratings, and certain other factors. The assessment rate schedule can change from time to time, at the discretion of the FDIC, subject to certain limits.

As of June 30, 2020, the DIF reserve ratio fell to 1.30%, below the statutory minimum of 1.35%. The FDIC, as required under the FDIA, established a plan in September 2020 to restore the DIF reserve ratio to meet or exceed the statutory minimum of 1.35% within eight years. In October 2022, the FDIC adopted an amended restoration plan to increase the likelihood that the reserve ratio would be restored to at least 1.35% by September 30, 2028. The FDIC's amended restoration plan increased the initial base deposit insurance assessment rate schedules uniformly by 2 basis points beginning in the first quarterly assessment period of 2023. The FDIC could further increase the deposit insurance assessments for certain insured depository institutions, including the Bank, if the DIF reserve ratio is not restored as projected.

In November 2023, the FDIC approved a final rule to implement a special assessment to recover the loss to the DIF associated with several bank failures that occurred during early 2023. The assessment base for the special assessment was equal to estimated uninsured deposits reported as of December 31, 2022, adjusted to exclude the first $5 billion, to be collected at an annual rate of approximately 13.4 basis points for an anticipated total of eight quarterly assessment periods beginning the first quarterly assessment period of 2024.

Deposit insurance may be terminated by the FDIC upon a finding that an institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by a bank's primary federal regulatory agency. In addition, the FDIA provides that, in the event of the liquidation or other resolution of an insured depository institution, the claims of depositors of the institution, including the claims of the FDIC as subrogee of insured depositors, and certain claims for administrative expenses of the FDIC as receiver, will have priority over other general unsecured claims against the institution, including those of a parent bank holding company.

#### Transactions with Affiliates
The Bank is subject to Sections 23A and 23B of the Federal Reserve Act (the "Affiliates Act") and the Federal Reserve's implementing regulations, Regulation W, which place limitations on certain transactions between a bank and its affiliates. For purposes of the Affiliates Act and Regulation W, an affiliate of a bank generally is any company that controls, is controlled by or is under common control with the bank. Accordingly, transactions between the Company and the Bank are subject to the requirements of the Affiliates Act and Regulation W. The Affiliates Act and Regulation W impose restrictions and limitations on a bank making extensions of credit to, or issuing a guarantee or letter of credit on behalf of, the bank's affiliates, a bank's purchase of, or investment in, stock or other securities of an affiliate, a bank taking such securities as collateral for loans, and the purchase by a bank of assets of its affiliates. Such restrictions and limitations prevent the Company or other Bank affiliates from borrowing from the Bank unless the borrowings are secured by marketable obligations of designated amounts. All such transactions, as well as contracts entered into between the Bank and its affiliates, must be on terms that are no less favorable to the Bank than those that would be available to/from non-affiliated third parties. Federal Reserve policy also forbids the payment by bank subsidiaries of management fees to their parent holding companies that are unreasonable in amount or exceed the fair market value of the services rendered or, if no market exists, actual costs plus a reasonable profit.

#### Consumer Financial Services
The Bank is subject to a number of federal and state consumer protection laws that extensively govern its relationships with its customers. These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds

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Availability Act, the Home Mortgage Disclosure Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, the Service Members Civil Relief Act, the Military Lending Act, and these laws' respective state law counterparts, as well as state usury laws and laws regarding unfair and deceptive acts and practices. These and other federal laws, among other things, require disclosures of the cost of credit and terms of deposit accounts, provide substantive consumer rights, prohibit discrimination in credit transactions, regulate the use of credit report information, provide financial privacy protections, prohibit unfair, deceptive and abusive practices and subject us to substantial regulatory oversight. Violations of applicable consumer protection laws can result in significant potential liability from litigation brought by customers, including actual damages, restitution and attorneys' fees. Federal and state bank regulators, state attorneys general and state and local consumer protection agencies may also seek to enforce consumer protection requirements and obtain these and other remedies, including regulatory sanctions, customer rescission rights, action by the state and local attorneys general in each jurisdiction in which we operate and civil money penalties. Failure to comply with applicable consumer protection requirements may also negatively impact our reputation in the marketplace and result in our failure to obtain required regulatory approvals for mergers or acquisitions or a prohibition on expansionary activities.

#### Dodd-Frank Act
On July 21, 2010, the Dodd-Frank Act was signed into law. This law significantly changed the bank regulatory landscape and affects the lending, deposit, investment, trading and operating activities of banks and their holding companies. The Dodd-Frank Act required various federal agencies to adopt a broad range of new implementing rules and regulations and to prepare numerous studies and reports for Congress. The following summarizes just a few of the provisions of the Dodd-Frank Act.

The Dodd-Frank Act changed the types of instruments that are eligible for Tier 1 capital treatment at the bank holding company level. It also called for the Federal Reserve to apply to certain bank holding companies (currently, generally, those with $3 billion or more in total consolidated assets) the same minimum leverage and risk-based capital standards that apply to banks under the FDIA's prompt corrective action framework.

The Dodd-Frank Act eliminated the federal prohibitions on paying interest on demand deposits, thus allowing businesses to have interest-bearing checking accounts.

The Dodd-Frank Act authorized state-chartered and national banks to, subject to the receipt of any required regulatory approvals, establish de novo interstate branches at any location where a bank based in that state could establish a branch. The act also requires that bank holding companies and banks be well capitalized and well managed in order to acquire banks located outside their home state.

The Dodd-Frank Act required fees charged by banks for debit card transactions, commonly referred to as interchange fees, to be both "reasonable and proportional" to the cost incurred by the card issuer and authorized the Federal Reserve to implement regulations with respect to this requirement.

The Dodd-Frank Act broadened the base for FDIC insurance assessments. Assessments are based on the average consolidated total assets, less tangible equity capital, of a financial institution. The Dodd-Frank Act permanently increased the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250,000 per depositor, per insured bank for each account ownership category.

The Dodd-Frank Act also created a new federal consumer protection agency, the CFPB, with broad powers to supervise and enforce consumer protection laws. The CFPB has broad rule-making authority for a wide range of consumer protection laws that apply to all banks, including the authority to prohibit "unfair, deceptive or abusive" acts and practices. The CFPB has examination and enforcement authority over all banks with more than $10 billion in assets. Banks with less than $10 billion in assets are examined for compliance with consumer protection laws by their primary federal bank regulators. The CFPB has recently been the target of intense scrutiny from the Trump administration, which has indicated a desire to dismantle, or significantly reform, the agency, one which it perceives as lacking sufficient supervision and regularly exceeding its statutory authority. The future structure, operation, and authority of the CFPB, as well as its fate, are currently uncertain and cannot be predicted.

Additionally, the Dodd-Frank Act increased the regulation of consumer protections relative to mortgage origination, including mortgage loan originator compensation, minimum repayment standards and new servicing requirements.

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#### Mortgage Lending Rules
The Dodd-Frank Act authorized the CFPB to establish certain minimum standards for the origination of residential mortgages, including a determination of a borrower's ability to repay. Under the Dodd-Frank Act, financial institutions may not make a residential mortgage loan unless they make a "reasonable and good faith determination" that the consumer has a "reasonable ability" to repay the loan. The Dodd-Frank Act allows borrowers to raise certain defenses to foreclosure but provides a full or partial safe harbor from such defenses for loans that are "qualified mortgages." The CFPB published final rules to, among other things, specify the types of income and assets that may be considered in the ability-to-repay determination, the permissible sources for verification, and the required methods of calculating a loan's monthly payments. Subsequently, the CFPB made certain modifications to these rules. The rules extend the requirement that creditors verify and document a borrower's income and assets to include all information that creditors rely on in determining repayment ability.

#### Financial Privacy and Cybersecurity Requirements
Federal law and regulations limit a financial institution's ability to share consumers' financial information with unaffiliated third parties. Specifically, these laws and regulations require all financial institutions offering financial products or services to consumer customers to provide such customers with the financial institution's privacy policy and provide such customers the opportunity to "opt out" of the sharing of personal financial information with unaffiliated third parties. The sharing of information for marketing purposes is also subject to limitations.

Federal law and regulations also establish certain information security guidelines that require each financial institution, under the supervision and ongoing oversight of its board of directors or an appropriate committee thereof, to develop, implement, and maintain a comprehensive written information security program designed to ensure the security and confidentiality of customer information, to protect against anticipated threats or hazards to the security or integrity of such information, and to protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer. Federal and state laws also require that notice of a data breach incident be provided to a bank's customers under certain circumstances.

Federal banking regulators regularly issue guidance relative to cybersecurity that is intended to enhance cyber risk management. A financial institution is expected to implement multiple lines of defense against cyber-attacks. Financial institutions are also expected to implement procedures designed to address the risks posed by potential cyber threats and to allow the institutions to respond and recover effectively after a cyber-attack.

#### Other Legislation and Regulation
Other legislative and regulatory proposals that would impact banking and the regulation of banks, thrifts and other financial institutions are considered from time to time by the executive branch of the federal government, Congress and various state governments. It cannot be predicted whether any of such legislative or regulatory proposals will be adopted or, if any of such proposals are adopted, how they will affect the Company and the Bank. It is anticipated that the Trump Administration may undertake a comprehensive review of a full range of bank regulatory laws and regulations; however, there can be no assurance that such a review will take place or, if it does, what the result will be.

#### Monetary and Fiscal Policy
Banking is a business which heavily depends on interest rate differentials. In general, the difference between the interest paid by a bank on its deposits and its other borrowings and the interest received by a bank on its loans to customers and its securities holdings generally constitutes a major portion of a bank's earnings. Thus, the earnings and growth of the Bank will be subject to the influence of economic conditions generally, both domestic and foreign, and also to the monetary and fiscal policies of the United States and its agencies, particularly the Federal Reserve. The Federal Reserve regulates the supply of money through various means, including open-market dealings in United States government securities, the discount rate at which Federal Reserve members may borrow, and reserve requirements on deposits and funds availability regulations. These instruments are used by the Federal Reserve in varying combinations to influence the overall growth of bank loans, investments and deposits and also affect interest rates charged on loans or paid on deposits. The policies of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and will continue to do so in the future. The nature and timing of any future changes in Federal Reserve policies and their impact on the Bank cannot be predicted.

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#### SHARES ELIGIBLE FOR FUTURE SALE
Actual or anticipated issuances or sales of substantial amounts of our common stock in the public market following this offering could cause the market price of our common stock to decline significantly and make it more difficult for us to sell equity or equity-related securities in the future at a time and on terms that we deem appropriate. The issuance of any shares of our common stock in the future also would, and the issuance of equity-related securities could, dilute the percentage ownership interests of our shareholders.

Upon completion of this offering, we will have shares of our common stock issued and outstanding.

The shares of common stock sold by the selling shareholders and us in this offering will be freely tradable without further restriction or registration under the Securities Act, except that any shares purchased by our "affiliates" may generally only be resold in compliance with Rule 144 under the Securities Act ("Rule 144"), which is described below. The remaining outstanding shares will be deemed to be "restricted securities" as that term is defined in Rule 144. Restricted securities may be resold in the U.S. only if they are registered for resale under the Securities Act or an exemption from registration is available.

#### Lock-Up Agreements
We, our executive officers, our directors and the holders of 5% or more of our currently outstanding shares of common stock, including the selling shareholders, are entering into lock-up agreements under which we and they will generally agree not to offer, sell or otherwise transfer our or their shares for a period of 180 days after the completion of this offering. These lock-up agreements are subject to certain limited exceptions. For additional information, see "Underwriting — Lock-Up Agreements." As a result of these contractual restrictions, shares of our common stock subject to lock-up agreements will not be eligible for sale until these agreements expire or the restrictions are waived by the underwriter.

Following the lock-up period, all of the shares of our common stock that are restricted securities or are held by our affiliates will be eligible for sale in the public market only if (i) they are registered under the Securities Act or (ii) an exemption from registration, such as Rule 144, is available.

#### Rule 144
All shares of our common stock held by our "affiliates," as that term is defined in Rule 144, may be sold in the public market, subject to the lock-up agreements and our insider trading policies, in compliance with Rule 144. Rule 144 defines an affiliate as any person who directly or indirectly controls, or is controlled by, or is under common control with, the issuer, which generally includes our directors, executive officers, and certain other related persons. As of August 15, 2025, affiliates held 10,412,635 shares, or 85.1% of our total shares of common stock outstanding (counting for such purposes our directors and executive officers and 10% or greater beneficial owners), and immediately following this offering, affiliates held [ ] shares, or [ ]% of our total shares of common stock outstanding (excluding the underwriter's option to purchase additional shares of our common stock).

In general, under Rule 144, a person (or persons whose shares are aggregated) who is deemed to be, or to have been during the three months preceding the sale, an "affiliate" of ours would be entitled to sell within any three-month period a number of shares that does not exceed the greater of 1% of the then outstanding shares of our common stock or the average weekly trading volume of our common stock on Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale. Sales by our affiliates under Rule 144 are also subject to a six-month holding period and requirements relating to manner of sale, the availability of current public information about us and the filing of a form in certain circumstances.

In general, Rule 144 also provides that a person who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has for at least six months beneficially owned shares of our common stock that are restricted securities, will be entitled to freely sell such shares of our common stock without regard to the limitations described above, provided that such sales comply with the current public information requirements of Rule 144 and we were subject to the Exchange Act periodic reporting requirements for at least 90 days immediately before the sale. A person who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has beneficially owned for at least one year shares of our common

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stock that are restricted securities, will be entitled to freely sell such shares of our common stock under Rule 144 without regard to the current public information requirements of Rule 144, provided that we were subject to the Exchange Act periodic reporting requirements for at least 90 days immediately before the sale.

#### Rule 701
In general, under Rule 701 under the Securities Act ("Rule 701"), any of our employees, directors or officers who purchase shares from us in connection with a compensatory stock or option plan or other written agreement before the effective date of this offering, and who are not deemed to have been an "affiliate" of ours during the immediately preceding 90 days, are entitled to resell such shares 90 days after the effective date of this offering in reliance on Rule 144, without having to comply with the holding period requirements or other restrictions contained in Rule 144. The shares that may be sold in compliance with Rule 701 under the Securities Act that are subject to lock-up agreements as described above will not become eligible for sale until expiration or waiver of the restrictions set forth in those agreements.

#### Form S-8 Registration Statement
We intend to file one or more registration statements on Form S-8 under the Securities Act to register the offer and sale of shares of our common stock that are issuable under our 2025 Plan. Any such registration statement would be expected to be filed and become effective as soon as practicable after the completion of this offering. Upon effectiveness, the shares of common stock covered by that registration statement will be eligible for sale in the public market, subject to any vesting restrictions with us, Rule 144 restrictions applicable to our affiliates and the lock-up restrictions described above.

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#### MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS TO NON-U .S. HOLDERS
The following is a discussion of the material United States federal income tax considerations for non-U.S. holders, as defined below, relating to the purchase, ownership and disposition of our common stock. The following discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the applicable United States federal income tax regulations promulgated under the Code (the "Treasury Regulations") and judicial and administrative authority as of the date hereof, all of which are subject to change or differing interpretation, possibly with retroactive effect. Any such change or differing interpretation could result in U.S. federal income tax consequences that differ from those summarized below. We have not sought and do not plan to seek any ruling from the Internal Revenue Service (the "IRS") with respect to the statements made and the conclusions reached in the following discussion, and we cannot assure you that the IRS or a court will agree with our statements and conclusions. This discussion does not address all aspects of U.S. federal income taxes, such as consequences under the Medicare tax on certain investment income or the alternative minimum tax. Further, this discussion does not consider the consequences related to state, local, gift, estate, or foreign tax, nor does it address tax consequences to special classes of investors, including, but not limited to, tax-exempt organizations, insurance companies, banks or other financial institutions, partnerships or other entities classified as partnerships for United States federal income tax purposes, dealers in securities, persons liable for the alternative minimum tax, regulated investment companies, real estate investment trusts, controlled foreign corporations, passive foreign investment companies, United States expatriates or United States expatriated entities, those who are subject to the United States anti-inversion rules, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, persons subject to special tax accounting rules under Section 451(b) of the Code, persons who have acquired our common stock as compensation or otherwise in connection with the performance of services, or persons that will hold our common stock as a position in a hedging transaction, "straddle," "conversion transaction," synthetic security or other integrated investment or risk reduction transaction. Tax consequences may vary depending upon the particular status of an investor. The discussion is limited to non-U.S. holders who will hold our common stock as capital assets (generally, property held for investment) within the meaning of section 1221 of the Code. Each potential non-U.S. investor should consult its own tax advisor as to the United States federal, state, local, foreign and any other tax consequences of the purchase, ownership and disposition of our common stock.

You are a "non-U.S. holder" if you are a beneficial owner of our common stock for United States federal income tax purposes that is:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a nonresident alien individual, other than certain former citizens and residents of the United States subject to U.S. tax as expatriates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a corporation (or other entity that is taxable as a corporation for United States federal income tax purposes) not created or organized in the United States or under the laws of the United States or of any state (or the District of Columbia);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• an estate other than an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a trust other than a trust: (A) the administration of which is subject to the primary supervision of a United States court and which has one or more "United States persons" (as defined in Section 7701(a)(30) of the Code) who have the authority to control all substantial decisions of the trust; or (B) that has a valid election in effect under appropriate Treasury Regulations to be treated as a United States person.

If an entity or arrangement treated as a partnership for United States federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. If you are treated as a partner in such an entity or arrangement holding our common stock, you should consult your tax advisor as to the United States federal income tax consequences applicable to you.

#### Distributions
Distributions of cash or property (other than certain stock distributions) with respect to our common stock will be treated as dividends when paid to the extent of our current and accumulated earnings and profits as determined for United States federal income tax purposes as of the end of the taxable year of the distribution. To the extent any such

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distributions exceed both our current and accumulated earnings and profits, such excess amount will be allocated ratably among each share of common stock with respect to which the distribution is paid and will first be treated as a tax-free return of capital reducing your adjusted tax basis in our common stock, but not below zero, and thereafter will be treated as gain from the sale or other taxable disposition of such stock, the treatment of which is discussed below under "Gain on Disposition of Shares of Common Stock." Your adjusted tax basis in a share of our common stock is generally your purchase price for such share, reduced (but not below zero) by the amount of such prior tax-free returns of capital.

Except as described below, if you are a non-U.S. holder of our common stock, dividends paid to you are subject to withholding of United States federal income tax at a 30% gross rate, or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate. We may withhold up to 30% of the gross amount of the entire distribution, even if greater than the amount constituting a dividend (as described in the paragraph above), to the extent provided for in the Treasury Regulations. If tax is withheld on the amount of a distribution in excess of the amount constituting a dividend, such excess will be allowed as a credit against the non-U.S. holder's United States federal income tax liability, and may entitle the holder to a refund, provided that the non-U.S. holder timely provides the required information to the IRS.

Even if you are eligible for a lower treaty rate, we and other payors will generally be required to withhold at a 30% gross rate (rather than the lower treaty rate) on dividends paid to you, unless you have furnished to us or our paying agent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a valid IRS Form W-8BEN or W-8BEN-E, or an acceptable substitute form upon which you certify, under penalties of perjury, your status as a non-U.S. person and your entitlement to the lower treaty rate with respect to such payments; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• if our common stock is held through certain foreign intermediaries or foreign partnerships, other documentary evidence establishing your entitlement to the lower treaty rate in accordance with the Treasury Regulations.

This valid certification must be provided to us or our paying agent prior to the payment to you of any dividends and must be updated periodically, including upon a change in circumstances that makes any information on such certificate incorrect.

If you are eligible for a reduced rate of U.S. withholding tax under a tax treaty, any excess withholding will be allowed as a credit against a non-U.S. holder's United States federal income tax liability, and may entitle the holder to a refund, provided that the non-U.S. holder timely provides the required information to the IRS.

If dividends paid to you are "effectively connected" with your conduct of a trade or business within the United States, and, if required by a tax treaty, the dividends are attributable to a permanent establishment that you maintain in the United States, we generally are not required to withhold tax from such dividends, provided that you have furnished to us or our paying agent a valid IRS Form W-8ECI or an acceptable substitute form upon which you represent, under penalties of perjury, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• you are a non-U.S. person; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the dividends are effectively connected with your conduct of a trade or business within the United States and are includible in your gross income.

"Effectively connected" dividends, although not subject to withholding tax, are taxed on a net income basis at applicable graduated individual or corporate tax rates in generally the same manner as if a non-U.S. holder were a United States person, unless an applicable income tax treaty provides otherwise. If you are a corporate non-U.S. holder, "effectively connected" dividends that you receive may, under certain circumstances, be subject to an additional "branch profits tax" at a 30% gross rate, or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate.

#### Gain on Disposition of Shares of Common Stock
Subject to the discussions below regarding backup withholding and the Foreign Account Tax Compliance Act ("FATCA"), if you are a non-U.S. holder, you generally will not be subject to United States federal income or withholding tax on gain realized on the sale, exchange or other disposition of our common stock unless (i) you

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are an individual who is present in the United States for 183 or more days in the taxable year of the sale or other disposition and certain other conditions exist; (ii) the gain is "effectively connected" with your conduct of a trade or business in the United States, and the gain is attributable to a permanent establishment that you maintain in the United States, if that is required by an applicable income tax treaty as a condition to subjecting you to United States taxation on a net income basis; or (iii) we are or have been a U.S. real property holding corporation ("USRPHC") for United States federal income tax purposes at any time during the shorter of the five-year period ending on the date of the disposition or the period that you held shares of our common stock, and certain other conditions are met.

If you are an individual described in (i) above, you will be subject to a 30% tax, or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate, on the net gain derived from the sale, which may be offset by certain United States source capital losses, if any, recognized in the taxable year of the disposition of our common stock. If you are a non-U.S. holder described in (ii) above, gain recognized on the sale will generally be subject to United States federal income tax at graduated United States federal income tax rates on a net income basis and in generally the same manner as if the non-U.S. holder were a United States person, unless an applicable income tax treaty provides otherwise. Additionally, a non-U.S. holder that is a corporation may be subject to the branch profits tax equal to 30% of its effectively connected earnings and profits, subject to certain adjustments, or at a lower rate if you are eligible for the benefits of an income tax treaty that provides for a lower rate. We believe, although we have not made a determination, that we are not currently and will not become a USRPHC. If, however, we are or become a USRPHC, so long as our common stock continues to be regularly traded on an established securities market, only a non-U.S. holder who holds, or held (at any time during the shorter of the five-year period ending on the date of disposition or the non-U.S. holder's holding period), more than 5% of our common stock will be subject to United States federal income tax on the disposition of the common stock. Non-U.S. holders should consult their own tax advisors about the consequences if we are, or become, a USRPHC.

Non-U.S. holders should consult their tax advisors regarding any applicable tax treaties that may provide different results.

#### Information Reporting and Backup Withholding
The payment of dividends, and the tax withheld on those payments, are subject to information reporting requirements. These information reporting requirements apply regardless of whether withholding was reduced or eliminated by an applicable income tax treaty. Under the provisions of an applicable income tax treaty or agreement, copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which a non-U.S. holder resides. United States backup withholding will generally apply on payments of dividends to non-U.S. holders unless such non-U.S. holders furnish to the payor a Form W-8BEN or Form W-8BEN-E (or other applicable form), or otherwise establish an exemption and the payor does not have actual knowledge or reason to know that the holder is a United States person that is not an exempt recipient or that the conditions of any other exemption are not, in fact, satisfied.

Payment of the proceeds of a sale or other disposition of our common stock within the United States or conducted through certain U.S.-related entities and financial intermediaries is subject to information reporting and, depending on the circumstances, backup withholding, unless a non-U.S. holder, or beneficial owner thereof, as applicable, certifies that it is a non-U.S. holder on Form W-8BEN or W-8BEN-E (or other applicable form), or otherwise establishes an exemption and the payor does not have actual knowledge or reason to know the holder is a United States person that is not an exempt recipient or that the conditions of any other exemption are not, in fact, satisfied.

Backup withholding is not an additional tax. Any amount withheld under the backup withholding rules from a payment to a non-U.S. holder will be allowed as a credit against the non-U.S. holder's United States federal income tax liability, and may entitle the holder to a refund, provided that the non-U.S. holder timely provides the required information to the IRS. Moreover, certain penalties may be imposed by the IRS on a non-U.S. holder who is required to furnish information but does not do so in the proper manner. Non-U.S. holders should consult their tax advisors regarding the application of backup withholding in their particular circumstances and the availability of and procedure for obtaining an exemption from backup withholding under current Treasury Regulations.

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#### FATCA Withholding
FATCA imposes a 30% withholding tax on certain types of payments made to "foreign financial institutions" ("FFIs") and certain other non-U.S. entities unless certain due diligence, reporting, withholding, and certification requirements are satisfied.

As a general matter, FATCA imposes a 30% withholding tax on dividends on our common stock if paid to a foreign entity unless (i) the foreign entity is an FFI that undertakes certain due diligence, reporting, withholding, and certification obligations, or in the case of an FFI that is a resident in a jurisdiction that has entered into an intergovernmental agreement to implement FATCA, the entity complies with the diligence and reporting requirements of such an agreement; (ii) the foreign entity is not an FFI and either certifies that it does not have any "substantial" U.S. owners or furnishes identifying information regarding each substantial U.S. owner; or (iii) the foreign entity qualifies for an exemption from these rules. In certain cases, a "substantial" United States owner can mean an owner of any interest in the foreign entity.

Under U.S. Treasury Department proposed regulations, gross proceeds from a disposition of stock, such as our common stock, are no longer subject to the 30% withholding tax under FATCA. With limited exceptions, the IRS and the U.S. Treasury Department provide that taxpayers can generally rely on the proposed regulations until final regulations are issued.

If withholding is required under FATCA on a payment related to our common stock, investors that otherwise would be exempt from withholding (or that otherwise would be entitled to a reduced rate of withholding) generally will be required to seek a refund or credit from the IRS to obtain the benefit of such exemption or reduction (provided that such benefit is available).

Non-U.S. holders are encouraged to consult with their tax advisors regarding the possible implications of FATCA on their investment in our common stock.

**This discussion is for general information only and is not intended to constitute a complete description of all U.S. federal income tax consequences for non-U.S. holders relating to the purchase, ownership, and disposition of shares of our common stock. If you are considering the purchase of shares of our common stock, you should consult with your tax advisor concerning the particular U.S. federal income tax consequences to you of the purchase, ownership and disposition of shares of our common stock, as well as the consequences to you arising under U.S. tax laws other than the federal income tax law discussed herein or under the laws of any other applicable taxing jurisdiction in light of your particular circumstances.**

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#### UNDERWRITING
We and the selling shareholders are offering the shares of our common stock described in this prospectus in an underwritten offering in which we, the selling shareholders, and Hovde Group, LLC will enter into an underwriting agreement with respect to the shares of common stock offered hereby. Subject to the terms and conditions contained in the underwriting agreement, the underwriter has agreed to purchase from us and the selling shareholders, and we and the selling shareholders will agree to sell to the underwriter, the number of shares of our common stock as set forth opposite the underwriter's name in the following table:

---

| | |
|:---|:---|
|  **Underwriter** | **Number of <br>Shares of <br>Common Stock** |
|  Hovde Group, LLC |  |
| &nbsp;&nbsp;&nbsp; **Total** |  |

---

This is a firm commitment underwritten offering. Subject to the terms and conditions set forth in the underwriting agreement, the underwriter will be committed to purchase and pay for all such shares of our common stock if any are purchased. However, the underwriter will not be obligated to take or pay for the shares of our common stock covered by the underwriter's option to purchase additional shares from the selling shareholders described below, unless and until such option is exercised. The underwriting agreement will provide that, if the underwriter defaults, the underwriting agreement may be terminated.

The shares of our common stock will be offered by the underwriter, subject to prior sale, when, as and if issued to and accepted by it, subject to approval of certain legal matters by counsel for the underwriter and other conditions specified in the underwriting agreement. The underwriter will reserve the right to withdraw, cancel or modify this offer and to reject orders in whole or in part. The underwriting agreement will provide that the obligations of the underwriter may also be terminated upon the occurrence of certain events specified in the underwriting agreement.

#### Option to Purchase Additional Shares
The selling shareholders have granted the underwriter an option, exercisable no later than 30 days after the date of this prospectus, to purchase up to additional shares of our common stock at the public offering price less the underwriting discount set forth on the cover page of this prospectus. The selling shareholders will be obligated to sell these shares of common stock to the underwriter to the extent the purchase option is exercised. The underwriter may exercise this option only to cover over-allotments, if any, made in connection with the sale of our common stock offered by this prospectus.

#### Discounts and Expenses
The underwriter will propose to offer the shares of our common stock directly to the public at the offering price set forth on the cover page of this prospectus and to certain securities dealers at the public offering price less a concession not in excess of $ per share. After the public offering of the common stock, the underwriter may change the offering price and other selling terms.

The following table shows the per-share and total underwriting discount that we and the selling shareholders will pay to the underwriter and the proceeds we and the selling shareholders will receive before expenses. These amounts are shown assuming both no exercise and full exercise of the underwriter's option to purchase additional shares.

---

| | | | |
|:---|:---|:---|:---|
|  | | **Total** | **Total** |
|  | **Per Share** | **No Exercise <br>of Option** | **Full Exercise <br>of Option** |
|  Public offering price | $| $| $|
|  Underwriting discounts and commissions to be paid by us | $| $| $|
|  Underwriting discounts and commissions to be paid by the selling shareholders | $| $| $|
|  Proceeds, before expenses, to us | $| $| $|
|  Proceeds, before expenses, to the selling shareholders | $| $| $|

---

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We estimate that the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $. We will agree to reimburse the underwriter for certain reasonable and documented out-of-pocket expenses incurred by the underwriter on our behalf and in connection with this offering, including any applicable state securities filings and legal fees and expenses of counsel incurred by the underwriter, up to a maximum of $300,000 for such legal fees and a maximum of $50,000 for such other out-of-pocket expenses. We will also agree to reimburse the underwriter for certain expenses relating to the clearance of this offering with the Financial Industry Regulatory Authority.

#### Lock-Up Agreements
We, the selling shareholders, all of our directors and executive officers, and certain holders of our currently outstanding common stock holding, in the aggregate, [ ] shares of our common stock as of [ ], 2025 (representing approximately [ ]% of our issued and outstanding common stock as of such date), have agreed, subject to certain exceptions, for a period of 180 days after the date of this prospectus, not to offer, announce the intention to sell, sell, contract to sell, pledge, grant any option, right or warrant to purchase, make any short sale, sell any option or contract to purchase, purchase any option or contract to sell, or otherwise transfer or dispose of, directly or indirectly, or file with or confidentially submit to the SEC a registration statement under the Securities Act relating to, any securities of the Company that are substantially similar to our common stock without, in each case, the prior written consent of the underwriter. These restrictions are expressly agreed to preclude us, the selling shareholders, our executive officers and directors and certain other current shareholders from engaging in any hedging or other transaction or arrangement that is designed to, or that reasonably could be expected to, lead to or result in a sale, disposition or transfer, in whole or in part, of any of the economic consequences of ownership of our common stock, whether such transaction would be settled by delivery of common stock or other securities, in cash or otherwise.

#### Pricing of the Offering
Prior to this offering, there has been no established public market for our common stock. The initial public offering price was determined by negotiations among us and the underwriter. In addition to prevailing market conditions, among the factors to be considered in determining the initial public offering price of our common stock were our historical performance, estimates of our business potential and our earnings prospects, an assessment of our management, and the consideration of the above factors in relation to market valuations of companies in related businesses. The estimated initial public offering price range set forth on the cover page of this prospectus is subject to change as a result of market conditions and other factors. An active trading market for shares of our common stock may not develop. It is also possible that the shares of our common stock will not trade in the public market at or above the initial public offering price following the completion of this offering.

#### Exchange Listing
We have applied to list our common stock on Nasdaq under the symbol "CBK."

#### Indemnification and Contribution
We and the selling shareholders have agreed to indemnify the underwriter against certain liabilities, including liabilities under the Securities Act. If we are unable to provide this indemnification, we or the selling shareholders may be required to contribute to payments the underwriter may be required to make in respect of those liabilities.

#### Price Stabilization, Short Positions and Penalty Bids

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purchase additional shares pursuant to the option described above. "Naked" short sales are any short sales that create a short position greater than the amount of additional shares for which the option described above may be exercised. The underwriter must cover any such naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriter is concerned that there may be downward pressure on the price of our common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of our common stock made by the underwriter in the open market prior to the closing of the offering.

Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriter for its own account, may have the effect of preventing or delaying a decline in the market price of our common stock and, together with the imposition of the penalty bid, may stabilize, maintain, or otherwise affect the market price of our common stock. As a result, the price of our common stock may be higher than the price that otherwise might exist in the open market. The underwriter is not required to engage in these activities and may end any of these activities at any time. These transactions may be effected on Nasdaq, in the over-the-counter market or otherwise.

#### Passive Market Making
In connection with this offering, the underwriter may engage in passive market making transactions in our common stock on Nasdaq in accordance with Rule 103 of Regulation M under the Exchange Act during a period before the commencement of offers or sales of our common stock and extending through the completion of the distribution of this offering. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker's bid, that bid must then be lowered when specified purchase limits are exceeded. Passive market making may cause the price of our common stock to be higher than the price that otherwise would exist in the open market in the absence of those transactions. The underwriter is not required to engage in passive market making and may end passive market making activities at any time.

#### Electronic Distribution
A prospectus in electronic format may be made available by email or on the websites or through online services maintained by the underwriter or its affiliates. In those cases, prospective investors may view offering terms online and may be allowed to place orders online. The underwriter may agree with us to allocate a specific number of shares for sale to online brokerage account holders. Any such allocation for online distributions will be made by the underwriter on the same basis as other allocations. Other than the prospectus in electronic format, the information on the underwriter's website and any information contained on any other website maintained by the underwriter is not part of this prospectus, has not been approved and/or endorsed by the underwriter or us and should not be relied upon by investors.

#### Directed Share Program
At our request, the underwriter has reserved up to [•]% of the shares of common stock offered by this prospectus for sale at the initial public offering price through a directed share program to directors, executive officers and employees of the Company and the Bank and other designated persons. Our directed share program will be administered by Hovde Group, LLC or its affiliate. Reserved shares purchased by our directors and executive officers will be subject to the lock-up provisions described above. The number of shares of our common stock available for sale to the general public will be reduced to the extent these persons purchase the reserved shares. Any reserved shares of our common stock that are not so purchased will be offered by the underwriter to the general public on the same terms as the other shares of common stock offered by this prospectus.

#### Affiliations
The underwriter and its affiliates are full-service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment advisory, investment research, principal investment, hedging, financing, loan referral, valuation, and brokerage activities. From time to time, the underwriter and/or its affiliates have directly and indirectly engaged, and/or may in the future engage, in various financial advisory, investment banking, loan referral, and commercial banking services with us and our affiliates for which they received or paid, or may receive or pay, customary compensation, fees, and expense reimbursements.

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In the ordinary course of their various business activities, the underwriter and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their clients, and those investment and securities activities may involve our securities and/or instruments. The underwriter and its affiliates may also make investment recommendations and/or publish or express independent research views in respect of those securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in those securities and instruments.

#### Selling Restrictions
Other than in the United States, no action has been taken by us or the underwriter that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisement in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable laws, rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

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#### LEGAL MATTERS
The validity of the shares of our common stock offered by this prospectus will be passed upon for us by K&L Gates LLP, Nashville, Tennessee. Certain legal matters in connection with this offering will be passed upon for the underwriter by Squire Patton Boggs (US) LLP, New York, New York.

#### EXPERTS
Our consolidated financial statements as of December 31, 2024 and 2023 and for the two years ended December 31, 2024 included in this prospectus have been audited by Mauldin Jenkins, LLC, an independent registered public accounting firm, as set forth in its report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of that firm as experts in accounting and auditing.

#### WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common stock offered by this prospectus. This prospectus, which constitutes a part of that registration statement, does not contain all of the information set forth in the registration statement and the related exhibits and schedules. Some items are omitted in accordance with the rules and regulations of the SEC. Accordingly, we refer you to the complete registration statement, including its exhibits and schedules, for further information about us and the shares of common stock to be sold in this offering. Statements or summaries in this prospectus as to the contents of any contract or other document referred to in this prospectus are not necessarily complete and, where that contract or document is filed as an exhibit to the registration statement, each statement or summary is qualified in all respects by reference to the exhibit to which the reference relates.

The registration statement, of which this prospectus forms a part, and its exhibits and schedules are available to you for free on the SEC's Internet website at *www.sec.gov*.

Upon completion of this offering, we will become subject to the informational and reporting requirements of the Exchange Act and, in accordance with those requirements, will file reports and proxy statements with the SEC. These reports and proxy statements and other information will be available to you for free on the SEC's Internet website at *www.sec.gov*. You can also obtain reports and proxy statements and other information about us, free of charge, at our website at *www.cbtn.com*. Information on, or accessible through, our website is not part of this prospectus. We intend to furnish to our shareholders our annual reports containing our audited consolidated financial statements certified by an independent registered public accounting firm.

Information that we file with the SEC after the date of this prospectus may supersede the information in this prospectus. You may read these reports and proxy statements and other information and obtain copies of such documents and information as described above. No person is authorized to give any information or to make any representations other than those contained in this prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized. Neither the delivery of this prospectus nor any distribution of securities made hereunder shall imply that there has been no change in the information set forth or in our affairs since the date hereof.

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#### INDEX TO THE FINANCIAL STATEMENTS

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| | |
|:---|:---|
|  | **page** |
|  **Consolidated Financial Statements (Unaudited)** |  |
| &nbsp;&nbsp;&nbsp; [Consolidated Balance Sheets at June 30, 2025 (unaudited) and December 31, 2024 (audited)](#T5001) | F-2 |
| &nbsp;&nbsp;&nbsp; [Consolidated Statements of Income for the Six Months Ended June 30, 2025 and 2024 (unaudited)](#T5002) | F-3 |
| &nbsp;&nbsp;&nbsp; [Consolidated Statements of Comprehensive Income for the Six Months Ended June 30, 2025 and 2024 (unaudited)](#T5003) | F-4 |
| &nbsp;&nbsp;&nbsp; [Consolidated Statements of Changes in Shareholders' Equity for the Six Months Ended June 30, 2025 and 2024 (unaudited)](#T5004) | F-5 |
| &nbsp;&nbsp;&nbsp; [Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (unaudited)](#T5005) | F-6 |
| &nbsp;&nbsp;&nbsp; [Notes to Consolidated Financial Statements (unaudited)](#T5006) | F-8 |

---

---

| | |
|:---|:---|
|  **Audited Consolidated Financial Statements** |  |
| &nbsp;&nbsp;&nbsp; [Report of Independent Registered Public Accounting Firm](#T501) | F-37 |
| &nbsp;&nbsp;&nbsp; [Consolidated Balance Sheets as of December 31, 2024 and 2023](#T502) | F-38 |
| &nbsp;&nbsp;&nbsp; [Consolidated Statements of Income for the years ended December 31, 2024 and 2023](#T503) | F-39 |
| &nbsp;&nbsp;&nbsp; [Consolidated Statements of Comprehensive Income for the years ended December 31, 2024 and 2023](#T504) | F-40 |
| &nbsp;&nbsp;&nbsp; [Consolidated Statements of Stockholders' Equity for the years ended December 31, 2024 and 2023](#T505) | F-41 |
| &nbsp;&nbsp;&nbsp; [Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023](#T506) | F-42 |
| &nbsp;&nbsp;&nbsp; [Notes to Consolidated Financial Statements](#T507) | F-44 |

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**Commercial Bancgroup, Inc.<br>*Consolidated Balance Sheets***<br>

---

| | | |
|:---|:---|:---|
|  | **(Unaudited) <br>June 30, <br>2025** | **(Audited) <br>December 31, <br>2024** |
|  **Assets** |  |  |
| &nbsp;&nbsp;&nbsp; Cash and due from banks | $43686727 | $18991800 |
| &nbsp;&nbsp;&nbsp; Federal funds sold | 42781580 | 43742762 |
| &nbsp;&nbsp;&nbsp; Interest-bearing deposits in banks | 64814047 | 115463354 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | 151282354 | 178197916 |
| &nbsp;&nbsp;&nbsp; Available-for-sale securities | 30113327 | 47937616 |
| &nbsp;&nbsp;&nbsp; Held-to-maturity securities | 157451839 | 128216954 |
| &nbsp;&nbsp;&nbsp; Loans, net of allowance for credit losses of $17,989,127 and $18,205,421 on June 30, 2025 and December 31, 2024, respectively | 1773527499 | 1788791583 |
| &nbsp;&nbsp;&nbsp; Premises and equipment, net | 50337132 | 50288378 |
| &nbsp;&nbsp;&nbsp; Restricted stock, at cost | 8108100 | 8264150 |
| &nbsp;&nbsp;&nbsp; Foreclosed assets held for sale, net | 861255 | 831662 |
| &nbsp;&nbsp;&nbsp; Interest receivable | 7083989 | 7187304 |
| &nbsp;&nbsp;&nbsp; Bank owned life insurance | 46480167 | 45883124 |
| &nbsp;&nbsp;&nbsp; Core deposits and other intangibles | 5034771 | 5824968 |
| &nbsp;&nbsp;&nbsp; Goodwill | 8510852 | 8514092 |
| &nbsp;&nbsp;&nbsp; Deferred tax asset | 1029337 | 1078881 |
| &nbsp;&nbsp;&nbsp; Other | 22690564 | 30194510 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total assets** | $**2262511186** | $**2301211138** |
|  **Liabilities and Shareholders' Equity** |  |  |
|  **Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp; Deposits |  |  |
| &nbsp;&nbsp;&nbsp; Demand | $926885823 | $976481028 |
| &nbsp;&nbsp;&nbsp; Savings, NOW and money market | 382788203 | 385614692 |
| &nbsp;&nbsp;&nbsp; Time | 541573877 | 576501235 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total deposits** | **1851247903** | **1938596955** |
| &nbsp;&nbsp;&nbsp; Short-term borrowings | 46300160 | 3391566 |
| &nbsp;&nbsp;&nbsp; Long-term debt | 102208828 | 105772642 |
| &nbsp;&nbsp;&nbsp; Interest payable | 4545440 | 4224695 |
| &nbsp;&nbsp;&nbsp; Other liabilities | 22941133 | 28969497 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities** | **2027243464** | **2080955355** |
|  **Shareholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp; Common stock |  |  |
| &nbsp;&nbsp;&nbsp; $0.01 par value; 50,000,000 shares authorized; 12,239,644 shares issued and outstanding at June 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 | 227900096 | 212310977 |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss | (1160886) | (1564506) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total shareholders' equity** | **235267722** | **220255783** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities and shareholders' equity** | $**2262511186** | $**2301211138** |

---

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

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**Commercial Bancgroup, Inc.<br>*Consolidated Statements of Income (Unaudited)***<br>

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| | | |
|:---|:---|:---|
|  | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
|  | **2025** | **2024** |
|  ***Interest and Dividend Income*** |  |  |
| &nbsp;&nbsp;&nbsp; Loans, including fees | $56361313 | $56250159 |
| &nbsp;&nbsp;&nbsp; Debt securities-taxable | 2044816 | 1308223 |
| &nbsp;&nbsp;&nbsp; Debt securities-tax-exempt | 226155 | 211910 |
| &nbsp;&nbsp;&nbsp; Dividends on restricted stock | 308437 | 357261 |
| &nbsp;&nbsp;&nbsp; Interest-bearing time deposits | 2683867 | 3130978 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total interest and dividend income** | 61624588 | 61258531 |
| &nbsp;&nbsp;&nbsp; **Interest expense** |  |  |
| &nbsp;&nbsp;&nbsp; Deposits | 20011375 | 19698952 |
| &nbsp;&nbsp;&nbsp; Short-term borrowings | 74612 | 88365 |
| &nbsp;&nbsp;&nbsp; Long-term debt | 2139822 | 2710709 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total interest expense** | **22225809** | **22498026** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net interest income** | **39398779** | **38760505** |
| &nbsp;&nbsp;&nbsp; Provision for credit losses |  | 1500644 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net interest income after provision for credit losses** | **39398779** | **37259861** |
|  ***Noninterest Income*** |  |  |
| &nbsp;&nbsp;&nbsp; Customer service fees | 1329317 | 1504256 |
| &nbsp;&nbsp;&nbsp; Net gains on sales of premises and equipment | 4459 | 23094 |
| &nbsp;&nbsp;&nbsp; Net gains on sales of foreclosed assets | 3550 | 119095 |
| &nbsp;&nbsp;&nbsp; ATM fees | 1690449 | 1549186 |
| &nbsp;&nbsp;&nbsp; Increase in bank owned life insurance | 643531 | 562700 |
| &nbsp;&nbsp;&nbsp; Other | 995391 | 1311796 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total noninterest income** | **4666697** | **5070127** |
|  ***Noninterest Expense*** |  |  |
| &nbsp;&nbsp;&nbsp; Salaries and employee benefits | 11282996 | 11247084 |
| &nbsp;&nbsp;&nbsp; Occupancy | 1649228 | 1714880 |
| &nbsp;&nbsp;&nbsp; Data processing | 2358359 | 2325806 |
| &nbsp;&nbsp;&nbsp; Deposit insurance premiums | 470988 | 524812 |
| &nbsp;&nbsp;&nbsp; Professional fees | 480941 | 650674 |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 1751007 | 2055213 |
| &nbsp;&nbsp;&nbsp; Other | 3312689 | 3103079 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total noninterest expense** | **21306206** | **21621548** |
| &nbsp;&nbsp;&nbsp; **Income before income taxes** | **22759268** | **20708440** |
| &nbsp;&nbsp;&nbsp; Provision for income taxes | 5168070 | 3840328 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Income** | **17591198** | **16868112** |
| &nbsp;&nbsp;&nbsp; Less: net income attributable to noncontrolling interest |  | 275755 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net income attributable to Commercial Bancgroup, Inc.** | $**17591198** | $**16592357** |
|  ***Earnings per share:*** |  |  |
| &nbsp;&nbsp;&nbsp; Basic | $1.44 | $1.38 |
| &nbsp;&nbsp;&nbsp; Diluted | $1.44 | $1.36 |

---

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Consolidated Statements of Comprehensive Income (Unaudited)***<br>

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended<br>June 30,** | **Six Months Ended<br>June 30,** |
|  | **2025** | **2024** |
|  Net income attributable to Commercial Bancgroup, Inc. | $17591198 | $16592357 |
|  Other comprehensive income (loss): |  |  |
| &nbsp;&nbsp;&nbsp; Unrealized holding gains (losses) on securities available for sale arising during the period | 381312 | (278069) |
| &nbsp;&nbsp;&nbsp; Tax benefit (expense) | (72669) | 80648 |
| &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 | 128580 | 248737 |
| &nbsp;&nbsp;&nbsp; Tax expense | (33603) | (65007) |
|  **Other comprehensive income (loss), net of tax** | **403620** | **(13691)** |
|  **Comprehensive income** | $**17994818** | $**16578666** |

---

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Consolidated Statements of Changes in Shareholders' Equity (Unaudited)***<br>

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Common<br>Stock** | **Additional<br>Paid-In<br>Capital** | **Retained<br>Earnings** | **Other <br>Comprehensive <br>Income <br>(Loss)** | **Non-<br>Controlling <br>Interest** | **TOTAL** |
|  **Balance – January 1, 2024** | $122118 | $9073467 | $182903720 | $(1724275) | $5402293 | $195777323 |
| &nbsp;&nbsp;&nbsp; Net income |  |  | 16592357 |  | 275755 | 16868112 |
| &nbsp;&nbsp;&nbsp; Other comprehensive loss |  |  |  | (13691) |  | (13691) |
| &nbsp;&nbsp;&nbsp; Dividends paid to shareholders |  |  | (2002669) |  |  | (2002669) |
| &nbsp;&nbsp;&nbsp; Repurchase of stock (2,813 shares) | (28) | (45213) |  |  |  | (45241) |
|  **Balance – June 30, 2024** | $122090 | $9028254 | $197493408 | $(1737966) | $5678048 | $210583834 |
|  **Balance – January 1, 2025** | $121131 | $9388181 | $212310977 | $(1564506) | $— | $220255783 |
| &nbsp;&nbsp;&nbsp; Net income |  |  | 17591198 |  |  | 17591198 |
| &nbsp;&nbsp;&nbsp; Other comprehensive income |  |  |  | 403620 |  | 403620 |
| &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 – June 30, 2025** | $122396 | $8406116 | $227900096 | $(1160886) | $— | $235267722 |

---

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Consolidated Statements of Cash Flows (Unaudited)***<br>

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended <br>June 30,** | **Six Months Ended <br>June 30,** |
|  | **2025** | **2024** |
|  ***Operating Activities*** |  |  |
| &nbsp;&nbsp;&nbsp; Net income | $17591198 | $16868112 |
| &nbsp;&nbsp;&nbsp; Items not requiring (providing) cash |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation | 960810 | 1139981 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization and (accretion), net | (189698) | 2245637 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for credit losses |  | 1500644 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for losses on foreclosed assets | 4500 | 35400 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net realized gains on foreclosed assets | (3550) | (119095) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net gains on sales of premises and equipment | (4459) | (23094) |
| &nbsp;&nbsp;&nbsp; Changes in |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest receivable | 103315 | 527396 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets | 7507216 | (6448845) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other liabilities | (6028395) | 4856560 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in bank owned life insurance | (597043) | (453155) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income taxes | (56728) | (1527711) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest payable | 320745 | (664714) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by operating activities | 19607911 | 17937116 |
|  ***Investing Activities*** |  |  |
| &nbsp;&nbsp;&nbsp; Purchases of available-for-sale securities | (16929788) | (14809986) |
| &nbsp;&nbsp;&nbsp; Proceeds from sales, maturities and calls of available-for-sale securities | 35479367 | 27296544 |
| &nbsp;&nbsp;&nbsp; Proceeds from, maturities and calls of held-to-maturity securities | 44421401 | 12925701 |
| &nbsp;&nbsp;&nbsp; Purchases of held-to-maturity securities | (72891789) |  |
| &nbsp;&nbsp;&nbsp; Net change in loans | 14977938 | (56552940) |
| &nbsp;&nbsp;&nbsp; Purchase of premises and equipment, net | (1049005) | (2400827) |
| &nbsp;&nbsp;&nbsp; Proceeds from sales of premises and equipment | 43900 | 23094 |
| &nbsp;&nbsp;&nbsp; Proceeds from sales of foreclosed assets | 255064 | 336453 |
| &nbsp;&nbsp;&nbsp; Redemption of restricted stock, at cost | 156050 | 1242500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by (used in) investing activities | $4463678 | $(31939461) |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Consolidated Statements of Cash Flows (Unaudited) (Continued)***<br>

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended <br>June 30,** | **Six Months Ended <br>June 30,** |
|  | **2025** | **2024** |
|  ***Financing Activities*** |  |  |
| &nbsp;&nbsp;&nbsp; Net decrease in deposits | $(87349052) | $(4070991) |
| &nbsp;&nbsp;&nbsp; Proceeds from short-term borrowings | 42908594 | 42289479 |
| &nbsp;&nbsp;&nbsp; Repayments of long-term borrowings | (3563814) | (30133468) |
| &nbsp;&nbsp;&nbsp; Repurchase of stock | (980800) | (45244) |
| &nbsp;&nbsp;&nbsp; Payment of dividends | (2002079) | (2002669) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided (used in) by financing activities | (50987151) | 6037107 |
| &nbsp;&nbsp;&nbsp; Decrease in cash and cash equivalents | (26915562) | (7965238) |
|  ***Cash and cash equivalents, beginning of period*** | 178197916 | 155940735 |
|  ***Cash and cash equivalents, end of period*** | $151282354 | $147975497 |
|  ***Supplemental Cash Flows Information*** |  |  |
| &nbsp;&nbsp;&nbsp; Interest paid | $21905064 | $23162740 |
| &nbsp;&nbsp;&nbsp; Income taxes paid | $4500000 | $3275000 |
|  ***Supplemental Disclosures of Noncash Items*** |  |  |
| &nbsp;&nbsp;&nbsp; Unrealized gain on AFS securities | $159770 | $37987 |
| &nbsp;&nbsp;&nbsp; Transfer of loans to OREO | $286146 | $295359 |

---

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 1. Summary of Significant Accounting Policies
*<u>*<u>Nature of operations:</u>*</u>*

Commercial Bancgroup, Inc. (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, Commercial Bank (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>*<u>Basis of presentation:</u>*</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 six month period ended June 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.

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

On _______, 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 into 1.15 shares of common stock and the automatic reclassification and conversion of each outstanding share of Class C Common Stock 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 _______, 2025, no preferred shares have been issued or are outstanding. The Board of Directors 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>*<u>Principles of consolidation:</u>*</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.

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 1. Summary of Significant Accounting Policies (cont.)
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>*<u>Loans:</u>*</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 $6,573,597 and $6,679,881 as of June 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.

*<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.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 1. Summary of Significant Accounting Policies (cont.)
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.

#### 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,

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 1. Summary of Significant Accounting Policies (cont.)
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>*<u>Loan commitments and financial instruments:</u>*</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.

*<u>*<u>Allowance for credit losses (ACL) — securities:</u>*</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 ACL 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 $240,678 and $230,223 as of June 30, 2025 and December 31, 2024, respectively.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 1. Summary of Significant Accounting Policies (cont.)
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.

#### Note 2. Securities
The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Amortized <br>cost** | **Gross <br>unrealized <br>gains** | **Gross <br>unrealized <br>losses** | **Fair <br>value** |
|  Available-for-sale securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Government and federal agency | $9807 | $— | $(21) | $9786 |
| &nbsp;&nbsp;&nbsp; Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GSE residential | 15178426 | 26395 | (691865) | 14512956 |
| &nbsp;&nbsp;&nbsp; State and political subdivisions | 16250677 | 18 | (660110) | 15590585 |
|  | $31438910 | $26413 | $(1351996) | $30113327 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized <br>cost** | **Gross <br>unrealized <br>gains** | **Gross <br>unrealized <br>losses** | **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;&nbsp; GSE residential | 17084785 | 7733 | (949087) | 16143431 |
| &nbsp;&nbsp;&nbsp; State and political subdivisions | 17253763 | 144 | (783896) | 16470011 |
|  | $49670923 | $7877 | $(1741184) | $47937616 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Amortized <br>cost** | **Gross <br>unrealized <br>gains** | **Gross <br>unrealized <br>losses** | **Fair <br>value** |
|  Held-to-maturity securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Government and federal agency | $97622692 | $— | $(1836244) | $95786448 |
| &nbsp;&nbsp;&nbsp; U.S. Government-sponsored enterprises (GSEs) | 16448349 |  | (453632) | 15994717 |
| &nbsp;&nbsp;&nbsp; Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GSE residential | 39458331 |  | (2967304) | 36491027 |
| &nbsp;&nbsp;&nbsp; State and political subdivisions | 3922467 |  | (276505) | 3645962 |
|  | $157451839 | $— | $(5533685) | $151918154 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 2. Securities (cont.)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized <br>cost** | **Gross <br>unrealized <br>gains** | **Gross <br>unrealized <br>losses** | **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;&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 June 30, 2025, and December 31, 2024.

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 June 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 | $3541405 | $3494703 | $72926040 | $72383149 |
|  One to five years | 5519245 | 5376909 | 43586145 | 41641895 |
|  Five to ten years | 5262267 | 4937767 | 98336 | 97387 |
|  After ten years | 2009268 | 1863155 | 1382989 | 1304697 |
|  Mortgage-backed securities | 15106725 | 14440793 | 39458329 | 36491026 |
| &nbsp;&nbsp;&nbsp; Totals | $31438910 | $30113327 | $157451839 | $151918154 |

---

The market value of securities pledged as collateral, to secure public deposits and for other purposes, was $150,238,777 and $168,979,774 on June 30, 2025 and December 31, 2024, respectively.

The book value of securities sold under agreements to repurchase amounted to $6,300,160 and $3,391,566 on June 30, 2025 and December 31, 2024, respectively.

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

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 June 30, 2025 and December 31, 2024.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 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 | $9786 | $(21) | $— | $— | $9786 | $(21) |
| &nbsp;&nbsp;&nbsp; Mortgage-backed: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GSE residential | 2000443 | (13383) | 8366046 | (678482) | 10366489 | (691865) |
| &nbsp;&nbsp;&nbsp; State and political subdivisions | 1992869 | (116565) | 13497698 | (543545) | 15490567 | (660110) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $4003098 | $(129969) | $21863744 | $(1222027) | $25866842 | $(1351996) |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **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;&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;&nbsp; Total | $20855604 | $(124162) | $24197717 | $(1617022) | $45053321 | $(1741184) |

---

As of June 30, 2025, the Company had 166 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.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 3. Loans and Allowance for Credit Losses
*<u>*<u>Portfolio segmentation:</u>*</u>*

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

---

| | | |
|:---|:---|:---|
|  | **June 30, <br>2025** | **December 31, <br>2024** |
|  Real estate secured: |  |  |
| &nbsp;&nbsp;&nbsp; Commercial | $1016228823 | $1006206845 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 189187205 | 199799772 |
| &nbsp;&nbsp;&nbsp; Residential | 376442033 | 369308057 |
| &nbsp;&nbsp;&nbsp; Other | 15289596 | 16815790 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate secured | 1597147657 | 1592130464 |
| &nbsp;&nbsp;&nbsp; Commercial | 178832110 | 201593312 |
| &nbsp;&nbsp;&nbsp; Consumer | 14635510 | 15213998 |
| &nbsp;&nbsp;&nbsp; Other | 7772970 | 6744117 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | 1798388247 | 1815681891 |
|  Less |  |  |
| &nbsp;&nbsp;&nbsp; Net deferred loan fees, premiums and discounts | 6871621 | 8684887 |
| &nbsp;&nbsp;&nbsp; Allowance for credit losses | 17989127 | 18205421 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net loans | $1773527499 | $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.

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.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 3. Loans and Allowance for Credit Losses (cont.)
***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.

***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.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

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

*<u>*<u>ACL</u> <u>on loans:</u>*</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 allowance for credit losses by portfolio segment for the six month periods ended June 30, 2025 and June 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.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **Six months ended as of June 30, 2025<br>*(Dollars are in thousands)*** | **Beginning <br>balance** | **Charge offs** | **Recoveries** | **Provision** | **Ending <br>balance** |
|  Real estate secured: Commercial | $10380 | $(18) | $43 | $— | $10405 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 2240 |  | 202 |  | 2442 |
| &nbsp;&nbsp;&nbsp; Residential | 3471 | (121) | 18 |  | 3368 |
| &nbsp;&nbsp;&nbsp; Other | 1 |  |  |  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total real estate secured** | 16092 | (139) | 263 |  | 16216 |
|  Commercial | 1776 | (314) | 3 |  | 1465 |
|  Consumer | 338 | (51) | 21 |  | 308 |
|  Other | (1) |  | 1 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total loans** | $18205 | $(504) | $288 | $— | $17989 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **Six months ended as of June 30, 2024 <br>*(Dollars are in thousands)*** | **Beginning <br>balance** | **Charge offs** | **Recoveries** | **Provision** | **Ending <br>balance** |
|  Real estate secured: Commercial | $8243 | $— | $27 | $1335 | $9605 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 2019 |  |  | 88 | 2107 |
| &nbsp;&nbsp;&nbsp; Residential | 3449 | (34) | 9 |  | 3424 |
| &nbsp;&nbsp;&nbsp; Other | 56 |  |  |  | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total real estate secured** | 13767 | (34) | 36 | 1423 | 15192 |
|  Commercial | 2164 |  | 54 |  | 2218 |
|  Consumer | 439 | (107) | 20 | 63 | 415 |
|  Other | 265 |  |  | 15 | 280 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total loans** | $16635 | $(141) | $110 | $1501 | $18105 |

---

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

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.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

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

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Revolving <br>loans** | **Revolving <br>to term <br>loans** | **Total** |
|  **Real estate secured:** |  |  |  |  |  |  |  |  |  |
|  **Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $32898671 | $77554468 | $131387547 | $281961665 | $196699853 | $279076317 | $12611024 | $— | $1012189545 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  | 901893 | 1613071 |  |  | 2514964 |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  | 1524314 |  |  | 1524314 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Commercial | $32898671 | $77554468 | $131387547 | $281961665 | $197601746 | $282213702 | $12611024 | $— | $1016228823 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $17534 | $— | $— | $— | $— | $17534 |
|  **Construction and land development** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $6853436 | $58065222 | $51970639 | $18231190 | $11772913 | $15644100 | $26611926 | $— | $189149426 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  | 37779 |  |  | 37779 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total construction and land development | $6853436 | $58065222 | $51970639 | $18231190 | $11772913 | $15681879 | $26611926 | $— | $189187205 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
|  **Residential** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pass | $18690810 | $31545678 | $37847650 | $62188508 | $42216644 | $143483276 | $35380555 | $— | $371353121 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  | 705647 | 143698 |  | 849345 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Substandard |  |  | 619127 | 429033 | 67599 | 3123808 |  |  | 4239567 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total residential | $18690810 | $31545678 | $38466777 | $62617541 | $42284243 | $147312731 | $35524253 | $— | $376442033 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $120509 | $— | $— | $120509 |
|  **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $185754 | $217669 | $2214178 | $1214643 | $— | $11238764 | $218588 | $— | $15289596 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other | $185754 | $217669 | $2214178 | $1214643 | $— | $11238764 | $218588 | $— | $15289596 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate loans | $58628671 | $167383037 | $224039141 | $364025039 | $251658902 | $456447076 | $74965791 | $— | $1597147657 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate loans – current period gross charge-offs | $— | $— | $— | $17534 | $— | $120509 | $— | $— | $138043 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Revolving <br>loans** | **Revolving <br>to term <br>loans** | **Total** |
|  **Non-real estate secured** |  |  |  |  |  |  |  |  |  |
|  **Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $4350583 | $21056831 | $40859115 | $28277658 | $11481035 | $21999032 | $49944387 | $— | $177968641 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  | 488226 |  |  | 259269 |  |  | 747495 |
| &nbsp;&nbsp;&nbsp; Substandard |  |  | 96482 |  |  | 19492 |  |  | 115974 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total commercial | $4350583 | $21056831 | $41443823 | $28277658 | $11481035 | $22277793 | $49944387 | $— | $178832110 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $306153 | $8000 | $— | $— | $— | $314153 |
|  **Consumer** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $3867679 | $5084473 | $1799533 | $583467 | $474711 | $593724 | $2190528 | $— | $14594115 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  | 5886 |  |  | 5886 |
| &nbsp;&nbsp;&nbsp; Substandard |  | 1317 | 11445 | 22747 |  |  |  |  | 35509 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total consumer | $3867679 | $5085790 | $1810978 | $606214 | $474711 | $599610 | $2190528 | $— | $14635510 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $9932 | $4071 | $2983 | $— | $6336 | $28384 | $— | $51706 |
|  **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $298401 | $5081494 | $1233962 | $— | $— | $144972 | $1014141 | $— | $7772970 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total others | $298401 | $5081494 | $1233962 | $— | $— | $144972 | $1014141 | $— | $7772970 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $67145334 | $198607152 | $268527904 | $392908911 | $263614648 | $479469451 | $128114847 | $— | $1798388247 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current period gross charge-offs | $— | $9932 | $4071 | $326670 | $8000 | $126845 | $28384 | $— | $503902 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

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** | **Prior** | **Revolving<br>loans** | **Revolving<br>to term<br>loans** | **Total** |
|  **Real estate secured:** |  |  |  |  |  |  |  |  |  |
|  **Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $74062572 | $134177320 | $281634276 | $200968090 | $48180246 | $251402010 | $11687742 | $— | $1002112256 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  | 217387 | 2554211 | 255730 | 578113 |  |  | 3605441 |
| &nbsp;&nbsp;&nbsp; Substandard |  |  | 131353 |  | 45110 | 312685 |  |  | 489148 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Commercial | $74062572 | $134177320 | $281983016 | $203522301 | $48481086 | $252292808 | $11687742 | $— | $1006206845 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $48560 | $— | $— | $48560 |
|  **Construction and land development** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $49718279 | $57789669 | $22765767 | $16986717 | $11053291 | $5665441 | $35118777 | $— | $199097941 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  | 407846 | 293985 |  |  | 701831 |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total construction and land development | $49718279 | $57789669 | $22765767 | $16986717 | $11461137 | $5959426 | $35118777 | $— | $199799772 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
|  **Residential** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $26437836 | $36617917 | $64512640 | $44308505 | $40298138 | $112643931 | $39132829 | $— | $363951796 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  | 720903 | 144380 |  | 865283 |
| &nbsp;&nbsp;&nbsp; Substandard | 491732 | 74062 | 515481 |  | 54639 | 3355064 |  |  | 4490978 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total residential | $26929568 | $36691979 | $65028121 | $44308505 | $40352777 | $116719898 | $39277209 | $— | $369308057 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $4143 | $— | $48361 | $— | $— | $52504 |
|  **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $222509 | $2295430 | $1603658 | $239878 | $299467 | $10861737 | $1293111 | $— | $16815790 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other | $222509 | $2295430 | $1603658 | $239878 | $299467 | $10861737 | $1293111 | $— | $16815790 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &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; Total real estate loans – current period gross charge-offs | $— | $— | $— | $4143 | $— | $96921 | $— | $— | $101064 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2024** | **2023** | **2022** | **2021** | **2020** | **Prior** | **Revolving<br>loans** | **Revolving<br>to term<br>loans** | **Total** |
|  **Non-real estate secured** |  |  |  |  |  |  |  |  |  |
|  **Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $28531060 | $53548762 | $29932635 | $12926112 | $15174653 | $12004986 | $48857733 | $— | $200975951 |
| &nbsp;&nbsp;&nbsp; Special mention |  | 543282 |  |  |  |  |  |  | 543282 |
| &nbsp;&nbsp;&nbsp; Substandard |  | 21458 |  | 36405 |  | 16216 |  |  | 74079 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total commercial | $28531060 | $54113,,502 | $29932635 | $12962527 | $15174653 | $12021202 | $48857733 | $— | $201593312 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $73978 | $173 | $102504 | $— | $— | $176655 |
|  **Consumer** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $9345126 | $2771310 | $1066679 | $633186 | $387000 | $351779 | $603554 | $— | $15158614 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  | 7810 |  |  |  | 7810 |
| &nbsp;&nbsp;&nbsp; Substandard | 642 | 17420 | 22641 |  |  | 6871 |  |  | 47574 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total consumer | $9345768 | $2788730 | $1089320 | $633186 | $394810 | $358650 | $603554 | $— | $15213998 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $54554 | $16651 | $25950 | $363 | $53298 | $— | $— | $— | $150816 |
|  **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $5036024 | $1292956 | $— | $— | $— | $165595 | $249542 | $— | $6744117 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total others | $5036024 | $1292956 | $— | $— | $— | $165595 | $249542 | $— | $6744117 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $193845779 | $289149586 | $402402517 | $278653114 | $116163930 | $398379316 | $137087648 | $— | $1815681890 |
| &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 June 30, 2025 or December 31, 2024. There were no revolving loans converted to term as of June 30, 2025 or December 31, 2024.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

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

---

| | | | |
|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Nonaccrual <br>loans with no <br>allowance** | **Nonaccrual <br>loans with an <br>allowance** | **Total <br>nonaccrual <br>loans** |
|  Real estate secured: |  |  |  |
| &nbsp;&nbsp;&nbsp; Commercial | $1480801 | $— | $1480801 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 37779 |  | 37779 |
| &nbsp;&nbsp;&nbsp; Residential | 3880591 | 298320 | 4178911 |
| &nbsp;&nbsp;&nbsp; Other |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate secured loans | 5399171 | 298320 | 5697491 |
|  Commercial | 115975 |  | 115975 |
|  Consumer | 32880 |  | 32880 |
|  Other |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $5548026 | $298320 | $5846346 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Nonaccrual <br>loans with no <br>allowance** | **Nonaccrual <br>loans with an <br>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;&nbsp; Total real estate secured loans | 4635621 | 305489 | 4941110 |
|  Commercial | 74078 |  | 74078 |
|  Consumer | 43824 |  | 43824 |
|  Other |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $4753523 | $305489 | $5059012 |

---

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

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

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  **As of June 30, 2025** | **Loans <br>30-59 <br>days past <br>due** | **Loans <br>60-89 <br>days past <br>due** | **Accruing <br>loans 90 or <br>more days <br>past due** | **Nonaccrual <br>loans** | **Total <br>noncurrent <br>loans** | **Current<br>loans** | **Total<br>loans** |
|  Real estate secured: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Commercial | $190293 | $— | $— | $1480801 | $1671094 | $1014557729 | $1016228823 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 359799 |  |  | 37779 | 397578 | 188789627 | 189187205 |
| &nbsp;&nbsp;&nbsp; Residential | 1750942 | 1213229 |  | 4178911 | 7143082 | 369298951 | 376442033 |
| &nbsp;&nbsp;&nbsp; Other |  |  |  |  |  | 15289596 | 15289596 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate secured | 2301034 | 1213229 |  | 5697491 | 9211754 | 1587935903 | 1597147657 |
|  Commercial | 722040 | 43465 |  | 115975 | 881480 | 177950630 | 178832110 |
|  Consumer | 66613 | 74978 | 6432 | 32880 | 180903 | 14454607 | 14635510 |
|  Other |  |  |  |  |  | 7772970 | 7772970 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $3089687 | $1331672 | $6432 | $5846346 | $10274137 | $1788114110 | $1798388247 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  **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 or <br>more days <br>past due** | **Nonaccrual <br>loans** | **Total <br>noncurrent <br>loans** | **Current <br>loans** | **Total<br>loans** |
|  Real estate secured: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; 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;&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;&nbsp; Total loans | $6210144 | $995295 | $2202 | $5059012 | $12266653 | $1803415238 | $1815681891 |

---

*<u>*<u>Collateral-dependent</u> <u>loans:</u>*</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 June 30, 2025 and December 31, 2024.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

---

| | | |
|:---|:---|:---|
|  | **June 30, <br>2025** | **December 31, <br>2024** |
|  **Collateral type** |  |  |
|  Single Family Residence | $1620254 | $1721316 |
|  Country club | 660875 |  |
|  Commercial Real Estate | 819927 | 255730 |
|  Land |  | 293985 |
|  | $3101056 | $2271031 |

---

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

---

| | | |
|:---|:---|:---|
|  | **June 30, <br>2025** | **December 31, <br>2024** |
|  Real estate secured: |  |  |
| &nbsp;&nbsp;&nbsp; Commercial | $4795550 | $5038501 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 2345596 | 2383036 |
| &nbsp;&nbsp;&nbsp; Residential | 1717979 | 1768090 |
| &nbsp;&nbsp;&nbsp; Other |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate secured | 8859125 | 9189627 |
|  Commercial | 4844713 | 5206784 |
|  Consumer | 5886 | 7810 |
|  Other |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $13709724 | $14404221 |

---

*<u>*<u>Modifications to borrowers experiencing financial difficulty:</u>*</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 June 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 June 30, 2025 or December 31, 2024.

*<u>*<u>Unfunded commitments:</u>*</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 June 30, 2025 and December 31, 2024, is separately classified on the consolidated balance sheet within other liabilities.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 4. Premises and Equipment

---

| | | |
|:---|:---|:---|
|  | **June 30,<br>2025** | **December 31,<br>2024** |
|  Land and land improvements | $17199368 | $17350753 |
|  Buildings and improvements | 47431973 | 47159512 |
|  Furniture, fixtures and equipment | 13529168 | 13557620 |
|  Construction in progress | 951045 | 459288 |
|  | 79111554 | 78527173 |
|  Less: Accumulated depreciation | (28774422) | (28238795) |
| &nbsp;&nbsp;&nbsp; Total | $50337132 | $50288378 |

---

Depreciation expense, included in depreciation and amortization on the consolidated statements of income, for the six months ended June 30, 2025, and 2024 amounted to $989,073 and $1,046,006, 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.

#### 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 June 30, 2025 and December 31, 2024 was approximately $8,511,000 and $8,514,000, respectively.

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

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

---

| | | |
|:---|:---|:---|
|  | **June 30,<br>2025** | **December 31,<br>2024** |
|  Gross balance | $13061936 | $13061936 |
|  Accumulated amortization | (8027165) | (7236968) |
|  Carrying amount | $5034771 | $5824968 |

---

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

---

| | | |
|:---|:---|:---|
|  | **June 30,<br>2025** | **December 31,<br>2024** |
|  Beginning of year | $5824968 | $7632399 |
|  Amortization | (790197) | (1807431) |
|  End of year | $5034771 | $5824968 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 5. Other Intangible Assets (cont.)
As of June 30, 2025, the estimated amortization expense of CDIs for future periods is as follows:

---

| | |
|:---|:---|
|  Remainder of 2025 | $783034 |
| 2026 | 1412133 |
| 2027 | 963171 |
| 2028 | 784729 |
| 2029 | 435744 |
|  Thereafter | 655960 |
|  Total | $5034771 |

---

#### Note 6. Short-Term Borrowings
Short-term borrowings included the following on June 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br>2025** | **December 31,<br>2024** |
|  Securities sold under repurchase agreements | $6300160 | $3391566 |
|  Federal funds purchased | 40000000 |  |
| &nbsp;&nbsp;&nbsp; Total short-term borrowings | $46300160 | $3391566 |

---

As of June 30, 2025 the Company had federal funds purchased totaling $40,000,000. These borrowings had a weighted average interest rate of 5.22% and a maturity of 14 days.

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 June 30, 2025 and December 31, 2024 was 2.69% and 3.27%, respectively. The maximum amount of outstanding agreements at any month end during the six months ended June 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 $5,075,441 and $4,519,370 for the six months ended June 30, 2025 and the fiscal year ended December 31, 2024, respectively, with an average rate paid of 2.82% and 3.53%, for the six months ended June 30, 2025 and for the fiscal year ended December 31, 2024, respectively.

#### Note 7. Long-Term Debt
FHLB advances and notes payable consisted of the following components as of the dates indicated:

---

| | | |
|:---|:---|:---|
|  | **June 30, <br>2025** | **December 31, <br>2024** |
|  FHLB advances, principal and interest payments at fixed interest rates from 0.69% to 5.33% | $63153102 | $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. | 20665298 | 21451660 |
|  Trust Preferred Securities, interest payments due quarterly at SOFR <br>plus 2.4%. | 5542090 | 5507284 |
|  PBD Promissory Note, payments due quarterly at 3.75%, maturing September 2026. | 12848338 | 13233122 |
| &nbsp;&nbsp;&nbsp; Total | $102208828 | $105772642 |

---

The FHLB advances were secured by mortgage loans totaling $627,310,000 on June 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.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 7. Long-Term Debt (cont.)
On January 27, 2020, the Company executed a Loan Agreement with Community Trust Bank, Inc., Pikeville, Kentucky, 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 note payable to Community Trust Bank, Inc. 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 six months ended June 30, 2025.

With the acquisition of 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 with an aggregate liquidation amount of $6,000,000 ($1,000 per preferred security) to a third-party investor. The Company then issued variable rate junior debentures aggregating $6,186,000 to the Trust. The junior subordinated debentures are the sole assets of the Trust. The junior subordinated debentures and the 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 6.74% and 6.89% on June 30, 2025 and December 31, 2024, respectively. These junior subordinated debentures will mature in 2034, at which time the preferred securities are to be redeemed. The junior subordinated debentures and 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 has provided a full, irrevocable, and unconditional guarantee on a subordinated basis of the obligations of the Trust under the 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 June 30, 2025 and December 31, 2024. Unamortized discount was $643,910 and $678,716 on June 30, 2025 and December 31, 2024, respectively.

Aggregate annual maturities of long-term debt on June 30, 2025, were:

---

| | |
|:---|:---|
|  | **Debt** |
|  Remainder of 2025 | $13839511 |
| 2026 | 24377433 |
| 2027 | 10595051 |
| 2028 | 9201560 |
| 2029 | 8061728 |
|  Thereafter | 36133545 |
|  | $102208828 |

---

#### 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.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 8. Regulatory Matters (cont.)
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) and of Tier I capital to average assets (as defined in the regulations). Management believes as of June 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 June 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 category.

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Actual** | **Actual** | **Minimum <br>for capital <br>adequacy purposes** | **Minimum <br>for capital <br>adequacy purposes** | **Minimum <br>to be well <br>capitalized under <br>prompt corrective <br>action provisions** | **Minimum <br>to be well <br>capitalized under <br>prompt corrective <br>action provisions** |
|  | **Amount** | **Ratio** | **Amount** | **Ratio** | **Amount** | **Ratio** |
|  As of June 30, 2025: Total capital (to risk-weighted assets) | $267495 | 14.6% | $146733 | 8.0% | $183416 | 10.0% |
| &nbsp;&nbsp;&nbsp; Tier I capital (to risk-weighted assets) | $249436 | 13.6% | $110050 | 6.0% | $146733 | 8.0% |
| &nbsp;&nbsp;&nbsp; Common equity Tier 1 capital (to risk-weighted assets) | $249436 | 13.6% | $82537 | 4.5% | $119221 | 6.5% |
| &nbsp;&nbsp;&nbsp; Tier 1 capital (to average assets) | $249436 | 11.2% | $88913 | 4.0% | $111142 | 5.0% |
|  As of December 31, 2024: 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. Stock-Based Compensation
*<u>*<u>Stock awards:</u>*</u>*

The Chief Executive Officer (CEO) was awarded 35,938 shares of common stock of the Company in 2024. 35,938 shares are awarded annually contingent on the CEO's employment with the Company as of December 31<sup>st</sup> of each year. Because the common stock is not actively traded, the Company's best estimate of the fair value of the stock is book value per share as approved by the Company's board of directors.

In addition, the Company's board of directors approved an award of 107,812 shares of common stock to the CEO contingent on the Company's completion of its acquisition of AB&T. Because the common stock is not actively traded, the Company's best estimate of the fair value of the stock is book value per share as approved by the Company's board of directors.

A total of 179,688 shares of common stock were issued to our CEO in March 2025.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### 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.

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

Where quoted market prices are available in an active market, securities are classified within Level 1 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>*<u>Interest rate swap agreements:</u>*</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 June 30, 2025 and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **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)** | **Significant <br>unobservable <br>inputs<br>(Level 3)** |
|  Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Government and federal agency | $9786 | $— | $9786 | $— |
| &nbsp;&nbsp;&nbsp; Mortgage-backed: GSE residential | 14512956 |  | 14512956 |  |
| &nbsp;&nbsp;&nbsp; State and political subdivision <br>securities | 15590585 |  | 15590585 |  |
| &nbsp;&nbsp;&nbsp; Interest rate swaps | 15468343 |  | 15468343 |  |
|  Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest rate swaps | 15468343 |  | 15468343 |  |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 10. Disclosures About Fair Value of Assets and Liabilities (cont.)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **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)** | **Significant<br>unobservable<br>inputs<br>(Level 3)** |
|  Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Government and federal agency | $15268645 | $— | $15268645 | $— |
| &nbsp;&nbsp;&nbsp; U.S. Government sponsored enterprises (GSEs) | 55929 |  | 55929 |  |
| &nbsp;&nbsp;&nbsp; Mortgage-backed: |  |  |  |  |
| &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>*<u>Collateral-dependent</u> <u>and individually evaluated:</u>*</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.

*<u>*<u>Foreclosed assets held for sale:</u>*</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 June 30, 2025 and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 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 | $230000 | $— | $— | $230000 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **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 | $— | $— | $73020 |
|  Collateral-dependent loans | $230000 | $— | $— | $230000 |

---

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 June 30, 2025 and December 31, 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Fair <br>value** | **Valuation <br>techniques<sup>(1)</sup>** | **Significant <br>unobservable <br>inputs** | **Weighted <br>average** |
|  Foreclosed assets held for sale | $— | Appraisal | Estimated costs to sell |  |
|  Collateral-dependent loans | $230000 | 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<br>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.

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

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Carrying<br>amount** | **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 | $151282354 | $151282354 | $— | $— | $151282354 |
| &nbsp;&nbsp;&nbsp; Held-to-maturity securities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Government and federal agency | 97622692 |  | 95786448 |  | 95786448 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Government-sponsored enterprises (GSEs) | 16448349 |  | 15994717 |  | 15994717 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage-backed: GSE residential | 39458331 |  | 36491027 |  | 36491027 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; State and political subdivisions | 3922467 |  | 3645962 |  | 3645962 |
|  | 157451839 |  | 151918154 |  | 151918154 |
| &nbsp;&nbsp;&nbsp; Loans Receivable | 1773527499 |  |  | 1736099207 | 1736099207 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Carrying<br>amount** | **Fair value measurements** | **Fair value measurements** | **Fair value measurements** | **Fair value measurements** |
|  | **Carrying<br>amount** | **Level 1** | **Level 2** | **Level 3** | **Total** |
|  Financial Liabilities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Time Deposits | 541573877 |  | 538566084 |  | 538566084 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-Term borrowings | 102208828 |  | 107824270 |  | 107824270 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-Term borrowings | 46300160 | 46300160 |  |  | 46300160 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Carrying<br>amount** | **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;&nbsp; U.S. Government and federal agency | 87467213 |  | 84439850 |  | 84439850 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Government-sponsored enterprises (GSEs) | 19270853 |  | 18559597 |  | 18559597 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage-backed: GSE residential | 19030532 |  | 15864131 |  | 15864131 |
| &nbsp;&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;&nbsp; Time Deposits | 576501235 |  | 574604000 |  | 574604000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-Term borrowings | 105772642 |  | 109165065 |  | 109165065 |
| &nbsp;&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 June 30, 2025 and December 31, 2024, 89% 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>*<u>Current economic conditions:</u>*</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.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### Note 11. Significant Estimates and Concentrations (cont.)
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.

#### Note 12. Commitments and Contingencies
*<u>*<u>Standby letters of credit:</u>*</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 $22,939,000 and $45,505,000 on June 30, 2025 and December 31, 2024, respectively, with terms ranging from 30 days to five years. On June 30, 2025 and December 31, 2024, the Company's deferred revenue under standby letter of credit agreements was $0.

*<u>*<u>Lines of credit:</u>*</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 June 30, 2025, the Company had granted unused lines of credit to borrowers aggregating approximately $305,381,000 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>*<u>Contingencies:</u>*</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 June 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.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements (Unaudited)***<br>

#### 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 June 30, 2025 and December 31, 2024, were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 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 | $270194942 | $15468343 | $262864970 | $22178477 |
|  Included in other liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest rate swaps related to customer loans | $270194942 | $15468343 | $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 June 30, 2025, approximately $44,885,000 of retained earnings was available to pay dividends.

#### Note 15. Earnings Per Share
The factors used in the earnings per share computation follow:

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30** | **Six Months Ended June 30** |
|  | **2025** | **2024** |
|  **Basic** |  |  |
|  Net income | $17591198 | $16868112 |
| &nbsp;&nbsp;&nbsp; Weighted average common shares outstanding | 12188624 | 12210006 |
| &nbsp;&nbsp;&nbsp; Basic earnings per share | $1.44 | $1.38 |
|  **Diluted** |  |  |
|  Net income | $17591198 | $16868112 |
| &nbsp;&nbsp;&nbsp; Weighted average common shares outstanding for basic EPS | 12188624 | 12210006 |
| &nbsp;&nbsp;&nbsp; Add: Dilutive effects of assumed exercise of stock grants |  | 179688 |
| &nbsp;&nbsp;&nbsp; Average shares and dilutive common shares | 12188624 | 12389694 |
| &nbsp;&nbsp;&nbsp; Diluted earnings per common share | $1.44 | $1.36 |

---

Dilutive common shares represent shares that have been awarded but have not been issued to the recipient. (See Note 9 regarding discussion of the award.)

[**Table of Contents**](#TOC001)

#### PREFACE
The following Report of Independent Registered Public Accounting Firm is drafted in the form that will be expressed at effectiveness. When the transactions referred to in Note 23 of the Notes to the Consolidated Financial Statements for the years ended December 31, 2024 and 2023 have been consummated, we will be in a position to render the following report.

 /s/ Mauldin & Jenkins, LLC<br>

![](tfooter.jpg)

[**Table of Contents**](#TOC001)

#### Report of Independent Registered Public Accounting Firm

#### To the Board of Directors and Stockholders<br>Commercial Bancgroup, Inc. and Subsidiary<br>Harrogate, Tennessee

#### Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Commercial Bancgroup, Inc. and Subsidiary (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

#### Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Chattanooga, Tennessee<br>March 26, 2025, except for the effects of the recapitalization and stock split discussed in Note 23, as to which is dated ____________________.

We have served as the Company's auditor since 2018.

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**Commercial Bancgroup, Inc.<br>*Consolidated Balance Sheets<br>As of December 31, 2024 and 2023***<br>

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| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  **Assets** |  |  |
| &nbsp;&nbsp;&nbsp; Cash and due from banks | $18991800 | $14730978 |
| &nbsp;&nbsp;&nbsp; Federal funds sold | 43742762 | 10860394 |
| &nbsp;&nbsp;&nbsp; Interest-bearing deposits in banks | 115463354 | 130349363 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | 178197916 | 155940735 |
| &nbsp;&nbsp;&nbsp; Available-for-sale securities | 47937616 | 52041398 |
| &nbsp;&nbsp;&nbsp; Held-to-maturity securities | 128216954 | 158631596 |
| &nbsp;&nbsp;&nbsp; Loans, net of allowance for credit losses of $18,205,421 and <br>$16,635,663 at December 31, 2024 and 2023, respectively | 1788791583 | 1669846369 |
| &nbsp;&nbsp;&nbsp; Premises and equipment, net | 50288378 | 52263866 |
| &nbsp;&nbsp;&nbsp; Restricted stock, at cost | 8264150 | 9111850 |
| &nbsp;&nbsp;&nbsp; Foreclosed assets held for sale, net | 831662 | 1046030 |
| &nbsp;&nbsp;&nbsp; Interest receivable | 7187304 | 8240516 |
| &nbsp;&nbsp;&nbsp; Bank owned life insurance | 45883124 | 44765332 |
| &nbsp;&nbsp;&nbsp; Core deposits and other intangibles | 5824968 | 7632399 |
| &nbsp;&nbsp;&nbsp; Goodwill | 8514092 | 8510851 |
| &nbsp;&nbsp;&nbsp; Deferred tax asset | 1078881 | 154289 |
| &nbsp;&nbsp;&nbsp; Other | 30194510 | 28424194 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $2301211138 | $2196609429 |
|  **Liabilities and Stockholders' Equity** |  |  |
|  **Liabilities** |  |  |
| &nbsp;&nbsp;&nbsp; Deposits |  |  |
| &nbsp;&nbsp;&nbsp; Demand | $976481028 | $922117166 |
| &nbsp;&nbsp;&nbsp; Savings, NOW and money market | 385614692 | 381679618 |
| &nbsp;&nbsp;&nbsp; Time | 576501235 | 516125848 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total deposits** | **1938596955** | **1819922632** |
| &nbsp;&nbsp;&nbsp; Short-term borrowings | 3391566 | 6046531 |
| &nbsp;&nbsp;&nbsp; Long-term debt | 105772642 | 143216982 |
| &nbsp;&nbsp;&nbsp; Interest payable | 4224695 | 3643453 |
| &nbsp;&nbsp;&nbsp; Other liabilities | 28969497 | 28002507 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities** | **2080955355** | **2000832105** |
|  **Stockholders' equity** |  |  |
| &nbsp;&nbsp;&nbsp; Common stock |  |  |
| &nbsp;&nbsp;&nbsp; $0.01 par value; 50,000,000 shares authorized; 12,113,144 shares issued and outstanding in at December 31, 2024; 12,211,756 at December 31, 2023 | 121131 | 122118 |
| &nbsp;&nbsp;&nbsp; Additional paid-in capital | 9388181 | 9073467 |
| &nbsp;&nbsp;&nbsp; Retained earnings | 212310977 | 182903720 |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss | (1564506) | (1724275) |
|  | **220255783** | **190375030** |
| &nbsp;&nbsp;&nbsp; Non-controlling interest |  | 5402293 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total stockholders' equity** | **220255783** | **195777323** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total liabilities and stockholders' equity** | $**2301211138** | $**2196609429** |

---

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

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**Commercial Bancgroup, Inc.<br>*Consolidated Statements of Income<br>For the years ended December 31, 2024 and 2023***<br>

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  ***Interest and Dividend Income*** |  |  |
| &nbsp;&nbsp;&nbsp; Loans, including fees | $113391226 | $95205768 |
| &nbsp;&nbsp;&nbsp; Debt securities-taxable | 2678546 | 1862851 |
| &nbsp;&nbsp;&nbsp; Debt securities-tax-exempt | 368332 | 372643 |
| &nbsp;&nbsp;&nbsp; Dividends on restricted stock | 699728 | 646736 |
| &nbsp;&nbsp;&nbsp; Interest-bearing time deposits | 6075137 | 4549113 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total interest and dividend income** | **123212968** | **102637111** |
| &nbsp;&nbsp;&nbsp; **Interest expense** |  |  |
| &nbsp;&nbsp;&nbsp; Deposits | 40352584 | 24092234 |
| &nbsp;&nbsp;&nbsp; Short-term borrowings | 204963 | 448751 |
| &nbsp;&nbsp;&nbsp; Long-term debt | 5071831 | 5995491 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total interest expense** | **45629378** | **30536476** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net interest income** | **77583590** | **72100635** |
| &nbsp;&nbsp;&nbsp; Provision for credit losses | 1828644 | 3273674 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net interest income after provision for credit losses** | **75754946** | **68826961** |
|  ***Noninterest Income*** |  |  |
| &nbsp;&nbsp;&nbsp; Customer service fees | 3040449 | 2860763 |
| &nbsp;&nbsp;&nbsp; Net gains on sales of premises and equipment | 759482 | 53500 |
| &nbsp;&nbsp;&nbsp; Net gains on sales of foreclosed assets | 153346 | 132898 |
| &nbsp;&nbsp;&nbsp; Net losses on sales of loans |  | (174051) |
| &nbsp;&nbsp;&nbsp; ATM fees | 3281291 | 3323496 |
| &nbsp;&nbsp;&nbsp; Increase in BOLI | 1198572 | 1661021 |
| &nbsp;&nbsp;&nbsp; Other | 2444769 | 1761619 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total noninterest income** | **10877910** | **9619247** |
|  ***Noninterest Expense*** |  |  |
| &nbsp;&nbsp;&nbsp; Salaries and employee benefits | 24872660 | 20746114 |
| &nbsp;&nbsp;&nbsp; Occupancy | 3786162 | 3360702 |
| &nbsp;&nbsp;&nbsp; Data processing | 4234564 | 3862046 |
| &nbsp;&nbsp;&nbsp; Deposit insurance premiums | 1128574 | 1035345 |
| &nbsp;&nbsp;&nbsp; Professional fees | 1017108 | 1295929 |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 4109259 | 3039802 |
| &nbsp;&nbsp;&nbsp; Other | 6912551 | 5413921 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total noninterest expense** | **46060878** | **38753859** |
| &nbsp;&nbsp;&nbsp; **Income before income taxes** | **40571978** | **39692350** |
| &nbsp;&nbsp;&nbsp; Provision for income taxes | 8886195 | 8480225 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net Income** | **31685783** | **31212124** |
| &nbsp;&nbsp;&nbsp; Less: net income attributable to noncontrolling interest | 275857 | 519153 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Net income attributable to Commercial Bancgroup, Inc.** | $**31409926** | $**30692971** |
|  ***Earnings per share:*** |  |  |
| &nbsp;&nbsp;&nbsp; Basic | $2.58 | $2.52  |
| &nbsp;&nbsp;&nbsp; Diluted | $2.54 | $2.51 |

---

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Consolidated Statements of Comprehensive Income<br>For the years ended December 31, 2024 and 2023***<br>

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Net income attributable to Commercial Bancgroup, Inc. | $31409926 | $30692971 |
|  Other comprehensive income (loss): |  |  |
| &nbsp;&nbsp;&nbsp; Unrealized holding gains (losses) on securities available for sale arising during the year | 1114724 | (801966) |
| &nbsp;&nbsp;&nbsp; Tax (benefit) expense | (286150) | 209634 |
| &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 | (744167) | (477480) |
| &nbsp;&nbsp;&nbsp; Tax expense | 75362 | 65998 |
|  **Other comprehensive income (loss), net of tax** | **159769** | **(1003814)** |
|  Comprehensive income | 31569695 | 29689158 |
|  Comprehensive income attributable to noncontrolling interest | 1551 | 37987 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total Comprehensive income attributable to Commercial Bancgroup, Inc.** | $**31568144** | $**29651171** |

---

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Consolidated Statements of Changes in Stockholders' Equity<br>For the years ended December 31, 2024 and 2023***<br>

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Common <br>Stock** | **Additional <br>Paid-In <br>Capital** | **Retained <br>Earnings** | **Other <br>Comprehensive <br>Income <br>(Loss)** | **Non-<br>Controlling <br>Interest** | **TOTAL** |
|  **Balance – January 1, 2023** | $120509 | $6832411 | $153706036 | $(720461) | $— | $159938495 |
| &nbsp;&nbsp;&nbsp; Net income |  |  | 30692971 |  | 519153 | 31212124 |
| &nbsp;&nbsp;&nbsp; Other comprehensive loss |  |  | (1003814) |  |  | (1003814) |
| &nbsp;&nbsp;&nbsp; Dividends paid to shareholders |  |  | (1495287) |  |  | (1495287) |
| &nbsp;&nbsp;&nbsp; Non-controlling interest |  |  |  |  | 4883140 | 4883140 |
| &nbsp;&nbsp;&nbsp; Stock Compensation |  | 458624 |  |  |  | 458624 |
| &nbsp;&nbsp;&nbsp; Repurchase of stock (131,500 shares) | (1315) | (2103770) |  |  |  | (2105085) |
| &nbsp;&nbsp;&nbsp; Issuance of stock (292,269 shares) | 2924 | 3886202 |  |  |  | 3889126 |
|  **Balance – December 31, 2023** | 122118 | 9073467 | 182903720 | (1724275) | 5402293 | 195777323 |
| &nbsp;&nbsp;&nbsp; Comprehensive income |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Net income |  |  | 31409926 |  | 275857 | 31685783 |
| &nbsp;&nbsp;&nbsp; Other comprehensive income |  |  |  | 159769 |  | 159769 |
| &nbsp;&nbsp;&nbsp; Stock compensation |  | 2143530 |  |  |  | 2143530 |
| &nbsp;&nbsp;&nbsp; Dividends paid to shareholders |  |  | (2002669) |  |  | (2002669) |
| &nbsp;&nbsp;&nbsp; Acquisition of minority interest |  |  |  |  | (5678150) | (5678150) |
| &nbsp;&nbsp;&nbsp; Repurchase of stock (98,550 shares) | (987) | (1828816) |  |  |  | (1829803) |
|  **Balance – December 31, 2024** | $121131 | $9388181 | $212310977 | $(1564506) | $— | $220255783 |

---

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Consolidated Statements of Cash Flows<br>For the years ended December 31, 2024 and 2023***<br>

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  ***Operating Activities*** |  |  |
| &nbsp;&nbsp;&nbsp; Net income | $31685783 | $31212124 |
| &nbsp;&nbsp;&nbsp; Items not requiring (providing) cash |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation | 2301828 | 2115620 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization and (accretion), net | 2291946 | 1423930 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for credit losses | 1828644 | 3273674 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock compensation | 2143530 | 458624 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for losses on foreclosed assets | 41750 | 79060 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income taxes | (1140719) | (705799) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net realized gains on foreclosed assets | (153346) | (132898) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gains on sales of premises and equipment | (759482) | (53500) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on sales of loans |  | 174051 |
| &nbsp;&nbsp;&nbsp; Changes in |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest receivable | 1053212 | (2000771) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets | (1773556) | 11521830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other liabilities | 1183115 | (9700129) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in BOLI | (1198572) | (1661021) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Interest payable | 1171802 | 2882275 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by operating activities | 38675935 | 38887070 |
|  ***Investing Activities*** |  |  |
| &nbsp;&nbsp;&nbsp; Purchases of available-for-sale securities | (30342662) | (16648939) |
| &nbsp;&nbsp;&nbsp; Proceeds from sales, maturities and calls of available-for-sale securities | 33969465 |  |
| &nbsp;&nbsp;&nbsp; Proceeds from sales, maturities and calls of held-to-maturity securities | 47344967 | 35356445 |
| &nbsp;&nbsp;&nbsp; Purchases of held-to-maturity securities | (16930325) |  |
| &nbsp;&nbsp;&nbsp; Net change in loans | (121081897) | (154547344) |
| &nbsp;&nbsp;&nbsp; Purchase of premises and equipment, net | (3041086) | (3165972) |
| &nbsp;&nbsp;&nbsp; Proceeds from sales of premises and equipment | 3474228 | 91500 |
| &nbsp;&nbsp;&nbsp; Proceeds from the sales of foreclosed assets | 747928 | 577962 |
| &nbsp;&nbsp;&nbsp; Purchase of restricted stock, at cost | (1497328) | (1653400) |
| &nbsp;&nbsp;&nbsp; Redemption of restricted stock, at cost | 2345028 | 1992800 |
| &nbsp;&nbsp;&nbsp; Death benefits received | 80780 | 2069093 |
| &nbsp;&nbsp;&nbsp; Cash acquired in business combination, net of consideration |  | 7972548 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in investing activities | $(84930902) | $(127955307) |

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[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Consolidated Statements of Cash Flows (Continued)<br>For the years ended December 31, 2024 and 2023***<br>

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| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  ***Financing Activities*** |  |  |
| &nbsp;&nbsp;&nbsp; Net increase in deposits | $118712636 | $176132320 |
| &nbsp;&nbsp;&nbsp; Proceeds from short-term borrowings | 69360463 | 78979217 |
| &nbsp;&nbsp;&nbsp; Repayments of short-term borrowings | (72015428) | (80668501) |
| &nbsp;&nbsp;&nbsp; Proceeds from long-term borrowings | 2146001 | 27131000 |
| &nbsp;&nbsp;&nbsp; Repayments of long-term borrowings | (40180902) | (18764849) |
| &nbsp;&nbsp;&nbsp; Repurchase of common stock | (1829803) | (2105085) |
| &nbsp;&nbsp;&nbsp; Issuance of common stock |  | 3889126 |
| &nbsp;&nbsp;&nbsp; Acquisition of minority interest | (5678150) |  |
| &nbsp;&nbsp;&nbsp; Payment of dividends | (2002669) | (1495287) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by financing activities | 68512148 | 183097941 |
| &nbsp;&nbsp;&nbsp; Increase in cash and cash equivalents | 22257181 | 94029704 |
|  ***Cash and cash equivalents, beginning of year*** | 155940735 | 61911031 |
|  ***Cash and cash equivalents, end of year*** | $178197916 | $155940735 |
|  ***Supplemental Cash Flows Information*** |  |  |
|  Interest paid | $44457576 | $27636493 |
|  Income taxes paid | $9750000 | $6801000 |
|  ***Supplemental Disclosures of Noncash Items*** |  |  |
| &nbsp;&nbsp;&nbsp; Unrealized gain(loss) on AFS securities | $159769 | $(801966) |
| &nbsp;&nbsp;&nbsp; Transfer of loans to OREO | $421963 | $138816 |

---

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 1. Summary of Significant Accounting Policies

#### Nature of operations:
Commercial Bancgroup, Inc. (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, Commercial Bank (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 May of 2023, Commercial Bancgroup acquired 76.83% of the stock of AB&T Financial Corporation, which owns 100% of Alliance Bank & Trust Company. Alliance Bank & Trust Company (AB&T) provided banking and financial services to individual and corporate customers in Gastonia and Cleveland counties in North Carolina. The acquisition occurred in two steps and was completed on July 1, 2024, when Commercial Bancgroup acquired the remaining minority ownership interest in AB&T Financial Corporation and merged Alliance Bank & Trust Company into the operations of Commercial Bank.

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

The Company's accounting and reporting policies conform to accounting principles generally accepted in the United States ("GAAP") and to generally accepted practices within the banking industry. Certain prior period balances have been reclassified to conform to the current period presentation.

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

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

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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, 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>*<u>Business combinations:</u>*</u>*

The Company applies the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity recognizes the assets acquired and liabilities assumed at their acquisition date fair values. Management utilizes prevailing valuation techniques appropriate for the asset or liability being measured in determining these fair values. This method often involves estimates based on third party valuations based on discounted cash flow analyses or other valuation techniques, all of which are inherently subjective. Any excess of the purchase price over the fair value of net assets and other identifiable intangible assets acquired is recorded as goodwill. Assets acquired and liabilities assumed from contingencies must also be recognized at fair value if the fair value can be determined during the measurement period. Acquisition-related costs, including conversion and restructuring charges, are expensed as incurred. Fair values are subject to refinement over the measurement period, not to exceed one year after the closing date.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 1. Summary of Significant Accounting Policies (cont.)
*<u>*<u>Basic and diluted earnings per common share:</u>*</u>*

Basic earnings per common share is based on net income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect additional potential common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. Potential common shares that may be issued by the Company relate to stock awards.

*<u>*<u>Significant concentrations of credit risk:</u>*</u>*

The Company maintains cash balances at financial institutions whose accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to statutory limits. At times during the year, the Company's balances with financial institutions exceeded FDIC insurance limits. Management considers bank balances in excess of FDIC limits to be a normal business risk.

*<u>*<u>Cash and cash equivalents:</u>*</u>*

The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. Cash and Cash equivalents consist of cash on hand, due from banks, interest-bearing deposits in banks and federal funds sold. Interest-bearing deposits in banks are carried at cost.

*<u>*<u>Investment securities:</u>*</u>*

Investment securities are classified as either held-to-maturity or available-for-sale securities. 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 net of tax.

Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities. Premiums on callable debt securities are amortized to their earliest call date. Gains and losses on the sale of available-for-sale securities are recorded on the trade date and are determined using the specific identification method.

The Company has made a policy election to exclude accrued interest from the amortized cost basis of debt securities and report accrued interest in interest receivable in the consolidated balance sheets. Interest receivable on available-for-sale debt securities totaled $124,431 and $110,332 as of December 31, 2024 and 2023, respectively.

A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a security placed on nonaccrual is reversed against interest income. There was no accrued interest related to debt securities reversed against interest income for the years ended December 31, 2024 and 2023.

*<u>*<u>Allowance for credit losses:</u>*</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 an 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,

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 1. Summary of Significant Accounting Policies (cont.)
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 allowance for credit losses (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 debit 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 $230,223 and $296,568 as of December 31, 2024 and 2023, 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.

*<u>*<u>Loans:</u>*</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 allowance for credit losses). Amortized cost is the principal balance outstanding adjusted for unearned income, charge-offs, the allowance for credit losses, 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 $6,679,881 and $7,721,487 as of December 31, 2024 and 2023, 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 are 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

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 1. Summary of Significant Accounting Policies (cont.)
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 allowance for credit losses is determined using the same methodology as other loans held for investment. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan's purchase price and allowance for credit losses 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 allowance for credit losses are recorded through credit loss expense.

*<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 Bank has policies in place to reverse accrued interest in a timely manner. Therefore, the Bank has made a policy election to exclude accrued interest from the measurement of ACL.

Expected credit losses are reflected in the allowance for credit losses 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 weighted average remaining maturity method. The WARM CECL 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 allowance for credit losses 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.

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 1. Summary of Significant Accounting Policies (cont.)
Qualitative factors considered include: changes in lending policies and procedures, including underwriting standards, collection, 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, legal and regulatory requirements.

#### Allowance for Credit Losses 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 allowance for credit losses 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>*<u>Loan commitments and financial instruments:</u>*</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.

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 1. Summary of Significant Accounting Policies (cont.)
The Company records an allowance for credit losses 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.

*<u>*<u>Premises and equipment:</u>*</u>*

Depreciable assets are stated at cost less accumulated depreciation. Depreciation is charged to expense using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are capitalized and depreciated using the straight-line method over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. Expected terms include lease option periods to the extent that the exercise of such options is reasonably assured. The estimated useful lives for each major depreciable classification of premises and equipment are as follows:

---

| | |
|:---|:---|
|  Buildings and improvements | 35 – 40 years |
|  Leasehold improvements | 5 – 10 years |
|  Furniture and Fixtures | 7 years |
|  Software | 3 – 5 years |
|  Equipment | 3 – 5 years |

---

*<u><u>Leases:</u></u>*

Leases are classified as operating or finance leases at the lease commencement date. The Company leases certain locations and equipment. The Company records leases on the balance sheet in the form of a lease liability for the present value of future minimum payments under the lease terms and a right-of-use asset equal to the lease liability adjusted for items such as deferred or prepaid rent, lease incentives, and any impairment of the right-of-use asset. The discount rate used in determining the lease liability is based upon incremental borrowing rates the Company could obtain for similar loans as of the date of commencement or renewal. The Company does not record leases on the consolidated balance sheets that are classified as short term (less than one year).

At lease inception, the Company determines the lease term by considering the minimum lease term and all optional renewal periods that the Company is reasonably certain to renew. The lease term is also used to calculate straight-line rent expense. The depreciable life of leasehold improvements is limited by the estimated lease term, including renewals if they are reasonably certain to be renewed. The Company's leases do not contain residual value guarantees or material variable lease payments that will impact the Company's ability to pay dividends or cause the Company to incur additional expenses.

Operating lease expense consists of a single lease cost allocated over the remaining lease term on a straight-line basis, variable lease payments not included in the lease liability, and any impairment of the right-of-use asset. Rent expense and variable lease expense are included in other operating expenses on the Company's consolidated statements of income. The Company's variable lease expense includes rent escalators that are based on market conditions and include items such as common area maintenance, utilities, parking, property taxes, insurance and other costs associated with the lease.

The Company has elected to treat property leases that include both lease and non-lease components as a single component and account for it as a lease.

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

*<u>*<u>Long-lived</u> <u>asset impairment:</u>*</u>*

The Company evaluates the recoverability of the carrying value of long-lived assets whenever events or circumstances indicate the carrying amount may not be recoverable. If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows expected to result from the use and eventual disposition of the asset is less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value.

No asset impairment was recognized during the years ended December 31, 2024 and 2023.

*<u>*<u>Restricted stock:</u>*</u>*

Federal Reserve Bank (FRB) and Federal Home Loan Bank (FHLB) stock are required investments for institutions that are members of the FRB and FHLB systems. The required investment in the common stock is based on a predetermined formula, carried at cost and evaluated for impairment.

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

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Costs incurred subsequent to acquisition relating to development and improvement of the property are capitalized up to fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in net income or expense from foreclosed assets.

*<u>*<u>Bank owned life insurance:</u>*</u>*

The Company purchases life insurance policies on certain key executives and records purchases at an amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or amounts due that are probable at settlement.

*<u>*<u>Intangible assets:</u>*</u>*

Intangible assets consist of goodwill and core deposit intangible assets that result from business combinations. Goodwill represents the excess of the purchase price over the fair value of net assets acquired that is allocated to the appropriate reporting unit when acquired. Core deposit intangible asset represent the future earnings potential of acquired deposit relationships that are amortized over their remaining useful lives.

An interim analysis of goodwill is performed quarterly, and goodwill is tested for impairment annually, on December 31, or more frequently if events or circumstances indicate there may be impairment. The Company has one reporting unit, Commercial Bank. If the Company elects to perform a qualitative assessment, it evaluates factors such as macroeconomic conditions, industry and market considerations, overall financial performance, changes in stock price, and progress towards stated objectives in determining if it is more likely than not that the fair value of their reporting unit is less than its carrying amount. If the Company concludes that it is more likely than not that the fair value of our reporting unit is less than its carrying amount, a quantitative test is performed; otherwise, no further testing is required. The quantitative test consists of comparing the fair value of the reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its book value, no goodwill impairment exists. If the carrying amount of the reporting unit is greater than its calculated fair value, a goodwill impairment charge is recognized for the difference.

Management has concluded that there was no goodwill impairment for 2024 and 2023.

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

*<u>*<u>Derivatives:</u>*</u>*

Derivatives are recognized as assets and liabilities on the consolidated balance sheets and measured at fair value. For exchange-traded contracts, fair value is based on quoted market prices. For non-exchange traded contracts, fair value is based on dealer quotes, pricing models, discounted cash flow methodologies, or similar techniques for which the determination of fair value may require significant management judgment or estimation.

For asset/liability management purposes, the Company uses interest rate swap agreements to hedge various exposures or to modify interest rate characteristics of various balance sheet accounts. Interest rate swaps are contracts in which a series of interest rate cash flows are exchanged over a prescribed period. The notional amount on which the interest payments are based is not exchanged.

The Company is exposed to losses if a counterparty fails to make its payments under a contract in which the Company is in the net receiving position. The Company anticipates that the counterparties will be able to fully satisfy their obligations under the agreements.

Interest rate derivative financial instruments receive hedge accounting treatment only if they are designated as a cash flow hedge and are expected to be, and are, effective in substantially reducing interest rate risk arising from the assets and liabilities identified as exposing the Company to risk. Those derivative financial instruments that do not meet specified hedging criteria are recorded at fair value with changes in fair value recorded in income. If periodic assessment indicates derivatives no longer provide an effective hedge, the derivative contracts would be closed out and settled, or classified as a trading activity.

*<u>*<u>Transfers of financial assets:</u>*</u>*

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (l) the assets have been isolated from the Company — put presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity or the ability to unilaterally cause the holder to return specific assets.

*<u>*<u>Income taxes:</u>*</u>*

The Company accounts for income taxes in accordance with income tax accounting guidance (ASC 740, *Income Taxes*). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are reduced by a valuation allowance if, based on the evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

Management performs an evaluation of all income tax positions taken or expected to be taken in the course of preparing the Company's income tax returns to determine whether the income tax positions meet a "more likely than not" standard of being sustained under examination by the applicable taxing authorities. Management has performed its evaluation of all income tax positions taken on all open income tax returns and has determined that there were no positions taken that do not meet the "more likely than not" standard. Accordingly, there are no provisions for income taxes, penalties or interest receivable or payable relating to uncertain income tax positions in the accompanying financial statements.

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

The Company recognizes interest and penalties on income taxes as a component of income tax expense.

The Company files income tax returns in the U.S. federal jurisdiction, the state of Tennessee, the state of Kentucky and state of Noth Carolina. The Company is no longer subject to U.S. federal income tax examinations by tax authorities of years before 2021. The State of Tennessee has a statute of limitations of four years as does the State of Kentucky; therefore, the Company's 2020 through 2023 franchise and excise tax returns remain subject to examination.

The Company files consolidated income tax returns with its subsidiary.

*<u>*<u>Advertising costs:</u>*</u>*

The Company follows the policy of charging the costs for advertising to expense as incurred. Advertising expense charged to operations was $298,750 and $319,969 for the years ended December 31, 2024 and 2023, respectively.

*<u>*<u>Comprehensive income:</u>*</u>*

Comprehensive income consists of net income and other comprehensive income, net of applicable income taxes. Other comprehensive income includes unrealized gains and losses on available-for-sale securities.

*<u>*<u>Revenue from contracts with customers:</u>*</u>*

All of the Company's revenue from contracts with customers in the scope of ASC 606 is recognized within noninterest income. Following is a discussion of key revenues within the scope of Topic 606:

***Customer service fees:*** Revenue from customer service charges is earned through account servicing, overdraft, non-sufficient funds, and other deposit-related services. Revenue is recognized for these services either over time, corresponding with deposit accounts' monthly cycle, or at point in time for transaction-related services and fees. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers' accounts.

***Net realized gains on sale of foreclosed assets:*** Net realized gains on sales of foreclosed assets is recognized when the buyer obtains control, which generally occurs at the time of an executed deed. The Company believes this criterion is met when the buyer closes on the property and the Company has no other performance obligations.

**Net gains on sale of premise and equipment:** Net realized gains on sales of premise and equipment is recognized when the buyer obtains control, which generally occurs at the time the of an executed deed or transfer of title. The Company believes this criterion is met when the buyer closes on the property or equipment and the Company has no other performance obligations.

***ATM/debit card fees:*** ATM fees represent charges to customers for transactions completed at the Bank's ATMs or through third-party ATMs, including cash withdrawals, balance inquiries, and other ATM-related services. The Bank recognizes revenue from ATM fees at the point in time when the customer completes the transaction, which is the point when the Bank satisfies its performance obligation. For each debit card transaction, the Bank charges a fee, typically a fixed amount, which is recognized as revenue upon the completion of the transaction. The performance obligation is considered satisfied when the transaction is processed and the requested service is provided to the customer.

***Other Income:*** The other income includes insurance commissions, letter of credit fee, management fee income, safe deposit box rent, investments services income, rental income and miscellaneous income. The Bank recognizes the revenue at point in time as these are transaction-related services except for rental income which is recognized over time due to the monthly cycle.

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

*<u>*<u>Reclassifications:</u>*</u>*

Certain reclassifications have been made to the 2023 consolidated financial statements to conform to the December 31, 2024 consolidated financial statement presentation.

*<u>*<u>Adoption of new accounting standards:</u>*</u>*

#### Segment Reporting:
The Company adopted Accounting Standards Update 2023-07 *"*Segment Reporting (Topic 280) — Improvement to Reportable Segment Disclosures*"* on January 1, 2024. The Company has determined that all of its banking divisions and subsidiaries meet the aggregation criteria of ASC 280, Segment Reporting, as its current operating model is structured whereby banking divisions and subsidiaries serve a similar base of primarily commercial clients utilizing a company-wide offering of similar products and services managed through similar processes and platforms that are collectively reviewed by the Company's Chief Executive Officer, who has been identified as the chief operating decision maker ("CODM").

The CODM regularly assesses performance of the aggregated single operating and reporting segment and decides how to allocate resources based on net income calculated on the same basis as is net income reported in the Company's consolidated statements of income and other comprehensive income. The CODM is also regularly provided with expense information at a level consistent with that disclosed in the Company's consolidated statements of income and other comprehensive income.

*<u>*<u>Newly issued accounting standards updates:</u>*</u>*

#### ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures:
This ASU requires public business entities to disclose additional information in specified categories with respect to the reconciliation of the effective tax rate to the statutory rate (the rate reconciliation) for federal, state, and foreign income taxes. It also requires greater detail about individual reconciling items in the rate reconciliation to the extent the impact of those items exceeds a specified threshold. The amendments are effective for annual periods beginning after December 15, 2024. The amendments should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact of this standard as well as the impact to the financial statements and disclosures.

#### ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses:
This ASU improves financial reporting and responds to investor input by requiring public business entities to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to the financial statements. These amendments are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard as well as the impact to the financial statements and disclosures.

#### Note 2. Business Combination
On May 31, 2023, the Company acquired 76.83% of the outstanding common shares of AB&T Financial Corporation and, therefore, its wholly owned subsidiary Alliance Bank and Trust in exchange for $23,780,497. Results of operations were included in the Company's results beginning June 1, 2023.

Goodwill of $7,771,389 arising from the acquisition consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies.

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 2. Business Combination (cont.)
The following table summarized the consideration paid for AB&T Financial Corporation and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:

---

| | |
|:---|:---|
|  Consideration |  |
|  Fair value of total consideration transferred | $23780497 |
|  Recognized amounts of identifiable assets acquired and liabilities assumed |  |
| &nbsp;&nbsp;&nbsp; Cash and cash equivalents | $31753045 |
| &nbsp;&nbsp;&nbsp; Securities available-for-sale | 14668100 |
| &nbsp;&nbsp;&nbsp; Loans, net of deferred fees and costs<sup>(1)</sup> | 185539138 |
| &nbsp;&nbsp;&nbsp; Premises and equipment | 6554737 |
| &nbsp;&nbsp;&nbsp; Core deposit intangible | 5550000 |
| &nbsp;&nbsp;&nbsp; Other assets | 3953900 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets acquired | 248018920 |
| &nbsp;&nbsp;&nbsp; Deposits | 222714725 |
| &nbsp;&nbsp;&nbsp; Other liabilities | 4466222 |
| &nbsp;&nbsp;&nbsp; Less: non-controlling interest | 4828865 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities assumed | 232009812 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total identifiable net assets | 16009108 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill | $7771389 |

---

____________

(1) Loans consisted of purchased credit deteriorated loans having a carrying value of $17,273,612 and fair value of $16,394,789 as of the date of acquisition. The ACL recorded as of the date of acquisition was $357,571 and the non-credit discount was $878,823.

*<u>*<u>Supplemental Pro Forma information:</u>*</u>*

The table below presents supplemental pro forma information as if the AB&T Financial Corporation acquisition had occurred at the beginning of the earliest period presented, which was January 1, 2023. The unaudited pro forma information includes adjustments for interest income on loans and securities acquired, amortization of intangibles arising from transaction, depreciation expense on property acquired, interest expense on deposits acquired, and the related income tax effects. The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transactions been effected on the assumed dates.

---

| | |
|:---|:---|
|  | **December 31,<br>2023** |
|  Net interest income | $76571348 |
|  Net income | $32634260 |

---

*<u>*<u>Correction of an error:</u>*</u>*

We corrected the following errors related to the amounts reported in previously issued financial statements for the period December 31, 2023 as presented in the Annual Report. These corrections resulted in the restatement of certain financial information disclosed within the financial statements and related footnotes.

The Company identified an error in the accounting for its acquisition of AB&T Financial Corporation, resulting in the incorrect recognition of goodwill. The error stemmed from an incorrect valuation of the assets and liabilities of AB&T Financial Corporation. As a result, the table summarized in Note 2 — Business Combination have been restated.

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

The table below summarizes the effects of the restatement on the Company's disclosure relating to the aforementioned footnote.

---

| | | |
|:---|:---|:---|
|  | **As previously<br>reported** | **As restated** |
|  Consideration |  |  |
|  Fair value of total consideration transferred | $23635655 | $23780497 |
|  Recognized amounts of identifiable assets acquired and liabilities assumed |  |  |
| &nbsp;&nbsp;&nbsp; Cash and cash equivalents | 31753045 | 31753045 |
| &nbsp;&nbsp;&nbsp; Securities available-for-sale | 14668100 | 14668100 |
| &nbsp;&nbsp;&nbsp; Loans | 189880732 | 185539138 |
| &nbsp;&nbsp;&nbsp; Premises and equipment, net | 9952206 | 6554737 |
| &nbsp;&nbsp;&nbsp; Core deposit intangibles | 3344592 | 5550000 |
| &nbsp;&nbsp;&nbsp; Other assets | 1477885 | 3953900 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets acquired | 251076560 | 248018920 |
| &nbsp;&nbsp;&nbsp; Deposits | 222972810 | 222714725 |
| &nbsp;&nbsp;&nbsp; Non-controlling interest | 7123920 | 4828865 |
| &nbsp;&nbsp;&nbsp; Other liabilities | 2885516 | 4466222 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities assumed | 232982246 | 232009812 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total identifiable net assets | $18094314 | $16009108 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill | $5541341 | $7771389 |

---

The net effect on 2023 net income due to changes in the initial purchase accounting are as follows:

---

| | |
|:---|:---|
|  Interest and dividend income |  |
| &nbsp;&nbsp;&nbsp; Loans, including fees | $1050922 |
|  Interest expense, deposits | (761801) |
|  Provision for credit losses | (2068313) |
|  Depreciation and amortization | 26804 |
|  Provision for income taxes | 388832 |
|  Cumulative effect in retained earnings | $(1363556) |

---

#### Note 3. Restriction on Cash and Due from Banks
The Company is required to maintain reserve funds in cash and/or on deposit with the Federal Reserve Bank. As of December 31, 2024 and December 31, 2023, there was no reserve requirement since the Federal Reserve lowered the reserve rate to 0% for both years.

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 4. Securities
The amortized cost and approximate fair values, together with gross unrealized gains and losses, of securities are as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized<br>cost** | **Gross<br>unrealized<br>gains** | **Gross<br>unrealized<br>losses** | **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;&nbsp; GSE residential | 17084785 | 7733 | (949087) | 16143431 |
| &nbsp;&nbsp;&nbsp; State and political subdivisions | 17253763 | 144 | (783896) | 16470011 |
|  | $49670923 | $7877 | $(1741184) | $47937616 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **Amortized<br>cost** | **Gross<br>unrealized<br>gains** | **Gross<br>unrealized<br>losses** | **Fair<br>value** |
|  Available-for-sale securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Government and federal agency | $15060360 | $— | $(21415) | $15038945 |
| &nbsp;&nbsp;&nbsp; U.S. Government-sponsored enterprises (GSEs) | 849307 | 4943 | (4326) | 849924 |
| &nbsp;&nbsp;&nbsp; Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GSE residential | 22164494 | 3170 | (2277039) | 19890625 |
| &nbsp;&nbsp;&nbsp; State and political subdivisions | 16815269 | 5149 | (558514) | 16261904 |
|  | $54889430 | $13262 | $(2861294) | $52041398 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Amortized<br>cost** | **Gross<br>unrealized<br>gains** | **Gross<br>unrealized<br>losses** | **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;&nbsp; GSE residential | 19030532 |  | (3166401) | 15864131 |
| &nbsp;&nbsp;&nbsp; State and political subdivisions | 2448356 |  | (269776) | 2178580 |
|  | $128216954 | $— | $(7174796) | $121042158 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 4. Securities (cont.)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **Amortized<br>cost** | **Gross<br>unrealized<br>gains** | **Gross<br>unrealized<br>losses** | **Fair<br>value** |
|  Held-to-maturity securities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Government and federal agency | $104740556 | $— | $(6228669) | $98511887 |
| &nbsp;&nbsp;&nbsp; U.S. Government-sponsored enterprises (GSEs) | 32684099 |  | (1115659) | 31568440 |
| &nbsp;&nbsp;&nbsp; Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GSE residential | 18507509 |  | (3113267) | 15394242 |
| &nbsp;&nbsp;&nbsp; State and political subdivisions | 2699432 | 249 | (302232) | 2397449 |
|  | $158631596 | $249 | $(10759827) | $147872018 |

---

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 allowance for credit losses has been established.

U.S. Government sponsored enterprises include entities such as Federal Nation Mortgage Association, Federal Home Loan Mortgage Corporation, and Federal Home Loan Banks.

The amortized cost and fair value of available-for-sale securities and held-to-maturity securities at December 31, 2024, 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 | $18064300 | $18033434 | $65647991 | $64498340 |
|  One to five years | 8703994 | 8390730 | 43538430 | 40679688 |
|  Five to ten years | 4416840 | 4086725 |  |  |
|  After ten years | 1401004 | 1283296 |  |  |
|  Mortgage-backed securities | 17084785 | 16143431 | 19030532 | 15864131 |
| &nbsp;&nbsp;&nbsp; Totals | $49670923 | $47937616 | $128216953 | $121042159 |

---

The market value of securities pledged as collateral, to secure public deposits and for other purposes, was $168,979,774 and $142,668,212 at December 31, 2024 and 2023, respectively.

The book value of securities sold under agreements to repurchase amounted to $3,391,565 and $6,046,531 and at December 31, 2024 and 2023, respectively.

There were no sales of available-for-sale securities during the year ended December 31, 2024 and 2023.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

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 on December 31, 2024 and December 31, 2023.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **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;&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;&nbsp; Total | $20855604 | $(124162) | $24197717 | $(1617022) | $45053321 | $(1741184) |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **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 | $15038945 | $(21415) | $— | $— | $15038945 | $(21415) |
| &nbsp;&nbsp;&nbsp; U.S. Government sponsored enterprises (GSEs) | 222370 | (1113) | 298320 | (3213) | 520690 | (4326) |
| &nbsp;&nbsp;&nbsp; Mortgage-backed: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; GSE residential | 36094 | (351) | 19431215 | (2276688) | 19467309 | (2277039) |
| &nbsp;&nbsp;&nbsp; State and political subdivisions | 3194845 | (53704) | 12187068 | (504810) | 15381913 | (558514) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $18492254 | $(76583) | $31916603 | $(2784711) | $50408857 | $(2861294) |

---

As of December 31, 2024, the Company had 128 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 they 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 date or repricing date or if market yields for such investments decline.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 5. Loans and Allowance for Credit Losses
*<u>*<u>Portfolio segmentation:</u>*</u>*

At December 31, 2024 and 2023, the Company's loans consist of the following:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Real estate secured: |  |  |
| &nbsp;&nbsp;&nbsp; Commercial | $1006206845 | $894265037 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 199799772 | 186764041 |
| &nbsp;&nbsp;&nbsp; Residential | 369308057 | 359013872 |
| &nbsp;&nbsp;&nbsp; Other | 16815790 | 16850403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate secured | 1592130464 | 1456893353 |
| &nbsp;&nbsp;&nbsp; Commercial | 201593312 | 220826912 |
| &nbsp;&nbsp;&nbsp; Consumer | 15213998 | 16707142 |
| &nbsp;&nbsp;&nbsp; Other | 6744117 | 1867728 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | 1815681891 | 1696295135 |
|  Less |  |  |
| &nbsp;&nbsp;&nbsp; Net deferred loan fees, premiums and discounts | 8684887 | 9813103 |
| &nbsp;&nbsp;&nbsp; Allowance for credit losses | 18205421 | 16635663 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net loans | $1788791583 | $1669846369 |

---

For purposes of the disclosures, 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 allowance for credit losses. There are four loan portfolio segments that include real estate secured, commercial, consumer and other loans. A class is generally determined based on the initial measurement attribute, risk characteristic 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. Commercial, consumer and other loans are a class in itself.

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 and 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 percent 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 affiliate of the party, who owns the property.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 5. Loans and Allowance for Credit Losses (cont.)
***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 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.

***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 home. 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, 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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

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.

*<u>*<u>Allowance</u> <u>for credit losses on loans:</u>*</u>*

The allowance for credit losses 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 allowance for credit losses by portfolio segment for the period ended December 31, 2024 and 2023. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **As of December 31, 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) | $75 | $2111 | $10380 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 2019 |  |  | 221 | 2240 |
| &nbsp;&nbsp;&nbsp; Residential | 3449 | (52) | 9 | 65 | 3471 |
| &nbsp;&nbsp;&nbsp; Other | 56 |  |  | (55) | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total real estate secured** | 13767 | (101) | 84 | 2342 | 16092 |
|  Commercial | 2164 | (177) | 54 | (265) | 1776 |
|  Consumer | 439 | (151) | 32 | 18 | 338 |
|  Other | 265 |  |  | (266) | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total loans** | $16635 | $(429) | $170 | $1829 | $18205 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  **As of December 31, 2023<br>*(Dollars are in thousands)*** | **Beginning<br> balance** | **Charge offs** | **Recoveries** | **Provision** | **Ending<br> balance** |
|  Real estate secured: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Commercial | $5652 | $— | $— | $2591 | $8243 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 1849 | (30) | 36 | 164 | 2019 |
| &nbsp;&nbsp;&nbsp; Residential | 2536 |  |  | 913 | 3449 |
| &nbsp;&nbsp;&nbsp; Other | 4 |  |  | 52 | 56 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total real estate secured** | 10041 | (30) | 36 | 3720 | 13767 |
|  Commercial | 1584 | (9) | 8 | 581 | 2164 |
|  Consumer | 377 | (147) | 55 | 154 | 439 |
|  Other | 1446 |  |  | (1181) | 265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total loans** | $13448 | $(186) | $99 | $3274 | $16635 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

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** | **Prior** | **Revolving <br>loans** | **Revolving <br>to term <br>loans** | **Total** |
|  **Real estate secured:** |  |  |  |  |  |  |  |  |  |
|  **Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $74062572 | $134177320 | $281634276 | $200968090 | $48180246 | $251402010 | $11687742 | $— | $1002112256 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  | 217387 | 2554211 | 255730 | 578113 |  |  | 3605441 |
| &nbsp;&nbsp;&nbsp; Substandard |  |  | 131353 |  | 45110 | 312685 |  |  | 489148 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Commercial | $74062572 | $134177320 | $281983016 | $203522301 | $48481086 | $252292808 | $11687742 | $— | $1006206845 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $48560 | $— | $— | $48560 |
|  **Construction and land development** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $49718279 | $57789669 | $22765767 | $16986717 | $11053291 | $5665441 | $35118777 | $— | $199097941 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  | 407846 | 293985 |  |  | 701831 |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total construction and land development | $49718279 | $57789669 | $22765767 | $16986717 | $11461137 | $5959426 | $35118777 | $— | $199799772 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
|  **Residential** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $26437836 | $36617917 | $64512640 | $44308505 | $40298138 | $112643931 | $39132829 | $— | $363951796 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  | 720903 | 144380 |  | 865283 |
| &nbsp;&nbsp;&nbsp; Substandard | 491732 | 74062 | 515481 |  | 54639 | 3355064 |  |  | 4490978 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total residential | $26929568 | $36691979 | $65028121 | $44308505 | $40352777 | $116719898 | $39277209 | $— | $369308057 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $4143 | $— | $48361 | $— | $— | $52504 |
|  **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $222509 | $2295430 | $1603658 | $239878 | $299467 | $10861737 | $1293111 | $— | $16815790 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other | $222509 | $2295430 | $1603658 | $239878 | $299467 | $10861737 | $1293111 | $— | $16815790 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &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; Total real estate loans – current period gross charge-offs | $— | $— | $— | $4143 | $— | $96921 | $— | $— | $101064 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2024** | **2023** | **2022** | **2021** | **2020** | **Prior** | **Revolving <br>loans** | **Revolving <br>to term <br>loans** | **Total** |
|  **Non-real estate secured** |  |  |  |  |  |  |  |  |  |
|  **Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $28531060 | $53548762 | $29932635 | $12926112 | $15174653 | $12004986 | $48857733 | $— | $200975951 |
| &nbsp;&nbsp;&nbsp; Special mention |  | 543282 |  |  |  |  |  |  | 543282 |
| &nbsp;&nbsp;&nbsp; Substandard |  | 21458 |  | 36405 |  | 16216 |  |  | 74079 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total commercial | $28531060 | $54113502 | $29932635 | $12962527 | $15174653 | $12021202 | $48857733 | $— | $201593312 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $73978 | $173 | $102504 | $— | $— | $176655 |
|  **Consumer** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $9345126 | $2771310 | $1066679 | $633186 | $387000 | $351779 | $603554 | $— | $15158614 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  | 7810 |  |  |  | 7810 |
| &nbsp;&nbsp;&nbsp; Substandard | 642 | 17420 | 22641 |  |  | 6871 |  |  | 47574 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total consumer | $9345768 | $2788730 | $1089320 | $633186 | $394810 | $358650 | $603554 | $— | $15213998 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $54554 | $16651 | $25950 | $363 | $53298 | $— | $— | $— | $150816 |
|  **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $5036024 | $1292956 | $— | $— | $— | $165595 | $249542 | $— | $6744117 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total others | $5036024 | $1292956 | $— | $— | $— | $165595 | $249542 | $— | $6744117 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $193845779 | $289149586 | $402402517 | $278653114 | $116163930 | $398379316 | $137087648 | $— | $1815681890 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current period gross charge-offs | $54554 | $16651 | $25950 | $78484 | $53471 | $199425 | $— | $— | $428535 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

The following table presents the Company's recorded investment in loans by credit quality indicators by year of origination as of December 31, 2023:

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2023** | **2022** | **2021** | **2020** | **2019** | **Prior** | **Revolving <br>loans** | **Revolving <br>to term <br>loans** | **Total** |
|  **Real estate secured:** |  |  |  |  |  |  |  |  |  |
|  **Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $106064739 | $204532008 | $222336104 | $54996615 | $95298426 | $198988094 | $10041542 | $— | $892257528 |
| &nbsp;&nbsp;&nbsp; Special mention |  | 218975 |  |  |  | 1090467 |  |  | 1309442 |
| &nbsp;&nbsp;&nbsp; Substandard |  |  | 8178 | 127120 | 490427 | 72342 |  |  | 698067 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Commercial | $106064739 | $204750983 | $222344282 | $55123735 | $95788853 | $200150903 | $10041542 | $— | $894265037 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
|  **Construction and land development** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $49803473 | $57662462 | $18916334 | $19426689 | $1055569 | $6438662 | $33053006 | $— | $186356195 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  | 407846 |  |  |  |  | 407846 |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total construction and land development | $49803473 | $57662462 | $18916334 | $19834535 | $1055569 | $6438662 | $33053006 | $— | $186764041 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
|  **Residential** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $29344887 | $66630088 | $48452944 | $44221075 | $25876650 | $110036084 | $29153512 | $— | $353715240 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  | 144802 | 319223 | 538573 |  |  | 1002598 |
| &nbsp;&nbsp;&nbsp; Substandard |  | 218130 | 41217 | 346005 | 174674 | 3407854 | 108154 |  | 4296034 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total residential | $29344887 | $66848218 | $48494161 | $44711882 | $26370547 | $113982511 | $29261666 | $— | $359013872 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $3487 | $— | $26656 | $— | $— | $30143 |
|  **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $2838902 | $2260134 | $— | $250743 | $311689 | $11138935 | $50000 | $— | $16850403 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total other | $2838902 | $2260134 | $— | $250743 | $311689 | $11138935 | $50000 | $— | $16850403 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **2023** | **2022** | **2021** | **2020** | **2019** | **Prior** | **Revolving <br>loans** | **Revolving <br>to term <br>loans** | **Total** |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate loans | $188052001 | $331521797 | $289754777 | $119920895 | $123526658 | $331711011 | $72406214 | $— | $1456893353 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate loans – current period gross charge-offs | $— | $— | $— | $3487 | $— | $26656 | $— | $— | $30143 |
|  **Non-real estate secured** |  |  |  |  |  |  |  |  |  |
|  **Commercial** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $68232340 | $35996362 | $25038361 | $19345643 | $8025082 | $10213001 | $53805738 | $— | $220656527 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  | 15135 |  |  |  | 15135 |
| &nbsp;&nbsp;&nbsp; Substandard | 18498 |  | 86871 | 35367 |  | 14514 |  |  | 155250 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total commercial | $68250838 | $35996362 | $25125232 | $19381010 | $8040217 | $10227515 | $53805738 | $— | $220826912 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $7000 | $— | $1502 | $— | $— | $8502 |
|  **Consumer** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $9185829 | $3022950 | $1433345 | $736719 | $685509 | $685194 | $861263 | $— | $16610809 |
| &nbsp;&nbsp;&nbsp; Special mention | 3311 |  |  | 11518 |  |  |  |  | 14829 |
| &nbsp;&nbsp;&nbsp; Substandard | 6168 |  | 27962 | 47374 |  |  |  |  | 81504 |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total consumer | $9195308 | $3022950 | $1461307 | $795611 | $685509 | $685194 | $861263 | $— | $16707142 |
| &nbsp;&nbsp;&nbsp; Current period gross charge-offs | $49647 | $22184 | $33427 | $4967 | $12306 | $24809 | $— | $— | $147340 |
|  **Other** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Pass | $1423654 | $174169 | $— | $— | $1011 | $214270 | $55635 | $— | $1867728 |
| &nbsp;&nbsp;&nbsp; Special mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Substandard |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Doubtful |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total others | $1423654 | $174169 | $— | $— | $1011 | $214270 | $55635 | $— | $1867728 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $266921801 | $370715278 | $316341316 | $140097516 | $132252384 | $342837990 | $127128850 | $— | $1696295135 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current period gross charge-offs | $49647 | $22184 | $33427 | $15454 | $12306 | $52967 | $— | $— | $185985 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

There were no loans classified in the Loss category as of December 31, 2024 and 2023. There were no revolving loans converted to term as of December 31, 2024 and 2023.

*<u>*<u>Nonaccrual and past due loans:</u>*</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 for the period indicated:

---

| | | | |
|:---|:---|:---|:---|
|  | **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;&nbsp; Total real estate secured loans | 4635621 | 305489 | 4941110 |
|  Commercial | 74078 |  | 74078 |
|  Consumer | 43824 |  | 43824 |
|  Other |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $4753523 | $305489 | $5059012 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **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 | $643030 | $— | $643030 |
| &nbsp;&nbsp;&nbsp; Construction and land development |  |  |  |
| &nbsp;&nbsp;&nbsp; Residential | 3699209 | 307713 | 4006922 |
| &nbsp;&nbsp;&nbsp; Other |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate secured loans | 4342239 | 307713 | 4649952 |
|  Commercial | 155251 |  | 155251 |
|  Consumer | 83162 |  | 83162 |
|  Other |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $4580652 | $307713 | $4888365 |

---

There was no interest income recognized on nonaccrual loans during the years ended December 31, 2024 or 2023.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

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

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

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  **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 or<br> more days<br> past 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;&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;&nbsp; Total loans | $6210144 | $995295 | $2202 | $5059012 | $12266653 | $1803415238 | $1815681891 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  **As of December 31, 2023** | **Loans<br> 30-59<br> days past<br> due** | **Loans<br> 60-89<br> days past<br> due** | **Accruing<br> loans 90 or<br> more days<br> past due** | **Nonaccrual<br> loans** | **Total<br> noncurrent<br> loans** | **Current<br> loans** | **Total<br> loans** |
|  Real estate secured: Commercial | $813447 | $216170 | $160781 | $643030 | $1833428 | $892431609 | $894265037 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 431437 |  |  |  | 431437 | 186332604 | 186764041 |
| &nbsp;&nbsp;&nbsp; Residential | 2007818 | 359650 | 180753 | 4006922 | 6555143 | 352458729 | 359013872 |
| &nbsp;&nbsp;&nbsp; Other |  |  |  |  |  | 16850403 | 16850403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate secured | 3252702 | 575820 | 341534 | 4649952 | 8820008 | 1448073345 | 1456893353 |
|  Commercial | 66959 | 165378 |  | 155251 | 387588 | 220439324 | 220826912 |
|  Consumer | 56774 | 22007 |  | 83162 | 161943 | 16545199 | 16707142 |
|  Other |  |  |  |  |  | 1867728 | 1867728 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $3376435 | $763205 | $341534 | $4888365 | $9369539 | $1686925596 | $1696295135 |

---

*<u>*<u>Collateral-dependent</u> <u>loans:</u>*</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 allowance for credit losses 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 allowance for credit loss 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 December 31, 2024 and 2023.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

---

| | | |
|:---|:---|:---|
|  **Collateral type** | **2024** | **2023** |
|  Single Family Residence | $1721316 | $2354720 |
|  Country club |  | 537286 |
|  Commercial Real Estate | 255730 | 1081228 |
|  Commercial Vehicles |  | 34551 |
|  Land | 293985 |  |
|  | $2271031 | $4007785 |

---

The carrying amount of purchased credit deteriorated loans at December 31, 2024 and 2023 are as follows:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Real estate secured: |  |  |
| &nbsp;&nbsp;&nbsp; Commercial | $5038501 | $5974726 |
| &nbsp;&nbsp;&nbsp; Construction and land development | 2383036 | 2124813 |
| &nbsp;&nbsp;&nbsp; Residential | 1768090 | 2096963 |
| &nbsp;&nbsp;&nbsp; Other |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total real estate secured | 9189627 | 10196502 |
|  Commercial | 5206784 | 5094554 |
|  Consumer | 7810 | 159335 |
|  Other |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total loans | $14404221 | $15450391 |

---

*<u>*<u>Modifications to borrowers experiencing financial difficulty:</u>*</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 allowance for credit losses 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.

At December 31, 2024 and 2023, loans modified to borrowers experiencing financial difficulty during the year were immaterial. The Company has no unfunded commitments to borrowers experiencing financial difficulty for which the Company has modified their loans at December 31, 2024 and 2023.

*<u>*<u>Unfunded commitments:</u>*</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, as well as 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 its estimated life, which are the same loss rates that are used in computing the allowance for credit losses on loans. The allowance for credit losses for unfunded loan commitments of $70,000 at December 31, 2024 and 2023, respectively, is separately classified on the consolidated balance sheet within other liabilities

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 6. Premises and Equipment

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Land and land improvements | $17350753 | $15477576 |
|  Buildings and improvements | 47159512 | 47454497 |
|  Furniture, fixtures and equipment | 13557620 | 14349442 |
|  Construction in progress | 459288 | 6338476 |
|  | 78527173 | 83619991 |
|  Less: Accumulated depreciation | (28238795) | (31356124) |
| &nbsp;&nbsp;&nbsp; Total | $50288378 | $52263867 |

---

Depreciation expense, included in depreciation and amortization on the consolidated statements of income, for the years ended December 31, 2024, and 2023 amounted to $2,301,828 and $2,115,620, 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 cost 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.

#### Note 7. Other Intangible Assets
*<u>Goodwill</u>:*

The change in goodwill during the year is as follows:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Beginning of year | $8510852 | $739463 |
|  Acquired goodwill |  | 7771389 |
|  Adjustments | 3240 |  |
|  End of year | $8514092 | $8510852 |

---

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

The carrying basis and accumulated amortization of core deposit intangibles at December 31 were:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Gross balance | $13061936 | $13061936 |
|  Accumulated amortization | 7632399 | 5429537 |
|  Carrying amount | $5824968 | $7632399 |

---

The change in core deposit intangibles during the year is as follows:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Beginning of year | $7632399 | $3527525 |
|  Acquired CDI |  | 5550000 |
|  Amortization | (1807431) | (1445126) |
|  End of year | $5824968 | $7632399 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 7. Other Intangible Assets (cont.)
The estimated amortization expense of CDI for each of the following five years and thereafter is:

---

| | |
|:---|:---|
| 2025 | $1573231 |
| 2026 | 1412133 |
| 2027 | 963171 |
| 2028 | 784729 |
| 2029 | 435744 |
|  Thereafter | 655960 |
|  Total | $5824968 |

---

#### Note 8. Time Deposits
Time deposits in denominations of $250,000 or more were $94,566,467 and $78,198,003 on December 31, 2024 and December 31, 2023, respectively. Brokered deposits were $174,918,000 and $160,521,000 on December 31, 2024 and December 31, 2023, respectively.

At December 31, 2024, the scheduled maturities of time deposits are as follows:

---

| | |
|:---|:---|
| 2025 | $480867539 |
| 2026 | 78946829 |
| 2027 | 6742649 |
| 2028 | 3046526 |
| 2029 | 3451421 |
|  Thereafter | 3446271 |
|  | $576501235 |

---

#### Note 9. Short-Term Borrowings
Short-term borrowings included the following at December 31:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Securities sold under repurchase agreements | $3391566 | $6046531 |

---

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 at December 31, 2024 and 2023 was 3.27% and 2.26%, respectively. The maximum amount of outstanding agreements at any month end during December 31, 2024 and 2023 totaled $6,046,056 and $7,791,668, respectively, and the monthly average of such agreements totaled $4,519,370 and $6,636,022 for December 31, 2024 and 2023, respectively, with an average rate paid of 3.53% and 2.29%, respectively.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 10. Long-Term Debt
FHLB advances and notes payable consisted of the following components:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Federal Home Loan Bank advances, principal and interest payments of at fixed interest rates from 0.69% to 5.33% | $65580576 | $99030851 |
|  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 Bancgroup, Inc. stock. | 21451660 | 22541358 |
|  Trust Preferred Securities, interest payment due quarterly at SOFR plus 2.4%. | 5507284 | 5368060 |
|  AB&T LOC to Millennium Bank principal and interest payments based on a ten year amortization with the balance due February 2027, at the prime rate. |  | 2500000 |
|  PBD Promissory Note, payment due quarterly at 3.75%, maturing September 2026. | 13233122 | 13776713 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $105772642 | $143216982 |

---

The FHLB advances are secured by mortgage loans totaling $591,649,000 at December 31, 2024. 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 2024 and 2041.

On January 27, 2020, the Company executed a Loan Agreement with Community Trust Bank, Inc., Pikeville, Kentucky, to refinance the 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 at Prime Rate, daily adjustable.

The note payable to Community Trust Bank, Inc. 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 year ended December 31, 2024.

With the acquisition of 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 with an aggregate liquidation amount of $6,000,000 ($1,000 per preferred security) to a third-party investor. The Company then issued variable rate junior debentures aggregating $6,186,000 to the Trust. The junior subordinated debentures are the sole assets of the Trust. The junior subordinated debentures and the 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 6.89% and 7.76% at December 31, 2024 and December 31, 2023, respectively. These junior subordinated debentures will mature in 2034, at which time the preferred securities can be redeemed. The junior subordinated debentures and preferred securities can be redeemed, in whole or in part, beginning October 7, 2009, at a redemption price of $1,000 per preferred security. The Company has provided a full, irrevocable, and unconditional guarantee on a subordinated basis of the obligations of the Trust under the 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 at December 31, 2024 and December 31, 2023, is $6,186,000. Unamortized discount is $678,716 and $748,328 at December 31, 2024 and December 31, 2023, respectively.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 10. Long-Term Debt (cont.)
Aggregate annual maturities of long-term debt at December 31, 2024, are:

---

| | |
|:---|:---|
|  | **Debt** |
| 2025 | $16385247 |
| 2026 | 24561313 |
| 2027 | 10316512 |
| 2028 | 8997096 |
| 2029 | 7940232 |
|  Thereafter | 37572242 |
|  | $105772642 |

---

#### Note 11. Income Taxes
The provision for income taxes includes these components:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Taxes currently payable |  |  |
| &nbsp;&nbsp;&nbsp; Federal | $9301169 | $8318642 |
| &nbsp;&nbsp;&nbsp; State | 725745 | 867382 |
|  Deferred income taxes |  |  |
| &nbsp;&nbsp;&nbsp; Federal | (838604) | (638092) |
| &nbsp;&nbsp;&nbsp; State | (302115) | (67707) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income tax expense | $8886195 | $8480225 |

---

A reconciliation of income tax expense at the statutory rate to the Company's actual income tax expense is shown below:

---

| | | |
|:---|:---|:---|
|  Computed at the statutory rate | $8520115 | $8335393 |
|  Increase (decrease) resulting from |  |  |
| &nbsp;&nbsp;&nbsp; State income taxes, net of federal benefit | 334668 | 631743 |
| &nbsp;&nbsp;&nbsp; Tax exempt income on loans and securities | (116015) | (87264) |
| &nbsp;&nbsp;&nbsp; Increase in cash surrender value of life insurance | (251700) | (463121) |
| &nbsp;&nbsp;&nbsp; Tax credits | (126598) |  |
| &nbsp;&nbsp;&nbsp; Transaction expenses | 135148 | 26808 |
| &nbsp;&nbsp;&nbsp; Other | 390577 | 36666 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Actual tax expense | $8886195 | $8480225 |

---

The significant components of deferred tax assets and liabilities as of December 31, 2024 and 2023, are presented below.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 11. Income Taxes (cont.)
The tax effect of temporary differences related to deferred taxes shown on the balance sheet were:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Deferred tax assets |  |  |
| &nbsp;&nbsp;&nbsp; Allowance for credit losses | $4351118 | $3698829 |
| &nbsp;&nbsp;&nbsp; Valuation of foreclosed assets | 266128 | 249524 |
| &nbsp;&nbsp;&nbsp; Deferred compensation | 242513 | 263798 |
| &nbsp;&nbsp;&nbsp; Loan marks | 1193812 | 1588327 |
| &nbsp;&nbsp;&nbsp; Accrued expenses | 449624 | 30433 |
| &nbsp;&nbsp;&nbsp; Deferred loan fees | 778767 | 729122 |
| &nbsp;&nbsp;&nbsp; Stock compensation | 668233 | 116312 |
| &nbsp;&nbsp;&nbsp; Other | 796889 | 49280 |
| &nbsp;&nbsp;&nbsp; Net operating loss | 2661417 | 2401283 |
| &nbsp;&nbsp;&nbsp; Unrealized losses on available-for-sale securities | 542685 | 902488 |
|  | 11951186 | 10029396 |
| &nbsp;&nbsp;&nbsp; Valuation allowance | (1995657) | (1612042) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $9995529 | $8417354 |
|  Deferred tax liabilities |  |  |
| &nbsp;&nbsp;&nbsp; Depreciation | $(5012260) | $(4323156) |
| &nbsp;&nbsp;&nbsp; FHLB stock dividends | (386675) | (486755) |
| &nbsp;&nbsp;&nbsp; Deposit-based intangibles | (1493984) | (1995109) |
| &nbsp;&nbsp;&nbsp; Other | (884090) | (372066) |
| &nbsp;&nbsp;&nbsp; Gain on purchase of bank | (1099639) | (1085979) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | (8876648) | (8263065) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net deferred tax asset | $1078881 | $154289 |

---

The Company has deferred tax assets of and $2,661,417 and $2,401,283 at December 31, 2024 and 2023, respectively, relating to federal net operating loss (NOL) carryforwards from the acquisitions of the National Bank of Tennessee (NBT), Newport, Tennessee, Citizens Bank of New Tazewell (Citizens), New Tazewell, Tennessee, and AB&T Financial Corporation and Alliance Bank & Trust Company (AB&T), Gastonia, North Carolina. Both NOLs are subject to limitation under IRC §382. A portion of the federal NOL generated by NBT and AB&T will expire unused due to §382 limits. A valuation allowance is recorded for the amount that will expire unused. The NOL generated by Citizens is expected to be fully utilized and no valuation allowance is recorded related to the Citizens NOL.

#### Note 12. 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, the Banks must meet specific capital guidelines that involve quantitative measures of the 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.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 12. Regulatory Matters (cont.)
Quantitative measures established by regulation to ensure capital adequacy require the 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) and of Tier I capital to average assets (as defined). Management believes as of December 31, 2024 and December 31, 2023, that the Banks meets all capital adequacy requirements to which is subject. In addition to these requirements, the Banks are subject to an institution specific capital conservation buffer, which must exceed 2.50%, to avoid limitations on distributions and discretionary bonus payments.

As of December 31, 2024, 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 Banks must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank's category.

The Banks' actual capital amounts and ratios are presented in the table (dollars in thousands).

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Actual** | **Actual** | **Minimum<br>for capital<br>adequacy purposes** | **Minimum<br>for capital<br>adequacy purposes** | **Minimum<br>to be well<br>capitalized under<br>prompt corrective<br> action provisions** | **Minimum<br>to be well<br>capitalized under<br>prompt corrective<br> 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 <br>(to average assets) | $235674 | 10.6% | $89209 | 4.0% | $111511 | 5.0% |
|  As of December 31, 2023: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Total capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bank only | $207918 | 13.2% | $125590 | 8.0% | $156988 | 10.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AB&T | $26252 | 12.1% | $17368 | 8.0% | $21710 | 10.0% |
| &nbsp;&nbsp;&nbsp; Tier I capital (to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bank only | $193842 | 12.3% | $94193 | 6.0% | $125590 | 8.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AB&T | $23622 | 10.9% | $13026 | 6.0% | $17368 | 8.0% |
| &nbsp;&nbsp;&nbsp; Common equity Tier 1 Capital <br>(to risk-weighted assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bank only | $193842 | 12.3% | $70645 | 4.5% | $102042 | 6.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AB&T | $23622 | 10.9% | $9770 | 4.5% | $14112 | 6.5% |
| &nbsp;&nbsp;&nbsp; Tier 1 capital <br>(to average assets) |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Bank only | $193842 | 10.3% | $75070 | 4.0% | $97837 | 5.0% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AB&T | $23622 | 9.1% | $10433 | 4.0% | $13041 | 5.0% |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 13. Related-Party Transactions
At December 31, 2024 and December 31, 2023, the Company had loans outstanding to executive officers, directors, significant shareholders and their affiliates (related parties). The following table summarizes related party loans:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Loans, beginning of year | $72534349 | $38217919 |
| &nbsp;&nbsp;&nbsp; Advances | 3923049 | 33198131 |
| &nbsp;&nbsp;&nbsp; Repayments | (2405521) | (8180844) |
| &nbsp;&nbsp;&nbsp; Changes in related parties | (4777415) | 9299143 |
|  Loans, end of year | $69274462 | $72534349 |

---

Deposits from related parties held by the Company at December 31, 2024 and 2023 totaled $26,018,291 and $18,633,104 respectively.

In management's opinion, such loans and other extensions of credit and deposits were made in the ordinary course of business and were made on substantially the same terms (including interest rates and collateral) as those prevailing at the time for comparable transactions with other persons. Further, in management's opinion, these loans did not involve more than normal risk of collectability or present other unfavorable features.

#### Note 14. Employee Benefits
*<u>401(k) and deferred compensation plans</u>:*

The Bank has a retirement savings 401(k) plan covering substantially all employees. Employees may contribute up to 50% of their compensation with the Bank matching 100% of the employee's contribution on the first 2% of the employee's compensation and 50% on the next 4% contributed by the employee. Employer contributions, including a discretionary profit- sharing contribution, charged to expense for 2024 and 2023 were $570,670 and $456,832, respectively.

Also, the Bank has a deferred compensation agreement with certain active and retired officers. The Bank has recognized a liability for such agreements in the amounts of $943,921 and $1,009,172 for the years ended December 31, 2024 and December 31, 2023, respectively and are included in other liabilities on the consolidated balance sheets. The charge to expense for the agreements was $43,579 and $45,158 for 2024 and 2023.

*<u>*<u>Stock awards:</u>*</u>*

The Chief Executive Officer (CEO) was granted 35,937.5 shares of Commercial Bancgroup, Inc. stock in 2024 and 2023. 35,937.5 shares are awarded annually contingent on the CEO employment with the Company as of December 31<sup>st</sup> of each year. Since the stock is not actively traded, the Company's best estimate of the fair value of the stock is book value per share as approved by the Company's board of directors.

In addition, the board of directors approved an award of 107,812.5 shares of Commercial Bancgroup, Inc. stock for the successful acquisition of AB&T. Since the stock is not actively traded, the Company's best estimate of the fair value of the stock is book value per share as approved by the Company's board of directors.

Stock compensation expense for these awards was $2,143,530 and $458,623 for 2024 and 2023 respectively.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 15. Leases
A lease is defined as a contract, or part of a contract, that covers the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. On January 1, 2022 the Company adopted ASU No. 2016-02 *Leases* (Topic 842) and all subsequent ASUs that modified Topic 842 12-2022. For the Company, Topic 842 primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee.

*<u>*<u>Lessee accounting:</u>*</u>*

Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches and office space with terms extending through 2059. Substantially all leases are classified as operating leases, and therefore, were previously not recognized on the Company's consolidated balance sheets. With the adoption of Topic 842, operating lease agreements are required to be recognized on the consolidated balance sheets as a right-of-use ("ROU") asset and a corresponding lease liability. The Company elected to use the optional transition method, which allowed for a modified retrospective method of adoption without restating comparable periods. The Company also elected the relief package of practical expedients for which there is no requirement to reassess existence of leases, their classification, and initial direct costs. The Company also applied the exemption for short-term leases with a term of less than one year and therefore does not recognize a lease liability or right-of-use asset on the balance sheet but instead recognizes lease payments as an expense over the lease term as appropriate.

The following table represents the consolidated balance sheets classification of the Company's ROU assets and lease liabilities. The Company elected not to include short-term leases (i.e., leases with initial terms of twelve months or less), or equipment leases (deemed immaterial) on the consolidated balance sheets.

---

| | | | |
|:---|:---|:---|:---|
|  **Lease** | **Classification on<br>consolidated <br>balance sheet** | **December 31,<br>2024** | **December 31,<br>2023** |
|  Operating lease |  |  |  |
|  ROU asset | Other assets | $1530735 | $1736006 |
|  Operating lease |  |  |  |
|  liability | Other liabilities | $1541545 | $1748758 |

---

The calculated amounts of the ROU assets and lease liabilities in the table above are impacted by the length of the lease term and the discount rate used to present value the minimum lease payments. The Company's lease agreements often include one or more options to renew at the Company's discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability. Regarding the discount rate, Topic 842 requires the use of the rate implicit in the lease whenever this rate is readily determinable. As this rate was determinable, the Company utilized this rate at lease inception. For operating leases existing prior to January 1, 2023, the rate for the remaining lease term as of January 1, 2023 was used.

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Weighted-average remaining lease term for operating | 19.73 years | 19.04 years |
|  Weighted-average discount rate for operating leases | 3.25% | 3.25% |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 15. Leases (cont.)
*<u>Lessee accounting:</u>*

Future undiscounted lease payments for operating leases with initial or remaining terms of one year or more as of December 31, 2024, were as follows:

---

| | |
|:---|:---|
|  | **Operating<br>leases** |
| 2025 | $172850 |
| 2026 | 149629 |
| 2027 | 149629 |
| 2028 | 149629 |
| 2029 | 149629 |
|  Thereafter | 1341964 |
| &nbsp;&nbsp;&nbsp; Total undisclosed lease payments | 2112330 |
|  Amounts representing imputed interest | (570785) |
| &nbsp;&nbsp;&nbsp; Net lease liabilities | $1541545 |

---

Total lease expense for 2024 and 2023 was approximately $264,000 and $427,000, respectively.

#### Note 16. 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.

*<u>*<u>Available-for</u><u>-sale securities:</u>*</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 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 16. Disclosures About Fair Value of Assets and Liabilities (cont.)
*<u>*<u>Interest rate swap agreements:</u>*</u>*

The fair value 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 table presents 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 fall at December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **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)** | **Significant<br>unobservable <br>Inputs<br>(Level 3)** |
|  Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Government and federal agency | $15268645 | $— | $15268645 | $— |
| &nbsp;&nbsp;&nbsp; U.S. Government sponsored enterprises (GSEs) | 55929 |  | 55929 |  |
| &nbsp;&nbsp;&nbsp; Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; GSE residential | 16143431 |  | 16143431 |  |
| &nbsp;&nbsp;&nbsp; State and political subdivision <br>securities | 16470010 |  | 16470010 |  |
| &nbsp;&nbsp;&nbsp; Interest rate swaps | 22178477 |  | 22178477 |  |
|  Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest rate swaps | 22178477 |  | 22178477 |  |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** | **December 31, 2023** |
|  | **Fair<br>value** | **Quoted prices<br>in active<br>markets for<br>(Level 1)** | **Significant<br>other<br>observable<br>identical assets <br>inputs<br>(Level 2)** | **Significant<br>unobservable<br>inputs<br>(Level 3)** |
|  Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp; U.S. Government and federal agency | $15038945 | $— | $15038945 | $— |
| &nbsp;&nbsp;&nbsp; U.S. Government-sponsored enterprises (GSEs) | 849924 |  | 849924 |  |
| &nbsp;&nbsp;&nbsp; Mortgage-backed: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; GSE residential | 19890625 |  | 19890625 |  |
| &nbsp;&nbsp;&nbsp; State and political subdivision <br>securities | 16261904 |  | 16261904 |  |
| &nbsp;&nbsp;&nbsp; Interest rate swaps | 19698494 |  | 19698494 |  |
|  Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest rate swaps | 19698494 |  | 19698494 |  |

---

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

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

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

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

The fair value 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 table presents 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 fall at December 31:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2024** | **2024** | **2024** | **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 | $— | $— | $73020 |
|  Collateral-dependent loans | $230000 | $— | $— | $230000 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2023** | **2023** | **2023** | **2023** |
|  | **Fair value** | **(Level 1)** | **(Level 2)** | **(Level 3)** |
|  Foreclosed assets held for sale | $264810 | $— | $— | $264810 |
|  Collateral-dependent loans | $230000 | $— | $— | $230000 |

---

The following table presents 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 at December 31:

---

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

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **2023** | **2023** | **2023** | **2023** |
|  | **Fair<br>value** | **Valuation<br>techniques<sup>(1)</sup>** | **Significant <br>Unobservable<br>inputs** | **Weighted<br>average** |
|  Foreclosed assets held for sale | $264810 | Appraisal | Estimated <br>costs to sell | 20% |
|  Collateral-dependent loans | $230000 | Appraisal | Estimated <br>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.

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

The carrying amounts and estimated fair values of financial instruments not carried at fair value, at December 31, 2024 and 2023, are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **2024** | **2024** | **2024** | **2024** | **2024** |
|  | **Carrying<br>amount** | **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;&nbsp; U.S. Government and federal agency | 87467213 |  | 84439850 |  | 84439850 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Government-sponsored enterprises (GSEs) | 19270853 |  | 18559597 |  | 18559597 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage-backed: <br>GSE residential | 19030532 |  | 15864131 |  | 15864131 |
| &nbsp;&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;&nbsp; Time Deposits | 576501235 |  | 574604000 |  | 574604000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-Term borrowings | 105182081 |  | 109165065 |  | 109165065 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-Term borrowings | $3391566 | $3391566 | $— | $— | $3391566 |

---

[**Table of Contents**](#TOC001)

**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **2023** | **2023** | **2023** | **2023** | **2023** |
|  | **Carrying<br>amount** | **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 | $155940735 | $155940735 | $— | $— | $155940735 |
| &nbsp;&nbsp;&nbsp; Held-to-maturity securities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Government and federal agency | 104740556 |  | 98511887 |  | 98511887 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Government-sponsored enterprises (GSEs) | 32684099 |  | 31568440 |  | 31568440 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Mortgage-backed: <br>GSE residential | 18507509 |  | 15394242 |  | 15394242 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; State and political subdivisions | 2699432 |  | 2397449 |  | 2397449 |
|  | 158631596 |  | 147872018 |  | 147872018 |
| &nbsp;&nbsp;&nbsp; Loans Receivable | 1669846369 |  |  | 1663737000 | 1663737000 |
|  Financial Liabilities |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Time Deposits | 516125848 |  | 516116000 |  | 516116000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-Term borrowings | 141189982 |  | 141189982 |  | 141189982 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Short-Term borrowings | $6046531 | $6046531 | $— | $— | $6046531 |

---

#### Note 17. Significant Estimates and Concentrations
The Company originates primarily real estate, commercial, and consumer loans to customers primarily in Claiborne County 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.

At December 31, 2024 and 2023, 88% and 86%, 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 5.

*<u>*<u>Current economic conditions:</u>*</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 allowance for credit losses and capital that could negatively impact the Company's ability to meet regulatory capital requirements and maintain sufficient liquidity.

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 18. Commitments and Contingencies
*<u>*<u>Standby letters of credit:</u>*</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 $45,505,000 and $19,787,000 at December 31, 2024 and December 31, 2023, respectively, with terms ranging from 30 days to five years. At December 31, 2024 and 2023, the Company's deferred revenue under standby letter of credit agreements was $0.

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

Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since 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.

At December 31, 2024, the Company had granted unused lines of credit to borrowers aggregating approximately $354,509,000 for commercial lines and open-end consumer lines. At December 31, 2023, unused lines of credit to borrowers aggregated approximately $397,396,000 for commercial lines and open-end consumer lines.

*<u>*<u>Contingencies:</u>*</u>*

Various legal proceedings to which the Company is party arise from time to time in the normal course of business. Management believes there are no current proceedings that would materially impact the consolidated financial statements.

#### Note 19. 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.

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 19. Derivatives Not Designated as Hedges (cont.)
The Company presents derivative positions gross on the consolidated balance sheets. The derivatives recorded on the consolidated balance sheet are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2023** | **December 31, 2023** |
|  | **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 <br>loans | $262864970 | $22178477 | $258165658 | $19698494 |
|  Included in other liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Interest rate swaps related to customer <br>loans | $262864970 | $22178477 | $258165658 | $19698494 |

---

#### Note 20. 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 December 31, 2024, approximately $47, 610,000 of retained earnings is available to pay dividends.

#### Note 21. Parent Company Financial Information
Condensed financial information of Commercial Bancgroup, Inc. is presented as follows:

#### Balance Sheets<br>December 31, 2024 and 2023

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  ***Assets*** |  |  |
| &nbsp;&nbsp;&nbsp; Cash and due from banks | $1033714 | $1077627 |
| &nbsp;&nbsp;&nbsp; Investment in subsidiaries | 238056051 | 214913205 |
| &nbsp;&nbsp;&nbsp; Loans, net of allowance for credit losses | 13143989 | 13838352 |
| &nbsp;&nbsp;&nbsp; Other | 8919934 | 10244911 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $261153688 | $240074095 |
|  ***Liabilities*** |  |  |
| &nbsp;&nbsp;&nbsp; Long-term debt | $40192065 | $42158628 |
| &nbsp;&nbsp;&nbsp; Other | 705840 | 2138144 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | 40897905 | 44296772 |
|  ***Stockholders' Equity*** |  |  |
| &nbsp;&nbsp;&nbsp; Common stock | 471700 | 475143 |
| &nbsp;&nbsp;&nbsp; Additional paid-in capital | 9037612 | 8720442 |
| &nbsp;&nbsp;&nbsp; Retained earnings | 212310977 | 182903720 |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss | (1564506) | (1724275) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | 220255783 | 190375030 |
| &nbsp;&nbsp;&nbsp; Minority Interest |  | 5402293 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total stockholders' equity | 220255784 | 195777323 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and stockholders' equity | $261153688 | $240074095 |

---

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 21. Parent Company Financial Information (cont.)

#### Statements of Income<br>For the years ended December 31, 2024 and 2023

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  Interest Income |  |  |
| &nbsp;&nbsp;&nbsp; Loans, including fees | $568785 | $347821 |
| &nbsp;&nbsp;&nbsp; Others | 14996 | 13948 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Interest Income | 583781 | 361769 |
|  Equity in Earnings | 23142846 | 10010985 |
|  Dividend Income | 12900000 | 23500000 |
|  Interest Expense: |  |  |
| &nbsp;&nbsp;&nbsp; Long-term debt | 2983783 | 2842489 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Interest Expense | 2983783 | 2842489 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Interest Income before provision for credit losses | 33642844 | 31030265 |
|  Provision for Credit Losses |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Interest Income After Provision for Credit Losses | 33642844 | 31030265 |
| &nbsp;&nbsp;&nbsp; Noninterest Expense |  |  |
| &nbsp;&nbsp;&nbsp; Salaries and employee benefits | 2364852 | 1122575 |
| &nbsp;&nbsp;&nbsp; Professional fees | 425496 | 431163 |
| &nbsp;&nbsp;&nbsp; Other | 689962 | 54351 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Noninterest Expense | 3480310 | 1608089 |
| &nbsp;&nbsp;&nbsp; Income Before Income Taxes | 30162534 | 29422176 |
| &nbsp;&nbsp;&nbsp; Provision for Income Taxes | (1247392) | (1270795) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net Income | $31409926 | $30692971 |

---

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 21. Parent Company Financial Information (cont.)

#### Statements of Cash Flows<br>For the years ended December 31, 2024 and 2023

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  **Operating activities** |  |  |
| &nbsp;&nbsp;&nbsp; Net income | $31409926 | $30692971 |
| &nbsp;&nbsp;&nbsp; Items not requiring (providing) cash |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Equity in undistributed earnings | (23142846) | (10010985) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets and liabilities | 328300 | (342372) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock compensation | 2143530 | 458624 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by operating activities | 10738910 | 20798238 |
|  **Investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash paid for acquisition |  | (5833364) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net change in loans | 694362 | (13838351) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash (used) provided by investing activities | 694362 | (19671715) |
|  **Financing activities** |  |  |
| &nbsp;&nbsp;&nbsp; Increase/(decrease) in long-term debt | (1966563) | (588275) |
| &nbsp;&nbsp;&nbsp; Repurchase of common stock | (1829803) | (2105085) |
| &nbsp;&nbsp;&nbsp; Issuance of common stock |  | 3889126 |
| &nbsp;&nbsp;&nbsp; Acquisition of minority interest | (5678150) |  |
| &nbsp;&nbsp;&nbsp; Payment of dividends | (2002669) | (1495287) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used financing activities | (11477185) | (299521) |
| &nbsp;&nbsp;&nbsp; Increase (decrease) in cash and cash equivalents | (43913) | 827002 |
| &nbsp;&nbsp;&nbsp; Cash and cash equivalents, beginning of year | 1077627 | 250625 |
| &nbsp;&nbsp;&nbsp; Cash and cash equivalents, end of year | $1033714 | $1077627 |

---

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**Commercial Bancgroup, Inc.<br>*Notes to Consolidated Financial Statements<br>December 31, 2024 and 2023***<br>

#### Note 22. Earnings Per Share
The factors used in the earnings per share computation follow:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
|  **Basic** |  |  |
|  Net income | $31409926 | $30692971 |
| &nbsp;&nbsp;&nbsp; Weighted average common shares outstanding | 12187560 | 12189452 |
| &nbsp;&nbsp;&nbsp; Basic earnings per share | $2.58 | $2.52 |
|  **Diluted** |  |  |
|  Net income | $31409926 | $30692971 |
| &nbsp;&nbsp;&nbsp; Weighted average common shares outstanding for basic EPS | 12187560 | 12189452 |
| &nbsp;&nbsp;&nbsp; Add: Dilutive effects of assumed exercise of stock grants | 179688 | 35938 |
| &nbsp;&nbsp;&nbsp; Average shares and dilutive common shares | 12367248 | 12225390 |
| &nbsp;&nbsp;&nbsp; Diluted earnings per common share | $2.54 | $2.51 |

---

Dilutive common shares represent shares that have been awarded but have not been issued to the recipient. (See Note 14 regarding discussion of the award.)

#### Note 23. Subsequent Events
Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date.

On , 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 into 1.15 shares of common stock and the automatic reclassification and conversion of each outstanding share of Class C Common Stock 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 , 2025, no preferred shares have been issued or are outstanding. The Board of Directors 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.

[**Table of Contents**](#TOC001)

 **Shares**

#### Common Stock

#### _________________________

#### Preliminary Prospectus

#### _________________________

#### , 2025
*Sole Book*-Running *Manager*

**Hovde Group, LLC**

**Through and including , 2025 (the 25<sup>th</sup> day after the date of this prospectus), all dealers effecting transactions in our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.**

------

[**Table of Contents**](#TOC001)

#### PART II

#### INFORMATION NOT REQUIRED IN PROSPECTUS
**ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.**

Set forth below is an itemization of total expenses, other than underwriting discounts and commissions, that we expect to incur in connection with the sale of our common stock in this offering. With the exception of the SEC registration fee, the FINRA filing fee and the Nasdaq listing fees and expenses, all amounts shown are estimates:

---

| | |
|:---|:---|
|  | **Amount** |
|  SEC registration fee | $[___] |
|  FINRA filing fee | [___] |
|  Nasdaq listing fees and expenses | [___] |
|  Transfer agent and registrar fees and expenses | [___] |
|  Printing fees and expenses | [___] |
|  Legal fees and expenses |  |
|  Accounting expenses | [___] |
|  Miscellaneous | [___]  |
|  Total | $[___]  |

---

#### ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The TBCA provides that a corporation may indemnify any of its directors and officers against liability incurred in connection with a proceeding if (i) the director or officer acted in good faith, (ii) in the case of conduct in his or her official capacity with the corporation, the director or officer reasonably believed such conduct was in the corporation's best interest, and in all other cases, the director or officer reasonably believed that his or her conduct was not opposed to the best interest of the corporation and (iii) in connection with any criminal proceeding, the director or officer had no reasonable cause to believe that his or her conduct was unlawful. In actions brought by or in the right of the corporation, however, the TBCA provides that no indemnification may be made if the director or officer was adjudged to be liable to the corporation. In cases where the director or officer is wholly successful, on the merits or otherwise, in the defense of any proceeding instigated because of his or her status as an officer or director of a corporation, the TBCA mandates that the corporation indemnify the director or officer against reasonable expenses incurred in the proceeding. The TBCA also provides that, in connection with any proceeding charging improper personal benefit to an officer or director, no indemnification may be made if such officer or director is adjudged liable on the basis that personal benefit was improperly received. Notwithstanding the foregoing, the TBCA provides that a court of competent jurisdiction, upon application, may order that an officer or director be indemnified for reasonable expenses if, in consideration of all relevant circumstances, the court determines that such individual is fairly and reasonably entitled to indemnification, notwithstanding the fact that (i) such officer or director was adjudged liable to the corporation in a proceeding by or in right of the corporation, (ii) such officer or director was adjudged liable on the basis that personal benefit was improperly received by him or her, or (iii) such officer or director breached his or her duty of care to the corporation.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us under any of the foregoing provisions, in the opinion of the SEC, that indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. Finally, our ability to provide indemnification to our directors and officers is limited by federal banking laws and regulations, including, but not limited to, 12 U.S.C. §1828(k) and 12 C.F.R. Part 359.

#### Amended and Restated Charter and Amended and Restated Bylaws
Our A&R Charter requires us to indemnify and advance expenses to our directors and officers to the fullest extent permitted by the TBCA. Our A&R Bylaws further require us to indemnify and advance expenses to each of our directors and officers with respect to all losses, damages, liabilities, and expenses reasonably incurred or suffered by such person in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, to which such person was or is made a party, or threatened to be made a party, or in which such person was otherwise involved by reason of the fact that such person 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.

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In addition, our A&R Charter provides that our directors shall not be personally liable to us or our shareholders for monetary damages for breach of any fiduciary duty as a director of the Company, except to that this provision does not eliminate or limit liability of a director (i) for any breach of the director's duty of loyalty to us or our shareholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or (iii) related to any unlawful distributions under Section 48-18-302 of the TBCA. This provision does not affect a director's responsibilities under any other law, such as the federal securities laws or state or federal environmental laws.

#### Insurance Coverage
We maintain a directors and officers liability insurance policy providing for insurance against certain liabilities incurred by directors and officers of the Company and the Bank while serving in their capacities as such.

#### Underwriting Agreement
The proposed form of underwriting agreement to be filed as an exhibit hereto obligates the underwriter to indemnify our directors, officers and controlling persons under limited circumstances against certain liabilities under the Securities Act.

**ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.**

Except as described below, within the past three years, we have not engaged in the issuance of securities not registered under the Securities Act:

*AB&T Acquisition*

As part of our 2023 acquisition of a majority ownership interest in AB&T, the Company acquired certain of the shares of AB&T common stock in this transaction in exchange for shares of Class C Common Stock. The Company issued, in the aggregate, 976.5 shares of its Class C Common Stock to former AB&T shareholders in exchange for approximately 19.7% of the then-outstanding shares of AB&T common stock. The issuance of these shares of Class C Common Stock to the former AB&T shareholders was deemed to be exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act.

Because the Company's equity securities, including the Class C Common Stock, are not actively traded, the Company's best estimate of the fair value of the Class C Common Stock is book value per share, calculated as total equity divided by total shares outstanding. The Company's stock was valued at book value as of April 30, 2023 for purposes of determining the number of shares of Class C Common Stock to be issued to former AB&T shareholders in exchange for their shares of AB&T common stock.

*Terry L. Lee Employment Agreement*

Since January 1, 2022, we issued an aggregate of 450 shares of Class B Common Stock to Terry L. Lee, the Company's President and Chief Executive Officer and a member of the Board, as compensation for his service as Chief Executive Officer of the Bank, pursuant to an employment agreement, dated as of January 27, 2020, as amended, by and between the Bank and Terry L. Lee, which has subsequently been terminated, and an aggregate of 375 shares of Class B Common Stock to Terry L. Lee as a one-time grant contingent upon the closing of our acquisition of AB&T in 2024 (the "Transaction Award"). The issuances of these shares of Class B Common Stock to Terry L. Lee pursuant to his employment agreement were deemed to be exempt from registration under the Securities Act in reliance upon Rule 701 because the issuances were pursuant to a contract relating to compensation as provided under Rule 701. The issuance of the shares of Class B Common Stock to Terry L. Lee as a result of the Transaction Award was deemed to be exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act.

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Because the Company's equity securities, including the Class B Common Stock, are not actively traded, the Company's best estimate of the fair value of the Class B Common Stock is book value per share, calculated as total equity divided by total shares outstanding. The Company's best estimate of the fair value, as of the date of vesting, of the 375 shares of Class B Common Stock issued as a result of the Transaction Award is book value per share calculated as of June 30, 2024, which was approximately $4,287 per share.

**ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.**

(a) Exhibits:

---

| | |
|:---|:---|
|  **Number** | **Description** |
|  1.1\* | Form of Underwriting Agreement. |
|  2.1# | [Agreement and Plan of Merger dated February 27, 2024, by and among Commercial Bancgroup, Inc., CB Merger Sub, Inc. and AB&T Financial Corporation.](ea023588506ex2-1_commercial.htm) |
| 3.1 | [Form of Amended and Restated Charter of Commercial Bancgroup, Inc., to be in effect upon the completion of this offering.](ea023588506ex3-1_commercial.htm) |
|  3.2\* | Form of Amended and Restated Bylaws of Commercial Bancgroup, Inc., to be in effect upon the completion of this offering. |
| 4.1 | [Specimen Common Stock Certificate.](ea023588506ex4-1_commercial.htm) |
|  5.1\* | Opinion of K&L Gates LLP. |
|  10.1† | [Commercial Bancgroup, Inc. 2025 Omnibus Incentive Plan, to be in effect upon the completion of this offering.](ea023588506ex10-1_commercial.htm) |
|  10.2\*† | Employment Agreement, by and among Commercial Bancgroup, Inc., Commercial Bank, and Terry L. Lee, to be in effect upon the completion of this offering. |
|  10.3\*† | Employment Agreement, by and among Commercial Bancgroup, Inc., Commercial Bank, and Philip J. Metheny, to be in effect upon the completion of this offering. |
|  10.4\*† | Employment Agreement, by and between Commercial Bank and Richard C. Sprinkle, Jr., to be in effect upon the completion of this offering. |
|  10.5# | [Amended and Restated Loan Agreement, dated January 27, 2020, by and between Commercial Bancgroup, Inc. and Community Trust Bank, Inc.](ea023588506ex10-5_commercial.htm) |
|  10.6\*† | Form of Director and Executive Officer Indemnification Agreement, to be in effect upon the completion of this offering. |
| 21.1 | [Subsidiaries of Commercial Bancgroup, Inc.](ea023588506ex21-1_commercial.htm) |
| 23.1 | [Consent of Mauldin Jenkins, LLC.](ea023588506ex23-1_commercial.htm) |
|  23.2\* | Consent of K&L Gates LLP (contained in Exhibit 5.1). |
| 24.1 | [Power of Attorney (included on the signature page to the registration statement).](#T786) |
| 107 | [Filing Fee Table.](ea023588506ex-fee_commercial.htm) |

---

____________

\* To be filed by amendment.

† Indicates a management contract or compensatory plan.

# Certain schedules, exhibits and appendices have been omitted pursuant to Item 601(a)(5). We will furnish the omitted schedules exhibits and appendices to the Securities and Exchange Commission upon request by the Commission.

(b) Financial Statement Schedules: None. All financial statement schedules are omitted because the information required to be set forth therein is not applicable or is shown in the consolidated financial statements and related notes.

#### ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant

[**Table of Contents**](#TOC001)

in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The registrant hereby further undertakes that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

[**Table of Contents**](#TOC001)

#### SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in Harrogate, Tennessee on August 26, 2025.

---

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

---

#### POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoint Terry L. Lee and Philip J. Metheny, and each one of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in their name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to sign any registration statement for the same offering covered by this registration statement that is to be effective on filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and all post-effective amendments thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
|  **Signature** | **Title** | **Date** |
|  /s/ Terry L. Lee | President, Chief Executive Officer, and Director | August 26, 2025 |
|  Terry L. Lee | *(Principal Executive Officer)* |  |
|  /s/ Philip J. Metheny | Executive Vice President, Chief Financial Officer | August 26, 2025 |
|  Philip J. Metheny | *(Principal Financial Officer and Principal Accounting Officer)* |  |
|  /s/ Alan C. Neely | Director | August 26, 2025 |
|  Alan C. Neely |  |  |
|  /s/ Sam A. Mars III | Director | August 26, 2025 |
|  Sam A. Mars III |  |  |
|  /s/ Aaron A. Robertson | Director | August 26, 2025 |
|  Aaron A. Robertson |  |  |
|  /s/ Dennis Michael Robertson | Director | August 26, 2025 |
|  Dennis Michael Robertson |  |  |
|  /s/ J. Adam Robertson | Director | August 26, 2025 |
|  J. Adam Robertson |  |  |
|  /s/ James J. Shoffner | Director | August 26, 2025 |
|  James J. Shoffner |  |  |
|  /s/ Martha S. Spurlock | Director | August 26, 2025 |
|  Martha S. Spurlock |  |  |
|  /s/ Charles L. Yates | Director | August 26, 2025 |
|  Charles L. Yates |  |  |

---

## Exhibit 2.1

**Exhibit 2.1**

**AGREEMENT AND PLAN**

**OF**

**MERGER**

**COMMERCIAL BANCGROUP, INC.**

**CB MERGER SUB, INC.**

**AND**

**AB&T FINANCIAL CORPORATION**

February 27, 2024

**AGREEMENT AND PLAN OF MERGER**

THIS AGREEMENT AND PLAN OF MERGER (this "***Agreement***"), dated as of the 27th day of February, 2024, is made and entered into by and among Commercial Bancgroup, Inc., a Tennessee corporation and registered bank holding company ("***Commercial***"); CB Merger Sub, Inc., a Tennessee corporation and direct, wholly owned Subsidiary (as defined below) of Commercial ("***Merger Sub***"); and AB&T Financial Corporation, a North Carolina corporation and registered bank holding company (the "***Company***"), under authority of resolutions of their respective boards of directors duly adopted.

<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. Commercial, as of the date hereof, owns approximately 76.83% of the issued and outstanding capital stock of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Pursuant to and in accordance with the terms of this Agreement, Commercial and the Company desire to provide for (i) the merger of Merger Sub with and into the Company, with the Company to be the corporation to survive such merger, followed by (ii) the merger of the Company with and into Commercial, with Commercial to be the corporation to survive such merger.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. The board of directors of each of Commercial and Merger Sub, and the board of directors of the Company, upon the recommendation of a special committee of the Company's board of directors (the "***Special Committee***"), has determined that this Agreement and the transactions contemplated hereby are advisable and in the best interests of Commercial, Merger Sub, and the Company, respectively, and their respective shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. The Parties (as defined below), for U.S. federal income tax purposes, intend for (i) the Merger (as defined below) provided for herein to be treated as an acquisition of stock which, together with the prior acquisitions of Company capital stock by Commercial within the 12-month period ending on and including the date on which the Effective Time (as defined below) occurs, constitutes a "qualified stock purchase" within the meaning of Section 338 of the Code (as defined below) and (ii) the Second Step Merger (as defined below) provided for herein to qualify as a complete liquidation of the Interim Surviving Company (as defined below) under the provisions of Section 332 of the Code or, to the extent the Second Step Merger does not so qualify, to qualify as an integrated part of a "reorganization" under the provisions of Section 368(a) of the Code, and, for purposes of the Second Step Merger, this Agreement is intended to be and is adopted as a "plan of liquidation" for purposes of Section 332 of the Code and, for purposes of the integrated transactions including the Second Step Merger, this Agreement is intended to be and is adopted as a "plan of reorganization" for purposes of Sections 354, 361, and 368 of the Code and within the meaning of U.S. Treasury Regulations Section 1.368-2(g).

NOW, THEREFORE, for and in consideration of the foregoing, the representations, warranties, covenants, and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

Article I<u><br> DEFINITIONS</u>

Section 1.1 <u>Certain Definitions</u>. For purposes of and as used in this Agreement, the terms defined below shall, when capitalized, have the indicated meanings.

"***Acquisition Proposal***" means any inquiry, indication, proposal, solicitation, or offer, or the filing of any regulatory application, notice, waiver, or request (whether in draft or final form), from or by any Person relating to (i) any direct or indirect sale, acquisition, purchase, lease, exchange, mortgage, pledge, transfer, or other disposition of 20% or more of the consolidated assets of the Company and its Subsidiaries, in a single transaction or series of transactions; (ii) any tender offer (including a self-tender) or exchange offer with respect to, or direct or indirect purchase or acquisition of, 20% or more of any class of equity or voting securities of the Company or of any Subsidiary of the Company; or (iii) any merger, share exchange, consolidation, business combination, reorganization, recapitalization, or similar transaction involving the Company or any of its Subsidiaries, in each case other than the transactions contemplated by this Agreement.

"***Affiliate***" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with such Person. For this purpose, the terms "controls," "controlled by," and "under common control with" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

"***Alliance Bank***" means Alliance Bank & Trust Company, a North Carolina state-chartered bank and direct, wholly owned Subsidiary of the Company.

"***Alliance Bank Common Stock***" means the common stock, par value $3.00 per share, of Alliance Bank.

"***Alliance Bank Preferred Stock***" means the preferred stock of Alliance Bank.

"***Alliance Bank Stock***" means, collectively, the Alliance Bank Common Stock and the Alliance Bank Preferred Stock.

"***BHCA***" means the Bank Holding Company Act of 1956, as amended (12 U.S.C. § 1841 *et seq*.).

"***Book-Entry Shares***" means shares of Company Stock immediately prior to the Effective Time which are non-certificated.

"***Business Day***" means Monday through Friday of each week, excluding legal holidays recognized as such by the United States government and any day on which banking institutions in the State of Tennessee are authorized or obligated to close.

"***CERCLA***" means the Comprehensive Environmental Response, Compensation and Liability Act, as amended by the Superfund Amendments and Reauthorization Act of 1986, as amended, 42 U.S.C. § 9601 *et seq*.

"***Certificate***" means a certificate which immediately prior to the Effective Time represents shares of Company Stock.

"***Code***" means the Internal Revenue Code of 1986, as amended.

"***Commercial Bank***" means Commercial Bank, a Tennessee state-chartered bank and wholly owned Subsidiary of Commercial.

"***Commercial Class B Common Stock***" means the Class B common stock, par value $10.00 per share, of Commercial.

"***Commercial Class C Common Stock***" means the Class C common stock, par value $10.00 per share, of Commercial.

"***Commercial Common Stock***" means the common stock, par value $10.00 per share, of Commercial.

"***Commercial Parties***" means, collectively, Commercial and Merger Sub.

"***Commercial Stock***" means, collectively, the Commercial Common Stock, the Commercial Class B Common Stock and the Commercial Class C Common Stock.

"***Company Common Stock***" means the common stock, no par value, of the Company.

"***Company Financial Statements***" means, collectively, the Audited Company Financials and the Interim Company Financials.

"***Company Option***" means an option to purchase or acquire shares of Company Stock granted under the AB&T Financial Corporation 2015 Incentive Stock Option Plan.

"***Company Parties***" means, collectively, the Company and Alliance Bank.

"***Company Preferred Stock***" means the preferred stock, no par value, of the Company.

"***Company Stock***" means, collectively, the Company Common Stock and the Company Preferred Stock.

"***Contract***" means any contract, lease, deed, deed of trust, mortgage, license, instrument, note, commitment, undertaking, indenture, or other agreement, understanding, or legally binding arrangement, whether written or oral.

"***Environmental Law***" means any Law relating to (i) pollution, the protection, preservation, or restoration of the environment or natural resources, (ii) the handling, use, storage, recycling, treatment, generation, transportation, processing, production, presence, disposal, release, or threatened release of or exposure to any Hazardous Substance or (iii) any injury or threat of injury to persons or property in connection with any Hazardous Substance. The term Environmental Law includes, without limitation, (A) the following statutes, as amended, any successors thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules and regulations addressing similar matters: CERCLA; the Resource Conservation and Recovery Act, as amended, 42 U.S.C. § 6901 *et seq*.; the Clean Air Act, as amended, 42 U.S.C. § 7401 *et seq*.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251 *et seq*.; the Toxic Substances Control Act, as amended, 15 U.S.C. § 2601 *et seq*.; the Emergency Planning and Community Right to Know Act, 42 U.S.C. § 1101 *et seq*.; the Safe Drinking Water Act, 42 U.S.C. § 300f *et seq*.; and the Occupational Safety and Health Act, 29 U.S.C. § 651 *et seq*., and (B) any common Law that may impose Liability (including without limitation strict liability) or obligations for injuries or damages due to the presence of or exposure to any Hazardous Substance.

"***ERISA***" means the Employee Retirement Income Security Act of 1974, as amended.

"***ERISA Affiliate***" means any Person that is considered one employer with a Party or any of such Party's Subsidiaries under Section 4001(b)(1) of ERISA or Section 414 of the Code.

"***Exchange Act***" means the Securities Exchange Act of 1934, as amended.

"***Excluded Shares***" means shares of Company Stock that, immediately prior to the Effective Time, are owned or held, other than in a *bona fide* fiduciary or agency capacity, by Commercial or the Company, or any Subsidiary of Commercial or the Company, including shares of Company Stock held by the Company as treasury stock.

"***FDIC***" means the Federal Deposit Insurance Corporation.

"***Federal Reserve***" means the Board of Governors of the Federal Reserve System.

"***GAAP***" means accounting principles generally accepted in the United States.

"***Governmental Entity***" means any federal, state, provincial, local, or foreign court, agency, tribunal, commission, governmental or regulatory authority, or other governmental or administrative body, instrumentality, or authority, including without limitation the SEC, the Federal Trade Commission, the United States Department of Justice, the United States Department of Labor, the IRS, the Federal Reserve, the FDIC, and the TDFI, and any arbitrator or mediator.

"***Hazardous Substances***" means any and all substances (whether solid, liquid, or gas) defined, listed, designated, classified, or otherwise regulated as pollutants, hazardous or toxic wastes, hazardous or toxic substances, hazardous or toxic materials, extremely hazardous or toxic wastes, flammable or explosive materials, radioactive materials, or words of similar meaning or regulatory effect under any present Environmental Law, including without limitation oil, petroleum and petroleum products, asbestos and asbestos-containing materials, urea formaldehyde foam insulation, polychlorinated biphenyls, lead, radioactive materials, flammables, and explosives.

"***Intellectual Property***" means, collectively, (i) all rights (anywhere in the world, whether statutory, common law, or otherwise) in or affecting intellectual property or other proprietary rights, including with respect to (A) all inventions, whether or not patentable and whether or not reduced to practice, and all improvements thereon, and all patents, patent applications, and patent disclosures, together with all re-issues, continuations, continuations-in-part, divisions, extensions, and re-examinations thereof; (B) all trademarks, whether registered or unregistered, service marks, logos, domain names, rights in or to Internet web sites and social media accounts, and corporate, fictitious, assumed, and trade names, together with the goodwill associated with any of the foregoing; (C) all copyrights, whether registered or unregistered, and all applications, registrations, and renewals relative thereto; (D) all computer software (whether in object code or source code form), datasets, databases, trade secrets, confidential information, and related information and documentation; (E) any and all other intellectual property and proprietary rights; and (F) the right to file applications and obtain registrations for any of the foregoing and claim priority thereto; (ii) all claims, causes of action, and rights to sue for past, present, and future infringement or misappropriation of the foregoing, and all proceeds, rights of recovery, and revenues arising from or pertaining to the foregoing; and (iii) all copies and tangible embodiments of any of the foregoing (in whatever form or medium).

"***IRS***" means the United States Internal Revenue Service.

"***Knowledge***" means, (i) with respect to the Company, the actual knowledge after reasonable inquiry of Daniel M. Boyd IV and Roger A. Mobley, and (ii) with respect to Commercial, the actual knowledge after reasonable inquiry of Terry L. Lee.

"***Laws***" means any and all federal, state, provincial, local, and foreign laws, constitutions, common law, ordinances, codes, statutes, judgments, determinations, injunctions, decrees, orders, rules, and regulations.

"***Liability***" means any debt, liability, commitment, or obligation of any kind, character, or nature whatsoever (whether accrued, contingent, absolute, known, unknown, or otherwise and whether due or to become due).

"***Lien***" means any lien, claim, attachment, garnishment, imperfection of title, defect, pledge, mortgage, deed of trust, hypothecation, security interest, charge, option, restriction, easement, reversionary interest, right of refusal, voting trust arrangement, buy-sell agreement, preemptive right, or other adverse claim, encumbrance, or right of any nature whatsoever.

"***Loan***" means a loan, commitment, lease, advance, credit enhancement, guarantee, or other extension of credit or borrowing arrangement.

"***Material Adverse Effect***" means an effect, circumstance, occurrence, event, development, or change that, individually or in the aggregate with one or more other effects, circumstances, occurrences, events, developments, or changes, (i) has had, or would reasonably be expected to have, a material and adverse effect on the business, properties, assets, liabilities, financial condition, operations, or results of operations of the Company and its Subsidiaries taken as a whole or (ii) prevents or materially impedes the consummation by the Company of the transactions contemplated by this Agreement; *provided*, *however*, that, with respect to clause (i), the term Material Adverse Effect shall not be deemed to include the impact of any effect, circumstance, occurrence, event, development, or change resulting from (A) changes after the date of this Agreement in Laws of general applicability that apply to insured depository institutions and/or registered bank or financial holding companies generally, or interpretations thereof by Governmental Entities, (B) changes after the date of this Agreement in GAAP or regulatory accounting requirements applicable to insured depository institutions and/or registered bank or financial holding companies generally, (C) changes in economic conditions, or changes in global, national, or regional political or market conditions (including changes in credit or debt markets or changes in prevailing interest or exchange rates), in either case affecting the banking and financial services industry generally, (D) actions and omissions of the Company required under this Agreement or taken or omitted with the prior written consent of Commercial, (E) acts of war, armed hostilities, or terrorism within or involving the United States, or (F) the public announcement or pendency of the transactions contemplated by this Agreement and the impact thereof on relationships with customers or employees; *provided* that effects, circumstances, occurrences, events, developments, and changes resulting from the changes or other matters described in clauses (A), (B), (C), and (E) shall not be excluded in determining whether there exists or has occurred a Material Adverse Effect to the extent of any materially disproportionate impact they have on the Company and its Subsidiaries taken as a whole as measured relative to similarly situated companies in the banking and financial services industry.

"***Merger Sub Common Stock***" means the common stock, no par value, of Merger Sub.

"***Mergers***" means, collectively, the Merger and the Second Step Merger.

"***NC Banking Laws***" means Chapter 53 and Chapter 53C of the North Carolina General Statutes Annotated (N.C. Gen. Stat. Ann. § 53-1.1 *et seq*. and N.C. Gen. Stat. Ann. § 53C-1-1 *et seq*.).

"***NCBCA***" means the North Carolina Business Corporation Act, N.C. Gen. Stat. Ann. § 55-1-01 *et seq*.

"***NCCOB***" means the North Carolina Office of the Commissioner of Banks.

"***Party***" means, individually, Commercial, Merger Sub, or the Company.

"***Parties***" means, collectively, Commercial, Merger Sub, and the Company.

"***Permitted Liens***" means (i) liens for Taxes not yet delinquent for which adequate reserves have been established; (ii) mechanics', carriers', workers', repairers' and similar statutory liens arising or incurred in the ordinary course of business for amounts which are not delinquent and which are not, either individually or in the aggregate, material or for which adequate reserves have been established; (iii) encroachments, easements or reservations thereof, rights of way, highway and railroad crossings, sewer, electric, and other utility lines, telegraph and telephone lines, zoning and building codes, and other similar restrictions that are a matter of public record or would be disclosed by a current and accurate survey of the applicable property; and (iv) imperfections or irregularities of title or other Liens that are a matter of public record or would be disclosed by a current and accurate survey of the applicable property.

"***Person***" means an individual, a corporation, a limited liability company, a partnership, an association, an estate, a trust or trustee on behalf of a trust, and any other entity or organization, whether or not incorporated, including without limitation any Governmental Entity.

"***Personal Information***" means (i) "nonpublic personal information" as defined under Title V of the Gramm-Leach-Bliley Act of 1999 and regulations promulgated thereunder; and (ii) any other information relating to an identified individual that is considered "personally identifiable information," "personal information," or "personal data" under any Law to which the Company Parties or any of their respective Subsidiaries are subject.

"***Regulation O***" means Regulation O of the Federal Reserve (12 C.F.R. Part 215).

"***SEC***" means the United States Securities and Exchange Commission.

"***Securities Act***" means the Securities Act of 1933, as amended.

"***Subsidiary***" means any corporation, limited liability company, partnership, joint venture, trust, or other entity in which a Party or any of its Subsidiaries has, directly or indirectly, an equity or ownership interest representing 50% or more of any class of the capital stock thereof or other equity or ownership interests therein.

"***Tax***" or "***Taxes***" means any and all federal, state, provincial, local, and foreign taxes, including without limitation (i) any income, profits, alternative or add-on minimum, gross receipts, sales, use, value-added, ad valorem, transfer, franchise, license, withholding, payroll, employment, unemployment, excise, severance, stamp, occupation, net worth, premium, real property, personal property, vehicle, airplane, boat, vessel, or other title or registration, environmental, or windfall profit tax, custom, or duty, or any other tax, fee, assessment, levy, tariff, or charge of any kind whatsoever in the nature of a tax, together with any interest or penalty, addition to tax, or other additional amount, imposed by any Governmental Entity responsible for the imposition or collection of any such tax, and (ii) any Liability for the payment of any amounts of the type described in clause (i) above as a result of any express or implied agreement or obligation to indemnify any other Person or any contractual arrangement or agreement.

"***Tax Return***" means any return (including any amended return), declaration, or other report, including without limitation elections, claims for refunds, schedules, estimates, and information returns and statements filed or required to be filed with a Governmental Entity, with respect to any Taxes (including estimated Taxes).

"***TBCA***" means the Tennessee Business Corporation Act, Tenn. Code Ann. § 48-11-101 *et seq*.

"***TDFI***" means the Tennessee Department of Financial Institutions.

"***TN Banking Act***" means the Tennessee Banking Act, Tenn. Code Ann. § 45-1--101 *et seq.*

"***Treasury Regulations***" means the final and temporary regulations promulgated under the Code by the United States Department of the Treasury.

"***U.S.***" or "***United States***" means the United States of America.

"***USA PATRIOT Act***" means the USA PATRIOT Act of 2001, as amended.

Section 1.2 <u>Other Definitions</u>. Capitalized terms used in this Agreement and not defined in <u>Section 1.1</u>, but otherwise defined in this Agreement, shall have the meanings otherwise ascribed thereto.

Article II<u><br> THE MERGERS</u>

Section 2.1 <u>The Merger</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) *General*. Subject to and upon the terms and conditions set forth in this Agreement, at the Effective Time (as defined below), Merger Sub shall be merged with and into the Company in accordance with, and with the effects provided in, this Agreement and applicable provisions of the TBCA, TN Banking Act, NCBCA, and NC Banking Laws (the "***Merger***"). At the Effective Time, the separate corporate existence of Merger Sub shall cease and the Company shall continue, as the surviving corporation of the Merger, as a corporation chartered under the laws of the State of North Carolina (the Company in such capacity as the surviving corporation of the Merger is sometimes referred to herein as the "***Interim Surviving 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) *Effective Time*. Prior to or at the Closing (as defined below), and in order to effect the Merger, Merger Sub and the Company shall duly execute and deliver articles of merger for filing with the Tennessee Secretary of State (the "***TN Articles of Merger***") and articles of merger for filing with the North Carolina Secretary of State (the "***NC Articles of Merger***" and together with the TN Articles of Merger, the "***Articles of Merger***"), the same to be in such form and of such substance as is consistent with applicable provisions of the TBCA and NCBCA and otherwise mutually agreed upon by Merger Sub and the Company. The Merger shall become effective on such date and at such time as set forth in the Articles of Merger (the date and time the Merger becomes effective being referred to in this Agreement as the "***Effective 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;(c) *Effects of the Merger*. The Merger shall have the effects set forth in this Agreement and applicable provisions of the TBCA, TN Banking Act, NCBCA, and NC Banking Laws. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, all property, rights, interests, privileges, powers, and franchises of Merger Sub shall vest in the Interim Surviving Company, and all debts, liabilities, obligations, restrictions, disabilities, and duties of Merger Sub shall become and be debts, liabilities, obligations, restrictions, disabilities, and duties of the Interim Surviving 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;(d) *Merger Sub Common Stock*. Each share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time shall at the Effective Time be converted into and become one share of common stock, no par value, of the Interim Surviving Company (such common stock of the Interim Surviving Company, the "***Post-Merger Common Stock***"), which Post-Merger Common Stock shall at such time be the only issued and outstanding shares of capital stock of the Interim Surviving 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;(e) *Articles of Incorporation, Bylaws, and Name of Interim Surviving Company*. The articles of incorporation and bylaws of the Company, in each case as amended and/or restated and in effect immediately prior to the Effective Time, shall at and after the Effective Time be the articles of incorporation and bylaws of the Interim Surviving Company until such time as the same shall be amended in accordance with applicable Law. The legal name of the Interim Surviving Company shall be "AB&T Financial 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;(f) *Directors and Officers of Interim Surviving Company*. The directors and officers of the Company as of immediately prior to the Effective Time shall, at and after the Effective Time, be the directors and officers, respectively, of the Interim Surviving Company, such individuals to serve in such capacities until such time as their successors shall have been duly elected or appointed and qualified or until their earlier death, resignation, or removal from office.

Section 2.2 <u>The Second Step Merger</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) *General*. As soon as reasonably practicable following the Effective Time, but in no event earlier than the day immediately following the day on which the Effective Time occurs, Commercial shall cause the Interim Surviving Company to be, and the Interim Surviving Company shall be, merged with and into Commercial in accordance with, and with the effects provided in, this Agreement and applicable provisions of the TBCA, TN Banking Act, NCBCA, and NC Banking Laws (the "***Second Step Merger***"). At the Second Step Effective Time (as defined below), the separate corporate existence of the Interim Surviving Company shall cease and Commercial shall continue, as the surviving corporation of the Second Step Merger, as a corporation chartered under the laws of the State of Tennessee (Commercial in such capacity as the surviving corporation of the Second Step Merger is sometimes referred to herein as the "***Surviving 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;(b) *Second Step Effective Time*. In order to effect the Second Step Merger, Commercial and the Interim Surviving Company shall duly execute and deliver articles of merger for filing with the Tennessee Secretary of State (the "***TN Second Step Articles of Merger***") and articles of merger for filing with the North Carolina Secretary of State (the "***NC Second Step Articles of Merger***" and together with the TN Second Step Articles of Merger, the "***Second Step Articles of Merger***"), the same to be in such form and of such substance as is consistent with applicable provisions of the TBCA and NCBCA and otherwise mutually agreed upon by Commercial and the Interim Surviving Company. The Second Step Merger shall become effective on such date and at such time as set forth in the Second Step Articles of Merger (the date and time the Second Step Merger becomes effective being referred to in this Agreement as the "***Second Step Effective 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;(c) *Effects of the Second Step Merger*. The Second Step Merger shall have the effects set forth in this Agreement and applicable provisions of the TBCA, TN Banking Act, NCBCA, and NC Banking Laws. Without limiting the generality of the foregoing, and subject thereto, at the Second Step Effective Time, all property, rights, interests, privileges, powers, and franchises of the Interim Surviving Company shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities, and duties of the Interim Surviving Company shall become and be debts, liabilities, obligations, restrictions, disabilities, and duties of the Surviving 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;(d) *Cancellation of Interim Surviving Company Stock*. Each share of common stock, no par value, of the Interim Surviving Company, as well as each share of any other class or series of capital stock of the Interim Surviving Company, in each case that is issued and outstanding immediately prior to the Second Step Effective Time, shall, at the Second Step Effective Time, solely by virtue and as a result of the Second Step Merger and without any action on the part of any holder thereof, automatically be canceled and retired for no consideration and shall cease to exist.

&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) *Commercial Stock*. The shares of Commercial Stock issued and outstanding immediately prior to the Second Step Effective Time shall not be affected by the Second Step Merger, and, accordingly, each share of Commercial Stock issued and outstanding immediately prior to the Second Step Effective Time shall, at and immediately following the Second Step Effective Time, remain issued and outstanding.

&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) *Charter, Bylaws, and Name of Surviving Corporation*. The charter and bylaws of Commercial, in each case as amended and/or restated and in effect immediately prior to the Second Step Effective Time, shall at and after the Second Step Effective Time be the charter and bylaws of the Surviving Corporation until such time as the same shall be amended in accordance with applicable Law. The name of the Surviving Corporation shall be "Commercial Bancgroup, Inc."

&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) *Directors and Officers of Surviving Corporation*. The directors and officers of Commercial as of immediately prior to the Second Step Effective Time shall, at and after the Second Step Effective Time, continue as the directors and officers, respectively, of the Surviving Corporation, such individuals to serve in such capacities until such time as their successors shall have been duly elected or appointed and qualified or until their earlier death, resignation, or removal from office.

Section 2.3 <u>Merger Sub Shareholder Approval</u>. Prior to or as soon as reasonably practicable following the approval of this Agreement and the Mergers by the shareholders of the Company in accordance with the articles of incorporation and bylaws of the Company and applicable Law, Commercial shall approve this Agreement and the transactions contemplated hereby as the sole shareholder of Merger Sub in accordance with the charter and bylaws of Merger Sub and applicable Law.

Section 2.4 <u>Closing</u>. Subject to the satisfaction or waiver (to the extent permissible under applicable Law) of the conditions precedent set forth in <u>Article VIII</u> hereof (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver (to the extent permissible under applicable Law) thereof at the Closing), the closing of the transactions contemplated by this Agreement, including without limitation the Merger and the Second Step Merger (the "***Closing***"), shall take place by electronic exchange of documents at 10:00 a.m. Eastern Time on such date as the Parties shall mutually agree, *provided* that such date shall be not more than 60 days after the satisfaction or waiver (subject to applicable Law) of all of the conditions precedent set forth in Article VIII hereof (other than those conditions that by their nature are to be satisfied at the Closing), or at such other place, at such other time, or on such other date as the Parties may otherwise mutually agree. The actual date on which the Closing shall occur is referred to in this Agreement as the "***Closing Date***."

Section 2.5 <u>The Bank Merger</u>. Simultaneously with the Parties' execution of this Agreement, Commercial Bank and Alliance Bank have executed and delivered an Agreement and Plan of Bank Merger dated the date hereof (the "***Bank Merger Agreement***"), which provides for the merger of Alliance Bank with and into Commercial Bank following the Second Step Merger (on such date and at such time as shall be determined by Commercial in its sole discretion) in accordance with the terms and conditions of, and with the effects provided by, the Bank Merger Agreement and applicable provisions of the TBCA, TN Banking Act, NCBCA, and NC Banking Laws (the "***Bank Merger***"). Commercial Bank will be the banking corporation to survive the Bank Merger, and at the effective time of the Bank Merger, the separate corporate existence of Alliance Bank will cease. Prior to or as soon as reasonably practicable following the approval of this Agreement and the Mergers by the shareholders of the Company in accordance with the articles of incorporation and bylaws of the Company and applicable Law, Commercial shall approve the Bank Merger Agreement as the sole shareholder of Commercial Bank and the Company shall approve the Bank Merger Agreement as the sole shareholder of Alliance Bank. Each of Commercial and the Company will cause its bank Subsidiary to timely execute and deliver such articles of merger and other documents and certificates as are necessary or appropriate to effectuate the Bank Merger (the "***Bank Merger Certificates***").

Article III<u><br> MERGER CONSIDERATION</u>

Section 3.1 <u>Conversion of and Consideration for Company Stock</u>(a). Subject to the other provisions of this <u>Article III</u>, solely by virtue and as a result of the Merger, each share of Company Stock issued and outstanding immediately prior to the Effective Time (other than Excluded Shares and Appraisal Shares (as defined below)) shall, at the Effective Time, automatically and without any action on the part of the holder(s) thereof, be converted into and canceled in exchange for the right to receive from Commercial $0.74 in cash, without interest (the "***Per Share Consideration***"). The aggregate Per Share Consideration payable by Commercial to holders of Company Stock as consideration for the Merger in accordance with this Agreement is referred to herein as the "***Merger Consideration***."

Section 3.2 <u>Exchange Procedures</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) *Deposit with Exchange Agent*. At or prior to the Closing, Commercial shall deposit or cause to be deposited with an exchange agent selected by Commercial and reasonably acceptable to the Company (the "***Exchange Agent***"), for the benefit of holders of Company Stock (other than holders of Excluded Shares and Appraisal Shares), cash in an amount sufficient for the Exchange Agent to make payment of the Per Share Consideration payable to holders of Company Stock (other than holders of Excluded Shares and Appraisal Shares) in accordance with this Agreement; *provided* that the Parties expressly agree that Commercial may itself act as the Exchange Agent, in which event Commercial shall deposit said cash with Commercial Bank, in a segregated account, for payment as herein provided.

&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) *Letter of Transmittal*. Provided that prior to the Effective Time the Company has delivered or caused to be delivered to the Exchange Agent all information relating to the Company and its shareholders which is necessary for the Exchange Agent to perform its obligations as specified in this Agreement, Commercial will use commercially reasonable efforts to cause the Exchange Agent to, as soon as reasonably practicable after the Effective Time (but in no event later than 10 Business Days after the Effective Time), mail or otherwise deliver to each holder of record of shares of Company Stock immediately prior to the Effective Time (other than holders of Excluded Shares and holders of Appraisal Shares) a letter of transmittal in customary form and containing such provisions as Commercial shall reasonably require (including provisions confirming that delivery of Certificates and Book-Entry Shares shall be effected, and that risk of loss of and title to Certificates and Book-Entry Shares shall pass, only upon proper delivery of the Certificates or Book-Entry Shares to the Exchange Agent) and instructions for use in effecting the surrender of Certificates and Book-Entry Shares in exchange for that portion of the Merger Consideration payable in respect of the shares of Company Stock previously represented by such Certificates or in respect of such Book-Entry Shares, as applicable, pursuant to the provisions 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;(c) *Payment of Merger Consideration*. Upon proper surrender of a Certificate or Book-Entry Shares to the Exchange Agent for exchange and cancellation, together with a properly completed and duly executed letter of transmittal (or an "agent's message," in the case of Book-Entry Shares held in street name) and such other documents as may reasonably be required by the Exchange Agent, (i) the holder of such Certificate or Book-Entry Shares shall be entitled to receive in exchange therefor, and the Exchange Agent shall pay to such holder, the Per Share Consideration to which such holder shall have become entitled pursuant to the provisions of this <u>Article III</u>, in full satisfaction of all rights pertaining to the shares of Company Stock formerly represented by such Certificate or to such Book-Entry Shares, as applicable, and (ii) the Certificate or Book-Entry Shares so surrendered shall be canceled. In the event the Merger Consideration or any other amounts payable under this Agreement to a holder of shares of Company Stock is to be paid to a Person other than the Person in whose name such shares are registered, it shall be a condition to the payment of such Merger Consideration or other amounts that the Certificate formerly representing such shares, or, in the case of non-certificated shares, the Book-Entry Shares, be presented to the Exchange Agent, together with evidence of or appropriate documents or instruments for transfer and evidence that any applicable stock transfer or other Taxes have been paid or are not applicable, all in such form as the Exchange Agent shall reasonably require.

&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) *Closing of Stock Transfer Books*. At the Effective Time, the stock transfer books of the Company shall be closed and there shall thereafter be no transfers of shares of Company Stock on the books or records of the Company, and if any shares of Company Stock are thereafter presented to Commercial or the Exchange Agent for transfer, such shares shall be canceled against delivery of the Per Share Consideration payable in respect thereof as herein provided. Until duly surrendered to the Exchange Agent in accordance with the provisions of this Agreement, Certificates and Book-Entry Shares shall, at and after the Effective Time, evidence and represent only the right to receive the Per Share Consideration payable in respect thereof (or the Company Stock previously represented thereby) in accordance with this Agreement. No interest will be paid or will accrue on any amounts payable to holders of Company Stock under or in accordance with 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) *Lost, Stolen, or Destroyed Certificates*. In the event any Certificate shall have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen, or destroyed and the execution by such Person of an indemnity agreement and/or the posting by such Person of a bond in such form and amount as Commercial or the Exchange Agent may reasonably require as indemnity against any claim that may be made against them with respect to such Certificate, the Exchange Agent will deliver in exchange for such lost, stolen, or destroyed Certificate the Per Share Consideration deliverable in respect of the shares of Company Stock previously represented thereby pursuant to 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) *Unclaimed Merger Consideration*. Any Merger Consideration, and any other amounts payable by Commercial to the holders of shares of Company Stock in accordance with this Agreement, in each case that remain(s) unclaimed by former shareholders of the Company for 12 months after the Effective Time shall at the request of Commercial be delivered by the Exchange Agent to Commercial. Any former shareholder of the Company who has not theretofore complied with the exchange procedures provided for in this Agreement shall thereafter look only to Commercial for the Per Share Consideration (and any other amounts) payable in respect of the shares of Company Stock previously held by such shareholder, as determined pursuant to this Agreement, without any interest thereon. If the Merger Consideration or any other amounts payable under this Agreement in respect of any shares of Company Stock is not claimed prior to the date on which such Merger Consideration or other amounts would otherwise escheat to a Governmental Entity, such Merger Consideration or other amounts shall, to the extent permitted by abandoned property, escheat, and other applicable Laws, become the property of Commercial (and to the extent not in its possession shall be delivered to it), free and clear of all claims or interests of any Person previously entitled to such property. Neither the Exchange Agent nor any Party to this Agreement shall be liable to any holder of Company Stock for any portion of the Merger Consideration (or any other amounts) properly paid to a Governmental Entity pursuant to applicable abandoned property, escheat, or similar Laws. Commercial and the Exchange Agent shall be entitled to rely upon the stock transfer books and records of the Company to establish the identity of those Persons entitled to receive the Merger Consideration (and any other amounts) specified in this Agreement, which books and records shall be conclusive with respect thereto. In the event of a dispute regarding the ownership of Company Stock, Commercial and the Exchange Agent shall be entitled to deposit any portion of the Merger Consideration (or any other amounts) payable in respect thereof in escrow with an independent third party and thereafter be relieved with respect to any claims thereto.

Section 3.3 <u>Rights as Company Shareholders</u>. Holders of Company Stock immediately prior to the Effective Time shall, at and after the Effective Time, cease to be shareholders of the Company and have no further rights as shareholders of the Company, other than the right to receive the Merger Consideration and any other amounts payable in respect of such holders' Company Stock in accordance with this <u>Article III</u>, except for Commercial as the holder of the Post-Merger Common Stock.

Section 3.4 <u>Appraisal Rights</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) Holders of shares of Company Stock shall, in connection with the Merger, be entitled to appraisal rights and to obtain payment of the fair value of their shares pursuant to and in accordance with Chapter 55, Article 13 of the NCBCA.

&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) Notwithstanding any provision of this Agreement to the contrary, but subject to <u>Section 3.4(c)</u>, each issued and outstanding share of Company Stock the holder of which has perfected his or her appraisal rights pursuant to Chapter 55, Article 13 of the NCBCA and has not effectively withdrawn or lost such rights as of the Effective Time (collectively, the "***Appraisal Shares***") shall not be converted into and canceled in exchange for, or represent a right to receive, the Per Share Consideration hereunder, and the holder thereof shall be entitled only to such rights as are afforded to such holder by the NCBCA. Commercial shall be entitled to retain any Merger Consideration not paid on account of Appraisal Shares, and the shareholders of the Company shall not be entitled to any portion of such retained Merger Consideration. Any payments made in respect of Appraisal Shares shall be made by Commercial within the time periods set forth in, and otherwise in accordance with, the NCBCA.

&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 any holder of shares of Company Stock who asserts appraisal rights in connection with the Merger pursuant to Chapter 55, Article 13 of the NCBCA shall have effectively withdrawn or lost his or her appraisal rights (through failure to perfect or otherwise), then, as of the Effective Time or the occurrence of such event, whichever occurs later, the shares of Company Stock held by such holder shall be converted into and canceled in exchange for, on a share by share basis, the right to receive the Per Share Consideration payable in respect thereof in accordance with the applicable provisions of this Agreement.

Section 3.5 <u>Excluded Shares</u>. At the Effective Time, each Excluded Share shall, for no consideration, be automatically canceled and retired and shall cease to exist, and, for the avoidance of doubt, no payment shall be made with respect thereto or in respect thereof.

Section 3.6 <u>Adjustments Upon Change in Capitalization</u>. If during the period from the date of this Agreement until immediately prior to the Effective Time the outstanding shares of Company Stock are increased, decreased, or changed into or exchanged for a different number or kind of securities as a result of a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, or other similar change in capitalization, an equitable and proportionate adjustment shall be made to the Per Share Consideration. For the avoidance of doubt, the issuance or withholding of shares of Company Stock upon the exercise of (including the satisfaction of Tax withholding obligations associated with) Company Options shall not cause or result in an adjustment to the Per Share Consideration.

Section 3.7 <u>Company Options</u>. The Company and its board of directors (or the appropriate committee thereof) shall prior to the Effective Time take all action necessary to (a) cause all outstanding Company Options to become fully vested, to the extent not already vested, and (b) cancel all outstanding Company Options and cause the Company pay to the holder of each Company Option, in consideration therefor, cash (without interest) in an amount, rounded to the nearest whole cent, equal to the product of (i) the Per Share Consideration *minus* the per share exercise price of such Company Option *multiplied by* (ii) the number of shares of Company Stock subject to such Company Option, to the extent not previously exercised, subject to applicable withholdings. In the event the per share exercise price of a Company Option is equal to or greater than the Per Share Consideration, such Company Option shall be canceled for no consideration. The cancellation of Company Options as contemplated by this <u>Section 3.7</u> shall be evidenced by option cancellation agreements, signed by the holders of Company Options, in form and substance reasonably acceptable to Commercial.

Section 3.8 <u>Withholding Rights</u>. Commercial (through the Exchange Agent, if applicable) shall be entitled to deduct and withhold, or cause the applicable payor to deduct and withhold, from any consideration payable or otherwise deliverable pursuant to this Agreement to any holder or former holder of shares of Company Stock such amounts as are required under the Code or any other applicable Law to be deducted and withheld. Any amounts so deducted and withheld shall be timely remitted to the appropriate Governmental Entity and, to the extent so remitted, shall be treated for all purposes as having been paid to the Person to whom such amounts would otherwise have been paid.

Article IV<u><br> REPRESENTATIONS AND WARRANTIES OF COMPANY</u>

Section 4.1 <u>Disclosure Memorandum</u>. Prior to the Parties' execution and delivery of this Agreement, the Company has delivered to the Commercial Parties a confidential memorandum (the "***Disclosure Memorandum***") setting forth, among other things, items the disclosure of which is necessary either in response to an express disclosure requirement contained in a provision of this Agreement or as an exception to one or more representations or warranties of the Company contained in this <u>Article IV</u>, making specific reference in the Disclosure Memorandum to the section(s) of this Agreement to which such items relate.

Section 4.2 <u>Representations and Warranties</u>. The Company hereby represents and warrants to the Commercial Parties 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) *Organization and Qualification*. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of North Carolina and is duly registered as a bank holding company under the BHCA. Alliance Bank is a banking corporation duly organized, validly existing, and in good standing under the laws of the State of North Carolina. Each of the Company and Alliance Bank has the corporate power and authority to own, lease, and operate its properties and assets and to conduct its respective business as presently conducted. Each of the Company and Alliance Bank is duly licensed and qualified to transact business and is in good standing in each jurisdiction in which the character of the properties or assets owned or leased by it or the nature of the business conducted by it makes such licensing and qualification necessary, except where the failure to be so licensed, qualified, or in good standing has not had and would not reasonably be expected to have a Material Adverse Effect. The copies of the articles of incorporation, bylaws, and other organizational and governing documents of the Company and Alliance Bank and their respective Subsidiaries previously provided or made available to the Commercial Parties are true, correct, and complete copies of such documents as in effect as of the date of this Agreement. Neither the Company nor Alliance Bank nor any Subsidiary of the Company or Alliance Bank is in violation of its respective articles of incorporation, bylaws, or other organizational or governing documents.

&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) *Subsidiaries and Other Interests*. Set forth on **<u>Schedule 4.2(b)</u>** of the Disclosure Memorandum is a true, correct, and complete list of all Subsidiaries of the Company (other than Alliance Bank) and/or Alliance Bank, as well as each such Subsidiary's jurisdiction of incorporation, organization, or formation and the Company's and/or Alliance Bank's percentage ownership of each such Subsidiary. Except as set forth on **<u>Schedule 4.2(b)</u>** of the Disclosure Memorandum, each of the Company and Alliance Bank owns beneficially and of record the capital stock or other equity or ownership interest it owns in each of its respective Subsidiaries free and clear of any Liens. There are no Contracts relating to the right of the Company or Alliance Bank to vote or dispose of any capital stock or other equity or ownership interest of any Subsidiary of the Company or Alliance Bank. The ownership interests of the Company and Alliance Bank in their respective Subsidiaries are in full compliance with all applicable Laws. Each of the Subsidiaries of the Company and/or Alliance Bank (i) is a corporation, limited liability company, or other entity duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation, organization, or formation, (ii) has all requisite corporate, limited liability company, or other power and authority to own, lease, and operate its properties and assets and to conduct its business as presently conducted, and (iii) is duly licensed and qualified to transact business and is in good standing in each jurisdiction in which the character of the properties or assets owned or leased by it or the nature of the business conducted by it makes such licensing or qualification necessary, except, with respect to clause (iii) only, where the failure to be so licensed, qualified, or in good standing has not had and would not reasonably be expected to have a Material Adverse Effect. The outstanding capital stock or other outstanding equity or ownership interests of each Subsidiary of the Company and/or Alliance Bank have been validly authorized and are validly issued, fully paid, and non-assessable. No shares of capital stock or other equity or ownership interests of any Subsidiary of the Company and/or Alliance Bank are or may be required to be issued by virtue of any options, warrants, or other rights; no securities exist that are convertible into or exchangeable for any shares of capital stock or other equity or ownership interests of any Subsidiary of the Company and/or Alliance Bank, or any other debt or equity security of any Subsidiary of the Company and/or Alliance Bank; and there are no Contracts for the issuance of any additional capital stock or other equity or ownership interests, or any other debt or equity securities, of any Subsidiary of the Company and/or Alliance Bank or any options, warrants, or other rights with respect to such securities. Except for securities and other interests held in a fiduciary capacity and beneficially owned by third parties, neither the Company nor Alliance Bank owns, beneficially or of record, directly or indirectly, any equity securities of or any other equity or ownership interest in any Person.

&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) *Capitalization*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 authorized capital stock of the Company consists of 45,000,000 shares of Company Common Stock, of which 31,433,508 shares are issued and outstanding as of the date of this Agreement, and 1,000,000 shares of Company Preferred Stock, no shares of which are issued and outstanding as of the date of this Agreement. The authorized capital stock of Alliance Bank consists of 10,000,000 shares of Alliance Bank Common Stock, of which 2,678,205 shares are issued and outstanding as of the date of this Agreement, and 1,000,000 shares of Alliance Bank Preferred Stock, no shares of which are issued and outstanding as of the date of this Agreement. There are no other classes or series of authorized, issued, or outstanding capital stock of the Company or Alliance Bank. Except as set forth on **<u>Schedule 4.2(c)(i)</u>** of the Disclosure Memorandum, no shares of Company Stock are held in treasury by the Company or otherwise owned, directly or indirectly, by the Company, and no shares of Alliance Bank Stock are held in treasury by Alliance Bank or otherwise owned, directly or indirectly, by Alliance Bank. All of the issued and outstanding shares of Company Stock and Alliance Bank Stock have been duly and validly authorized and issued in compliance in all material respects with all applicable Laws and are fully paid and non-assessable with no personal liability attaching to the ownership thereof, and none of the issued and outstanding shares of Company Stock or Alliance Bank Stock have been issued in violation of the preemptive or other rights of any Person. No bonds, debentures, notes, or other indebtedness having the right to vote on any matters on which shareholders of the Company or Alliance Bank may vote are issued or outstanding. No trust preferred or subordinated debt securities of the Company or Alliance Bank or any of their respective Subsidiaries are issued or outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Except as set forth on **<u>Schedule 4.2(c)(ii)</u>** of the Disclosure Memorandum, as of the date of this Agreement, (i) there are no outstanding options, warrants, subscriptions, agreements, contracts, rights, calls, or commitments, of any kind or character, that require or obligate or could require or obligate the Company to issue, deliver, or sell, or cause to be issued, delivered, or sold, any additional shares of Company capital stock, or securities convertible into or exercisable for shares of Company capital stock, or that require or obligate or could require or obligate the Company to grant, extend, or enter into any such option, warrant, subscription, agreement, contract, right, call, or commitment, and (ii) there are no outstanding options, warrants, subscriptions, agreements, contracts, rights, calls, or commitments, of any kind or character, that require or obligate or could require or obligate Alliance Bank to issue, deliver, or sell, or cause to be issued, delivered, or sold, any additional shares of Alliance Bank capital stock, or securities convertible into or exercisable for shares of Alliance Bank capital stock, or that require or obligate or could require or obligate Alliance Bank to grant, extend, or enter into any such option, warrant, subscription, agreement, contract, right, call, or commitment. There are no outstanding obligations or commitments of the Company or Alliance Bank to repurchase, redeem, or otherwise acquire any shares of its capital stock. Set forth on **<u>Schedule 4.2(c)(ii)</u>** of the Disclosure Memorandum is a true, correct, and complete list, as of the date of this Agreement, of all outstanding Company Options, including for each Company Option the name of the optionee, the date of grant, the exercise price, the date(s) of termination, the number and class of shares subject to such Company Option, and whether such Company Option is an "incentive stock option" (as defined in Section 422 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;(d) *Authority*. The Company has all requisite corporate power and authority to execute and deliver this Agreement and, subject to the consents, approvals, waivers, notices, filings, and registrations referred to in <u>Section 4.2(f)</u>, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the Bank Merger Agreement by Alliance Bank, the performance by the Company of its obligations hereunder and the performance by Alliance Bank of its obligations under the Bank Merger Agreement, and the consummation by the Company of the transactions contemplated hereby and the consummation by Alliance Bank of the transactions contemplated by the Bank Merger Agreement, upon recommendation of the Special Committee, have been duly and validly authorized by all necessary corporate action on the part of the boards of directors of the Company and Alliance Bank, and no other corporate actions or proceedings on the part of the Company or Alliance Bank are necessary to authorize the execution, delivery, or performance of this Agreement by the Company or the Bank Merger Agreement by Alliance Bank or the consummation by the Company of the transactions contemplated hereby or the consummation by Alliance Bank of the transactions contemplated by the Bank Merger Agreement, other than the approval of this Agreement by the shareholders of the Company in accordance with the articles of incorporation and bylaws of the Company and applicable Law and the approval of the Bank Merger Agreement by the Company as the sole shareholder of Alliance Bank in accordance with the articles of incorporation and bylaws of Alliance Bank and applicable Law. The board of directors of the Company has determined that this Agreement and the transactions contemplated hereby are advisable and in the best interests of the Company and its shareholders and has directed that this Agreement be submitted to the Company's shareholders for approval, and has duly and validly adopted resolutions to the foregoing effect and to recommend that the shareholders of the Company approve this Agreement. This Agreement has been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by Commercial and Merger Sub, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization, and similar Laws affecting creditors' rights and remedies generally or general principles of equity, whether applied in a court of law or a court of equity (collectively, the "***Enforceability Exceptions***").

&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) *No Violations*. Neither the execution, delivery, or performance of this Agreement by the Company, nor the execution, delivery, or performance of the Bank Merger Agreement by Alliance Bank, nor the consummation of the transactions contemplated by this Agreement or the Bank Merger Agreement, will (i) assuming the approval of this Agreement by the shareholders of the Company in accordance with the articles of incorporation and bylaws of the Company and applicable Law and the approval of the Bank Merger Agreement by the Company as the sole shareholder of Alliance Bank in accordance with the articles of incorporation and bylaws of Alliance Bank and applicable Law, violate the articles of incorporation, bylaws, or other organizational or governing documents of the Company or Alliance Bank or any of their respective Subsidiaries or (ii) assuming that the consents, approvals, waivers, notices, filings, and registrations referred to in <u>Section 4.2(f)</u> have been obtained and made and all applicable waiting periods have expired, (A) violate any Law to which the Company Parties or any of their respective Subsidiaries (or the properties or assets of the Company Parties or any of their respective Subsidiaries) are subject or by which the Company Parties or any of their respective Subsidiaries (or the properties or assets of the Company Parties or any of their respective Subsidiaries) are bound or (B) constitute a breach or violation of or a default under (or an event which, with notice or lapse of time or both, could constitute a default under), or result in the termination of, accelerate the performance required by, or result in the creation of any Lien upon any of the properties or assets of the Company or Alliance Bank or any of their respective Subsidiaries under, any of the terms, conditions, or provisions of any Contract to which the Company or Alliance Bank, or any of their respective Subsidiaries, is a party or to or by which any of the properties or assets of the Company or Alliance Bank, or any of their respective Subsidiaries, may be subject or bound, except, in the case of clause (B) above only, for breaches, violations, defaults, terminations, accelerations, or Liens that have not had and would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

&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) *Consents and Approvals*. No consents or approvals of, waivers by, notices to, or filings or registrations with any Governmental Entity or other Person are required to be obtained, received, given, or made by the Company or Alliance Bank, or any of their respective Subsidiaries, in connection with the execution, delivery, or performance of this Agreement by the Company, or the execution, delivery, or performance of the Bank Merger Agreement by Alliance Bank, or the consummation by the Company and Alliance Bank of the transactions contemplated hereby and thereby, including without limitation the Mergers and the Bank Merger, except (i) applications, notices, and waiver requests required to be filed with or given or made to and consents, approvals, and waivers required from, and the expiration of related waiting periods imposed by, the Federal Reserve, the TDFI, the NCCOB, and the United States Department of Justice (collectively, the "***Regulatory Approvals***"); (ii) the filing of the Articles of Merger and the Second Step Articles of Merger with the Tennessee Secretary of State and the North Carolina Secretary of State and the filing of the Bank Merger Certificates; (iii) filings and reports required under the Exchange Act, if applicable; (iv) the approval of this Agreement by the shareholders of the Company in accordance with the articles of incorporation and bylaws of the Company and applicable Law and the approval of the Bank Merger Agreement by the Company as the sole shareholder of Alliance Bank in accordance with the articles of incorporation and bylaws of Alliance Bank and applicable Law; and (v) as set forth on **<u>Schedule 4.2(f)</u>** of the Disclosure Memorandum. As of the date of this Agreement, the Company does not have Knowledge of any reason why any of the consents, approvals, or waivers referred to in this <u>Section 4.2(f)</u> will not be obtained or received in a timely manner.

&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) *Reports*. The Company and Alliance Bank, and each of their respective Subsidiaries, have timely filed or furnished, as applicable, all reports, notices, applications, schedules, registration and proxy statements, and other filings, documents, and instruments (together with any amendments required to be made with respect thereto) that they have been required to file or furnish since January 1, 2021, with or to the Federal Reserve, the FDIC, the NCCOB, or any other Governmental Entity, or any exchange or market on which shares of Company Stock are or were during such period listed or quoted, and have paid all fees and assessments due and payable in connection therewith, except where the failure to file or furnish the same or pay such fees and assessments would not be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect. As of their respective dates, such reports, notices, applications, schedules, registration and proxy statements, and other filings, documents, and instruments were complete and accurate in all material respects and complied in all material respects with all applicable Laws.

&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) *Financial Statements*. The Company has previously delivered to the Commercial Parties true, complete, and correct copies of (i) the consolidated balance sheets of the Company and its Subsidiaries as of the fiscal years ended December 31, 2022, 2021, and 2020, and the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows for each of the fiscal years then ended, together with the notes thereto, accompanied by the audit reports of the Company's independent registered public accounting firm (collectively, the "***Audited Company Financials***"), and (ii) the unaudited consolidated balance sheet of the Company and its Subsidiaries as of December 31, 2023 (the "***Interim Financials Date***"), and the related unaudited consolidated statement of income for the 12-month period ended December 31, 2023 (collectively, the "***Interim Company Financials***"). The Company Financial Statements were prepared from and in accordance with the books and records of the Company and its Subsidiaries, fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries in each case at and as of the dates indicated and the consolidated results of operations, changes in stockholders' equity, and cash flows of the Company and its Subsidiaries for the periods indicated, and, except as otherwise set forth in the notes thereto, were prepared in all material respects in accordance with GAAP and applicable regulatory accounting principles consistently applied throughout the periods covered thereby; *provided*, *however*, that unaudited financial statements for interim periods are subject to normal year-end adjustments (which will not be material individually or in the aggregate) and lack footnotes to the extent permitted under applicable Law. No financial statements of any entity or enterprise other than the Company and its Subsidiaries are required by GAAP to be included in the financial statements of the Company. The books and records of the Company and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP consistently applied and other legal, accounting, and regulatory requirements.

&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) *Undisclosed Liabilities*. Neither the Company nor any of its Subsidiaries has, or has incurred, any Liabilities other than (i) Liabilities reflected on or reserved against in the Interim Company Financials, (ii) Liabilities incurred since the Interim Financials Date in the ordinary course of business consistent with past practice that, either individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect; and (iii) Liabilities incurred in connection with this Agreement or the transactions contemplated hereby.

&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) *Absence of Certain Changes or Events*. Since December 31, 2022, (i) except as relates to the matters contemplated by this Agreement, the Company and Alliance Bank and their respective Subsidiaries have conducted their respective businesses only in the ordinary and usual course consistent with past practice and (ii) there has been no Material Adverse Effect.

&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) *Litigation*. There are no suits, actions, claims, investigations, or legal, administrative, arbitration, or other proceedings pending or, to the Knowledge of the Company, threatened against or affecting the Company or Alliance Bank or any of their respective Subsidiaries, any current or former director, officer, or employee of the Company or Alliance Bank or any of their respective Subsidiaries in his or her capacity as such, any Company Benefit Plan (as defined below), or any property, asset, right, or interest of the Company or Alliance Bank or any of their respective Subsidiaries, which, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect, and, to the Knowledge of the Company, there are no facts or circumstances that would reasonably be expected to give rise to any such suit, action, claim, investigation, or legal, administrative, arbitration, or other proceeding. Set forth on **<u>Schedule 4.2(k)</u>** of the Disclosure Memorandum is a true, correct, and complete list, as of the date of this Agreement, of each suit, action, claim, investigation, or legal, administrative, arbitration, or other proceeding pending or, to the Knowledge of the Company, threatened against or affecting the Company or Alliance Bank or any of their respective Subsidiaries, any current or former director, officer, or employee of the Company or Alliance Bank or any of their respective Subsidiaries in his or her capacity as such, any Company Benefit Plan, or any property, asset, right, or interest of the Company or Alliance Bank or any of their respective Subsidiaries. Neither the Company nor Alliance Bank nor any of their respective Subsidiaries, nor any of the properties or assets of the Company or Alliance Bank or any of their respective Subsidiaries, is a party or subject to or bound by any judgment, decree, injunction, order, or ruling of any Governmental Entity (other than such as are applicable to banks or bank holding companies generally) that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect on the Company. Set forth on **<u>Schedule 4.2(k)</u>** of the Disclosure Memorandum is a true, correct, and complete list, as of the date of this Agreement, of each judgment, decree, injunction, order, or ruling of any Governmental Entity (other than such as are applicable to banks or bank holding companies generally) that the Company or Alliance Bank or any of their respective Subsidiaries, or any of the properties or assets of the Company or Alliance Bank or any of their respective Subsidiaries, is a party or subject to or bound by.

&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) *Regulatory Actions*. Since January 1, 2021, neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, has been a party to or subject to any cease and desist order, prompt corrective action directive, written agreement, or memorandum of understanding issued by or with, or any commitment letter or similar undertaking to, or has been subject to any action, proceeding, order, or directive by, any Governmental Entity, or has adopted any board resolutions at the request of any Governmental Entity, or has been advised by any Governmental Entity that such Governmental Entity is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such action, proceeding, order, directive, cease and desist order, prompt corrective action directive, written agreement, memorandum of understanding, commitment letter, board resolutions, or similar undertaking. To the Knowledge of the Company, there are no facts or circumstances which would reasonably be expected to result in any Governmental Entity issuing or requesting any such action, proceeding, order, directive, cease and desist order, prompt corrective action directive, written agreement, memorandum of understanding, commitment letter, board resolutions, or similar undertaking. There are no material unresolved violations, criticisms, or exceptions noted by any Governmental Entity in or with respect to any report or statement relating to any examination or inspection of the Company or Alliance Bank or any of their respective Subsidiaries. Since January 1, 2021, there have been no material formal or informal inquires by (other than in the ordinary course of routine regulatory examinations and visitations), or material disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies, or procedures of the Company or Alliance Bank or any of their respective Subsidiaries.

&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) *Compliance with Laws; Deposit Insurance*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Company Parties and their respective Subsidiaries have at all times since January 1, 2021, complied with, and are currently in compliance with, in each case in all material respects, all applicable Laws. The Company Parties and their respective Subsidiaries have, and have at all times since January 1, 2021 had, all permits, licenses, franchises, certificates of authority, orders, authorizations, and approvals, and have made all filings, applications, and registrations with all Governmental Entities, that are required in order to permit them to own, lease, and operate their properties and assets and to carry on their respective businesses as heretofore or presently conducted, and all such permits, licenses, franchises, certificates of authority, orders, authorizations, and approvals are in full force and effect and, to the Knowledge of the Company, no termination, suspension or cancellation of any of them is threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) The deposits of Alliance Bank are insured by the FDIC in accordance with the Federal Deposit Insurance Act (the "***FDIA***") to the fullest extent permitted by Law, and Alliance Bank has timely paid all premiums and assessments and filed all reports required by the FDIA. No proceeding for the revocation or termination of such deposit insurance is pending or, to the Knowledge of the Company, threatened.

&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) *Taxes*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Company Parties and their respective Subsidiaries have filed all income and other material Tax Returns required to be filed by or with respect to them (all such required Tax Returns, collectively, the "***Company Returns***"). Neither the Company Parties nor any of their respective Subsidiaries currently is the beneficiary of any extension of time within which to file any Company Returns. All of the Company Returns were true, correct, and complete in all material respects, and all material Taxes due and payable by the Company Parties and their respective Subsidiaries with respect to the periods covered by the Company Returns have been paid (whether or not shown on any Company Returns). The accruals and reserves for unpaid Taxes (other than reserves for deferred Taxes established to reflect timing differences between book and Tax income) reflected in the Interim Company Financials are adequate in all material respects, in accordance with GAAP, to cover all unpaid Taxes of the Company and its Subsidiaries for periods ending on or prior to the date of the Interim Company Financials. All such accruals and reserves for Taxes, as adjusted for operations and transactions and the passage of time for periods ending on or prior to the Closing Date in accordance with past custom and practice of the Company and its Subsidiaries, will be adequate in all material respects, in accordance with GAAP, to cover all unpaid Taxes of the Company and its Subsidiaries accruing through the Closing Date. No claim has been made against the Company or Alliance Bank or any of their respective Subsidiaries by a taxing authority in a jurisdiction where the Company or Alliance Bank or their respective Subsidiaries do not file Tax Returns that the Company or Alliance Bank or any of their respective Subsidiaries are or may be subject to taxation in that jurisdiction. No outstanding agreement, arrangement, extension, or waiver of or with respect to the limitation period applicable to any Company Return has been agreed to or entered into or granted (by the Company Parties or any other Person), which is still in effect, no such agreement, arrangement, extension, or waiver (other than any that has been fully resolved or terminated) has been requested in writing by or from the Company Parties or any of their respective Subsidiaries, and neither the Company Parties nor any of their respective Subsidiaries has executed or is bound by any extension or waiver of any statute of limitations on the assessment or collection of any Tax.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) All material estimated Taxes required to be paid by or with respect to, or in respect of the operations of, the Company Parties or any of their respective Subsidiaries have been paid to the proper taxing authorities. All material Taxes that the Company Parties or any of their respective Subsidiaries have been required to withhold or collect in connection with any amounts paid or owing to any employee, director, independent contractor, shareholder, nonresident, creditor, or other third party have been duly withheld or collected and have been paid, to the extent required, to the proper taxing authorities; the Company Parties and their respective Subsidiaries have complied in all material respects with all information reporting and backup withholding requirements, including the maintenance of required records, with respect to such amounts; and the Company Parties and their respective Subsidiaries have paid all material employer contributions and premiums and filed all Tax Returns with respect to any employee income Tax withholding, and social security and unemployment Taxes and premiums, all in compliance in all material respects with the withholding provisions of the Code and other applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) No audit, investigation, examination, deficiency assessment, refund litigation, or other proceeding is pending or, to the Knowledge of the Company, threatened in writing against or with respect to the Company Parties or any of their respective Subsidiaries in respect of any Taxes or Tax matters, and to the Knowledge of the Company there are no facts or circumstances that would reasonably be expected to give rise to any such audit, investigation, examination, deficiency assessment, refund litigation or other proceeding. There are no Liens for Taxes upon any of the properties or assets of the Company Parties or any of their respective Subsidiaries, other than Permitted Liens.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) There is no Contract or plan covering any director, officer, employee, or independent contractor, or any former director, officer, employee, or independent contractor, of the Company or Alliance Bank or any of their respective Subsidiaries that, individually or collectively with any other such Contracts or plans, will, or would reasonably be expected to, (A) give rise, directly or indirectly, to the payment of any amount for which a deduction will be disallowed pursuant to Section 280G of the Code or (B) subject any such Person to additional taxes under Section 409A of the Code. Neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, is a party to or bound by any Contract or plan, or has any obligation (current or contingent), to compensate any Person for Taxes paid pursuant to Section 4999 of the Code or 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Except as set forth on **<u>Schedule 4.2(n)(v)</u>** of the Disclosure Memorandum, (A) neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, has at any time been a member of a group with which it has filed or been included in a combined, consolidated, or unitary Tax Return (other than a group for which the Company was the common parent); (B) neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, is or has ever been a party to or bound by any Tax indemnity agreement, Tax sharing agreement, Tax allocation agreement, or similar Contract, other than ordinary commercial agreements the primary purpose of which is not indemnification for or the sharing or allocation of Taxes; and (C) neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, is liable for the Taxes of any other Person, whether as a transferee or successor, by Contract (including any Tax allocation agreement, Tax sharing agreement, or Tax indemnity agreement), or otherwise, other than pursuant to ordinary commercial agreements the primary purpose of which is not indemnification for or the allocation or sharing of Taxes.

&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) *Material Contracts*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) As used in this Agreement, the term "***Material Contract***" means any Contract to which the Company or Alliance Bank, or any of their respective Subsidiaries, is a party or by which the Company or Alliance Bank, or any of their respective Subsidiaries, is bound (A) that involves, or would reasonably be expected to involve, annual receipts or disbursements of $50,000 or more (other than Contracts for Bank Loans (as defined below) made in the ordinary course of business); (B) that requires the Company or Alliance Bank, or any of their respective Subsidiaries, to purchase all of its requirements for a given product, good, or service from a given Person; (C) that provides for the indemnification by the Company or Alliance Bank, or any of their respective Subsidiaries, of any Person, or the express assumption by the Company or Alliance Bank, or any of their respective Subsidiaries, of any Tax, environmental, or other Liability of any Person; (D) relating to the disposition or acquisition, directly or indirectly (by merger or otherwise), by the Company or Alliance Bank, or any of their respective Subsidiaries, after the date of this Agreement of properties, assets, or securities with a fair market value of $50,000 or more; (E) that is an employment agreement, consulting agreement, severance agreement, change of control agreement, bonus agreement, salary continuation agreement, deferred compensation agreement, stock option agreement, non-competition agreement, non-solicitation agreement, confidentiality or non-disclosure agreement, or other Contract with any current or former director, officer, employee, or independent contractor of or to the Company or Alliance Bank or any of their respective Subsidiaries (excluding commercially standard confidentiality and non-disclosure provisions included in vendor agreements entered into by the Company Parties in the ordinary course of business); (F) to or under which any shareholder, director, officer, employee, independent contractor, or Affiliate of the Company or Alliance Bank or any of their respective Subsidiaries, or any Affiliate of or member of the immediate family of any such Person, is a party or beneficiary; (G) under which any payment (whether change of control, severance, or otherwise) will or may become due to any current or former director, officer, employee, independent contractor, or other service provider as of result of or upon the execution or delivery of this Agreement or the consummation of the any of the transactions contemplated by this Agreement (either alone or upon the occurrence of any additional acts or events); (H) that provides for compensation or benefits that will or may be increased, or under which compensation or benefits will or may be accelerated, as of result of or upon the execution or delivery of this Agreement or the consummation of the any of the transactions contemplated by this Agreement (either alone or upon the occurrence of any additional acts or events), or that provides for compensation or benefits the value of which will be calculated on the basis of any of the transactions contemplated by this Agreement; (I) that provides for any payments by the Company or Alliance Bank, or any of their respective Subsidiaries, upon a change of control; (J) that limits or purports to limit the right of the Company or Alliance Bank, or any of their respective Subsidiaries, to engage in any line of business, compete with any Person, or operate in any geographic location; (K) with respect or relating to any partnership, joint venture, limited liability company, or similar arrangement; (L) with respect to the ownership, occupancy, management, lease (as lessor, lessee, or otherwise), or operation of real property; (M) with respect or relating to data or item processing, data security, or information technology; (N) that grants to any Person any right of first refusal, right of first offer, or similar right with respect to any assets, rights, properties, or securities of the Company or Alliance Bank or any of their respective Subsidiaries; (O) that relates to indebtedness of or borrowings of money by the Company or Alliance Bank, or any of their respective Subsidiaries, in excess of $50,000 (other than Contracts relating to customer deposit liabilities, Federal Home Loan Bank borrowings, or repurchase agreements with customers, in each case created, incurred, or entered into in the ordinary course of business); (P) relating to the acquisition, transfer, sale, or issuance of, or otherwise directly affecting or dealing with, any securities of the Company or Alliance Bank or any of their respective Subsidiaries, including without limitation any voting, shareholders, or underwriting agreement; (Q) that is not terminable on 30 days or less notice without any payment or penalty and involving annual disbursements or payments by the Company or Alliance Bank or any of their respective Subsidiaries in excess of $25,000 per annum; or (R) that is not described in subsections (A)-(Q) above and that is material to the Company or Alliance Bank or any of their respective Subsidiaries or the business, operations, or financial condition of the Company or Alliance Bank or any of their respective Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 true, correct, and complete copy (or, in the case of any oral Contract, a complete and accurate written description) of each Material Contract, as amended through the date of this Agreement, has been previously provided or made available to Commercial. Each of the Material Contracts is in full force and effect and is a valid and binding obligation of the Company or Alliance Bank or their respective Subsidiaries, as applicable, and, to the Knowledge of the Company, each of the other parties thereto, and is enforceable against the Company or Alliance Bank or their respective Subsidiaries, as applicable, and, to the Knowledge of the Company, each of the other parties thereto in accordance with its terms, subject to the Enforceability Exceptions. The Company and Alliance Bank and their respective Subsidiaries have performed in all material respects all duties and obligations required to be performed by them under each Material Contract. Neither the Company nor Alliance Bank nor any of their respective Subsidiaries nor, to the Knowledge of the Company, any other party thereto is in breach or violation of or default under, in each case in any material respect, any Material Contact, and there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a breach, violation, or default. To the Knowledge of the Company, no event has occurred and no circumstance or condition exists that, with or without notice or lapse of time or both, gives any Person, or will or could give any Person, (A) the right to declare a breach or default or exercise any remedy under any Material Contract, (B) the right to accelerate the maturity of or performance under any Material Contract, or (C) the right to prematurely cancel or terminate or to modify any Material Contract.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Except as set forth on **<u>Schedule 4.2(o)(iii)</u>** of the Disclosure Memorandum, (A) no consents, approvals, waivers, or notices are required to be obtained, given, or delivered pursuant to the terms of any Material Contract as a result of the execution, delivery, or performance of this Agreement by the Company or the Bank Merger Agreement by Alliance Bank or the consummation of the transactions contemplated by this Agreement or the Bank Merger Agreement, and (B) assuming the consents, approvals, waivers, and notices referred to in clause (A) are obtained, given, and delivered, neither the execution, delivery, or performance of this Agreement by the Company or the Bank Merger Agreement by Alliance Bank nor the consummation of the transactions contemplated by this Agreement or the Bank Merger Agreement will result in any Person having the right to declare a breach or default or exercise any remedy under any Material Contract, accelerate the maturity of or performance under any Material Contract, or cancel, terminate, or modify any Material Contract.

&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) *Intellectual Property; Information Technology Systems*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Company Parties own or have a license to use all of the Intellectual Property used by such Company Parties in the course of their business, including sufficient rights in each copy possessed by the Company Parties. The Company Parties are the owner of or have a license to any Intellectual Property sold or licensed to a third party by such Company Parties in connection with their business operations, and the Company Parties have the right to convey by sale or license any Intellectual Property so conveyed. To the Knowledge of the Company Parties, none of the Company Parties is in material default under any of its Intellectual Property licenses. No proceedings have been instituted, or are pending or to the Knowledge of the Company Parties threatened, which challenge the rights of the Company Parties with respect to Intellectual Property used, sold or licensed by the Company Parties in the course of their business, nor has any Person claimed or alleged any rights to such Intellectual Property of any other Person. The Company Parties do not have any contracts or agreements with their directors, officers, or employees which require such directors, officers, or employees to assign any interest in any Intellectual Property to the Company 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) All of the computer firmware, computer hardware, computer software (whether general or special purpose), telecommunications hardware, and other similar or related items of automated, computerized, or software systems, networks, interfaces, platforms or applications, whether or not in electronic format, and other equipment used or relied upon in the conduct of the business of the Company Parties and their respective Subsidiaries (collectively, the "***Company IT Systems***") (A) have been properly maintained by technically competent personnel, in accordance with standards set by manufacturers or otherwise in accordance with standards in the industry, to ensure proper operation, monitoring, and use; (B) are in good working order; (C) function in all material respects in accordance with all specifications and any other descriptions under which they were supplied; (D) are free of any material defects, bugs, or errors, (E) do not contain or make available any disabling software, code, or instructions, spyware, Trojan horses, worms, viruses, or other software routines that permit or cause unauthorized access to or material disruption, impairment, disablement, or destruction of any software, data, or other materials (collectively, "***Contaminants***"); and (F) are sufficient for the existing and currently anticipated needs of the business of the Company Parties and their respective Subsidiaries. The Company Parties and their respective Subsidiaries have taken commercially reasonable steps and implemented commercially reasonable safeguards to ensure that the Company IT Systems are free from Contaminants. The Company Parties and their respective Subsidiaries have reasonable business continuity and disaster recovery plans, procedures, and facilities for their respective businesses and have taken commercially reasonable steps to safeguard the Company IT Systems against unauthorized access. Since January 1, 2021, the Company IT Systems have not suffered any failures, errors, or breakdowns which have caused any substantial disruption to or interruption in the operation of the business of the Company Parties and their respective Subsidiaries. The Company Parties and their respective Subsidiaries have used commercially reasonably efforts to promptly implemented material security patches that are made generally available for the Company IT Systems by the providers of the Company IT Systems. Neither the Company nor Alliance Bank nor any of their respective Subsidiaries is in breach of or default under any Contract relating to any of the Company IT Systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Company Parties and their respective Subsidiaries have in place commercially reasonable data protection and privacy policies and procedures to protect, safeguard, and maintain the confidentiality, integrity, and security of (A) their information technology systems and software owned or purported to be owned by them and (B) all information, data, and transactions stored or contained therein or transmitted thereby, including Personal Information (the "***Company Data***"). Since January 1, 2021, the Company Parties and their respective Subsidiaries have complied in all material respects with their respective privacy policies and procedures and have complied in all material respects with all applicable Laws governing the receipt, collection, use, storage, processing, sharing, security, disclosure, or transfer of Personal Information, including without limitation Title V of the Gramm-Leach-Bliley Act of 1999 and regulations promulgated thereunder, the provisions of the information security program adopted by the Company Parties pursuant to 12 C.F.R. Part 364, and all self-regulatory standards with which the Company Parties are bound to comply with respect to their handling of Personal Information, including and as applicable the Payment Card Industry Data Security Standard. The Company Parties and their respective Subsidiaries have implemented commercially reasonable administrative, technical, and physical security measures designed to protect Company Data against loss, damage, unauthorized access, use, or disclosure, modification, or other misuse. To the Knowledge of the Company, the Company Parties and their respective Subsidiaries have the legal right to possess, use, and process for the business and operations of the Company Parties and their respective Subsidiaries as currently conducted all Company Data collected, held, or processed by the Company Parties and their respective Subsidiaries. To the Knowledge of the Company, since January 1, 2021, there has been no loss, damage, unauthorized access, use, or disclosure, modification, or other misuse of any Company Data that would give rise to a duty to notify any Person of the same under applicable Laws. There currently are not any, and since January 1, 2021, there have not been any, pending or, to the Knowledge of the Company, threatened claims or written complaints from any Governmental Entity or other Person with respect to unauthorized access to or breaches of the security of (A) any of the Company IT Systems or (B) Company Data or any other information collected, maintained, or stored by or on behalf of the Company Parties or their respective Subsidiaries (or any unlawful acquisition, use, loss, destruction, compromise, or disclosure 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;(q) *Labor and Employment Matters*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Company Parties and their respective Subsidiaries are, and have been at all times since January 1, 2021, in compliance in all material respects with all applicable Laws respecting employment, retention of independent contractors, employment practices, terms and conditions of employment, and wages and hours. Neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, is or has ever been a party to, or is or has ever been bound by, any collective bargaining agreement or contract or other agreement or understanding with a labor union or labor organization with respect to its employees, nor is the Company or Alliance Bank, or any of their respective Subsidiaries, the subject of any proceeding in which it is asserted that the Company or Alliance Bank, or any of their respective Subsidiaries, has committed an unfair labor practice or seeking to compel the Company or Alliance Bank, or any of their respective Subsidiaries, to bargain with any labor union or labor organization as to wages or conditions of employment, nor, to the Knowledge of the Company, has any such proceeding been threatened, nor is there any strike, labor dispute, or organizational effort involving the Company or Alliance Bank, or any of their respective Subsidiaries, pending or, to the Knowledge of the Company, threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Set forth on **<u>Schedule 4.2(q)(ii)</u>** of the Disclosure Memorandum is (A) a true, correct, and complete list of all employees (including any temporary employees) of the Company or Alliance Bank or their respective Subsidiaries; (B) each such employee's current rate of compensation and bonus or incentive compensation arrangements; (C) each such employee's date of hire and accrued vacation, sick leave, personal leave, and paid time off, as applicable; and (D) the names of any employees of the Company or Alliance Bank or any of their respective Subsidiaries who are absent from work due to a leave of absence (including without limitation in accordance with the requirements of the Family and Medical Leave Act or the Uniformed Services Employment and Reemployment Rights Act) or a work-related injury, or who are receiving workers' compensation or disability compensation. Other than compensation and benefits payable in the ordinary course of business the payment of which is not delinquent, there are no unpaid wages, salaries, bonuses, commissions, or other amounts owed to any employee or former employee of the Company or Alliance Bank or any of their respective Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, has classified any Person as an "independent contractor" or any similar status who, under applicable Law or the provisions of any Company Benefit Plan (as defined below), should have been classified as an employee. To the Knowledge of the Company, neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, has any material Liability for improperly excluding any Person who provides or has provided services to the Company or Alliance Bank or any of their respective Subsidiaries in any capacity from participating in any Company Benefit 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) There is no pending or, to the Knowledge of the Company, threatened suit, action, claim, or legal, administrative, arbitration, or other proceeding by or on behalf of any current or former employee of the Company or Alliance Bank or any of their respective Subsidiaries, including without limitation any suit, action, claim, or legal, administrative, arbitration, or other proceeding alleging noncompliance with applicable Laws respecting employment, employment practices, wages and hours, or terms and conditions of employment (but excluding workers' compensation matters), and to the Knowledge of the Company, there are no facts or circumstances that would reasonably be expected to give rise to any such suit, action, claim, or legal, administrative, arbitration, or other proceeding.

&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) *Benefit Plans*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Set forth on **<u>Schedule 4.2(r)(i)</u>** of the Disclosure Memorandum is a true, correct, and complete list of all pension, retirement, survivor income, salary continuation, stock option, restricted stock, restricted stock unit, stock purchase, stock ownership, savings, stock appreciation right, capital appreciation, profit sharing, deferred compensation, consulting, bonus, group insurance, disability, severance, change of control, fringe benefit, incentive, cafeteria or Code Section 125, welfare, or other benefit plans, contracts, agreements, and arrangements, including without limitation each "employee benefit plan" as defined in Section 3(3) of ERISA, whether or not subject to ERISA, any incentive or welfare policies, contracts, plans, or arrangements, including split dollar life insurance arrangements, and all trust agreements and funding arrangements related thereto, which are or in the past three years have been maintained, sponsored, or contributed to (or required to be contributed to) by the Company or Alliance Bank or an ERISA Affiliate for the benefit of or with respect to any current or former directors, officers, employees, independent contractors, or consultants of the Company or Alliance Bank or any of their respective Subsidiaries, or any spouse, dependent, or beneficiary of any such Person, or to or under which the Company or Alliance Bank has any Liability, contingent or otherwise (herein referred to collectively as the "***Company Benefit Plans***"). The Company has previously delivered or made available to Commercial true, correct, and complete copies of all Company Benefit Plans, along with, where applicable: (A) all current investment management contracts, custodial agreements, administrative service agreements, and insurance and annuity contracts; (B) the current summary plan description and summary of material modifications and each current summary of benefits and coverage; (C) the most recently filed annual reports (Form 5500 with all corresponding schedules and financial statements); (D) the most recent IRS determination, advisory, or opinion letter and each currently pending application to the IRS for a determination letter; (E) the most recent nondiscrimination testing reports, actuarial reports, and financial statements; (F) all material correspondence, notices, and filings within the last three years with the IRS, United States Department of Labor ("***DOL***"), Pension Benefit Guaranty Corporation ("***PBGC***"), or any other Governmental Entity; and (G) copies of the most recently filed IRS Forms 1094 and 1095. There has been no announcement or commitment by the Company or Alliance Bank, or any of their respective Subsidiaries, to create any additional Company Benefit Plan, to amend any Company Benefit Plan (except for amendments required by applicable Law which do not materially increase the costs associated with such Company Benefit Plan), or to terminate any Company Benefit 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Other than routine claims for benefits thereunder customary in nature and amount, there is no pending or, to the Knowledge of the Company, threatened claim, litigation, action, administrative action, suit, audit, arbitration, mediation, or other proceeding (legal, administrative, or otherwise) relating to any Company Benefit Plan. All of the Company Benefit Plans comply in all material respects with applicable requirements of ERISA and the Code and other applicable Laws and have been established, maintained, and administered in compliance, in all material respects, with all applicable requirements of ERISA, the Code and other applicable Laws, and the terms and provisions of all documents, contracts, or agreements establishing the Company Benefit Plans or pursuant to which they are maintained or administered. There are no existing circumstances and no event has occurred that would reasonably be expected to adversely affect the qualified status of any Company Benefit Plan that is likely to result in, or has already resulted in, the imposition of any material Taxes or material Liability upon the Company or Alliance Bank or any of their respective Subsidiaries. No audit of any Company Benefit Plan by the IRS or the DOL is ongoing or, to the Knowledge of the Company, threatened or was ongoing or closed at any time during the past five years. No "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) has occurred with respect to any Company Benefit Plan that would reasonably be expected to result in, or has already resulted in, the imposition of any material penalties or material Taxes upon the Company or Alliance Bank or any of their respective Subsidiaries under Section 502(i) of ERISA or Section 4975 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Neither the Company Parties nor any ERISA Affiliate currently maintains, contributes to, or has an obligation to maintain or contribute to, or has previously maintained, contributed to, or had an obligation to maintain or contribute to, (A) a pension plan subject to Section 302 or Title IV of ERISA or Section 412 of the Code, (B) a "multiemployer plan" (within the meaning of Section 3(37) of ERISA), (C) a "multiple employer plan" (within the meaning of Section 413(c) of the Code), (D) a voluntary employees' beneficiary association under Section 501(c)(9) of the Code, or (E) a "multiple employer welfare arrangement" (within the meaning of Section 3(40) of ERISA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Each Company Benefit Plan that is an "employee pension benefit plan" (as defined in Section 3(2) of ERISA) and that is intended to be qualified under Section 401(a) of the Code (a "***Company Qualified Plan***") has received a current favorable determination letter from the IRS (or, in the case of an IRS pre-approved plan, the pre-approved plan has a current IRS opinion or advisory letter upon which the Company Parties are entitled to rely under applicable IRS guidance), and to the Knowledge of the Company there are no facts or circumstances that would reasonably be expected to result in the revocation of any such favorable determination letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, has any obligations for post-retirement or post-employment benefits under any Company Benefit Plan that cannot be amended or terminated upon 60 days or less notice without incurring any Liability thereunder, except for coverage required by Part 6 of Title I of ERISA or Section 4980B of the Code or similar state Laws, the cost of which is borne by the insured individuals.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) All contributions and payments required to be made with respect to any Company Benefit Plan by applicable Law or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Company Benefit Plan, have been timely made or paid in full by the applicable due date, with extensions, or to the extent not required to be made or paid on or before the date hereof, have been fully reflected or reserved against in the Interim Company Financials to the extent required by GAAP or regulatory accounting requirements. Each Company Benefit Plan that is an employee welfare benefit plan under Section 3(1) of ERISA either (A) is funded through an insurance company contract and is not a "welfare benefit fund" within the meaning of Section 419 of the Code or (B) is unfunded. Any unfunded Company Benefit Plan pays benefits solely from the general assets of the Company or Alliance Bank, or a Subsidiary thereof, for which arrangement the establishment of a trust under ERISA is not required. All unfunded benefits for which claims have been filed under a Company Benefit Plan have been or are being processed for payment or otherwise adjudicated in accordance with the terms of the applicable Company Benefit Plan and paid (to the extent payment is due), or will be paid, within the customary, normal, and routine claims processing and payment time frames followed by the Company Benefit Plan and as required by ERISA. No unfunded Company Benefit Plan is delinquent in the payment of benefits, and neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, is delinquent in making its required contributions to any such unfunded Company Benefit Plan so that the Company Benefit Plan can pay benefits on a timely basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) All required reports, notices, disclosures, and descriptions (including without limitation Form 5500 annual reports and required attachments, IRS Forms 1099-R, Forms 1094 and 1095, summary annual reports, Forms PBGC-1, and summary plan descriptions) have been timely filed or distributed in accordance with applicable Law with respect to each Company Benefit Plan. All required Tax filings with respect to each Company Benefit Plan have been made, and any Taxes due in connection with such filings have been paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Except as set forth on **<u>Schedule 4.2(r)(viii)</u>** of the Disclosure Memorandum, neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, is a party to or bound by any Contract (including without limitation any severance, change of control, salary continuation, or employment agreement) under or pursuant to which (A) any current or former director, officer, employee, independent contractor, or consultant of the Company or Alliance Bank, or of any of their respective Subsidiaries, is or will be entitled to severance pay or change of control or other benefits, or any increase in severance pay or other benefits (whether upon termination of employment or termination of such Contract after the date hereof or otherwise), (B) the timing of any payment or vesting will be accelerated, any payment or funding (through a grantor trust or otherwise) of compensation or benefits will be triggered, the amount payable thereunder will be increased, or any withdrawal liability or any other material obligation will be triggered, or (C) there is or will be payable any "excess parachute payment" within the meaning of Section 280G of the Code, the imposition of any Tax under Section 409A of the Code, or the forgiveness of any indebtedness, in each case as a result or consequence of the execution or delivery of this Agreement, shareholder approval of this Agreement or the transactions contemplated hereby, or the consummation of the transactions, including the Mergers and the Bank Merger, contemplated hereby, either alone or in connection with any other event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) Each Company Benefit Plan that is a "nonqualified deferred compensation plan" (as defined in Section 409A(d)(1) of the Code) is in documentary compliance with Section 409A of the Code and has been administered, in all material respects, (A) in good-faith compliance with Section 409A of the Code during the period October 1, 2004, through December 31, 2008, and (B) in compliance with Section 409A of the Code since January 1, 2009.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) No Person is entitled to receive any additional payment (including without limitation any Tax gross-up or similar payment) from the Company or Alliance Bank or any of their respective Subsidiaries as a result of the imposition of any excise Taxes under Section 4999 of the Code or any Taxes required or imposed 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;(s) *Real and Personal Property*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Set forth on **<u>Schedule 4.2(s)(i)</u>** of the Disclosure Memorandum is a true, correct, and complete list (by street address) as of the date of this Agreement of all real property owned by the Company or Alliance Bank or any of their respective Subsidiaries, including without limitation property carried on the books of Alliance Bank as "other real estate owned" (the "***Owned Real Property***"), and all real property leased by the Company or Alliance Bank or any of their respective Subsidiaries (the "***Leased Real Property***" and together with the Owned Real Property, collectively, the "***Company Properties***"). Except for the Company Properties, as of the date of this Agreement, neither the Company nor Alliance Bank nor any of their respective Subsidiaries holds any interest (fee, leasehold, or otherwise) in any real property, other than interests held as a creditor in real property securing Bank Loans. The Company, Alliance Bank or their respective Subsidiaries have good and marketable title to all of the Owned Real Property (including any property acquired in a judicial foreclosure proceeding or by way of a deed in lieu of foreclosure or similar transfer), in each case free and clear of any and all Liens, except for Permitted Liens. None of the Owned Real Property is leased by the Company or Alliance Bank or any of their respective Subsidiaries. Each lease pursuant to which the Company or Alliance Bank or their respective Subsidiaries lease the Leased Real Property (each, a "***Company Lease***") is valid, binding, enforceable, and in full force and effect in accordance with its terms, and neither the Company nor Alliance Bank nor any of their respective Subsidiaries, nor to the Knowledge of the Company any other party to any such lease, is in breach or default under or in violation of any provision of any such lease. The Company has previously delivered or made available to Commercial a true, correct, and complete copy of each such lease, including all amendments thereto. To the Knowledge of the Company, each of the Company Properties is in reasonable operating condition (normal wear and tear excepted), and neither the Company nor Alliance Bank nor any of their respective Subsidiaries has received written notice that any of the Company Properties is currently in violation of applicable ordinances, regulations, or zoning or other Laws. Each of the Company Properties is reasonably considered by the Company to be adequate for the current business of the Company Parties and their respective Subsidiaries. Except for Permitted Liens, to the Knowledge of the Company, (A) none of the buildings, structures, or other improvements located on any of the Owned Real Property or the Leased Real Property encroaches upon or over any adjoining parcel of real estate or any easement or right-of-way and (B) none of the buildings, structures, or other improvements located on any parcel adjoining any of the Owned Real Property or the Leased Real Property encroaches upon or over any portion of the Company Properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Each Company Party or respective Subsidiary named as tenant or lessee under a Company Lease is entitled to and has exclusive possession of the applicable Leased Real Property, subject to the terms and conditions of such Company Lease. None of the Owned Real Property and, to the Knowledge of the Company, none of the Leased Real Property is subject to any legally binding lease, tenancy, or license or any legally binding agreement to grant any such lease, tenancy, or license that materially interferes with the Company Parties' or their respective Subsidiaries' use of the Company Properties. There is no Person in possession or occupation of or who has any current right to possession or occupation of the Owned Real Property, other than the Company Parties and their respective Subsidiaries. There is no Person in possession or occupation of or, to the Knowledge of the Company, who has any current right to possession or occupation of the Leased Real Property, other than (A) the Company Parties and their respective Subsidiaries and (B) the owners, lessors, or landlords of the Leased Real Property, in accordance with the terms and conditions of the applicable Company Lease. Except for Permitted Liens, to the Knowledge of the Company, there are no easements of any kind on, in respect of, or affecting the Company Properties that materially and adversely affect the right of the Company Parties and their respective Subsidiaries to use the Company Properties for the conduct of their 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;(iii) None of the Company Properties, nor any building, structure, fixture, or improvement thereon, is the subject of (or, to the Knowledge of the Company, affected by) any condemnation, taking, eminent domain, or inverse condemnation proceeding currently instituted or pending, and the Company has no Knowledge that any of the Company Properties, or any such building, structure, fixture, or improvement, will or is expected to be the subject of, or affected by, any such proceeding. The Company has no Knowledge that there are currently any special, general, or other assessment proceedings affecting the Company Properties which, if as a result of which a special, general, or other assessment were imposed, would materially increase the cost of using and operating the Company Properties as currently used and operated by the Company Parties and their respective Subsidiaries. To the Knowledge of the Company, the Company Properties are appropriately zoned for each of the purposes for which they are being used by the Company Parties and their respective Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Neither the Company nor Alliance Bank, nor any of their Subsidiaries, has experienced with respect to the Company Properties any material restriction in access to or from public roads or any material restriction in access to any utilities, including without limitation water, sewer, drainage, gas, electric, telephone, cable, and internet, used by the Company or Alliance Bank or any of their Subsidiaries in the operation of their business as presently conducted; there is no pending or, to the Knowledge of the Company, threatened governmental action that would prohibit or materially interfere with such access; and, to the Knowledge of the Company, no fact or condition exists which, with the passage of time or the giving of notice, or both, may result in the termination of or the material reduction or impairment of such access. All existing utilities provided at the Company Properties are adequate in all material respects for the Company Parties' and their respective Subsidiaries' existing use and operation of the Company Properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) The Company and Alliance Bank and their respective Subsidiaries have good and marketable title to all personal property owned by them, in each case free and clear of any and all Liens, except for Permitted Liens. Each lease pursuant to which the Company or Alliance Bank, or any of their respective Subsidiaries, leases personal property is valid, binding, enforceable, and in full force and effect in accordance with its terms, and neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, nor, to the Knowledge of the Company, any other party to any such lease, is in default under or in breach or violation of any provision of any such lease. The personal property owned or leased by the Company and Alliance Bank and their respective Subsidiaries is in reasonable operating condition, normal wear and tear excepted, and is reasonably considered by the Company to be adequate for the carrying on of the business of the Company and Alliance Bank and their respective Subsidiaries in the ordinary course consistent with past practice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) *Environmental Matters*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Owned Real Property is, and the Company and Alliance Bank are operating and have operated each of the Company Properties, in compliance in all material respects with all Environmental Laws. There is no suit, claim, action, demand, executive or administrative order, investigation, directive, or proceeding pending or, to the Knowledge of the Company, threatened against the Company or Alliance Bank or any of their respective Subsidiaries, (A) relating to alleged noncompliance (including by any predecessor) with or Liability under any Environmental Law or (B) relating to the presence of or release into the environment of any Hazardous Substance, whether or not occurring at or on a site owned, leased, or operated by the Company or Alliance Bank or any of their respective Subsidiaries. Neither the Company nor Alliance Bank, nor any of their respective Subsidiaries, has received any written notice, demand letter, executive or administrative order, directive, or request for information from any Governmental Entity or other third party indicating that it is or may be in violation of or have any Liability under any Environmental Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) To the Knowledge of the Company, there are no underground storage tanks at or on any of the Company Properties or any other property operated by the Company or Alliance Bank or any of their respective Subsidiaries. Neither the Company nor Alliance Bank nor any of their respective Subsidiaries, nor to the Knowledge of the Company any other Person, has closed or removed any underground storage tank on or from (A) any of the Company Properties or (B) any other property while such other property was operated by the Company or Alliance Bank or any of their respective Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) During the period of the Company Parties' and their respective Subsidiaries' ownership, occupancy, or operation of the Company Properties, there has been no contamination by or release of Hazardous Substances in, on, or under such properties, except for releases of Hazardous Substances, individually or in the aggregate, in quantities below the level at which they were regulated under Environmental Laws in effect at the time of such release(s).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 Company Parties and their respective Subsidiaries have all permits, licenses, consents, orders, authorizations, and approvals required by the Environmental Laws for the use and occupancy of, and for all operations and activities conducted on, the properties owned, leased, operated, or occupied by the Company Parties or their respective Subsidiaries, and the Company Parties and their respective Subsidiaries are in compliance in all material respects with all such permits, licenses, consents, orders, authorizations, and approvals. All such permits, licenses, consents, orders, authorizations, and approvals were duly issued, are in full force and effect, and will remain in full force and effect as of and after the Effective 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The representations and warranties set forth in this <u>Section 4.2(t)</u> constitute the Company's sole representations and warranties with respect to the Company's and the Company Properties' compliance with Environmental Laws, or with respect to the presence, absence, release, or threatened release of Hazardous Substances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) [Intentionally Omitted]

&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) *Brokers*. Except for the engagement of and amounts payable to Hovde Group, LLC, in each case pursuant to those certain engagement letters dated July 6, 2023, and August 24, 2023 between Hovde Group, LLC and the Company, neither the Company nor Alliance Bank nor any of their respective Subsidiaries, nor any of their respective officers, directors, employees, or agents, has engaged or employed any broker, investment banker, or finder or incurred any Liability for any financial advisory, investment banking, brokerage, or finder's fees, commissions, or expenses, and no broker, investment banker, or finder has acted directly or indirectly for or on behalf of the Company or Alliance Bank or any of their respective Subsidiaries, in connection with this Agreement or the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) *Loan Matters*.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) All Loans made, originated, or held by the Company or Alliance Bank or any of their respective Subsidiaries (collectively, the "***Bank Loans***") (A) were made or originated for good, valuable, and adequate consideration in the ordinary course of business and (B) were solicited and originated, and are and have been administered and, where applicable, serviced, and the relevant Loan files are being and have been maintained, (1) in accordance in all material respects with the relevant notes or other credit or security documents, (2) in accordance in all material respects with the applicable underwriting and servicing standards of Alliance Bank (and, in the case of Loans held for resale to investors, the underwriting standards, if any, of the applicable investors), and (3) in accordance in all material respects with all applicable Laws. To the Knowledge of the Company, none of Bank Loans are subject to any defenses, setoffs, or counterclaims, including without limitation any of such as are afforded by usury or truth in lending Laws, subject, however, to the Enforceability Exceptions. The notes or other evidences of indebtedness evidencing the Bank Loans and all pledges, mortgages, deeds of trust, and other collateral documents and security agreements related thereto are legal, valid, binding, and enforceable (except as enforceability may be limited by the Enforceability Exceptions). Neither the terms of any Bank Loan, any of the documentation for any Bank Loan, the manner in which any Bank Loan has been administered or serviced, nor the Company's or Alliance Bank's, or their respective Subsidiaries', practices of approving or rejecting Loan applications violate, in any material respect, any Law applicable thereto, including without limitation the Truth in Lending Act of 1968, as amended; Regulation B, Regulation O, and Regulation Z of the Federal Reserve; the Community Reinvestment Act of 1977, as amended (the "***CRA***"); the Equal Credit Opportunity Act, as amended; and any applicable federal or state Laws relating to consumer protection, installment sales, or usury.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) The Company Parties' allowance for loan and lease losses is, and shall be as of the Effective Time, in compliance in all material respects with their existing methodology for determining the adequacy of their allowance for loan and lease losses as well as the standards established by applicable Governmental Entities and the Financial Accounting Standards Board, and is and shall be adequate under all such standards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) None of the Contracts pursuant to which the Company or Alliance Bank or any of their respective Subsidiaries has sold Loans or pools of Loans, or participations in Loans or pools of Loans, contain any Liability on the part of the Company or Alliance Bank or any of their respective Subsidiaries to repurchase such Loans or interests therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Set forth on **<u>Schedule 4.2(w)(iv)</u>** of the Disclosure Memorandum is a true, correct, and complete list of all Loans, as of the date of this Agreement, by the Company or Alliance Bank or any of their respective Subsidiaries to any director, executive officer, or principal shareholder (as such terms are defined in Regulation O of the Federal Reserve (12 C.F.R. Part 215)) of the Company or Alliance Bank or any of their respective Subsidiaries. All such Loans are, and were originated, in compliance with all applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Set forth on **<u>Schedule 4.2(w)(v)</u>** of the Disclosure Memorandum is a true, correct, and complete listing, as of December 31, 2023, of (A) all Loans of the Company and Alliance Bank and their respective Subsidiaries (1) that are contractually past due 90 days or more in the payment of principal and/or interest, (2) that are on non-accrual status, (3) that are classified as "special mention," "substandard," "doubtful," "loss," or words of similar import, (4) where the interest rate terms have been reduced and/or the maturity dates have been extended subsequent to the origination of the Loans due to concerns regarding the borrowers' ability to pay in accordance with the Loans' original terms, or (5) where a specific reserve allocation exists in connection therewith, and (B) all assets classified by the Company or Alliance Bank or any of their respective Subsidiaries as "other real estate owned" or real estate acquired through foreclosure or deed in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure or in lieu of foreclosure, in each case including the book value thereof as of December 31, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) Each Loan held by the Company or Alliance Bank or any of their respective Subsidiaries (A) is evidenced by notes, agreements, or other evidences of indebtedness that are true, genuine, and what they purport to be, (B) to the extent secured, has been secured by valid Liens which have been perfected, and (C) is a legal, valid, and binding obligation of the obligor named therein, enforceable in accordance with its terms, except as enforceability may be limited by the Enforceability Exceptions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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) There are no oral modifications or amendments to any Loans held by the Company or Alliance Bank or their respective Subsidiaries that are not reflected in the written records of the Company Parties or their Subsidiaries. All Loans held by the Company or Alliance Bank or their respective Subsidiaries are owned by the Company Parties or their respective Subsidiaries free and clear of any Liens, except for Liens on Loans granted to the Federal Home Loan Bank of Atlanta to secure advances therefrom. None of the Loans held by the Company or Alliance Bank or their respective Subsidiaries are presently serviced by third parties, and there is no obligation which could result in any such Loan becoming subject to third-party servicing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) *Material Interests of Certain Persons*. Except for deposit and loan relationships entered into in the ordinary course of business in compliance with applicable Law, no current or former officer or director of the Company or Alliance Bank or any of their respective Subsidiaries, or any family member or Affiliate of any such Person, has any material direct or indirect interest in any Contract or property, real or personal, tangible or intangible, of, used in the business of, or owned or leased by the Company or Alliance Bank or any of their respective Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) *Insurance*. The Company Parties and their respective Subsidiaries are insured with reputable insurers against such risks and in such amounts as are customary and prudent in light of prevailing industry practices. All policies of insurance held or maintained by or providing coverage for the benefit of the Company or Alliance Bank or their Subsidiaries (collectively, the "***Company Policies***") are in full force and effect, neither the Company nor Alliance Bank nor any of their Subsidiaries is in default thereunder, and no event has occurred which, with notice or lapse of time or both, would constitute a default or permit a termination, modification, or acceleration under any of the Company Policies. All premiums due and payable with respect to the Company Policies have been timely and fully paid (to the extent due and payable), and all claims thereunder have been filed in a timely fashion. To the Knowledge of the Company, there is no material claim for coverage by the Company or Alliance Bank or any of their respective Subsidiaries pending under any of the Company Policies as to which coverage has been denied or disputed. Neither the Company or Alliance Bank nor any of their Subsidiaries has received written notice of any termination of (actual or threatened), material premium increase with respect to, or material alteration of coverage under any of the Company 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;(z) *Investment Securities*. The Company Parties and their respective Subsidiaries have good title to all securities and commodities owned by them (except those sold under repurchase agreements), free and clear of any Liens, except to the extent such securities or commodities are pledged in the ordinary course of business to secure obligations of the Company Parties and their respective Subsidiaries. Such securities and commodities are valued on the books of the Company Parties and their respective Subsidiaries in accordance with GAAP. The Company Parties and their respective Subsidiaries employ investment, securities, commodities, risk management, and other similar policies, practices, and procedures that are prudent and reasonable in the context of their respective businesses. Except for restrictions that exist for securities that are classified as "held to maturity," none of the investment securities held by the Company or Alliance Bank or any of their respective Subsidiaries are subject to any restriction (whether contractual, statutory, or otherwise) that could materially impair the ability of the entity holding such investment securities freely to dispose of such investment securities at any 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;(aa) *Securities Transactions*. All offers and sales of securities by the Company or Alliance Bank or any of their respective Subsidiaries were at all relevant times exempt from, or complied in all material respects with, the registration requirements of the Securities Act, and the rules and regulations promulgated thereunder, and applicable state securities or "blue sky" Laws. Neither the Company Parties nor their respective Subsidiaries, nor to the Knowledge of the Company any director, officer, or employee of the Company or Alliance Bank or their respective Subsidiaries, any Person related to any such director, officer, or employee by blood, marriage, or adoption and residing in the same household, or any Person who has been knowingly provided material nonpublic information by any one or more of any of the foregoing Persons, has purchased or sold, or caused to be purchased or sold, any shares of Company Stock (or other securities issued by the Company) in violation of any applicable provision of federal or state securities Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) *Fiduciary Accounts*. The Company and Alliance Bank and their respective Subsidiaries have properly administered all accounts, if any, for which they serve or act as a fiduciary, including without limitation accounts for which they serve as trustee, agent, custodian, personal representative, guardian, conservator, or investment advisor, in accordance with the terms of all governing documents and applicable Laws. Neither the Company nor Alliance Bank nor any of their respective Subsidiaries, nor to the Knowledge of the Company any of the Company's or Alliance Bank's or any of their respective Subsidiaries' directors, officers, or employees, have committed any breach of trust with respect to any fiduciary account, and the records for each such fiduciary account are true and correct and accurately reflect the assets of such fiduciary account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) *CRA, Anti-Money Laundering, and OFAC*. Alliance Bank received a rating of "Satisfactory" or better during its most recent examination or interim review with respect to the CRA. The Company does not have Knowledge of any facts or circumstances that would reasonably be expected to cause Alliance Bank (i) to be deemed not to be in satisfactory compliance in any material respect with the CRA and the regulations promulgated thereunder, or to be assigned a rating for CRA purposes by federal banking regulators of lower than "Satisfactory"; or (ii) to be deemed to be operating in violation, in any material respect, of the Bank Secrecy Act of 1970, as amended, the USA PATRIOT Act, any order issued with respect to anti-money laundering by the United States Department of the Treasury's Office of Foreign Assets Control, or any other applicable anti-money laundering Law. The board of directors of Alliance Bank has adopted, and Alliance Bank has implemented, an anti-money laundering program that contains adequate and appropriate customer identification verification procedures that comply with Section 326 of the USA PATRIOT Act, and such anti-money laundering program meets the requirements of Section 352 of the USA PATRIOT Act and the regulations thereunder, and Alliance Bank has complied in all material respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations 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;(dd) *Internal Controls*. The records, systems, controls, data, and information of the Company Parties and their respective Subsidiaries are recorded, stored, maintained, and operated under means (including any electronic, mechanical, or photographic process, whether computerized or not) that are under the exclusive ownership and direct control of the Company Parties and their respective Subsidiaries (including all means of access thereto and therefrom), except for any non-exclusive ownership and non-direct control that has not had and would not reasonably be expected to have a material and adverse effect on the Company Parties' or their respective Subsidiaries' system(s) of internal accounting controls. The Company and Alliance Bank and their respective Subsidiaries have devised and maintained a system of internal control over financial reporting sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets, and (iii) access to assets is permitted only in accordance with management's general or specific authorizations. There are no significant deficiencies or material weaknesses in the design or operation of internal controls over financial reporting which could adversely affect the ability of the Company or Alliance Bank or their respective Subsidiaries to record, process, summarize, and report financial information. Since January 1, 2021, (i) neither the Company Parties nor any of their respective Subsidiaries, nor any director, officer, or employee of the Company Parties or any of their respective Subsidiaries, has received any complaint, allegation, assertion, or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies, or methods of the Company Parties or any of their respective Subsidiaries or internal accounting controls, including any complaint, allegation, assertion, or claim that the Company Parties or any of their respective Subsidiaries have engaged in questionable accounting or auditing practices, and (ii) no Person (other than federal or state bank regulatory agencies in the ordinary course of routine regulatory examinations and visitations), whether or not employed by the Company Parties or any of their respective Subsidiaries, has reported evidence of a material violation of securities Laws, breach of fiduciary duty, or violation of banking or other Laws by the Company Parties or any of their respective Subsidiaries, or any of the officers, directors, or employees of the Company Parties or any of their respective Subsidiaries, to the board of directors of the Company or Alliance Bank or any of their respective Subsidiaries (or any committee thereof) or, to the Knowledge of the Company, to any director or executive officer of the Company or Alliance Bank or any of their respective Subsidiaries. There has occurred no fraud, whether or not material, that involves management or other employees who have a role in the Company Parties' internal controls over financial reporting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) *Regulatory Capital*. Alliance Bank is "well-capitalized" as such term is defined in 12 C.F.R. 324.403.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) *Antitakeover Laws*. The Company and Alliance Bank and their respective Subsidiaries have taken (through their respective boards of directors or otherwise) all action, if any, required to render inapplicable to this Agreement and the Bank Merger Agreement and the transactions contemplated hereby and thereby any otherwise applicable state antitakeover Laws, including without limitation any "moratorium," "control share," "fair price," "takeover," or "interested shareholder" Law (collectively, "***Takeover Laws***").

Section 4.3 <u>No Further Representations</u>. Except for the representations and warranties made by the Company in this <u>Article IV</u>, the Company makes no express or implied representations or warranties to Commercial with respect to the Company or Alliance Bank or any of their Subsidiaries, or the respective business, operations, assets, liabilities, or condition (financial or otherwise) of the Company or Alliance Bank or any of their Subsidiaries, and the Company hereby disclaims any such other representations or warranties. The Company acknowledges and agrees that (a) except as expressly set forth in <u>Article V</u>, neither Commercial nor any other Person makes or has made any representation or warranty, express or implied, with respect to Commercial or Commercial Bank or the respective business, operations, assets, liabilities, or condition (financial or otherwise) of Commercial or Commercial Bank, and (b) any such other representations or warranties not expressly set forth in <u>Article V</u> are specifically disclaimed and the Company did not rely on any representation or warranty not contained in <u>Article V</u> when making its decision to enter into this Agreement and will not rely on any such representation or warranty in deciding to consummate the transactions contemplated by this Agreement

Article V<u><br> REPRESENTATIONS AND WARRANTIES OF COMMERCIAL</u>

Section 5.1 <u>Representations and Warranties</u>. Commercial hereby represents and warrants to the Company 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) *Organization*. Commercial is a corporation duly organized, validly existing, and in good standing under the laws of the State of Tennessee and is duly registered as a bank holding company under the BHCA. Commercial has the corporate power and authority to own, lease, and operate its properties and assets and to conduct its business as presently conducted. Merger Sub is a corporation duly organized, validly existing, and in good standing under the laws of the State of Tennessee. Merger Sub is a wholly owned Subsidiary of Commercial.

&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) *Authority*. Each of Commercial and Merger Sub has all requisite corporate power and authority to execute and deliver this Agreement and, subject to the consents, approvals, waivers, notices, filings, and registrations referred to in <u>Section 5.1(d)</u> and the Required Corporate Approvals, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by each of Commercial and Merger Sub, the performance by each of Commercial and Merger Sub of its respective obligations hereunder, and the consummation by each of Commercial and Merger Sub of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the boards of directors of Commercial and Merger Sub, and, other than the approval this Agreement and the transactions contemplated hereby by Commercial as the sole shareholder of Merger Sub in accordance with the charter and bylaws of Merger Sub and applicable Law and the approval of the Bank Merger Agreement by Commercial as the sole shareholder of Commercial Bank in accordance with the charter and bylaws of Commercial Bank and applicable Law (collectively, the "***Required Corporate Approvals***"), no other corporate actions or proceedings on the part of Commercial or Merger Sub are necessary to authorize the execution, delivery, or performance of this Agreement by Commercial and Merger Sub or the consummation by Commercial and Merger Sub of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by each of Commercial and Merger Sub and, assuming due authorization, execution, and delivery by the Company, constitutes a valid and legally binding obligation of each of Commercial and Merger Sub enforceable against Commercial and Merger Sub in accordance with its terms, except as enforceability may be limited by the Enforceability Exceptions.

&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 Violations*. Neither the execution, delivery, or performance of this Agreement by Commercial or Merger Sub, nor the execution, delivery, or performance of the Bank Merger Agreement by Commercial Bank, nor the consummation of the transactions contemplated by this Agreement or the Bank Merger Agreement, will, assuming the approval this Agreement and the transactions contemplated hereby by Commercial as the sole shareholder of Merger Sub in accordance with the charter and bylaws of Merger Sub and applicable Law, the approval of the Bank Merger Agreement by Commercial as the sole shareholder of Commercial Bank in accordance with the charter and bylaws of Commercial Bank and applicable Law, and that the consents, approvals, waivers, notices, filings, and registrations referred to in <u>Section 5.1(d)</u> have been obtained and made and all applicable waiting periods have expired, (i) violate the charter or bylaws of Commercial, Merger Sub, or Commercial Bank or (ii) violate any Law to which Commercial, Merger Sub, or Commercial Bank, or the properties or assets of Commercial, Merger Sub, or Commercial Bank, are subject or by which Commercial, Merger Sub, or Commercial Bank, or the properties or assets of Commercial, Merger Sub, or Commercial Bank, are bound.

&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) *Consents and Approvals*. No consents or approvals of, waivers by, notices to, or filings or registrations with any Governmental Entity are required to be obtained, received, given, or made by Commercial, Merger Sub, or Commercial Bank in connection with the execution, delivery, or performance of this Agreement by Commercial and Merger Sub, or the execution, delivery, or performance of the Bank Merger Agreement by Commercial Bank, or the consummation by Commercial and Merger Sub of the transactions contemplated by this Agreement or the consummation by Commercial Bank of the transactions contemplated by the Bank Merger Agreement, except (i) the Regulatory Approvals and (ii) the filing of the Articles of Merger and the Second Step Articles of Merger with the Tennessee Secretary of State and North Carolina Secretary of State and the filing of the Bank Merger Certificates. As of the date of this Agreement, Commercial does not have Knowledge of any reason why the Regulatory Approvals cannot be obtained in a timely manner.

&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) *Litigation*. As of the date of this Agreement, there are no legal proceedings pending or, to the knowledge of Commercial, threatened against Commercial, Merger Sub, or Commercial Bank that would reasonably be expected to have a material adverse effect on the ability of Commercial or Merger Sub to consummate the transactions contemplated by this Agreement or the ability of Commercial Bank to consummate the transactions contemplated by the Bank Merger 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) *Brokers*. Neither Commercial, Merger Sub, nor Commercial Bank, nor any of their respective officers, directors, employees, agents, or representatives, has engaged or employed any broker, investment banker, or finder or incurred any Liability for any financial advisory, investment banking, brokerage, or finder's fees, commissions, or expenses, and no broker, investment banker, or finder has acted directly or indirectly for or on behalf of Commercial, Merger Sub, or Commercial Bank, in connection with this Agreement or the transactions contemplated hereby.

Section 5.2 <u>No Further Representations</u>. Except for the representations and warranties made by Commercial in this <u>Article V</u>, Commercial makes no express or implied representations or warranties to the Company with respect to Commercial, Merger Sub, or Commercial Bank, or any of their respective Subsidiaries, or the respective business, operations, assets, liabilities, or condition (financial or otherwise) of Commercial, Merger Sub, or Commercial Bank, or any of their respective Subsidiaries, and Commercial hereby disclaims any such other representations or warranties. Commercial acknowledges and agrees that (a) except as expressly set forth in <u>Article IV</u>, neither the Company nor any other Person makes or has made any representation or warranty, express or implied, with respect to the Company or Alliance Bank or the respective business, operations, assets, liabilities, or condition (financial or otherwise) of the Company or Alliance Bank, and (b) any such other representations or warranties not expressly set forth in <u>Article IV</u> are specifically disclaimed and Commercial did not rely on any representation or warranty not contained in <u>Article IV</u> when making its decision to enter into this Agreement and will not rely on any such representation or warranty in deciding to consummate the transactions contemplated by this Agreement.

Article VI<u><br> CONDUCT PENDING THE MERGER</u>

Section 6.1 <u>Company Forbearances</u>. Except as expressly contemplated or permitted by this Agreement, as required by applicable Law or at the direction of a Governmental Entity, or with the prior written consent of Commercial, which consent will not be unreasonably withheld, from the date of this Agreement until the Effective Time, the Company shall not, and will cause each of its Subsidiaries not to:

&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) Conduct its business other than in the regular, ordinary, and usual course consistent with past practice; fail to use commercially reasonable efforts to maintain and preserve intact its business and its customer and other business relationships, and retain the services of its current officers and employees; or take any action that would reasonably be expected to adversely affect or delay, in any material respect, its ability to perform its obligations under this Agreement or the consummation of the transactions contemplated hereby;

&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) Incur, renew, modify, extend, or renegotiate any indebtedness for borrowed money or assume, guarantee, endorse, or otherwise as an accommodation become responsible for the obligations of any other Person, other than (i) the creation of deposit liabilities in the ordinary course of business consistent with past practice, (ii) purchases of federal funds, and (iii) Federal Home Loan Bank advances with a maturity of not more than 12 months; prepay any indebtedness or other similar arrangements so as to cause the Company or any of its Subsidiaries to incur any prepayment penalty thereunder; or purchase, accept, or renew any brokered deposits, except in the ordinary course of business consistent with past practice and with maturities of 12 months or less;

&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) Adjust, split, combine, or reclassify any of its capital stock; make, declare, pay, or set aside for payment any dividend or other distribution on or in respect of its capital stock, other than the declaration and payment by Alliance Bank of dividends to the Company; grant any Person any right to acquire any shares of its capital stock or any securities or rights convertible into or exercisable for its capital stock; issue any additional shares of capital stock or any securities or obligations convertible into or exercisable for any shares of its capital stock, except pursuant to the exercise of Company Options outstanding as of the date of this Agreement; or directly or indirectly redeem, purchase, repurchase, or otherwise acquire any shares of its capital stock;

&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) Other than in the ordinary course of business consistent with past practice, (i) sell, transfer, mortgage, encumber, or otherwise dispose of any of its properties, assets, or business (including without limitation "other real estate owned") or (ii) cancel, release, or assign any material indebtedness or claims or waive any rights of substantial value;

&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) Acquire or make any equity investment in, whether by purchase of stock or other securities, contributions to capital, property transfers, purchase of any property or assets, or otherwise, any other Person, or form any new Subsidiary or dissolve, liquidate, or terminate any existing Subsidiary;

&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) Enter into, renew, fail to renew, materially amend or modify, cancel, or terminate any new or existing Material Contract;

&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) [Intentionally Omitted];

&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) Except in strict compliance with Regulation O, make or increase the amount of any Loan, or commit to make or increase the amount of any Loan, to any director, executive officer, or principal shareholder (as such terms are defined in Regulation O) of the Company or any of its Subsidiaries, or any entity controlled, directly or indirectly, by any such Person;

&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) Commence any claim, action, suit, or proceeding, other than to enforce an obligation owed to the Company or any of its Subsidiaries in the ordinary course of business, or, other than the settlement of foreclosure actions and debt workouts in the ordinary course of business, enter into any settlement or similar agreement with respect to any claim, action, suit, or proceeding, which claim, action, suit, proceeding, or settlement or other agreement (i) involves the payment by it of an amount in excess of $50,000, individually, or $150,000, in the aggregate (net of any insurance proceeds or indemnity, contribution, or similar payments actually received by the Company or its Subsidiaries in connection therewith), or (ii) would impose any material restriction on its business or operations or the business or operations of any of its Subsidiaries;

&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) Increase the salary, wages, bonuses, compensation, or other benefits of, for, or payable to any of its directors, officers, or employees (except for normal employee wage and salary increases in the ordinary course of business consistent with past practice not exceeding 3% per year on an aggregate basis and normal bonuses consistent with past practice), or pay any bonus, pension, severance, retirement allowance, or contribution not required by or accrued for under any existing plan, agreement, or arrangement to any such directors, officers, or employees; become a party to, establish, adopt, materially amend, renew, terminate, extend, or commit to any pension, retirement, profit-sharing, welfare, or other benefit plan, agreement, or arrangement, or any employment, severance, salary continuation, retention, change of control, change in control, consulting, or other Contact, with or for the benefit of any director, officer, or employee, except as required by applicable Law; amend, modify, or supplement the terms of any outstanding stock option or voluntarily accelerate the vesting of, or the lapsing of restrictions with respect to, any stock options or other equity-based compensation; or hire any employee with annualized base compensation (excluding health insurance and retirement plan benefits) in excess of $100,000, except as may be necessary to replace an employee whose employment is terminated, whether voluntarily or involuntarily;

&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) Amend its articles of incorporation, bylaws, or other governing documents, or enter into any stock or asset purchase agreement or any plan or agreement of consolidation, merger, share exchange, or reorganization with any Person or any indication of interest, letter of intent, or agreement in principle with respect thereto;

&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) Increase or decrease the rates of interest paid on time deposits or certificates of deposit, except in the ordinary course of business consistent with past practice;

&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) Purchase any debt security, including mortgage-backed and mortgage-related securities, other than United States government and United States government agency securities with final maturities of 24 months or less;

&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) Make any capital expenditures in excess of $50,000 individually or $150,000, in the aggregate, other than in the ordinary course of business consistent with past practice or pursuant to binding commitments existing on the date hereof, or as contemplated as potential commitments in the Material Contracts;

&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) Establish or commit to or file any application or notice for the establishment of any new branch office, loan or deposit production office, or other banking office or facility, or file any application or notice to relocate or close or terminate the operations of any banking office or facility;

&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) Make any material Tax election inconsistent with prior practice or change any election in respect of Taxes, settle or compromise any Tax Liability, agree to an extension or waiver of the statute of limitations with respect to the assessment, collection, or determination of any Taxes, enter into any closing agreement with respect to any Taxes or surrender any right to claim a Tax refund, adopt or change any method of accounting with respect to Taxes, or file any amended Tax Return;

&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) Take any action that is intended or could reasonably be expected to result in (i) any of the representations or warranties of the Company set forth in this Agreement being or becoming untrue in any material respect at any time prior to the Effective Time, (ii) any of the conditions to the Merger set forth in <u>Article VIII</u> not being satisfied, or (iii) a breach or violation of any 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;(r) Adopt or implement any change in its accounting principles, practices, or methods, other than as may be required by GAAP or regulatory guidelines, or policies imposed by any Governmental 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;(s) Make any written communications to the officers or employees of the Company or any of its Subsidiaries, or any oral communications made or presented to a significant portion of the officers or employees of the Company or any of its Subsidiaries, in each case that are materially different than or include material information not contained in prior communications, which pertain to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, without first providing Commercial a copy or written description of the intended communication and providing Commercial with a reasonable period of time to review and comment on the communication; 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;(t) Agree to do, make any commitment to do, or adopt any resolutions of its board of directors (or other governing body) in support of, recommending, or proposing any of the foregoing.

Section 6.2 <u>Commercial Forbearances</u>. Except as expressly contemplated or permitted by this Agreement, as required by applicable Law or at the direction of a Governmental Entity, or with the prior written consent of the Company, which consent will not be unreasonably withheld, from the date of this Agreement until the Effective Time, Commercial shall not, and will cause each of its Subsidiaries not to, take any action that could reasonably be expected to materially and adversely affect or materially delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.

Section 6.3 <u>Absence of Control</u>. It is the mutual intent of the Parties that Commercial shall not prior to the Effective Time, by reason of this Agreement, be deemed to control, directly or indirectly, the Company or Alliance Bank or to exercise, directly or indirectly, a controlling influence over the management or policies of the Company or Alliance Bank.

Article VII<u><br> COVENANTS</u>

Section 7.1 <u>Acquisition Proposals</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 Company shall, and shall direct and cause its Subsidiaries and its and its Subsidiaries' Affiliates, directors, officers, employees, agents, and representatives (including without limitation any investment banker, financial advisor, attorney, accountant, or other representative retained by the Company or any of its Subsidiaries) to, immediately cease and cause to be terminated any activities, discussions, or negotiations with any Person other than Commercial and Commercial Bank with respect to the possibility, consideration, or consummation of any Acquisition Proposal.

&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) From the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement in accordance with its terms, the Company shall not, and shall direct and use its best efforts to cause its Subsidiaries and its and its Subsidiaries' Affiliates, directors, officers, employees, agents, and representatives (including without limitation any investment banker, financial advisor, attorney, accountant, or other representative retained by the Company or any of its Subsidiaries) not to, directly or indirectly through another Person, (i) solicit, initiate, or knowingly encourage (including by way of furnishing information or assistance), or take any other action to knowingly facilitate or that could reasonably be expected to result in, any inquiries or discussions regarding, or the making of any proposal or offer that constitutes or could reasonably be expected to lead to, an Acquisition Proposal; (ii) provide any non-public information or data regarding the Company or any of its Subsidiaries to any Person other than Commercial and Commercial Bank relating to or in connection with any Acquisition Proposal or any inquiry or indication of interest that could reasonably be expected to lead to an Acquisition Proposal; (iii) continue or participate in any discussions or negotiations, or otherwise communicate in any way with any Person other than Commercial and Commercial Bank, regarding any Acquisition Proposal; (iv) approve, endorse, or recommend, or execute, enter into, or consummate, any indication of interest, letter of intent, or other Contract relating to any Acquisition Proposal or requiring the Company to abandon, terminate, or fail to consummate the transactions contemplated by this Agreement, or propose to do any of the foregoing; or (v) make or authorize any statement, recommendation, or solicitation in support of any Acquisition Proposal.

&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 addition to the obligations of the Company set forth above, the Company shall promptly (orally within not more than 24 hours and in writing within two calendar days) advise Commercial of its or any of its Subsidiaries' receipt of any Acquisition Proposal, or any request for information or inquiry which could reasonably be expected to lead to an Acquisition Proposal, and shall keep Commercial informed, on a prompt basis, of any material changes in the status thereof, including the material terms and conditions thereof and any changes thereto, and shall provide to Commercial any written materials received by the Company or any of its Subsidiaries in connection therewith. Additionally, the Company shall contemporaneously provide or make available to Commercial all materials provided or made available to any third party pursuant to this <u>Section 7.1</u> which have not been previously provided or made available to Commercial.

&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) For the avoidance of doubt, the Company expressly agrees that any breach or violation of any provision of this <u>Section 7.1</u> by any of its Subsidiaries or by any of its or its Subsidiaries' Affiliates, directors, officers, employees, agents, or representatives (including without limitation any investment banker, financial advisor, attorney, accountant, or other representative retained by such Party or any of its Subsidiaries) shall be deemed a breach or violation of this <u>Section 7.1</u> by the Company for which the Company shall be responsible.

&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) Nothing contained in this <u>Section 7.1</u> shall prevent the Company or its board of directors, as applicable, from informing any Person who submits an unsolicited Acquisition Proposal of the Company's obligations pursuant to this <u>Section 7.1</u>.

Section 7.2 <u>Notice of Certain Matters</u>. Prior to the Effective Time, the Company shall promptly notify Commercial in writing of any fact, event, occurrence, circumstance, or condition known to the Company that (a) constitutes or has caused, or would reasonably be expected to cause, a material breach of any of the representations, warranties, covenants, or agreements of the Company set forth in this Agreement, *provided*, *however*, that no such notification shall (i) affect the representations, warranties, covenants, or agreements of the Company, or the conditions to the obligations of the Parties, contained in this Agreement or (ii) be deemed to amend or supplement the Disclosure Memorandum; (b) has had, or would reasonably be expected to have, either individually or taken together with all other facts, events, occurrences, circumstances, and conditions known to the Company, a Material Adverse Effect; or (c) would, or would reasonably be expected to, prohibit or materially impede or materially delay the consummation of the transactions contemplated by this Agreement. Prior to the Effective Time, Commercial shall promptly notify the Company in writing of any fact, event, occurrence, circumstance, or condition known to Commercial that would, or would reasonably be expected to, prohibit or materially impede or materially delay the consummation of the transactions contemplated by this Agreement. Further, the Company shall promptly give written notice to Commercial of any notice or other communication from any third party alleging that the consent or approval of such third party is or may be required in connection with any of the transactions contemplated by this Agreement. The failure of a Party to comply with this <u>Section 7.2</u> shall not in and of itself constitute the failure of any condition set forth in <u>Section 8.2</u> or <u>Section 8.3</u> to be satisfied unless the underlying fact, event, occurrence, circumstance, or condition would independently result in the failure of a condition set forth in <u>Section 8.2</u> or <u>Section 8.3</u> to be satisfied.

Section 7.3 <u>Access and 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) Prior to the Effective Time, upon reasonable notice and subject to applicable Laws relating to the exchange of information, for the purpose of Commercial verifying the representations and warranties of the Company and compliance by the Company with its covenants and agreements set forth herein, and preparing for the Mergers and the other matters contemplated by this Agreement (including without limitation for purposes of integration planning), the Company shall, and will cause its Subsidiaries to, afford to Commercial and Commercial Bank and their representatives (including without limitation their officers, employees, financial advisors, legal counsel, accountants, and other professionals retained by Commercial or Commercial Bank) reasonable access during normal business hours to the books, records, Contracts, properties, assets, personnel, and information technology systems of the Company Parties and their respective Subsidiaries, as well as such other information relating to the Company Parties or their respective Subsidiaries as Commercial or Commercial Bank may reasonably request.

&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) From the date of this Agreement until the Effective Time, the Company shall, and shall cause Alliance Bank to, reasonably promptly furnish to Commercial (i) a copy of any report, application, notice, schedule, or other document or instrument filed with or received from any Governmental Entity (other than any such materials which the Company Parties are not permitted to disclose under applicable Law) and (ii) such other information regarding their and their respective Subsidiaries' businesses, properties, assets, or personnel as Commercial may reasonably request. Additionally, prior to the Effective Time, the Company shall deliver to Commercial (y) as soon as reasonably practicable, but in no event more than 45 days, after the end of each calendar quarter ending after the date of this Agreement (other than the last quarter of each fiscal year ending December 31) its unaudited consolidated balance sheet and the related unaudited consolidated statement of income as of the end of and for such quarter prepared in a manner consistent with the Interim Company Financials and (z) as soon as reasonably practicable, but in no event more than 90 days, after the end of each fiscal year ending after the date of this Agreement, its audited consolidated balance sheet and the related audited consolidated statements of operations, comprehensive earnings, changes in stockholders' equity, and cash flows as of the end of and for such year (together with the notes thereto and accompanied by the audit reports of the Company's independent accountant(s)) prepared in accordance with GAAP.

&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 investigation by Commercial or Commercial Bank, or their representatives, pursuant to this <u>Section 7.3</u> shall be conducted in a manner that does not unreasonably interfere with the business operations of the Company Parties. No such investigation shall include groundwater, surface water, soil, indoor air, or sub-slab or other vapor testing without the Company's prior written consent. No investigation by Commercial or Commercial Bank or their representatives pursuant to this <u>Section 7.3</u> shall affect or be deemed to modify any of the representations, warranties, covenants, or agreements of the Company. Neither the Company nor its Subsidiaries shall be required to provide access to or to disclose information pursuant to this <u>Section 7.3</u> where such access or disclosure would violate or prejudice the rights of customers of the Company Parties, jeopardize the attorney-client privilege of the Person in possession or control of such information (after giving due consideration to the existence of any common interest, joint defense, or similar agreement between the Parties), or contravene any Law, fiduciary duty, or binding Contract entered into prior to the date of this Agreement. The Parties agree to make appropriate substitute disclosure arrangements under circumstances in which the restrictions of the immediately preceding sentence apply.

Section 7.4 <u>Regulatory Filings; Consents and Approvals</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 Parties shall cooperate with each other and use commercially reasonable efforts to prepare all documentation, to make all filings, to give all notices, and to obtain all permits, consents, approvals, waivers, and authorizations of all Governmental Entities and other third parties, including the Regulatory Approvals, necessary or advisable to consummate the Mergers, the Bank Merger, and the other transactions contemplated by this Agreement. Commercial shall, and shall cause Commercial Bank to, use its commercially reasonable efforts to make any initial application, notice, and waiver filings required by the Federal Reserve, the TDFI, or the NCCOB in connection with the Mergers or the Bank Merger within 45 days after the date of this Agreement. Each Party shall have the right to review in advance, and to the extent practicable each Party shall consult with the other Parties with respect to, in each case subject to applicable Laws relating to the exchange of information, all written applications, notices, and waiver requests, and any other written information, submitted to any Governmental Entity or other third party in connection with the transactions contemplated by this Agreement, *provided* that Commercial shall not be required to provide or make available to the Company the confidential portions of any filing made by Commercial or its Subsidiaries with a Governmental Entity or other third party. In exercising the foregoing rights, each Party agrees to act reasonably and as promptly as practicable. Each Party agrees that it will consult with the other Parties with respect to the obtainment of all permits, consents, approvals, waivers, and authorizations of all Governmental Entities and other third parties, including the Regulatory Approvals, necessary or advisable to consummate the Mergers, the Bank Merger, and the other transactions contemplated by this Agreement, and each Party shall keep the other Parties reasonably apprised of the status of material matters relating to the consummation of such transactions.

&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) Each Party agrees to, upon request, furnish the other Parties with all information concerning itself, its Subsidiaries, and its and its Subsidiaries' directors, officers, and shareholders, as well as such other matters, as may be necessary, advisable, or appropriate in connection with any filing, notice, or application made or given by or on behalf of such other Parties or any of their respective Subsidiaries with or to any Governmental Entity or other third party.

Section 7.5 <u>Further Assurances</u>. Subject to the terms and conditions of this Agreement, each of the Parties agrees to use its commercially reasonable efforts to promptly take, or cause to be promptly taken, all actions, and to promptly do, or cause to be promptly done, all things, necessary, proper, or advisable under applicable Laws to consummate and make effective the transactions contemplated by this Agreement as expeditiously as reasonably possible, including using its commercially reasonable efforts to obtain all necessary actions or non-actions, extensions, waivers, consents, and approvals from Governmental Entities, effecting all necessary registrations, applications, and filings (including without limitation filings under any applicable federal or state securities Laws), and obtaining any required contractual consents and regulatory approvals.

Section 7.6 <u>Publicity</u>. Each Party shall consult with the other Parties before issuing any press release or making any public statements or disclosures (including without limitation written communications to shareholders) with respect to this Agreement or the transactions, including the Mergers and the Bank Merger, contemplated hereby, and no Party shall issue any such press release or make any such public statements or disclosures without the prior consent of the other Parties, which consent shall not be unreasonably withheld; *provided*, *however*, that nothing contained in this <u>Section 7.6</u> shall prohibit a Party from making any disclosure (a) that legal counsel to such Party determines is necessary in order to satisfy such Party's disclosure obligations under applicable Law or (b) at the request of a Governmental Entity.

Section 7.7 <u>Company Shareholder Approval</u>. The Company and its board of directors shall take, in accordance with applicable Law and the Company's articles of incorporation and bylaws, all action necessary or appropriate for the approval by the Company's shareholders of this Agreement and the transactions contemplated hereby, and any other matters required to be approved by the Company's shareholders in order to consummate the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, as soon as reasonably practicable following the Parties' execution and delivery of this Agreement, the Company and Commercial will, in accordance with NCBCA § 55-7-04, prepare or cause to be prepared a written consent to be signed by Commercial, in its capacity as a shareholder of the Company, providing for the approval by Commercial of this Agreement and the transactions contemplated hereby, and any other matters required to be approved by the Company's shareholders in order to consummate the transactions contemplated by this Agreement (the "***Consent Action***"), such Consent Action to be in such form and of such substance as is reasonably acceptable to each of the Company and Commercial. The Company shall comply with any applicable shareholder notice requirements for the Consent Action and the actions taken thereby, including any applicable shareholder notice requirements under NCBCA § 55-7-04.

Section 7.8 <u>Employee and Benefit Matters</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) Subject to applicable Law and the terms of Alliance Bank's and Commercial Bank's employee benefit plans, Commercial will cause Alliance Bank and/or Commercial Bank to provide the employees of Alliance Bank immediately prior to the Effective Time who remain employees of Alliance Bank or become employees of Commercial Bank after the Effective Time (the "***Continuing Employees***") with benefits that are no less favorable, in the aggregate, than, (i) prior to the Bank Merger, those provided by Alliance Bank to its employees generally as of the date of this Agreement, and (ii) after the Bank Merger, those provided to similarly situated employees of Commercial Bank. With respect to any "employee benefit plan" (as defined in Section 3(3) of ERISA) maintained by Commercial Bank, other than retiree health care plans or programs and equity incentive, equity compensation, or deferred compensation plans or arrangements (collectively, "***Commercial Employee Plans***"), in which any Continuing Employees will participate after the Effective Time, Commercial Bank will, subject to the terms and limitations of the Commercial Employee Plans, recognize all years of full-time service of Continuing Employees with Alliance Bank for vesting and eligibility purposes (but not for benefit accrual purposes or purposes of early retirement subsidies under any Employee Plan that is a defined benefit pension plan) under any Commercial Employee Plan in which such Continuing Employees are eligible to participate after the Effective Time; *provided* that such service shall not be recognized to the extent that (i) such recognition of service would result in a duplication of benefits or (ii) such service was not recognized under a corresponding Company Benefit 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) With respect to any Commercial Employee Plan in which any Continuing Employees become eligible to participate after the Effective Time, Commercial Bank will use commercially reasonable efforts to, subject to applicable Law and the term of the Commercial Employee Plan, (i) waive all pre-existing conditions, exclusions, and waiting periods with respect to participation and coverage requirements applicable to such Continuing Employees and their eligible dependents under the Commercial Employee Plan, except to the extent such pre-existing conditions, exclusions, or waiting periods would apply under the analogous Company Benefit Plan, and (ii) provide each such Continuing Employee and his or her eligible dependents with credit for any eligible expenses incurred by such Continuing Employee or dependent prior to the Effective Time under a Company Benefit Plan (to the same extent that such credit was given under the analogous Company Benefit Plan prior to the Effective Time) in satisfying any applicable deductible, co-payment, or out of-pocket requirements under any Commercial Employee Plans.

&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) At the request of Commercial, the Company shall take, and shall cause its Subsidiaries to take, prior to the Effective Time all actions reasonably requested by Commercial that are necessary or appropriate to (i) cause one or more of the Company Benefits Plans to terminate or to be frozen as of or after the Effective Time, (ii) cause benefit accruals and entitlements under any Company Benefit Plan to cease as of or after the Effective Time, (iii) cause the continuation at and after the Effective Time of any insurance policy or other Contract relating to any Company Benefit Plan for such period as may be requested by Commercial, or (iv) facilitate the merger of any Company Benefit Plan into any employee benefit plan maintained by Commercial or its Subsidiaries. All resolutions, notices, or other documents adopted, issued, or executed in connection with the implementation of this <u>Section 7.8(b)</u> shall be subject to Commercial's prior review and approval, which approval shall not be unreasonably withheld.

&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) This <u>Section 7.8</u> shall be binding upon and inure solely to the benefit of the Parties, and nothing in this <u>Section 7.8</u>, express or implied, shall confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this <u>Section 7.8</u>. Nothing contained in this <u>Section 7.8</u>, express or implied, shall (i) be construed to establish, amend, or modify any benefit plan, program, agreement, or arrangement or (ii) alter or limit the ability of Commercial or Commercial Bank, or any of their respective Subsidiaries or Affiliates, to amend, modify, or terminate any benefit plan, program, agreement, or arrangement at any time assumed, established, sponsored, or maintained by any of them. The Parties acknowledge and agree that the provisions of this <u>Section 7.8</u> shall not create any right on the part of any employee of the Company or Alliance Bank or any of their respective Subsidiaries, or any other Person, to continued employment with the Commercial or Commercial Bank, or any of their respective Subsidiaries or Affiliates (and shall not limit the right of Commercial or Commercial Bank, or any of their respective Subsidiaries or Affiliates, to terminate the employment of any employee), or to any compensation or benefits of any nature or kind whatsoever.

Section 7.9 <u>Indemnification.</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) For a period of six years immediately following the Effective Time, (i) the Surviving Corporation shall indemnify, defend, and hold harmless each of the current and former directors and officers of the Company and Alliance Bank, determined as of immediately prior to the Effective Time (each, an "***Indemnified Party***"), against any and all costs and expenses (including reasonable attorneys' fees and expenses and court costs), judgments, fines, losses, claims, damages, and liabilities incurred in connection with any claim, action, suit, proceeding, or investigation, whether civil, criminal, administrative, or investigative, arising out of matters existing or occurring prior to the Effective Time (including matters related to this Agreement and the transactions contemplated hereby), whether asserted or claimed prior to, at, or after the Effective Time, and based on or pertaining to the fact that he or she was a director or officer of the Company or Alliance Bank or any of their respective Subsidiaries, or was serving at the request of the Company or Alliance Bank as a director, officer, employee, agent, trustee, or partner of another corporation, partnership, trust, joint venture, employee benefit plan, or other entity, to the fullest extent such Indemnified Party would have been entitled to be so indemnified, defended, and held harmless under applicable Law and the articles of incorporation and bylaws of the Company and Alliance Bank as in effect as of the date of this Agreement, and (ii) the Surviving Corporation shall also advance to an Indemnified party expenses as incurred by such Indemnified Party to the fullest extent permitted under applicable Law and the articles of incorporation and bylaws of the Company and Alliance Bank as in effect as of the date of this Agreement; *provided* that the Indemnified Party to whom expenses are advanced provides a written undertaking to repay such advances if it is ultimately determined that such Indemnified Party is not entitled to indemnification.

&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 Indemnified Party wishing to claim indemnification under this <u>Section 7.9</u>, upon learning of any such claim, action, suit, proceeding, or investigation, shall promptly notify the Surviving Corporation of the same; *provided* that the failure of the Indemnified Party to so notify the Surviving Corporation shall not relieve the Surviving Corporation of any Liability it may have to such Indemnified Party if such failure does not actually and materially prejudice the Surviving Corporation. In the event of any such claim, action, suit, proceeding, or investigation (whether arising before or after the Effective Time), (i) the Surviving Corporation shall have the right to assume the defense thereof and the Surviving Corporation shall not be liable to the Indemnified Party for any legal expenses of other counsel or any other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof, except that, (A) if the Surviving Corporation elects not to assume such defense or (B) if counsel for the Indemnified Party advises the Surviving Corporation in writing that there are legal defenses available to the Indemnified Party that are different from or in addition to those available to the Surviving Corporation or that there are issues which raise conflicts of interest between the Surviving Corporation and the Indemnified Party that make joint representation inappropriate, the Indemnified Party may retain its own legal counsel and the Surviving Corporation shall pay, as statements therefor are received, the reasonable fees and expenses of such counsel for the Indemnified Party (which may not exceed one firm in any jurisdiction unless there are multiple Indemnified Parties who have conflicts of interest), (ii) the Indemnified Party will cooperate in the defense thereof, (iii) the Surviving Corporation shall not be liable for any settlement effected without its prior written consent, and (iv) the Surviving Corporation shall have no obligation hereunder in the event a federal or state banking agency or a court of competent jurisdiction shall determine that indemnification of an Indemnified Party in the manner contemplated hereby is prohibited by applicable Law.

&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) Prior to the Effective Time, the Company shall obtain, or shall cause Alliance Bank to obtain, and after the Effective Time the Surviving Corporation shall maintain, a "tail" policy under the Company Parties' existing directors' and officers' liability insurance policy providing coverage for a period of six years immediately after the Effective Time for Persons who are immediately prior to the Effective Time covered by the Company Parties' existing directors' and officers' liability insurance policy (the "***Tail Insurance***"), which Tail Insurance shall provide for at least the same coverage and coverage amounts as, and contain terms and conditions not materially less advantageous than, those currently provided for by the Company Parties' existing directors' and officers' liability insurance policy; *provided*, *however*, that, without the prior written consent of Commercial, the Company Parties shall not expend for such Tail Insurance (for said six-year period) more than $18,000.

&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) In the event the Surviving Corporation or any of its successors or assigns shall consolidate with or merge with or into any other Person and shall not be the continuing or surviving entity of such consolidation or merger, or shall transfer all or substantially all of its properties and assets to any other Person, then, and in each such case, the Surviving Corporation or its successors or assigns, as applicable, shall make proper provision so that the successors or assigns of the Surviving Corporation assume the obligations of the Surviving Corporation set forth in this <u>Section 7.9</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;(e) Any indemnification payments made pursuant to this <u>Section 7.9</u> are subject to and conditioned upon their compliance with Section 18(k) of the FDIA (12 U.S.C. § 1828(k)) and the regulations promulgated thereunder by the FDIC (12 C.F.R. Part 359).

Section 7.10 <u>Takeover Laws</u>. Neither the Company nor its board of directors shall take any action that would cause any Takeover Law to become applicable to this Agreement, the Mergers, the Bank Merger, or any of the other transactions contemplated hereby, and the Company and its board of directors shall take all necessary steps to exempt (or ensure the continued exemption of) this Agreement, the Mergers, the Bank Merger, and the other transactions contemplated hereby from any applicable Takeover Law now or hereafter in effect. If any Takeover Law should become, or should purport to be, applicable to the transactions contemplated by this Agreement, the Company and its board of directors will grant such approvals and take such other actions as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of any Takeover Law on any of the transactions contemplated by this Agreement, including, if necessary, challenging the validity or applicability of any such Takeover Law.

Section 7.11 <u>Litigation and Claims</u>. The Company shall promptly notify Commercial in writing of any action, arbitration, hearing, investigation, litigation, suit, or other proceeding instituted, initiated, or commenced, or, to the Knowledge of the Company, threatened to be instituted, initiated, or commenced, against the Company or any of its Subsidiaries or Affiliates, or any of its or its Subsidiaries' or Affiliates' directors or officers, relating to the transactions contemplated by this Agreement. The Company shall give Commercial the opportunity to participate in (but not control), at its own expense, the defense or settlement of any shareholder litigation against the Company or any of its directors, officers, Subsidiaries, or Affiliates relating to the transactions contemplated by this Agreement, and no such settlement shall be agreed to without Commercial's prior written consent (which consent shall not to be unreasonably withheld or delayed).

Section 7.12 <u>Notice of Appraisal Rights Matters</u>. The Company shall give Commercial prompt written notice of the Company's receipt of any notice, demand, or other instrument or communication relating to appraisal rights (including any notice of intent to demand payment or any withdrawal of any such notice) provided by or behalf of any shareholder of the Company pursuant to Chapter 55, Article 13 of the NCBCA.

Section 7.13 <u>Operating Functions</u>. To the extent permitted by applicable Law, the Company shall, and will cause Alliance Bank to, cooperate with Commercial and Commercial Bank in connection with planning for the efficient and orderly combination of Commercial and the Company and Commercial Bank and Alliance Bank and the operation of the Surviving Corporation and the combined bank, and in preparing for the consolidation of appropriate operating functions and the conversion of the data processing and related electronic information technology systems of the Company Parties to those used by Commercial and Commercial Bank, effective as of the Effective Time or such later date as determined by Commercial.

Article VIII<u><br> CONDITIONS TO CONSUMMATION OF MERGER</u>

Section 8.1 <u>Mutual Conditions</u>. The respective obligation of each Party to consummate the Merger and the other transactions contemplated by this Agreement is subject to the satisfaction or, to the extent permitted by applicable Law, written waiver by such Party prior to the Closing of each of the following conditions (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of such conditions):

&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 Approval*. This Agreement shall have been duly approved by the shareholders of the Company in accordance with the Company's articles of incorporation and bylaws and applicable Law.

&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) *Governmental Approvals*. All approvals, consents, and waivers of or from Governmental Entities (including without limitation the Regulatory Approvals) required to consummate the transactions contemplated by this Agreement (including without limitation the Merger, the Second Step Merger, and the Bank Merger) shall have been obtained and shall be in full force and effect, and all statutory waiting periods in respect thereof shall have expired.

&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 Injunction; Illegality*. There shall not be in effect any order, decree, or injunction of any Governmental Entity that enjoins or prohibits the consummation of the Merger, the Second Step Merger, or the Bank Merger, and no Governmental Entity shall have instituted any action, suit, or proceeding for the purpose of enjoining or prohibiting the consummation of the Merger, the Second Step Merger, or the Bank Merger. No Law shall have been enacted, entered, promulgated, or enforced by any Governmental Entity which prohibits or makes illegal the consummation of the Merger, the Second Step Merger, or the Bank Merger.

Section 8.2 <u>Company Conditions</u>. The obligation of the Company to consummate the Merger and the other transactions contemplated by this Agreement is also subject to the satisfaction or, to the extent permitted by applicable Law, written waiver by the Company prior to the Closing of each of the following conditions (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of such conditions):

&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) *Representations and Warranties of Commercial*. The representations and warranties of Commercial contained in <u>Section 5.1</u> shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that representations and warranties that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct only as of such 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) *Performance of Obligations of Commercial Parties*. The Commercial Parties shall have performed and complied with, in all material respects, all obligations and covenants required to be performed and complied with by them under this Agreement prior to or at the Closing.

&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) *Officer's Certificate*. The Company shall have received a certificate, dated as of the Closing Date, signed by the president of Commercial, and otherwise in form and substance reasonably satisfactory to the Company, to the effect that the conditions set forth in <u>Section 8.2(a)</u> and <u>Section 8.2(b)</u> have been satisfied.

&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) *Deposit of Merger Consideration*. Commercial shall have deposited, or caused to be deposited, with the Exchange Agent or, in the event Commercial is to act as the Exchange Agent hereunder, Commercial shall have deposited with Commercial Bank, into a segregated account, cash in an amount sufficient for the Exchange Agent to make payment of the Per Share Consideration payable to holders of Company Stock (other than holders of Excluded Shares and Appraisal Shares) in accordance with this Agreement, and Commercial shall have delivered to the Company such evidence of the same as the Company shall reasonably request.

Section 8.3 <u>Commercial Parties Conditions</u>. The obligation of each of the Commercial Parties to consummate the Merger and the other transactions contemplated by this Agreement is also subject to the satisfaction or, to the extent permitted by applicable Law, written waiver by the Commercial Parties prior to the Closing of each of the following conditions (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of such conditions):

&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) *Representations and Warranties of the Company*. The representations and warranties of the Company contained in <u>Section 4.2(c)</u> (*Capitalization*), <u>Section 4.2(j)(ii)</u> (*Absence of Certain Changes or Events*), <u>Section 4.2(u)</u> (*Fairness Opinion*), and <u>Section 4.2(v)</u> (*Brokers*) shall be true and correct in all respects (other than, in the case of <u>Section 4.2(c)</u> (*Capitalization*) only, inaccuracies which, individually and in the aggregate, are *de minimis* in both amount and impact) as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that representations and warranties that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct only as of such date). The representations and warranties of the Company contained in <u>Section 4.2(a)</u> (*Organization and Qualification*), <u>Section 4.2(d)</u> (*Authority*), and <u>Sections 4.2(e)(i)</u> and <u>4.2(e)(ii)(A)</u> (*No Violations*) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that representations and warranties that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct only as of such date). All other representations and warranties of the Company contained in <u>Article IV</u> shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except that representations and warranties that by their terms speak specifically as of the date of this Agreement or another date shall be true and correct only as of such date), except where the failure of such representations and warranties to be so true and correct has not had or resulted in, and would not reasonably be expected to have or result in, individually or in the aggregate, a Material Adverse Effect; *provided* that, for purposes of this sentence only, those representations and warranties containing or subject to a materiality or Material Adverse Effect qualifier shall be read without, and shall be deemed not to include or be subject to, any such qualifier.

&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) *Performance of Obligations of the Company*. The Company shall have performed and complied with, in all material respects, all obligations and covenants required to be performed and complied with by the Company under this Agreement prior to or at the Closing.

&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 Material Adverse Effect*. Since the date of this Agreement, there shall have been no Material Adverse Effect.

&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) *Officers' Certificate*. The Commercial Parties shall have received a certificate, dated as of the Closing Date, signed by the chief executive officer and the chief financial officer of the Company, and otherwise in form and substance reasonably satisfactory to the Commercial Parties, to the effect that the conditions set forth in <u>Section 8.3(a)</u>, <u>Section 8.3(b)</u>, and <u>Section 8.3(c)</u> have been satisfied.

&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) *No Burdensome Condition*. No approval, consent, or waiver referred to in <u>Section 8.1(b)</u> shall contain any condition, restriction, or requirement that would, individually or in the aggregate with one or more other such conditions, restrictions, or requirements, so adversely affect the economic or business benefits to Commercial or its Subsidiaries of the transactions contemplated by this Agreement that a purchaser acting reasonably under the circumstances and in good faith would not have entered into this Agreement had such purchaser known and reasonably assessed that such condition(s), restriction(s), or requirement(s) would be imposed (any such condition, restriction, or requirement, a "***Burdensome Condition***"); *provided*, *however*, that (i) any condition, restriction, or requirement imposed by a Governmental Entity which is customarily imposed in published orders or approvals for transactions such as the Merger, the Second Step Merger, or the Bank Merger shall not be deemed to be a Burdensome Condition and (ii) prior to declaring a Burdensome Condition and electing not to consummate the transactions contemplated hereby as a result thereof, Commercial shall use commercially reasonable efforts to negotiate with the relevant Governmental Entity a modification to the condition, restriction, or requirement to reduce the burdensome nature thereof such that the condition, restriction, or requirement no longer constitutes a Burdensome Condition

&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) *Appraisal Rights*. The holders of not more than 7.5% of the outstanding shares of Company Stock shall have exercised and not effectively withdrawn or lost their appraisal rights in connection with the Merger pursuant to Chapter 55, Article 13 of the NCBCA.

&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) *Consents*. All of the consents, approvals, and waivers required to be obtained by the Company Parties for or in connection with the consummation of the transactions contemplated by this Agreement (including without limitation those required by or under any Material Contract, but excluding the consents, approvals, and waivers referred to in <u>Section 8.1(b)</u>), shall have been obtained and the Company shall have delivered to the Commercial Parties such evidence of the same as the Commercial Parties may reasonably request.

&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) *FIRPTA*. Commercial shall have received from the Company a properly executed certification in accordance with U.S. Treasury Regulations Section 1.897-2(h)(1), dated not more than 30 days prior to the Closing Date, to the effect that the equity of the Company does not constitute "United States real property interests" under Section 897(c) of the Code along with evidence that the Company has complied with any notice requirement pursuant to U.S. Treasury Regulations Section 1.897-2(h)(2).

Article IX<u><br> TERMINATION</u>

Section 9.1 <u>Termination</u>. This Agreement may be terminated, and the transactions contemplated hereby may be abandoned, at any time prior to the Effective 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;(a) By mutual written agreement of Commercial, Merger Sub, and 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) By the Commercial Parties (provided that neither Commercial nor Merger Sub is then in material breach of any representation, warranty, covenant, or agreement contained herein), in the event of a breach by the Company of any representation, warranty, covenant, or agreement contained in this Agreement, or by the Company (provided that the Company is not then in material breach of any representation, warranty, covenant, or agreement contained herein), in the event of a breach by Commercial or Merger Sub of any representation, warranty, covenant, or agreement contained in this Agreement, in either case which breach (i) individually or in the aggregate with all other such breaches would, if occurring or continuing on the Closing Date, result in the failure of any of the conditions set forth in <u>Article VIII</u> and (ii) has not been cured by the earlier of September 6, 2024, and the date which is 30 days after written notice to the breaching Party 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;(c) By either the Commercial Parties, on the one hand, or the Company, on the other hand, in the event any approval, consent, or waiver of or from any Governmental Entity required to consummate the transactions contemplated by this Agreement (including without limitation the Merger, the Second Step Merger, or the Bank Merger) shall have been denied by final and non-appealable action of such Governmental Entity or any application or request therefor shall have been permanently withdrawn at the request of a Governmental Entity; *provided*, *however*, that the Commercial Parties shall not be entitled to exercise their right of termination under this <u>Section 9.1(c)</u> if such denial or withdrawal shall be due to the failure of the Commercial Parties to perform or observe their obligations and covenants set forth in this Agreement, and that the Company shall not be entitled to exercise its right of termination under this <u>Section 9.1(c)</u> if such denial or withdrawal shall be due to the failure of the Company to perform or observe its obligations and 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;(d) By either the Commercial Parties, on the one hand, or the Company, on the other hand, in the event any court or other Governmental Entity of competent jurisdiction shall have issued a final, non-appealable order enjoining or otherwise prohibiting the consummation of any of the transactions contemplated by this Agreement; *provided*, *however*, that the Commercial Parties shall not be entitled to exercise their right of termination under this <u>Section 9.1(d)</u> if such action of such court or other Governmental Entity shall be due to the failure of the Commercial Parties to perform or observe their obligations and covenants set forth in this Agreement, and that the Company shall not be entitled to exercise its right of termination under this <u>Section 9.1(d)</u> if such action of such court or other Governmental Entity shall be due to the failure of the Company to perform or observe its obligations and 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;(e) By either the Commercial Parties, on the one hand, or the Company, on the other hand, in the event the Merger is not consummated by September 6, 2024, unless (i) in the event of termination by the Commercial Parties, the failure to consummate the Merger by such date shall be due to the failure of the Commercial Parties to perform or observe their obligations and covenants set forth in this Agreement, and (ii) in the event of termination by the Company, the failure to consummate the Merger by such date shall be due to the failure of the Company to perform or observe its obligations and covenants set forth in this Agreement.

Section 9.2 <u>Effect of Termination</u>. In the event of the termination of this Agreement in accordance with this <u>Article IX</u>, this Agreement shall become null and void and have no further force or effect and the Parties shall have no further or continuing liability or obligations under this Agreement, except that (a) <u>Section 7.6</u>, this <u>Section 9.2</u>, and <u>Article X</u> shall survive the termination of this Agreement and (b) notwithstanding anything to the contrary contained in this Agreement, no Party shall be relieved of or released from any liability or damages arising out of any breach of this Agreement by such Party giving rise to or serving as the basis for the termination of this Agreement or deliberate fraud on the part of such Party.

Article X<u><br> MISCELLANEOUS</u>

Section 10.1 <u>Survival</u>. None of the representations, warranties, covenants, or agreements contained in this Agreement shall survive the Effective Time (other than those covenants and agreements contained herein that by their express terms are to be observed or performed after the Effective Time) or the termination of this Agreement (other than <u>Section 7.6</u>, <u>Section 9.2</u>, and this <u>Article X</u>, each of which shall survive the termination of this Agreement). Notwithstanding the foregoing or anything else in this Agreement to the contrary, none of the representations, warranties, covenants, or agreements contained in this Agreement shall be deemed to be terminated or extinguished so as to deprive any Party hereto or any of its Affiliates of any defense, at law or in equity, which otherwise would be available against the claims of any Person, including without limitation any shareholder or former shareholder.

Section 10.2 <u>Interpretation</u>. When reference is made in this Agreement to an article, section, exhibit, or schedule, such reference shall be to an article or section of or exhibit or schedule to this Agreement, unless otherwise indicated. The headings appearing in this Agreement have been inserted for purposes of convenience of reference only and shall not affect the meaning of, or be given any force or effect in the construction or interpretation of, this Agreement. Whenever the words "include," "includes," and "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation," whether or not actually followed by such words. Any singular term used in this Agreement shall be deemed to include the plural, and any plural term the singular. Any gender reference in this Agreement shall be deemed to include all genders. All references in this Agreement to a specific statute shall be deemed to refer to all regulations and authoritative guidance issued thereunder, and all references in this Agreement to a statute, regulation, or other guidance shall also be deemed to refer to any superseding statute, regulation or guidance. All references to "dollars" or "$" in this Agreement are to United States dollars. Whenever the words "as of the date hereof" are used in this Agreement, such date shall be deemed the date of this Agreement. The Parties have participated jointly in the negotiation and drafting of this Agreement, and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

Section 10.3 <u>Amendment; Waiver</u>. This Agreement may be amended, modified, or supplemented at any time, either before or after approval of this Agreement by the shareholders of the Company, by, but only by, a written instrument executed by each of the Parties; *provided*, *however*, that, after the approval of this Agreement by the Company's shareholders, there may not be, without further approval of such shareholders, any amendment, modification, or supplement of or to this Agreement that requires further approval of or by such shareholders under applicable Law. Prior to the Effective Time, any provision of this Agreement may be waived by the Party or Parties entitled to the benefits thereof, *provided* that any such waiver shall be in writing and executed by the Party or Parties granting such waiver.

Section 10.4 <u>Counterparts</u>. This Agreement may be executed in counterparts, each of which shall be deemed to constitute an original, but all of which together shall constitute one and the same instrument. A facsimile or other electronic (including .pdf) copy of a signature page to this Agreement shall be deemed to be, and shall have the same force and effect as, an original signature page.

Section 10.5 <u>Governing Law</u>. This Agreement shall be governed by, and construed, interpreted, and enforced in accordance with, the laws of the State of Tennessee, without regard to conflict of laws principles.

Section 10.6 <u>Expenses</u>. Except as expressly otherwise provided in this Agreement, each Party shall be responsible for and pay all costs and expenses incurred by it in connection with this Agreement and the transactions contemplated hereby.

Section 10.7 <u>Notices</u>. All notices, requests, consents, and other communications required or permitted under or related to this Agreement shall be in writing and shall be deemed given, delivered, and effective (a) when delivered, if delivered personally, (b) on the fifth Business Day after mailing, if mailed by first class United States Mail, postage prepaid and return receipt requested, or (c) on the first Business Day after mailing, if sent by a nationally recognized overnight delivery service for next-day delivery, in each case to the Parties at the following addresses (or such other addresses as the Parties may designate from time to time by notice given in accordance with this <u>Section 10.7</u>):

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>If to Commercial or Merger Sub:</u> | <u>with a copy (which shall not constitute notice) to:</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial Bancgroup, Inc. | K&L Gates LLP |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CB Merger Sub, Inc. | Attention: Adam Smith |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention: President | 501 Commerce Street |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Post Office Box 400 | Suite 1500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Harrogate, Tennessee 37752 | Nashville, Tennessee 37203 |

---

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>If to the Company:</u> | <u>with a copy (which shall not constitute notice) to:</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AB&T Financial Corporation | Wyrick Robbins Yates & Ponton LLP |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention: President/CEO | Attention: Jonathan A. Greene |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;292 West Main Avenue | 4101 Lake Boone Trail, Suite 300 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gastonia, North Carolina 28052 | Raleigh, North Carolina 27607 |

---

Section 10.8 <u>Entire Agreement; Third Party Beneficiaries</u>. This Agreement, including and together with the exhibits and schedules hereto and the Disclosure Memorandum, represent the entire understanding and agreement of the Parties with respect to the transactions contemplated hereby and supersede any and all prior agreements, understandings, and arrangements, whether written or oral, between or among the Parties with respect to such subject matter. This Agreement is made solely for the benefit of the Parties hereto and their respective successors and permitted assigns, and no other Person shall acquire or have any rights under or by virtue of this Agreement, except that the Indemnified Parties (and their heirs and legal and personal representatives) are intended third-party beneficiaries of this Agreement to the extent, but only to the extent, provided in <u>Section 7.9</u>.

Section 10.9 <u>Severability</u>. In the event any term or provision of this Agreement is held to be invalid, illegal, or unenforceable for any reason or in any respect, (a) such invalidity, illegality, or unenforceability shall in no event affect, prejudice, or disturb the validity, legality, or enforceability of the remainder of this Agreement, which shall be and remain in full force and effect enforceable in accordance with its terms, and (b) the Parties shall use commercially reasonable best efforts to substitute for such invalid, illegal, or unenforceable term or provision an alternative term or provision which, insofar as practicable, implements the original purposes and intent of this Agreement.

Section 10.10 <u>Assignment</u>. No Party may assign or delegate this Agreement or any of its rights, interests, duties, or obligations hereunder without the prior written consent of each of the other Parties. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns.

Section 10.11 <u>Specific Performance</u>. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached. Accordingly, the Parties shall be entitled to specific performance of the terms of this Agreement, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any action or proceeding brought in accordance with <u>Section 10.12</u>, this being in addition to any other remedy to which they are entitled at law or in equity. Each Party hereby further waives any defense in any action for specific performance that a remedy at law would be adequate and any requirement under any Law to post security or a bond as a prerequisite to obtaining equitable relief.

Section 10.12 <u>SUBMISSION TO JURISDICTION</u>. EACH PARTY KNOWINGLY AND VOLUNTARILY HEREBY (A) IRREVOCABLY SUBMITS TO THE SOLE AND EXCLUSIVE JURISDICTION OF THE STATE COURTS OF THE STATE OF TENNESSEE LOCATED IN KNOXVILLE, TENNESSEE, OR IN THE EVENT (BUT ONLY IN THE EVENT) THAT NO SUCH STATE COURT HAS JURISDICTION, THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TENNESSEE, NORTHERN DIVISION (THE "***STIPULATED COURTS***"), IN RESPECT OF ANY CLAIM, ACTION, SUIT, OR PROCEEDING UNDER, ARISING OUT OF, OR RELATED TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO, (B) IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT AS A DEFENSE IN OR TO ANY SUCH CLAIM, ACTION, SUIT, OR PROCEEDING THAT SUCH PARTY IS NOT SUBJECT TO THE JURISDICTION OF THE STIPULATED COURTS, THAT SUCH CLAIM, ACTION, SUIT, OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN THE STIPULATED COURTS OR THAT THE VENUE THEREOF MAY NOT BE APPROPRIATE, OR THAT THIS AGREEMENT MAY NOT BE CONSTRUED, INTERPRETED, OR ENFORCED IN OR BY THE STIPULATED COURTS, AND (C) IRREVOCABLY AGREES THAT ALL CLAIMS A PART OF OR WITH RESPECT TO ANY SUCH CLAIM, ACTION, SUIT, OR PROCEEDING SHALL BE HEARD AND DETERMINED BY THE STIPULATED COURTS. THE PARTIES HEREBY GRANT THE STIPULATED COURTS JURISDICTION OVER THE PERSONS OF THE PARTIES AND, TO THE EXTENT PERMITTED BY LAW, OVER THE SUBJECT MATTER OF ANY SUCH CLAIM, ACTION, SUIT, OR PROCEEDING.

Section 10.13 <u>JURY TRIAL WAIVER</u>. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO A TRIAL BY JURY in respect of any claim, action, suit, or proceeding under, arising out of, or related to this Agreement or the transactions contemplated hereby.

Section 10.14 <u>Attorneys' Fees</u>. In the event of any claim, action, suit, or proceeding arising out of or in any way relating to this Agreement or the transactions contemplated hereby, the prevailing Party or Parties shall be entitled to recover from the non-prevailing Party or Parties all reasonable fees, expenses, and disbursements, including without limitation reasonable attorneys' fees and court costs, incurred by such prevailing Party or Parties in connection with such claim, action, suit, or proceeding, in addition to any other relief to which such prevailing Party or Parties may be entitled.

Section 10.15 <u>Confidential Supervisory Information</u>. Notwithstanding any other provision of this Agreement, no disclosure, representation, or warranty shall be made (or other action taken) pursuant to this Agreement, if the same would involve the disclosure of confidential supervisory information (including confidential supervisory information as defined in 12 C.F.R. 261.2(c) and as identified in 12 C.F.R. 309.5(g)(8)) of a Governmental Entity by any party to this Agreement where such disclosure is prohibited by applicable Law. To the extent legally permissible, appropriate substitute disclosures, representations, warranties, or actions shall be made or taken under circumstances in which the limitations of the preceding sentence apply.

(*Signature Page Follows*)

IN WITNESS WHEREOF, the Parties have caused this Agreement and Plan of Merger to be executed by their duly authorized officers as of the date first above written.

---

| | |
|:---|:---|
| COMMERCIAL BANCGROUP, INC. | COMMERCIAL BANCGROUP, INC. |
| By: | /s/ Terry L. Lee |
|  | Terry L. Lee |
|  | President |
| CB MERGER SUB, INC. | CB MERGER SUB, INC. |
| By: | /s/ Terry L. Lee |
|  | Terry L. Lee |
|  | President |
| AB&T FINANCIAL CORPORATION | AB&T FINANCIAL CORPORATION |
| By: | /s/ Daniel M. Boyd IV |
|  | Daniel M. Boyd IV |
|  | President and Chief Executive Officer |

---

(*Signature Page to Agreement and Plan of Merger*)

## 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 [●], 2025.

---

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

---

## Exhibit 4.1

**Exhibit 4.1**

![](ex4-1_001.jpg)

- Exhibit 4.1

![](ex4-1_002.jpg)

l:l 1 A ll. ¥ HM J SJ/'i rO J.tlY � O 1/a �/ .]!J J/¥1 N ? dONOl.fYY 'l l. iV 1fJOJ.l llM · cnnn :J l.l c! YJ .,:..JJ A. 3 NI ].J,v:J/:Jl.l.t:l - 3:J ]Hl JO :1:J �,J 3.1/.J. i1Cd i 1 N .J.1 .. !J YIA S1/ :l VI Y II Jill.. ;JlJM GNOc:'S � l:/¥0:J J. SflPV 1 N 3>'/N9/ S S V s1;a .! 0 3 ¥ /U YNS/$}Hi "]:JI.LON 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) . SPECIMEN - NON - NEGOTIABLE

## Exhibit 10.1

**Exhibit 10.1**

![](ex10-1_001.jpg)

**commercial bancgroup, inc.**

**2025 omnibus INCENTIVE PLAN**

[●], 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 *Transferabilsity 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 [●].

&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 10.5

**Exhibit 10.5**

**AMENDED AND RESTATED LOAN AGREEMENT**

**THIS AMENDED AND RESTATED LOAN AGREEMENT** (herein this "Loan Agreement") is made, entered into and effective as of the 27 day of January, 2020, by and between (i) **COMMUNITY TRUST BANK, INC.,** a Kentucky banking corporation, with its principal office at 346 North Mayo Trail, Pikeville, Kentucky 41501 (the "Bank"); and (ii) **COMMERCIAL BANCGROUP, INC.,** a Tennessee corporation, with a mailing address of 6710 Cumberland Gap Parkway, Harrogate, Tennessee 37752-8013 (the "Borrower").

This Loan Agreement is an amendment and restatement, and not a novation, of that certain Loan Agreement dated April 30, 2015 by and among Bank and Borrower (the "Original Loan Agreement"), by which the Borrower obtained from the Bank a $19,500,000.00 term loan (the "Loan"). The current principal balance of the Loan is $15,216,175.36. The parties desire to amend and restate the Original Loan Agreement as set forth herein, including without limitation, to increase the principal amount of the Loan by $13,283,824.64. (the "Additional Funds") to $28,500,000.00. The Additional Funds will be used to purchase First National Bank & Trust, London, Kentucky. As amended and restated hereby, the Original Loan Agreement shall remain in full force and effect.

**R E C I T A L S:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Borrower desires to obtain from the Bank a $28,500,000.00 term loan (the "Loan") to refinance existing holding company debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. The Bank desires to grant to the Borrower the Loan upon the terms and conditions set forth or referred to herein.

**NOW, THEREFORE,** in consideration of the Recitals and the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows:

1. <u>Definitions</u>. The following terms shall have the meanings set forth below. Other terms used herein are defined elsewhere in
this Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1. "Bank" means Community Trust Bank, Inc., a Kentucky banking corporation, or any successor
holder of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. "Borrower" means Commercial Bancgroup, Inc., a Tennessee corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3. "Borrowing Rate" means a variable rate per annum equal to the Prime Rate, as herein defined,
in effect from time to time, which shall be adjusted daily. At all times, the Borrowing Rate shall be computed on a 365/360 basis; that
is, by applying the ratio of the interest rate over an assumed year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding. All interest on the Loan shall be calculated using this
method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4. "Business Days" means all calendar days excluding
Saturdays, Sundays, legal holidays of the United States Government and other days on which the Bank is not open for the regular conduct
of its business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5. "Closing" means the date on which the disbursement of the proceeds of the Loan occurs, unless
otherwise agreed in writing by the Bank and Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6. "Closing Fees" means all amounts necessary to pay all costs, charges and expenses incurred
by Bank or Borrower in connection with making the Loan, including, but not limited to, reasonable attorneys fees and expenses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7. "Commercial Bank" means Borrower's subsidiary, Commercial Bank, a Tennessee banking corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8. "Event of Default" means the occurrence or happening of any one of the matters set forth in
Section 9 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9. "First National Bank & Trust" means Borrower's subsidiary, First National Bank & Trust,
a national banking association.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.10. "Indebtedness" means all principal, interest and other amounts, costs and expenses payable
under the Note or other Loan Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions
for the Note or other Loan Documents and any amounts expended or advanced by the Bank to discharge Borrower's obligations or expenses
incurred by the Bank to enforce Borrower's obligations under the Loan Documents, together with interest on such amounts as provided in
the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.11. "Loan Documents" means this Loan Agreement, the
Note, the Security Instruments and all other instruments, documents or agreements related to any of the foregoing. Any reference herein
to the Loan Documents or any particular Loan Document shall be deemed a reference to such Loan Document or Loan Documents as the same
may be amended or modified from time to time by the parties thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.12. "Loan" shall have the meaning set out in Recital A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.13. "Note" shall have the meaning set out in Section 2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.14. "Person" or "party" means any individual, sole proprietorship, partnership, joint
venture, trust, limited liability company, unincorporated organization, association, corporation, other entity or group, institution,
party or government (whether federal, state, county, city, municipal or other) or agency or division thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.15. "Possible Default" means an event, condition, or thing which, with the lapse of any applicable
grace period or the giving of notice, or both, would constitute an Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.16. "Prime Rate" means at any time the interest rate per annum most recently quoted or the
 highest of any range quoted from time to time by The Wall Street Journal ("WSJ") as the "Prime Rate" or base
 rate on corporate loans in effect at large U.S. money center commercial banks. In the event the WSJ ceases to publish a "Prime
 Rate," the "Prime Rate" shall be the interest rate designated and announced from time to time by the Bank as its
 "Prime Rate" in effect at its principal office, although such rate may not be the lowest rate available at the
 particular time on loans of a similar nature.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.17. "Security Instruments" means all of the instruments and rights securing the Indebtedness as referred to in Section 4 hereof
and otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.18. "Subsidiary Banks" means all of the Borrower's subsidiary banks, including without limitation, Commercial Bank and First
National Bank & Trust.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.19. Except as otherwise provided herein, all accounting terms used herein shall be defined in accordance with generally accepted accounting
principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.20. As used herein, any gender includes all other genders, and the singular includes the plural and the plural includes the singular.

2. <u>Amount</u>. The Bank hereby agrees to make the Loan to the Borrower in the total amount of $28,500,000.00,
of which the Additional Funds shall be disbursed upon the execution of this Loan Agreement and the fulfillment of all conditions precedent
set forth herein at the time of execution of this Loan Agreement. The Additional Funds shall be used to refinance existing holding company
debt. The Loan is evidenced by, shall bear interest at the rate established in, and shall be payable and otherwise be made on the terms
set forth in the Amended and Restated Term Note in the face principal amount of $28,500,000.00 made by the Borrower payable to the order
of the Bank, executed contemporaneously herewith, as such Note may hereafter be amended, modified, extended or renewed (herein the "Note"),
and on the terms established in this Loan Agreement. All payments on the Note shall be made to the holder of the Note in immediately available
funds.

3. <u>Term</u>. The maturity date of the Note (herein the "Maturity Date"), at which time all
 principal and accrued but unpaid interest on the Note shall be due and payable, unless earlier payable pursuant to the terms of this
 Loan Agreement or otherwise, is January 30, 2035. If the Loan is prepaid in full during the first five years from the date hereof as a
 result of a refinancing with another financial institution, a prepayment premium shall be assessed as follows: if prepaid (i) during
 the first year: five percent (5%) of the principal amount repaid; (ii) during the second year: four percent (4%) of the principal
 amount repaid; (iii) during the third year: three percent (3%) of the principal amount repaid; (iv) during the fourth year: two
 percent (2%) of the principal amount repaid; and (v) during the fifth year: one percent (1%) of the principal amount repaid;
 provided, however, this premium shall not apply if paid from internally generated funds or is refinanced with the Bank. After the
 first five years, the Loan may be prepaid at any time without premium or penalty.

4. <u>Security for the Indebtedness</u>. The Indebtedness, including that evidenced by the Note, is and shall
be secured by and entitled to the benefits of all the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1. <u>Right of Offset</u>. The right of offset specified in Section 10.3 hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2. <u>Stock Pledge and Security Agreement</u>. That certain Stock Pledge and Security Agreement (herein the
"Security Agreement") executed and delivered by Borrower to Bank pledging all of the issued and outstanding shares of the
Subsidiary Banks (collectively, the "Bank Shares") to the Bank, and granting to the Bank a first and prior security interest
in all of the Bank Shares, and pursuant to which the original certificate evidencing the Bank Shares shall be delivered to the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3. <u>Other Security</u>. Other security and instruments, if any, granted by Borrower or any other person
or entity to Bank, whether of even date herewith or hereafter or heretofore so granted, to secure the Note or any other Indebtedness.

5. <u>Conditions Precedent</u>. The Bank's obligations under this Loan Agreement, shall be subject to the
fulfillment to Bank's satisfaction prior to or at the Closing of each of the following Conditions Precedent ("Conditions Precedent")
unless such condition or conditions shall be waived by Bank in writing, in the sole discretion of the Bank:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1. <u>Resolutions and Approvals</u>. The Borrower shall furnish certified copies of all consents, resolutions
and approvals, including regulatory approvals, as may be required by the Bank, evidencing approval of the execution of the Loan Documents
and the performance of all obligations contained therein, as well as of the acquisition of First National Bank & Trust, all in form
and substance acceptable to the Bank. The Borrower shall also furnish the Bank copies of its Articles of Incorporation, Bylaws, and Certificate
of Existence from the Tennessee Secretary of State's Office.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2. <u>Legal Opinion</u>. The Bank shall have received a favorable written opinion of Borrower's counsel acceptable
to the Bank, dated and effective as of the Closing, addressed to the Bank rendering substantially the opinions set forth on <u>Exhibit A</u> attached hereto and incorporated herein by reference, with only such modifications, exceptions, assumptions and qualifications as
shall be acceptable to the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3. <u>Loan Documents</u>. All the Loan Documents, and such other documents or instruments as the Bank may
reasonably require, shall have been duly executed and delivered, and those instruments required to be recorded in any public office are
properly recorded.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4. <u>Representations, Warranties and Covenants</u>. All representations and warranties of the Borrower contained
herein shall be true and correct and Borrower shall be in compliance with all covenants contained in this Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5. <u>Delivery of Certificates for Bank Shares</u>. The Bank shall have received the original certificates
evidencing the Bank Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6. <u>Taxpayer ID Number</u>. The Bank shall have been given the Internal Revenue Service taxpayer identification
number for Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7. <u>Lien Searches</u>. The Bank shall have received the results of lien, litigation and UCC searches for the Borrower, which shall
be satisfactory to the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. <u>Loan Origination Fee</u>. The Borrower shall pay to the Bank
at the time of the Closing of the Loan a loan origination fee in the amount of $65,000.00 (the "Origination Fee"), which
shall be paid as follows: (i) $32,500.00 due and payable upon acceptance of the commitment for the Loan and (ii) the balance at Closing.
The full amount of the Origination Fee is payable in full even if the Loan does not close, and shall not be applied to any indebtedness
of any nature of the Borrower to the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8. <u>Other Conditions</u>. Such other pre-conditions as the Bank may reasonably establish.

6. <u>Affirmative Covenants</u>. The Borrower agrees that until the principal of, and all interest on, the
Note shall have been paid in full and this Loan Agreement terminated, the Borrower shall perform and observe all the following provisions,
as applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1. <u>Money Obligations</u>. The Borrower shall pay in full:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Prior in each case to the date when penalties would attach, all taxes, assessments and governmental charges
and levies (except only those so long as, and to the extent that, the same shall be contested in good faith by appropriate and timely
legal proceedings and as to which the enforcement of any lien or right of execution against property of the Borrower is stayed), and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. All its debts, obligations and liabilities on or prior to their respective due dates (with the benefit
of any grace period) for which it becomes legally liable or to which any or all of its properties become legally subject.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2. <u>Financial Statements</u>. The Borrower shall furnish to the Bank the following, as applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. (i) within fifteen (15) days after the Borrower files its signed federal income tax returns with the Internal
Revenue Service, copies of the signed income tax returns of the Borrower, and (ii) within 120 days of the end of Borrower's fiscal year,
annual audited financial statements of Borrower for the previous year, consisting of a balance sheet, profit and loss statement, cash
flow statement and
report on changes in stockholders equity, audited by certified public accountants acceptable to the Bank, all of which shall be certified
by an authorized officer of the Borrower, as applicable as being true, correct and accurate, together with an unqualified opinion of such
certified public accountants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. As requested by the Bank, the Borrower shall promptly furnish to the Bank Allowance for Loan and Lease
Loss calculation, classified asset report ("watch list") quarterly, and ORE/problem asset summaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Borrower shall furnish or cause to be furnished to Bank
within forty-five (45) days of a request by the Bank, such further data and information relating to the financial affairs, assets and
liabilities of Borrower as Bank may reasonably request from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3. <u>Regulatory Reports</u>. The Borrower shall provide to the Bank copies of all regulatory reports for
the Borrower and the Subsidiary Banks, including without limitation, copies of the Subsidiary Banks' quarterly and annual Uniform Bank
Performance Reports and Call Reports filed with the applicable bank regulatory agencies at the end of each calendar quarter. Each Uniform
Bank Performance Report shall disclose that (i) the loan loss reserve total of each Subsidiary Bank shall be within acceptable federal
regulatory limits, (ii) the risk-based capital ratios of each Subsidiary Bank shall be "well-capitalized" as that term is
defined at 12 C.F.R. 325 101, and (iii) each Subsidiary Bank has not made loans, advances, and investments in interest swaps and derivatives;
provided however, interest rate swaps related to individual commercial loan customers shall be permitted. The Borrower shall take all
action to ensure that the Subsidiary Banks comply with the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4. <u>Financial Records</u>. The Borrower shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. At all times keep true and complete financial records in accordance with generally accepted accounting
principles and all financial statement required hereunder shall be prepared in accordance with generally accepted accounting principles.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Permit the Bank or its agents to examine any or all of its financial records and to copy any part or all
of said records in any reasonable manner; Bank agrees to keep such records confidential, except if disclosure is required by law or court
order, in which case Bank will immediately notify Borrower of the circumstances requiring such disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Maintain the Borrower's books and records at the office of the Borrower, or at such other reasonable place
Borrower may locate its records after notice to Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5. <u>Legal Existence and Licenses</u>.
The Borrower shall preserve its legal existence in good standing, and will maintain all permits, licenses and other similar matters necessary
or appropriate for its operation as a registered bank holding company. The Borrower shall cause the Subsidiary Banks to preserve their
legal existences in good standing, and will cause the Subsidiary Banks to maintain all permits, licenses and other similar matters necessary
or appropriate for their operation as commercial banks. The Borrower shall at all times comply, and shall cause the Subsidiary Banks to
comply, with the applicable statutes, regulations, ordinances and other laws applicable to their operations and activities, including
but not limited to, all banking laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6. <u>Agreements</u>. Unless being
disputed in good faith, the Borrower shall timely comply with all its respective agreements and valid obligations to and with all parties,
and shall not commit or permit to be committed any default thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7. <u>Payment of Note and Other Indebtedness</u>.
The Borrower shall timely pay the Note and all the other Indebtedness in accordance with their respective terms. All payments on the Note
and the other Indebtedness shall be made to the Bank in immediately available funds at the Bank's principal office on the date due.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8. <u>Correction Agreement</u>. If
any Loan Document is lost, misplaced, misstated, or inaccurately reflects the true and correct terms and conditions of the Loan, upon
request of the Bank, the Borrower shall comply with the Bank's request to execute, acknowledge, initial, and deliver to the Bank any documentation
that the Bank deems necessary to replace or correct the lost, misplaced, misstated or inaccurate Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.9. <u>Notice</u>. The Borrower shall promptly notify the
 Bank in writing, within no more than ten (10) Business Days (and without the benefit of any grace period afforded in any provision
 of this Loan Agreement or any Security Instrument) after the Borrower learns of any of the following: (i) the existence or
 occurrence of any Event of Default under this Loan Agreement, or any default under the Note or any of the Security Instruments; or
 (ii) if any representation or warranty made herein, or in any related instrument, shall, for any reason, not be or shall cease in
 any material respect to be true and complete and not misleading; or (iii) the institution of, or adverse determination in, any
 litigation, arbitration or other proceeding involving the Borrower, which, if adversely determined, would materially impair
 Borrower's rights to carry on its business substantially as now conducted and as now contemplated, and describing in such detail as
 the Bank may reasonably require, the nature thereof, what happened with respect thereto and what steps are being taken by the
 Borrower with respect thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.10. <u>Debt Service Coverage Ratio</u>.
The Borrower shall maintain a consolidated minimum Debt Service Coverage Ratio of 1.25 to 1 at all times, which shall be calculated annually
as follows using uniform cash flow analysis, consistently applied. The "Debt
Service Coverage Ratio" shall mean the ratio of (i) consolidated after-tax net income plus (A) interest expense, plus (B) amortization
expense and plus (C) depreciation expense of the Borrower divided by (ii) actual debt service on the aggregate total of the Loan and
all other outstanding consolidated debt of the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.11. <u>Dividend Coverage Ratio</u>.
During each calendar year while the Loan remains outstanding, the Borrower shall maintain a Dividend Coverage Ratio of (i) total consolidated
earnings to (ii) cash dividends paid to Borrower's shareholders of at least 1.0 to 1.0 (i.e., cash dividends paid may be less, but not
more than total consolidated earnings), all as measured in accordance with uniform cash flow analysis, consistently applied. The Dividend
Coverage Ratio shall be measured annually.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.12. <u>Leverage Ratios</u>. The Borrower shall maintain at
 all times for itself on a consolidated basis, and for each Subsidiary Bank, the following ratios as established by the Board of
 Governors of the Federal Reserve for a "well-capitalized bank": (i) a total risk-based capital ratio of ten percent
 (10.0%) or greater; (ii) a Tier 1 risk-based capital ratio of six percent (6.0%) or greater; and (iii) a Tier 1 core leverage ratio
 of five percent (5.0%) or greater.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.13. <u>Management Change</u>. The Borrower
shall promptly notify the Bank of any significant changes in the management of the Borrower or Subsidiary Banks.

7. <u>Negative Covenants</u>. The Borrower
agrees that, until the principal of and all interest on the Note and all the other Indebtedness shall have been paid in full and this
Loan Agreement terminated, the Borrower shall observe and comply with each of the following provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1. <u>Additional Debt</u>. The Borrower
shall not create, incur, assume, or suffer to exist an indebtedness or liabilities in excess of $500,000.00 (other than the Loan) for
borrowed money, any indebtedness evidenced by notes, debentures or similar obligations or any conditional sales or title retention agreements
or capitalized leases without the prior written consent of the Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2. <u>Dividend Payments</u>. The Borrower
shall not pay any dividend on the Bank Shares if an uncured Event of Default shall be in existence or if the payment of the dividend would
create an Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3. <u>Liens</u>. The Borrower shall
not incur, create, assume or suffer to exist any security interest, pledge, lien, charge or other encumbrance of any nature whatsoever
on the Bank Shares except the liens and security interests granted by the Borrower to the Bank contemporaneously with or in connection
with the execution of this Loan Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4. <u>Liquidation or Dissolution</u>. Borrower shall not
liquidate or dissolve or take any action with a view towards same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5. <u>Sales and Capital Structure Changes</u>. Without
the prior written consent of the Bank, the Borrower (whether in one transaction or in a series of transactions) shall not:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Sell all or substantially all of its assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Merge with and into another entity; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Effect any change in its capital structure, or amend its Articles of Incorporation or Bylaws.

8. <u>Representations and Warranties</u>.
The Borrower hereby represents and warrants to the Bank as follows, which warranties and representations shall be deemed to be continuing
and shall survive the execution of this Loan Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1. <u>Existence and Licenses</u>. Borrower
is a duly incorporated, validly existing corporation under the laws of the State of Tennessee and shall maintain at all times, in full
force and effect all licenses and permits necessary or appropriate for its business as a bank holding company. Commercial Bank is a
duly incorporated, validly existing banking corporation under the laws of the State of Tennessee and Borrower shall cause Commercial
Bank to maintain at all times, in full force and effect all licenses and permits necessary or appropriate for its business as a commercial
bank. First National Bank & Trust is a duly incorporated, validly existing banking corporation under the laws of the United States
and Borrower shall cause First National Bank & Trust to maintain at all times, in full force and effect all licenses and permits necessary
or appropriate for its business as a commercial bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2. <u>Right to Act</u>. No registration
with or approval of any governmental agency of any kind is required for the due execution and delivery of, or for the enforceability of,
this Loan Agreement, the Note or any of the Security Instruments or other Loan Documents except for the recording in the appropriate public
offices of the Financing Statement. The Borrower has the legal power and right to execute and deliver this Loan Agreement, the Note, the
Security Instruments and the other Loan Documents and to observe and perform all of the provisions of such instruments and documents.
The Borrower's execution and delivery of this Loan Agreement, the Note and Security Instruments or of any other writing relating to the
Loan, and the performance or observance by the Borrower of the provisions of any of such instruments does not violate or will not violate
any law applicable to it or otherwise constitute a default or violation under any existing contract or other obligation binding upon it
or its property, with or without the passage of time or the giving of notice, or both. The persons or entities executing and delivering
this Loan Agreement, the Note, Security Instruments and other Loan Documents on behalf of the Borrower have been duly authorized to do
so, and this Loan Agreement, the Note, the Security Instruments and the other Loan Documents
are legally binding upon the Borrower, and are enforceable in accordance with their respective terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3. <u>Litigation and Taxes</u>. To
Borrower's knowledge, no litigation or proceeding involving Borrower is pending which may materially affect the properties or business
of the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4. <u>Financial Statements</u>. The
Borrower's financial statements, heretofore furnished to the Bank, are true and complete in all material respects, and fairly present
the Borrower's financial condition as of their dates. Since the date of such statements, there has been no material adverse change in
the Borrower's financial conditions, properties or businesses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5. <u>Default</u>. No Possible Default
or Event of Default exists under this Loan Agreement, nor will begin to exist immediately upon the execution and delivery hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6. <u>Investment Company Act</u>.
The Borrower is not an "investment company" or company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7. <u>Patriot Act</u>. Borrower, and
to the best of Borrower's knowledge, after having made diligent inquiry, each Person owning a direct or indirect interest in the Borrower:
(i) is not currently identified on the OFAC List, or other federally or state issued list of known or suspected terrorists or terrorist
organizations; and (ii) is not a Person with whom a citizen of the United States is prohibited to engage in transactions by any trade
embargo, economic sanction, anti-money laundering rules, or other prohibition of United States law, regulation, or executive order of
the President of the United States. At all times throughout the term of the Loan, none of the funds or assets of the funds or assets of
the Borrower that are used to repay the Loan shall constitute property of, or shall be beneficially owned directly or, to the knowledge
of Borrower, indirectly, by any Person identified on the OFAC List. Borrower has implemented procedures, and will consistently apply those
procedures throughout the terms of the Loan, to ensure the foregoing representations and warranties remain true and correct during the
term of the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8. <u>Regulation U</u>. The Borrower
is not engaged principally or as one of its important activities in the business of extending credit for the purpose of purchasing or
carrying margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9. <u>Bank Shares</u>. The Bank Shares
represent 100% of the issued and outstanding stock of the Subsidiary Banks, and the Borrower owns the Bank Shares free and clear of all
liens and encumbrances.

9. <u>Events of Default</u>. Each of the following shall constitute an Event of Default
hereunder:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1. <u>Payments</u>. If any installment
of principal or interest on the Note shall not be paid in full punctually when due and payable and such failure to pay continues for a
period of fifteen (15) days, or if any Event of Default occurs under any other Loan Document following the expiration of any applicable
cure period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.2. <u>Covenants and Agreements</u>.
If Borrower shall violate, fail or omit to perform or observe any covenant, agreement, condition or other provision (other than referred
to in Section 9.1 hereof) contained herein on the part of the Borrower to be performed, and such failure or omission shall not have been
fully corrected to the reasonable satisfaction of the Bank within thirty (30) days after the Bank has given written notice thereof to
the Borrower; provided, however, if such Event of Default may not be cured within such period, then the Borrower shall have such reasonable
time thereafter to cure so long as the Borrower has started and is diligently pursuing the curing of such Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.3. <u>Failure to Pay Other Indebtedness</u>.
If the Borrower shall fail to pay any material obligation it may legitimately have or be subject to with respect to any Person within
ten (10) days after the respective due date or performance date thereof (with the benefit of any grace period).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.4. <u>Accuracy of Statements</u>. If any representation or warranty or other statement of material fact
 contained herein or in any of the Security Instruments or in any writing, certificate, report
 or **  statement at any time furnished to the Bank pursuant to or in connection with this
 Loan Agreement or otherwise, shall be false or misleading in any material respect or shall
 omit a material fact, whether or not made with knowledge of same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.5. <u>Judgments and Liens</u>. If
a final judgment or judgments for the payment of money in excess of the sum of Seven Hundred Fifty Thousand Dollars ($750,000.00) in the
aggregate shall be rendered against the Borrower, and such judgment or judgments shall remain unsatisfied and in effect and shall not
have been discharged within thirty (30) consecutive
days after the entry thereof and execution thereon shall not have been stayed pending appeal, or if so stayed, ten (10) days after the
expiration of such stay.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.6. <u>Solvency and Other Matters</u>. If the Borrower
 shall (a) discontinue business, (b) make a general assignment for the benefit of its creditors, (c) apply for or consent to the
 appointment of a custodian, receiver, trustee or liquidator of all or a substantial part of its assets, (d) be adjudicated
 insolvent, or have an Order for Relief entered as to it in any bankruptcy proceeding or be the subject of an involuntary bankruptcy
 petition and which remains in place for a period of ninety (90) days or more, (e) file a voluntary petition in bankruptcy or file a
 petition or an answer seeking a composition, reorganization or an arrangement with creditors or seeking to take advantage of any
 other law (whether federal or state) relating to relief for debtors, or admit (by answer, default or otherwise) the material
 allegations of any petition filed against it in any bankruptcy, reorganization, composition, insolvency or other proceeding (whether
 federal or state) relating to relief for debtors, (f) suffer or permit to continue unstayed and in effect for ninety (90)
 consecutive days any judgment, decree or order entered by a court or governmental agency of competent jurisdiction, which assumes
 control of the Borrower, or the business or financial affairs of the Borrower or approves a petition seeking a reorganization,
 composition or arrangement of the Borrower, or any other judicial modification of the rights of any of its creditors, or appoints a
 custodian, receiver, trustee or liquidator for the Borrower, or for all or a substantial part of its business or assets, or (g) be
 enjoined or restrained from conducting all or a material part of any of its business as now conducted and the same is not dismissed
 and dissolved within ninety (90) days after the entry thereof.

10. <u>Remedies Upon Default</u>. Notwithstanding any contrary
provision or inference herein or elsewhere:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1. <u>Optional Acceleration</u>. If
any Event of Default referred to in Sections 9.1 through 9.5 hereof shall occur and is continuing, following the expiration of any applicable
cure period, the Bank, in its absolute discretion, without further notice to the Borrower, may declare all amounts of principal and interest
evidenced by the Note and all other Indebtedness, to be, whereupon the same shall be, accelerated and immediately due and payable in
full, all without any presentment, demand or notice of any kind, all of which are hereby expressly waived by the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2. <u>Automatic Acceleration</u>. If
any Event of Default referred to in Section 9.6 hereof shall occur, all of the Indebtedness including that evidenced by the Note shall
thereupon become accelerated and immediately due and payable in full, all without presentment, demand or notice of any kind, all of which
are hereby expressly waived by the Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3. <u>Offsets</u>. If any Event of Default shall occur or begin to exist, the Bank shall have the right then, or at any time thereafter, to set off
 against, and to appropriate and apply toward the payment of the Indebtedness (in such order as the Bank may select in its sole
 discretion), including but not limited to, the Indebtedness evidenced by the Note, whether or not such Indebtedness shall then have
 matured or be due and payable and whether or not the Bank has declared the Note and/or other Indebtedness to be in default and
 immediately due, any and all deposit balances and other sums and indebtedness and other property then held or owed by the Bank to or
 for the credit or account of the Borrower, and in and on all of which the Borrower hereby grants the Bank a first security interest,
 lien and pledge to secure all the Indebtedness, all without notice to or demand upon the Borrower or any other person, all such
 notices and demands being hereby expressly waived.

**IN WITNESS WHEREOF,** the parties hereto have executed this Loan Agreement the day, month and year first above written.

---

| | |
|:---|:---|
| **COMMERCIAL BANCGROUP, INC.** | **COMMERCIAL BANCGROUP, INC.** |
| By: | /s/ Terry L. Lee |
|  | Terry L. Lee, President |
|  | ("Borrower") |
| **COMMUNITY TRUST BANK, INC.** | **COMMUNITY TRUST BANK, INC.** |
| By: | /s/ Jody I. Thompson |
|  | Jody I. Thompson, Vice President |
|  | ("Bank") |

---

## Exhibit 21.1

**Exhibit 21.1**

**COMMERCIAL BANCGROUP, INC.**

**LIST OF SUBSIDIARIES**

---

| | |
|:---|:---|
| **Subsidiary Name** | **State of Incorporation** |
| Commercial Bank | Tennessee |

---

## Exhibit 23.1

**Exhibit 23.1**

![](ex23-1_001.jpg)

When the transactions referred to in Note 23 of the Notes to the Consolidated Financial Statements for the years ended December 31, 2024 and 2023 have been consummated, we will be in a position to render the following consent.

/s/ Mauldin & Jenkins, LLC

Chattanooga, Tennessee

August 26, 2025

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

We consent to the use in this Registration Statement on Form S-1 of Commercial Bancgroup, Inc. of our report dated March 26, 2025, except for the effects of the recapitalization and stock split described in Note 23 as to which the date is _______________, relating to the consolidated financial statements of Commercial Bancgroup, Inc., appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to our Firm under the heading "Experts" in the Prospectus.

---

| | |
|:---|:---|
|  | [unsigned] |
| Chattanooga, Tennessee |  |
| ______________ |  |

---

200 W. MARTIN LUTHER KING BLVD, SUITE 1100 ● CHATTANOOGA, TENNESSEE 37402 ● 423-756-6133 ● FAX 423-756-2727 ● www.mjcpa.com

*MEMBERS OF THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS*

## Ex-Filing

?xml version='1.0' encoding='ASCII'? Filing Fee Exhibit

**Ex-Filing Fees**

**CALCULATION OF FILING FEE TABLES**

**S-1**

**Commercial Bancgroup, Inc.**

**Table 1: Newly Registered and Carry Forward Securities**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Line Item Type** | **Security Type** | **Security Class Title** | **Notes** | **Fee Calculation<br> Rule** | **Amount Registered** | **Proposed Maximum Offering<br> Price Per Unit** | **Maximum Aggregate Offering Price** | **Fee Rate** | **Amount of Registration Fee** |
| *Newly Registered Securities* | *Newly Registered Securities* | *Newly Registered Securities* | *Newly Registered Securities* | *Newly Registered Securities* | *Newly Registered Securities* | *Newly Registered Securities* | *Newly Registered Securities* | *Newly Registered Securities* | *Newly Registered Securities* |
| Fees to be Paid | Equity | Common stock, par value $0.01 per share | (1) | 457(o) |  | $| $172500000.00 | 0.0001531 | $26409.75 |
| Total Offering Amounts: | Total Offering Amounts: | Total Offering Amounts: | Total Offering Amounts: | Total Offering Amounts: | Total Offering Amounts: | Total Offering Amounts: | $172500000.00 |  | 26409.75 |
| Total Fees Previously Paid: | Total Fees Previously Paid: | Total Fees Previously Paid: | Total Fees Previously Paid: | Total Fees Previously Paid: | Total Fees Previously Paid: | Total Fees Previously Paid: |  |  | 0.00 |
| Total Fee Offsets: | Total Fee Offsets: | Total Fee Offsets: | Total Fee Offsets: | Total Fee Offsets: | Total Fee Offsets: | Total Fee Offsets: |  |  | 0.00 |
| Net Fee Due: | Net Fee Due: | Net Fee Due: | Net Fee Due: | Net Fee Due: | Net Fee Due: | Net Fee Due: |  |  | $26409.75 |

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**__________________________________________ Offering Note(s)**

&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes offering price of shares of common stock that the underwriter has the option to purchase to cover over-allotments, if any, as described in the attached Registration Statement on Form S-1. Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended. This amount represents the proposed maximum aggregate offering price of the securities registered hereunder to be sold by the registrant and the selling shareholders.