# EDGAR Filing Document

**Accession Number:** 0000880641
**File Stem:** 0000880641-26-000013
**Filing Date:** 2026-5
**Character Count:** 215997
**Document Hash:** 0a4d9d6257ee4888c01522d72db5fd0c
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000880641-26-000013.hdr.sgml**: 20260511

**ACCESSION NUMBER**: 0000880641-26-000013

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 94

**CONFORMED PERIOD OF REPORT**: 20260331

**FILED AS OF DATE**: 20260511

**DATE AS OF CHANGE**: 20260511

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** EAGLE FINANCIAL SERVICES INC
- **CENTRAL INDEX KEY:** 0000880641
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 541601306
- **STATE OF INCORPORATION:** VA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42512
- **FILM NUMBER:** 26962569

**BUSINESS ADDRESS:**
- **STREET 1:** 2 E MAIN ST
- **CITY:** BERRYVILLE
- **STATE:** VA
- **ZIP:** 22611
- **BUSINESS PHONE:** 540-955-2510

**MAIL ADDRESS:**
- **STREET 1:** PO BOX 391
- **CITY:** BERRYVILLE
- **STATE:** VA
- **ZIP:** 22611

?xml version='1.0' encoding='ASCII'? 10-Q

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM** 10-Q

(Mark One)

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

**For the quarterly period ended** **March 31,** 2026

**or**

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

**For the transition period from to**

**Commission File Number:** 001-42512

EAGLE FINANCIAL SERVICES, INC.

**(Exact name of registrant as specified in its charter)**

---

| | | |
|:---|:---|:---|
| Virginia |  | 54-1601306 |
| **(State or other jurisdiction of**<br>**incorporation or organization)** |  | **(I.R.S. Employer**<br>**Identification No.)** |
| 2 East Main Street | **P.O. Box 391** |  |
| Berryville**,** VA |  | 22611 |
| **(Address of principal executive offices)** |  | **(Zip Code)** |

---

(540) 955-2510

**(Registrant's telephone number, including area code)**

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

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, Par Value $2.50 | EFSI | The Nasdaq Stock Market LLC |

---

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

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

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

---

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

---

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

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

The number of shares of the registrant's Common Stock ($2.50 par value) outstanding as of May 6, 2026 was 5,412,376.

------

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| [**<u>PART I - FINANCIAL INFORMATION</u>**](#part_i_financial_information) | [**<u>PART I - FINANCIAL INFORMATION</u>**](#part_i_financial_information) |  |
| Item 1. | [<u>Financial Statements:</u>](#item_1_financial_statements) |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Balance Sheets at March 31, 2026 and December 31, 2025</u>](#consolidated_balance_sheets) | 1 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025</u>](#consolidated_statements_income_unaudited) | 2 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2026 and 2025</u>](#consolidated_statements_comprehensive_in) | 3 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended March 31, 2026 and 2025</u>](#consolidated_statements_changes_in_share) | 4 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025</u>](#consolidated_statements_cash_flows_unaud) | 5 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[<u>Notes to Consolidated Financial Statements</u>](#notes_to_consolidated_financial_statemen) | 6 |
| Item 2. | [<u>Management's Discussion and Analysis of Financial Condition and Results of Operations</u>](#item_2_managements_discussion_analysis_f) | 39 |
| Item 3. | [<u>Quantitative and Qualitative Disclosures about Market Risk</u>](#item_3_quantitative_qualitative_disclosu) | 60 |
| Item 4. | [<u>Controls and Procedures</u>](#item_4_controls_procedures) | 60 |
| [**<u>PART II - OTHER INFORMATION</u>**](#part_ii_or_information) | [**<u>PART II - OTHER INFORMATION</u>**](#part_ii_or_information) |  |
| Item 1. | [<u>Legal Proceedings</u>](#item_1_legal_proceedings) | 61 |
| Item 1A. | [<u>Risk Factors</u>](#item_1a_risk_factors) | 61 |
| Item 2. | [<u>Unregistered Sales of Equity Securities and Use of Proceeds</u>](#item_2_unregistered_sales_equity_securit) | 61 |
| Item 3. | [<u>Defaults Upon Senior Securities</u>](#item_3_deaults_upon_senior_securities) | 61 |
| Item 4. | [<u>Mine Safety Disclosures</u>](#item_4_mine_safety_disclosures) | 61 |
| Item 5. | [<u>Other Information</u>](#item_5_or_information) | 61 |
| Item 6. | [<u>Exhibits</u>](#item_6_exhibits) | 62 |

---

------

&nbsp;&nbsp;&nbsp;&nbsp;

**PART I - FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**EAGLE FINANCIAL SERVICES, INC.**

**Consolidated Balance Sheets**

**(dollars in thousands, except per share amounts)**

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
|  | **(Unaudited)** | **\*** |
| **Assets** |  |  |
| Cash and due from banks | $14500 | $13942 |
| Interest-bearing deposits with other institutions | 94974 | 103984 |
| Federal funds sold | 80293 | 99268 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total cash and cash equivalents | $189767 | $217194 |
| Securities available for sale, at fair value, amortized cost of $122,916 and $126,197, respectively | 115370 | 119543 |
| Restricted investments, at cost | 1875 | 3786 |
| Loans held for sale | 5214 | 4786 |
| Loans | 1458859 | 1473077 |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for credit losses | (17326) | (15320) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Loans | $1441533 | $1457757 |
| Bank premises and equipment, net | 14911 | 14906 |
| Bank owned life insurance | 32004 | 31720 |
| Other assets | 37686 | 38934 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $1838360 | $1888626 |
| **Liabilities and Shareholders' Equity** |  |  |
| **Liabilities** |  |  |
| Deposits: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Noninterest bearing demand deposits | $455107 | $432171 |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings and interest bearing demand deposits | 728322 | 728545 |
| &nbsp;&nbsp;&nbsp;&nbsp;Time deposits | 414790 | 446644 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deposits | $1598219 | $1607360 |
| Federal Home Loan Bank advances, long-term |  | 40000 |
| Subordinated debt, net of unamortized issuance costs | 29596 | 29579 |
| Other liabilities | 20219 | 22848 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $1648034 | $1699787 |
| Commitments and contingencies |  |  |
| **Shareholders' Equity** |  |  |
| Preferred stock, $10 par value; 500,000 shares authorized and unissued | $— | $— |
| Common stock, $2.50 par value; authorized 10,000,000 shares; issued and outstanding 2026, 5,412,376 including 87,673 shares of unvested restricted stock; issued and outstanding 2025, 5,374,205 including 68,476 shares of unvested restricted stock | 13311 | 13264 |
| Surplus | 64802 | 64720 |
| Retained earnings | 118178 | 116115 |
| Accumulated other comprehensive loss | (5965) | (5260) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | $190326 | $188839 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $1838360 | $1888626 |

---

See Notes to Consolidated Financial Statements

\* Derived from the consolidated audited financial statements.

------

[**<u>**TABLE OF CONTENTS**</u>**](#toc)

**EAGLE FINANCIAL SERVICES, INC.**

**Consolidated Statements of Operations (Unaudited)**

**(dollars in thousands, except per share amounts)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
| **Interest and Dividend Income** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and fees on loans | $20713 | $19971 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest and dividends on securities available for sale: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxable interest income | 1230 | 695 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest income exempt from federal income taxes |  | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends | 76 | 150 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest on deposits in banks | 1698 | 2644 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest on federal funds sold | 109 | 39 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest and dividend income | $23826 | $23502 |
| **Interest Expense** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest on deposits | $7225 | $8504 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest on Federal Home Loan Bank advances | 344 | 1308 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest on subordinated debt | 354 | 354 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest expense | $7923 | $10166 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income | $15903 | $13336 |
| **Provision for Credit Losses** | 1961 | 1233 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net interest income after provision for credit losses | $13942 | $12103 |
| **Noninterest Income** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Wealth management fees | $1782 | $1681 |
| &nbsp;&nbsp;&nbsp;&nbsp;Service charges on deposit accounts | 556 | 492 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other service charges and fees | 921 | 972 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) on the sale of bank premises and equipment |  | (16) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) on the sale of securities |  | (12425) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of loans | 1012 | 429 |
| &nbsp;&nbsp;&nbsp;&nbsp;Small business investment company income | 266 | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bank owned life insurance income | 284 | 273 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other operating income | 107 | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income (loss) | $4928 | $(8554) |
| **Noninterest Expenses** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Salaries and employee benefits | $8229 | $7179 |
| &nbsp;&nbsp;&nbsp;&nbsp;Occupancy expenses | 666 | 662 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equipment expenses | 462 | 423 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advertising and marketing expenses | 191 | 183 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stationery and supplies | 46 | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;ATM network fees | 327 | 362 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other real estate owned expense (gain), net | (5) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on sale of repossessed assets | 39 | 133 |
| &nbsp;&nbsp;&nbsp;&nbsp;FDIC assessment | 227 | 322 |
| &nbsp;&nbsp;&nbsp;&nbsp;Computer software expense | 354 | 282 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bank franchise tax | 481 | 367 |
| &nbsp;&nbsp;&nbsp;&nbsp;Professional fees | 604 | 563 |
| &nbsp;&nbsp;&nbsp;&nbsp;Data processing fees | 486 | 550 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loan servicing expense | 269 | 237 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other operating expenses | 1836 | 1284 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total noninterest expenses | $14212 | $12589 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) before income taxes | $4658 | $(9040) |
| **Income Tax Expense (Benefit)** | 918 | (2066) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Income (Loss) | $3740 | $(6974) |
| **Earnings (Loss) Per Share** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) per common share, basic | $0.69 | $(1.53) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) per common share, diluted | $0.69 | $(1.53) |

---

See Notes to Consolidated Financial Statements

------

[**<u>**TABLE OF CONTENTS**</u>**](#toc)

**EAGLE FINANCIAL SERVICES, INC.**

**Consolidated Statements of Comprehensive Income** 

**(Unaudited)**

**(dollars in thousands)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
| Net income (loss) | $3740 | $(6974) |
| Other comprehensive (loss) income: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized (loss) gain on available for sale securities, net of reclassification adjustments, net of deferred income tax (benefit) expense of $(187) and $3,193 for the three months ended March 31, 2026 and 2025, respectively. | (705) | 12013 |
| Total other comprehensive (loss) income | (705) | 12013 |
| Total comprehensive income | $3035 | $5039 |

---

See Notes to Consolidated Financial Statements

------

[**<u>**TABLE OF CONTENTS**</u>**](#toc)

**EAGLE FINANCIAL SERVICES, INC.**

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

**(dollars in thousands, except per share amounts)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Surplus** | **Retained<br>Earnings** | **Accumulated<br>Other<br>Comprehensive<br>(Loss)** | **Total** |
| **December 31, 2024** | $8714 | $14901 | $114012 | $(18640) | $118987 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net loss |  |  | (6974) |  | (6974) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive income |  |  |  | 12013 | 12013 |
| &nbsp;&nbsp;&nbsp;Vesting of restricted stock awards, stock incentive plan (25,717 shares) | 64 | (64) |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense |  | 323 |  |  | 323 |
| &nbsp;&nbsp;&nbsp;Issuance of common stock, public offering, net (1,796,875 shares) | 4492 | 49009 |  |  | 53501 |
| &nbsp;&nbsp;&nbsp;Repurchase and retirement of common stock (7,348 shares) | (18) | (247) |  |  | (265) |
| &nbsp;&nbsp;&nbsp;Dividends declared ($0.31 per share) |  |  | (1110) |  | (1110) |
| **March 31, 2025** | $13252 | $63922 | $105928 | $(6627) | $176475 |
| **December 31, 2025** | $13264 | $64720 | $116115 | $(5260) | $188839 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income |  |  | 3740 |  | 3740 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other comprehensive (loss) |  |  |  | (705) | (705) |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense |  | 413 |  |  | 413 |
| &nbsp;&nbsp;&nbsp;Vesting of restricted stock awards, stock incentive plan (26,209 shares) | 65 | (65) |  |  |  |
| &nbsp;&nbsp;&nbsp;Repurchase and retirement of common stock (7,235 shares) | (18) | (266) |  |  | (284) |
| &nbsp;&nbsp;&nbsp;Dividends declared ($0.31 per share) |  |  | (1677) |  | (1677) |
| **March 31, 2026** | $13311 | $64802 | $118178 | $(5965) | $190326 |

---

See Notes to Consolidated Financial Statements

------

[**<u>**TABLE OF CONTENTS**</u>**](#toc)

**EAGLE FINANCIAL SERVICES, INC.**

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

**(dollars in thousands)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
| **Cash Flows from Operating Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income (loss) | $3740 | $(6974) |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 204 | 198 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of other assets | 251 | 245 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Origination of loans held for sale | (24588) | (17432) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of loans held for sale | 25171 | 17343 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net (gain) on sales of loans | (1012) | (424) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 1961 | 1233 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) on the sale of portfolio loans |  | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on the sale and disposal of premises and equipment |  | 16 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on the sale of repossessed assets | 39 | 133 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on the sale of securities |  | 12425 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of subordinated debt issuance costs | 17 | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 413 | 323 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Accretion) amortization of premiums and discounts on debt securities and loans, net | (242) | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bank-owned life insurance income | (284) | (273) |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease in other assets | 973 | 2493 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Decrease) in other liabilities | (2347) | (3522) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | $4296 | $5800 |
| **Cash Flows from Investing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from maturities, calls, and principal payments of securities available for sale | $13302 | $3277 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of securities available for sale |  | 86822 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of securities available for sale | (9824) | (75862) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of restricted investments | 1931 | 2628 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of restricted investments | (20) | (45) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of bank premises and equipment | (209) | (537) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of bank premises and equipment |  | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of repossessed assets | 96 | 381 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of portfolio loans |  | 18772 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net decrease (increase) in loans | 14103 | (4752) |
| &nbsp;&nbsp;&nbsp;&nbsp;Funding of capital commitments related to other investments |  | (495) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by investing activities | $19379 | $30226 |
| **Cash Flows from Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net increase in noninterest bearing demand deposits, savings, and interest bearing demand deposits | $22713 | $33511 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net (decrease) increase in time deposits | (31854) | 5124 |
| &nbsp;&nbsp;&nbsp;&nbsp;Repayments of long-term Federal Home Loan Bank advances | (40000) | (55000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net proceeds from issuance of common stock in public offering |  | 53501 |
| &nbsp;&nbsp;&nbsp;&nbsp;Repurchase and retirement of common stock | (284) | (265) |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash dividends paid | (1677) | (1110) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by financing activities | $(51102) | $35761 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Decrease) increase in cash and cash equivalents | $(27427) | $71787 |
| **Cash and Cash Equivalents** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Beginning | 217194 | 193159 |
| &nbsp;&nbsp;&nbsp;&nbsp;Ending | $189767 | $264946 |
| **Supplemental Disclosures of Cash Flow Information** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash payments for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest | $8448 | $10576 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes | $30 | $— |
| **Supplemental Schedule of Noncash Investing and Financing Activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized (loss) gain on securities available for sale | $(892) | $15206 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities arising from right-of-use assets | $— | $773 |

---

See Notes to Consolidated Financial Statements

------

[**<u>**TABLE OF CONTENTS**</u>**](#toc)

**EAGLE FINANCIAL SERVICES, INC.**

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

**March 31, 2026**

**NOTE 1. General**

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP.

In the opinion of management, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position at March 31, 2026 and December 31, 2025, the results of operations and the changes in shareholders' equity for the three months ended March 31, 2026 and 2025, and cash flows for the three months ended March 31, 2026 and 2025. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full year. These financial statements should be read in conjunction with the Consolidated Financial Statements and related Notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K").

Eagle Financial Services, Inc. (the "Company") owns 100% of Bank of Clarke (the "Bank"). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions between the Company and the Bank have been eliminated.

Certain amounts in the consolidated financial statements have been reclassified to conform to current year presentations. None of the reclassifications were of a material nature and they had no effect on prior year net income or shareholders' equity.

Application of the principles of GAAP and practices within the banking industry require management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements may reflect different estimates, assumptions, and judgments. Certain policies inherently rely more extensively on the use of estimates, assumptions, and judgments and as such may have a greater possibility of producing results that could be materially different than originally reported. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance of credit losses on loans.

The Company's significant accounting policies followed in preparation of the unaudited consolidated financial statements are disclosed in Note 1 of the Company's 2025 Form 10-K. There have been no significant changes to the application of significant accounting policies since December 31, 2025.

**NOTE 2. Stock-Based Compensation Plan**

On May 16, 2023, the Company's shareholders approved the 2023 Stock Incentive Plan which allows key employees and directors to increase their personal financial interest in the Company. The 2023 plan permits the issuance of incentive stock options and non-qualified stock options and the award of common stock, restricted stock, and stock units. The plan authorizes the issuance of up to 250,000 shares of common stock. The 2023 Stock Incentive Plan replaced the 2014 Stock Incentive Plan.

The Company periodically grants restricted stock to its directors, executive officers and certain non-executive officers. Restricted stock provides grantees with rights to shares of common stock upon completion of a service period or achievement of Company performance measures. During the restricted period, all shares are considered outstanding and dividends are paid to the grantee. Outside directors are periodically granted restricted shares which vest over a period of one year. Executive officers have been

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granted restricted shares which vest over a three year service period and restricted shares which cliff vest based on meeting performance measures over a three year period. Certain non-executive officers also have been granted restricted shares which vest over a three year service period. The Company recognizes compensation expense over the restricted period based on the fair value of the Company's stock on the grant date. The Company's policy is to recognize forfeitures as they occur. As of March 31, 2026, there was $2.1 million of unrecognized compensation cost related to nonvested restricted stock, with a weighted average remaining term of 2.18 years.

The following table presents restricted stock activity for the three months ended March 31, 2026 and 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** | **March 31,** | **March 31,** |
|  | **2026** | **2026** | **2025** | **2025** |
|  | **Shares** | **Weighted<br>Average<br>Grant Date<br>Fair Value** | **Shares** | **Weighted<br>Average<br>Grant Date<br>Fair Value** |
| Nonvested, beginning of period | 68476 | $33.96 | 64043 | $32.02 |
| Granted | 45406 | 39.44 | 39545 | 36.40 |
| Vested | (26209) | 34.50 | (25717) | 32.58 |
| Forfeited |  |  |  |  |
| Nonvested, end of period | 87673 | $36.64 | 77871 | $34.06 |

---

**NOTE 3. Earnings Per Common Share**

Basic earnings per share represents income available to common shareholders divided by the weighted average number of common shares outstanding during the period. Nonvested restricted shares are included in the weighted average number of common shares used to compute basic earnings per share because of dividend participation and voting rights. Diluted earnings per share reflects additional 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. The number of potential common shares is determined using the treasury method.

The following table shows the weighted average number of shares used in computing earnings per share for the three months ended March 31, 2026 and 2025. During 2026 and 2025, there were no potentially dilutive securities outstanding.

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
| Average number of common shares outstanding | 5412021 | 4572297 |
| Average number of common shares outstanding used to calculate basic and diluted earnings per share | 5412021 | 4572297 |

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**NOTE 4. Securities**

Amortized costs and fair values of securities available for sale at March 31, 2026 and December 31, 2025 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Amortized<br>Cost** | **Gross<br>Unrealized<br>Gains** | **Gross<br>Unrealized<br>(Losses)** | **Fair Value** |
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Obligations of U.S. government corporations and agencies | $7222 | $— | $(18) | 7204 |
| U.S. treasury securities | 9884 |  | (12) | 9872 |
| Mortgage-backed securities | 79271 | 116 | (7131) | 72256 |
| Collateralized mortgage obligations | 22289 | 15 | (235) | 22069 |
| Subordinated debt | 4250 |  | (281) | 3969 |
|  | $122916 | $131 | $(7677) | $115370 |

---

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Obligations of U.S. government corporations and agencies | $7458 | $2 | $(16) | $7444 |
| U.S. treasury securities | 9999 | 2 |  | 10001 |
| Mortgage-backed securities | 81492 | 480 | (6843) | 75129 |
| Collateralized mortgage obligations | 22498 | 84 | (87) | 22495 |
| Subordinated debt | 4750 |  | (276) | 4474 |
|  | $126197 | $568 | $(7222) | $119543 |

---

The Company has elected to exclude accrued interest receivable, totaling $442 thousand and $669 thousand at March 31, 2026 and December 31, 2025, respectively from the amortized cost basis of securities. The deferred tax asset on the securities portfolio at March 31, 2026 and December 31, 2025 was $1.6 million and $1.4 million, respectively, and is included in Other Assets in the Consolidated Balance Sheets.

In March 2025, balance sheet repositioning transactions were executed. The Bank sold available for sale securities with an amortized cost balance of $99.2 million and reinvested $66.0 million into purchases of available for sale securities. The sale of securities resulted in a net realized pre-tax loss of $12.4 million recognized during the three months ended March 31, 2025. There were no sales of available for sale securities during the three months ended March 31, 2026.

The following table summarizes amounts related to the sale of available for sale securities:

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| | |
|:---|:---|
|  | **For the Three Months Ended March 31,** |
|  | **2025** |
|  | **(in thousands)** |
| Proceeds from sales | $86822 |
| Gross realized gains | $— |
| Gross realized losses | (12425) |
| Net realized losses on securities | $(12425) |

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The amortized cost and estimated fair value of securities at March 31, 2026, by the earlier of contractual maturity or expected maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to prepay obligations with or without call or prepayment penalties.

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| | | |
|:---|:---|:---|
|  | **Amortized Cost** | **Fair Value** |
|  | **(in thousands)** | **(in thousands)** |
| Due in one year or less | $9884 | $9872 |
| Due after one year through five years | 13768 | 13657 |
| Due after five years through ten years | 17307 | 17051 |
| Due after ten years | 81957 | 74790 |
|  | $122916 | $115370 |

---

The fair value and gross unrealized losses for securities available for sale, totaled by the length of time that individual securities have been in a continuous gross unrealized loss position, at March 31, 2026 and December 31, 2025 were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Less than 12 months** | **Less than 12 months** | **12 months or more** | **12 months or more** | **Total** | **Total** |
|  | **Fair Value** | **Gross<br>Unrealized<br>Losses** | **Fair Value** | **Gross<br>Unrealized<br>Losses** | **Fair Value** | **Gross<br>Unrealized<br>Losses** |
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Obligations of U.S. government corporations and agencies | $7204 | $18 | $— | $— | $7204 | $18 |
| U.S. treasury securities | 9872 | 12 |  |  | 9872 | 12 |
| Mortgage-backed securities | 14956 | 39 | 28650 | 7092 | 43606 | 7131 |
| Collateralized mortgage obligations | 15835 | 109 | 2755 | 126 | 18590 | 235 |
| Subordinated debt | 981 | 19 | 2488 | 262 | 3469 | 281 |
| Total | $48848 | $197 | $33893 | $7480 | $82741 | $7677 |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Less than 12 months** | **Less than 12 months** | **12 months or more** | **12 months or more** | **Total** | **Total** |
|  | **Fair Value** | **Gross<br>Unrealized<br>Losses** | **Fair Value** | **Gross<br>Unrealized<br>Losses** | **Fair Value** | **Gross<br>Unrealized<br>Losses** |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Obligations of U.S. government corporations and agencies | $5503 | $16 | $— | $— | $5503 | $16 |
| Mortgage-backed securities |  |  | 29508 | 6843 | 29508 | 6843 |
| Collateralized mortgage obligations | 7116 | 87 |  |  | 7116 | 87 |
| Subordinated debt | 973 | 28 | 3002 | 248 | 3975 | 276 |
| Total | $13592 | $131 | $32510 | $7091 | $46102 | $7222 |

---

The reference point for determining when securities are in an unrealized loss position is month end. As such, it is possible that a security's market value exceeded its amortized cost on other days during the past twelve-month period.

There were 47 and 39 debt securities with a fair value below the amortized cost basis, totaling $82.7 million and $46.1 million of aggregate fair value as of March 31, 2026 and December 31, 2025 respectively. The Company concluded that a credit loss does not exist in its securities portfolio at March 31, 2026 based on the fact that (1) changes in fair value were caused by non-credit-related factors, primarily fluctuations in interest rates, (2) securities with unrealized losses had generally high credit quality, (3) as of March 31, 2026, the Company intends to hold these investments in debt securities to maturity and it is more-likely-than-not that the Company will not be required to sell these investments before a recovery of its investment, and (4) issuers have continued to make timely payments of principal and interest. Additionally, the Company's mortgage-backed securities, collateralized

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mortgage obligations, U.S. treasury securities, and obligations of U.S. government corporations and agencies are entirely issued by either U.S. government agencies or U.S. government-sponsored enterprises. Collectively, these entities provide a guarantee, which is either explicitly or implicitly supported by the full faith and credit of the U.S. government, that investors in such mortgage-backed securities will receive timely principal and interest payments.

Securities having carrying values of $3.9 million, $3.0 million and $87.3 million at March 31, 2026 were pledged as security for trust accounts, a deposit relationship and for borrowing capacity at the Federal Reserve Bank ("FRB") discount window, respectively.

The composition of restricted investments at March 31, 2026 and December 31, 2025 was as follows:

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| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
|  | **(in thousands)** | **(in thousands)** |
| Federal Reserve Bank Stock | $344 | $344 |
| Federal Home Loan Bank Stock | 1391 | 3302 |
| Community Bankers' Bank Stock | 140 | 140 |
|  | $1875 | $3786 |

---

**NOTE 5. Loans and Allowance for Credit Losses on Loans**

The composition of loans at March 31, 2026 and December 31, 2025 was as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31,** | **December 31,** |
|  | **2026** | **2025** |
|  | **(in thousands)** | **(in thousands)** |
| Mortgage real estate loans: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Construction & Secured by Farmland | $82594 | $82336 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HELOCs | 58784 | 58640 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Investor | 107084 | 107307 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Owner Occupied | 176378 | 178807 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Residential Junior Liens | 10775 | 10724 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial - Owner Occupied | 313161 | 298853 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commercial - Non-Owner Occupied & Multifamily | 389878 | 398926 |
| Commercial and industrial loans: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SBA PPP loans |  | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other commercial and industrial loans | 101289 | 113220 |
| Marine loans | 170217 | 175639 |
| Consumer loans | 30495 | 28742 |
| Overdrafts | 343 | 318 |
| Other loans | 12572 | 13946 |
| Total loans | $1453570 | $1467462 |
| Net deferred loan costs and premiums | 5289 | 5615 |
| Allowance for credit losses | (17326) | (15320) |
|  | $1441533 | $1457757 |

---

At March 31, 2026, the Company was servicing $47.3 million of loans for other financial institutions which are not included in the table above. Also excluded from the table above are net servicing assets of $742 thousand at March 31, 2026, which are recorded in Other Assets in the Consolidated Balance Sheets. When loans are sold with servicing retained, servicing assets are recorded which represent the Company's right to service loans that were sold. Servicing assets are initially recorded by the Company at fair value and are subsequently amortized in proportion to, and over the period of, estimated net servicing income.

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Changes in the allowance for credit losses on loans for the three months ended March 31, 2026 and 2025 and year-ended December 31, 2025 were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Year Ended** |
|  | **March 31,** | **March 31,** | **December 31,** |
|  | **2026** | **2025** | **2025** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Balance, beginning | $15320 | $15027 | $15027 |
| &nbsp;&nbsp;&nbsp;&nbsp;Provision for credit losses | 1972 | 1146 | 3880 |
| &nbsp;&nbsp;&nbsp;&nbsp;Recoveries added to the allowance | 189 | 185 | 559 |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit losses charged to the allowance | (155) | (1076) | (4146) |
| Balance, ending | $17326 | $15282 | $15320 |

---

Past due loans by class at March 31, 2026 and December 31, 2025 were as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  | **30 - 59<br>Days<br>Past Due** | **60 - 89<br>Days<br>Past Due** | **90 or More<br>Days<br>Past Due** | **Total Past<br>Due** | **Current** | **Total Loans** | **90 or More<br>Days Past <br>Due Still<br>Accruing** |
| Mortgage real estate loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction & Secured by Farmland | $— | $— | $428 | $428 | $82166 | $82594 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;HELOCs | 141 |  | 156 | 297 | 58487 | 58784 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Investor |  | 388 | 98 | 486 | 106598 | 107084 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Owner Occupied |  |  | 177 | 177 | 176201 | 176378 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential Junior Liens | 57 |  |  | 57 | 10718 | 10775 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial - Owner Occupied | 4440 |  | 4704 | 9144 | 304017 | 313161 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial - Non-Owner Occupied & Multifamily |  |  | 5300 | 5300 | 384578 | 389878 |  |
| Commercial and industrial loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other commercial and industrial loans | 397 | 48 | 2891 | 3336 | 97953 | 101289 |  |
| Marine loans |  |  |  |  | 170217 | 170217 |  |
| Consumer loans | 33 | 107 | 13 | 153 | 30342 | 30495 | 13 |
| Overdrafts |  |  |  |  | 343 | 343 |  |
| Other loans |  |  |  |  | 12572 | 12572 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $5068 | $543 | $13767 | $19378 | $1434192 | $1453570 | $13 |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  | **30 - 59<br>Days<br>Past Due** | **60 - 89<br>Days<br>Past Due** | **90 or More<br>Days Past<br>Due** | **Total Past<br>Due** | **Current** | **Total Loans** | **90 or More<br>Past Due<br>Still<br>Accruing** |
| Mortgage real estate loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction & Secured by Farmland | $— | $— | $428 | $428 | $81908 | $82336 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;HELOCs | 112 |  | 160 | 272 | 58368 | 58640 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Investor |  | 391 | 98 | 489 | 106818 | 107307 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Owner Occupied | 467 | 85 | 24 | 576 | 178231 | 178807 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential Junior Liens | 57 |  |  | 57 | 10667 | 10724 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial - Owner Occupied |  |  | 4738 | 4738 | 294115 | 298853 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial - Non-Owner Occupied & Multifamily | 1913 |  | 5348 | 7261 | 391665 | 398926 |  |
| Commercial and industrial loans: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;SBA PPP loans |  |  |  |  | 4 | 4 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other commercial and industrial loans | 240 | 363 | 2311 | 2914 | 110306 | 113220 |  |
| Marine loans |  |  |  |  | 175639 | 175639 |  |
| Consumer loans | 128 | 9 | 60 | 197 | 28545 | 28742 | 60 |
| Overdrafts |  |  |  |  | 318 | 318 |  |
| Other loans |  |  |  |  | 13946 | 13946 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $2917 | $848 | $13167 | $16932 | $1450530 | $1467462 | $60 |

---

Nonaccrual loans by class at March 31, 2026 and December 31, 2025 were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  | **Nonaccruals with No Allowance for Credit Losses** | **Nonaccrual with an Allowance for Credit Losses** | **Nonaccrual<br>Loans** | **Nonaccruals with No Allowance for Credit Losses** | **Nonaccrual with an Allowance for Credit Losses** | **Nonaccrual<br>Loans** |
| Mortgage real estate loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction & Secured by Farmland | $— | $428 | $428 | $428 | $— | $428 |
| &nbsp;&nbsp;&nbsp;&nbsp;HELOCs | 156 |  | 156 | 160 |  | 160 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Investor |  | 98 | 98 | 98 |  | 98 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Owner Occupied | 635 |  | 635 | 494 |  | 494 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential Junior Liens |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial - Owner Occupied | 2171 | 2533 | 4704 | 2894 | 1844 | 4738 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial - Non-Owner Occupied & Multifamily | 5300 |  | 5300 | 5348 |  | 5348 |
| Commercial and industrial loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other commercial and industrial loans | 19 | 3323 | 3342 | 2253 | 879 | 3132 |
| Marine loans |  |  |  |  |  |  |
| Consumer loans | 48 |  | 48 |  |  |  |
| Overdrafts |  |  |  |  |  |  |
| Other loans |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $8329 | $6382 | $14711 | $11675 | $2723 | $14398 |

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The allowance for credit losses on loans by segment at March 31, 2026 and December 31, 2025 was as follows:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of and For the Three Months Ended** | **As of and For the Three Months Ended** | **As of and For the Three Months Ended** | **As of and For the Three Months Ended** | **As of and For the Three Months Ended** | **As of and For the Three Months Ended** | **As of and For the Three Months Ended** | **As of and For the Three Months Ended** |
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  | **Construction<br>and Farmland** | **Residential<br>Real Estate** | **Commercial<br>Real Estate &<br>MultiFamily** | **Commercial** | **Marine** | **Consumer** | **All Other<br>Loans** | **Total** |
| **Allowance for credit losses:** |  |  |  |  |  |  |  |  |
| Beginning Balance | $1275 | $3160 | $8163 | $1312 | $710 | $230 | $470 | $15320 |
| Charge-Offs |  |  |  | (82) |  | (26) | (47) | (155) |
| Recoveries | 1 | 145 |  | 25 |  | 9 | 9 | 189 |
| Provision | 89 | 15 | 1001 | 1044 | 19 | 20 | (216) | 1972 |
| Ending balance | $1365 | $3320 | $9164 | $2299 | $729 | $233 | $216 | $17326 |
| Ending balance: Individually evaluated for impairment | $201 | $12 | $215 | $1686 | $— | $— | $— | $2114 |
| Ending balance: Collectively evaluated for impairment | $1164 | $3308 | $8949 | $613 | $729 | $233 | $216 | $15212 |
| **Loans:** |  |  |  |  |  |  |  |  |
| Ending balance | $82594 | $353021 | $703039 | $101289 | $170217 | $30495 | $12915 | $1453570 |
| Ending balance: Individually evaluated for impairment | $428 | $867 | $10004 | $3323 | $— | $— | $— | $14622 |
| Ending balance: Collectively evaluated for impairment | $82166 | $352154 | $693035 | $97966 | $170217 | $30495 | $12915 | $1438948 |

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **As of and For the Year Ended** | **As of and For the Year Ended** | **As of and For the Year Ended** | **As of and For the Year Ended** | **As of and For the Year Ended** | **As of and For the Year Ended** | **As of and For the Year Ended** | **As of and For the Year Ended** |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  | **Construction<br>and Farmland** | **Residential<br>Real Estate** | **Commercial<br>Real Estate &<br>MultiFamily** | **Commercial** | **Marine** | **Consumer** | **All Other<br>Loans** | **Total** |
| **Allowance for credit losses:** |  |  |  |  |  |  |  |  |
| Beginning Balance | $2387 | $2318 | $7251 | $1433 | $1279 | $238 | $121 | $15027 |
| Charge-Offs |  | (31) | (2771) | (485) | (580) | (140) | (139) | (4146) |
| Recoveries | 5 | 308 |  | 153 |  | 46 | 47 | 559 |
| Provision | (1117) | 565 | 3683 | 211 | 11 | 86 | 441 | 3880 |
| Ending balance | $1275 | $3160 | $8163 | $1312 | $710 | $230 | $470 | $15320 |
| Ending balance: Individually evaluated for impairment | $— | $— | $49 | $418 | $— | $— | $— | $467 |
| Ending balance: Collectively evaluated for impairment | $1275 | $3160 | $8114 | $894 | $710 | $230 | $470 | $14853 |
| **Loans:** |  |  |  |  |  |  |  |  |
| Ending balance | $82336 | $355478 | $697779 | $113224 | $175639 | $28742 | $14264 | $1467462 |
| Ending balance: Individually evaluated for impairment | $428 | $728 | $10086 | $3113 | $— | $— | $— | $14355 |
| Ending balance: Collectively evaluated for impairment | $81908 | $354750 | $687693 | $110111 | $175639 | $28742 | $14264 | $1453107 |

---

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[**<u>**TABLE OF CONTENTS**</u>**](#toc)

The following table presents the amortized cost basis of collateral-dependent loans by loan portfolio segment:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| **(in thousands)** | **Real Estate Collateral** | **Other Collateral** | **Total** | **Real Estate Collateral** | **Other Collateral** | **Total** |
| Mortgage real estate loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction & Secured by Farmland | $428 | $— | $428 | $428 | $— | $428 |
| &nbsp;&nbsp;&nbsp;&nbsp;HELOCs | 156 |  | 156 | 160 |  | 160 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Investor | 98 |  | 98 | 98 |  | 98 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Owner Occupied | 613 |  | 613 | 470 |  | 470 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential Junior Liens |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial - Owner Occupied | 4704 |  | 4704 | 4738 |  | 4738 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial - Non-Owner Occupied & Multifamily | 5300 |  | 5300 | 5348 |  | 5348 |
| Commercial and industrial loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other commercial and industrial loans |  | 3323 | 3323 |  | 3113 | 3113 |
| Marine loans |  |  |  |  |  |  |
| Consumer loans |  |  |  |  |  |  |
| Overdrafts |  |  |  |  |  |  |
| Other loans |  |  |  |  |  |  |
|  | $11299 | $3323 | $14622 | $11242 | $3113 | $14355 |

---

The Company did not identify any significant changes in the extent to which collateral secures its collateral dependent loans, whether in the form of general deterioration or from other factors during the period ended March 31, 2026.

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 is performed on a quarterly basis. The following table presents risk ratings by loan portfolio segment and origination year. Description of these ratings are as follows:

---

| | |
|:---|:---|
| Pass | Pass loans exhibit acceptable history of profits, cash flow ability and liquidity. Sufficient cash flow exists to service the loan. All obligations have been paid by the borrower in an as agreed manner. |
| Special Mention | Special mention loans exhibit negative trends and potential weakness that, if left uncorrected, may negatively affect the borrower's ability to repay its obligations. Loan relationships with stale financial statements at their annual review will also cause a downgrade to special mention until current financials are received and upgrade is approved. The risk of default is not imminent and the borrower still demonstrates sufficient financial strength to service debt. |
| Classified | Classified loans include loans rated Substandard, Doubtful and Loss.  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Substandard loans exhibit well defined weaknesses resulting in a higher probability of default. The borrowers exhibit adverse financial trends and a diminishing ability or willingness to service debt. |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Doubtful loans exhibit all of the characteristics inherent in substandard loans; however given the severity of weaknesses, the collection of 100% of the principal is unlikely under current 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;•Loss loans are considered uncollectible over a reasonable period of time and of such little value that its continuance as a bankable asset is not warranted.  |

---

Credit quality information by class at March 31, 2026 and gross charge-offs by year of origination for the three months ended March 31, 2026 was as follows:

------

[**<u>**TABLE OF CONTENTS**</u>**](#toc)

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **March 31, 2026** |  |  |  |  |  |  |  |  |  |
|  | **Term Loans Amortized Cost Basis by Origination Year** | **Term Loans Amortized Cost Basis by Origination Year** | **Term Loans Amortized Cost Basis by Origination Year** | **Term Loans Amortized Cost Basis by Origination Year** | **Term Loans Amortized Cost Basis by Origination Year** | **Term Loans Amortized Cost Basis by Origination Year** |  |  |  |
| **(in thousands)** | **2026** | **2025** | **2024** | **2023** | **2022** | **Prior** | **Revolving Loans Amortized Cost Basis** | **Revolving Loans Converted to Term** | **Total** |
| **Mortgage real estate loans:** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Construction & Secured by Farmland** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $4355 | $21154 | $34825 | $3633 | $6063 | $8091 | $1689 | $308 | $80118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  | 653 |  |  | 1389 |  |  | 2042 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  | 428 |  | 6 |  |  | 434 |
| **Total** | $4355 | $21154 | $35478 | $4061 | $6063 | $9486 | $1689 | $308 | $82594 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;**HELOCs** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $— | $— | $— | $— | $— | $— | $58585 | $— | $58585 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  |  |  |  | 43 |  | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  |  |  | 156 |  | 156 |
| **Total** | $— | $— | $— | $— | $— | $— | $58784 | $— | $58784 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;**Residential First Lien - Investor** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $4883 | $19203 | $5464 | $9419 | $15155 | $47055 | $— | $1093 | $102272 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  | 681 |  | 3105 |  |  | 3786 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  | 928 |  | 98 |  |  |  | 1026 |
| **Total** | $4883 | $19203 | $6392 | $10100 | $15253 | $50160 | $— | $1093 | $107084 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;**Residential First Lien - Owner Occupied** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $400 | $13473 | $18932 | $47370 | $28540 | $63623 | $— | $231 | $172569 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  | 40 | 277 |  | 2766 |  |  | 3083 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  | 154 |  |  | 572 |  |  | 726 |
| **Total** | $400 | $13473 | $19126 | $47647 | $28540 | $66961 | $— | $231 | $176378 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;**Residential Junior Liens** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $835 | $1648 | $618 | $1406 | $1783 | $4117 | $— | $157 | $10564 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  | 148 |  | 63 |  |  | 211 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  |  |  |  |  |  |
| **Total** | $835 | $1648 | $618 | $1554 | $1783 | $4180 | $— | $157 | $10775 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;**Commercial - Owner Occupied** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $14446 | $36652 | $26101 | $48785 | $66203 | $85208 | $3140 | $2706 | $283241 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  | 915 | 5877 | 18424 |  |  | 25216 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  | 1834 | 699 |  | 2171 |  |  | 4704 |

---

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[**<u>**TABLE OF CONTENTS**</u>**](#toc)

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Total** | $14446 | $36652 | $27935 | $50399 | $72080 | $105803 | $3140 | $2706 | $313161 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;**Commercial - Non-Owner Occupied & Multifamily** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $13779 | $67781 | $26383 | $52617 | $71781 | $124371 | $7903 | $4691 | $369306 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  | 270 | 2463 |  | 8418 |  |  | 11151 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  | 5253 | 4168 |  |  | 9421 |
| **Total** | $13779 | $67781 | $26653 | $55080 | $77034 | $136957 | $7903 | $4691 | $389878 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| **Commercial and industrial loans:** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Other commercial and industrial loans** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $4276 | $17122 | $14064 | $5875 | $8758 | $8530 | $33170 | $2035 | $93830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  | 203 | 3908 |  |  |  |  | 6 | 4117 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  | 48 | 113 | 1725 | 461 | 235 | 760 |  | 3342 |
| **Total** | $4276 | $17373 | $18085 | $7600 | $9219 | $8765 | $33930 | $2041 | $101289 |
| Current period gross charge-offs | $— | $79 | $— | $— | $— | $— | $3 | $— | $82 |
| **Marine loans** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $— | $— | $— | $58814 | $89503 | $21900 | $— | $— | $170217 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  |  |  |  |  |  |
| **Total** | $— | $— | $— | $58814 | $89503 | $21900 | $— | $— | $170217 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| **Consumer loans** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $2804 | $1828 | $1440 | $865 | $9263 | $11948 | $2283 | $— | $30431 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  | 4 |  |  |  |  | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  | 48 |  | 12 |  |  |  |  | 60 |
| **Total** | $2804 | $1876 | $1440 | $881 | $9263 | $11948 | $2283 | $— | $30495 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $26 | $— | $26 |
| **Overdrafts** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified | 343 |  |  |  |  |  |  |  | 343 |
| **Total** | $343 | $— | $— | $— | $— | $— | $— | $— | $343 |
| Current period gross charge-offs | $47 | $— | $— | $— | $— | $— | $— | $— | $47 |
| **Other loans** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $— | $4677 | $— | $36 | $5322 | $2072 | $465 | $— | $12572 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  |  |  |  |  |  |
| **Total** | $— | $4677 | $— | $36 | $5322 | $2072 | $465 | $— | $12572 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| **Total by Risk Category** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $45778 | $183538 | $127827 | $228820 | $302371 | $376915 | $107235 | $11221 | $1383705 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  | 203 | 4871 | 4488 | 5877 | 34165 | 43 | 6 | 49653 |

---

------

[**<u>**TABLE OF CONTENTS**</u>**](#toc)

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified | 343 | 96 | 3029 | 2864 | 5812 | 7152 | 916 |  | 20212 |
| **Total** | $46121 | $183837 | $135727 | $236172 | $314060 | $418232 | $108194 | $11227 | $1453570 |
| Total current period gross charge-offs | $47 | $79 | $— | $— | $— | $— | $29 | $— | $155 |

---

Credit quality information by class at December 31, 2025 and gross charge-offs by year of origination for the year ended December 31, 2025 was as follows:

------

[**<u>**TABLE OF CONTENTS**</u>**](#toc)

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **December 31, 2025** |  |  |  |  |  |  |  |  |  |
|  | **Term Loans Amortized Cost Basis by Origination Year** | **Term Loans Amortized Cost Basis by Origination Year** | **Term Loans Amortized Cost Basis by Origination Year** | **Term Loans Amortized Cost Basis by Origination Year** | **Term Loans Amortized Cost Basis by Origination Year** | **Term Loans Amortized Cost Basis by Origination Year** |  |  |  |
| **(in thousands)** | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Revolving Loans Amortized Cost Basis** | **Revolving Loans Converted to Term** | **Total** |
| **Mortgage real estate loans:** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**Construction & Secured by Farmland** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $17680 | $37736 | $6684 | $6158 | $3089 | $6643 | $1144 | $308 | $79442 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 1788 | 655 |  |  |  |  |  |  | 2443 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  | 428 |  |  | 23 |  |  | 451 |
| **Total** | $19468 | $38391 | $7112 | $6158 | $3089 | $6666 | $1144 | $308 | $82336 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;**HELOCs** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $— | $— | $— | $— | $— | $— | $58439 | $— | $58439 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  |  |  |  | 41 |  | 41 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  |  |  | 160 |  | 160 |
| **Total** | $— | $— | $— | $— | $— | $— | $58640 | $— | $58640 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $31 | $— | $31 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Residential First Lien - Investor** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $19774 | $6261 | $10174 | $15545 | $23908 | $25060 | $— | $900 | $101622 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  | 685 |  | 3025 | 925 |  |  | 4635 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  | 952 |  | 98 |  |  |  |  | 1050 |
| **Total** | $19774 | $7213 | $10859 | $15643 | $26933 | $25985 | $— | $900 | $107307 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;**Residential First Lien - Owner Occupied** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $13144 | $18396 | $47588 | $28716 | $21399 | $45468 | $— | $250 | $174961 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  | 41 | 277 |  |  | 2784 |  |  | 3102 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  |  | 744 |  |  | 744 |
| **Total** | $13144 | $18437 | $47865 | $28716 | $21399 | $48996 | $— | $250 | $178807 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;**Residential Junior Liens** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $1763 | $628 | $1547 | $1843 | $2541 | $2028 | $— | $161 | $10511 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  | 149 |  |  | 64 |  |  | 213 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  |  |  |  |  |  |

---

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[**<u>**TABLE OF CONTENTS**</u>**](#toc)

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Total** | $1763 | $628 | $1696 | $1843 | $2541 | $2092 | $— | $161 | $10724 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;**Commercial - Owner Occupied** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $36319 | $24619 | $46689 | $69524 | $25728 | $61040 | $3046 | $2736 | $269701 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  | 1371 | 920 | 3336 | 5879 | 12908 |  |  | 24414 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  | 1844 | 699 |  | 2195 |  |  |  | 4738 |
| **Total** | $36319 | $27834 | $48308 | $72860 | $33802 | $73948 | $3046 | $2736 | $298853 |
| Current period gross charge-offs | $— | $468 | $37 | $— | $8 | $— | $— | $— | $513 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Commercial - Non-Owner Occupied & Multifamily** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $68609 | $25254 | $53637 | $72478 | $48985 | $94990 | $7909 | $4838 | $376700 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  | 271 | 2053 | 4153 | 3728 | 6673 |  |  | 16878 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  | 1132 | 4216 |  |  |  | 5348 |
| **Total** | $68609 | $25525 | $55690 | $77763 | $56929 | $101663 | $7909 | $4838 | $398926 |
| Current period gross charge-offs | $1184 | $— | $— | $257 | $817 | $— | $— | $— | $2258 |
| **Commercial and industrial loans:** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;**SBA PPP loans** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $— | $— | $— | $— | $4 | $— | $— | $— | $4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  |  |  |  |  |  |
| **Total** | $— | $— | $— | $— | $4 | $— | $— | $— | $4 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;**Other commercial and industrial loans** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $23186 | $15740 | $6112 | $9317 | $4531 | $4746 | $41305 | $2125 | $107062 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  | 2802 |  |  |  | 216 |  | 8 | 3026 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified | 48 | 113 | 1725 | 461 | 19 |  | 766 |  | 3132 |
| **Total** | $23234 | $18655 | $7837 | $9778 | $4550 | $4962 | $42071 | $2133 | $113220 |
| Current period gross charge-offs | $— | $96 | $184 | $85 | $— | $— | $120 | $— | $485 |
| **Marine loans** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $— | $— | $60223 | $92924 | $22191 | $301 | $— | $— | $175639 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  |  |  |  |  |  |
| **Total** | $— | $— | $60223 | $92924 | $22191 | $301 | $— | $— | $175639 |
| Current period gross charge-offs | $— | $— | $314 | $266 | $— | $— | $— | $— | $580 |

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Consumer loans** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $2237 | $1643 | $1072 | $9713 | $4665 | $7525 | $1870 | $— | $28725 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  |  |  | 17 |  | 17 |
| **Total** | $2237 | $1643 | $1072 | $9713 | $4665 | $7525 | $1887 | $— | $28742 |
| Current period gross charge-offs | $— | $6 | $30 | $2 | $6 | $8 | $88 | $— | $140 |
| **Overdrafts** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified | 318 |  |  |  |  |  |  |  | 318 |
| **Total** | $318 | $— | $— | $— | $— | $— | $— | $— | $318 |
| Current period gross charge-offs | $139 | $— | $— | $— | $— | $— | $— | $— | $139 |
| **Other loans** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $4250 | $— | $40 | $7515 | $— | $2102 | $39 | $— | $13946 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified |  |  |  |  |  |  |  |  |  |
| **Total** | $4250 | $— | $40 | $7515 | $— | $2102 | $39 | $— | $13946 |
| Current period gross charge-offs | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| **Total by Risk Category** |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pass | $186962 | $130277 | $233766 | $313733 | $157041 | $249903 | $113752 | $11318 | $1396752 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 1788 | 5140 | 4084 | 7489 | 12632 | 23570 | 41 | 8 | 54752 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Classified | 366 | 2909 | 2852 | 1691 | 6430 | 767 | 943 |  | 15958 |
| **Total** | $189116 | $138326 | $240702 | $322913 | $176103 | $274240 | $114736 | $11326 | $1467462 |
| Total current period gross charge-offs | $1323 | $570 | $565 | $610 | $831 | $8 | $239 | $— | $4146 |

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Unfunded Commitments: The Company maintains a separate reserve for credit losses on unfunded commitments, which is included in Other Liabilities on the Consolidated Balance Sheet. The reserve for credit losses on off-balance-sheet credit exposures is adjusted as a provision for credit losses in the Consolidated Statement of Operations. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded, utilizing the same models and approaches for the Company's other loan portfolio segments, as these unfunded commitments share similar risk characteristics as its loan portfolio segments. The Company has identified the unfunded portion of certain lines of credit as unconditionally cancellable credit exposures, meaning the Company can cancel the unfunded commitment at any time. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company or for undrawn amounts under such arrangements that maybe drawn prior to the cancellation of the arrangement.

During the three months ended March 31, 2026, a reduction to the unfunded commitment reserve of $11 thousand was recorded as a credit to the provision for credit losses in the consolidated statement of operations. During the three months ended March 31, 2025, an increase to the unfunded commitment reserve of $87 thousand was recorded, thereby increasing the provision for credit losses in the consolidated income statement. The reserve for unfunded commitments at March 31, 2026 and 2025 and December 31, 2025 was $315 thousand, $592 thousand, and $326 thousand, respectively.

Restructurings for Borrowers Experiencing Financial Difficulty: A loan that has been modified is considered a troubled loan modification when the modification is made to a borrower experiencing financial difficulty and the modification has a direct impact to the contractual cash flows.

There were no new loan modifications to borrowers experiencing financial difficulty made during the three months ended March 31, 2026 and 2025.

At March 31, 2026, the amortized cost balance of loans modified in the past 12 months was $5.3 million. This balance represents one customer relationship comprised of three residential multifamily income producing properties in Washington D.C. (the District). These loans are on nonaccrual status and are 90 or more days past due. The Bank has been granted receivership and is actively working with the receiver to update the properties and ready them for sale while continuing to collect the housing payments directly from the District.

There were no loans to borrowers experiencing financial difficulty that had a payment default during the three months ended March 31, 2025 and were modified in the twelve months prior to that default.

Default is determined at 30 days or more past due, upon charge-off, or upon foreclosure. Modified loans in default are individually evaluated for the allowance of credit losses or if the modified loan is deemed uncollectible, the loan, or a portion of the loan, is written off and the allowance for credit losses is adjusted accordingly.

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N**OTE 6. Deposits**

The composition of deposits at March 31, 2026 and December 31, 2025 was as follows:

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| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
|  | **(in thousands)** | **(in thousands)** |
| Noninterest bearing demand deposits | $455107 | $432171 |
| Savings and interest bearing demand deposits: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;NOW accounts | $309903 | $322687 |
| &nbsp;&nbsp;&nbsp;&nbsp;Money market accounts | 294810 | 282828 |
| &nbsp;&nbsp;&nbsp;&nbsp;Regular savings accounts | 123609 | 123030 |
|  | $728322 | $728545 |
| Time deposits: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Balances of less than $250,000 | $239897 | $262390 |
| &nbsp;&nbsp;&nbsp;&nbsp;Balances of $250,000 and more | 174893 | 184254 |
|  | $414790 | $446644 |
|  | $1598219 | $1607360 |

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**NOTE 7. Leases**

Lease liabilities represent the Company's obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. Cash flows are discounted at the Company's incremental borrowing rate in effect at the commencement date of the lease. Right-of-use assets represent the Company's right to use the underlying asset for the lease term and are calculated as the sum of the lease liability and if applicable, prepaid rent, initial direct costs and any incentives received from the lessor. Right-of-use assets and lease liabilities are included in Other Assets and Other Liabilities, respectively, in the Consolidated Balance Sheets.

The Company's five long-term lease agreements are classified as operating leases. These leases offer the option to extend the lease term and the Company has included such extensions in its calculation of the lease liability to the extent the options are reasonably certain of being exercised. The lease agreements do not provide for residual value guarantee and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

The following tables present information about the Company's leases:

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| | | |
|:---|:---|:---|
| **(dollars in thousands)** |  |  |
|  | **March 31, 2026** | **December 31, 2025** |
| Lease liabilities | $9693 | $9845 |
| Right-of-use assets | $9259 | $9438 |
| Weighted average remaining lease term | 11 years | 12 years |
| Weighted average discount rate | 4.26% | 4.25% |
|  | **Three Months Ended** | **Three Months Ended** |
| **Lease Cost** | **March 31, 2026** | **March 31, 2025** |
| Operating lease cost | $287 | $284 |
| Short-term lease cost | 4 | 4 |
| Total lease cost | $291 | $288 |
| Cash paid for amounts included in the measurement of lease liabilities | $257 | $251 |

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A maturity analysis of operating lease liabilities and reconciliation of the undiscounted cash flows to the total operating lease liabilities is as follows:

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| | |
|:---|:---|
| **(dollars in thousands)** | **As of** |
| **Lease payments due** | **March 31, 2026** |
| 2026, remainder | $765 |
| 2027 | 1035 |
| 2028 | 1058 |
| 2029 | 1083 |
| 2030 | 1135 |
| Thereafter | 7428 |
| Total undiscounted cash flows | $12504 |
| Discount | (2811) |
| Lease liabilities | $9693 |

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**NOTE 8. Fair Value Measurements**

GAAP requires the Company to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The fair value of assets and liabilities is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

"Fair Value Measurements" defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:

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| | | |
|:---|:---|:---|
| •  | Level 1 | Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| •  | Level 2 | Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
| •  | Level 3 | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |

---

The following section provides a description of the valuation methodologies used for instruments measured at fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy:

Securities Available for Sale: Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. Level 1 securities would include highly liquid government bonds, mortgage products and exchange traded equities. 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 flow. Level 2 securities would include U.S. agency securities, mortgage-backed agency securities, obligations of states and political subdivisions and certain corporate, asset backed and other securities. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy.

Derivative instruments are recorded at fair value on a recurring basis. The Company utilizes derivative instruments as part of the management of interest rate risk to modify the re-pricing characteristics of certain portions of the Company's interest-bearing assets and liabilities. The Company has contracted with a third-party vendor to provide valuations for derivatives using standard valuation techniques and therefore classifies such valuations as Level 2. The Company has considered counterparty credit risk in the valuation of its derivative assets and has considered its own credit risk in the valuation of its derivative liabilities.

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The following table presents balances of financial assets and liabilities measured at fair value on a recurring basis at March 31, 2026 and December 31, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
|  |  | **Fair Value Measurements at** | **Fair Value Measurements at** | **Fair Value Measurements at** |
|  |  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
|  |  | **Using** | **Using** | **Using** |
|  | **Balance as of** | **Quoted Prices<br>in Active<br>Markets for<br>Identical Assets** | **Significant<br>Other<br>Observable<br>Inputs** | **Significant<br>Unobservable<br>Inputs** |
|  | **March 31, 2026** | **(Level 1)** | **(Level 2)** | **(Level 3)** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Assets: |  |  |  |  |
| Securities available for sale |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Obligations of U.S. government corporations and agencies | $7204 | $— | $7204 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. Treasury securities | 9872 |  | 9872 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed securities | 72256 |  | 72256 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Collateralized mortgage obligations | 22069 |  | 22069 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated debt | 3969 |  | 3469 | 500 |
| Derivative: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rate swaps on loans | 807 |  | 807 |  |
| Total assets at fair value | $116177 | $— | $115677 | $500 |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rate swaps on loans | $807 | $— | $807 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value swap | 26 |  | 26 |  |
| Total liabilities at fair value | $833 | $— | $833 | $— |
|  |  | **Fair Value Measurements at** | **Fair Value Measurements at** | **Fair Value Measurements at** |
|  |  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  |  | **Using** | **Using** | **Using** |
|  | **Balance as of** | **Quoted Prices<br>in Active<br>Markets for<br>Identical Assets** | **Significant<br>Other<br>Observable<br>Inputs** | **Significant<br>Unobservable<br>Inputs** |
|  | **December 31, 2025** | **(Level 1)** | **(Level 2)** | **(Level 3)** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Assets: |  |  |  |  |
| Securities available for sale |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Obligations of U.S. government corporations and agencies | $7444 | $— | $7444 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;U.S. treasury notes | 10001 |  | 10001 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage-backed securities | 75129 |  | 75129 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Collateralized mortgage obligations | 22495 |  | 22495 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated debt | 4474 |  | 3974 | 500 |
| Derivative: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rate swaps on loans | 1030 |  | 1030 |  |
| Total assets at fair value | $120573 | $— | $120073 | $500 |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rate swaps on loans | $1030 | $— | $1030 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value swap | 75 |  | 75 |  |
| Total liabilities at fair value | $1105 | $— | $1105 | $— |

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The table below presents a reconciliation for all assets and liabilities measured at fair value on a recurring basis classified as Level 3 for the periods indicated. Level 3 securities consist of one corporate subordinated debt security for which no pricing information was available and therefore priced at book value.

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| | | |
|:---|:---|:---|
|  | **Level 3 Recurring Fair Value Measurements As Of and For The** | **Level 3 Recurring Fair Value Measurements As Of and For The** |
|  | **Three Months Ended March 31,** | **Three Months Ended March 31,** |
|  | **2026** | **2025** |
|  | **(in thousands)** | **(in thousands)** |
| Beginning balance | $500 | $— |
| Purchases |  |  |
| Sales |  |  |
| Issuances |  |  |
| Settlements |  |  |
| Total Gains (Losses) included in Net Income |  |  |
| Total Gains (Losses) included in OCI |  |  |
| Transfer into Level 3 |  |  |
| Transfer out of Level 3 |  |  |
| Total assets at fair value | $500 | $— |

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Certain financial assets are measured at fair value on a nonrecurring basis in accordance with GAAP. Adjustments to the fair value of these assets usually result from the application of lower of cost or market accounting or write downs of individual assets.

The following describes the valuation techniques used by the Company to measure certain financial and nonfinancial assets recorded at fair value on a nonrecurring basis in the financial statements:

Loans Held for Sale: Loans held for sale are carried at the lower of cost or market value. These loans currently consist of one-to-four family residential loans originated for sale in the secondary market. Fair value is based on the price secondary markets are currently offering for similar loans using observable market data which is not materially different than cost due to the short duration between origination and sale (Level 2). The Company records any fair value adjustments on a nonrecurring basis. No nonrecurring fair value adjustments were recorded on loans held for sale during three months ended March 31, 2026 and the year ended December 31, 2025.

Individually Evaluated Collateral-Dependent Loans: The estimated fair value of individually evaluated collateral-dependent loans is based on the value of the underlying collateral or the value of the underlying collateral, less estimated cost to sell, as appropriate. Collateral is generally real estate; however, collateral may include vehicles, marine vessels, equipment, inventory, accounts receivable, and/or other business assets. The value of real estate collateral is determined using a market valuation approach based on an appraisal conducted by an independent, licensed appraiser. The value of other assets may also be based on an appraisal, market quotations, aging schedules or other sources. Collateral-dependent individually evaluated loans are classified within Level 3 of the fair value hierarchy. Any fair value adjustments are recorded in the period incurred as a provision for credit losses on the Consolidated Statements of Operations. At March 31, 2026 collateral-dependent loans totaling $6.4 million were individually evaluated and being carried at fair value of $4.3 million, the majority of which represents three relationships consisting of loans secured by owner occupied commercial real estate properties and commercial business loans collateralized by equipment. At December 31, 2025 there were four collateral-dependent relationships totaling $2.7 million, which were individually evaluated and being carried at fair value of $2.3 million. Three relationships represent five commercial business loans collateralized by equipment and one relationship is collateralized by commercial real estate.

Other Real Estate Owned: Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at the fair value of the property, less estimated selling costs, establishing a new costs basis. Any write-downs based on the asset's

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fair value at the date of acquisition are charged to the allowance for credit losses. Costs of significant property improvements are capitalized, whereas costs relating to holding property are expensed. The portion of interest costs relating to development of real estate is capitalized. Valuations are periodically obtained by management, and any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of a property to fair value less cost to sell. The fair value measurement of real estate held in other real estate owned is assessed in the same manner as collateral-dependent loans described above. We believe that the fair value follows the provisions of GAAP. The Company held no other real estate owned at March 31, 2026 or December 31, 2025.

Repossessed Assets: Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at the fair value of the asset, less estimated selling costs, establishing a new costs basis. Any write-downs based on the asset's fair value at the date of acquisition are charged to the allowance for credit losses. Costs of significant improvements are capitalized, whereas costs relating to holding assets are expensed. Valuations are periodically obtained by management, and any subsequent write-downs are recorded as a charge to operations, if necessary, to reduce the carrying value of an asset to fair value less cost to sell. The fair value measurement of repossessed assets is assessed in the same manner as collateral dependent loans described above. We believe that the fair value follows the provisions of GAAP. The Company held no repossessed assets at March 31, 2026 and $135 thousand at December 31, 2025. Repossessed assets are included in Other Assets in the Consolidated Balance Sheets.

The following table summarizes the Company's financial and nonfinancial assets that were measured at fair value on a nonrecurring basis at March 31, 2026 and December 31, 2025.

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| | | | | |
|:---|:---|:---|:---|:---|
|  |  | **Carrying value at** | **Carrying value at** | **Carrying value at** |
|  |  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
|  | **Balance as of** | **Identical<br>Assets** | **Observable<br>Inputs** | **Unobservable<br>Inputs** |
|  | **March 31, 2026** | **(Level 1)** | **(Level 2)** | **(Level 3)** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Financial Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Collateral dependent individually evaluated loans | $4268 | $— | $— | $4268 |
|  |  | **Carrying value at** | **Carrying value at** | **Carrying value at** |
|  |  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Balance as of** | **Quoted Prices<br>in Active<br>Markets<br>for Identical<br>Assets** | **Significant<br>Other<br>Observable<br>Inputs** | **Significant<br>Unobservable<br>Inputs** |
|  | **December 31, 2025** | **(Level 1)** | **(Level 2)** | **(Level 3)** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Financial Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Collateral dependent individually evaluated loans | $2256 | $— | $— | $2256 |
| Nonfinancial Assets: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Repossessed assets | 135 |  |  | 135 |

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The following table displays quantitative information about Level 3 Fair Value Measurements for certain financial and nonfinancial assets measured at fair value on a nonrecurring basis for March 31, 2026 and December 31, 2025.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quantitative information about Level 3 Fair Value Measurements** | **Quantitative information about Level 3 Fair Value Measurements** | **Quantitative information about Level 3 Fair Value Measurements** | **Quantitative information about Level 3 Fair Value Measurements** |
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
|  | **Valuation Technique(s)** | **Unobservable Input** | **Range** | **Weighted Average (1)** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;Collateral dependent individually evaluated loans | Discounted value | Selling cost and appraisal discount | 6% - 39% | 23% |
|  | **Quantitative information about Level 3 Fair Value Measurements** | **Quantitative information about Level 3 Fair Value Measurements** | **Quantitative information about Level 3 Fair Value Measurements** | **Quantitative information about Level 3 Fair Value Measurements** |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Valuation Technique(s)** | **Unobservable Input** | **Range** | **Weighted Average (1)** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;Collateral dependent individually evaluated loans | Discounted value | Selling cost and appraisal discount | 6% - 40% | 9% |
| &nbsp;&nbsp;Repossessed assets | Discounted appraised value | Selling cost | 10% | 10% |

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(1) Weighted based on the relative fair value of the specific items measured at fair value.

The carrying value and fair value of the Company's financial instruments at March 31, 2026 and December 31, 2025 were as follows:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Fair Value Measurements at** | **Fair Value Measurements at** | **Fair Value Measurements at** | **Fair Value Measurements at** | **Fair Value Measurements at** |
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
|  | **Using** | **Using** | **Using** | **Using** | **Using** |
|  | **Carrying<br>Value<br>as of** | **Quoted Prices<br>in Active<br>Markets for<br>Identical<br>Assets** | **Significant<br>Other<br>Observable<br>Inputs** | **Significant<br>Unobservable<br>Inputs** | **Fair Value<br>as of** |
|  | **March 31, 2026** | **(Level 1)** | **(Level 2)** | **(Level 3)** | **March 31, 2026** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Financial assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and short-term investments | $189767 | $189767 | $— | $— | $189767 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities | 115370 |  | 114870 | 500 | 115370 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted investments | 1875 |  | 1875 |  | 1875 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans held for sale | 5214 |  | 5214 |  | 5214 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, net | 1441533 |  |  | 1380699 | 1380699 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bank owned life insurance | 32004 |  | 32004 |  | 32004 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest receivable | 4936 |  | 4936 |  | 4936 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative assets | 807 |  | 807 |  | 807 |
| Financial liabilities: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits | $1598219 | $— | $1598773 | $— | $1598773 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated debt, net of unamortized issuance costs | 29596 |  | 27122 |  | 27122 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable | 797 |  | 797 |  | 797 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative liabilities | 833 |  | 833 |  | 833 |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Fair Value Measurements at** | **Fair Value Measurements at** | **Fair Value Measurements at** | **Fair Value Measurements at** | **Fair Value Measurements at** |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Using** | **Using** | **Using** | **Using** | **Using** |
|  | **Carrying Value<br>as of** | **Quoted Prices<br>in Active<br>Markets for<br>Identical<br>Assets** | **Significant<br>Other<br>Observable<br>Inputs** | **Significant<br>Unobservable<br>Inputs** | **Fair Value<br>as of** |
|  | **December 31, 2025** | **(Level 1)** | **(Level 2)** | **(Level 3)** | **December 31, 2025** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Financial assets: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and short-term investments | $217194 | $217194 | $— | $— | $217194 |
| &nbsp;&nbsp;&nbsp;&nbsp;Securities | 119543 |  | 119043 | 500 | 119543 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted Investments | 3786 |  | 3786 |  | 3786 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans held for sale | 4786 |  | 4786 |  | 4786 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans, net | 1457757 |  |  | 1390948 | 1390948 |
| &nbsp;&nbsp;&nbsp;&nbsp;Bank owned life insurance | 31720 |  | 31720 |  | 31720 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest receivable | 5287 |  | 5287 |  | 5287 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative assets | 1030 |  | 1030 |  | 1030 |
| Financial liabilities: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deposits | $1607360 | $— | $1607995 | $— | $1607995 |
| &nbsp;&nbsp;&nbsp;&nbsp;Federal Home Loan Bank advances, long-term | 40000 |  | 40080 |  | 40080 |
| &nbsp;&nbsp;&nbsp;&nbsp;Subordinated debt, net of unamortized issuance costs | 29579 |  | 27106 |  | 27106 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable | 1339 |  | 1339 |  | 1339 |
| &nbsp;&nbsp;&nbsp;&nbsp;Derivative liabilities | 1105 |  | 1105 |  | 1105 |

---

**NOTE 9. Change in Accumulated Other Comprehensive Loss**

Accumulated other comprehensive loss includes unrealized gains and losses on available for sale securities and changes in benefit obligations and plan assets for the post retirement benefit plan. Changes to accumulated other comprehensive loss are presented net of their tax effect as a component of equity. Reclassifications out of accumulated other comprehensive loss are recorded in the Consolidated Statements of Operations either as a gain or loss.

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Changes to accumulated other comprehensive loss by component are shown in the following table for the periods indicated:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** | **March 31,** | **March 31,** | **March 31,** | **March 31,** |
|  | **2026** | **2026** | **2026** | **2025** | **2025** | **2025** |
|  | **Unrealized<br>Gains and<br>Losses on<br>Available<br>for Sale<br>Securities** | **Change in<br>Benefit<br>Obligations<br>and Plan<br>Assets for<br>the Post<br>Retirement<br>Benefit<br>Plan** | **Total** | **Unrealized<br>Gains and<br>Losses on<br>Available<br>for Sale<br>Securities** | **Change in<br>Benefit<br>Obligations<br>and Plan<br>Assets for<br>the Post<br>Retirement<br>Benefit<br>Plan** | **Total** |
|  | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** | **(dollars in thousands)** |
| January 1 | $(5257) | $(3) | $(5260) | $(18645) | $5 | $(18640) |
| Other comprehensive (loss) income before reclassifications | (892) |  | (892) | 27631 |  | 27631 |
| Reclassification of net realized losses into earnings |  |  |  | (12425) |  | (12425) |
| Tax effect of current period changes | 187 |  | 187 | (3193) |  | (3193) |
| Current period changes net of taxes | (705) |  | (705) | 12013 |  | 12013 |
| March 31 | $(5962) | $(3) | $(5965) | $(6632) | $5 | $(6627) |

---

For the three months ended March 31, 2025, the reclassification out of accumulated other comprehensive loss represents the realized loss on the sale of available for sale securities, which appears as loss on the sale of securities in the Consolidated Statements of Operations. The tax benefit related to this reclassification was $2.6 million and was included in income tax expense in the Consolidated Statements of Operations.

**NOTE 10. Other Real Estate Owned & Repossessed Assets**

The following table is a summary of other real estate owned ("OREO") and repossessed asset activity for the three months ended March 31, 2026 and 2025 and the year ended December 31, 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Year Ended** | **Year Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** | **March 31, 2025** | **March 31, 2025** |
|  | **Other Real Estate Owned** | **Repossessed Assets** | **Other Real Estate Owned** | **Repossessed Assets** | **Other Real Estate Owned** | **Repossessed Assets** |
|  |  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Balance, beginning | $— | $135 | $— | $514 | $— | $514 |
| &nbsp;&nbsp;&nbsp;&nbsp;Transfer from loans |  |  | 305 | 1346 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Sales proceeds |  | (96) | (254) | (1422) |  | (381) |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss on sales |  | (39) | (51) | (252) |  | (133) |
| &nbsp;&nbsp;&nbsp;&nbsp;Valuation adjustments |  |  |  | (51) |  |  |
| Balance, ending | $— | $— | $— | $135 | $— | $— |

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The balance at December 31, 2025 represents a repossessed marine vessel.

There was one loan collateralized by residential real estate with a balance of $156 thousand in the process of foreclosure at March 31, 2026 and none at December 31, 2025.

**NOTE 11. Qualified Affordable Housing Project Investments**

The Company invests in qualified affordable housing projects. The general purpose of these investments is to encourage and assist participants in investing in low-income residential rental properties located in the Commonwealth of Virginia, develop and implement strategies to maintain projects as low-income housing, provide tax credits and other tax benefits to investors, and to preserve and protect project assets.

At March 31, 2026 and December 31, 2025, the balance of the investment for qualified affordable housing projects was $914 thousand and $977 thousand, respectively. These balances are reflected in Other Assets on the Consolidated Balance Sheets. There were no unfunded commitments related to the investments in qualified affordable housing projects at March 31, 2026 and December 31, 2025.

During the three months ended March 31, 2026 and March 31, 2025, the Company recognized amortization expense of $63 thousand and $67 thousand, respectively. Amortization expense is included in income tax expense on the Consolidated Statements of Operations.

Total estimated credits to be received during 2026 are $258 thousand based on the most recent quarterly estimates received from the funds. Total tax credits and other tax benefits recognized during the three months ended March 31, 2026 and 2025, were $65 thousand and $69 thousand, respectively.

**NOTE 12. Recent Accounting Pronouncements and Other Authoritative Guidance**

*Pending Adoption*

In November 2025, the FASB issued ASU 2025-09, "Derivatives and Hedging (Topic 815): Hedge Accounting Improvements." The amendments in this ASU enables entities to apply hedge accounting to a greater number of highly effective economic hedges in the following five areas: 1) similar risk assessment for cash flow hedges, 2) hedging forecasted interest payments on choose-your-rate debt instruments, 3) cash flow hedges of nonfinancial forecasted transactions, 4) net written options as hedging instruments, and 5) foreign-currency-denominated debt instrument as hedging instrument and hedged item (dual hedge). This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted on any date on or after November 25, 2025. The Company does not expect the adoption of ASU 2025-09 to have a material impact on its consolidated financial statements.

In November 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025-08, "Financial Instruments—Credit Losses (Topic 326): Purchased Loans." The amendments in this ASU expand the population of acquired financial assets accounted for using the gross-up approach. Acquired loans (excluding credit cards) are deemed purchased seasoned loans and accounted for using the gross-up approach upon acquisition if criteria established by the new guidance are met. This change aims to enhance comparability, consistency, and better reflect the economics of acquiring financial assets. This ASU is effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. If an entity adopts this ASU in an interim reporting period, it should apply it as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period. The Company does not expect the adoption of ASU 2025-08 to have a material impact on its consolidated financial statements.

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Other accounting standards that have been issued by the FASB or other standards-setting bodies are not currently expected to have a material effect on the Company's financial position, results of operations or cash flows.

**NOTE 13. Revenue Recognition**

Substantially all of the Company's revenue from contracts with customers that is within the scope of ASC 606, "Revenue from Contracts with Customers" is reported within noninterest income. A limited amount of other in-scope items such as gains and losses on other real estate owned are recorded in noninterest expense. The recognition of interest income and certain sources of noninterest income (e.g. gains on securities transactions, bank owned life insurance income, etc.) are governed by other areas of U.S. GAAP. Significant revenue streams that are within the scope of ASC 606 and included in noninterest income are discussed in the following paragraphs.

**Income from Fiduciary Activities**

Trust asset management fee income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company's performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to customers' accounts. Estate management fees are based upon the size of the estate. Revenue for estate management fees are recorded periodically, according to a fee schedule and are based on the services that have been provided. The Company does not earn performance-based incentives on customer products sold. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. The Company's performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered.

**Service Charges on Deposit Accounts**

Service charges on deposit accounts are principally comprised of overdrawn account fees, account maintenance charges and other activity based fees. The Company's performance obligations on revenue generated from deposit accounts are generally satisfied immediately, when the transaction occurs, or by month-end. Typically, the duration of a contract does not extend beyond the services performed. Due to the short duration of most customer contracts which generate these sources of noninterest income, no significant judgments must be made in the determination of the amount and timing of revenue recognized.

**Other Service Charges and Fees**

The majority of the Company's noninterest income is derived from short term contracts associated with services provided for other ancillary services such as ATM fees, safe deposit box fees and loan servicing fees. The Company's performance obligations on revenue generated from these ancillary services are generally satisfied immediately, when the transaction occurs, or by month-end. Typically, the duration of a contract does not extend beyond the services performed. Due to the short duration of most customer contracts which generate these sources of noninterest income, no significant judgments must be made in the determination of the amount and timing of revenue recognized. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. Since the rentals and renewals occur fairly consistently, revenue is recognized on a basis consistent with the duration of the performance obligation.

The Company earns interchange fees from credit cardholder transactions conducted through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized no less than monthly.

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Noninterest income (loss) and the related amounts that are from contracts with customers within the scope of ASC 606 disaggregated by major source, for the three months ended March 31, 2026 and 2025 consisted of the following:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** | **Three Months Ended<br>March 31,** |
|  | **2026** | **2026** | **2025** | **2025** |
|  | **Revenue (1)** | **ASC 606 Revenue (2)** | **Revenue (1)** | **ASC 606 Revenue (2)** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Noninterest income : |  |  |  |  |
| Wealth management fees |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trust asset management fees | $1557 | $1557 | $1309 | $1309 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brokerage commissions | 225 | 225 | 372 | 372 |
| Service charges on deposit accounts |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Overdrawn account fees | 422 | 422 | 374 | 374 |
| &nbsp;&nbsp;&nbsp;&nbsp;Monthly and other service charges | 134 | 134 | 118 | 118 |
| Other service charges and fees: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interchange fees | 815 | 815 | 845 | 845 |
| &nbsp;&nbsp;&nbsp;&nbsp;ATM fees | 92 | 92 | 82 | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other charges and fees | 14 | 40 | 45 | 33 |
| Loss on the sale and disposal of bank premises and equipment |  |  | (16) | (16) |
| Loss on sale of securities |  |  | (12425) |  |
| Gain on sale of loans | 1012 |  | 429 |  |
| Small business investment company income | 266 |  | 20 |  |
| Bank owned life insurance income | 284 |  | 273 |  |
| Other operating income | 107 | 97 | 20 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total noninterest income | $4928 | $3382 | $(8554) | $3125 |

---

(1)As reported in the Unaudited Consolidated Statements of Operations.

(2)Revenue from contracts with customers in scope of ASC 606.

**Contract Balances**

The Company's noninterest revenue streams are largely based on transactional activity, or standard month-end revenue accruals such as asset management fees based on month-end market values. Consideration is often received immediately or shortly after the Company satisfies its performance obligation and revenue is recognized. The Company does not typically enter into long-term revenue contracts with customers, and therefore, does not experience significant contract balances. As of March 31, 2026 and December 31, 2025, the Company did not have any significant contract balances.

**NOTE 14. Borrowings**

The composition of borrowings at March 31, 2026 and December 31, 2025 was as follows:

---

| | | |
|:---|:---|:---|
|  | **March 31, 2026** | **December 31, 2025** |
|  | **(in thousands)** | **(in thousands)** |
| FHLB advances - long term | $— | $40000 |
| Subordinated debt | $29596 | $29579 |
| Total | $29596 | $69579 |

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On March 31, 2022, the Company entered into Subordinated Note Purchase Agreements with certain purchasers pursuant to which the Company issued and sold $30.0 million in aggregate principal amount of its 4.50% Fixed-to-Floating Rate Subordinated Notes due April 1, 2032 (the "Notes").

The Notes were structured to qualify as Tier 2 capital for regulatory capital purposes at the holding company and bear an initial interest rate of 4.50% until April 1, 2027, with interest during this period payable semi-annually in arrears. From and including April 1, 2027, to but excluding the maturity date or early redemption date, the interest rate will reset quarterly to an annual floating rate equal to three-month SOFR, plus 2.35%, with interest during this period payable quarterly in arrears. The Notes are redeemable by the Company at its option, in whole or in part, on or after April 1, 2027. Initial debt issuance costs were $673 thousand. The debt balance of $30.0 million is presented net of unamortized issuance costs of $404 thousand and $421 thousand at March 31, 2026 and December 31, 2025 respectively.

The Bank pledges certain qualified loans and available for sale investment securities as collateral to the FHLB and FRB. At March 31, 2026, available borrowing capacity totaled $496.3 million and $61.0 million at the FHLB and FRB discount window, respectively. The Company also has access to federal fund lines of credit extended to the Bank by nonaffiliated banks with which a correspondent banking relationship exists. At March 31, 2026 these available lines totaled $78.0 million.

Additionally, the Company had $70 million in irrevocable letters of credit at March 31, 2026 with the FHLB to secure public deposits.

**NOTE 15. Derivatives**

The Company uses derivative financial instruments primarily to manage risks to the Company associated with changing interest rates, and to assist customers with their risk management objectives. Derivative contracts that are not designated in a qualifying hedging relationships include customer accommodation loan swaps.

On August 15, 2024, the Company executed a 2-year, 3.862% pay-fixed portfolio layer method fair value swap, designated as a hedging instrument, with a total notional amount of $35.0 million. The Company receives a variable rate equal to the daily secured overnight financing rate ("SOFR"). This swap will terminate on August 15, 2026. The Company designated the fair value swap under the portfolio layer method ("PLM"). Under this method, the hedged item is designated as a hedged layer of a closed portfolio of financial loans that is anticipated to remain outstanding for the designated hedged period. Adjustments are made to record the swap at fair value as either an Other asset or Other liability on the Consolidated Balance Sheets, with changes in fair value recognized in net loans. The carrying value of the fair value swap on the Consolidated Balance Sheets will also be adjusted through loan interest income, based on changes in the fair value attributable to changes in the hedged risk.

The following table represents the carrying value of the portfolio layer method hedged asset and the cumulative fair value hedging adjustment included in the carrying value of the hedged asset as of March 31, 2026 and December 31, 2025.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** |
|  | **Carrying Amount of Hedged Asset** | **Cumulative Amount of Fair Value Adjustment** | **Carrying Amount of Hedged Asset** | **Cumulative Amount of Fair Value Adjustment** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Loans receivable <sup>(1)</sup> | $35056 | $56 | $35105 | $105 |

---

<sup>(1)</sup> These amounts include the amortized cost basis of closed portfolios of fixed rate loans used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the hedged period. As of March 31, 2026, the amortized cost basis of the closed portfolio used in this hedging relationship was $450.5 million and the cumulative basis adjustment associated with this hedging relationship was $56 thousand. At March 31, 2026, the amount of the designated hedged item was $35.0 million.

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The following table summarizes the effect of the fair value hedging relationship recognized in the Consolidated Statements of Operations for the three months ended March 31, 2026.

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| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
|  | **(in thousands)** | **(in thousands)** |
| Hedged asset | $(17) | $42 |
| Fair value derivative designated as hedging instrument | (1) | 2 |
| Total (loss) gain recognized in the consolidated statement of operations within interest and fees on loans | $(18) | $44 |

---

The Company enters into interest rate swaps with certain qualifying commercial loan customers to meet their interest rate risk management needs. The Bank simultaneously enters into interest rate swaps with dealer counterparties, with identical notional amounts and offsetting terms. The net result of these interest rate swaps is that the customer pays a fixed rate of interest and the Company receives a floating rate. These back-to-back loan swaps are derivative financial instruments and are reported at fair value in "other assets" and "other liabilities" in the Consolidated Balance Sheets. Changes in the fair value of loan swaps are recorded in other noninterest income and sum to zero because of the offsetting terms of the swaps with borrowers and the swaps with dealer counterparties.

The following tables summarize key elements of the Company's derivative instruments at March 31, 2026 and December 31, 2025.

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| | | | |
|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
|  | **Notional Amount** | Assets | Liabilities |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Derivatives designated as hedging instruments: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value swap | $35000 | $— | $26 |
| Derivatives not designated as hedging instruments: |  |  |  |
| Customer-related interest rate swap contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Matched interest rate swaps with borrower | $40743 | $396 | $411 |
| &nbsp;&nbsp;&nbsp;&nbsp;Matched interest rate swaps with counterparty | 40743 | 411 | 396 |
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Notional Amount** | Assets | Liabilities |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Derivatives designated as hedging instruments: |  |  |  |
| Fair value swap | $35000 | $— | $75 |
| Derivatives not designated as hedging instruments: |  |  |  |
| Customer-related interest rate swap contracts: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Matched interest rate swaps with borrower | $40980 | $643 | $387 |
| &nbsp;&nbsp;&nbsp;&nbsp;Matched interest rate swaps with counterparty | 40980 | 387 | 643 |

---

**NOTE 16. Business Segments**

The Company has three reportable operating segments: community banking, marine lending and wealth management.

The community banking segment offers a wide range of retail and community banking services in the form of loan and deposit products. Revenues consist primarily of net interest income related to investments in non-marine loans and securities and outstanding deposits and borrowings, fees earned on deposit accounts and debit card interchange activity. During the first quarter of 2025 the Company sold available for sale securities with an amortized cost of $99.2 million, which resulted in a net realized

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pre-tax loss of $12.4 million. This loss on the sale of securities is the main driver of the community banking segment's reported net loss, total noninterest loss and income tax benefit for the three months ended March 31, 2025.

Revenue from marine lending operations consist primarily of net interest income related to commercial and consumer marine vessel loans originated through August 2023, at which time the Company ceased accepting new marine lending business. The interest expense allocation is a function of the Bank's internal cost of funds rate and the average loan balance of marine lending. The balance of the marine loan portfolio, which constitutes a significant portion of the Company's assets, revenues, and earnings, totaled $170.2 million and $175.6 million at March 31, 2026 and December 31, 2025, respectively. This balance will continue to decline as the loans are repaid.

The wealth management segment offers both a trust department and investment services. Trust department services include a full range of personal and retirement plan services, and investment services products include, among other products, annuities, IRA's, life insurance, fixed income investing, and full service or discount brokerage services. Non-deposit investment products are offered through a third-party service provider.

Financial information of the parent company is included in the "All Other" category. The parent company's revenue and expenses are comprised primarily of interest expense associated with subordinated debt.

The Company's segment structure reflects the financial information and reports used by our chief operating decision maker to make decisions regarding the business, including resource allocations and performance. Our Chief Executive Officer is the chief operating decision maker ("CODM"). We evaluate performance and allocate resources based on the operating income of each operating segment. The CODM uses segment operating income in the annual budget process. The operating income of each operating segment includes the revenues of the segment less expenses that are directly related to those revenues. Operating overhead, shared costs and share-based compensation costs are included in Community Banking. As such, expenses may not be representative of the costs expected to be incurred if the specific business segments operated as stand-alone entities. The Company expects it will continue to evaluate its business segments and internal reporting structure, including the production of discrete financial information to the CODM.

The following tables provide income and asset information as of March 31, 2026 and December 31, 2025 and for three months ended March 31, 2026 and 2025, which are included within the Consolidated Balance Sheets and Consolidated Statements of Operations.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** |
|  | **Community Banking** | **Marine Lending** | **Wealth Management** | **All Other** | **Eliminations** | **Consolidated** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Interest Income | $21594 | $2232 | $— | $— | $— | $23826 |
| Interest Expense | 6755 | 814 |  | 354 |  | 7923 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Interest Income (Expense) | 14839 | 1418 |  | (354) |  | 15903 |
| Gain on sales of loans | 1012 |  |  |  |  | 1012 |
| Other noninterest income | 2091 |  | 1825 |  |  | 3916 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Revenue (Expense) | 17942 | 1418 | 1825 | (354) |  | 20831 |
| Provision for credit losses | 1942 | 19 |  |  |  | 1961 |
| Salaries and employee benefits | 7777 |  | 414 | 38 |  | 8229 |
| Occupancy expenses | 643 |  | 23 |  |  | 666 |
| Professional fees | 522 | 2 | 1 | 79 |  | 604 |
| Data processing fees | 486 |  |  |  |  | 486 |
| Other noninterest expense | 3899 | 91 | 237 |  |  | 4227 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Noninterest Expenses | 13327 | 93 | 675 | 117 |  | 14212 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) before taxes | 2673 | 1306 | 1150 | (471) |  | 4658 |
| Income tax expense (benefit) | 525 | 274 | 242 | (123) |  | 918 |
| Net Income (Loss) | $2148 | $1032 | $908 | $(348) | $— | $3740 |
| Other data: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | $200 | $— | $9 | $— | $— | $209 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 421 |  | 34 | 17 |  | 472 |
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **March 31, 2025** | **March 31, 2025** | **March 31, 2025** | **March 31, 2025** | **March 31, 2025** | **March 31, 2025** |
|  | **Community Banking** | **Marine Lending** | **Wealth Management** | **All Other** | **Eliminations** | **Consolidated** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Interest Income | $20796 | $2706 | $— | $— | $— | $23502 |
| Interest Expense | 8616 | 1196 |  | 354 |  | 10166 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Interest Income (Expense) | 12180 | 1510 |  | (354) |  | 13336 |
| Gain on sales of loans | 429 |  |  |  |  | 429 |
| (Loss) on the sale of securities | (12425) |  |  |  |  | (12425) |
| Other noninterest income | 1718 |  | 1724 |  |  | 3442 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net Revenue (Expense) | 1902 | 1510 | 1724 | (354) |  | 4782 |
| Provision for (recovery of) credit losses | 1377 | (144) |  |  |  | 1233 |
| Salaries and employee benefits | 6695 |  | 458 | 26 |  | 7179 |
| Occupancy expenses | 642 |  | 20 |  |  | 662 |
| Professional fees | 499 |  |  | 64 |  | 563 |
| Data processing fees | 530 |  | 20 |  |  | 550 |
| Other noninterest expense | 3346 | 104 | 185 |  |  | 3635 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Noninterest Expenses | 11712 | 104 | 683 | 90 |  | 12589 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income before taxes | (11187) | 1550 | 1041 | (444) |  | (9040) |
| Income tax (benefit) expense | (2506) | 326 | 219 | (105) |  | (2066) |
| Net (Loss) Income | $(8681) | $1224 | $822 | $(339) | $— | $(6974) |
| Other data: |  |  |  |  |  |  |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures | $537 | $— | $— | $| $537 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 394 | 32 | 17 |  | $443 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Community Banking** | **Marine Lending** | **Wealth Management** | **All Other** | **Eliminations** | **Consolidated** |
| Total assets at March 31, 2026 | $1660826 | $175106 | $824 | $1604 | $— | $1838360 |
| Total assets at December 31, 2025 | 1705394 | 181062 | 849 | 1321 |  | 1888626 |

---

**NOTE 17. Subsequent Events**

The Bank is a member in Bankers Title Shenandoah, LLC, which is an investor in Bearing Insurance Group, LLC ("Bearing"). On May 1, 2026, Bearing was sold to an unaffiliated third party. Based on the Company's ownership percentage in Bearing, The Bank received proceeds of $5.06 million. A pre-tax gain of approximately $3.5 million is estimated to be recognized from this sale and included in the Company's financial results for the second quarter of 2026.

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

The purpose of this discussion is to focus on certain information relevant to the Company's financial condition, results of operations, liquidity and capital resources. This discussion should be read in conjunction with the Company's Audited Consolidated Financial Statements and notes thereto included in the 2025 Form 10-K, and in conjunction with the Unaudited Consolidated Financial Statements and notes thereto presented in Part I, Item 1, Financial Statements, of this Form 10-Q. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results for the full-year ending December 31, 2026 or any future period.

GENERAL

Eagle Financial Services, Inc. is a bank holding company which owns 100% of the stock of Bank of Clarke (the "Bank" and, collectively with Eagle Financial Services, Inc., the "Company", "we", "us" or "our"). Accordingly, the results of operations for the Company are dependent upon the operations of the Bank.

The Bank conducts a commercial banking business which consists of attracting deposits from the general public and investing those funds in commercial, consumer and real estate loans and mortgage-backed securities, municipal and U.S. government agency securities. The Bank's deposits are insured by the Federal Deposit Insurance Corporation to the maximum extent permitted by law.

The Company strives to be an outstanding financial institution in its market by: building solid sustainable relationships with its customers, employees, communities, and shareholders; offering best-in-class products and services; and being the leader in the markets it serves.

At March 31, 2026, the Company had total assets of $1.84 billion, net loans of $1.44 billion, total deposits of $1.60 billion, and shareholders' equity of $190.3 million.

The Company has continued to build on its strategic actions taken during 2025, which was marked by a successful capital raise and balance sheet repositioning of its investment securities portfolio. These actions strengthened its balance sheet and improved its forward earnings profile. Our vision for 2026 is about disciplined growth with smart investment and continued focus on people and technology, which we believe will lead to stronger core earnings and a balance sheet positioned for more consistent results.

CRITICAL ACCOUNTING ESTIMATES

The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), which requires us to make estimates and assumptions. These estimates, assumptions and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements may reflect different estimates, assumptions and judgments. Certain policies inherently rely more extensively on the use of estimates, assumptions and judgments and as such may have a greater possibility of producing results that could be materially different than originally reported.

Our most significant policies are described in in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 1 to our audited financial statements for the year ended December 31, 2025, included in the Company's 2025 Annual Report on Form 10-K filed with the SEC. There have been no changes since that time.

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NON-GAAP FINANCIAL MEASURES

This report refers to certain financial measures that are computed under a basis other than GAAP ("non-GAAP"). The Company uses certain non-GAAP financial measures, including non-GAAP net income, non-GAAP noninterest income, non-GAAP earnings per share, non-GAAP return on average equity and average assets, tax-equivalent net interest income and efficiency ratio, to provide meaningful supplemental information regarding the Company's operational performance and to enhance investors' overall understanding of such financial performance. The methodology for determining these non-GAAP measures may differ among companies. Non-GAAP measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.

There were no significant non-recurring transactions executed during the first quarter of 2026 that substantially impacted the Company's operating results, unlike during the 2025 quarter. During the three months ended March 31, 2025, the Company executed balance sheet repositioning transactions and recorded a realized loss on the sale of the available for sale securities totaling $12.4 million. This loss significantly impacted the Company's operating results and certain performance metrics and ratios for three months ended March 31, 2025.

The following table reconciles the GAAP reported measure to the adjusted non-GAAP measure to show the impact of significant non-recurring transactions for the periods presented:

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| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
| **(dollars in thousands except for per share data)** | **2026** | **2025** |
| GAAP Net income (loss) | $3740 | $(6974) |
| Adjustments to net income (loss): |  |  |
| Loss on sales of securities |  | 12425 |
| Tax effect of adjustments to net income (loss) |  | (2609) |
| Non-GAAP Net income | $3740 | $2842 |
| GAAP Noninterest income (loss) | $4928 | $(8554) |
| Adjustments to noninterest income (loss): |  |  |
| Loss on sales of securities |  | 12425 |
| Non-GAAP Noninterest income | $4928 | $3871 |
| Earnings (loss) per share, basic and diluted (GAAP) | $0.69 | $(1.53) |
| Effect of adjustments to net income |  | 2.15 |
| Non-GAAP Earnings per share, basic and diluted | $0.69 | $0.62 |
| Annualized return on average equity | 7.98% | (20.75)% |
| Effect of adjustments to net income |  | 29.21 |
| Non-GAAP Annualized return on average equity | 7.98% | 8.46% |
| Annualized return on average assets | 0.81% | (1.48)% |
| Effect of adjustments to net income |  | 2.07 |
| Non-GAAP Annualized return on average assets | 0.81% | 0.59% |

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For additional information and calculations of tax-equivalent net interest income and efficiency ratio, see the sections entitled "Tax-Equivalent Net Interest Income" and "Efficiency Ratio" below.

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FORWARD LOOKING STATEMENTS

This report contains statements that are "forward looking statements." The Company may also make forward looking statements in other documents that are filed with the Securities and Exchange Commission, in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors, or employees. Forward looking statements include statements regarding our expectations, intentions, and objectives, or other expressions that predict or indicate future events and trends and which do not relate to historical matters. The words "believe," "expect," "may," "will," "should," "could," "projects," "contemplates," "anticipates," "forecasts," "intends," or other similar words or terms are intended to identify forward looking statements. You should not rely on forward looking statements, as they involve known and unknown risks, uncertainties, and other factors, some of which are beyond our control. These risks, uncertainties, and other factors may cause our actual results, performance, or achievements to be materially different than the anticipated future results, performance, or achievements expressed or implied by the forward looking statements.

Some of the factors that might cause these differences include the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•difficult market conditions in our industry;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the ability to successfully manage growth or implement growth strategies if the Bank is unable to identify attractive markets, locations or opportunities to expand in the future or if the Bank is unable to successfully integrate new branches, business lines or other growth opportunities into its existing operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•competition with other banks and financial institutions, and companies outside of the banking industry, including those companies that have substantially greater access to capital and other resources;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the successful management of interest rate risk;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•risks inherent in making loans such as repayment risks and fluctuating collateral values;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the Company's ability to successfully resolve non-performing assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in general economic and business conditions in the Bank's market area;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•reliance on the Bank's management team, including the ability to attract and retain key personnel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in interest rates and interest rate policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•maintaining capital levels adequate to support growth;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•maintaining cost controls and asset qualities as new branches are opened or acquired;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•demand, development and acceptance of new products and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•deposit flows;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the Bank's ability to manage liquidity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the cost and availability of secondary funding sources;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•effects of soundness of other financial institutions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•problems with technology utilized by the Bank;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changing trends in customer profiles and behavior;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•geopolitical conditions, including acts or threats of terrorism, international hostilities, or actions taken by the U.S. or other governments in response to acts or threats of terrorism and/or military conflicts, which could impact business and economic conditions in the U.S. and abroad;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the economic impact of duties, tariffs or other barriers or restrictions on trade, any retaliatory counter measures, or the volatility and uncertainty arising there from;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•political developments, including government shutdowns, and other significant disruptions and changes in the funding, size, scope, and efficiencies of the federal government, its agencies and services;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the Company's potential exposure to fraud, negligence, computer theft, and cyber-crime;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•potential impact on us of existing and future legislation and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•changes in accounting policies and banking and other law and regulations; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•other factors described in Item 1A., "Risk Factors," in the Company's 2025 Form 10-K.

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You should carefully review all of these factors and you should be aware that there may be other factors that cause these differences. These forward looking statements were based on information, plans, and estimates at the date of this report, and we assume no obligation to update any forward looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

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RESULTS OF OPERATIONS

*Summary*

The following table presents a summarized consolidated statement of operations for the periods indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |  |  |
|  | **March 31,** | **March 31,** | **Change** | **Change** |
| **(dollars in thousands)** | **2026** | **2025** | **$ Change** | **% Change** |
| Net interest income | $15903 | $13336 | $2567 | 19% |
| Noninterest income (loss) | 4928 | (8554) | 13482 | 158% |
| Net revenues | 20831 | 4782 | 16049 | 336% |
| Provision for credit losses | 1961 | 1233 | 728 | 59% |
| Noninterest expense | 14212 | 12589 | 1623 | 13% |
| Income (loss) before income taxes | 4658 | (9040) | 13698 | 152% |
| Income tax expense (benefit) | 918 | (2066) | 2984 | 144% |
| Net income (loss) | $3740 | $(6974) | $10714 | 154% |
| Adjusted net income (non-GAAP) <sup>(1)</sup> | $3740 | $2842 | $898 | 32% |

---

(1) Adjusted to exclude the loss on sale of securities in connection with the Company's balance sheet repositioning transactions during the three months ended March 31, 2025. See "Non-GAAP Financial Measures" for a reconciliation to comparable measures calculated in accordance with GAAP.

The Company's net income increased during the three months ended March 31, 2026, compared to the three months ended March 31, 2025 primarily due to the loss on the sale of available for sale securities totaling $12.4 million, or $9.8 million, net of tax, recognized during the prior year period. The first quarter of 2026 also experienced an increase in net interest income, which was partially offset by higher noninterest expenses and provision for credit losses over the corresponding 2025 period.

The following table presents a summary of performance metrics and ratios for the periods indicated:

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| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
| Earnings per share, basic and diluted | $0.69 | $(1.53) |
| Adjusted earnings per share, basic and diluted (non-GAAP)<sup>(1)</sup> | $0.69 | $0.62 |
| Return on average assets | 0.81% | -1.48% |
| Adjusted return on average assets (non-GAAP)<sup>(1)</sup> | 0.81% | 0.60% |
| Return on average equity | 7.98% | -20.75% |
| Adjusted return on average equity (non-GAAP)<sup>(1)</sup> | 7.98% | 8.46% |

---

(1) Adjusted to exclude the loss on sale of securities in connection with the Company's balance sheet repositioning transactionsduring the three months ended March 31, 2025. See "Non-GAAP Financial Measures" for a reconciliation to comparable measures calculated in accordance with GAAP.

Return on average equity ("ROE") measures the utilization of shareholders' equity in generating net income. This measurement is affected by the same factors as ROA with consideration to how much of the Company's assets are funded by shareholders.

Return on average assets ("ROA") measures how efficiently the Company uses its assets to produce net income. Factors reflected within this efficiency include the Company's asset mix, funding sources, pricing, fee generation, and cost control.

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*Average Balances, Income and Expenses, Yields and Rates (Tax-Equivalent Basis)* 

The following table shows average balance, interest, and yield/rate information, as well as net interest margin on a tax- equivalent basis for the three months ended March 31, 2026 and 2025 (dollars in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **March 31, 2026** | **March 31, 2025** | **March 31, 2025** | **March 31, 2025** |
|  |  | **Interest** | **Average** |  | **Interest** | **Average** |
|  | **Average** | **Income/** | **Yield/** | **Average** | **Income/** | **Yield/** |
| **Assets:** | **Balance** | **Expense** | **Rate** <sup>(2)</sup> | **Balance** | **Expense** | **Rate** <sup>(2)</sup> |
| Securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | $122130 | $1306 | 4.34% | $117367 | $845 | 2.92% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-Exempt <sup>(1)</sup> |  |  | —% | 353 | 4 | 4.25% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Securities | $122130 | $1306 | 4.34% | $117720 | $849 | 2.93% |
| Loans: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | 1434955 | 20639 | 5.83% | 1442343 | 19871 | 5.59% |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-accrual | 14534 |  | —% | 3959 |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-Exempt <sup>(1)</sup> | 7448 | 94 | 5.12% | 10130 | 127 | 5.07% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Loans | $1456937 | $20733 | 5.77% | $1456432 | $19998 | 5.57% |
| Federal funds sold and interest-bearing deposits in other banks | 198084 | 1807 | 3.70% | 244780 | 2683 | 4.45% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total earning assets | $1777151 | $23846 | 5.44% | $1818932 | $23530 | 5.25% |
| Allowance for credit losses on loans | (15695) |  |  | (15228) |  |  |
| Total non-earning assets | 105767 |  |  | 102727 |  |  |
| Total assets | $1867223 |  |  | $1906431 |  |  |
| **Liabilities and Shareholders' Equity:** |  |  |  |  |  |  |
| Interest-bearing deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;NOW accounts | $312314 | $1667 | 2.16% | $275462 | $1463 | 2.15% |
| &nbsp;&nbsp;&nbsp;&nbsp;Money market accounts | 286953 | 1515 | 2.14% | 274142 | 1512 | 2.24% |
| &nbsp;&nbsp;&nbsp;&nbsp;Savings accounts | 122622 | 33 | 0.11% | 132905 | 37 | 0.11% |
| Time deposits: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;$250,000 and more | 172241 | 1646 | 3.88% | 186048 | 2115 | 4.61% |
| &nbsp;&nbsp;&nbsp;&nbsp;Less than $250,000 | 264713 | 2364 | 3.62% | 311499 | 3377 | 4.40% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing deposits | $1158843 | $7225 | 2.53% | $1180056 | $8504 | 2.92% |
| Federal funds purchased | 7 |  | NM | 8 |  | NM |
| Federal Home Loan Bank advances | 28444 | 344 | 4.90% | 110556 | 1308 | 4.80% |
| Subordinated debt, net | 29585 | 354 | 4.85% | 29517 | 354 | 4.87% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities | $1216879 | $7923 | 2.64% | $1320137 | $10166 | 3.12% |
| Noninterest-bearing liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Demand deposits | 437244 |  |  | 426947 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other Liabilities | 23092 |  |  | 23071 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $1677215 |  |  | $1770155 |  |  |
| Shareholders' equity | 190008 |  |  | 136276 |  |  |
| Total liabilities and shareholders' equity | $1867223 |  |  | $1906431 |  |  |
| Net interest income |  | $15923 |  |  | $13364 |  |
| Net interest spread |  |  | 2.80% |  |  | 2.13% |
| Interest expense as a percent of average earning assets |  |  | 1.81% |  |  | 2.27% |
| Net interest margin (non-GAAP) <sup>(3)</sup> |  |  | 3.63% |  |  | 2.98% |

---

(1)Income and yields are reported on a tax-equivalent basis using a federal tax rate of 21% (Non-GAAP).

(2)Annualized.

(3)Refer to section entitled "Tax-Equivalent Net Interest Income" for the reconciliation of tax-equivalent net interest income.

*NM - Not Meaningful*

*Tax-Equivalent Net Interest Income*

The following table reconciles tax-equivalent net interest income, which is not a measurement under GAAP, to net interest income. Tax-equivalent net interest income (Non-GAAP) is calculated by adding the tax benefit on certain securities and loans, whose interest is tax-exempt, to total interest income then subtracting total interest expense. The tax rate used to calculate the tax benefit was 21% for 2026 and 2025.

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| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
|  | **(in thousands)** | **(in thousands)** |
| **GAAP Financial Measurements:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest Income - Loans | $20713 | $19971 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest Income - Securities and Other Interest-Earnings Assets | 3113 | 3531 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest Expense - Deposits | 7225 | 8504 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest Expense - Borrowings | 698 | 1662 |
| **Total Net Interest Income** | $15903 | $13336 |
| **Non-GAAP Financial Measurements:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Add: Tax Benefit on Tax-Exempt Interest Income - Loans <sup>(1)</sup> | $20 | $27 |
| &nbsp;&nbsp;&nbsp;&nbsp;Add: Tax Benefit on Tax-Exempt Interest Income - Securities <sup>(1)</sup> |  | $1 |
| **Total Tax Benefit on Tax-Exempt Interest Income** | $20 | $28 |
| **Tax-Equivalent Net Interest Income** | $15923 | $13364 |

---

(1)Tax benefit was calculated using the federal statutory tax rate of 21%.

*Net Interest Income*

Net interest income is our primary source of revenue, representing the difference between interest and fees earned on interest-earning assets and the interest paid on deposits and other interest-bearing liabilities. The level of net interest income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates.

The year-over-year improvements in net interest income, tax-equivalent net interest income, net interest spread, and net interest margin primarily reflect a decrease in the average balances of interest-bearing liabilities and reductions in the average rates paid. Additionally, the impact of the balance sheet repositioning strategy completed in March 2025, pursuant to which the Company raised capital, increased cash on hand and replaced lower-yielding investment securities with higher yielding securities, and an increase in the average yield earned on loans contributed to the increase in net interest income during the three months ended March 31, 2026.

Net interest income, on a tax-equivalent basis, was $15.9 million and $13.4 million for the three months ended March 31, 2026 and 2025, respectively, an increase of $2.6 million, or 19.2%.

The Company's net interest spread and net interest margin increased 67 basis points and 65 basis points, respectively, for the three months ended March 31, 2026 compared to three months ended March 31, 2025. These increases are primarily attributable to the repositioning of the securities portfolio and reductions in the average rate paid on and average balances of time deposits. Ongoing margin pressures include loan demand unpredictability, deposit competition, and elevated funding costs.

Total average balance of securities increased by $4.4 million for the three months ended March 31, 2026 from the average balance in the prior year period due to purchases exceeding routine paydowns and maturities in the portfolio. The average yield on securities increased 141 basis points during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 reflecting the sale of lower-yielding securities and reinvestment into higher-yielding securities in the first quarter of 2025.

The total average loan balances for the three months ended March 31, 2026 remained level with the same period in 2025 reflecting growth in commercial real estate and home equity lines of credit loan portfolios, offset by the sale of a pool of mortgage loans totaling $18.8 million early in the first quarter of 2025 ahead of the Company's public offering, continued amortization of the marine loan portfolio as the Company is no longer accepting new marine business, and a net decrease in the commercial and industrial loan portfolio largely due to sales of SBA loans to the secondary market.

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Total average balance of federal funds sold and interest-bearing deposits in other banks decreased $46.7 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025, due to the payoff of maturing borrowings.

Total average interest-bearing deposit balances for three months ended March 31, 2026 decreased $21.2 million from the same period in 2025. Time deposits and savings accounts decreased $60.6 million and $10.3 million, respectively, partially offset by NOW and money market accounts which increased $36.9 million and $12.8 million, respectively. The average rate paid on interest-bearing deposits decreased 39 basis points during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 reflecting lower average rates paid on time deposits.

The average balance of FHLB advances decreased $82.1 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to maturing advances that were not replaced with new borrowings. During the three months ended March 31, 2026 the Company's remaining FHLB borrowings were fully paid down, which materially reduced our reliance on wholesale funding.

*Volume and Rate Analysis (Tax-Equivalent Basis)*

Interest income and expense are affected by fluctuation in interest rates, by changes in the volume of earning assets and interest-bearing liabilities, and by the interaction of rate and volume factors. Changes attributable to both volume and rate have been allocated proportionately based on the relationship of the absolute dollar amount of change in each.

The following table provides information about changes in rate and volume (dollars in thousands):

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| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended March 31, 2026 from 2025** | **Three Months Ended March 31, 2026 from 2025** | **Three Months Ended March 31, 2026 from 2025** |
|  | **Increase (Decrease)<br>Due to:** | **Increase (Decrease)<br>Due to:** |  |
|  | **Volume** | **Rate** | **Total** |
| **Earning Assets:** |  |  |  |
| Securities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | $36 | $425 | $461 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-exempt | (2) | (2) | (4) |
| Loans: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Taxable | (104) | 872 | 768 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax-exempt | (34) | 1 | (33) |
| Federal funds sold and interest-bearing deposits in other banks | (465) | (411) | (876) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total earning assets | $(569) | $885 | $316 |
| **Interest-Bearing Liabilities:** |  |  |  |
| NOW accounts | $197 | $7 | $204 |
| Money market accounts | 67 | (64) | 3 |
| Savings accounts | (4) |  | (4) |
| Time deposits: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;$250,000 and more | (150) | (319) | (469) |
| &nbsp;&nbsp;&nbsp;&nbsp;Less than $250,000 | (465) | (548) | (1013) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing deposits | $(355) | $(924) | $(1279) |
| Federal Home Loan Bank advances | (992) | 28 | (964) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing liabilities | $(1347) | $(896) | $(2243) |
| Change in net interest income | $778 | $1781 | $2559 |

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*Provision for Credit Losses*

The provision for credit losses results from management's review of the adequacy of the allowance for credit losses. The allowance for credit losses is management's estimate, at the reporting date, of expected lifetime credit losses and includes consideration of current forecasted economic conditions. Estimating the amount required to maintain an adequate allowance for credit losses involves a high degree of judgment.

The following table presents the provision for credit losses:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** | **March 31,** | **March 31,** |
| **(dollars in thousands)** | **2026** | **2025** | **$ Change** | **% Change** |
| Provision for credit losses on loans | $1972 | $1146 | $826 | 72% |
| Provison for (recovery of) credit losses on unfunded commitments | (11) | 87 | (98) | (113)% |
| Provison for credit losses | $1961 | $1233 | $728 | 59% |

---

The provision for credit losses for the three months ended March 31, 2026 and 2025 included the impact of net losses and specific reserve allocations on individually evaluated nonaccrual loans and reflected management's estimate of forecasted economic conditions and changes in loan balances.

During the three months ended March 31, 2026, net recoveries totaled $34 thousand compared to net charge-offs totaling $891 thousand during the three months ended March 31, 2025.

Specific reserve allocations totaled $2.1 million at March 31, 2026 primarily reflecting four commercial loan relationships, three of which are commercial and industrial relationships and one includes both commercial and industrial and commercial real estate loans. The specific reserves on these four relationships comprised $1.7 million, or 81%, of the total allocation at March 31, 2026. At March 31, 2025, specific reserve allocations totaled $152 thousand consisting of two commercial loan relationships.

The increase in the specific reserve allocation at March 31, 2026 was primarily attributable to two commercial and industrial relationships for which new or increased specific allocations were recorded during the first quarter of 2026, driven by updated collateral information. Additional appraisals on certain nonaccrual and individually evaluated loans have been ordered and are expected to be received in the middle to late portion of the second quarter of 2026. The results of these appraisals may indicate that further specific reserves are warranted on certain existing nonaccrual or impaired loans, which could result in additional provisioning in future periods.

*Noninterest Income*

Total noninterest income (loss) was $4.9 million and $(8.6) million for the three months ended March 31, 2026 and 2025, respectively. Management reviews the activities which generate noninterest income on an ongoing basis. The following table provides the components of noninterest income for the three months ended March 31, 2026 and 2025, which are included within the respective Consolidated Statements of Operations headings.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** | **March 31,** | **March 31,** |
| **(dollars in thousands)** | **2026** | **2025** | **$ Change** | **% Change** |
| Wealth management fees | $1782 | $1681 | $101 | 6% |
| Service charges on deposit accounts | 556 | 492 | 64 | 13% |
| Other service charges and fees | 921 | 972 | (51) | (5)% |
| (Loss) on sale of securities |  | (12425) | 12425 | NM |
| (Loss) on disposal of bank premises and equipment |  | (16) | 16 | NM |
| Gain on sale of loans | 1012 | 429 | 583 | 136% |
| Small business investment company income | 266 | 20 | 246 | 1230% |
| Bank owned life insurance income | 284 | 273 | 11 | 4% |
| Other operating income | 107 | 20 | 87 | 435% |
| &nbsp;&nbsp;Total noninterest income (loss) | $4928 | $(8554) | $13482 | 158% |

---

*NM - Not Meaningful*

Wealth management fee income increased from 2025 to 2026. Wealth management fee income is comprised of income from fiduciary activities as well as commissions from the sale of non-deposit investment products. The amount of income from fiduciary activities is determined by the number of active accounts and total assets under management, which has increased $48.5 million, or 9.22%, to $574.4 million since March 31, 2025. Additionally, per transaction fees for estates and other services have also contributed to the year over year increase in revenue. Partially offsetting these increases was a decrease in investment sales commissions.

The Company executed balance sheet repositioning transactions within its investment securities portfolio during March 2025. The sale of $99.2 million of available for sale debt securities, with a fair value of $86.8 million, resulted in a net pre-tax loss of $12.4 million during three months ended March 31, 2025. There was no sale of available for sale debt securities in the three months ended March 31, 2026 .

Gain on sale of loans increased during the three months ended March 31, 2026 when compared to the same period in 2025. The Company sold $24.1 million in mortgage loans on the secondary market, consisting of $16.6 million of loans originated for sale and $7.5 million of SBA commercial loans during the three months ended March 31, 2026. This compares to loan sales of $16.9 million, consisting of $14.9 million of loans originated for sale and $2.0 million SBA commercial loans, during the three months ended March 31, 2025. Additionally, during three months ended March 31, 2025 a pool of $18.8 million residential mortgage loans held for investment was sold at par.

Income from holdings in small business investment companies increased during three months ended March 31, 2026, compared to the same period in 2025. The increase during the current year period is mainly attributed to higher cash distributions received, based on the results of their performance and difference in timing of distributions.

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*Noninterest Expenses*

Total noninterest expenses increased $1.6 million, or 13%, for the three months ended March 31, 2026 compared to the same period in 2025. The following table presents the components of noninterest expense for the three months ended March 31, 2026 and 2025, which are included within the respective Consolidated Statements of Operations headings.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** | **March 31,** | **March 31,** |
| **(dollars in thousands)** | **2026** | **2025** | **$ Change** | **% Change** |
| Salaries and employee benefits | $8229 | $7179 | $1050 | 15% |
| Occupancy expenses | 666 | 662 | 4 | 1% |
| Equipment expenses | 462 | 423 | 39 | 9% |
| Advertising and marketing expenses | 191 | 183 | 8 | 4% |
| Stationary and supplies | 46 | 42 | 4 | 10% |
| ATM network fees | 327 | 362 | (35) | (10)% |
| Other real estate owned expense (gain), net | (5) |  | (5) | NM |
| Loss on sale of repossessed assets | 39 | 133 | (94) | (71)% |
| FDIC assessment | 227 | 322 | (95) | (30)% |
| Computer software expense | 354 | 282 | 72 | 26% |
| Bank franchise tax | 481 | 367 | 114 | 31% |
| Professional fees | 604 | 563 | 41 | 7% |
| Data processing fees | 486 | 550 | (64) | (12)% |
| Loan servicing expense | 269 | 237 | 32 | 14% |
| Other operating expenses | 1836 | 1284 | 552 | 43% |
| &nbsp;&nbsp;Total noninterest expenses | $14212 | $12589 | $1623 | 13% |

---

*NM - Not Meaningful*

Salaries and employee benefits increased during the three months ended March 31, 2026 over 2025, primarily reflecting increases in salaries, employee insurance expense, employer 401(k) expense, and stock-based compensation expense. The Company's number of full-time equivalent employees ("FTE's") has increased from 233 at March 31, 2025 to 253 at March 31, 2026.

One repossessed marine vessel was sold during the first quarter of 2026, resulting in the recognition of a $39 thousand loss compared to the sale of three repossessed marine vessels during the first quarter 2025 which resulted in a loss of $133 thousand.

FDIC assessment expense, which is based in part on asset size and capital levels, decreased during the three months ended March 31, 2026 compared to the same periods in 2025. The decrease in FDIC assessment reflects an improvement in the capital adequacy and financial ratio portions of the assessment rate for the year ended December 31, 2025 compared to December 31, 2024 largely due to the capital raise completed in early 2025.

Bank Franchise tax increased during the three months ended March 31, 2026 compared to the same period in 2025 due to a higher estimate for 2026, reflective of the Company's capital level.

Other operating expenses increased by $552 thousand, or 43% during the three months ended March 31, 2026 compared to the three months ended March 31, 2025, largely reflecting higher expenses related to volume based costs and loan collection costs, an increase in director expenses, and higher charitable contributions.

*Efficiency Ratio*

The efficiency ratio of the Company was 67.97% and 72.20% for the three months ended March 31, 2026 and 2025, respectively. The improvement in the efficiency ratio during 2026 reflects an increase in net interest and noninterest income, which was partially offset by an increase in noninterest expenses. The efficiency ratio is not a measurement under GAAP. It is

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calculated by dividing noninterest expense by the sum of tax equivalent net interest income and noninterest income. The Company adjusts for non-recurring items such as gains and losses on the investment portfolio and other gains/losses from OREO, repossessed assets, disposals of bank premises and equipment, etc. The tax rate utilized is 21%. The Company calculates and reviews this ratio as a means of evaluating operational efficiency.

The calculation of the efficiency ratio for the three months ended March 31, 2026 and 2025 was as follows:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
|  | **2026** | **2025** |
|  | **(in thousands)** | **(in thousands)** |
| Summary of Operating Results: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Noninterest expenses (GAAP) | $14212 | $12589 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: Loss on sale of repossessed assets | 39 | 133 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted noninterest expenses (Non-GAAP) | $14173 | $12456 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net interest income | 15903 | 13336 |
| &nbsp;&nbsp;&nbsp;&nbsp;Noninterest income (loss) (GAAP) | 4928 | (8554) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: (Loss) on the sale and disposal of premises and equipment |  | (16) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: (Loss) on the sale of securities |  | (12425) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjusted noninterest income (Non-GAAP) | $4928 | $3887 |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax equivalent adjustment <sup>(1)</sup> | 20 | 28 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net interest income and noninterest income, adjusted (Non-GAAP) | $20851 | $17251 |
| Efficiency ratio | 67.97% | 72.20% |

---

(1)Includes tax-equivalent adjustments on loans and securities using the federal statutory tax rate of 21%.

*Income Taxes*

The following table presents the Company's income tax provision (benefit) and effective tax rate for the periods indicated:

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| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
| **(dollars in thousands)** | **2026** | **2025** |
| Income tax expense (benefit) | $918 | $(2066) |
| Effective income tax rate | 19.71% | (22.85)% |

---

Income tax expense for the three months ended March 31, 2026 was comprised of federal and state income taxes of $874 thousand and $44 thousand, respectively. For the three months ended March 31, 2025, the Company recognized a net income tax benefit of $2.1 million, which represented a federal income tax benefit partially offset by state income taxes of $1 thousand. The increase in income tax expense reflects the level of net income recognized during the first quarter of 2026 compared to a net loss recognized in the first quarter of 2025.

The effective tax rate for the three months ended March 31, 2026 was below the statutory rate of 21% due primarily to the recognition of tax-exempt life insurance income. The effective tax rate was also impacted by tax-exempt income on investment securities and loans, qualified rehabilitation credits and tax credits on qualified affordable housing project investments. The effective tax rate for the three months ended March 31, 2025 was also impacted by the balance sheet repositioning transaction previously discussed in the "Non-GAAP Financial Measures" section above.

*Business Segments*

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The Company has three reportable operating segments: community banking, marine lending and wealth management. See Note 16 to the Consolidated Financial Statements.

The following table presents a summarized statement of operations for the community banking business segment for the three months ended March 31, 2026 and 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** |
| **(dollars in thousands)** | **2026** | **2025** | **$ Change** | **% Change** |
| Interest Income | $21594 | $20796 | $798 | 4% |
| Interest Expense | 6755 | 8616 | (1861) | (22)% |
| Net interest income | $14839 | $12180 | $2659 | 22% |
| Gain on sales of loans | 1012 | 429 | 583 | 136% |
| (Loss) on the sale of securities |  | (12425) | 12425 | NM |
| Other noninterest income | 2091 | 1718 | 373 | 22% |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Revenue | 17942 | 1902 | 16040 | 843% |
| Provision for credit losses | 1942 | 1377 | 565 | 41% |
| Noninterest expense | 13327 | 11712 | 1615 | 14% |
| &nbsp;&nbsp;&nbsp;&nbsp;Income (Loss) before taxes | 2673 | (11187) | 13860 | (124)% |
| Income tax expense (benefit) | 525 | (2506) | 3031 | 121% |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Income (Loss) | $2148 | $(8681) | $10829 | (125)% |

---

Net interest income increased during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to income earned on: i) non-marine loans; ii) the investment securities portfolio, which was restructured in the first quarter of 2025 to sell and replace lower yielding investments with higher yielding securities; iii) reduction in time deposit interest expense due primarily to lower average rates paid; and iv) reduction in borrowings interest expense as FHLB advances have matured. These increases were partially offset by a decrease in the level of interest-earning deposits balances in other banks as cash was deployed to payoff the Company's remaining FHLB advances, as well as an increase in customer NOW and money market deposit balances.

Provision for credit losses reflects net recoveries totaling $34 thousand and net charge-offs totaling $891 thousand for the three months ended March 31, 2026 and 2025, respectively, as well as specific reserves of $2.1 million and $152 thousand, respectively. The increase in the specific reserve was primarily attributable to two commercial and industrial relationships for which new or increased specific allocations were recorded during the first quarter of 2026.

Loss on the sale of securities during the three months ended March 31, 2025 resulted from the Company's execution of balance sheet repositioning transactions within its investment securities portfolio in March 2025. Available for sale debt securities totaling $99.2 million, with a fair value of $86.8 million, were sold and a pre-tax loss of $12.4 million was recognized.

The increase in income tax expense during the three months ended March 31, 2026 was due to the Company's net income compared to its net loss recorded during three months ended March 31, 2025, which was directly related to the recognized loss on the sale of securities during the 2025 period.

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The following table presents a summarized statement of operations for the marine lending segment for the three months ended March 31, 2026 and 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** |
| **(dollars in thousands)** | **2026** | **2025** | **$ Change** | **% Change** |
| Interest Income | $2232 | $2706 | $(474) | (18)% |
| Interest Expense <sup>(1)</sup> | 814 | 1196 | (382) | (32)% |
| Net interest income | $1418 | $1510 | $(92) | (6)% |
| Gain on sales of loans |  |  |  | —% |
| Other noninterest income |  |  |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Revenue | 1418 | 1510 | (92) | (6)% |
| Provision for (recovery of) credit losses | 19 | (144) | 163 | (113)% |
| Noninterest expense | 93 | 104 | (11) | (11)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Income before taxes | 1306 | 1550 | (244) | (16)% |
| Income tax expense | 274 | 326 | (52) | (16)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Income | $1032 | $1224 | $(192) | (16)% |

---

(1) Allocation of interest expense is a function of the Bank's internal cost of funds rate and the average loan balance of the marine lending portfolio.

Net revenues declined due to pay downs in the portfolio, which are not being replaced with new loan originations. The marine loan portfolio totaled $170.2 million and $203.5 million at March 31, 2026 and March 31, 2025, respectively.

Provision for credit losses increased reflecting an increase in the historical loss factor, which was partially offset by declining loan balances during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The following table presents a summarized statement of operations for the wealth management segment for the three months ended March 31, 2026 and 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** | **For the Three Months Ended March 31,** |
| **(dollars in thousands)** | **2026** | **2025** | **$ Change** | **% Change** |
| Interest Income | $— | $— | $— | —% |
| Interest Expense |  |  |  | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Interest Income | $— | $— | $— | —% |
| Gain on sales of loans |  |  |  | —% |
| Other noninterest income | $1825 | $1724 | $101 | 5.86% |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Revenue | 1825 | 1724 | 101 | 6% |
| Provision for credit losses |  |  |  | —% |
| Noninterest expense | 675 | 683 | (8) | (1)% |
| &nbsp;&nbsp;&nbsp;&nbsp;Income before taxes | 1150 | 1041 | 109 | 10% |
| Income tax expense | 242 | 219 | 23 | 11% |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Income | $908 | $822 | $86 | 10% |

---

Net revenue increased during the three months ended March 31, 2026 over the 2025 periods due to increases in trust services income reflecting fees earned on a higher level of assets under management and estate settlements, partially offset by a decrease in investment sales revenue. Assets under management were $574.4 million and $525.9 million at March 31, 2026 and 2025, respectively.

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FINANCIAL CONDITION

Select financial condition data is presented in the following table:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **March 31,** | **December 31,** |  |  |
| **(dollars in thousands)** | **2026** | **2025** | **$ Change** | **% Change** |
| Securities available for sale | $115370 | $119543 | $(4173) | (3)% |
| Loans | 1458859 | 1473077 | (14218) | (1)% |
| Allowance for credit losses | (17326) | (15320) | (2006) | 13% |
| Total assets | 1838360 | 1888626 | (50266) | (3)% |
| Total deposits | 1598219 | 1607360 | (9141) | (1)% |
| FHLB advances |  | 40000 | (40000) | (100)% |
| Total shareholders' equity | 190326 | 188839 | 1487 | 1% |

---

*Securities*

The carrying amounts of the Company's available for sale securities are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** |
| **(dollars in thousands)** | **Amount** | **Percent** | **Amount** | **Percent** |
| Obligations of U.S. government corporations and agencies | $7204 | 6% | $7444 | 6% |
| U.S. Treasury securities | 9872 | 9% | 10001 | 8% |
| Mortgage-backed securities | 72256 | 63% | 75129 | 63% |
| Collateralized mortgage obligations | 22069 | 19% | 22495 | 19% |
| Subordinated debt | 3969 | 3% | 4474 | 4% |
| &nbsp;&nbsp;Total securities available for sale at fair value | $115370 | 100% | $119543 | 100% |

---

Total securities available for sale decreased $4.2 million, or 3.49% during the three months ended March 31, 2026. The Company purchased $9.8 million of securities during the three months ended March 31, 2026 and had total maturities, calls, and principal repayments of $13.3 million. There were no sales during the three months ended March 31, 2026.

Net unrealized loss on available for sale securities was $7.5 million at March 31, 2026 as compared to a net unrealized loss of $6.7 million at December 31, 2025. Unrealized gains or losses on available for sale securities are reported within shareholders' equity, net of the related deferred tax effect, as accumulated other comprehensive income (loss).

The primary cause of the unrealized losses at March 31, 2026 and December 31, 2025 was changes in market interest rates, rather than other market conditions or credit concerns of the issuers over the time between purchase and measurement periods. Since the losses can be primarily attributed to changes in market interest rates and conditions and not expected cash flows or an issuer's financial condition and management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, the Company concluded a credit loss did not exist.

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*Loan Portfolio*

The Company's primary use of funds is supporting lending activities from which it derives the greatest amount of interest income. Details of the Company's loan portfolio are presented below:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** |
| **(dollars in thousands)** | **Amount** | **Percent to Total Loans** | **Amount** | **Percent to Total Loans** |
| Mortgage real estate loans: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;HELOCs | $58784 | 4% | $58640 | 4% |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Investor | 107084 | 7% | 107307 | 7% |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential First Lien - Owner Occupied | 176378 | 12% | 178807 | 12% |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential Junior Liens | 10775 | 1% | 10724 | 1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total residential real estate loans | 353021 | 24% | 355478 | 24% |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial - Owner Occupied | 313161 | 21% | 298853 | 20% |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial - Non-Owner Occupied & Multifamily | 389878 | 27% | 398926 | 27% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total commercial real estate loans | 703039 | 48% | 697779 | 47% |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction & Secured by Farmland | 82594 | 6% | 82336 | 6% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total mortgage real estate loans | 1138654 | 78% | 1135593 | 77% |
| Commercial and industrial loans | 101289 | 7% | 113224 | 8% |
| Marine loans | 170217 | 12% | 175639 | 12% |
| Consumer loans | 30495 | 2% | 28742 | 2% |
| Other loans | 12915 | 1% | 14264 | 1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | 1453570 | 100% | 1467462 | 100% |
| Net deferred loans costs and premiums | 5289 |  | 5615 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross loans | $1458859 |  | $1473077 |  |

---

Gross loans were $1.46 billion and $1.47 billion at March 31, 2026 and December 31, 2025, respectively. This represents a decrease of $14.2 million, or 0.97%, during the three months ended March 31, 2026. The ratio of gross loans to deposits decreased during the three months ended March 31, 2026 from 91.65% at December 31, 2025 to 91.28% at March 31, 2026 reflecting the decrease in gross loans, mostly offset by a .57% decrease in deposits during the same time period.

The loan portfolio consists primarily of loans for owner-occupied single-family dwellings and loans secured by commercial real estate. The decline in gross loans is primarily attributable to SBA loan sales, marine loan portfolio paydowns, and significant payoffs of matured commercial and industrial and municipal notes. This decline was partially offset by growth within the commercial real estate loan portfolio.

During the three months ended March 31, 2026, through the normal course of business, $24.1 million in loans were sold, consisting of $16.6 million in mortgage loans originated for sale and $7.5 million of SBA commercial loans.

Commercial real estate loans increased during the three months ended March 31, 2026 with growth in the owner occupied portfolio. The Company experienced steady activity across commercial business lines reflecting its focus on relationship-based lending in its core markets.

Marine loans are declining due to normal paydowns and payoffs only as the Company is no longer accepting new marine business. At present, the Company expects to hold the remaining outstanding loans until they are ultimately repaid.

*Allowance for Credit Losses on Loans*

The purpose of, and the methods for, measuring the allowance for credit losses on loans are discussed in Note 1 to the Consolidated Financial Statements in the 2025 Form 10-K.

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The following table presents the activity in the allowance for credit losses on loans and related ratios for the periods indicated:

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| | | |
|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** |
|  | **March 31,** | **March 31,** |
| **(dollars in thousands)** | **2026** | **2025** |
| Balance at beginning of period | $15320 | $15027 |
| Charge-Offs |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction & secured by farmland |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential real estate |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial real estate |  | (971) |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial | (82) | (49) |
| &nbsp;&nbsp;&nbsp;&nbsp;Marine |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | (26) | (33) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | (47) | (23) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total charge-off's | (155) | (1076) |
| Recoveries |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction & secured by farmland | 1 | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Residential real estate | 145 | 153 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial real estate |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Commercial | 25 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;Marine |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 9 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 9 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total recoveries | 189 | 185 |
| Net recoveries (charge-off's) | 34 | (891) |
| Provision for credit losses on loans | 1972 | 1146 |
| Balance at end of period | $17326 | $15282 |
| Net recoveries (charge-off's) to average loans (annualized) | 0.01% | (0.25)% |
| Allowance for credit losses on loans as a percentage of gross loans | 1.19% | 1.05% |

---

During the three months ended March 31, 2026, the Company recorded net recoveries of $34 thousand primarily due to a recovery on a residential mortgage loan. Charge-offs during three months ended March 31, 2026 primarily consisted of one commercial loan secured by equipment and writeoffs of overdraft and credit card accounts.

During the three months ended March 31, 2025, charge-offs were primarily related to one non-owner occupied commercial loan relationship consisting of four residential multifamily income producing properties. Recoveries were $185 thousand resulting in net charge-offs of $891 thousand for the three months ended March 31, 2025.

The increase of 14 basis points in the allowance for credit losses on loans to gross loans ratio largely reflects the increase in specific reserve allocations required at March 31, 2026. The increase was also attributable to changes in historical loss ratios, primarily within the consumer and non-owner occupied commercial real estate portfolios.

Management believes that the allowance for credit losses on loans is currently adequate to absorb the current expected losses in the loan portfolio.

*Credit Risk, Nonperforming Assets and Other Assets*

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

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current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk on a quarterly basis. The following table presents credit risk ratings as of March 31, 2026 and December 31, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **March 31, 2026** | **March 31, 2026** | **December 31, 2025** | **December 31, 2025** |
| **(dollars in thousands)** | **Amount** | **Percent to Total Loans** | **Amount** | **Percent to Total Loans** |
| Risk categories |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pass | $1383705 | 95% | $1396752 | 95% |
| &nbsp;&nbsp;&nbsp;&nbsp;Special Mention | 49653 | 4% | 54752 | 4% |
| &nbsp;&nbsp;&nbsp;&nbsp;Classified | 20212 | 1% | 15958 | 1% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total loans | $1453570 | 100% | $1467462 | 100% |

---

Loans risk rated as special mention, which exhibit negative trends and potential weaknesses include loans with stale financial information. Of the total special mention loans, $37.0 million had stale financial information at March 31, 2026 compared to $35.7 million at December 31, 2025.

Loans risk rated as classified, include substandard, doubtful, and loss loans increased primarily due to one commercial real estate relationship being downgraded from special mention to classified during the first quarter of 2026 due to cash flow concerns. This relationship consists of a non-owner occupied office building that is active, accruing and current at March 31, 2026.

All other loans were classified as pass, exhibiting acceptable history of profits, cash flow ability and liquidity.

Nonperforming assets and related ratios are detailed in the table below:

---

| | | |
|:---|:---|:---|
| **(dollars in thousands)** | **March 31, 2026** | **December 31, 2025** |
| Nonaccrual loans | $14711 | $14398 |
| Loans past due 90 days or more and accruing interest | 13 | 60 |
| Other real estate owned and repossessed assets |  | 135 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total nonperforming assets | $14724 | $14593 |
| Allowance for credit losses on loans | $17326 | $15320 |
| Gross loans | $1458859 | $1473077 |
| Allowance for credit losses on loans to nonperforming assets | 118% | 105% |
| Allowance for credit losses on loans to total gross loans | 1.19% | 1.04% |
| Allowance for credit losses on loans to nonaccrual loans | 118% | 106% |
| Nonaccrual loans to total gross loans | 1.01% | 0.98% |
| Non-performing assets to period end gross loans, other real estate owned and repossessed assets | 1.01% | 0.99% |

---

Nonperforming assets increased slightly during the three months ended March 31, 2026, reflecting the addition of two small loans to nonaccrual status, partially offset by the sale of one repossessed assets.

Total past due loans, as disclosed in Note 5 to the Consolidated Financial Statements, increased by $2.5 million and totaled $19.4 million at March 31, 2026 compared to $16.9 million at December 31, 2025. The increase in past due loans primarily reflects loans secured by commercial real estate in the past due 30-59 days category. One owner occupied commercial real estate loan totaling $4.4 million became past due and a non-owner occupied commercial real estate loan totaling $1.9 million moved into current status during the three months ended March 31, 2026. Both of these loans are rated special mention.

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Nonaccrual loans are risk rated as classified and comprised the majority of the classified loan balance as previously described. Management evaluates the financial condition of borrowers and the value of any collateral on nonaccrual loans. The results of these evaluations are used to estimate the amount of losses which may be realized on the disposition of these nonaccrual loans and are reflected in the allowance for credit losses on loans. At March 31, 2026 total specific reserves of $2.1 million were required primarily reflecting four commercial relationships, compared to specific reserves of $467 thousand at December 31, 2025.

Loans are placed on nonaccrual status when collection of principal and interest is doubtful, generally when a loan becomes 90 days past due. There are three negative implications for earnings when a loan is placed on non-accrual status. First, all interest accrued but unpaid at the date that the loan is placed on non-accrual status is either deducted from interest income or written off as a loss. Second, accruals of interest are discontinued until it becomes certain that both principal and interest can be repaid. Finally, there may be actual losses to principal that require additional provisions for credit losses to be charged against earnings.

For real estate loans, upon foreclosure, the balance of the loan is transferred to OREO and carried at the fair value of the property based on current appraisals and other current market trends, less estimated selling costs. If a write down of the OREO property is necessary at the time of foreclosure, the amount is charged-off to the allowance for credit losses. A review of the recorded property value is performed in conjunction with normal quarterly reviews, and if market conditions indicate that the recorded value exceeds the fair value, additional write downs of the property value are charged directly to operations.

*Deposits*

Total deposits were $1.60 billion and $1.61 billion at March 31, 2026 and December 31, 2025, respectively. This represents a decrease of $9.1 million or 0.57% during the three months ended March 31, 2026.

The following table provides the composition of total deposits at March 31, 2026 and December 31, 2025.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(dollars in thousands)** | **March 31,<br>2026** | **December 31,<br>2025** | **$ Change** | **% Change** |
| Noninterest bearing demand deposits | $455107 | $432171 | $22936 | 5% |
| NOW accounts | 309903 | 322687 | (12784) | (4)% |
| Money market accounts | 294810 | 282828 | 11982 | 4% |
| Regular savings accounts | 123609 | 123030 | 579 | 0% |
| Time deposits less than $250,000 | 239897 | 262390 | (22493) | (9)% |
| Time deposits $250,000 and more | 174893 | 184254 | (9361) | (5)% |
| &nbsp;&nbsp;Total deposits | $1598219 | $1607360 | $(9141) | (1)% |
| Core deposits <sup>(1)</sup> | $1334448 | $1304733 | 29715 | 2% |
| Core deposits as a percent of total deposits | 83% | 81% |  |  |
| Non-core deposits <sup>(2)</sup> | $263771 | $302627 | (38856) | (13)% |
| Non-core deposits as a percent of total deposits | 17% | 19% |  |  |

---

(1) Core deposits consist of checking accounts, NOW accounts, money market accounts, regular savings accounts and time deposits less than $250,000, excluding wholesale or brokered deposits.

(2) Non-core deposits consist of brokered deposits, CDARs and time deposits of $250,000 or more.

The decline in deposits was due to a decrease in non-core deposits of $38.9 million, reflecting runoff of higher cost deposits, partially offset by core deposits which increased $29.7 million during the three months ended March 31, 2026. The increase in core deposits was in line with management's effort to grow these deposits to support loan expansion.

In general, deposit pricing is done in response to monetary policy actions and yield curve changes. Local competition for funds also affects the cost of time deposits. Marketing efforts, including rate specials and emphasis on customer relationships are utilized to maintain maturing accounts and to acquire new time deposit accounts. At March 31, 2026, over 86% of deposits were fully FDIC insured.

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CAPITAL RESOURCES

The Bank continues to be a well capitalized financial institution. Total shareholders' equity at March 31, 2026 was $190.3 million, reflecting a percentage of total assets of 10.35%, as compared to $188.9 million and 10.00% at December 31, 2025. The $1.5 million increase in shareholders' equity was primarily due to net operating income of $3.7 million earned during the three months ended March 31, 2026, partially offset by an increase in unrealized losses on available for sale securities amounting to $705 thousand, net of tax and dividends declared of $1.7 million. During each of the three months ended March 31, 2026 and 2025, the Company declared dividends of $0.31. The Company has a Dividend Investment Plan that allows shareholders to reinvest dividends in Company stock.

At March 31, 2026, the Bank met all capital adequacy requirements and had regulatory capital ratios in excess of the levels established for well-capitalized institutions. The Bank monitors these ratios on a quarterly basis and has several strategies, including without limitation the issuance of common stock, to ensure that these ratios remain above regulatory minimums. The Bank's capital amounts and ratios are presented using the Federal Reserve's risk-based capital framework.

The risk-based capital rules require the Bank to comply with the following minimum capital ratios: (i) a common equity Tier 1 capital ratio of 4.5% of risk-weighted assets; (ii) a Tier 1 capital ratio of 6.0% of risk-weighted assets; (iii) a total capital ratio of 8.0% of risk-weighted assets; and (iv) a leverage ratio of 4.0% of total assets. In addition, a capital conservation buffer requirement of 2.5% was effective January 1, 2019. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with any ratio (excluding the leverage ratio) above the minimum but below the conservation buffer will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. The capital conservation buffer rule requires the Bank to maintain (i) a minimum ratio of common equity Tier 1 to risk-weighted assets of at least 4.5%, plus a 2.5% "capital conservation buffer" (which is added to the 4.5% common equity Tier 1 ratio, effectively resulting in a minimum ratio of common equity Tier 1 to risk-weighted assets of at least 7.0%), (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the 2.5% capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio, effectively resulting in a minimum Tier 1 capital ratio of 8.5%), (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0%, plus the 2.5% capital conservation buffer (which is added to the 8.0% total capital ratio, effectively resulting in a minimum total capital ratio of 10.5%), and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average assets.

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At March 31, 2026 and December 31, 2025, the Bank's regulatory capital and related ratios were as follows:

---

| | | |
|:---|:---|:---|
| **(dollars in thousands)** | **March 31,<br>2026** | **December 31,<br>2025** |
| Tier 1 Capital: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock | $1682 | $1682 |
| &nbsp;&nbsp;&nbsp;&nbsp;Capital surplus | 9773 | 9773 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 212828 | 211730 |
| &nbsp;&nbsp;&nbsp;&nbsp;Nonmortgage servicing assets | (742) | (637) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Tier 1 capital | $223541 | $222548 |
| Common equity tier 1 capital | $223541 | $222548 |
| Tier 2 Capital: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowable portion of allowance for credit losses and reserve for off-balance sheet commitments | $17641 | $15128 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Tier 2 capital | $17641 | $15128 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total risk-based capital | $241182 | $237676 |
| Risk weighted assets | $1544456 | $1530835 |
| Capital Ratios: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common equity Tier 1 capital ratio | 14.47% | 14.54% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 risk-based capital ratio | 14.47% | 14.54% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total risk-based capital ratio | 15.62% | 15.53% |
| &nbsp;&nbsp;&nbsp;&nbsp;Tier 1 leverage ratio | 11.94% | 11.68% |

---

Pursuant to the Federal Reserve's Small Bank Holding Company and Savings and Loan Holding Company Policy Statement, qualifying bank holding companies with total consolidated assets of less than $3 billion, such as the Company, are not subject to consolidated regulatory capital requirements.

LIQUIDITY

Liquidity management involves meeting the present and future financial obligations of the Company with the sale or maturity of assets or with the occurrence of additional liabilities. Liquidity needs are met with cash on hand, deposits in banks, federal funds sold, unpledged securities classified as available for sale and loans maturing within one year. At March 31, 2026, liquid assets totaled $429.1 million as compared to $423.4 million at December 31, 2025. These amounts represented 26.04% and 24.91% of total liabilities at March 31, 2026 and December 31, 2025, respectively. The increase during the first quarter of 2026 was primarily due to an increase in unpledged securities classified as available for sale as well as an increase in balance of loans maturing within one year, offset by lower levels of deposits with other institutions and federal funds sold.

The Company generally attempts to minimize liquidity demand by primarily utilizing core deposits to fund asset growth. Securities provide a constant source of liquidity through paydowns and maturities. Also, the Company maintains short-term borrowing arrangements, including the Federal Reserve discount window and federal funds lines of credit with larger financial institutions as additional sources of liquidity. The Bank's membership with the Federal Home Loan Bank of Atlanta provides a source of borrowings with numerous rate and term structures. The Company's senior management monitors the liquidity position regularly and attempts to maintain a position which utilizes available funds most efficiently.

OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

There have been no material changes in off-balance sheet arrangements and contractual obligations as reported in the 2025 Form 10-K.

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

There have been no material changes in Quantitative and Qualitative Disclosures about Market Risk as reported in the 2025 Form 10-K.

**Item 4. Controls and Procedures**

Disclosure Controls and Procedures

The Company, under the supervision and with the participation of management, including the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective as of March 31, 2026 to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and that such information is accumulated and communicated to the Company's management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting

Management is also responsible for establishing and maintaining adequate internal control over the Company's financial reporting (as defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934, as amended). The Company is currently using the 2013 COSO Framework.

There were no changes in the Company's internal control over financial reporting during the Company's three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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**PART II - OTHER INFORMATION**

**Item 1. Legal Proceedings**

There are no material pending legal proceedings to which the Company is a party or of which the property of the Company is subject.

**Item 1A. Risk Factors**

There were no material changes to the Company's risk factors as disclosed in the 2025 Form 10-K.

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

The following table details the Company's purchases of its common stock during the first quarter of 2026 pursuant to its Stock Repurchase Program ("the Program"). On June 18, 2025, the Board of Directors of the Company re-authorized the purchase of up to 150,000 shares for repurchase under the Program. The Program expires on June 30, 2026.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Issuer Purchases of Equity Securities** | **Issuer Purchases of Equity Securities** | **Issuer Purchases of Equity Securities** | **Issuer Purchases of Equity Securities** |
|  | **Total Number<br>of Shares<br>Purchased** | **Average Price<br>Paid Per Share** | **Total Number<br>of Shares<br>Purchased as<br>Part of<br>Publicly<br>Announced Plan** | **Maximum<br>Number of<br>Shares that<br>may Yet Be<br>Purchased<br>Under the<br>Plan** |
|  |  |  |  | 149182 |
| January 1 - January 31, 2026 | 7235 | $39.30 | 7235 | 141947 |
| February 1 - February 28, 2026 |  |  | 7235 | 141947 |
| March 1 - March 31, 2026 |  |  | 7235 | 141947 |
|  | 7235 | $39.30 | 7235 | 141947 |

---

**Item 3. Defaults Upon Senior Securities**

None.

**Item 4. Mine Safety Disclosures**

None.

**Item 5. Other Information**

During the fiscal quarter ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408(a) of Regulation S-K).

The Bank is a member in Bankers Title Shenandoah, LLC, which is an investor in Bearing Insurance Group, LLC ("Bearing"). On May 1, 2026, Bearing was sold to an unaffiliated third party. Based on the Company's ownership percentage in Bearing, a pre-tax gain of approximately $3.5 million is estimated to be recognized from this sale and included in the Company's financial results for the second quarter of 2026.

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**Item 6. Exhibits**

The following exhibits are filed with this Form 10-Q or incorporated by reference to previous filings. This list includes the exhibit index:

---

| | |
|:---|:---|
| [<u>31.1</u>](efsi-ex31_1.htm) | Certification by Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| [<u>31.2</u>](efsi-ex31_2.htm) | Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| [<u>32.1</u>](efsi-ex32_1.htm) | Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 101 | The following materials from the Eagle Financial Services, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 formatted in Inline Extensible Business Reporting Language (XBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (iv) Consolidated Statements of Changes in Shareholders' Equity, (v) Consolidated Statements of Cash Flows and (vi) notes to Consolidated Financial Statements. |
| 104 | The cover page from the Eagle Financial Services, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 formatted in Inline XBRL (included with Exhibit 101). |

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, this 11th day of May, 2026.

**Eagle Financial Services, Inc.**

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| | |
|:---|:---|
| By: | /S/ BRANDON C. LOREY |
|  | Brandon C. Lorey<br>President and Chief Executive Officer |
| By: | /S/ KATHLEEN J. CHAPPELL |
|  | Kathleen J. Chappell<br>Executive Vice President, Chief Financial Officer |

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## Exhibit 31.1

**EXHIBIT 31.1**

**CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO RULES 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Brandon C. Lorey, certify that:

1. I have reviewed the quarterly report on Form 10-Q of Eagle Financial Services, Inc. for the period ended March 31, 2026;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| Date: May 11, 2026 | By: | /s/ BRANDON C. LOREY |
|  |  | **Brandon C. Lorey** |
|  |  | **President and Chief Executive Officer** |

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## Exhibit 31.2

**EXHIBIT 31.2**

**CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO RULES 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Kathleen J. Chappell, certify that:

1. I have reviewed the quarterly report on Form 10-Q of Eagle Financial Services, Inc. for the period ended March 31, 2026;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: May 11, 2026 | By: | /s/ KATHLEEN J. CHAPPELL |
|  |  | **Kathleen J. Chappell** |
|  |  | **Executive Vice President and Chief Financial Officer** |

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## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the quarterly report on Form 10-Q of Eagle Financial Services, Inc. (the "Company") for the period ending March 31, 2026 to be filed with the Securities and Exchange Commission (the "Report"), the undersigned Chief Executive Officer and Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. Code Section 1350, as adopted pursuant to Code Section 906 of the Sarbanes-Oxley Act of 2002, that, to our knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: May 11, 2026 | By: | /s/ BRANDON C. LOREY |
|  |  | **Brandon C. Lorey** |
|  |  | **President and Chief Executive Officer** |
|  |  | /s/ KATHLEEN J. CHAPPELL |
|  |  | **Kathleen J. Chappell** |
|  |  | **Executive Vice President and Chief Financial Officer** |

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