NWPP 10-K & 10-Q changes, risk factors and insider trading

Caution About Forward LookingForward-Looking Statements

We make forward looking forward-looking statements in this annual report on Form 10-K that are subject to risks and uncertainties. These forward-looking statements include statements regarding expectations, intentions, projectionsprojections, and beliefs concerning our profitability, liquidity, and allowance for credit losses, interest rate sensitivity, market risk, growth strategy, and financial and other goals. The words “believes,” “expects,” “may,” “will,” “should,” “projects,” “contemplates,” “anticipates,” “forecasts,” “intends,” or other similar words or terms are intended to identify forward lookingforward-looking statements. These forward-looking statements are based on various factors and were derived using numerous assumptions as of the date of this Form 10-K and are subject to significant risks.

New Peoples generates a significant amount of its income from the net interest income earned by the Bank. Net interest income is the difference between interest income and interest expense. Interest income depends on the volume of interest-earning assets outstanding during the period and the interest rates earned thereon. The Bank's interest expense is a function of the average amount of interest-bearing deposits and borrowed money outstanding during the period and the interest rates paid thereon. The quality of theour assets further influences the amount of interest income lost on nonaccruing loans and the amount of provision expense added to the allowance for credit losses. The Bank also generates noninterest income from service charges and fees on deposit accounts, debit and credit card interchange income, and commissions on insurance and investment products sold.

ResultsIn for the year ended December 31, 2024 were impacted by several non-recurring events. On December 31, 20242024, the Bank provided notice of termination of the contract with our core systems provider. We plan to complete the conversion to a new core systems provider in the fourth quarter of 2025. As a result of thethis termination notice, we recordeddecision, termination charges and certain conversion costs were recorded in 2024, totaling an estimated to be $850,000. DuringAdditionally, during the fourth quarter of 2024, we had completed two transactions in our bank owned life insurance portfolio (“BOLI”) that disposed of the entire portfolio. One policy was cancelled and redeemed, resulting in a loss of $49,000;approximately and$49,000, while a benefit claim was filed on the second policypolicy, resulting in a gain of $1.6 million. After consideration of the tax impact, these non-recurring items increased 2024 earnings by $756,000approximately $756,000, or $0.03 per basic and diluted share. The Inconversion 2023,to otherthe noninterest incomenew includedcore $257,000systems provider was completed in insurancethe proceedsfourth recoveryquarter relatedof to2025. After consideration of the tax impact, additional conversion-related costs incurreddecreased duringearnings thefor cybersecurity2025 incidentby inapproximately 2022.$221,000, Theor following non-GAAP$0.01 tableper summarizesbasic theand impactdiluted of these nonrecurring events:share.

Adjusted net income and net income per share are non-GAAP financial measures that management uses to supplement the evaluation of theNew Company’sPeoples’s operating results and believes is beneficial to the users of its financial statements in evaluating theNew Company’sPeoples’s current operating results in relation to past periods.

As discussed in “Net Interest Income and Net Interest MarginMargin,”, net interest income for the year ended December 31, 20242025 was $28.5$33.2 million compared to $28.0 $28.5 million for the year ended December 31, 2023.2024. The increase was primarily due to a $59.6$41.0 million increase in average earning assets.assets and a 37 basis point improvement in the net interest margin. Average interest-bearing liabilities increased $65.3$26.2 million to $549.5$575.7 million during the comparative twelve-month periods.

Total assets as of December 31, 20242025 were $854.9$909.7 million, an increase of $28.6$54.8 million, or 3.46%,6.41%, from $826.3$854.9 million as of December 31, 2023.2024. Gross loans increased $19.4$52.1 million, or 3.04%,7.92%, during 2024 2025 due to continuing loan demand. Investment securities increased $6.2approximately million $449,000 during 20242025 primarily due to a $5.2 million improvement in the unrealized loss on investment securities and purchases executed throughout throughout the year.year largely offset by maturities, calls, payments, and amortization. All of theNew Company'sPeoples's investments are designated as available-for-sale.

Deposits totaled $798.3 million as of December 31, 2025 compared to $750.0 million as of December 31, 2024 compared to $716.5 million as of December 31, 2023.2024. The increase of $33.5$48.3 million, or 4.68%,6.44%, was due to efforts to attract and retain deposits, specifically time deposits through targeted promotional rates and terms and money market accounts through moredisciplined aggressive pricing of rates, combined with cyclical funds inflows.pricing. As a result of these efforts, total time deposits increased $16.4$23.1 million and money market and saving accounts increased $28.2 million during the year ended December 31, 2024.2025.

New Peoples Bank remains well-capitalized.well-capitalized Theas of December 31, 2025 and had a leverage ratio isof 10.93% compared to 10.70% as of December 31, 2024, compared to 11.11% as of December 31, 2023.2024.

TheNew Company’s Peoples’s key performance indicators are as follows:

Average Balances, Income and Expense, and Yields and Yields and Rates

Net interest income is affected by changes in both average interest rates and average volumes (balances) of interest-earning assets and interest-bearing liabilities. The following tables set forth the amounts of the total changes in interest income and interest expense which can be attributed to rates, volume and a combination of rates and volume, for the periods indicated.

Our primary source of income is interest earned on loans. Total gross loans increased $19.4$52.1 million during 2024,2025, or 3.04%,7.92%, to $709.6 million as of December 31, 2025 as compared to $657.5 million as of December 31, 2024 as compared to $638.1 million as of December 31, 2023.2024. The primary drivers of this increase in total loans were increases in commercial, constructionresidential loans,1-4 commercial family, and multifamily real estate loans andof commercial loans which increased $7.3$12.1 million to $36.1$255.7 million, $3.5$17.8 million to $243.6$252.6 million, and $13.6 million and $7.4 million to $60.6$46.0 million, respectively. These increases resulted from smallcustomer businessrelationship development effortsand throughoutcontinued 2024demand for commercial and a commercial loan promotion offered. In addition, consumer installmentlending and all other loans increased $5.9 million due to private student loan originations of $1.8 millionproducts, and the acquisitionopening of $2.9a millionloan production office in consumerWytheville, loans. These increases offset reductions in residential and multi-family mortgage loans which decreased $3.4 million to $234.9 million and $2.2 million to $32.4 millionVirginia during 2024.2025. For more detail on loan balances, refer to Note 67 of the consolidated financial statements contained in Item 8 of this Form 10-K.

Nonaccrual loans decreased increased approximately $261,000 during 2024$325,000 from $3.5 million as of December 31, 2023 to $3.3 million as of December 31, 2024.2024 to $3.6 million as of December 31, 2025. Nonaccrual loans negatively affect interest income as these loans are nonearning assets. When doubt about the collectability of a loan exists, it is the the Bank’s policy to stop accruing interest on that loan under the following circumstances: (a) whenever we are advised by the borrower that scheduled payment or interest payments cannot be met, (b) when conditions indicate that payment of principal and interest can no longer be expected, or (c) when any such loan becomes delinquent for 90 days and is not both well secured and in the process of collection. All interest accrued but not collected on loans that are placed on nonaccrual is charged off and reversed against interest income in the current period. In the case of a nonaccrual loan that is well secured and in the process of collection, the interest accrued but not collected is not reversed. Interest received on these loans is accounted for on the cash basis or cost-recovery method until qualifying for return to accrual. Generally, loans are returned to accrual status when all the principal and interest amounts contractually contractually due are brought current, six consecutive timely payments are made, and prospects for future contractual payments are reasonably assured. assured. For more detail on nonaccrual loans, refer to Note 67 of the consolidated financial statements in Item 8 of this Form 10-K.

TheNew CompanyPeoples maintains its allowance for credit losses based on the expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities, and some off-balance sheet credit exposures such as unfunded commitments to extend credit. Financial assets measured at amortized cost will be presented at the net amount expected to be collected by using an allowance for credit losses.

TheNew CompanyPeoples primarily utilizes the cohort and the probability of default/loss given default methodologies for its reasonable and supportable forecasting of current expected credit losses. To further adjust the allowance for credit losses for expected losses not already included within the quantitative component of the calculation, theNew CompanyPeoples may consider the following qualitative adjustment factors: changes to: lending policies and procedures, national and local economic conditions, the experience and ability of management and staff, the volume and severity of past due, rated and nonaccrual assets, loan review system, collateral values, concentrations of credit, and legal or regulatory requirements and competition.

TheNew CompanyPeoples measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis. TheNew CompanyPeoples designates loan relationships of $250,000 or more that have been determined to meet the regulatory definitions of “classified” as individually evaluated. The fair value of individually evaluated loans is measured using the fair value of collateral (“collateral method”) or the discounted cash flow (“DCF”) method.

The allowance for credit losses increased to $7.7 million as of December 31, 2024 from $7.3$8.1 million as of December 31, 2023.2025 from $7.7 million as of December 31, 2024. The allowance for credit losses at the end of 20242025 was approximately 1.17% 1.14% of total loans as compared to 1.14%1.17% at the end of 2023.2024. Provisions for credit losses for loans receivable of approximately $506,000 $739,000 and $712,000$506,000 were recorded during the years ended December 31, 20242025 and 2023,2024, respectively. Loans charged off, net of recoveries, totaled approximately $78,000,$316,000, or 0.01%0.05% of average loans, for the year ended December 31, 2024,2025, compared to approximately $103,000,$78,000, or 0.02%0.01% of average loans, in 2023.2024. The allowance for credit losses represents an amount that, in theNew Company's Peoples's judgment, will be adequate to absorb expected and estimable losses inherent in the loan portfolio. The judgment in determining the level of the allowance is based on evaluations of the collectability of loans while taking into consideration such factors as trends in delinquencies and charge-offs for relevant periods of time, changes in the nature and volume of the loan portfolio, current reasonable and supportable forecasts of economic conditions that may affect a borrower's ability to repay and the value of collateral, overall portfolio quality and review of specific potential losses. This evaluation is inherently subjective because it requires estimates that are susceptible to significant revision as more information becomes available.

Nonaccrual loans decreased increased approximately $261,000 during 2024$325,000 from $3.5 million as of December 31, 2023 to $3.3 million as of December 31, 2024.2024 to $3.6 million as of December 31, 2025. The amount of interest income that would have been recognized on these loans had they been accruing interest was approximately $49,000 andfor $61,000both inof the years ended December 31, 2024 2025 and 2023,2024. respectively.Loans past due 90 days or greater and still accruing interest totaled approximately $165,000 at December 31, 2025. There were no loans past due 90 days or greater and still accruing interest atas eitherof December 31, 20242024. or 2023. There are no commitments to lend additional funds to non-performing borrowers.

DuringNet interest income for the firstquarter ended June 30, 2026 was $9.4 million, an increase of $1.2 million, or 14.38%, compared to the second quarter of 2026,2025. interestInterest and dividend income increased $1.2 million to $12.6$13.2 million due to the combination of an increase of 1817 basis points (“bps”) in the yield on earning assets to 5.69%5.78% and a $61.5$60.6 million increase in the average balance of earning assets when compared to the first second quarter of 2025. The loan portfolio was the primary driver of both increases as the yield rose 25 bps to 6.35%6.45% while the average balance increased $57.8$46.4 million compared to the firstsecond quarter of 2025. Also contributing to the improvement in net interest income was lower funding costs. While the average balance of interest-bearing liabilities increased $44.2$40.2 million, the costscost decreased 1814 bps to 2.55%, 2.52%, and total interest expense increased only increased by $39,000$49,000 to $3.8 million during the firstsecond quarter of 2026 as compared to the firstsecond quarter of 2025. The reduction in the cost of interest-bearing liabilities is primarily due to maturing time deposits repricing in a lower interest-rate environment and declines in both the cost and balance of borrowed funds. The decrease in the average balance of borrowed funds was due to a $3 million principal payment on a borrowing from the Federal Home Loan Bank of Atlanta during the fourth quarter of 2025 combined with principal payments made on a trust preferred security in January 2025. In addition, the variable rate paid on the trust preferred securities decreased as overnight and short-term borrowing rates declined during the last half of 2025. The net interest margin improved 30 26 bps to 3.99%4.12% for the quarter endingended MarchJune 31,30, 2026, compared to 3.69%3.86% for the same period in 2025, due to the increase in the yield on earning assets and the decline in the cost of funds. The net interest spread, which is the difference between the yield on interest-earning assets and the costs of interest-bearing liabilities,spread widened by 3631 bps to 3.14%3.26% for the firstsecond quarter of 2026 from 2.78%2.95% for the comparable period of 2025.

Three Months Ended MarchJune 31,30,

Net interest income is affected by changes in both average interest rates and average volumes (balances) of interest-earning assets and interest-bearing liabilities. The following table sets forth the amounts of the total changes in interest income and interest expense which can be attributed to rates and volume for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025.

The provision for credit losses charged to the income statement for the quarter ended MarchJune 31,30, 2026 was $240,000$63,000 compared to $259,000$154,000 for for the three months ended MarchJune 31,30, 2025. The provision expense for the firstsecond quarter of 2026 is mainlyprimarily attributable to growth in the loan portfolio and a modest adjustment to certainthe qualitative factors in the calculation of the allowance for loancredit losses on toone-to-four-family reflectresidential mortgage loans and for geopolitical uncertainty related to the conflict in the Middle East.East and was partially offset by a slight decrease in the overall historical loss rates. The provision expense also benefited from the net recoveries on loans previously charged off and a reduction in the allowance for credit losses duringon theunfunded firstcommitments quarterresulting from ofa 2025decline isin attributable toconstruction loan growth and the impact of valuation allowances for two specifically assessed borrower relationships.commitments. A recovery of credit losses on unfunded commitments of $11,000$5,000 was recognized for the firstsecond quarter of 2026 due to a $2.1$4.6 million reduction in commitments on construction loans. The provision for credit losses on unfunded commitments for the firstsecond quarter of 2025 was $92,000, reflecting an $11.6 million, or 31.84%, increase in unfunded commitments on construction loans.$0.

Noninterest income, totaling $2.6$2.5 million for the firstsecond quarter of 2026, increased $217,000$84,000 compared to the quarter ended MarchJune 31,30, 2025. The improvement improvement was driven primarily by a $101,000 increase in income from financial and investment services and a $121,000$100,000 increase in income from card processing.processing and interchange income.

The efficiency ratio, which is defined as noninterest expense divided by the sum of net interest incomeincome, on a tax-equivalent basis, plus noninterest income, decreased to 63.17%61.93% during the firstsecond quarter of 2026 from 72.55%67.70% for the firstsecond quarter of 2025. We continue to assess our operational procedures and structure to improve efficiencies and contain costs.

Income tax expense for the firstsecond quarter of 2026 totaled $912,000,$1,020,000, an increase of $328,000,$269,000, or 56.16%,35.82%, from $584,000$751,000 recorded during the same period in 2025. This increase was in line with the same periodincrease in pre-tax income which increased $1.2 million or 36.19% for the comparative three months ended June 30, 2026 and 2025. The effective tax rate for the three months ended MarchJune 31,30, 2026, was 22.95%,22.81%, compared to 23.43%22.88% for the same period in 2025.

Total assets as of MarchJune 31,30, 2026,2026 were $939.6$942.2 million, an increase of $29.9$32.5 million, or 3.28%,3.57%, from $909.7 million as of December 31, 2025. 2025. GrossLoans loansheld for investment of $723.3$732.3 million as of MarchJune 31,30, 2026 reflected an increase of $13.7$22.7 million, or 1.93%,3.20%, from $709.6 million as of December 31, 2025. During the second quarter of 2026, the Company transferred its $1.3 million credit card portfolio from loans held for investment to loans held for sale based on management’s decision to sell the portfolio. The sale of the portfolio is not expected to be finalized until 2027. Liquid assets in the form of cash and cash equivalents increased $15.7 $7.1 million, or 20.31%,9.20%, during the first quartersix months of 2026 mainly due to the seasonal increase in deposits.2026. Investment securities available for sale increased $427,000$2.2 million during the first quartersix months of 2026 due to purchases of $4.2$9.9 million offset by maturities, calls, payments and amortization of $2.9$6.7 million and ana $808,000$1.0 million increase in the unrealized loss on securities available-for-sale.available for sale.

Deposits totaled $827.7$827.5 million as of MarchJune 31,30, 2026, compared to $798.3 million as of December 31, 2025. The increase of $29.4$29.2 million, or 3.68%, 3.66%, was due to continued efforts to attract and retain money market account relationships combined with seasonalgrowth andin cyclicalnoninterest-bearing demand fundsdeposits. inflows.Uninsured Asdeposits aas result, moneyof marketJune and30, savings2026 accountswere increasedestimated $14.8at $136 million, andor noninterest-bearing demand and interest-bearing demand deposits combined for an increase16.4% of $18.9total million during the first quarter of 2026. Over this same period, time deposits decreased $5.0 million largely due to the maturity of a public funds deposit with no other deposit relationship, for which the Bank did not aggressively bid.deposits.

As of MarchJune 31,30, 2026 and December 31, 2025, borrowed funds totaled $19.0 million.

During the quartersix months ended MarchJune 31,30, 2026, total shareholders’ equity increased $262,000$3.5 million to $83.1$86.3 millionmillion, due to net income of $3.1$6.5 million million, which was partially offset by an increase in the net unrealized loss on available-for-sale securities of $805,000, dividends paid to shareholders of $2.1 million, and the repurchase of common stock totaling $41,000, and an increase in the unrealized loss on securities available for sale, net of the tax effects, of $639,000.$98,000. Consequently, book value per share increased to $3.53$3.67 as of MarchJune 31,30, 20262026, compared to $3.52 as of December 31, 2025. The Bank remains well-capitalizedwell capitalized per regulatory guidance.

AsDuring previously announced, the Board of Directors extended the repurchase of up to 500,000 shares of the Company’s common stock through March 31, 2027. During the first quartersix months of 2026, the Company repurchased 11,49627,701 shares of its common stock at an average price of $3.55$3.54 per share. Since Since the commencement of the repurchase plan in 2022, 366,569382,774 shares have been repurchased at an average price of $2.57$2.61 per share. On July 20, 2026, the Board of Directors approved the termination of the Company's stock repurchase program. As a result, the Company will no longer repurchase shares of its common stock under the program.

The allowance for credit losses on loans was $8.1$8.2 million, or 1.12% as a percentage of total loans, as of MarchJune 31,30, 2026, and $8.1 million, million, or 1.14%, as of December 31, 2025. The decrease in the allowance as a percentage of loans was primarily attributable to chargingcharge-offs off the year-end specific reservesrecorded on two individually evaluated borrower relationships duringfor thewhich firstspecific quarterallowance ofallocations 2026.had been established at year-end. One of these relationships had two pieces of collateral – the residential property was foreclosed and reclassified into other real estate owned duringand the quarter, and the commercial property was sold at auction andduring the salesfirst proceedssix weremonths received subsequent to March 31,of 2026. The charge-off on the other relationship was largely driven by the amount of time that it had been in its classified status. The $9,000 $108,000 increase in the allowance for credit losses on loans was attributable to provision expense associated with a larger loan portfolio and a modest adjustmentadjustments to a qualitative factorfactors for geopolitical uncertainty related to the conflict in the Middle East and partiallyone-to-four-family offsetresidential bymortgage the charge-off of the specific reserves discussed above.loans.

The allowance for credit losses on unfunded commitments was $460,000$455,000 as of MarchJune 31,30, 2026, as compared to $471,000 as of December 31, 2025. 2025. The decrease in the allowance for credit losses on unfunded commitments was due to a decrease in loan commitments, specifically residential residential and commercial real estate construction loan commitments.

Annualized net charge-offs (recoveries) as a percentage of average loans were 0.14%(0.02%) during the firstsecond 3 monthsquarter of 2026 compared to 0.05% during the fourth quarter0.14% of 2025 and 0.01% during the first quarter of 2025.2026 Theand increase0.02% was due toduring the charge-offsecond quarter of 2025. Annualized net charge-offs for the specificfirst reservessix discussedmonths of above.2026 and 2025 were 0.06% and 0.02%, respectively.

Nonperforming assets, which include nonaccrual loans, accruing loans past due 90 days or more, and other real estate owned, totaled $3.3$3.5 million as as of MarchJune 31,30, 2026, a decrease of $537,000,$320,000, or 13.94%,8.29%, since year-end 2025. Nonaccrual loans decreased $467,000$285,000 during the first six three months of 2026 primarily due to the charge-off of the specific reservesallowance allocations on the individually evaluated loans and a loan that was removed from nonaccrual status based on performance. Nonperforming assets as a percentage of total assets were 0.35% 0.38% as of MarchJune 31,30, 2026 and 0.42% as of December 31, 2025.

Other real estate owned increased to $184,000$225,000 as of MarchJune 31,30, 2026 from $89,000 at December 31, 2025 due to the foreclosure on the residential property discussed above. ExpensesDuring associatedthe withsecond quarter of 2026, a residential property in other real estate owned,owned includingwas gainssold and losses on sales, were $3,000 and $1,000 for thea $37,000 three months ended March 31, 2026 and 2025, respectively.gain.

For detailed information on nonaccrual loans and other real estate owned as of MarchJune 31,30, 2026 and December 31, 2025, refer to Note 6 Loans and Note 10 Other Real Estate Owned in Item 1 of this Form 10-Q.

Loans rated substandard or below totaled $3.7$3.2 million as of MarchJune 31,30, 2026, an increase of $1.1 million$600,000 from $2.6 million as of December 31, 31, 2025. Total past due loans decreased to $6.1$4.8 million as of MarchJune 31,30, 2026 from $7.2 million as of December 31, 2025.

The allowance for credit losses is maintained at a level that management deems appropriate to absorb any potentialexpected future losses and known known impairments within the loan portfolio, whether or not the losses are actually ever realized. Through our quarterly assessment, we continue to adjust the CECL model to best reflect the risks in the portfolio. However, future provisions may be deemed necessary. During the first three six months of 2026, we maintained the adjustments to our qualitative factors initiated in 2024 and carried forward into 2025, to consider risk factors associated with commercial real estate and residential mortgage loans.loans, In addition, we madeincluding a slightmodest increase adjustmentin of 3 bps to consider the geopolitical uncertainty2026 in the Middlerisk East.factor for residential mortgage loans based on the past dues and increases in loans in the process of foreclosure in that portfolio. Those changes, along with growthrecoveries inof theloans loanpreviously portfoliocharged off and the assessment of the historical and specific risks associated with the loan portfolio, resulted in a recovery of credit lossesprovision for credit losses of $240,000, $303,000, which included a $251,000$319,000 provision for the loan portfolio; and a $11,000$16,000 negativerecovery provisionof forcredit losses on unfunded commitments due to a decrease in unfunded commitments, particularly construction loans. The following table summarizes components of the allowance for credit losses and related loans as of March 31, 2026 and December 31, 2025:commitments.

Due to timing differences between the book and tax treatments of several income and expense items, a net deferred tax asset, excluding the the deferred tax asset on the unrealized loss on securities available-for-sale of $2.3 million and $2.1 million,million existed as of June March30, 31, 2026 and December 31, 2025, respectively. Our income tax expense was computed at the federal corporate income tax rate of 21% of taxable income and a blended state tax rate of 1.95%.1.87%. We have no significant nontaxable income or non-deductiblenondeductible expenses.

As of MarchJune 31,30, 2026, the Bank remains well capitalized under the regulatory framework for prompt corrective action. The ratios mentioned above for the Bank comply with the Federal Reserve rules to align with the Basel III Capital requirements.

Book value per common share was $3.53$3.67 and $3.52 as of MarchJune 31,30, 2026 and December 31, 2025, respectively. The increase in the book value was due largely to the $6.5 million, or $0.28 per share, of net income for the first six months of $3.12026, million which waspartially offset by dividends paid to shareholders of $2.1 million, the repurchase of common stock totaling $41,000, and annet increase in the unrealized loss on securities available for sale,sale netinvestment securities of $805,000, the taxcash effects,dividend payment of $639,000.$0.09 per share and the repurchase of common shares for $98,000 during the first half of 2026.

OnAs Aprilpreviously 28, 2022 the board of directors ofreported, the Company had approved a one-year stock repurchase program that authorized the repurchase of up to 500,000 shares of the Company’s outstanding common stock.shares Asthrough previouslyMarch reported,31, this2027. planOn wasJuly extended20, by2026, the Board of Directors throughapproved Marchthe 31, 2027. The actual means and timingtermination of anythe purchases,Company's numberstock ofrepurchase sharesprogram. andAs pricesa or range of prices will be determined byresult, the Company inwill no longer repurchase shares of its discretioncommon andstock will dependunder on a number of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal and regulatory requirements.program. As of MarchJune 31,30, 2026, the Company hashad repurchased 366,569382,774 shares at an average price of $2.57$2.61 per share since inception of the plan. During the quarter ended MarchJune 31,30, 2026, the Company repurchased 11,49616,205 shares at an average price of $3.55$3.53 per share. There is no assurance that the Company will purchase any additional shares under this program.

We closely monitor our liquidity and our liquid assets in the form of cash, due from banks, federal funds sold and unpledged available-for-sale investments. Collectively, those balances were $158.0 million as of March 31, 2026, up from $141.0 million as of December 31, 2025. The increase is primarily due to deposit growth exceeding funding needs for loan growth. A surplus of short-term assets is maintained at levels management deems adequate to meet potential liquidity needs As of MarchJune 31,30, 2026, all of our investments are classified as available-for-sale, providing an additional source of liquidity in the amount of $65.1$68.8 million, which is net of the $31.8$29.8 million of securities pledged as collateral. Generally, the investment portfolio serves as a source of liquidity while yielding a higher return at the purchase date when compared to other short-term investment options, such as federal funds sold and overnight deposits with the Federal Reserve Bank of Richmond (the FRB). Due to the unrealized loss on securities available-for-sale, the sale of investments, other than shorter-term investments with minimal unrealized losses or more recently purchased investments, would not be a main source of liquidity at this time due to the immediate impact on regulatory capital; however, the majority of the portfolio is considered high credit quality investments and would be available to pledge against borrowed funds. Total investment securities increased $427,000$2.2 million, or 4.55%, annualized during the first quarterhalf of 2026 from $96.4 million as of December 31, 2025 to $96.9$98.6 million as of March 31,June 30, 2026. The Bank also has additional borrowing capacity on lines for which investments and certain loans are currently pledged.

Our loan to deposit ratio was 87.39%88.48% and 88.89% as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

Available third-party sources of liquidity as of MarchJune 31,30, 2026 include the following: a line of credit with the FHLB, access to brokered certificates certificates of deposit markets and the discount window at the Federal Reserve Bank. We also have the ability to borrow $30.0 million in unsecured federal funds through credit facilities extended by correspondent banks.

We have used our line of credit with the FHLB to issue letters of credit totaling $14.0 million to the Treasury Board of Virginia for collateral on public funds. No draws on these letters of credit have been issued. The letters of credit are considered to be draws on our FHLB line of credit. In May 2023, we borrowed $10.0 million from the FHLB, through a fixed rate 5-year advance, to support loan fundings and other general liquidity needs and prepaid $3 million of the outstanding balance in the fourth quarter of 2025; and, in June 2025, we borrowed an additional $5.0 million which was repaid in July 2025. An additional $252.0$261.0 million was available as of MarchJune 31,30, 2026 on the $273.0 $282.0 million line of credit. Full use of the FHLB borrowing capacity would require the Company to pledge additional assets.

As of MarchJune 31,30, 2026 we held brokered time deposits of $8.0 million, unchanged from December 31, 2025. Internet accounts are limited to to customers located in our primary market area and the surrounding geographical area. The average balance of and the rate paid on deposits is shown in the net interest margin analysis tables. Total reciprocal Certificate of Deposit Registry Services (“CDARS”) time deposits were $7.7$7.3 million and $7.0 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively. Aside from the availability of CDARS time deposits, we also offer a similar deposit product for transaction account customers through Intrafi Cash Service (“ICS”). As of MarchJune 31,30, 2026 approximately $16.3$11.4 million were placed in this product as compared to $16.1 million at December 31, 2025. Both the CDARS and ICS offerings assist us in maintaining deposit relationships, while assuring the depositors’ funds retain federal deposit insurance coverage.

Additional liquidity is available through the Federal Reserve Bank discount window for overnight funding needs. We may collateralize this line with investment securities and loans at our discretion; however, while we do not anticipate using this as a primary funding source, securities with an estimated market value of $24.9$24.6 million were pledged as of MarchJune 31,30, 2026.

Time deposits of $250,000 or more were approximately 6.35%6.21% of total deposits at MarchJune 31,30, 2026 and 7.15% of total deposits at December 31, 31, 2025.

There have been no material changes during the threesix months ended MarchJune 31,30, 2026, to the off-balance sheet items and the contractual obligations disclosed in our 2025 Form 10-K.