MVB FINANCIAL CORP (MVBF)

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q and with the consolidated financial statements and accompanying notes and other detailed information appearing in the 2025 Form 10-K. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations. See the “Forward-Looking Statements” section of this report for further information on forward-looking statements.

Executive Summary

We continue to adapt our business model due to challenging market conditions, primarily due to the current interest rate environment and economy, as well as consideration of regulatory and geopolitical environments, among others. The Federal Reserve lowered its federal funds interest rate range to 3.50% to 3.75% in December 2025. Higher loan balances primarily reflect the Bank's execution of its asset generation strategies that include the diversification of risk among loans with relatively smaller loan balances, as well as a focus on loans with fixed interest rates. We remain committed to the gaming, payments and banking-as-a-service industries. We continue to expand the Bank's treasury services function to support the banking needs of financial and emerging technology companies, which we believe will further enhance CoRe deposits, notably through the expansion of deposit acquisition and fee income strategies through the Fintech division. Additionally, we have expanded our compliance and risk management team to support the growth in these lines of business.

Financial Results

Three Months Ended March 31, 2026 vs. Three Months Ended March 31, 2025

During the three months ended March 31, 2026, net interest income increased $1.8 million, noninterest income increased $1.2 million and noninterest expense declined by $0.6 million compared to the three months ended March 31, 2025. Our yield on tax-equivalent earning assets for the three months ended March 31, 2026 was 5.86% compared to 5.91% for the three months ended March 31, 2025. Loans receivable increased by $60.6 million to $2.40 billion during the three months ended March 31, 2026. Our overall cost of interest-bearing liabilities was 3.26% for the three months ended March 31, 2026 compared to 3.71% at March 31, 2025. This cost of interest-bearing liabilities, combined with the earning asset yield, resulted in a tax-equivalent net interest margin of 3.73% in the three months ended March 31, 2026, compared to 3.66% in the three months ended March 31, 2025.

Our net income for the three months ended March 31, 2026 was $5.2 million compared to $3.6 million for the three months ended March 31, 2025. Earnings for the three months ended March 31, 2026 equated to a return on average assets of 0.6% and a return on average equity of 6.1%, compared to the three months ended March 31, 2025 results of 0.4% and 4.7%, respectively. Basic and diluted earnings per share were $0.41 and $0.39, respectively, for the three months ended March 31, 2026, compared to $0.28 and $0.27, respectively, for the three months ended March 31, 2025.

Net Interest Income and Net Interest Margin (Average Balance Schedules)

The following tables present information regarding (i) average balances, the total dollar amount of interest income from interest earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income and margin (tax-equivalent); (iv) net interest income and margin as of and for the periods shown. The average balances presented are derived from daily average balances.

42

1 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a federal tax rate of 21% for the three months ended March 31, 2026 and 2025, which is a non-U.S. GAAP financial measure. See the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable U.S. GAAP financial measure following this table.

2 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.

43

The following table presents the reconciliation of net interest margin for the periods shown:

Key Metrics

1 Non-U.S. GAAP metric. See the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable U.S. GAAP financial measure following this table.

2 Noninterest expense as a percentage of net interest income and noninterest income.

3 Annualized for the quarterly periods presented.

4 Noninterest expense as a percentage of average assets.

5 Charge-offs less recoveries.

Tangible book value (“TBV”) per common share was $25.98 and $23.85 as of March 31, 2026 and March 31, 2025, respectively. TBV per common share is a non-U.S. GAAP measure that we believe is helpful to interpreting financial results. A reconciliation of TBV per common share is included below.

44

Net Interest Income

Net interest income is the amount by which interest income on earning assets exceeds interest expense incurred on interest-bearing

[Excerpt truncated for page length; source filing is linked above.]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis provides information that management believes is necessary to understand our financial condition, results of operations and cash flows for the year ended December 31, 2025 as compared to 2024. This information should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this report. A discussion of changes in our results of operations from 2023 to 2024 may be found in Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 13, 2025. Further, we encourage you to revisit the Forward-Looking Statements at the beginning of this report.

Executive Summary

We continue to adapt our business model due to challenging market conditions, primarily due to the current interest rate environment and economy, as well as consideration of regulatory and geopolitical environments, among others. The Federal Reserve lowered its key interest rate to a range of 3.50% to 3.75% in December 2025. Higher loan balances primarily reflect the Bank's execution of its asset generation strategies that include the diversification of risk among loans with relatively smaller loan balances, as well as a focus on loans with fixed interest rates. We remain committed to the gaming, payments and banking-as-a-service industries. We continue to expand the Bank's treasury services function to support the banking needs of financial and emerging technology companies, which we believe will further enhance CoRe deposits, notably through the expansion of deposit acquisition and fee income strategies through the Fintech division. Additionally, we have expanded our compliance and risk management team to support the growth in these lines of business.

Financial Results

Net interest income declined $1.8 million to $107.4 million, noninterest income increased $17.4 million to $60.3 million and noninterest expense declined $0.1 million to $122.1 million during 2025 compared to 2024. Our tax-equivalent yield on earning assets was 5.95% in 2025, compared to 6.22% in 2024. Total loans increased $243.0 million to $2.34 billion as of December 31, 2025 from $2.10 billion as of December 31, 2024. Our overall cost of interest-bearing liabilities was 3.43% in 2025 compared to 4.07% in 2024. Despite the decline in the cost of interest-bearing liabilities outpacing the decline in the earning assets yield, the shift in the mix of earning assets and the increase in interest-bearing liabilities resulted in our tax-equivalent net interest margin declining to 3.65% during the year ended December 31, 2025 from 3.67% during the year ended December 31, 2024.

Net income available to common shareholders in 2025 totaled $26.9 million, compared to $20.1 million in 2024, an increase of $6.8 million. Earnings for 2025 equated to a return on average assets of 0.8% and a return on average equity of 8.7%, compared to 2024 results of 0.6% and 6.9%, respectively. Basic and diluted earnings per share were $2.11 and $2.06, respectively, in 2025 compared to $1.56 and $1.53, respectively, in 2024.

Net Interest Income and Net Interest Margin (Average Balance Schedules)

The following tables present, for the periods indicated, information about (1) average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (2) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (3) the interest rate spread; (4) net interest income and margin; and (5) net interest income and margin (on a tax-equivalent basis). The average balances presented are derived from daily average balances.

34

Average Balances and Analysis of Net Interest Income

1 In order to make pre-tax income and resultant yields on tax-exempt loans and investment securities comparable to those on taxable loans and investment securities, a tax-equivalent adjustment has been computed using a federal tax rate of 21% for the years ended December 31, 2025, 2024 and 2023, which is a non-U.S. GAAP financial measure. Refer to the reconciliation of this non-U.S. GAAP financial measure to its most directly comparable U.S. GAAP financial measure following this table.

2 Non-accrual loans are included in total loan balances, lowering the effective yield for the portfolio in the aggregate.

3 The senior term loan was paid off in May 2024 and the unamortized debt issuance costs were recorded as interest expense upon the repayment.

35

Rate Volume Calculation

The year over year change in rates and change in volume from 2024 to 2025 was as follows:

36

Key Metrics

1 Non-U.S. GAAP metric

2 Noninterest expense as a percentage of net interest income and noninterest income

3 Noninterest expense as a percentage of average assets

4 Charge-offs, less recoveries

Tangible book value ("TBV") per common share was $26.17 and $23.37 as of December 31, 2025 and 2024, respectively. TBV per common share is a non-U.S. GAAP measure that we believe is helpful to interpreting financial results. A reconciliation of TBV per common share is included below.

Net Interest Income

Net interest income is the amount by which interest income on earning assets exceeds interest expense incurred on interest-bearing liabilities. Interest-earning assets include loans, investment securities and interest-bearing balances with banks. Interest-bearing liabilities include interest-bearing deposits and borrowed funds, such as sweep accounts, repurchase agreements and subordinated debt. Net interest income, which is the primary source of revenue for the Bank, is also impacted by changes in market interest rates and the mix of interest-earning assets and interest-bearing liabilities.

Net interest margin is calculated by dividing net interest income by average interest-earning assets and measures the net revenue generated by our balance sheet. Net interest margin on a tax-equivalent basis was 3.65% and 3.67% in 2025 and 2024, respectively.

During 2025, the Federal Reserve lowered its key interest rate from a range of 4.25% to 4.50% as of December 31, 2024 to a range of 3.50% to 3.75% as of December 31, 2025. We continue to analyze methods to deploy assets into an earning asset mix to result in a stronger net interest margin. Management’s estimate of the impact of future changes in market interest rates is shown in the section captioned Interest Rate Risk, in Item 7A – Quantitative and Qualitative Disclosures About Market Risk included elsewhere in this report.

37

Net interest spread is calculated by taking the difference between interest earned on earning assets and interest paid on interest-bearing liabilities. Net interest spread on a tax-equivalent basis was 2.52% in 2025 compared to 2.15% in 2024. The difference between the net interest margin on a tax-equivalent basis and net interest spread on a tax-equivalent basis was 113 basis points in 2025 compared to 152 basis points in 2024. This was driven by the 64 basis point decline in the cost of interest-bearing liabilities outpacing the 27 basis point decline in yield on earning assets.

During 2025, net interest income declined $1.8 million, or 1.6%, and total interest income declined $10.5 million, or 5.7%. These declines were primarily driven by a $40.1 million decline in average total loans and a $34.2 million decline in average interest-bearing deposits with banks as compared to 2024. The $40.1 million decline in average total loans during 2025 reflects declines of $36.7 million in average real estate loans and $6.1 million in average consumer loans, partially offset by a $3.3 million increase in average commercial loans. The yield on total loans declined 32 basis points during 2025.

Average investment securities increased $35.4 million, or 9.7%, in 2025 as the result of a $54.0 million increase in taxable investments, partially offset by an $18.5 million decline in tax-exempt investments. The yield increased 105 basis points on taxable securities and increased 40 basis points on tax-exempt securities.

Average interest-bearing liabilities increased $100.8 million, or 5.4%, in 2025, primarily as a result of increases of $166.0 million in average NOW accounts, $19.5 million in average money market checking accounts and $13.0 million in savings accounts, partially offset by a decline of $96.2 million in average certificates of deposit.

Total interest expense declined $8.7 million, primarily due to an $8.6 million decline in deposit interest expense. The result was a 64 basis point decline in the cost of interest-bearing liabilities, from 4.07% in 2024 to 3.43% in 2025. This decline is primarily the result of a 67 basis point decline in the cost of deposits, reflecting a shift in the mix of average deposits driven by the highly-competitive deposit environment, as well as decreasing interest rates. There was also a decline in the cost of funds related to the senior term loan that was repaid in May 2024. Further discussion on borrowings is included in Note 7 – Borrowed Funds accompanying the consolidated financial statements included elsewhere in this report.

Provision for Credit Losses

Provision for credit losses was $8.7 million and $3.5 million in 2025 and 2024, respectively. The provision for credit losses, which is a product of management's analysis, is recorded in response to forecasted losses over the remaining life of the loan and available-for-sale investment security portfolios. Further discussion on the provision for credit losses is included in Note 1 – Summary of Significant Accounting Policies accompanying the consolidated financial statements included elsewhere in this report. The increase in provision for credit losses is primarily the result of the level of recognized charge-offs within the portfolio, which was compounded by increases to the outstanding balances of the commercial loan portfolio, partially offset by decreases in the residential loan segment.

Total loan receivable balances increased $243.0 million in 2025, compared to a decline of $217.5 million in 2024. The commercial loan portfolio increased by $292.5 million in 2025, compared to a decline of $184.8 million in 2024, while the consumer loan portfolio increased by $7.0 million in 2025, compared to a decline of $8.8 million in 2024. Additionally, the residential mortgage loan portfolio declined by $51.6 million and $21.8 million in 2025 and 2024, respectively. Net charge-offs in 2025 totaled $5.6 million, in comparison to net charge-offs of $4.4 million in 2024. Lastly, the provision for credit losses was impacted by a $0.9 million decline in the specific credit loss allocations in 2025, relative to a $0.6 million decline in provision for such loan losses in 2024.

Noninterest Income

Payment card and service charge income, equity method investment income or loss, investments portfolio gains or losses and gains or losses on acquisition and divestiture activity generally account for the majority of our noninterest income. Total noninterest income for 2025, 2024 and 2023 was $60.3 million, $42.9 million and $19.7 million, respectively.

The increase in noninterest income for 2025 compared to 2024 was primarily the result of a $34.2 million gain on divestiture activity from the sale of Victor, a $6.7 million increase in equity method investment income from our mortgage segment and a $2.5 million increase in holding gains on equity securities. For more information regarding the sale of Victor, refer to Note 24 – Acquisitions and Divestitures accompanying the consolidated financial statements included elsewhere in this report. These increases were partially offset by the $11.7 million gain on sale of assets in 2024 related to the sale-leaseback transaction, a $7.6 million net loss on the sale of available-for-sale investment securities in 2025 associated with our previously disclosed investment

38

portfolio restructuring, a $4.1 million decline in compliance and consulting income and a $2.3 million decline in other operating income.

Noninterest Expense

Noninterest expense was $122.1 million and $122.2 million in 2025 and 2024, respectively. The decline of noninterest expense relative to the year ended December 31, 2024 primarily reflects declines of $6.2 million in professional fees and $1.3 million in equipment depreciation and maintenance, offset by increase of $3.0 million in salaries and employee benefits, $2.4 million in other operating expenses, $1.3 million in software costs and $1.2 million in occupancy expense.

Approximately, 58% and 56% of noninterest expense for 2025 and 2024, respectively, related to personnel costs. Personnel costs are a significant part of our noninterest expense as such costs are critical to services organizations.

Discontinued Operations

In February 2023, we completed the sale of the Bank’s wholly-owned subsidiary, ProCo Global, Inc. (“Chartwell,” which does business under the registered trade name Chartwell Compliance) for total consideration of $14.4 million in the form of a loan issued to the buyer, resulting in a gain on sale of $11.8 million. Chartwell provides integrated regulatory compliance, state licensing, financial crimes prevention and enterprise risk management services that include consulting, outsourcing, testing and training solutions. To facilitate a transition of the Chartwell services and support the onboarding and conversion of systems, we entered into a 60-day Employee Lease and Service Agreement, whereby we provided the purchaser with finance and accounting, human capital, information technology, marketing and record/data retention services. In addition, we entered into a contract with the purchaser for Chartwell to continue to provide services and support for three years following the sale. We paid $3.9 million and $2.5 million in fees related to this contract during the years ended December 31, 2024 and 2023, respectively. The fees paid related to this contract were not material for the year ended December 31, 2025.

Income Taxes

We incurred income tax expense of $9.9 million and $6.1 million in 2025 and 2024, respectively. Our effective tax rate was 26.9% and 23.2% in 2025 and 2024, respectively. Our effective tax rate is affected by certain permanent tax differences caused by statutory requirements in the tax code. The largest permanent differences relate to income tax credits and executive compensation. Other permanent differences arise from interest income on municipal bonds and bank owned life insurance. For 2025, we expect to file tax returns in 29 states.

Return on Assets and Equity

Assets

Our return on average assets was 0.8% in 2025, compared to 0.6% in 2024. The increase in 2025 is a result of a $6.8 million, or 34.1%, increase in earnings and a $26.3 million, or 0.8%, decline in average total assets as compared to 2024. The decline in average total assets was primarily the result of a $40.1 million, or 1.8%, decline in average total loans and a $34.2 million, or 8.1%, decline in average interest-bearing deposits with banks, partially offset by an increase of $35.4 million, or 9.7%, in average investment securities.

Equity

Our return on average stockholders’ equity was 8.7% in 2025, compared to 6.9% in 2024. The increase in 2025 is a result of an $6.8 million, or 34.1%, increase in earnings, partially offset by a $17.9 million, or 6.1%, increase in average equity to $310.1 million.

Statement of Financial Condition

Cash and Cash Equivalents

Cash and cash equivalents totaled $244.1 million at December 31, 2025, compared to $317.9 million at December 31, 2024. We believe the current balance of cash and cash equivalents adequately serves our liquidity and performance needs. Total cash and

39

cash equivalents fluctuate daily due to transactions in process and other liquidity demands.

Investment Securities

Investment securities totaled $461.2 million at December 31, 2025, compared to $453.5 million at December 31, 2024.

The following table sets forth a summary of the investment securities portfolio as of the dates indicated. The available-for-sale securities are reported at estimated fair value.

At December 31, 2025, all investment securities are available-for-sale or equity securities. Management believes the available-for-sale classification provides flexibility in terms of managing the portfolio for liquidity, yield enhancement and interest rate risk management opportunities. At December 31, 2025, the amortized cost of available-for-sale investment securities totaled $426.1 million, resulting in a net unrealized loss in the investment portfolio of $15.6 million. Management has the intent and ability to hold the investments to maturity and they are all high quality investments. Declines in the fair values of these securities can be attributed to general market conditions, rather than credit-related conditions. The municipal securities continue to give us the ability to pledge and to decrease the effective tax rate.

At December 31, 2025, equity securities primarily consist of our Fintech investment portfolio and are comprised of investments in 11 companies with a carrying value of $41.3 million. Investments in our top four equity securities represented $37.6 million, or 91.1%, of our total Fintech investment portfolio at December 31, 2025. The Fintech equity securities do not have readily determinable fair values and are recorded at cost and adjusted for observable price changes for underlying transactions for identical or similar investments.

The following table shows the maturities for the available-for-sale investment securities portfolio at December 31, 2025:

Maturities are based on the final contractual payment dates and do not reflect the impact of prepayments or early redemptions that may occur.

Management monitors the earnings performance and liquidity of the investment portfolio on a regular basis through the Asset and Liability Committee (“ALCO”) meetings. The ALCO also monitors net interest income and assists in the management of interest rate risk for us. Through active balance sheet management and analysis of the investment securities portfolio, sufficient liquidity is maintained to satisfy depositor requirements and the various credit needs of our customers. Management believes the risk

40

characteristics inherent in the investment portfolio are acceptable based on these parameters.

Loans

Our primary market areas are North Central West Virginia, Northern Virginia, Maryland, North Carolina and South Carolina. Our loan portfolio consists principally of commercial lending, retail lending, which includes single-family residential mortgages, home equity lines of credit and consumer lending. Loans receivable totaled $2.34 billion as of December 31, 2025, an increase of $243.0 million from $2.10 billion as of December 31, 2024.

Major classification of loans held for investment at December 31, are as follows:

At December 31, 2025, commercial and non-residential real estate loans represented the largest portion of the portfolio at 72.9%. Commercial and non-residential real estate loans totaled $1.71 billion at December 31, 2025, compared to $1.42 billion at December 31, 2024. Management expects to continue to focus on the enhancement and growth of the commercial loan portfolio while maintaining appropriate underwriting standards and risk/price balance.

Residential real estate loans to retail customers account for the second largest portion of the loan portfolio, comprising 25.6%. Residential real estate loans totaled $599.1 million at December 31, 2025, compared to $650.7 million at December 31, 2024. Management believes residential real estate lending continues to represent a primary focus due to the lower risk factors associated with this type of loan and the opportunity to provide service to both those in the primary North Central West Virginia and Northern Virginia markets, as well as those in the surrounding areas as management deems appropriate.

Consumer loans totaled $25.6 million at December 31, 2025, compared to $18.6 million at December 31, 2024.

At December 31, 2025, Special Mention loans amounted to $30.3 million. The balance is comprised of 25 loans, which include one $9.5 million loan for an office commercial real estate project, two commercial real estate loans totaling $11.0 million to senior care facilities and a $2.6 million commercial loan to finance a business acquisition. In addition, there are 21 loans to various unrelated borrowers totaling $7.2 million in commercial, home equity line of credit ("HELOC"), installment and mortgage loans. Special Mention loans include loans for which information about the borrowers' possible credit problems causes management to have doubts as to the borrowers' ability to comply with the loan repayment terms in the future.

There were 39 additional loans that management identified as Substandard loans, totaling $49.7 million as of December 31, 2025. These loans include three loans to separate borrowers totaling $12.7 million secured by commercial real estate office properties, a $12.3 million loan to finance a multifamily real estate property and a $4.1 million loan to a hotel. In addition, there are 34 loans to various unrelated borrowers totaling $20.6 million in commercial, HELOC, installment and mortgage loans. Substandard loans include loans where known information about the borrowers’ credit problems causes management to have serious doubts as to the borrowers’ ability to comply with the loan repayment terms in the future.

41

The following table provides loan maturities at December 31, 2025:

The following table reflects the sensitivity of loans to changes in interest rates as of December 31, 2025 that mature after one year:

Loan Concentration

At December 31, 2025, commercial and non-residential real estate loans comprised the largest component of the loan portfolio. Healthcare loans are a significant component of commercial and non-residential real estate loans and comprise 27.8% of total loans receivable at December 31, 2025. A large portion of commercial loans are secured by real estate and they are diverse with respect to geographical location and industry. Loans that are not secured by real estate are typically secured by accounts receivable, mortgages or equipment. While the loan concentration is in commercial loans, the commercial portfolio is comprised of loans to many different borrowers, in numerous different industries, primarily located in our market areas.

Lending operations of commercial banks may be subject to enhanced scrutiny by federal banking regulators based on a bank’s concentration of commercial real estate (“CRE”) loans. The federal banking regulators have issued guidance to remind financial institutions of the risk posed by CRE lending concentrations. CRE loans generally include land development, construction loans and loans secured by multifamily property, and nonfarm, nonresidential real property where the primary source of repayment is derived from rental income associated with the property. The guidance prescribes the following guidelines for bank examiners to help identify institutions that are potentially exposed to significant CRE loan risk and may warrant greater supervisory scrutiny:

As of December 31, 2025, the Bank's concentration of loans for construction, land development and other land as a percentage of capital totaled 30.3% and the Bank's CRE loan concentration, excluding owner-occupied loans, as a percentage of capital totaled 293.0%.

All commercial loans, regardless of loan type, with an exposure of $1 million or greater are subject to the Bank’s internal annual review process. This process involves the collection and analysis of updated financial statements from all parties required to provide them under the loan agreements, as well as several other review items, dependent upon the specific loan characteristics, including but not limited to:

The internal annual review process is specialized based on the loan type, with emphasis and additional analysis performed based

42

on each specific loan type’s characteristics.

Management continuously reviews the commercial real estate portfolio on an annual basis, through the internal annual review process, third-party review engagements and other specialized ad hoc portfolio reviews as deemed appropriate by management. During the year ended December 31, 2025, management focused on the review of non-owner-occupied real estate, with an emphasis on office properties. This review was triggered by the macroeconomic trend of increasing vacancy rates, brought on by the continued work from home trend.

Management recognizes that the current business environment is inflationary, with elevated interest rates. This has portfolio wide impacts on borrowers’ cash flows and borrowing costs, and is not considered to be market or industry specific. However, management recognizes that some portions of the portfolio, such as loans with variables interest rates, are more susceptible to the current economic environment.

Should any deficiencies or problems be identified during these regular reviews, subject loans will be appropriately reviewed for any downgrades and be presented at the monthly Special Assets Review Committee for any further necessary action.

Management tracks several commercial real estate concentrations monthly. These concentrations are monitored through bi-annual concentration scorecards, which are presented to the Bank’s Board for review and approval. These scorecards are used to justify the lending limits for each concentration. There are five CRE loan concentrations currently being monitored:

Classified loans are loans in the Substandard or Doubtful risk grade categories.

43

Overall, these concentrations have weighted average LTVs between approximately 45% and 64%. The “Other” segment above contains all CRE loan types outside of the five listed. The loans included in the Other concentration primarily include mixed use CRE loans and are not tracked through scorecards.

Nursing Homes are mainly originated through purchased participation from third-party banks. These loans typically are made to skilled nursing facilities ("SNF") and are secured by the subject properties. A majority of these loans are bridge to U.S. Department of Housing and Urban Development loans and have a three to five year term. As of December 31, 2025, these borrowers are in 20 different states. This concentration contains two unrelated Special Mention notes totaling $11.0 million, well secured by SNF properties in Florida and North Carolina, respectively.

Retail borrowers are mainly located in the Northern Virginia and Washington, D.C. metro area. These borrowers vary in size and scope, but generally include multi-unit retail strip centers.

Office borrowers are more dispersed, with material loan balances in Northern Virginia, Southwest Pennsylvania and North Central West Virginia. Since the COVID-19 pandemic, the office CRE loan concentration has been subject to increased scrutiny by management, due to the lowered demand for office space. This concentration includes three Classified notes to unrelated borrowers, secured by properties in North Central West Virginia and Southwestern Pennsylvania.

Multifamily borrowers are mainly located in the Northern Virginia and North Central West Virginia areas and are heavily concentrated in four loans to three unrelated borrowers. These four loans make up more than 76% of the total concentration.

The Hospitality concentration consists of 10 loans with five loans to a single ownership group totaling 38% of the concentration total. All these loans are performing and are located in the Northwest Virginia area. This concentration includes a single Classified note, which is considered performing and has been paying as agreed under a forbearance agreement.

Allowance for Credit Losses

Management continually monitors the risk in the loan portfolio through the review of the monthly delinquency reports and the Loan Review Committee. The Loan Review Committee is responsible for the determination of the adequacy of the ACL. This analysis involves both experience of the portfolio to date and the makeup of the overall portfolio. Specific loss estimates are derived for individually analyzed loans based on specific criteria such as current delinquent status, related deposit account activity, where applicable and changes in the local and national economy. Loans are moved to individual analysis when, based on current information and events, the loan no longer exhibits similar risk characteristics as its pool and we analyze the loan individually on a collateral or cash flow basis. When appropriate, we also consider public knowledge and verifiable information from the local market to assess risks to individually analyzed loans and the loan portfolios as a whole.

The result of the evaluation of the adequacy at each period presented herein indicated that the ACL was considered by management to be adequate to absorb forecasted losses over the remaining life of the loan portfolio.

At December 31, 2025 and 2024, individually analyzed loans totaled $31.6 million and $43.2 million, respectively. The decrease in individually analyzed loans is primarily due to the payoff of a commercial real estate loan of $18.0 million. A portion of the ACL of $0.4 million and $1.3 million was allocated to cover any loss in individually analyzed loans at December 31, 2025 and 2024, respectively. Loans past due more than 30 days were $28.5 million and $45.5 million, respectively, at December 31, 2025 and 2024.

44

For tables reflecting the allocation of the ACL, refer to Note 3 – Loans and Allowance for Credit Losses accompanying the consolidated financial statements included elsewhere in this report.

The following table summarizes the primary segments of the ACL as of December 31, 2025 and 2024:

Nonperforming assets consist of loans that are no longer accruing interest and real estate acquired through foreclosure. When interest accruals are suspended, accrued interest income is reversed and charged to earnings. When, in management’s judgment, the borrower’s ability to make periodic interest and principal payments resumes and collectability is no longer in doubt, which is evident by the receipt of six consecutive months of regular, on-time payments, the loan is eligible to be returned to accrual status. Interest income on loans would have increased by $1.9 million, $1.6 million and $0.8 million for 2025, 2024 and 2023, respectively, if loans had performed in accordance with their terms.

Nonperforming assets and past due loans as of December 31, are as follows:

Individually analyzed loans have decreased by $11.6 million, or 26.9%, during 2025. This change is the net effect of multiple factors, primarily the payoff of an $18.0 million note secured by commercial real estate, as well as the amortization/curtailment of 29 commercial loans totaling $2.4 million, six residential mortgages totaling $3.5 million, two HELOCs totaling $0.2 million and one loan to construct a healthcare facility totaling $1.2 million. In addition, four loans to three borrowers were returned to accrual during the period, totaling $0.9 million, and nine charge offs were executed to nine borrowers totaling $1.3 million. This decrease was partially offset by 23 newly identified individually analyzed loans of all types totaling $14.4 million, as well as an increase of $0.4 million to an already individually analyzed loan.

The $25.3 million of principal curtailments/payoffs of individually analyzed loans were concentrated in a single commercial real estate relationship, in which a payoff of $18.0 million was received, or 71% of the total principal curtailments.

The $1.3 million of charged off loans were concentrated in nine commercial relationships with government guarantees representing all of the charge offs. These notes were secured by business assets and owner-occupied real estate.

45

Loans classified as Special Mention totaled $30.3 million and $50.4 million as of December 31, 2025 and December 31, 2024, respectively. The decrease of $20.1 million, or 39.9%, was concentrated in the commercial loan portfolio. This decrease is primarily the result of 12 Special Mention notes that were paid off during the year totaling $25.5 million. These included nine commercial notes, one residential mortgage and two HELOCs. Seven commercial loans totaling $6.5 million and eight residential mortgages totaling $1.0 million were upgraded to Pass during the year. One commercial note with a government guarantee totaling $0.3 million was charged off during the year, and there were risk downgrades to either Substandard or Doubtful of 11 commercial loans totaling $8.0 million and one residential mortgage of $0.4 million. These reductions were partially offset by 11 loans totaling $21.3 million recently downgraded to Special Mention, including one commercial loan for $9.5 million secured by an office building, and a commercial loan for $3.4 million secured by a skilled nursing facility. There were also two loans upgraded from Substandard to Special Mention totaling $0.6 million.

Loans classified as Substandard totaled $53.0 million and $76.8 million as of December 31, 2025 and December 31, 2024, respectively. The decrease of $23.8 million, or 31.0%, was concentrated in the commercial loan portfolio. This decrease is primarily the result of nine Substandard notes that were paid off during the year totaling $34.0 million. These included three commercial real estate notes, including one secured by a skilled nursing facility totaling $18.0 million, and two loans to one borrower secured by hotel properties totaling $13.5 million, as well as three residential mortgage and three HELOCs. Eight commercial loans totaling $3.8 million and three residential mortgages totaling $0.6 million were upgraded to Pass or Special Mention during the year. There were six risk downgrades to Doubtful of six commercial loans totaling $1.0 million. These reductions were partially offset by 22 loans totaling $14.5 million recently downgraded to Substandard, including 12 commercial loans of $9.7 million, seven loans secured by residential real estate totaling $4.7 million and three HELOCs for $0.1 million. There was also a residential mortgage that was repurchased from a third party totaling $2.0 million that is also Substandard.

Loans classified as Doubtful totaled $3.2 million and $3.4 million as of December 31, 2025 and December 31, 2024, respectively. The decrease of $0.2 million, or 5.9%, was concentrated in the commercial loan portfolio and is the result of the implementation of the workout of these loans resulting in principal reduction from paydowns, loan sales and foreclosures of various loans to unrelated borrowers, as well as payoffs of two commercial loans to a single borrower totaling $0.2 million secured by business assets. One residential mortgage totaling $0.1 million was upgraded to Pass during the year, and six commercial loans totaling $1.7 million were downgraded to Doubtful during the period, including two loans to a single borrower totaling $1.4 million, secured by business assets. As of December 31, 2025, there is an immaterial calculated credit loss reserve allocation against these Doubtful loans.

Interest Rate Risk

Management continually evaluates hedging strategies that are available to manage interest rate risk. We enter into interest rate swap contracts designated as hedging instruments to manage the interest rate risk associated with certain fixed rate loans. As of December 31, 2025, there were two active portfolio layer method fair value swaps designated as hedging instruments over a closed portfolio of fixed-rate mortgage loans. The interest rate swap portfolio had a total notional amount of $84.2 million and $126.0 million as of December 31, 2025 and December 31, 2024, respectively, including amortization adjustments of $35.8 million and $24.0 million related to one of the swaps which is amortizing. The portfolio was in an liability position with a fair value of $1.0 million as of December 31, 2025 and an asset position with a fair value of $0.5 million as of December 31, 2024. The amortized cost basis of the closed portfolio of fixed-rate loans was $403.9 million and $443.8 million as of December 31, 2025 and December 31, 2024, respectively, including basis adjustments of $2.4 million and $1.1 million as of December 31, 2025 and December 31, 2024, respectively.

Management also enters into interest rate swap contracts not designated as hedging instruments to help a small number of commercial loan borrowers manage their interest rate risk. The interest rate swap contracts with commercial loan borrowers allows them to convert floating-rate loan payments to fixed rate loan payments. When we enter into an interest rate swap contract with a commercial loan borrower, we simultaneously enter into a "mirror" swap contract with a third-party who exchanges the borrower's fixed-rate payments for floating-rate loan payments. At December 31, 2025 the fair value and notional amount of the interest rate swap agreements were $2.6 million and $126.1 million, respectively, as compared to $5.9 million and $133.9 million at December 31, 2024. For additional details on our hedging activity, refer to Note 19 – Derivatives accompanying the consolidated financial statements included elsewhere in this report.

Funding Sources

The Bank considers a number of alternatives, including but not limited to deposits, short-term borrowings and long-term borrowings, when evaluating funding sources. Deposits continue to be the most significant source of funds, totaling $2.84 billion,

46

or 97.3% of funding sources, at December 31, 2025, versus $2.69 billion, or 97.2% of such funding sources, at December 31, 2024.

Of these amounts, Fintech deposits totaled $1.21 billion and $964.1 million at December 31, 2025 and 2024, respectively. The increase in Fintech deposits is primarily attributable to increases in payments deposits, which increased to $660.3 million at December 31, 2025 from $505.8 million at December 31, 2024 and an increase in banking-as-a-service deposits to $329.5 million at December 31, 2025 from $208.1 million at December 31, 2024. Gaming deposits generally represent online sportsbook accounts and totaled $184.3 million and $227.6 million at December 31, 2025 and 2024, respectively.

Borrowings, consisting of subordinated debt, represented 2.5% and 2.7% of funding sources at December 31, 2025 and December 31, 2024, respectively. Repurchase agreements, which are available to large corporate customers, represented 0.2% and 0.1% of funding sources at December 31, 2025 and December 31, 2024, respectively.

Management continues to emphasize the development of noninterest-bearing deposits as a core funding source. At December 31, 2025, noninterest-bearing balances totaled $1.14 billion, compared to $941 million at December 31, 2024, or 40.3% and 34.9%, respectively, of total deposits. Interest-bearing deposits totaled $1.70 billion at December 31, 2025, compared to $1.75 billion at December 31, 2024, or 59.7% and 65.1%, respectively, of total deposits.

The following table sets forth the balance of each of the deposit categories for the years ended December 31, 2025 and 2024:

Average interest-bearing deposits totaled $1.90 billion during 2025 compared to $1.80 billion during 2024. Average noninterest bearing deposits totaled $915.7 million and $1.07 billion during 2025 and 2024.

During the year ended December 31, 2025, we utilized a deposit placement network for certain deposit programs. Under this structure, we, acting as custodian, place a portion of account holder funds not needed to support near-term settlement at one or more third-party FDIC-insured banks (each, a "program bank"). Accounts at program banks are established in our name as custodian, for the benefit of account holders. We remain the issuer of record under all applicable account holder agreements and maintain sole custodial control and transaction authority over program bank accounts, as well as the records of each account holder's beneficial interest in funds held at program banks.

Deposits placed at program banks may be eligible for FDIC pass-through insurance coverage up to applicable limits, subject to satisfaction of applicable regulatory requirements, including maintenance of accurate beneficial ownership records. There can be no assurance that pass-through insurance coverage will be available in all circumstances.

Prior to onboarding, program banks are subject to due diligence review encompassing their financial condition, regulatory standing and operational capabilities. Program banks are subject to ongoing monitoring on a periodic basis.

Off-balance sheet deposits placed through the network totaled $732.9 million at December 31, 2025 and $1.42 billion at December 31, 2024, and primarily represent funds associated with our gaming and banking-as-a-service deposit programs. The decline from December 31, 2024 to December 31, 2025 primarily reflects a decrease in banking-as-a-service deposits. We derecognize deposits placed within the network upon transfer to the program banks, as we satisfy our obligation to account holders through the transfer of funds and are legally released from being the primary obligor. Upon placement, the program banks assume responsibility for the deposited balances, and we no longer have an obligation to repay those amounts.

47

Maturities of time deposits that met or exceeded the FDIC insurance limit as of December 31, 2025:

Total uninsured deposits were $1.2 billion, or 43.1% of total deposits, as of December 31, 2025. Of these uninsured deposits, $258.2 million represents collateralized public fund deposits. Further, at December 31, 2025, we had available liquidity of $244.1 million of cash and cash equivalents on hand and $702.5 million remaining borrowing capacity with the FHLB.

Along with deposits, the Bank has access to both short-term borrowings from FHLB and overnight repurchase agreements to fund its operations and investments. For details on our borrowings, refer to Note 7 – Borrowed Funds accompanying the consolidated financial statements included elsewhere in this report.

Capital Resources

During the year ended December 31, 2025, stockholders’ equity increased $28.2 million to $334.0 million from $305.8 million. This increase primarily consists of net income for the year of $26.9 million, stock-based compensation of $3.8 million, common stock options exercised totaling $2.3 million and other comprehensive income of $14.4 million, partially offset by the repurchase of 479,069 shares of common stock for a total of $10.2 million and cash dividends paid of $8.7 million.

With stockholders’ equity increasing as noted above and an increase in assets of $180.2 million, the equity to assets ratio increased from 9.8% at December 31, 2024 to 10.1% at December 31, 2025. We paid dividends to common shareholders of $8.7 million in 2025 and $8.8 million in 2024, compared to earnings of $26.9 million in 2025 versus $20.1 million in 2024, resulting in a decline in the dividend payout ratio to 32.3% in 2025 from 43.7% in 2024.

We and the Bank are also subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on our consolidated financial statements. The Bank is required to comply with applicable capital adequacy standards established by the federal banking agencies. West Virginia state chartered banks, such as the Bank, are subject to similar capital requirements adopted by the West Virginia Division of Financial Institutions. Bank regulators have established “risk-based” capital requirements designed to measure capital adequacy. Risk-based capital ratios reflect the relative risks of various assets companies hold in their portfolios. A weight category of 0% (lowest risk assets), 20%, 50%, 100% or 150% (highest risk assets) is assigned to each asset on the balance sheet. Detailed information concerning our risk-based capital ratios can be found in Supervision and Regulation in Item 1 – Business and Note 15 – Regulatory Capital Requirements accompanying the consolidated financial statements included elsewhere in this report.

The optional CBLR framework, which is issued through interagency guidance, intends to provide a simple alternative measure of capital adequacy for electing qualifying depository institutions as directed under the EGRRCPA. Under the CBLR, if a qualifying depository institution elects to use such measure, such institutions will be considered well capitalized if its ratio of Tier 1 capital to average total consolidated assets (i.e., leverage ratio) exceeds a 9% threshold, subject to a limited two quarter grace period, during which the leverage ratio cannot go 100 basis points below the then applicable threshold, and will not be required to calculate and report risk-based capital ratios.

Eligibility criteria to utilize the CBLR includes the following:

●    Total assets of less than $10 billion;

●    Total trading assets plus liabilities of 5% or less of consolidated assets;

●    Total off-balance sheet exposures of 25% or less of consolidated assets;

●    Cannot be an advanced approaches banking organization; and

●    Leverage ratio greater than 9%.

The Bank's CBLR at December 31, 2025 was 11.1%, which is above the well-capitalized standard of 9%. Management currently believes that capital continues to provide a strong base for profitable growth.

48

Liquidity

Maintenance of a sufficient level of liquidity is a primary objective of the ALCO. Liquidity, as defined by the ALCO, is the ability to meet anticipated operating cash needs, loan demand and deposit withdrawals without incurring a sustained negative impact on net interest income. It is our policy to optimize the funding of the balance sheet, continually balancing the stability and cost factors of various funding sources. We believe liquidity needs are satisfied by the current balance of cash and cash equivalents, readily available access to traditional and non-traditional funding sources and the portions of the investment and loan portfolios that mature within one year. Our liquid assets totaled $453.4 million and $379.7 million as of December 31, 2025 and 2024, respectively. We believe that these sources of funds would enable us to meet cash obligations as they come due.

Our main source of liquidity comes through deposit growth. Liquidity is also provided from cash generated from investment maturities, principal payments from loans and income from loans and investment securities. During the year ended December 31, 2025, cash flows from operating activities totaled $4.0 million, cash used in investing activities totaled $208.6 million and cash flows from financing activities totaled $130.8 million. During the year ended December 31, 2024, cash used in operating and financing activities totaled $0.3 million and $224.5 million, respectively, while cash flows from investing activities totaled $144.5 million. Significant changes in cash flows during the year ended December 31, 2025 include inflows from the net change in deposits of $147.2 million, net maturities/paydowns of available-for-sale investment securities of $126.9 million and sales of available-for-sale investment securities of $95.7 million. These inflows were offset by cash outflows from the net change in loans of $278.7 million and $212.0 million to purchase available-for-sale investment securities.

When appropriate, the Bank has the ability to take advantage of external sources of funds such as advances from the FHLB, national market certificate of deposit issuance programs, the Federal Reserve discount window, brokered deposits and Certificate of Deposit Account Registry Services. These external sources often provide attractive interest rates and flexible maturity dates that enable the Bank to match funding with the contractual maturity dates of assets. Securities in the investment portfolio are classified as available-for-sale and can be utilized as an additional source of liquidity.

We have an effective shelf registration covering $75 million of debt and equity securities, all of which is available, subject to authorization from the Board of Directors and market conditions, to issue debt or equity securities at our discretion. While we seek to preserve flexibility with respect to cash requirements, there can be no assurance that market conditions would permit us to sell securities on acceptable terms, or at all.

Critical Accounting Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. Our significant accounting policies are described in Note 1 – Summary of Significant Accounting Policies accompanying the consolidated financial statements included elsewhere in this report. The preparation of these statements requires us to make certain assumptions, judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities and commitments as of the date of our financial statements. We analyze and base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Changes in facts and circumstances or additional information may result in revised estimates and actual results may differ from these estimates. We have identified the following estimates as critical to the understanding of our financial position and results of operations and which require the application of significant judgment by management.

Allowance for Credit Losses

The ACL represents management’s current estimate of credit losses for the remaining estimated life of financial instruments, primarily to loans on our balance sheet. Estimating the amount of the ACL requires significant judgment and the use of estimates related to historical experience, current conditions, reasonable and supportable forecasts and the value of collateral on collateral-dependent loans. Credit losses are charged against the allowance, while recoveries of amounts previously charged off are credited to the allowance. A provision for credit losses is charged to operations based on management’s periodic evaluation of the factors previously mentioned, as well as other pertinent factors.

We estimate the general component of the ACL based on a forecasting model and consideration of qualitative factors, both internal and external, all of which may be susceptible to significant change.

Through a loss driver analysis, a forecasting model that correlates specific economic factors with credit quality of each loan segment was developed. Peer bank data was identified and used in this process, as we did not have adequate quarterly loan data to

49

analyze over the look-back period to 2004. After analyzing both historical peer loan data and various economic factors over the same look-back period, two economic variables, national GDP and national unemployment rate, were identified as showing the highest correlation to the performance of the loans within each of the pooled segments. Within each loan segment forecast, these two economic variables are forecasted based on expected trends over a 12-month period. This quarterly average is then maintained for the life of the loan segment. These variables are used to produce an estimated probability of default for each quarterly period and, through a proprietary model, also calculate a loss given default factor to estimate overall losses. Benchmark studies are prepared for prepayment and curtailment rate estimates for each loan segment, as well as recovery lag estimates. With all these factors combined, a forecasted allocation rate is produced for each loan segment..

The qualitative factors include items such as the nature and volume of the portfolio; the volume and severity of problem credits; collateral values; portfolio concentrations; economic and business conditions; lending policies and procedures; experience of lending management and staff; and quality of the loan review system. Each of these environmental factors has been analyzed by management and each has been assigned a risk modifier on a four-point scale (No Change, Minor, Moderate and Major) as a measure of the risk that factor creates to the Bank’s loan portfolio. Each environmental factor has also been weighted to reflect how it relates to the different portfolio segments (i.e., various Commercial, Residential, Consumer and HELOC). Individual risk grade factors are then calculated by applying the individual weightings to the individual risk modifiers. The total of these factors provides an overall risk grade for each portfolio segment, which is then applied to a basis point scale to calculate an actual loss rate adjustment. This process is applied to each of the Bank’s portfolio segments. As of December 31, 2025, the "economic and business conditions" factor was generally the highest weighted qualitative factor, with a weighting of 10% to 20%, and given a risk rating of “No Change” for one, a risk rating of “Minor” for fifteen and "Moderate" for four of the 21 portfolio segments (one segment does not have Q Factors). Increasing the risk rating by one for all segments would have resulted in an additional allowance of $1.6 million at December 31, 2025 and decreasing the risk grade by one would have resulted in a reduction to the allowance of $1.5 million.

In addition to the above judgments and estimates, the specific reserves on impaired loans is an important input to the ACL due to the increased risks inherent in those loans. This evaluation requires significant judgment and estimates related to the amount and timing of expected future cash flows and collateral values. To the extent actual outcomes differ from our estimates, we may need additional provisions for credit losses. Any such additional provisions for credit losses will be a direct charge to our earnings.

Fair Value of Level III Financial Instruments

Available-for-sale investment securities are recorded at fair value based upon quoted prices, if available. However, certain local municipal securities included in available-for-sale securities, which are related to tax increment financing, represent Level III instruments. These are assets that have little to no pricing observability as of the reported date, do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation. The fair value of Level III municipal securities are based upon pricing obtained from third-party pricing services, which perform independent analysis of liquidity, rating, yield and duration. Based upon internal review procedures and the fair values provided by the pricing services, we believe that the fair values provided by the pricing services are consistent with the principles of ASC 820, Fair Value Measurement ("ASC 820").

ASC 820 defines fair value as the price that would be received to sell a financial asset or paid to transfer a financial liability in an orderly transaction between market participants at the measurement date. The degree of management judgment involved in determining the fair value of assets and liabilities is dependent upon the availability of quoted market prices or observable market parameters. Assets acquired, liabilities assumed and consideration exchanged are recorded at their respective acquisition date fair values. For financial instruments that trade actively and have quoted market prices or observable market parameters, there is minimal subjectivity involved in measuring fair value. When observable market prices and parameters are not available, management judgment and the use of models are necessary to estimate fair value. Significant assumptions used in models, which include assumptions for interest rates, discount rates, prepayments and credit losses, are independently verified against observable market data when possible. Fair value estimates are also based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment, and therefore cannot be determined with precision. When changes in market conditions reduce the availability of quoted prices or observable data, the estimate of fair value becomes more subjective and requires a higher degree of management judgment.

Refer to Note 18 – Fair Value Measurements accompanying the consolidated financial statements included elsewhere in this report for a complete discussion of our use of fair value and the related measurement practices.

50

Recent Accounting Pronouncements and Developments

Recent accounting pronouncements and developments applicable to us are described further in Note 1 – Summary of Significant Accounting Policies accompanying the consolidated financial statements included elsewhere in this report.

51