Dogwood State Bank Reports Fourth Quarter and Full Year 2024 Results

RALEIGH, N.C., Jan. 23, 2025 /PRNewswire/ — Dogwood State Bank DSBX (“Dogwood” or the “Bank”) announced today its financial results for the three and twelve months ended December 31, 2024.

Fourth Quarter and Full Year 2024 Highlights

Adjusted net income (non-GAAP) improved to $6.6 million, or $0.35 per diluted share, in Q4 2024 and improved to $18.7 million, or $1.12 per diluted share, in FY 2024
Adjusted pre-tax, pre-provision net revenue (non-GAAP) improved to $9.7 million in Q4 2024 and improved to $28.8 million in FY 2024
Net interest margin expanded to 4.13% in Q4 2024 and expanded to 3.80% in FY 2024
Adjusted efficiency ratio (non-GAAP) improved to 61.06% in Q4 2024 and improved to 62.76% in FY 2024
Dogwood completed the acquisition of Community First Bancorporation (“Community First”) on August 1, 2024
Dogwood Small Business Lending was recognized as the 3^rd largest North Carolina SBA lender and 29^th largest in the nation in the SBA’s 2024 fiscal year

“We are proud to close out the year with strong performance, reflecting the hard work, dedication, and innovation of our entire team,” commented Steve Jones, Chief Executive Officer. “Our successful acquisition and integration of Community First was transformational for our organization. We delivered exceptional value to our stakeholders, advanced key initiatives, and positioned ourselves for sustained growth in the years ahead. As we move forward, we remain committed to executing our strategy, fostering innovation, and delivering meaningful results for our customers and shareholders, while continuing to focus on building and nurturing strong relationships within our communities.

Q4 2024 Earnings Performance

Dogwood reported GAAP net income in Q4 2024 of $6.2 million, or $0.32 per diluted share, compared to $2.9 million, or $0.20 per diluted share, in Q4 2023. Current quarter GAAP earnings were negatively impacted by merger & acquisition expenses of $595 thousand related to the acquisition of Community First.

Adjusted net income (non-GAAP) in Q4 2024, which excludes the impact of merger & acquisition expenses, increased to $6.6 million, or $0.35 per diluted share, from $2.9 million, or $0.20 per diluted share, in Q4 2023. Adjusted pre-tax, pre-provision net revenue (non-GAAP) in Q4 2024 was $9.7 million, an increase from $5.5 million in Q4 2023.

Net Interest Income

Net interest income was $21.1 million in Q4 2024, an increase from $11.9 million in Q4 2023. The increase was primarily due to significant growth in interest-earning assets over the past year, including an increase in assets from the Community First acquisition, and an expansion in net interest margin.

Total average interest-earning assets increased to $2.04 billion in Q4 2024 from $1.27 billion in Q4 2023. Average loans increased by $749.8 million. Average investment securities balances increased by $50.8 million.

Net interest margin expanded to 4.13% in Q4 2024 from 3.43% in Q4 2023. Higher yields on interest-earning assets coupled with a more favorable mix of those assets contributed to the improved net interest margin.

Provision for Credit Losses and Asset Quality

Provision for credit losses was $1.1 million in Q4 2024, a decrease from $1.6 million in Q4 2023. The allowance for credit losses to total loans was 1.08% as of Q4 2024, compared to 1.09% as of both Q3 2024 and Q4 2023.

Nonperforming loans were 0.33% of total loans as of Q4 2024, compared to 0.18% as of Q3 2024, and 0.15% as of Q4 2023. Annualized net charge offs were 0.13% of average loans in Q4 2024, compared to 0.17% in Q3 2024 and 0.02% in Q4 2024. The vast majority of charge offs recognized in Q4 2024 were related to unguaranteed portions of U.S. Small Business Administration (“SBA”) loans.

Non-Interest Income

Non-interest income was $3.7 million in both Q4 2024 and Q4 2023. SBA lending income as well as service charges & debit card income increased over this period, but a $1.2 million gain on the early payoff of $50 million of term FHLB advances in Q4 2023 offset these increases.

SBA lending income rose by $381 thousand due to higher secondary market premiums on sales of guaranteed loans sold in the quarter and higher servicing fee income. The weighted average net premium on SBA loans sold in Q4 2024 was 8.95%, an increase from 8.14% in Q4 2023. Guaranteed balances of SBA loans sold totaled $23.2 million in Q4 2024, which was a decrease from $25.4 million in Q4 2023.

Service charges and debit card income increased by $611 thousand, which was primarily due to the Community First acquisition.

Non-Interest Expense

Non-interest expense was $15.8 million in Q4 2024, an increase from $10.2 million in Q4 2023. Merger & acquisition expenses of $595 thousand were incurred in Q4 2024 related to the Community First acquisition. These one-time expenses were primarily related to the systems conversion and other integration-related costs. Further, amortization of the Community First core deposit intangible, which was recognized in the acquisition, added $599 thousand to expense in the quarter.

Also contributing to the increase in non-interest expense, compensation and benefits grew by $2.5 million due partially to the increased headcount from the Community First acquisition as well as other investments that have been made in human capital across the Bank to support its organic growth.

Increases in expense items such as occupancy and equipment, software, data processing, and FDIC insurance were primarily due to the Community First acquisition.

Income Taxes

Dogwood had tax expense of $1.8 million in Q4 2024, compared to tax expense of $865 thousand in Q4 2023. The effective tax benefit rate was 22.73% in Q4 2024, which was similar to the effective tax rate of 22.77% in Q4 2023.

Full Year 2024 Earnings Performance

Dogwood reported GAAP net income in 2024 of $5.9 million, or $0.35 per diluted share, compared to net income of $10.6 million, or $0.72 per diluted share, in 2023. GAAP earnings in 2024 were negatively impacted by merger & acquisition expenses and a one-time provision charge on acquired PCD loans, both of which were related to the acquisition of Community First.

Adjusted net income (non-GAAP) in 2024, which excludes the impact of merger & acquisition expenses as well as the provision charge on acquired non-PCD loans, increased to $18.7 million, or $1.12 per diluted share, from $10.6 million, or $0.72 per diluted share, in 2023. Adjusted pre-tax, pre-provision net revenue (non-GAAP) in 2024 was $28.8 million, an increase from $18.8 million in 2023.

Net Interest Income

Net interest income was $63.1 million in 2024, an increase from $42.8 million in 2023. The increase was due to significant growth in interest-earning assets over the past year, including an increase in assets from the Community First acquisition, and an expansion in net interest margin.

Total average interest-earning assets increased to $1.66 billion in 2024 from $1.22 billion in 2023. Average loans increased by $435.8 million. Average investment securities balances increased by $25.3 million.

Net interest margin expanded to 3.80% in 2024 from 3.52% in 2023. While cost of funds increased by 0.44% over the periods under comparison, higher yields on interest-earning assets coupled with a more favorable mix of those assets contributed to the improved net interest margin.

Provision for Credit Losses and Asset Quality

Provision for credit losses was $9.9 million in 2024, an increase from $5.2 million in 2023. The increase in provision expense was primarily due to a one-time provision charge of $5.3 million on acquired non-PCD loans.

Non-Interest Income

Non-interest income was $14.2 million in 2024, an increase from $12.1 million in 2023. This increase was primarily related to SBA lending income as well as service charges and debit card income, partially offset by a $1.2 million gain on the early payoff of term FHLB advances in 2023.

SBA lending income rose by $1.5 million due to higher secondary market premiums on sales of guaranteed loans sold during the year and higher servicing fee income. The weighted average net premium on SBA loans sold in 2024 was 9.39%, an increase from 8.14% in 2023. Guaranteed balances of SBA loans sold totaled $102.7 million in 2024, which was a decrease from $105.1 million in 2023.

Service charges and debit card income increased by $1.1 million, which was primarily due to the Community First acquisition.

Non-Interest Expense

Non-interest expense was $59.8 million in 2024, an increase from $36.1 million in 2023. Merger & acquisition expenses of $11.3 million were incurred in 2024 to complete the Community First acquisition. These one-time expenses included placement agent fees, professional fees, executive change in control payments, vendor termination payments, and other merger-related costs. Further, amortization of the Community First core deposit intangible which was recognized in the acquisition added $1.0 million to expense.

Also contributing to the increase in non-interest expense, compensation and benefits grew by $7.0 million due partially to the increased headcount from the Community First acquisition as well as other investments that have been made in human capital across the Bank to support its organic growth.

Increases in expense items such as occupancy and equipment, software, data processing, and FDIC insurance were primarily due to the Community First acquisition.

Income Taxes

Dogwood had tax expense of $1.8 million in 2024, compared to tax expense of $3.0 million in 2023. The effective tax rate was 23.12% in 2024, which was slightly higher than the effective tax rate of 22.12% in 2023.

Community First Acquisition

On August 1, 2024, Dogwood completed the acquisition of Community First in an all-stock transaction. A total of 3.4 million shares of Dogwood voting common stock were issued in the transaction, which equated to total consideration paid of $54.3 million. Dogwood added $682.5 million in total assets, $474.1 million in gross loans, $572.1 million in total deposits, and $53.6 million in shareholders’ equity to its balance sheet in the acquisition. As part of the purchase price allocation, $4.8 million in goodwill was recognized at acquisition.

About Dogwood State Bank

Dogwood State Bank is a state-chartered community bank headquartered in Raleigh, North Carolina, with approximately $2.2 billion in total assets. Dogwood provides a wide range of banking products and services through its online offerings and twenty-one branch offices in North Carolina, South Carolina, and Eastern Tennessee. Dogwood also specializes in providing lending services to small businesses through its Dogwood State Bank Small Business Lending division. Dogwood is focused on becoming the bank for businesses, business owners, professionals, and their employees and redefining what it means to Bank Local. By leveraging leadership, investing in technology, and committing to personalized, superior customer service, Dogwood is changing the landscape of community banking.

Forward-Looking Statements

Statements made in this press release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this press release and are based on current expectations and involve a number of assumptions. Forward-looking statements can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Our ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors that could have a material effect on the Bank’s operations and future prospects include but are not limited to: the expected growth opportunities or cost savings from the proposed merger (the “merger”) of Community First and Community First Bank, Inc. with and into the Bank may not be fully realized or may take longer to realize than expected; the businesses of the Bank and Community First may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; deposit attrition, operating costs, customer losses and business disruption prior to and following the merger, including adverse effects on relationships with employees and customers, may be greater than expected; the regulatory and shareholder approvals required for the merger may not be obtained; changes in interest rates, general economic and business conditions; legislative/regulatory changes; the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the quality and composition of the Bank’s loan and securities portfolios; demand for loan products and other financial services in our market areas; inflation; deposit flows; competition; our implementation of new technologies and ability to develop and maintain secure and reliable electronic systems; changes in the securities markets; and changes in accounting principles, policies and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with United States generally accepted accounting principles (“GAAP”). The Bank uses the non-GAAP financial measures discussed herein in its analysis of the Bank’s performance. The Bank’s management believes that these non-GAAP financial measures enhance comparability of results of operations with prior periods by excluding the impact of items or events that may obscure trends in the Bank’s performance. These disclosures should not be viewed as a substitute for financial results in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Please refer to the Non-GAAP Reconciliation table for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure.

Financial Tables

Dogwood State Bank
Income Statements
			Quarter Ended					Twelve Months Ended
(Dollars in thousands, except per share data)			Dec 31 2024	Sep 30 2024	Jun 30 2024	Mar 31 2024	Dec 31 2023	Dec 31 2024	Dec 31 2023

Net interest income			$ 21,129	$ 18,157	$ 12,521	$ 11,312	$ 11,900	$ 63,119	$ 42,784
	Provision for credit losses		1,116	5,857	2,017	921	1,638	9,911	5,164
		Net interest income after provision	20,013	12,300	10,504	10,391	10,262	53,208	37,620
Non-interest income
	SBA lending		2,219	2,801	2,717	2,197	1,838	9,934	8,421
	Service charges and debit card income		954	811	340	351	343	2,456	1,399
	Bank-owned life insurance		346	301	219	211	201	1,079	751
	Securities gains (losses), net		60	(8)	(6)	6	5	52	77
	Gain on payoff of FHLB advances		–	–	–	–	1,230	–	1,230
	Other		160	293	161	85	93	697	251
		Total non-interest income	3,739	4,198	3,431	2,850	3,710	14,218	12,129
Non-interest expense
	Compensation and benefits		9,389	8,598	6,683	6,506	6,910	31,176	24,139
	Occupancy and equipment		1,166	1,025	707	719	634	3,617	2,403
	Software		561	497	344	346	343	1,748	1,375
	Loan related costs		570	182	314	290	254	1,359	1,010
	Data processing		780	648	315	261	245	2,004	914
	Professional fees		157	208	235	225	242	825	971
	FDIC insurance		390	287	204	240	239	1,122	734
	Merger and acquisition expenses		595	9,139	562	958	14	11,254	14
	Amortization of other intangible assets		599	408	4	11	18	1,022	111
	Other		1,572	1,731	1,102	1,259	1,274	5,660	4,406
		Total non-interest expense	15,779	22,723	10,470	10,815	10,173	59,787	36,077
		Net income (loss) before income taxes	7,973	(6,225)	3,465	2,426	3,799	7,639	13,672
Income tax expense (benefit)			1,812	(1,445)	811	588	865	1,766	3,024
		Net income (loss)	$ 6,161	$ (4,780)	$ 2,654	$ 1,838	$ 2,934	$ 5,873	$ 10,648

Pre-Tax, Pre-Provision Net Revenue (PPNR)⁽¹⁾			$ 9,089	$ (368)	$ 5,482	$ 3,347	$ 5,437	$ 17,550	$ 18,836
Adjusted PPNR⁽¹⁾			9,684	8,771	6,044	4,305	5,451	28,804	18,850

Per Share Data:
	Earnings per share (EPS) – basic		$ 0.33	$ (0.28)	$ 0.18	$ 0.13	$ 0.20	$ 0.36	$ 0.75
	Adjusted EPS – basic⁽¹⁾		0.36	0.37	0.21	0.18	0.21	1.15	0.75
	Earnings per share – diluted		0.32	(0.28)	0.17	0.12	0.20	0.35	0.72
	Adjusted EPS – diluted⁽¹⁾		0.35	0.36	0.20	0.17	0.20	1.12	0.72

Performance Ratios:
	Return on average assets (ROA)		1.13 %	-0.97 %	0.71 %	0.53 %	0.80 %	0.33 %	0.83 %
	Adjusted ROA⁽¹⁾		1.22 %	1.30 %	0.83 %	0.74 %	0.81 %	1.06 %	0.83 %
	Return on average equity (ROE)		10.73 %	-9.07 %	6.16 %	4.44 %	7.15 %	3.02 %	6.87 %
	Adjusted ROE⁽¹⁾		11.53 %	12.09 %	7.16 %	6.22 %	7.18 %	9.58 %	6.88 %
	Return on tangible common equity (ROTCE)⁽¹⁾		11.96 %	-9.93 %	6.42 %	4.63 %	7.48 %	3.25 %	7.20 %
	Adjusted ROTCE⁽¹⁾		12.85 %	13.24 %	7.46 %	6.50 %	7.51 %	10.32 %	7.21 %
	Net interest margin		4.13 %	3.93 %	3.53 %	3.41 %	3.42 %	3.80 %	3.52 %
	Efficiency ratio		63.45 %	101.65 %	65.63 %	76.37 %	65.17 %	77.31 %	65.70 %
	Adjusted efficiency ratio⁽¹⁾		61.06 %	60.76 %	62.11 %	69.60 %	65.08 %	62.76 %	65.67 %

⁽¹⁾ Denotes a non-GAAP measure. Refer to the non-GAAP reconciliation subsequently included in these materials for a reconciliation to the most directly
comparable GAAP measure. “Adjusted” items exclude the impact of merger and acquisition expenses.

Dogwood State Bank
Balance Sheets
				Ending Balance
(In thousands, except per share data)				Dec 31 2024	Sep 30 2024	Jun 30 2024	Mar 31 2024	Dec 31 2023
Assets
Cash and due from banks				$ 10,582	$ 7,622	$ 2,514	$ 2,353	$ 5,191
Interest-earning deposits with banks				75,612	146,732	59,073	91,365	123,474
	Total cash and cash equivalents			86,194	154,354	61,587	93,718	128,665
Investment securities available for sale				99,411	95,290	58,989	55,984	49,244
Investment securities held to maturity				71,952	73,144	74,404	76,119	77,557
Marketable equity securities				395	335	329	336	329
	Total investment securities			171,758	168,769	133,722	132,439	127,130
Loans held for sale				6,733	7,924	11,030	8,146	15,274
Loans				1,819,796	1,757,828	1,236,722	1,148,899	1,095,339
Less allowance for credit losses				(19,698)	(19,143)	(13,349)	(12,344)	(11,943)
	Loans, net			1,800,098	1,738,685	1,223,373	1,136,555	1,083,396
Bank-owned life insurance				45,089	44,743	27,888	27,669	27,458
Premises and equipment, net				37,180	35,378	19,713	18,838	18,707
SBA servicing asset				4,982	5,026	4,568	4,373	3,967
Goodwill				11,771	11,771	7,016	7,016	7,016
Other intangible assets, net				11,374	11,972	–	4	15
Other assets				35,991	36,274	21,854	19,750	20,060
		Total assets		$ 2,211,170	$ 2,214,896	$ 1,510,751	$ 1,448,508	$ 1,431,688
Liabilities and Shareholders’ Equity
Deposits:
	Noninterest-bearing			$ 474,458	$ 483,908	$ 379,465	$ 302,705	$ 291,910
	Interest-bearing			1,334,937	1,357,439	872,430	913,914	902,369
			Total deposits	1,809,395	1,841,347	1,251,895	1,216,619	1,194,279
FHLB advances				130,164	101,686	60,000	40,000	50,000
Subordinated debt				9,708	9,627	–	–	–
Lease obligations				12,258	10,491	10,726	10,959	11,187
Other liabilities				19,456	26,503	13,162	11,459	11,719
		Total liabilities		1,980,981	1,989,654	1,335,783	1,279,037	1,267,185
Shareholders’ equity
	Common stock ($1 par value)			18,976	18,980	15,541	15,020	14,710
	Additional paid-in capital			188,175	187,981	137,431	135,077	132,373
	Retained earnings			28,280	22,118	26,897	24,244	22,406
	Accumulated other comprehensive loss			(5,242)	(3,837)	(4,901)	(4,870)	(4,986)
		Total shareholders’ equity		230,189	225,242	174,968	169,471	164,503
		Total liabilities and shareholders’ equity		$ 2,211,170	$ 2,214,896	$ 1,510,751	$ 1,448,508	$ 1,431,688

Per Share Information:
	Shares outstanding			18,976	18,980	15,541	15,020	14,710
	Book value per share			$ 12.13	$ 11.87	$ 11.26	$ 11.28	$ 11.18
	Tangible book value per share⁽¹⁾			$ 10.91	$ 10.62	$ 10.81	$ 10.82	$ 10.71

Capital Ratios:
	Tier 1 leverage			9.83 %	10.58 %	12.14 %	11.75 %	11.05 %
	Common equity Tier 1 capital			10.70 %	10.70 %	12.64 %	13.12 %	13.47 %
	Tier 1 risk-based capital			10.70 %	10.70 %	12.64 %	13.12 %	13.47 %
	Total risk-based capital			12.32 %	12.34 %	13.81 %	14.29 %	14.65 %
	Tangible common equity⁽¹⁾			9.46 %	9.20 %	11.17 %	11.27 %	11.05 %

⁽¹⁾ Denotes a non-GAAP measure. Refer to the non-GAAP reconciliation subsequently included in these materials for a reconciliation to the most directly comparable GAAP measure.

Dogwood State Bank
Asset Quality Measures
			Quarter Ended
(Dollars in thousands)			Dec 31 2024	Sep 30 2024	Jun 30 2024	Mar 31 2024	Dec 31 2023
Nonperforming Assets:
	Non-accrual loans		$ 5,582	$ 3,234	$ 2,069	$ 1,938	$ 1,670
	Loans 90 days or more past due and accruing		338	–	–	–	–
	Other real estate owned		104	104	–	–	–
		Total nonperforming assets	$ 6,024	$ 3,338	$ 2,069	$ 1,938	$ 1,670

Asset Quality Ratios:
	Nonperforming loans/loans		0.33 %	0.18 %	0.17 %	0.17 %	0.15 %
	Nonperforming assets/total assets		0.27 %	0.15 %	0.14 %	0.13 %	0.12 %
	Nonperforming assets/loans and other real estate owned		0.33 %	0.19 %	0.17 %	0.17 %	0.15 %
	Loans 30 days or more past due/loans (excludes non-accruals)		0.67 %	0.29 %	0.21 %	0.41 %	0.23 %

Allowance for Credit Losses (ACL):
	ACL on Loans:
	Balance, beginning of period		$ 19,143	$ 13,349	$ 12,344	$ 11,943	$ 11,385
	Reclass of Day 1 ACL from loan fair value discount on acquired PCD loans		–	658	–	–	–
	Loans charged off		(614)	(738)	(987)	(288)	(81)
	Recoveries of loans previously charged off		29	79	11	9	40
		Net loans charged off	(585)	(659)	(976)	(279)	(41)
	Provision for credit losses		1,140	5,795	1,981	680	599
	Balance, end of period		$ 19,698	$ 19,143	$ 13,349	$ 12,344	$ 11,943

	ACL on Off-Balance Sheet Credit Exposures:
	Balance, beginning of period		$ 2,595	$ 2,336	$ 2,300	$ 2,059	$ 1,020
	Reserve on acquired unfunded loan commitments		–	197	–	–	–
	Provision for credit losses		(24)	62	36	241	1,039
	Balance, end of period		$ 2,571	$ 2,595	$ 2,336	$ 2,300	$ 2,059

Allowance for Credit Losses Ratios:
	Allowance for credit losses/loans		1.08 %	1.09 %	1.08 %	1.07 %	1.09 %
	Allowance for credit losses/nonperforming loans		332.74 %	591.93 %	645.19 %	636.95 %	715.15 %
	Net charge-offs/average loans (annualized)		0.13 %	0.17 %	0.33 %	0.10 %	0.02 %

Dogwood State Bank
Net Interest Margin Analysis

			Quarter Ended
			December 31, 2024			September 30, 2024			December 31, 2023
(Dollars in thousands)			Average Balance	Income/ Expense	Yield/ Rate	Average Balance	Income/ Expense	Yield/ Rate	Average Balance	Income/ Expense	Yield/ Rate
Interest-Earning Assets:
	Loans		$ 1,772,350	$ 30,524	6.85 %	$ 1,585,101	$ 27,589	6.92 %	$ 1,022,537	$ 15,959	6.19 %
	Investment securities		170,307	1,635	3.82 %	152,851	1,361	3.54 %	119,534	840	2.79 %
	Interest-earning deposits with banks		93,153	1,005	4.29 %	100,616	1,272	5.03 %	131,977	1,710	5.14 %
		Total interest-earning assets	2,035,810	33,164	6.48 %	1,838,568	30,222	6.54 %	1,274,048	18,509	5.76 %
Non interest-earning assets			129,999			116,334			65,619
		Total assets	$ 2,165,809			$ 1,954,902			$ 1,339,667

Interest-Bearing Liabilities:
	Interest-bearing demand		$ 175,373	$ 468	1.06 %	$ 165,104	$ 531	1.28 %	$ 109,731	$ 254	0.92 %
	Savings and money market		759,932	6,006	3.14 %	696,594	6,502	3.71 %	448,059	4,199	3.72 %
	Time		395,409	4,489	4.52 %	319,104	3,846	4.79 %	225,987	2,489	4.37 %
		Total interest-bearing deposits	1,330,714	10,963	3.28 %	1,180,802	10,879	3.67 %	783,777	6,942	3.51 %
	FHLB advances		68,177	797	4.65 %	76,176	979	5.11 %	50,435	505	3.97 %
	Subordinated debt		9,659	209	8.61 %	6,630	139	0.00 %	–	–	0.00 %
	Lease obligations		10,404	66	2.52 %	10,353	68	2.61 %	10,606	59	2.21 %
		Total interest-bearing liabilities	1,418,954	12,035	3.37 %	1,273,961	12,065	3.77 %	844,818	7,506	3.52 %
Non-interest bearing deposits			496,016			451,987			326,827
Other liabilities			22,497			19,280			8,813
Shareholders’ equity			228,342			209,674			159,209
		Total liabilities and shareholders’ equity	$ 2,165,809			$ 1,954,902			$ 1,339,667
Net interest income and interest rate spread				$ 21,129	3.11 %		$ 18,157	2.77 %		$ 11,005	2.24 %
Net interest margin					4.13 %			3.93 %			3.43 %

Cost of funds					2.50 %			2.78 %			2.54 %
Cost of deposits					2.39 %			2.65 %			2.48 %

						Twelve Months Ended
						December 31, 2024			December 31, 2023
(Dollars in thousands)						Average Balance	Income/ Expense	Yield/ Rate	Average Balance	Income/ Expense	Yield/ Rate
Interest-Earning Assets:
	Loans					$ 1,420,334	$ 95,775	6.74 %	$ 984,510	$ 59,618	6.06 %
	Investment securities					146,973	5,091	3.46 %	121,632	3,405	2.80 %
	Interest-earning deposits with banks					93,097	4,512	4.85 %	109,396	5,480	5.01 %
		Total interest-earning assets				1,660,404	105,378	6.35 %	1,215,538	68,503	5.64 %
Non interest-earning assets						95,589			64,638
		Total assets				$ 1,755,993			$ 1,280,176

Interest-Bearing Liabilities:
	Interest-bearing demand					145,803	$ 1,576	1.08 %	$ 114,956	$ 1,037	0.90 %
	Savings and money market					666,483	24,858	3.73 %	436,020	14,831	3.40 %
	Time					268,658	12,508	4.66 %	197,264	7,781	3.94 %
		Total interest-bearing deposits				1,080,944	38,942	3.60 %	748,240	23,649	3.16 %
	FHLB advances					53,280	2,696	5.06 %	42,069	1,831	4.35 %
	Subordinated debt					3,504	348	9.93 %	–	–	–
	Lease obligation					11,262	273	2.42 %	10,260	240	2.34 %
		Total interest-bearing liabilities				1,148,990	42,259	3.68 %	800,569	25,720	3.21 %
Non-interest bearing deposits						395,495			315,963
Other liabilities						16,898			8,657
Shareholders’ equity						194,610			154,987
		Total liabilities and shareholders’ equity				$ 1,755,993			$ 1,280,176
Net interest income and interest rate spread							$ 63,119	2.67 %		$ 42,783	2.42 %
Net interest margin								3.80 %			3.52 %

Cost of funds								2.74 %			2.30 %
Cost of deposits								2.64 %			2.22 %

Dogwood State Bank
Non-GAAP Reconciliation
			Quarter Ended					Twelve Months Ended
(In thousands, except per share data)			Dec 31 2024	Sep 30 2024	Jun 30 2024	Mar 31 2024	Dec 31 2023	Dec 31 2024	Dec 31 2023

Net income and EPS:
	Net income (loss) (GAAP)		$ 6,161	$ (4,780)	$ 2,654	$ 1,838	$ 2,934	$ 5,873	$ 10,648
		Adjust for provision on acquired non-PCD loans, net of tax	–	4,111	–	–	–	4,111	–
		Adjust for merger and acquisition expenses, net of tax	458	7,039	433	738	11	8,668	11
	Adjusted net income (non-GAAP)		$ 6,619	$ 6,369	$ 3,087	$ 2,576	$ 2,945	$ 18,651	$ 10,659

	Weighted average common shares outstanding
		Basic	18,488	17,301	14,905	14,377	14,329	16,275	14,152
		Diluted	18,978	17,810	15,480	15,075	15,039	16,726	14,839

	EPS (GAAP)
		Basic	$ 0.33	$ (0.28)	$ 0.18	$ 0.13	$ 0.20	$ 0.36	$ 0.75
		Diluted	0.32	(0.28)	0.17	0.12	0.20	0.35	0.72

	Adjusted EPS (non-GAAP)
		Basic	$ 0.36	$ 0.37	$ 0.21	$ 0.18	$ 0.21	$ 1.15	$ 0.75
		Diluted	0.35	0.36	0.20	0.17	0.20	1.12	0.72

PPNR:
	Net income (loss) (GAAP)		$ 6,161	$ (4,780)	$ 2,654	$ 1,838	$ 2,934	$ 5,873	$ 10,648
	Add:
		Provision for credit losses	1,116	5,857	2,017	921	1,638	9,911	5,164
		Income tax expense (benefit)	1,812	(1,445)	811	588	865	1,766	3,024
	PPNR (non-GAAP)		9,089	(368)	5,482	3,347	5,437	17,550	18,836
		Add: merger and acquisition expenses	595	9,139	562	958	14	11,254	14
	Adjusted PPNR (non-GAAP)		$ 9,684	$ 8,771	$ 6,044	$ 4,305	$ 5,451	$ 28,804	$ 18,850

ROA:
	Net income (loss) (GAAP)		$ 6,161	$ (4,780)	$ 2,654	$ 1,838	$ 2,934	$ 5,873	$ 10,648
	Adjusted net income (non-GAAP)		6,619	6,369	3,087	2,576	2,945	18,651	10,659

	Average assets		2,165,809	1,954,902	1,494,353	1,402,220	1,448,929	1,755,993	1,280,176

	ROA		1.13 %	-0.97 %	0.71 %	0.53 %	0.80 %	0.33 %	0.83 %
	Adjusted ROA (non-GAAP)		1.22 %	1.30 %	0.83 %	0.74 %	0.81 %	1.06 %	0.83 %

ROE and ROTCE:
	Net income (loss) (GAAP)		$ 6,161	$ (4,780)	$ 2,654	$ 1,838	$ 2,934	$ 5,873	$ 10,648
	Adjusted net income (non-GAAP)		6,619	6,369	3,087	2,576	2,945	18,651	10,659

	Average shareholders’ equity (GAAP)		228,342	209,674	173,356	166,534	162,703	194,610	154,987
		Less: average goodwill and other intangible assets, net	23,426	18,234	7,018	7,027	7,041	13,964	7,080
	Average tangible common equity (non-GAAP)		204,916	191,440	166,338	159,507	155,662	180,646	147,907

	ROE		10.73 %	-9.07 %	6.16 %	4.44 %	7.15 %	3.02 %	6.87 %
	Adjusted ROE (non-GAAP)		11.53 %	12.09 %	7.16 %	6.22 %	7.18 %	9.58 %	6.88 %
	ROTCE (non-GAAP)		11.96 %	-9.93 %	6.42 %	4.63 %	7.48 %	3.25 %	7.20 %
	Adjusted ROTCE (non-GAAP)		12.85 %	13.24 %	7.46 %	6.50 %	7.51 %	10.32 %	7.21 %

Efficiency Ratio:
	Non-interest expense (GAAP)		$ 15,779	$ 22,723	$ 10,470	$ 10,815	$ 10,173	$ 59,787	$ 36,077
		Less: merger and acquisition expenses	595	9,139	562	958	14	11,254	14
	Adjusted non-interest expense (non-GAAP)		15,184	13,584	9,908	9,857	10,159	48,533	36,063

	Net interest income		21,129	18,157	12,521	11,312	11,900	63,119	42,784
	Non-interest income		3,739	4,198	3,431	2,850	3,710	14,218	12,129
	Total revenue		24,868	22,355	15,952	14,162	15,610	77,337	54,913

	Efficiency ratio (non-interest expense / total revenue)		63.45 %	101.65 %	65.63 %	76.37 %	65.17 %	77.31 %	65.70 %
	Adjusted efficiency ratio (non-GAAP)		61.06 %	60.76 %	62.11 %	69.60 %	65.08 %	62.76 %	65.67 %

Tangible Book Value per Share and Tangible Common Equity Ratio:
	Shareholders’ equity (GAAP)		$ 230,189	$ 225,242	$ 174,968	$ 169,471	$ 164,503	$ 230,189	$ 164,503
		Less: goodwill and other intangible assets, net	23,145	23,743	7,016	7,020	7,031	23,145	7,031
	Tangible common equity (non-GAAP)		207,044	201,499	167,952	162,451	157,472	207,044	157,472

	Common shares outstanding		18,976	18,980	15,541	15,020	14,710	18,976	14,710

	Book value per share		$ 12.13	$ 11.87	$ 11.26	$ 11.28	$ 11.18	$ 12.13	$ 11.18
	Tangible book value per share (non-GAAP)		10.91	10.62	10.81	10.82	10.71	10.91	10.71

	Total assets (GAAP)		$ 2,211,170	$ 2,214,896	$ 1,510,751	$ 1,448,508	$ 1,431,688	$ 2,211,170	$ 1,431,688
		Less: goodwill and other intangible assets, net	23,145	23,743	7,016	7,020	7,031	23,145	7,031
	Tangible assets (non-GAAP)		2,188,025	2,191,153	1,503,735	1,441,488	1,424,657	2,188,025	1,424,657

	Tangible common equity to tangible assets (non-GAAP)		9.46 %	9.20 %	11.17 %	11.27 %	11.05 %	9.46 %	11.05 %