Earnings rise 46% from prior quarter; margin expands, credit quality remains strong, and restructured balance sheet remains well-positioned

1ST SUMMIT BANCORP OF JOHNSTOWN today announced financial results for the quarter ended September 30, 2025, marking another period of strong performance. Net income for the quarter was $1.7 million, up 46% from $1.2 million in the second quarter of 2025. Annualized return on average assets improved to 0.46% from 0.33% for the prior quarter, and return on average equity advanced proportionately over the same period. Net interest margin widened to 2.28% compared to 2.18% for the prior quarter, reflecting continued momentum in core earnings strength.

Financial Highlights for the Quarter Ended September 30, 2025:

• Net Income: $1.7 million, compared to $1.2 million in Q2 2025 and $294 thousand in Q3 2024 – a 45.7% sequential quarter increase over Q2 2025.
• Return on Average Assets: 0.46% annualized, up from 0.33% in Q2 2025.
• Return on Average Equity: 6.80%, up from 4.92% in Q2 2025.
• Loan Growth: 18.11% annualized growth rate for the quarter. Increase in loans includes a $22.3 million mortgage loan pool purchase. Excluding purchased loans, loan growth was 7.27% annualized for the quarter.
• Deposit Growth: 4.33% annualized, mostly due to $22 million in time deposit growth.
• Net Interest Margin: 2.28%, compared to 2.18% in Q2 2025 and 1.79% in Q3 2024.
• Noninterest Income: $2.0 million, compared to $2.2 million in Q2 2025.
• Operating Expenses: Well controlled at $8.0 million, compared to $8.3 million in Q2 2025.
• Provision for Loan Losses: $250 thousand due to loan growth, with no significant charge-offs during the quarter.
• Loan-to-Deposit Ratio: 71.1% as of September 30, 2025, up from 68.8% at June 30, 2025.
• Average Earning Assets: Increased 15.4% annualized over the quarter.

CEO Commentary

“Our last two quarters tell a clear story,” said Allison Johnson, President and Chief Executive Officer. “We’ve generated meaningful growth in profitability and expanded our margin without loosening our underwriting standards and while maintaining outstanding credit quality. We believe that the decisions we made to reshape our balance sheet, shorten durations, and control costs are paying off in real time. We now turn our attention to a higher probability of lower interest rates as we expect falling rates to provide a significant tailwind as deposit and borrowing costs reset downward over the next three to six months.

“Our strategy this year has been simple and our group of talented bankers have executed flawlessly. We intended to grow quality earning assets, fund them efficiently, and protect our margin. We weren’t chasing temporary volume or headline numbers, we simply remained alert to all potential opportunities for growth. It is now time to turn our attention to the expense side of the income statement. Over the next few quarters we will be looking for opportunities to improve our efficiency ratio while maintaining current asset levels and enjoying the benefit of lower funding costs.”

Third Quarter Review

Earnings Growth and Core Profitability

Net income expanded again during the quarter ended September 30, 2025, to $1.7 million, a 45.7% increase over net income of $1.2 million for the quarter ended June 30, 2025. Net income for the same quarter last year totaled $294 thousand. Current quarter net income represents core earnings with no nonrecurring revenue or expense items. Return on average assets increased to 0.46%, up from 0.33% in the second quarter, and return on average equity increased to 6.80% from 4.92%.

Net Interest Margin and Earning Assets

Management’s focus during the third quarter was to increase interest earning assets to a level that can be maintained long term, while also maintaining sufficient capacity for future growth in the coming quarters based on current capital levels and ratios. We accomplished this growth by purchasing approximately $17 million in high quality bonds and purchasing $22 million in mortgage loans. We anticipate these purchased interest earning assets will have durations ranging from two to seven years based on current rates and expected prepayments. These additional interest earning assets were funded with a successful certificates of deposit campaign designed to attract funding with maturities in the three to six month range that will reset at lower rates in the coming quarters.

The result of these efforts was net interest margin (NIM) expansion of 10 basis points to 2.28% in the third quarter, compared to 2.18% in the second quarter and 1.79% in the third quarter of 2024. Our expectation is that opportunities to add significant levels of interest earning assets, while maintaining our current net interest margin, will be challenging going forward given increased competition for higher yields and quality deposits. As a result, we expect to focus on the funding side of the NIM equation in future periods in an effort to further enhance margin and profitability as rates fall.

Loan and Deposit Trends

Total loans grew at an annualized rate of 18.1% during the quarter, including the purchase of a $22.3 million pool of residential mortgage loans. Excluding that purchase, organic loan growth was 7.3% annualized, supported by healthy demand in both the commercial and industrial and commercial real estate segments. We intend to stay vigilant in coming quarters as competition for loans increases and the economy shows signs of slowing down. While production volumes may decrease in the coming quarters, we continue to expect that the loans originated will be high quality, consistent with our expectations of superior credit quality and low historical charge-offs.

Deposits increased 4.33% annualized over the prior quarter, primarily due to a $21.9 million increase in certificates of deposits resulting from the targeted campaign described above. We anticipate being able to roll a sufficient level of these certificates of deposit at lower rates as benchmark rates decline. This deliberate strategy supports our goal of continued net interest margin expansion while positioning the Bank to benefit quickly from declining liability costs.

Credit quality remained excellent. The $250 thousand loan-loss provision recorded in the quarter was entirely attributable to loan growth; there were no specific credit-related concerns or charge-offs of significance.

Strategic Focus

We have enjoyed two exceptional quarters with net income growth near or above 50% each quarter achieved through calculated increases in interest earning assets funded at spreads that we can either maintain or improve as rate shifts occur in the coming quarters. Looking ahead, our goal is to drive both balance sheet and net income growth that is at or above peer levels. The next leg of our transition will involve a focus on expense discipline. As some of our vendor contracts expire over the next three to six quarters, we are looking at ways to preserve or enhance functionality while reducing costs. To this end, we believe that a new generation of tools built and powered by artificial intelligence presents exciting opportunities to improve internal efficiency and enhance the customer experience. We will stay selective on new production to protect margin and credit quality and in an effort to convert efficiency gains into durable earnings. Our strategic focus going forward is to continue in our efforts to drive meaningful results for our shareholders that are balanced, repeatable, and resilient.

About 1st Summit Bancorp of Johnstown, Inc.

1st Summit, through its wholly owned subsidiary, 1st Summit Bank (the “Bank”), is a community oriented financial institution that primarily focuses on relationship banking for both consumers and businesses. From 17 full-service community offices and one loan production office, the Bank provides a full-array of personal and business banking solutions, investment management and trust services. The Bank serves communities throughout the counties of Cambria, Westmoreland, Blair, Somerset, and Indiana in southwestern PA. Please visit https://www.1stsummit.bank for more information.

Cautionary Statement Regarding Forward Looking Statements

Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended. Any statements about our expectations, beliefs, plans, predictions, protections, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. Forward-looking statements are typically, but not exclusively, identified by the use of forward-looking terminology such as “believes,” “expects,” “could,” “may,” “will,” “should,” “seeks,” “likely,” “intends” “plans,” “pro forma,” “projects,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Factors that could cause our actual results to differ materially from those described in the forward-looking statements include, among others:(i) changes in general business and our ability to successfully implement our strategic plan, (ii) changes in interest rates or in the quality or composition of our loan and investment portfolios; (iii) adequacy of loan loss reserves; (iv) increased competition; (v) loss of certain key officers; (vi) continued relationships with major customers; (vii) deposit attrition; (viii) rapidly changing technology; (ix) unanticipated regulatory or judicial proceedings and liabilities and other costs; (x) changes in the cost of funds, demand for loan products, or demand for financial services; (xi) other economic, competitive, governmental, or technological factors affecting our operations, markets, products, services, and prices; and (xii) our success at managing the foregoing items. For a discussion of additional factors that could cause our actual results to differ materially from those described in the forward-looking statements, please see the risk factors discussed in our most recent Annual Report on our website at https://www.1stsummit.bank/home/about-us/meet-1st-summit/investor-information/.

While forward-looking statements reflect our good-faith beliefs, they are not guarantees of future performance. All forward-looking statements are necessarily only estimates of future results. Accordingly, actual results may differ materially from those contemplated, expressed in or implied by the particular forward-looking statement due to additional risks and uncertainties of which the Company is not currently aware or which it does not currently view as, but in the future may become, material to its business or operating results. Due to these and other possible uncertainties and risks, we can give no assurance that the results contemplated in the forward-looking statements will be realized and, therefore, you are cautioned not to place undue reliance on such statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law. All forward-looking statements, express or implied, included in this press release are qualified in their entirety by this cautionary statement.

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