January 22, 2026

As we enter 2026, our Bank approaches the New Year with optimism and a renewed sense of purpose. Candidly, it took longer than I anticipated for us to develop the focus and skills essential to fully execute our business plan from the very beginning. There has been some trial-and-error involved in our development process, but we are now finely attuned to how to grow our Bank in a manner that is totally consistent with our business plan.

This Report will show you where we are today and the basis for our optimism heading into 2026.

When we opened our Bank, key elements of our business plan were to limit operating expenses and to maintain excellent asset quality. By doing so, the Bank would achieve linear growth in net income from concomitant growth in loans, investments, and core deposits. Our financial results from the fourth calendar quarter of 2025 show that this is unfolding as we expected.

First, our asset quality continues to remain excellent. As of December 31, 2025, we once again had no loans past due more than 30 days, no nonaccrual loans, and no real estate owned through foreclosure or repossessed assets. As a result, we incurred zero expenses associated with asset quality issues, such as higher loan loss provisions to cover expected losses, increased operational costs for loan recoveries, and reduced interest income.

Second, we continue to limit operating expenses without sacrificing operational efficiency. For the calendar quarter ending December 31, 2025, our noninterest expense was $769 thousand compared to $768 thousand in the same calendar quarter of the prior year. A major reason why was our ability to maintain personnel expenses without hindering the Bank’s growth trajectory. We were able to grow both loans and deposits with 10 full-time equivalent employees as of December 31, 2025, compared to 11 full-time equivalent employees when we opened our Bank.

In other words, we try to run our Bank the way that you run your business, with a close eye on expenses and head count.

During 2025, our mix of loans, deposits, and investments continued to evolve, which directly helped improve net interest income. Our net interest income for the fourth quarter of 2025 was $864 thousand, an increase of $112 thousand over the $752 thousand of net interest income generated in the fourth quarter of 2024. This was a year-over-year increase of 14.9%.

Turning to our net income after taxes, our Bank had net income after taxes of $76 thousand in the fourth quarter of 2025, compared to net income after taxes of $60 thousand in the fourth quarter of 2024. This increase may appear to be marginal on the surface. However, in the fourth quarter of 2024, we received a one-time payment of $100 thousand from a U.S. Treasury Employee Retention Credit related to the COVID period of operations. Adjusting to exclude this one-time payment, which was totally unrelated to our core operations, the comparison between the two quarters shows an actual increase of $116 thousand in net income after taxes. That’s an increase of approximately 290%!

Looking back at 2025, we can see that holding fast to the key elements of our business plan allowed the Bank to achieve incremental growth in loans, deposits, and investments in a safe and sound manner.  Looking ahead, you may be wondering why we are even more optimistic about 2026. To answer that, I’m excited to address new and exciting initiatives that will come into play in the upcoming calendar year. 

First, we have adopted a new logo and brand identification designed to highlight our banking professionalism and focus. Using this new logo and related materials, we have commenced a new targeted advertising program in selected Virginia Beach communities. We have also upgraded our website with client testimonials and more precise descriptions of our operations, our Management Team, and Board of Directors. All of this has been designed to refine and enhance our image, brand, and name recognition for our outreach program.

Second, we are firmly underway with a more vigorous and aggressive outreach program for business development. I previously advised you of this new initiative when we first implemented it.  I can now report that the early fruits of this program are readily apparent in the most robust loan pipeline the Bank has had since opening.  

The most tangible evidence of our outreach success so far is in our loan pipeline. At December 31, 2025, we had a pipeline of proposed lines of credit and construction and permanent commercial real estate loans totaling approximately $20 million when fully funded. In comparison, our loan pipeline was only approximately $2.3 million of loans at December 31, 2024.

Of course, loan pipelines do not equate to closed loans. Any one or more of these loans may not close with our Bank for many different reasons. That being said, I have a high degree of confidence in our current loan pipeline. Each prospect in the pipeline is a qualified borrower with whom we are in serious discussion about a specific lending transaction. My confidence is further enhanced by the knowledge that all of these potential borrowers are investors in the Bank, existing clients, or both.

Candidly, our loan pipeline today is the largest and highest quality loan pipeline that I have had in my 30+ years banking career as the CEO of Integrity Bank, the CEO of two other local community banks, and the Hampton Roads Market CEO for SouthTrust Bank!  The most important point is that our Bank is starting 2026 with many great opportunities to materially grow our loan portfolio and our profitability.

Finally, we are also in the early stages of exploring several new business initiatives outside of our core operations to date. If and when any of these initiatives become material and take place, we will provide you with further information to explain that initiative to you as part of our overall business strategy.

The beginning of a new year is often used as a time for reflection on the past, the present, and the future. We can be proud of the Bank’s past and use the present to measure just how far we have come. Recently, however, I find that these thoughts are increasingly being pushed aside by thoughts of the future and my excitement for where I believe the Bank will be at this time next year.    
 
Michael S. Ives
President and Chief Executive Officer
 
 
The above letter from the CEO of Integrity Bank for Business (the “Bank”) may contain “forward looking statements” regarding future events and future results of the Bank. Forward-looking statements can be identified by words such as “anticipates,” “estimates,” “intends,” “plans,” “believes,” “projects,” “will,” “expects,” “may,” and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance, but are based only on the Bank’s current beliefs, expectations, and assumptions regarding the future of its business, plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and outside of the Bank’s control. The Bank’s actual results and financial condition may differ materially from those indicated in forward-looking statements, and therefore you should not rely on forward-looking statements. Any forward-looking statement made by the Bank is based only on information available to the Bank as of the date on which it is made, and the Bank has no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise.

Balance Sheet 12/31/25


Income Statement for 2nd Quarter FY2026