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TECTONIC FINANCIAL, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

   September 30, 2025   
(In thousands, except share amounts and footnotes)  Historical   Split Off of Tectonic Advisors   Other Adjustments Related to Split off   Pro Forma   
ASSETS                  
Cash and due from banks  $6,167   $(250)  $(143)  $5,774  (a)
Interest-bearing deposits   156,571    -    34,500    191,071  (b)
Federal funds sold   1,228    -    -    1,228   
Total cash and cash equivalents   163,966    (250)   34,357    198,073   
Securities available for sale   21,831    -    -    21,831   
Securities held to maturity   21,805    -    -    21,805   
Securities, restricted at cost   2,598    -    -    2,598   
Securities, not readily marketable   -    -    -    -   
Loans held for sale   35,031    -    -    35,031   
Loans, net of Provision for credit loan losses of $12,451 and $9,183, respectively   767,467    -    -    767,467   
Bank premises and equipment, net   4,562    (88)   -    4,474   
Other real estate   1,053    -    -    1,053   
Goodwill   21,440    -    -    21,440   
Deferred tax asset   1,917    -    -    1,917   
Other assets   22,167    (4,381)   4,139    21,925  (c)
Total assets  $1,063,837    (4,719)   38,496   $1,097,614   
                       
LIABILITIES                      
Demand deposits:                      
Non-interest-bearing  $71,418    -    -   $71,418   
Interest-bearing   186,419    -    -    186,419   
Time deposits   654,071    -    -    654,071   
Total deposits   911,908    -    -    911,908   
Borrowed funds   -    -    -    -   
Subordinated notes, net of unamortized issuance costs   12,000    -    -    12,000   
Deferred tax liabilities   -    (30)   -    (30 ) 
Other liabilities   20,778    (1,427)   845    20,196   
Total liabilities   944,686    (1,457)   845    944,074   
                       
SHAREHOLDERS’ EQUITY                      
Preferred Stock 9% fixed to floating rate series B non-cumulative, perpetual, $.01 par value; 1,725,000 shares authorized, 1,725,000 shares issued and outstanding at September 30, 2025)   17    -    -    17   
Common stock, $0.01 par value; 40,000,000 shares authorized; 7,250,453 shares issued and 6,776,601 shares outstanding at September 30, 2025 Historical, and 7,250,453 issued and 5,546,556 shares outstanding at September 30, 2025 Pro Forma   72    -    (15)   57  (b)
Additional paid-in capital   50,098    -    (33,642)   16,456  (b)
Treasury stock, at cost; 473,852 shares and 170,352 shares as of September 30, 2025   (8,908)   -    -    (8,908 ) 
Retained earnings   78,866    (3,262)   71,308    146,912   
Accumulated other comprehensive loss   (994)   -    -    (994 ) 
Total shareholders’ equity   119,151    (3,262)   37,651    153,540   
Total liabilities and shareholders’ equity  $1,063,837    (4,719)   38,496   $1,097,614   

 

(a)Under the Separation Agreement, the Company agreed that at the date of the Split Off, Tectonic Advisors would hold $250,000 in cash.
(b)In connection with the Distribution, the Company received (i) approximately 1.53 million shares of the Company's common stock and (ii) a promissory note issued by Spinco and payable to the Company in the amount of $35,000,000. Immediately following the distrbution, Spinco refinanced and paid the promissory note in full, and the Company received $35,000,000 in cash proceeds.
(c)Under the Separation Agreement, certain accounts receivable and accounts payable were transferred to the Company prior to the Distribution.

 

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TECTONIC FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

   Year ended December 31,   
(In thousands, except per share data and numbers within footnotes)  2024   
   Historical (Audited)   Pro Forma Split Off Tectonic Advisors, LLC (unaudited)   Other Pro Forma Adjustments (unaudited)   Pro Forma Net Income (unaudited)   
Interest Income                  
Loans, including fees  $56,512    -    -   $56,512   
Securities   2,272    -    -    2,272   
Federal funds sold   53    -    -    53   
Interest-bearing deposits   4,791    -    -    4,791   
Total interest income   63,628    -    -    63,628   
Interest Expense                      
Deposits   29,441    -    -    29,441   
Borrowed funds   2,171    -    -    2,171   
Total interest expense   31,612    -    -    31,612   
Net interest income   32,016    -    -    32,016   
Provision for credit losses   4,848    -    -    4,848   
Net interest income after provision for loan losses   27,168    -    -    27,168   
Noninterest Income                      
Trust income   7,481    -    -    7,481   
Gain on sale of loans   234    -    -    234   
Advisory income   18,355    (12,815)   -    5,540   
Brokerage income   8,096    -    -    8,096   
Service fees and other income   10,548    (1)   1,773    12,320  (a)
Rental income   358    -    -    358   
Total noninterest income   45,072    (12,816)   1,773    34,029   
Noninterest Expense                      
Salaries and employee benefits   37,022    (2,037)   -    34,985   
Occupancy and equipment   2,008    (199)   -    1,809   
Trust expenses   2,511    -    -    2,511   
Brokerage and advisory direct costs   2,126    (275)   -    1,851   
Professional fees   1,773    (132)   -    1,641   
Data processing   1,172    -    -    1,172   
Other   7,308    (1,042)   -    6,266   
Total noninterest expense   53,920    (3,685)   -    50,235   
Income before income taxes   18,320    (9,131)   1,773    10,962   
Income tax expense   4,385    (1,920)   -    2,465   
Net Income from ordinary operations   13,935    (7,211)   1,773    8,497   
Net Income from split off of subsidiary, net of tax   -    -    27,255    27,255  (c)
Net Income   13,935    (7,211)   29,028    35,752   
Preferred stock dividends   1,852    -    -    1,852   
Net income available to common stockholders  $12,083    (7,211)   29,028    33,900   
Earnings per common share:                      
Basic earnings per share before non-recurring items  $1.71    -    -   $1.20   
Basic earnings per share including non-recurring items  $1.71    -    -   $6.11   
Weighted average shares used in computation of basic earnings per share   7,076,436    (1,529,880)   -    5,546,556  (b)
Diluted earnings per share before non-recurring items  $1.67    -    -   $1.17   
Diluted earnings per share including non-recurring items  $1.67    -    -   $5.96   
Weighted average shares used in computation of diluted earnings per share   7,213,951    (1,529,880)   -    5,684,071  (b)

 

(a)Assumes net cash proceeds, net of tax, is invested in an interest bearing account at the weighted average effective rate of 5.14% for the year ended December 31, 2024.
(b)The TA Continuing Shareholders tendered 1,529,880 shares in connection with the Split Off.
(c)Cash proceeds of $35 million, less legal expenses of $500,000, at an effective tax rate of 21%.

 

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TECTONIC FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 

   Nine months ended September 30,   
(In thousands, except per share data and footnote information)  2025   
   Historical   Pro Forma Split Off Tectonic Advisors, LLC   Other Pro Forma Adjustments   Pro Form Net Income   
Interest Income                  
Loans, including fees  $51,739    -    -   $51,739   
Securities   1,614    -    -    1,614   
Federal funds sold   40    -    -    40   
Interest-bearing deposits   3,052    -    -    3,052   
Total interest income   56,445    -    -    56,445   
Interest Expense                      
Deposits   25,249    -    -    25,249   
Borrowed funds   957    -    -    957   
Total interest expense   26,206    -    -    26,206   
Net interest income   30,239    -    -    30,239   
Provision for credit loan losses   4,695    -    -    4,695   
Net interest income after provision for loan losses   25,544    -    -    25,544   
Noninterest Income                      
Trust income   6,004    -    -    6,004   
Gain on sale of loans   -    -    -    -   
Advisory income   13,736    (10,361)   -    3,375   
Brokerage income   7,866    -    -    7,866   
Service fees and other income   8,649    -    883    9,532  (a)
Total noninterest income   36,255    (10,361)   883    26,777   
Noninterest Expense                      
Salaries and employee benefits   29,000    (1,631)   -    27,369   
Occupancy and equipment   1,613    (157)   -    1,456   
Trust expenses   1,873    -    -    1,873   
Brokerage and advisory direct costs   1,872    (219)   -    1,653   
Professional fees   1,681    (119)   -    1,562   
Data processing   1,053    -    -    1,053   
Other   6,372    (628)   -    5,744   
Total noninterest expense   43,464    (2,754)   -    40,710   
Income before income taxes   18,335    (7,607)   883    11,611   
Income tax expense   4,116    (1,600)   -    2,516   
Net Income   14,219    (6,007)   883    9,095   
Preferred stock dividends   1,488              1,488   
Net income available to common stockholders  $12,731    (6,007)   883   $7,607   
Earnings per common share:                      
Basic  $1.87    -    -   $1.45   
Weighted average shares used in computation of basic earnings per share   6,791,053    (1,529,880)   -    5,261,173  (b)
Diluted  $1.85    -    -   $1.42   
Weighted average shares used in computation of diluted earnings per share   6,891,371    (1,529,880)   -    5,361,491  (b)

 

(a)Assumes net cash proceeds, net of tax, is invested in an interest bearing account at the weighted average effective rate of 4.32% for the nine months ended September 30, 2025.
(b)The TA Continuing Shareholders tendered 1,529,880 shares in connection with the Split Off.

 

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