What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-01 compared with 2025-10-30 · 175 added, 486 removed, 613 unchanged (52% of the section changed)

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We believe these factors include, but are not limited to, the following:

• risks relating to the proposed acquisition of Progressive Bancorp, Inc.

(“Progressive”) including, without limitation:

the timing of consummation of the proposed merger;

the risk that any condition to closing of the proposed merger may not be satisfied or waived;

the risk that the merger may not be completed at all;

the diversion of management time on issues related to the proposed merger;

unexpected transaction costs, including the costs of integrating operations;

the risks that the businesses will not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected;

the potential failure to fully or timely realize expected revenues and revenue synergies, including as the result of revenues following the merger being lower than expected;

the risk of deposit and customer attrition;

any changes in deposit mix;

unexpected operating and other costs, which may differ or change from expectation;

the risk of customer and employee loss and business disruptions, including, without limitation, as the result of difficulties in maintaining relationships with employees;

increased competitive pressures on solicitations of customers by competitors;

as well as difficulties and risks inherent with entering new markets;

• risks related to the integration of any other acquired businesses, including exposure to potential asset quality and credit quality risks and unknown or contingent liabilities, risks related to entering a new geographic market, the time and costs associated with integrating systems, technology platforms, procedures and personnel, the ability to retain key employees and maintain relationships with significant customers, the need for additional capital to finance such transactions, and possible failures in realizing the anticipated benefits from acquisitions;

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• the ability to sustain and continue our organic loan and deposit growth, and manage that growth effectively;

• market declines in industries to which we have exposure, such as the volatility in oil prices and downturn in the energy industry that impact certain of our borrowers and investments that operate within, or are backed by collateral associated with, the energy industry;

• market declines in industries to which we have exposure, such as the volatility in oil prices and downturns in the energy industry that impact certain of our borrowers and investments that operate within, or are backed by collateral associated with, the energy industry;

• volatility and direction of interest rates and market prices, which could reduce our net interest margins, asset valuations and expense expectations;

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF BUSINESS FIRST

The following discussion and analysis focuses on significant changes in the financial condition of Business First and its subsidiaries from December 31, 2024 to September 30, 2025, and its results of operations for the three and nine months ended September 30, 2025.

The following discussion and analysis focuses on significant changes in the financial condition of Business First and its subsidiaries from December 31, 2025 to March 31, 2026, and its results of operations for the three months ended March 31, 2026.

This discussion and analysis is intended to highlight and supplement information presented elsewhere in this report and should be read in conjunction with (i) the accompanying unaudited consolidated financial statements and the notes thereto (the “Notes”) and (ii) our Annual Report on Form 10-K for the year ended December 31, 2025 , including the audited consolidated financial statements and notes thereto, management’s discussion and analysis, and the risk factor disclosures contained therein.

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We currently operate out of banking centers and loan production offices across Louisiana and Texas.

As of September 30, 2025, we had total assets of $8.0 billion, total loans of $6.0 billion, total deposits of $6.5 billion, and total shareholders’ equity of $878.4 million.

As of March 31, 2026, we had total assets of $8.9 billion, total loans of $6.7 billion, total deposits of $7.5 billion, and total shareholders’ equity of $991.2 million.

As a financial holding company operating through one reportable operating segment, community banking, we generate most of our revenues from interest income on loans, customer service and loan fees, and interest income from securities.

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Other Developments

Federal Reserve Bank ’ s Discount Window

On April 11, 2023, the Bank opened two new lines of credit for additional contingent liquidity, totaling $1.0 billion and $907.7 million as of September 30, 2025, and December 31, 2024, respectively, through the Federal Reserve discount window.

The Bank has not yet drawn on either of the lines of credit as of the date of this report.

Acquisition of Waterstone LSP, LLC ("Waterstone")

On January 31, 2024, we consummated the acquisition, through b1BANK, of Waterstone, headquartered in Katy, Texas.

Waterstone offers community banks and small businesses a range of small business administration ("SBA") lending services including planning, pre-qualification, packaging, closing and disbursements, servicing, and liquidations.

Upon consummation of the acquisition, we paid $3.3 million in cash to the former owners of Waterstone.

Acquisition of Oakwood Bancshares, Inc.

On October 1, 2024, we consummated the merger of Oakwood, the parent bank holding company for Oakwood Bank, with and into us, with us continuing as the surviving corporation pursuant to the terms the Reorganization Agreement.

Immediately following the consummation of the Oakwood acquisition, Oakwood Bank merged with and into b1BANK, with b1BANK surviving the merger.

Pursuant to the terms of the Reorganization Agreement, upon consummation of the Oakwood acquisition, we issued 3,973,134 shares of our common stock to the former shareholders of Oakwood.

As of September 30, 2024, Oakwood reported $863.6 million in total assets, $700.2 million in loans and $741.3 million in deposits.

Sale of Kaplan Banking Center

On April 4, 2025, we sold the Kaplan banking center, located in Kaplan, Louisiana, to Currency Bank headquartered in Baton Rouge, Louisiana, in accordance with a Branch Purchase and Assumption Agreement, dated December 12, 2024.

The sale included $50.7 million in deposits, $2.3 million in loans, and $1.4 million in fixed assets, net of depreciation.

The total deposit premium paid by Currency Bank as consideration was 8.00% of the total deposits assumed at closing resulting in a gain on the sale of $3.4 million.

Acquisition of Progressive Bancorp, Inc.

("Progressive")

On July 7, 2025, we entered into a definitive agreement with Progressive providing for us to acquire Progressive and its wholly-owned bank subsidiary, Progressive Bank.

Progressive had approximately $755.3 million of total assets, $675.1 million of deposits and $595.8 million of loans as of June 30, 2025.

On January 1, 2026, we consummated the merger of Progressive, the parent bank holding company for Progressive Bank, with and into Business First, with Business First continuing as the surviving corporation pursuant to the terms of the Reorganization Agreement.

Immediately following consummation of the Progressive acquisition, Progressive Bank merged with and into b1BANK, with b1BANK surviving the merger.

Pursuant to the terms of the Reorganization Agreement, upon consummation of the Progressive acquisition, we issued 3,192,367 shares of our common stock to the former shareholders

of Progressive.

As of December 31, 2025, Progressive had $773.8 million in total assets, $597.2 million in loans and $684.9 million in total deposits.

Technology Partnership with Covecta

On February 17, 2026, we announced a strategic partnership with Covecta, to deploy agentic AI across the bank's day to day workflows.

The collaboration focuses on streamlining and automating repeatable, policy-driven activities across core deposit and loans operational processes, reducing manual effort and operational friction so that teams can devote more time towards higher value-adding work including analysis, exception handling and customer engagement.

Private Placement of Subordinated Notes

On April 2, 2026, we completed an $85.0 million private placement of subordinated notes with a 6.50% fixed-to-floating rate due in 2036.

The subordinated notes were issued to certain qualified institutional and accredited investors.

The notes will bear interest at an annual rate of 6.50% until March 30, 2031, and then reset quarterly to the then current three-month Secured Overnight Financing Rate plus 300 basis points.

The proceeds from the sale of these subordinated notes were utilized to redeem $66.9 million in outstanding subordinated notes, to provide additional capital support to b1BANK, to support growth, to better position the Company to take advantage of strategic opportunities that may arise from time to time, to repay other existing borrowings, and for other general corporate purposes.

Financial Highlights

The financial highlights as of and for the nine months ended September 30, 2025, include:

The financial highlights as of and for the three months ended March 31, 2026, include:

• Total assets of $8.9 billion, a $692.1 million, or 8.4%, increase from December 31, 2025.

• Total loans held for investment of $6.7 billion, a $494.8 million, or 8.0%, increase from December 31, 2025.

• Total deposits of $6.5 billion, a $4.5 million, or 0.1%, decrease from December 31, 2024.

• Net income available to common shareholders of $61.5 million for the nine months ended September 30, 2025, an $16.9 million, or 37.9%, increase from the nine months ended September 30, 2024.

The increase was largely attributable to the acquisition of Oakwood during the quarter ended December 31, 2024.

• Net interest income of $202.3 million for the nine months ended September 30, 2025, an increase of $40.6 million, or 25.1%, from the nine months ended September 30, 2024.

The increase was largely attributable to the acquisition of Oakwood during the quarter ended December 31, 2024.

• Total deposits of $7.5 billion, a $766.4 million, or 11.4%, increase from December 31, 2025.

• Net income available to common shareholders of $22.2 million for the three months ended March 31, 2026, a $3.0 million, or 15.7%, increase from the three months ended March 31, 2025.

The increase was largely attributable to the acquisition of Progressive during the quarter ended March 31, 2026.

• Net interest income of $75.2 million for the three months ended March 31, 2026, an increase of $9.2 million, or 14.0%, from the three months ended March 31, 2025.

The increase was largely attributable to the acquisition of Progressive during the quarter ended March 31, 2026.

• Allowance for credit losses of 1.03% of total loans held for investment, compared to 0.94% as of December 31, 2025, and a ratio of nonperforming loans to total loans held for investment of 1.53%, compared to 1.24% as of December 31, 2025.

• Earnings per common share for the first nine months of 2025 of $2.09 per basic common share and $2.08 per diluted common share, compared to $1.77 per basic common share and $1.75 per diluted common share for the first nine months of 2024.

• Return on average assets of 1.05% over the first nine months of 2025, compared to 0.89% for the first nine months of 2024.

• Return on average common equity of 10.74% over the first nine months of 2025, compared to 10.08% for the first nine months of 2024.

• Earnings per common share for the first three months of 2026 of $0.68 per basic and diluted common share, compared to $0.65 per basic and diluted common share for the first three months of 2025.

• Return on average assets of 1.01% over the first three months of 2026, compared to 1.00% for the first three months of 2025.

• Return on average common equity of 9.77% over the first three months of 2026, compared to 10.48% for the first three months of 2025.

• Capital ratios for Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 10.03%, 10.21%, 11.26% and 13.08%, respectively, compared to 10.08%, 9.94%, 11.00% and 12.93% at December 31, 2025.

• Book value per common share of $28.18, an increase of 0.8% from $27.95 at December 31, 2025.

Results of Operations for the Three and Nine Months Ended September 30, 2025, and 2024

Results of Operations for the Three Months Ended March 31, 2026, and 2025

Performance Summary

For the three months ended September 30, 2025, net income available to common shareholders was $21.5 million, or $0.73 per basic and diluted common share, compared to net income of $16.5 million, or $0.65 per basic and diluted common share, for the three months ended September 30, 2024.

Return on average assets, on an annualized basis, increased to 1.08% for the three months ended September 30, 2025, from 0.97% for the three months ended September 30, 2024.

Return on average equity, on an annualized basis, increased to 10.80% for the three months ended September 30, 2025, as compared to 10.76% for the three months ended September 30, 2024.

For the nine months ended September 30, 2025, net income available to common shareholders was $61.5 million, or $2.09 per basic common share and $2.08 per diluted common share, compared to net income of $44.6 million, or $1.77 per basic common share and $1.75 per diluted common share, for the nine months ended September 30, 2024.

Return on average assets, on an annualized basis, increased to 1.05% for the nine months ended September 30, 2025, from 0.89% for the nine months ended September 30, 2024.

Return on average equity, on an annualized basis, increased to 10.74% for the nine months ended September 30, 2025, as compared to 10.08% for the nine months ended September 30, 2024.

For the three months ended March 31, 2026, net income available to common shareholders was $22.2 million, or $0.68 per basic and diluted common share, compared to net income of $19.2 million, or $0.65 per basic and diluted common share, for the three months ended March 31, 2025.

Return on average assets, on an annualized basis, increased to 1.01% for the three months ended March 31, 2026, from 1.00% for the three months ended March 31, 2025.

Return on average equity, on an annualized basis, decreased to 9.77% for the three months ended March 31, 2026, as compared to 10.48% for the three months ended March 31, 2025.

Net Interest Income

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We calculate average assets, liabilities, and equity using a daily average, and average yield/rate utilizing an actual day count convention.

For the three months ended September 30, 2025, net interest income totaled $69.3 million, and net interest margin and net interest spread were 3.68% and 2.85%, respectively, compared to $56.1 million, 3.51%, and 2.54%, respectively,

for the three months ended September 30, 2024.

The average yield on the loan portfolio was 7.01% for the three months ended September 30, 2025, compared to 7.12% for the three months ended September 30, 2024, and the average yield on total interest-earning assets was 6.31% for the three months ended September 30, 2025, compared to 6.42% for the three months ended September 30, 2024.

For the three months ended September 30, 2025, overall cost of funds (which includes noninterest-bearing deposits) decreased 26 basis points compared to the three months ended September 30, 2024.

For the nine months ended September 30, 2025, net interest income totaled $202.3 million, and net interest margin and net interest spread were 3.68% and 2.88%, respectively, compared to $161.7 million, 3.43%, and 2.46%, respectively, for the nine months ended September 30, 2024.

The average yield on the loan portfolio was 6.99% for the nine months ended September 30, 2025, compared to 7.02% for the nine months ended September 30, 2024, and the average yield on total interest-earning assets was 6.32% for the nine months ended September 30, 2025, compared to 6.33% for the nine months ended September 30, 2024.

For the nine months ended September 30, 2025, overall cost of funds (which includes noninterest-bearing deposits) decreased 24 basis points compared to the nine months ended September 30, 2024.

The following tables present, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts.

For the three months ended March 31, 2026, net interest income totaled $75.2 million, and net interest margin and net interest spread were 3.65% and 2.91%, respectively, compared to $66.0 million, 3.68%, and 2.91%, respectively, for the three months ended March 31, 2025.

The average yield on the loan portfolio was 6.61% for the three months ended March 31, 2026, compared to 6.99% for the three months ended March 31, 2025, and the average yield on total interest-earning assets was 5.95% for the three months ended March 31, 2026, compared to 6.35% for the three months ended March 31, 2025.

For the three months ended March 31, 2026, overall cost of funds (which includes noninterest-bearing deposits) decreased 37 basis points compared to the three months ended March 31, 2025.

The following table presents, for the periods indicated, an analysis of net interest income by each major category of interest-earning assets and interest-bearing liabilities, the average amounts outstanding and the interest earned or paid on such amounts.

The table also sets forth the average rate earned on interest-earning assets, the average rate paid on interest-bearing liabilities, and the net interest margin on average total interest-earning assets for the same periods.

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however, the balances are reflected in average outstanding balances for the period.

For the three and six months ended September 30, 2025, and 2024, interest income not recognized on nonaccrual loans was not material.

For the three months ended March 31, 2026, and 2025, interest income not recognized on nonaccrual loans was not material.

Any nonaccrual loans have been included in the table as loans carrying a zero yield.

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Acquired loans were recorded at fair value at acquisition and accrete/amortize discounts and premiums as an adjustment to yield.

Averages presented in the tables below, and throughout this report, are daily averages.

For the Three Months Ended September 30,

Balance Interest

Earned/Interest

Paid Average Yield/Rate Average

Balance Interest

Earned/Interest

Paid Average Yield/Rate

(Dollars in thousands) (Unaudited)

Interest-earning assets:

Total loans $ 6,036,622 $ 106,662 7.01 % $ 5,212,948 $ 93,307 7.12 %

Securities 978,502 7,554 3.06 924,012 6,263 2.70

Securities purchased under agreements to resell 25,490 330 5.14 17,117 154 3.58

Interest-bearing deposits in other banks 419,413 4,142 3.92 209,918 3,017 5.72

Total interest-earning assets 7,460,027 118,688 6.31 6,363,995 102,741 6.42

Allowance for loan losses (58,468) (41,554)

Noninterest-earning assets 519,600 466,203

Total assets $ 7,921,159 $ 118,688 $ 6,788,644 $ 102,741

Liabilities and Shareholders' Equity

Interest-bearing liabilities:

Interest-bearing deposits $ 5,122,136 $ 43,358 3.36 % $ 4,308,780 $ 41,303 3.81 %

Subordinated debt 92,624 1,235 5.29 99,854 1,353 5.39

Subordinated debt - trust preferred securities 5,000 100 7.93 5,000 114 9.07

Advances from FHLB 424,287 4,547 4.25 347,476 3,723 4.26

Other borrowings 26,176 172 2.61 20,971 134 2.54

Total interest-bearing liabilities 5,670,223 49,412 3.46 4,782,081 46,627 3.88

Noninterest-bearing liabilities:

Noninterest-bearing deposits 1,315,064 1,269,282

Other liabilities 73,794 55,333

Total noninterest-bearing liabilities 1,388,858 1,324,615

Shareholders' equity:

Common shareholders' equity 790,148 610,018

Preferred equity 71,930 71,930

Total shareholders' equity 862,078 681,948

Total liabilities and shareholders' equity $ 7,921,159 $ 6,788,644

Net interest rate spread (1) 2.85 % 2.54 %

Net interest income $ 69,276 $ 56,114

Net interest margin (2) 3.68 % 3.51 %

Overall cost of funds 2.81 % 3.07 %

____________________________

(1) Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

(2) Net interest margin is equal to net interest income divided by average interest-earning assets.

For the Nine Months Ended September 30,

Averages presented in the table below, and throughout this report, are daily averages.

For the Three Months Ended March 31,

(Dollars in thousands) (Unaudited) Average

Balance Interest

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Paid Average Yield/Rate

(Dollars in thousands) (Unaudited)

Interest-earning assets:

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Subordinated debt - trust preferred securities 11,671 165 5.73 5,000 99 8.03

Bank Term Funding Program - - - 86,496 2,788 4.31

Advances from FHLB 297,588 3,038 4.14 362,092 3,796 4.25

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(2) Net interest margin is equal to net interest income divided by average interest-earning assets.

The following tables present information regarding the dollar amount of changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in volume and changes attributable to changes in interest rates.

For the purposes of these tables, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.

For the Three Months Ended September 30, 2025 compared to the

Three Months Ended September 30, 2024

Increase (Decrease) due to change in

Volume Rate Total

(Dollars in thousands) (Unaudited)

Interest-earning assets:

Total loans $ 14,809 $ (1,454) $ 13,355

Securities 438 853 1,291

Securities purchased under agreements to resell 109 67 176

Interest-bearing deposits in other banks 2,077 (952) 1,125

Total increase (decrease) in interest income $ 17,433 $ (1,486) $ 15,947

Interest-bearing liabilities:

Interest-bearing deposits $ 6,998 $ (4,943) $ 2,055

Subordinated debt (93) (25) (118)

Subordinated debt - trust preferred securities - (14) (14)

Advances from FHLB 833 (9) 824

Other borrowings 35 3 38

Total increase (decrease) in interest expense $ 7,773 $ (4,988) $ 2,785

Increase in net interest income $ 9,660 $ 3,502 $ 13,162

For the Nine Months Ended September 30, 2025 compared to the

Nine Months Ended September 30, 2024

The following table presents information regarding the dollar amount of changes in interest income and interest expense for the periods indicated for each major component of interest-earning assets and interest-bearing liabilities and distinguishes between the changes attributable to changes in volume and changes attributable to changes in interest rates.

For the purposes of this table, changes attributable to both rate and volume that cannot be segregated have been allocated to rate.

For the Three Months Ended March 31, 2026 compared to the

Three Months Ended March 31, 2025

Increase (Decrease) due to change in

Volume Rate Total

(Dollars in thousands) (Unaudited)

(Dollars in thousands) (Unaudited) Volume Rate Total

Interest-earning assets:

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Subordinated debt - trust preferred securities 94 (28) 66

Bank Term Funding Program - (2,788) (2,788)

Advances from FHLB (659) (99) (758)

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Total increase (decrease) in interest expense $ 4,776 $ (5,187) $ (411)

Increase in net interest income $ 24,996 $ 15,651 $ 40,647

Increase (decrease) in net interest income $ 9,892 $ (680) $ 9,212

Provision for Credit Losses

Our provision for credit losses is a charge to income in order to bring our allowance for credit losses to a level deemed appropriate by management.

For a description of the factors taken into account by management in determining the allowance for credit losses see “— Financial Condition—Allowance for Credit Losses .” The provision for credit losses was $3.2 million for the three months ended September 30, 2025, and $1.7 million for the same period in 2024.

For the nine months ended September 30, 2025, and 2024, the provision for credit losses was $8.2 million and $4.2 million, respectively.

The higher provision for the three and nine months ended September 30, 2025, compared to the same period in 2024 relates primarily to individual reserves associated with certain commercial lending relationships, as well as deterioration in the macroeconomic forecast in the current period compared to the same period in 2024.

To a lesser extent, the increase is also a result of increased lending commitments and outstanding loan balances, compared to the three and nine months ended September 30, 2024.

For a description of the factors taken into account by management in determining the allowance for credit losses see “— Financial Condition—Allowance for Credit Losses .” The provision for credit losses was $2.3 million for the three months ended March 31, 2026, and $2.8 million for the same period in 2025.

The lower provision for the three months ended March 31, 2026, compared to the same period in 2025 is primarily the result of higher specific reserve estimates during the three months ended March 31, 2025, as compared to the three months ended March 31, 2026.

The decrease was partially offset by increased reserve estimates on the pooled portfolio.

Noninterest Income ( “ Other Income ” )

Our primary sources of noninterest income are service charges on deposit accounts, debit card and automated teller machine (“ATM”) fee income, income from bank-owned life insurance, fees and brokerage commissions, loan sales, swap fee income, and pass-through income from other investments (small business investment company (“SBIC”) partnerships and financial technology (“Fintech”) funds).

The following tables present, for the periods indicated, the major categories of noninterest income:

For the Three Months Ended September 30,

2025 2024 Increase (Decrease)

(Dollars in thousands) (Unaudited)

Noninterest income:

Service charges on deposit accounts $ 2,565 $ 2,723 $ (158)

Debit card and ATM fee income 1,915 1,864 51

Bank-owned life insurance income 802 679 123

Gain on sales of loans 624 122 502

Gain (loss) on sales of investment securities 77 (13) 90

Fees and brokerage commissions 1,880 1,968 (88)

Mortgage origination income 122 98 24

Gain (loss) on sales of other real estate owned 470 (16) 486

Swap fee income 1,065 937 128

Pass-through income from other investments 133 335 (202)

Other 2,018 2,077 (59)

Total noninterest income $ 11,671 $ 10,774 $ 897

For the Nine Months Ended September 30,

2025 2024 Increase (Decrease)

(Dollars in thousands) (Unaudited)

The following table presents, for the periods indicated, the major categories of noninterest income:

For the Three Months Ended March 31,

(Dollars in thousands) (Unaudited) 2026 2025 Increase (Decrease)

Noninterest income:

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Debit card and ATM fee income 2,306 1,858 448

Bank-owned life insurance income 2,368 1,885 483

Cash value of life insurance income 831 808 23

Gain on sales of loans 1,341 1,256 85

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Fees and brokerage commissions 2,261 2,148 113

Mortgage origination income 287 202 85

Gain on sales of other real estate owned 258 49 209

Gain (loss) on sales of other assets 155 (15) 170

Gain on sale of branch 3,360 - 3,360

Gain on extinguishment of debt — 630 (630)

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Total noninterest income $ 14,050 $ 13,226 $ 824

Total noninterest income increased $897,000, or 8.3%, from the three months ended September 30, 2024.

The increase is primarily due higher gains on the sales of loans of $502,000 and higher gains on the sales of other real estate owned of $486,000 compared to the three months ended September 30, 2024.

Total noninterest income increased $7.0 million, or 21.6%, from the nine months ended September 30, 2024.

The increase is primarily due to the gain of $3.4 million from the sale of our Kaplan banking center, increases in our swap fee income of $1.2 million, or 80.0%, and the gain on the extinguishment of debt related to our subordinated debt of $630,000.

Total noninterest income increased $824,000, or 6.2%, from the three months ended March 31, 2025, mainly attributable to an increase in service charges on deposit accounts of $282,000, or 9.9%, an increase in debit card and ATM fee income of $448,000, or 24.1%, an increase in swap fee income of $798,000, or 108.0%, and the acquisition of Progressive.

This is offset by the gain on the extinguishment of debt related to our subordinated debt of $630,000 and higher pass-through income from other investments in the quarter ended March 31, 2025.

Noninterest Expense ( “ Other Expense ” )

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The largest component of noninterest expense is salaries and employee benefits.

Noninterest expense also includes operational expenses, such as occupancy expenses, depreciation and amortization, professional and regulatory fees, including Federal Deposit Insurance Corporation (“FDIC”) assessments, data processing expenses, and advertising and promotion expenses, among others.

Noninterest expense also includes operational expenses, such as occupancy and equipment expenses, advertising and promotion expenses, data processing expenses, and professional and regulatory fees, including Federal Deposit Insurance Corporation (“FDIC”) assessments, among others.

The following tables present, for the periods indicated, the major categories of noninterest expense:

For the Three Months Ended September 30,

2025 2024 Increase (Decrease)

(Dollars in thousands) (Unaudited)

For the Three Months Ended March 31,

(Dollars in thousands) (Unaudited) 2026 2025 Increase (Decrease)

Salaries and employee benefits $ 33,039 $ 29,497 $ 3,542

Non-staff expenses:

Occupancy of bank premises 3,324 2,630 694

Depreciation and amortization 2,036 1,844 192

Data processing 3,972 2,881 1,091

FDIC assessment fees 988 887 101

Legal and professional fees 1,024 873 151

Occupancy and equipment expense 8,122 7,356 766

Advertising and promotions 1,508 1,291 217

Utilities and communications 767 716 51

Communications 652 591 61

Ad valorem shares tax 978 1,125 (147)

Directors' fees 261 245 16

Other real estate owned expenses and write-downs 355 11 344

Merger and conversion related expenses 477 319 158

Other 5,735 5,210 525

Total noninterest expense $ 48,882 $ 42,450 $ 6,432

For the Nine Months Ended September 30,

2025 2024 Increase (Decrease)

(Dollars in thousands) (Unaudited)

Salaries and employee benefits $ 85,427 $ 75,816 $ 9,611

Non-staff expenses:

Occupancy of bank premises 9,844 7,778 2,066

Depreciation and amortization 6,264 5,262 1,002

Data processing 3,712 3,236 476

FDIC assessment fees 3,033 2,589 444

Legal and professional fees 3,130 2,781 349

Advertising and promotions 3,584 3,168 416

Utilities and communications 2,243 2,108 135

Ad valorem shares tax 3,375 2,700 675

Directors' fees 260 279 (19)

Other real estate owned expenses and write-downs 405 119 286

Insurance 411 404 7

Legal and professional fees 1,085 1,013 72

Office supplies and printing 313 311 2

Regulatory assessments 984 1,257 (273)

Merger and conversion related expenses 1,377 250 1,127

1 unchanged sentence

Total noninterest expense $ 57,471 $ 50,578 $ 6,893

Total noninterest expense increased $6.4 million, or 15.2%, from the three months ended September 30, 2024, primarily attributed to the increase in salaries and employee benefits of $2.7 million, or 11.0%, and an increase in data processing of $1.1 million, or 37.9%.

The increases were largely attributable to the acquisition of Oakwood and our core conversion, respectively.

Total noninterest expense increased $22.6 million, or 17.6%, from the nine months ended September 30, 2024, primarily attributed to the increase in salaries and employee benefits of $9.6 million, or 12.7%, an increase in occupancy of bank premises of $2.1 million, or 26.6%, and an increase in data processing of $4.4 million, or 54.7%.

The increases were largely attributable to the acquisition of Oakwood and our core conversion.

Total noninterest expense increased $6.9 million, or 13.6%, from the three months ended March 31, 2025, primarily attributed to the increase in salaries and employee benefits of $3.5 million, or 12.0%, and an increase in merger and conversion related expenses of $1.1 million, or 450.8%.

The increases were largely attributable to the acquisition of Progressive.

Income Tax Expense

3 unchanged sentences

Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

For the three months ended September 30, 2025, income tax expense totaled $6.0 million, an increase of $1.1 million, or 22.2%, compared to $4.9 million for the same period in 2024.

Our effective tax rates for the three months ended September 30, 2025, and 2024 were 20.9% and 21.6%, respectively.

For the nine months ended September 30, 2025, income tax expense totaled $17.2 million, an increase of $4.1 million, or 31.2%, compared to $13.1 million for the same period in 2024.

Our effective tax rates for the nine months ended September 30, 2025, and 2024 were 20.8% and 21.3%, respectively.

For the three months ended March 31, 2026, income tax expense totaled $5.9 million, an increase of $656,000, or 12.4%, compared to $5.3 million for the same period in 2025.

Our effective tax rates for the three months ended March 31, 2026, and 2025 were 20.1% and 20.4%, respectively.

Financial Condition

Our total assets increased $96.8 million, or 1.2%, from December 31, 2024, to September 30, 2025, primarily due to the increases in our mortgage-backed investment portfolio, unrealized gains in our investment portfolio, and increases in our loan portfolio.

Our total assets increased $692.1 million, or 8.4%, from December 31, 2025, to March 31, 2026, primarily due to the acquisition of Progressive.

Loan Portfolio

2 unchanged sentences

Our loan portfolio represents the highest yielding component of our earning asset base.

As of September 30, 2025, total loans, excluding mortgage loans held for sale, were $6.0 billion, an increase of $39.7 million, or 0.7%, compared to $6.0 billion as of December 31, 2024.

Additionally, $433,000, and $717,000 in loans were classified as loans held for sale as of September 30, 2025, and December 31, 2024, respectively.

Total loans held for investment as a percentage of total deposits were 92.5% and 91.9% as of September 30, 2025, and December 31, 2024, respectively.

Total loans held for investment as a percentage of total assets were 75.7% and 76.1% as of September 30, 2025, and December 31, 2024, respectively.

As of March 31, 2026, total loans, excluding mortgage loans held for sale, were $6.7 billion, a $494.8 million increase, or 8.0%, compared to $6.2 billion as of December 31, 2025.

Additionally, $480,000, and $1.1 million in loans were classified as loans held for sale as of March 31, 2026, and December 31, 2025, respectively.

Total loans held for investment as a percentage of total deposits were 89.5% and 92.4% as of March 31, 2026, and December 31, 2025, respectively.

Total loans held for investment as a percentage of total assets were 75.0% and 75.3% as of March 31, 2026, and December 31, 2025, respectively.

The following table summarizes our loan portfolio by type of loan as of the dates indicated.

During the third quarter of 2025, we transitioned to analyzing loans based on the North American Industry Classification System ("NAICS") code, compared to our internal coding.

The prior period has been restated to comply with the estimated NAICS code applicable to the loan portfolio as of December 31, 2024.

As of September 30, 2025 (Unaudited) As of December 31, 2024

Amount Percent Amount Percent

(Dollars in thousands)

As of March 31, 2026 (Unaudited)

As of December 31, 2025

(Dollars in thousands) Amount Percent Amount Percent

Real Estate Loans:

16 unchanged sentences

Total loans held for investment $ 6,684,263 100.0 % $ 6,189,490 100.0 %

As of September 30, 2025 (Unaudited) As of December 31, 2024

Amount Percent Amount Percent

(Dollars in thousands)

As of March 31, 2026 (Unaudited)

As of December 31, 2025

(Dollars in thousands) Amount Percent Amount Percent

Commercial real estate loans:

12 unchanged sentences

These loans are usually repaid through refinancing, cash flow from the borrower’s ongoing operations, development of the property, or sale of the property.

Commercial loans decreased $20.6 million or 0.8%, remaining at $2.5 billion as of September 30, 2025, compared to December 31, 2024.

Commercial loans increased $230.3 million, or 8.8%, to $2.8 billion as of March 31, 2026, from $2.6 billion as of December 31, 2025.

Construction loans include loans to small-to-midsized businesses to construct owner-occupied properties, loans to developers of commercial real estate investment properties and residential developments and, to a lesser extent, loans to individual clients for construction of single-family homes in our market areas.

1 unchanged sentence

We are also exposed to risk based on the ability of the construction loan borrower to finance the loan or sell the property upon completion of the project, which may be affected by changes in secondary market terms and criteria for permanent financing since the time we funded the loan.

Construction loans decreased $31.6 million, or 4.7%, to $638.9 million as of September 30, 2025, from $670.5 million as of December 31, 2024.

Construction loans increased $46.7 million, or 7.3%, to $685.8 million as of March 31, 2026, from $639.1 million as of December 31, 2025.

Residential loans include first and second lien 1-4 family mortgage loans, as well as home equity lines of credit, in each case primarily on owner-occupied primary residences.

2 unchanged sentences

Repayment of these loans primarily relies on successful rental and management of the property.

Residential loans increased $42.9 million, or 4.9%, to $927.5 million as of September 30, 2025, from $884.5 million as of December 31, 2024.

Residential loans increased $197.2 million, or 20.9%, to $1.1 billion as of March 31, 2026, from $944.1 million as of December 31, 2025.

Commercial loans include general commercial and industrial, or C&I, loans, including commercial lines of credit, working capital loans, term loans, equipment financing, asset acquisition, expansion, and development loans, borrowing base loans, letters of credit and other loan products, primarily in the Company’s target markets that are underwritten based on the borrower’s ability to service the debt from income.

1 unchanged sentence

Any interruption or discontinuance of operating cash flows from the business, which may be influenced by events not under the control of the borrower such as economic events and changes in governmental regulations, could materially affect the ability of the borrower to repay the loan.

Commercial loans increased $52.1 million, or 2.8%, remaining at $1.9 billion as of September 30, 2025, compared to December 31, 2024.

Commercial loans increased $21.6 million, or 1.1%, remaining at $1.9 billion at both March 31, 2026, and December 31, 2025.

Consumer and other loans include a variety of loans to individuals for personal, family and household purposes, including secured and unsecured installment and term loans.

The risk is based on changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness or other personal hardship, and fluctuations in the value of the real estate or personal property securing the consumer loan, if any.

Consumer and other loans decreased $3.2 million, or 4.3%, to $71.3 million as of September 30, 2025, from $74.5 million as of December 31, 2024.

Consumer and other loans decreased $1.1 million, or 1.4%, to $72.2 million as of March 31, 2026, from $73.2 million as of December 31, 2025.

The contractual maturity ranges of loans in our loan portfolio and the amount of such loans with fixed and floating interest rates in each maturity range as of the date indicated are summarized in the following tables:

As of September 30, 2025

One Year or Less One Through Five

Years Five Through

Fifteen Years After Fifteen Years Total

(Dollars in thousands) (Unaudited)

Real Estate Loans:

Commercial $ 402,827 $ 1,524,970 $ 476,036 $ 58,784 $ 2,462,617

Construction 256,401 329,967 30,348 22,191 638,907

Residential 179,582 452,668 158,282 136,924 927,456

Total Real Estate Loans 838,810 2,307,605 664,666 217,899 4,028,980

Commercial 860,882 810,545 243,971 5,415 1,920,813

Consumer and Other 47,864 20,204 3,045 149 71,262

Total loans held for investment $ 1,747,556 $ 3,138,354 $ 911,682 $ 223,463 $ 6,021,055

Fixed rate loans:

Real Estate Loans:

Commercial $ 207,827 $ 1,083,812 $ 265,986 $ 12,625 $ 1,570,250

Construction 59,169 69,977 12,472 8,000 149,618

Residential 106,987 351,505 104,041 19,336 581,869

Total Real Estate Loans 373,983 1,505,294 382,499 39,961 2,301,737

Commercial 263,626 311,453 118,252 499 693,830

Consumer and Other 37,482 16,106 2,652 149 56,389

Total fixed rate loans $ 675,091 $ 1,832,853 $ 503,403 $ 40,609 $ 3,051,956

Floating rate loans:

Real Estate Loans:

Commercial $ 195,000 $ 441,158 $ 210,050 $ 46,159 $ 892,367

Construction 197,232 259,990 17,876 14,191 489,289

Residential 72,595 101,163 54,241 117,588 345,587

Total Real Estate Loans 464,827 802,311 282,167 177,938 1,727,243

Commercial 597,256 499,092 125,719 4,916 1,226,983

Consumer and Other 10,382 4,098 393 - 14,873

Total floating rate loans $ 1,072,465 $ 1,305,501 $ 408,279 $ 182,854 $ 2,969,099

As of December 31, 2024

One Year or Less One Through Five

As of March 31, 2026

(Dollars in thousands) (Unaudited) One Year or Less One Through Five

Years Five Through

Fifteen Years After Fifteen Years Total

(Dollars in thousands)

Real Estate Loans:

6 unchanged sentences

Total loans held for investment $ 2,010,039 $ 3,348,758 $ 1,081,186 $ 244,280 $ 6,684,263

Fixed rate loans:

Real Estate Loans:

Commercial $ 134,809 $ 1,141,096 $ 349,949 $ 12,854 $ 1,638,708

Construction 66,241 132,702 13,892 7,454 220,289

Residential 72,174 422,430 96,826 21,189 612,619

Total Real Estate Loans 273,224 1,696,228 460,667 41,497 2,471,616

Commercial 179,506 351,913 152,841 - 684,260

Consumer and Other 35,067 21,062 2,585 154 58,868

Total fixed rate loans $ 779,112 $ 1,903,503 $ 615,976 $ 47,326 $ 3,345,917

Floating rate loans:

Real Estate Loans:

Commercial $ 239,320 $ 371,913 $ 164,050 $ 69,232 $ 844,515

Construction 254,491 153,624 33,303 8,795 450,213

Residential 71,630 92,166 54,436 53,682 271,914

Total Real Estate Loans 565,441 617,703 251,789 131,709 1,566,642

Commercial 740,399 320,240 118,791 4,985 1,184,415

Consumer and Other 9,292 5,768 538 - 15,598

Total floating rate loans 1,230,927 1,445,255 465,210 196,954 3,338,346

10 unchanged sentences

We believe our conservative lending approach and focused management of nonperforming assets has resulted in sound asset quality and the timely resolution of problem assets.

We had $66.1 million and $30.5 million in nonperforming assets as of September 30, 2025, and December 31, 2024, respectively.

We had $49.3 million in nonperforming loans as of September 30, 2025, compared to $25.0 million as of December 31, 2024.

The increase in nonperforming assets from December 31, 2024, to September 30, 2025, is primarily due to two commercial real estate and three commercial lending relationships, making up 67.0% of the total nonaccrual loans increase and three commercial real estate properties that were foreclosed on during the quarter, making up 129.6% of the increase in other real estate owned.

We had $123.1 million and $89.7 million in nonperforming assets as of March 31, 2026, and December 31, 2025, respectively.

We had $102.2 million in nonperforming loans as of March 31, 2026, compared to $76.7 million as of December 31, 2025.

The increase in nonperforming assets from December 31, 2025, to March 31, 2026, is primarily due to six commercial lending relationships, four of which are real estate loans and two are commercial loans.

There was also a property in Texas we foreclosed on during the quarter ended March 31, 2026.

The following tables present information regarding nonperforming assets at the dates indicated:

As of September 30,

2025 (Unaudited) As of December 31,

(Dollars in thousands)

(Dollars in thousands) As of March 31, 2026 (Unaudited)

As of December 31, 2025

Nonaccrual loans $ 100,803 $ 74,471

10 unchanged sentences

Ratio of nonaccrual loans to total loans held for investment 1.51 1.20

As of September 30, 2025 (Unaudited) As of December 31, 2024

(Dollars in thousands)

(Dollars in thousands) As of March 31, 2026 (Unaudited)

As of December 31, 2025

Nonaccrual loans by category:

14 unchanged sentences

Our methodology is structured so that specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk of loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk of loss).

Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness;

however, such concerns are not so pronounced that we generally expect to experience significant loss within the short-term.

Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits with a lower rating.

Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses which exist in collateral.

A protracted workout on these credits is a distinct possibility.

Prompt corrective action is therefore required to reduce exposure and to assure that adequate remedial measures are taken by the borrower.

Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed.

Credits rated doubtful have all the weaknesses inherent in those rated substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The following tables summarize our internal ratings of loans held for investment as of the dates indicated.

See Note 6 of the consolidated financial statements for the presentation of loans in their credit quality categories that is in compliance with the CECL standard.

As of September 30, 2025

Pass Special Mention Substandard Doubtful Total

(Dollars in thousands) (Unaudited)

Real Estate Loans:

Commercial $ 2,342,085 $ 95,012 $ 24,930 $ 590 $ 2,462,617

Construction 612,813 20,416 5,678 - 638,907

Residential 906,724 8,492 12,193 47 927,456

Total Real Estate Loans 3,861,622 123,920 42,801 637 4,028,980

Commercial 1,832,472 58,115 30,101 125 1,920,813

Consumer and Other 70,776 - 486 - 71,262

Total $ 5,764,870 $ 182,035 $ 73,388 $ 762 $ 6,021,055

As of December 31, 2024

Pass Special Mention Substandard Doubtful Total

(Dollars in thousands)

Real Estate Loans:

Commercial $ 2,383,439 $ 75,385 $ 23,548 $ 851 $ 2,483,223

Construction 658,364 3,436 8,702 - 670,502

Residential 871,634 3,163 9,485 251 884,533

Total Real Estate Loans 3,913,437 81,984 41,735 1,102 4,038,258

Commercial 1,828,485 25,979 13,911 300 1,868,675

Consumer and Other 74,097 - 369 - 74,466

Total $ 5,816,019 $ 107,963 $ 56,015 $ 1,402 $ 5,981,399

For additional information, see Note 5 of the consolidated financial statements for a summary of loans by credit quality indicators.

Allowance for Credit Losses

1 unchanged sentence

In determining the allowance for credit losses, we estimate losses on specific loans, or groups of loans, where the probable loss can be identified and reasonably determined.

The balance of the allowance for credit losses is based on

internally assigned risk classifications of loans, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions on certain historical credit loss rates.

The balance of the allowance for credit losses is based on internally assigned risk classifications of loans, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic

conditions on certain historical credit loss rates.

For additional information, see Note 5 to the consolidated financial statements.

8 unchanged sentences

• for Commercial loans, the operating results of the commercial, industrial or professional enterprise, the borrower’s business, professional and financial ability and expertise, the specific risks and volatility of income and operating results typical for businesses in that category, and the value, nature and marketability of collateral;

As of September 30, 2025, the allowance for credit losses totaled $61.9 million, or 1.03%, of total loans held for investment.

As of March 31, 2026, the allowance for credit losses totaled $68.8 million, or 1.03%, of total loans held for investment.

As of December 31, 2025, the allowance for credit losses totaled $58.1 million, or 0.94%, of total loans held for investment.

The following tables present, as of and for the periods indicated, an analysis of the allowance for credit losses and other related data:

As of and For the Nine Months Ended

September 30, 2025 (Unaudited) As of and For the Year Ended December

(Dollars in thousands)

(Dollars in thousands) As of and For the Three Months Ended March 31, 2026 (Unaudited)

As of and For the Year Ended December 31, 2025

Average loans outstanding $ 6,698,261 $ 6,023,214

1 unchanged sentence

Allowance for credit losses at beginning of period $ 58,136 $ 58,528

Adjustment for Oakwood purchased credit deterioration loans - 8,410

Adjustment for Progressive purchased credit deterioration loans 9,264 -

Provision for credit losses 2,278 11,318

18 unchanged sentences

Ratio of allowance for credit losses to nonaccrual loans 68.21 78.07

As of and For the Nine Months Ended

September 30, 2025 (Unaudited) As of and For the Year Ended

December 31, 2024 As of and For the Nine Months Ended

September 30, 2024 (Unaudited)

Net Charge-offs

As of and For the Three Months Ended March 31, 2026 (Unaudited)

As of and For the Year Ended December 31, 2025

As of and For the Three Months Ended March 31, 2025 (Unaudited)

(Dollars in thousands) Net Charge-offs

(Recoveries) Percent of Average

3 unchanged sentences

(Recoveries) Percent of Average

(Dollars in thousands)

Commercial $ (6) 0.00 % $ 4,086 0.07 % $ (3) 0.00 %

4 unchanged sentences

Consumer and Other 467 0.01 1,677 0.02 499 0.01

Total net charge-offs (recoveries) $ 4,866 0.08 % $ 4,493 0.08 % $ 2,856 0.06 %

Total net charge-offs $ 923 0.02 % $ 11,710 0.19 % $ 977 0.02 %

Although we believe that we have established our allowance for credit losses in accordance with U.S.

generally accepted accounting principles (“GAAP”) and that the allowance for credit losses was adequate to provide for known and estimated losses in the portfolio at all times shown above, future provisions will be subject to ongoing evaluations of the risks in our loan portfolio.

GAAP and that the allowance for credit losses was adequate to provide for known and estimated losses in the portfolio at all times shown above, future provisions will be subject to ongoing evaluations of the risks in our loan portfolio.

If we experience economic declines or if asset quality deteriorates, material additional provisions could be required.

2 unchanged sentences

The total allowance is available to absorb losses from any loan category.

As of September 30, 2025 (Unaudited) As of December 31, 2024 As of September 30, 2024 (Unaudited)

Amount Percent to Total Amount Percent to Total Amount Percent to Total

(Dollars in thousands)

As of March 31, 2026 (Unaudited)

As of December 31, 2025

As of March 31, 2025 (Unaudited)

(Dollars in thousands) Amount Percent to Total Amount Percent to Total Amount Percent to Total

Commercial $ 24,434 35.5 % $ 23,806 40.9 % $ 23,542 39.0 %

6 unchanged sentences

We use our securities portfolio to provide a source of liquidity, an appropriate return on funds invested, manage interest rate risk, meet collateral requirements, and meet regulatory capital requirements.

As of September 30, 2025, the carrying amount of investment securities totaled $985.9 million, an increase of $92.4 million, or 10.3%, compared to $893.5 million as of December 31, 2024.

The increase was primarily due to purchases of mortgage-backed securities and net unrealized gains in the first nine months of 2025.

Securities represented 12.4% and 11.4% of total assets as of September 30, 2025, and December 31, 2024, respectively.

As of March 31, 2026, the carrying amount of investment securities totaled $1.0 billion, an increase of $56.6 million, or 5.7%, compared to $989.2 million as of December 31, 2025.

The increase was primarily due to acquisition of Progressive.

Securities represented 11.7% and 12.0% of total assets as of March 31, 2026, and December 31, 2025, respectively.

Our investment portfolio consists entirely of securities classified as available for sale.

As a result, the carrying values of our investment securities are adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax

basis as a component of other comprehensive income in shareholders’ equity.

As a result, the carrying values of our investment securities are adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax basis as a component of other comprehensive income in shareholders’ equity.

The following tables summarize the amortized cost and estimated fair value of investment securities as of the dates shown:

As of September 30, 2025

Amortized Cost Gross Unrealized

As of March 31, 2026

(Dollars in thousands) (Unaudited) Amortized Cost Gross Unrealized

Gains Gross Unrealized

Losses Fair Value

(Dollars in thousands) (Unaudited)

treasury securities $ 24,562 $ — $ 282 $ 24,280

5 unchanged sentences

As of December 31, 2025

Amortized Cost Gross Unrealized

(Dollars in thousands) Amortized Cost Gross Unrealized

Gains Gross Unrealized

Losses Fair Value

(Dollars in thousands)

treasury securities $ 17,571 $ — $ 293 $ 17,278

5 unchanged sentences

All of our mortgage-backed securities are agency securities.

We do not hold any Fannie Mae or Freddie Mac preferred stock, corporate equity, collateralized debt obligations, collateralized loan obligations, private label collateralized mortgage obligations, subprime, Alt-A, or second lien elements in our investment portfolio as of September 30, 2025.

The allowance for credit losses encompasses potential expected credit losses related to the securities portfolio.

2 unchanged sentences

The results of the analysis are evaluated quarterly to confirm that credit loss estimates are appropriate for the securities portfolio.

Based on our assessments, expected credit losses on the investment securities portfolio as of both September 30, 2025 and December 31, 2024, was negligible and therefore, no allowance for credit loss was recorded related to our investment securities.

The following tables set forth the fair value, maturities and approximated weighted average yield based on estimated annual income divided by the average amortized cost of the securities portfolio as of the dates indicated.

The contractual maturity of a mortgage-backed security is the date at which the last underlying mortgage matures.

As of September 30, 2025

Within One Year After One Year but Within Five Years After Five Years but Within Ten Years After Ten Years Total

Amount Yield Amount Yield Amount Yield Amount Yield Total Yield

(Dollars in thousands) (Unaudited)

treasury securities $ 7,391 0.79 % $ 9,763 0.80 % $ - - % $ - - % $ 17,154 0.80 %

government agencies 9,821 0.92 % - - % - - % - - % 9,821 0.92 %

Corporate bonds - - % 8,924 3.88 % 31,642 4.94 % - - % 40,566 4.71 %

Mortgage-backed securities 2,471 0.79 % 59,766 2.47 % 195,925 3.44 % 377,536 3.60 % 635,698 3.43 %

Municipal securities 28,035 1.38 % 96,878 1.91 % 93,545 2.06 % 64,241 3.96 % 282,699 2.37 %

Total $ 47,718 1.17 % $ 175,331 2.14 % $ 321,112 3.19 % $ 441,777 3.65 % $ 985,938 3.11 %

As of December 31, 2024

Within One Year After One Year but Within Five Years After Five Years but Within Ten Years After Ten Years Total

Amount Yield Amount Yield Amount Yield Amount Yield Total Yield

(Dollars in thousands)

treasury securities $ - - % $ 16,675 0.80 % $ - - % $ - - % $ 16,675 0.80 %

government agencies - - % 9,588 0.92 % - - % - - % 9,588 0.92 %

Corporate bonds - - % 6,253 5.00 % 38,912 4.90 % - - % 45,165 4.91 %

Mortgage-backed securities 4,081 2.68 % 47,501 2.07 % 184,576 2.99 % 301,580 3.16 % 537,738 3.00 %

Municipal securities 24,577 1.44 % 93,150 1.76 % 105,409 1.96 % 61,247 2.97 % 284,383 2.07 %

Total $ 28,658 1.61 % $ 173,167 1.82 % $ 328,897 2.89 % $ 362,827 3.13 % $ 893,549 2.74 %

The contractual maturity of mortgage-backed securities, collateralized mortgage obligations and asset-backed securities is not a reliable indicator of their expected life because borrowers have the right to prepay their obligations at any time.

Mortgage-backed securities and asset-backed securities are typically issued with stated principal amounts and are backed by pools of mortgage loans and other loans with varying maturities.

The term of the underlying mortgages and loans may vary significantly due to the ability of a borrower to prepay.

Monthly paydowns on mortgage-backed securities tend to cause the average life of the securities to be much different than the stated contractual maturity.

During a period of increasing interest rates, fixed rate mortgage-backed securities do not tend to experience heavy prepayments of principal and, consequently, the average life of this security will be lengthened.

If interest rates begin to fall, prepayments may increase, thereby shortening the estimated life of this security.

The weighted average life of our investment portfolio was 4.39 years with an estimated effective duration of 3.61 years as of September 30, 2025.

As of September 30, 2025, and December 31, 2024, we did not own securities of any one issuer for which aggregate adjusted cost exceeded 10% of our consolidated shareholders’ equity as of such respective dates.

As of September 30, 2025, and December 31, 2024, the Company held other equity securities of $44.3 million and $41.1 million, respectively, comprised mainly of FHLB stock, SBICs and Fintech fund investments.

Based on our assessments, expected credit losses on the investment securities portfolio as of both March 31, 2026 and December 31, 2025, was negligible and therefore, no allowance for credit loss was recorded related to our investment securities.

As of March 31, 2026, and December 31, 2025, the Company held other equity securities of $40.0 million and $49.3 million, respectively, comprised mainly of FHLB stock, SBICs and Fintech fund investments.

We offer a variety of deposit accounts having a wide range of interest rates and terms including demand, savings, money market and time accounts.

We rely primarily on competitive pricing policies, convenient locations and personalized service to attract and retain these deposits.

Total deposits as of September 30, 2025, were $6.5 billion, a decrease of $4.5 million, or 0.1%, compared to $6.5 billion as of December 31, 2024.

Total uninsured deposits were $2.8 billion, or 42.6%, of total deposits as of September 30, 2025 compared to $2.8 billion, or 43.4%, of total deposits as of December 31, 2024.

Total deposits as of March 31, 2026, were $7.5 billion, an increase of $766.4 million, or 11.4%, compared to $6.7 billion as of December 31, 2025.

Total uninsured deposits were $3.5 billion, or 46.5%, of total deposits as of March 31, 2026 compared to $2.9 billion, or 43.2%, of total deposits as of December 31, 2025.

Since it is not reasonably practical to provide a precise measure of uninsured deposits, the amounts are estimated and are based on the same methodologies and assumptions that are used for regulatory reporting requirements for the call report.

Noninterest-bearing deposits as of both September 30, 2025 and December 31, 2024, were $1.4 billion, an increase of $9.5 million, or 0.7%.

Average deposits for the nine months ended September 30, 2025, were $6.4 billion, an increase of $676.0 million, or 11.8%, over the full year average for the year ended December 31, 2024, of $5.7 billion.

The increase was largely attributable to the impact of the acquisition of Oakwood on October 1, 2024.

The average rate paid on total interest-bearing deposits decreased over this period from 3.73% for the year ended December 31, 2024, to 3.34% for the nine months ended September 30, 2025.

In addition, noninterest-bearing demand accounts served to reduce the cost of deposits to 2.66% for the nine months ended September 30, 2025, compared to 2.89% for the year ended December 31, 2024.

Noninterest-bearing deposits as of March 31, 2026, were $1.6 billion, compared to $1.3 billion as of December 31, 2025, an increase of $253.0 million, or 19.1%.

Average deposits for the three months ended March 31, 2026, were $7.4 billion, an increase of $974.8 million, or 15.2%, over the full year average for the year ended December 31, 2025, of $6.4 billion.

The increase was largely attributable to the impact of the acquisition of Progressive on January 1, 2026.

The average rate paid on total interest-bearing deposits decreased over this period from 3.29% for the year ended December 31, 2025, to 2.95% for the three months ended March 31, 2026.

In addition, noninterest-bearing demand accounts served to reduce the cost of deposits to 2.34% for the three months ended March 31, 2026, compared to 2.63% for the year ended December 31, 2025.

The following table presents the daily average balances and weighted average rates paid on deposits for the periods indicated:

For the Nine Months Ended

September 30, 2025 (Unaudited) For the Year Ended

December 31, 2024

Average Balance Average Rate Average Balance Average Rate

(Dollars in thousands)

For the Three Months Ended March 31, (Unaudited)

For the Year Ended December 31, 2025

(Dollars in thousands) Average Balance Average Rate Average Balance Average Rate

Interest-bearing demand accounts $ 889,495 2.28 % $ 807,107 2.54 %

7 unchanged sentences

Total deposits $ 7,405,509 2.34 % $ 6,430,684 2.63 %

The ratio of average noninterest-bearing deposits to average total deposits for the nine months ended September 30, 2025, and the year ended December 31, 2024, was 20.1% and 22.5%, respectively.

The following table sets forth the contractual maturities of certain certificates of deposit at September 30, 2025:

Certificates of

Deposit More Than

$250,000 Certificates of

$100,000 Through

(Dollars in thousands) (Unaudited)

3 months or less $ 184,049 $ 113,578

More than 3 months but less than 6 months 151,255 130,601

More than 6 months but less than 12 months 321,301 156,265

12 months or more 170,351 41,214

Total $ 826,956 $ 441,658

The ratio of average noninterest-bearing deposits to average total deposits for the three months ended March 31, 2026, and the year ended December 31, 2025, was 20.5% and 20.2%, respectively.

Federal Funds Purchased Lines of Credit Relationships

We maintain Federal Funds Purchased Lines of Credit Relationships with the following correspondent banks and limits as of September 30, 2025:

Fed Funds Purchase

(Dollars in thousands)

We maintain Federal Funds Purchased Lines of Credit Relationships with the following correspondent banks and limits as of March 31, 2026:

(Dollars in thousands) Fed Funds Purchase

TIB National Association $ 45,000

3 unchanged sentences

Total $ 145,000

We had no outstanding balances on these lines at both September 30, 2025 and December 31, 2024.

We had no outstanding balances on these lines at both March 31, 2026 and December 31, 2025.

Liquidity and Capital Resources

Liquidity involves our ability to utilize funds to support asset growth and acquisitions or reduce assets to meet deposit withdrawals and other payment obligations, to maintain reserve requirements and otherwise to operate on an ongoing basis and manage unexpected events.

For the nine months ended September 30, 2025, and the year ended December 31, 2024, liquidity needs were primarily met by core deposits, security and loan maturities, and amortizing investment and loan portfolios.

For the three months ended March 31, 2026, and the year ended December 31, 2025, liquidity needs were primarily met by core deposits, security and loan maturities, and amortizing investment and loan portfolios.

In addition, we also utilize, or have available, brokered deposits, purchased funds from correspondent banks, the Federal Reserve discount window, and overnight advances from the FHLB.

As of September 30, 2025, and December 31, 2024, we maintained five federal funds purchased lines of credit with correspondent banks which provided for extensions of credit with an availability to borrow up to an aggregate of $145.0 million.

There were no funds drawn under these lines of credit at September 30, 2025, and December 31, 2024.

We had an additional $1.4 billion and $1.3 billion of availability through the FHLB at September 30, 2025, and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, we had $1.0 billion and $907.7 million, respectively, of availability through the Federal Reserve Discount Window.

The following table illustrates, during the periods presented, the mix of our funding sources and the average assets in which those funds are invested as a percentage of average total assets for the periods indicated.

Average total assets equaled $7.8 billion and $7.0 billion for the nine months ended September 30, 2025, and the year ended December 31, 2024, respectively.

September 30,

2025 (Unaudited) For the Year Ended

Source of Funds:

Noninterest-bearing 16.4 % 18.4 %

Interest-bearing 65.2 63.5

Subordinated debt (excluding trust preferred securities) 1.2 1.4

Advances from FHLB 5.3 4.6

Other borrowings 0.3 0.4

Bank Term Funding Program - 0.9

Other liabilities 0.9 0.8

Shareholders' equity 10.7 10.0

Total 100.0 % 100.0 %

Uses of Funds:

Loans, net of allowance for loan losses 76.0 % 75.8 %

Securities available for sale 12.1 13.0

Securities purchased under agreements to resell 0.5 0.2

Interest-bearing deposits in other banks 4.6 4.1

Other noninterest-earning assets 6.8 6.9

Total 100.0 % 100.0 %

Average noninterest-bearing deposits to average deposits 20.1 % 22.5 %

Average loans to average deposits 93.9 93.3

Our primary source of funds is deposits, and our primary use of funds is loans.

We do not expect a change in the primary source or use of our funds in the foreseeable future.

Our average net loans increased 16.8% for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to the acquisition of Oakwood.

We predominantly invest excess deposits in overnight deposits with the Federal Reserve, securities, interest-bearing deposits at other banks or other short-term liquid investments until needed to fund loan growth.

Our securities portfolio had a weighted average life of 4.39 years and an effective duration of 3.61 years as of September 30, 2025.

As of December 31, 2024, our securities portfolio had a weighted average life of 4.63 years and an effective duration of 3.79 years.

As of September 30, 2025, we had outstanding $1.6 billion in commitments to extend credit and $50.1 million in commitments associated with outstanding standby and commercial letters of credit.

As of March 31, 2026, and December 31, 2025, we maintained five federal funds purchased lines of credit with correspondent banks which provided for extensions of credit with an availability to borrow up to an aggregate of $145.0 million.

There were no funds drawn under these lines of credit at March 31, 2026, and December 31, 2025.

We had an additional $1.5 billion and $1.2 billion of availability through the FHLB as of March 31, 2026, and December 31, 2025, respectively.

As of March 31, 2026 and December 31, 2025, we had $924.7 million and $967.3 million, respectively, of availability through the Federal Reserve Discount Window.

As of March 31, 2026, we had outstanding $2.0 billion in commitments to extend credit and $55.9 million in commitments associated with outstanding standby and commercial letters of credit.

As of December 31, 2025, we had outstanding $1.7 billion in commitments to extend credit and $51.2 million in commitments associated with outstanding standby and commercial letters of credit.

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See “ Off Balance Sheet Items ” below for additional information.

As of September 30, 2025, and December 31, 2024 we had cash and cash equivalents, including federal funds sold and securities purchased under agreements to resell, of $525.7 million and $567.6 million, respectively.

As of March 31, 2026, and December 31, 2025 we had cash and cash equivalents, including federal funds sold and securities purchased under agreements to resell, of $708.8 million and $609.2 million, respectively.

We had no exposure to future cash requirements associated with known uncertainties or capital expenditures of a material nature for either period.

Capital Resources

Total shareholders’ equity increased to $878.4 million as of September 30, 2025, compared to $799.5 million as of December 31, 2024, an increase of $79.0 million, or 9.9%.

This increase was primarily due to net income of $65.5 million and other comprehensive income of $26.6 million resulting from the after-tax effect of unrealized gains in our investment securities portfolio, offset with dividends paid on preferred stock and common stock of $16.5 million.

On October 23, 2025, our Board declared a quarterly dividend in the amount of $18.75 per preferred share to the preferred shareholders of record as of November 15, 2025.

The dividend is to be paid on November 30, 2025, or as soon as practicable thereafter.

On October 23, 2025, our Board declared a quarterly dividend based upon our financial performance for the three months ended September 30, 2025, in the amount of $0.15 per common share to the common shareholders of record as of November 15, 2025.

The dividend is to be paid on November 30, 2025, or as soon as practicable thereafter.

Total shareholders’ equity increased to $991.2 million as of March 31, 2026, compared to $896.9 million as of December 31, 2025, an increase of $94.3 million, or 10.5%.

This increase was primarily due to the acquisition of Progressive of $83.4 million and net income of $23.6 million, offset with other comprehensive losses of $4.6 million resulting from the after-tax effect of unrealized losses in our investment securities portfolio and dividends paid on preferred stock and common stock of $6.2 million.

On April 23, 2026, our Board declared a quarterly dividend in the amount of $18.75 per preferred share to the preferred shareholders of record as of May 15, 2026.

The dividend is to be paid on May 29, 2026, or as soon as practicable thereafter.

On April 23, 2026, our Board declared a quarterly dividend based upon our financial performance for the three months ended March 31, 2026, in the amount of $0.15 per common share to the common shareholders of record as of May 15, 2026.

The dividend is to be paid on May 29, 2026, or as soon as practicable thereafter.

The declaration and payment of dividends to our shareholders, as well as the amounts thereof, are subject to the discretion of the Board and depend upon our results of operations, financial condition, capital levels, cash requirements, future prospects and other factors deemed relevant by the Board.

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We are subject to regulatory capital requirements at the holding company and bank levels.

As of September 30, 2025, and December 31, 2024, we and b1BANK were in compliance with all applicable regulatory capital requirements, and b1BANK was classified as “well-capitalized,” for purposes of prompt corrective action regulations.

As of March 31, 2026, and December 31, 2025, we and b1BANK were in compliance with all applicable regulatory capital requirements, and b1BANK was classified as “well-capitalized,” for purposes of prompt corrective action regulations.

As we employ our capital and continue to grow our operations, our regulatory capital levels may decrease depending on our level of earnings.

1 unchanged sentence

The following table presents the actual capital amounts and regulatory capital ratios for us and b1BANK as of the dates indicated.

As of September 30, 2025 (Unaudited) As of December 31, 2024

Amount Ratio Amount Ratio

(Dollars in thousands)

As of March 31, 2026 (Unaudited)

As of December 31, 2025

(Dollars in thousands) Amount Ratio Amount Ratio

Business First

8 unchanged sentences

FHLB Advances

Advances from the FHLB totaled approximately $367.4 million and $355.9 million at September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025, and December 31, 2024, the FHLB advances were collateralized by a blanket floating lien on certain securities and loans, had a weighted average stated rate of 4.16% and 4.15%, respectively, and mature within ten years.

Advances from the FHLB totaled approximately $260.8 million and $431.2 million at March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026, and December 31, 2025, the FHLB advances were collateralized by a blanket floating lien on certain securities and loans, had a weighted average stated rate of 4.14% and 4.02%, respectively, and mature within ten years.

Contractual Obligations

The following tables summarize contractual obligations and other commitments to make future payments as of September 30, 2025, and December 31, 2024 (other than non-maturity deposit obligations), which consist of future cash payments associated with our contractual obligations pursuant to our FHLB advances, subordinated debt, revolving line of credit, and non-cancelable future operating leases.

The following tables summarize contractual obligations and other commitments to make future payments as of March 31, 2026, and December 31, 2025 (other than non-maturity deposit obligations), which consist of future cash payments associated with our contractual obligations pursuant to our FHLB advances, subordinated debt, revolving line of credit, and non-cancelable future operating leases.

Payments related to leases are based on actual payments specified in underlying contracts.

Advances from the FHLB totaled approximately $367.4 million and $355.9 million at September 30, 2025 and December 31, 2024, respectively.

We participated in the Bank Term Funding Program in March 2023 and as of December 31, 2023, had outstanding debt of $300.0 million, at a fixed rate of 4.38% and set to mature on March 22, 2024.

We repaid this debt in full at the time of maturity.

The subordinated debt totaled $92.6 million and $99.8 million at September 30, 2025 and December 31, 2024, respectively, including premium.

Advances from the FHLB totaled approximately $260.8 million and $431.2 million at March 31, 2026 and December 31, 2025, respectively.

Subordinated debt totaled $92.5 million at both March 31, 2026 and December 31, 2025, respectively, including premium.

Of this subordinated debt, $25.0 million bears interest at a fixed rate of 6.75% through December 31, 2028 and a floating rate, based on a benchmark rate plus 369 basis points, thereafter through maturity in 2033, $52.5 million of this subordinated debt bears interest at a fixed rate of 4.25% through March 31, 2026 and a floating rate, based on a benchmark rate plus 354 basis points, thereafter through maturity in 2031.

During the three months ended March 31, 2025, $7.0 million of this debt was redeemed for a gain of $630,000.

Also, $3.9 million of this subordinated debt bears interest at a fixed rate of 4.75% through April 1, 2026 and a floating rate, based on a benchmark rate plus 442 basis points, thereafter through maturity in 2031.

We had $3.9 million of this subordinated debt bearing interest at a fixed rate of 4.75% through April 1, 2026 and a floating rate, based on a benchmark rate plus 442 basis points, thereafter through maturity in 2031.

We acquired three separate notes as part of the TCBI acquisition totaling $26.4 million.

Of those notes, $10.0 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly until maturity on April 11, 2028, and callable beginning April 11, 2023, $7.5 million bears an adjustable interest rate plus 350 basis points, based on a benchmark rate, adjusting quarterly, until maturity on December 13, 2028, and callable beginning December 13, 2023, and $8.9 million, which was called on May 1, 2023 and ceased bearing interest as of such date.

As part of valuing these three subordinated notes from TCBI, we incurred a fair value adjustment premium of $3.4 million that will accrete over five-to-seven years, with $660,000 and $833,000 remaining at September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025

1 year or less More than 1 year

As part of valuing these three subordinated notes from TCBI, we incurred a fair value adjustment premium of $3.4 million that will accrete over five-to-seven years, with $545,000 and $603,000 remaining at March 31, 2026 and December 31, 2025, respectively.

We acquired two additional trust preferred securities as part of the Progressive acquisition totaling $5.2 million.

Of the trust preferred securities, $4.0 million bears an adjustable interest rate plus 1.45%, based on a benchmark rate, adjusting quarterly, until maturity on December 15, 2037, and $1.2 million bears an adjustable rate plus 3.58%, based on a benchmark rate, adjusting quarterly, until maturity on July 31, 2031.

As part of valuing these two trust preferred securities from Progressive, we incurred a fair value adjustment of

$555,000 and will amortize this over 12 years, with $544,000 remaining at March 31, 2026.

As of March 31, 2026

(Dollars in thousands) (Unaudited) 1 year or less More than 1 year

but less than 3

2 unchanged sentences

years 5 years or more Total

(Dollars in thousands) (Unaudited)

Non-cancelable future operating leases $ 5,807 $ 10,285 $ 6,906 $ 5,700 $ 28,698

8 unchanged sentences

As of December 31, 2025

1 year or less More than 1 year

(Dollars in thousands) 1 year or less More than 1 year

but less than 3

2 unchanged sentences

years 5 years or more Total

(Dollars in thousands)

Non-cancelable future operating leases $ 5,896 $ 10,510 $ 7,382 $ 6,383 $ 30,171

8 unchanged sentences

Off-Balance Sheet Items

In the normal course of business, we enter into various transactions which, in accordance with GAAP, are not included in our consolidated balance sheets.

In the normal course of business, we enter into various transactions which, in accordance with U.S.

GAAP, are not included in our consolidated balance sheets.

We enter into these transactions to meet the financing needs of our customers.

36 unchanged sentences

The following table summarizes the simulated change in net interest income and fair value of equity over a 12-month horizon as of the dates indicated:

As of September 30, 2025 As of December 31, 2024

As of March 31, 2026

As of December 31, 2025

Change in Interest Rates (Basis Points) Percent Change in

7 unchanged sentences

+100 2.97 0.68 2.69 (1.03)

Base - % - % - % - %

-100 (2.93) (0.73) (2.62) 0.89

6 unchanged sentences

As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation.

Interest rates

may not necessarily move in the same direction or in the same magnitude as the prices of goods and services.

Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services.

However, other operating expenses do reflect general levels of inflation.

12 unchanged sentences

Core Net Income .

Core net income available to common shareholders, which excludes certain income and expenses, for the three months ended September 30, 2025, was $21.2 million, or $0.72 per diluted common share, compared to core net income available to common shareholders of $17.2 million, or $0.68 per diluted common share, for the three months ended September 30, 2024.

Notable noncore events impacting earnings for the three months ended September 30, 2025, included a $2.0 million in employee retention tax credits, offset by $1.2 million in acquisition-related expenses and core conversion expenses of $439,000, compared to $319,000 in acquisition-related expenses and $511,000 in core conversion expenses for the same period in 2024.

For the nine months ended September 30, 2025, core net income available to common shareholders, was $60.0 million, or $2.03 per diluted common share, compared to core net income available to common shareholders of $46.3 million, or $1.82 per diluted common share, for the nine months ended September 30, 2024.

Notable noncore events impacting earnings for the nine months ended September 30, 2025, included a $155,000 gain on sale of a former bank premises, $3.4 million gain on the sale of a branch, $630,000 gain on the extinguishment of subordinated debt, and $2.0 million in employee retention tax credits, offset by $2.4 million in acquisition-related expenses and core conversion expenses of $1.7 million, compared to a $1.5 million in acquisition-related expenses and $511,000 in core conversion expenses for the same period in 2024.

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2025 2024 2025 2024

Core net income available to common shareholders, which excludes certain income and expenses, for the three months ended March 31, 2026, was $24.0 million, or $0.73 per diluted common share, compared to core net income available to common shareholders of $19.3 million, or $0.65 per diluted common share, for the three months ended March 31, 2025.

Notable noncore events impacting earnings for the three months ended March 31, 2026, included acquisition-related expenses $2.2 million, compared to a $155,000 gain on sale of a former bank premises, $630,000 gain on the extinguishment of subordinated debt, offset by $679,000 in acquisition-related expenses and core conversion expenses of $216,000 for the same period in 2025.

For the Three Months Ended March 31,

(Dollars in thousands, except per share data) (Unaudited) 2026

12 unchanged sentences

(Gains) losses on sale of securities (80) 1

Gain on sale of branch - - (3,360) -

Gain on extinguishment of debt — (630)

4 unchanged sentences

Core conversion expenses — (216)

Employee retention tax credit 1,997 - 1,997 -

Core other expense 55,244 49,683

3 unchanged sentences

(Gains) losses on sale of securities (80) 1

Gain on sale of branch - - (3,360) -

Gain on extinguishment of debt — (630)

1 unchanged sentence

Core conversion expenses — 216

Employee retention tax credit (1,997) - (1,997) -

Core pre-tax income 31,615 25,930

3 unchanged sentences

Tax on (gains) losses on sale of securities (17) —

Tax on gain on sale of branch - - (833) -

Tax on gain on extinguishment of debt — (133)

1 unchanged sentence

Tax on core conversion expenses — 46

Tax on employee retention tax credit (422) - (422) -

Core provision for income taxes 6,228 5,299

6 unchanged sentences

(Gains) losses on sale of securities, net of tax (63) 1

Gain on sale of branch, net of tax - - (2,527) -

Gain on extinguishment of debt, net of tax — (497)

1 unchanged sentence

Core conversion expenses, net of tax — 170

Employee retention tax credit, net of tax (1,575) $ - (1,575) $ -

Core net income available to common shareholders $ 24,037 $ 19,281

3 unchanged sentences

(Gains) losses on sale of securities, net of tax — —

Gain on sale of branch, net of tax - - (0.09) -

Gain on extinguishment of debt, net of tax — (0.02)

1 unchanged sentence

Core conversion expenses, net of tax — —

Employee retention tax credit, net of tax (0.05) - (0.05) -

Core diluted earnings per common share $ 0.73 $ 0.65

8 unchanged sentences

The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and presents tangible book value per common share compared to book value per common share:

As of September

(Dollars in thousands, except per share data) (Unaudited) As of March 31, 2026

As of December 31, 2025

(Dollars in thousands, except per share data) (Unaudited)

Tangible Common Equity

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____________________________

(1) Excludes the dilutive effect, if any, of 131,911 and 198,238 shares of common stock issuable upon exercise of outstanding stock options and restricted stock awards as of September 30, 2025 and December 31, 2024, respectively.

(1) Excludes the dilutive effect, if any, of 205,620 and 149,240 shares of common stock issuable upon exercise of outstanding stock options and restricted stock awards as of March 31, 2026 and December 31, 2025, respectively.

Tangible Common Equity to Tangible Assets .

3 unchanged sentences

The following table reconciles, as of the dates set forth below, total shareholders’ equity to tangible common equity and total assets to tangible assets:

As of September

(Dollars in thousands, except per share data) (Unaudited) As of March 31, 2026

As of December 31, 2025

(Dollars in thousands, except per share data)

Tangible Common Equity

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis