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Item 2. Management’s Discussion and Analysis

2026-07-31 compared with 2026-05-01 · 246 added, 126 removed, 662 unchanged (36% of the section changed)

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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, 2025 to March 31, 2026, and its results of operations for the three months ended March 31, 2026.

The following discussion and analysis focuses on significant changes in the financial condition of Business First and its subsidiaries from December 31, 2025 to June 30, 2026, and its results of operations for the three and six months ended June 30, 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 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 of June 30, 2026, we had total assets of $8.9 billion, total loans of $6.7 billion, total deposits of $7.2 billion, and total shareholders’ equity of $1.0 billion.

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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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.

The collaboration focuses on streamlining and automating repeatable, policy-driven activities across core deposit and loan 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

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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 notes bear interest at an annual rate of 6.50% until March 30, 2031, and then will 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.

Acquisition of American Planning Corporation (“APC”)

On June 29, 2026, we consummated the acquisition of APC, a financial consulting firm, for $6.8 million, of which $2.6 million was paid in cash and $4.3 million was paid in the form of subordinated debt.

As part of the transaction, we recorded a customer intangible of $4.9 million, to be amortized over a 10-year period and $1.9 million in goodwill.

The APC acquisition will expand the advisory platform of b1BANK’s subsidiary, Smith Shellnut Wilson, LLC (“SSW”).

Financial Highlights

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

The financial highlights as of and for the six months ended June 30, 2026, include:

• Total assets of $8.9 billion, a $688.8 million, or 8.4%, increase from December 31, 2025.

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• Total deposits of $7.2 billion, a $537.0 million, or 8.0%, 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.

• Net income available to common shareholders of $45.0 million for the six months ended June 30, 2026, a $5.1 million, or 12.7%, increase from the six months ended June 30, 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.

• Net interest income of $153.0 million for the six months ended June 30, 2026, an increase of $20.0 million, or 15.0%, from the six months ended June 30, 2025.

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

• Allowance for credit losses of 1.02% 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 1.26%, compared to 1.24% as of December 31, 2025.

• 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.

• Earnings per common share for the first six months of 2026 of $1.38 per basic common share and $1.37 diluted common share, compared to $1.36 per basic common share and $1.35 diluted common share for the first six months of 2025.

• Return on average assets of 1.02% over the first six months of 2026, compared to 1.04% for the first six months of 2025.

• Return on average common equity of 9.80% over the first six months of 2026, compared to 10.68% for the first six months of 2025.

• Capital ratios for Tier 1 Leverage, Common Equity Tier 1, Tier 1 Risk-based and Total Risk-based Capital of 10.11%, 10.38%, 11.43% and 13.77%, respectively, compared to 10.08%, 9.94%, 11.00% and 12.93% at December 31, 2025.

• Book value per common share of $28.79, an increase of 3.0% from $27.95 at December 31, 2025.

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

Results of Operations for the Three and Six Months Ended June 30, 2026, and 2025

Performance Summary

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.

For the three months ended June 30, 2026, net income available to common shareholders was $22.8 million, or $0.70 per basic and diluted common share, compared to net income available to common shareholders of $20.8 million, or $0.70 per basic and diluted common share, for the three months ended June 30, 2025.

Return on average assets, on an annualized basis, decreased to 1.03% for the three months ended June 30, 2026, from 1.07% for the three months ended June 30, 2025.

Return on average common equity, on an annualized basis, decreased to 9.83% for the three months ended June 30, 2026, as compared to 10.87% for the three months ended June 30, 2025.

For the six months ended June 30, 2026, net income available to common shareholders was $45.0 million, or $1.38 per basic common share and $1.37 per diluted common share, compared to net income available to common shareholders of $39.9 million, or $1.36 per basic common share and $1.35 per diluted common share, for the six months ended June 30, 2025.

Return on average assets, on an annualized basis, decreased to 1.02% for the six months ended June 30, 2026, from 1.04% for the six months ended June 30, 2025.

Return on average common equity, on an annualized basis, decreased to 9.80% for the six months ended June 30, 2026, as compared to 10.68% for the six months ended June 30, 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 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.

For the three months ended June 30, 2026, net interest income totaled $77.8 million, and net interest margin and net interest spread were 3.73% and 2.99%, respectively, compared to $67.0 million, 3.68%, and 2.88%, respectively, for the three months ended June 30, 2025.

The average yield on the loan portfolio was 6.63% for the three months ended June 30, 2026, compared to 6.96% for the three months ended June 30, 2025, and the average yield on total interest-earning assets was 6.02% for the three months ended June 30, 2026, compared to 6.31% for the three months ended June 30, 2025.

For the three months ended June 30, 2026, overall cost of funds (which includes noninterest-bearing deposits) decreased 34 basis points compared to the three months ended June 30, 2025.

For the six months ended June 30, 2026, net interest income totaled $153.0 million, and net interest margin and net interest spread were 3.69% and 2.95%, respectively, compared to $133.0 million, 3.68%, and 2.90%, respectively, for the six months ended June 30, 2025.

The average yield on the loan portfolio was 6.62% for the six months ended June 30, 2026, compared to 6.98% for the six months ended June 30, 2025, and the average yield on total interest-earning assets was 5.99% for the six months ended June 30, 2026, compared to 6.33% for the six months ended June 30, 2025.

For the six months ended June 30, 2026, overall cost of funds (which includes noninterest-bearing deposits) decreased 35 basis points compared to the six months ended June 30, 2025.

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.

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

For the three and six months ended June 30, 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 table below, and throughout this report, are daily averages.

For the Three Months Ended March 31,

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

For the Three Months Ended June 30,

(Dollars in thousands) (Unaudited) Average

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

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

For the Six Months Ended June 30,

(Dollars in thousands) (Unaudited) Average

Balance Interest

Earned/Interest

Paid Average Yield/Rate Average

Balance Interest

Earned/Interest

Paid Average Yield/Rate

Interest-earning assets:

Total loans $ 6,728,183 $ 220,926 6.62 % $ 5,983,870 $ 207,020 6.98 %

Securities 1,066,827 17,566 3.32 930,930 13,520 2.93

Securities purchased under agreements to resell 28,681 637 4.48 40,950 1,052 5.18

Interest-bearing deposits in other banks 533,687 9,015 3.41 326,000 6,951 4.30

Total interest-earning assets 8,357,378 248,144 5.99 7,281,750 228,543 6.33

Allowance for loan losses (61,924) (55,829)

Noninterest-earning assets 609,797 545,367

Total assets $ 8,905,251 $ 248,144 $ 7,771,288 $ 228,543

Liabilities and Shareholders' Equity

Interest-bearing liabilities:

Interest-bearing deposits $ 5,811,348 $ 84,009 2.92 % $ 5,085,431 $ 83,985 3.33 %

Subordinated debt 102,263 2,998 5.91 94,954 2,497 5.30

Subordinated debt - trust preferred securities 10,665 332 6.27 5,000 199 8.03

Advances from FHLB 369,696 7,495 4.09 404,917 8,589 4.28

Other borrowings 21,124 271 2.59 19,424 248 2.57

Total interest-bearing liabilities 6,315,096 95,105 3.04 5,609,726 95,518 3.43

Noninterest-bearing liabilities:

Noninterest-bearing deposits 1,519,818 1,268,659

Other liabilities 71,854 66,503

Total noninterest-bearing liabilities 1,591,672 1,335,162

Shareholders' equity:

Common shareholders' equity 926,553 754,470

Preferred equity 71,930 71,930

Total shareholders' equity 998,483 826,400

Total liabilities and shareholders' equity $ 8,905,251 $ 7,771,288

Net interest rate spread (1) 2.95 % 2.90 %

Net interest income $ 153,039 $ 133,025

Net interest margin (2) 3.69 % 3.68 %

Overall cost of funds 2.45 % 2.80 %

____________________________

(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.

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 June 30, 2026 compared to the

Three Months Ended June 30, 2025

Increase (Decrease) due to change in

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Total increase (decrease) in interest expense $ 5,442 $ (5,444) $ (2)

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

Increase in net interest income $ 9,785 $ 1,017 $ 10,802

For the Six Months Ended June 30, 2026 compared to the

Six Months Ended June 30, 2025

Increase (Decrease) due to change in

(Dollars in thousands) (Unaudited) Volume Rate Total

Interest-earning assets:

Total loans $ 24,440 $ (10,534) $ 13,906

Securities 2,238 1,808 4,046

Securities purchased under agreements to resell (272) (143) (415)

Interest-bearing deposits in other banks 3,508 (1,444) 2,064

Total increase (decrease) in interest income $ 29,914 $ (10,313) $ 19,601

Interest-bearing liabilities:

Interest-bearing deposits $ 10,494 $ (10,470) $ 24

Subordinated debt 214 287 501

Subordinated debt - trust preferred securities 176 (43) 133

Advances from FHLB (714) (380) (1,094)

Other borrowings 22 1 23

Total increase (decrease) in interest expense $ 10,192 $ (10,605) $ (413)

Increase in net interest income $ 19,722 $ 292 $ 20,014

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 $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.

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 $2.0 million for the three months ended June 30, 2026, and $2.2 million for the same period in 2025.

For the six months ended June 30, 2026, and 2025, the provision for credit losses was $4.3 million and $5.0 million, respectively.

The lower provision for the three and six months ended June 30, 2026, compared to the same period in 2025 is primarily the result of higher specific reserve estimates during the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2026.

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

For the Three Months Ended March 31,

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

For the Three Months Ended June 30,

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

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Gain on sales of loans 1,583 781 802

Loss on sales of investment securities (6) (47) 41

Fees and brokerage commissions 2,387 1,980 407

Gain on sale of banking center — 3,360 (3,360)

Gain on extinguishment/redemption of debt 545 — 545

Swap fee income 385 808 (423)

Pass-through income (loss) from other investments 14 (246) 260

Other 2,545 2,430 115

Total noninterest income $ 13,967 $ 14,415 $ (448)

For the Six Months Ended June 30,

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

Noninterest income:

Service charges on deposit accounts $ 6,339 $ 5,493 $ 846

Debit card and ATM fee income 4,721 3,816 905

Cash value of life insurance income 1,733 1,566 167

Gain on sales of loans 2,924 2,037 887

Gain (loss) on sales of investment securities 74 (48) 122

Fees and brokerage commissions 4,648 4,128 520

Gain on extinguishment of debt — 630 (630)

Gain on sale of banking center — 3,360 (3,360)

Gain on extinguishment/redemption of debt 545 630 (85)

Swap fee income 1,922 1,547 375

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Total noninterest income $ 28,017 $ 27,641 $ 376

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.

Total noninterest income decreased $448,000, or 3.1%, from the three months ended June 30, 2025, mainly attributable to the gain of $3.4 million from the sale of our Kaplan banking center in 2025 and a $423,000 decrease in swap fee income, compared to the three months ended June 30, 2025.

Total noninterest income increased $376,000, or 1.4%, from the six months ended June 30, 2025, mainly attributable to an increase in service charges on deposit accounts of $846,000, or 15.4%, an increase in the gain on sales of loans of $887,000, or 43.5%, an increase in debit card and ATM fee income of $905,000, or 23.7%, and the acquisition of Progressive.

This is offset by the gain on the sale of our Kaplan banking center in 2025 in the quarter ended June 30, 2025.

Noninterest Expense ( “ Other Expense ” )

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

For the Three Months Ended March 31,

For the Three Months Ended June 30,

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

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Total noninterest expense $ 59,525 $ 51,206 $ 8,319

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%.

For the Six Months Ended June 30,

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

Salaries and employee benefits $ 66,159 $ 57,814 $ 8,345

Non-staff expenses:

Occupancy and equipment expense 16,401 14,518 1,883

Advertising and promotions 4,114 2,379 1,735

Communications 1,290 1,181 109

Ad valorem shares tax 1,955 2,250 (295)

Data processing 7,029 8,557 (1,528)

Directors' fees 507 472 35

Insurance 843 839 4

Legal and professional fees 2,746 2,106 640

Office supplies and printing 591 611 (20)

Regulatory assessments 2,518 2,190 328

Merger and conversion related expenses 1,680 460 1,220

Other 11,163 8,407 2,756

Total noninterest expense $ 116,996 $ 101,784 $ 15,212

Total noninterest expense increased $8.3 million, or 16.2%, from the three months ended June 30, 2025, primarily attributed to an increase in salaries and employee benefits of $4.8 million, or 17.0%, an increase in occupancy and equipment of $1.1 million, or 15.6%, and an increase in advertising and promotions of $1.5 million, or 139.5% , which were partially offset by a reduction in data processing fees of $2.0 million, or 37.7% .

The increases were largely attributable to the acquisition of Progressive.

Total noninterest expense increased $15.2 million, or 14.9%, from the six months ended June 30, 2025, primarily attributed to the increase in salaries and employee benefits of $8.3 million, or 14.4%, an increase in occupancy and equipment of $1.9 million, or 13.0%, an increase in advertising and promotions of $1.7 million, or 72.9%,and an increase in merger and conversion related expenses of $1.2 million, or 265.2%, which were partially offset by a reduction in data processing fees of $1.5 million, or 17.9%.

The increases were largely attributable to the acquisition of Progressive.

Income Tax Expense

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

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.

For the three months ended June 30, 2026, income tax expense totaled $6.1 million, an increase of $197,000, or 3.3%, compared to $5.9 million for the same period in 2025.

Our effective tax rates for the three months ended June 30, 2026, and 2025 were 20.2% and 21.1%, respectively.

For the six months ended June 30, 2026, income tax expense totaled $12.1 million, an increase of $853,000, or 7.6%, compared to $11.2 million for the same period in 2025.

Our effective tax rates for the six months ended June 30, 2026, and 2025 were 20.2% and 20.8%, respectively.

Financial Condition

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.

Our total assets increased $688.8 million, or 8.4%, from December 31, 2025, to June 30, 2026, primarily due to the acquisition of Progressive.

Loan Portfolio

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

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.

As of June 30, 2026, total loans, excluding mortgage loans held for sale, were $6.7 billion, a $470.0 million increase, or 7.6%, compared to $6.2 billion as of December 31, 2025.

Additionally, $2.8 million, and $1.1 million in loans were classified as loans held for sale as of June 30, 2026, and December 31, 2025, respectively.

In June 2026, we sold $100.3 million in loans that were acquired from Progressive, including $55.3 million of residential mortgages and $45.0 million commercial real estate loans.

As part of the sale, we will retain the servicing of these loans.

Total loans held for investment as a percentage of total deposits were 92.0% and 92.4% as of June 30, 2026, and December 31, 2025, respectively.

Total loans held for investment as a percentage of total assets were 74.8% and 75.3% as of June 30, 2026, and December 31, 2025, respectively.

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

As of March 31, 2026 (Unaudited)

As of June 30, 2026 (Unaudited)

As of December 31, 2025

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Total loans held for investment $ 6,659,447 100.0 % $ 6,189,490 100.0 %

As of March 31, 2026 (Unaudited)

As of June 30, 2026 (Unaudited)

As of December 31, 2025

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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 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.

Commercial loans increased $212.7 million, or 8.1%, to $2.8 billion as of June 30, 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.

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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 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.

Construction loans increased $54.4 million, or 8.5%, to $693.5 million as of June 30, 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.

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

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.

Residential loans increased $135.0 million, or 14.3%, to $1.1 billion as of June 30, 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.

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

Commercial loans increased $66.9 million, or 3.5%, to $2.0 billion as of June 30, 2026, from $1.9 billion as of 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 $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 March 31, 2026

Consumer and other loans increased $1.0 million, or 1.4%, to $74.2 million as of June 30, 2026, from $73.2 million as of December 31, 2025.

As of June 30, 2026

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

22 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 $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.

We had $109.2 million and $89.7 million in nonperforming assets as of June 30, 2026, and December 31, 2025, respectively.

We had $84.1 million in nonperforming loans as of June 30, 2026, compared to $76.7 million as of December 31, 2025.

The increase in nonperforming assets from December 31, 2025, to June 30, 2026, is primarily due to two commercial lending relationships.

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:

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

(Dollars in thousands) As of June 30, 2026 (Unaudited)

As of December 31, 2025

11 unchanged sentences

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

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

(Dollars in thousands) As of June 30, 2026 (Unaudited)

As of December 31, 2025

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

As of June 30, 2026, the allowance for credit losses totaled $67.8 million, or 1.02%, 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:

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

(Dollars in thousands) As of and For the Six Months Ended June 30, 2026 (Unaudited)

As of and For the Year Ended December 31, 2025

23 unchanged sentences

Ratio of allowance for credit losses to nonaccrual loans 84.66 78.07

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

As of and For the Six Months Ended June 30, 2026 (Unaudited)

As of and For the Year Ended December 31, 2025

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

As of and For the Six Months Ended June 30, 2025 (Unaudited)

(Dollars in thousands) Net Charge-offs

17 unchanged sentences

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

As of March 31, 2026 (Unaudited)

As of June 30, 2026 (Unaudited)

As of December 31, 2025

As of March 31, 2025 (Unaudited)

As of June 30, 2025 (Unaudited)

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

7 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 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.

As of June 30, 2026, the carrying amount of investment securities totaled $1.0 billion, an increase of $51.9 million, or 5.2%, compared to $989.2 million as of December 31, 2025.

The increase was primarily due to the acquisition of Progressive.

Securities represented 11.7% and 12.0% of total assets as of June 30, 2026, and December 31, 2025, respectively.

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

1 unchanged sentence

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

As of March 31, 2026

As of June 30, 2026

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

18 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 March 31, 2026.

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 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.

Based on our assessments, expected credit losses on the investment securities portfolio as of both June 30, 2026 and December 31, 2025, was negligible and therefore, no allowance for credit loss was recorded related to our investment securities.

As of June 30, 2026, and December 31, 2025, the Company held other equity securities of $51.3 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 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.

Total deposits as of June 30, 2026, were $7.2 billion, an increase of $537.0 million, or 8.0%, compared to $6.7 billion as of December 31, 2025.

Total uninsured deposits were $3.4 billion, or 46.9%, of total deposits as of June 30, 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 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.

Noninterest-bearing deposits as of June 30, 2026, were $1.6 billion, compared to $1.3 billion as of December 31, 2025, an increase of $261.5 million, or 19.8%.

Average deposits for the six months ended June 30, 2026, were $7.3 billion, an increase of $900.5 million, or 14.0%, 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 average rate paid on total interest-bearing deposits decreased over this period from 3.29% for the year ended December 31, 2025, to 2.92% for the six months ended June 30, 2026.

In addition, noninterest-bearing demand accounts served to reduce the cost of deposits to 2.31% for the six months ended June 30, 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 Three Months Ended March 31, (Unaudited)

For the Six Months Ended June 30, 2026 (Unaudited)

For the Year Ended December 31, 2025

9 unchanged sentences

Total deposits $ 7,331,166 2.31 % $ 6,430,684 2.63 %

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.

The ratio of average noninterest-bearing deposits to average total deposits for the six months ended June 30, 2026, and the year ended December 31, 2025, was 20.7% 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 March 31, 2026:

We maintain Federal Funds Purchased Lines of Credit Relationships with the following correspondent banks and limits as of June 30, 2026:

(Dollars in thousands) Fed Funds Purchase

4 unchanged sentences

Total $ 145,000

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

We had no outstanding balances on these lines at both June 30, 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 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.

For the six months ended June 30, 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 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.

As of June 30, 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 June 30, 2026, and December 31, 2025.

We had an additional $1.5 billion and $1.2 billion of availability through the FHLB as of June 30, 2026, and December 31, 2025, respectively.

As of June 30, 2026 and December 31, 2025, we had $1.0 billion and $967.3 million, respectively, of availability through the Federal Reserve Discount Window.

As of June 30, 2026, we had outstanding $2.0 billion in commitments to extend credit and $29.8 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.

Because commitments associated with letters of credit and commitments to extend credit may expire unused, the total outstanding may not necessarily reflect the actual future cash funding requirements.

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

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.

As of June 30, 2026, and December 31, 2025 we had cash and cash equivalents, including federal funds sold and securities purchased under agreements to resell, of $701.8 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 $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.

Total shareholders’ equity increased to $1.0 billion as of June 30, 2026, compared to $896.9 million as of December 31, 2025, an increase of $111.7 million, or 12.5%.

This increase was primarily due to the acquisition of Progressive of $83.4 million and net income of $47.7 million, offset with other comprehensive losses of $2.5 million resulting from the after-tax effect of unrealized losses in our investment securities portfolio, repurchased shares of $7.6 million and dividends paid on preferred stock and common stock of $12.5 million.

On July 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 August 15, 2026.

The dividend is to be paid on August 31, 2026, or as soon as practicable thereafter.

On July 23, 2026, our Board declared a quarterly dividend based upon our financial performance for the three months ended June 30, 2026, in the amount of $0.15 per common share to the common shareholders of record as of August 15, 2026.

The dividend is to be paid on August 31, 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.

5 unchanged sentences

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

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 of June 30, 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 March 31, 2026 (Unaudited)

As of June 30, 2026 (Unaudited)

As of December 31, 2025

10 unchanged sentences

FHLB Advances

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.

Advances from the FHLB totaled approximately $442.5 million and $431.2 million at June 30, 2026 and December 31, 2025, respectively.

As of June 30, 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 4.04% 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 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.

The following tables summarize contractual obligations and other commitments to make future payments as of June 30, 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 $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.

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 $545,000 and $603,000 remaining at March 31, 2026 and December 31, 2025, respectively.

Advances from the FHLB totaled approximately $442.5 million and $431.2 million at June 30, 2026 and December 31, 2025, respectively.

Subordinated debt totaled $114.3 million and $92.5 million at June 30, 2026 and December 31, 2025, respectively, including premium.

During the second quarter of 2026, we completed an $85.0 million private placement of subordinated debt with a fixed rate of 6.50% through March 30, 2031, and a floating rate, based on a benchmark rate plus 300 basis points, thereafter through maturity in 2036.

During the six months ended June 30, 2026, we redeemed $66.9 million in outstanding subordinated notes including the recognition of a $545,000 gain.

As part of the APC acquisition, we issued $4.3 million of subordinated notes with a fixed rate of 6.50% through June 30, 2031, and a floating rate, based on a benchmark rate plus 300 basis points, thereafter through maturity in 2036.

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

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 $532,000 remaining at June 30, 2026.

As of June 30, 2026

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

39 unchanged sentences

Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.

Because many of the commitments are expected to expire without being fully drawn upon, the total commitment amounts disclosed above do not necessarily represent future cash requirements.

Because many of the commitments are expected to expire without being fully drawn upon, the

total commitment amounts disclosed above do not necessarily represent future cash requirements.

We evaluate each customer’s creditworthiness on a case-by-case basis.

26 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 March 31, 2026

As of June 30, 2026

As of December 31, 2025

31 unchanged sentences

Core Net Income .

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,

Core net income available to common shareholders, which excludes certain income and expenses, for the three months ended June 30, 2026, was $23.3 million, or $0.71 per diluted common share, compared to core net income available to common shareholders of $19.5 million, or $0.66 per diluted common share, for the three months ended June 30, 2025.

Notable noncore events impacting earnings for the three months ended June 30, 2026, included a gain on the redemption of debt of $545,000, offset by acquisition-related expenses of $1.2 million, compared to a $3.4 million gain on the sale of a branch, offset by $570,000 in acquisition-related expenses and core conversion expenses of $1.0 million for the same period in 2025.

Core net income available to common shareholders, which excludes certain income and expenses, for the six months ended June 30, 2026, was $47.4 million, or $1.45 per diluted common share, compared to core net income available to common shareholders of $38.8 million, or $1.31 per diluted common share, for the six months ended June 30, 2025.

Notable noncore events impacting earnings for the six months ended June 30, 2026, included a gain on the redemption of debt of $545,000, offset by acquisition-related expenses of $3.4 million, compared to a $155,000 gain on sale of former bank premises, $3.4 million gain on the sale of a branch, $630,000 gain on the extinguishment of debt, offset by $1.2 million in acquisition-related expenses and core conversion expenses of $1.2 million for the same period in 2025.

For the Three Months Ended June 30,

For the Six Months Ended June 30,

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

12 unchanged sentences

(Gains) losses on sale of securities 6 47 (74) 48

Gain on extinguishment of debt — (630)

Gain on extinguishment/redemption of debt (545) — (545) (630)

Gain on branch sale — (3,360) — (3,360)

Core other income 13,428 11,102 27,370 23,544

8 unchanged sentences

(Gains) losses on sale of securities 6 47 (74) 48

Gain on extinguishment of debt — (630)

Gain on extinguishment/redemption of debt (545) — (545) (630)

Gain on branch sale — (3,360) — (3,360)

Acquisition-related expenses (2) 1,169 570 3,396 1,249

1 unchanged sentence

Core pre-tax income 30,925 26,291 62,540 52,221

For the Three Months Ended June 30,

For the Six Months Ended June 30,

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

Provision for Income Taxes:

2 unchanged sentences

Tax on (gains) losses on sale of securities 1 10 (16) 10

Tax on gain on extinguishment of debt — (133)

Tax on gain on extinguishment/redemption of debt (115) — (115) (133)

Tax on gain on branch sale — (833) — (833)

Tax on acquisition-related expenses (2) 239 103 558 246

8 unchanged sentences

(Gains) losses on sale of securities, net of tax 5 37 (58) 38

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

Gain on extinguishment/redemption of debt, net of tax (430) — (430) (497)

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

Acquisition-related expenses (2), net of tax 930 467 2,838 1,003

5 unchanged sentences

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

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

Gain on extinguishment/redemption of debt, net of tax (0.01) — (0.01) (0.02)

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

Acquisition-related expenses (2), net of tax 0.02 0.02 0.09 0.04

10 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:

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

(Dollars in thousands, except per share data) (Unaudited) As of June 30, 2026

As of December 31, 2025

7 unchanged sentences

Common shares outstanding (1) 32,535,659 29,510,668

Book value per common shares (1) $ 28.18 $ 27.95

Tangible book value per common shares (1) 23.18 23.36

Book value per common share (1) $ 28.79 $ 27.95

Tangible book value per common share (1) 23.61 23.36

____________________________

(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.

(1) Excludes the dilutive effect, if any, of 193,229 and 149,240 shares of common stock issuable upon exercise of outstanding stock options and restricted stock awards as of June 30, 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:

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

(Dollars in thousands, except per share data) (Unaudited) As of June 30, 2026

As of December 31, 2025

14 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