Business First Bancshares, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations FORWARD-LOOKING STATEMENTS When we refer in this Form 10-Q to “we,” “our,” “us,” the “Company” and “Business First,” we are referring to Business First Bancshares, Inc. and its consolidated subsidiaries, including b1BANK, which we sometimes refer to as “the Bank,” unless the context indicates otherwise. The information contained in this Form 10-Q is accurate only as of the date of this form and the dates specified herein. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q (this “Report”) and other periodic reports filed by the Company, and other written or oral statements made by us or on our behalf, are “forward-looking statements,” as defined by (and subject to the “safe harbor” protections under) the federal securities laws. These forward-looking statements include statements that reflect the current views of our senior management with respect to our financial performance and future events with respect to our business and the banking industry in general. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “will continue,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” and similar expressions of a future or forward-looking nature. These statements involve estimates, assumptions, and risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe these factors include, but are not limited to, the following: • 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; • changes in the strength of the United States (“U.S.”) economy in general and the local economy in our local market areas adversely affecting our customers and their ability to transact profitable business with us, including the ability of our borrowers to repay their loans according to their terms or a change in the value of the related collateral; • economic risks posed by our geographic concentration in Louisiana, the Dallas/Fort Worth metroplex and Houston; • 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 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; • interest rate risk associated with our business; • changes in the levels of loan prepayments and the resulting effects on the value of our loan portfolio; • increased competition in the financial services industry, particularly from regional and national institutions and emerging non-bank competitors; • increased credit risk in our assets and increased operating risk caused by a material change in commercial, consumer and/or real estate loans as a percentage of our total loan portfolio; 35 Table of Contents • changes in the value of collateral securing our loans; • deteriorating asset quality and higher loan charge-offs, and the time and effort required to resolve problem assets; • the failure of assumptions underlying the establishment of and provisions made to our allowance for credit losses; • changes in the availability of funds resulting in increased costs or reduced liquidity; • our ability to maintain important deposit customer relationships and our reputation; • a determination or downgrade in the credit quality and credit agency ratings of the securities in our securities portfolio; • increased asset levels and changes in the composition of assets and the resulting impact on our capital levels and regulatory capital ratios; • our ability to prudently manage our growth and execute our strategy; • risks associated with our acquisition and de novo branching strategy; • the loss of senior management or operating personnel and the potential inability to hire qualified personnel at reasonable compensation levels; • legislative or regulatory developments, including changes in the laws, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters; • government intervention in the U.S. financial system; • changes in statutes and government regulations or their interpretations applicable to us, including changes in tax requirements and tax rates; • natural disasters and adverse weather, acts of terrorism, an outbreak of hostilities or other international or domestic calamities, epidemics and pandemics such as coronavirus, and other matters beyond our control; and • other risks and uncertainties listed from time to time in our reports and documents filed with the U.S. Securities and Exchange Commission (“SEC”). The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Report. Additional information on these and other risk factors can be found in Item 1A. “Risk Factors” of this Report and in Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC. In the event that one or more events related to these, or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made and we do not undertake any obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. 36 Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF 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 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. This discussion and analysis contains forward-looking statements that are subject to certain risks and uncertainties and are based on certain assumptions that Business First believes are reasonable but may prove to be inaccurate. Certain risks, uncertainties and other factors, including those set forth under “Forward-Looking Statements,” “Risk Factors” and elsewhere in this report, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. Business First assumes no obligation to update any of these forward-looking statements. Overview We are a registered financial holding company headquartered in Baton Rouge, Louisiana. Through our wholly-owned subsidiary, b1BANK, a Louisiana state chartered bank, we provide a broad range of financial services tailored to meet the needs of small-to-midsized businesses and professionals. Since our inception in 2006, our priority has been and continues to be creating shareholder value through the establishment of an attractive commercial banking franchise in Louisiana and across our region. We consider our primary market to include the State of Louisiana, the Dallas/Fort Worth metroplex, and Houston. We currently operate out of banking centers and loan production offices across Louisiana and Texas. 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. We incur interest expense on deposits and other borrowed funds and noninterest expense, such as salaries and employee benefits and occupancy expenses. We analyze our ability to maximize income generated from interest-earning assets and expense of our liabilities through our net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets. Net interest income is the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings, which are used to fund those assets. Changes in the market interest rates and the interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities and shareholders’ equity, are usually the largest drivers of periodic changes in net interest spread, net interest margin and net interest income. Fluctuations in market interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and international conditions, and conditions in domestic and foreign financial markets. Periodic changes in the volume and types of loans in our loan portfolio are affected by, among other factors, economic and competitive conditions in our markets and across our region, as well as developments affecting the real estate, technology, financial services, insurance, transportation, manufacturing and energy sectors within our markets. Other Developments Acquisition of Progressive Bancorp, Inc. ("Progressive") 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 37 Table of Contents 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 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 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 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 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. • Total loans held for investment of $6.7 billion, a $470.0 million, or 7.6%, increase from December 31, 2025. • 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 $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 $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 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. 38 Table of Contents • 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 and Six Months Ended June 30, 2026, and 2025 Performance Summary 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 Our operating results depend primarily on our net interest income, calculated as the difference between interest income on interest-earning assets, such as loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowings. Fluctuations in market interest rates impact the yield and rates paid on interest sensitive assets and liabilities. Changes in the amount and type of interest-earning assets and interest-bearing liabilities also impact net interest income. The variance driven by the changes in the amount and mix of interest-earning assets and interest-bearing liabilities is referred to as a “volume change.” Changes in yields earned on interest-earning assets and rates paid on interest-bearing deposits and other borrowed funds are referred to as a “rate change.” To evaluate net interest income, we measure and monitor (1) yields on our loans and other interest-earning assets, (2) the costs of our deposits and other funding sources, (3) our net interest spread and (4) our net interest margin. Net interest spread is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin is calculated as net interest income divided by average interest-earning assets. Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and shareholders’ equity also fund interest-earning assets, net interest margin includes the benefit of these noninterest-bearing sources. 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 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. 39 Table of Contents 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. Interest earned on loans that are classified as nonaccrual is not recognized in income; however, the balances are reflected in average outstanding balances for the period. 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. The average total loans reflected below are net of deferred loan fees and discounts. 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 June 30, 2026 2025 (Dollars in thousands) (Unaudited) Average Outstanding Balance Interest Earned/Interest Paid Average Yield/Rate Average Outstanding Balance Interest Earned/Interest Paid Average Yield/Rate Assets Interest-earning assets: Total loans $ 6,757,776 $ 111,780 6.63 % $ 5,995,490 $ 104,028 6.96 % Securities 1,068,191 9,104 3.42 937,099 6,906 2.96 Securities purchased under agreements to resell 30,683 335 4.38 31,172 401 5.16 Interest-bearing deposits in other banks 509,177 4,431 3.49 336,138 3,515 4.19 Total interest-earning assets 8,365,827 125,650 6.02 7,299,899 114,850 6.31 Allowance for loan losses (63,280) (56,934) Noninterest-earning assets 614,407 548,406 Total assets $ 8,916,954 $ 125,650 $ 7,791,371 $ 114,850 Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing deposits $ 5,739,241 $ 41,251 2.88 % $ 5,029,981 $ 41,546 3.31 % Subordinated debt 112,252 1,778 6.35 92,682 1,235 5.34 Subordinated debt - trust preferred securities 9,670 178 7.40 5,000 100 8.02 Advances from FHLB 441,012 4,457 4.05 447,271 4,793 4.30 Other borrowings 22,206 142 2.58 20,514 134 2.62 Total interest-bearing liabilities 6,324,381 47,806 3.03 5,595,448 47,808 3.43 Noninterest-bearing liabilities: Noninterest-bearing deposits 1,518,400 1,292,262 Other liabilities 71,223 65,847 Total noninterest-bearing liabilities 1,589,623 1,358,109 Shareholders' equity: Common shareholders' equity 931,020 765,884 Preferred equity 71,930 71,930 Total shareholders' equity 1,002,950 837,814 Total liabilities and shareholders' equity $ 8,916,954 $ 7,791,371 Net interest rate spread (1) 2.99 % 2.88 % Net interest income $ 77,844 $ 67,042 Net interest margin (2) 3.73 % 3.68 % Overall cost of funds 2.44 % 2.78 % ____________________________ (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. 40 Table of Contents For the Six Months Ended June 30, 2026 2025 (Dollars in thousands) (Unaudited) Average Outstanding Balance Interest Earned/Interest Paid Average Yield/Rate Average Outstanding Balance Interest Earned/Interest Paid Average Yield/Rate Assets 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. 41 Table of Contents 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 (Dollars in thousands) (Unaudited) Volume Rate Total Interest-earning assets: Total loans $ 12,609 $ (4,857) $ 7,752 Securities 1,117 1,081 2,198 Securities purchased under agreements to resell (5) (61) (66) Interest-bearing deposits in other banks 1,506 (590) 916 Total increase (decrease) in interest income $ 15,227 $ (4,427) $ 10,800 Interest-bearing liabilities: Interest-bearing deposits $ 5,098 $ (5,393) $ (295) Subordinated debt 310 233 543 Subordinated debt - trust preferred securities 86 (8) 78 Advances from FHLB (63) (273) (336) Other borrowings 11 (3) 8 Total increase (decrease) in interest expense $ 5,442 $ (5,444) $ (2) 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 42 Table of Contents 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 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) Noninterest income: Service charges on deposit accounts $ 3,197 $ 2,633 $ 564 Debit card and ATM fee income 2,415 1,958 457 Cash value of life insurance income 902 758 144 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 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 Pass-through income from other investments 149 505 (356) Other 4,962 4,607 355 Total noninterest income $ 28,017 $ 27,641 $ 376 43 Table of Contents 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 ” ) Generally, noninterest expense is composed of all employee expenses and costs associated with operating our facilities, obtaining and retaining customer relationships, and providing bank services. The largest component of noninterest expense is salaries and employee benefits. 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 June 30, (Dollars in thousands) (Unaudited) 2026 2025 Increase (Decrease) Salaries and employee benefits $ 33,120 $ 28,317 $ 4,803 Non-staff expenses: Occupancy and equipment expense 8,279 7,162 1,117 Advertising and promotions 2,606 1,088 1,518 Communications 638 590 48 Ad valorem shares tax 977 1,125 (148) Data processing 3,317 5,321 (2,004) Directors' fees 247 193 54 Insurance 432 435 (3) Legal and professional fees 1,661 1,093 568 Office supplies and printing 278 300 (22) Regulatory assessments 1,534 933 601 Merger and conversion related expenses 303 210 93 Other 6,133 4,439 1,694 Total noninterest expense $ 59,525 $ 51,206 $ 8,319 44 Table of Contents 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 The amount of income tax expense is influenced by the amounts of our pre-tax income, tax-exempt income and other nondeductible expenses. Deferred tax assets and liabilities are reflected at currently enacted income tax rates in effect for the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. 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 $688.8 million, or 8.4%, from December 31, 2025, to June 30, 2026, primarily due to the acquisition of Progressive. 45 Table of Contents Loan Portfolio Our primary source of income is interest on loans to individuals, professionals and small-to-midsized businesses located in our markets. Our loan portfolio consists primarily of commercial loans and real estate loans secured by commercial real estate properties located in our primary market areas. Our loan portfolio represents the highest yielding component of our earning asset base. 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 June 30, 2026 (Unaudited) As of December 31, 2025 (Dollars in thousands) Amount Percent Amount Percent Real Estate Loans: Commercial Real estate rental and leasing $ 1,593,963 23.9 % $ 1,456,484 23.5 % Accommodation and food services 267,833 4.0 247,951 4.0 Other services (except public administration) 148,969 2.2 160,548 2.6 Health care and social assistance 133,889 2.0 121,850 2.0 Finance and insurance 89,073 1.3 84,592 1.4 Construction 76,534 1.2 63,931 1.0 Manufacturing 65,987 1.0 73,369 1.2 Agriculture, forestry, fishing and hunting 65,474 1.0 42,730 0.7 Transportation and warehousing 19,081 0.3 22,070 0.4 Other 363,212 5.5 337,754 5.4 Total Commercial 2,824,015 42.4 2,611,279 42.2 Construction 693,477 10.4 639,069 10.3 Residential 1,079,018 16.2 944,065 15.3 Total Real Estate Loans 4,596,510 69.0 4,194,413 67.8 Commercial 1,988,696 29.9 1,921,833 31.0 Consumer and Other 74,241 1.1 73,244 1.2 Total loans held for investment $ 6,659,447 100.0 % $ 6,189,490 100.0 % 46 Table of Contents As of June 30, 2026 (Unaudited) As of December 31, 2025 (Dollars in thousands) Amount Percent Amount Percent Commercial real estate loans: Dallas Region $ 719,186 25.4 % $ 720,436 27.6 % New Orleans Region 519,532 18.4 505,447 19.3 North Louisiana Region 707,843 25.1 454,909 17.4 Capitol Region 303,423 10.7 323,420 12.4 Houston Region 182,755 6.5 240,422 9.2 Southwest Louisiana Region 307,427 10.9 280,889 10.8 Bayou Region 83,849 3.0 85,756 3.3 Total commercial real estate loans $ 2,824,015 100.0 % $ 2,611,279 100.0 % Real Estate: Commercial loans are extensions of credit secured by owner-occupied and non-owner-occupied collateral. Repayment is generally dependent on the successful operations of the property. General economic conditions may impact the performance of these types of loans, including fluctuations in the value of real estate, vacancy rates, and unemployment trends. Real estate commercial loans also include farmland loans that can be, or are, used for agricultural purposes. These loans are usually repaid through refinancing, cash flow from the borrower’s ongoing operations, development of the property, or sale of the property. Real Estate: 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. Real Estate: 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. Risks associated with these loans include fluctuations in the value of real estate, project completion risk and changes in market trends. 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. Real Estate: 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. Real Estate: 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. The Company is exposed to risk based on fluctuations in the value of the real estate collateral securing the loan, as well as changes in the borrower’s financial condition, which could be affected by numerous factors, including divorce, job loss, illness, or other personal hardship. Real estate residential loans also include multi-family residential loans originated to provide permanent financing for multi-family residential income producing properties. Repayment of these loans primarily relies on successful rental and management of the property. Real Estate: 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. Commercial loan risk is derived from the expectation that such loans generally are serviced principally from the operations of the business, and those operations may not be successful. 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. 47 Table of Contents 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 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. 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 table: As of June 30, 2026 (Dollars in thousands) (Unaudited) One Year or Less One Through Five Years Five Through Fifteen Years After Fifteen Years Total Real Estate Loans: Commercial $ 703,658 $ 1,621,291 $ 447,857 $ 51,209 $ 2,824,015 Construction 300,811 279,482 83,170 30,014 693,477 Residential 224,775 482,902 207,062 164,279 1,079,018 Total Real Estate Loans 1,229,244 2,383,675 738,089 245,502 4,596,510 Commercial 898,993 848,899 228,305 12,499 1,988,696 Consumer and Other 42,468 24,782 6,847 144 74,241 Total loans held for investment $ 2,170,705 $ 3,257,356 $ 973,241 $ 258,145 $ 6,659,447 Total fixed rate loans $ 908,763 $ 1,736,688 $ 501,242 $ 52,975 $ 3,199,668 Total floating rate loans 1,261,942 1,520,668 471,999 205,170 3,459,779 Nonperforming Assets Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is generally reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due, or interest may be recognized on a cash basis as long as the remaining book balance of the loan is deemed collectible. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. We have several procedures in place to assist in maintaining the overall quality of our loan portfolio. We have established underwriting guidelines to be followed by our bankers, and we also monitor our delinquency levels for any negative or adverse trends. There can be no assurance, however, that our loan portfolio will not become subject to increasing pressures from deteriorating borrower credit due to general economic conditions. 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 $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. 48 Table of Contents The following tables present information regarding nonperforming assets at the dates indicated: (Dollars in thousands) As of June 30, 2026 (Unaudited) As of December 31, 2025 Nonaccrual loans $ 80,124 $ 74,471 Accruing loans 90 or more days past due 4,011 2,215 Total nonperforming loans 84,135 76,686 Other nonperforming assets — — Other real estate owned: Commercial real estate, construction, land and land development 24,070 12,192 Residential real estate 1,039 821 Total other real estate owned 25,109 13,013 Total nonperforming assets $ 109,244 $ 89,699 Ratio of nonperforming loans to total loans held for investment 1.26 % 1.24 % Ratio of nonperforming assets to total assets 1.23 1.09 Ratio of nonaccrual loans to total loans held for investment 1.20 1.20 (Dollars in thousands) As of June 30, 2026 (Unaudited) As of December 31, 2025 Nonaccrual loans by category: Real Estate Loans: Commercial $ 20,583 $ 36,252 Construction 8,876 4,539 Residential 11,389 10,144 Total Real Estate Loans 40,848 50,935 Commercial 39,168 23,370 Consumer and Other 108 166 Total $ 80,124 $ 74,471 Potential Problem Loans From a credit risk standpoint, we classify loans in one of four categories: pass, special mention, substandard or doubtful. Loans classified as loss are charged-off. The classifications of loans reflect a judgment about the risks of default and loss associated with the loan. Ratings are adjusted to reflect the degree of risk and loss that is believed to be inherent in each credit. 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). For additional information, see Note 5 of the consolidated financial statements for a summary of loans by credit quality indicators. Allowance for Credit Losses We maintain an allowance for credit losses, which includes both our allowance for loan losses and reserves for unfunded commitments, that represents management’s best estimate of the credit losses and risks inherent in the loan portfolio. 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 49 Table of Contents conditions on certain historical credit loss rates. For additional information, see Note 5 to the consolidated financial statements. In connection with our review of the loan portfolio, we consider risk elements attributable to particular loan types or categories in assessing the quality of individual loans. Some of the risk elements we consider include: • for Real Estate: Commercial loans, the debt service coverage ratio (income from the property in excess of operating expenses compared to loan payment requirements), operating results of the owner in the case of owner-occupied properties, the loan to value ratio, the age and condition of the collateral, and the volatility of income, property value and future operating results typical for properties of that type; • for Real Estate: Construction loans, the perceived feasibility of the project including the ability to sell developed lots or improvements constructed for resale or the ability to lease property constructed for lease, the quality and nature of contracts for presale or prelease, if any, the experience and ability of the developer, and the loan to value ratio; • for Real Estate: Residential real estate loans, the borrower’s ability to repay the loan, including a consideration of the debt to income ratio and employment and income stability, the loan to value ratio, and the age, condition and marketability of the collateral; and • 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 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. 50 Table of Contents 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 Six Months Ended June 30, 2026 (Unaudited) As of and For the Year Ended December 31, 2025 Average loans outstanding $ 6,728,183 $ 6,023,214 Gross loans held for investment outstanding end of period $ 6,659,447 $ 6,189,490 Allowance for credit losses at beginning of period $ 58,136 $ 58,528 Adjustment for Progressive purchased credit deterioration loans 9,264 — Provision for credit losses 4,269 11,318 Charge-offs: Real Estate: Commercial 1,057 4,116 Construction — 20 Residential 27 242 Total Real Estate 1,084 4,378 Commercial 2,459 6,768 Consumer and other 769 1,991 Total charge-offs 4,312 13,137 Recoveries: Real Estate: Commercial 6 30 Construction 4 211 Residential 60 33 Total Real Estate 70 274 Commercial 299 839 Consumer and other 105 314 Total recoveries 474 1,427 Net charge-offs 3,838 11,710 Allowance for credit losses at end of period $ 67,831 $ 58,136 Ratio of allowance for credit losses to end of period loans held for investment 1.02 % 0.94 % Ratio of net charge-offs to average loans 0.06 0.19 Ratio of allowance for credit losses to nonaccrual loans 84.66 78.07 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 Six Months Ended June 30, 2025 (Unaudited) (Dollars in thousands) Net Charge-offs (Recoveries) Percent of Average Loans Net Charge-offs (Recoveries) Percent of Average Loans Net Charge-offs (Recoveries) Percent of Average Loans Real estate: Commercial $ 1,051 0.02 % $ 4,086 0.07 % $ 256 0.00 % Construction (4) 0.00 (191) 0.00 (78) 0.00 Residential (33) 0.00 209 0.00 227 0.00 Total Real Estate Loans 1,014 0.02 4,104 0.07 405 0.00 Commercial 2,160 0.03 5,929 0.10 481 0.01 Consumer and Other 664 0.01 1,677 0.02 913 0.02 Total net charge-offs $ 3,838 0.06 % $ 11,710 0.19 % $ 1,799 0.03 % 51 Table of Contents Although we believe that we have established our allowance for credit losses in accordance with U.S. 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. The following table shows the allocation of the allowance for credit losses among loan categories and certain other information as of the dates indicated. The allocation of the allowance for credit losses as shown in the table should neither be interpreted as an indication of future charge-offs, nor as an indication that charge-offs in future periods will necessarily occur in these amounts or in the indicated proportions. The total allowance is available to absorb losses from any loan category. As of June 30, 2026 (Unaudited) As of December 31, 2025 As of June 30, 2025 (Unaudited) (Dollars in thousands) Amount Percent to Total Amount Percent to Total Amount Percent to Total Real estate: Commercial $ 21,907 32.3 % $ 23,806 40.9 % $ 23,583 38.2 % Construction 5,042 7.4 4,416 7.6 7,086 11.4 Residential 9,353 13.8 7,732 13.3 8,462 13.7 Total real estate 36,302 53.5 35,954 61.8 39,131 63.3 Commercial 30,680 45.2 21,618 37.2 22,097 35.8 Consumer and Other 849 1.3 564 1.0 538 0.9 Total allowance for credit losses $ 67,831 100.0 % $ 58,136 100.0 % $ 61,766 100.0 % Securities 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 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. 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 June 30, 2026 (Dollars in thousands) (Unaudited) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasury securities $ 22,627 $ — $ 240 $ 22,387 U.S. government agencies 10,022 — 70 9,952 Corporate bonds 87,029 262 1,724 85,567 Mortgage-backed securities 698,832 1,564 29,039 671,357 Municipal securities 268,040 190 16,360 251,870 Total $ 1,086,550 $ 2,016 $ 47,433 $ 1,041,133 52 Table of Contents As of December 31, 2025 (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value U.S. treasury securities $ 17,571 $ — $ 293 $ 17,278 U.S. government agencies 10,070 — 196 9,874 Corporate bonds 38,324 377 1,639 37,062 Mortgage-backed securities 674,211 3,153 27,273 650,091 Municipal securities 291,256 536 16,868 274,924 Total $ 1,031,432 $ 4,066 $ 46,269 $ 989,229 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 June 30, 2026. The allowance for credit losses encompasses potential expected credit losses related to the securities portfolio. In order to develop an estimate of credit losses expected for the current securities portfolio, we perform an assessment that includes reviewing historical loss data for both our portfolio and similar types of investment securities. Additionally, our review of the securities portfolio for expected credit losses includes an evaluation of factors including the security issuer bond ratings, delinquency status, insurance or other available credit support, as well as our expectations of the forecasted economic outlook relevant to these securities. 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 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. Deposits 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 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 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 2.92% 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. 53 Table of Contents The following table presents the daily average balances and weighted average rates paid on deposits for the periods indicated: For the Six Months Ended June 30, 2026 (Unaudited) For the Year Ended December 31, 2025 (Dollars in thousands) Average Balance Average Rate Average Balance Average Rate Interest-bearing demand accounts $ 878,569 2.26 % $ 807,107 2.54 % Negotiable order of withdrawal ("NOW") accounts 400,881 2.06 303,167 2.51 Limited access money market accounts and savings 3,143,222 2.86 2,601,497 3.24 Certificates and other time deposits > $250k 763,952 3.92 783,326 4.19 Certificates and other time deposits < $250k 624,724 3.43 639,425 3.70 Total interest-bearing deposits 5,811,348 2.92 5,134,522 3.29 Noninterest-bearing demand accounts 1,519,818 — 1,296,162 — 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 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 June 30, 2026: (Dollars in thousands) Fed Funds Purchase Limits TIB National Association $ 45,000 PNC Bank 38,000 FNBB 35,000 First Horizon Bank 17,000 ServisFirst Bank 10,000 Total $ 145,000 We had no outstanding balances on these lines at both June 30, 2026 and December 31, 2025. Liquidity and Capital Resources Liquidity 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 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 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 54 Table of Contents 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 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 $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. As a holding company, our ability to pay dividends is largely dependent upon the receipt of dividends from our subsidiary, b1BANK. There can be no assurance that we will declare and pay any dividends to our shareholders. Capital management consists of providing equity to support current and future operations. Banking regulators view capital levels as important indicators of an institution’s financial soundness. As a general matter, FDIC-insured depository institutions and their holding companies are required to maintain minimum capital relative to the amount and types of assets they hold. We are subject to regulatory capital requirements at the holding company and bank levels. 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. However, we expect to monitor and control our growth in order to remain in compliance with all applicable regulatory capital standards applicable to us. 55 Table of Contents The following table presents the actual capital amounts and regulatory capital ratios for us and b1BANK as of the dates indicated. As of June 30, 2026 (Unaudited) As of December 31, 2025 (Dollars in thousands) Amount Ratio Amount Ratio Business First Total capital (to risk weighted assets) $ 1,070,669 13.77 % $ 939,331 12.93 % Tier 1 capital (to risk weighted assets) 888,588 11.43 799,527 11.00 Common Equity Tier 1 capital (to risk weighted assets) 806,980 10.38 722,597 9.94 Tier 1 Leverage capital (to average assets) 888,588 10.11 799,527 10.08 b1BANK Total capital (to risk weighted assets) $ 1,025,514 13.20 % $ 930,600 12.82 % Tier 1 capital (to risk weighted assets) 957,683 12.33 872,464 12.02 Common Equity Tier 1 capital (to risk weighted assets) 957,683 12.33 872,464 12.02 Tier 1 Leverage capital (to average assets) 957,683 10.91 872,464 11.01 FHLB Advances 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 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 $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. 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. 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. 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 $532,000 remaining at June 30, 2026. 56 Table of Contents As of June 30, 2026 (Dollars in thousands) (Unaudited) 1 year or less More than 1 year but less than 3 years 3 years or more but less than 5 years 5 years or more Total Non-cancelable future operating leases $ 5,961 $ 10,704 $ 6,534 $ 5,016 $ 28,215 Time deposits 1,052,954 237,331 7,533 — 1,297,818 Subordinated debt — — — 114,250 114,250 Advances from FHLB 265,102 100,680 26,712 50,000 442,494 Subordinated debt - trust preferred securities — — — 10,210 10,210 Securities sold under agreements to repurchase 24,442 — — — 24,442 Standby and commercial letters of credit 27,477 2,324 46 — 29,847 Commitments to extend credit 1,319,243 523,065 95,826 84,767 2,022,901 Total $ 2,695,179 $ 874,104 $ 136,651 $ 264,243 $ 3,970,177 As of December 31, 2025 (Dollars in thousands) 1 year or less More than 1 year but less than 3 years 3 years or more but less than 5 years 5 years or more Total Non-cancelable future operating leases $ 5,896 $ 10,510 $ 7,382 $ 6,383 $ 30,171 Time deposits 1,170,413 227,926 9,106 — 1,407,445 Subordinated debt — 17,500 — 74,427 91,927 Advances from FHLB 256,200 100,000 25,000 50,000 431,200 Subordinated debt - trust preferred securities — — — 5,000 5,000 Securities sold under agreements to repurchase 22,622 — — — 22,622 Standby and commercial letters of credit 47,671 3,486 86 — 51,243 Commitments to extend credit 1,121,371 405,515 97,958 71,259 1,696,103 Total $ 2,624,173 $ 764,937 $ 139,532 $ 207,069 $ 3,735,711 Off-Balance Sheet Items 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. These transactions include commitments to extend credit and standby and commercial letters of credit which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. Our commitments associated with outstanding standby and commercial letters of credit and commitments to extend credit expiring by period as of the date indicated are summarized in the tables above. Because commitments associated with letters of credit and commitments to extend credit may expire unused, the amounts shown do not necessarily reflect the actual future cash funding requirements. Standby and commercial letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party. In the event of nonperformance by the customer, we have rights to the underlying collateral, which can include commercial real estate, physical plant and property, inventory, receivables, cash and/or marketable securities. The credit risk to us in issuing letters of credit is essentially the same as that involved in extending loan facilities to our customers. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. 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 57 Table of Contents total commitment amounts disclosed above do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if considered necessary by us, upon extension of credit, is based on management’s credit evaluation of the customer. Interest Rate Sensitivity and Market Risk As a financial institution, our primary component of market risk is sensitivity to movement in interest rates. Our asset and liability management policy provides management with the guidelines for effective interest rate risk management, and we have established a measurement system for monitoring our net interest rate sensitivity position. We manage our sensitivity position within our established guidelines. Fluctuations in interest rates will ultimately impact both the level of income and expense recorded on most of our assets and liabilities, and the market value of all interest-earning assets and interest-bearing liabilities. Interest rate risk is the potential of economic losses due to future interest rate changes. These economic losses can be reflected as a loss of future net interest income and/or a loss of current fair market value of equity. The objective interest rate risk management is to measure the effect on net interest income and fair value of equity and to position the balance sheet to minimize the risk of losses and maximize the amount of income without taking on unnecessary earning volatility. We seek to manage our exposure to interest rates by structuring our balance sheet in the ordinary course of business; however, we may enter into derivative contracts to hedge interest rate risk if it is appropriate given our risk profile and policy guidelines. Based upon the nature of our operations, we are not subject to foreign exchange or commodity price risk. We do not own any trading assets. Our exposure to interest rate risk is managed by the asset-liability committee (“ALCO”) of b1BANK, in accordance with policies approved by our board of directors. In determining the appropriate level of interest rate risk, the committee considers the impact on earnings and capital of the current outlook on interest rates, potential changes in interest rates, regional economies, liquidity, business strategies and other factors. The committee meets regularly to review, among other things, the sensitivity of assets and liabilities to interest rate changes, the book and market values of assets and liabilities, unrealized gains and losses, purchase and sale activities, commitments to originate loans and the maturities of investments and borrowings. Additionally, the committee reviews liquidity, cash flow flexibility, maturities of deposits and consumer and commercial deposit activity. Management employs methodologies to manage interest rate risk which include an analysis of relationships between interest-earning assets and interest-bearing liabilities, and an interest rate shock simulation model. We use interest rate risk simulation models and shock analysis to test the interest rate sensitivity of net interest income and fair value of equity, and the impact of changes in interest rates on other financial metrics. Contractual maturities and re-pricing opportunities of loans are incorporated in the model as prepayment assumptions, maturity data and optionality. Deposit assumptions such as repricing betas and non-maturity balance decay rates are also incorporated into the model. Model assumptions are revised and updated on a regular basis as directed by policy, and more frequently if conditions merit. The assumptions used are inherently uncertain and, as a result, the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest rates on net interest income. Actual results will differ from the model’s simulated results due to timing, magnitude, and frequency of interest rate changes, as well as changes in market conditions, customer behavior, and the application and timing of various management strategies. On at least a quarterly basis, we run simulation models to calculate potential impacts to net interest income and the fair value of equity. Specific details of the simulations are reflected in policy as directed by ALCO. 58 Table of Contents 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 June 30, 2026 As of December 31, 2025 Change in Interest Rates (Basis Points) Percent Change in Net Interest Income Percent Change in Fair Value of Equity Percent Change in Net Interest Income Percent Change in Fair Value of Equity +300 10.98 % 2.55 % 7.81 % (3.73 %) +200 7.46 2.04 5.31 (2.36) +100 3.76 1.33 2.69 (1.03) Base — — — — -100 (3.71) (1.04) (2.62) 0.89 -200 (7.30) (2.79) (5.09) 1.23 The results of the simulations are primarily driven by the contractual characteristics of all balance sheet instruments and customer behavior. Impact of Inflation Our consolidated financial statements and related notes included elsewhere in this statement have been prepared in accordance with GAAP. These require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative value of money over time due to inflation or recession. Unlike many industrial companies, substantially all of our assets and liabilities are monetary in nature. 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. However, other operating expenses do reflect general levels of inflation. Non-GAAP Financial Measures Our accounting and reporting policies conform to GAAP, and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional non-GAAP financial measures. We classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with GAAP as in effect from time to time in the United States in our statements of income, balance sheets or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios, or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both. This discussion and analysis section includes certain non-GAAP financial measures (e.g., referenced as “core” or “tangible”) intended to supplement, not substitute for, comparable GAAP measures. These measures typically adjust income available to common shareholders for certain significant activities or transactions that in management’s opinion can distort period-to-period comparisons of Business First’s performance. Transactions that are typically excluded from non-GAAP measures include realized and unrealized gains/losses on former bank premises and equipment, gains/losses on sales of securities, and acquisition-related expenses (including, but not limited to, legal costs, system conversion costs, severance and retention payments, etc.). The measures also typically adjust goodwill and certain intangible assets from book value and shareholders’ equity. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core business. These non-GAAP disclosures are not necessarily comparable to non-GAAP measures that may be presented by other companies. You should understand how such other banking organizations calculate their financial metrics or with names similar to the non-GAAP financial measures we have discussed in this statement when comparing such non-GAAP financial measures. 59 Table of Contents Core Net Income . 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 2025 2026 2025 Interest Income: Interest income $ 125,650 $ 114,850 $ 248,144 $ 228,543 Core interest income 125,650 114,850 248,144 228,543 Interest Expense: Interest expense 47,806 47,808 95,105 95,518 Core interest expense 47,806 47,808 95,105 95,518 Provision for Credit Losses: Provision for credit losses 1,991 2,225 4,269 5,037 Core provision expense 1,991 2,225 4,269 5,037 Other Income: Other income 13,967 14,415 28,017 27,641 Gains on former bank premises and equipment — — (28) (155) (Gains) losses on sale of securities 6 47 (74) 48 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 Other Expense: Other expense 59,525 51,206 116,996 101,784 Acquisition-related expenses (2) (1,169) (570) (3,396) (1,249) Core conversion expenses — (1,008) — (1,224) Core other expense 58,356 49,628 113,600 99,311 Pre-Tax Income: Pre-tax income 30,295 28,026 59,791 53,845 Gains on former bank premises and equipment — — (28) (155) (Gains) losses on sale of securities 6 47 (74) 48 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 Core conversion expenses — 1,008 — 1,224 Core pre-tax income 30,925 26,291 62,540 52,221 (CONTINUED) 60 Table of Contents For the Three Months Ended June 30, For the Six Months Ended June 30, (Dollars in thousands, except per share data) (Unaudited) 2026 2025 2026 2025 Provision for Income Taxes: (1) Provision for income taxes 6,120 5,923 12,052 11,199 Tax on gains on former bank premises and equipment — — (6) (33) Tax on (gains) losses on sale of securities 1 10 (16) 10 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 Tax on core conversion expenses — 213 — 259 Core provision for income taxes 6,245 5,416 12,473 10,715 Preferred Dividends Preferred dividends 1,350 1,350 2,700 2,700 Core preferred dividends 1,350 1,350 2,700 2,700 Net Income Available to Common Shareholders: Net income available to common shareholders 22,825 20,753 45,039 39,946 Gains on former bank premises and equipment, net of tax — — (22) (122) (Gains) losses on sale of securities, net of tax 5 37 (58) 38 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 Core conversion expenses, net of tax — 795 — 965 Core net income available to common shareholders $ 23,330 $ 19,525 $ 47,367 $ 38,806 Diluted Earnings Per Common Share: Diluted earnings per common share $ 0.70 $ 0.70 $ 1.37 $ 1.35 Gains on former bank premises and equipment , net of tax — — — — (Gains) losses on sale of securities, net of tax — — — — 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 Core conversion expenses, net of tax — 0.03 — 0.03 Core diluted earnings per common share $ 0.71 $ 0.66 $ 1.45 $ 1.31 ____________________________ (1) Tax rates, exclusive of certain nondeductible acquisition-related expenses and goodwill, utilized were 21.129% for both 2026 and 2025. These rates approximate the marginal tax rates for the applicable periods. (2) Includes merger and conversion-related expenses and salary and employee benefits. Tangible Book Value Per Common Share . Tangible book value per common share is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate (1) tangible common equity as shareholders’ equity less preferred stock, goodwill, and core deposit and customer intangible assets, net of accumulated amortization, and (2) tangible book value per common share as tangible common equity divided by shares of common stock outstanding. The most directly comparable GAAP financial measure for tangible book value per common share is book value per common share. 61 Table of Contents 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 June 30, 2026 As of December 31, 2025 Tangible Common Equity Total shareholders' equity $ 1,008,577 $ 896,883 Preferred stock (71,930) (71,930) Total common shareholders' equity 936,647 824,953 Adjustments: Goodwill (135,222) (121,146) Core deposit and customer intangibles (33,267) (14,497) Total tangible common equity $ 768,158 $ 689,310 Common shares outstanding (1) 32,535,659 29,510,668 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 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 . Tangible common equity to tangible assets is a non-GAAP measure generally used by financial analysts and investment bankers to evaluate financial institutions. We calculate tangible common equity, as described above, and tangible assets as total assets less goodwill, core deposit and customer intangible assets, net of accumulated amortization. The most directly comparable GAAP financial measure for tangible common equity to tangible assets is total common shareholders’ equity to total assets. 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 June 30, 2026 As of December 31, 2025 Tangible Common Equity Total shareholders' equity $ 1,008,577 $ 896,883 Preferred stock (71,930) (71,930) Total common shareholders' equity 936,647 824,953 Adjustments: Goodwill (135,222) (121,146) Core deposit and customer intangibles (33,267) (14,497) Total tangible common equity $ 768,158 $ 689,310 Tangible Assets Total Assets $ 8,903,506 $ 8,214,740 Adjustments: Goodwill (135,222) (121,146) Core deposit and customer intangibles (33,267) (14,497) Total tangible assets $ 8,735,017 $ 8,079,097 Common Equity to Total Assets 10.5 % 10.0 % Tangible Common Equity to Tangible Assets 8.8 8.5 62 Table of Contents