What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-09 compared with 2024-11-13 · 200 added, 394 removed, 580 unchanged (51% of the section changed)

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The following discussion and analysis of our consolidated financial condition and results of operations of the Company should be read in conjunction with the preceding consolidated financial statements and notes presented in Item 1.

Financial Statements of this Form 10-Q, as well as with the audited consolidated financial statements and notes for the year ended December 31, 2023, included in our Form 10-K filed with the SEC on March 22, 2024, and as amended on April 12, 2024 (the “Form 10-K”).

Financial Statements of this Form 10-Q, as well as with the audited consolidated financial statements and notes for the year ended December 31, 2024, included in our Form 10-K filed with the SEC on March 17, 2025 (the “Form 10-K”).

Historical results of operations and the percentage relationships among any amounts included and any trends that may appear may not indicate trends in operations or results of operations for any future periods.

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Disclosure Regarding Forward-Looking Statements

This Form 10-Q contains statements that we believe are, or may be considered to be, “forward-looking statements”.

This Form 10-Q contains statements that we believe are, or may be considered to be, “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the beliefs, goals, intentions, and expectations of the Company regarding revenues, earnings, earnings per share, loan production, asset quality, and capital levels, among other matters;

our estimates of future costs and benefits of the actions we may take;

our assessments of expected losses on loans;

our assessments of interest rate and other market risks;

our ability to achieve our financial and other strategic goals;

and other statements that are not historical facts.

Forward-looking statements are neither historical facts nor assurances of future performance.

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In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “plans,” “expects” or “does not expect,” “is expected,” “look forward to,” “budget,” “scheduled,” “estimates,” “forecasts,” “will continue,” “intends,” “the intent of,” “have the potential,” “anticipates,” “does not anticipate,” “believes,” “should,” “should not,” or variations of such words and phrases that indicate that certain actions, events, or results “may,” “could,” “would,” “might,” or “will,” “be taken,” “occur,” or “be achieved,” or the negative of these terms or variations of them or similar terms.

Furthermore, forward-looking statements may be included in various filings that we make with the SEC or press releases or oral statements made by or with the approval of one of our authorized executive officers.

Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct.

These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections, and other forward-looking statements will not be achieved.

We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates, and intentions expressed in such forward-looking statements.

Important risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company, as applicable, to be materially different from any expected future results, performance, or achievements expressed or implied by such forward-looking information and statements include, but are not limited to, the risks described in Item 1A, under the caption “Risk Factors” in our Form 10-K, and in Part II, Item 1A.

Additionally, forward–looking statements speak only as of the date they are made;

the Company does not assume any duty, does not undertake, and specifically disclaims any obligation to update such forward–looking statements, whether written or oral, that may be made from time to time, whether because of new information, future events, or otherwise, except as required by law.

Furthermore, because forward–looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in or implied by such forward-looking statements because of a variety of factors, many of which are beyond the control of the Company.

Further, factors identified herein are not necessarily all of the factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements.

Other factors, including unknown or unpredictable factors, also could harm the Company.

Accordingly, you should consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company and not place undue reliance on forward-looking statements.

The risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to, the following:

costs or difficulties associated with newly developed or acquired operations;

changes in general economic, political, or market trends (either nationally or locally in the areas in which we conduct, or will conduct, business), including inflation, changes in interest rates, market volatility and monetary fluctuations, and changes in federal government policies and practices, as well as the impact from recently announced and future tariffs on the markets we serve;

increased competition;

changes in consumer confidence and demand for financial services, including changes in consumer borrowing, repayment, investment, and deposit practices;

changes in asset quality and credit risk;

our ability to control costs and expenses;

adverse developments in borrower industries or declines in real estate values;

changes in and compliance with federal and state laws and regulations that pertain to our business and capital levels;

our ability to raise capital as needed;

the impact, extent and timing of technological changes;

the effects of any cybersecurity breaches;

and the other factors discussed in the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” section of the Company's Annual Report on Form 10–K for the year ended December 31, 2024 and in Part I, Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A.

Risk Factors in this Form 10-Q.

Readers are cautioned not to place undue reliance on any forward-looking statements contained in this Form 10-Q, which reflect management’s opinions only as of the date hereof.

Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements.

You are advised, however, to consult any additional disclosures we make in our reports to the SEC.

All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Form 10-Q.

We have made, and will continue to make, various forward-looking statements with respect to financial and business matters.

Comments regarding our business that are not historical facts are considered forward-looking statements that involve inherent risks and uncertainties.

Actual results may differ materially from those contained in these forward-looking statements.

Burke & Herbert Financial Services Corp.

was organized as a Virginia corporation on September 14, 2022, to serve as the holding company for the Bank.

Burke & Herbert commenced operations as a bank holding company on October 1, 2022, following a reorganization transaction in which it became the Bank’s holding company.

This transaction was treated as an internal reorganization as all shareholders of the Bank became shareholders of Burke & Herbert.

In September 2023, Burke

& Herbert elected financial holding company status.

As a financial holding company, Burke & Herbert is subject to regulation and supervision by the Federal Reserve.

Burke & Herbert has no material operations and owns 100% of the Bank.

was organized as a Virginia corporation in 2022 to serve as the holding company for Burke & Herbert Bank & Trust Company.

The Company became a bank holding company when it commenced operations on October 1, 2022, following a reorganization transaction in which it acquired control of the Bank under the BHCA.

This transaction was treated as an internal reorganization as all shareholders of the Bank became shareholders of the Company.

The Company has no material operations other than owning the Bank.

In September 2023, the Company elected to become a financial holding company under the BHCA.

As a financial holding company of a Virginia state bank, the Company is subject to regulation, supervision, and examination by the Federal Reserve and the Virginia BFI.

The Bank is a Virginia chartered commercial bank that commenced operations in 1852.

The Bank is supervised and regulated by the FDIC and the Virginia BFI.

The Bank became a member of the Federal Reserve System on December 31, 2024.

The Bank is subject to regulation, supervision, and examination by the Federal Reserve (through the Federal Reserve Bank of Richmond) and the Virginia BFI.

The Bank’s primary market area includes northern Virginia and West Virginia, and it has over 77 branches and commercial loan offices across Delaware, Kentucky, Maryland, Virginia, and West Virginia.

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In order to maintain its operations and branch locations, the Bank incurs various operating expenses which are further described within the “Results of Operations” later in this section.

As of September 30, 2024, we had total consolidated assets of $7.9 billion, gross loans of $5.6 billion, total deposits of $6.6 billion, and total shareholders’ equity of $738.1 million.

As of September 30, 2024, we had 857 full-time employees.

As of March 31, 2025, we had total consolidated assets of $7.8 billion, gross loans of $5.6 billion, total deposits of $6.5 billion, and total shareholders’ equity of $758.0 million.

As of March 31, 2025, we had 814 full-time employees.

None of our employees are covered by a collective bargaining agreement.

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The total aggregate consideration payable in the Merger was approximately 7,405,772 shares of Burke & Herbert Common Stock.

Additionally, each share of the Summit Series 2021 Preferred Stock issued and outstanding was converted into the right to receive a share of the new Burke & Herbert Series 2021 Preferred Stock.

Additionally, each share of the Summit Series 2021 Preferred Stock issued and outstanding was converted into the right to receive a share of the newly created Burke & Herbert Series 2021 Preferred Stock.

Summit results of operations are included from the Closing Date forward.

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These estimates, assumptions, and judgments affect the amounts reported in the financial statements and accompanying notes and are based on information available as of the date of the financial statements, and, as this information changes, actual results could differ from the estimates, assumptions, and judgments reflected in the financial statements.

In particular, management has identified several accounting policies that, due to the estimates, assumptions, and judgments inherent in those policies, are critical in understanding our financial statements.

In particular, management has

identified several accounting policies that, due to the estimates, assumptions, and judgments inherent in those policies, are critical in understanding our financial statements.

Our most significant accounting policies are presented in the notes to the accompanying consolidated financial statements.

These policies, along with the other disclosures presented in the financial statement notes and in this financial review, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined.

determination of the allowance for credit losses, and income taxes to be the accounting areas that require the most subjective or complex judgments, and as such, could be most subject to revision as new information becomes available.

Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, we have identified business combination and goodwill, the determination of the allowance for credit losses, and income taxes to be the accounting areas that require the most subjective or complex judgments, and as such, could be most subject to revision as new information becomes available.

Business Combination and Goodwill

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Allowance for Credit Losses

The allowance for credit losses represents our estimate of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and projections including reasonable and supportable forecasts, reversion, and post-reversion forecasts.

It is a valuation account that is deducted from the financial assets’ amortized cost basis to present the net amount expected to be collected on the financial asset.

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Historical credit loss experience provides the basis for the estimation of expected credit losses;

adjustments to historical loss information are made for differences in current loan-specific risk characteristics, such as differences in underwriting standards, portfolio mix, and delinquency levels, as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors.

values, or other relevant factors.

The model methodology used for funded credits, along with taking into consideration the probability of drawdowns or funding on unfunded commitments and whether such commitments are irrevocable or not by the Company, is how the Company determines the allowance for credit losses for unfunded commitments.

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This model uses a remaining useful life or WARM method within defined-contractual terms by federal call codes.

The model forecasts net charge-off rates by call codes using ordinary least

squares (“OLS”) regression models that use macroeconomic variables to forecast the Company’s and peer banks’ net charge-off rates.

The model forecasts net charge-off rates by call codes using ordinary least squares (“OLS”) regression models that use macroeconomic variables to forecast the Company’s and peer banks’ net charge-off rates.

These models are used to produce reasonable and supportable forecasts of net charge-off rates.

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and (iii) underwriting and delinquency trends.

The qualitative factors applied at September 30, 2024, and the importance and levels of the qualitative factors applied, may change in future periods depending on the level of changes to items such as the uncertainty of economic conditions and management’s assessment of the level of credit risk within the loan portfolio as a result of such changes, compared to the amount of ACL calculated by the model.

The qualitative factors applied at March 31, 2025, and the importance and levels of the qualitative factors applied, may change in future periods depending on the level of changes to items such as the uncertainty of economic conditions and management’s assessment of the level of credit risk within the loan portfolio as a result of such changes, compared to the amount of ACL calculated by the model.

Management reviews supplemental data sources including historical net charge-off rates and data measuring other specific credit outcomes from its systems of record in supporting qualitative factors.

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For more information, including the reconciliation of these non-GAAP financial measures to their corresponding GAAP financial measures, see the respective sections where the measures are presented.

Current Economic Environment in the Financial Services Industry

Commercial Real Estate Sector Concentration

The commercial real estate (“CRE”) sector has been impacted significantly by rising interest rates and higher vacancies, increasing the prospect of default that borrowers may face due to the record amount of upcoming maturities.

The commercial real estate (“CRE”) sector has been impacted significantly by rising interest rates and rising vacancies, increasing the prospect of default that borrowers may face due to the record amount of upcoming maturities.

In addition, the office market continues to struggle with fewer employees in the office after the COVID-19 pandemic.

The Bank continues to monitor its commercial real estate portfolio by reviewing various credit risk and concentration reports.

The Bank’s exposure to commercial real estate at September 30, 2024, was $2.5 billion, or 45.4%, of its gross loan portfolio, not including owner-occupied commercial real estate and acquisition, construction & development.

Commercial real estate as a percent of total assets at September 30, 2024, was 32.1%, not including owner-occupied commercial real estate and acquisition, construction & development.

Including owner-occupied commercial real estate and acquisition, construction & development, total exposure was at $3.6 billion, or 64.8%, of our total gross loans and 45.9% of total assets at September 30, 2024.

Loan balances by portfolio segment amortized cost (in thousands) and by percentage of our total gross loan portfolio at September 30, 2024, were as follows:

September 30, 2024

However, in late 2024 interest rates began falling, and in January 2025 the U.S.

president signed an executive order requiring all federal employees to return to offices on a five-day-a-week basis.

Additionally, several large private-sector employers instituted similar return to office mandates in 2024.

We would expect the federal return to office mandate, combined with mandates at private sector employers and decreasing interest rates could help the region’s CRE office market;

however, we cannot be certain that this would be the case or the degree to which such mandates may improve the CRE sector in our markets in 2025, if at all.

Additionally, recent reductions, and possible further reductions, in the federal workforce, combined with general economic uncertainty as a result of federal trade and other policies could continue to challenge the economy and impact the CRE sector.

The Bank’s exposure to CRE at March 31, 2025, was $2.8 billion, or 49.7%, of its gross loan portfolio, not including owner-occupied commercial real estate and acquisition, construction & development.

Commercial real estate as a percent of total assets at March 31, 2025, was 35.8%, not including owner-occupied commercial real estate and acquisition, construction & development.

Including owner-occupied commercial real estate and acquisition, construction & development, total exposure was at $3.7 billion, or 65.8%, of our total gross loans and 47.4% of total assets at March 31, 2025.

Loan balances by portfolio segment amortized cost (in thousands) and by percentage of our total gross loan portfolio at March 31, 2025, were as follows:

March 31, 2025

Amortized Cost Percentage

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Monitoring of the CRE concentration is performed at both the loan level and at the portfolio level.

The Credit Risk Management team provides management and the Board of Directors with periodic reports on the credit portfolio, which include the CRE portfolio (including owner-occupied CRE and acquisition, construction & development loans).

The Credit Risk Management team provides management and the Board with periodic reports on the credit portfolio, which include the CRE portfolio (including owner-occupied CRE and acquisition, construction & development loans).

These reports provide an assessment of asset quality and risk rating migration and monitor concentrations against the board approved concentration limits (including sub-limits).

The tables below present the Bank’s commercial real estate, owner-occupied commercial real estate, and acquisition, construction & development portfolios by collateral type and geographic location as of September 30, 2024 (in thousands).

Commercial Real Estate by Collateral Type and Geographic Location

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Monitoring the market conditions is also an important component of prudent CRE risk management.

Quarterly construction progress reviews are also completed on all acquisition, construction & development loans.

For each loan, management reviews the adequacy of the construction budget, adequacy of the interest reserve, pace of construction, and review of any loan covenants.

Quarterly construction progress reviews are also completed on acquisition, construction & development loans.

loan, management reviews the adequacy of the construction budget, adequacy of the interest reserve, pace of construction, and review of any loan covenants.

The Bank believes its underwriting and monitoring standards for commercial real estate loans are sufficient to evaluate its loan portfolio and keep it from incurring significant losses.

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“Risk Factors” .

2023 Banking Failures and Ensuing Banking Industry Liquidity Concerns

In response to the bank failures that occurred during March and May 2023 and the attendant stress on economic agents, including various financial markets, the Company took multiple proactive measures to mitigate any potential financial and operational impacts.

Such measures included, but were not limited to:

• dissemination of internal communication to inform the Board and employees of current events and the Company’s condition and desired market response;

• testing of available liquidity sources;

• real-time analysis of our deposit composition and deposit concentrations;

• assessment of our investment securities portfolio;

• stress testing of liquidity and capital metrics based on observed financial conditions with particular emphasis on the causes of such risk events.

For further discussion see Part II, Item 1A.

“Risk Factors” .

The measures were taken following meetings convened by a subcommittee provided for in our Asset/Liability policy more fully described in Item 3.

— Quantitative and Qualitative Disclosures About Market Risk .

The Company’s key inputs and certain assumptions of the stress testing included, but were not limited to, uninsured deposits, deposit composition and deposit flows, borrowings and borrowing capacity, interest rate movements and sensitivity, unrealized losses in the investment securities portfolio, loan balances and loan demand, credit risks, and current allowances for credit losses.

Results of the stress tests indicated capital levels that remained above the well capitalized regulatory ratios and liquidity metrics remained within internal policy guidelines.

For additional information related to capital, see Notes to the Consolidated Financial Statements – Note 8 — Regulatory Capital Matters .

The Company intends to continue conducting such stress tests on a periodic basis.

Liquidity Management

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The primary source of liquidity for the Company is dividends paid by the Bank.

federal and state statutes and regulations impose restrictions on the amount of dividends that may be paid by the Bank.

Applicable federal and state statutes and regulations impose restrictions on the amount of dividends that may be paid by the Bank.

In addition to the formal statutes and regulations, regulatory authorities also consider the adequacy of the Bank’s total capital in relation to its assets, deposits, and other such items.

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Management believes that the current sources of liquidity are adequate to meet the Company’s requirements and plans for continued growth.

See Note 6 - Borrowed Funds and Note 10 - Commitments and Contingencies , in Notes to Consolidated Financial Statements for additional information regarding outstanding balances of sources of liquidity and contractual commitments and obligations.

See Note 6 - Borrowed Funds and Note 10 - Commitments and Contingencies , in Notes to Consolidated

Financial Statements for additional information regarding outstanding balances of sources of liquidity and contractual commitments and obligations.

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies.

Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

Applicable Basel III Capital Rules require the Company and the Bank to maintain minimum Common Equity Tier 1 (“CET 1”), Tier 1, and Total Capital ratios, along with a capital conservation buffer, effectively resulting in new minimum capital ratios.

Applicable capital rules under the Basel III Framework require the Company and the Bank to maintain minimum Common Equity Tier 1 (“CET 1”), Tier 1, and Total Capital ratios, along with a capital conservation buffer, effectively resulting in new minimum capital ratios.

The capital conservation buffer is designed to absorb losses during periods of economic stress.

Banking institutions with a ratio of CET 1 capital to risk-weighted assets above the minimum but below the conservation buffer (or below the combined capital conservation buffer and counter-cyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall.

The Basel III Capital Rules also provide for a “counter-cyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company or the Bank.

The Basel III Framework also provides for a “counter-cyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company or the Bank.

Under capital adequacy guidelines and the regulatory framework for “prompt corrective action,” the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.

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A depository institution that is not “well capitalized” is generally prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market, may be subject to asset growth limitations, and may be required to submit capital restoration plans.

As of September 30, 2024, and December 31, 2023, the Bank complied with all regulatory capital standards and qualifies as “well capitalized”.

Note 8 - Regulatory Capital Matters in Notes to Consolidated Financial Statements contains additional discussion and analysis regarding the Company and the Bank’s regulatory capital requirements.

As of March 31, 2025, and December 31, 2024, the Bank complied with all regulatory capital standards and qualifies as “well capitalized.” Note 8 - Regulatory Capital Matters in Notes to Consolidated Financial Statements contains additional discussion and analysis regarding the Company and the Bank’s regulatory capital requirements.

Effects of Inflation

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Management believes the most significant potential impact of inflation on financial results is a direct result of the Company’s ability to manage the impact of changes in interest rates.

Management attempts to maintain a balanced position between rate-sensitive assets and liabilities over an economic cycle in order to minimize the impact of interest rate

fluctuations on net interest income.

Management attempts to maintain a balanced position between rate-sensitive assets and liabilities over an economic cycle in order to minimize the impact of interest rate fluctuations on net interest income.

However, this goal can be difficult to completely achieve in times of rapidly changing interest rates and is one of many factors considered in determining the Company’s interest rate positioning.

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The extent of such impacts may vary depending on factors such as the current business and economic conditions, political and regulatory environment, and operational challenges.

Many of these risks and our risk management strategies are described in more detail elsewhere in this Report as well as with the audited consolidated financial statements and notes for the year ended December 31, 2023, included in our Form 10-K.

Many of these risks and our risk management strategies are described in more

detail elsewhere in this Report as well as with the audited consolidated financial statements and notes for the year ended December 31, 2024, included in our Form 10-K.

Our success will depend upon, among other things, the following factors that we manage or control:

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• The appropriateness of critical accounting estimates and related contingencies,

• Our ability to manage operational risks related to new products and services, changes in processes and procedures, or the implementation of new technology,

• The ability to make investments to promote compliance with existing and evolving regulatory requirements that will increase as the Company grows and will result in increased administrative expenses that we did not previously incur, which costs may materially increase our general and administrative expenses, and

• The ability to execute our strategic objectives, including successfully integrating Summit’s operations, people, and technology with ours, and continuing to efficiently satisfy the obligations associated with being a public company, all of which will require significant resources and management attention and may divert management’s attention from our business operations.

• Our ability to manage operational risks related to new products and services, changes in processes and procedures, or the implementation of new technology, and

Our financial performance is also substantially affected by a number of external factors outside of our control, including the following:

• Economic conditions, including the length and extent of the economic impacts of events affecting the financial services market generally as well as pandemics and political instability and conflicts, and any actions taken to mitigate and manage such impacts,

• The effect of climate change on our business and performance, including indirectly through impacts on our customers,

• Economic conditions, including the effects of pandemics, political conflicts, political instability, trade policies, including tariffs and other barriers to trade, the availability of labor, supply chain volatility, and any actions taken to mitigate and manage such impacts;

• The actions by the Federal Reserve, U.S.

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and global financial markets, including capital markets;

• The impact of tariffs and other trade policies of the U.S.

and its global trading partners,

• Changes in the competitive landscape;

• Impacts of changes in federal, state, and local governmental policy, including on the regulatory landscape, capital markets, taxes, infrastructure spending, and social programs;

• The effect of climate change on our business and performance, including indirectly through impacts on our customers;

• The impact of market credit spreads on asset valuations;

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• The impact on customers and changes in customer behavior due to changing business and economic conditions or regulatory or legislative initiatives.

• Our ability to successfully integrate into our operations Summit’s assets, liabilities, and systems, as well as new management personnel and customers, and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto.

The impact of these items, where material, is discussed in the applicable sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operation.

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The following table contains selected historical consolidated financial data as of the dates and for the periods shown.

The selected balance sheet data as of September 30, 2024, and September 30, 2023, and the selected income statement data for the three months and nine months ended September 30, 2024, and September 30, 2023, have been derived from our consolidated financial statements included elsewhere in this Form 10-Q and in other filings we have submitted with the SEC and should be read in conjunction with the other information contained in this Form 10-Q.

As of the Three Months Ended September 30,

As of the Nine Months Ended September 30,

The selected balance sheet data as of March 31, 2025, and March 31, 2024, and the selected income statement data for the three months ended March 31, 2025, and March 31, 2024, have been derived from our consolidated financial statements included elsewhere in this Form 10-Q and in other filings we have submitted with the SEC and should be read in conjunction with the other information contained in this Form 10-Q.

As of the Three Months Ended March 31,

(In thousands, except ratios, share and per share data) 2025 2024

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747,587 319,308

As of or for the Three Months Ended September 30,

As of or for the Nine Months Ended September 30,

2024 2023 2024 2023

As of or for the Three Months Ended March 31,

Selected Operating Data:

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Net interest income 72,987 22,131

Provision for credit losses

147 235 23,387 964

Provision (recapture) for credit losses

Total non-interest income 10,023 4,254

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Income before income taxes

32,822 4,520 19,640 19,483

Income tax expense

5,200 464 3,725 1,869

Preferred stock dividends

Net income applicable to common shares

27,397 4,056 15,465 17,614

Per Share Data:

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Diluted net income per common share

1.82 0.55 1.33 2.35

Dividends declared per common share

0.53 0.53 1.59 1.59

Common stock dividend payout ratio (1)

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$ 49.90 $ 42.92

As of or for the Three Months Ended September 30,

As of or for the Nine Months Ended September 30,

2024 2023 2024 2023

As of or for the Three Months Ended March 31,

Performance Ratios:

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Interest rate spread (3)

3.35 2.10 3.06 2.30

Net interest margin (4)

4.07 2.76 3.78 2.90

Efficiency ratio (5)

60.66 82.50 76.02 75.83

Capital Ratios:

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Tier 1 capital to average assets (leverage ratio)

9.66 11.32 9.66 11.32

Asset Quality Ratios:

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(1) The dividend payout ratio represents per share dividends declared divided by diluted earnings per share.

(2) Return on average equity computed using total average equity at period-end.

(3) The interest rate spread represents the difference between the fully taxable-equivalent weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

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(5) The efficiency ratio represents non-interest expense as a percentage of the sum of net interest income and non-interest income.

Results of Operations

Results of Operations for the Nine Months Ended September 30, 2024, and September 30, 2023

Net income applicable to common shares for the nine months ended September 30, 2024, was $15.5 million compared to net income applicable to common shares of $17.6 million for the nine months ended September 30, 2023.

The $2.1 million decrease in net income applicable to common shares was primarily the result of merger related expenses and one-time CECL Day 2 provision for non-PCD assets acquired in the Merger for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Net interest income increased by $83.6 million to $155.1 million for the nine months ended September 30, 2024, compared to $71.5 million for the nine months ended September 30, 2023.

The main driver for this increase was the impact of the Merger.

For the nine months ended September 30, 2024, the Company recorded credit provision expense of $23.4 million compared to a provision of $1.0 million for the nine months ended September 30, 2023.

For the nine months ended September 30, 2024, the Company recognized a one-time CECL Day 2 provision for non-PCD assets acquired in the Merger, which

resulted in a higher credit provision expense for the nine months ended September 30, 2024, compared to the nine months ended, September 30, 2023.

Non-interest income increased by $11.2 million, or 85.7%, to $24.4 million for the nine months ended September 30, 2024, as compared to $13.1 million for the nine months ended September 30, 2023, as a result of the Merger.

In addition, the Company liquidated the majority of the acquired securities portfolio that resulted in a gain on sale of securities of $0.6 million.

Non-interest expense increased by $72.3 million, or 112.7%, to $136.4 million for the nine months ended September 30, 2024, compared to $64.1 million for the nine months ended September 30, 2023.

The increase was primarily due to effect of the Merger and also included higher legal fees, consulting fees, audit fees, investment banking fees, software contract terminations, change-in-control salary and benefit payments, funding a charitable donation (as part of the Merger Agreement), and other expenses related to the Merger.

For the nine months ended September 30, 2024, the Company incurred $27.5 million of expenses related to the Merger with Summit.

Net Interest Income and Net Interest Margin

Net interest income is the principal component of the Company’s income stream and represents the difference, or spread, between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds.

Net interest margin, stated as a percentage, is the yield obtained by dividing the difference between interest income generated on earning assets and the interest expense paid on all funding sources by average earning assets.

Fluctuations in interest rates as well as changes in the volume and mix of earning assets and interest-bearing liabilities can impact net interest income and net interest margin.

Management closely monitors both total net interest income and the net interest margin and seeks to maximize net interest income without exposing the Company to an excessive level of interest rate risk through our asset and liability policies.

Interest rate risk is managed by monitoring the pricing, maturity and repricing options of all classes of interest-bearing assets and liabilities.

Net interest income totaled $155.1 million for the nine months ended September 30, 2024, compared to $71.5 million for the nine months ended September 30, 2023.

The increase in net interest income was primarily driven by higher interest earning assets, higher rates, and higher accretion income, as a result of the Merger.

Accretion income associated with acquired loans and borrowings totaled $28.8 million for the nine months ended September 30, 2024.

Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $6.3 million for the nine months ended September 30, 2024.

The tax-adjusted net interest margin was 3.78% for the nine months ended September 30, 2024, compared to 2.90% for the nine months ended September 30, 2023.

The increase in tax-adjusted net interest margin was primarily driven by the effect of the Merger and the acquisition of additional, higher-yielding interest-earning assets.

The yield for the taxable loan portfolio was 7.01% for the nine months ended September 30, 2024, compared to 5.01% for the nine months ended September 30, 2023.

The increase was primarily the result of the effect of the Merger which resulted in the acquisition of additional, higher-yielding loans.

The tax-adjusted yield on the total investment securities portfolio was 3.81% for the nine months ended September 30, 2024, compared to 3.42% for the nine months ended September 30, 2023.

The increase was partly due to higher yields in our investment portfolio in addition to the Merger, which resulted in the acquisition of additional securities with higher tax-adjusted yields.

The yield on interest-bearing deposits increased to 2.86% during the nine months ended September 30, 2024, from 1.70% during the nine months ended September 30, 2023.

The increase was a result of the Merger which resulted in the assumption of additional interest-bearing deposits with higher interest rates and to a lesser extent by higher market interest rates.

The yield on our short-term borrowings for the nine months ended September 30, 2024, was 4.42%, compared to 4.67% for the nine months ended September 30, 2023.

The decrease was due to decreases in the Federal Funds Rate and other short-term market rates.

The yield on our subordinated debt acquired in the Merger was 10.21%.

The following table sets forth the major components of net interest income and the related yields and rates for the nine months ended September 30, 2024, and September 30, 2023, for comparison (dollars in thousands).

For the Nine Months Ended September 30,

Average Outstanding Balance Interest Income/Expense Average Yield / Rate

Taxable loans (1)(2)

$ 4,068,804 $ 213,400 7.01 % $ 1,985,898 $ 74,485 5.01 %

Tax-exempt loans (1)(2)

2,457 103 5.60 — — N/A

4,071,261 213,503 7.00 % 1,985,898 74,485 5.01 %

Interest-earning deposits and fed funds sold 104,168 2,738 3.51 55,870 1,858 4.45

Taxable securities 991,723 30,096 4.05 1,040,695 28,130 3.61

Tax-exempt securities (3)

375,762 8,928 3.17 267,135 5,371 2.69

Total securities 1,367,485 39,024 3.81 1,307,830 33,501 3.42

Total interest-earning assets 5,542,914 255,265 6.15 3,349,598 109,844 4.38

Non-interest-earning assets 430,892 248,292

Total assets $ 5,973,806 $ 3,597,890

Liabilities and shareholders’ equity:

Non-interest-bearing demand $ 1,137,182 $ 887,711

Interest-bearing demand 1,410,111 29,770 2.82 % 554,724 1,520 0.37 %

Savings 1,377,642 16,336 1.58 983,046 11,242 1.53

Time 1,072,861 36,639 4.56 559,453 13,946 3.33

Total interest-bearing deposits 3,860,614 82,745 2.86 2,097,223 26,708 1.70

Total deposits 4,997,796 82,745 2.21 2,984,934 26,708 1.20

Short-term borrowings

329,363 10,890 4.42 302,060 10,553 4.67

Subordinated debt borrowings

60,912 4,658 10.21 — — N/A

Total interest-bearing liabilities 4,250,889 98,293 3.09 2,399,283 37,261 2.08

Non-interest-bearing liabilities 56,361 24,485

Equity 529,374 286,411

Total liabilities and equity $ 5,973,806 $ 3,597,890

Taxable-equivalent net interest income /net interest spread (4)

156,972 3.06 % 72,583 2.30 %

Taxable-equivalent net interest margin (5)

3.78 % 2.90 %

Taxable-equivalent net adjustment (1,897) (1,128)

Net interest income $ 155,075 $ 71,455

Net interest-earning assets $ 1,292,025 $ 950,315

(1) Non-accrual loans are included in average loan balances.

(2) Loan fees are included in the calculation of interest income.

(3) Yields and interest income on tax-exempt assets are computed on a taxable-equivalent basis assuming a 21% tax rate.

(4) The interest rate spread represents the difference between the fully taxable-equivalent weighted-average yield on interest-earning assets and the weighted-average yield of interest-bearing liabilities for the period.

(5) The net interest margin represents fully taxable-equivalent net interest income as a percent of average interest-earning assets for the period.

Taxable-equivalent net interest margin, as presented above, is calculated by dividing fully-taxable equivalent (“FTE”) net interest income by total average earning assets.

Net interest income, on an FTE basis, is a non-GAAP financial measure that the Company believes to provide a more accurate picture of the interest margin for comparative purposes.

Management believes FTE net interest income is a standard practice in the banking industry, and when net interest income is adjusted on an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable;

however, the adjustment to an FTE basis has no impact on net income.

FTE net interest income is calculated by adding the tax benefit on certain financial interest-earning assets, whose interest is tax-exempt, to total interest income then subtracting total interest expense.

As a non-GAAP measure, FTE net interest income should not be considered as a substitute for the nearest comparable GAAP measure, net interest income.

Net interest income shown elsewhere in this presentation is GAAP net interest income.

The following table reconciles GAAP net interest income to FTE net interest income (in thousands).

Nine Months Ended

September 30, 2024 September 30, 2023

GAAP Financial Measurements

Interest Income - Loans $ 213,400 $ 74,485

Interest Income - Tax-exempt loans 81 —

Interest Income - Securities taxable 29,949 28,130

Interest Income - Securities tax-exempt 7,052 4,243

Interest Income - Other interest income 2,886 1,858

Interest Expense - Deposits 82,745 26,708

Interest Expense - Borrowed funds 10,806 10,495

Interest Expense - Subordinated debt 4,658 —

Interest Expense - Other 84 58

Total Net Interest Income $ 155,075 $ 71,455

Non-GAAP Financial Measurements

Tax Benefit on Tax-Exempt Interest Income - Securities $ 1,897 $ 1,128

Total Tax Benefit on Tax-Exempt Interest Income (1)

Tax-Equivalent Net Interest Income $ 156,972 $ 72,583

(1) Tax benefit was calculated using the federal statutory tax rate of 21%.

Yield/Rate and Volume Analysis

The following table sets forth the dollar difference in interest earned and paid for each major category of interest-earning assets and interest-bearing liabilities for the noted periods and the amount of such change attributable to changes in average balances (volume) or changes in average interest rates.

Interest income and interest expense for the nine months ended September 30, 2024, and September 30, 2023, are annualized using an actual days over calendar year method.

The volume variances are equal to the increase or decrease in average balance multiplied by current period rates, and rate variances are equal to the increase or decrease in rate times prior period average balances.

Variances attributable to both rate and volume changes are calculated by multiplying the change in rate by the change in average balance and are allocated to the volume variance.

See table below (in thousands).

Nine Months Ended September 30, 2024, compared to September 30, 2023

Dollar Increase (Decrease) Due to Change in:

Average Volume Average Yield / Rate

Income from the interest-earning assets:

Loans (1) , gross

$ 175,785 $ 7,605 $ 183,390

Securities (1)

3,094 4,745 7,839

Interest-bearing deposits and fed funds sold 1,832 (475) 1,357

Total interest income on interest-earning assets 180,711 11,875 192,586

Expense from the interest-bearing liabilities:

Interest-bearing demand deposits 24,406 13,047 37,453

Savings deposits 6,500 (497) 6,003

Time deposits 22,377 5,500 27,877

Total interest expense on interest-bearing deposits 53,283 18,050 71,333

Borrowings 7,647 (821) 6,826

Total interest expense on interest-bearing liabilities 60,930 17,229 78,159

Taxable-equivalent net interest income

$ 119,781 $ (5,354) $ 114,427

(1) Yields and interest income on tax-exempt securities have been computed on a taxable-equivalent basis.

Interest Income

Total interest income was $253.4 million for the nine months ended September 30, 2024, compared to $108.7 million for the nine months ended September 30, 2023, an increase of 133.1%.

The increase in interest income was due to the effect of the Merger and the acquisition of additional interest-earning assets.

Interest income on loans increased by $139.0 million and interest income on securities increased $4.6 million, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Interest Expense

Total interest expense was $98.3 million for the nine months ended September 30, 2024, compared to $37.3 million for the nine months ended September 30, 2023.

The increase in interest expense was a result of the Merger and the assumption of additional interest-bearing liabilities.

Interest expense on interest-bearing deposits and borrowed funds increased by $56.0 million and $0.3 million, respectively, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Interest on subordinated debt assumed in the Merger was $4.7 million for the nine months ended September 30, 2024.

Provision for (Recapture of) Credit Losses

The provision for credit losses was $23.4 million for the nine months ended September 30, 2024, compared to a provision of $1.0 million for the nine months ended September 30, 2023.

The increased provision expense was due to a one-time CECL Day 2 provision for non-PCD assets acquired in the Merger and acquired commitments for unfunded commitments for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

See Note 4 - Allowance for Credit Losses in Notes to Consolidated Financial Statements for further information.

Non-interest Income

The following table sets forth the various components of our non-interest income for the periods indicated (in thousands):

Nine Months Ended September 30, Increase (Decrease)

2024 2023 Amount Percent

Fiduciary and wealth management $ 5,982 $ 3,996 $ 1,986 49.7 %

Service charges and fees 11,147 4,959 6,188 124.8

Net gains (losses) on securities 613 (112) 725 647.3

Income from company-owned life insurance 2,799 1,720 1,079 62.7

Other non-interest income 3,834 2,565 1,269 49.5

Total $ 24,375 $ 13,128 $ 11,247 85.7 %

Non-interest income increased 85.7% for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

The increase was primarily driven by the Merger.

The largest increase was a $6.2 million increase in service charges and fees for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

A majority of the securities acquired in the Merger were sold, resulting in gains of $0.6 million for the nine months ended September 30, 2024, compared to losses of $0.1 million during the nine months ended September 30, 2023.

Loan swap fees included in other non-interest income increased $0.1 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Other categories of non-interest income also increased due to the Merger, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Non-interest Expense

The following table sets forth the various components of our non-interest expense for the periods indicated (in thousands):

Nine Months Ended September 30, Increase (Decrease)

2024 2023 Amount Percent

Salaries and wages $ 51,271 $ 29,283 $ 21,988 75.1 %

Pensions and other employee benefits 12,346 7,116 5,230 73.5

Occupancy 7,947 4,464 3,483 78.0

Equipment rentals, depreciation and maintenance 18,643 4,231 14,412 340.6

Other 46,216 19,042 27,174 142.7

Total $ 136,423 $ 64,136 $ 72,287 112.7 %

Non-interest expense increased $72.3 million, or 112.7%, for the nine months ended September 30, 2024, compared to September 30, 2023.

The increase was primarily due to effect of the Merger and also included higher legal fees, consulting fees, audit fees, investment banking fees, software contract terminations, change-in-control salary and benefit payments, funding a charitable donation (as contemplated by the Merger Agreement), and other expenses related to the Merger.

For the nine months ended September 30, 2024, the Company incurred $27.5 million of merger-related expenses within non-interest expense for the nine months ended September 30, 2024.

Other non-interest expense included $11.3 million of these costs, while the remaining amount of the total is included in the other line items of non-interest expense.

See Note 16 — Business Combination in Notes to Consolidated Financial Statements for further information on merger-related expenses and Note 13 — Other Operating Expenses in Notes to Consolidated Financial Statements for further information on “Other” non-interest expense.

Income Tax Expense

Income tax expense was $3.7 million for the nine months ended September 30, 2024, an increase of $1.9 million from the tax provision for the nine months ended September 30, 2023.

The increase was due to changes in estimated tax rates, additional estimated state tax liability, and tax credits resulting from the Merger for the nine months ended September 30, 2024, when compared to the nine months ended September 30, 2023.

For the nine months ended September 30, 2024, the effective tax rate was 19.0%, while the effective tax rate was 9.6% for the nine months ended September 30, 2023.

Results of Operations for the Three Months Ended September 30, 2024, and September 30, 2023

Net income applicable to common shares for the three months ended September 30, 2024, was $27.4 million, compared to net income applicable to common shares of $4.1 million during the three months ended September 30, 2023.

The $23.3 million increase was primarily due to results that reflect combined income after the Merger completion for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Net interest income increased by $50.3 million to $73.2 million for the three months ended September 30, 2024, compared to $22.9 million for the three months ended September 30, 2023.

Results of Operations for the Three Months Ended March 31, 2025, and March 31, 2024

Net income applicable to common shares for the three months ended March 31, 2025, was $27.0 million, compared to net income applicable to common shares of $5.2 million during the three months ended March 31, 2024.

The $21.8 million increase was primarily due to results that reflect combined income after the Merger completion for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Net interest income increased by $50.9 million to $73.0 million for the three months ended March 31, 2025, compared to $22.1 million for the three months ended March 31, 2024.

The main driver for this increase was the impact of the Merger.

For the three months ended September 30, 2024, the Company recorded credit provision expense of $0.1 million compared to a provision of $0.2 million for the three months ended September 30, 2023.

For the three months ended September 30, 2024, the Company recognized less credit loss expense on loans and off-balance sheet credit exposures which led to a decrease in credit provision expense for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Non-interest income increased by $6.3 million, or 147.5%, to $10.6 million for the three months ended September 30, 2024, as compared to $4.3 million for the three months ended September 30, 2023, as a result of the Merger.

All categories of non-interest income increased as a result of the combined operations for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Non-interest expense increased by $28.4 million, or 126.7%, to $50.8 million for the three months ended September 30, 2024, as compared to $22.4 million for the three months ended September 30, 2023.

For the three months ended September 30, 2024, the Company incurred $3.1 million of expenses related to the Merger with Summit.

For the three months ended March 31, 2025, the Company recorded credit provision expense of $0.5 million compared to a provision recapture of $0.7 million for the three months ended March 31, 2024.

For the three months ended March 31, 2025, the Company recognized additional credit loss expense on loans which led to an increase in credit provision expense for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Non-interest income increased by $5.8 million, or 135.6%, to $10.0 million for the three months ended March 31, 2025, as compared to $4.3 million for the three months ended March 31, 2024, as a result of the Merger.

All categories of non-interest income increased as a result of the combined operations for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Non-interest expense increased by $28.5 million, or 134.7%, to $49.7 million for the three months ended March 31, 2025, as compared to $21.2 million for the three months ended March 31, 2024.

The increase was primarily due to effect of the Merger.

Net Interest Income and Net Interest Margin

4 unchanged sentences

Interest rate risk is managed by monitoring the pricing, maturity and repricing options of all classes of interest-bearing assets and liabilities.

Net interest income totaled $73.2 million for the three months ended September 30, 2024, compared to $22.9 million for the three months ended September 30, 2023.

Net interest income totaled $73.0 million for the three months ended March 31, 2025, compared to $22.1 million for the three months ended March 31, 2024.

The increase in net interest income was primarily driven by higher interest earning assets, higher rates, and higher accretion income, as a result of the Merger.

Accretion income associated with acquired loans and borrowings totaled $15.4 million for the three months ended September 30, 2024.

Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $3.8 million for the three months ended September 30, 2024.

The tax-adjusted net interest margin was 4.07% for the three months ended September 30, 2024, compared to 2.76% for the three months ended September 30, 2023.

Accretion income associated with acquired loans and borrowings totaled $11.4 million for the three months ended March 31, 2025.

Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $2.2 million for the three months ended March 31, 2025.

The tax-adjusted net interest margin was 4.18% for the three months ended March 31, 2025, compared to 2.68% for the three months ended March 31, 2024.

The increase in tax-adjusted net interest margin was primarily driven by the effect of the Merger and the acquisition of additional, higher-yielding interest-earning assets.

The yield for the taxable loan portfolio was 7.34% for the three months ended September 30, 2024, compared to 5.15% for the three months ended September 30, 2023.

The yield for the taxable loan portfolio was 6.96% for the three months ended March 31, 2025, compared to 5.41% for the three months ended March 31, 2024.

The increase was primarily the result of the effect of the Merger, which resulted in the acquisition of additional, higher-yielding loans.

The tax-adjusted yield on the total investment securities portfolio was 3.91% for the three months ended September 30, 2024, compared to 3.37% for the three months ended September 30, 2023.

The tax-adjusted yield on the total investment securities portfolio was 3.85% for the three months ended March 31, 2025, compared to 3.43% for the three months ended March 31, 2024.

The increase was partly due to higher yields in our investment portfolio in addition to the Merger, which resulted in the acquisition of additional securities with higher tax-adjusted yields.

The yield on interest-bearing deposits increased to 3.02% during the three months ended September 30, 2024, from 2.09% during the three months ended September 30, 2023.

The increase was a result of the Merger, which resulted in the assumption of additional interest-bearing deposits with higher interest rates, and to a lesser extent, by higher market interest rates compared to the prior year quarter.

The yield on our short-term borrowings for the three months ended September 30, 2024, was 4.06%, compared to 4.69% for the three months ended September 30, 2023.

The yield on interest-bearing deposits increased to 2.53% during the three months ended March 31, 2025, from 2.41% during the three months ended March 31, 2024.

The increase was a result of the Merger, which resulted in the assumption of additional interest-bearing deposits with higher interest rates.

The yield on our short-term borrowings for the three months ended March 31, 2025, was 3.88%, compared to 4.82% for the three months ended March 31, 2024.

The decrease was due to decreases in the Federal Funds Rate and other short-term market rates.

The yield on our subordinated debt assumed in the Merger was 9.85%.

The following table sets forth the major components of net interest income and the related yields and rates for the three months ended September 30, 2024, and September 30, 2023, for comparison (dollars in thousands).

For the Three Months Ended September 30,

The following table sets forth the major components of net interest income and the related yields and rates for the three months ended March 31, 2025, and March 31, 2024, for comparison (dollars in thousands).

For the Three Months Ended March 31,

Average Outstanding Balance Interest Income/Expense Average Yield / Rate

6 unchanged sentences

Interest-earning deposits and fed funds sold 40,757 579 5.76 41,692 396 3.82

Taxable securities 996,749 10,151 4.05 991,170 8,909 3.57

Tax-exempt securities (3)

Taxable AFS securities and other securities

1,039,391 9,862 3.85 989,875 8,943 3.63

Tax-exempt AFS securities (3)

435,789 4,136 3.85 259,699 1,723 2.67

Total securities 1,475,180 13,998 3.85 1,249,574 10,666 3.43

5 unchanged sentences

Interest-bearing demand 2,216,243 11,816 2.16 % 489,779 765 0.63 %

Savings 1,725,387 6,191 1.43 952,001 4,370 1.82

Time 1,328,076 16,079 4.82 654,952 6,150 3.73

Money market & savings

1,633,307 8,139 2.02 922,732 4,529 1.97

Brokered CDs & time deposits

1,253,841 11,896 3.85 745,945 7,637 4.12

Total interest-bearing deposits 5,103,391 31,851 2.53 2,158,456 12,931 2.41

Total deposits 6,475,006 31,851 1.99 2,970,655 12,931 1.75

Short-term borrowings

Short-term borrowings and other

336,245 3,219 3.88 307,446 3,683 4.82

26 unchanged sentences

Three Months Ended

September 30, 2024 September 30, 2023

March 31, 2025 March 31, 2024

GAAP Financial Measurements

1 unchanged sentence

Interest income - Tax-exempt loans 46 —

Interest Income - Securities taxable 10,076 8,909

Interest Income - Securities tax-exempt 3,135 1,376

Interest income - Taxable AFS securities and other securities 9,487 8,943

Interest income - Tax-exempt AFS securities 3,267 1,361

Interest income - Other interest income 955 396

Total Interest Income 110,786 38,745

Interest expense - Deposits 31,851 12,931

2 unchanged sentences

Interest expense - Other 27 28

Total interest expense 37,799 16,614

Total net interest income $ 72,987 $ 22,131

Non-GAAP Financial Measurements

Tax Benefit on Tax-Exempt Interest Income - Securities $ 847 $ 366

Tax benefit on tax-exempt interest income $ 881 $ 362

Total tax benefit on tax-exempt interest income (1)

3 unchanged sentences

Interest income and interest expense for the three months ended September 30, 2024, and September 30, 2023, are annualized using an actual days over calendar year method.

Interest income and interest expense for the three months ended March 31, 2025, and March 31, 2024, are annualized using actual days over calendar year method.

Volume variances are equal to the increase or decrease in average balance multiplied by current period rates, and rate variances are equal to the increase or decrease in rate times prior period average balances.

1 unchanged sentence

See table below (in thousands).

Three Months Ended September 30, 2024, compared to September 30, 2023

Three Months Ended March 31, 2025, compared to March 31, 2024

Dollar Increase (Decrease) Due to Change in:

3 unchanged sentences

$ 60,583 $ 8,462 $ 69,045

Securities (1)

AFS securities and other securities (1)

2,141 1,191 3,332

10 unchanged sentences

$ 44,482 $ 9,622 $ 54,104

(1) Yields and interest income on tax-exempt securities have been computed on a taxable-equivalent basis.

(1) Yields and interest income on tax-exempt loans and securities have been computed on a taxable-equivalent basis.

Interest Income

Total interest income was $118.5 million for the three months ended September 30, 2024, compared to $37.3 million for the three months ended September 30, 2023, an increase of 218.0%.

Total interest income was $110.8 million for the three months ended March 31, 2025, compared to $38.7 million for the three months ended March 31, 2024, an increase of 185.9%.

The increase in interest income was due to the effect of the Merger and the acquisition of additional interest-earning assets.

Interest income on loans increased by $77.3 million and interest income on securities increased $2.9 million, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Interest income on loans increased by $69.0 million and interest income on securities increased $2.5 million, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Interest Expense

Total interest expense was $45.3 million for the three months ended September 30, 2024, compared to $14.4 million for the three months ended September 30, 2023.

Total interest expense was $37.8 million for the three months ended March 31, 2025, compared to $16.6 million for the three months ended March 31, 2024.

The increase in interest expense was a result of the Merger and the assumption of additional interest-bearing liabilities.

Interest expense on interest-bearing deposits increased by $28.2 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Interest on subordinated debt acquired in the Merger was $2.8 million for the three months ended September 30, 2024, while interest expense on short-term borrowings amounted to $3.1 million for the three months ended September 30, 2024.

Interest expense on interest-bearing deposits increased by $18.9 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Interest on subordinated debt acquired in the Merger was $2.7 million for the three months ended March 31, 2025, while interest expense on short-term borrowings amounted to $3.2 million for the three months ended March 31, 2025, compared to $3.7 million for the three months ended March 31, 2024.

Provision for (Recapture of) Credit Losses

The provision for credit losses was $0.1 million for the three months ended September 30, 2024, compared to a provision of $0.2 million for the three months ended September 30, 2023.

The decreased provision expense is a function of the Merger closing last quarter and the Day 2 non-PCD provision expense captured for the acquired portfolio, resulting in a lower credit loss expense on loans and off-balance sheet credit exposures, compared to the three months ended September 30, 2023.

The provision for credit losses was $0.5 million for the three months ended March 31, 2025, compared to a provision recapture of $0.7 million for the three months ended March 31, 2024.

The increased provision expense was due to additional credit loss expense in the loan portfolio which was somewhat offset by a recapture in credit expense on off-balance sheet credit exposures, compared to the three months ended March 31, 2024.

See Note 4 - Allowance for Credit Losses in Notes to Consolidated Financial Statements for further information.

1 unchanged sentence

The following table sets forth the various components of our non-interest income for the periods indicated (in thousands):

Three months ended September 30,

Three months ended March 31,

Increase (Decrease)

2 unchanged sentences

Service charges and fees 2,089 655 1,434 218.9

Net gains (losses) on securities — (1) 1 100.0

Net gains (losses) on securities 1 — 1 NM

Income from company-owned life insurance 1,193 547 646 118.1

Bank debit and other card revenue 2,884 1,132 1,752 154.8

Other non-interest income 1,413 501 912 182.0

Total $ 10,023 $ 4,254 $ 5,769 135.6 %

Non-interest income increased 147.5% for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Non-interest income increased 135.6% for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

The increase was primarily driven by the Merger.

The largest increase was a $3.9 million increase in service charges and fees for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

All other categories of non-interest income also increased due to the Merger for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

The largest increase was a $1.8 million increase in bank debit and other card revenue for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

This increase was driven by the Merger and the increase in card revenue as a result of the increase in the customer base.

The second largest increase was a $1.4 million increase in service charges and fees for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

This increase was primarily driven by an increase in deposit-based fees of $1.3 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, resulting from the increase in accounts as a result of the Merger.

All other categories of non-interest income also increased, primarily due to the Merger for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

Non-interest Expense

The following table sets forth the various components of our non-interest expense for the periods indicated (in thousands):

Three months ended September 30,

Three months ended March 31,

Increase (Decrease)

6 unchanged sentences

Total $ 49,664 $ 21,165 $ 28,499 134.7 %

Non-interest expense increased $28.4 million, or 126.7%, for the three months ended September 30, 2024, compared to September 30, 2023.

For the three months ended September 30, 2024, the Company incurred $3.1 million of merger-related expenses within non-interest expense for the three months ended September 30, 2024.

Non-interest expense increased $28.5 million, or 134.7%, for the three months ended March 31, 2025, compared to March 31, 2024.

The increase was primarily due to effect of the Merger.

All other categories of non-interest expense also increased, primarily due to the effect of the Merger, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

See Note 13 — Other Operating Expense in Notes to Consolidated Financial Statements for further information on “Other” non-interest expense.

Income Tax Expense

Income tax expense was $5.2 million for the three months ended September 30, 2024, an increase of $4.7 million from the tax provision for the three months ended September 30, 2023.

The increase was due to the increase in net income for the three months ended September 30, 2024, when compared to the three months ended September 30, 2023.

For the three months ended September 30, 2024, the effective tax rate was 15.8%, while the effective tax rate was 10.3% for September 30, 2023.

Analysis of Financial Condition for the Period Ended September 30, 2024, and December 31, 2023

Due mostly to the Merger, assets increased by $4.25 billion to $7.86 billion as of September 30, 2024, compared to $3.62 billion as of December 31, 2023.

Loans, net of ACL, increased by $3.44 billion from $2.06 billion as of December 31, 2023, to $5.51 billion as of September 30, 2024.

Deposits increased by $3.60 billion and amounted to $6.60 billion at September 30, 2024, compared to $3.00 billion at December 31, 2023.

Short-term borrowings increased by $48.2 million to $320.2 million as of September 30, 2024, compared to $272.0 million at December 31, 2023.

Subordinated debt and

subordinated debt owed to unconsolidated subsidiary trusts, which were assumed in the Merger, totaled $110.5 million at September 30, 2024, compared to zero at December 31, 2023.

Income tax expense was $5.6 million for the three months ended March 31, 2025, an increase of $5.0 million from the tax provision for the three months ended March 31, 2024.

The increase was due to the increase in net income and additional state taxes incurred in the combined market area after the Merger, for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024.

For the three months ended March 31, 2025, the effective tax rate was 17.2%, while the effective tax rate was 11.5% for March 31, 2024.

Analysis of Financial Condition for the Period Ended March 31, 2025, and December 31, 2024

Assets increased by $25.9 million to $7.84 billion as of March 31, 2025, compared to $7.8 billion as of December 31, 2024.

Loans, net of ACL, decreased by $24.4 million from $5.6 billion as of December 31, 2024, to $5.6 billion as of March 31, 2025.

Deposits increased by $26.6 million and amounted to $6.5 billion at March 31, 2025, compared to $6.5 billion at December 31, 2024.

Short-term borrowings decreased by $65.0 million to $300.0 million as of March 31, 2025, compared to $365.0 million at December 31, 2024.

Subordinated debt and subordinated debt owed to unconsolidated subsidiary trusts, which were assumed in the Merger, totaled $113.3 million at March 31, 2025, compared to $111.9 million at December 31, 2024.

Investment Securities

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The majority of our AFS investment portfolio is comprised of obligations of states and municipalities and residential mortgage-backed securities.

During the nine months ended September 30, 2024, the unrealized losses on our holdings decreased $36.3 million from December 31, 2023.

During the three months ended March 31, 2025, the unrealized losses on our holdings decreased $7.7 million from December 31, 2024.

The Company determined that the declines in market value were due to increases in interest rates and market movements and not due to credit factors.

Therefore, the Company has concluded that the unrealized losses for the AFS securities do not require an ACL at September 30, 2024, or at December 31, 2023.

Therefore, the Company has concluded that the unrealized losses for the AFS securities do not require an ACL at March 31, 2025, or at December 31, 2024.

The Company has sufficient access to liquidity such that management does not believe it would be necessary to sell any of its investment securities at a loss to offset any unexpected deposit outflows.

Management believes the structure of the Bank’s investment portfolio is appropriately aligned with the rest of the balance sheet to protect against significant and unexpected charges against earnings and capital.

The following tables reflect the amortized cost and fair market values for the total portfolio for each category of investment for September 30, 2024, and December 31, 2023 (in thousands):

September 30, 2024

The following tables reflect the amortized cost and fair market values for the total portfolio for each category of investment for March 31, 2025, and December 31, 2024 (in thousands):

March 31, 2025

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

21 unchanged sentences

$ 1,549,589 $ 1,658 $ 118,876 $ 1,432,371

The investment maturity table below summarizes contractual maturities for our investment securities at September 30, 2024.

The investment maturity table below summarizes contractual maturities for our investment securities at March 31, 2025.

The actual timing of principal payments may differ from remaining contractual maturities because obligors may have the right to repay certain obligations with or without penalties.

The overall weighted average duration of the Company’s investment portfolio is 4.3 years at September 30, 2024.

The overall weighted average duration of the Company’s investment portfolio is 4.6 years at March 31, 2025.

The weighted-average yield below represents the effective yield for the investment securities and is calculated based on the amortized cost of each security (dollars in thousands).

Interest on securities below excludes tax-equivalent adjustments.

September 30, 2024

March 31, 2025

One Year or Less One to Five Years Five to Ten Years After Ten Years Total

16 unchanged sentences

The following tables set forth the composition of our loan portfolio as of the dates indicated (in thousands):

September 30, 2024

March 31, 2025

December 31, 2024

8 unchanged sentences

Loans, net $ 5,579,754 $ 5,604,196

The loan portfolio, excluding ACL, at September 30, 2024, increased by $3.49 billion primarily due to the Merger.

The following table shows the maturity distribution for total loans outstanding as of September 30, 2024.

The loan portfolio, excluding ACL, at March 31, 2025, decreased by $24.7 million primarily due to the exiting of loans that do not align with the Company’s desired risk profile.

The following table shows the maturity distribution for total loans outstanding as of March 31, 2025.

The maturity distribution is grouped by remaining scheduled principal payments that are due in the following periods.

The principal balance of loans is indicated by both fixed and floating rate categories in the table below (in thousands).

September 30, 2024

March 31, 2025

Within One Year One Year to Five Years Five Years to 15 Years After 15 Years

11 unchanged sentences

The Chief Credit Officer is responsible for establishing credit risk policies and procedures, including underwriting guidelines and credit approval authority, and monitoring credit exposure and performance of the Company’s lending-related transactions.

We regularly monitor the level of loan delinquencies and believe these levels are a key indicator of credit quality in our loan portfolio.

We manage credit risk based on the risk profile of the borrower, repayment sources, underlying collateral, and other support given current events, economic conditions and expectations.

A loan is placed on non-accrual status when (i) the Company is advised by the borrower that scheduled principal or interest payments cannot be met, (ii) when management’s best judgment indicates that payment in full of principal and interest can no longer be expected, or (iii) when any such loan or obligation becomes delinquent for 90 days, unless it is both well-secured and in the process of collection.

The Company’s asset quality remained stable through the third quarter of 2024, but the nonaccrual loan balance increased $32.1 million from December 31, 2023.

As a result of the Merger, the nonaccrual loan balance increased due to the acquired loan portfolio.

The Company’s non-performing assets, which includes non-performing loans consisting of non-accrual loans, loans that are more than 90 days past due and still accruing, and other real estate owned as of September 30, 2024, totaled $38.4 million.

The following table summarizes the Company’s non-performing assets as of September 30, 2024, and December 31, 2023 (in thousands):

September 30, 2024 December 31, 2023

The Company’s asset quality remained relatively stable through the first quarter of 2025 with the nonaccrual loan balance increasing by $5.6 million from December 31, 2024.

However, the Company’s loans 90 days past due and still accruing increased $20.8 million from December 31, 2024.

The following table summarizes the Company’s non-performing assets as of March 31, 2025, and December 31, 2024 (in thousands):

March 31, 2025 December 31, 2024

Non-accrual loans $ 41,431 $ 35,871

4 unchanged sentences

Allowance for Credit Losses

Refer to the discussion in Note 1.

Nature of Business Activities and Significant Accounting Policies in Notes to Consolidated Financial Statements for management’s approach to estimating the ACL.

Refer to the discussion in Note 1 — Nature of Business Activities and Significant Accounting Policies in Notes to Consolidated Financial Statements for management’s approach to estimating the ACL.

The Company maintains the ACL at a level deemed adequate by management for expected credit losses.

On January 1, 2023, the Company implemented CECL and increased the ACL, previously the allowance for loan losses, with a cumulative-effect adjustment to the ACL for credit losses of $4.4 million, which included a cumulative-effect adjustment to the ACL for off-balance sheet exposures of $274.8 thousand.

The Company’s ACL is calculated quarterly with any adjustment recorded to the provision for credit losses in the Consolidated Statement of Income.

2 unchanged sentences

Management believes its approach properly addresses relevant accounting and bank regulatory guidance for loans both collectively and individually evaluated.

The Company recorded a provision expense of $0.1 million and a provision expense of $0.2 million on loans for the three months ended September 30, 2024, and September 30, 2023, respectively, and a provision expense of $19.5 million and a provision expense of $1.0 million on loans for the nine months ended September 30, 2024, and September 30, 2023, respectively.

The increase in provision expense for the nine months ended was due to the Merger and the requirement to record a provision expense for loans classified as non-PCD.

The Company also recorded a $23.9 million provision directly to the allowance for credit losses as required for acquired PCD loans for the nine months ended September 30, 2024.

This allowance for acquired PCD loans did not result in an additional provision expense for the nine months ended September 30, 2024.

Gross charged-off loans were $305.0 thousand and $13.0 thousand for the three months ended September 30, 2024, and September 30, 2023, respectively, and $947.0 thousand and $134.0 thousand for the nine months ended September 30, 2024, and September 30, 2023, respectively.

Gross recoveries totaled $20.0 thousand and $5.0 thousand for the three months ended September 30, 2024, and September 30, 2023, respectively, and $38.0 thousand and $48.0 thousand for the nine months ended September 30, 2024, and September 30, 2023, respectively.

The ACL as a percentage of gross loans, net of unearned income, was 1.22% and 1.26% as of September 30, 2024, and September 30, 2023, respectively.

The following table summarizes the changes in the Company’s credit loss experience by portfolio for the three and nine months ended September 30, 2024, and 2023 (dollars in thousands):

Three months ended Nine months ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

The Company recorded a provision expense of $0.9 million and a provision recapture of $0.7 million on loans for the three months ended March 31, 2025, and March 31, 2024, respectively.

The increase in provision expense for the three months ended was due and increase in expected losses under the CECL model.

Gross charged-off loans were $1.4 million and $30.0 thousand for the three months ended March 31, 2025, and March 31, 2024, respectively.

Gross recoveries totaled $237.0 thousand and $5.0 thousand for the three months ended March 31, 2025, and March 31, 2024, respectively.

The ACL as a percentage of gross loans, net of unearned income, was 1.20% and 1.16% as of March 31, 2025, and March 31, 2024, respectively.

The following table summarizes the changes in the Company’s credit loss experience by portfolio for the three months ended March 31, 2025, and 2024 (dollars in thousands):

Three months ended

March 31, 2025

March 31, 2024

Loans outstanding at end of period $ 5,647,507 $ 2,118,155

Balance of allowance at beginning of period (68,040) (25,301)

Impact of the adoption of CECL — — — (4,125)

Allowance established for acquired PCD Loans — — (23,910) —

Loans charged-off:

21 unchanged sentences

Net charge-offs to average outstanding loans during the period (2)

0.01 0.00 0.02 0.00

Allowance for credit losses as a percentage of non-performing loans (3)

189.05 914.25 189.05 914.25

(1) The allowance coverage ratio is calculated by dividing the ACL at the end of the period by gross loans, net of unearned income at the end of the period.

(2) The Net charge-offs to average outstanding loans during the period is calculated by dividing total net loan charge-offs (recoveries) during the year by average gross loans outstanding during the year.

(3) The Allowance for credit losses as a percentage of non-performing loans ratio is calculated by dividing the ACL at the end of the period by non-accrual loans at the end of the period.

The following table summarizes the ACL by portfolio with a comparison of the percentage composition in relation to total ACL and allowance for credit losses and total loans as of September 30, 2024, and December 31, 2023 (dollars in thousands).

September 30, 2024

(3) The Allowance for credit losses as a percentage of non-performing loans ratio is calculated by dividing the ACL at the end of the period by non-accrual loans and loans 90 days past due and still accruing at the end of the period.

The following table summarizes the ACL by portfolio with a comparison of the percentage composition in relation to total ACL and allowance for credit losses and total loans as of March 31, 2025, and December 31, 2024 (dollars in thousands).

March 31, 2025

Allowance for credit losses Percent of Allowance in Each Category to Total Allocated ACL Percent of Loans in Each Category to Total Loans

17 unchanged sentences

The Company utilizes interest rate swap agreements as part of its asset/liability management strategy to help manage its interest rate risk position.

The Company recognizes derivative financial instruments at fair value as either other assets or other liabilities on the Consolidated Balance Sheets.

The Company recognizes derivative financial instruments at fair value as either other assets or accrued interest and other liabilities on the Consolidated Balance Sheets.

The Company’s use of derivative financial instruments is described more fully in Note 9 — Derivatives in Notes to Consolidated Financial Statements.

13 unchanged sentences

For more discussion of brokered time deposits, see the Deposits heading below this section.

As of September 30, 2024, the Company has available unused borrowing capacity of $2.4 billion through its available lines of credit with the FHLB of Atlanta, the Federal Reserve Borrower-In-Custody Program line, and unsecured federal fund lines of credit from correspondent banking relationships.

As of March 31, 2025, the Company has available unused borrowing capacity of $4.1 billion through its available lines of credit with the FHLB of Atlanta, the Federal Reserve Borrower-In-Custody Program line, and unsecured federal fund lines of credit from correspondent banking relationships.

Advances on credit lines are secured by both securities and loans.

The following table shows certain information regarding short-term borrowings as of the three months ended September 30, 2024, and December 31, 2023, respectively (dollars in thousands):

Balance at end of period September 30, 2024 December 31, 2023

The following table shows certain information regarding short-term borrowings as of the three months ended March 31, 2025, and December 31, 2024, respectively (dollars in thousands):

Balance at end of period March 31, 2025 December 31, 2024

Short-term borrowings $ 300,000 $ 365,000

Weighted average interest yield at end of period 3.89% 3.35%

The following table shows certain information regarding long-term debt as of the three months ended September 30, 2024, and December 31, 2023, respectively (dollars in thousands):

Balance at end of period September 30, 2024 December 31, 2023

The following table shows certain information regarding long-term debt as of the three months ended March 31, 2025, and December 31, 2024, respectively (dollars in thousands):

Balance at end of period March 31, 2025 December 31, 2024

Subordinated debentures, net $ 96,212 $ 94,872

1 unchanged sentence

Total long-term debt $ 113,289 $ 111,885

Weighted average interest yield at end of period 10.16% N/A

Total deposits increased by $3.6 billion from December 31, 2023, to September 30, 2024, primarily due to the completion of the Merger with Summit.

The Company has brokered time deposits that amounted to $345.3 million as of September 30, 2024, and $389.0 million at December 31, 2023.

Weighted average interest yield at end of period 9.85% 10.08%

Total deposits slightly increased by $26.6 million from December 31, 2024, to March 31, 2025, primarily due to a continued focus on gathering deposits across our commercial and retail businesses.

The Company has brokered time deposits that amounted to $246.9 million as of March 31, 2025, and $244.8 million at December 31, 2024.

All of the Company’s brokered deposits are in the form of certificates of deposits that are insured by the FDIC.

Excluding the brokered deposit balance, the total deposit balance increased by $24.5 million from December 31, 2024 to March 31, 2025.

The following table sets forth the balance of each category of deposits as of the dates indicated (in thousands):

September 30, 2024

March 31, 2025

December 31, 2024

9 unchanged sentences

Management evaluates its utilization of brokered deposits, taking into consideration the interest rate curve and regulatory views on non-core funding sources, and balances this funding source with its funding needs based on growth initiatives.

The Company has deposits that meet or exceed the FDIC insurance limit of $250,000 in the amounts of $2.0 billion and $677.3 million at September 30, 2024, and December 31, 2023, respectively, with the increase being primarily attributable to the Merger.

The following table sets forth maturity ranges of time deposits as of September 30, 2024, that meet or exceed the FDIC insurance limit (in thousands).

September 30, 2024

The Company has deposits that meet or exceed the FDIC insurance limit of $250,000 in the amounts of $1.9 billion and $1.9 billion at March 31, 2025, and December 31, 2024, respectively.

The Company does not have material deposit concentration risk to any significant market, industry or individual at March 31, 2025 or December 31, 2024.

The following table sets forth maturity ranges of time deposits as of March 31, 2025, that meet or exceed the FDIC insurance limit (in thousands).

March 31, 2025

Due within 3 months or less $ 149,818

4 unchanged sentences

Shareholders’ Equity

Total shareholders’ equity at September 30, 2024, was $738.1 million, compared to $314.8 million at December 31, 2023.

Shareholders’ equity increased by $423.3 million mostly due to the Merger since December 31, 2023.

Accumulated other comprehensive income/(loss) decreased $27.7 million from December 31, 2023, to September 30, 2024, from $(103.5) million to $(75.8) million.

Total shareholders’ equity at March 31, 2025, was $758.0 million, compared to $730.2 million at December 31, 2024.

Shareholders’ equity increased by $27.8 million mostly due to an increase in earnings since December 31, 2024.

Accumulated other comprehensive income/(loss) decreased $7.7 million from December 31, 2024, to March 31, 2025, from $(95.7) million to $(88.0) million.

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