What changed in this filing

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Item 1. Financial Statements

2025-11-07 compared with 2025-08-08 · 234 added, 237 removed, 1257 unchanged (27% of the section changed)

2 unchanged sentences

Consolidated Financial Statements:

Consolidated Balance Sheets as of June 3 0 , 2025 (Unaudited), and December 31, 2024

Consolidated Statements of Income ( L oss) for the Three and Six Months Ended June 3 0 , 2025, and June 3 0 , 2024 (Unaudited)

Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 3 0 , 2025, and June 3 0 , 2024 (Unaudited)

Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30 , 2025, and June 30 , 2024 (Unaudited)

Consolidated Statements of Cash Flows for the Six Months Ended June 30 , 2025, and June 30 , 2024 (Unaudited)

Consolidated Balance Sheets as of Septem ber 30, 2025 (Unaudited), and December 31, 2024

Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2025, and September 30, 2024 (Unaudited)

Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025, and September 30, 2024 (Unaudited)

Consolidated Statements of Changes in Shareholders’ Equity for the Three and Nine Months Ended September 30, 2025, and September 30, 2024 (Unaudited)

Consolidated Statements of Cash Flows for the N ine Months Ended September 30, 2025, and September 30, 2024 (Unaudited)

Notes to the Consolidated Financial Statements (Unaudited)

2 unchanged sentences

(In thousands, except share and per share data)

June 30, 2025

September 30, 2025

December 31, 2024

30 unchanged sentences

2,000,000 shares authorized;

1,500 shares issued and outstanding at June 30, 2025;

1,500 shares issued and outstanding at September 30, 2025;

1,500 shares issued and outstanding at December 31, 2024

2 unchanged sentences

$ 0.50 par value;

40,000,000 shares authorized, 15,579,002 shares issued and 15,007,712 shares outstanding at June 30, 2025;

40,000,000 shares authorized, 15,599,814 shares issued and 15,028,524 shares outstanding at September 30, 2025;

40,000,000 shares authorized, 15,540,394 shares issued and 14,969,104 shares outstanding at December 31, 2024

3 unchanged sentences

Treasury stock ( 27,584 ) ( 27,584 )

571,290 shares, at cost, at June 30, 2025, and 571,290 shares, at cost, at December 31, 2024

571,290 shares, at cost, at September 30, 2025, and 571,290 shares, at cost, at December 31, 2024

Total Shareholders’ Equity

4 unchanged sentences

Burke & Herbert Financial Services Corp.

Consolidated Statements of Income (Loss)

Consolidated Statements of Income

(In thousands, except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

14 unchanged sentences

73,770 73,179 220,990 155,075

Credit loss expense (recapture) - loans and available-for-sale securities 717 20,100 1,617 19,430

Credit loss expense - loans and available-for-sale securities 574 85 2,191 19,515

Credit loss expense (recapture) - off-balance sheet credit exposures

Total provision (recapture) for credit losses 624 23,910 1,125 23,240

( 312 ) 62 ( 804 ) 3,872

Total provision for credit losses

262 147 1,387 23,387

Net interest income after credit loss expense 73,508 73,032 219,603 131,688

12 unchanged sentences

Equipment rentals, depreciation and maintenance 3,908 4,699 12,092 18,643

Core deposit intangible amortization 3,683 4,297 11,869 7,162

ATM, card and network expense 1,200 1,640 3,646 3,299

FDIC and other regulatory assessments 976 1,037 2,978 2,500

Other operating 9,569 10,205 28,690 33,255

Total non-interest expense 48,092 50,826 147,061 136,423

Income (loss) before income taxes 37,181 ( 19,072 ) 70,026 ( 13,182 )

Income tax expense (benefit)

7,284 ( 2,153 ) 12,928 ( 1,475 )

Net income (loss) 29,897 ( 16,919 ) 57,098 ( 11,707 )

Income before income taxes 37,001 32,822 107,027 19,640

Income tax expense 7,037 5,200 19,965 3,725

Net income 29,964 27,622 87,062 15,915

Preferred stock dividends 225 225 675 450

Net income (loss) applicable to common shares $ 29,672 $ ( 17,144 ) $ 56,648 $ ( 11,932 )

Earnings (loss) per common share:

Net income applicable to common shares $ 29,739 $ 27,397 $ 86,387 $ 15,465

Earnings per common share:

Basic $ 1.98 $ 1.83 $ 5.76 $ 1.34

2 unchanged sentences

Burke & Herbert Financial Services Corp.

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

(In thousands, except share and per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Net income (loss) $ 29,897 $ ( 16,919 ) $ 57,098 $ ( 11,707 )

Net income $ 29,964 $ 27,622 $ 87,062 $ 15,915

Other comprehensive income (loss), net of tax:

Unrealized gains (losses) on securities:

Unrealized gain (loss) arising during period, net of tax of ($ 43 ) and ($ 221 ) for the three months ended June 30, 2025, and June 30, 2024, respectively, net of tax of ($ 2,560 ) and ($ 104 ) for the six months ended June 30, 2025, and June 30, 2024, respectively

Unrealized gain (loss) arising during period, net of tax of ($ 5,965 ) and ($ 7,610 ) for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of ($ 8,525 ) and ($ 7,714 ) for the nine months ended September 30, 2025, and September 30, 2024, respectively

19,970 28,628 28,540 29,019

Reclassification adjustment for loss (gain) on securities, net of tax of $ 9 and $ 129 for the three months ended June 30, 2025, and June 30, 2024, respectively, net of tax of $ 9 and $ 129 for the six months ended June 30, 2025, and June 30, 2024, respectively

Reclassification adjustment for loss (gain) on securities, net of tax of $ 49 and $ 0 for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of $ 58 and $ 129 for the nine months ended September 30, 2025, and September 30, 2024, respectively

( 163 ) — ( 193 ) ( 484 )

Reclassification adjustment for loss (gain) on fair value hedge, net of tax of $ 9 and $ 9 for the three months ended June 30, 2025, and June 30, 2024, respectively, net of tax of $ 19 and $ 17 for the six months ended June 30, 2025, and June 30, 2024, respectively

Reclassification adjustment for loss (gain) on fair value hedge, net of tax of $ 9 and $ 9 for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of $ 27 and $ 25 for the nine months ended September 30, 2025, and September 30, 2024, respectively

( 31 ) ( 32 ) ( 92 ) ( 95 )

Defined benefit pension plans:

Changes in pension plan benefits, net of tax of $ 8 and $ — for the three months ended June 30, 2025, and June 30, 2024, respectively, net of tax of $ 8 and — for the six months ended June 30, 2025, and June 30, 2024, respectively

( 26 ) — ( 26 ) —

Changes in pension plan benefits, net of tax of $ — and $ — for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of $ 8 and — for the nine months ended September 30, 2025, and September 30, 2024, respectively

Unrealized gain (loss) on cash flow hedge:

Unrealized holding gain (loss) on cash flow hedge, net of tax of ($ 202 ) and ($ 238 ) for the three months ended June 30, 2025, and June 30, 2024, respectively, net of tax of ($ 91 ) and ($ 945 ) for the six months ended June 30, 2025, and June 30, 2024, respectively

Unrealized holding gain (loss) on cash flow hedge, net of tax of ($ 51 ) and $ 816 for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of ($ 142 ) and ($ 128 ) for the nine months ended September 30, 2025, and September 30, 2024, respectively

170 ( 3,071 ) 475 483

Reclassification adjustment for losses (gains) included in net income, net of tax $ 168 and $ 183 for the three months ended June 30, 2025, and June 30, 2024, respectively, net of tax of $ 266 and $ 89 for the six months ended June 30, 2025, and June 30, 2024, respectively

Reclassification adjustment for losses (gains) included in net income, net of tax $ 163 and $ 227 for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of $ 430 and $ 315 for the nine months ended September 30, 2025, and September 30, 2024, respectively

( 546 ) ( 853 ) ( 1,438 ) ( 1,187 )

5 unchanged sentences

Consolidated Statements of Changes in Shareholders’ Equity

For the Three Months Ended June 30, 2025, and 2024

For the Three Months Ended September 30, 2025, and 2024

(In thousands, except share and per share data)

4 unchanged sentences

Shares Outstanding Amount Additional Paid-in

Balance March 31, 2025 $ 10,413 14,982,807 $ 7,777 $ 402,682 $ 452,736 $ ( 88,024 ) $ ( 27,584 ) $ 758,000

Balance June 30, 2025 $ 10,413 15,007,712 $ 7,790 $ 403,234 $ 474,019 $ ( 87,854 ) $ ( 27,584 ) $ 780,018

Net income — — — — 29,964 — — 29,964

4 unchanged sentences

Share-based compensation expense, net — 20,812 10 1,422 ( 96 ) — — 1,336

Balance September 30, 2025 $ 10,413 15,028,524 $ 7,800 $ 404,656 $ 495,400 $ ( 68,454 ) $ ( 27,584 ) $ 822,231

Balance June 30, 2024 $ 10,413 14,932,169 $ 7,752 $ 399,553 $ 403,422 $ ( 100,430 ) $ ( 27,584 ) $ 693,126

Balance March 31, 2024 $ — 7,440,025 $ 4,006 $ 15,308 $ 428,532 $ ( 100,954 ) $ ( 27,584 ) $ 319,308

Acquisition of Summit Financial Group, Inc.

10,413 7,405,772 3,703 383,329 — — — 397,445

Net income (loss) — — — — ( 16,919 ) — — ( 16,919 )

Net income — — — — 27,622 — — 27,622

Other comprehensive income (loss) — — — — — 24,672 — 24,672

3 unchanged sentences

Share-based compensation expense, net — 30,834 15 824 ( 54 ) — — 785

Balance June 30, 2024 $ 10,413 14,932,169 $ 7,752 $ 399,553 $ 403,422 $ ( 100,430 ) $ ( 27,584 ) $ 693,126

Balance September 30, 2024 $ 10,413 14,963,003 $ 7,767 $ 400,377 $ 422,844 $ ( 75,758 ) $ ( 27,584 ) $ 738,059

See Notes to Consolidated Financial Statements.

1 unchanged sentence

Consolidated Statements of Changes in Shareholders’ Equity

For the Six Months Ended June 30, 2025, and 2024

For the Nine Months Ended September 30, 2025, and 2024

(In thousands, except share and per share data)

11 unchanged sentences

Share-based compensation expense, net — 59,420 30 3,484 ( 340 ) — — 3,174

Balance June 30, 2025 $ 10,413 15,007,712 $ 7,790 $ 403,234 $ 474,019 $ ( 87,854 ) $ ( 27,584 ) $ 780,018

Balance September 30, 2025 $ 10,413 15,028,524 $ 7,800 $ 404,656 $ 495,400 $ ( 68,454 ) $ ( 27,584 ) $ 822,231

Balance December 31, 2023 $ — 7,428,710 $ 4,000 $ 14,495 $ 427,333 $ ( 103,494 ) $ ( 27,584 ) $ 314,750

1 unchanged sentence

10,413 7,405,772 3,703 383,329 — — — 397,445

Net income (loss) — — — — ( 11,707 ) — — ( 11,707 )

Net income — — — — 15,915 — — 15,915

Other comprehensive income (loss) — — — — — 27,736 — 27,736

3 unchanged sentences

Share-based compensation expense, net — 128,521 64 2,553 ( 225 ) — — 2,392

Balance June 30, 2024 $ 10,413 14,932,169 $ 7,752 $ 399,553 $ 403,422 $ ( 100,430 ) $ ( 27,584 ) $ 693,126

Balance September 30, 2024 $ 10,413 14,963,003 $ 7,767 $ 400,377 $ 422,844 $ ( 75,758 ) $ ( 27,584 ) $ 738,059

See Notes to Consolidated Financial Statements.

2 unchanged sentences

(In thousands, except share and per share data)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows from Operating Activities

Net Income (loss) $ 57,098 $ ( 11,707 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net Income $ 87,062 $ 15,915

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of fixed assets 5,142 4,130

20 unchanged sentences

Increase in accrued interest payable and other liabilities 30,287 61,882

Net cash flows provided by (used in) operating activities $ 37,688 $ ( 38,879 )

Net cash flows provided by operating activities $ 76,990 $ 8,918

Cash Flows from Investing Activities

9 unchanged sentences

Decrease in loans made to customers, net 142,087 190,979

Net cash flows provided by investing activities $ 9,012 $ 165,657

Net cash flows provided by (used in) investing activities $ ( 6,392 ) $ 202,653

Cash Flows from Financing Activities

2 unchanged sentences

Net increase in other short-term borrowings 85,000 158,485

Payment for call of subordinated debt

Repayment of finance lease liabilities ( 170 ) ( 161 )

Cash dividends paid ( 25,428 ) ( 20,179 )

Proceeds from employee stock purchase program 354 208

Burke & Herbert Financial Services Corp.

1 unchanged sentence

(In thousands, except share and per share data)

Proceeds from employee stock purchase program 523 62

Issuance of common stock 135 2,617

Sale of treasury stock — —

Net cash flows provided by financing activities $ 143,132 $ 40,644

Increase in cash and cash equivalents 189,832 167,422

Net cash flows provided by (used in) financing activities $ ( 74,199 ) $ 35,696

Increase (decrease) in cash and cash equivalents ( 3,601 ) 247,267

Cash and cash equivalents

46 unchanged sentences

They do not include all of the information and notes required by GAAP for complete financial statements.

As such, these unaudited financial statements

As such, these unaudited financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ending December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2025.

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ending December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2025.

The consolidated financial statements include the accounts of the Company and the Bank (as its wholly-owned subsidiary).

3 unchanged sentences

In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results of operations in these financial statements, have been made.

The results of operations for the three and six months ended June 30, 2025, are not necessarily indicative of the results to be expected for any other interim period or for the full year.

The results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the results to be expected for any other interim period or for the full year.

All December 31, 2024, amounts and disclosures included in this quarterly report were derived from the Company’s audited consolidated financial statements.

4 unchanged sentences

Reporting Comprehensive Income—Expense Disaggregation Disclosures.

This ASU seeks to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions.

This ASU seeks to improve the disclosures about a public business entity’s expenses and addresses requests from investors for more detailed information about the types of expenses in commonly presented expense captions.

The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

10 unchanged sentences

Note 2— Securities

The carrying amount of available-for-sale (“AFS”) securities and their approximate fair values at June 30, 2025, and December 31, 2024, are summarized as follows (in thousands):

June 30, 2025

The carrying amount of available-for-sale (“AFS”) securities and their approximate fair values at September 30, 2025, and December 31, 2024, are summarized as follows (in thousands):

September 30, 2025

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

9 unchanged sentences

Total $ 1,682,026 $ 5,588 $ 89,207 $ 1,598,407

Note 2— Securities (continued)

December 31, 2024

10 unchanged sentences

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

At June 30, 2025, and December 31, 2024, AFS securities with amortized costs of $ 1.1 billion and $ 1.2 billion, respectively, and with estimated fair values of $ 1.0 billion and $ 1.1 billion, respectively, were pledged to serve as collateral for secured borrowings, derivative exposures, or to secure public deposits as required or permitted by law.

The proceeds from sales, calls, and maturities of debt securities available-for-sale, including principal payments received, and the related gross gains and losses realized, for the six months ended June 30, 2025, and June 30, 2024, were as follows (in thousands):

At September 30, 2025, and December 31, 2024, AFS securities with amortized costs of $ 1.2 billion and $ 1.2 billion, respectively, and with estimated fair values of $ 1.1 billion and $ 1.1 billion, respectively, were pledged to serve as collateral for secured borrowings, derivative exposures, or to secure public deposits as required or permitted by law.

The proceeds from sales, calls, and maturities of debt securities available-for-sale, including principal payments received, and the related gross gains and losses realized, for the nine months ended September 30, 2025, and September 30, 2024, were as follows (in thousands):

Proceeds from Gross realized

Six Months Ended June 30, Sales Calls and maturities Principal Payments Gains Losses

Nine Months Ended September 30, Sales Calls and maturities Principal Payments Gains Losses

2025 $ 6,194 $ 38,148 $ 119,805 $ 257 $ 6

2024 365,990 38,137 152,087 2,637 2,024

The tax benefit (provision) related to these net realized gains and losses for June 30, 2025, and June 30, 2024, was ($ 8.2 ) thousand, and ($ 128.7 ) thousand, respectively.

The maturities of AFS securities at June 30, 2025, were as follows (in thousands):

The tax benefit (provision) related to these net realized gains and losses for September 30, 2025, and September 30, 2024, was ($ 57.7 ) thousand, and ($ 128.7 ) thousand, respectively.

The maturities of AFS securities at September 30, 2025, were as follows (in thousands):

(Expected maturities of securities not due at a single maturity date are based on average life at estimated prepayment speed.

Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay some obligations with or without call or prepayment penalties).

Note 2— Securities (continued)

June 30, 2025

September 30, 2025

Amortized Cost

10 unchanged sentences

Total $ 55,138 $ 629,093 $ 716,529 $ 281,266 $ 1,682,026

June 30, 2025

Note 2— Securities (continued)

September 30, 2025

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

9 unchanged sentences

Total $ 54,751 $ 605,218 $ 680,033 $ 258,405 $ 1,598,407

At June 30, 2025, and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S.

At September 30, 2025, and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S.

Government and its agencies, in any amount greater than 10% of shareholders’ equity.

Note 2— Securities (continued)

The following table shows the gross unrealized losses and fair value of the Company’s securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2025, and December 31, 2024.

AFS securities in a continuous unrealized loss position for less than twelve months and more than twelve months are as follows (in thousands):

June 30, 2025

September 30, 2025

Less Than Twelve Months More Than Twelve Months

10 unchanged sentences

Total $ 278,019 $ 4,137 $ 872,239 $ 85,070 $ 89,207

Note 2— Securities (continued)

December 31, 2024

18 unchanged sentences

If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security.

If the present value of the cash flows expected to be collected is less than the amortized cost, an allowance for credit losses (“ACL”) is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis under the current expected credit loss (“CECL”) standard, and declines due to non-credit factors are recorded in accumulated

Note 2— Securities (continued)

other comprehensive income (“AOCI”), net of taxes.

If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL.

If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in accumulated other comprehensive income, net of taxes, in the Consolidated Balance Sheets.

The Company did no t record an ACL on the AFS securities as of June 30, 2025, or December 31, 2024.

The Company did no t record an ACL on the AFS securities as of September 30, 2025, or December 31, 2024.

The Company considers the unrealized losses on the AFS securities to be related to fluctuations in market conditions, primarily interest rates, and not reflective of deterioration in credit.

The Company had 528 securities in an unrealized loss position as of June 30, 2025.

The Company has evaluated AFS securities in an unrealized loss position for credit-related impairment at June 30, 2025, and concluded no impairment existed based on a combination of factors, which included:

The Company had 441 securities in an unrealized loss position as of September 30, 2025.

The Company has evaluated AFS securities in an unrealized loss position for credit-related impairment at September 30, 2025, and concluded no impairment existed based on a combination of factors, which included:

(1) the securities are of high credit quality, (2) unrealized losses are primarily the result of market volatility and increases in market interest rates, (3) the contractual terms of the investments do not permit the issuer(s) to settle the securities at a price less than the par value of each investment, (4) issuers continue to make timely principal and interest payments, and (5) the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis.

As such, there was no ACL on AFS securities at June 30, 2025.

As such, there was no ACL on AFS securities at September 30, 2025.

Securities of U.S.

Treasury and Federal Agencies and Federal Agency Mortgage (Residential and Commercial) Backed Securities

At June 30, 2025, the unrealized losses associated with 11 U.S.

At September 30, 2025, the unrealized losses associated with 11 U.S.

Treasuries and Government Agency securities, 12 Residential Mortgage Backed – Agency securities, and 13 Commercial Mortgage Backed – Agency securities were generally driven by changes in interest rates and not due to credit losses given the explicit or implicit guarantees provided by the U.S.

Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at June 30, 2025.

Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2025.

Note 2— Securities (continued)

Securities of U.S.

States and Municipalities

At June 30, 2025, the unrealized losses associated with 386 State and Municipal securities were primarily caused by changes in interest rates and not the credit quality of the securities.

At September 30, 2025, the unrealized losses associated with 311 State and Municipal securities were primarily caused by changes in interest rates and not the credit quality of the securities.

These securities are investment grade and were generally underwritten in accordance with our own investment standards prior to the decision to purchase, without relying on a bond insurer’s guarantee in making the investment decision.

1 unchanged sentence

As a result, we expect to recover the entire amortized cost basis of these securities.

Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at June 30, 2025.

Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2025.

Residential & Commercial Mortgage Backed – Non-Agency Securities

At June 30, 2025, the unrealized losses associated with 61 Residential Mortgage Backed – Non-Agency securities and 16 Commercial Mortgage Backed – Non-Agency securities were generally driven by changes in interest rates, credit spreads, and projected collateral losses.

At September 30, 2025, the unrealized losses associated with 57 Residential Mortgage Backed – Non-Agency securities and 13 Commercial Mortgage Backed – Non-Agency securities were generally driven by changes in interest rates, credit spreads, and projected collateral losses.

We assess for credit impairment by estimating the present value of expected cash flows.

1 unchanged sentence

Based on our assessment of the expected credit losses and the credit enhancement level of the securities, we expect to recover the entire amortized cost of these securities.

Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at June 30, 2025.

Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2025.

Asset-Backed Securities

At June 30, 2025, the unrealized losses associated with 20 Asset-Backed securities were generally driven by changes in interest rates, credit spreads, and projected collateral losses.

At September 30, 2025, the unrealized losses associated with 17 Asset-Backed securities were generally driven by changes in interest rates, credit spreads, and projected collateral losses.

We assess for credit impairment by estimating the present value of expected cash flows.

1 unchanged sentence

Based on our assessment of the expected credit losses and the credit enhancement level of the securities, we expect to recover the entire amortized cost of these securities.

Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at June 30, 2025.

Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2025.

Other Securities

At June 30, 2025, the unrealized losses associated with 8 securities were primarily driven by interest rates and not the credit quality of the securities.

These investments were underwritten in accordance with our own investment standards prior to the

Note 2— Securities (continued)

decision to purchase, without relying on a bond insurer’s guarantee in making the investment decision.

At September 30, 2025, the unrealized losses associated with 7 securities were primarily driven by interest rates and not the credit quality of the securities.

These investments were underwritten in accordance with our own investment standards prior to the decision to purchase, without relying on a bond insurer’s guarantee in making the investment decision.

Based on our assessment of the expected credit losses, we expect to recover the entire amortized cost basis of the securities.

Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at June 30, 2025.

Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2025.

Restricted stock, at cost

The Company’s investment in Federal Home Loan Bank (“FHLB”) stock totaled $ 26.8 million and $ 18.2 million at June 30, 2025, and December 31, 2024, respectively.

The Company’s investment in Federal Reserve Bank stock totaled $ 14.8 million and $ 14.8 million at June 30, 2025, and December 31, 2024, respectively.

The Company’s investment in Federal Home Loan Bank (“FHLB”) stock totaled $ 26.8 million and $ 18.2 million at September 30, 2025, and December 31, 2024, respectively.

The Company’s investment in Federal Reserve Bank stock totaled $ 14.8 million and $ 14.8 million at September 30, 2025, and December 31, 2024, respectively.

FHLB and Federal Reserve stock are generally viewed as long-term investments and as restricted investment securities, which are carried at cost, because there is no market for the stocks other than member institutions.

Therefore, when evaluating FHLB and Federal Reserve stock for impairment, their values are based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value.

The Company does not consider these investments to be impaired at June 30, 2025, and no impairment has been recognized.

The Company does not consider these investments to be impaired at September 30, 2025, and no impairment has been recognized.

FHLB stock and Federal Reserve stock are included in a separate line item, restricted stock, at cost on the Consolidated Balance Sheets and are not part of the Company’s AFS securities portfolio.

The Company’s restricted stock line item on the Consolidated Balance Sheets also includes an investment in Community Bankers’ Bank, totaling $ 111 thousand at June 30, 2025, and $ 111 thousand at December 31, 2024, which is carried at cost and is not impaired at June 30, 2025.

The Company’s restricted stock line item on the Consolidated Balance Sheets also includes an investment in Community Bankers’ Bank, totaling $ 111 thousand at September 30, 2025, and $ 111 thousand at December 31, 2024, which is carried at cost and is not impaired at September 30, 2025.

The Company also has other restricted investments including Independent Community Bancorp, Inc.

and WV Bankers Title which are included in restricted stock on the Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024.

and WV Bankers Title which are included in restricted stock on the Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024.

Note 3— Loans

4 unchanged sentences

• Owner-occupied commercial real estate loans carry risk associated with the operations of the business that occupies the property and the value of the collateral.

• Acquisition, construction & development loans carry risk associated with the credit-worthiness of the borrower, project completion within budget, sale after completion, and the value of the collateral.

• Acquisition, construction & development loans carry risk associated with the credit-worthiness of the borrower, project completion within budget including the potential impact of volatile construction costs, sale after completion, and the value of the collateral.

• Commercial & industrial loans carry the risk associated with the operations of the business and the value of the collateral, if any.

2 unchanged sentences

• Consumer non-real estate and other loans, which includes overdrafts, carry risk associated with the credit-worthiness of the borrower and the value of the collateral, if any.

Note 3— Loans (continued)

Loan balances as of June 30, 2025, and December 31, 2024, by portfolio segment were as follows (in thousands):

June 30, 2025 December 31, 2024

Loan balances as of September 30, 2025, and December 31, 2024, by portfolio segment were as follows (in thousands):

September 30, 2025 December 31, 2024

Commercial real estate $ 2,804,175 $ 2,637,802

7 unchanged sentences

Loans, net $ 5,491,875 $ 5,604,196

Net deferred loan fees included in the above loan categories totaled $ 4.9 million and $ 4.4 million at June 30, 2025, and December 31, 2024, respectively.

Net deferred loan fees included in the above loan categories totaled $ 4.8 million and $ 4.4 million at September 30, 2025, and December 31, 2024, respectively.

Note 4— Allowance for Credit Losses

3 unchanged sentences

Loans that do not share similar risk characteristics are evaluated on an individual loan basis and are excluded from the collective evaluation for the ACL.

Loans identified to be individually evaluated under CECL include loans on non-accrual status and may include accruing loans that do not share similar risk characteristics to other accruing loans that are collectively evaluated on a loan pool basis.

Loans identified to be individually evaluated under CECL include loans on non-accrual

Note 4— Allowance for Credit Losses (continued)

status and may include accruing loans that do not share similar risk characteristics to other accruing loans that are collectively evaluated on a loan pool basis.

A specific reserve analysis may be applied to the individually evaluated loans, which considers collateral value, an observable market price, or the present value of the expected future cash flows.

1 unchanged sentence

Based on management’s analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond the information that is used to calculate a reasonable and supportable forecast and a reversion period forecast on collectively evaluated loans.

Management may consider an additional or reduced reserve as warranted through qualitative risk factors based on the current and expected conditions as measured in supplemental information relative to the macroeconomic variable loss drivers used to calculate a reasonable and supportable forecast and a reversion period

Note 4— Allowance for Credit Losses (continued)

These qualitative risk factors considered by management are largely comparable to legacy factors prior to the adoption of CECL.

The following tables present the activity in the ACL for the three and six months ended June 30, 2025, and for the three and six months ended June 30, 2024, including the impact of the allowance established for Purchase Credit Deteriorated (“PCD”) loans for the three and six months ended June 30, 2024, (in thousands).

The following tables present the activity in the ACL for the three and nine months ended September 30, 2025, and for the three and nine months ended September 30, 2024, including the impact of the allowance established for Purchase Credit Deteriorated (“PCD”) loans for the nine months ended September 30, 2024, (in thousands).

Commercial real estate Owner-occupied commercial real estate Acquisition, construction & development Commercial & industrial Single family residential (1-4 units) Consumer non-real estate and other Total

Three months ended

June 30, 2025

September 30, 2025

Balance, beginning of period $ 28,113 $ 3,530 $ 12,085 $ 10,643 $ 12,208 $ 677 $ 67,256

3 unchanged sentences

Balance, end of period $ 26,074 $ 3,095 $ 16,355 $ 8,680 $ 12,509 $ 891 $ 67,604

June 30, 2024

September 30, 2024

Balance, beginning of period $ 27,304 $ 5,040 $ 18,639 $ 4,768 $ 11,648 $ 618 $ 68,017

Allowance established for acquired PCD loans 7,503 1,931 5,968 5,684 2,608 216 23,910

Provision for (recapture of) credit losses ( 1,516 ) ( 1,073 ) 3,084 425 ( 1,006 ) 171 85

3 unchanged sentences

Commercial real estate Owner-occupied commercial real estate Acquisition, construction & development Commercial & Industrial Single family residential (1-4 units) Consumer non-real estate and other Total

Six months ended

June 30, 2025

Nine months ended

September 30, 2025

Balance, beginning of period $ 30,444 $ 3,261 $ 17,386 $ 6,633 $ 9,763 $ 553 $ 68,040

3 unchanged sentences

Balance, end of period $ 26,074 $ 3,095 $ 16,355 $ 8,680 $ 12,509 $ 891 $ 67,604

June 30, 2024

September 30, 2024

Balance, beginning of period $ 20,633 $ 783 $ 368 $ 645 $ 2,797 $ 75 $ 25,301

6 unchanged sentences

The recorded investment in loans excludes accrued interest receivable due to immateriality.

The following table presents the aging of the recorded investment in past due loans as of June 30, 2025, and December 31, 2024, by portfolio segment (in thousands):

June 30, 2025

The following table presents the aging of the recorded investment in past due loans as of September 30, 2025, and December 31, 2024, by portfolio segment (in thousands):

September 30, 2025

30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total Past Due Current Loans Total Loans 90 Days Past Due or More & Still Accruing Non-accrual loans

20 unchanged sentences

The Company internally grades all commercial loans at the time of origination.

In addition, the Company performs an annual review on at least 50% of the Bank’s commercial credit exposure to each borrower.

In addition, the Company performs an annual review on at least 50% of the Bank’s commercial credit exposure.

The Company uses the following definitions for credit risk classifications:

13 unchanged sentences

Generally, these loan classes are rated as “Pass” unless these loans are on non-accrual and are then classified as substandard.

The following table presents the amortized cost basis of the loan portfolio, by year of origination, loan class, and credit quality, as of June 30, 2025, and December 31, 2024 (in thousands):

June 30, 2025

The following table presents the amortized cost basis of the loan portfolio, by year of origination, loan class, and credit quality, as of September 30, 2025, and December 31, 2024 (in thousands):

September 30, 2025

2025 2024 2023 2022 2021 Prior Revolving Loans Total

101 unchanged sentences

Totals $ 554,237 $ 805,534 $ 1,052,113 $ 903,616 $ 329,467 $ 1,258,726 $ 768,543 $ 5,672,236

The following tables present information about collateral-dependent loans that were individually evaluated for purposes of determining the ACL as of June 30, 2025, and December 31, 2024 (in thousands):

June 30, 2025

The following tables present information about collateral-dependent loans that were individually evaluated for purposes of determining the ACL as of September 30, 2025, and December 31, 2024 (in thousands):

September 30, 2025

With Allowance With No Related Allowance Total

Amortized Cost Related Allowance Amortized Cost Amortized Cost Related Allowance

June 30, 2025

September 30, 2025

Commercial real estate $ 10,109 $ 3,213 $ 43,629 $ 53,738 $ 3,213

31 unchanged sentences

The Company may also provide multiple types of modifications on an individual loan.

For the six months ended June 30, 2025, and for the year ended, December 31, 2024, the Company did not extend any modifications to borrowers experiencing financial difficulty that had a more-than-insignificant direct change in the contractual cash flows of the loan.

For the nine months ended September 30, 2025, and for the year ended, December 31, 2024, the Company did not extend any modifications to borrowers experiencing financial difficulty that had a more-than-insignificant direct change in the contractual cash flows of the loan.

Other Real Estate Owned

Real estate owned activity was as follows for the six months ended June 30, 2025, and for the year ended, December 31, 2024 (in thousands):

June 30, 2025 December 31, 2024

Real estate owned activity was as follows for the nine months ended September 30, 2025, and for the year ended, December 31, 2024 (in thousands):

September 30, 2025 December 31, 2024

Beginning balance $ 2,783 $ —

5 unchanged sentences

Note 5— Deposits

The aggregate amount of time deposits that meet or exceed the FDIC Insurance Limit of $250,000, was approximately $ 289.7 million and $ 284.4 million on June 30, 2025, and December 31, 2024, respectively.

Brokered time deposits, which are fully insured, totaled $ 132.1 million and $ 244.8 million as of June 30, 2025, and December 31, 2024, respectively.

Time deposits through the Certificate of Deposit Account Registry Service (“CDARS”) program totaled $ 28.1 million at June 30, 2025, compared to $ 35.7 million at December 31, 2024.

The aggregate amount of time deposits that meet or exceed the FDIC Insurance Limit of $250,000, was approximately $ 295.9 million and $ 284.4 million on September 30, 2025, and December 31, 2024, respectively.

Brokered time deposits, which are fully insured, totaled $ 124.4 million and $ 244.8 million as of September 30, 2025, and December 31, 2024, respectively.

Time deposits through the Certificate of Deposit Account Registry Service (“CDARS”) program totaled $ 22.8 million at September 30, 2025, compared to $ 35.7 million at December 31, 2024.

Note 5— Deposits (continued)

The remaining maturities of time deposits as of June 30, 2025 are as follows (in thousands):

As of June 30, 2025

Remaining six months ending, December 31, 2025 $ 941,496

The remaining maturities of time deposits as of September 30, 2025 are as follows (in thousands):

As of September 30, 2025

Remaining three months ending, December 31, 2025 $ 553,403

Thereafter 9,308

Total $ 1,129,916

At June 30, 2025, and December 31, 2024, amounts included in time deposits for individual retirement accounts totaled $ 116.2 million and $ 118.9 million, respectively.

Overdrafts of $ 730.0 thousand and $ 1.6 million were reclassified to loans as of June 30, 2025, and the year ended December 31, 2024, respectively.

At September 30, 2025, and December 31, 2024, amounts included in time deposits for individual retirement accounts totaled $ 114.6 million and $ 118.9 million, respectively.

Overdrafts of $ 657.4 thousand and $ 1.6 million were reclassified to loans as of September 30, 2025, and the year ended December 31, 2024, respectively.

Note 6— Borrowed Funds

Short-term borrowings

The Company had borrowings of $ 650.0 million and $ 365.0 million at June 30, 2025, and December 31, 2024, respectively.

At June 30, 2025, the interest rate on this debt ranged from 4.40 % to 4.50 %.

The Company had borrowings of $ 450.0 million and $ 365.0 million at September 30, 2025, and December 31, 2024, respectively.

At September 30, 2025, the interest rate on this debt was 4.24 %.

At December 31, 2024, the interest rate on this debt ranged from 4.43 % to 4.57 %.

The average balance outstanding during the six months ending June 30, 2025, and the year ending December 31, 2024, was $ 393.8 million and $ 422.5 million, respectively.

The average balance outstanding during the nine months ending September 30, 2025, and the year ending December 31, 2024, was $ 412.7 million and $ 422.5 million, respectively.

The Company has a finance lease liability that is not included in these balances - see Note 7 - Leased Property for a discussion of this liability that is included in the accrued interest and other liabilities line in the Consolidated Balance Sheets.

The Company has available secured lines of credit with the Federal Reserve Bank of Richmond, such as the Borrower-In-Custody program, the FHLB of Atlanta, and unsecured federal funds lines of credit from correspondent banking relationships.

Through these sources, the Company has unused capacity of $ 4.1 billion in remaining borrowing capacity as of June 30, 2025.

Through these sources, the Company has unused capacity of $ 4.2 billion in remaining borrowing capacity as of September 30, 2025.

The advances on credit lines are secured by both securities and loans.

The lendable collateral value of securities and loans pledged against available lines of credit as of June 30, 2025, and December 31, 2024, was $ 3.2 billion and $ 3.1 billion, respectively.

As of June 30, 2025, all of the Company’s borrowings will mature within one calendar year.

The contractual maturities of these borrowings, which all occur within one year of the reporting date, are as follows as of June 30, 2025, (in thousands):

The lendable collateral value of securities and loans pledged against available lines of credit as of September 30, 2025, and December 31, 2024, was $ 3.2 billion and $ 3.1 billion, respectively.

As of September 30, 2025, all of the Company’s borrowings will mature within one calendar year.

The contractual maturities of these borrowings, which all occur within one year of the reporting date, are as follows as of September 30, 2025, (in thousands):

Due in 2025 $ 450,000

3 unchanged sentences

As part of the Merger, Burke & Herbert assumed $ 75.0 million of subordinated debentures, that were fair valued at $ 61.5 million with a $ 13.5 million discount being amortized into interest expense over the stated maturity.

As of June 30, 2025, the net balance was $ 67.6 million.

As of September 30, 2025, the net balance was $ 68.9 million.

The subordinated debt qualifies as Tier 2 capital under Federal Reserve Board guidelines, until the debt is within 5 years of its maturity;

6 unchanged sentences

Through the Merger, Burke & Herbert also assumed $ 30 million of subordinated debentures that were fair valued at $ 29.8 million with a $ 0.2 million discount being amortized into interest expense over the stated maturity.

As of June 30, 2025, the net balance was $ 30 million.

The subordinated debt qualifies as Tier 2 capital under Federal Reserve Board guidelines, until the debt is within 5 years of its maturity;

thereafter, the amount qualifying as Tier 2 capital is reduced by 20 % each year until its maturity.

The subordinated debentures were issued in the third quarter of 2020.

This subordinated debt bears interest at a fixed rate of 5.00 % per year from the date of assumption to, but excluding, September 30, 2025, payable quarterly in arrears.

From and including September 30, 2025, to, but excluding, the maturity date or earlier redemption date, the interest rate will reset quarterly at a variable rate equal to the then current three-month term SOFR plus 487 basis points, payable quarterly in arrears.

This debt has a 10 -year term, and generally, is not prepayable by us within the first 5 years from issuance, which was third quarter 2020.

This subordinated debt qualified as Tier 2 capital under Federal Reserve Board guidelines, until the debt was within 5 years of its maturity;

thereafter, the amount qualifying as Tier 2 capital would have been reduced by 20 % each year until its maturity.

The subordinated debentures were issued on September 22, 2020, had a 10 -year term, and generally, were not prepayable by us within the first 5 years from issuance, absent specific events.

This subordinated debt bore interest at a fixed rate of 5.00 % per year from the date of assumption to, but excluding, September 30, 2025, payable quarterly in arrears.

On September 30, 2025, the Company redeemed all $ 30 million aggregate principal amount of this subordinated debt.

The redemption was made pursuant to the optional redemption provisions set forth in the indenture, at a redemption price equal to 100 % of the principal amount plus accrued and unpaid interest to the redemption date.

The redemption was funded with available cash in the form of a dividend from the Company’s Bank subsidiary.

Subordinated Debentures Owed to Unconsolidated Subsidiary Trusts

4 unchanged sentences

SFG Capital Trust III issued $ 8.0 million in capital securities and $ 248 thousand in common securities and invested the proceeds in $ 8.3 million of debentures, which were assumed by Burke & Herbert in the Merger.

Distributions on the capital securities issued by the trusts are payable quarterly at a variable rate equal to 3 month LIBOR plus 345 basis points for SFG Capital Trust I, 3 months of LIBOR plus 280 basis points for SFG Capital Trust II, and 3 month LIBOR plus 145 basis points for SFG Capital Trust III, and equals the interest rate earned on the debentures held by the trusts and is recorded as interest expense by us.

Distributions on the capital securities issued by the trusts are payable quarterly at a variable rate equal to three-month term SOFR, plus 345 basis points for SFG Capital Trust I, three-month term SOFR, plus 280 basis points for SFG Capital Trust II, and three-month term SOFR, plus 145 basis points for SFG Capital Trust III, and equals the interest rate earned on the debentures held by the trusts and is recorded as interest expense by us.

The capital securities are subject to mandatory redemption in whole, or in part, upon repayment of the debentures.

4 unchanged sentences

The amount of trust preferred securities and certain other elements in excess of the limit can be included in Tier 2 capital.

The remaining maturities of subordinated debentures as of June 30, 2025, are as follows (in thousands):

The remaining maturities of subordinated debentures as of September 30, 2025, are as follows (in thousands):

Subordinated debentures

Subordinated debentures owed to unconsolidated subsidiary trusts

Remaining six months ending, December 31, 2025 $ — $ —

Remaining three months ending, December 31, 2025 $ — $ —

Thereafter 75,000 19,589

6 unchanged sentences

Note 7— Leased Property (continued)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

1 unchanged sentence

Total lease income $ 709 $ 565 $ 2,101 $ 1,696

The remaining maturities of operating lease receivables as of June 30, 2025, are as follows (in thousands):

The remaining maturities of operating lease receivables as of September 30, 2025, are as follows (in thousands):

Operating Leases

Remaining six months ending, December 31, 2025 $ 1,388

Remaining three months ending, December 31, 2025 $ 696

Thereafter 2,922

4 unchanged sentences

Certain leases offer the option to extend the lease term, and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised.

Including renewal options, the terms of the Company’s leases range from less than one year to approximately twelve years .

Including renewal options, the terms of the Company’s leases range from less than one year to approximately thirteen years .

The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations.

3 unchanged sentences

Right-of-use assets and liabilities by lease type, and the associated balance sheet classifications are as follows (in thousands):

Balance Sheet Classification June 30, 2025 December 31, 2024

Balance Sheet Classification September 30, 2025 December 31, 2024

Right-of-use assets:

7 unchanged sentences

The components of total lease cost were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

5 unchanged sentences

Note 7— Leased Property (continued)

The Company’s future undiscounted lease payments for finance and operating leases with initial terms of one year or more as of June 30, 2025, are as follows (in thousands):

The Company’s future undiscounted lease payments for finance and operating leases with initial terms of one year or more as of September 30, 2025, are as follows (in thousands):

Operating Leases Finance Leases

Remaining six months ending, December 31, 2025 $ 1,645 $ 168

Remaining three months ending, December 31, 2025 $ 824 $ 84

2026 3,205 340

6 unchanged sentences

Net lease liabilities $ 14,806 $ 3,449

The following table presents additional information about the Company’s leases as of June 30, 2025, and December 31, 2024.

Supplemental lease information (dollars in thousands) June 30, 2025 December 31, 2024

The following table presents additional information about the Company’s leases as of September 30, 2025, and December 31, 2024.

Supplemental lease information (dollars in thousands) September 30, 2025 December 31, 2024

Finance lease weighted average remaining lease term (years) 11.01 11.75

2 unchanged sentences

Operating lease weighted average discount rate 4.68 % 4.65 %

Six Months Ended June 30,

Nine Months Ended September 30,

Cash paid for amounts included in the measurement of lease liabilities 2025 2024

11 unchanged sentences

The net unrealized gain or loss on AFS securities is not included in computing regulatory capital.

Management believes as of June 30, 2025, the Company and the Bank meet all capital adequacy requirements to which they are subject.

Management believes as of September 30, 2025, the Company and the Bank meet all capital adequacy requirements to which they are subject.

“Prompt corrective action” regulations provide five classifications:

2 unchanged sentences

If “undercapitalized”, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

As of June 30, 2025, and December 31, 2024, the most recent notification from the FDIC categorized the Bank as “well capitalized” under the regulatory framework for “prompt corrective action.”

As of September 30, 2025, and December 31, 2024, the most recent notification from the FDIC categorized the Bank as “well capitalized” under the regulatory framework for “prompt corrective action.”

Note 8— Regulatory Capital Matters (continued)

The following table presents the actual and required capital amounts and ratios for the Company and the Bank at June 30, 2025, and December 31, 2024 (in thousands except for ratios):

The following table presents the actual and required capital amounts and ratios for the Company and the Bank at September 30, 2025, and December 31, 2024 (in thousands except for ratios):

Actual Minimum Required Capital - Basel III Minimum Required to be Well Capitalized

Amount Ratio Amount Ratio Amount Ratio

As of June 30, 2025

As of September 30, 2025

Total Capital to risk weighted assets

35 unchanged sentences

Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies.

As of June 30, 2025, approximately $ 293.6 million of retained earnings was available for dividend declaration consistent with the Company’s capital plan.

As of September 30, 2025, approximately $ 297.0 million of retained earnings was available for dividend declaration consistent with the Company’s capital plan.

Note 9— Derivatives

6 unchanged sentences

Interest rate swaps, designated as cash flow hedges, involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

As of June 30, 2025, such derivatives were

As of September 30, 2025, such derivatives

Note 9— Derivatives (continued)

used to hedge the variable cash flows associated with variable-rate liabilities.

As of June 30, 2024, such derivatives were used to hedge the variable cash flows associated with variable-rate debt and variable-rate securities.

were used to hedge the variable cash flows associated with variable-rate liabilities.

As of September 30, 2024, such derivatives were used to hedge the variable cash flows associated with variable-rate debt and variable-rate securities.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest expense or interest income in the same period(s) during which the hedged transaction affects earnings.

During the next twelve months, the Company estimates that an additional $ 514.6 thousand will be reclassified as a reduction to interest expense.

During the next twelve months, the Company estimates that an additional $ 6.5 thousand will be reclassified as an increase in interest expense.

Derivatives not designated as hedges

4 unchanged sentences

Changes in the fair value of interest rate swaps are recorded in other non-interest expense and sum to zero because of offsetting terms of swaps with borrowers and swaps with dealer counterparties.

The table below presents the fair value of the Company’s derivative financial instruments, which includes accrued interest, as well as their classification on the Consolidated Balance Sheets as of June 30, 2025, and December 31, 2024 (in thousands):

June 30, 2025

The table below presents the fair value of the Company’s derivative financial instruments, which includes accrued interest, as well as their classification on the Consolidated Balance Sheets as of September 30, 2025, and December 31, 2024 (in thousands):

September 30, 2025

Balance Sheet Location Notional Amount Fair Value

14 unchanged sentences

Note 9— Derivatives (continued)

The table below presents the effect of cash flow hedge accounting on AOCI for the three months ended June 30, 2025, and June 30, 2024 (in thousands):

The table below presents the effect of cash flow hedge accounting on AOCI for the three months ended September 30, 2025, and September 30, 2024 (in thousands):

Derivatives in Cash Flow

Hedging Relationships June 30, 2025 Location of Gain or (Loss) Reclassified from AOCI into Income June 30, 2025

Hedging Relationships September 30, 2025 Location of Gain or (Loss) Reclassified from AOCI into Income September 30, 2025

Amount of Gain or (Loss) Recognized in OCI on Derivative

4 unchanged sentences

Derivatives in Cash Flow

Hedging Relationships June 30, 2024 Location of Gain or (Loss) Reclassified from AOCI into Income June 30, 2024

Hedging Relationships September 30, 2024 Location of Gain or (Loss) Reclassified from AOCI into Income September 30, 2024

Amount of Gain or (Loss) Recognized in OCI on Derivative

3 unchanged sentences

Total $ ( 3,887 ) $ ( 3,887 ) $ — $ 1,080 $ 1,080 $ —

The table below presents the effect of cash flow hedge accounting on AOCI for the six months ended June 30, 2025, and June 30, 2024 (in thousands):

The table below presents the effect of cash flow hedge accounting on AOCI for the nine months ended September 30, 2025, and September 30, 2024 (in thousands):

Derivatives in Cash Flow

Hedging Relationships June 30, 2025 Location of Gain or (Loss) Reclassified from AOCI into Income June 30, 2025

Hedging Relationships September 30, 2025 Location of Gain or (Loss) Reclassified from AOCI into Income September 30, 2025

Amount of Gain or (Loss) Recognized in OCI on Derivative

4 unchanged sentences

Derivatives in Cash Flow

Hedging Relationships June 30, 2024 Location of Gain or (Loss) Reclassified from AOCI into Income June 30, 2024

Hedging Relationships September 30, 2024 Location of Gain or (Loss) Reclassified from AOCI into Income September 30, 2024

Amount of Gain or (Loss) Recognized in OCI on Derivative

4 unchanged sentences

Note 9— Derivatives (continued)

The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income for the three and six months ended June 30, 2025, and June 30, 2024 (in thousands).

The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income for the three and nine months ended September 30, 2025, and September 30, 2024 (in thousands).

Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships

Three months ended

June 30, 2025 June 30, 2024

September 30, 2025 September 30, 2024

Interest Income Interest Expense Interest Income Interest Expense

13 unchanged sentences

Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships

Six months ended

June 30, 2025 June 30, 2024

Nine months ended

September 30, 2025 September 30, 2024

Interest Income Interest Expense Interest Income Interest Expense

16 unchanged sentences

Credit-risk-related Contingent Features

As of June 30, 2025, the fair value of derivatives in a liability position, which includes accrued interest but excludes any adjustment for non-performance risk related to these agreements, was $ 0.2 million.

As of December 31, 2024, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for non-performance risk related to these agreements, was $ 0.2 million.

As of June 30, 2025, and as of December 31, 2024, the Company has posted the full amount of collateral related to these agreements.

As of September 30, 2025, the fair value of derivatives in a liability position, which includes accrued interest but excludes any adjustment for non-performance risk related to these agreements, was $ 174.2 thousand.

As of September 30, 2025, and as of December 31, 2024, the Company has posted the full amount of collateral related to these agreements.

Note 10— Commitments and Contingencies

6 unchanged sentences

Since many of our commitments to extend credit may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements.

A summary of the contractual amounts of the Company’s financial instruments outstanding at June 30, 2025, and December 31, 2024, is as follows (in thousands):

June 30, 2025 December 31, 2024

A summary of the contractual amounts of the Company’s financial instruments outstanding at September 30, 2025, and December 31, 2024, is as follows (in thousands):

September 30, 2025 December 31, 2024

Commitments to extend credit $ 852,242 $ 969,317

5 unchanged sentences

Allowance for credit losses - off-balance-sheet credit exposures

The Company recorded a recapture of credit losses on unfunded commitments of $ 93.0 thousand and provision for credit losses of $ 3.8 million on unfunded commitments for the three months ended June 30, 2025 and June 30, 2024, respectively.

The Company recorded a recapture of credit losses on unfunded commitments of $ 492.0 thousand and a provision for credit losses of $ 3.8 million for the six months ended June 30, 2025 and June 30, 2024, respectively.

The ACL on off-balance-sheet credit totaled $ 3.5 million and $ 4.0 million as of June 30, 2025, and December 31, 2024, and is included in accrued interest and other liabilities on the accompanying Consolidated Balance Sheets.

The Company recorded a recapture of credit losses on unfunded commitments of $ 312.0 thousand and provision for credit losses of $ 62.0 thousand on unfunded commitments for the three months ended September 30, 2025 and September 30, 2024, respectively.

The Company recorded a recapture of credit losses on unfunded commitments of $ 804.0 thousand and a provision for credit losses of $ 3.9 million for the nine months ended September 30, 2025 and September 30, 2024, respectively.

The ACL on off-balance-sheet credit totaled $ 3.2 million and $ 4.0 million as of September 30, 2025, and December 31, 2024, and is included in accrued interest and other liabilities on the accompanying Consolidated Balance Sheets.

The Company is a party to litigation, claims, and proceedings arising in the normal course of business that are ordinary and routine to the nature of the Company’s business and operations.

Management, after consultation with legal counsel, believes that the liabilities, if any, arising from any currently pending or threatened litigation, claims, or proceedings will not be material to the Company’s financial position as of June 30, 2025, and December 31, 2024, respectively.

Management, after consultation with legal counsel, believes that the liabilities, if any, arising from any currently pending or threatened litigation, claims, or proceedings will not be material to the Company’s financial position as of September 30, 2025, and December 31, 2024, respectively.

Note 11— Fair Value Measurements

17 unchanged sentences

Equity investments are recorded at fair value on a recurring basis, with changes in fair value reported in net income.

Through the Merger, at June 30, 2025, we acquired an investment in an S&P 500 index mutual fund that is traded on an exchange, and we classify it as Level 2.

Through the Merger we acquired an investment in an S&P 500 index mutual fund that is traded on an exchange, and we classify it as Level 2 as of September 30, 2025.

Through the Merger, we acquired perpetual preferred stock of a bank holding company issued in October 2022 in a private offering.

13 unchanged sentences

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

Fair Value Measurements at June 30, 2025, Using:

Fair Value Measurements at September 30, 2025, Using:

Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs

54 unchanged sentences

Assets that were measured at fair value on a non-recurring basis during the period are summarized below (in thousands):

Fair Value Measurements at June 30, 2025, Using:

Fair Value Measurements at September 30, 2025, Using:

Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs

20 unchanged sentences

Other real estate owned — — 2,783 2,783

The following table presents quantitative information about Level 3 Fair Value Measurements for assets measured at fair value on a non-recurring basis at June 30, 2025, and December 31, 2024 (in thousands except for percentages):

The following table presents quantitative information about Level 3 Fair Value Measurements for assets measured at fair value on a non-recurring basis at September 30, 2025, and December 31, 2024 (in thousands except for percentages):

Description Fair Value Valuation Techniques Unobservable Inputs Range

June 30, 2025

September 30, 2025

Collateral dependent loans $ 11,874 Appraisal of collateral Management adjustments (e.g., liquidity, selling costs, etc.) 5.0 % to 20.0 % for liquidity, 6.0 % to 8.0 % for selling costs

4 unchanged sentences

Fair value of financial instruments

The carrying amounts and estimated fair values of financial instruments not carried at fair value, at June 30, 2025, and December 31, 2024, were as follows (in thousands):

Fair Value Measurements at June 30, 2025, Using:

The carrying amounts and estimated fair values of financial instruments not carried at fair value, at September 30, 2025, and December 31, 2024, were as follows (in thousands):

Fair Value Measurements at September 30, 2025, Using:

Carrying Amount Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs

29 unchanged sentences

Note 12— Accumulated Other Comprehensive Income (Loss)

The following table presents changes in accumulated other comprehensive income (loss) by component, net of tax, for the three and six months ended June 30, 2025, and June 30, 2024 (in thousands):

Three months ended June 30, 2025

The following table presents changes in accumulated other comprehensive income (loss) by component, net of tax, for the three and nine months ended September 30, 2025, and September 30, 2024 (in thousands):

Three months ended September 30, 2025

Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income

4 unchanged sentences

Ending Balance $ ( 52 ) $ ( 63,800 ) $ ( 4,602 ) $ ( 68,454 )

Three months ended June 30, 2024

Three months ended September 30, 2024

Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income

5 unchanged sentences

Note 12— Accumulated Other Comprehensive Income (Loss) (continued)

Six months ended June 30, 2025

Nine months ended September 30, 2025

Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income

4 unchanged sentences

Ending Balance $ ( 52 ) $ ( 63,800 ) $ ( 4,602 ) $ ( 68,454 )

Six months ended June 30, 2024

Nine months ended September 30, 2024

Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income

4 unchanged sentences

Ending Balance $ ( 1,194 ) $ ( 68,819 ) $ ( 5,745 ) $ ( 75,758 )

The following table presents amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2025, and June 30, 2024 (in thousands).

Note 12— Accumulated Other Comprehensive Income (Loss) (continued)

The following table presents amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2025, and September 30, 2024 (in thousands).

Details about Accumulated Other Comprehensive Income Components Amount Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Statements of Income

Three months ended Six months ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three months ended Nine months ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Cash flow hedges:

14 unchanged sentences

Note 13— Other Operating Expense

Other operating expense from the Consolidated Statements of Income for the three and six months ended June 30, 2025, and June 30, 2024, is as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Other operating expense from the Consolidated Statements of Income for the three and nine months ended September 30, 2025, and September 30, 2024, is as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

FDIC & other regulatory assessments $ 1,088 $ 947 $ 2,002 $ 1,463

Historic tax credit amortization $ 435 $ 632 $ 1,305 $ 1,895

1 unchanged sentence

Consultant fees 661 1,585 2,115 5,865

ATM, card, & network expense 1,314 1,108 2,446 1,659

Directors' fees 499 124 1,455 1,578

4 unchanged sentences

Donation expense 37 26 121 5,145

Core deposit intangible amortization 3,888 2,865 8,186 2,865

Other 5,214 4,747 15,984 10,551

Total $ 9,569 $ 10,205 $ 28,690 $ 33,255

The Company incurred Merger-related expenses of zero and $ 9.5 million for the six months ended June 30, 2025 and June 30, 2024, respectively.

Note 13— Other Operating Expense (continued)

The Company incurred Merger-related expenses of zero and $ 11.3 million for the nine months ended September 30, 2025 and September 30, 2024, respectively.

These expenses are included in the consultant fees, audit fees, legal expense, donation, and other line items detailed in other operating expenses.

1 unchanged sentence

The Company has a share-based incentive plan described below that allows it to offer a variety of equity compensation awards subject to approval.

Total compensation cost that has been charged against income for the share-based awards granted was $ 1.5 million and $ 937.6 thousand for the three months ended June 30, 2025, and June 30, 2024, respectively.

The total income tax benefit was $ 310.4 thousand and $ 196.9 thousand for the three months ended June 30, 2025, and June 30, 2024, respectively.

Total compensation cost that has been charged against income for the share-based awards granted was $ 2.4 million and $ 1.4 million for the six months ended June 30, 2025, and June 30, 2024, respectively.

The total income tax benefit was $ 499.5 thousand and $ 291.5 thousand for the six months ended June 30, 2025, and June 30, 2024, respectively.

Total compensation cost that has been charged against income for restricted stock unit awards granted was $ 1.1 million and $ 566.9 thousand for the three months ended September 30, 2025, and September 30, 2024, respectively.

The total income tax benefit was $ 242.9 thousand and $ 119.0 thousand for the three months ended September 30, 2025, and September 30, 2024, respectively.

Total compensation cost that has been charged against income for restricted stock unit awards granted was $ 3.5 million and $ 2.0 million for the nine months ended September 30, 2025, and September 30, 2024, respectively.

The total income tax benefit was $ 806.1 thousand and $ 410.5 thousand for the nine months ended September 30, 2025, and September 30, 2024, respectively.

2019 Stock Incentive Plan

7 unchanged sentences

Compensation expense is recognized over the vesting period of the awards based on the fair value of the award at grant date.

Note 14— Share-Based Compensation (continued)

2023 Stock Incentive Plan

3 unchanged sentences

The 2023 SIP authorized the issuance of 250,000 shares, subject to an annual increase in available shares and shares and shares recycled from the 2019 SIP that were cancelled.

Based on our shares outstanding as of June 30, 2025, and awards that were recycled from the 2019 SIP, the total shares authorized for issuance under the plan as of June 30, 2025 was 324,887 .

A total of 96,132 and 48,450 shares were issued during the six months ended June 30, 2025, and June 30, 2024, respectively.

Based on our shares outstanding as of September 30, 2025, and awards that were recycled from the 2019 SIP, the total shares authorized for issuance under the plan as of September 30, 2025 was 324,887 .

A total of 95,587 and 64,365 shares were issued during the nine months ended September 30, 2025, and September 30, 2024, respectively.

For time-based RSUs, the fair value was determined by using the closing stock price on the date prior to the grant date.

12 unchanged sentences

The dividend yield assumption was based on historical and anticipated dividend payouts.

Note 14— Share-Based Compensation (continued)

The following is a summary of all the Company’s RSU awards issued under both the 2019 SIP and 2023 SIP:

4 unchanged sentences

Forfeited ( 7,947 ) 55.22

Non-vested at June 30, 2025 188,379 $ 58.88

As of June 30, 2025, there was $ 7.8 million of total unrecognized compensation costs related to non-vested shares granted under both the 2019 SIP and 2023 SIP.

Non-vested at September 30, 2025 173,989 $ 59.53

As of September 30, 2025, there was $ 6.8 million of total unrecognized compensation costs related to non-vested shares granted under both the 2019 SIP and 2023 SIP.

The cost is expected to be recognized over a weighted average period of 1.36 years.

2 unchanged sentences

Upon the 2023 ESPP’s shareholder approval date of March 30, 2023, the 2023 ESPP reserved 250,000 shares of common stock for issuance to employees, subject to an annual increase in reserved shares.

At June 30, 2025, 305,210 shares were available to be issued.

At September 30, 2025, 299,391 shares were available to be issued.

Whole shares are sold to participants in the 2023 ESPP at 85 % of the lower of the stock price at the beginning or end of each semi-annual offering period.

The first semi-annual offering period began on September 1, 2023, and the current semi-annual offering period began on March 1, 2025.

The first semi-annual offering period began on September 1, 2023, and the current semi-annual offering period began on September 1, 2025.

Eligible employees may purchase shares in an amount that does not exceed the lesser of the IRS limit of $25,000 or 15 % of their annual salary.

Note 14— Share-Based Compensation (continued)

The following table presents information for the 2023 ESPP for the six months ended June 30, 2025:

June 30, 2025

The following table presents information for the 2023 ESPP for the nine months ended September 30, 2025:

September 30, 2025

Shares purchased 12,839

15 unchanged sentences

4.77 7.20 8.77

A summary of SAR and option activity during the six months ended June 30, 2025, is as follows:

Note 14— Share-Based Compensation (continued)

A summary of SAR and option activity during the nine months ended September 30, 2025, is as follows:

Weighted Average

7 unchanged sentences

Expired — — — —

Outstanding, June 30, 2025 193,066 $ 2,166 5.34 $ 48.51

Outstanding, September 30, 2025

186,009 $ 2,003 5.09 $ 48.48

Exercisable SARs:

At June 30, 2025 158,987 $ 1,793 5.01 $ 48.46

The total fair value of SARs exercised was $ 657.0 thousand during the six months ended June 30, 2025.

The total fair value of SARs vested was $ 78.0 thousand during the six months ended June 30, 2025.

As of June 30, 2025, there was $ 383.2 thousand of total unrecognized compensation costs related to non-vested SARs acquired through the Merger.

At September 30, 2025 156,427 $ 2,091 4.80 $ 48.32

The total fair value of SARs exercised was $ 731.1 thousand during the nine months ended September 30, 2025.

The total fair value of SARs vested was $ 126.1 thousand during the nine months ended September 30, 2025.

As of September 30, 2025, there was $ 354.8 thousand of total unrecognized compensation costs related to non-vested SARs acquired through the Merger.

The cost is expected to be recognized over a weighted average period of 2.09 years.

5 unchanged sentences

Dilutive potential common stock has no effect on income available to common shareholders.

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

5 unchanged sentences

Diluted earnings (loss) per common share 1.97 1.82 5.74 1.33

For the three and six months ended June 30, 2024, the options effect of dilutive shares is anti-dilutive and not considered in calculating diluted EPS.

Stock awards equivalent to 37,255 and 323,902 shares of common stock were not considered in computing diluted earnings per common share for the three months ended June 30, 2025, and June 30, 2024, respectively, because they are antidilutive.

Stock awards equivalent to 44,598 and 329,572 shares of common stock were not considered in computing diluted earnings per share for the six months ended June 30, 2025 and June 30, 2024, respectively, because they are antidilutive.

Stock awards equivalent to 23,303 and 27,418 shares of common stock were not considered in computing diluted earnings per common share for the three months ended September 30, 2025, and September 30, 2024, respectively, because they are antidilutive.

Stock awards equivalent to 31,173 and 51,094 shares of common stock were not considered in computing diluted earnings per share for the nine months ended September 30, 2025 and September 30, 2024, respectively, because they are antidilutive.

Note 16— Business Combination

9 unchanged sentences

The following table summarizes adjustments to goodwill subsequent to December 31, 2024 (in thousands):

Note 16— Business Combination (continued)

Balance at December 31, 2024 $ 32,783

8 unchanged sentences

The following table details the total consideration paid for Summit on May 3, 2024, the fair values of the assets acquired and liabilities assumed and the resulting goodwill at the acquisition date.

Note 16— Business Combination (continued)

($ in thousands, except share information)

43 unchanged sentences

Note 17— Goodwill and Other Intangible Assets

The following table presents the change in goodwill for the three and six months ended June 30, 2025, and June 30, 2024, (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

The following table presents the change in goodwill for the three and nine months ended September 30, 2025, and September 30, 2024, (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

9 unchanged sentences

During the year ended December 31, 2024, the Company recorded $ 68.8 million of core deposit intangibles associated with the acquisition of Summit.

The gross carrying amount and accumulated amortization of other intangible assets for the three and six months ended June 30, 2025, and June 30, 2024, was as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

The gross carrying amount and accumulated amortization of other intangible assets for the three and nine months ended September 30, 2025, and September 30, 2024, was as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

5 unchanged sentences

The Company reviews other intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

Total amortization expense associated with intangible assets was $ 8.2 million for the six months ended June 30, 2025.

Total amortization expense associated with intangible assets was $ 11.9 million for the nine months ended September 30, 2025.

Estimated amortization expense for future years is as follows (in thousands):

Estimated Amortization

Remaining six months ending, December 31, 2025 $ 7,367

Remaining three months ending, December 31, 2025 $ 3,684

Thereafter 4,093

4 unchanged sentences

The Company’s Chief Executive Officer is in charge of allocating the Company’s resources and assessing performance, and has been identified as the chief operating decision maker.

While the chief decision-maker monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis.

While the chief operating decision-maker monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis.

Individual operating results are not reviewed by senior management to make resource allocation or performance decisions.

1 unchanged sentence

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 1. Financial Statements