What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-08 compared with 2025-11-07 · 189 added, 400 removed, 615 unchanged (49% 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, 2024, included in our Form 10-K filed with the SEC on March 17, 2025 (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, 2025, included in our Form 10-K filed with the SEC on February 27, 2026 (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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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:

the possibility that the anticipated benefits of the LNKB Merger will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company does business;

the possibility that we may be unable to achieve expected synergies and operating efficiencies of the LNKB Merger within the expected timeframes or at all and to successfully integrate LNKB’s operations and those of the Company;

such integration may be more difficult, time-consuming or costly than expected;

revenues following the LNKB Merger may be lower than expected;

the Company’s success in executing its business plans and strategies and managing the risks involved in the foregoing;

the dilution caused by the Company’s issuance of additional shares of its capital stock in connection with the LNKB Merger;

costs or difficulties associated with newly developed or acquired operations;

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increased competition;

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

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;

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the effects of any cybersecurity breaches or events;

the development and use of artificial intelligence (“AI”) in business processes, services, and products, including emerging external focus among regulators and other officials related to risks in connection with the development and use of AI;

the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts and tensions, or public health events (such as pandemics), and of governmental and societal responses thereto;

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, 2025 and in Part I, Item 2.

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Risk Factors in this Form 10-Q.

Burke & Herbert Financial Services Corp.

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.

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

Burke & Herbert 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 Burke & Herbert.

Burke & Herbert has no material operations other than owning the Bank.

In September 2023, Burke & Herbert elected to become a financial holding company under the BHCA.

As a financial holding company of a Virginia state bank, Burke & Herbert 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.

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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.

The Bank’s primary market area includes northern Virginia and West Virginia, and as of March 31, 2026, it has over 77 branches and commercial loan offices across Delaware, Kentucky, Maryland, Virginia, and West Virginia.

The Company’s branch locations accept business and consumer deposits from a diverse customer base.

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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, 2025, we had total consolidated assets of $7.9 billion, gross loans of $5.6 billion, total deposits of $6.4 billion, and total shareholders’ equity of $822.2 million.

As of September 30, 2025, we had 829 full-time employees.

As of March 31, 2026, we had total consolidated assets of $7.9 billion, gross loans of $5.4 billion, total deposits of $6.3 billion, and total shareholders’ equity of $864.5 million.

As of March 31, 2026, we had 830 full-time employees.

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

Merger with Summit Financial Group, Inc.

Effective on the Closing Date, Burke & Herbert completed the M erger with Summit, pursuant to the August 24, 2023 Merger Agreement.

Pursuant to the Merger Agreement, on the Closing Date, (i) Summit merged with and into Burke & Herbert through the Merger, and (ii) immediately following the Merger, SCB merged with and into the Bank, with the Bank as the surviving bank.

In the Merger, holders of Summit common stock outstanding at the effective time of the Merger received 0.5043 shares of Burke & Herbert common stock for each share of Summit common stock they owned, subject to the payment of cash in lieu of fractional shares.

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 newly created Burke & Herbert Series 2021 Preferred Stock.

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

Merger With LINKBANCORP, Inc.

Effective on May 1, 2026, Burke & Herbert Financial Services Corp., a Virginia corporation, completed its previously announced merger with LINKBANCORP, Inc., a Pennsylvania corporation, pursuant to the LNKB Merger Agreement between Burke & Herbert and LNKB.

See Note 1 - Nature of Business Activities and Significant Accounting Policies , in Notes to Consolidated Financial Statements for additional information regarding the LNKB merger.

Critical Accounting Policies and Estimates

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To prepare financial statements in conformity with GAAP, management makes estimates, assumptions, and judgments based on available information.

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.

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.

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

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Management uses significant estimates and assumptions to value such items, including projected cash flows, repayment rates, default rates and losses assuming default, discount rates, and realizable collateral values.

The allowance for credit losses for PCD loans is recognized within acquisition accounting.

The allowance for credit losses for non-PCD assets is recognized as provision for credit losses in the same reporting period as the acquisition.

The allowance for credit losses for purchased credit deteriorated (“PCD”) and purchased seasoned loans (“PSL”) loans is recognized within acquisition accounting.

The allowance for credit losses for non-PCD and non-PSL assets is recognized as provision for credit losses in the same reporting period as the acquisition.

Fair value adjustments are amortized or accreted into the income statement over the estimated life of the acquired assets or assumed liabilities.

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Determining the amount of the allowance for credit losses is considered a critical accounting estimate, because it is based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts, and prepayment experience as related to credit contractual terms.

Management estimates the allowance balance using relevant available information from internal and external sources.

Management estimates the

allowance balance using relevant available information from internal and external sources.

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.

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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The Company is using an internally developed model that produces an estimate of the allowance for credit losses as the lifetime expected credit losses of the loan portfolio.

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

This model uses a remaining useful life or weighted average remaining maturity (“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.

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The Company sources the macroeconomic variables and the macroeconomic variable forecasts that it uses in its ACL model from the Standard & Poor’s Global Market Intelligence and from CoStar Group.

The Company currently has set an initial reasonable and supportable period of two years with a subsequent straight-line loss-rate reversion for the following four quarters before then utilizing historical average loss rates in remaining periods of the modeled contractual terms.

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

As the reasonable and supportable and reversion period forecasts reflect the use of the macroeconomic variable loss drivers, management may consider that an additional or reduced reserve is warranted through qualitative risk factors based on current and expected conditions, including those that utilize supplemental information relative to the macroeconomic variable loss drivers.

The Company currently has set an initial reasonable and supportable forecast period of two years with subsequent immediate reversion to the historical average loss rates in remaining periods of the modeled contractual terms.

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

As the reasonable and supportable forecast and reversion period forecast reflects the use of the macroeconomic variable loss drivers, management may consider that an additional or reduced reserve is warranted through qualitative risk factors based on current and expected conditions, including those that utilize supplemental information relative to the macroeconomic variable loss drivers.

Qualitative adjustments considered by management include the following:

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and (iii) underwriting and delinquency trends.

The qualitative factors applied at September 30, 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.

The qualitative factors applied at March 31, 2026, 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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The calculation of each component of the Company’s income tax provision is complex and requires the use of estimates and judgments in its determination.

As part of the Company’s evaluation and implementation of business strategies, consideration is given to the regulations and tax laws that apply to the specific facts and circumstances for any tax positions under evaluation.

Management closely monitors tax developments on both the federal and state level in order to evaluate the effect they may have on the Company’s overall tax position and the estimates and judgments used in determining the income tax provision and records adjustments, as necessary.

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See Note 8 — Income Taxes, in Notes to the December 31, 2025, Consolidated Financial Statements of the Company for additional information.

On July 4, 2025, the President signed H.R.

1, the “One Big Beautiful Bill Act,” into law.

The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in

2025, including, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense.

The Company is currently evaluating the impact on future periods.

Non-GAAP Financial Measures

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Commercial Real Estate Sector Concentration

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.

In recent years, commercial real estate (“CRE”) markets have been impacted by economic disruptions, including those resulting from the effects of increases in remote work in urban centers and changes in the characteristics of certain urban centers.

CRE loans are generally viewed as having a greater risk of default than other types of loans and depend on cash flows from the owner’s business or the property’s tenants to service the debt.

The borrower’s cash flows may be affected significantly by general economic conditions.

Adverse conditions in the real estate market or the general business climate and economy or in occupancy rates where the property is located could increase the likelihood of default.

In particular, CRE office borrowers in central business districts have been impacted by decreased property valuations, oversupply due to remote work trends, and rising interest rates which has increased default rates and impeded their ability to secure new financing.

CRE loans generally have large loan balances, and therefore, the deterioration of one or a few of these loans could cause a significant increase in the percentage of our non-performing loans.

An increase in non-performing loans could result in a loss of earnings from these loans, an increase in the provision for loan losses, and an increase in charge-offs, all of which could have a material adverse effect on our financial condition and results of operations.

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

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.

The start of the U.S.

federal government’s new fiscal year began October 1, 2025, without the passage of Appropriation Acts or a Continuing Resolution (“CR”) and the government began its shutdown procedures, which included furloughing government civilian employees.

It is unclear at this time when either a CR or Appropriations Act will be enacted.

Notwithstanding the government shutdown, 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 (including during the government shutdown), 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 September 30, 2025, was $2.8 billion, or 50.4%, 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, 2025, was 35.5%, 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 $3.8 billion, or 68.1%, of our total gross loans and 48.1% of total assets at September 30, 2025.

Loan balances by portfolio segment amortized cost (in thousands) and by percentage of our total gross loan portfolio at September 30, 2025, were as follows:

September 30, 2025

The Bank’s exposure to CRE at March 31, 2026, was $2.8 billion, or 51.9%, 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, 2026, was 35.4%, 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 69.1%, of our total gross loans and 47.2% of total assets at March 31, 2026.

Loan balances by portfolio segment amortized cost (in thousands) and by percentage of our total gross loan portfolio at March 31, 2026, were as follows:

March 31, 2026

Amortized Cost Percentage

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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, 2025 (in thousands).

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 Company’s commercial real estate, owner-occupied commercial real estate, and acquisition, construction & development portfolios by collateral type and geographic location as of March 31, 2026 (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 acquisition, construction & development loans.

Quarterly construction progress reviews are also completed on all 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.

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Those scenarios may include projected growth, credit deterioration, deposit decay, interest rate changes, and a variety of other economic scenarios that can impact the liquidity position of the Company.

These analyses are performed on a quarterly basis in conjunction with the Company’s Asset/Liability meetings, and findings are reported to the Asset/Liability Committee (the “ALCO”) and to the Board.

These analyses are performed on a quarterly basis in conjunction with the Company’s Asset/Liability meetings, and findings are reported to the Asset and Liability Management Committee (the “ALCO”) and to the Board.

From time to time, management may change the frequency of such testing or update certain inputs as a result of abnormal market conditions.

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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 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.

The Basel III Framework 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.

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, 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.

As of March 31, 2026, and December 31, 2025, 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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• Our ability to manage operational risks related to new products and services, changes in processes and procedures, or the implementation of new technology, and

• 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.

• Our success realizing the expected benefits of the LNKB Merger and integrating the operations and customers of LNKB, 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 financial performance is also substantially affected by a number of external factors outside of our control, including the following:

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Risks related to these items, where material to the Company’s business, are discussed in the applicable sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operation.

For additional information on the risks we face, see Part II, Ite m 1A.

For additional information on the risks we face, see Part II, Item 1A.

- Risk Factors .

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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, 2025, and September 30, 2024, and the selected income statement data for the three and nine months ended September 30, 2025, and September 30, 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 and Nine Months Ended September 30,

The selected balance sheet data as of March 31, 2026, and March 31, 2025, and the selected income statement data for the three months ended March 31, 2026, and March 31, 2025, 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.

For the Period Ended March 31,

(In thousands, except ratios, share and per share data) 2026 2025

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854,091 747,587

As of or for the Three Months Ended September 30,

As of or for the Nine Months Ended September 30,

2025 2024 2025 2024

As of or for the Three Months Ended March 31,

Selected Operating Data:

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Net interest income 71,843 72,987

Provision (recapture) for credit losses

262 147 1,387 23,387

Provision for credit losses

Total non-interest income 12,853 10,023

Total non-interest expenses 51,381 49,664

Income (loss) before income taxes

37,001 32,822 107,027 19,640

Income tax expense (benefit)

Income before income taxes

33,303 32,845

Income tax expense

Preferred stock dividends

225 225 675 450

Net income (loss) applicable to common shares

Net income applicable to common shares

27,124 26,976

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15,045,941 14,982,807

Basic net income (loss) per common share

$ 1.98 $ 1.83 $ 5.76 $ 1.34

Diluted net income (loss) per common share

Basic net income per common share

$ 1.80 $ 1.80

Diluted net income per common share

Dividends declared per common share

0.55 0.53 1.65 1.59

Common stock dividend payout ratio (1)

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$ 56.77 $ 49.90

As of or for the Three Months Ended September 30,

As of or for the Nine Months Ended September 30,

2025 2024 2025 2024

As of or for the Three Months Ended March 31,

Performance Ratios:

Return on average assets 1.39 % 1.41 %

Return on average equity (2)

14.88 15.20 14.99 3.90

Return on average common equity (2)

Interest rate spread (3)

3.48 3.35 3.52 3.06

Net interest margin (4)

4.08 4.07 4.13 3.78

Efficiency ratio (5)

56.34 60.66 57.56 76.02

Capital Ratios:

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Tier 1 capital to average assets (leverage ratio)

10.71 9.66 10.71 9.66

Asset Quality Ratios:

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Number of full-time equivalent employees 830 814

(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.

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

(2) Return on average common equity computed using total average common 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 for the Nine Months Ended September 30, 2025, and September 30, 2024

Net income applicable to common shares for the nine months ended September 30, 2025, was $86.4 million, compared to net income applicable to common shares of $15.5 million during the nine months ended September 30, 2024.

The $70.9 million increase was due to results that reflect a full nine months of combined income after the Merger completion for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Net interest income increased by $65.9 million to $221.0 million for the nine months ended September 30, 2025, compared to $155.1 million for the nine months ended September 30, 2024.

The main driver for this increase was results that reflect a full nine months of combined income after the Merger.

For the nine months ended September 30, 2025, the Company recorded credit provision expense of $1.4 million compared to a provision of $23.4 million for the nine months ended September 30, 2024.

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 when compared to the nine months ended September 30, 2025.

Non-interest income increased by $10.1 million, or 41.5%, to $34.5 million for the nine months ended September 30, 2025, as compared to $24.4 million for the nine months ended September 30, 2024.

All categories of non-interest income except net gains on securities increased due to results that reflect a full nine months of combined income after the Merger for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Non-interest expense increased by $10.6 million, or 7.8%, to $147.1 million for the nine months ended September 30, 2025, as compared to $136.4 million for the nine months ended September 30, 2024.

The increase was primarily due to results that reflect a full nine months of combined operations after the Merger but reflect some continued operating efficiency gains, as a result of the merger, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

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 $221.0 million for the nine months ended September 30, 2025, compared to $155.1 million for the nine months ended September 30, 2024.

The increase in net interest income was primarily driven by results that reflect a full nine months of combined income after the Merger as well as higher rates on interest-earning assets, lower rates on interest-bearing liabilities, and higher accretion income, as a result of the Merger.

Accretion income associated with acquired loans totaled $31.2 million for the nine months ended September 30, 2025, compared to $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 $5.0 million for the nine months ended September 30, 2025, compared to $6.3 million the nine months ended September 30, 2024.

The tax-adjusted net interest margin was 4.13% for the nine months ended September 30, 2025, compared to 3.78% for the nine months ended September 30, 2024.

The increase in tax-adjusted net interest margin was primarily driven by results that reflect a full nine months of combined income after the Merger as well as higher rates on interest-earning assets, lower rates on interest-bearing liabilities, and higher accretion income, as a result of the Merger.

The yield for the taxable loan portfolio was 6.87% for the nine months ended September 30, 2025, compared to 7.01% for the nine months ended September 30, 2024.

The decrease was primarily the result of lower accretion income and an increase in the average balance of non-accrual loans.

The tax-adjusted yield on the total investment securities portfolio was 3.89% for the nine months ended September 30, 2025, compared to 3.81% for the nine months ended September 30, 2024.

The increase was mainly due to higher yields in our investment portfolio.

The yield on interest-bearing deposits decreased to 2.44% during the nine months ended September 30, 2025, from 2.86% during the nine months ended September 30, 2024.

The decrease was primarily due to lower market interest rates on deposit products reflective of decreases in the Federal Funds Rate and other market rates.

The yield on our short-term borrowings for the nine months ended September 30, 2025, was 3.88%, compared to 4.42% for the nine months ended September 30, 2024.

The decrease was due to decreases in the Federal Funds Rate and other short-term market rates and the addition of derivative swaps that decreased our cost of borrowing.

The yield on our subordinated debt assumed in the Merger was 9.65% for the nine months ended September 30, 2025, compared to 10.21% for the nine months ended September 30, 2024.

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, 2025, and September 30, 2024, for comparison (dollars in thousands).

For the Nine Months Ended September 30,

Average Outstanding Balance Interest Income/Expense Average Yield / Rate

Loans, gross (1)(2)

$ 5,620,915 $ 288,966 6.87 % $ 4,068,804 $ 213,400 7.01 %

Tax-exempt loans (1)(2)

3,766 172 6.11 2,457 103 5.60

5,624,681 289,138 6.87 4,071,261 213,503 7.00

Interest-earning deposits and fed funds sold 74,409 2,625 4.72 104,168 2,738 3.51

Taxable AFS securities and other securities (3)

1,044,260 30,057 3.85 991,723 30,096 4.05

Tax-exempt AFS securities (3)(4)

515,385 15,277 3.96 375,762 8,928 3.17

Total securities 1,559,645 45,334 3.89 1,367,485 39,024 3.81

Total interest-earning assets 7,258,735 337,097 6.21 5,542,914 255,265 6.15

Non-interest-earning assets 582,280 430,892

Total assets $ 7,841,015 $ 5,973,806

Liabilities and shareholders’ equity:

Non-interest-bearing demand $ 1,354,074 $ 1,137,182

Interest-bearing demand 2,244,872 36,657 2.18 % 1,410,111 29,770 2.82 %

Money market & savings

1,647,448 24,857 2.02 1,377,642 16,336 1.58

Brokered CDs & time deposits

1,187,100 31,054 3.50 1,072,861 36,639 4.56

Total interest-bearing deposits 5,079,420 92,568 2.44 3,860,614 82,745 2.86

Total deposits 6,433,494 92,568 1.92 4,997,796 82,745 2.21

Short-term borrowings and other

416,265 12,088 3.88 329,363 10,890 4.42

Subordinated debt borrowings

113,708 8,207 9.65 60,912 4,658 10.21

Total interest-bearing liabilities 5,609,393 112,863 2.69 4,250,889 98,293 3.09

Non-interest-bearing liabilities 106,864 56,361

Equity 770,684 529,374

Total liabilities and equity $ 7,841,015 $ 5,973,806

Taxable-equivalent net interest income /net interest spread (5)

224,234 3.52 % 156,972 3.06 %

Taxable-equivalent net interest margin (6)

4.13 % 3.78 %

Taxable-equivalent net adjustment (3,244) (1,897)

Net interest income $ 220,990 $ 155,075

Net interest-earning assets $ 1,649,342 $ 1,292,025

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

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

(3) Calculated based on fair value of investment securities.

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

(5) 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.

(6) The net interest margin represents FTE 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 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 provides 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, 2025 September 30, 2024

GAAP Financial Measurements

Interest income - Loans $ 288,966 $ 213,400

Interest income - Tax-exempt loans 136 81

Interest income - Taxable AFS securities and other securities 27,852 29,949

Interest income - Tax-exempt AFS securities 12,069 7,052

Interest income - Other interest income 4,830 2,886

Total Interest Income 333,853 253,368

Interest expense - Deposits 92,568 82,745

Interest expense - Borrowed funds 12,009 10,806

Interest expense - Subordinated debt 8,207 4,658

Interest expense - Other 79 84

Total interest expense 112,863 98,293

Total net interest income $ 220,990 $ 155,075

Non-GAAP Financial Measurements

Tax benefit on tax-exempt interest income $ 3,244 $ 1,897

Total tax benefit on tax-exempt interest income (1) 3,244 1,897

Tax-equivalent net interest income $ 224,234 $ 156,972

(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, 2025, and September 30, 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.

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, 2025, compared to September 30, 2024

Dollar Increase (Decrease) Due to Change in:

Average Volume Average Yield / Rate

Income from the interest-earning assets:

Loans, (1) gross

$ 113,179 $ (37,544) $ 75,635

AFS securities and other securities (1)

6,613 (303) 6,310

Interest-bearing deposits and fed funds sold 218 (331) (113)

Total interest income on interest-earning assets 120,010 (38,178) 81,832

Expense from the interest-bearing liabilities:

Interest-bearing demand deposits 19,693 (12,806) 6,887

Money market & savings

6,724 1,797 8,521

Brokered CDs & time deposits

5,803 (11,388) (5,585)

Total interest expense on interest-bearing deposits 32,220 (22,397) 9,823

Borrowings 7,749 (3,002) 4,747

Total interest expense on interest-bearing liabilities 39,969 (25,399) 14,570

Taxable-equivalent net interest income

$ 80,041 $ (12,779) $ 67,262

(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 $333.9 million for the nine months ended September 30, 2025, compared to $253.4 million for the nine months ended September 30, 2024, an increase of 31.8%.

The increase in interest income was due to results that reflect a full nine months of combined income after the Merger as well as higher rates on interest-earning assets and a full nine months of accretion income, as a result of the Merger.

Interest income on loans increased by $75.6 million and interest income on securities increased $2.9 million, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Accretion income associated with acquired loans totaled $31.2 million for the nine months ended September 30, 2025, compared to $28.8 million for the nine months ended September 30, 2024.

Interest Expense

Total interest expense was $112.9 million for the nine months ended September 30, 2025, compared to $98.3 million for the nine months ended September 30, 2024.

The increase in interest expense was due to results that reflect a full nine months of combined operations after the Merger, partially offset by a decrease in amortization expense associated with fair value marks for liabilities acquired in the Merger, and lower rates on interest-bearing liabilities.

Interest expense on interest-bearing deposits increased by $9.8 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Interest on subordinated debt acquired in the Merger was $8.2 million for the nine months ended September 30, 2025, compared to $4.7 million for the nine months ended September 30, 2024.

Interest expense on short-term borrowings amounted to $12.0 million for the nine months ended September 30, 2025, compared to $10.8 million for the nine months ended September 30, 2024.

Provision for Credit Losses

The provision for credit losses was $1.4 million for the nine months ended September 30, 2025, compared to a provision of $23.4 million for the nine months ended September 30, 2024.

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 compared to the nine months ended September 30, 2025.

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)

2025 2024 Amount Percent

Fiduciary and wealth management $ 7,532 $ 5,982 $ 1,550 25.9 %

Service charges and fees 6,195 4,977 1,218 24.5

Net gains (losses) on securities 251 613 (362) (59.1)

Income from company-owned life insurance 5,327 2,799 2,528 90.3

Bank debit and other card revenue 9,100 6,708 2,392 35.7

Other non-interest income 6,080 3,296 2,784 84.5

Total $ 34,485 $ 24,375 $ 10,110 41.5 %

Non-interest income increased 41.5% for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

The largest percentage increase included a $2.5 million increase in income from company-owned life insurance for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

This increase was driven by an increase in the collection of death proceeds from company-owned life insurance for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

The third largest percentage increase included a $2.4 million increase in bank debit and other card revenue for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

This increase was primarily driven by results that reflect a full nine months of combined income after the Merger and increased customer card activity and increased card network partnership income for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

All other categories of non-interest income except net gains on securities also increased, primarily due to results that reflect a full nine months of combined income after the Merger for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

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)

2025 2024 Amount Percent

Salaries and wages $ 63,109 $ 51,271 $ 11,838 23.1 %

Pensions and other employee benefits 13,632 12,346 1,286 10.4

Occupancy 11,045 7,947 3,098 39.0

Equipment rentals, depreciation and maintenance 12,092 18,643 (6,551) (35.1)

Core deposit intangible amortization 11,869 7,162 4,707 65.7

ATM, card, and network expense 3,646 3,299 347 10.5

FDIC and other regulatory assessments 2,978 2,500 478 19.1

Other operating 28,690 33,255 (4,565) (13.7)

Total $ 147,061 $ 136,423 $ 10,638 7.8 %

Non-interest expense increased $10.6 million, or 7.8%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

The increase was primarily due to results that reflect a full nine months of combined operations after the Merger but reflect some continued operating efficiency gains as a result of the merger, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

In total, all categories of non-interest expense increased except equipment rentals, depreciation and maintenance and other operating expense.

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 $20.0 million for the nine months ended September 30, 2025, an increase of $16.2 million from income tax expense for the nine months ended September 30, 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 nine months ended September 30, 2025, when compared to the nine months ended September 30, 2024.

For the nine months ended September 30, 2025, the effective tax rate was 18.7%, while the effective tax rate was 19.0% for September 30, 2024.

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

Net income applicable to common shares for the three months ended September 30, 2025, was $29.7 million, compared to net income applicable to common shares of $27.4 million during the three months ended September 30, 2024.

The $2.3 million increase was due to a decrease in interest expense, partially offset by a decrease in interest income, an increase in non-interest income, and a decrease in non-interest expense for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Net interest income increased by $591.0 thousand to $73.8 million for the three months ended September 30, 2025, compared to $73.2 million for the three months ended September 30, 2024.

The main driver for this increase was results that reflect lower rates on interest-bearing liabilities which was partially offset by a decline in interest income, primarily related to lower accretion income, when compared to the three months ended September 30, 2024.

For the three months ended September 30, 2025, the Company recorded credit provision expense of $262.0 thousand compared to a provision of $147.0 thousand for the three months ended September 30, 2024.

For the three months ended September 30, 2025, credit loss expense on loans and AFS securities was $574.0 thousand compared to $85.0 thousand for the three months ended September 30, 2024.

For the three months ended September 30, 2025, the increase in credit loss expense on loans and AFS securities was offset by a credit loss recapture of $312.0 thousand on off-balance sheet credit exposures.

For the three months ended September 30, 2024, there was a credit loss expense of $62.0 thousand on off-balance sheet credit exposures.

Non-interest income increased by $1.0 million, or 9.1%, to $11.6 million for the three months ended September 30, 2025, as compared to $10.6 million for the three months ended September 30, 2024.

Increases in fiduciary and wealth management, net gains on securities, bank debit and other card revenue, and other non-interest income exceeded declines in service charges and fees income and income from company-owned life insurance for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Non-interest expense decreased by $2.7 million, or 5.4%, to $48.1 million for the three months ended September 30, 2025, as compared to $50.8 million for the three months ended September 30, 2024.

The decrease was primarily due to continued operating efficiency gains, post-merger, that were realized after the merger and during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

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

Net income applicable to common shares for the three months ended March 31, 2026, was $27.1 million, compared to net income applicable to common shares of $27.0 million during the three months ended March 31, 2025.

The $0.1 million increase was due to a decrease in interest expense, and an increase in non-interest income, partially offset by a decrease in interest income, and an increase in non-interest expense for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Net interest income decreased by $1.1 million to $71.8 million for the three months ended March 31, 2026, compared to $73.0 million for the three months ended March 31, 2025.

The main driver for this decrease was results that reflect lower interest income, primarily related to lower accretion income, which was partially offset by lower interest expense when compared to the three months ended March 31, 2025.

For the three months ended March 31, 2026, the Company recorded credit provision expense of $12.0 thousand compared to a provision of $501.0 thousand for the three months ended March 31, 2025.

For the three months ended March 31, 2026, credit loss expense on loans and AFS securities was $213.0 thousand compared to $900.0 thousand for the three months ended March 31, 2025.

For the three months ended March 31, 2026, credit loss expense on loans and AFS securities was offset by a credit expense recapture of $201.0 thousand on off-balance sheet credit exposures.

For the three months ended March 31, 2025, credit loss expense on loans and AFS securities was offset by a credit expense recapture of $398.8 thousand on off-balance sheet credit exposures.

Non-interest income increased by $2.8 million, or 28.2%, to $12.9 million for the three months ended March 31, 2026, as compared to $10.0 million for the three months ended March 31, 2025.

Increases in fiduciary and wealth management, net gains on securities, income from company-owned life insurance, and other non-interest income exceeded declines in service charges and fees income and bank debit and other card revenue for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Non-interest expense increased by $1.7 million, or 3.5%, to $51.4 million for the three months ended March 31, 2026, as compared to $49.7 million for the three months ended March 31, 2025.

The increase was primarily due to increases in salaries and wages, pensions and other employee benefits, equipment rentals, depreciation and maintenance, FDIC and other regulatory assessments and other operating expense for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increases were partially offset by a decrease in core deposit intangible amortization for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

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 $73.8 million for the three months ended September 30, 2025, compared to $73.2 million for the three months ended September 30, 2024.

The increase in net interest income was primarily driven by results that reflect lower rates on interest-bearing liabilities which was partially offset by a decline in interest income, primarily related to lower accretion income, when compared to the three months ended September 30, 2024.

Accretion income associated with acquired loans totaled $8.2 million for the three months ended September 30, 2025, compared to $15.5 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 $1.4 million for the three months ended September 30, 2025, compared to $3.8 million for the three months ended September 30, 2024.

The tax-adjusted net interest margin was 4.08% for the three months ended September 30, 2025, compared to 4.07% for the three months ended September 30, 2024.

The increase in tax-adjusted net interest margin was primarily driven by results that reflect lower rates on interest-bearing liabilities, partially offset by a decline in interest income, primarily related to lower accretion income, when compared to the three months ended September 30, 2024.

The yield for the taxable loan portfolio was 6.76% for the three months ended September 30, 2025, compared to 7.34% for the three months ended September 30, 2024.

The decrease was primarily the result of lower accretion income for three months ended September 30, 2025 compared to the three months ended September 30, 2024.

The tax-adjusted yield on the total investment securities portfolio was 3.97% for the three months ended September 30, 2025, compared to 3.91% for the three months ended September 30, 2024.

The increase was primarily the result of an increase in balance of higher-yielding securities for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The yield on interest-bearing deposits decreased to 2.37% during the three months ended September 30, 2025, from 3.02% during the three months ended September 30, 2024.

Net interest income totaled $71.8 million for the three months ended March 31, 2026, compared to $73.0 million for the three months ended March 31, 2025.

The decrease in net interest income was primarily driven by results that reflect lower interest income, primarily related to lower accretion income, partially offset by lower interest expense related to lower deposit rates when compared to the three months ended March 31, 2025.

Accretion income associated with acquired loans totaled $6.8 million for the three months ended March 31, 2026, compared to $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 $1.4 million for the three months ended March 31, 2026, compared to $2.2 million for the three months ended March 31, 2025.

The tax-adjusted net interest margin was 4.09% for the three months ended March 31, 2026, compared to 4.18% for the three months ended March 31, 2025.

The decrease in tax-adjusted net interest margin was primarily driven by results that reflect lower interest income, primarily related to lower accretion income, partially offset by lower interest expense related to lower deposit rates, when compared to the three months ended March 31, 2025.

The yield for the taxable loan portfolio was 6.64% for the three months ended March 31, 2026, compared to 6.96% for the three months ended March 31, 2025.

The decrease was primarily the result of lower accretion income for three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The tax-adjusted yield on the total investment securities portfolio was 4.05% for the three months ended March 31, 2026, compared to 3.85% for the three months ended March 31, 2025.

The increase was primarily the result of an increase in balance of higher-yielding securities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The yield on interest-bearing deposits decreased to 2.16% during the three months ended March 31, 2026, from 2.53% during the three months ended March 31, 2025.

The decrease was primarily due to lower market interest rates on deposit products reflecting decreases in the Federal Funds Rate and other market rates.

The yield on our short-term borrowings for the three months ended September 30, 2025, was 3.85%, compared to 4.06% for the three months ended September 30, 2024.

The yield on our short-term borrowings for the three months ended March 31, 2026, was 3.78%, compared to 3.88% for the three months ended March 31, 2025.

The decrease was due to decreases in the Federal Funds Rate and other short-term market rates and the addition of derivative swaps that decreased our cost of borrowing.

The yield on our subordinated debt assumed in the Merger was 9.49% for the three months ended September 30, 2025, compared to 10.16% for the three months ended September 30, 2024.

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, 2025, and September 30, 2024, for comparison (dollars in thousands).

For the Three Months Ended September 30,

The yield on our subordinated debt assumed in the Summit Merger was 10.46% for the three months ended March 31, 2026, compared to 9.85% for the three months ended March 31, 2025.

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, 2026, and March 31, 2025, for comparison (dollars in thousands).

For the Three Months Ended March 31,

Average Outstanding Balance Interest Income/Expense Average Yield / Rate

42 unchanged sentences

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

(5) 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.

(6) The net interest margin represents FTE net interest income as a percent of average interest-earning assets for the period.

8 unchanged sentences

Three Months Ended

September 30, 2025 September 30, 2024

March 31, 2026 March 31, 2025

GAAP Financial Measurements

18 unchanged sentences

Interest income and interest expense for the three months ended September 30, 2025, and September 30, 2024, are annualized using actual days over calendar year method.

Interest income and interest expense for the three months ended March 31, 2026, and March 31, 2025, are annualized using actual days over calendar year method.

1 unchanged sentence

See table below (in thousands).

Three Months Ended September 30, 2025, compared to September 30, 2024

Three Months Ended March 31, 2026, compared to March 31, 2025

Dollar Increase (Decrease) Due to Change in:

14 unchanged sentences

Total interest expense on interest-bearing deposits (1,404) (3,727) (5,131)

Borrowings 1,572 (325) 1,247

Short-term borrowings 1,534 (129) 1,405

Subordinated debt and other (593) 133 (460)

Total borrowings 941 4 945

Total interest expense on interest-bearing liabilities (463) (3,723) (4,186)

3 unchanged sentences

Interest Income

Total interest income was $111.2 million for the three months ended September 30, 2025, compared to $118.5 million for the three months ended September 30, 2024, a decrease of 6.2%.

The decrease in interest income was primarily due to lower accretion income when compared to the three months ended September 30, 2024.

Interest income on loans decreased by $8.6 million and interest income on securities increased $714.0 thousand, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Accretion income associated with acquired loans totaled $8.2 million for the three months ended September 30, 2025, compared to $15.5 million for the three months ended September 30, 2024.

Total interest income was $105.5 million for the three months ended March 31, 2026, compared to $110.8 million for the three months ended March 31, 2025, a decrease of 4.8%.

The decrease in interest income was primarily due to lower accretion income when compared to the three months ended March 31, 2025.

Interest income on loans decreased by $9.0 million and interest income on securities increased $3.1 million, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Accretion income associated with acquired loans totaled $6.8 million for the three months ended March 31, 2026, compared to $11.4 million for the three months ended March 31, 2025.

Interest Expense

Total interest expense was $37.4 million for the three months ended September 30, 2025, compared to $45.3 million for the three months ended September 30, 2024.

The decrease in interest expense was due to results that reflect lower rates on interest-bearing liabilities, and lower amortization expense associated with fair value marks for liabilities acquired in the Merger.

Interest expense on interest-bearing deposits decreased by $9.2 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to lower market rates.

Interest on subordinated debt acquired in the Merger was $2.7 million for the three months ended September 30, 2025, compared to $2.8 million for the three months ended September 30, 2024.

Interest expense on short-term borrowings amounted to $4.4 million for the three months ended September 30, 2025, compared to $3.1 million for the three months ended September 30, 2024, due to higher average balances.

Total interest expense was $33.6 million for the three months ended March 31, 2026, compared to $37.8 million for the three months ended March 31, 2025.

Interest expense on interest-bearing deposits decreased by $5.1 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, due to lower market rates.

Interest on subordinated debt acquired in the Summit Merger was $2.3 million for the three months ended March 31, 2026, compared to $2.7 million for the three months ended March 31, 2025.

Interest expense on short-term borrowings amounted to $4.6 million for the three months ended March 31, 2026, compared to $3.2 million for the three months ended March 31, 2025, due to higher average balances.

Provision for (Recapture of) Credit Losses

The provision for credit losses was $262.0 thousand for the three months ended September 30, 2025, compared to a provision of $147.0 thousand for the three months ended September 30, 2024.

For the three months ended September 30, 2025, credit loss expense on loans and AFS securities was $574.0 thousand compared to $85.0 thousand for the three months ended September 30, 2024.

For the three months ended September 30, 2024, there was a credit loss expense of $62.0 thousand on off-balance sheet credit exposures.

The provision for credit losses was $12.0 thousand for the three months ended March 31, 2026, compared to a provision of $501.0 thousand for the three months ended March 31, 2025.

For the three months ended March 31, 2026, credit loss expense on loans and AFS securities was $213.0 thousand compared to $900.0 thousand for the three months ended March 31, 2025.

For the three months ended March 31, 2026, credit loss expense on loans and AFS securities was offset by a credit expense recapture of $201.0 thousand on off-balance sheet credit exposures.

For the three months ended March 31, 2025, credit loss expense on loans and AFS securities was offset by a credit expense recapture of $398.8 thousand on off-balance sheet credit exposures.

Non-interest Income

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 1,855 2,178 (323) (14.8)

Net gains (losses) on securities 212 — 212 N/A

Net gains (losses) on securities 1,799 1 1,798 NM

Income from company-owned life insurance 1,479 1,193 286 24.0

2 unchanged sentences

Total $ 12,853 $ 10,023 $ 2,830 28.2 %

Non-interest income increased 9.1% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The largest dollar and percentage increase was a $989.0 thousand increase in other non-interest income for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

This increase was driven by an increase in the utilization of services and fees in other non-interest income categories for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The fiduciary and wealth management increase was driven by increased wealth and fiduciary services performance, while the increase in net gains from securities was driven by security sales.

Non-interest income increased 28.2% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The largest dollar increase was a $1.8 million increase in net gains on securities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

This increase was driven by an increase in sales in our AFS securities portfolio for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Increases in fiduciary and wealth management, income from company-owned life insurance, and other non-interest income exceeded declines in service charges and fees income and bank debit and other card revenue for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The fiduciary and wealth management increase was driven by increased wealth and fiduciary services performance.

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)

9 unchanged sentences

Total $ 51,381 $ 49,664 $ 1,717 3.5 %

Non-interest expense decreased $2.7 million, or 5.4%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The decrease was primarily driven by continued operating efficiency gains, post-merger, that were realized after the merger and during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The largest dollar decrease for the three months ended September 30, 2025, compared to the three months ended September 30, 2024 was $791.0 thousand for equipment rentals, depreciation and maintenance, mostly driven by continued operating efficiencies, while core deposit intangible amortization declined due to its accelerated amortization method.

ATM, card and network expense, pensions and other employee benefits, and other non-interest expense also declined due to continued operating efficiencies for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Non-interest expense increased $1.7 million, or 3.5%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase was primarily driven by increases in salaries and wages, pensions and other employee benefits, equipment rentals, depreciation and maintenance, FDIC and other regulatory assessments, and other operating expenses for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The largest dollar increase for the three months ended March 31, 2026, compared to the three months ended March 31, 2025 was a $1.3 million increase in other operating expenses, mostly driven by an increase in merger related expenses.

The largest dollar decrease was a $614.0 thousand decrease in core deposit intangible amortization which declined due to its accelerated amortization method.

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 $7.0 million for the three months ended September 30, 2025, an increase of $1.8 million from the tax expense of $5.2 million for the three months ended September 30, 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 September 30, 2025, when compared to the three months ended September 30, 2024.

For the three months ended September 30, 2025, the effective tax rate was 19.0%, while the effective tax rate was 15.8% for September 30, 2024.

Analysis of Financial Condition for the Period Ended September 30, 2025, and December 31, 2024

Assets increased by $76.9 million to $7.9 billion as of September 30, 2025, compared to $7.8 billion as of December 31, 2024.

Loans, net of ACL, decreased by $112.3 million from $5.6 billion as of December 31, 2024, to $5.5 billion as of September 30, 2025.

Deposits decreased by $103.2 million and amounted to $6.4 billion at September 30, 2025, compared to $6.5 billion at December 31, 2024.

Short-term borrowings increased by $85.0 million to $450.0 million as of September 30, 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 $86.1 million at September 30, 2025, compared to $111.9 million at December 31, 2024.

During the quarter ended September 30, 2025, $30.0 million of subordinated debt was redeemed by the Company.

Income tax expense was $6.0 million for the three months ended March 31, 2026, an increase of $310.0 thousand from the tax expense of $5.6 million for the three months ended March 31, 2025.

The increase was mostly due to additional state taxes incurred in the combined market area after the Summit Merger, for the three months ended March 31, 2026, when

compared to the three months ended March 31, 2025.

For the three months ended March 31, 2026, the effective tax rate was 17.9%, while the effective tax rate was 17.2% for March 31, 2025.

Analysis of Financial Condition for the Period Ended March 31, 2026, and December 31, 2025

Assets increased by $7.1 million to $7.9 billion as of March 31, 2026, compared to $7.9 billion as of December 31, 2025.

Loans, net of ACL, was essentially flat at $5.3 billion as of March 31, 2026, increasing by $16.9 million from December 31, 2025.

Deposits decreased by $71.7 million and amounted to $6.3 billion at March 31, 2026, compared to $6.4 billion at December 31, 2025.

Short-term borrowings increased by $75.0 million to $525.0 million as of March 31, 2026, compared to $450.0 million at December 31, 2025.

Subordinated debt and subordinated debt owed to unconsolidated subsidiary trusts, which were assumed in the Summit Merger, totaled $88.8 million at March 31, 2026, compared to $87.5 million at December 31, 2025.

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, 2025, the unrealized losses on our holdings decreased $33.6 million from December 31, 2024.

During the three months ended March 31, 2026, the unrealized losses on our holdings increased $14.6 million from December 31, 2025.

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, 2025, or at December 31, 2024.

Therefore, the Company has concluded that the unrealized losses for the AFS securities do not require an ACL at March 31, 2026, or at December 31, 2025.

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, 2025, and December 31, 2024 (in thousands):

September 30, 2025

The following tables reflect the amortized cost and fair market values for the total portfolio for each category of investment for March 31, 2026, and December 31, 2025 (in thousands):

March 31, 2026

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

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$ 1,687,817 $ 8,819 $ 80,682 $ 1,615,954

The investment maturity table below summarizes contractual maturities for our investment securities at September 30, 2025.

The investment maturity table below summarizes contractual maturities for our investment securities at March 31, 2026.

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 4.6 years at September 30, 2025.

The overall weighted average duration of the Company’s investment portfolio is 4.6 years at March 31, 2026.

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, 2025

March 31, 2026

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

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

September 30, 2025

March 31, 2026

December 31, 2025

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Consumer non-real estate and other

Loans, gross 5,559,479 5,672,236

5,404,667 5,387,676

Allowance for credit losses

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

The loan portfolio, excluding ACL, at September 30, 2025, decreased by $112.8 million from December 31, 2024, 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 September 30, 2025.

(67,955) (67,823)

The loan portfolio, excluding ACL, at March 31, 2026, increased by $17.0 million from December 31, 2025, primarily due to growth in the commercial real estate and commercial & industrial loan segments.

The following table shows the maturity distribution for total loans outstanding as of March 31, 2026.

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, 2025

March 31, 2026

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

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The Company’s asset quality metrics remain within the Company’s risk profile with adequate reserve coverage.

The Company’s nonaccrual loan balances increased by $49.6 million from December 31, 2024, while the Company’s loans 90 days past due and still accruing increased $1.0 million from December 31, 2024.

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, 2025, totaled $91.8 million, an increase of $50.6 million from $41.2 million at December 31, 2024.

The following table summarizes the Company’s non-performing assets as of September 30, 2025, and December 31, 2024 (in thousands):

September 30, 2025 December 31, 2024

The Company’s nonaccrual loan balances increased by $3.7 million from December 31, 2025, while the Company’s loans 90 days past due and still accruing increased $577.0 thousand from December 31, 2025.

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 March 31, 2026, totaled $81.7 million, an increase of $4.7 million from $76.9 million at December 31, 2025.

The following table summarizes the Company’s non-performing assets as of March 31, 2026, and December 31, 2025 (in thousands):

March 31, 2026 December 31, 2025

Non-accrual loans $ 74,359 $ 70,613

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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 $574.0 thousand and a provision of $85.0 thousand on loans for the three months ended September 30, 2025, and September 30, 2024, respectively, and a provision of $2.2 million and a provision of $19.5 million on loans for the nine months ended September 30, 2025, and September 30, 2024, respectively.

For the nine months ended September 30, 2024, the Company recorded a $23.9 million provision directly to the allowance for credit losses to establish an allowance for acquired PCD loans.

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 $519.0 thousand and $305.0 thousand for the three months ended September 30, 2025, and September 30, 2024, respectively and $3.5 million and $947.0 thousand for the nine months ended September 30, 2025, and September 30, 2024, respectively.

Gross recoveries totaled $293.0 thousand and $20.0 thousand for the three months ended September 30, 2025, and September 30, 2024, respectively and $856.0 thousand and $38.0 thousand for the nine months ended September 30, 2025, and September 30, 2024, respectively.

The ACL as a percentage of gross loans, net of unearned income, was 1.22% and 1.22% as of September 30, 2025, and September 30, 2024, 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, 2025, and 2024 (dollars in thousands):

Three months ended Nine months ended

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

The Company recorded a provision expense of $213.0 thousand and a provision of $900.0 thousand on loans for the three months ended March 31, 2026, and March 31, 2025, respectively.

Gross charged-off loans were $490.0 thousand and $1.4 million for the three months ended March 31, 2026, and March 31, 2025, respectively.

Gross recoveries totaled $409.0 thousand and $237.0 thousand for the three months ended March 31, 2026, and March 31, 2025, respectively.

The ACL as a percentage of gross loans, net of unearned income, was 1.26% and 1.20% as of March 31, 2026, and March 31, 2025, respectively.

The following table summarizes the changes in the Company’s credit loss experience by portfolio for the three months ended March 31, 2026, and 2025 (dollars in thousands):

Three months ended

March 31, 2026

March 31, 2025

Loans outstanding at end of period $ 5,404,667 $ 5,647,507

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

0.00 0.01 0.05 0.02

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

75.92 189.05 75.92 189.05

(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.

1 unchanged sentence

(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 September 30, 2025, and December 31, 2024 (dollars in thousands).

September 30, 2025

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, 2026, and December 31, 2025 (dollars in thousands).

March 31, 2026

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

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

As of September 30, 2025, the Company has available unused borrowing capacity of $4.2 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, 2026, the Company has available unused borrowing capacity of $4.7 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, 2025, and December 31, 2024, respectively (dollars in thousands):

Balance at end of period September 30, 2025 December 31, 2024

The following table shows certain information regarding short-term borrowings as of the three months ended March 31, 2026, and December 31, 2025, respectively (dollars in thousands):

Balance at end of period March 31, 2026 December 31, 2025

Short-term borrowings $ 525,000 $ 450,000

Weighted average interest yield at end of period 3.85% 3.35%

The following table shows certain information regarding long-term debt as of the three months ended September 30, 2025, and December 31, 2024, respectively (dollars in thousands):

Balance at end of period September 30, 2025 December 31, 2024

Weighted average interest yield

The following table shows certain information regarding long-term debt as of the three months ended March 31, 2026, and December 31, 2025, respectively (dollars in thousands):

Balance at end of period March 31, 2026 December 31, 2025

Subordinated debentures, net $ 71,510 $ 70,222

1 unchanged sentence

Total long-term debt $ 88,841 $ 87,490

Weighted average interest yield at end of period 9.49% 10.08%

Total deposits decreased by $103.2 million from December 31, 2024, to September 30, 2025, primarily due to a decrease in brokered deposits of $120.4 million.

The Company’s brokered time deposits amounted to $124.4 million as of September 30, 2025, and $244.8 million at December 31, 2024.

Weighted average interest yield 10.46% 9.85%

Total deposits decreased by $71.7 million from December 31, 2025, to March 31, 2026, primarily due to a decrease in brokered deposits of $61.0 million.

The Company’s brokered time deposits amounted to $3.4 million as of March 31, 2026, and $64.4 million at December 31, 2025.

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 $17.2 million from December 31, 2024 to September 30, 2025.

Excluding the brokered deposit balance, the total deposit balance decreased by $10.7 million from December 31, 2025 to March 31, 2026.

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

September 30, 2025

March 31, 2026

December 31, 2025

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 $1.9 billion at September 30, 2025, and December 31, 2024, respectively.

The Company does not have material deposit concentration risk to any significant market, industry or individual at September 30, 2025 or December 31, 2024.

The following table sets forth maturity ranges of time deposits as of September 30, 2025, that meet or exceed the FDIC insurance limit (in thousands).

September 30, 2025

The Company has deposits that meet or exceed the FDIC insurance limit of $250,000 in the amounts of $2.1 billion and $2.1 billion at March 31, 2026, and December 31, 2025, respectively.

The Company does not have material deposit concentration risk to any significant market, industry or individual at March 31, 2026 or December 31, 2025.

The following table sets forth maturity ranges of time deposits as of March 31, 2026, that meet or exceed the FDIC insurance limit (in thousands).

March 31, 2026

Due within 3 months or less $ 120,826

4 unchanged sentences

Shareholders’ Equity

Total shareholders’ equity at September 30, 2025, was $822.2 million, compared to $730.2 million at December 31, 2024.

Shareholders’ equity increased by $92.1 million mostly due to an increase in earnings and a decrease in other comprehensive loss since December 31, 2024.

Accumulated other comprehensive loss decreased by $27.3 million from December 31, 2024, to September 30, 2025, from $(95.7) million to $(68.5) million due to a decrease in unrealized losses in our securities portfolio.

Total shareholders’ equity at March 31, 2026, was $864.5 million, compared to $854.6 million at December 31, 2025.

Shareholders’ equity increased by $9.9 million mostly due to an increase in earnings since December 31, 2025.

Accumulated other comprehensive loss increased by $10.0 million from December 31, 2025, to March 31, 2026, from $(59.0) million to $(69.0) million due to an increase in unrealized losses in our securities portfolio.

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