What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-28 · 268 added, 212 removed, 669 unchanged (42% of the section changed)

6 unchanged sentences

Executive Summary

Our Company offers a broad range of business and personal banking services including wealth management.

Lending services include commercial and industrial, commercial real estate, real estate construction and development, residential real estate, specialty, and other loans.

The Company offers a broad range of business and personal banking services including wealth management.

Lending services include C&I, CRE, real estate construction and development, residential real estate, specialty, and consumer loans.

A wide variety of deposit products and a complete suite of treasury management and international trade services complement our lending capabilities.

1 unchanged sentence

The Company’s financial condition, operating results and liquidity in 2025 continued to be impacted by monetary policy actions.

The Federal Reserve decreased the target federal funds rate 100 basis points in the fourth quarter 2024, following a 100 basis point increase in 2023.

The Federal Reserve has begun to loosen its monetary policy, but has indicated it will continue to reduce its balance sheet namely through a reduction in bond holdings.

These actions represent the Federal Reserve’s response to an environment of high inflation and elevated interest rates following a period of highly expansionary fiscal support from the federal government during the COVID-19 pandemic in 2020-2021.

The Federal Reserve decreased the target federal funds rate 75 basis points in 2025, following a 100 basis point decrease in 2024.

This follows the period of 2022 to 2023 when the Federal Reserve increased the target federal funds rate 525 basis points.

Financial Performance Highlights

5 unchanged sentences

Net interest income 626,738 568,096 562,592

Provision (benefit) for credit losses 21,508 36,605 (611)

Net interest income after provision (benefit) for credit losses 546,588 525,987 474,514

Provision for credit losses

26,337 21,508 36,605

Net interest income after provision for credit losses

600,401 546,588 525,987

Total noninterest income 113,123 69,703 68,725

4 unchanged sentences

Preferred dividends 3,750 3,750 3,750

Net income available to common shareholders $ 181,516 $ 190,309 $ 199,002

Basic earnings per share $ 4.86 $ 5.09 $ 5.32

Diluted earnings per share $ 4.83 $ 5.07 $ 5.31

Net income available to common stockholders $ 197,624 $ 181,516 $ 190,309

Basic earnings per common share $ 5.34 $ 4.86 $ 5.09

Diluted earnings per common share $ 5.31 $ 4.83 $ 5.07

Return on average assets 1.24 % 1.25 % 1.41 %

8 unchanged sentences

13.17 % 13.71 % 16.35 %

Net interest margin (fully tax equivalent) 4.16 % 4.43 % 3.89 %

Net interest margin (tax-equivalent) 4.21 % 4.16 % 4.43 %

Efficiency ratio 58.09 % 60.37 % 55.15 %

13 unchanged sentences

Nonaccrual loans 81,180 42,667 43,181

Nonperforming assets 164,353 46,642 49,464

Classified assets 410,485 193,838 185,389

8 unchanged sentences

A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.”

2 Common dividends per share divided by diluted earnings per share.

2 Dividends per common share divided by diluted earnings per common share.

2025 Financial Highlights

During 2025, we noted the following significant developments:

• The Company had a return on average assets of 1.24%.

This drove a 11.0% increase in tangible book value per share in 2025.

• Dividends paid in 2025 of $1.22 per share increased $0.16 per share, or 15%, compared to $1.06 per share in 2024.

• The Company repurchased 258,739 shares of its common stock at a weighted-average share price of $54.60.

• The Bank acquired 12 branches from First Interstate Bank, including certain deposits and loans, and the owned real estate and fixed and other assets associated with the 12 branches.

The Company acquired $609 million in deposits, and certain, mostly commercially-oriented loans with outstanding balances of approximately $292 million as of December 31, 2025.

The transaction added 10 branches in Arizona and two branches in Kansas City, and expands the Company’s presence in those markets.

• A solar provider from which the Company had purchased $24.1 million of transferrable solar tax credits declared bankruptcy.

The bankrupt solar provider indirectly owned, through a complex structure of multiple entities, the solar projects generating the tax credits that the Company purchased.

As part of the bankruptcy, the bankrupt solar provider sold and transferred equity interests in certain of those entities.

As a result of this transfer, the $24.1 million of solar tax credits purchased by the Company were recaptured.

The Company previously purchased an insurance policy to insure against recapture risk and anticipates proceeds from the insurance policy to cover the $24.1 million of recaptured tax credits and approximately $8.0 million of incremental tax liability attributable to the anticipated insurance proceeds from the insured recaptured credits.

• The Company redeemed $63.3 million of subordinated debt that had a floating rate of three-month Term SOFR plus a spread of 5.66%.

The redemption was funded through the issuance of a $63.3 million senior note at a rate of one-month Term SOFR plus a spread of 2.50%.

The Company noted the following trends during 2025:

2 unchanged sentences

PPNR ROAA 1 for 2025 and 2024 was 1.70% and 1.72%, respectively.

The decrease in PPNR 1 and PPNR ROAA 1 was primarily due to increases in employee compensation and benefits, deposit costs, and expenses incurred in connection with the core system conversion, partially offset by an increase in operating revenue.

Offsetting the decrease in PPNR 1 and PPNR ROAA 1 was a $15.1 million decrease in the provision for credit losses in 2024 compared to 2023, due to an improvement in overall asset quality.

• NIM decreased to 4.16% in 2024, from 4.43% in 2023, primarily due to the impact of higher interest expense on the deposit portfolio from an increase in deposit rates and average balances.

The increase in PPNR 1 was primarily due to higher net interest income that benefited from an organic increase in average interest-earning asset balances and liquidity provided through the Branch Acquisition, and lower rates paid on interest-bearing liabilities.

These increases were partially offset by an increase in noninterest expense due to the Branch Acquisition, merit increases, higher headcount and higher deposit costs from growth in the deposit verticals.

• Net interest income was $626.7 million, an increase of $58.6 million over the prior year.

NIM increased to 4.21% in 2025, from 4.16% in 2024, primarily due to higher average loan and securities balances, higher yields on the securities portfolio, and lower short-term interest rates that decreased deposit interest expense.

Average loans and securities increased $472.6 million and $753.8 million, respectively, compared to 2024.

While the decline in market interest rates reduced the yield on loans 28 basis points, the yield on securities increased 51 basis points compared to 2024.

The total cost of deposits was 1.77% in 2025 compared to 2.12% in 2024.

Offsetting the decline in NIM was a $995.0 million increase in average interest earning assets, which resulted in total net interest income of $568.1 million, a $5.5 million increase over the prior year.

1 PPNR, PPNR ROAA, and the core efficiency ratio are non-GAAP measures.

A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.”

• Noninterest income was $113.1 million, an increase of $43.4 million from $69.7 million in 2024.

Noninterest expense was $385.0 million in 2024, an 11% increase from $348.2 million in 2023.

The increase in noninterest expense was primarily from higher customer deposit servicing costs due to higher average balances and an increase in earnings credit rates, an increase in compensation due to the recruitment of new relationship bankers and annual merit increases, and expenses related to the core system conversion.

Noninterest income in 2025 includes $32.1 million of anticipated insurance proceeds from a pending claim related to a recapture event during the third quarter 2025 with respect to a $24.1 million solar tax credit.

There is an offsetting amount of $32.1 million in income tax expense related to the solar tax credit recapture.

• Noninterest expense was $429.8 million in 2025, a 12% increase from $385.0 million in 2024.

The increase in noninterest expense was primarily from higher deposit costs due to an increase in average deposit vertical balances, an increase in compensation due an expanded associate base and the onboarding of the associates from the fourth quarter 2025 Branch Acquisition, along with other expenses related to the Branch Acquisition.

The increase was partially offset by a $4.9 million decline in core conversion expenses due to the completion of the core implementation in the fourth quarter 2024.

The core efficiency ratio 1 was 59.3% in 2025, compared to 58.4% in 2024.

• The Company’s effective tax rate was 19.9% in 2024 compared to 21.3% in 2023.

2024 Financial Highlights

During 2024, we announced the following significant transactions:

During 2024, noted the following significant developments:

• The Company had a return on average assets of 1.25%.

3 unchanged sentences

• In the fourth quarter 2024, the Company successfully completed the conversion of its legacy core system into a new core banking platform.

2023 Financial Highlights

During 2023, we announced the following significant transactions:

• Dividends paid in 2023 of $1.00 per share increased $0.10 per share, or 11%, compared to $0.90 per share in 2022.

• The process of converting to a leading core operating system was initiated.

1 PPNR, PPNR ROAA, and the core efficiency ratio are non-GAAP measures.

A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.”

RESULTS OF OPERATIONS

21 unchanged sentences

Total assets $ 16,199,003 $ 14,841,690 $ 13,805,236

Liabilities and Shareholders' Equity

Liabilities and Stockholders' Equity

Interest-bearing liabilities:

13 unchanged sentences

Total liabilities 14,259,509 13,057,515 12,182,115

Shareholders' equity 1,784,175 1,623,121 1,498,759

Total liabilities & shareholders' equity $ 14,841,690 $ 13,805,236 $ 13,319,624

Stockholders' equity 1,939,494 1,784,175 1,623,121

Total liabilities & stockholders’ equity $ 16,199,003 $ 14,841,690 $ 13,805,236

Net interest income $ 638,473 $ 576,541 $ 570,671

Net interest spread 3.21 % 3.00 % 3.45 %

Net interest margin (tax equivalent) 4.16 % 4.43 % 3.89 %

1 Average balances include non-accrual loans.

Interest income includes net loan fees of $9.6 million, $13.8 million, and $16.7 million for the years ended December 31, 2024, 2023, and 2022 respectively.

Loan fees in 2022 included Paycheck Protection Program fees of $4.1 million.

Net interest margin 4.21 % 4.16 % 4.43 %

1 Average balances include nonaccrual loans.

Interest income includes loan fees of $7.0 million, $9.6 million, and $13.8 million for the years ended December 31, 2025, 2024, and 2023 respectively.

2 Non-taxable income is presented on a fully tax-equivalent basis using a tax rate of approximately 25%.

14 unchanged sentences

Money market accounts 8,192 (22,557) (14,365) 14,928 19,747 34,675

Savings (165) 451 286 (66) 736 670

Savings accounts (68) (469) (537) (165) 451 286

Certificates of deposit 6,562 (7,170) (608) 6,674 9,294 15,968

10 unchanged sentences

Net interest income (on a tax-equivalent basis) was $638.5 million for 2025, compared to $576.5 million for 2024, an increase of $61.9 million.

The increase in net interest income in 2024 was primarily due to a higher average yield on interest earning assets and organic loan growth, which was partially offset by an increase in the average cost paid on interest bearing liabilities.

Total tax equivalent interest income increased $86.5 million in 2024 primarily due to a $67.0 million increase in loan interest income.

The increase was primarily due to an increase in average loan balances of $665.8 million during the year.

In addition, the loan yield increased 20 basis points from 6.67% in 2023 to 6.87% in 2024.

Tax equivalent interest income on securities (taxable and non-taxable) in 2024 increased $14.0 million from 2023, primarily due to increases of $7.3 million in interest income on average balances and $6.7 million in yield.

Average securities represented 18% of earnings assets in both 2024 and 2023.

Overall, average interest-earning assets increased $995.0 million, or 8%, to $13.9 billion for the year ended December 31, 2024, primarily due to success in growing the deposit portfolio.

The loan portfolio expanded and excess liquidity was deployed into the investment portfolio and other interest-earning assets.

Volume growth of the balance sheet drove an increase in interest income on earning assets of $58.3 million, while higher loan and securities yields drove interest income on interest-earning assets up by $28.2 million in 2024 compared to 2023.

Total interest expense increased $80.6 million in 2024 primarily due to increased deposit interest expense.

The increase in deposit interest expense reflects higher rates paid on deposits, as well as successful marketing efforts that

increased average deposits.

Remixing of the deposit portfolio from noninterest-bearing and lower cost accounts into higher cost accounts contributed to the increase in deposit interest expense in 2024.

The increase in net interest income in 2025 was primarily due to higher average interest-earning asset balances and a decrease in the average rates paid on interest-bearing liabilities.

Total tax-equivalent interest income of $900.1 million increased $40.6 million in 2025 primarily due to a $42.2 million increase in interest income from investment securities.

Higher interest income on investment securities was primarily due to a $753.8 million increase in average securities balances and a 51 basis point increase in yield on investment securities.

Average securities represented 22% and 18% of earnings assets for 2025 and 2024, respectively.

Average loan balances increased $472.6 million during the year primarily from organic loan growth and the Branch Acquisition, partially offset by a 28 basis point decrease in loan yield resulting in a $0.2 million decrease in loan interest income.

Overall, average interest-earning assets increased $1.3 billion, or 9%, to $15.1 billion for the year ended December 31, 2025.

Excess liquidity provided through the Branch Acquisition was deployed into the securities portfolio and other interest-earning assets.

Volume growth of the balance sheet drove an increase in interest income on earning assets of $62.8 million, partially offset by a decrease of $22.1 million in yield on interest-earning assets in 2025 compared to 2024.

Total interest expense decreased $21.3 million in 2025 primarily due to decreased rates paid on interest-bearing liabilities.

The decrease in deposit interest expense reflects lower rates paid on deposits, partially offset by successful marketing efforts and acquired deposits in connection with the Branch Acquisition that increased average deposit balances.

Total average interest-bearing deposits increased to $9.1 billion, an increase of $643.8 million, or 8%, in 2025 over the average for 2024.

Average noninterest-bearing deposits declined $88.8 million, or 2%, in 2024 compared to the average for 2023.

Average noninterest-bearing deposits increased $483.4 million, or 12%, in 2025 compared to the average for 2024.

Average noninterest-bearing deposits represented 33% of total average deposits in 2025, compared to 32% in 2024.

Overall, average interest-bearing liabilities increased $934.9 million, or 12%, for the year ended December 31, 2024.

The shift in volume from noninterest-bearing deposit accounts into higher cost deposit accounts increased interest expense in 2024 by $29.0 million, while the increase in the average cost of interest-bearing liabilities increased interest expense $51.6 million in 2024.

Overall, average interest-bearing liabilities increased $722.9 million, or 8%, for the year ended December 31, 2025 as compared to the prior year end.

The increase in the average balance of interest-bearing liabilities increased interest expense in 2025 by $23.4 million, which was partially offset by the decrease in the average cost of interest-bearing liabilities that decreased interest expense $44.7 million in 2025.

The tax-equivalent net interest margin was 4.21% for 2025, compared to 4.16% for 2024.

The primary driver of the decrease in net interest margin from 2023 to 2024 was higher interest expense on the deposit portfolio.

In 2023, the Federal Reserve increased interest rates three times for a total of 100 basis points.

In the fourth quarter 2024, the Federal Reserve lowered the federal funds target rate by 100 basis points.

The primary driver of the increase in net interest margin from 2024 to 2025 was lower interest expense on the deposit portfolio.

Since September 2024, the Federal Reserve has reduced the federal funds target rate 175 basis points.

As of December 31, 2025, variable-rate loans comprised approximately 60% of total loans.

The earning-asset yield increased 20 basis points to 6.20% in 2024, compared to 6.00% in 2023.

Comparatively, the cost of interest-bearing liabilities increased 65 basis points to 3.20%, from 2.55% in 2023.

The earning-asset yield decreased 26 basis points to 5.94% in 2025, compared to 6.20% in 2024.

Comparatively, the cost of interest-bearing liabilities decreased 47 basis points to 2.73%, from 3.20% in 2024.

Noninterest Income

3 unchanged sentences

2024 2024 vs.

Service charges on deposit accounts $ 18,344 $ 16,559 $ 18,326 $ 1,785 $ (1,767)

Deposit service charges $ 19,376 $ 18,344 $ 16,559 $ 1,032 $ 1,785

Wealth management revenue 10,456 10,452 10,030 4 422

1 unchanged sentence

Tax credit income 7,697 8,954 9,196 (1,257) (242)

Anticipated insurance recoveries 32,112 — — 32,112 —

Other income 33,487 21,987 22,912 11,500 (925)

1 unchanged sentence

Noninterest income increased $43.4 million, or 62%, in 2025 compared to 2024.

This increase was primarily due to a $1.8 million increase in service charges on deposit accounts, partially offset by a $0.9 million decrease in other income.

Other income decreased primarily due to lower private equity and community development income ($3.1 million) and gains on the sale of SBA loans ($0.6 million), offset by an increase in gains on sale of other real estate owned ($2.9 million).

The increase in noninterest income was primarily due to $32.1 million of anticipated insurance proceeds from a third quarter 2025 pending claim related to a recapture event with respect to a solar tax credit that the Company purchased and applied to prior taxable periods.

Excluding this item, noninterest income increased primarily due to an $11.5 million increase in other income.

Other income increased primarily due to higher BOLI income ($3.7 million), an increase in gains on the sale of SBA loans ($2.8 million), and an increase in net gain on OREO ($3.2 million).

Private equity and community development income are not consistent sources of income and fluctuate based on distributions and earnings from the underlying funds.

18 unchanged sentences

Noninterest expense increased $44.8 million, or 12%, in 2025 compared to 2024.

The increase was attributed primarily to an increase in compensation and benefits due to annual merit increases and the recruitment of new relationship bankers, a $16.4 million increase in deposit costs, and a $4.5 million increase in data processing primarily related to the core system conversion.

The total cost of the core conversion in noninterest expense was $4.9 million in 2024.

For certain deposit accounts in the Company’s deposit verticals, clients receive an earnings credit on average collected balances that may be used to offset expenses associated with the client’s activities for managing the accounts.

The increase was attributed primarily to an increase in compensation and benefits due to annual merit increases, an expanded associate base, the onboarding of the associates from the Branch Acquisition, and the recruitment of new relationship bankers.

The total cost of the Branch Acquisition in noninterest expense was $3.7 million in 2025.

The increase from 2024 was also primarily due to a $14.6 million increase in deposit costs due to an increase in average deposit vertical balances.

For certain deposit accounts in the Company’s deposit verticals, clients receive an earnings credit allowance on average collected balances that may be used to offset expenses associated with the client’s activities for managing the accounts.

These costs are reflected in noninterest expense as deposit costs.

The increase in deposit costs in 2024 is due to organic growth in the deposit verticals and an increase in market interest rates that increased the earnings credit rate and related expenses for those accounts.

Average balances in the deposit verticals were approximately $3.8 billion and $3.1 billion, resulting in an average deposit vertical cost of 2.75% and 2.82% for 2025 and 2024, respectively.

The Company’s blended federal and state tax rate was approximately 24.8% in 2024 and 2023.

The effective tax rate, which is adjusted for permanent differences, such as tax exempt income and tax credits, was 19.9% in 2024 compared to 21.3% in 2023.

The effective tax rate decrease was driven by tax credit opportunities the Company has deployed as part of its tax planning strategy.

As part of the normal, ongoing review of state tax apportionment, the Company's state statutory tax rate was increased in the fourth quarter.

Due to the increase, the Company’s blended federal and state tax rate was approximately 25.1% in 2025, compared to 24.8% in 2024.

Included in tax expense during 2025 was $24.1 million in recaptured tax credits as discussed above and approximately $8.0 million of incremental tax liability attributable to the anticipated insurance proceeds from the insured recaptured credits.

Excluding the impact of the recaptured tax credits and related insurance proceeds, the adjusted effective tax rate 2 for 2025, after adjusting for permanent tax differences such as tax exempt income and tax credits, is approximately 20.0% compared to 19.9% in 2024.

Note 15 – Income Taxes” for additional information.

2 A djusted effective tax rate is a non-GAAP measure.

A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.”

FINANCIAL CONDITION

9 unchanged sentences

Liabilities 15,261,498 13,772,429 12,802,522 10.81 % 7.58 %

Shareholders’ equity 1,824,002 1,716,068 1,522,263 6.29 % 12.73 %

The table below represents the summary balance sheet shown as a percentage of account class (total assets, total liabilities or total shareholders’ equity), as applicable:

Stockholders’ equity 2,039,386 1,824,002 1,716,068 11.81 % 6.29 %

The table below represents the summary balance sheet shown as a percentage of account class (total assets, total liabilities or total stockholders’ equity), as applicable:

2025 2024 2023

7 unchanged sentences

The ability of the Company’s borrowers to honor their contractual obligations is partially dependent upon the local economy and its effect on the real estate market.

Included in total loans at December 31, 2025 are $292.0 million of loans from the Branch Acquisition.

The following table sets forth the composition of the loan portfolio by type of loans:

($ in thousands) 2025 (1)

Commercial and industrial $ 4,716,689 $ 4,672,559

Commercial real estate - investor owned 2,606,964 2,451,953

Commercial real estate - owner occupied 2,367,823 2,351,618

C&I $ 5,231,616 $ 4,716,689

CRE - investor owned 2,984,858 2,606,964

CRE - owner occupied 2,468,963 2,367,823

Construction and land development 687,584 891,059

Residential real estate 367,682 359,263

Other 278,557 275,375

Consumer 59,635 278,557

Total loans $ 11,800,338 $ 11,220,355

Commercial and industrial 42.0 % 42.9 %

Commercial real estate - investor owned 23.2 % 22.5 %

Commercial real estate - owner occupied 21.1 % 21.6 %

(1) Certain loans were reclassified from Consumer and into other categories in 2025.

Prior period amounts were not adjusted.

C&I 44.3 % 42.0 %

CRE - investor owned 25.3 % 23.2 %

CRE - owner occupied 20.9 % 21.1 %

Construction and land development 5.9 % 8.0 %

Residential real estate 3.1 % 3.2 %

Other 2.5 % 2.5 %

Consumer 0.5 % 2.5 %

Total loans 100.0 % 100.0 %

5 unchanged sentences

As a result, these specialized loan products offer opportunities to expand and diversify our overall geographic concentration by entering into new markets.

C&I also represents loans to state and political subdivisions, loans to nondepository financial institutions, and loans to purchase, or are fully secured by, investment securities.

Real estate loans place an emphasis on the estimated cash flows from the operation of the property and/or the underlying collateral value.

• Our commercial real estate loans, including investor-owned and owner-occupied categories, primarily represent commercial property loans on which the primary source of repayment is income from the property for investor-owned and the operating business for owner-occupied.

• Our CRE loans, including investor-owned and owner-occupied categories, primarily represent commercial property loans on which the primary source of repayment is income from the property for investor-owned and the operating business for owner-occupied.

These loans are principally underwritten based on the cash flow coverage of the property, the Company’s loan to value guidelines, and generally require either the limited or full guaranty of principal sponsors of the credit.

The Company also maintains standards for amortization and maturity terms.

Commercial real estate loans also represent owner-occupied C&I loans for which the primary source of repayment is dependent on sources other than the underlying collateral.

CRE loans also represent owner-occupied C&I loans for which the primary source of repayment is dependent on sources other than the underlying collateral.

In an effort to mitigate credit risk, the Company routinely reviews its loan portfolio for various concentrations.

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Residential mortgage loans are usually limited to a maximum of 80% of collateral value at origination.

Other loans represent loans to individuals, loans to state and political subdivisions, loans to nondepository financial institutions, and loans to purchase or are fully secured by investment securities.

Consumer loans represent loans to individuals.

Credit risk is managed by thoroughly reviewing the creditworthiness of the borrowers prior to origination and thereafter.

7 unchanged sentences

Construction 635,854 5 % 584,421 5 %

Educational Services 49,942 NM 54,044 1 %

Educational services 49,753 NM 49,942 NM

Finance and insurance 2,540,455 22 % 2,252,420 20 %

18 unchanged sentences

The Company does not intend to enter into new agricultural loans.

The following table presents a breakdown of commercial & industrial loans by size at the periods indicated:

The following table presents a breakdown of C&I loans by size at the periods indicated:

($ in thousands) Number of Loans Outstanding Balance Average Balance Number of Loans Outstanding Balance Average Balance

4 unchanged sentences

Total 3,453 $ 5,231,616 $ 1,515 3,165 $ 4,716,689 $ 1,490

The following table presents a breakdown of commercial real estate loans (investor owned and owner occupied) by size at the periods indicated:

The following table presents a breakdown of CRE loans (investor owned and owner occupied) by size at the periods indicated:

($ in thousands) Number of Loans Outstanding Balance Average Balance Number of Loans Outstanding Balance Average Balance

5 unchanged sentences

The Company had $574.8 million and $513.7 million of investor owned office real estate loans as of December 31, 2025 and 2024, respectively.

The Company also had $322.5 million and $271.8 million of multifamily commercial real estate loans as of December 31, 2024 and 2023, respectively.

The Company also had $399.0 million and $322.5 million of multifamily CRE loans as of December 31, 2025 and 2024, respectively.

The following table presents a breakdown of construction loans by size at the periods indicated:

11 unchanged sentences

Total 2,019 $ 367,682 $ 182 2,022 $ 359,263 $ 178

The following table presents a breakdown of other loans by size at the periods indicated:

The following table presents a breakdown of consumer loans by size at the periods indicated:

($ in thousands) Number of Loans Outstanding Balance Average Balance Number of Loans Outstanding Balance Average Balance

4 unchanged sentences

Total 923 $ 59,635 $ 65 1,053 $ 278,557 $ 265

(1) Certain loans were reclassified from Consumer and into other categories in 2025.

Prior period amounts were not adjusted.

The following table presents a breakdown of total loans by geographic region at the periods indicated:

3 unchanged sentences

West 1,883,236 1,855,380

Specialty and other loans 4,378,838 4,166,719

Specialty and Consumer loans 4,315,558 4,378,838

Total $ 11,800,338 $ 11,220,355

The following table presents a breakdown of total loans by MSA, excluding specialty and other loans, at the periods indicated:

The following table presents a breakdown of total loans by MSA, excluding specialty and consumer loans, at the periods indicated:

($ in thousands) 2025 2024

1 unchanged sentence

Los Angeles-Long Beach-Santa Ana, CA MSA 1,318,397 1,557,990

Phoenix-Mesa-Scottsdale, AZ MSA 993,239 899,768

Phoenix-Mesa-Chandler, AZ MSA 1,254,713 993,239

Kansas City, MO-KS MSA 1,038,226 975,457

4 unchanged sentences

Las Vegas-Paradise, NV MSA 236,047 165,485

Tucson-Nogales, AZ MSA 69,564 —

All other MSAs 135,039 77,364

Specialty and other loans 4,378,838 4,166,719

Specialty and Consumer loans 4,315,558 4,378,838

Total $ 11,800,338 $ 11,220,355

1 unchanged sentence

The following table sets forth additional information on certain categories of loans that are included in total loans above at the periods indicated:

($ in thousands) December 31,

2024 December 31,

2023 Increase (decrease)

($ in thousands) December 31, 2025 December 31, 2024 Increase (decrease)

SBA loans $ 1,262,456 1,298,007 $ (35,551) (3) %

10 unchanged sentences

The tax credits are sold to clients and other individuals for tax planning purposes.

SBA loans are originated under the SBA 7(a) program and are primarily owner-occupied, commercial real estate loans secured by a 1st lien.

SBA loans are originated under the SBA 7(a) program and are primarily owner-occupied, CRE loans secured by a 1st lien.

These loans predominantly have a 75% portion guaranteed by the SBA.

7 unchanged sentences

Fixed rate loans

Commercial and industrial $ 107,243 $ 592,690 $ 591,926 $ 12,247 $ 1,304,106 12 %

C&I $ 114,325 $ 1,036,964 $ 282,917 $ 13,419 $ 1,447,625 12 %

Commercial 589,463 1,843,501 316,639 278,636 3,028,239 26 %

1 unchanged sentence

Residential 37,295 84,957 21,424 13,160 156,836 1 %

Other 928 53,078 77,201 36,309 167,516 1 %

Consumer 2,618 2,915 17,862 25,581 48,976 NM

Total $ 771,815 $ 3,026,900 $ 638,926 $ 335,795 $ 4,773,436 40 %

Variable rate loans

Commercial and industrial $ 1,258,702 $ 1,935,810 $ 211,279 $ 6,792 $ 3,412,583 30 %

C&I $ 1,409,356 $ 2,062,589 $ 295,494 $ 16,552 $ 3,783,991 32 %

Commercial 243,460 680,343 409,149 1,092,630 2,425,582 21 %

1 unchanged sentence

Residential 40,355 30,708 56,463 83,320 210,846 2 %

Other 52,632 13,054 45,237 118 111,041 1 %

Consumer 4,181 6,221 141 116 10,659 NM

Total $ 1,894,519 $ 3,019,124 $ 867,261 $ 1,245,998 $ 7,026,902 60 %

Commercial and industrial $ 1,365,945 $ 2,528,500 $ 803,205 $ 19,039 $ 4,716,689 42 %

C&I $ 1,523,681 $ 3,099,553 $ 578,411 $ 29,971 $ 5,231,616 44 %

Commercial 832,923 2,523,844 725,788 1,371,266 5,453,821 47 %

1 unchanged sentence

Residential 77,650 115,665 77,887 96,480 367,682 3 %

Other 53,560 66,132 122,438 36,427 278,557 2 %

Consumer 6,799 9,136 18,003 25,697 59,635 NM

Total $ 2,666,334 $ 6,046,024 $ 1,506,187 $ 1,581,793 $ 11,800,338 100 %

(1) Includes loans with no stated maturity and overdraft lines of credit.

The majority of variable loans are based on the prime rate or SOFR.

The majority of variable rate loans are based on the prime rate or SOFR.

At December 31, 2025, $4.8 billion or 68% of variable rate loans were subject to an interest rate floor.

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The Company has also entered into interest rate hedges to reduce the cash flow impact of changes in interest rates on the variable rate loan portfolio.

These hedges, which include interest rate swaps and collars, had a notional amount of $400.0 million and $350.0 million at December 31, 2024 and 2023, respectively.

These hedges, which include interest rate swaps and collars, had a notional amount of $400.0 million at both December 31, 2025 and 2024.

See “Interest Rate Risk” of this MD&A section for additional information.

Provision and Allowance for Credit Losses

Provision and ACL

The following table presents the components of the provision for credit losses for the periods indicated:

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$ 23,076 $ 20,629

Provision for available-for-sale securities

Benefit for off-balance sheet commitments

(586) (5,450)

Provision / (Benefit) for held-to-maturity securities

Benefit for held-to-maturity securities

Charge-offs of accrued interest

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$ 26,337 $ 21,508

The provision for credit losses, which includes a provision for losses on unfunded commitments, is a charge to earnings to maintain the ACL at a level consistent with management’s assessment of expected losses in the loan portfolio at the balance sheet date.

The provision for credit losses, which includes a provision for losses on unfunded commitments, is a charge to earnings to maintain the ACL on loans at a level consistent with management’s assessment of expected losses in the loan portfolio at the balance sheet date.

The Company also records reversals of interest on nonaccrual loans and interest recoveries directly through the provision of credit losses.

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As a result, CECL is designed to typically require a higher level of provision at the start of an economic downturn.

The decrease in the provision for credit losses in 2024 was primarily due to improved credit quality, including a reduction in net charge-offs.

The higher provision for credit losses in the prior year was primarily due to loan growth, net charge-offs and the increase in nonperforming loans.

The provision for credit losses in 2023 also included the impact of the impairment of an available-for-sale investment security, related to a subordinated debt security in a publicly-traded bank that failed in the first quarter of 2023.

The increase in the provision for credit losses in 2025 was primarily due to loan growth, net charge-offs and the increase in nonperforming loans.

The higher provision for credit losses in 2024 was also primarily due to loan growth, net charge-offs and the increase in nonperforming loans.

To the extent the Company does not recognize charge-offs and economic forecasts improve in future periods, the Company could recognize a reversal of provision for credit losses.

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($ in thousands) 2025 2024

Balance at End of Period Applicable to:

Amount Percent of loans in each category to total loans Amount Percent of loans in each category to total loans

Commercial and industrial $ 63,231 42.1 % $ 58,886 42.9 %

C&I $ 68,345 44.4 % $ 63,231 42.1 %

Commercial 50,783 46.2 % 54,617 44.3 %

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Residential 8,023 3.1 % 6,534 3.2 %

Other 3,731 2.4 % 4,860 2.6 %

Consumer 1,855 0.5 % 3,731 2.4 %

Total allowance $ 140,022 100.0 % $ 137,950 100.0 %

The allowance for credit losses was 1.23% of total loans at December 31, 2024, compared to 1.24%, and 1.41%, at December 31, 2023 and 2022, respectively.

The decrease in the allowance to total loans ratio in 2024 compared to 2023 was primarily due to a shift in the mix of the loan portfolio to categories with lower reserve requirements, improvement in the economic forecast and net loan charge-offs of $17.5 million.

The ACL on loans was 1.19% of total loans at December 31, 2025, compared to 1.23%, and 1.24%, at December 31, 2024 and 2023, respectively.

The decrease in the allowance to total loans ratio in 2025 compared to 2024 was primarily due to an improvement in the economic forecast, a reduction in qualitative reserves, and net loan charge-offs of $24.3 million.

The Company adopted a new accounting standard in the current quarter that resulted in the $3.3 million credit mark on the acquired loan portfolio from the Branch Acquisition being added directly to the ACL in purchase accounting and no provision for credit losses was recognized on the acquired loans.

The following table is a summary of net charge-offs (recoveries) to average loans for the periods indicated:

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Net Charge-offs (Recoveries)/Average Loans

Commercial and industrial $ 10,425 $ 5,602,957 0.19 % $ 33,257 $ 4,247,091 0.78 %

C&I $ 15,371 $ 5,069,686 0.30 % $ 10,425 $ 5,602,957 0.19 %

Commercial 5,030 5,120,288 0.10 % 3,510 3,934,764 0.09 %

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Residential (70) 365,429 (0.02) % (264) 352,754 (0.07) %

Other 654 306,583 0.21 % 718 290,054 0.25 %

Consumer 731 58,249 1.25 % 654 306,583 0.21 %

Total $ 24,302 $ 11,462,647 0.21 % $ 17,450 $ 10,989,912 0.16 %

(1) Excludes loans held for sale.

See “Critical Accounting Policies and Estimates” of this MD&A section for more information on the allowance for credit losses methodology.

See “Critical Accounting Policies and Estimates” of this MD&A section for more information on the ACL methodology.

Nonperforming loans and assets

Note 1 – Summary of Significant Accounting Policies” for more information on nonaccrual loans and other real estate.

Note 1 – Summary of Significant Accounting Policies” for more information on nonaccrual loans and OREO.

The following table presents the categories of nonperforming assets and other ratios, excluding government guaranteed portions, as of the dates indicated.

($ in thousands) 2025 2024

Non-accrual loans $ 42,667 $ 43,181

Nonaccrual loans $ 81,180 $ 42,667

Loans past due 90 days or more and still accruing interest 1,629 20

Total nonperforming loans 82,809 42,687

Other real estate 3,955 5,736

OREO 81,544 3,955

Total nonperforming assets $ 164,353 $ 46,642

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Total loans 11,800,338 11,220,355

Total allowance for credit losses 137,950 134,771

ACL to nonaccrual loans 323 % 312 %

ACL to nonperforming loans 323 % 308 %

ACL to total loans 1.23 % 1.24 %

Total ACL on loans 140,022 137,950

ACL on loans to nonaccrual loans 172 % 323 %

ACL on loans to nonperforming loans 169 % 323 %

ACL on loans to total loans 1.19 % 1.23 %

Nonaccrual loans to total loans 0.69 % 0.38 %

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Nonperforming loans based on loan type were as follows:

($ in thousands) December 31, 2024 Number of loans December 31, 2023 Number of loans

Commercial and industrial $ 15,821 37 % 23 $ 7,756 18 % 15

Commercial real estate 25,096 59 % 33 33,739 77 % 27

Construction and land development 1,503 3 % 2 1,269 3 % 3

December 31, 2025 December 31, 2024

($ in thousands) Amount Percent Number of loans Amount Percent Number of loans

C&I $ 27,979 34 % 19 $ 15,821 37 % 23

CRE 46,326 56 % 39 25,096 59 % 33

Construction and land development 155 NM 1 1,503 3 % 2

Residential real estate 8,340 10 % 5 258 1 % 1

Other 9 NM 4 5 — % 2

Consumer 9 NM 4 9 NM 4

Total $ 82,809 100 % 68 $ 42,687 100 % 63

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Principal payments (26,845) (29,000)

Moved to other real estate (5,914) (6,933)

Moved to OREO (76,546) (5,914)

Nonperforming loans, end of period $ 82,809 $ 42,687

Nonperforming loans at December 31, 2024 decreased $1.0 million, or 2%, when compared to December 31, 2023.

The decrease in nonperforming loans during 2024 was primarily from principal payments of $29.0 million and charge-offs of $21.9 million, partially offset by additions to nonaccrual loans of $55.7 million.

Other real estate

The following table summarizes the changes in other real estate:

Nonperforming loans at December 31, 2025 increased $40.1 million, or 94%, when compared to December 31, 2024.

The addition to nonperforming loans during 2025 was primarily related to seven real estate loans to special purpose entities (each an “SPE Borrower”) affiliated with two commercial banking relationships in Southern California that share some common ownership.

Litigation resulting from a business dispute between the owners of the entities resulted in all of the SPE Borrowers filing bankruptcy in the first quarter 2025, which was subsequently dismissed.

In the fourth quarter 2025, the Company foreclosed on six of the seven properties serving as collateral for the loans.

The six properties were transferred to OREO at fair market value, less selling costs.

Based on each individual property’s fair value, a net charge-off of $4.0 million and a gain on transfer of $6.2 million was recorded.

The seventh property with a book value of $4.0 million was foreclosed on in the first quarter of 2026.

The following table provides a summary of the six properties foreclosed in 2025 by collateral type:

($ in thousands) Fair market value, less selling costs Carrying value (1)

Charge-off Gain

CRE - investor owned:

Multifamily $ 13,240 $ 17,209 $ 3,969 $ —

Mixed use 49,760 47,694 — 2,066

Total CRE - investor owned $ 63,000 $ 64,903 $ 3,969 $ 2,066

Residential real estate:

Duplex $ 3,520 $ 1,953 $ — $ 1,567

Condominiums 6,960 4,413 — 2,547

Total residential real estate 10,480 6,366 — 4,114

Total $ 73,480 $ 71,269 $ 3,969 $ 6,180

(1) Includes accrued interest.

Other than these foreclosures, the increase in nonperforming loans during 2025 was driven primarily by net charge-offs of $24.3 million and a relationship with two loans totaling $28.0 million that went on nonaccrual.

These loans are well-secured with real estate collateral and the Company expects to collect the full value of the outstanding loans.

Subsequent to December 31, 2025, $17.5 million in nonperforming loans were fully paid off in the first quarter of 2026.

The following table summarizes the changes in OREO:

Year ended December 31,

($ in thousands) 2025 2024

Other real estate, beginning of period $ 5,736 $ 269

OREO, beginning of period $ 3,955 $ 5,736

Additions 84,905 6,559

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Sales (7,316) (8,184)

Other real estate, end of period $ 3,955 $ 5,736

OREO, end of period $ 81,544 $ 3,955

Investment Securities

At December 31, 2025, our portfolio of investment securities was $3.7 billion, or 22% of total assets, compared to $2.8 billion, or 18% of total assets as of December 31, 2024.

The portfolio is comprised of both available-for-sale and held-to-maturity securities.

The table below sets forth the carrying value of investment securities, excluding the allowance for credit losses:

The table below sets forth the carrying value of investment securities, excluding the ACL:

($ in thousands) Amount % Amount %

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Total $ 3,730,137 100.0 % $ 2,791,462 100.0 %

The allowance for credit losses on held-to-maturity debt securities was $0.3 million and $0.8 million at December 31, 2024 and 2023, respectively.

The Company had no debt securities classified as trading at December 31, 2024, or 2023.

The ACL on held-to-maturity debt securities was $0.1 million and $0.3 million at December 31, 2025 and 2024, respectively.

The Company had no debt securities classified as trading at December 31, 2025 or December 31, 2024.

The following table summarizes contractual maturity and tax-equivalent yields on the investment portfolio at December 31, 2025:

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Actual maturities can differ from contractual maturities, as borrowers may have the right to call or repay obligations with or without prepayment penalties.

Other investments primarily consist of the FHLB capital stock, common stock investments related to our trust preferred securities, community development funds, and other investments in private equity funds, primarily SBICs.

The following table details the balance of FHLB capital stock and other investments.

Other investments consist primarily of common stock investments related to our trust preferred securities, community development funds, and investments in private equity funds, primarily SBICs.

These investments do not have a stated maturity.

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The following table shows the breakdown of deposits by type:

Years ended December 31, $ Increase (decrease) % Increase (decrease)

December 31, $ Increase (decrease) % Increase (decrease)

($ in thousands) 2025 2024 2025 vs.

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Noninterest-bearing deposits / Total deposits 33 % 34 %

Total deposits increased $970.1 million, primarily due to client deposit growth.

Total deposits increased $1.5 billion primarily due to organic deposit growth, as well as $609.5 million of deposits from the Branch Acquisition.

Brokered certificates of deposit increased $237.4 million, to $722.0 million at December 31, 2025.

Brokered certificates of deposit are used for term liquidity purposes in place of FHLB borrowings.

The brokered certificates of deposit balance has a weighted average cost of 4.50% and a weighted average remaining term of 9 months at December 31, 2024.

The brokered certificates of deposit balance has a weighted average cost of 3.98% and a weighted average remaining term of six months at December 31, 2025.

The Company has a deposit vertical portfolio focusing primarily on property management, community associations, and legal industry and escrow services.

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The following table shows the average balance and average rate of the Company’s deposits by type:

Years ended December 31,

Year ended December 31,

2025 2024 2023

($ in thousands) Average Balance Average Rate Paid Average Balance Average Rate Paid Average Balance Average Rate Paid

Noninterest-bearing deposit accounts $ 4,042,368 — % $ 4,131,163 — % $ 4,805,549 — %

Noninterest-bearing demand accounts $ 4,525,761 — % $ 4,042,368 — % $ 4,131,163 — %

Interest-bearing demand accounts 3,311,368 2.08 % 3,033,616 2.54 % 2,559,238 1.84 %

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Total average deposits $ 13,635,868 1.77 % $ 12,508,637 2.12 % $ 11,601,114 1.58 %

Average total deposits were $12.5 billion for the year ended December 31, 2024, an increase of $907.5 million, or 8%, from December 31, 2023.

The increase in 2024 was primarily due to organic growth in money market and interest-bearing demand accounts.

Average total deposits were $13.6 billion for the year ended December 31, 2025, an increase of $1.1 billion, or 9%, from December 31, 2024.

The increase in 2025 was primarily due to acquired deposits related to the Branch Acquisition, and organic growth in noninterest-bearing demand accounts, interest-bearing demand accounts, and money market accounts.

The following table sets forth the maturities of estimated uninsured certificates of deposit as of December 31, 2025.

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Total $ 289,852

As of December 31, 2024, estimated uninsured deposits totaled $4.5 billion, including $268.2 million of certificates of deposit.

At December 31, 2023 estimated uninsured deposits totaled $4.3 billion.

Estimated uninsured deposits include $0.5 billion of balances that are collateralized or secured with third party insurance at December 31, 2024 and 2023, respectively.

Shareholders’ equity

Shareholders’ equity totaled $1.8 billion at December 31, 2024, an increase of $107.9 million, or 6%, from December 31, 2023.

Estimated uninsured deposits totaled $5.1 billion, including $289.9 million of certificates of deposit, as of December 31, 2025, and $4.5 billion as of December 31, 2024.

Estimated uninsured deposits include $0.4 billion and $0.5 billion of balances that are collateralized or secured with third party insurance at December 31, 2025 and 2024, respectively.

Stockholders’ equity

Stockholders’ equity totaled $2.0 billion at December 31, 2025, an increase of $215.4 million, or 12%, from December 31, 2024.

Significant activity during the year ended December 31, 2025 included the following:

• Increase from net income of $201.4 million;

• Net decrease in fair value of available-for-sale securities and cash flow hedges of $15.7 million;

• Net increase in fair value of available-for-sale securities and cash flow hedges of $62.1 million;

• Decrease from dividends paid on common stock of $45.1 million and preferred stock of $3.8 million;

• Decrease from share repurchases of $29.6 million, pursuant to the Company’s publicly-announced stock repurchase program.

• Decrease from common stock repurchases of $14.1 million, pursuant to the Company’s publicly-announced stock repurchase program.

Liquidity and Capital Resources

The objective of liquidity management is to ensure we have the ability to generate sufficient cash or cash equivalents in a timely and cost-effective manner to meet our commitments as they become due.

Typical demands on liquidity are changes in deposit levels, maturing time deposits which are not renewed, and fundings under credit commitments to customers.

Typical demands on liquidity are changes in deposit levels, maturing time deposits which are not renewed, and fundings under credit commitments to clients.

Funds are available from a number of sources, such as the core deposit base and loan and security repayments and maturities.

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Cash and interest-bearing deposits with other banks totaled $681.9 million at December 31, 2025, compared to $764.2 million at December 31, 2024.

The increase in cash balances during 2024 is due to deposit growth exceeding loan growth.

increase in market interest rates in 2022 - 2023 increased the competitive environment for deposits, as depositors had more alternatives to bank deposit accounts.

Successful marketing efforts increased total deposits in 2024.

Investment securities are another important tool to the Company’s liquidity objectives.

The decrease in cash balances during 2025 is due to the deployment of liquidity into the investment portfolio.

Investment securities are an important tool to the Company’s liquidity objectives.

Securities totaled $3.7 billion at December 31, 2025, and included $1.7 billion pledged as collateral for deposits of public institutions, treasury, loan notes, and other requirements.

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($ in thousands) December 31, 2025

Federal Reserve Bank borrowing capacity $ 2,751,533

Federal Reserve borrowing capacity $ 3,047,606

FHLB borrowing capacity 1,603,974

Unpledged securities 1,992,864

Federal funds lines (7 correspondent banks) 140,000

Federal funds lines ( eight correspondent banks)

Cash and interest-bearing deposits 681,902

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The Company also has a portfolio of SBA guaranteed loans, a portion of which could be sold in the secondary market to generate earnings and liquidity.

The guaranteed portion of SBA loans totaling $23.1 million and $42.1 million were sold during 2024 and 2023.

Liability liquidity funding sources are available to increase financial flexibility.

In addition to amounts borrowed at December 31, 2024, the Company could borrow an additional $1.3 billion from the FHLB of Des Moines under blanket loan pledges and has additional real estate loans that could be pledged.

The Company also has $2.8 billion available from the Federal Reserve Bank under a pledged loan agreement.

The Company also has unsecured federal funds lines with seven correspondent banks totaling $140 million.

The guaranteed portion of SBA loans totaling $78.2 million and $23.1 million were sold during 2025 and 2024, respectively.

Liability funding sources are available to increase financial flexibility.

In addition to amounts borrowed at December 31, 2025, the Company could borrow an additional $1.6 billion from the FHLB of Des Moines as of December 31, 2025 under blanket loan pledges and has additional real estate loans that could be pledged.

The Company also has $3.0 billion available from the Federal Reserve under a pledged loan agreement.

The Company also has unsecured federal funds lines with eight correspondent banks totaling $135 million as of December 31, 2025.

In the normal course of business, the Company enters into certain forms of off-balance sheet transactions, including unfunded loan commitments and letters of credit.

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stock option exercises, stock offerings) and debt instruments.

The main use of this liquidity is to provide the funds necessary to pay dividends to shareholders, service debt, invest in subsidiaries as necessary, and satisfy other operating requirements.

The main use of this liquidity is to provide the funds necessary to pay dividends to stockholders, service debt, invest in subsidiaries as necessary, repurchase common stock and satisfy other operating requirements.

In 2025, the holding company maintained a revolving line of credit for an aggregate amount up to $25 million, all of which was available at December 31, 2025.

The line of credit had a one-year term that matured in February 2025, the interest rate was one-month Term SOFR plus 185 basis points, and an annual unused commitment fee of 0.40% was assessed.

The proceeds could be used for general corporate purposes.

The line of credit has a one-year term that was renewed in February 2026, has an interest rate of one-month Term SOFR plus 185 basis points, and the annual unused commitment fee was 0.40%.

The proceeds can be used for general corporate purposes.

Strong capital ratios, credit quality and core earnings are essential to retaining cost-effective access to the wholesale funding markets.

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The Bank is subject to regulations and, among other things, may be limited in its ability to pay dividends or transfer funds to the parent company.

Accordingly, consolidated cash flows as presented in the consolidated statements of cash flows may not represent cash immediately available for the payment of cash dividends to the Company’s shareholders or for other cash needs.

Through the normal course of operations, the Company has entered into certain contractual obligations and other commitments.

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For additional information on the Company’s contractual obligations and commitments, see the following footnotes in Item 8:

“Note 5 – Leases,” “Note 6 – Derivative Financial Instruments,” “Note 10 – Subordinated Debentures and Notes,” “Note 11 – Federal Home Loan Bank Advances,” “Note 12 – Other Borrowings,” and “Note 17 – Commitments and Contingent Liabilities.”

“Note 6 – Leases,” “Note 7 – Derivative Financial Instruments,” “Note 11 – Debt,” and “Note 16 – Commitments and Contingent Liabilities.”

Capital Resources

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Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and tier 1 capital to risk-weighted assets, and of tier 1 capital to average assets.

To be categorized as “well-capitalized”, banks must maintain minimum total risk-based (10%), tier 1 risk-based (8%), common equity tier 1 risk-based (6.5%), and tier 1 leverage ratios (5%).

To be categorized as “well-capitalized”, banks must maintain minimum capital ratios as noted in the table below.

As of December 31, 2025, and December 31, 2024, the Company and the Bank met all capital adequacy requirements to which they are subject.

The Bank met the definition of “well-capitalized” at each of December 31, 2024 and 2023.

The Company and the Bank met the definition of “well-capitalized” at each of December 31, 2025 and 2024.

Refer to “Item 8.

Note 13 – Regulatory Capital” for a summary of our risk-based capital and leverage ratios.

The following table summarizes the Company’s capital ratios:

The following table summarizes the Company’s and Bank’s capital ratios:

December 31, 2025 December 31, 2024

($ in thousands) EFSC Bank EFSC Bank To Be Well-Capitalized Minimum Ratio

Common Equity Tier 1 Capital to Risk Weighted Assets 11.8 % 12.4 % 11.3 % 12.2 % 6.5 % 7.0 %

CET1 Capital to Risk Weighted Assets 11.6 % 11.9 % 11.8 % 12.4 % 6.5 % 7.0 %

Tier 1 Capital to Risk Weighted Assets 12.8 % 11.9 % 13.1 % 12.4 % 8.0 % 8.5 %

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9.07 % 9.05 %

Common equity tier 1 capital $ 1,505,162 $ 1,578,293 $ 1,387,802 $ 1,493,105

CET1 capital $ 1,583,989 $ 1,623,652 $ 1,505,162 $ 1,578,293

Tier 1 capital 1,749,635 1,623,711 1,670,810 1,578,353

1 unchanged sentence

1 Not a required regulatory capital ratio

Total regulatory capital includes $63.3 million of subordinated debentures that were issued in 2020 at a fixed rate of 5.75%.

The interest rate on these debentures resets to a floating rate based on 3 month term SOFR plus a spread of 5.66% in June of 2025.

When the interest rate resets, the debentures become callable and the inclusion in regulatory capital begins to phase out over a five year period.

At December 31, 2024, total regulatory capital included $63.3 million of subordinated debentures that were issued in 2020 at a fixed rate of 5.75%.

Beginning June 1, 2025, the subordinated debentures bore interest at a floating rate per annum equal to a benchmark rate of three-month term SOFR (as defined in the Indenture, dated May 21, 2020, between the Company and U.S.

Bank National Association, as trustee, and subsequent First Supplemental Indenture), plus 566 basis points.

On September 2, 2025, the Company redeemed the 2030 Notes funded through the issuance of a $63.3 million senior note at a rate of one-month Term SOFR plus a spread of 250 basis points.

Prior to being redeemed, the 2030 Notes bore interest at a floating rate then equal to 9.98% per annum, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year.

The Company believes the tangible common equity and regulatory capital ratios are important measures of capital strength.

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Derivative financial instruments are discussed in “Item 8.

Financial Statements and Supplementary Data – Note 6 – Derivative Financial Instruments.”

The FCA ceased publishing the most common USD LIBOR settings (overnight, 1-month.

3-month, 6-month and 12-month) after September 30, 2024.

LIBOR was the most liquid and common interest rate index in the world and was commonly referenced in financial instruments.

With the cessation of LIBOR, the Company has selected term SOFR as the replacement index for the majority of its variable rate loans and began providing customer notifications in early 2023.

The Company ceased using LIBOR and ICE swap rates in new contracts and began issuing SOFR based loans in December 2021.

Note 7 – Derivative Financial Instruments.”

The Company had $7.0 billion in variable rate loans as of December 31, 2025.

Of these loans, $4.8 billion have an interest rate floor and nearly all of those loans were at or above the floor.

Variable rate loans include $2.7 billion indexed to the prime rate, $3.2 billion are indexed to SOFR, and $807.4 million indexed to other rates.

Variable rate loans include $2.7 billion indexed to the prime rate, $3.5 billion are indexed to SOFR, and $0.8 billion indexed to other rates.

Changes in interest rates will also have an effect on noninterest expense.

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The impact and any associated risks related to our critical accounting policies on our business operations are described throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” where such policies affect our reported and expected financial results.

For a detailed

discussion on the application of these and other accounting policies, see “Item 8.

For a detailed discussion on the application of these and other accounting policies, see “Item 8.

Note 1 – Summary of Significant Accounting Policies.”

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There can be no assurances that actual results will not differ from those estimates.

Allowance for Credit Losses

The Company maintains separate allowances for funded loans, unfunded loans, and held-to-maturity securities, collectively referred to as the ACL.

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Because economic conditions can change and are difficult to predict, the anticipated amount of estimated loan defaults and losses, and therefore the adequacy of the allowance, could change significantly and have a direct impact on the Company’s credit costs.

The Company’s allowance for credit losses on loans was $138.0 million at December 31, 2024 based on the weighting of the different economic scenarios.

The Company’s ACL on loans was $140.0 million at December 31, 2025 based on the weighting of the different economic scenarios.

As a hypothetical example, if the Company had only used the upside scenario, the allowance would have decreased $29.8 million.

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GAAP and the prevailing practices in the banking industry.

However, the Company provides other financial measures, such as core efficiency ratio, tangible common equity ratio, return on average tangible common equity, and tangible book value per common share, in this report that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position, or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.

The Company considers its core efficiency ratio, tangible common equity ratio, return on average tangible common equity, and tangible book value per common share, collectively “core performance measures,” presented in this earnings release and the included tables as important measures of financial performance, even though they are non-GAAP measures, as they provide supplemental information by which to evaluate the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis.

Core performance measures exclude certain other income and expense items, such as core conversion expenses, FDIC special assessment, merger-related expenses, facilities charges, and the gain or loss on sale of other real estate owned and investment securities, that the Company believes to be not indicative of or useful to measure the Company’s operating performance on an ongoing basis.

However, the Company provides other financial measures, such as adjusted return on average assets, adjusted return on average common equity, return on average tangible common equity, adjusted return on average tangible common equity, tangible book value per common share, tangible common equity to tangible assets, pre-provision net revenue, pre-provision net revenue return on average assets, core efficiency ratio, and adjusted effective tax rate, in this report that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position, or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.

The Company considers its adjusted return on average assets, adjusted return on average common equity, return on average tangible common equity, adjusted return on average tangible common equity, tangible book value per common share, tangible common equity to tangible assets, pre-provision net revenue, pre-provision net revenue return on average assets, core efficiency ratio, and adjusted effective tax rate, collectively “core performance measures,” presented in this report as important measures of financial performance, even though they are non-GAAP measures, as they provide supplemental information by which to evaluate the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis.

Core performance measures exclude certain other income and expense items, such as acquisition costs, core conversion expenses, FDIC special assessment, net gain or loss on OREO, and net gain or loss on the sale of investment securities, that the Company believes to be not indicative of or useful to measure the Company’s operating performance on an ongoing basis.

The attached tables contain a reconciliation of these core performance measures to the GAAP measures.

The Company believes that the tangible common equity ratio provides useful information to investors about the Company’s capital strength even though it is considered to be a non-GAAP financial measure and is not part of the regulatory capital requirements to which the Company is subject.

The Company believes that tangible common equity to tangible assets provides useful information to investors about the Company’s capital strength even though it is considered to be a non-GAAP financial measure and is not part of the regulatory capital requirements to which the Company is subject.

The Company believes these non-GAAP measures and ratios, when taken together with the corresponding GAAP measures and ratios, provide meaningful supplemental information regarding the Company’s performance and capital strength.

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However, these non-GAAP measures and ratios should be considered in addition to, and not as a substitute for or preferable to, ratios prepared in accordance with GAAP.

The Company has provided a reconciliation of, where applicable, the most comparable GAAP financial measures and ratios to the non-GAAP financial measures and ratios, or a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated.

In the following tables, the Company has provided a reconciliation of, where applicable, the most comparable GAAP financial measures and ratios to the non-GAAP financial measures and ratios, or a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated.

Reconciliations of Non-GAAP Financial Measures

Pre-Provision Net Revenue (PPNR) and Pre-Provision Net Revenue Return on Average Assets (PPNR ROAA)

For the years ended December 31,

Year ended December 31,

($ in thousands) 2025 2024 2023

Net interest income $ 568,096 $ 562,592 $ 473,903

Noninterest income 69,703 68,725 59,162

Net interest income (GAAP) $ 626,738 $ 568,096 $ 562,592

Noninterest income (GAAP) 113,123 69,703 68,725

FDIC special assessment (652) 625 2,412

Core conversion expense — 4,868 —

Less gain on sale of investment securities — 601 —

Less gain (loss) on sale of other real estate owned 3,089 187 (93)

Less noninterest expense 385,047 348,186 274,216

Acquisition costs 3,675 — —

Less net gain on sale of investment securities 49 — 601

Less net gain on OREO

6,255 3,089 187

Less insurance recoveries 1

Less noninterest expense (GAAP) 429,807 385,047 348,186

PPNR (non-GAAP) $ 274,661 $ 255,156 $ 284,755

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PPNR ROAA (non-GAAP) 1.70 % 1.72 % 2.06 %

Tangible Common Equity, Tangible Book Value per Share, and Tangible Common Equity Ratio

1 Represents anticipated proceeds from a pending insurance claim related to a third quarter 2025 solar tax credit recapture event.

Tangible Common Equity, Tangible Book Value per Common Share, and Tangible Common Equity to Tangible Assets

At December 31,

($ and shares in thousands, except per share data) 2024 2023 2022

Shareholders' equity (GAAP) $ 1,824,002 $ 1,716,068 $ 1,522,263

(in thousands, except per share data) 2025 2024 2023

Stockholders' equity (GAAP) $ 2,039,386 $ 1,824,002 $ 1,716,068

Less preferred stock 71,988 71,988 71,988

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Tangible common equity to tangible assets (non-GAAP) 9.07 % 9.05 % 8.96 %

Return on Average Tangible Common Equity (ROATCE) and Return on Average Assets (ROAA)

At or for the years ended December 31,

Adjusted Return on Average Common Equity, Return on Average Tangible Common Equity (ROATCE) and Adjusted Return on Average Assets (ROAA)

Year ended December 31,

($ in thousands) 2025 2024 2023

Average shareholder’s equity (GAAP) $ 1,784,175 $ 1,623,121 $ 1,498,759

Average stockholder’s equity (GAAP) $ 1,939,494 $ 1,784,175 $ 1,623,121

Less average preferred stock 71,988 71,988 71,988

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Core conversion expense (after tax) — 3,661 —

Less gain on sale of investment securities (after tax) — 452 —

Less net gain (loss) on sale of other real estate owned (after tax) 2,323 141 (70)

Acquisition costs (after tax) 2,753 — —

Less net gain on sale of investment securities (after tax) 37 — 452

Less net gain on OREO (after tax) 4,685 2,323 141

Net income adjusted (non-GAAP) $ 198,917 $ 187,074 $ 195,280

Less preferred stock dividends 3,750 3,750 3,750

Net income available to common shareholders adjusted (non-GAAP) $ 183,324 $ 191,530 $ 199,072

Return on average common equity (non-GAAP) 10.60 % 12.27 % 13.95 %

Net income available to common stockholders adjusted (non-GAAP) $ 195,167 $ 183,324 $ 191,530

Return on average common equity (GAAP) 10.58 % 10.60 % 12.27 %

Adjusted return on average common equity (non-GAAP) 10.45 % 10.71 % 12.35 %

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Core Efficiency Ratio

For the years ended December 31,

Year ended December 31,

($ in thousands) 2025 2024 2023

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Noninterest income (GAAP) 113,123 69,703 68,725

Less gain on sale of investment securities — 601 —

Less gain (loss) on sale of other real estate owned 3,089 187 (93)

Less insurance recoveries 1

Less net gain on sale of investment securities 49 — 601

Less net gain on OREO

6,255 3,089 187

Core revenue (non-GAAP) $ 713,180 $ 643,155 $ 638,608

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Less FDIC special assessment (652) 625 2,412

Less acquisition costs 3,675 — —

Core noninterest expense (non-GAAP) $ 423,060 $ 375,720 $ 341,173

Core efficiency ratio (non-GAAP) 59.32 % 58.42 % 53.42 %

1 Represents anticipated proceeds from a pending insurance claim related to a third quarter 2025 solar tax credit recapture event.

Adjusted Effective Tax Rate

Year ended December 31,

($ in thousands) 2025 2024

Income before income tax expense (GAAP) $ 283,717 $ 231,244

Less insurance recoveries 1

Adjusted income before income tax expense (non-GAAP) $ 251,605 $ 231,244

Income tax expense (GAAP) $ 82,343 $ 45,978

Less tax credit recapture and tax applied to insurance recoveries 1

Adjusted income tax expense (non-GAAP) $ 50,231 $ 45,978

Effective tax rate (GAAP) 29.0 % 19.9 %

Adjusted effective tax rate (non-GAAP) 20.0 % 19.9 %

1 Represents $32.1 million of anticipated proceeds from a pending insurance claim related to a third quarter 2025 solar tax credit recapture event included in noninterest income, and $24.1 million of tax liability related to the anticipated recapture plus approximately $8.0 million of estimated tax liability related to the anticipated proceeds from the pending insurance claim included in income tax expense.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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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-K

Item 7. Management’s Discussion and Analysis