FIRST BANCORP /NC/ 10-Q

Item 1 - Financial Statements First Bancorp Consolidated Balance Sheets ($ in thousands - unaudited) June 30, 2025 December 31, 2024 Assets Cash and due from banks, noninterest-bearing $ 139,486 $ 78,596 Due from banks, interest-bearing 571,800 428,911 Total cash and cash equivalents 711,286 507,507 Securities available for sale (amortized cost of $ 2,443,724 and $ 2,411,117 , respectively) 2,144,831 2,043,062 Securities held to maturity (fair values of $ 431,420 and $ 428,571 , respectively) 516,405 519,998 Presold mortgages in process of settlement 8,928 5,942 Loans 8,225,650 8,094,676 Allowance for credit losses on loans ( 120,545 ) ( 122,572 ) Net loans 8,105,105 7,972,104 Premises and equipment, net 141,661 143,459 Accrued interest receivable 36,681 36,329 Goodwill 478,750 478,750 Other intangible assets, net 19,920 22,904 Bank-owned life insurance 190,817 188,460 Other assets 253,881 229,179 Total assets $ 12,608,265 $ 12,147,694 Liabilities Deposits Noninterest-bearing deposits $ 3,542,626 $ 3,367,624 Interest-bearing deposits 7,287,754 7,162,901 Total deposits 10,830,380 10,530,525 Borrowings 92,237 91,876 Accrued interest payable 4,340 4,604 Other liabilities 125,128 75,078 Total liabilities 11,052,085 10,702,083 Commitments and contingencies Shareholders' Equity Preferred stock, no par value per share. Authorized: 5,000,000 shares Issued & outstanding: none and none , respectively — — Common stock, no par value per share. Authorized: 60,000,000 shares Issued & outstanding: 41,468,098 shares and 41,347,418 shares, respectively 973,041 971,313 Retained earnings 812,657 756,327 Stock in rabbi trust assumed in acquisition ( 869 ) ( 1,148 ) Rabbi trust obligation 869 1,148 Accumulated other comprehensive income (loss) ( 229,518 ) ( 282,029 ) Total shareholders’ equity 1,556,180 1,445,611 Total liabilities and shareholders’ equity $ 12,608,265 $ 12,147,694 See accompanying notes to unaudited consolidated financial statements. Page 4 Index First Bancorp Consolidated Statements of Income Three Months Ended June 30, Six Months Ended June 30, ($ in thousands, except share data - unaudited) 2025 2024 2025 2024 Interest Income Interest and fees on loans $ 112,931 $ 110,472 $ 223,464 $ 220,270 Interest on investment securities: Taxable interest income 16,857 11,291 32,381 24,019 Tax-exempt interest income 1,116 1,117 2,232 2,234 Other, principally overnight investments 5,837 5,942 11,324 8,913 Total interest income 136,741 128,822 269,401 255,436 Interest Expense Interest on deposits 38,405 44,744 76,524 83,879 Interest on borrowings 1,660 2,963 3,318 11,168 Total interest expense 40,065 47,707 79,842 95,047 Net interest income 96,676 81,115 189,559 160,389 Provision for credit losses 2,212 541 3,328 1,741 Net interest income after provision for credit losses 94,464 80,574 186,231 158,648 Noninterest Income Service charges on deposit accounts 3,976 4,139 7,743 8,007 Other service charges and fees 6,595 5,314 12,478 10,884 Presold mortgage loan fees and gains on sale 315 588 765 926 Commissions from sales of financial products 1,388 1,377 2,796 2,697 SBA loan sale gains 151 1,336 203 2,231 Bank-owned life insurance income 1,221 1,179 2,449 2,343 Securities losses, net — ( 186 ) — ( 1,161 ) Other income, net 695 854 809 1,570 Total noninterest income 14,341 14,601 27,243 27,497 Noninterest Expense Salaries, incentives and commissions expense 29,005 27,809 57,666 55,451 Employee benefit expense 6,187 6,703 12,282 12,972 Total personnel expense 35,192 34,512 69,948 68,423 Occupancy and equipment expense 5,195 4,877 10,387 10,952 Intangibles amortization expense 1,468 1,669 2,984 3,428 Other operating expenses 17,128 17,233 33,557 34,675 Total noninterest expenses 58,983 58,291 116,876 117,478 Income before income taxes 49,822 36,884 96,598 68,667 Income tax expense 11,256 8,172 21,626 14,683 Net income $ 38,566 $ 28,712 $ 74,972 $ 53,984 Earnings per common share: Basic $ 0.93 $ 0.70 $ 1.81 $ 1.31 Diluted 0.93 0.70 1.81 1.31 Weighted average common shares outstanding: Basic 41,168,260 40,879,684 41,149,623 40,861,775 Diluted 41,441,393 41,262,091 41,424,063 41,256,081 See accompanying notes to unaudited consolidated financial statements. Page 5 Index First Bancorp Consolidated Statements of Comprehensive Income (Loss) Three Months Ended June 30, Six Months Ended June 30, ($ in thousands - unaudited) 2025 2024 2025 2024 Net income $ 38,566 $ 28,712 $ 74,972 $ 53,984 Other comprehensive income (loss): Unrealized gains (losses) on securities available for sale: Unrealized holding gains (losses) arising during the period, pretax 22,321 8,614 69,162 ( 10,529 ) Tax (expense) benefit ( 5,211 ) ( 1,995 ) ( 16,651 ) 2,437 Reclassification to realized losses — 186 — 1,161 Tax (benefit) expense — ( 43 ) — ( 269 ) Postretirement Plans: Amortization of unrecognized net actuarial losses — 25 — 50 Tax (expense) benefit — ( 5 ) — ( 11 ) Other comprehensive income (loss) 17,110 6,782 52,511 ( 7,161 ) Comprehensive income (loss) $ 55,676 $ 35,494 $ 127,483 $ 46,823 See accompanying notes to unaudited consolidated financial statements. Page 6 Index First Bancorp Consolidated Statements of Shareholders’ Equity ($ in thousands, except per share data - unaudited) Common Stock Retained earnings Stock in rabbi trust assumed in acquisition Rabbi trust obligation Accumulated other comprehensive income (loss) Total shareholders’ equity Shares Amount Three Months Ended June 30, 2024 Balances, April 1, 2024 41,156 $ 965,429 $ 732,643 $ ( 1,396 ) $ 1,396 $ ( 321,973 ) $ 1,376,099 Net income 28,712 28,712 Cash dividends declared ($ 0.22 per common share) ( 9,061 ) ( 9,061 ) Change in Rabbi Trust Obligation 257 ( 257 ) — Stock options exercised 16 379 379 Stock-based compensation 16 1,431 1,431 Other comprehensive loss 6,782 6,782 Balances, June 30, 2024 41,188 $ 967,239 $ 752,294 $ ( 1,139 ) $ 1,139 $ ( 315,191 ) $ 1,404,342 Three Months Ended June 30, 2025 Balances, April 1, 2025 41,369 $ 971,174 $ 783,630 $ ( 1,166 ) $ 1,166 $ ( 246,628 ) $ 1,508,176 Net income 38,566 38,566 Cash dividends declared ($ 0.23 per common share) ( 9,539 ) ( 9,539 ) Change in Rabbi Trust Obligation 297 ( 297 ) — Stock options exercised 60 1,112 1,112 Stock withheld for payment of taxes ( 14 ) ( 546 ) ( 546 ) Stock-based compensation 53 1,301 1,301 Other comprehensive income 17,110 17,110 Balances, June 30, 2025 41,468 $ 973,041 $ 812,657 $ ( 869 ) $ 869 $ ( 229,518 ) $ 1,556,180 See accompanying notes to unaudited consolidated financial statements. Page 7 Index First Bancorp Consolidated Statements of Shareholders’ Equity ($ and share data in thousands - unaudited) Common Stock Retained earnings Stock in rabbi trust assumed in acquisition Rabbi trust obligation Accumulated other comprehensive income (loss) Total shareholders’ equity Shares Amount Six Months Ended June 30, 2024 Balances, January 1, 2024 41,110 $ 963,990 $ 716,420 $ ( 1,385 ) $ 1,385 $ ( 308,030 ) $ 1,372,380 Net income 53,984 53,984 Cash dividends declared ($ 0.44 per common share) ( 18,110 ) ( 18,110 ) Change in Rabbi Trust Obligation 246 ( 246 ) — Stock options exercised 52 1,105 1,105 Stock withheld for payment of taxes ( 4 ) ( 126 ) ( 126 ) Stock-based compensation 30 2,270 2,270 Other comprehensive loss ( 7,161 ) ( 7,161 ) Balances, June 30, 2024 41,188 $ 967,239 $ 752,294 $ ( 1,139 ) $ 1,139 $ ( 315,191 ) $ 1,404,342 Six Months Ended June 30, 2025 Balances, January 1, 2025 41,347 $ 971,313 $ 756,327 $ ( 1,148 ) $ 1,148 $ ( 282,029 ) $ 1,445,611 Net income 74,972 74,972 Cash dividends declared ($ 0.45 per common share) ( 18,642 ) ( 18,642 ) Change in Rabbi Trust Obligation 279 ( 279 ) — Stock repurchases ( 25 ) ( 992 ) ( 992 ) Stock options exercised 73 1,238 1,238 Stock withheld for payment of taxes ( 22 ) ( 839 ) ( 839 ) Stock-based compensation 95 2,321 2,321 Other comprehensive income 52,511 52,511 Balances, June 30, 2025 41,468 $ 973,041 $ 812,657 $ ( 869 ) $ 869 $ ( 229,518 ) $ 1,556,180 See accompanying notes to unaudited consolidated financial statements. Page 8 Index First Bancorp Consolidated Statements of Cash Flows Six Months Ended June 30, ($ in thousands-unaudited) 2025 2024 Cash Flows From Operating Activities Net income $ 74,972 $ 53,984 Reconciliation of net income to net cash provided by operating activities: Provision for credit losses 3,328 1,741 Net security premium amortization 3,012 4,448 Deferred income taxes, net 1,654 ( 1,358 ) Loan discount accretion ( 3,962 ) ( 5,645 ) Deposit and debt discount accretion, net 590 886 Foreclosed property losses (gains), net 41 ( 153 ) Securities losses, net — 1,161 Other (gains) losses, net ( 805 ) ( 555 ) Bank-owned life insurance income ( 2,449 ) ( 2,343 ) Net amortization of deferred loan costs/(fees) 347 ( 886 ) Depreciation of premises and equipment 3,457 4,029 Amortization of operating lease right-of-use assets 646 990 Repayments of lease obligations ( 611 ) ( 949 ) Stock-based compensation expense 2,321 2,093 Amortization of intangible assets 2,984 3,428 Amortization and impairment of SBA servicing assets 632 890 Gains on sale of loans ( 968 ) ( 3,157 ) Origination of presold mortgage loans and SBA loans held for sale ( 41,103 ) ( 76,938 ) Proceeds from sales of presold mortgage loans and SBA loans 42,357 82,784 (Increase) decrease in accrued interest receivable ( 352 ) 1,746 Decrease (increase) in other assets 6,300 952 (Decrease) increase in accrued interest payable ( 264 ) 29 Increase (decrease) in other liabilities 6,180 453 Net cash provided by (used in) operating activities 98,307 67,630 Cash Flows From Investing Activities Purchases of securities available for sale ( 136,987 ) — Proceeds from maturities, calls and principal repayments of securities available for sale 103,558 167,698 Proceeds from maturities, calls and principal repayments of securities held to maturity 1,403 6,867 Proceeds from sales of securities available for sale — 138,182 Proceeds from sale of VISA B shares — 4,522 Purchases of Federal Reserve and FHLB stock ( 359 ) ( 15,804 ) Redemptions of Federal Reserve and FHLB stock — 28,880 Proceeds from bank owned life insurance death benefits 92 209 Purchases of other investments ( 10,902 ) ( 1,465 ) Net (increase) decrease in loans ( 135,599 ) 75,748 Proceeds from sales of foreclosed properties 4,201 217 Purchases of premises and equipment ( 1,611 ) ( 1,721 ) Proceeds from sales of premises and equipment 851 10 Net cash provided by (used in) investing activities ( 175,353 ) 403,343 Cash Flows From Financing Activities Net increase (decrease) in deposits 299,650 455,723 Proceeds from the issuance of FHLB and FRB borrowings 2,000 481,000 Repayment of FHLB and FRB borrowings ( 2,024 ) ( 1,010,024 ) Repayment of subordinated debentures — ( 10,000 ) Cash dividends paid – common stock ( 18,208 ) ( 18,094 ) Repurchases of common stock ( 992 ) — Proceeds from stock option exercises 1,238 1,105 Payment of taxes related to stock withheld ( 839 ) ( 126 ) Net cash provided by (used in) financing activities 280,825 ( 100,416 ) Increase (decrease) in cash and cash equivalents 203,779 370,557 Cash and cash equivalents, beginning of period 507,507 237,855 Cash and cash equivalents, end of period $ 711,286 $ 608,412 (Continued) Page 9 Index First Bancorp Consolidated Statements of Cash Flows Six Months Ended June 30, ($ in thousands-unaudited) 2025 2024 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for interest $ 79,730 $ 94,342 Cash paid during the period for income taxes 8,836 14,382 Non-cash: Unrealized gain (loss) on securities available for sale, net of taxes 52,511 ( 7,200 ) Non-cash: Foreclosed loans transferred to foreclosed real estate 494 — Non-cash: Accrued dividends at end of period 9,539 9,061 Non-cash: Cancellation of operating lease right-of-use assets and operating lease liabilities — ( 1,497 ) Non-cash: Initial recognition of operating lease right-of-use assets and liabilities 939 — Non-cash: Affordable housing investments obtained in exchange for funding commitments 42,248 — See accompanying notes to consolidated financial statements. Page 10 Index First Bancorp Notes to Consolidated Financial Statements (unaudited) Note 1. Organization and Basis of Presentation The consolidated financial statements include the accounts of First Bancorp (the “Company”) and its wholly owned subsidiary First Bank (the “Bank”). The Bank has two wholly owned subsidiaries that are fully consolidated, Magnolia Financial, Inc. ("Magnolia Financial"), and First Troy SPE, LLC. All significant intercompany accounts and transactions have been eliminated. The Bank formerly operated a third subsidiary, SBA Complete, Inc. ("SBA Complete"), which specialized in providing consulting services for financial institutions across the country related to Small Business Administration (“SBA”) loan origination and servicing. During the second quarter of 2024, SBA Complete became inactive with certain activities transitioning to the Bank. The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes necessary for complete financial statements in accordance with GAAP. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the consolidated financial position of the Company as of June 30, 2025, the consolidated results of income, comprehensive income and shareholders' equity for the six months ended June 30, 2025 and 2024, and the consolidated cash flows for the six months ended June 30, 2025 and 2024. Any such adjustments were of a normal, recurring nature. These interim financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes in the 2024 Annual Report for the year ended December 31, 2024. Operating results for interim period are not necessarily indicative of the results that may be expected for the full year. In certain instances, amounts reported in prior years’ consolidated financial statements have been reclassified to conform to the current presentation. Such reclassifications had no effect on previously reported shareholders’ equity or net income. Refer to Note 1 of the 2024 Annual Report filed with the Securities and Exchange Commission (“SEC”) for a discussion of accounting policies and other relevant information with respect to the consolidated financial statements. The Company has evaluated all subsequent events through the date the consolidated financial statements were issued. Accounting Standards Adopted in 2025 The Company did not adopt any accounting standards during the first six months of 2025. Accounting Standards Pending Adoption ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” amended existing guidance to improve the transparency of income tax disclosures, including disclosure of specific categories in the rate reconciliation, providing additional information for certain reconciling items, and providing details on income taxes paid. The amendments are effective for annual periods beginning after December 15, 2024. The adoption of ASU 2023-09 is not expected to have a significant impact on the Company's consolidated financial statements. ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” amended the Income Statement—Reporting Comprehensive Income topic in the Accounting Standards Codification to require public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements. The amendments are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company will apply the amendments retrospectively to all prior periods presented in the financial statements after the effective date. The Page 11 Index adoption of ASU 2023-09 is not expected to have a significant impact on the Company's consolidated financial statements . Other accounting standards that have been issued or proposed by the Financial Accounting Standards Board ("FASB") or other standards-setting bodies are not expected to have a material impact on the Company’s consolidated financial statements. Note 2. Securities The book values and approximate fair values of investment securities at June 30, 2025 and December 31, 2024 are summarized as follows: ($ in thousands) June 30, 2025 December 31, 2024 Amortized Cost Fair Value Unrealized Amortized Cost Fair Value Unrealized Gains (Losses) Gains (Losses) Securities available for sale: U.S. Treasuries $ 121,461 $ 124,020 $ 2,559 $ — $ 121,051 $ 120,581 $ — $ ( 470 ) Government-sponsored enterprise securities 11,964 10,097 — ( 1,867 ) 11,961 9,614 — ( 2,347 ) Mortgage-backed securities 2,295,111 1,995,592 1,984 ( 301,503 ) 2,261,924 1,897,175 60 ( 364,809 ) Corporate bonds 15,188 15,122 47 ( 113 ) 16,181 15,692 — ( 489 ) Total available for sale $ 2,443,724 $ 2,144,831 $ 4,590 $ ( 303,483 ) $ 2,411,117 $ 2,043,062 $ 60 $ ( 368,115 ) Securities held to maturity: Mortgage-backed securities $ 7,885 $ 7,600 $ — $ ( 285 ) $ 9,198 $ 8,739 $ — $ ( 459 ) State and local governments 508,520 423,820 2 ( 84,702 ) 510,800 419,832 1 ( 90,969 ) Total held to maturity $ 516,405 $ 431,420 $ 2 $ ( 84,987 ) $ 519,998 $ 428,571 $ 1 $ ( 91,428 ) All of the Company’s mortgage-backed securities were issued by government-sponsored enterprises ("GSEs"), except for private mortgage-backed securities with a fair value of $ 0.7 million as of June 30, 2025 and December 31, 2024. Accrued interest receivable on available for sale ("AFS") debt securities was $ 4.5 million and $ 4.6 million at June 30, 2025 and December 31, 2024, respectively. Accrued interest receivable on held to maturity ("HTM") debt securities was $ 4.2 million and $ 4.2 million as of June 30, 2025 and December 31, 2024. The following table presents information regarding all securities with unrealized losses at June 30, 2025: Securities in an Unrealized Loss Position for Less than Twelve Months Securities in an Unrealized Loss Position for More than Twelve Months Total ($ in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Government-sponsored enterprise securities $ — $ — $ 10,097 $ 1,867 $ 10,097 $ 1,867 Mortgage-backed securities 277,088 1,302 1,536,577 300,486 1,813,665 301,788 Corporate bonds — — 3,324 113 3,324 113 State and local governments 4,617 41 418,441 84,661 423,058 84,702 Total unrealized loss position $ 281,705 $ 1,343 $ 1,968,439 $ 387,127 $ 2,250,144 $ 388,470 Page 12 Index The following table presents information regarding all securities with unrealized losses at December 31, 2024: Securities in an Unrealized Loss Position for Less than Twelve Months Securities in an Unrealized Loss Position for More than Twelve Months Total ($ in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasuries $ 120,581 $ 470 $ — $ — $ 120,581 $ 470 Government-sponsored enterprise securities — — 9,614 2,347 9,614 2,347 Mortgage-backed securities 317,015 1,845 1,538,156 363,423 1,855,171 365,268 Corporate bonds 380 51 13,562 438 13,942 489 State and local governments 4,513 75 414,331 90,894 418,844 90,969 Total unrealized loss position $ 442,489 $ 2,441 $ 1,975,663 $ 457,102 $ 2,418,152 $ 459,543 As of June 30, 2025, the Company's securities portfolio included 589 securities of which 548 securities were in an unrealized loss position. As of December 31, 2024, the Company's securities portfolio included 584 securities of which 560 securities were in an unrealized loss position. In the above tables, all of the securities that were in an unrealized loss position at June 30, 2025 and December 31, 2024 are bonds that the Company has determined are in a loss position due primarily to interest rate factors and not credit quality concerns. In arriving at this conclusion, the Company reviewed third-party credit ratings and considered the severity of the impairment. The state and local government investments are comprised almost entirely of highly-rated municipal bonds issued by state and local governments throughout the nation. The Company has no significant concentrations of bond holdings from any one state or local government entity. Substantially all of the Company's mortgage-backed securities were issued by Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA"), Government National Mortgage Association ("GNMA"), or SBA, each of which is a government agency or GSE and guarantees the repayment of its securities. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell these securities before recovery of the amortized cost. At June 30, 2025 and December 31, 2024, the Company determined that expected credit losses associated with HTM securities were insignificant. The book values and fair values of investment securities at June 30, 2025, by contractual maturity, are summarized in the table below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities Available for Sale Securities Held to Maturity ($ in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due after one year but within five years $ 105,805 $ 107,789 $ 6,035 $ 5,897 Due after five years but within ten years 42,808 41,450 209,190 178,650 Due after ten years — — 293,295 239,273 Mortgage-backed securities 2,295,111 1,995,592 7,885 7,600 Total securities $ 2,443,724 $ 2,144,831 $ 516,405 $ 431,420 At June 30, 2025 and December 31, 2024, investment securities with carrying values of $ 787.0 million and $ 806.0 million, respectively, were pledged as collateral for public deposits. In addition, at June 30, 2025 and December 31, 2024, investment securities with carrying values of $ 713.5 million and $ 661.0 million, respectively, were pledged as collateral to the Federal Reserve Bank ("Federal Reserve") to secure any such borrowings. At June 30, 2025 and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies or GSEs, in an amount greater than 10% of shareholders' equity. During three and six months ended June 30, 2025, there were no sales of investment securities. During the three months ended June 30, 2024, the Company received proceeds from the sale of securities and its holdings of Class B shares of Visa, Inc. of $ 142.7 million and recorded $ 0.2 million in net losses from the sales. During the six months Page 13 Index ended June 30, 2024, the Company received proceeds from the sale of securities and its holdings of Class B shares of Visa, Inc. of $ 148.0 million and recorded $ 1.2 million in net losses from the sales. Included in “Other assets” in the consolidated balance sheets are investments in Federal Home Loan Bank (“FHLB”) and Federal Reserve stock totaling $ 41.6 million and $ 41.3 million at June 30, 2025 and December 31, 2024, respectively. These investments do not have readily determinable fair values. The FHLB stock had a cost of $ 8.6 million at June 30, 2025 and December 31, 2024, and serves as part of the collateral for the Company’s line of credit with the FHLB and is also a requirement for membership in the FHLB system. The Federal Reserve stock had a cost of $ 33.0 million and $ 32.7 million at June 30, 2025 and December 31, 2024, respectively, and is a requirement for Federal Reserve member bank qualification. Periodically, both the FHLB and Federal Reserve recalculate the Company’s required level of holdings, and the Company either buys more stock or redeems a portion of the stock at cost. The Company determined that neither stock was impaired at either period end. Note 3. Loans, Allowance for Credit Losses, and Asset Quality Information The following is a summary of the major categories of total loans outstanding: ($ in thousands) June 30, 2025 December 31, 2024 Amount Percentage Amount Percentage Commercial and industrial $ 911,227 11 % $ 919,690 11 % Construction, development & other land loans 633,529 8 % 647,167 8 % Commercial real estate - owner occupied 1,254,596 15 % 1,248,812 16 % Commercial real estate - non owner occupied 2,758,629 34 % 2,625,554 33 % Multi-family real estate 509,419 6 % 506,407 6 % Residential 1-4 family real estate 1,731,397 21 % 1,729,322 21 % Home equity loans/lines of credit 355,876 4 % 345,883 4 % Consumer loans 70,137 1 % 70,653 1 % Subtotal 8,224,810 100 % 8,093,488 100 % Unamortized net deferred loan costs/(fees) 840 1,188 Total loans $ 8,225,650 $ 8,094,676 Also included in the table above are various SBA loans, generally originated under the SBA 7A program, with additional information on these loans presented in the table below. ($ in thousands) June 30, 2025 December 31, 2024 Guaranteed portions of SBA loans included in table above $ 60,818 $ 34,095 Unguaranteed portions of SBA loans included in table above 101,170 101,356 Total SBA loans included in the table above $ 161,988 $ 135,451 Sold portions of SBA loans with servicing retained - not included in tables above $ 301,145 $ 330,482 At June 30, 2025 and December 31, 2024, there were remaining unaccreted discounts on the retained portion of sold SBA loans amounting to $ 2.3 million and $ 2.9 million, respectively. At June 30, 2025 and December 31, 2024, l oans in the amount of $ 6.9 billion and $ 6.7 billion, respectively, were pledged as collateral to the Federal Reserve and the FHLB for borrowing capacity. Refer to Note 5 for further discussion. At June 30, 2025 and December 31, 2024, total loans included loans to directors and executive officers of the Company, and their associates, totaling approximately $ 61.7 million and $ 62.9 million, respectively. Available credit on related party loans totaled $ 0.3 million and $ 1.0 million at June 30, 2025 and December 31, 2024, respectively. As of June 30, 2025 and December 31, 2024, unamortized discounts on all acquired loans totaled $ 11.8 million and $ 15.1 million, respectively. Page 14 Index Nonperforming assets ("NPAs") are defined as nonaccrual loans, loans past due 90 or more days and still accruing interest, and foreclosed properties. The following table summarizes the NPAs for each date presented. ($ in thousands) June 30, 2025 December 31, 2024 Nonaccrual loans $ 34,625 $ 31,779 Accruing loans > 90 days past due — — Total nonperforming loans 34,625 31,779 Foreclosed properties 1,218 4,965 Total nonperforming assets $ 35,843 $ 36,744 At June 30, 2025 and December 31, 2024, the Company had $ 1.3 million and $ 1.2 million, respectively, in residential mortgage loans in the process of foreclosure. At June 30, 2025 and December 31, 2024, there was one loan with commitments to lend an immaterial amount and $ 0.2 million, respectively, of additional funds to borrowers whose loans were nonperforming. The following table is a summary of the Company’s nonaccrual loans by major categories as of June 30, 2025: ($ in thousands) Nonaccrual Loans with No Allowance Nonaccrual Loans with an Allowance Total Nonaccrual Loans Commercial and industrial $ — $ 10,594 $ 10,594 Construction, development & other land loans — 151 151 Commercial real estate - owner occupied 1,985 8,007 9,992 Commercial real estate - non owner occupied 3,051 1,874 4,925 Residential 1-4 family real estate — 6,678 6,678 Home equity loans/lines of credit — 1,971 1,971 Consumer loans — 314 314 Total $ 5,036 $ 29,589 $ 34,625 The following table is a summary of the Company’s nonaccrual loans by major categories as of December 31, 2024: ($ in thousands) Nonaccrual Loans with No Allowance Nonaccrual Loans with an Allowance Total Nonaccrual Loans Commercial and industrial $ — $ 9,804 $ 9,804 Construction, development & other land loans — 90 90 Commercial real estate - owner occupied 879 8,488 9,367 Commercial real estate - non owner occupied — 887 887 Residential 1-4 family real estate — 9,487 9,487 Home equity loans/lines of credit — 1,795 1,795 Consumer loans — 349 349 Total $ 879 $ 30,900 $ 31,779 There was no interest income recognized during the periods presented on nonaccrual loans. In the period that the Company places a loan on nonaccrual status, contractual interest income is reversed in the consolidated income statement. Page 15 Index The following table represents the accrued interest receivables written off by reversing interest income during each period indicated: ($ in thousands) Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 Commercial and industrial $ 234 $ 226 Construction, development & other land loans 42 — Commercial real estate - owner occupied 223 168 Commercial real estate - non owner occupied 93 55 Residential 1-4 family real estate 115 34 Home equity loans/lines of credit 39 16 Consumer loans 3 — Total $ 749 $ 499 The following table presents an analysis of the payment status of the Company’s loans as of June 30, 2025: ($ in thousands) Accruing Current Accruing 30-59 Days Past Due Accruing 60-89 Days Past Due Nonaccrual Loans Total Loans Receivable Commercial and industrial $ 899,125 $ 1,220 $ 288 $ 10,594 $ 911,227 Construction, development & other land loans 632,474 904 — 151 633,529 Commercial real estate - owner occupied 1,240,800 3,804 — 9,992 1,254,596 Commercial real estate - non owner occupied 2,749,190 4,496 18 4,925 2,758,629 Multi-family real estate 509,419 — — — 509,419 Residential 1-4 family real estate 1,712,490 7,237 4,992 6,678 1,731,397 Home equity loans/lines of credit 353,058 588 259 1,971 355,876 Consumer loans 69,455 224 144 314 70,137 Total $ 8,166,011 $ 18,473 $ 5,701 $ 34,625 8,224,810 Unamortized net deferred loan costs/(fees) 840 Total loans $ 8,225,650 The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2024: ($ in thousands) Accruing Current Accruing 30-59 Days Past Due Accruing 60-89 Days Past Due Nonaccrual Loans Total Loans Receivable Commercial and industrial $ 906,903 $ 2,442 $ 541 $ 9,804 $ 919,690 Construction, development & other land loans 647,077 — — 90 647,167 Commercial real estate - owner occupied 1,236,396 2,073 976 9,367 1,248,812 Commercial real estate - non owner occupied 2,614,843 9,678 146 887 2,625,554 Multi-family real estate 506,407 — — — 506,407 Residential 1-4 family real estate 1,699,800 12,973 7,062 9,487 1,729,322 Home equity loans/lines of credit 342,551 1,118 419 1,795 345,883 Consumer loans 69,775 317 212 349 70,653 Total $ 8,023,752 $ 28,601 $ 9,356 $ 31,779 8,093,488 Unamortized net deferred loan costs/(fees) 1,188 Total loans $ 8,094,676 Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. Page 16 Index The following table presents an analysis of collateral dependent loans of the Company as of June 30, 2025: ($ in thousands) Commercial Property Total Collateral-Dependent Loans Commercial real estate - owner occupied $ 2,598 $ 2,598 Commercial real estate - non owner occupied 3,051 3,051 Total $ 5,649 $ 5,649 The following table presents an analysis of collateral dependent loans of the Company as of December 31, 2024: ($ in thousands) Commercial Property Total Collateral-Dependent Loans Commercial real estate - owner occupied $ 879 $ 879 Total $ 879 $ 879 There have been no material changes from the treatment of collateral dependent loans under the current expected credit loss ("CECL") model as discussed in Note 4 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The following tables present the activity in the allowance for credit losses ("ACL") on loans for each of the periods indicated. Fluctuations in the ACL each period are based on loan mix and growth, changes in the levels of nonperforming loans, economic forecasts impacting loss drivers, other assumptions and inputs to the CECL model. ($ in thousands) Beginning balance Charge-offs Recoveries Provisions / (Reversals) Ending balance As of and for the three months ended June 30, 2025 Commercial and industrial $ 19,275 $ ( 1,416 ) $ 467 $ 180 $ 18,506 Construction, development & other land loans 7,669 — 32 959 8,660 Commercial real estate - owner occupied 19,325 ( 13 ) 5 1,429 20,746 Commercial real estate - non owner occupied 28,384 ( 33 ) 17 ( 3,943 ) 24,425 Multi-family real estate 5,015 — — ( 270 ) 4,745 Residential 1-4 family real estate 33,735 — 24 2,024 35,783 Home equity loans/lines of credit 3,502 — 2 ( 59 ) 3,445 Consumer loans 3,726 ( 292 ) 51 750 4,235 Total $ 120,631 $ ( 1,754 ) $ 598 $ 1,070 $ 120,545 As of and for the six months ended June 30, 2025 Commercial and industrial $ 19,474 $ ( 3,632 ) $ 964 $ 1,700 $ 18,506 Construction, development & other land loans 9,314 — 105 ( 759 ) 8,660 Commercial real estate - owner occupied 19,380 ( 450 ) 111 1,705 20,746 Commercial real estate - non owner occupied 27,768 ( 938 ) 20 ( 2,425 ) 24,425 Multi-family real estate 5,476 — — ( 731 ) 4,745 Residential 1-4 family real estate 33,552 ( 124 ) 53 2,302 35,783 Home equity loans/lines of credit 4,111 ( 68 ) 21 ( 619 ) 3,445 Consumer loans 3,497 ( 662 ) 105 1,295 4,235 Total $ 122,572 $ ( 5,874 ) $ 1,379 $ 2,468 $ 120,545 Page 17 Index ($ in thousands) Beginning balance Charge-offs Recoveries Provisions / (Reversals) Ending balance As of and for the three months ended June 30, 2024 Commercial and industrial $ 20,294 $ ( 2,478 ) $ 857 $ 1,164 $ 19,837 Construction, development & other land loans 11,783 — 50 ( 1,837 ) 9,996 Commercial real estate - owner occupied 18,163 ( 30 ) 4 ( 278 ) 17,859 Commercial real estate - non owner occupied 26,252 — 41 ( 417 ) 25,876 Multi-family real estate 4,422 — — 707 5,129 Residential 1-4 family real estate 22,704 ( 6 ) 106 2,051 24,855 Home equity loans/lines of credit 3,336 ( 2 ) 17 ( 174 ) 3,177 Consumer loans 3,113 ( 141 ) 123 234 3,329 Total $ 110,067 $ ( 2,657 ) $ 1,198 $ 1,450 $ 110,058 As of and for the six months ended June 30, 2024 Commercial and industrial $ 21,227 $ ( 4,063 ) $ 1,100 $ 1,573 $ 19,837 Construction, development & other land loans 13,940 ( 79 ) 147 ( 4,012 ) 9,996 Commercial real estate - owner occupied 18,218 ( 88 ) 8 ( 279 ) 17,859 Commercial real estate - non owner occupied 24,916 ( 158 ) 43 1,075 25,876 Multi-family real estate 3,825 — — 1,304 5,129 Residential 1-4 family real estate 21,396 ( 6 ) 227 3,238 24,855 Home equity loans/lines of credit 3,339 ( 2 ) 22 ( 182 ) 3,177 Consumer loans 2,992 ( 376 ) 180 533 3,329 Total $ 109,853 $ ( 4,772 ) $ 1,727 $ 3,250 $ 110,058 Credit Quality Indicators There have been no material changes from the treatment of credit quality tracking and risk grade descriptions as discussed in Note 4 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. In the tables that follow, substantially all of the "Classified" loans have grades of 7 for commercial loans or Fail for consumer loans, with those categories having similar levels of risk. The tables below present the Company’s recorded investment in loans by credit quality indicators by year of origination or renewal as of the periods indicated. Acquired loans are presented in the year originated, not in the year of acquisition. Page 18 Index Term Loans by Year of Origination ($ in thousands) 2025 2024 2023 2022 2021 Prior Revolving Total As of June 30, 2025 Commercial and industrial Pass $ 91,695 $ 100,390 $ 70,362 $ 105,483 $ 68,956 $ 122,571 $ 335,484 $ 894,941 Special Mention 9 889 108 45 82 708 2,203 4,044 Classified 48 372 1,696 3,589 703 4,230 1,604 12,242 Total commercial and industrial 91,752 101,651 72,166 109,117 69,741 127,509 339,291 911,227 Gross charge-offs, YTD — 257 747 449 20 411 1,748 3,632 Construction, development & other land loans Pass 225,553 221,690 78,728 29,769 21,706 14,827 39,821 632,094 Special Mention — — 590 63 6 — — 659 Classified — 362 72 74 — 268 — 776 Total construction, development & other land loans 225,553 222,052 79,390 29,906 21,712 15,095 39,821 633,529 Gross charge-offs, YTD — — — — — — — — Commercial real estate - owner occupied Pass 138,171 182,313 201,521 233,755 236,166 210,733 16,552 1,219,211 Special Mention 2,717 6,167 1,845 2,668 229 6,641 1,723 21,990 Classified 167 1,429 — 2,340 519 8,940 — 13,395 Total commercial real estate - owner occupied 141,055 189,909 203,366 238,763 236,914 226,314 18,275 1,254,596 Gross charge-offs, YTD — 420 — 17 — 13 — 450 Commercial real estate - non owner occupied Pass 354,236 442,904 410,671 633,032 572,230 299,601 29,241 2,741,915 Special Mention 49 1,357 265 189 6 1,595 — 3,461 Classified — 1,591 465 552 — 10,645 — 13,253 Total commercial real estate - non owner occupied 354,285 445,852 411,401 633,773 572,236 311,841 29,241 2,758,629 Gross charge-offs, YTD — 905 — 33 — — — 938 Multi-family real estate Pass 48,590 61,123 64,830 120,800 153,767 46,374 13,800 509,284 Special Mention — — — — — — — — Classified — — 135 — — — — 135 Total multi-family real estate 48,590 61,123 64,965 120,800 153,767 46,374 13,800 509,419 Gross charge-offs, YTD — — — — — — — — Residential 1-4 family real estate Pass 80,383 220,334 316,823 390,884 279,792 425,944 2,631 1,716,791 Special Mention 146 21 — — 88 652 — 907 Classified 302 2,168 572 2,226 529 7,902 — 13,699 Total residential 1-4 family real estate 80,831 222,523 317,395 393,110 280,409 434,498 2,631 1,731,397 Gross charge-offs, YTD — — — — — 124 — 124 Home equity loans/lines of credit Pass 2,437 1,314 2,228 602 231 666 342,750 350,228 Special Mention — 119 — — — — 14 133 Classified 176 73 — — 89 5 5,172 5,515 Total home equity loans/lines of credit 2,613 1,506 2,228 602 320 671 347,936 355,876 Gross charge-offs, YTD — — — 68 — — — 68 Consumer loans Pass 8,825 11,576 7,294 4,874 1,566 887 34,652 69,674 Special Mention — — — — — — 18 18 Classified — 32 58 38 7 20 290 445 Total consumer loans 8,825 11,608 7,352 4,912 1,573 907 34,960 70,137 Gross charge-offs, YTD — 71 27 4 — 37 523 662 Total loans $ 953,504 $ 1,256,224 $ 1,158,263 $ 1,530,983 $ 1,336,672 $ 1,163,209 $ 825,955 8,224,810 Unamortized net deferred loan costs/(fees) 840 Total loans, net of deferred loan costs/(fees) $ 8,225,650 Total gross charge-offs, year to date $ — $ 1,653 $ 774 $ 571 $ 20 $ 585 $ 2,271 $ 5,874 Page 19 Index Term Loans by Year of Origination ($ in thousands) 2024 2023 2022 2021 2020 Prior Revolving Total As of December 31, 2024 Commercial and industrial Pass $ 114,786 $ 81,851 $ 120,769 $ 82,810 $ 59,218 $ 70,986 $ 373,850 $ 904,270 Special Mention 1,076 26 190 36 259 804 1,825 4,216 Classified 266 2,496 3,254 713 1,199 2,634 642 11,204 Total commercial and industrial 116,128 84,373 124,213 83,559 60,676 74,424 376,317 919,690 Gross charge-offs, YTD 306 669 849 318 137 929 4,070 7,278 Construction, development & other land loans Pass 355,734 124,323 60,305 29,823 12,727 5,276 57,177 645,365 Special Mention — 605 77 8 — 2 11 703 Classified 227 449 80 — 67 276 — 1,099 Total construction, development & other land loans 355,961 125,377 60,462 29,831 12,794 5,554 57,188 647,167 Gross charge-offs, YTD — 79 — — — — — 79 Commercial real estate - owner occupied Pass 194,193 222,718 261,634 252,929 153,634 109,559 15,772 1,210,439 Special Mention 9,927 1,869 2,731 184 147 7,007 — 21,865 Classified 4,506 235 2,085 1,294 1,188 7,200 — 16,508 Total commercial real estate - owner occupied 208,626 224,822 266,450 254,407 154,969 123,766 15,772 1,248,812 Gross charge-offs, YTD — 25 — 19 114 65 — 223 Commercial real estate - non owner occupied Pass 482,433 434,713 668,168 602,028 252,260 132,316 29,922 2,601,840 Special Mention 1,648 265 189 11 331 5,721 54 8,219 Classified 12,725 429 566 — 88 1,687 — 15,495 Total commercial real estate - non owner occupied 496,806 435,407 668,923 602,039 252,679 139,724 29,976 2,625,554 Gross charge-offs, YTD — — — — 304 158 — 462 Multi-family real estate Pass 87,803 65,508 114,627 159,038 40,940 9,926 27,630 505,472 Special Mention — — — — — 793 — 793 Classified — 142 — — — — — 142 Total multi-family real estate 87,803 65,650 114,627 159,038 40,940 10,719 27,630 506,407 Gross charge-offs, YTD — — — — — — — — Residential 1-4 family real estate Pass 216,725 347,472 404,809 278,197 166,013 296,870 2,768 1,712,854 Special Mention 74 — 10 95 61 740 — 980 Classified 3,968 227 2,558 544 1,558 6,633 — 15,488 Total residential 1-4 family real estate 220,767 347,699 407,377 278,836 167,632 304,243 2,768 1,729,322 Gross charge-offs, YTD — — — — — 18 — 18 Home equity loans/lines of credit Pass 2,096 2,672 645 251 259 832 333,434 340,189 Special Mention 120 153 — — — — 15 288 Classified 88 43 68 90 — 7 5,110 5,406 Total home equity loans/lines of credit 2,304 2,868 713 341 259 839 338,559 345,883 Gross charge-offs, YTD — — — — — — 2 2 Consumer loans Pass 14,623 10,005 7,059 2,380 1,049 320 34,747 70,183 Special Mention — — — — — — 21 21 Classified 33 21 27 9 — 28 331 449 Total consumer loans 14,656 10,026 7,086 2,389 1,049 348 35,099 70,653 Gross charge-offs, YTD 6 121 41 37 2 10 1,308 1,525 Total loans $ 1,503,051 $ 1,296,222 $ 1,649,851 $ 1,410,440 $ 690,998 $ 659,617 $ 883,309 8,093,488 Unamortized net deferred loan costs/(fees) 1,188 Total loans, net of deferred loan costs/(fees) $ 8,094,676 Total gross charge-offs, year to date $ 312 $ 894 $ 890 $ 374 $ 557 $ 1,180 $ 5,380 $ 9,587 Page 20 Index Loan Modifications to Borrowers Experiencing Financial Difficulty Occasionally, the Company modifies loans to borrowers in financial distress as a part of our loss mitigation activities. Various types of modification may be offered including principal forgiveness, term extension, payment delays, or interest rate reductions. In some cases, the Company will modify a certain loan by providing multiple types of concessions. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession may be granted. For loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period. The following table is a summary of the Company's nonaccrual and accruing modifications for borrowers experiencing financial difficulty by major categories for each date presented. June 30, 2025 December 31, 2024 ($ in thousands) Accruing loans Nonaccrual loans Total Accruing loans Nonaccrual loans Total Commercial and industrial $ 86 $ 1,115 $ 1,201 $ 165 $ 2,118 $ 2,283 Construction, development & other land loans 346 — 346 212 — 212 Commercial real estate - owner occupied 3,736 571 4,307 3,974 175 4,149 Commercial real estate - non owner occupied 4,523 1,544 6,067 — 149 149 Multi-family real estate — — — — — — Residential 1-4 family real estate 483 308 791 380 285 665 Home equity loans/lines of credit 2,184 621 2,805 2,143 572 2,715 Consumer loans — — — — — — Total $ 11,358 $ 4,159 $ 15,517 $ 6,874 $ 3,299 $ 10,173 The following tables present the amortized cost basis at June 30, 2025 and June 30, 2024 of the loans modified during the three and six month periods then ended for borrowers experiencing financial difficulty, by loan category and type of concession granted. ($ in thousands) Payment Delay Term Extension Combination - Payment Delay and Term Extension Total Percent of Total Class of Loans As of and for the three months ended June 30, 2025 Commercial and industrial $ 138 $ — $ — $ 138 0.02 % Construction, development & other land loans — 309 — 309 0.05 % Commercial real estate - owner occupied 334 68 — 402 0.03 % Commercial real estate - non owner occupied — — 85 85 — % Residential 1-4 family real estate — 95 120 215 0.01 % Home equity loans/lines of credit — 225 — 225 0.06 % Total $ 472 $ 697 $ 205 $ 1,374 0.02 % As of and for the six months ended June 30, 2025 Commercial and industrial $ 192 $ — $ — $ 192 0.02 % Construction, development & other land loans — 309 — 309 0.05 % Commercial real estate - owner occupied 334 111 — 445 0.04 % Commercial real estate - non owner occupied 1,589 — 4,478 6,067 0.22 % Residential 1-4 family real estate — 110 120 230 0.01 % Home equity loans/lines of credit — 380 — 380 0.11 % Total $ 2,115 $ 910 $ 4,598 $ 7,623 0.09 % Page 21 Index ($ in thousands) Payment Delay Term Extension Combination - Term Extension and Payment Delay Combination - Interest Rate Reduction and Term Extension Total Percent of Total Class of Loans As of and for the three months ended June 30, 2024 Commercial and industrial $ — $ 1 $ — $ 96 $ 97 0.01 % Residential 1-4 family real estate — 203 — — 203 0.01 % Home equity loans/lines of credit — 290 — — 290 0.09 % Total $ — $ 494 $ — $ 96 $ 590 0.01 % As of and for the six months ended June 30, 2024 Commercial and industrial $ 114 $ 1 $ 878 $ 96 $ 1,089 0.13 % Commercial real estate - non owner occupied — 111 — — 111 — % Residential 1-4 family real estate — 203 — — 203 0.01 % Home equity loans/lines of credit — 323 — 176 499 0.15 % Total $ 114 $ 638 $ 878 $ 272 $ 1,902 0.02 % For the three and six months ended June 30, 2025 and June 30, 2024, there were no modifications for borrowers experiencing financial difficulty with principal forgiveness concessions. The following table describes the financial effect for the three and six months ended June 30, 2025 of the modifications made for borrowers experiencing financial difficulty: Financial Effect of Modification to Borrowers Experiencing Financial Difficulty Weighted Average Interest Rate Reduction Weighted Average Payment Delay (in months) Weighted Average Term Extension (in months) For the three months ended June 30, 2025 Construction, development & other land loans — % 0 3 Commercial real estate - owner occupied — % 7 148 Commercial real estate - non owner occupied — % 4 2 Residential 1-4 family real estate — % 4 29 Home equity loans/lines of credit — % 0 40 For the six months ended June 30, 2025 Commercial and industrial — % 1 0 Construction, development & other land loans — % 0 3 Commercial real estate - owner occupied — % 7 97 Commercial real estate - non owner occupied — % 7 7 Residential 1-4 family real estate — % 4 31 Home equity loans/lines of credit — % 0 63 Page 22 Index The following table describes the financial effect for the three and six months ended June 30, 2024 of the modifications made for borrowers experiencing financial difficulty: Financial Effect of Modification to Borrowers Experiencing Financial Difficulty Weighted Average Interest Rate Reduction Weighted Average Payment Delay (in months) Weighted Average Term Extension (in months) For the three months ended June 30, 2024 Commercial and industrial 0.75 % 0 27 Residential 1-4 family real estate — % 0 103 Home equity loans/lines of credit — % 0 95 For the six months ended June 30, 2024 Commercial and industrial 0.75 % 36 13 Commercial real estate - non owner occupied — % 0 13 Residential 1-4 family real estate — % 0 103 Home equity loans/lines of credit 2.10 % 0 69 The Company closely monitors the performance of the modified loans that are to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that were modified in the last twelve months as of June 30, 2025: Payment Status (Amortized Cost Basis) ($ in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Commercial and industrial $ 286 $ — $ — $ — Construction, development & other land loans 309 — — — Commercial real estate - owner occupied 571 — — — Commercial real estate - non owner occupied 1,675 4,393 — — Residential 1-4 family real estate 185 45 — — Home equity loans/lines of credit 486 — — — $ 3,512 $ 4,438 $ — $ — The following table depicts the performance of loans that were modified in the last twelve months as of December 31, 2024: Payment Status (Amortized Cost Basis) ($ in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90+ Days Past Due Commercial and industrial $ 1,183 $ — $ — $ 878 Construction, development & other land loans 171 — — — Commercial real estate - owner occupied 131 — — — Commercial real estate - non owner occupied 102 — — — Residential 1-4 family real estate 137 — — 58 Home equity loans/lines of credit 583 — 68 — $ 2,307 $ — $ 68 $ 936 During the three and six months ended June 30, 2025 and June 30, 2024, none of the loans to borrowers experiencing financial difficulty that were modified in the twelve months prior were considered to have had a payment default. At June 30, 2025, there were no commitments to lend additional funds to a borrower experiencing financial difficulty for whom a modification had been made. At December 31, 2024, there was a commitment to lend $ 0.1 million of additional funds to one borrower experiencing financial difficulty for whom a modification had been made. Page 23 Index Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL is adjusted by the same amount. Concentration of Credit Risk The Company’s loan portfolio is not concentrated in loans to any single borrower or to a relatively small number of borrowers. Additionally, management is not aware of any concentrations of loans to classes of borrowers or industries that would be similarly affected by economic conditions. Approximately 88 % of the Company's loan portfolio is secured by real estate and is therefore susceptible to changes in real estate valuations. There have been no material changes to the primary loan markets (as identified by counties) from year end. Impact of Hurricane Helene Within the portions of Western North and South Carolina that were significantly impacted by Hurricane Helene, the Company identified borrowers with outstanding loan balances of approximately $ 755 million at the time of the storm. Those balances have since reduced to $ 703 million. The following is a summary of the categories of those loans outstanding as of June 30, 2025: ($ in thousands) Balance Commercial and industrial $ 15,997 Construction, development & other land loans 15,933 Commercial real estate - owner occupied 91,485 Commercial real estate - non owner occupied 270,597 Multi-family real estate 24,838 Residential 1-4 family real estate 247,503 Home equity loans/lines of credit 36,185 Total $ 702,538 Given that the recovery from the storm is ongoing in many impacted communities, the Company continues to evaluate possible impacts from the storm on borrowers and has reserved accordingly based upon the information available as of June 30, 2025. The Company applied increased reserve rates based upon severe economic factors to the approximately $ 703 million of loans in the most impacted path of Hurricane Helene. Additionally, the Company continues to evaluate the largest commercial loans in that area and applied incremental reserves to those loans that were suspected of having higher potential property damage or economic impact from the storm. Due to the potential exposure from Hurricane Helene, the ACL on these impacted loans was $ 7.5 million as of June 30, 2025, adding 10 basis points to the overall ACL as a percent of total loans, which was 1.47 % as of June 30, 2025. As of December 31, 2024, the ACL on these loans was $ 13.0 million, adding 16 basis points to the overall ACL as a percent of total loans, which was 1.51 %. Allowance for Unfunded Loan Commitments In addition to the ACL on loans, the Company maintains an allowance for lending-related commitments such as unfunded loan commitments and letters of credit. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for lending-related commitments on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the ACL on loans. The allowance for unfunded loan commitments was included in "Other liabilities" on the consolidated balance sheets. Page 24 Index The following table presents the balance and activity in the allowance for unfunded loan commitments for the three and six months ended June 30, 2025 and 2024: Three months ended June 30, Six months ended June 30, ($ in thousands) 2025 2024 2025 2024 Beginning balance $ 8,784 $ 10,768 $ 9,066 $ 11,369 Charge-offs — — — — Recoveries — — — — Provision for (reversal of) unfunded commitments 1,142 ( 908 ) 860 ( 1,509 ) Ending balance $ 9,926 $ 9,860 $ 9,926 $ 9,860 Note 4. Goodwill, Other Intangible Assets and Servicing Assets The following is a summary of the gross carrying amount and accumulated amortization of amortizable intangible assets and the carrying amount of unamortized intangible assets as of the periods presented. June 30, 2025 December 31, 2024 ($ in thousands) Gross Carrying Amount Accumulated Amortization Net Amount Gross Carrying Amount Accumulated Amortization Net Amount Amortizable intangible assets: Customer lists $ 1,600 $ 1,547 $ 53 $ 1,600 $ 1,387 $ 213 Core deposit intangibles 57,890 38,023 19,867 57,890 35,199 22,691 Other intangibles 100 100 — 100 100 — Total amortizable intangible assets $ 59,590 $ 39,670 $ 19,920 $ 59,590 $ 36,686 $ 22,904 Unamortizable intangible assets: Goodwill $ 478,750 $ 478,750 Customer lists are generally amortized over five years and core deposit intangibles are generally amortized over 10 years, both at an accelerated rate. Amortization expense of all amortizable intangible assets totaled $ 1.5 million and $ 1.7 million for the three months ended June 30, 2025 and 2024, respectively, and $ 3.0 million and $ 3.4 million for the six months ended June 30, 2025 and 2024. Goodwill is evaluated for impairment on at least an annual basis, with the annual evaluation occurring as of October 31 of each year. Goodwill is also evaluated for impairment any time there is a triggering event indicating that impairment may have occurred. No triggering events were identified during 2025 to date and, therefore, the Company did not perform interim impairment evaluations. The Company's most recent evaluation of goodwill, which occurred in the fourth quarter of 2024, indicated that there was no goodwill impairment. There was no change to carrying amounts of goodwill during 2025. Other than the expected amortization expense recognized during the six months ended June 30, 2025, there have been no material changes to the estimated amortization expense related to amortizable intangible assets as discussed in Note 6 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The Company recorded SBA guaranteed servicing fee income of $ 0.7 million and $ 0.8 million during the three months ended June 30, 2025 and 2024, respectively, and $ 1.4 million and $ 1.5 million for the six months ended June 30, 2025 and 2024, respectively. There was no impairment of SBA servicing assets at June 30, 2025 and December 31, 2024 and no significant methodology changes have been made since year end. Page 25 Index The following table presents the changes in the SBA servicing assets (included in "Other assets" in the Company's consolidated balance sheet) for each period indicated: Three months ended June 30, Six months ended June 30, ($ in thousands) 2025 2024 2025 2024 Beginning balance, net $ 2,256 $ 3,137 $ 2,605 $ 3,350 Add: New servicing assets 43 319 56 543 Less: Amortization expense and impairment charges 270 453 632 890 Ending balance, net $ 2,029 $ 3,003 $ 2,029 $ 3,003 Note 5. Borrowings The following tables present information regarding the Company’s outstanding borrowings at June 30, 2025: ($ in thousands) Description Due date Call Feature Balance Interest Rate FHLB Principal Reducing Credit 6/26/2028 to 12/20/2028 None $ 778 0.00 % to 1.00 % fixed Trust Preferred Securities 1/23/2034 Quarterly by Company 10,310 7.19 % at 6/30/25 adjustable rate 3 month CME Term SOFR+ 2.91 % Trust Preferred Securities 1/23/2034 Quarterly by Company 10,310 7.29 % at 6/30/25 adjustable rate 3 month CME Term SOFR + 3.01 % Trust Preferred Securities 9/20/2034 Quarterly by Company 12,372 6.74 % at 6/30/25 adjustable rate 3 month CME Term SOFR + 2.41 % Trust Preferred Securities 1/7/2035 Quarterly by Company 10,310 6.52 % at 6/30/25 adjustable rate 3 month CME Term SOFR + 2.00 % Trust Preferred Securities 6/15/2036 Quarterly by Company 25,774 5.95 % at 6/30/25 adjustable rate 3 month CME Term SOFR + 1.65 % Trust Preferred Securities 6/23/2036 Quarterly by Company 8,248 6.44 % at 6/30/25 adjustable rate 3 month CME Term SOFR + 2.11 % Subordinated Debentures 11/15/2030 Continuous by Company beginning 11/15/2025 18,000 4.38 % fixed at 6/30/25 until 11/15/25, then adjustable rate 3 month CME Term SOFR + 4.16 % Total borrowings / weighted average rate as of June 30, 2025 96,102 6.09 % Unamortized discount on acquired borrowings ( 3,865 ) Total borrowings $ 92,237 Page 26 Index The following tables present information regarding the Company’s outstanding borrowings at December 31, 2024: ($ in thousands) Description Due date Call Feature Balance Interest Rate FHLB Principal Reducing Credit 6/26/2028 to 12/20/2028 None $ 802 0.00 % to 1.00 % fixed Trust Preferred Securities 1/23/2034 Quarterly by Company 10,310 7.50 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 2.91 % Trust Preferred Securities 1/23/2034 Quarterly by Company 10,310 7.61 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 3.01 % Trust Preferred Securities 9/20/2034 Quarterly by Company 12,372 6.77 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 2.41 % Trust Preferred Securities 1/7/2035 Quarterly by Company 10,310 6.92 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 2.00 % Trust Preferred Securities 6/15/2036 Quarterly by Company 25,774 6.01 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 1.65 % Trust Preferred Securities 6/23/2036 Quarterly by Company 8,248 6.45 % at 12/31/24 adjustable rate 3 month CME Term SOFR + 2.11 % Subordinated Debentures 11/15/2030 Continuous by Company beginning 11/15/2025 18,000 4.38 % fixed at 12/31/24 until 11/15/25, then adjustable rate 3 month CME Term SOFR + 4.16 % Total borrowings / weighted average rate as of December 31, 2024 96,126 6.22 % Unamortized discount on acquired borrowings ( 4,250 ) Total borrowings $ 91,876 Note 6. Leases The Company enters into leases in the normal course of business. As of June 30, 2025, the Company leased 13 bank branch offices for which the land and buildings are leased and ten branch offices for which the land is leased but the buildings are owned. The Company also leases office space for several operational departments. All of the Company’s leases are operating leases and the lease agreements have maturity dates ranging from April 2026 through May 2076, some of which include options for multiple five-year and ten-year extensions. The Company includes lease extension options in the lease term if, after considering relevant economic, market, and strategic factors, it is reasonably certain the Company will exercise the option. The weighted average remaining life of the lease term for these leases was 20.7 years as of June 30, 2025 and 21.2 years as of December 31, 2024. Certain of the Company's lease agreements include variable lease payments based on changes in inflation, with the impact of that factor being insignificant to the Company's total lease expense. As permitted by applicable accounting standards, the Company has elected not to recognize leases with original lease terms of 12 months or less (short-term leases) on the Company's consolidated balance sheets. The short-term lease cost for each period presented was insignificant. Leases are classified as either operating or finance leases at the lease commencement date and all of the Company's leases have been determined to be operating leases. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the applicable lease term. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company uses its incremental borrowing rate, on a collateralized basis, at lease commencement to calculate the present value of lease payments when the rate implicit in the lease is not known. The weighted average discount rates for leases were 3.40 % and 3.34 % as of June 30, 2025 and December 31, 2024, respectively. The right-of-use assets, included in "Other assets" on the Company's consolidated balance sheets, and lease liabilities, included in "Other liabilities" on the Company's consolidated balance sheets, were $ 14.0 million and $ 14.9 Page 27 Index million as of June 30, 2025, respectively, and were $ 13.8 million and $ 14.6 million as of December 31, 2024, respectively. Total operating lease expenses, included in "Other operating expenses" in the Company's consolidated statements of income, were $ 0.6 million and $ 0.5 million for the three months ended June 30, 2025 and 2024, respectively and $ 1.3 million and $ 1.2 million for six months ended June 30, 2025and 2024, respectively. Future undiscounted lease payments for operating leases with initial terms of greater than one year as of June 30, 2025 are as follows: ($ in thousands) July 1, 2025 to December 31, 2025 $ 914 2026 1,616 2027 1,338 2028 1,251 2029 1,196 Thereafter 15,725 Total undiscounted lease payments 22,040 Less effect of discounting ( 7,158 ) Present value of estimated lease payments (lease liability) $ 14,882 Note 7. Fair Value of Financial Instruments Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal and most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair value: Level 1: Quoted prices (unadjusted) of identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Page 28 Index The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring and nonrecurring basis at June 30, 2025: ($ in thousands) Description of Financial Instruments Fair Value at June 30, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Securities available for sale: U.S. Treasury $ 124,020 $ — $ 124,020 $ — Government-sponsored enterprise securities $ 10,097 $ — $ 10,097 $ — Mortgage-backed securities 1,995,592 — 1,994,907 685 Corporate bonds 15,122 — 13,372 1,750 Total available for sale securities $ 2,144,831 $ — $ 2,142,396 $ 2,435 Derivative financial assets $ 2,714 $ — $ 2,714 $ — Presold mortgages in process of settlement $ 8,928 $ — $ 8,928 $ — Derivative financial liabilities $ 2,752 $ — $ 2,752 $ — Nonrecurring Individually evaluated loans $ 5,649 $ — $ — $ 5,649 The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring and nonrecurring basis at December 31, 2024: ($ in thousands) Description of Financial Instruments Fair Value at December 31, 2024 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Recurring Securities available for sale: US Treasury securities $ 120,581 $ — $ 120,581 $ — Government-sponsored enterprise securities 9,614 — 9,614 — Mortgage-backed securities 1,897,175 — 1,896,469 706 Corporate bonds 15,692 — 13,942 1,750 Total available for sale securities $ 2,043,062 $ — $ 2,040,606 $ 2,456 Derivative financial assets $ 301 $ — $ 301 $ — Presold mortgages in process of settlement $ 5,942 $ — $ 5,942 $ — Derivative financial liabilities $ 302 $ — $ 302 $ — Nonrecurring Individually evaluated loans $ 879 $ — $ — $ 879 The following is a description of the valuation methodologies used for financial instruments measured at fair value. Securities Available for Sale — When quoted market prices are available in an active market, the securities are classified as Level 1 in the valuation hierarchy. If quoted market prices are not available, but fair values can be estimated by observing quoted prices of securities with similar characteristics, the securities are classified as Level 2 on the valuation hierarchy. Most of the fair values for the Company’s Level 2 securities are determined by the Company's third-party bond accounting provider using matrix pricing. Matrix pricing is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. For the Company, Level 2 securities include U.S Treasury bonds, mortgage- Page 29 Index backed securities, commercial mortgage-backed obligations, government-sponsored enterprise securities, and corporate bonds. In cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. The Company reviews the pricing methodologies utilized by the bond accounting provider to ensure the fair value determination is consistent with the applicable accounting guidance and that the investments are properly classified in the fair value hierarchy. Presold Mortgages in Process of Settlemen t - The fair value is based on the committed price that an investor has agreed to pay for the loan which is considered a Level 2 input. Derivative financial assets and liabilities - The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. These are considered a Level 2 input. Individually evaluated loans — Fair values for individually evaluated loans are measured on a non-recurring basis and are based on the underlying collateral values securing the loans, adjusted for estimated selling costs, or the net present value of the cash flows expected to be received for such loans. Collateral may be in the form of real estate or business assets including equipment, inventory and accounts receivable. The vast majority of the collateral is real estate. The value of real estate collateral is generally determined by third-party appraisers using an income or market valuation approach based on an appraisal conducted by an independent, licensed third party appraiser (Level 3). The value of business equipment is based upon an outside appraisal if deemed significant, or the net book value on the applicable borrower’s financial statements if not considered significant. Likewise, values for inventory and accounts receivable collateral are based on borrower financial statement balances or aging reports on a discounted basis as appropriate (Level 3). Appraisals used in this analysis are generally obtained at least annually based on when the loans first became impaired, and thus the appraisals are not necessarily as of the period ends presented. Any fair value adjustments are recorded in the period incurred as provision for credit losses on the consolidated statements of income. There were no significant changes in the reported amount of Level 3 assets and liabilities measured at fair value on either a recurring or a non-recurring basis as of June 30, 2025. The carrying amounts and estimated fair values of financial instruments not carried at fair value at June 30, 2025 and December 31, 2024 were as follows: June 30, 2025 December 31, 2024 ($ in thousands) Level in Fair Value Hierarchy Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Cash and due from banks, noninterest-bearing Level 1 $ 139,486 $ 139,486 $ 78,596 $ 78,596 Due from banks, interest-bearing Level 1 571,800 571,800 428,911 428,911 Securities held to maturity Level 2 516,405 431,420 519,998 428,571 Total loans, net of allowance Level 3 8,105,105 7,650,793 7,972,104 7,514,505 SBA Servicing Asset Level 3 2,028 2,981 2,604 3,746 Demand deposits, money market and savings Level 1 9,968,368 9,968,368 9,593,557 9,593,557 Time deposits Level 2 862,012 858,132 936,968 933,523 Borrowings Level 2 92,237 84,296 91,876 81,216 Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no highly liquid market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Page 30 Index Fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial assets or liabilities include net premises and equipment, intangible and other assets such as deferred income taxes, prepaid expense accounts, income taxes currently payable, and other various accrued expenses. In addition, the income tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates. Note 8. Stock-Based Compensation The Company recorded total stock-based compensation expense of $ 1.1 million and $ 0.9 million for the three months ended June 30, 2025 and 2024, respectively, and $ 2.1 million and $ 1.6 million for the six months ended June 30, 2025 and 2024, respectively. These amounts are included in "Total personnel expense" on the accompanying consolidated statements of income. The Company recog nized income tax benefits related to stock-based compensation expense in its income statement of $ 246,000 an d $ 218,000 for the three months ended June 30, 2025 and 2024, respectively, and $ 484,000 and $ 371,000 for the six months ended June 30, 2025 and 2024, respectively. At June 30, 2025, the sole equity-based compensation plan of the Company was the First Bancorp 2024 Equity Plan (the "Equity Plan"), which was approved by shareholders on May 31, 2024. As of June 30, 2025, the Equity Plan had 1,831,944 shares remaining available for grant. The Equity Plan is intended to serve as a means to attract, retain, and motivate key employees and directors and to associate the interests of the Equity Plan's participants with those of the Company and its shareholders. The Equity Plan allows for both grants of stock options and other types of equity-based compensation, including stock appreciation rights, restricted and unrestricted stock, restricted performance stock, and performance units. For the last several years, the only equity-based compensation granted by the Company has been shares of restricted stock, as it relates to employees, and unrestricted stock as it relates to non-employee directors. There have been no material changes to the treatment of stock awards and equity grants as discussed in Note 15 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. In addition to employee equity awards, the Company's practice is to grant unrestricted common shares to each non-employee director (currently eleven in total) in June of each year. The grants were valued at approximately $ 37,500 in 2025. Compensation expense associated with these director awards is fully recognized by the date of the award since there are no vesting conditions. The following table presents information regarding the activity for the first six months of 2025 related to the Company’s outstanding restricted stock awards: Long-Term Restricted Stock Awards Number of Units Weighted-Average Grant-Date Fair Value Nonvested at January 1, 2025 236,951 $ 36.43 Granted during the period 86,434 41.53 Vested during the period ( 74,063 ) 37.86 Forfeited or expired during the period ( 4,069 ) 41.88 Nonvested at June 30, 2025 245,253 $ 37.70 Total unrecognized compensation expense as of June 30, 2025 amounted to $ 4.5 million with a weighted average remaining term of 2.5 years. For the nonvested awards that were outstanding at June 30, 2025, the Company expects to record $ 2.0 million in compensation expense in the next twelve months, $ 1.1 million of which is expected to be recorded in the remaining quarters of 2025. Page 31 Index Note 9. Earnings Per Share The following is a reconciliation of the numerators and denominators used in computing Basic and Diluted Earnings Per Common Share ("EPS"): For the Three Months Ended June 30, 2025 2024 ($ in thousands except per share amounts) Income (Numerator) Shares (Denominator) Per Share Amount Income (Numerator) Shares (Denominator) Per Share Amount Basic EPS: Net income $ 38,566 $ 28,712 Less: income allocated to restricted stock ( 235 ) ( 205 ) Basic EPS per common share $ 38,331 41,168,260 $ 0.93 $ 28,507 40,879,684 $ 0.70 Diluted EPS: Net income $ 38,566 41,168,260 $ 28,712 40,879,684 Effect of dilutive securities — 273,133 — 382,407 Diluted EPS per common share $ 38,566 41,441,393 $ 0.93 $ 28,712 41,262,091 $ 0.70 For the Six Months Ended June 30, 2025 2024 ($ in thousands except per share amounts) Income (Numerator) Shares (Denominator) Per Share Amount Income (Numerator) Shares (Denominator) Per Share Amount Basic EPS: Net income $ 74,972 $ 53,984 Less: income allocated to restricted stock ( 432 ) ( 384 ) Basic EPS per common share $ 74,540 41,149,623 $ 1.81 $ 53,600 40,861,775 $ 1.31 Diluted EPS: Net income $ 74,972 41,149,623 $ 53,984 40,861,775 Effect of dilutive securities — 274,440 — 394,306 Diluted EPS per common share $ 74,972 41,424,063 $ 1.81 $ 53,984 41,256,081 $ 1.31 Page 32 Index Note 10. Accumulated Other Comprehensive Income (Loss) The components of accumulated other comprehensive income (loss) ("AOCI") for the Company for the periods shown were as follows: ($ in thousands) June 30, 2025 December 31, 2024 Unrealized loss on securities available for sale $ ( 298,893 ) $ ( 368,055 ) Tax effect 69,290 85,941 Net unrealized loss on securities available for sale ( 229,603 ) ( 282,114 ) Postretirement plans asset (liability) 111 111 Tax effect ( 26 ) ( 26 ) Net postretirement plans asset (liability) 85 85 Total accumulated other comprehensive income (loss) $ ( 229,518 ) $ ( 282,029 ) The following tables disclose the changes in AOCI for the three six months ended June 30, 2025 and 2024 (all amounts are net of tax): For the Three Months Ended June 30, 2025 ($ in thousands) Unrealized Loss on Securities Available for Sale Postretirement Plans Asset (Liability) Total Beginning balance $ ( 246,713 ) $ 85 $ ( 246,628 ) Other comprehensive income before reclassifications 17,110 — 17,110 Net current period other comprehensive income 17,110 — 17,110 Ending balance $ ( 229,603 ) $ 85 $ ( 229,518 ) For the Three Months Ended June 30, 2024 ($ in thousands) Unrealized Loss on Securities Available for Sale Postretirement Plans Asset (Liability) Total Beginning balance $ ( 321,915 ) $ ( 58 ) $ ( 321,973 ) Other comprehensive loss before reclassifications 6,619 — 6,619 Amounts reclassified from accumulated other comprehensive income 143 20 163 Net current period other comprehensive (loss) income 6,762 20 6,782 Ending balance $ ( 315,153 ) $ ( 38 ) $ ( 315,191 ) Page 33 Index For the Six Months Ended June 30, 2025 ($ in thousands) Unrealized Loss on Securities Available for Sale Postretirement Plans Asset (Liability) Total Beginning balance $ ( 282,114 ) $ 85 $ ( 282,029 ) Other comprehensive income before reclassifications 52,511 — 52,511 Net current period other comprehensive income 52,511 — 52,511 Ending balance $ ( 229,603 ) $ 85 $ ( 229,518 ) For the Six Months Ended June 30, 2024 ($ in thousands) Unrealized Loss on Securities Available for Sale Postretirement Plans Asset (Liability) Total Beginning balance $ ( 307,953 ) $ ( 77 ) $ ( 308,030 ) Other comprehensive loss before reclassifications ( 8,092 ) — ( 8,092 ) Amounts reclassified from accumulated other comprehensive income 892 39 931 Net current period other comprehensive (loss) income ( 7,200 ) 39 ( 7,161 ) Ending balance $ ( 315,153 ) $ ( 38 ) $ ( 315,191 ) Amounts reclassified from AOCI for unrealized gain (loss) on AFS securities represent realized securities gains or losses, net of tax effects. Amounts reclassified from AOCI for postretirement plans asset (liability) represent amortization of amounts included in AOCI, net of taxes, and are recorded in the "Other operating expenses" line item of the consolidated statements of income. Note 11. Revenue from Contracts with Customers All of the Company’s revenues that are in the scope of the “ Revenue from Contracts with Customers ” accounting standard (“ASC 606”) are recognized within noninterest income. The following table presents the Company’s sources of noninterest income for the six months ended June 30, 2025 and 2024. Items outside the scope of ASC 606 are noted as such. For the Three Months Ended For the Six Months Ended ($ in thousands) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Noninterest Income in-scope of ASC 606: Service charges on deposit accounts $ 3,976 $ 4,139 $ 7,743 $ 8,007 Other service charges and fees: Bankcard interchange income, net 2,588 2,359 4,915 4,673 Other service charges and fees 1,873 1,650 3,998 3,498 Commissions from sales of financial products 1,388 1,377 2,796 2,697 Portion of other income in-scope of ASC 606 — 55 — 312 Noninterest income (in-scope of ASC 606) 9,825 9,580 19,452 19,187 Noninterest income (out-of-scope of ASC 606) 4,516 5,021 7,791 8,310 Total noninterest income $ 14,341 $ 14,601 $ 27,243 $ 27,497 There have been no material changes from the Company's revenue streams accounted for under ASC 606 as discussed in Note 20 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Page 34 Index Note 12. Segment Reporting The Company is a bank holding company, whose principal activity is the ownership and management of its wholly-owned subsidiary, First Bank (the "Bank"). As a community-oriented financial institution, substantially all of the Company’s operations involve the delivery of loan and deposit products or the provision of financial advice to customers. Management makes operating decisions and assesses performance based on an ongoing review of these banking operations, which constitute the Company’s only operating segment for financial reporting purposes. The accounting policies of the banking operations segment are the same as those described in the Summary of Significant Accounting Policies as discussed in Note 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The measure of segment assets is reported on the balance sheet as total consolidated assets. The role of chief operating decision maker is comprised of the executive leadership team to include the Company's Chief Executive Officer, the Bank's Chief Executive Officer, the Company's President, and the Company's Chief Financial Officer. The chief operating decision makers use pre-tax net income to allocate resources in the annual budget and forecasting process. The chief operating decision makers consider budget-to-actual variances on a monthly basis for profit measures when making decisions about allocating capital and personnel to the operating segment. The chief operating decision makers use the Consolidated Statements of Income and Consolidated Balance Sheets to ascertain measures or performance such as revenue, profit or loss, significant expenses and assets. Depreciation expense amounted to $ 1.7 million, and $ 2.0 million, for the three months ended June 30, 2025 and June 30, 2024, respectively, and $ 3.5 million and $ 4.0 million for the six months ended June 30, 2025 and June 30, 2024, respectively. Depreciation expense is recorded in Occupancy and equipment expense on the Consolidated Statements of Income. Note 13. Subsequent Events During the third quarter of 2025, to take advantage of the current yields on certain categories of bonds, the Com pany executed a securities loss earnback transaction. The Company identified $ 194.3 million of AFS securities bearing 1.63 % to dispose of and sold those securities at a loss of approximately $ 27.9 million. During the third quar ter of 2025, the Company invested a total of $ 167.4 million in AFS securities bearing 4.79 %. Page 35 Index