FIRST BANCORP /NC/ 10-Q

Item 1 - Financial Statements First Bancorp Consolidated Balance Sheets ($ in thousands - unaudited) September 30, 2025 December 31, 2024 Assets Cash and due from banks, noninterest-bearing $ 138,369 $ 78,596 Due from banks, interest-bearing 459,606 428,911 Total cash and cash equivalents 597,975 507,507 Securities available for sale (amortized cost of $ 2,417,434 and $ 2,411,117 , respectively) 2,165,668 2,043,062 Securities held to maturity (fair values of $ 443,055 and $ 428,571 , respectively) 514,733 519,998 Presold mortgages in process of settlement 4,032 5,942 Loans 8,419,224 8,094,676 Allowance for credit losses on loans ( 120,948 ) ( 122,572 ) Net loans 8,298,276 7,972,104 Premises and equipment, net 141,441 143,459 Accrued interest receivable 35,986 36,329 Goodwill 478,750 478,750 Other intangible assets, net 18,526 22,904 Bank-owned life insurance 191,911 188,460 Other assets 302,965 229,179 Total assets $ 12,750,263 $ 12,147,694 Liabilities Deposits Noninterest-bearing deposits $ 3,580,560 $ 3,367,624 Interest-bearing deposits 7,300,610 7,162,901 Total deposits 10,881,170 10,530,525 Borrowings 92,421 91,876 Accrued interest payable 4,436 4,604 Other liabilities 168,913 75,078 Total liabilities 11,146,940 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: 41,465,437 shares and 41,347,418 shares, respectively 973,235 971,313 Retained earnings 823,483 756,327 Stock in rabbi trust assumed in acquisition ( 877 ) ( 1,148 ) Rabbi trust obligation 877 1,148 Accumulated other comprehensive income (loss) ( 193,395 ) ( 282,029 ) Total shareholders’ equity 1,603,323 1,445,611 Total liabilities and shareholders’ equity $ 12,750,263 $ 12,147,694 See accompanying notes to unaudited consolidated financial statements. Page 4 Index First Bancorp Consolidated Statements of Income Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands, except per share data - unaudited) 2025 2024 2025 2024 Interest Income Interest and fees on loans $ 118,822 $ 111,076 $ 342,286 $ 331,346 Interest on investment securities: Taxable interest income 17,571 10,779 49,952 34,798 Tax-exempt interest income 1,114 1,116 3,346 3,350 Other, principally overnight investments 6,693 8,438 18,017 17,351 Total interest income 144,200 131,409 413,601 386,845 Interest Expense Interest on deposits 40,035 46,420 116,559 130,299 Interest on borrowings 1,676 1,946 4,994 13,114 Total interest expense 41,711 48,366 121,553 143,413 Net interest income 102,489 83,043 292,048 243,432 Provision for credit losses 3,442 14,200 6,770 15,941 Net interest income after provision for credit losses 99,047 68,843 285,278 227,491 Noninterest Income Service charges on deposit accounts 4,225 4,320 11,968 12,327 Other service charges and fees 6,355 5,555 18,833 16,439 Presold mortgage loan fees and gains on sale 471 690 1,236 1,616 Commissions from sales of financial products 1,678 1,371 4,474 4,068 SBA loan sale gains 869 1,108 1,072 3,339 Bank-owned life insurance income 1,289 1,205 3,738 3,548 Securities losses, net ( 27,905 ) — ( 27,905 ) ( 1,161 ) Other income, net 139 ( 670 ) 948 900 Total noninterest income ( 12,879 ) 13,579 14,364 41,076 Noninterest Expense Salaries, incentives and commissions expense 31,065 29,955 88,731 85,406 Employee benefit expense 5,751 6,495 18,033 19,467 Total personnel expense 36,816 36,450 106,764 104,873 Occupancy and equipment expense 5,145 4,884 15,532 15,835 Intangibles amortization expense 1,394 1,613 4,378 5,041 Other operating expenses 16,856 16,903 50,413 51,579 Total noninterest expenses 60,211 59,850 177,087 177,328 Income before income taxes 25,957 22,572 122,555 91,239 Income tax expense 5,594 3,892 27,220 18,575 Net income $ 20,363 $ 18,680 $ 95,335 $ 72,664 Earnings per common share: Basic $ 0.49 $ 0.45 $ 2.30 $ 1.76 Diluted 0.49 0.45 2.30 1.76 Weighted average common shares outstanding: Basic 41,237,874 40,971,520 41,179,363 40,924,822 Diluted 41,481,542 41,366,743 41,443,636 41,294,137 See accompanying notes to unaudited consolidated financial statements. Page 5 Index First Bancorp Consolidated Statements of Comprehensive Income (Loss) Three Months Ended September 30, Nine Months Ended September 30, ($ in thousands - unaudited) 2025 2024 2025 2024 Net income $ 20,363 $ 18,680 $ 95,335 $ 72,664 Other comprehensive income (loss): Unrealized gains (losses) on securities available for sale: Unrealized holding gains (losses) arising during the period, pretax 19,222 78,550 88,384 68,021 Tax (expense) benefit ( 4,488 ) ( 18,184 ) ( 21,139 ) ( 15,747 ) Reclassification to realized losses 27,905 — 27,905 1,161 Tax (benefit) expense ( 6,516 ) — ( 6,516 ) ( 269 ) Postretirement Plans: Amortization of unrecognized net actuarial losses — 25 — 75 Tax (expense) benefit — ( 6 ) — ( 17 ) Other comprehensive income (loss) 36,123 60,385 88,634 53,224 Comprehensive income (loss) $ 56,486 $ 79,065 $ 183,969 $ 125,888 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 September 30, 2024 Balances, July 1, 2024 41,188 $ 967,239 $ 752,294 $ ( 1,139 ) $ 1,139 $ ( 315,191 ) $ 1,404,342 Net income 18,680 18,680 Cash dividends declared ($ 0.22 per common share) ( 9,093 ) ( 9,093 ) Change in Rabbi Trust Obligation ( 9 ) 9 — Stock options exercised 111 2,324 2,324 Stock withheld for payment of taxes ( 11 ) ( 478 ) ( 478 ) Stock-based compensation 52 1,365 1,365 Other comprehensive income 60,385 60,385 Balances, September 30, 2024 41,340 $ 970,450 $ 761,881 $ ( 1,148 ) $ 1,148 $ ( 254,806 ) $ 1,477,525 Three Months Ended September 30, 2025 Balances, July 1, 2025 41,468 $ 973,041 $ 812,657 $ ( 869 ) $ 869 $ ( 229,518 ) $ 1,556,180 Net income 20,363 20,363 Cash dividends declared ($ 0.23 per common share) ( 9,537 ) ( 9,537 ) Change in Rabbi Trust Obligation ( 8 ) 8 — Stock options exercised 6 163 163 Stock withheld for payment of taxes ( 11 ) ( 546 ) ( 546 ) Stock-based compensation 2 577 577 Other comprehensive income 36,123 36,123 Balances, September 30, 2025 41,465 $ 973,235 $ 823,483 $ ( 877 ) $ 877 $ ( 193,395 ) $ 1,603,323 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 Nine Months Ended September 30, 2024 Balances, January 1, 2024 41,110 $ 963,990 $ 716,420 $ ( 1,385 ) $ 1,385 $ ( 308,030 ) $ 1,372,380 Net income 72,664 72,664 Cash dividends declared ($ 0.66 per common share) ( 27,203 ) ( 27,203 ) Change in Rabbi Trust Obligation 237 ( 237 ) — Stock options exercised 163 3,429 3,429 Stock withheld for payment of taxes ( 15 ) ( 604 ) ( 604 ) Stock-based compensation 82 3,635 3,635 Other comprehensive income 53,224 53,224 Balances, September 30, 2024 41,340 $ 970,450 $ 761,881 $ ( 1,148 ) $ 1,148 $ ( 254,806 ) $ 1,477,525 Nine Months Ended September 30, 2025 Balances, January 1, 2025 41,347 $ 971,313 $ 756,327 $ ( 1,148 ) $ 1,148 $ ( 282,029 ) $ 1,445,611 Net income 95,335 95,335 Cash dividends declared ($ 0.68 per common share) ( 28,179 ) ( 28,179 ) Change in Rabbi Trust Obligation 271 ( 271 ) — Stock repurchases ( 25 ) ( 992 ) ( 992 ) Stock options exercised 79 1,401 1,401 Stock withheld for payment of taxes ( 33 ) ( 1,385 ) ( 1,385 ) Stock-based compensation 97 2,898 2,898 Other comprehensive income 88,634 88,634 Balances, September 30, 2025 41,465 $ 973,235 $ 823,483 $ ( 877 ) $ 877 $ ( 193,395 ) $ 1,603,323 See accompanying notes to unaudited consolidated financial statements. Page 8 Index First Bancorp Consolidated Statements of Cash Flows Nine Months Ended September 30, ($ in thousands-unaudited) 2025 2024 Cash Flows From Operating Activities Net income $ 95,335 $ 72,664 Reconciliation of net income to net cash provided by operating activities: Provision for credit losses 6,770 15,941 Net security premium amortization 4,253 6,700 Deferred income taxes, net 6,838 ( 5,814 ) Loan discount accretion ( 5,850 ) ( 8,060 ) Deposit and debt discount accretion, net 864 1,253 Foreclosed property losses (gains), net 81 ( 214 ) Securities losses, net 27,905 1,161 Other (gains) losses, net ( 916 ) ( 504 ) Bank-owned life insurance income ( 3,738 ) ( 3,548 ) Net amortization of deferred loan costs/(fees) 269 ( 975 ) Depreciation of premises and equipment 5,106 5,884 Amortization of operating lease right-of-use assets 984 1,420 Repayments of lease obligations ( 931 ) ( 1,360 ) Stock-based compensation expense 2,898 3,458 Amortization of intangible assets 4,378 5,041 Amortization and impairment of SBA servicing assets 897 1,248 Gains on sale of loans ( 2,308 ) ( 4,955 ) Origination of presold mortgage loans and SBA loans held for sale ( 68,796 ) ( 120,281 ) Proceeds from sales of presold mortgage loans and SBA loans 75,953 131,430 (Increase) decrease in accrued interest receivable 343 4,461 (Increase) decrease in other assets ( 13,227 ) ( 2,527 ) (Decrease) increase in accrued interest payable ( 168 ) ( 133 ) Increase (decrease) in other liabilities 11,035 3,762 Net cash provided by (used in) operating activities 147,975 106,052 Cash Flows From Investing Activities Purchases of securities available for sale ( 353,673 ) — Proceeds from maturities, calls and principal repayments of securities available for sale 152,109 204,848 Proceeds from maturities, calls and principal repayments of securities held to maturity 1,982 7,567 Proceeds from sales of securities available for sale 166,372 138,182 Proceeds from sale of VISA B shares — 4,522 Purchases of Federal Reserve and FHLB stock ( 398 ) ( 39,553 ) Redemptions of Federal Reserve and FHLB stock — 52,810 Proceeds from bank owned life insurance death benefits 287 209 Purchases of other investments ( 17,072 ) ( 1,858 ) Net (increase) decrease in loans ( 330,748 ) 125,241 Proceeds from sales of foreclosed properties 4,241 687 Purchases of premises and equipment ( 3,073 ) ( 2,159 ) Proceeds from sales of premises and equipment 863 754 Net cash (used in) provided by investing activities ( 379,110 ) 491,250 Cash Flows From Financing Activities Net increase (decrease) in deposits 350,363 472,649 Proceeds from the issuance of FHLB and FRB borrowings 2,000 986,000 Repayment of FHLB and FRB borrowings ( 2,037 ) ( 1,515,036 ) Repayment of subordinated debentures — ( 10,000 ) Cash dividends paid – common stock ( 27,747 ) ( 27,154 ) Repurchases of common stock ( 992 ) — Proceeds from stock option exercises 1,401 3,429 Payment of taxes related to stock withheld ( 1,385 ) ( 604 ) Net cash provided by (used in) financing activities 321,603 ( 90,716 ) Increase (decrease) in cash and cash equivalents 90,468 506,586 Cash and cash equivalents, beginning of period 507,507 237,855 Cash and cash equivalents, end of period $ 597,975 $ 744,441 (Continued) Page 9 Index First Bancorp Consolidated Statements of Cash Flows Nine Months Ended September 30, ($ in thousands-unaudited) 2025 2024 Supplemental Disclosures of Cash Flow Information: Cash paid during the period for interest $ 121,183 $ 142,610 Cash paid during the period for income taxes 9,046 26,084 Cash paid during the period for the purchase of transferable tax credits 9,337 — Non-cash: Unrealized gain (loss) on securities available for sale, net of taxes 88,634 53,166 Non-cash: Foreclosed loans transferred to foreclosed real estate 1,076 1,066 Non-cash: Accrued dividends at end of period 9,537 9,093 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 81,420 — 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 September 30, 2025, the consolidated results of income, comprehensive income and shareholders' equity for the nine months ended September 30, 2025 and 2024, and the consolidated cash flows for the nine months ended September 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 nine 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. ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) , amended the Derivatives and Hedging and Revenue from Contracts with Customers topics in the Accounting Standards Codification to refine derivative scope and clarify the accounting treatment of share-based noncash consideration from customers in revenue contracts. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. Early adoption is permitted. Entities may apply the guidance prospectively or on a modified retrospective basis. The adoption of ASU 2025-07 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 September 30, 2025 and December 31, 2024 are summarized as follows: ($ in thousands) September 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 $ 144,944 $ 147,760 $ 2,816 $ — $ 121,051 $ 120,581 $ — $ ( 470 ) Government-sponsored enterprise securities 1,966 1,738 — ( 228 ) 11,961 9,614 — ( 2,347 ) Mortgage-backed securities 2,255,334 2,000,847 3,002 ( 257,489 ) 2,261,924 1,897,175 60 ( 364,809 ) Corporate bonds 15,190 15,323 172 ( 39 ) 16,181 15,692 — ( 489 ) Total available for sale $ 2,417,434 $ 2,165,668 $ 5,990 $ ( 257,756 ) $ 2,411,117 $ 2,043,062 $ 60 $ ( 368,115 ) Securities held to maturity: Mortgage-backed securities $ 7,291 $ 7,051 $ — $ ( 240 ) $ 9,198 $ 8,739 $ — $ ( 459 ) State and local governments 507,442 436,004 30 ( 71,468 ) 510,800 419,832 1 ( 90,969 ) Total held to maturity $ 514,733 $ 443,055 $ 30 $ ( 71,708 ) $ 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 September 30, 2025 and December 31, 2024. Accrued interest receivable on available for sale ("AFS") debt securities was $ 5.0 million and $ 4.6 million at September 30, 2025 and December 31, 2024, respectively. Accrued interest receivable on held to maturity ("HTM") debt securities was $ 3.0 million and $ 4.2 million as of September 30, 2025 and December 31, 2024. The following table presents information regarding all securities with unrealized losses at September 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 $ — $ — $ 1,738 $ 228 $ 1,738 $ 228 Mortgage-backed securities 243,236 440 1,365,028 257,289 1,608,264 257,729 Corporate bonds 3,711 39 — — 3,711 39 State and local governments 512 8 430,580 71,460 431,092 71,468 Total unrealized loss position $ 247,459 $ 487 $ 1,797,346 $ 328,977 $ 2,044,805 $ 329,464 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 September 30, 2025, the Company's securities portfolio included 580 securities of which 522 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 September 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 September 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 September 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 $ 129,260 $ 131,491 $ 6,015 $ 5,939 Due after five years but within ten years 32,840 33,330 231,205 201,931 Due after ten years — — 270,222 228,134 Mortgage-backed securities 2,255,334 2,000,847 7,291 7,051 Total securities $ 2,417,434 $ 2,165,668 $ 514,733 $ 443,055 At September 30, 2025 and December 31, 2024, investment securities with carrying values of $ 914.8 million and $ 806.0 million, respectively, were pledged as collateral for public deposits. In addition, at September 30, 2025 and December 31, 2024, investment securities with carrying values of $ 662.8 million and $ 661.0 million, respectively, were pledged as collateral to the Federal Reserve Bank ("Federal Reserve") to secure any such borrowings. At September 30, 2025 and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies or GSEs, in an amount greater than 10% of shareholders' equity. Page 13 Index During the three and nine months ended September 30, 2025, as part of a securities loss-earnback transaction, the Company received proceeds from sales of securities of $ 166.4 million and recorded $ 27.9 million in losses from the sales. There were no sales of investment securities during the three months ended September 30, 2024. During the second quarter of 2024, the Company sold all of its holdings of Class B shares of Visa, Inc. (“Visa”) stock that were received upon Visa’s initial public offering and recognized a gain of $ 4.5 million. As the Class B stock did not initially have a readily determinable fair value, it was carried at$0 prior to the sale. During the second quarter of 2024, the Company received proceeds from sales of securities of $ 138.2 million and recorded $ 4.7 million in losses from the sales. This loss was partially offset by the $ 4.5 million gain on the sale of the Visa stock discussed above. Included in "Securities losses, net" in the consolidated statements of income, during the first quarter of 2024, the Company received proceeds from the call of a security of $ 5.2 million and recorded a $ 975 thousand loss related to the unamortized premium balance at the time of the call. Included in “Other assets” in the consolidated balance sheets are investments in Federal Home Loan Bank (“FHLB”) and Federal Reserve stock totaling $ 41.7 million and $ 41.3 million at September 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 and $ 8.5 million at September 30, 2025 and December 31, 2024, respectively, 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 $ 33.1 million and $ 32.7 million at September 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) September 30, 2025 December 31, 2024 Amount Percentage Amount Percentage Commercial and industrial $ 904,226 11 % $ 919,690 11 % Construction, development & other land loans 688,302 8 % 647,167 8 % Commercial real estate - owner occupied 1,337,345 16 % 1,248,812 16 % Commercial real estate - non owner occupied 2,773,349 33 % 2,625,554 33 % Multi-family real estate 535,681 6 % 506,407 6 % Residential 1-4 family real estate 1,743,884 21 % 1,729,322 21 % Home equity loans/lines of credit 365,488 4 % 345,883 4 % Consumer loans 70,031 1 % 70,653 1 % Subtotal 8,418,306 100 % 8,093,488 100 % Unamortized net deferred loan costs/(fees) 918 1,188 Total loans $ 8,419,224 $ 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) September 30, 2025 December 31, 2024 Guaranteed portions of SBA loans included in table above $ 54,690 $ 34,095 Unguaranteed portions of SBA loans included in table above 103,083 101,356 Total SBA loans included in the table above $ 157,773 $ 135,451 Sold portions of SBA loans with servicing retained - not included in tables above $ 300,537 $ 330,482 At September 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. Page 14 Index At September 30, 2025 and December 31, 2024, l oans in the amount of $ 7.0 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 September 30, 2025 and December 31, 2024, total loans included loans to directors and executive officers of the Company, and their associates, totaling approximately $ 61.4 million and $ 62.9 million, respectively. Available credit on related party loans totaled $ 0.1 million and $ 1.0 million at September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025 and December 31, 2024, unamortized discounts on all acquired loans totaled $ 10.1 million and $ 15.1 million, respectively. 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) September 30, 2025 December 31, 2024 Nonaccrual loans $ 37,289 $ 31,779 Accruing loans > 90 days past due — — Total nonperforming loans 37,289 31,779 Foreclosed properties 1,718 4,965 Total nonperforming assets $ 39,007 $ 36,744 At September 30, 2025 and December 31, 2024, the Company had $ 0.6 million and $ 1.2 million, respectively, in residential mortgage loans in the process of foreclosure. At September 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 September 30, 2025: ($ in thousands) Nonaccrual Loans with No Allowance Nonaccrual Loans with an Allowance Total Nonaccrual Loans Commercial and industrial $ — $ 10,016 $ 10,016 Construction, development & other land loans — 148 148 Commercial real estate - owner occupied 698 11,995 12,693 Commercial real estate - non owner occupied 4,393 776 5,169 Residential 1-4 family real estate — 7,077 7,077 Home equity loans/lines of credit — 1,983 1,983 Consumer loans — 203 203 Total $ 5,091 $ 32,198 $ 37,289 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 Page 15 Index 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. The following table represents the accrued interest receivables written off by reversing interest income during each period indicated: ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 Commercial and industrial $ 295 $ 360 Construction, development & other land loans 42 — Commercial real estate - owner occupied 325 238 Commercial real estate - non owner occupied 184 55 Residential 1-4 family real estate 120 45 Home equity loans/lines of credit 49 26 Consumer loans 4 1 Total $ 1,019 $ 725 The following table presents an analysis of the payment status of the Company’s loans as of September 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 $ 892,540 $ 1,143 $ 527 $ 10,016 $ 904,226 Construction, development & other land loans 687,901 253 — 148 688,302 Commercial real estate - owner occupied 1,322,791 694 1,167 12,693 1,337,345 Commercial real estate - non owner occupied 2,767,841 339 — 5,169 2,773,349 Multi-family real estate 535,681 — — — 535,681 Residential 1-4 family real estate 1,724,168 7,981 4,658 7,077 1,743,884 Home equity loans/lines of credit 362,306 1,199 — 1,983 365,488 Consumer loans 69,443 285 100 203 70,031 Total $ 8,362,671 $ 11,894 $ 6,452 $ 37,289 8,418,306 Unamortized net deferred loan costs/(fees) 918 Total loans $ 8,419,224 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 September 30, 2025: ($ in thousands) Commercial Property Total Collateral-Dependent Loans Commercial real estate - owner occupied $ 4,263 $ 4,263 Commercial real estate - non owner occupied 4,393 4,393 Total $ 8,656 $ 8,656 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 September 30, 2025 Commercial and industrial $ 18,506 $ ( 2,357 ) $ 580 $ 1,823 $ 18,552 Construction, development & other land loans 8,660 — 31 973 9,664 Commercial real estate - owner occupied 20,746 ( 890 ) 12 1,240 21,108 Commercial real estate - non owner occupied 24,425 — 9 257 24,691 Multi-family real estate 4,745 — — 655 5,400 Residential 1-4 family real estate 35,783 ( 3 ) 27 ( 1,813 ) 33,994 Home equity loans/lines of credit 3,445 — 2 ( 107 ) 3,340 Consumer loans 4,235 ( 400 ) 30 334 4,199 Total $ 120,545 $ ( 3,650 ) $ 691 $ 3,362 $ 120,948 As of and for the nine months ended September 30, 2025 Commercial and industrial $ 19,474 $ ( 5,989 ) $ 1,544 $ 3,523 $ 18,552 Construction, development & other land loans 9,314 — 136 214 9,664 Commercial real estate - owner occupied 19,380 ( 1,340 ) 123 2,945 21,108 Commercial real estate - non owner occupied 27,768 ( 938 ) 29 ( 2,168 ) 24,691 Multi-family real estate 5,476 — — ( 76 ) 5,400 Residential 1-4 family real estate 33,552 ( 127 ) 80 489 33,994 Home equity loans/lines of credit 4,111 ( 68 ) 23 ( 726 ) 3,340 Consumer loans 3,497 ( 1,062 ) 135 1,629 4,199 Total $ 122,572 $ ( 9,524 ) $ 2,070 $ 5,830 $ 120,948 Page 17 Index ($ in thousands) Beginning balance Charge-offs Recoveries Provisions / (Reversals) Ending balance As of and for the three months ended September 30, 2024 Commercial and industrial $ 19,837 $ ( 1,913 ) $ 246 $ ( 27 ) $ 18,143 Construction, development & other land loans 9,996 — 35 1,394 11,425 Commercial real estate - owner occupied 17,859 ( 21 ) 4 657 18,499 Commercial real estate - non owner occupied 25,876 — 3 2,754 28,633 Multi-family real estate 5,129 — — 161 5,290 Residential 1-4 family real estate 24,855 — 28 9,183 34,066 Home equity loans/lines of credit 3,177 — 232 165 3,574 Consumer loans 3,329 ( 754 ) 17 496 3,088 Total $ 110,058 $ ( 2,688 ) $ 565 $ 14,783 $ 122,718 As of and for the nine months ended September 30, 2024 Commercial and industrial $ 21,227 $ ( 5,976 ) $ 1,346 $ 1,546 $ 18,143 Construction, development & other land loans 13,940 ( 79 ) 182 ( 2,618 ) 11,425 Commercial real estate - owner occupied 18,218 ( 109 ) 12 378 18,499 Commercial real estate - non owner occupied 24,916 ( 158 ) 46 3,829 28,633 Multi-family real estate 3,825 — — 1,465 5,290 Residential 1-4 family real estate 21,396 ( 6 ) 255 12,421 34,066 Home equity loans/lines of credit 3,339 ( 2 ) 254 ( 17 ) 3,574 Consumer loans 2,992 ( 1,130 ) 197 1,029 3,088 Total $ 109,853 $ ( 7,460 ) $ 2,292 $ 18,033 $ 122,718 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 September 30, 2025 Commercial and industrial Pass $ 143,026 $ 92,703 $ 49,653 $ 97,711 $ 63,505 $ 115,494 $ 327,985 $ 890,077 Special Mention 88 573 103 33 43 372 1,596 2,808 Classified 742 209 982 3,243 662 4,137 1,366 11,341 Total commercial and industrial 143,856 93,485 50,738 100,987 64,210 120,003 330,947 904,226 Gross charge-offs, YTD 35 399 780 903 27 590 3,255 5,989 Construction, development & other land loans Pass 347,468 159,590 80,951 26,988 20,004 12,507 39,388 686,896 Special Mention — — 580 53 — — — 633 Classified — 360 72 71 4 266 — 773 Total construction, development & other land loans 347,468 159,950 81,603 27,112 20,008 12,773 39,388 688,302 Gross charge-offs, YTD — — — — — — — — Commercial real estate - owner occupied Pass 221,605 200,134 193,271 224,333 227,539 210,127 23,802 1,300,811 Special Mention 2,266 3,033 1,825 3,075 225 6,366 1,683 18,473 Classified 134 1,432 586 2,324 614 12,971 — 18,061 Total commercial real estate - owner occupied 224,005 204,599 195,682 229,732 228,378 229,464 25,485 1,337,345 Gross charge-offs, YTD — 420 — 17 — 903 — 1,340 Commercial real estate - non owner occupied Pass 515,220 405,117 394,638 613,322 562,686 244,095 28,970 2,764,048 Special Mention 49 1,228 — — 4 1,355 — 2,636 Classified 81 313 — 547 — 5,724 — 6,665 Total commercial real estate - non owner occupied 515,350 406,658 394,638 613,869 562,690 251,174 28,970 2,773,349 Gross charge-offs, YTD — 905 — 33 — — — 938 Multi-family real estate Pass 91,920 59,021 64,491 110,234 151,679 42,409 15,793 535,547 Special Mention — — — — — — — — Classified — — 134 — — — — 134 Total multi-family real estate 91,920 59,021 64,625 110,234 151,679 42,409 15,793 535,681 Gross charge-offs, YTD — — — — — — — — Residential 1-4 family real estate Pass 134,800 226,892 309,247 381,262 272,054 401,953 213 1,726,421 Special Mention 154 20 — — 38 642 — 854 Classified 439 4,339 423 2,208 1,081 8,119 — 16,609 Total residential 1-4 family real estate 135,393 231,251 309,670 383,470 273,173 410,714 213 1,743,884 Gross charge-offs, YTD — — — — — 127 — 127 Home equity loans/lines of credit Pass 3,203 1,290 2,185 723 221 571 351,914 360,107 Special Mention — 118 — — — — 14 132 Classified 166 58 — — 89 4 4,932 5,249 Total home equity loans/lines of credit 3,369 1,466 2,185 723 310 575 356,860 365,488 Gross charge-offs, YTD — — — 68 — — — 68 Consumer loans Pass 13,172 10,053 6,153 4,104 1,321 652 34,274 69,729 Special Mention — — — — — — 16 16 Classified 10 53 36 31 4 — 152 286 Total consumer loans 13,182 10,106 6,189 4,135 1,325 652 34,442 70,031 Gross charge-offs, YTD — 98 87 5 1 37 834 1,062 Total loans $ 1,474,543 $ 1,166,536 $ 1,105,330 $ 1,470,262 $ 1,301,773 $ 1,067,764 $ 832,098 8,418,306 Unamortized net deferred loan costs/(fees) 918 Total loans, net of deferred loan costs/(fees) $ 8,419,224 Total gross charge-offs, year to date $ 35 $ 1,822 $ 867 $ 1,026 $ 28 $ 1,657 $ 4,089 $ 9,524 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 tables present the amortized cost basis at September 30, 2025 and September 30, 2024 of the loans modified during the three and nine month periods then ended for borrowers experiencing financial difficulty, by loan category and type of concession granted. ($ 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 September 30, 2025 Commercial and industrial $ 66 $ 608 $ — $ 40 $ 714 0.08 % Home equity loans/lines of credit — 327 — — 327 0.09 % Total $ 66 $ 935 $ — $ 40 $ 1,041 0.01 % As of and for the nine months ended September 30, 2025 Commercial and industrial $ 120 $ 712 $ — $ 40 $ 872 0.10 % Construction, development & other land loans — 309 — — 309 0.04 % Commercial real estate - owner occupied 734 134 — — 868 0.06 % Commercial real estate - non owner occupied 45 — 4,476 — 4,521 0.16 % Residential 1-4 family real estate — 103 118 — 221 0.01 % Home equity loans/lines of credit — 693 — — 693 0.19 % Total $ 899 $ 1,951 $ 4,594 $ 40 $ 7,484 0.09 % ($ 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 September 30, 2024 Construction, development & other land loans $ — $ 143 $ — $ — $ 143 0.02 % Home equity loans/lines of credit — 96 — — 96 0.03 % Total $ — $ 239 $ — $ — $ 239 — % As of and for the nine months ended September 30, 2024 Commercial and industrial $ 114 $ 1 $ 878 $ 92 $ 1,085 0.13 % Construction, development & other land loans — 208 — — 208 0.03 % Commercial real estate - non owner occupied — 107 — — 107 — % Residential 1-4 family real estate — 199 — — 199 0.01 % Home equity loans/lines of credit — 417 — 173 590 0.18 % Total $ 114 $ 932 $ 878 $ 265 $ 2,189 0.03 % For the three and nine months ended September 30, 2025 and September 30, 2024, there were no modifications for borrowers experiencing financial difficulty with principal forgiveness concessions. Page 21 Index The following table describes the financial effect for the three and nine months ended September 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 September 30, 2025 Commercial and industrial 2.24 % 6 19 Home equity loans/lines of credit — % 0 10 For the nine months ended September 30, 2025 Commercial and industrial 2.24 % 6 30 Construction, development & other land loans — % 0 6 Commercial real estate - owner occupied — % 6 91 Commercial real estate - non owner occupied — % 7 7 Residential 1-4 family real estate — % 4 30 Home equity loans/lines of credit — % 0 38 The following table describes the financial effect for the three and nine months ended September 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 September 30, 2024 Construction, development & other land loans — % 0 8 Home equity loans/lines of credit — % 0 40 For the nine months ended September 30, 2024 Commercial and industrial 0.75 % 36 13 Construction, development & other land loans — % 0 6 Commercial real estate - non owner occupied — % 0 13 Residential 1-4 family real estate — % 0 103 Home equity loans/lines of credit 2.13 % 0 65 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 September 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 $ 701 $ — $ 54 $ 208 Construction, development & other land loans 309 — — — Commercial real estate - owner occupied 591 399 — — Commercial real estate - non owner occupied 130 — — 4,393 Residential 1-4 family real estate 221 — — — Home equity loans/lines of credit 693 — — — $ 2,645 $ 399 $ 54 $ 4,601 Page 22 Index 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 The following table presents the amortized cost basis of loans that had a payment default during the three and nine months ended September 30, 2025 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty by loan category and type of concession granted. ($ in thousands) Payment Delay Total Commercial and industrial $ 54 $ 54 Commercial real estate - owner occupied 334 334 Total $ 388 $ 388 During the three and nine months ended September 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 September 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. 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. Page 23 Index 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 $ 674 million. The following is a summary of the categories of those loans outstanding as of September 30, 2025: ($ in thousands) Balance Commercial and industrial $ 15,153 Construction, development & other land loans 13,025 Commercial real estate - owner occupied 93,322 Commercial real estate - non owner occupied 252,072 Multi-family real estate 24,519 Residential 1-4 family real estate 242,214 Home equity loans/lines of credit 33,257 Total $ 673,562 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 September 30, 2025. The Company applied increased reserve rates based upon severe economic factors to the approximately $ 674 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 $ 3.5 million as of September 30, 2025, adding 5 basis points to the overall ACL as a percent of total loans, which was 1.44 % as of September 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. The following table presents the balance and activity in the allowance for unfunded loan commitments for the three and nine months ended September 30, 2025 and 2024: Three months ended September 30, Nine months ended September 30, ($ in thousands) 2025 2024 2025 2024 Beginning balance $ 9,926 $ 9,860 $ 9,066 $ 11,369 Charge-offs — — — Recoveries — — — Provision for (reversal of) unfunded commitments 80 ( 583 ) 940 ( 2,092 ) Ending balance $ 10,006 $ 9,277 $ 10,006 $ 9,277 Page 24 Index 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. September 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 $ 1,600 $ — $ 1,600 $ 1,387 $ 213 Core deposit intangibles 57,890 39,364 18,526 57,890 35,199 22,691 Other intangibles 100 100 — 100 100 — Total amortizable intangible assets $ 59,590 $ 41,064 $ 18,526 $ 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 $ 1.4 million and $ 1.6 million for the three months ended September 30, 2025 and 2024, respectively, and $ 4.4 million and $ 5.0 million for the nine months ended September 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 nine months ended September 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 September 30, 2025 and 2024, respectively, and $ 2.0 million and $ 2.3 million for the nine months ended September 30, 2025 and 2024, respectively. There was no impairment of SBA servicing assets at September 30, 2025 and December 31, 2024 and no significant methodology changes have been made since year end. 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 September 30, Nine months ended September 30, ($ in thousands) 2025 2024 2025 2024 Beginning balance, net $ 2,029 $ 3,003 $ 2,605 $ 3,350 Add: New servicing assets 228 315 284 858 Less: Amortization expense and impairment charges 265 358 897 1,248 Ending balance, net $ 1,992 $ 2,960 $ 1,992 $ 2,960 Page 25 Index Note 5. Borrowings The following tables present information regarding the Company’s outstanding borrowings at September 30, 2025: ($ in thousands) Description Due date Call Feature Balance Interest Rate FHLB Principal Reducing Credit 6/26/2028 to 12/20/2028 None $ 765 0.00 % to 1.00 % fixed Trust Preferred Securities 1/23/2034 Quarterly by Company 10,310 7.22 % at 9/30/25 adjustable rate 3 month CME Term SOFR+ 2.91 % Trust Preferred Securities 1/23/2034 Quarterly by Company 10,310 7.32 % at 9/30/25 adjustable rate 3 month CME Term SOFR + 3.01 % Trust Preferred Securities 9/20/2034 Quarterly by Company 12,372 6.41 % at 9/30/25 adjustable rate 3 month CME Term SOFR + 2.41 % Trust Preferred Securities 1/7/2035 Quarterly by Company 10,310 6.58 % at 9/30/25 adjustable rate 3 month CME Term SOFR + 2.00 % Trust Preferred Securities 6/15/2036 Quarterly by Company 25,774 5.69 % at 9/30/25 adjustable rate 3 month CME Term SOFR + 1.65 % Trust Preferred Securities 6/23/2036 Quarterly by Company 8,248 6.12 % at 9/30/25 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 9/30/25 until 11/15/25, then adjustable rate 3 month CME Term SOFR + 4.16 % Total borrowings / weighted average rate as of September 30, 2025 96,089 5.97 % Unamortized discount on acquired borrowings ( 3,668 ) Total borrowings $ 92,421 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 Page 26 Index Note 6. Leases The Company enters into leases in the normal course of business. As of September 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 20.8 years as of September 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 3.41 % and 3.34 % as of September 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 $ 13.7 million and $ 14.6 million as of September 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 for the three months ended September 30, 2025 and 2024, and $ 1.9 million and $ 1.8 million for the nine months ended September 30, 2025 and 2024, respectively. Future undiscounted lease payments for operating leases with initial terms of greater than one year as of September 30, 2025 are as follows: ($ in thousands) October 1, 2025 to December 31, 2025 $ 450 2026 1,616 2027 1,338 2028 1,251 2029 1,196 Thereafter 15,725 Total undiscounted lease payments 21,576 Less effect of discounting ( 7,014 ) Present value of estimated lease payments (lease liability) $ 14,562 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. Page 27 Index 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. The following table summarizes the Company’s financial instruments that were measured at fair value on a recurring and nonrecurring basis at September 30, 2025: ($ in thousands) Description of Financial Instruments Fair Value at September 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 $ 147,760 $ — $ 147,760 $ — Government-sponsored enterprise securities 1,738 — 1,738 — Mortgage-backed securities 2,000,847 — 2,000,172 675 Corporate bonds 15,323 — 14,323 1,000 Total available for sale securities $ 2,165,668 $ — $ 2,163,993 $ 1,675 Derivative financial assets $ 3,993 $ — $ 3,993 $ — Presold mortgages in process of settlement $ 4,032 $ — $ 4,032 $ — Derivative financial liabilities $ 4,034 $ — $ 4,034 $ — Nonrecurring Individually evaluated loans $ 8,656 $ — $ — $ 8,656 Foreclosed real estate 44 — — 44 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. Page 28 Index 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-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. Foreclosed real estate – Foreclosed real estate, consisting of properties obtained through foreclosure or in satisfaction of loans, is reported at the lower of cost or fair value. Fair value is measured on a non-recurring basis and is based upon independent market prices or current appraisals that are generally prepared using an income or market valuation approach and conducted by an independent, licensed third party appraiser, adjusted for estimated selling costs (Level 3). Appraisals used in this analysis are generally obtained at least annually based on when the assets were acquired, and thus the appraisals are not necessarily as of the period ends presented. At the time of foreclosure, any excess of the loan balance over the fair value of the real estate held as collateral is treated as a charge against the allowance for loan losses. For any real estate valuations subsequent to foreclosure, any excess of the real estate recorded value over the fair value of the real estate is treated as a foreclosed real estate write-down 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 September 30, 2025. Page 29 Index The carrying amounts and estimated fair values of financial instruments not carried at fair value at September 30, 2025 and December 31, 2024 were as follows: September 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 $ 138,369 $ 138,369 $ 78,596 $ 78,596 Due from banks, interest-bearing Level 1 459,606 459,606 428,911 428,911 Securities held to maturity Level 2 514,733 443,055 519,998 428,571 Total loans, net of allowance Level 3 8,298,276 7,901,035 7,972,104 7,514,505 SBA Servicing Asset Level 3 1,991 3,168 2,604 3,746 Demand deposits, money market and savings Level 1 10,059,129 10,059,129 9,593,557 9,593,557 Time deposits Level 2 822,042 819,192 936,968 933,523 Borrowings Level 2 92,421 88,644 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. 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 $ 0.7 million and $ 1.4 million for the three months ended September 30, 2025 and 2024, respectively, and $ 2.8 million and $ 3.0 million for the nine months ended September 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 $ 163,000 an d $ 304,000 for the three months ended September 30, 2025 and 2024, respectively, and $ 647,000 and $ 675,000 for the nine months ended September 30, 2025 and 2024, respectively. At September 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 September 30, 2025, the Equity Plan had 1,828,580 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. Page 30 Index 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 nine 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 89,798 41.84 Vested during the period ( 101,184 ) 37.81 Forfeited or expired during the period ( 5,324 ) 41.40 Nonvested at September 30, 2025 220,241 $ 37.88 Total unrecognized compensation expense as of September 30, 2025 amounted to $ 4.1 million with a weighted average remaining term of 2.3 years. For the nonvested awards that were outstanding at September 30, 2025, the Company expects to record $ 1.9 million in compensation expense in the next twelve months, $ 0.6 million of which is expected to be recorded in the remaining quarter 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 September 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 $ 20,363 $ 18,680 Less: income allocated to restricted stock ( 112 ) ( 134 ) Basic EPS per common share $ 20,251 41,237,874 $ 0.49 $ 18,546 40,971,520 $ 0.45 Diluted EPS: Net income $ 20,363 41,237,874 $ 18,680 40,971,520 Effect of dilutive securities — 243,668 — 395,223 Diluted EPS per common share $ 20,363 41,481,542 $ 0.49 $ 18,680 41,366,743 $ 0.45 For the Nine Months Ended September 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 $ 95,335 $ 72,664 Less: income allocated to restricted stock ( 541 ) ( 471 ) Basic EPS per common share $ 94,794 41,179,363 $ 2.30 $ 72,193 40,924,822 $ 1.76 Diluted EPS: Net income $ 95,335 41,179,363 $ 72,664 40,924,822 Effect of dilutive securities — 264,273 — 369,315 Diluted EPS per common share $ 95,335 41,443,636 $ 2.30 $ 72,664 41,294,137 $ 1.76 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) September 30, 2025 December 31, 2024 Unrealized loss on securities available for sale $ ( 251,766 ) $ ( 368,055 ) Tax effect 58,286 85,941 Net unrealized loss on securities available for sale ( 193,480 ) ( 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) $ ( 193,395 ) $ ( 282,029 ) Page 32 Index The following tables disclose the changes in AOCI for the three and nine months ended September 30, 2025 and 2024 (all amounts are net of tax): For the Three Months Ended September 30, 2025 ($ in thousands) Unrealized Loss on Securities Available for Sale Postretirement Plans Asset (Liability) Total Beginning balance $ ( 229,603 ) $ 85 $ ( 229,518 ) Other comprehensive income before reclassifications 14,734 — 14,734 Amounts reclassified from accumulated other comprehensive income 21,389 — 21,389 Net current period other comprehensive income 36,123 — 36,123 Ending balance $ ( 193,480 ) $ 85 $ ( 193,395 ) For the Three Months Ended September 30, 2024 ($ in thousands) Unrealized Loss on Securities Available for Sale Postretirement Plans Asset (Liability) Total Beginning balance $ ( 315,153 ) $ ( 38 ) $ ( 315,191 ) Other comprehensive income before reclassifications 60,366 — 60,366 Amounts reclassified from accumulated other comprehensive income — 19 19 Net current period other comprehensive income 60,366 19 60,385 Ending balance $ ( 254,787 ) $ ( 19 ) $ ( 254,806 ) For the Nine Months Ended September 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 67,245 — 67,245 Amounts reclassified from accumulated other comprehensive income 21,389 — 21,389 Net current period other comprehensive income 88,634 — 88,634 Ending balance $ ( 193,480 ) $ 85 $ ( 193,395 ) For the Nine Months Ended September 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 52,274 — 52,274 Amounts reclassified from accumulated other comprehensive income 892 58 950 Net current period other comprehensive (loss) income 53,166 58 53,224 Ending balance $ ( 254,787 ) $ ( 19 ) $ ( 254,806 ) 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 Page 33 Index 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 three and nine months ended September 30, 2025 and 2024. Items outside the scope of ASC 606 are noted as such. For the Three Months Ended For the Nine Months Ended ($ in thousands) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Noninterest Income in-scope of ASC 606: Service charges on deposit accounts $ 4,225 $ 4,320 $ 11,968 $ 12,327 Other service charges and fees: Bankcard interchange income, net 2,308 2,372 7,223 7,045 Other service charges and fees 1,764 1,710 5,762 5,208 Commissions from sales of financial products 1,678 1,371 4,474 4,068 Portion of other income in-scope of ASC 606 — — — 312 Noninterest income (in-scope of ASC 606) 9,975 9,773 29,427 28,960 Noninterest income (out-of-scope of ASC 606) ( 22,854 ) 3,806 ( 15,063 ) 12,116 Total noninterest income $ ( 12,879 ) $ 13,579 $ 14,364 $ 41,076 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. Note 12. Segment Reporting The Company is a bank holding company, whose principal activity is the ownership and management of its wholly-owned subsidiary, the Bank. As a community focused 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 $ 1.6 million and $ 1.9 million for the three months ended September 30, 2025 and 2024, respectively, and $ 5.1 million and $ 5.9 million for the nine months ended September 30, 2025 and 2024, respectively. Depreciation expense is recorded in Occupancy and equipment expense on the Consolidated Statements of Income. Page 34 Index