What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2026-02-19 compared with 2025-02-20 · 157 added, 125 removed, 314 unchanged (47% of the section changed)

2 unchanged sentences

Additional risks that are not presently known, or that we presently deem to be immaterial, also could have a material effect on our financial condition, results of operations, business and prospects.

You should carefully consider the following risk factors that may affect our financial condition, results of operations, business and prospects.

Additionally, the aggregate impact of multiple risk factors, whether presently deemed material or immaterial, could similarly result in a material effect on our financial condition, results of operations, business and prospects.

(See also “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” for certain forward looking statements.)

Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional discussion of forward looking statements that could result in a material effect on our financial condition, results of operations, business and prospects.)

Risks Related to Economic and Market Conditions

2 unchanged sentences

Conditions such as inflation, deflation, recession, unemployment, changes in interest rates, tariffs, fiscal and monetary policy and other factors beyond our control may affect our deposit levels and composition, demand for loans and other products and services, the ability of borrowers to repay their loans and the value of the collateral securing the loans it makes.

Economic turmoil in different regions of the world, as well as military conflicts such as those currently ongoing in Ukraine and the Middle East, affect the economy and stock prices in the United States, which can affect our earnings and capital and the ability of our customers to repay loans.

The new Presidential administration has stated its intention to scrutinize the United States’ trade relationships with its economic partners, indicated an interest in renegotiating trade agreements, and stated a willingness to implement tariffs with some of the United States’ trade partners which could lead to trade wars.

These statements by the administration have signaled a change in the United States’ economic policies, and it is not clear which policies, if any, will be implemented and what effect these policies may have on the local, national, and global economy.

Economic turmoil in different regions of the world, as well as military conflicts such as those currently ongoing in Russia, Ukraine, the Middle East, China, and Venezuela affect the economy and stock prices in the United States, which can affect our earnings and capital and the ability of our customers to repay loans.

trade policies and international economic relationships continue to evolve, including potential changes to trade agreements and tariffs.

Such changes may contribute to economic uncertainty and could negatively affect financial markets, supply chains, and the economic performance of the Company’s customers and markets.

Trade wars and tariffs can affect the economy and stock prices in the United States and can impact the costs of goods paid by customers, which can affect our deposit levels and concentration, the demand for loans and other products and services and the ability of our customers to repay outstanding loans, which could adversely affect our financial condition and the results of operations.

If the strength of the United States economy declines, this could result in, among other things, a deterioration of credit quality, altered consumer spending habits or a reduced demand for credit, including a resultant effect on our loan portfolio and allowance for credit losses.

While the Federal Reserve began cutting the target fed funds rate in 2024, there are no assurances that it will continue to cut the target fed funds rate in 2025 and it may remain open to increasing rates further should inflation dynamics remain unfavorable.

This scenario of higher short-term interest rates for a longer period than currently anticipated by market participants (“higher for longer”), along with other factors, could also result in higher delinquencies and greater charge-offs in future periods, which could materially affect our financial condition and results of operations.

If the strength of the United States economy declines, this could result in, among other things, a deterioration of credit quality, altered consumer spending habits, decreased deposit balances maintained by our customers, or a reduced demand for credit, including a resultant effect on our loan portfolio and allowance for credit losses.

Although the Federal Reserve eased monetary policy in 2025 with a series of rate cuts that brought the target federal funds range down to 3.50% – 3.75% by year-end, policymakers paused rate reductions in early 2026 and signaled patience in setting future policy as inflation remains elevated and labor market signals evolve.

Despite these reductions, the future path of interest rates remains uncertain.

Market and policy forecasts have not settled on expectations in the coming year.

A scenario in which short-term interest rates remain elevated for longer than currently anticipated, or rise again in response to inflation or other macroeconomic developments, could increase stress on borrowers, potentially leading to higher delinquencies and charge-offs and adversely affecting our financial condition and results of operations.

In addition, earnings sensitivity may be driven not only by rate levels but also by rate volatility and speed of rate changes, which may reduce hedge effectiveness and pressure margins.

There is no assurance that our non-impaired loans will not become impaired or that our impaired loans will not suffer further deterioration in value.

2 unchanged sentences

These fluctuations are not predictable, cannot be controlled and may have a material impact on our operations and financial condition even if other favorable events occur.

Changes in leadership of the Federal Reserve Board of Governors may adversely affect us.

The Federal Reserve is the primary regulator of bank holding companies and financial holding companies, and is also responsible for regulating the money supply and credit conditions in the United States.

The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks and are expected to continue to do so in the future.

The Federal Reserve is expected to go through a change of leadership in 2026.

The term of the Chair of the Federal Reserve Board of Governors, Jerome Powell, expires on May 15, 2026.

On January 30, 2026, Kevin Warsh was nominated as the

successor to Chair Powell.

Warsh must be confirmed by the United States Senate prior to becoming the Chair of the Federal Reserve Board of Governors.

A change in leadership may result in policy changes of the Federal Reserve related to the regulation of bank holding companies and financial holding companies, the money supply, and/or credit conditions in the United States.

The effects of such policies upon our financial condition, results of operations, business and prospects cannot be predicted or determined.

Changes in market interest rates or financial markets could affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital or liquidity.

3 unchanged sentences

If the interest we pay on deposits and other borrowings increases at a faster rate than increases in the interest we receive on loans and investments, net interest income, and, therefore, our earnings, could be affected.

Earnings and capital

levels could also be affected if the interest we receive on loans and other investments falls more quickly than the interest we pay on deposits and other borrowings.

Earnings and capital levels could also be affected if the interest we receive on loans and other investments falls more quickly than the interest we pay on deposits and other borrowings.

In addition to the general impact of the economy, changes in interest rates or in valuations in the debt, equity, commodities or currency markets could directly impact us in one or more of the following ways:

7 unchanged sentences

• to the extent we access capital markets to raise funds to support our business, such changes could affect the cost of such funds or the ability to raise such funds.

Although we have implemented procedures we believe will reduce the potential effects of changes in interest rates on our results of operations, these procedures may not always be successful.

During 2025, the Federal Reserve implemented a series of rate cuts that decreased the target fed funds rate by 75 basis points.

Although we have implemented procedures we believe will prepare us for the potential effects of changes in interest rates on our results of operations, these procedures may not always be successful.

In addition, any substantial or prolonged change in market interest rates could affect our financial condition, results of operations and liquidity.

During 2024, the target fed funds rate decreased by 100 basis points.

Because our balance sheet is asset sensitive, these interest rate decreases resulted in a decline in our net income in 2024.

The Presidential Administration’s regulatory agenda could result in substantial impact to our regulatory compliance procedures and operations.

We anticipate that the Presidential administration will seek to implement a regulatory reform agenda that is significantly different than that of the Biden administration, impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies.

While we do not specifically know what these changes will be, we may be required to implement different compliance procedures and modify our policies and activities to comply with changes set forth by the administration.

This may cause us to incur additional costs and expenses, and dedicate additional resources, to achieve compliance with any changes from the Presidential administration, which can impact our financial condition and the results of our operations.

Local economic factors may adversely affect our business and the results of our operations.

1 unchanged sentence

As a result of this geographic concentration, our results of operations are largely dependent on economic conditions in these local markets.

Changes to the economic conditions in these local markets, which may be different from the national economic conditions, may adversely affect our financial condition and the results of our operations.

Declines in the local economic conditions in our market areas could impact:

our deposit levels and composition;

the demand for our products and services;

the strength of our credit quality;

the demand for loans;

the ability of borrowers to repay their loans;

the value of collateral securing loans;

the number of foreclosures and workouts;

the amount of our allowance for credit losses;

and the number of loans that we charge off.

This can lead to a detrimental impact on our financial condition and the results of our operations.

Changes to the economic conditions in these local markets, which may be different from the national economic conditions, may adversely affect our financial condition, results of operations, and business prospects.

Our loan portfolio and investments in mortgage-backed securities consist of a significant number of loans secured by real estate and other assets, the value of which can be affected by national and local market conditions.

1 unchanged sentence

Many of our loans are secured by real estate (both residential and commercial) within our market area.

A major change in the real estate market, such as deterioration in the value of collateral, or in the local or national economy, could affect our customers' ability to pay these loans, which in turn could impact our results of operations and

financial condition.

Additionally, increases in unemployment also may affect the ability of certain clients to repay loans and the financial results of commercial clients in localities with higher unemployment, may result in loan defaults and foreclosures and may impair the value of our collateral.

Increases in loan defaults may also lead to additional losses in our investments in mortgage-backed securities, including collateralized mortgage obligations.

In 2024, we experienced losses in mortgage-backed securities primarily due to a $9.7 million impairment loss on two commercial mortgage backed securities where the underlying collateral consisted of skilled nursing facilities with credit deterioration, which we expect to sell in the near term.

This is especially relevant in light of the ongoing inflationary pressures and potential impact of trade wars and tariffs to increase those inflationary pressures.

Loan defaults and foreclosures are unavoidable in the banking industry, and we try to limit our exposure to this risk by monitoring carefully our extensions of credit.

In 2024, our classified asset balances increased $83.1 million, driven by a $45.0 million asset that was recorded following the mutually agreed upon termination of a foreign exchange trade, as well as the downgrade of three commercial real estate loans, one commercial and industrial loan and one construction loan.

Continued increases in our classified asset balances and/or an increase in loan defaults may also increase our costs associated with servicing these loans, foreclosing on properties and costs of property maintenance on foreclosed properties .

Loan defaults and foreclosures are unavoidable in the banking industry, and we try to limit our exposure to this risk by carefully adhering to our credit risk standards and actively and carefully monitoring our extensions of credit throughout the lifespan of a loan.

Classified asset balances increased $11.4 million, or 5.1%, to $235.5 million at December 31, 2025 from $224.1 million at December 31, 2024.

The change in classified assets during 2025 included $20.4 million of loans rated substandard or worse acquired in the Westfield transaction.

Absent the impact from Westfield, classified assets declined $9.0 million during 2025 as resolutions of classified assets outpaced downward credit migration during the period.

Any increases in our classified asset balances and/or an increase in loan defaults may also increase our costs associated with servicing these loans, foreclosing on properties and costs of property maintenance on foreclosed properties.

We cannot fully eliminate credit risk, and as a result, credit losses may increase in the future and impact our financial condition and results of operations.

1 unchanged sentence

Declines in demand for residential mortgage loans, changed government laws or regulations or other disruptions in the secondary market for residential mortgage loans can limit the market for and liquidity of many mortgage loans that we seek to sell in the secondary market.

The effects of these disruptions to the secondary market for residential morgage loans, as well as reductions in residential real estate market prices and declining home sales, could affect the value of collateral securing mortgage loans that we hold, income generated from mortgage loan originations and profits on sales of mortgage loans in the secondary market.

The effects of these disruptions to the secondary market for residential mortgage loans, as well as reductions in residential real estate market prices and declining home sales, could affect the value of collateral securing mortgage loans that we hold, income generated from mortgage loan originations and profits on sales of mortgage loans in the secondary market.

Such conditions could result in higher losses or charge-offs in our mortgage loan portfolio and other lines of business.

Declines in real estate values, home sale volumes, financial stress on borrowers as a result of job losses, interest rate resets on adjustable rate mortgage loans or other factors, either independently or in the aggregate could have further effects on borrowers that could result in higher delinquencies and greater charge-offs in future periods, which would affect our financial condition or results of operations.

A decline in home values or overall economic weakness could also have an impact upon the value of real estate or other assets which we own upon foreclosing a loan and our ability to realize value on such assets.

Our financial instruments carried at fair value expose us to certain market risks.

12 unchanged sentences

This process, which is critical to our financial results and condition, requires difficult, subjective and complex judgments, including reviews of economic conditions and how these economic conditions might impair the ability of our borrowers to repay their loans.

As is the case with any such assessments, there is always the chance that we will fail to identify the proper factors, that we will fail to accurately estimate the impacts of factors that we identify, or that we fail to accurately estimate the aggregate impacts of factors that we identify, all of which could impact the credit quality of our portfolio and have

an impact on the results of operations.

In addition, large loans, letters of credit and contracts with individual counterparties in our portfolio magnify the credit risk that we face, as the impact of large borrowers and counterparties not repaying their loans or performing according to the terms of their contracts has a disproportionately significant impact on our credit losses, reserves and the results of operations.

The information that we use in managing our credit risk may be inaccurate or incomplete, which may result in an increased risk of default and otherwise have an effect on our business, results of operations and financial condition.

In deciding whether to extend credit or enter into other transactions with clients and counterparties, we may rely on information furnished by or on behalf of clients and counterparties, including financial statements and other financial information.

Certain segments of commercial real estate, including office properties, continue to experience elevated vacancy rates and refinancing pressure, which may reduce collateral values and increase default risk.

The information that we use in managing our credit risk may be inaccurate or incomplete, which may result in an increased risk of default and otherwise have an effect on our financial condition, results of operations and business.

In deciding whether to extend credit or enter into other transactions with clients and counterparties, we may rely on information furnished by or on

behalf of clients and counterparties, including financial statements and other financial information.

We also may rely on representations of clients and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors.

Nonetheless, in the near-term, higher interest rates along with elevated costs are expected to weigh on firms’ profit margins.

Nonetheless, in the near-term, sustained interest rates along with elevated costs are expected to weigh on firms’ profit margins.

Although we regularly review our credit exposure to specific clients and counterparties and to specific industries that we believe may present credit concerns, default risk may arise from events or circumstances that are difficult to detect, such as fraud.

2 unchanged sentences

In addition, in cases where we have extended credit against collateral and/or guarantees, we may find that we are under-secured, for example, as a result of sudden declines in market values that reduce the value of collateral or due to fraud with respect to such collateral or the ability of a guarantor to fulfill its financial obligations.

If such events or circumstances were to occur, it could result in a potential loss of revenue, increase in costs and have an effect on our business, results of operations and financial condition.

Our allowance for credit losses may prove to be insufficient to absorb losses in our loan portfolio.

We maintain an allowance for credit losses that we believe is a reasonable estimate of the expected losses over the expected life of the loan portfolio based on a CECL model.

We believe that our allowance for credit losses is maintained at a level adequate to absorb expected losses over the life of the loans in the loan portfolio as of the corresponding balance sheet date.

If such events or circumstances were to occur, it could result in a potential loss of revenue and increase in recovery costs which could have an effect on our financial condition, results of operations and business.

Our allowance for credit losses may prove to be insufficient to absorb losses in our loan portfolio or may produce volatility in provision expense and earnings.

We maintain an allowance for credit losses that we believe is a reasonable estimate of the expected losses over the expected life of the loan portfolio based on a CECL model as of the corresponding balance sheet date.

However, our allowance for credit losses may not be sufficient to cover actual credit losses, and future provision for credit losses could materially affect our operating results.

2 unchanged sentences

Historical credit loss experience paired with economic forecasts provide the basis for the quantitatively modeled estimation of expected credit losses.

CECL estimates are sensitive to economic forecast assumptions, including unemployment, interest rates, and property valuations.

Changes in forecasts may produce volatility in provision expense and earnings.

We adjust our quantitative model, as necessary, to reflect conditions not already considered by such model.

Our estimates of the risk of loss and amount of loss on any loan are complicated by the significant uncertainties surrounding our borrowers’ abilities to successfully execute their business models through changing economic environments, competitive challenges and other factors.

Because of the degree of uncertainty and susceptibility of these factors to change, our actual losses may vary from our current estimates.

Because of the degree of uncertainty with respect to assumptions in our models and susceptibility of these factors to change, our actual losses may vary from our current estimates.

In addition, bank regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or recognize further loan charge-offs.

2 unchanged sentences

If the methodologies and assumptions we use in the CECL model prove to be incorrect, or inadequate, the allowance for credit losses may not be sufficient, resulting in the need for additional allowance for credit losses to be established, which could have a material adverse impact on our financial condition and results of operations.

We adopted the CECL accounting guidance in 2020 and recognized a one-time cumulative effect adjustment to our allowance for credit losses and retained earnings as of January 1, 2020.

Concurrent with the enactment of the CARES Act, federal bank regulatory agencies issued an interim final rule that delayed the estimated impact on regulatory capital resulting from the adoption of CECL.

The interim final rule provided banking organizations that implemented CECL prior to the end of 2020 the option to delay for two years the estimated impact of CECL on regulatory capital relative to regulatory capital determined under the prior incurred loss methodology, followed by a three-year transition period to phase out the aggregate amount of capital benefit provided during the initial two-year delay.

We adopted CECL in the first quarter of 2020, including the regulatory phase-in.

As a result of CECL, our financial results may be negatively affected as soon as weak or deteriorating economic conditions are forecasted and alter our expectations for credit losses.

In 2022, we recorded $6.7 million of provision expense as our loan portfolio grew and the overall duration of the portfolio extended due to rising interest rates.

In 2023, we recorded $43.1 million of provision expense as our loan portfolio grew, net charge-offs increased and the overall duration of the portfolio extended due to rising interest rates and slower loan prepayments.

In 2024, we recorded $49.2 million of provision expense as our loan portfolio grew and the overall duration of

the portfolio extended due slower loan prepayments.

In 2025, we recorded $36.5 million of provision expense on loans and leases due to net charge-offs and loan portfolio growth.

Depending upon future circumstances, as well as broader macroeconomic shifts, we may incur significant provision expense for credit losses in future periods.

4 unchanged sentences

The loss of one or more of these large clients would adversely affect the revenue derived from Bannockburn.

Revenue concentration among a limited number of counterparties may make earnings from Bannockburn more volatile and we may see a negative impact on our financial condition or results of operations should we lose or see reduced activity from any of these large clients.

• Market risk:

Foreign currency and commodities transactions expose us to market risk, including fluctuations in foreign exchange rates, interest rates, and commodity prices.

These fluctuations could result in financial losses or decreased revenues if we fail to accurately predict or manage these risks.

These fluctuations could result in financial losses or decreased revenues or additional liquidity needs if we fail to accurately predict or manage these risks.

Foreign currency and commodities transactions historically increase as market volatility increases.

2 unchanged sentences

We are exposed to credit risk through our dealings with counterparties in derivative transactions.

While we have risk management policies and procedures in place to mitigate credit risk, the failure of counterparties to fulfill their obligations could lead to financial losses or damage to our reputation.

While we have risk management policies and procedures in place to manage credit risk, the failure of counterparties to fulfill their obligations could lead to financial losses or damage to our reputation.

• Liquidity risk:

The nature of our capital markets operations requires us to maintain sufficient liquidity to meet our obligations, including margin calls and settlement requirements.

A sudden or unexpected increase in liquidity needs could strain our resources and negatively impact our financial position.

Sudden increases in collateral or margin requirements during periods of market volatility may create additional liquidity needs, which could strain our resources and negatively impact our financial position.

• Regulatory risk:

8 unchanged sentences

Our foreign exchange business is also susceptible to the risk that political events or changes in government policies, such as renegotiated trade agreements or tariffs, could negatively impact the bank's matched book business.

For additional discussion related to political risks, please see the Risk Factor titled “ Weakness in the economy and governmental policies, whether or not adopted in response to economic conditions such as inflation, may adversely affect us.

• Currency Risk:

Recent depreciation and volatility in the U.S.

dollar have increased uncertainty in foreign exchange markets, which may affect transaction volumes, hedging activity, client demand, and the value of positions managed within Bannockburn’s matched book operations.

Continued currency volatility or abrupt shifts in exchange rates could result in reduced revenues, valuation impacts, or increased liquidity and collateral requirements, adversely affecting our financial condition and results of operations.

We rely on other companies to provide key components of our business infrastructure, creating risks of failures or disruptions by such companies and cybersecurity incidents which may involve our customers’ information.

4 unchanged sentences

Technological or financial difficulties of a third-party service provider could affect our business to the extent such difficulties result in the interruption or discontinuation of services provided by that party, and could lead to potential regulatory issues, reputational harm and impact the results of our operations.

A cybersecurity breach of a vendor's system may result in theft of our data or disruption of business processes.

In addition, a cybersecurity breach of a vendor's system may result in theft of our data or disruption of business processes.

Increased use of artificial intelligence (AI) by vendors can further increase the risks of a cybersecurity breach, as discussed in the Risk Factor titled “ The increased use and capacity of AI, Generative AI, large language models (LLMs), and AI agents by customers, vendors and competitors increases risks to our business.

” A material breach of customer data security at a service provider's site may negatively impact our business reputation and cause a loss of customers, result in increased expense to contain the event and/or require that we provide credit monitoring services for affected customers, result in regulatory fines and sanctions, and possibly litigation.

3 unchanged sentences

Failures in our business infrastructure could interrupt our operations, cause reputational harm, increase the costs of doing business and impact the results of our operations.

In certain cases, a limited number of vendors provide critical or specialized services, and disruption, pricing changes, financial stress, or service degradation at one of these providers could have a disproportionate impact on our operations.

The Company’s business continuity and disaster recovery planning addresses disruption in critical vendors.

Unauthorized use or disclosure of sensitive or confidential client or customer information, whether through a breach of our computer systems or otherwise, or other breaches in the security of our systems could harm our business.

11 unchanged sentences

Congress and the legislatures of states in which we operate regularly consider legislation that would impose more stringent data privacy requirements which may result in increased costs of compliance and impact the results of our operations.

Any of these occurrences could result in our diminished ability to operate one or more of our businesses, potential civil liability, reputational damage and regulatory intervention in the form of requirements, restrictions and penalties, which could affect us our business and results of operations.

We rely on our systems, employees and certain counterparties, and certain failures or actions could affect our operations.

8 unchanged sentences

We are also at risk of an impact on our systems and operations from natural disasters, accidents outside of our control, terrorism, international hostilities, and other exceptional or outlier events outside of our control.

Increasing electricity demand, including from data centers and industrial activity, is placing pressure on regional power grid operators, including PJM Interconnection LLC, which serves many of the markets in which we operate, and prolonged or widespread power disruptions could adversely affect our facilities, third-party service providers, customers, and business continuity.

Such events can impact operational systems operated by us or others on which we rely and can result in an impact to our business operations and subsequent impacts to our financial condition and results of operations.

Misconduct by employees could include negligent, fraudulent, improper, or unauthorized activities on behalf of clients or improper use of confidential information.

While we have implemented precautions to mitigate the risk, we may not be able to prevent employee or third party errors or misconduct, and the precautions we take to detect this type of activity might not be effective in all cases.

Employee errors or misconduct could subject us to civil claims and/or regulatory enforcement actions, including fines, penalties and restrictions on our business.

In addition, continuing cyberattacks and current geopolitical tensions highlight the importance of heightened threat monitoring and safeguarding against disruptive attacks targeting the financial sector.

There have been instances where financial institutions have been victims of fraudulent activity in which criminals pose as customers to initiate wire and automated clearinghouse transactions out of customer accounts.

There have also been increased instances of scammers who target clients to gain access to their accounts to conduct transactions or convince customers to initiate transactions for the scammers’ benefit.

Although we have policies and procedures in place to verify the authenticity of our customers, we cannot assure that such policies and procedures will prevent all fraudulent transfers.

Such activity can result in financial liability to us and/or our customers and harm to our reputation and impact the results of our operations.

There have also been increased instances of scammers who target and socially engineer clients to gain access to their accounts to conduct transactions or induce customers to authorize fraudulent transactions for the scammers’ benefit.

Although we have commercially reasonable policies and procedures in place to verify the authenticity of our customers, we cannot assure that such policies and procedures will prevent all fraudulent transfers.

AI tools may also be utilized by bad actors to increase the sophistication and speed of cyberattacks and fraud attempts.

For more information on the risks associated with AI, see the Risk Factor titled “ The increased use and capacity of AI, Generative AI, large language models (LLMs), and AI agents by customers, vendors and competitors increases risks to our business.

The fraudulent activity and cybersecurity risks can result in financial liability and litigation risk to us and/or our customers, as well as harm to our reputation and negative impacts on our financial condition, results of our operations, business and prospects.

The increased use and capacity of AI, Generative AI, large language models (LLMs), and AI agents by customers, vendors and competitors increases risks to our business.

The use and capacity of AI, Generative AI, LLMs and AI agents has increased in the past year and is being employed by customers, competitors, and vendors at increased rates.

Many of these tools can increase cybersecurity risks, require specific technical expertise to operate, or expose information through open source code.

These tools are being used by parties in various capacities, and employing these tools without sufficient knowledge or expertise of the power and risks associated with the tools can increase risks for the users.

These tools are relatively new and there is potential of continued and/or increased adoption of legal and regulatory frameworks governing the use of these tools, by law, our primary banking regulators, other federal or state regulatory bodies, or other self-regulatory organizations.

The use of these tools by customers can increase the risk of exposure to their personal information and/or banking credentials which can result in increased opportunities for bad actors to initiate fraudulent activity with respect to a customer’s account(s).

While we have implemented commercially reasonable policies and procedures to protect against fraudulent activity on the accounts of our customers, we cannot assure that such policies and procedures will prevent all fraudulent activity or capture activity that has been inadvertently been authorized by the customer.

Such activity can result in financial liability and litigation risk to us and/or our customers, as well as harm to our reputation and negative impacts on our financial condition, results of our operations, business and prospects.

The use of these tools by vendors engaged by us can increase the risk of unauthorized use or disclosure of sensitive or confidential client or customer information and cyberattacks.

In conducting due diligence of our vendors, we request detailed information regarding how the vendor uses these tools and attempt to mitigate risks related to exposure by agreement with vendors.

While these processes seek to mitigate risks associated with vendor use of these tools, we cannot eliminate this risk.

Vendors may employ tools without realizing the risks associated with the tools, may have employees that use unauthorized technology tools that were not disclosed to us during our diligence process, or the tools that were disclosed may implement new services, features, or technologies that increase the exposure to cybersecurity risks.

If a vendor engaged by us experienced a cyberattack related to use of these tools, or deliberately or inadvertently exposed sensitive or confidential client or customer information, we may experience financial liability and litigation risk to us and/or our customers, as well as harm to our reputation and negative impact on our financial condition, results of operations and business.

Additionally, if any vendors incur additional costs related to any legal or regulatory framework adopted governing the use of such tools, we may face increased costs to engage such vendor, which could impact or financial condition and results of operations if we continue to use such vendor or as a result of costs incurred to find an alternative vendor.

The use of these tools by competitors may impair our ability to attract or retain business if our competitors are successful in their implementation.

Failure to keep pace with these evolving technologies can have a negative impact on our financial condition, results of operations, business and prospects.

In addition, if our competitors suffer any reputational harm as a result of the implementation of these evolving technologies, it could have a negative effect on the financial services industry as a whole and have a negative impact on our financial condition, results of operations, business and prospects.

The increased use of these tools by competitors may also increase pressure to impose legal or regulatory frameworks regarding these tools, which could impact the financial services industry as a whole and cause us to incur increased costs to comply with such legal or regulatory frameworks, which may result in a negative impact on our financial condition, results of operations and business.

Our liquidity is dependent upon our ability to receive dividends from our subsidiaries, which accounts for most of our revenue and could affect our ability to pay dividends, and we may be unable to provide liquidity from other sources.

8 unchanged sentences

Limitations on our ability to receive dividends from our subsidiaries or an inability to increase liquidity through additional borrowings, or inability to maintain, renew or replace existing credit facilities, could have a material effect on our liquidity and on our ability to pay dividends on our common shares and interest and principal on our debt.

As of December 31, 2024, we had indebtedness of $1.1 billion which was a decrease from $1.3 billion in 2023 in large part due to an increase in deposits.

As of December 31, 2025, we had indebtedness of $1.2 billion which was an increase from $1.1 billion in 2024.

This increase was primarily a result of the Company's overall balance sheet management strategies subsequent to the Westfield acquisition.

If deposits were to decrease, we may need to incur additional indebtedness to ensure that we have adequate levels of liquidity.

1 unchanged sentence

Checking and savings account balances and other forms of client deposits, including uninsured deposits, could decrease if clients perceive alternative investments as providing superior expected returns.

Increased competition from money market funds and alternative investment vehicles may decrease our deposit balances and increase our funding costs.

We regularly perform liquidity stress testing and sensitivity analyses of deposit assumptions.

Both remain critical given recent trends in deposit balance and interest rate movements, as well as uncertainty regarding depositor behavior moving forward.

Consumers may move money out of bank deposits in favor of other investments, including digital assets or cryptocurrency or money market funds, or into alternative financial services providers.

Digital banking has accelerated deposit mobility and increased liquidity risk.

Consumers may move money out of bank deposits in favor of other investments, including digital assets or cryptocurrency or money market funds, or into alternative financial services providers with limited friction in moving assets.

When clients move money out of bank deposits in favor of alternative investments or to alternative financial services providers, we can lose a relatively inexpensive source of funds, increasing our funding costs, and impacting the results of our operations.

Recent industry events have demonstrated that deposit balances, particularly uninsured and digitally accessible deposits, can move rapidly during periods of market stress, requiring banks employ risk mitigation strategies to handle any increased liquidity pressures.

Sound liquidity risk management, including processes that ensure sufficient committed capacity to meet contingent liquidity needs, remains critical.

3 unchanged sentences

These bank failures led to volatility and declines in the market for bank stocks and questions about depositor confidence in depository institutions, which in turn led to a greater focus by institutions, investors, and regulators on the on-balance sheet liquidity of and funding sources for financial institutions and the composition of its deposits.

Notwithstanding, our efforts to promote deposit insurance coverage with our customers and otherwise effectively

manage our liquidity, deposit portfolio retention, and other related matters, our financial condition, results of operation, and stock price may be adversely affected by future negative events within the banking sector and adverse customer or investor responses to such events.

Notwithstanding, our efforts to promote deposit insurance coverage with our customers and otherwise effectively manage our liquidity, deposit portfolio retention, and other related matters, our financial condition, results of operation, and stock price may be adversely affected by future negative events within the banking sector and adverse customer or investor responses to such events.

Disruptions in our ability to access capital markets on desirable terms may affect our capital resources, liquidity and business.

11 unchanged sentences

• limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase securities.

We continue to evaluate these risks on an ongoing basis.

Projections for new business initiatives and strategies may prove inaccurate.

1 unchanged sentence

The Bank makes certain projections and develops plans and strategies for its banking and financial products.

If we do not accurately forecast demand for our banking and financial products, it could result in us incurring significant expenses without the anticipated increases in revenue, which could result in a material effect on the Bank’s business, capital, and/or results of our operations.

If we do not accurately forecast demand for our banking and financial products or if technology conversion challenges and/or customer attrition risks delay realization of expected benefits from acquisitions or branch purchases, it could result in us incurring significant expenses without the anticipated increases in revenue, which could result in a material effect on the Bank’s business, capital, and/or results of our operations.

We may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and warranties, borrower fraud, or certain borrower defaults, which could harm our liquidity, results of operations and financial condition.

4 unchanged sentences

Competition in the financial services industry is intense and could result in our losing business and/or experiencing reduced margins.

We operate in a highly competitive industry that could become even more competitive as a result of legislative, regulatory and technological changes, and continued consolidation.

We operate in a highly competitive industry that could become even more competitive as a result of legislative, regulatory and technological changes, including AI, Generative AI, LLMs and AI agents, and continued consolidation.

We face aggressive competition from other domestic and foreign lending institutions as well as from numerous other providers of financial services.

The ability of non-banking financial institutions to provide services previously limited to commercial banks has intensified competition.

Because non-banking financial institutions are not subject to the same regulatory restrictions as banks and bank holding companies, they can often operate with

greater flexibility and lower cost structures.

Because non-banking financial institutions are not subject to the same regulatory restrictions as banks and bank holding companies, they can often operate with greater flexibility and lower cost structures.

Securities firms and insurance companies that elect to become financial holding companies may acquire banks and other financial institutions.

1 unchanged sentence

Some of our competitors have greater financial resources and/or face fewer regulatory constraints, such as FinTechs, digital assets or cryptocurrencies.

FinTechs and other new technologies seek to complete financial transactions without banks or by utilizing banks that are not dependent on having physical branches in a customer’s market area.

Consumers can also shop for higher deposit interest rates at banks across the country, which may offer higher rates because they have few or no physical branches and open deposit accounts electronically.

Credit unions that compete with us have tas, regulatory and other advantages that allow them to price products and services more competitively.

FinTechs and other new technologies seek to complete financial transactions without banks or by utilizing banks that are not dependent on having physical branches in a customer’s market area, or embed financial services into non-bank platforms which could reduce customer reliance on traditional banking services.

FinTechs have also begun seeking commercial bank or industrial loan company charters, or are actively seeking to acquire commercial banks or industrial loan companies to further compete with traditional banking services.

The rise in technological advances in the financial services industry has led to simpler opportunities for consumers to shop for higher deposit interest rates at banks across the country, which may offer higher rates because they have few or no physical branches and open deposit accounts electronically.

Further, in 2025, the United States passed the Guiding and Establishing National Innovation for U.S.

Stablecoins Act (the “GENIUS Act”), which provides a regulatory framework for the issuance and adoption of stablecoins in the United States.

The passage of the GENIUS Act may result in increased competition from issuers of stablecoins and providers of related technology, as well as non-bank competitors and financial institutions that offer to hold stablecoin reserve assets or custody stablecoins.

In addition to non-bank competitors, we face competition from within the traditional financial services industry.

Credit unions that compete with us have tax, regulatory and other advantages that allow them to price products and services more competitively.

Competing banks may have greater financial resources and/or face fewer regulatory constraints.

Competing banks may also be more successful in implementing new technologies or developing or launching new products or services.

As a result of these various sources of competition, we could lose loan, deposit, or other types of business to competitors or be forced to price products and services on less advantageous terms to retain or attract clients, either of which could affect our profitability.

The principal bases for competition are pricing (including the interest rates charged on loans or paid on interest bearing deposits), product structure, the range of products and services offered and the quality of customer service (including convenience and responsiveness to customer needs and concerns).

The ability to access and use technology is an increasingly important competitive factor in the financial services industry, and it is a critically important component to customer satisfaction as it affects our ability to deliver the right products and services.

For example, digital or cryptocurrencies, blockchain, and other FinTech technologies that are designed to enhance transactional security have the potential to disrupt the financial industry, change the way banks do business, and reduce the need for banks as financial deposit-keepers and intermediaries.

Failure to adequately address the competitive pressures we face could make it harder for us to attract and retain customers across our businesses.

Similarly, meeting these competitive pressures could require us to incur significant additional expense, to reevaluate the number of branches through which we serve our customers, or to accept risk beyond what we would otherwise view as desirable under the circumstances.

view as desirable under the circumstances.

In addition, in our interest rate sensitive business, pressure to increase rates on deposits or decrease rates on loans could reduce our net interest margin with a resulting negative impact on our net interest income.

These competitive pressures could result in the loss of fee income and client deposits, increase our funding costs and impact our financial condition and results of our operations.

Maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services.

Our success depends, in part, on our ability to develop, adapt, implement and release products and services to evolving industry standards.

There is increasing pressure to provide products and services at lower prices with increased efficiency, which can reduce net interest income and noninterest income from fee-based products and services.

In addition, the widespread adoption of new technologies, including digital or cryptocurrencies, blockchain and other “fintech” technologies, could require us to make substantial capital expenditures to modify or adapt existing products and services or develop new products and services.

We may also make substantial capital expenditures through strategic partnerships or other corporate transactions to modify, adopt, develop or implement new technologies, products or services.

We may not be successful in introducing new or modified products and services in response to industry trends or developments in technology or those new or modified products or services may not achieve market acceptance.

As a result, we could lose business, be forced to price products and services on less advantageous terms to retain or attract clients, be subject to increased costs or have a detrimental effect on the results of our operations.

Failure to keep pace or successfully adopt new technologies could adversely affect the results of our operations.

In addition to the new products and services that new technologies, including digital or cryptocurrencies, blockchain and other “fintech” technologies, bring to customers, successful adoption and implementation of new technologies can allow us to increase efficiencies and enable us to better serve customers in a more efficient manner at reduced costs.

Our success depends in part on recognizing the potential of new technology that can be implemented to achieve these benefits.

We may undertake additional costs to implement new technologies.

Our success depends in part on recognizing the potential of new technology that can be implemented to achieve these benefits.

If we are not successful in implementing the new technologies, or otherwise do not realize the intended efficiency and cost benefits of the implementation of new technologies, we may be unable to recover the costs incurred during the implementation.

Additionally, implementation of certain new technologies, such as artificial intelligence, machine learning and other large language models and similar technologies, can expose us to new or increased operational risks, including risks related to our system of internal controls.

Additionally, implementation of certain new technologies, such as AI, Generative AI, LLMs, AI agents and similar technologies, can expose us to new or increased operational risks, including risks related to data leakage, model bias, decision errors, regulatory non-compliance, or ineffective governance or internal controls.

The implementation of these new technologies may have unintended consequences due to their limitations or failure to use and implement them effectively.

Further, many of our competitors have greater resources to

develop these and other new technologies without reliance on third party vendors or developers, which can reduce their costs and exposure to third party risks, which could put us at a competitive disadvantage.

Further, many of our competitors have greater resources to develop these and other new technologies without reliance on third party vendors or developers, which can reduce their costs and exposure to third party risks, which could put us at a competitive disadvantage.

For more information on the risks associated with these new technologies, see the Risk Factor titled “ The increased use and capacity of AI, Generative AI, large language models (LLMs), and AI agents by customers, vendors and competitors increases risks to our business.

Failure to attract and/or retain key employees could impact our business operations.

36 unchanged sentences

We may also open new branches and enter into new lines of business or offer new products or services either through organic expansion, mergers, acquisitions or similar corporate transactions.

These risks and uncertainties are present in the acquisitions and subsequent integration into First Financial of Westfield Bancorp and Westfield Bank;

and BankFinancial Corporation and BankFinancial, National Association.

Any such expansion of our business will involve a number of expenses and risks, which may include:

• the time and expense associated with identifying and evaluating potential expansions;

• the potential inaccuracy of estimates and judgments used to evaluate credit, operations, management and market risk with respect to the target company;

• the time and expense associated with identifying and evaluating potential expansions, including the ability to conduct due diligence and the access to information discovered during the due diligence process;

• the potential inaccuracy of estimates, judgments, and assumptions used to evaluate credit, operations, management and market risk with respect to the target company;

• potential exposure to unknown or contingent liabilities of the target company;

2 unchanged sentences

• difficulty or added costs in the wind-down of non-strategic operations;

• a target specific risk that the acquisition target faces that is specific to its business, industry, or market area and its impact to the success of the transaction;

• potential disruption to our business;

2 unchanged sentences

• difficulty in estimating the value (including goodwill) of the target company;

• difficulty in receiving appropriate regulatory approval for any proposed transaction;

• difficulty in receiving appropriate regulatory approval for any proposed transaction or the denial of such approval;

• potential increased costs or time required to complete an acquisition may be substantially greater or longer than anticipated;

• the potential risks related to any transactions involving intellectual property, and the extent to which such intellectual property is utilized or protected in the transaction;

• challenges faced when integrating a target into First Financial related to differences in policies and procedures, utilization of systems, details and comprehensiveness of data integration, and the integration of new employees;

• potential changes in banking, tax or other laws or regulations or accounting rules that may affect the target company or our realization of any anticipated benefits or accretive shareholder value from undertaking such expansion;

• litigation risk.

We regularly evaluate merger and acquisition opportunities and conduct due diligence activities related to possible transactions with other financial institutions and financial services companies.

34 unchanged sentences

Prepayments of the underlying real estate loans may shorten the lives of the securities, thereby affecting yields to maturity and market values.

Losses on investment securities were higher in 2024 due to a $9.7 million impairment loss on two commercial mortgage backed securities where the underlying collateral consisted of skilled nursing facilities with credit deterioration, which we expect to sell in the near term and $13.2 million of losses resulting from the repositioning of a portion of the investment portfolio during 2024.

During 2025, the Company realized $22.3 million of losses on investment securities, compared to $22.6 million in 2024.

The repositioning of a portion of the investment portfolio accounted for losses of $6.5 million and $13.2 million in 2025 and 2024, respectively, while impairment write-downs on securities with credit deterioration accounted for $8.1 million of losses in 2025 and $9.7 million in 2024.

While we do not expect these losses to continue in 2026, these losses are an example of losses experienced as a result of volatility in revenues derived from investment securities.

Sales of our securities, or the perception of such sales, by us or holders of our securities in the public market or otherwise could cause the market price of our securities to decline and issuances under additional registration statements would dilute the interest of our shareholders and likely present other risks.

The issuance or sale of our securities in public markets or otherwise, or the perception that such sales may occur, could impact the prevailing market price or demand of our securities.

These sales, or the possibility that these sales may occur, also might make it more difficult to issue securities in the future at a time and at a price that we deem appropriate.

Further resales of our securities may cause the market price of our securities to drop, even if our business is doing well.

The market price of our common stock could decline if holders of our shares sell those shares, including pursuant to a resale registration statement, or the market anticipates such sale by holders.

As such, substantial sales of our common stock could occur at any time.

Such sales, or the perception or anticipation of such sales, could reduce the demand and market price of our common stock.

On November 5, 2025, we filed an automatic shelf registration statement on Form S-3ASR for the issuance of an indeterminate amount of debt securities, capital stock, depositary shares, warrants, rights, stock purchase contracts, and units or a combination thereof.

On November 10, 2025, we issued and sold $300.0 million aggregate principal amount of 6.375% Fixed-to-Floating Rate Subordinated Notes due 2035 (the “ Subordinated Notes ”) under the November 5, 2025 automatic shelf registration statement on Form S-3ASR.

We have not issued any other securities under this automatic shelf registration statement.

The issuances and sales of our securities described herein may increase the volatility of the market price of our common stock.

The sale by holders who were issued common stock, or the perception that these holders will sell the common stock, could result in a decline in the public trading price of our common stock.

The issuance of our Subordinated Notes may decrease the demand for our common stock, as holders who purchased the Subordinated Notes may no longer be buyers of our common stock or may consider diversifying their holdings of us by selling shares of our common stock.

Additionally, the issuances of these securities may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise with effect to sales.

Risks Related to the Legal and Regulatory Environment

3 unchanged sentences

This includes, among others, capital adequacy requirements, Anti-Money Laundering and Bank Secrecy Act compliance, consumer protection laws and data privacy laws.

As part of their supervisory process, which includes periodic examinations and continuous monitoring, the regulators have the authority to impose restrictions or conditions on our activities and the manner in which we operate our business.

As part of their supervisory

process, which includes periodic examinations and continuous monitoring, the regulators have the authority to impose restrictions or conditions on our activities and the manner in which we operate our business.

These actions could impact the Company and the Bank in a variety of ways, including subjecting us to fines, restricting our ability to pay dividends, precluding mergers or acquisitions, limiting our ability to offer certain products or services, requiring us to undertake significant remedial measures, removing key employees from their positions, imposing additional capital, operating, or oversight requirements or ultimately, in the event that any regulatory violations or actions cannot be corrected and are substantial in nature to cause an imminent risk of loss to depositors, we could be placed into receivership or conservatorship.

11 unchanged sentences

Regulations and laws are subject to change, and changes may impact us in a variety of ways, including increasing costs to operate our business, limiting our ability to offer certain products or services, requiring us to undertake significant measures to comply with the changing regulations or otherwise impact the results of our operations.

The 2023 bank failures of Silicon Valley Bank in California, Signature Bank in New York, and First Republic Bank in California, and the decision of Silvergate Bank in California to voluntarily liquidate its assets and wind down operations may result in modifications or additional laws which we would be subject to, including potentially increasing capital requirements, modifying regulations related to liquidity risk management, deposit concentrations, capital adequacy and other additional

oversight requirements.

These changes may result in increased compliance costs which could detrimentally affect the results of our operations.

The CFPB has recently undertaken an effort to eliminate “junk fees” which could subject us and our fee practices to additional scrutiny.

“Junk fees” has not been specifically defined, but has been focused on deposit products such as overdraft fees and non-sufficient funds fees.

The CFPB is soliciting comments on fee practices to determine the next steps, if any, to take in combatting “junk fees”.

As the regulatory focus shifts towards clarifying permissible and impermissible “junk fees”, we may be required to modify our fee practices and undergo costs to comply with new or modified regulations, which may cause a reduction in our non-interest income and impact the results of our operations.

On February 1, 2025, the director of the CFPB, Rohit Chopra, was relieved of his duties by President Trump, and the new director of the CFPB ordered the CFPB to cease all activities.

It is currently unknown what, if any, of the CFPB’s policies or directives will continue.

Additionally, if the regulatory restrictions in our industry were lessened or eliminated, it could have an adverse effect on us and our shareholders if such lessening or elimination of regulatory restrictions increases competition within our industry or our market area.

Legislative and regulatory proposals continue to be introduced that could significantly affect consumer credit products and pricing, including proposals to impose caps on interest rates or fees, such as a proposed federal limit on credit card interest rates.

If enacted, such measures could reduce interest income, alter product economics, limit the availability of certain credit products, or require material changes to underwriting, pricing, and risk management practices.

The outcome, timing, and scope of these proposals remain uncertain, but their adoption could adversely affect our financial condition, results of operations, business and prospects.

In 2025, the United States Congress took action to reduce federal funding to the CFPB.

The CFPB is currently undergoing changes as an agency in terms of leadership, direction, goals, and enforcement capabilities.

The results of these changes are not yet known.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Financial institutions are facing increasing scrutiny from customers, regulators, investors, and other stakeholders related to their environmental, social and governance (ESG) practices and disclosure.

Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, labor conditions and human rights.

Increased ESG-related compliance costs for us as well as among our third party suppliers, vendors and various other parties within our supply chain could result in increases to our overall operational costs.

Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, access to capital, the results of our operations and the price of our common shares.

Financial institutions continue to face evolving expectations from customers, regulators, investors, and other stakeholders regarding environmental, social, governance, and sustainability-related practices and disclosures.

In addition, climate-related physical and transition risks may affect borrowers, collateral values, insurance availability, supply chains, and economic conditions in the markets we serve, while shifts in public policy, technology, and investor or customer preferences may affect certain industries and business activities differently.

Adapting to changing regulatory requirements and stakeholder expectations, as well as managing risks associated with environmental and social developments, may increase operational and compliance costs, affect relationships with customers or business partners, and could adversely impact our reputation, access to capital, financial condition, and results of operations.

General Risk Factors

1 unchanged sentence

Our ability to engage in routine funding transactions could be affected by the actions and lack of commercial soundness of other financial institutions.

Financial services institutions are interrelated as a result of trading, clearing, and counterparty relationships, among others.

Financial services institutions are

interrelated as a result of trading, clearing, and counterparty relationships, among others.

As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry in general, have led to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions in the future.

4 unchanged sentences

For more details regarding the potential impacts of weakness in other financial institutions, see the Risk Factor titled “Our financial condition, results of operations, and stock price may be negatively impacted by unrelated bank failures and negative depositor confidence in depository institutions.”

” on page 22.

The fiscal and monetary policies of the United States government and its agencies could have an effect on our earnings.

The Federal Reserve Board regulates the supply of money and credit in the United States.

Its policies determine in large part the cost of funds for lending and investing and the returns earned on those loans and investments, both of which affect the net interest margin.

The resultant changes in interest rates can also materially affect the value of certain financial assets we hold, such as debt securities.

For example, in 2024, the Federal Reserve Open Markets Committee decreased the target fed funds rate by 100 basis points resulting in the Bank's net interest margin on a fully tax equivalent basis decreasing from 4.40% at December 31, 2023 to 4.05% at December 31, 2024 as the increase in funding costs and interest bearing liabilities outpaced the impact from increased asset yields and higher earning asset balances.

At the same time, accumulated other comprehensive loss increased from $309.8 million in 2023 to $289.8 million in 2024, driven by an increase in the valuation of available-for-sale

The policies of the Federal Reserve Board can adversely affect borrowers, and increase default risk on their loans.

Changes in Federal Reserve Board policies are beyond our control and difficult to predict;

consequently, the impact of these changes on our activities and results of operations is difficult to predict.

The Federal Reserve Board regulates the supply of money and credit in the United States, and its policies significantly influence funding costs, loan and investment yields, and net interest margin, as well as the value of financial assets such as debt securities.

During 2025, the Federal Reserve eased monetary policy through several rate reductions following the elevated rate environment of prior periods;

however, the future path of interest rates remains uncertain and policy decisions continue to evolve in response to economic conditions.

In addition, recent public debate and legal challenges concerning the independence of the Federal Reserve, along with the anticipated transition to new Federal Reserve leadership in 2026, have contributed to uncertainty regarding the direction and implementation of future monetary policy.

Federal Reserve policy decisions and related market reactions may adversely affect borrowers’ repayment capacity and asset valuations, and because such policies and leadership developments are beyond our control and difficult to predict, their impact on our financial condition and results of operations remains uncertain.

Changes in tax laws could affect our performance.

We are subject to extensive federal, state and local taxes, including income, excise, sales/use, payroll, property, franchise, withholding and ad valorem taxes.

The new Presidential administration has stated that it will look at possibly changing tax laws during the President's term in office.

Changes to these tax laws can impact our tax liability and the tax liabilities of our customers.

3 unchanged sentences

In addition, such negative effects on our customers could result in defaults on the loans we have made and decrease the value of mortgage-backed securities in which we have invested.

Adverse external events outside of our control, such as natural disasters, acts of war or terrorism, new public health issues, could impact our business operations.

Adverse external events outside of our control, such as natural disasters, acts of war or terrorism and new public health issues, could impact our business operations.

While we have implemented processes and procedures as part of our business continuity and disaster recovery plans, there is still the potential that adverse external events outside of our control, such as natural disasters, acts of war or terrorism, new public health issues, could impact our business operations.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors