What changed in this filing

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Item 1. Business

2026-02-25 compared with 2025-02-24 · 139 added, 161 removed, 582 unchanged (34% of the section changed)

The Corporation is a financial holding company headquartered in Muncie, Indiana and was organized in September 1982.

The Corporation’s Common Stock is traded on the Nasdaq Global Select Market under the symbol FRME.

First Merchants Corporation (the “Corporation”) is a financial holding company headquartered in Muncie, Indiana and was organized in September 1982.

The Corporation’s common stock is traded on the Nasdaq Global Select Market System under the symbol FRME.

The Corporation has one full-service bank charter, First Merchants Bank, which opened for business in Muncie, Indiana in March 1893.

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As of December 31, 2025, the Corporation had consolidated asse ts of $19.0 billion, consolidated deposits of $15.3 billion and stockholders’ equity of $2.5 billion.

BUSINESS DEVELOPMENTS

On February 1, 2026, the Corporation completed the acquisition of First Savings Financial Group, Inc., an Indiana corporation (“First Savings”), pursuant to the Agreement and Plan of Merger, dated as of September 24, 2025, by and between the Corporation and First Savings (the “Merger Agreement”).

Immediately following the Merger, First Savings Bank, a wholly-owned subsidiary of First Savings, merged with and into the Bank, with the Bank surviving the merger and continuing its corporate existence.

First Savings was headquartered in Jeffersonville, Indiana and had 16 banking centers serving the southern Indiana market and had total assets of $2.4 billion (unaudited), total loans of $1.9 billion (unaudited), and total deposits of $1.7 billion (unaudited) as of December 31, 2025.

The Corporation engaged in this transaction with the objective that the transaction would be accretive to earnings and add to the existing market area in Indiana that has a demographic profile consistent with many of the current Midwest markets served by the Bank.

For the year ended December 31, 2025, the Corporation recorded merger-related expenses of $0.8 million related to the First Savings acquisition.

For additional information regarding the acquisition, see NOTE 2.

ACQUISITIONS AND DIVESTITURES of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K.

In addition, the Merger Agreement is filed as an exhibit to this Annual Report on Form 10-K.

HUMAN CAPITAL

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We offer specific and concerted effort in supporting our managers who score under 70 percent engagement.

Retention and Turnover :

The Bank set a goal in 2025 to maintain a 20% or lower voluntary turnover rate as a way to measure the effectiveness of employee retention.

This metric, in conjunction with Employee Engagement metrics, offers an overall picture of engagement.

We achieved an overall turnover rate of 18% in 2025.

Education Assistance :

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All employee resource groups are open to all employees of the Corporation.

Additionally, we have created an Employee Community Call, which hosts monthly Zoom/TEAMS calls that are attended by over 150 employees.

Additionally, we have created an Employee Community Call, which hosts monthly meetings that are attended by over 150 employees.

Talent Assessment, Succession Planning and Career Path :

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The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including the Corporation.

Those filings are accessible on the SEC’s website at http://www.sec.gov.

Those filings are accessible on the SEC’s website at https://www.sec.gov .

ACQUISITION AND DIVESTITURE POLICY

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Acquisitions typically involve the payment of a premium over book and market values, and, therefore, some dilution of our tangible book value and net income per share may occur in connection with any future transaction.

The Corporation’s ability to engage in certain merger or acquisition transactions, whether or not any regulatory approval is required, will be dependent upon the Corporation’s bank regulators’ views at the time as to the capital levels, quality of management and the Corporation’s overall condition, and their assessment of a variety of other factors.

The Corporation’s ability to engage in certain merger or acquisition transactions, whether or not any regulatory approval is required, will be dependent upon the Corporation’s regulators’ views at the time as to the capital levels, quality of management and the Corporation’s overall condition, and their assessment of a variety of other factors.

Certain merger or acquisition transactions, including those involving the acquisition of a depository institution or the assumption of the deposits of any depository institution, require formal approval from various bank regulatory authorities, which will be subject to a variety of factors and considerations.

The Bank is located in Indiana, Ohio, and Michigan counties where other financial services companies provide similar banking services.

The Bank faces substantial competition in all areas of our operations from a variety of different competitors, many of which are larger and have more financial resources.

The Bank operates in Indiana, Ohio, and Michigan counties.

The Bank faces substantial competition across all areas of its operations from a variety of competitors, many of which are larger and have more financial resources.

Such competitors primarily include national, regional and internet banks within the various markets in which the Bank operates, though the Bank also competes with smaller community banks that seek to offer similar service levels.

The Bank also faces competition from many other types of institutions, including, without limitation savings and loans associations, credit unions, finance companies, brokerage firms, insurance companies, and other financial intermediaries.

The financial services industry continues to become even more competitive as a result of legislative, regulatory and technological changes and continued consolidation.

Banks, securities firms and insurance companies can operate as affiliates under the umbrella of a financial holding company, which can offer virtually any type of financial service, including banking, securities underwriting, insurance (both agency and underwriting) and merchant banking.

Also, technology has lowered barriers to enter and made it possible for nonbanks to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems.

The financial services industry has become increasingly competitive as a result of legislative, regulatory and technological changes and continued consolidation.

Banks, securities firms and insurance companies can operate as affiliates under the umbrella of a financial holding company, which can offer a broad range of financial services, including banking, securities underwriting, insurance (both agency and underwriting) and merchant banking.

In addition, technological developments have lowered barriers to entry and enabled nonbank competitors to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems.

Many of our nonbank competitors have fewer regulatory constraints and may have lower cost structures.

Additionally, due to their size, many competitors may be able to achieve economies of scale and, as a result, may offer broader range of products and services as well as better pricing for those products and services than we can.

Additionally, due to their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range of products and services as well as more competitive pricing for those products and services than we can.

Finally, the Bank’s competitors may choose to offer lower loan interest rates and pay higher deposit rates.

The Bank believes that the most important criteria to their targeted clients when selecting a bank is the customer’s desire to receive exceptional and personal customer service while being able to enjoy convenient access to a broad array of financial products.

Additionally, when presented with a choice, the Bank believes that many of their targeted clients prefer to deal with an institution that favors local decision making as opposed to where many important decisions regarding a client’s financial affairs are made outside the local community.

The Bank believes that the most important criteria to its targeted clients when selecting a bank include the quality of customer service and convenient access to a broad array of financial products.

Additionally, when presented with a choice, the Bank believes that many of its targeted clients prefer to deal with an institution that favors local decision making as opposed to institutions where many important decisions regarding a client’s financial affairs are made outside the local community.

REGULATION AND SUPERVISION OF FIRST MERCHANTS CORPORATION AND SUBSIDIARIES

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Significant elements of the laws and regulations applicable to the Corporation and its subsidiaries are described below.

The description is qualified in its entirety by reference to the full text of the statues, regulations and policies that are described.

Also, such statutes, regulations and policies are continually under review by Congress and state legislatures and federal and state regulatory agencies.

This description is qualified in its entirety by reference to the full text of the applicable statutes, regulations, and policies.

Such statutes, regulations and policies are continually under review by Congress and state legislatures and federal and state regulatory agencies.

A change in statutes, regulations or regulatory policies applicable to the Corporation and its subsidiaries could have a material effect on the Corporation’s business, financial condition or results of operations.

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The Corporation is registered as a bank holding company and has elected to be a financial holding company.

It is subject to the supervision of, and regulation by the Board of Governors of the Federal Reserve (“Federal Reserve”) under the BHC Act, as amended.

It is subject to the supervision of, and regulation by the Board of Governors of the Federal Reserve (“Federal Reserve”) under the Bank Holding Act of 1956, as amended (“BHC Act”).

Bank holding companies are required to file periodic reports with and are subject to periodic examination by the Federal Reserve.

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Thus, it is the policy of the Federal Reserve that a bank holding company should stand ready to use its resources to provide adequate capital funds to the Bank during periods of financial stress or adversity.

Additionally, under the FDICIA, a bank holding company is required to guarantee the compliance of any subsidiary bank that may become “undercapitalized” (as defined in the FDICIA section of this Form 10-K) with the terms of any capital restoration plan filed by such subsidiary with its appropriate federal banking agency.

Under the BHC Act, the Federal Reserve has the authority to require a bank holding company to terminate any activity or relinquish control of a non-bank subsidiary (other than a non-bank subsidiary of a bank) upon the determination that such activity constitutes a serious risk to the financial stability of any bank subsidiary.

Additionally, under the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), a bank holding company is required to guarantee the compliance of any subsidiary bank that may become “undercapitalized” (as defined in the FDICIA section of this Form 10-K) with the terms of any capital restoration plan filed by such subsidiary with its appropriate federal banking agency.

Under the BHC Act, the Federal Reserve has the authority to require a bank holding company to terminate any activity or relinquish control of a non-bank subsidiary (other than a non-bank subsidiary of a bank) upon a determination that such activity constitutes a serious risk to the financial stability of any bank subsidiary.

The BHC Act requires the Corporation to obtain the prior approval of the Federal Reserve before:

• acquiring direct or indirect control or ownership of any voting shares of any bank or bank holding company if, after such acquisition, the bank holding company will directly or indirectly own or control more than 5 percent of the voting shares of the bank or bank holding company;

• acquiring direct or indirect control or ownership of any voting shares of any bank or bank holding company if, after such acquisition, the bank holding company will directly or indirectly own or control more than five percent of the voting shares of the bank or bank holding company;

• merging or consolidating with another bank holding company;

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Specifically, Basel III requires the Corporation and the Bank to maintain:

• a minimum ratio of CET1 to risk-weighted assets of a least 4.5 percent, plus the 2.5 percent capital conservation buffer effectively resulting in a minimum ratio of CET1 to risk-weighted assets of at least 7.0 percent;

• a minimum ratio of CET1 to risk-weighted assets of at least 4.5 percent, plus the 2.5 percent capital conservation buffer effectively resulting in a minimum ratio of CET1 to risk-weighted assets of at least 7.0 percent;

• a minimum ratio of tier 1 capital to risk-weighted assets of at least 6.0 percent, plus the 2.5 percent capital conservation buffer effectively resulting in a minimum tier 1 capital ratio of 8.5 percent;

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Basel III also provides for a “countercyclical capital buffer” that is applicable to only certain covered institutions and is not expected to have any current applicability to the Corporation or the Bank.

The aforementioned capital conservation buffer is designed to absorb losses during periods of economic stress.

The capital conservation buffer is designed to absorb losses during periods of economic stress.

Banking institutions with risk-weighted capital ratios above the minimum but below the conservation buffer will face limitations on the payment of dividends, common stock repurchases and discretionary cash payments to executive officers based on the amount of the shortfall.

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These include, for example, the requirement that mortgage servicing rights, deferred tax assets dependent upon future taxable income and significant investments in non-consolidated financial entities be deducted from CET1 to the extent that any one such category exceeds 10 percent of CET1 or all such categories in the aggregate exceed 15 percent of CET1.

Under Basel III, the Corporation and the Bank made a one-time election to filter out certain AOCI components.

Basel III permits banks with less than $15 billion in assets to continue to treat trust preferred securities as tier 1 capital.

This treatment is permanently grandfathered as tier 1 capital even if the Corporation should ever exceed $15 billion in assets due to organic growth but not following certain mergers or acquisitions.

As a result, while the Corporation’s total assets exceeded $15 billion as of December 31, 2021, the Corporation had continued to treat its trust preferred securities as tier 1 capital as of such date.

However, under certain amendments to the “transition rules” of Basel III, if a bank holding company that held less than $15 billion of assets as of December 31, 2009 (which would include the Corporation) acquires a bank holding company with under $15 billion in assets at the time of acquisition (which would include Level One Bancorp, Inc.

(“Level One”), which the Corporation acquired on April 1, 2022), and the resulting organization has total consolidated assets of $15 billion or more as reported on the resulting organization’s call report for the period in which the transaction occurred, the resulting organization must begin reflecting its trust preferred securities as tier 2 capital at such time.

As a result, effective with the April 1, 2022 consummation of the Level One merger, the Corporation began reflecting all of its trust preferred securities as tier 2 capital.

Under Basel III, the Corporation and the Bank made a one-time election to filter out certain Accumulated Other Comprehensive Income (“AOCI”) components.

Under the Basel III capital rules, the Corporation’s outstanding trust preferred securities are included in tier 2 capital.

As a result of the April 1, 2022 acquisition of Level One Bancorp, Inc.

(“Level One”), the Corporation no longer qualifies to include trust preferred securities in tier 1 capital, and such securities are reflected in tier 2 capital as of that date.

Basel III permits banks with less than $250 billion in assets to choose to continue excluding unrealized gains and losses on certain securities holdings for purposes of calculating regulatory capital.

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Historically, the regulation and monitoring of a bank and bank holding company’s liquidity has been addressed as a supervisory matter, without minimum required formulaic measures.

The Basel III liquidity framework requires banks and bank holding companies to measure their liquidity against specific liquidity tests that, although similar in some respects to liquidity measures historically applied by banks and regulators for management and supervisory purposes, is now required by regulation.

One test, referred to as the liquidity coverage ratio, is designed to ensure that the banking entity maintains an adequate level of unencumbered high-quality liquid assets equal to the entity’s expected net cash outflow for a 30-day time horizon (or, if greater, 25 percent of its expected total cash outflow) under an acute liquidity stress scenario.

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As of December 31, 2025, the Corporation was “well capitalized” based on the required Basel III Minimum Capital ratios described above.

Impact of CECL Implementation on Regulatory Capital

As discussed in NOTE 1.

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES and NOTE 5.

LOANS AND ALLOWANCE FOR CREDIT LOSSES of the Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K, the FASB issued the “current expected credit losses” (“CECL”) accounting standard in 2016 to address concerns relating to the ability to record credit losses that are expected, but do not yet meet the “probable” threshold by replacing the current “incurred loss” model for recognizing credit losses with an “expected life of loan loss” model referred to as the CECL model.

While the original implementation date of the CECL model was January 1, 2020, the CARES Act and a related joint statement of federal banking regulators provided financial institutions with optional temporary relief from having to comply with implementation of the CECL standard.

This temporary relief was set to expire on December 31, 2020.

However, the 2021 Consolidated Appropriations Act (the “2021 CAA”), which was signed into law on December 27, 2020, amended the CARES Act by extending the temporary relief from CECL compliance to, effectively, January 1, 2022.

The Corporation elected to delay implementation of CECL following the approval of the CARES Act and, with the enactment of the 2021 CAA, the Corporation elected to adopt CECL on January 1, 2021.

As a result, the Corporation has utilized the CECL standard for 2024, 2023, 2022, and 2021.

As part of a March 27, 2020, joint statement of federal banking regulators, an interim final rule that allowed banking organizations to mitigate the effects of the CECL accounting standard on their regulatory capital was announced.

Banking organizations could elect to mitigate the estimated cumulative regulatory capital effects of CECL for up to two years.

This two-year delay was to be in addition to the three-year transition period that federal banking regulators had already made available.

While the 2021 CAA provided for a further extension of the mandatory adoption of CECL until January 1, 2022, the federal banking regulators elected to not provide a similar extension to the two year mitigation period applicable to regulatory capital effects.

Instead, the federal banking regulators require that, in order to utilize the additional two-year delay, banking organizations must have adopted the CECL standard no later than December 31, 2020, as required by the CARES Act.

As a result, because implementation of the CECL standard was delayed by the Corporation until January 1, 2021, it began phasing in the cumulative effect of the adoption on its regulatory capital, at a rate of 25 percent per year, over a three-year transition period that began on January 1, 2021.

Under that phase-in schedule, the cumulative effect of the adoption was fully reflected in regulatory capital on January 1, 2024.

Bank Regulation

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Federal law extensively regulates various aspects of the banking business such as reserve requirements, truth-in-lending and truth-in-savings disclosures, equal credit opportunity, fair credit reporting, trading in securities and other aspects of banking operations.

Current federal law also requires banks, among other things, to make deposited funds available within specified time periods.

Federal law also requires banks, among other things, to make deposited funds available within specified time periods.

The Consumer Financial Protection Bureau (“CFPB”), an independent federal agency created under the Dodd-Frank Act, was granted broad rulemaking, supervisory and enforcement powers under various federal consumer financial protection laws, primarily with authority over banks and their affiliates with assets of more than $10 billion.

As the quarter ended December 31, 2019, was the fourth consecutive quarter that the Bank reported assets exceeding $10 billion, effective as of the beginning of the second quarter of 2020, the Bank and its affiliates became subject to CFPB supervisory and enforcement authority.

Because the quarter ended December 31, 2019 represented the fourth consecutive quarter that the Bank reported assets exceeding $10 billion, effective as of the beginning of the second quarter of 2020, the Bank and its affiliates became subject to CFPB supervisory and enforcement authority.

See “- Dodd-Frank Wall Street Reform and Consumer Protection Act” and “- Consumer Financial Protection” below for additional information.

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The Corporation and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies including, in the case of both the Bank and the Corporation, the Basel III requirements discussed above under “- Capital Adequacy Guidelines for Bank Holding Companies (Basel III)” and, in the case of the Bank, the “prompt corrective action” requirements discussed below under “- FDIC Improvement Act of 1991 (FDICIA).” Under the regulations, a capital category is assigned to the regulated entity, which is largely determined by four ratios that are calculated according to the applicable regulations:

total risk-based capital, tier 1 risk-based capital, common equity tier 1 capital, and tier 1 leverage ratios.

total risk-based capital, tier 1 risk-based capital, CET1 capital, and tier 1 leverage ratios.

The ratios are intended to measure capital relative to assets and credit risk associated with those assets and off-balance sheet exposures of the entity.

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Classification of a bank in any of the undercapitalized categories can result in actions by regulators that could have a material effect on a bank’s operations.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total risk-based capital, tier 1 capital and common equity tier 1 capital, in each case, to risk-weighted assets, and of tier 1 capital to average assets, or leverage ratio, all of which are calculated as defined in the regulations.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total risk-based capital, tier 1 capital and CET1 capital, in each case, to risk-weighted assets, and of tier 1 capital to average assets (the leverage ratio), all of which are calculated as defined in the regulations.

Banks with lower capital levels are deemed to be “undercapitalized”, “significantly undercapitalized” or “critically undercapitalized”, depending on their actual levels.

The appropriate federal regulatory agency may also downgrade a bank to the next lower capital category upon a determination that the bank is in an unsafe or unsound practice.

The appropriate federal regulatory agency may also

downgrade a bank to the next lower capital category upon a determination that the bank is engaging in unsafe or unsound practice or condition.

Banks are required to monitor closely their capital levels and to notify their appropriate regulatory agency of any basis for a change in capital category.

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If an “undercapitalized” bank fails to submit an acceptable plan, it is treated as if it is “significantly undercapitalized”.

“Significantly undercapitalized” banks are subject to various requirements and restrictions, including an order by the FDIC to sell sufficient voting stock to become “adequately capitalized”, requirements to reduce total assets and cease receipt of deposits from correspondent banks, and restrictions on compensation of executive officers.

“Significantly undercapitalized” banks are subject to various requirements and restrictions, including, among other things, an order by the FDIC to sell sufficient voting stock to become “adequately capitalized”, requirements to reduce total assets and cease receipt of deposits from correspondent banks, and restrictions on compensation of executive officers.

“Critically undercapitalized” institutions may not, beginning 60 days after becoming “critically undercapitalized,” make any payment of principal or interest on certain subordinated debt, extend credit for a highly leveraged transaction, or enter into any transaction outside the ordinary course of business.

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Although most of the required regulations of the Dodd-Frank Act have been promulgated and implemented (or are being implemented over time), there are additional regulations yet to be finalized by the authorized federal agencies.

The changes resulting from the Dodd-Frank Act have impacted the profitability of the Corporation’s business activities, required changes to certain business practices, and imposed more stringent capital, liquidity and leverage requirements, and, when fully implemented, may further adversely affect our business.

Among other things, the Dodd-Frank Act has resulted, and in the future will likely result, in:

• increases to the cost of the Corporation’s operations due to greater regulatory oversight, supervision and examination of banks and bank holding companies, including higher deposit insurance premiums;

• increases in the cost of the Corporation’s operations due to greater regulatory oversight, supervision and examination of banks and bank holding companies, including higher deposit insurance premiums;

• limitations on the Corporation’s ability to raise additional capital through the use of trust preferred securities, as new issuances of these securities can no longer be included as tier 1 capital;

• reduced flexibility for the Corporation to generate or originate certain revenue-producing assets based on increased regulatory capital standards;

• reduced flexibility for the Corporation to generate or originate certain revenue-producing assets as a result of increased regulatory capital standards;

• limitations on the Corporation’s ability to expand consumer product and service offerings due to stricter consumer protection laws and regulations;

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The Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Economic Growth Act”), which was enacted in May 2018, repealed or modified several provisions of the Dodd-Frank Act.

In particular, the asset threshold at which banks are subject to annual company-run stress tests were increased from $10 billion to $250 billion under the Economic Growth Act.

In particular, the asset threshold at which banks are subject to annual company-run stress tests was increased from $10 billion to $250 billion under the Economic Growth Act.

As a result, the Corporation and the Bank are not subject to the Dodd-Frank Act stress testing requirements.

The Corporation’s management continues to take the steps necessary to minimize the adverse impact of the Dodd-Frank Act on its business, financial condition and results of operation.

Management continues to take steps intended to mitigate the adverse effects of the Dodd‑Frank Act on the Corporation’s business, financial condition, and results of operations.

Durbin Amendment

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An upward adjustment of no more than 1 cent to the issuer’s debit card interchange fee is allowed if the card issuer develops and implements policies and procedures reasonably designed to achieve certain fraud-prevention standards.

The Federal Reserve also has rules governing routing and exclusivity that require issuers to offer two unaffiliated networks for routing transactions on each debit or prepaid product.

The Federal Reserve also has

rules governing routing and exclusivity that require issuers to offer at least two unaffiliated networks for routing transactions on each debit or prepaid product.

The Volcker Rule, which was adopted under the Dodd-Frank Act, places certain limitations on the trading activity of insured depository institutions and their affiliates subject to certain exceptions.

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Government or other municipal securities and trading conducted (i) in certain capacities as a broker or other agent, or as a fiduciary on behalf of customers, (ii) to satisfy a debt previously contracted, (iii) pursuant to repurchase and securities lending agreements, and (iv) in risk-mitigating hedging activities.

The Volcker Rule also prohibited banking institutions from having an ownership interest in a hedge fund or private equity fund.

The Volcker Rule also generally prohibits banking institutions from having an ownership interest in a hedge fund or private equity fund.

In June 2020, the federal bank regulatory agencies finalized amendments to the Volcker Rule’s restrictions on ownership interests in and relationships with covered funds.

Among other things, these amendments permit banking entities to have relationships with and offer additional financial services to additional types of funds and investment vehicles.

A banking entity that engages in proprietary trading (which excludes the exceptions discussed above) or covered fund-related activities or investments, and has total consolidated assets of more than $10 billion for two years, must implement and maintain a compliance program that meets certain minimum requirements and must also maintain certain documentation with respect to covered fund activities, in each case, as described in the Volcker Rule.

A banking entity that engages in proprietary trading (which excludes the exceptions discussed above) or covered fund-related activities or investments, and has total consolidated assets of more than $10 billion for two consecutive years, must implement and maintain a compliance program that meets certain minimum requirements and must also maintain certain documentation with respect to covered fund activities, in each case, as described in the Volcker Rule.

While the Corporation’s total consolidated assets first exceeded $10 billion during the quarter ended March 31, 2019, the Volcker Rule has not had, and is not expected to have, a material impact on the Corporation or the Bank.

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Additionally, the Bank’s Indiana public funds (state of Indiana and its political subdivisions) are insured by the Public Deposit Insurance Fund (“PDIF”).

The PDIF provides insurance to those Indiana public funds deposited in approved financial institutions which exceed the limits of coverage provided by any federal deposit insurance.

The PDIF provides insurance to those Indiana public funds deposited in approved financial institutions that exceed the limits of coverage provided by any federal deposit insurance.

Deposit insurance assessments are based on average consolidated total assets minus average tangible equity.

Under the FDIC’s risk-based assessment system, insured institutions with a least $10 billion in assets, such as the Bank, are assessed on the basis of a scoring system that combine the institution’s regulatory ratings and certain financial measures.

Under the FDIC’s risk-based assessment system, insured institutions with at least $10 billion in assets, such as the Bank, are assessed on the basis of a scoring system that combines the institution’s regulatory ratings and certain financial measures.

The scoring system assesses risk measures to produce two scores, a performance score and a loss severity score, that will be combined and converted to an initial assessment rate.

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The Corporation’s principal source of funds for dividend payments to shareholders is dividends received from the Bank.

Banking regulations limit the maximum amount of dividends that a bank may pay without requesting prior approval of regulatory agencies.

Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the bank’s retained income (as defined under the regulations) for the current year plus those for the previous two years, subject to the capital requirements described above.

Banking regulations limit the maximum amount of dividends that a bank may pay without requesting prior approval from regulatory agencies.

Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the bank’s retained income (as defined under the regulations) for the current year plus retained income for the previous two years, subject to the capital requirements described above.

As of December 31, 2025, the amount available for dividends from the Corporation’s subsidiaries (both banking and non-banking), without prior regulatory approval or notice, was $228.9 million.

Brokered Deposits

Under FDIC regulations, no FDIC-insured depository institution can accept brokered deposits unless it (i) is well capitalized, or (ii) is adequately capitalized and received a waiver from the FDIC.

Under FDIC regulations, no FDIC-insured depository institution can accept brokered deposits unless it (i) is well capitalized, or (ii) is adequately capitalized and has received a waiver from the FDIC.

In addition, these regulations prohibit any depository institution that is not well capitalized from (a) paying an interest rate on deposits in excess of 75 basis points over certain prevailing market rates or (b) offering “pass through” deposit insurance on certain employee benefit plan accounts unless it provides certain notice to affected depositors.

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• the Equal Credit Opportunity Act (prohibiting discrimination on the basis of race, religion or other prohibited factors in the extension of credit);

• the Fair Credit Reporting Act (governing the provision of consumer information to credit reporting agencies and the use of consumer information);

• the Fair Credit Reporting Act (governing the provision and use of consumer information to, and by, credit reporting agencies);

• the Truth-In-Lending Act (governing disclosures of credit terms to consumer borrowers);

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• the Right to Financial Privacy Act (which imposes a duty to maintain the confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records);

• the Home Mortgage Disclosure Act and Regulation C, requiring financial institutions to provide certain information about home mortgage and refinanced loans;

• the Home Mortgage Disclosure Act and Regulation C (“HMDA”), requiring financial institutions to provide certain information about home mortgage origination and refinancing loans;

• the respective state-law counterparts to the above laws, as applicable, as well as state usury laws and laws regarding unfair and deceptive acts and practices.

Violations of applicable consumer protection laws can result in significant potential liability from litigation brought by customers, including actual damages, restitution and attorneys’ fees.

Federal bank regulators, state attorneys general and state and local consumer protection agencies may also seek to enforce consumer protection requirements and obtain these and other remedies, including regulatory sanctions, customer rescission rights, action by the state and local attorneys general in each jurisdiction in which we operate and civil money penalties.

Failure to comply with consumer protection requirements may also result in the Corporation’s failure to obtain any required bank regulatory approval for merger or acquisition transactions that it may wish to pursue or prohibition from engaging in such transactions even if approval is not required.

Federal bank regulators, state attorneys general and state and local consumer protection agencies may also seek to enforce consumer protection requirements and obtain these and other remedies, including regulatory sanctions, customer rescission rights, action by state and local attorneys general in each jurisdiction in which the Corporation operates and civil money penalties.

Failure to comply with consumer protection requirements may also result in the Corporation’s failure to obtain any required bank regulatory approval for merger or acquisition transactions that it may wish to pursue or the prohibition from engaging in such transactions even if approval is not required.

The CFPB, an independent federal agency created under the Dodd-Frank Act, was granted broad rulemaking, supervisory and enforcement powers under various federal consumer financial protection laws, primarily with authority over banks and their affiliates with assets of more than $10 billion.

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The Dodd-Frank Act does not prevent states from adopting stricter consumer protection standards.

State regulation of financial products and potential enforcement actions could also adversely affect our business, financial condition or results of operations.

State regulation of financial products and potential enforcement actions could also adversely affect the Corporation’s business, financial condition or results of operations.

Community Reinvestment Act

The Community Reinvestment Act of 1977 (the “CRA”) requires depository institutions to assist in meeting the credit needs of their market areas consistent with safe and sound banking practice.

Under the CRA, each depository institution is required to help meet the credit needs of its market areas by, among other things, providing investment in and credit to low- and moderate-income individuals and small businesses in those communities.

Under the CRA, each depository institution is required to help meet the credit needs of its market areas by, among other things, providing investments in, and credit, to low- and moderate-income individuals and small businesses in those communities.

These factors are also considered in evaluating mergers, acquisitions and applications to open a branch or facility.

The applicable federal regulators regularly conduct CRA examinations to assess the performance of financial institutions and assign one of four ratings to the institution’s records of meeting the credit needs of its community.

These ratings are outstanding, satisfactory, needs to improve or substantial noncompliance.

During its last examination, a rating of satisfactory was received by the Bank.

These ratings are “outstanding,” “satisfactory,” “needs to improve,” or “substantial noncompliance.” During its last examination, a rating of “satisfactory” was received by the Bank.

Financial Privacy

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The Bank Secrecy Act (the “BSA”) requires financial institutions to develop policies, procedures, and practices to prevent and deter money laundering, and mandates that every bank has a written, board-approved program that is reasonably designed to assure and monitor compliance with the BSA.

In addition, banks are required to adopt a customer identification program as part of their BSA compliance program, and are required to file Suspicious Activity Reports when they detect certain known or suspected violations of federal law or suspicious transactions related to a money laundering activity or a violation of the BSA.

The Bank is also required to (1) identify and verify, subject to certain exceptions, the identity of the beneficial owners of all legal entity customers at the time a new account is opened, and (2) include, in its anti-money laundering program, risk-based procedures for conducting ongoing customer due diligence, which are to include procedures that:

In addition, banks are required to adopt a customer identification program as part of their BSA compliance program, and are required to file Suspicious Activity Reports when they detect certain known or suspected violations of federal law or suspicious transactions related to money laundering activity or a violation of the BSA.

The Bank is also required to (1) identify and verify, subject to certain exceptions, the identity of the beneficial owners of all legal entity customers at the time a new account is opened;

and (2) include, in its anti-money laundering program, risk-based procedures for conducting ongoing customer due diligence, which are to include procedures that:

(a) assist in understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile, and (b) require ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information.

Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.

Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution, including causing applicable bank regulatory authorities to not approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.

Office of Foreign Assets Control Regulation

The United States has imposed economic sanctions that affect transactions with designated foreign countries, nationals and others which are administered by the U.S.

Treasury Department Office of Foreign Assets Control.

Treasury Department Office of Foreign Assets Control (“OFAC”).

Failure to comply with these sanctions could have serious legal and reputational consequences, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.

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The Corporation and the Bank are subject to the Federal Reserve Act, which restricts financial transactions between banks and affiliated companies.

The statute limits credit transactions between banks, affiliated companies and its executive officers and its affiliates.

The statute limits credit transactions between banks, affiliated companies and their executive officers and their affiliates.

The statute prescribes terms and conditions for bank affiliate transactions deemed to be consistent with safe and sound banking practices.

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(1) Average balance of securities is computed based on the average of the historical amortized cost balances without the effects of the fair value adjustments.

Annualized amounts are computed using a 30/360 day basis.

(2) Tax-exempt securities and loans are presented on a fully taxable equivalent basis, using a marginal tax rate of 21 percent for 2024, 2023 and 2022.

These totals equal $23.3 million, $23.9 million and $24.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

(3) Non accruing loans have been included in the average balances.

Annualized yields and rates are computed using a 30/360 day basis.

(2) Tax-exempt securities and loans are presented on a fully tax-equivalent basis, using a marginal tax rate of 21 percent for 2025, 2024 and 2023.

Tax-equivalent interest income on such assets totaled $24.7 million, $23.3 million and $23.9 million for the years ended December 31, 2025, 2024, and 2023, respectively.

(3) Nonaccruing loans have been included in the average balances.

(4) Net Interest Spread (FTE) is interest income expressed as a percentage of average earning assets minus interest expense expressed as a percentage of average interest-bearing liabilities.

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The interest rate changes were computed as the difference in rate between the current and prior year multiplied by the volume from the prior year.

Volume and rate variances have been allocated on the basis of the absolute relationship between volume variances and rate variances.

Volume and rate variances have been allocated on a proportional basis based on the absolute relationship between volume variances and rate variances.

2025 Compared to 2024

2 unchanged sentences

Increase (Decrease) Due To

(Dollars in Thousands, Fully Taxable Equivalent Basis) Volume Rate Total Volume Rate Total Volume Rate Total

(Dollars in Thousands, Fully Tax-Equivalent Basis) Volume Rate Total Volume Rate Total Volume Rate Total

Interest Income:

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The Corporation has obtained an understanding of what inputs are being used by the vendor in pricing the portfolio and how the vendor classified these securities based upon these inputs.

From these discussions, the Corporation’s management is comfortable that the classifications are proper.

The Corporation has gained trust in the data for two reasons:

(a) independent spot testing of the data is conducted by the Corporation through obtaining market quotes from various brokers on a periodic basis;

From these discussions, the Corporation’s management is comfortable that the classifications are appropriate.

The Corporation has confidence in the data for two reasons:

(a) independent spot testing of the data through periodic market quotes obtained from various brokers on a periodic basis;

and (b) actual gains or losses resulting from the sale of certain securities has proven the data to be accurate over time.

Fair value of securities classified as Level 3 in the valuation hierarchy were determined using a discounted cash flow model that incorporated market estimates of interest rates and volatility in markets that have not been active.

The following table summarizes the amortized cost, gross unrealized gains and losses and approximate fair value of investment securities available for sale at the dates indicated.

The fair value of securities classified as Level 3 in the valuation hierarchy was determined using a discounted cash flow model that incorporated market estimates of interest rates and volatility in markets that have not been active.

The following tables summarize the amortized cost, gross unrealized gains and losses and approximate fair value of investment securities available for sale at the dates indicated.

Cost Gross Unrealized

4 unchanged sentences

Government-sponsored mortgage-backed securities 482,702 1,600 (64,792) 419,510

Foreign investment 1,500 — — 1,500

Corporate obligations 7,974 1 (276) 7,699

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Available for sale at December 31, 2023

US Treasury $ 2,501 $ — $ 42 $ 2,459

Government-sponsored agency securities $ 111,521 $ — $ (16,214) $ 95,307

3 unchanged sentences

Total available for sale $ 1,846,840 $ 826 $ (220,554) $ 1,627,112

The following table summarizes the amortized cost, gross unrealized gains and losses, approximate fair value and allowance for credit losses on investment securities held to maturity at the dates indicated.

The following tables summarize the amortized cost, gross unrealized gains and losses, approximate fair value and allowance for credit losses on investment securities held to maturity at the dates indicated.

Cost Allowance for Credit Losses Net Carrying Amount Gross Unrealized

4 unchanged sentences

Government-sponsored mortgage-backed securities 577,488 — 577,488 — (69,966) 507,522

Foreign investment 1,500 — 1,500 — 5 1,495

Total held to maturity $ 1,971,784 $ (245) $ 1,971,539 $ 868 $ (254,365) $ 1,718,287

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If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through the income statement.

For investment securities available for sale that do not meet the aforementioned criteria, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors.

For investment securities available for sale that do not meet the criteria described above, the Corporation evaluates whether the decline in fair value has resulted from credit losses or other factors.

In making this assessment, the Corporation considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors.

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security.

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security.

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis.

Unrealized losses that have not been recorded through an allowance for credit losses are recognized in other comprehensive loss.

Unrealized losses that have not been recorded through an allowance for credit losses are recognized in other comprehensive income (loss).

Adjustments to the allowance are reported in the income statement as a component of the provision for credit losses.

The Corporation has made the accounting policy election to exclude accrued interest receivable on investment securities available for sale from the estimate of credit losses.

Investment securities available for sale are charged off against the allowance or, in the absence of any allowance, written down through the income statement when deemed uncollectible or when either of the aforementioned criteria regarding intent or requirement to sell is met.

Investment securities available for sale are charged off against the allowance or, if no allowance has been recorded, are written down through the income statement when deemed uncollectible or when either of the criteria described above regarding intent or requirement to sell is met.

The Corporation did not record an allowance for credit losses on its investment securities available for sale as the unrealized losses were attributable to changes in interest rates, not credit quality.

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With regard to U.S.

Government-sponsored agency and U.S.

Government-sponsored mortgage-backed securities, all these securities are issued by a U.S.

Government-sponsored agency and mortgage-backed securities, all such securities are issued by a U.S.

Government-sponsored entity and have an implicit or explicit government guarantee;

therefore, no allowance for credit losses has been recorded for these securities.

accordingly, no allowance for credit losses has been recorded for these securities.

With regard to securities issued by states and municipalities and other investment securities held to maturity, management considers (1) issuer bond ratings, (2) historical loss rates for given bond ratings, (3) the financial condition of the issuer, and (4) whether issuers continue to make timely principal and interest payments under the contractual terms of the securities.

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Furthermore, as of December 31, 2025, there were no past due principal and interest payments associated with these securities.

The balance of the allowance for credit losses on investment securities held to maturity remained unchanged at $245,000 as of December 31, 2024 and December 31, 2023 based on application of the long-term historical credit rate, as published by Moody’s, for similarly rated securities.

The balance of the allowance for credit losses on investment securities held to maturity remained unchanged at $245,000 as of December 31, 2025 and December 31, 2024 based on application of the long-term historical credit loss rate, as published by Moody’s, for similarly rated securities.

The cost and yield for Federal Home Loan Bank stock is included in the table below.

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Government and its sponsored agencies and corporations.

The maturity distribution and average yields for the securities portfolio at December 31, 2024 were:

Within 1 Year 1-5 Years 5-10 Years

The maturity distribution and weighted average yields for the securities portfolio at December 31, 2025 were:

Within 1 Year 1-5 Years 5-10 Years Due After Ten Years U.S.

sponsored mortgage-backed

(Dollars in Thousands) Amount Yield (1)

1 unchanged sentence

Amount Yield (1)

Securities available for sale December 31, 2024

State and municipal $ 1,795 2.8 % $ 7,026 2.7 % $ 144,031 3.2 %

Corporate obligations — — % 4,831 8.1 % 7,436 4.5 %

$ 1,795 2.8 % $ 11,857 4.9 % $ 151,467 3.2 %

Due After Ten Years U.S.

sponsored mortgage-backed

Amount Yield (1)

1 unchanged sentence

Amount Yield (1)

Available for sale at December 31, 2025:

Government-sponsored agency securities $ — — % $ — — % $ — — % $ 76,099 2.3 % $ — — % $ 76,099 2.3 %

1 unchanged sentence

Government-sponsored mortgage-backed securities — — % — — % — — % — — % 419,510 2.4 % 419,510 2.4 %

Foreign investment — — % 1,500 4.5 % — — % — — % — — % 1,500 4.5 %

Corporate obligations — — % 3,897 7.4 % 3,771 4.0 % 31 — % — — % 7,699 5.7 %

$ 789,734 3.0 % $ 431,622 2.8 % $ 1,386,475 3.0 %

Within 1 Year 1-5 Years 5-10 Years

Total available for sale $ — — % $ 16,577 4.1 % $ 227,493 3.2 % $ 743,522 3.1 % $ 419,510 2.4 % $ 1,407,102 2.9 %

(1) Interest yields calculated using amortized cost and presented on a fully taxable equivalent basis using a 21 percent tax rate.

Within 1 Year 1-5 Years 5-10 Years Due After Ten Years U.S.

sponsored mortgage-backed

(Dollars in Thousands) Amount Yield (1)

1 unchanged sentence

Amount Yield (1)

Securities held to maturity at December 31, 2024

Government-sponsored agency securities $ — — % $ 60,590 1.0 % $ 29,702 1.3 %

State and municipal 3,768 4.0 % 63,414 4.2 % 144,831 3.2 %

Foreign investment 1,500 3.5 % — — % — — %

$ 5,268 3.9 % $ 124,004 2.6 % $ 174,533 2.8 %

Due After Ten Years U.S.

sponsored mortgage-backed

Amount Yield (1)

1 unchanged sentence

Amount Yield (1)

Held to maturity at December 31, 2025:

Government-sponsored agency securities $ — — % $ 60,593 1.0 % $ 28,288 1.3 % $ 235,761 1.5 % $ — — % $ 324,642 1.4 %

1 unchanged sentence

Government-sponsored mortgage-backed securities — — % — — % — — % — — % 577,488 2.0 % 577,488 2.0 %

Foreign investment — — % — — % 1,500 — %

$ 1,129,147 2.6 % $ 641,513 2.6 % $ 2,074,465 2.6 %

(1) Interest yields are presented on a fully taxable equivalent basis using a 21 percent tax rate.

Total held to maturity $ 7,014 4.1 % $ 118,912 2.5 % $ 228,224 2.8 % $ 1,040,146 2.6 % $ 577,488 2.0 % $ 1,971,784 2.5 %

LOAN PORTFOLIO

Loans are generated from customers primarily in Indiana, Illinois, Ohio, and Michigan and are typically secured by specific items of collateral, including real property, consumer assets, and business assets.

The following table shows the composition of the Corporation’s loan portfolio by collateral classification, including purchased credit deteriorated loans, for the years indicated:

Loans are generated from customers primarily in Indiana, Ohio, and Michigan and are typically secured by specific items of collateral, including real property, consumer assets, and business assets.

The following table shows the composition of the Corporation’s loan portfolio by collateral classification for the years indicated:

2025 2024 2023 2022 2021

13 unchanged sentences

Loans 13,791,707 100.0 % 12,854,359 100.0 % 12,486,027 100.0 % 12,003,894 100.0 % 9,241,861 100.0 %

Allowance for loan/credit losses (192,757) (204,934) (223,277) (195,397) (130,648)

Allowance for credit losses - loans (195,597) (192,757) (204,934) (223,277) (195,397)

Net loans $ 13,596,110 $ 12,661,602 $ 12,281,093 $ 11,780,617 $ 9,046,464

(1) Includes PPP loans of $2.7 million in 2023, $4.7 million in 2022, $106.6 million in 2021, and $667.1 million in 2020.

(1) Includes PPP loans of $2.7 million in 2023, $4.7 million in 2022, and $106.6 million in 2021.

At December 31, 2025, 2024, 2023, 2022, and 2021, the remaining fair value discount on acquired loans was $13.4 million, $17.4 million, $23.2 million, $31.3 million, and $10.9 million, respectively.

LOAN MATURITIES

The following tables present the maturity distribution of our loan portfolio, excluding loans held for sale, by collateral classification at December 31, 2024 according to contractual maturities of (1) one year or less, (2) after one year but within five years and (3) after five years.

The following tables present the maturity distribution of the loan portfolio, excluding loans held for sale, by collateral classification at December 31, 2025, based on contractual maturities of (1) one year or less, (2) after one year but within five years, and (3) after five years.

The second table presents the same classifications including only fixed interest rate loans and the third table presents the same classifications including only the variable interest rate loans where the rates fluctuate over the life of the loans in accordance with changes in an interest rate index.

52 unchanged sentences

— — — 224 329

Nonperforming loans (NPL) 73,773 53,580 42,548 43,391 64,711

OREO and Repossessions 4,948 4,831 6,431 558 940

Nonperforming assets (NPA) 78,721 58,411 48,979 43,949 65,651

Nonperforming loans 71,773 73,773 53,580 42,548 43,391

Other real estate owned and repossessions 658 4,948 4,831 6,431 558

Nonperforming assets 72,431 78,721 58,411 48,979 43,949

Loans 90-days or more delinquent and still accruing 2,042 5,902 172 1,737 963

NPAs and loans 90-days or more delinquent $ 84,623 $ 58,583 $ 50,716 $ 44,912 $ 66,397

(1) As a result of the adoption of ASU 2022-02 on January 1, 2023, the renegotiated classification is no longer applicable.

Loans are reclassified to a non-accruing status when, in management’s judgment, the collateral value and financial condition of the borrower do not justify accruing interest.

Nonperforming assets and loans 90-days or more delinquent $ 74,473 $ 84,623 $ 58,583 $ 50,716 $ 44,912

(1) As a result of the adoption of ASU 2022-02 on January 1, 2023, the renegotiated classification is no longer applicable, and therefore comparative amounts are not presented for periods thereafter.

Loans are reclassified to a nonaccruing status when, in management’s judgment, the collateral value and financial condition of the borrower do not justify accruing interest.

At the time the accrual is discontinued, all unpaid accrued interest is reversed against earnings.

Interest income accrued in the prior year, if any, is charged to the allowance for credit losses (“ACL - Loans”).

Payments subsequently received on non-accrual loans are applied to principal.

Interest income accrued in prior years, if any, is charged to the allowance for credit losses (“ACL - Loans”).

Payments subsequently received on nonaccrual loans are applied to principal.

A loan is returned to accrual status when principal and interest are no longer past due and collectability is probable, typically after a minimum of six consecutive months of performance.

At December 31, 2024, non-accrual loans totaled $73.8 million, an increase of $20.2 million from December 31, 2023.

The increase was primarily due to a $24.1 million increase in non-accrual balances within the construction loan class.

The increase was offset by a $3.6 million decrease in non-accrual balances within the residential loan class.

At December 31, 2024, 2023, 2022, 2021, and 2020, non-accrual loans include assets acquired of $3.6 million, $5.2 million, $8.2 million, $3.2 million, and $7.9 million, respectively.

Other real estate owned (“OREO”) at December 31, 2024 increased $0.1 million from the December 31, 2023 balance of $4.8 million.

At December 31, 2025, nonaccrual loans totaled $71.8 million, a decrease of $2.0 million from December 31, 2024.

The decrease was primarily due to an $11.3 million decrease in nonaccrual balances within the commercial real estate, non-owner occupied loan class.

The decrease was offset by an $8.3 million increase in nonaccrual balances within the residential loan class.

At December 31, 2025, 2024, 2023, 2022, and 2021, nonaccrual loans include assets acquired of $2.3 million, $3.6 million, $5.2 million, $8.2 million, and $3.2 million, respectively.

Other real estate owned (“OREO”) at December 31, 2025 decreased by $4.3 million from the December 31, 2024 balance of $4.9 million.

At December 31, 2025, 2024, 2023, 2022 and 2021, OREO did not include any acquired assets.

2 unchanged sentences

Consumer loans are not risk graded.

However, for purposes of disclosure, the consumer loans are classified as follows:

However, for purposes of disclosure, consumer loans are classified as follows:

loans that are less than 30 days past due are Pass, loans 30-89 days past due are Special Mention and loans greater than 89 days past due are Substandard.

13 unchanged sentences

Construction (64) — — — (6)

Consumer — — — — (643)

Residential — — — — (993)

Consumer & Residential (5,615) (3,692) (4,659) (2,369) (1,496)

5 unchanged sentences

Construction 1 — — 863 1

Consumer — — — — 260

Residential — — — — 666

Consumer & Residential 1,381 1,477 1,341 1,096 1,273

9 unchanged sentences

In calculating the ACL - Loans, the loan portfolio was pooled into loan segments with similar credit risk characteristics.

The Corporation pooled consumer and residential loans into one segment at adoption of CECL on January 1, 2021, but prior to adoption, consumer and residential loans were classified in separate segments.

Additionally, prior to CECL adoption, construction loans were classified within the commercial real estate segment, but after CECL adoption, construction loans were classified as a separate segment.

Details of the ACL - Loans and nonperforming loans are discussed within the “LOAN QUALITY” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included as Item 7 of this Annual Report on Form 10-K.

ALLOCATION OF THE ALLOWANCE FOR CREDIT LOSSES

Presented below is an analysis of the composition of the ACL - Loans and percent of loans in each category to total loans, by collateral segment, as of the years indicated.

Presented below is an analysis of the composition of the ACL - Loans and percentage of total loans in each category, by collateral segment, as of the years indicated.

2025 2024 2023 2022 2021

2 unchanged sentences

Commercial (1)

$ 104,435 44.4 % $ 94,757 42.2 % $ 97,348 39.2 % $ 102,216 38.4 % $ 69,935 40.8 %

Commercial real estate (2)

45,541 25.9 % 51,099 26.7 % 44,048 28.5 % 46,839 30.4 % 60,665 33.8 %

Construction 5,470 5.9 % 9,784 6.2 % 24,823 7.7 % 28,955 7.0 % 20,206 5.6 %

Consumer — — % — — % — — % — — % 9,648 1.4 %

Residential — — % — — % — — % — — % 22,815 18.9 %

Consumer & Residential 40,151 23.8 % 37,117 24.9 % 38,715 24.6 % 45,267 24.2 % 44,591 19.8 %

Totals $ 195,597 100.0 % $ 192,757 100.0 % $ 204,934 100.0 % $ 223,277 100.0 % $ 195,397 100.0 %

The ACL - Loans decreased $12.2 million during the year ended December 31, 2024.

The allowance decreased primarily due to $49.4 million of net charge-offs during the year ended December 31, 2024.

In 2024, the Corporation recorded $37.2 million in provision for credit losses - loans, which was offset by a release in reserve of $1.5 million related to the allowance for unfunded commitments, resulting in a net provision expense for the year ended December 31, 2024 of $35.7 million.

The increase in net charge-offs was primarily related to two commercial relationships that accounted for $42.7 million of charge-offs.

One borrower experienced a sudden change in revenue from the cancellation and inability to renegotiate their contracts with the U.S.

This negatively impacted the value of the borrower’s business and resulted in their inability to repay principal and interest.

The second borrower provided notification of its plans to cease operations.

The Corporation does not believe these charge-offs are indicative of the portfolio as a whole.

Loan concentrations are considered to exist when there are amounts loaned to multiple borrowers engaged in similar activities, which would cause them to be similarly impacted by economic or other conditions.

At December 31, 2024, one concentration of commercial loans within a single industry (as segregated by North American Industry Classification System “NAICS code”) was in excess of 10 percent of total loans.

Lessors of Residential Buildings and Dwellings represented 11.62 percent of total loans.

(1) Category includes commercial and industrial, agricultural land, production and other loans to farmers, and other commercial loans.

(2) Category includes commercial real estate, non-owner occupied and commercial real estate, owner occupied.

The ACL - Loans increased $2.8 million during the year ended December 31, 2025.

The Corporation had $18.4 million of net charge-offs during the year ended December 31, 2025.

In 2025, the Corporation recorded $21.3 million in provision for credit losses - loans.

Loan concentrations are considered to exist when loans are extended to multiple borrowers engaged in similar activities that are subject to common economic or other risk factors.

These concentrations are determined based on borrower industry classification and reflect general exposure to commercial real estate market conditions, even where tenant composition may differ by property.

The Corporation manages these exposures through established underwriting practices, collateral requirements, portfolio diversification, and ongoing credit oversight.

At December 31, 2025, two concentrations of commercial loans within a single industry (as segregated by North American Industry Classification System “NAICS code”) were in excess of 10 percent of total loans.

Lessors of Residential Buildings and Dwellings and Lessors of Nonresidential Buildings represented 11.4 percent and 10.0 percent of total loans, respectively.

CREDIT LOSS CHARGE-OFF PROCEDURES

The Corporation maintains an allowance to cover estimated credit losses in its loan portfolio.

The Corporation maintains an allowance for credit losses to cover estimated credit losses in its loan portfolio.

The allowance is increased by the provision for credit losses - loans and decreased by charge-offs less recoveries.

2 unchanged sentences

PROVISION FOR CREDIT LOSSES

Credit losses are a cost of doing business in the banking industry.

Credit losses are an inherent cost of doing business in the banking industry.

Although management emphasizes the early detection and charge-off of loan losses, it is inevitable that certain losses, which have not been specifically identified, exist in the portfolio.

Accordingly, the provision for credit losses - loans is charged to earnings on an anticipatory basis and recognized credit losses, net of recoveries, are deducted from the established allowance.

Accordingly, the provision for credit losses - loans is charged to earnings on a forward-looking basis and recognized credit losses, net of recoveries, are deducted from the established allowance.

Over time, all net credit losses are charged to earnings.

50 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 1. Business