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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-27 · 258 added, 313 removed, 1433 unchanged (28% of the section changed)

45 unchanged sentences

The Company recorded $20.9 million in credit loss expense for the year ended December 31, 2025.

This consisted of a $24.1 million provision for credit losses on loans, which was partially offset by a $2.2 million recovery of credit losses on available-for-sale investments and a $1.0 million recovery of credit losses on unfunded commitments.

For the year ended December 31, 2025, the Company recorded $7.4 million in special income from equity investments, a $2.4 million increase in the fair value of marketable securities, $2.0 million in recoveries on historic losses, a $1.9 million gain on the retirement of subordinated debentures, $1.5 million in income from a Federal Deposit Insurance Corporation ("FDIC") assessment reduction, $1.4 million in bank owned life insurance ("BOLI") death benefits, a $983,000 gain on sale of a building from our Texas market and $885,000 in legal fee reimbursements, which were partially offset by $3.3 million in legal claims expense and $580,000 in merger expense.

Interest expense decreased by $64.5 million, or 14.3%, and non-interest income increased by $29.9 million, or 17.8%.

This was partially offset by a $21.0 million, or 1.6%, decrease in interest income and an $11.2 million, or 2.5%, increase in non-interest expense.

The decrease in interest expense was primarily due to a $30.7 million, or 58.4%, decrease in interest on FHLB and other borrowed funds, a $29.7 million, or 7.9%, decrease in interest on deposits, a $2.8 million, or 17.3%, decrease in interest on subordinated debentures and a $1.4 million, or 25.3%, decrease in interest on securities sold under agreements to repurchase.

The increase in non-interest income was primarily due to a $21.7 million, or 72.6%, increase in other income, a $3.6 million, or 8.4% increase, in other service charges and fees, a $2.1 million, or 92.9% decrease, in the loss on OREO, a $2.0 million, or 12.4%, increase in mortgage lending income, and a $1.2 million, or 25.0%, increase in cash value of life insurance, which were partially offset by a $1.3 million, or 64.1%, decrease in gain on branches, equipment and other assets, a $751,000, or 6.6%, decrease in dividends from FHLB, FRB, FNBB and other and a $574,000, or 19.3%, decrease in income from the fair value adjustment for marketable securities.

Included within other income was the $7.4 million in special income from equity investments, $2.0 million in recoveries on historic losses, $1.9 million gain on retirement of subordinated debt, $1.4 million in BOLI death benefits and $885,000 in legal fee reimbursements.

The decrease in interest income resulted from a $19.8 million, or 12.7%, decrease in investment income and a $16.6 million, or 38.7%, decrease in interest income on deposits at other banks, which was partially offset by a $15.5 million, or 1.4%, increase in loan interest income.

The increase in non-interest expense was due to an $11.8 million, or 4.9%, increase in salaries and employee benefits and a $1.2 million, or 1.1%, increase in other operating expenses, which was partially offset by a $2.0 million, or 5.6%, decrease in data processing expense.

Our net interest margin on a fully taxable equivalent basis increased from 4.27% for the year ended December 31, 2024 to 4.51% for the year ended December 31, 2025.

The yield on interest earning assets was 6.45% and 6.51% for the year ended December 31, 2025 and 2024, respectively, as average interest earning assets decreased from $20.09 billion to $20.00 billion.

The decrease in average interest earning assets is primarily due to a $379.3 million decrease in average investment securities and a $209.1 million decrease in average interest-bearing balances due from banks, which was partially offset by a $494.9 million increase in average loans receivable.

For the years ended December 31, 2025 and 2024, we recognized $5.1 million and $8.1 million, respectively, in total net accretion for acquired loans and deposits.

The reduction in accretion was dilutive to the net interest margin by approximately 2 basis points.

We recognized $6.0 million in event income for the year ended December 31, 2025, compared to $4.9 million for the year ended December 31, 2024.

The cost of interest-bearing liabilities decreased from 3.08% for the year ended December 31, 2024 to 2.68% for the year ended December 31, 2025, and average interest-bearing liabilities decreased from $14.63 billion to $14.44 billion.

The decrease in average-interest bearing liabilities is primarily due to a $638.8 million decrease in FHLB & other borrowed funds, a $66.0 million decrease in subordinated debentures and a $17.4 million decrease in securities sold under agreement to repurchase, which was partially offset by a $531.3 million increase in average interest-bearing deposits.

The reduction in FHLB & other borrowed funds was due to the Company paying off its Bank Term Funding Program ("BTFP") advance in November 2024.

Prior to paying off the advance, the Company held approximately $500 million in excess liquidity, which was dilutive to the net interest margin by approximately 8 basis points.

The reduction in subordinated debentures was due to the Company completing the payoff of its $140.0 million 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 and the Company also repurchasing $20.0 million of its $300.0 million Fixed-to-Floating Rate Subordinated Notes due 2032 during the third quarter of 2025.

The two payoff events were accretive to the net interest margin by approximately one basis point.

The overall increase in the net interest margin was due to a decrease in interest expense resulting from a decrease in interest rates paid on interest-bearing liabilities, a decrease in interest expense resulting from a reduction in the average balance of interest-bearing liabilities and an increase in interest income resulting from the increase in the average balance of interest-earning assets which was partially offset by a decrease in interest income due to a reduction in asset yields.

Our efficiency ratio was 40.88% for the year ended December 31, 2025, compared to 42.74% for the same period in 2024.

For the year ended December 31, 2025, our efficiency ratio, as adjusted (non-GAAP), was 41.29%, compared to 42.65% reported for the year ended December 31, 2024.

(See Table 35 for the non-GAAP tabular reconciliation.)

Our return on average assets was 2.10% for the year ended December 31, 2025, compared to 1.77% for the same period in 2024, and our return on average assets, as adjusted (non-GAAP), was 2.05% for the year ended December 31, 2025, compared to 1.77% for the same period in 2024.

(See Table 32 for the non-GAAP tabular reconciliation.) Our return on average common equity was 11.61% for the year ended December 31, 2025, compared to 10.43% for the same period in 2024.

Financial Condition as of and for the Years Ended December 31, 2025 and 2024

Our total assets as of December 31, 2025 increased $391.1 million to $22.88 billion from the $22.49 billion reported as of December 31, 2024.

The increase in total assets is primarily due to a $921.7 million increase in loans receivable, which was partially offset by a $243.0 million decrease in cash and cash equivalents and a $216.7 million decrease in investment securities resulting from paydowns and maturities.

Our loan portfolio balance increased $921.7 million to $15.69 billion as of December 31, 2025, from $14.76 billion as of December 31, 2024.

The increase in loans was due to $727.5 million in organic loan growth within our legacy footprint and $194.2 million of organic loan growth from our Centennial Commercial Finance Group ("CFG") franchise during 2025.

Total deposits increased $333.7 million to $17.48 billion as of December 31, 2025 compared to $17.15 billion as of December 31, 2024.

Subordinated debentures decreased by $160.0 million due to the Company completing the payoff of its $140.0 million 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 and the Company also repurchasing $20.0 million of its $300.0 million Fixed-to-Floating Rate Subordinated Notes due 2032 during the third quarter of 2025.

FHLB and other borrowed funds decreased by $100.5 million, due to maturities of FHLB borrowings.

Stockholders’ equity increased $335.8 million to $4.30 billion as of December 31, 2025, compared to $3.96 billion as of December 31, 2024.

The increase in stockholders’ equity is primarily associated with the $475.4 million in net income and the $90.2 million in accumulated other comprehensive income, which were partially offset by the $158.9 million of shareholder dividends paid and the repurchase of $81.4 million of our common stock during 2025.

The improvement in stockholders’ equity was 8.5% for the year ended December 31, 2025 compared to December 31, 2024.

As of December 31, 2025, our non-performing loans decreased to $85.0 million, or 0.54%, of total loans from $98.9 million, or 0.67%, of total loans as of December 31, 2024.

The allowance for credit losses as a percentage of non-performing loans increased to 350.17% as of December 31, 2025, compared to 278.99% as of December 31, 2024.

As of December 31, 2025, our non-performing assets decreased to $124.8 million, or 0.55%, of total assets from $142.4 million, or 0.63%, of total assets as of December 31, 2024.

2024 Overview

Results of Operations for the Years Ended December 31, 2024 and 2023

Our net income increased $9.3 million, or 2.4%, to $402.2 million for the year ended December 31, 2024, from $392.9 million for the same period in 2023.

On a diluted earnings per share basis, our earnings were $2.01 per share for the year ended December 31, 2024 and $1.94 per share for the year ended December 31, 2023.

The Company recorded $48.1 million in credit loss expense for the year ended December 31, 2024.

This consisted of a $48.4 million provision for credit losses on loans, which was partially offset by a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized loss position for one of our subordinated debt investments.

Of the $48.4 million provision for credit losses on loans recorded, $33.4 million as used to establish a hurricane reserve for loans located in the Federal Emergency Management Agency ("FEMA") disaster areas impacted by Hurricanes Helene and Milton, which made landfall during the third and fourth quarters of 2024.

Of the $48.4 million provision for credit losses on loans recorded, $33.4 million was used to establish a hurricane reserve for loans located in the Federal Emergency Management Agency ("FEMA") disaster areas impacted by Hurricanes Helene and Milton, which made landfall during the third and fourth quarters of 2024.

The hurricane related reserve had a $0.13 impact to diluted earnings per share.

The remaining portion of the provision was related to loan growth.

For the year ended December 31, 2024, the Company recorded a $3.0 million increase in the fair value of marketable securities, a $2.1 million gain on sale of a building from our Texas market, $257,000 in bank owned life insurance ("BOLI") death benefits and $2.3 million in Federal Deposit Insurance Corporation ("FDIC") special assessment expense.

For the year ended December 31, 2024, the Company recorded a $3.0 million increase in the fair value of marketable securities, a $2.1 million gain on sale of a building from our Texas market, $257,000 in BOLI death benefits and $2.3 million in Federal Deposit Insurance Corporation ("FDIC") special assessment expense.

Total interest income increased by $124.7 million, or 10.6%, and non-interest expense decreased by $25.9 million, or 5.5%.

This was partially offset by a $102.9 million, or 29.6%, increase in interest expense and a $1.4 million, or 0.8%, decrease in non-interest income.

The increase in interest income resulted from a $110.4 million, or 11.2%, increase in loan interest income and a $27.8 million, or 184.7%, increase in interest income on deposits at other banks, partially offset by a $13.4 million, or 7.9%, decrease in investment income.

The increase in interest income resulted from a $110.4 million, or 11.2%, increase in loan interest income and a $27.8 million, or 184.7%, increase in interest income on deposits at other banks, which was partially offset by a $13.4 million, or 7.9%, decrease in investment income.

The decrease in non-interest expense was due to a $15.9 million, or 6.2%, decrease in salaries and employee benefits, a $7.9 million, or 6.6%, decrease in other operating expenses and a $2.3 million, or 3.8%, decrease in occupancy and equipment expense.

14 unchanged sentences

Our return on average assets was 1.77% for the both the years ended December 31, 2024 and 2023, and our return on average assets, as adjusted (non-GAAP), was 1.77% for the year ended December 31, 2024, compared to 1.79% for the same period in 2023.

Our return on average common equity was 10.43% for the year ended December 31, 2024, compared to 10.82% for the same period in 2023.

(See Table 32 for the non-GAAP tabular reconciliation.) Our return on average common equity was 10.43% for the year ended December 31, 2024, compared to 10.82% for the same period in 2023.

Financial Condition as of and for the Years Ended December 31, 2024 and 2023

2 unchanged sentences

Our loan portfolio balance increased $339.8 million to $14.76 billion as of December 31, 2024, from $14.42 billion as of December 31, 2023.

The increase in loans was due to $471.4 million in organic loan growth within our legacy footprint, which was partially offset by $131.7 million of organic loan decline from our Centennial Commercial Finance Group ("CFG") franchise during 2024.

The increase in loans was due to $471.4 million in organic loan growth within our legacy footprint, which was partially offset by $131.7 million of organic loan decline from our CFG franchise during 2024.

Total deposits increased $358.6 million to $17.15 billion as of December 31, 2024 compared to $16.79 billion as of December 31, 2023.

5 unchanged sentences

As of December 31, 2024, our non-performing assets increased to $142.4 million, or 0.63%, of total assets from $95.4 million, or 0.42%, of total assets as of December 31, 2023.

The table below shows the non-performing loans and non-performing assets by region as of December 31, 2024:

(in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total

Non-accrual loans $ 23,494 $ 18,448 $ 7,390 $ 5,537 $ 38,778 $ 206 $ 93,853

Loans 90+ days past due 4,134 538 — — 362 — 5,034

Total non-performing loans $ 27,628 $ 18,986 $ 7,390 $ 5,537 $ 39,140 $ 206 $ 98,887

Foreclosed assets held for sale 13,924 757 22,775 — 5,951 — 43,407

Other non-performing assets 63 — — — — — 63

Total other non-performing assets $ 13,987 $ 757 $ 22,775 $ — $ 5,951 $ — $ 43,470

Total non-performing assets $ 41,615 $ 19,743 $ 30,165 $ 5,537 $ 45,091 $ 206 $ 142,357

The table below shows the non-performing loans and non-performing assets by region as of December 31, 2023:

(in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total

Non-accrual loans $ 29,391 $ 15,319 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 59,971

Loans 90+ days past due 4,092 38 — — — — 4,130

Total non-performing loans $ 33,483 $ 15,357 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 64,101

Foreclosed assets held for sale 264 167 22,775 — 7,280 — 30,486

Other non-performing assets 63 — — — 722 — 785

Total other non-performing assets $ 327 $ 167 $ 22,775 $ — $ 8,002 $ — $ 31,271

Total non-performing assets $ 33,810 $ 15,524 $ 25,539 $ 2,768 $ 17,318 $ 413 $ 95,372

The $7.4 million balance of non-accrual loans for our Centennial CFG Capital Markets Group at December 31, 2024 consists of three loans that are assessed for credit risk by the Federal Reserve under the Shared National Credit Program.

The loans are not current on either principal or interest, and we have reversed any interest that had accrued subsequent to the non-accrual date designated by the Federal Reserve.

Any interest payments that are received will be applied to the principal balance.

In addition, the $22.8 million balance of foreclosed assets held for sale for our Centennial CFG Property Finance Group consists of an office building located in California which was placed in foreclosed assets held for sale during the fourth quarter of 2023.

This represents the largest component of the Company's $43.4 million in foreclosed assets held for sale.

2023 Overview

Results of Operations for the Years Ended December 31, 2023 and 2022

Our net income increased $87.7 million, or 28.7%, to $392.9 million for the year ended December 31, 2023, from $305.3 million for the same period in 2022.

On a diluted earnings per share basis, our earnings were $1.94 per share for the year ended December 31, 2023 and $1.57 per share for the year ended December 31, 2022.

The Company recorded $12.1 million in credit loss expense for the year ended December 31, 2023.

This consisted of a $12.0 million provision for credit losses on loans, a $1.7 million provision for credit losses on investment securities and a reversal of a $1.5 million provision for unfunded commitments.

During the year ended December 31, 2023, the Company recorded $13.0 million in FDIC special assessment expense and a $1.1 million loss for the decrease in fair value of marketable securities, which were partially offset by $3.5 million in recoveries on historic losses from loans charged off prior to acquisition and $3.1 million in BOLI death benefits.

Total interest income increased by $297.3 million, or 33.9%, and non-interest expense decreased by $2.8 million, or 0.6%.

This was partially offset by a $229.0 million, or 192.3%, increase in interest expense and a $5.2 million, or 3.0%, decrease in non-interest income.

The increase in interest income resulted from a $261.3 million, or 35.9%, increase in loan interest income and a $49.9 million, or 41.5%, increase in investment income, partially offset by a $14.1 million, or 48.4%, decrease in interest income on deposits at other banks.

The decrease in non-interest expense was due to a $49.6 million, or 100.0%, decrease in merger and acquisition expense partially offset by a $20.5 million, or 20.7%, increase in other operating expenses, an $18.1 million, or 7.6%, increase in salaries and employee benefits, a $6.9 million, or 12.9%, increase in occupancy and equipment and a $1.4 million, or 4.0%, increase in data processing expense.

Included within other operating expense was $13.0 million in FDIC special assessment expense which was levied in order to recover the losses to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.

The increase in interest expense was primarily due to a $210.0 million, or 244.2%, increase in interest on deposits, a $19.7 million, or 178.3%, increase in interest on FHLB and other borrowed funds and a $3.4 million, or 236.6%, increase in interest on securities sold under agreements to repurchase, which were partially offset by a $4.1 million, or 19.9%, decrease in interest on subordinated debentures.

The decrease in non-interest income was primarily due to a $9.8 million, or 20.3%, decrease in other income and a $6.9 million, or 39.2%, decrease in mortgage lending income, which were partially offset by a $5.0 million, or 39.2%, increase in trust fees, a $2.4 million, or 26.6%, increase in dividends from FHLB, FRB, FNBB & other, a $2.1 million, or 5.6%, increase in service charges on deposit accounts, and a $1.5 million, or 9,946.7%, increase in gain on branches, equipment and other assets, net.

Our net interest margin on a fully taxable equivalent basis increased from 3.81% for the year ended December 31, 2022 to 4.25% for the year ended December 31, 2023.

The yield on interest earning assets was 6.03% and 4.40% for the year ended December 31, 2023 and 2022, respectively, as average interest earning assets decreased from $20.15 billion to $19.57 billion.

The decrease in average interest earning assets is primarily due to a $2.12 billion decrease in average interest-bearing balances due from banks, which was partially offset by a $1.37 billion increase in average loans receivable and a $171.0 million increase in average investment securities.

For the years ended December 31, 2023 and 2022, we recognized $10.6 million and $16.3 million, respectively, in total net accretion for acquired loans and deposits.

The reduction in accretion was dilutive to the net interest margin by approximately 3 basis points.

The overall increase in the net interest margin was due to a decrease in average interest-bearing cash balances as well as an increase in interest income from higher yields on average interest-earning assets, partially offset by an increase in interest expense due to an increase in average interest-bearing liabilities at higher interest rates primarily as a result of the Happy Bancshares, Inc.

acquisition and the increased interest rate environment.

Our efficiency ratio was 46.21% for the year ended December 31, 2023, compared to 49.53% for the same period in 2022.

For the year ended December 31, 2023, our efficiency ratio, as adjusted (non-GAAP), was 45.24%, compared to 44.55% reported for the year ended December 31, 2022.

(See Table 29 for the non-GAAP tabular reconciliation.)

Our return on average assets was 1.77% for the year ended December 31, 2023, compared to 1.35% for the same period in 2022, and our return on average assets, as adjusted (non-GAAP), was 1.79% or the year ended December 31, 2023, compared to 1.67% for the same period in 2022.

Our return on average common equity was 10.82% for the year ended December 31, 2023, compared to 9.17% for the same period in 2022.

Financial Condition as of and for the Years Ended December 31, 2023 and 2022

Our total assets as of December 31, 2023 decreased $226.9 million to $22.66 billion from the $22.88 billion reported as of December 31, 2022.

The decrease in total assets is primarily due to a $539.5 million decrease in investment securities resulting from paydowns and maturities, which was partially offset by a $275.4 million increase in cash and cash equivalents during the year.

Our loan portfolio balance increased $15.2 million to $14.42 billion as of December 31, 2023, from $14.41 billion as of December 31, 2022.

The increase in loans was due to $340.4 million in organic loan growth within our legacy footprint, which was partially offset by $325.2 million of organic loan decline from our CFG franchise during 2023.

Total deposits decreased $1.15 billion to $16.79 billion as of December 31, 2023 compared to $17.94 billion as of December 31, 2022.

The decrease in deposits was primarily due to the runoff of deposits during 2023 as a result of the rising interest rate environment.

Stockholders’ equity increased $264.7 million to $3.79 billion as of December 31, 2023, compared to $3.53 billion as of December 31, 2022.

The increase in stockholders’ equity is primarily associated with the $392.9 million in net income and the $56.4 million increase in accumulated other comprehensive income, which were partially offset by the $145.9 million of shareholder dividends paid and the repurchase of $48.3 million of our common stock during 2023.

The improvement in stockholders’ equity was 7.5% for the year ended D ecember 31, 2023 compared to December 31, 2022.

As of December 31, 2023, our non-performing loans increased to $64.1 million, or 0.44%, of total loans from $60.9 million, or 0.42%, of total loans as of December 31, 2022.

The allowance for credit losses as a percentage of non-performing loans decreased to 449.66% as of December 31, 2023, compared to 475.99% as of December 31, 2022.

As of December 31, 2023, our non-performing assets increased to $95.4 million, or 0.42%, of total assets from $61.5 million, or 0.27%, of total assets as of December 31, 2022.

The table below shows the non-performing loans and non-performing assets by region as of December 31, 2023:

(in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total

Non-accrual loans $ 29,391 $ 15,319 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 59,971

Loans 90+ days past due 4,092 38 — — — — 4,130

Total non-performing loans $ 33,483 $ 15,357 $ 2,764 $ 2,768 $ 9,316 $ 413 $ 64,101

Foreclosed assets held for sale 264 167 22,775 — 7,280 — 30,486

Other non-performing assets 63 — — — 722 — 785

Total other non-performing assets $ 327 $ 167 $ 22,775 $ — $ 8,002 $ — $ 31,271

Total non-performing assets $ 33,810 $ 15,524 $ 25,539 $ 2,768 $ 17,318 $ 413 $ 95,372

The table below shows the non-performing loans and non-performing assets by region as of December 31, 2022:

(in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total

Non-accrual loans $ 12,835 $ 8,326 $ 7,078 $ 2,316 $ 20,052 $ 404 $ 51,011

Loans 90+ days past due 9,356 62 — — 427 — 9,845

Total non-performing loans $ 22,191 $ 8,388 $ 7,078 $ 2,316 $ 20,479 $ 404 $ 60,856

Foreclosed assets held for sale 166 120 — — 260 — 546

Other non-performing assets 74 — — — — — 74

Total other non-performing assets $ 240 $ 120 $ — $ — $ 260 $ — $ 620

Total non-performing assets $ 22,431 $ 8,508 $ 7,078 $ 2,316 $ 20,739 $ 404 $ 61,476

The $2.7 million balance of non-accrual loans for our Centennial CFG Capital Markets Group consists of two loans that are assessed for credit risk by the Federal Reserve under the Shared National Credit Program.

The loans are not current on either principal or interest, and we have reversed any interest that had accrued subsequent to the non-accrual date designated by the Federal Reserve.

Any interest payments that are received will be applied to the principal balance.

This represents the largest component of the Company's $30.5 million in foreclosed assets held for sale.

Critical Accounting Policies and Estimates

32 unchanged sentences

The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326.

The Company first assesses whether it intends to sell or is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis.

The Company first assesses whether it intends to sell or whether it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis.

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 income.

5 unchanged sentences

The Company has made the election to exclude accrued interest receivable on AFS securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense.

Changes in the allowance for credit losses are recorded as provision for (or recovery of) credit loss expense.

Losses are charged against the allowance when management believes the uncollectability of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

6 unchanged sentences

The Company has made the election to exclude accrued interest receivable on HTM securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets.

Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense.

Changes in the allowance for credit losses are recorded as provision for (or recovery of) credit loss expense.

Losses are charged against the allowance when management believes the uncollectability of a security is confirmed.

25 unchanged sentences

The identified loan segments are as follows:

• 1-4 family construction

• All other construction

• 1-4 family revolving home equity lines of credit (“HELOC”) & junior liens

• 1-4 family senior liens

• Multifamily

• Owner occupies commercial real estate

• Non-owner occupied commercial real estate

• Commercial & industrial, agricultural, non-depository financial institutions, purchase/carry securities, other

• Consumer auto

• Other consumer

• Other consumer - SPF

• 1-4 family residential construction loans

• Other construction loans and all land development and other land loans

• Loans secured by farmland (including farm residential and other improvements)

• Revolving, open-end loans secured by 1-4 family residential properties and extended under lines

• Secured by first liens

• Secured by junior liens

• Secured by multifamily (5 or more) residential properties

• Loans secured by owner-occupied, nonfarm nonresidential properties

• Loans secured by other nonfarm nonresidential properties

• Loans to finance agricultural production and other loans to farmers

• Commercial and industrial loans

• Other revolving credit plans

• Automobile loans

• Other consumer loans

• Other consumer loans - Shore Premier Finance

• Obligations (other than securities and leases) of states and political subdivisions in the US

• Loans to nondepository financial institutions

• Loans for purchasing or carrying securities

• All other loans

Loans considered to be collateral dependent, according to ASC 326, are loans for which repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Company's assessment as of the reporting date.

The aggregate amount of collateral shortfall on such loans is utilized in evaluating the adequacy of the allowance for credit losses and amount of provisions thereto.

Losses on collateral dependent loans are charged against the allowance for credit losses when in the process of collection, it appears likely that such losses will be realized.

The accrual of interest on collateral dependent loans is discontinued when, in management’s opinion the collection of interest is doubtful or generally when loans are 90 days or more past due.

When accrual of interest is discontinued, all unpaid accrued interest is reversed.

Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due.

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans evaluated individually that are considered to be collateral dependent are not included in the collective evaluation.

3 unchanged sentences

For individually analyzed loans which are not considered to be collateral dependent, an allowance is recorded based on the loss rate for the respective pool within the collective evaluation.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate.

Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments and curtailments when appropriate.

The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies:

11 unchanged sentences

(viii) changes in the quality of the loan review system and (ix) economic conditions.

Loans considered to be collateral dependent, according to ASC 326, are loans for which, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement.

The aggregate amount of collateral shortfall on such loans is utilized in evaluating the adequacy of the allowance for credit losses and amount of provisions thereto.

Losses on collateral dependent loans are charged against the allowance for credit losses when in the process of collection, it appears likely that such losses will be realized.

The accrual of interest on collateral dependent loans is discontinued when, in management’s opinion the collection of interest is doubtful or generally when loans are 90 days or more past due.

When accrual of interest is discontinued, all unpaid accrued interest is reversed.

Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due.

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans are placed on non-accrual status when management believes that the borrower’s financial condition, after giving consideration to economic and business conditions and collection efforts, is such that collection of interest is doubtful, or generally when loans are 90 days or more past due.

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Interest income on non-accrual loans may be recognized to the extent cash payments are received, although the majority of payments received are usually applied to principal.

Non-accrual loans are generally returned to accrual status when principal and interest payments are less than 90 days past due, the customer has made required payments for at least six months, and we reasonably expect to collect all principal and interest.

Acquisition Accounting and Acquired Loans .

The Company accounts for its acquisitions under FASB Accounting Standards Codification ("ASC") Topic 805, Business Combinations , which requires the use of the purchase method of accounting.

All identifiable assets acquired, including loans, are recorded at fair value.

In accordance with FASB ASC 326, the Company records both a discount or premium and an allowance for credit losses on acquired loans.

All purchased loans are recorded at fair value in accordance with the fair value methodology prescribed in FASB ASC Topic 820, Fair Value Measurements .

The fair value estimates associated with the loans include estimates related to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows.

Purchased loans that have experienced more than insignificant credit deterioration since origination are purchase credit deteriorated (“PCD”) loans.

An allowance for credit losses is determined using the same methodology as other loans.

The Company develops separate PCD models for each loan segment with PCD loans not individually analyzed for credit losses.

These models utilize a peer group benchmark in order to determine the probability of default and loss given default to be used in the calculation.

The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis.

The difference between the initial amortized cost basis and the par value of the loan is a non-credit discount or premium, which is amortized into interest income over the life of the loan.

Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses.

Non-accrual loans are generally returned to accrual status when principal and interest payments are less than 90 days past due, the customer has made the required payments for at least six months, and we reasonably expect to collect all principal and interest.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures :

The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by the Company.

The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit loss expense.

The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for or recovery of credit loss expense.

The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

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We recognize compensation expense for the grant-date fair value of the option award over the vesting period of the award.

Acquisition of Happy Bancshares, Inc.

On April 1, 2022, the Company completed the acquisition of Happy Bancshares, Inc.

("Happy"), and merged Happy State Bank into Centennial Bank.

The Company issued approximately 42.4 million shares of its common stock valued at approximately $958.8 million as of April 1, 2022.

In addition, the holders of certain Happy stock-based awards received approximately $3.7 million in cash in cancellation of such awards, for a total transaction value of approximately $962.5 million.

The acquisition added new markets for expansion and brought complementary businesses together to drive synergies and growth.

Including the effects of purchase accounting adjustments, as of the acquisition date, Happy had approximately $6.69 billion in total assets, $3.65 billion in loans and $5.86 billion in customer deposits.

Happy formerly operated its banking business from 62 locations in Texas.

For further discussion of the acquisition, see Note 2 "Business Combinations" to the Condensed Notes to Consolidated Financial Statements.

Acquisition of Marine Portfolio

On February 4, 2022, the Company completed the purchase of the performing marine loan portfolio of Utah-based LendingClub Bank (“LendingClub”).

Under the terms of the purchase agreement with LendingClub, the Company acquired yacht loans totaling approximately $242.2 million.

This portfolio of loans is housed within the Company's Shore Premier Finance division, which is responsible for servicing the acquired loan portfolio and originating new loan production.

We will continue evaluating all types of potential bank acquisitions, which may include FDIC-assisted acquisitions as opportunities arise, to determine what is in the best interest of our Company.

Our goal in making these decisions is to maximize the return to our investors.

As opportunities arise, we will continue to open new (commonly referred to as de novo ) branches in our current markets and in other attractive market areas.

During the year ended December 31, 2025, we closed one branch in Jacksonville, Arkansas, and we opened a new branch in San Antonio, Texas.

As of December 31, 2025, we had 218 branch locations.

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The Company recorded $20.9 million in credit loss expense for the year ended December 31, 2025.

For the year ended December 31, 2025, the Company recorded $7.4 million in special income from equity investments, a $2.4 million increase in the fair value of marketable securities, $2.0 million in recoveries on historic losses, a $1.9 million gain on the retirement of subordinated debentures, $1.5 million in income from an FDIC assessment reduction, $1.4 million in BOLI death benefits, a $983,000 gain on sale of a building from our Texas market and $885,000 in legal fee reimbursements, which were partially offset by $3.3 million in legal claims expense and $580,000 in merger expense.

Our net income increased $9.3 million, or 2.4%, to $402.2 million for the year ended December 31, 2024, from $392.9 million for the same period in 2023.

On a diluted earnings per share basis, our earnings were $2.01 per share for the year ended December 31, 2024 and $1.94 per share for the year ended December 31, 2023.

The Company recorded $48.1 million in credit loss expense for the year ended December 31, 2024.

Of the $48.4 million provision for credit losses on loans recorded, $33.4 million as used to establish a hurricane reserve for loans located in the FEMA disaster areas impacted by Hurricanes Helene and Milton, which made landfall during the third and fourth quarters of 2024.

Of the $48.4 million provision for credit losses on loans recorded, $33.4 million was used to establish a hurricane reserve for loans located in the FEMA disaster areas impacted by Hurricanes Helene and Milton, which made landfall during the third and fourth quarters of 2024.

The hurricane related reserve had a $0.13 impact to diluted earnings per share.

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For the year ended December 31, 2024, the Company recorded a $3.0 million increase in the fair value of marketable securities, a $2.1 million gain on sale of a building from our Texas market, $257,000 in BOLI death benefits and $2.3 million in FDIC special assessment expense.

Our net income increased $87.7 million, or 28.7%, to $392.9 million for the year ended December 31, 2023, from $305.3 million for the same period in 2022.

On a diluted earnings per share basis, our earnings were $1.94 per share for the year ended December 31, 2023 and $1.57 per share for the year ended December 31, 2022.

The Company recorded $12.1 million in credit loss expense for the year ended December 31, 2023.

Net Interest Income

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The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions.

The Federal Reserve increased the target rate four times during 2023.

First, on February 1, 2023, the target rate was increased to 4.50% to 4.75%, second, on March 22, 2023, the target rate was increased to 4.75% to 5.00%, third, on May 3, 2023, the target rate was increased to 5.00% to 5.25% and fourth, on July 26, 2023, the target rate was increased to 5.25% to 5.50%.

The Federal Reserve reduced the target rate three times during 2024.

First, on September 18, 2024, the Federal Reserve reduced the target rate to 4.75% to 5.00%, second, on November 7, 2024, the target rate was reduced to 4.50% to 4.75% and third, on December 18, 2024, the target rate was reduced to 4.25% to 4.50%.

The Federal Reserve reduced the target rate three times during 2025.

First, on September 17, 2025, the Federal Reserve reduced the target rate to 4.00% to 4.25%, second, on October 29, 2025, the target rate was reduced to 3.75% to 4.00% and third, on December 10, 2025, the target rate was reduced to 3.50% to 3.75%.

Our net interest margin on a fully taxable equivalent basis increased from 4.27% for the year ended December 31, 2024 to 4.51% for the year ended December 31, 2025.

For the years ended December 31, 2025 and 2024, we recognized $5.1 million and $8.1 million, respectively, in total net accretion for acquired loans and deposits.

The reduction in accretion was dilutive to the net interest margin by approximately 2 basis points.

We recognized $6.0 million in event income for the year ended December 31, 2025, compared to $4.9 million for the year ended December 31, 2024.

The reduction in FHLB & other borrowed funds was due to the Company paying off its BTFP advance in November 2024.

Prior to paying off the advance, the Company held approximately $500 million in excess liquidity, which was dilutive to the net interest margin by approximately 8 basis points.

The two payoff events were accretive to the net interest margin by approximately one basis point.

Net interest income on a fully taxable equivalent basis increased $45.3 million, or 5.3%, to $902.6 million for the year ended December 31, 2025, from $857.3 million for the same period in 2024.

This increase in net interest income was the result of a $64.5 million decrease in interest expense, partially offset by a $19.3 million decrease in interest income on a fully taxable equivalent basis.

The $64.5 million decrease in interest expense is primarily the result of a lower interest rate environment.

The lower rates on interest bearing liabilities resulted in a decrease in interest expense of approximately $51.8 million, and the change in interest bearing liabilities resulted in a decrease in interest expense of approximately $12.7 million.

The $19.3 million decrease in interest income was also primarily the result of the lower interest rate environment.

The lower yield on earning assets resulted in a decrease in interest income of approximately $32.8 million, while the change in earning assets resulted in an increase in interest income of approximately $13.5 million.

Our net interest margin on a fully taxable equivalent basis increased from 4.25% for the year ended December 31, 2023 to 4.27% for the year ended December 31, 2024.

The yield on interest earning assets was 6.51% and 6.03% for the year ended December 31, 2024 and 2023, respectively, as average interest earning assets increased from $19.57 billion to $20.09 billion.

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The higher rates on interest bearing liabilities resulted in an increase in interest expense of approximately $68.9 million, and the change in interest bearing liabilities resulted in an increase in interest expense of approximately $34.0 million.

Our net interest margin on a fully taxable equivalent basis increased from 3.81% for the year ended December 31, 2022 to 4.25% for the year ended December 31, 2023.

For the years ended December 31, 2023 and 2022, we recognized $10.6 million and $16.3 million, respectively, in total net accretion for acquired loans and deposits.

The reduction in accretion was dilutive to the net interest margin by approximately 3 basis points.

acquisition and the increased interest rate environment.

Net interest income on a fully taxable equivalent basis increased $65.1 million, or 8.5%, to $832.5 million for the year ended December 31, 2023, from $767.3 million for the same period in 2022.

This increase in net interest income was the result of a $294.1 million increase in interest income, partially offset by a $229.0 million increase in interest expense on a fully taxable equivalent basis.

The $294.1 million increase in interest income was primarily the result of the increasing interest rate environment and the higher level of average interest earning assets due to the acquisition of Happy during the second quarter of 2022.

The higher yield on earning assets resulted in an increase in interest income of approximately $248.5 million, and the change in earning assets resulted in an increase in interest income of approximately $45.6 million.

The $229.0 million increase in interest expense is primarily the result of the increasing interest rate environment as well as the higher level of average interest bearing liabilities due to the acquisition of Happy during the second quarter of 2022.

The higher rates on interest bearing liabilities resulted in an increase in interest expense of approximately $224.1 million, and the change in interest bearing liabilities resulted in an increase in interest expense of approximately $4.9 million.

Tables 2 and 3 reflect an analysis of net interest income on a fully taxable equivalent basis for the years ended December 31, 2025, 2024 and 2023, as well as changes in fully taxable equivalent net interest margin for the years 2025 compared to 2024 and 2024 compared to 2023.

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Increase in interest income due to change in earning assets $ 13,499 $ 39,264

Increase in interest income due to change in earning asset yields 88,488 248,531

Increase in interest expense due to change in interest-bearing liabilities (33,968) (4,945)

Increase in interest expense due to change in interest rates paid on interest-bearing liabilities (68,927) (224,073)

(Decrease) increase in interest income due to change in earning asset yields (32,762) 88,488

Decrease (increase) in interest expense due to change in interest-bearing liabilities 12,710 (33,968)

Decrease (increase) in interest expense due to change in interest rates paid on interest-bearing liabilities 51,833 (68,927)

Increase in net interest income $ 45,280 $ 24,857

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During the year ended December 31, 2025, the Company recorded $20.9 million in credit loss expense.

The Company determined the $2.0 million allowance for credit losses on the held-to-maturity portfolio was adequate.

Therefore, no additional provision was considered necessary for the held-to-maturity portfolio.

During the year ended December 31, 2024, the Company recorded $48.1 million in credit loss expense.

The Company determined the $2.0 million allowance for credit losses on the held-to-maturity portfolio was adequate.

Therefore, no additional provision was considered necessary for the held-to-maturity portfolio.

Net charge-offs to average total loans increased to 0.41% for the year ended December 31, 2024 from 0.09% for the year ended December 31, 2023.

During the fourth quarter of 2024, the Company completed an asset quality cleanup project which was the main driver of the $47.4 million increase in net charge-offs for the year ended December 31, 2024 compared to December 31, 2023.

Non-performing loans to total loans increased from 0.44% as of December 31, 2023 to 0.67% as of December 31, 2024.

Net charge-offs to average total loans decreased to 0.02% for the year ended December 31, 2025 from 0.41% for the year ended December 31, 2024.

Net charge-offs decreased by $58.4 million for the year ended December 31, 2025 compared to December 31, 2024.

During the fourth quarter of 2024, the Company completed an asset quality cleanup project which drove the increase in the level of charge-offs during the year ended December 31, 2024.

Non-performing loans to total loans decreased from 0.67% as of December 31, 2024 to 0.54% as of December 31, 2025.

Non-Interest Income

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Total non-interest income $ 198,509 $ 168,574 $ 169,934 $ 29,935 17.8 % $ (1,360) (0.8) %

Non-interest income increased $29.9 million, or 17.8%, to $198.5 million for the year ended December 31, 2025 from $168.6 million for the same period in 2024.

The primary factors that resulted in this increase were the increases in other income, other service charges and fees, gain on OREO, net, mortgage lending income and cash value of life insurance, partially offset by the decrease in gain on sale of branches, equipment and other assets, net.

Other factors were changes related to service charges on deposit accounts, trust fees, dividends from FHLB, FRB, FNBB & other and fair value adjustment for marketable securities.

Additional details for the year ended December 31, 2025 on some of the more significant changes are as follows:

• The $945,000 increase in service charges on deposit accounts is primarily related to an increase in overdraft fees.

• The $3.6 million increase in other service charges and fees is primarily due to increases in Centennial CFG property finance loan fees.

• The $998,000 increase in trust fees is primarily related to an increase in personal trust and IRA fees.

• The $2.0 million increase in mortgage lending income is primarily related to an increase in volume of secondary market loans.

• The $1.2 million increase in cash value of life insurance is primarily related to gains recognized in connection with a tax-free exchange of BOLI policies under Section 1035 of the Internal Revenue Code.

• The $751,000 decrease in dividends from FHLB, FRB, Bankers' Bank and other was primarily due to a lower volume of dividends from the FHLB and equity investments.

• The $1.3 million decrease in the level of gain on sale of branches, equipment and other assets, net, is primarily due to the sale of a building from our Texas region during 2024.

• The $2.1 million decrease in loss on OREO is primarily due to revaluation of two OREO properties during 2024, partially offset by a loss on the sale of a building from our Florida region during 2025.

• The $574,000 decrease in the fair value adjustment for marketable securities is due to the changes in the fair value of marketable securities held by the Company.

• The $21.7 million increase in other income is primarily due to a $7.8 million increase in income for equity method investments, which includes a $7.4 million in special income from equity investments, a $6.6 million increase in income from a lawsuit settlement, a $2.0 million increase in recoveries on historic losses, a $1.9 million gain on redemption of subordinated debt, a $1.9 million increase in investment brokerage fee income, a $1.2 million increase in BOLI death benefit income, an $828,000 increase in building rental income and a $670,000 increase in miscellaneous income.

Non-interest income decreased $1.4 million, or 0.8%, to $168.6 million for the year ended December 31, 2024 from $169.9 million for the same period in 2023.

The primary factors that resulted in this decrease were the $8.5 million decrease in other income and $2.6 million decrease in gain on OREO, partially offset by the $5.1 million increase in mortgage lending income and $4.1 million increase in the fair value adjustment for marketable securities.

The primary factors that resulted in this decrease were the decreases in other income and gain on OREO, net partially offset by the increases in mortgage lending income and the fair value adjustment for marketable securities.

Other factors were changes related to service charges on deposit accounts, trust fees, and gain on sale of branches, equipment and other assets.

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• The $1.2 million decrease in other service charges and fees is primarily due to decreases in Centennial CFG property finance loan fees and Mastercard income.

• The $825,000 increase in trust fees is primarily related to an increases in personal trust fees, employee trust fees, IRA fees and retirement fees.

• The $825,000 increase in trust fees is primarily related to an increase in personal trust fees, employee trust fees, IRA fees and retirement fees.

• The $5.1 million increase in mortgage lending income is primarily related to an increase in volume of secondary market loans from the lower volume of loans during 2023.

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• The $8.5 million decrease in other income is primarily due to a $7.4 million reduction in income for equity method investments, a $2.9 million reduction in BOLI death benefit income and a $3.0 million decrease in recoveries on historic losses, partially offset by a $2.2 million increase in rental income from OREO and a $2.1 million increase in investment brokerage fee income.

Non-interest income decreased $5.2 million, or 3.0%, to $169.9 million for the year ended December 31, 2023 from $175.1 million for the same period in 2022.

The primary factors that resulted in this decrease were the $9.8 million decrease in other income and the $6.9 million decrease in mortgage lending income, partially offset by the $5.0 million increase in trust fees.

Other factors were changes related to service charges on deposit accounts, cash value of life insurance, dividends from FHLB, FRB, FNBB & other and gain on sale of branches, equipment and other assets.

Additional details for the year ended December 31, 2023 on some of the more significant changes are as follows:

• The $2.1 million increase in service charges on deposit accounts is primarily related to an increase in overdraft fees and service charge fees related to the acquisition of Happy.

• The $5.0 million increase in trust fees is primarily related to an increase in trust fees resulting from the acquisition of Happy.

• The $6.9 million decrease in mortgage lending income is primarily related to a decrease in volume of secondary market loans from the high volume of loans during 2022.

The decrease in volume is due to the increase in interest rates.

• The $855,000 increase in cash value of life insurance is primarily related to the increase in bank owned life insurance resulting from the acquisition of Happy.

• The $2.4 million increase in dividends from FHLB, FRB, FNBB & other is primarily due to an increase in dividend income from FHLB and FRB stock holdings related to the acquisition of Happy and an increase in dividends on marketable securities, partially offset by a lower volume of dividends from equity investments.

• The $1.5 million increase in gain on sale of branches, equipment and other assets, net, is primarily due to the sales of buildings in Texas and Florida in 2023.

• The $9.8 million decrease in other income is primarily due to the $15.0 million in income in 2022 from the settlement of a lawsuit brought by the Company and a $6.0 million decrease in income for items previously charged-off, which were partially offset by $4.9 million increase in income from equity method investments, $3.1 million in BOLI death benefit income and a $2.8 million increase in rental income primarily related to the acquisition of Happy.

Non-Interest Expense

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FDIC and state assessment 11,238 15,388 25,530 (4,150) (27.0) (10,142) (39.7)

Hurricane expense — — 176 — — (176) (100.0)

Insurance 4,202 3,634 3,567 568 15.6 67 1.9

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Total non-interest expense $ 458,169 $ 446,936 $ 472,863 $ 11,233 2.5 % $ (25,927) (5.5) %

Non-interest expense increased $11.2 million, or 2.5%, to $458.2 million for the year ended December 31, 2025, from $446.9 million for the same period in 2024.

The primary factors that resulted in this increase was the increase in salaries and employee benefits expense, advertising expense and other expenses, partially offset by the decrease in FDIC and state assessment expense and data processing expense.

Other factors were changes related to merger expense and electronic banking expense.

Additional details for the year ended December 31, 2025 on some of the more significant changes are as follows:

• The $11.8 million increase in salaries and employee benefits expense is primarily due to an increase in incentive compensation as a result of an increase in revenue for the Company combined with the additional costs of doing business.

• The $2.0 million decrease in data processing expense is primarily due relationship credits received as a result of a new contract.

• The $580,000 increase in merger expense is due to costs associated with the anticipated acquisition of Mountain Commerce Bancorp.

• The $1.1 million increase in advertising expense is primarily due to an increase in the volume of advertising.

• The $572,000 decrease in electronic banking expense is primarily due to a decrease in consulting expenses, partially offset by an increase in interchange network expenses.

• The $4.2 million decrease in FDIC and state assessment expense is primarily due to a reversal adjustment from restating call report uninsured deposits from December 2022 through December 2024, which lowered assessment expense by $1.5 million, as well as the FDIC special assessment being incurred during the second quarter of 2024.

The FDIC special assessment was levied in order to recover the losses to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.

• The $4.6 million increase in other expenses is primarily due to $3.3 million in legal claims expense being recorded during the second quarter of 2025 and a $1.6 million increase in loan fee expenses.

Non-interest expense decreased $25.9 million, or 5.5%, to $446.9 million for the year ended December 31, 2024, from $472.9 million for the same period in 2023.

The primary factors that resulted in this decrease was the decrease in salaries and employee benefits expense and FDIC and state assessment expense, partially offset by the increases in legal and accounting fees and other expenses.

Other factors were changes related to occupancy and equipment expenses, advertising expenses, amortization of intangibles, electronic banking expense and other professional fees.

The primary factors that resulted in this decrease was the decrease in merger expense, partially offset by increases in salaries and employee benefits expense and FDIC and state assessment expense.

Other factors were changes related to occupancy and equipment expenses, data processing expenses, advertising expenses, amortization of intangibles, legal and accounting expenses and other expense.

Additional details for the year ended December 31, 2024 on some of the more significant changes are as follows:

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• The $2.3 million decrease in occupancy and equipment expense is primarily due to decreases in lease, utility, maintenance and other occupancy expenses.

• The $1.8 million decrease in advertising expense is primarily due to a decreased volume of advertising.

• The $1.8 million decrease in advertising expense is primarily due to a decrease in the volume of advertising.

• The $1.2 million decrease in amortization of intangibles is primarily due to the core deposit intangible from the Company's 2013 acquisition of Liberty Bank being fully amortized in 2023.

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• The $4.0 million increase in other expenses is primarily related to an increase in OREO expense and miscellaneous costs, partially offset by decreases in travel expenses, reimbursable loan fees and other losses.

Non-interest expense increased $2.8 million, or 0.6%, to $472.9 million for the year ended December 31, 2023, from $475.6 million for the same period in 2022.

The primary factors that resulted in this decrease was the decrease in merger expense, partially offset by increases in salaries and employee benefits expense and FDIC and state assessment expense.

Other factors were changes related to occupancy and equipment expenses, data processing expenses, advertising expenses, amortization of intangibles, legal and accounting expenses and other expense.

Additional details for the year ended December 31, 2023 on some of the more significant changes are as follows:

• The $18.1 million increase in salaries and employee benefits expense is primarily due to the acquisition of Happy.

• The $6.9 million increase in occupancy and equipment expense is primarily due to increases in depreciation on buildings, machinery and equipment;

utility expenses;

lease expense;

equipment maintenance and repairs;

janitorial expenses;

property taxes and other occupancy expenses related to the acquisition of Happy.

• The $1.4 million increase in data processing expense is primarily due to increases in telecommunication fees, depreciation of equipment and software, software licensing subscriptions, core processing expenses and computer expenses related to the acquisition of Happy.

• The $49.6 million decrease in merger and acquisition expense is due to costs associated with the acquisition of Happy.

• The $876,000 increase in advertising expense is primarily related to the acquisition of Happy.

• The $832,000 increase in amortization of intangibles is due to the acquisition of Happy.

• The $17.1 million increase in FDIC and state assessment expense is primarily due to the FDIC special assessment during the fourth quarter of 2023 and the acquisition of Happy during the second quarter of 2022.

The $13.0 million FDIC special assessment was levied in order to recover the losses to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.

• The $4.2 million decrease in legal and accounting expense is primarily due to expenses related to a lawsuit brought by the Company which were incurred in 2022.

• The $5.1 million increase in other expenses is primarily related to the acquisition of Happy, partially offset by the reduction of $2.1 million in trust preferred securities redemption fees which were incurred in 2022.

During 2025, the Company lowered its marginal tax rate from 24.433% to 24.359%.

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This lowered the blended rate to 24.359%.

During 2024, the Company lowered its marginal tax rate from 24.989% to 24.433%.

In an effort to more accurately reflect legislative and current state income apportionment, the state tax rate was lowered to 4.346%.

This lowered the blended rate to 24.433%.

During 2023, the Company increased its marginal tax rate from 24.6735% to 24.989%.

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This raised the blended rate to 24.989%.

During 2022, the Company lowered its marginal tax rate from 25.740% to 24.6735%.

In an effort to more accurately reflect current state income apportionment and state tax rates, the state tax rate was lowered to 4.65%.

This lowered the blended rate to 24.6735%.

Apportionment changes related to the acquisition of Happy and statutory tax rate changes were the main drivers in the tax rate reduction.

Income tax expense increased $16.3 million, or 13.5%, to $136.4 million for the year ended December 31, 2025, from $120.1 million for 2024.

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Financial Condition as of and for the Years Ended December 31, 2025 and 2024

Our total assets as of December 31, 2024 decreased $165.9 million to $22.49 billion from the $22.66 billion reported as of December 31, 2023.

The decrease in total assets is primarily due to a $442.0 million decrease in investment securities resulting from paydowns and maturities and a $89.9 million decrease in cash and cash equivalents during the year.

Our total assets as of December 31, 2025 increased $391.1 million to $22.88 billion from the $22.49 billion reported as of December 31, 2024.

Our loan portfolio balance increased $921.7 million to $15.69 billion as of December 31, 2025, from $14.76 billion as of December 31, 2024.

The increase in loans was due to $727.5 million in organic loan growth within our legacy footprint and $194.2 million of organic loan growth from our CFG franchise during 2025.

Total deposits increased $333.7 million to $17.48 billion as of December 31, 2025 compared to $17.15 billion as of December 31, 2024.

FHLB and other borrowed funds decreased by $100.5 million, due to maturities of FHLB borrowings.

Stockholders’ equity increased $335.8 million to $4.30 billion as of December 31, 2025, compared to $3.96 billion as of December 31, 2024.

The increase in stockholders’ equity is primarily associated with the $402.2 million in net income, which was partially offset by the $150.0 million of shareholder dividends paid, the repurchase of $86.1 million of our common stock during 2024 and the $7.0 million decrease in accumulated other comprehensive income.

The improvement in stockholders’ equity was 8.5% for the year ended December 31, 2025 compared to December 31, 2024.

Our total assets as of December 31, 2024 decreased $165.9 million to $22.49 billion from the $22.66 billion reported as of December 31, 2023.

Our loan portfolio balance increased $339.8 million to $14.76 billion as of December 31, 2024, from $14.42 billion as of December 31, 2023.

Total deposits decreased $1.15 billion to $16.79 billion as of December 31, 2023 compared to $17.94 billion as of December 31, 2022.

The decrease in deposits was primarily due to the runoff of deposits during 2023 as a result of the rising interest rate environment.

Total deposits increased $358.6 million to $17.15 billion as of December 31, 2024 compared to $16.79 billion as of December 31, 2023.

Stockholders’ equity increased $170.0 million to $3.96 billion as of December 31, 2024, compared to $3.79 billion as of December 31, 2023.

The improvement in stockholders’ equity was 7.5% for the year ended D ecember 31, 2023 compared to December 31, 2022.

The improvement in stockholders’ equity was 4.5% for the year ended December 31, 2024 compared to December 31, 2023.

Loan Portfolio

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During 2025, the Company experienced $921.7 million in organic loan growth.

The $339.8 million in organic loan growth included $471.4 million in organic loan growth for our legacy footprint, which was partially offset by $131.7 million of organic loan decline for Centennial CFG during 2024.

The $921.7 million in organic loan growth included $727.5 million in organic loan growth for our legacy footprint and $194.2 million of organic loan growth for Centennial CFG during 2025.

During 2024, the Company experienced $339.8 million in organic loan growth.

4 unchanged sentences

Loans receivable were approximately $3.70 billion, $4.55 billion, $3.94 billion, $105.9 million, $1.38 billion and $2.01 billion as of December 31, 2025 in Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG, respectively.

As of December 31, 2024, we had $1.16 billion of construction/land development loans which were collateralized by land.

This consisted of $107.8 million for raw land and $1.05 billion for land with commercial and/or residential lots.

Table 8 presents our loans receivable balances by category as of December 31, 2025 and 2024.

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Commercial real estate loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $2.20 billion, $2.73 billion, $1.97 billion, $48.4 million, zero and $1.40 billion, respectively, at December 31, 2025.

As of December 31, 2025, we had $1.21 billion of construction/land development loans which were collateralized by land.

This consisted of $41.8 million for raw land and $1.17 billion for land with commercial and/or residential lots.

Table 9 presents the composition of the funded and unfunded balances of our CRE portfolio by loan type, as of December 31, 2025 and December 31, 2024, and their respective percentages of our total CRE portfolio.

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(1) Agriculture real estate loans and owner-occupied non-farm non-residential loans are not included within CRE for regulatory reporting purposes.

(2) Excludes multi-family residential loans of $496.5 million and $435.7 million as of December 31, 2024 and December 31, 2023, respectively, which are included in the residential real estate loans throughout the filing.

(2) Excludes multi-family residential loans of $1.14 billion and $496.5 million as of December 31, 2025 and December 31, 2024, respectively, which are included in the residential real estate loans throughout the filing.

Multi-family residential loans are included in CRE for regulatory purposes.

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Top 10 Geographical States for CRE Loan Collateral Concentrations

Florida Texas Arkansas New York Georgia Utah Alabama California Pennsylvania Tennessee All Other Areas Total

Florida Texas Arkansas New York California Georgia Alabama Utah Pennsylvania Tennessee All Other Areas Total

As of December 31, 2025

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Top 10 Geographical States for CRE Loan Collateral Concentrations

Florida Texas Arkansas New York Utah Alabama Georgia California Pennsylvania Oklahoma All Other Areas Total

Florida Texas Arkansas New York Georgia Utah Alabama California Pennsylvania Tennessee All Other Areas Total

As of December 31, 2024

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(1) Agriculture real estate loans and owner-occupied non-farm non-residential loans are not included within CRE for regulatory reporting purposes.

Multi-family residential loans are included in CRE for regulatory purposes.

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If one or a combination of these triggers have exceeded board approved thresholds, the Bank’s Executive Risk Committee will determine which action or combination of actions to take based on the specific situation.

The required actions are likely to focus on tightening/loosening of underwriting criteria, potential capital raises or loan distribution actions such as selling or participating loans.

However, other action steps may be considered necessary depending upon the specific situation.

As of December 31, 2024, none of the triggers exceeded our internal guidelines, and we have not recommended any additional changes to our underwriting standards because the Company considers the current standards to be adequate in addressing the risks to our CRE portfolio.

The potential actions are likely to focus on tightening/loosening of underwriting criteria, potential capital raises or loan distribution actions such as selling or participating loans.

However, other action steps may be considered depending upon the specific situation.

Based on our evaluation of economic conditions as of December 31, 2025, the Company believes our current underwriting standards and capital position remain adequate for addressing the risks to our CRE portfolio.

Residential Real Estate Loans .

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Agricultural loans originated in our Arkansas, Florida and Texas markets were $59.5 million, $55,000 and $300.3 million, respectively, and zero in our Alabama, SPF and Centennial CFG markets at December 31, 2025.

Other loans include obligations (other than securities and leases) of states and political subdivisions in the United States;

loans to nondepository financial institutions;

loans for purchasing or carrying securities, including margin loans;

leases and all other loans excluding consumer loans.

The performance of other loans will be affected by the local, regional and national economies as well as the performance of the financial markets.

As of December 31, 2025, other loans totaled $225.4 million, or 1.4% of loans receivable, compared to the 187,153, or 1.2% of loans receivable as of December 31, 2024.

Other loans originated in our Arkansas, Florida, Texas and Centennial CFG markets were $163.5 million, $31.7 million, $5.4 million and $24.8 million, respectively, and zero in our Alabama and SPF markets at December 31, 2025.

Table 11 presents the distribution of the maturity of our total loans as of December 31, 2025.

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If a loan is determined by management to be uncollectible, the portion of the loan determined to be uncollectible is then charged to the allowance for credit losses.

As of December 31, 2024, our non-performing loans increased to $98.9 million, or 0.67%, of total loans from $64.1 million, or 0.44%, of total loans as of December 31, 2023.

The allowance for credit losses as a percentage of non-performing loans decreased to 278.99% as of December 31, 2024, compared to 449.66% as of December 31, 2023.

As of December 31, 2024, our non-performing assets increased to $142.4 million, or 0.63%, of total assets from $95.4 million, or 0.42%, of total assets as of December 31, 2023.

The table below shows the non-performing loans and non-performing assets by region as of December 31, 2024:

As of December 31, 2025, our non-performing loans decreased to $85.0 million, or 0.54%, of total loans from $98.9 million, or 0.67%, of total loans as of December 31, 2024.

The allowance for credit losses as a percentage of non-performing loans increased to 350.17% as of December 31, 2025, compared to 278.99% as of December 31, 2024.

As of December 31, 2025, our non-performing assets decreased to $124.8 million, or 0.55%, of total assets from $142.4 million, or 0.63%, of total assets as of December 31, 2024.

Table 13 below shows the non-performing loans and non-performing assets by region as of December 31, 2025 and December 31, 2024:

Non-Performing Loans and Assets by Region

December 31, 2025

(in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total

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Foreclosed assets held for sale 15,988 771 22,812 — 260 — 39,831

Other non-performing assets 63 — — — — — 63

Total other non-performing assets 15,988 771 22,812 — 260 — 39,831

Total non-performing assets $ 42,605 $ 19,296 $ 23,599 $ 13,334 $ 25,925 $ 54 $ 124,813

The table below shows the non-performing loans and non-performing assets by region as of December 31, 2023:

December 31, 2024

(in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total

6 unchanged sentences

Total non-performing assets $ 41,615 $ 19,743 $ 30,165 $ 5,537 $ 45,091 $ 206 $ 142,357

The loans are not current on either principal or interest, and we have reversed any interest that had accrued subsequent to the non-accrual date designated by the Federal Reserve.

Any interest payments that are received will be applied to the principal balance.

This represents the largest component of the Company's $43.4 million in foreclosed assets held for sale.

Debt restructuring generally occurs when a borrower is experiencing, or is expected to experience, financial difficulties in the near term.

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As of December 31, 2025, we had $98.7 million of restructured loans that are in compliance with the modified terms and are not reported as past due or non-accrual.

Our Florida market contains $1.3 million, our Arkansas market contains $1.9 million, our Texas market contains $100.5 million and our New York region contains $2.2 million of these restructured loans.

Our Florida market contains $1.4 million, our Arkansas market contains $1.9 million, our Texas market contains $92.5 million and our SPF region contains $2.9 million of these restructured loans.

During the year ended December 31, 2025, the Company restructured approximately $5.0 million in loans to 13 borrowers.

The ending balance of these loans as of December 31, 2025, was $4.9 million.

Three of the modified loans pertained to one borrower relationship and accounted for $99.1 million of the total post-modification outstanding balance.

The modification involved three new loans being underwritten resulting in the interest rate decreasing by 12 basis points and one of the loans in the relationship being charged-off.

The charged-off amount was $26.1 million.

Five of the $122.7 million in restructured loans held by the Company were considered to be collateral dependent as of December 31, 2024.

The outstanding balance of these loans was $114.7 million, and the specific reserve was $2.9 million.

The majority of the Bank’s restructured loans involve reducing the interest rate, changing from a principal and interest payment to interest-only, lengthening the amortization period, or a combination of some or all of the three.

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As of December 31, 2025, 85.4% of all restructured loans were performing to the terms of the restructure.

Total foreclosed assets held for sale were $43.4 million as of December 31, 2024, compared to $30.5 million as of December 31, 2023 for a increase of $12.9 million.

The foreclosed assets held for sale as of December 31, 2024 are comprised of approximately $757,000 of assets located in Arkansas, $5.9 million of assets located in Florida, $14.0 million located in Texas, zero located in Alabama, zero for SPF and $22.8 million of assets in our Centennial CFG market.

The majority of the foreclosed assets held for sale is comprised of three properties.

Six of the $115.6 million in restructured loans held by the Company were considered to be collateral dependent as of December 31, 2025.

The outstanding balance of these loans was $109.2 million, and the specific reserve was $3.7 million.

Total foreclosed assets held for sale were $39.8 million as of December 31, 2025, compared to $43.4 million as of December 31, 2024 for a decrease of $3.6 million.

The foreclosed assets held for sale as of December 31, 2025 are comprised of approximately $771,000 of assets located in Arkansas, $260,000 of assets located in Florida, $16.0 million located in Texas, zero located in Alabama, zero for SPF and $22.8 million of assets in our Centennial CFG market.

The majority of the foreclosed assets held for sale is comprised of two properties.

The first is an office building located in Santa Monica, California with a carrying value of $22.8 million.

The second is an apartment complex which is under construction in Gunter, Texas with a carrying value of $12.1 million, and the third is an office building located in Miami, Florida with a carrying value of $5.5 million.

These three properties account for $40.4 million of the balance of foreclosed assets held for sale at December 31, 2024.

During the year ended December 31, 2024, the office building in Miami, Florida was written down by $1.5 million and the apartment complex in Gunter, Texas was written down by $1.0 million.

The second is an apartment complex which is under construction in Gunter, Texas with a carrying value of $14.8 million.

These two properties account for $37.6 million of the balance of foreclosed assets held for sale at December 31, 2025.

Table 14 shows the summary of foreclosed assets held for sale as of December 31, 2025 and 2024.

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The Company had $219.4 million and $268.0 million in impaired loans (which includes loans individually analyzed for credit losses for which a specific reserve has been recorded, non-accrual loans, loans past due 90 days or more and restructured loans made to borrowers experiencing financial difficulty) as of December 31, 2025 and December 31, 2024, respectively.

As of December 31, 2024, average impaired loans were $139.6 million compared to $160.9 million as of December 31, 2023.

The amortized cost balance for loans with a specific allocation increased from $10.5 million to $92.7 million, and the specific allocation for impaired loans increased by approximately $17.4 million for the period ended December 31, 2024 compared to the period ended December 31, 2023.

As of December 31, 2024, our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets accounted for approximately $24.6 million, $62.4 million, $157.6 million, $206,000, $13.5 million and $9.7 million, respectively, of the impaired loans.

As of December 31, 2025, our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets accounted for approximately $28.8 million, $27.0 million, $149.5 million, $54,000, $13.3 million and $787,000, respectively, of the impaired loans.

As of December 31, 2025, the amortized cost balance for loans with a specific allocation was $71.3 million, and the specific allocation was $17.0 million.

As of December 31, 2024, the amortized cost balance for loans with a specific allocation was $92.7 million, and the specific allocation was $23.8 million.

Past Due and Non-Accrual Loans

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Allowance for Credit Losses

The allowance for credit losses on loans receivable decreased from $288.2 million as of December 31, 2023 to $275.9 million as of December 31, 2024.

The allowance for credit losses on loans receivable increased from $275.9 million as of December 31, 2024 to $297.6 million as of December 31, 2025.

The specific reserve for loans individually analyzed for credit losses was $17.0 million on $186.5 million of individually analyzed loans as of December 31, 2025, compared to a reserve of $23.8 million on $209.8 million of individually analyzed loans as of December 31, 2024.

2 unchanged sentences

Loans receivable collectively evaluated for credit loss increased by approximately $945.0 million from $14.55 billion at December 31, 2024 to $15.50 billion at December 31, 2025.

The percentage of the allowance for credit losses allocated to loans receivable collectively evaluated for credit loss to the total loans collectively evaluated for impairment decreased from 1.98% at December 31, 2023 to 1.73% at December 31, 2024.

The percentage of the allowance for credit losses allocated to loans receivable collectively evaluated for credit loss to the total loans collectively evaluated for impairment increased from 1.73% at December 31, 2024 to 1.81% at December 31, 2025.

Charge-offs and Recoveries.

Total charge-offs increased to $63.0 million for the year ended December 31, 2024, compared to $16.1 million for the year ended December 31, 2023.

Total recoveries decreased to $2.3 million for the year ended December 31, 2024, compared to $2.7 million for the same period in 2023.

Total charge-offs decreased to $15.2 million for the year ended December 31, 2025, compared to $63.0 million for the year ended December 31, 2024.

Total recoveries increased to $12.8 million for the year ended December 31, 2025, compared to $2.3 million for the same period in 2024.

Net loans charged off for the years ended December 31, 2025 and 2024 were $2.4 million and $60.8 million, respectively.

The increase in net charge-offs was due to the asset quality cleanup project the Company completed in the fourth quarter of 2024.

The charge-off detail by region for the year ended December 31, 2024 can be seen below.

The increase in net charge-offs for the year ended December 31, 2024 was due to the asset quality cleanup project the Company completed in the fourth quarter of 2024.

Table 17 below shows a summary of the charge-off detail by region for the years ended December 31, 2025 and December 31, 2024.

Charge-Off Detail by Region

December 31, 2025

(in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total

1 unchanged sentence

Recovery 10,482 871 658 34 790 11 12,846

Net charge-offs $ 50,479 $ 5,041 $ 2,195 $ 1,729 $ 1,279 $ 31 $ 60,754

Percentage of total 83.1 % 8.3 % 3.6 % 2.8 % 2.1 % 0.1 % 100.0 %

The charge-off detail by region for the year ended December 31, 2023 can be seen below.

Net (recoveries) charge-offs

$ (4,354) $ 2,090 $ (477) $ 1,736 $ 3,283 $ 119 $ 2,397

December 31, 2024

(in thousands) Texas Arkansas Centennial CFG Shore Premier Finance Florida Alabama Total

2 unchanged sentences

Net charge-offs $ 50,479 $ 5,041 $ 2,195 $ 1,729 $ 1,279 $ 31 $ 60,754

Percentage of total 30.0 % 16.3 % 34.2 % 2.3 % 16.9 % 0.3 % 100.0 %

While the 2025 charge-offs and recoveries consisted of many relationships, there was only one individual relationship that consisted of a charge-off greater than $1.0 million.

This was a $2.2 million charge-off for a commercial real estate loan in our Florida market.

While the 2024 charge-offs and recoveries consisted of many relationships, there were seven individual relationships that consisted of charge-offs greater than $1.0 million.

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As noted previously, the increase in charge-offs was primarily due to the asset quality cleanup project completed during the fourth quarter of 2024.

While the 2023 charge-offs and recoveries consisted of many relationships, there were two individual relationships that consisted of charge-offs greater than $1.0 million.

The first was a $3.1 million charge-off for a commercial and industrial loan in our Centennial CFG market, and the second was a $1.5 million charge-off for a commercial real estate loan in our Florida market.

We have not charged off an amount less than what was determined to be the fair value of the collateral as presented in the appraisal, less estimated costs to sell (for collateral dependent loans), for any period presented.

10 unchanged sentences

Construction/land development 70 1,437

Agricultural — 7

Residential real estate loans:

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Residential 1-4 family 223 180

Multifamily residential — 8

Total real estate 9,499 460

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Net charge-offs to average loans receivable were 0.02% and 0.41% as of December 31, 2025 and 2024, respectively.

Despite the uptick in net charge-offs for the year due to the asset quality cleanup project, the Company considers the level immaterial for additional disclosure of net charge-offs to average loans outstanding by loan category.

The low level of charge-offs for the year ended December 31, 2025, emphasize the Company's strong asset quality, and additional disclosure of net charge-offs to average loans outstanding by loan category is not considered necessary.

Despite the higher level in net charge-offs for the year ended December 31, 2024, related to the asset quality cleanup project, the Company considers the level immaterial for additional disclosure of net charge-offs to average loans outstanding by loan category.

Table 19 presents the allocation of allowance for credit losses as of December 31, 2025 and 2024.

5 unchanged sentences

Construction/land development 48,023 17.4 52,271 18.5

Agricultural residential real estate loans:

3,174 2.3 1,441 2.3

Agricultural 3,048 2.1 3,174 2.3

Residential real estate loans:

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Premiums and discounts are amortized/accreted to the call date to interest income using the constant effective yield method over the estimated life of the security.

We had $1.28 billion of held-to-maturity securities at both December 31, 2024 and 2023.

We had $1.26 billion and $1.28 billion of held-to-maturity securities at December 31, 2025 and 2024, respectively.

As of December 31, 2025, $1.10 billion, or 87.4%, were invested in obligations of state and political subdivisions, compared to $1.11 billion, or 86.8%, as of December 31, 2024.

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Also, we had approximately $226.8 million, or 7.9%, invested in other securities as of December 31, 2025, compared to $195.8 million, or 6.4% of our available-for-sale securities as of December 31, 2024.

During the year ended December 31, 2025, the Company recovered $2.2 million in AFS reserves due to an upgrade in the credit quality of the subordinated debt investment securities for which an allowance had been previously recorded.

During the year ended December 31, 2024, the Company recovered $330,000 in AFS reserves due to an improvement in the unrealized loss position of one of the Company's subordinated debt investments.

1 unchanged sentence

As result, the Company wrote down the value of the investment to its unrealized loss position, which required a $1.7 million provision, but the remaining $842,000 allowance for credit losses on AFS investments associated with certain securities in the subordinated debt portfolio within the banking sector was considered adequate.

At December 31, 2022, the Company determined the $842,000 allowance for credit losses on AFS investments associated with certain securities in the subordinated debt portfolio within the banking sector was considered adequate.

These investments are classified within the other securities category of the AFS portfolio.

At both December 31, 2024 and 2023, the $2.0 million allowance for credit losses for the held-to-maturity portfolio was considered adequate.

At December 31, 2025, 2024 and 2023, the $2.0 million allowance for credit losses for the held-to-maturity portfolio was considered adequate.

No additional provision for credit losses was considered necessary for the HTM portfolio.

During the year ended December 31, 2022, the Company recorded a $2.0 million provision for credit losses for the HTM portfolio as a result of the investment securities acquired as part of the Happy acquisition.

Table 20 presents the carrying value and fair value of available-for-sale and held-to-maturity investment securities as of December 31, 2025 and 2024.

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State and political subdivisions — 41,372 336,948 731,160 — 1,109,480 984,927

Other securities — — — — — — —

Total $ — $ 55,827 $ 366,053 $ 731,160 $ 124,169 $ 1,277,209 $ 1,142,940

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The Federal Reserve increased the target rate four times during 2023.

The Federal Reserve reduced the target rate three times during 2024.

The Federal Reserve reduced the target rate three times during 2025.

Table 23 reflects the classification of the average deposits and the average rate paid on each deposit category which is in excess of 10 percent of average total deposits, for the years ended December 31, 2025, 2024, and 2023.

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Interest incurred on repurchase agreements is reported as interest expense.

Securities sold under agreements to repurchase increased $20.3 million, or 14.3%, from $142.1 million as of December 31, 2023 to $162.4 million as of December 31, 2024.

Securities sold under agreements to repurchase decreased $6.5 million, or 4.0%, from $162.4 million as of December 31, 2024 to $155.8 million as of December 31, 2025.

FHLB and Other Borrowed Funds

The Company’s FHLB borrowed funds, which are secured by our loan portfolio, were $600.0 million at both December 31, 2024 and 2023.

At December 31, 2024, $100.0 million and $500.0 million of the outstanding balance was classified as short-term and long-term advances, respectively.

At December 31, 2023, the entire $600.0 million balance was classified as long-term advances.

The Company’s FHLB borrowed funds, which are secured by our loan portfolio, were $500.0 million and $600.0 million at December 31, 2025 and 2024, respectively.

At December 31, 2025, $100.0 million and $400.0 million balance was classified as short-term and long-term advances, respectively.

At December 31, 2024, $100.0 million and $500.0 million balance was classified as short-term and long-term advances, respectively.

The FHLB advances mature from 2026 to 2037 with fixed interest rates ranging from 3.37% to 4.84% and are secured by loans and investments securities.

Expected maturities could differ from contractual maturities because the FHLB has have the right to call or the Company has the right to prepay certain obligations.

Expected maturities could differ from contractual maturities because the FHLB has the right to call or the Company has the right to prepay certain obligations.

Other borrowed funds were $250,000 as of December 31, 2025 and were classified as short-term advances.

Other borrowed funds were $701.3 million as of December 31, 2023 and were classified as short-term advances.

Other borrowed funds were $750,000 as of December 31, 2024 and were classified as short-term advances.

During the fourth quarter of 2024, the Company paid off its $700.0 million advance from the Federal Reserve's Bank Term Funding Program ("BTFP").

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Subordinated debentures were $279.3 million and $439.2 million as of December 31, 2025 and 2024, respectively.

On April 1, 2022, the Company acquired $140.0 million in aggregate principal amount of 5.500% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “2030 Notes”) from Happy, and the Company recorded approximately $144.4 million which included fair value adjustments..

The 2030 Notes are unsecured, subordinated debt obligations of the Company and will mature on July 31, 2030.

From and including the date of issuance to, but excluding July 31, 2025 or the date of earlier redemption, the 2030 Notes will bear interest at an initial rate of 5.50% per annum, payable in arrears on January 31 and July 31 of each year.

From and including July 31, 2025 to, but excluding, the maturity date or earlier redemption, the 2030 Notes will bear interest at a floating rate equal to the Benchmark rate (which is expected to be 3-month Secured Overnight Funding Rate (SOFR)), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2030 Notes, plus 5.345%, payable quarterly in arrears on January 31, April 30, July 31, and October 31 of each year, commencing on October 31, 2025.

The Company may, beginning with the interest payment date of July 31, 2025, and on any interest payment date thereafter, redeem the 2030 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100% of the principal amount of the 2030 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption.

The Company may also redeem the 2030 Notes at any time, including prior to July 31, 2025, at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occur that could impact the Company’s ability to deduct interest payable on the 2030 Notes for U.S.

federal income tax purposes or preclude the 2030 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company is required to register as an investment company under the Investment Company Act of 1940, as amended.

On July 31, 2025, the Company completed the payoff of its $140.0 million in aggregate principal amount of 5.500% Fixed-to-Floating Rate Subordinated Notes due 2030 (the "2030 Notes") acquired from Happy on April 1, 2022, for which the Company had recorded a value of approximately $144.4 million, including fair value adjustments.

Each 2030 Note was redeemed pursuant to the terms of the Subordinated Indenture, dated as of July 30, 2020, between the Company and UMB Bank, the Trustee for the 2030 Notes, at the redemption price of 100% of its principal amount, plus accrued and unpaid interest to, but excluding, the redemption date.

Prior to their redemption, the 2030 Notes were unsecured, subordinated debt obligations of the Company and were scheduled to mature on July 31, 2030.

From and including the date of issuance to, but excluding July 31, 2025 or the date of earlier redemption, the 2030 Notes bore interest at an initial rate of 5.50% per annum, payable in arrears on January 31 and July 31 of each year.

From and including July 31, 2025 to, but excluding, the maturity date or earlier redemption, the 2030 Notes were to bear interest at a floating rate equal to the Benchmark rate (which is expected to be 3-month Secured Overnight Funding Rate ("SOFR")), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2030 Notes, plus 5.345%, payable quarterly in arrears on January 31, April 30, July 31, and October 31 of each year, commencing on October 31, 2025.

The Company was permitted, beginning with the interest payment date of July 31, 2025, and on any interest payment date thereafter, to redeem the 2030 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100% of the principal amount of the 2030 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption.

The Company was also permitted to redeem the 2030 Notes at any time, including prior to July 31, 2025, at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occurred that could impact the Company’s ability to deduct interest payable on the 2030 Notes for U.S.

federal income tax purposes or preclude the 2030 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company was required to register as an investment company under the Investment Company Act of 1940, as amended.

In each case, the redemption would be at a redemption price equal to 100% of the principal amount of the 2030 Notes plus any accrued and unpaid interest to, but excluding, the redemption date.

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In each case, the redemption would be at a redemption price equal to 100% of the principal amount of the 2032 Notes plus any accrued and unpaid interest to, but excluding, the redemption date.

On September 4, 2025 , the Company repurchased $20.0 million of the 2032 Notes in an open-market transaction.

The repurchase resulted in a $1.9 million gain.

Stockholders’ Equity

Stockholders’ equity increased $335.8 million to $4.30 billion as of December 31, 2025, compared to $3.96 billion as of December 31, 2024.

The improvement in stockholders’ equity was 8.5% for the year ended December 31, 2025 compared to December 31, 2024.

5 unchanged sentences

Stock Repurchase Program.

On January 17, 2025, the Board of Directors (the “Board”) of the Company authorized an increase in the shares of the Company’s common stock available for repurchase under its stock repurchase program, which was originally approved by the Board in January 2008 and most recently amended in January 2021, to renew the authorization to 20,000,000 shares.

During 2025, the Company repurchased a total of 2,890,706 shares with a weighted-average stock price of $28.13 per share.

2 unchanged sentences

The remaining balance available for repurchase was 17,109,294 shares at December 31, 2025.

As of January 17, 2025, a total of approximately 13,244,493 shares remained available for repurchase under the existing repurchase authorization, resulting in an increase of 6,755,507 shares of common stock available for repurchase.

Liquidity and Capital Adequacy Requirements

10 unchanged sentences

Overall, we had $5.96 billion net available liquidity as of December 31, 2025, which consisted of $1.94 billion of net available internal liquidity and $4.02 billion in net available external liquidity.

Details on our available liquidity as of December 31, 2024 is available below.

Table 25 reflects the details on our available liquidity as of December 31, 2025.

Available Liquidity

(in thousands) Total Available Amount Used Net Availability

7 unchanged sentences

FRB Discount Window 162,894 — 162,894

BTFP (par value) — — —

FNBB 35,000 — 35,000

2 unchanged sentences

Total Available Liquidity $ 7,937,053 $ 1,977,575 $ 5,959,478

We have continued to limit our exposure to uninsured deposits and have been actively monitoring this exposure in light of the current banking environment.

We have continued to limit our exposure to uninsured deposits and have been actively monitoring this exposure.

As of December 31, 2025, we held approximately $8.77 billion in uninsured deposits of which $943.7 million were intercompany subsidiary deposit balances and $3.26 billion were collateralized deposits, for a net position of $4.56 billion.

1 unchanged sentence

In addition, net available liquidity exceeded uninsured and uncollateralized deposits by $1.40 billion.

Table 26 presents our uninsured deposit detail as of December 31, 2025.

Uninsured Deposits

(in thousands) As of December 31, 2025

23 unchanged sentences

The interim final rule allows bank holding companies and banks to delay for two years 100% of the day-one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL.

The Company has elected to adopt the interim final rule, which is reflected in the risk-based capital ratios presented below.

The Company elected to adopt the interim final rule, which is reflected in the risk-based capital ratios as of December 31, 2024.

The risk-based capital ratios as of December 31, 2025, do not include a transitional period adjustment as the transition period has ended.

Table 27 presents our risk-based capital ratios as of December 31, 2025 and 2024.

6 unchanged sentences

Goodwill and core deposit intangibles, net (1,430,107) (1,438,140)

Unrealized loss (gain) on available-for-sale securities 256,108 249,075

Unrealized loss on available-for-sale securities 165,887 256,108

Total common equity Tier 1 capital 3,032,651 2,787,116

73 unchanged sentences

The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.

The Company had total outstanding letters of credit amounting to $153.9 million and $185.5 million at December 31, 2024 and 2023, respectively, with the majority of maturities ranging from currently due to four years.

The Company had total outstanding letters of credit amounting to $131.9 million and $153.9 million at December 31, 2025 and 2024, respectively.

Table 29 presents the anticipated funding requirements of our most significant financial commitments, excluding interest, as of December 31, 2025.

47 unchanged sentences

Fair value adjustment for marketable securities (2,397) (2,971) 1,094

Initial provision for credit losses - acquisition — — 58,585

Gain on sale of building (983) (2,059) —

Recoveries on historic losses (2,040) — (3,461)

Special dividend from equity investment — — (1,434)

Special income from equity investments (7,389) — —

Merger expenses 580 — —

Hurricane expenses — — 176

TRUPS redemption fees — — 2,081

Special lawsuit settlement, net of expense — — (10,000)

Gain on retirement of subordinated debt (1,882) — —

Legal fee reimbursement (885) — —

Legal claims expense 3,300 — —

Total adjustments (14,642) (3,027) 7,499

89 unchanged sentences

Non-interest income:

Gain on retirement of subordinated debt $ 1,882 $ — $ —

Fair value adjustment for marketable securities 2,397 2,971 (1,094)

Special dividend from equity investment — — 1,434

Special income from equity investments 7,389 — —

(Loss) gain on OREO, net (161) (2,272) 332

1 unchanged sentence

BOLI death benefits 1,430 257 3,117

Special lawsuit settlement — — 15,000

Legal expense reimbursement 885 — —

Recoveries on historic losses 2,040 — 3,461

2 unchanged sentences

FDIC special assessment $ (1,516) $ 2,260 $ 12,983

TRUPS redemption fees — — 2,081

Merger expenses 580 — —

Hurricane expense — — 176

Special lawsuit legal expense — — 5,000

Legal claims expense 3,300 — —

Total non-interest expense adjustments (G) $ 2,364 $ 2,260 $ 12,983

42 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 7. Management’s Discussion and Analysis