First Internet Bancorp 10-Q

ITEM 1. FINANCIAL STATEMENTS First Internet Bancorp Condensed Consolidated Balance Sheets (Amounts in thousands except share data) March 31, 2026 December 31, 2025 (Unaudited) Assets Cash and due from banks $ 10,528 $ 6,145 Interest-bearing deposits 591,277 450,632 Total cash and cash equivalents 601,805 456,777 Securities available-for-sale, at fair value (amortized cost of $ 797,393 and $ 802,422 in 2026 and 2025, respectively) 772,035 778,687 Securities held-to-maturity, at amortized cost, net of allowance for credit losses of $ 0.1 million and $ 0.1 million in 2026 and 2025, respectively, (fair value of $ 262,416 and $ 238,815 in 2026 and 2025, respectively) 276,042 250,609 Loans held-for-sale 55,240 108,608 Loans 3,775,870 3,746,728 Allowance for credit losses - loans ( 56,496 ) ( 55,686 ) Net loans 3,719,374 3,691,042 Accrued interest receivable 28,182 27,909 Federal Home Loan Bank of Indianapolis stock 28,350 28,350 Cash surrender value of bank-owned life insurance 42,864 42,559 Premises and equipment, net 67,006 67,934 Goodwill 4,687 4,687 Servicing asset, at fair value 23,614 22,793 Other real estate owned 1,945 2,631 Accrued income and other assets 90,544 89,061 Total assets $ 5,711,688 $ 5,571,647 Liabilities and shareholders’ equity Liabilities Noninterest-bearing deposits $ 149,505 $ 146,879 Interest-bearing deposits 4,832,145 4,692,934 Total deposits 4,981,650 4,839,813 Advances from Federal Home Loan Bank 239,500 249,500 Subordinated debt, net of unamortized debt issuance costs of $ 1,454 and $ 1,535 in 2026 and 2025, respectively 105,546 105,465 Accrued interest payable 1,232 1,744 Accrued expenses and other liabilities 22,806 15,358 Total liabilities 5,350,734 5,211,880 Commitments and contingencies Shareholders’ equity Preferred stock, no par value; 4,913,779 shares authorized; issued and outstanding - none — — Voting common stock, no par value; 45,000,000 shares authorized; 8,716,662 and 8,686,994 shares issued and outstanding in 2026 and 2025, respectively 186,967 186,577 Nonvoting common stock, no par value; 86,221 shares authorized; issued and outstanding - none — — Retained earnings 195,292 193,320 Accumulated other comprehensive loss ( 21,305 ) ( 20,130 ) Total shareholders’ equity 360,954 359,767 Total liabilities and shareholders’ equity $ 5,711,688 $ 5,571,647 See Notes to Condensed Consolidated Financial Statements 1 First Internet Bancorp Condensed Consolidated Statements of Income – Unaudited (Amounts in thousands except share and per share data) Three Months Ended March 31, 2026 2025 Interest income Loans $ 60,839 $ 62,662 Securities – taxable 9,496 8,463 Securities – non-taxable 654 661 Other earning assets 4,821 5,043 Total interest income 75,810 76,829 Interest expense Deposits 40,359 47,626 Other borrowed funds 3,853 4,107 Total interest expense 44,212 51,733 Net interest income 31,598 25,096 Provision for credit losses - loans 16,606 12,121 Benefit for credit losses - debt securities held to maturity ( 6 ) ( 20 ) Benefit for credit losses - off-balance sheet commitments ( 295 ) ( 168 ) Net interest income after provision for credit losses 15,293 13,163 Noninterest income Service charges and fees 844 265 Loan servicing revenue 2,856 1,983 Loan servicing asset revaluation ( 1,060 ) ( 1,181 ) Gain on sale of loans 7,377 8,647 Other 1,501 713 Total noninterest income 11,518 10,427 Noninterest expense Salaries and employee benefits 13,236 13,107 Marketing, advertising and promotion 615 647 Consulting and professional services 1,080 1,228 Data processing 775 635 Loan expenses 2,179 1,531 Premises and equipment 3,676 3,115 Deposit insurance premium 1,487 1,398 Other 1,979 1,895 Total noninterest expense 25,027 23,556 Income before income taxes 1,784 34 Income tax (benefit) provision ( 725 ) ( 909 ) Net income $ 2,509 $ 943 Income per share of common stock Basic $ 0.29 $ 0.11 Diluted $ 0.29 $ 0.11 Weighted-average number of common shares outstanding Basic 8,734,383 8,715,655 Diluted 8,774,111 8,784,970 Dividends declared per share $ 0.06 $ 0.06 See Notes to Condensed Consolidated Financial Statements 2 First Internet Bancorp Condensed Consolidated Statements of Comprehensive Income – Unaudited (Amounts in thousands) Three Months Ended March 31, 2026 2025 Net income $ 2,509 $ 943 Other comprehensive income Securities available-for-sale Net unrealized holding (losses) gains recorded within other comprehensive income before (loss) income tax ( 1,623 ) 4,424 Income tax (benefit) provision ( 374 ) 1,017 Net effect on other comprehensive (loss) income ( 1,249 ) 3,407 Securities held-to-maturity Amortization of net unrealized holding losses on securities transferred from available-for-sale to held-to-maturity 100 120 Income tax provision 26 31 Net effect on other comprehensive income 74 89 Total other comprehensive (loss) income ( 1,175 ) 3,496 Comprehensive income $ 1,334 $ 4,439 See Notes to Condensed Consolidated Financial Statements 3 First Internet Bancorp Condensed Consolidated Statements of Changes in Shareholders’ Equity - Unaudited Three Months Ended March 31, 2026 and 2025 (Amounts in thousands except share and per share data) Voting and Nonvoting Common Stock Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity Balance, January 1, 2026 $ 186,577 $ 193,320 $ ( 20,130 ) $ 359,767 Net Income — 2,509 — 2,509 Other comprehensive income — — ( 1,175 ) ( 1,175 ) Dividends declared ($ 0.06 per share) — ( 537 ) — ( 537 ) Recognition of the fair value of share-based compensation 561 — — 561 Common stock redeemed for the net settlement of share-based awards ( 171 ) — — ( 171 ) Balance, March 31, 2026 $ 186,967 $ 195,292 $ ( 21,305 ) $ 360,954 Balance, January 1, 2025 $ 186,094 $ 230,622 $ ( 32,653 ) $ 384,063 Net income — 943 — 943 Other comprehensive income — — 3,496 3,496 Dividends declared ($ 0.06 per share) — ( 534 ) — ( 534 ) Recognition of the fair value of share-based compensation 1 — — 1 Deferred stock rights and restricted stock units issued in lieu of cash dividends payable on outstanding deferred stock rights and restricted stock units 2 — — 2 Common stock redeemed for the net settlement of share-based awards ( 224 ) — — ( 224 ) Balance, March 31, 2025 $ 185,873 $ 231,031 $ ( 29,157 ) $ 387,747 See Notes to Condensed Consolidated Financial Statements 4 First Internet Bancorp Condensed Consolidated Statements of Cash Flows – Unaudited (Amounts in thousands) Three Months Ended March 31, 2026 2025 Operating activities Net income $ 2,509 $ 943 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,710 1,070 Increase in cash surrender value of bank-owned life insurance ( 305 ) ( 281 ) Provision for credit losses 16,305 11,933 Share-based compensation expense 561 1 Loans originated for sale ( 60,864 ) ( 112,404 ) Proceeds from sale of loans 119,728 141,771 Gain on loans sold ( 7,377 ) ( 8,647 ) Loss (gain) on sale of other real estate owned 15 ( 19 ) Gain on derivatives — ( 216 ) Loan servicing asset revaluation 1,060 1,181 Net change in accrued income and other assets ( 597 ) ( 366 ) Net change in accrued expenses and other liabilities 1,805 ( 2,141 ) Net cash provided by operating activities 75,550 32,825 Investing activities Net loan activity, excluding purchases ( 44,939 ) ( 58,029 ) Proceeds from sale of other real estate owned 672 291 Maturities and calls of securities available-for-sale 42,663 25,528 Purchase of securities available-for-sale ( 39,409 ) ( 115,680 ) Maturities and calls of securities held-to-maturity 8,861 7,324 Purchase of securities held-to-maturity ( 28,263 ) ( 33,629 ) Purchase of premises and equipment ( 299 ) ( 184 ) Loans purchased — ( 36,907 ) Other investing activities ( 938 ) ( 5,160 ) Net cash used in investing activities ( 61,652 ) ( 216,446 ) Financing activities Net increase in deposits 141,837 12,419 Cash dividends paid ( 521 ) ( 520 ) Proceeds from advances from Federal Home Loan Bank — 100,000 Repayment of advances from Federal Home Loan Bank ( 10,000 ) — Other, net ( 186 ) ( 234 ) Net cash provided by financing activities 131,130 111,665 Net increase (decrease) in cash and cash equivalents 145,028 ( 71,956 ) Cash and cash equivalents, beginning of period 456,777 466,410 Cash and cash equivalents, end of period $ 601,805 $ 394,454 Supplemental disclosures Cash paid during the period for interest 44,724 52,583 Cash (received) paid during the period for taxes ( 368 ) 146 Loans transferred to other real estate owned — 1,518 Cash dividends declared, paid in subsequent period 523 522 Securities purchased during the period, settled in subsequent period 5,581 — See Notes to Condensed Consolidated Financial Statements 5 First Internet Bancorp Notes to Condensed Consolidated Financial Statements – Unaudited (Table amounts in thousands except share and per share data) Note 1: Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information or footnotes necessary for a complete presentation of financial condition, results of operations, changes in shareholders’ equity, or cash flows in accordance with GAAP. In our opinion, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation have been included. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results expected for the year ending December 31, 2026 or any other period. The March 31, 2026 condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the First Internet Bancorp Annual Report on Form 10-K for the year ended December 31, 2025. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, or assumptions that could have a material effect on the carrying value of certain assets and liabilities. These estimates, judgments, and assumptions affect the amounts reported in the condensed consolidated financial statements and the disclosures provided. The Company utilizes processes that involve the use of significant estimates and the judgment of management in determining the amount of the Company’s allowance for credit losses (“ACL”) and changes in any of these could have a significant impact on the condensed consolidated financial statements. The condensed consolidated financial statements include the accounts of First Internet Bancorp (the “Company”), its wholly owned subsidiary, First Internet Bank of Indiana (the “Bank”), and the Bank’s three wholly owned subsidiaries, First Internet Public Finance Corp., JKH Realty Services, LLC and SPF15, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. The Company is subject to claims and lawsuits that arise primarily in the ordinary course of business. It is the opinion of management that the disposition or ultimate resolution of such claims and lawsuits will not have a material adverse effect on the consolidated financial position, results of operations, and cash flows of the Company. 6 Note 2: Earnings Per Share Earnings per share of common stock are based on the weighted-average number of basic shares and dilutive shares outstanding during the period. The following is a reconciliation of the weighted-average common shares for the basic and diluted earnings per share computations for the three months ended March 31, 2026 and 2025. (dollars in thousands, except share and per share data) Three Months Ended March 31, 2026 2025 Basic earnings per share Net income $ 2,509 $ 943 Weighted-average common shares 8,734,383 8,715,655 Basic earnings per common share $ 0.29 $ 0.11 Diluted earnings per share Net income $ 2,509 $ 943 Weighted-average common shares 8,734,383 8,715,655 Dilutive effect of equity compensation 39,728 69,315 Weighted-average common and incremental shares 8,774,111 8,784,970 Diluted earnings per common share 1 $ 0.29 $ 0.11 1 Potential dilutive common shares are excluded from the computation of diluted EPS in the periods where the effect would be antidilutive. There were 11,186 and 3,916 weighted-average antidilutive shares excluded from the computation of diluted EPS for the three months ended March 31, 2026 and 2025, respectively. 7 Note 3: Securities The following tables summarize securities available-for-sale (“AFS”) and securities held-to-maturity (“HTM”) as of March 31, 2026 and December 31, 2025. March 31, 2026 Amortized Cost Gross Unrealized Fair Value (amounts in thousands) Gains Losses Securities available-for-sale U.S. Government-sponsored agencies $ 59,556 $ 506 $ ( 912 ) $ 59,150 Municipal securities 59,677 5 ( 2,577 ) 57,105 Agency mortgage-backed securities - residential 1 422,344 1,188 ( 21,454 ) 402,078 Agency mortgage-backed securities - commercial 62,063 89 ( 985 ) 61,167 Private label mortgage-backed securities - residential 116,592 138 ( 984 ) 115,746 Asset-backed securities 39,403 44 ( 153 ) 39,294 Corporate securities 37,758 399 ( 662 ) 37,495 Total available-for-sale $ 797,393 $ 2,369 $ ( 27,727 ) $ 772,035 March 31, 2026 Amortized Cost Gross Unrealized Fair Value Allowance for Credit Losses Net Carrying Value (amounts in thousands) Gains Losses Securities held-to-maturity Municipal securities $ 10,374 $ — $ ( 535 ) $ 9,839 $ ( 3 ) $ 10,371 Agency mortgage-backed securities - residential 241,611 1,337 ( 12,869 ) 230,079 — 241,611 Agency mortgage-backed securities - commercial 5,616 — ( 908 ) 4,708 — 5,616 Corporate securities 18,536 — ( 746 ) 17,790 ( 92 ) 18,444 Total held-to-maturity $ 276,137 $ 1,337 $ ( 15,058 ) $ 262,416 $ ( 95 ) $ 276,042 1 Includes $ 0.2 million of additional premium related to terminated interest rate swaps associated with agency mortgage-backed securities - residential as of March 31, 2026. December 31, 2025 Amortized Cost Gross Unrealized Fair Value (amounts in thousands) Gains Losses Securities available-for-sale U.S. Government-sponsored agencies $ 64,298 $ 480 $ ( 1,014 ) $ 63,764 Municipal securities 64,777 17 ( 1,408 ) 63,386 Agency mortgage-backed securities - residential 1 409,718 841 ( 21,102 ) 389,457 Agency mortgage-backed securities - commercial 59,112 202 ( 837 ) 58,477 Private label mortgage-backed securities - residential 124,264 234 ( 825 ) 123,673 Asset-backed securities 42,492 100 ( 39 ) 42,553 Corporate securities 37,761 346 ( 730 ) 37,377 Total available-for-sale $ 802,422 $ 2,220 $ ( 25,955 ) $ 778,687 8 December 31, 2025 Amortized Cost Gross Unrealized Fair Value Allowance for Credit Losses Net Carrying Value (amounts in thousands) Gains Losses Securities held-to-maturity Municipal securities $ 11,009 $ 1 $ ( 459 ) $ 10,551 $ ( 3 ) $ 11,006 Agency mortgage-backed securities - residential 213,530 1,834 ( 11,649 ) 203,715 — 213,530 Agency mortgage-backed securities - commercial 5,635 — ( 915 ) 4,720 — 5,635 Corporate securities 20,536 — ( 707 ) 19,829 ( 98 ) 20,438 Total held-to-maturity $ 250,710 $ 1,835 $ ( 13,730 ) $ 238,815 $ ( 101 ) $ 250,609 1 Includes $ 0.2 million of additional premium related to terminated interest rate swaps associated with agency mortgage-backed securities - residential as of December 31, 2025. Accrued interest receivable on AFS and HTM securities at March 31, 2026 was $ 2.9 million and $ 1.0 million, respectively, compared to $ 3.0 million and $ 1.1 million, respectively, at December 31, 2025, and is included in accrued interest receivable on the condensed consolidated balance sheet. The Company elected to exclude all accrued interest receivable from securities when estimating credit losses. At March 31, 2026 and December 31, 2025, approximately 86 % and 84 %, respectively, of mortgage-backed securities (including both AFS and HTM) held by the Company are issued by U.S. government-sponsored entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government and have a long history of no credit losses; therefore, the Company did not record an ACL on these securities. Additionally, the Company evaluated credit impairment for individual AFS securities that are in an unrealized loss position and determined that the unrealized losses are unrelated to credit quality and are primarily attributable to changes in interest rates and volatility in the financial markets. As the Company does not intend to sell the AFS securities that are in an unrealized loss position, and it is unlikely that it will be required to sell these securities before recovery of their amortized cost basis, the Company did not record an ACL on these securities. The Company also evaluated its HTM securities that are in an unrealized loss position and considered issuer bond ratings, historical loss rates for bond ratings and economic forecasts. The ACL on HTM securities was $ 0.1 million at both March 31, 2026 and December 31, 2025. The carrying value of securities at March 31, 2026 is shown below by their contractual maturity date. Actual maturities will differ because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Available-for-Sale (amounts in thousands) Amortized Cost Fair Value Within one year $ 1,985 $ 1,986 One to five years 27,911 27,430 Five to ten years 78,387 76,633 After ten years 48,708 47,701 156,991 153,750 Agency mortgage-backed securities - residential 422,344 402,078 Agency mortgage-backed securities - commercial 62,063 61,167 Private label mortgage-backed securities - residential 116,592 115,746 Asset-backed securities 39,403 39,294 Total $ 797,393 $ 772,035 9 Held-to-Maturity (amounts in thousands) Amortized Cost Fair Value Within one year $ 1,182 $ 1,172 One to five years 14,181 14,068 Five to ten years 12,794 11,696 After ten years 753 693 28,910 27,629 Agency mortgage-backed securities - residential 241,611 230,079 Agency mortgage-backed securities - commercial 5,616 4,708 Total $ 276,137 $ 262,416 No AFS securities were sold during the three months ended March 31, 2026 and March 31, 2025. As such, the Company did not realize any gains or losses related to the sale of AFS securities during either time period. Certain investments in debt securities are reported in the condensed consolidated financial statements at an amount less than their historical cost. The total fair value of these investments at March 31, 2026 and December 31, 2025 was $ 633.1 million and $ 611.2 million, which was approximately 60 % and 59 %, respectively, of the Company’s AFS and HTM securities portfolios. As of March 31, 2026, the Company’s security portfolio consisted of 623 positions, of which 412 were in an unrealized loss position. As of December 31, 2025, the Company’s security portfolio consisted of 618 positions, of which 395 were in an unrealized loss position. The unrealized losses are related to the categories noted below. U. S. Government-Sponsored Agencies, Municipal Securities and Corporate Securities The unrealized losses on the Company’s investments in securities issued by U.S. Government-sponsored agencies, municipal organizations and corporate entities were caused primarily by interest rate changes. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost basis of the investments. The Company does not intend to sell the investments, and it is not more likely than not that the Company will be required to sell the investments, before recovery of their amortized cost basis, which may be upon maturity. Agency Mortgage-Backed, Private Label Mortgage-Backed Securities and Asset-Backed Securities The unrealized losses on the Company’s investments in agency mortgage-backed, private label mortgage-backed securities and asset-backed securities were caused primarily by interest rate changes. The Company expects to recover the amortized cost basis over the terms of the securities. The Company does not intend to sell the investments, and it is not more likely than not that the Company will be required to sell the investments, before recovery of their amortized cost basis, which may be upon maturity. 10 The following tables show the securities portfolio’s gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2026 and December 31, 2025. March 31, 2026 Less Than 12 Months 12 Months or Longer Total (amounts in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Securities available-for-sale U.S. Government-sponsored agencies $ 3,885 $ ( 11 ) $ 22,200 $ ( 901 ) $ 26,085 $ ( 912 ) Municipal securities 13,492 ( 273 ) 27,837 ( 2,304 ) 41,329 ( 2,577 ) Agency mortgage-backed securities- residential 55,287 ( 540 ) 167,293 ( 20,914 ) 222,580 ( 21,454 ) Agency mortgage-backed securities- commercial 15,992 ( 137 ) 25,520 ( 848 ) 41,512 ( 985 ) Private label mortgage-backed securities - residential 82,283 ( 344 ) 6,265 ( 640 ) 88,548 ( 984 ) Asset-backed securities 24,006 ( 153 ) — — 24,006 ( 153 ) Corporate securities 7,705 ( 45 ) 14,384 ( 617 ) 22,089 ( 662 ) Total $ 202,650 $ ( 1,503 ) $ 263,499 $ ( 26,224 ) $ 466,149 $ ( 27,727 ) December 31, 2025 Less Than 12 Months 12 Months or Longer Total (amounts in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Securities available-for-sale U.S. Government-sponsored agencies $ 3,600 $ ( 20 ) $ 33,849 $ ( 994 ) $ 37,449 $ ( 1,014 ) Municipal securities 2,301 — 42,515 ( 1,408 ) 44,816 ( 1,408 ) Agency mortgage-backed securities - residential 67,177 ( 190 ) 186,453 ( 20,912 ) 253,630 ( 21,102 ) Agency mortgage-backed securities - commercial 2,981 ( 22 ) 25,915 ( 815 ) 28,896 ( 837 ) Private label mortgage-backed securities - residential 75,924 ( 191 ) 6,533 ( 634 ) 82,457 ( 825 ) Asset-backed securities 21,413 ( 39 ) — — 21,413 ( 39 ) Corporate securities 3,698 ( 52 ) 14,322 ( 678 ) 18,020 ( 730 ) Total $ 177,094 $ ( 514 ) $ 309,587 $ ( 25,441 ) $ 486,681 $ ( 25,955 ) 11 The following tables summarize ratings for the Company’s HTM portfolio as of March 31, 2026 and December 31, 2025. March 31, 2026 Held-to-Maturity (amounts in thousands) Municipal Securities Mortgage-Backed Securities - Residential Mortgage-Backed Securities - Commercial Corporate Securities Total AAA equivalent - agency $ — $ 241,611 $ 5,616 $ — $ 247,227 Aa1/AA+ 6,411 — — — 6,411 Aa2/AA 2,170 — — — 2,170 Aa3/AA- 1,793 — — — 1,793 A3/A- — — — 5,000 5,000 Baa1/BBB+ — — — 7,000 7,000 Baa3/BBB- — — — 4,536 4,536 Not Rated 1 — — — 2,000 2,000 Total $ 10,374 $ 241,611 $ 5,616 $ 18,536 $ 276,137 1 This security previously had a BBB rating, but the issuer was acquired during the first quarter 2026. The acquiring company did not have any outstanding subordinated debt issuances prior to the acquisition and, therefore, did not have a rating at the time of acquisition. December 31, 2025 Held-to-Maturity (amounts in thousands) Municipal Securities Mortgage-Backed Securities - Residential Mortgage-Backed Securities - Commercial Corporate Securities Total AAA equivalent - agency $ — $ 213,530 $ 5,635 $ — $ 219,165 Aa1/AA+ 7,046 — — — 7,046 Aa2/AA 2,170 — — — 2,170 Aa3/AA- 1,793 — — — 1,793 A3/A- — — — 5,000 5,000 Baa1/BBB+ — — — 5,000 5,000 Baa2/BBB — — — 4,000 4,000 Baa3/BBB- — — — 4,536 4,536 Ba1/BB+ — — — 2,000 2,000 Total $ 11,009 $ 213,530 $ 5,635 $ 20,536 $ 250,710 Equity Investments Equity investments, largely comprised of non-marketable equity investments, are generally accounted for under equity security accounting and are included within accrued income and other assets on the consolidated balance sheet. The Company’s non-marketable equity investments consist of limited partner interests in venture capital and Small Business Investment Company (“SBIC”) funds. After the initial commitment and over the course of the investment period, the Company will make capital contributions and receive a proportional share of profit and return of capital distributions as a result of fund performance until the funds wind down. While the partnership agreements allow the Company to remove the general partner, this right is not considered to be substantive as the general partner can only be removed for cause. All of these investments are generally non-redeemable and distributions are generally expected to be received through the liquidation of the underlying investments throughout the life of the investment fund. Investments may only be sold or transferred subject to the notice and approval provisions of the underlying investment agreements. 12 The following tables provide additional information related to equity investments accounted for under equity security accounting. The carrying amount of each equity investment with a readily determinable fair value or net asset value at March 31, 2026 and December 31, 2025 is reflected in the following table: (amounts in thousands) March 31, 2026 December 31, 2025 GenOpp Financial Fund LP $ 2,998 $ 2,876 Total $ 2,998 $ 2,876 The carrying amount of the Company’s investments in non-marketable equity securities with no readily determinable fair value and amounts recognized in earnings on a cumulative basis at March 31, 2026 and December 31, 2025 is reflected in the following table: (amounts in thousands) March 31, 2026 December 31, 2025 Carrying value 1 $ 38,023 $ 38,611 Carrying value adjustments — — Impairment — — Upward changes for observable prices — — Downward changes for observable prices — — Net change $ 38,023 $ 38,611 1 Excludes $ 14.3 million and $ 14.6 million in unfunded commitments as of March 31, 2026 and December 31, 2025, respectively. Variable Interest Entities The above investments meet the criteria of a VIE. However, the Company is not the primary beneficiary of the entities as it does not have the power to direct the activities that most significantly impact the economic performance of the entities. The Company’s maximum exposure to loss from unconsolidated VIEs includes the value of the investment recorded on the Company’s consolidated balance sheets and unfunded commitment. The Company believes the potential for loss from these investments is remote, the maximum exposure for the affordable housing investment was determined by assuming a scenario where related tax credits were recaptured. The following table provides a summary of VIEs that the Company has not consolidated as March 31, 2026 and December 31, 2025: March 31, 2026 (amounts in thousands) Carrying Amount Maximum Exposure to Loss Liability Recognized Classification Private equity and venture capital funds $ 13,354 $ 19,332 $ — Other assets (1) Hedge funds 2,998 2,998 — Other assets (2) SBIC 7,292 13,000 — Other assets (3) Affordable housing 7,378 12,519 — Other assets (4) Non-marketable and other equity investments 10,000 10,000 — Other assets (5) 13 December 31, 2025 (amounts in thousands) Carrying Amount Maximum Exposure to Loss Liability Recognized Classification Private equity and venture capital funds $ 13,685 $ 20,208 $ — Other assets (6) Hedge funds 2,876 2,876 — Other assets (7) SBIC 7,292 13,000 — Other assets (8) Affordable housing 7,634 12,519 — Other assets (9) Non-marketable and other equity investments 10,000 10,000 — Other assets (10) (1) Maximum exposure to loss includes $ 13.4 million of current investments and $ 6.0 million in unfunded commitments. (2) Maximum exposure to loss includes $ 2.9 million of current investments. (3) Maximum exposure to loss includes $ 7.3 million of current investments and $ 5.7 million in unfunded commitments. (4) Maximum exposure to loss includes $ 7.4 million of current investments, $ 2.6 million in unfunded commitments and a scenario in which related tax credits of $ 2.5 million are recaptured, totaling $ 12.5 million. (5) Maximum exposure to loss includes $ 10.0 million of current investments. (6) Maximum exposure to loss includes $ 13.7 million of current investments and $ 6.0 million in unfunded commitments. (7) Maximum exposure to loss includes $ 2.9 million of current investments. (8) Maximum exposure to loss includes $ 7.3 million of current investments and $ 5.7 million in unfunded commitments. (9) Maximum exposure to loss includes $ 7.6 million of current investments, $ 2.6 million in unfunded commitments and a scenario in which related tax credits of $ 2.5 million are recaptured, totaling $ 12.5 million. (10) Maximum exposure to loss includes $ 10.0 million of current investments. 14 Note 4: Loans Loan balances as of March 31, 2026 and December 31, 2025 are summarized in the table below. Categories of loans include: (amounts in thousands) March 31, 2026 December 31, 2025 Commercial loans Commercial and industrial $ 225,425 $ 221,714 Owner-occupied commercial real estate 48,136 48,575 Investor commercial real estate 598,933 647,394 Construction 449,888 372,668 Single tenant lease financing 254,044 222,925 Public finance 441,734 442,234 Healthcare finance 131,161 139,469 Small business lending 1 433,964 430,024 Franchise finance 389,249 417,045 Total commercial loans 2,972,534 2,942,048 Consumer loans Residential mortgage 338,058 343,110 Home equity 14,219 14,725 Other consumer loans 431,338 425,458 Total consumer loans 783,615 783,293 Total commercial and consumer loans 3,756,149 3,725,341 Net deferred loan origination costs, premiums and discounts on purchased loans, and other 2 19,721 21,387 Total loans 3,775,870 3,746,728 Allowance for credit losses ( 56,496 ) ( 55,686 ) Net loans $ 3,719,374 $ 3,691,042 1 Balances include $ 59.5 million and $ 52.2 million that are guaranteed by the U.S. government as of March 31, 2026 and December 31, 2025, respectively. 2 Includes carrying value adjustment of $ 18.1 million and $ 19.1 million related to terminated interest rate swaps associated with public finance loans as of March 31, 2026 and December 31, 2025, respectively. The general risk characteristics specific to each loan portfolio segment are as follows: Commercial and Industrial: Commercial and industrial loans’ sources of repayment are primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected, and the collateral securing these loans may fluctuate in value. Loans are made for working capital, equipment purchases, or other purposes. Most commercial and industrial loans are secured by the assets being financed and may incorporate a personal guarantee. This portfolio segment is generally concentrated in the Midwest and Southwest regions of the United States. Owner-Occupied Commercial Real Estate: The primary source of repayment is the cash flow from the ongoing operations and activities conducted by the borrower, or an affiliate of the borrower, who owns the property. This portfolio segment is generally concentrated in the Midwest and Southwest regions of the United States and its loans are often secured by manufacturing and service facilities. 15 Investor Commercial Real Estate: These loans are made on a nationwide basis and are underwritten primarily based on the cash flow expected to be generated from the property and are secondarily supported by the value of the real estate. These loans typically incorporate a personal guarantee from the primary sponsor or sponsors. This portfolio segment generally involves larger loan amounts with repayment primarily dependent on the successful leasing and operation of the property securing the loan or the business conducted on the property securing the loan. Investor commercial real estate loans may be more adversely affected by changing economic conditions in the real estate markets, industry dynamics or the overall health of the local economy where the property is located. The properties securing the Company’s investor commercial real estate portfolio tend to be diverse in terms of property type. Management monitors and evaluates commercial real estate loans based on property financial performance, collateral value, guarantor strength, economic and industry conditions together with other risk grade criteria. As a general rule, the Company avoids financing special use projects unless other underwriting factors are present to mitigate these additional risks. Construction: Construction loans are made on a nationwide basis and are secured by land and related improvements and are made to assist in the construction of new structures, which may include commercial (retail, industrial, office, and multi-family) properties, land development for residential properties or single family residential properties offered for sale by the builder. These loans generally finance a variety of project costs, including land, site preparation, architectural services, construction, closing and soft costs and interim financing needs. The cash flows of builders, while initially predictable, may fluctuate with market conditions, and the value of the collateral securing these loans may be subject to fluctuations based on general economic changes. Single Tenant Lease Financing: These loans are made on a nationwide basis to owners of real estate subject to long-term lease arrangements with single tenant operators. The real estate is typically operated by regionally, nationally or globally branded businesses. The loans are underwritten based on the financial strength of the borrower, characteristics of the real estate, cash flows generated from the lease arrangements and the financial strength of the tenant. Similar to the other loan portfolio segments, management monitors and evaluates these loans based on borrower and tenant financial performance, collateral value, industry trends and other risk grade criteria. Public Finance: These loans are made on a nationwide basis to governmental and not-for-profit entities to provide both tax-exempt and taxable loans for a variety of purposes including: short-term cash-flow needs; debt refinancing; economic development; quality of life projects; infrastructure improvements; renewable energy projects; and equipment financing. The primary sources of repayment for public finance loans include pledged revenue sources including but not limited to: general obligations; property taxes; income taxes; tax increment revenue; utility revenue; gaming revenues; sales tax; and pledged general revenue. Certain loans may also include an additional collateral pledge of mortgaged property or a security interest in financed equipment. Healthcare Finance: These loans are made on a nationwide basis to healthcare providers, primarily dentists, for practice acquisition financing or refinancing that occasionally includes owner-occupied commercial real estate and equipment purchases. The sources of repayment are primarily based on the identified cash flows from operations of the borrower and related entities and secondarily on the underlying collateral provided by the borrower. Small Business Lending: These loans are made on a nationwide basis to small businesses and generally carry a partial guaranty from the U.S. Small Business Administration (“SBA”) under its 7(a) loan program. We generally sell the government guaranteed portion of SBA loans into the secondary market while retaining the non-guaranteed portion of the loan and the servicing rights. Loans in the small business lending portfolio have sources of repayment that are primarily based on the identified cash flows of the borrower and secondarily on any underlying collateral provided by the borrower. Loans may, but do not always, have a collateral shortfall. For SBA loans where the guaranteed portion is retained, the SBA guaranty provides a tertiary source of repayment to the Bank in the event of borrower default. Cash flows of borrowers, however, may not be as expected and collateral securing these loans may fluctuate in value. Loans are made for a broad array of purposes including, but not limited to, providing operating cash flow, funding ownership changes, and facilitating equipment and commercial real estate purchases. Franchise Finance: These loans are made on a nationwide basis with financing options for new franchise units, recapitalization, expansion, equipment and working capital. The sources of repayment are either based on identified cash flows from existing operations of the borrower or pro forma cash flow for new franchise locations. Residential Mortgage: With respect to residential loans that are secured by 1-to-4 family residences and are generally owner occupied, the Company typically establishes a maximum loan-to-value ratio and requires private mortgage 16 insurance if that ratio is exceeded. Repayment of these loans is primarily dependent on the financial circumstances of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment can also be impacted by changes in residential property values. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers in geographically diverse locations throughout the country. Home Equity: Home equity loans and lines of credit are typically secured by a subordinate interest in 1-to-4 family residences. Repayment of these loans and lines of credit is primarily dependent on the financial circumstances of the borrowers and may be impacted by changes in unemployment levels and property values on residential properties, among other economic conditions in the market. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers in geographically diverse locations throughout the country. Other Consumer: These loans primarily consist of consumer loans and credit cards. Consumer loans may be secured by consumer assets such as horse trailers or recreational vehicles. Some consumer loans are unsecured, such as small installment loans, home improvement loans and certain lines of credit. Repayment of consumer loans is primarily dependent upon the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers in geographically diverse locations throughout the country. ACL Methodology The ACL for loans represents management's estimate of all expected credit losses over the expected life of the Company’s existing loan portfolio. Management estimates the ACL balance using relevant available information about the collectability of cash flows, from internal and external sources, including historical information relating to past events, current conditions, and reasonable and supportable forecasts of future economic conditions. When the Company is unable to forecast future economic events, management may revert to historical information. The Company's methodologies incorporate a one-year reasonable and supportable forecast period with a one-year straight line reversion to the long-term historical average for most segments. The ACL methodology may also consider other adjustments to address changes in conditions, trends, and circumstances such as local industry changes that could have a significant impact on the risk profile of the loan portfolio and provide for adjustments that may not be reflected and/or captured in the historical loss data. These factors include: lending policies, imprecision in forecasting future economic conditions, loan profile, lending staff, problem loan trends, loan review, collateral, credit concentration, or other internal and external factors. The Company includes these as qualitative adjustments to the ACL which include, but are not limited to: • Changes in lending policies and procedures, including changes in underwriting standards and collections, charge-offs and recovery practices • Changes in international, national, regional and local economic conditions • Changes in the nature and volume of the portfolio and terms of loans • Changes in the experience, depth and ability of lending management • Changes in the volume and severity of past due loans and other similar conditions • Changes in the quality of the Company’s loan review system • Changes in the value of underlying collateral for collateral dependent loans • The existence and effect of any concentrations of credit and changes in the levels of such concentrations • The effect of other external factors (e.g. competition, legal and regulatory requirements) on the level of estimated credit losses The ACL is measured on a collective or pool basis when similar risk characteristics exist. The Company segments its portfolio generally by Federal Financial Institutions Examination Council ("FFIEC") Call Report codes that align with its lines of business. Additional sub-segmentation has not been utilized to identify groups of loans with unique risk characteristics relative to the rest of the portfolio. Loans that do not share similar risk characteristics are evaluated on an individual basis. These evaluations are typically performed on loans with a deteriorated internal risk rating. The ACL is determined based on several methods, including estimating the fair value of the underlying collateral or the present value of expected cash flows. Modified Loans to Borrowers Experiencing Financial Difficulty 17 The Company may make modifications to certain loans in order to alleviate temporary difficulties in the borrower’s financial condition and/or constraints on the borrower’s ability to repay the loan, and to minimize potential losses to the Company. Modifications may include changes in the amortization terms of the loan, other-than-insignificant payment delays, reductions in interest rates, acceptance of interest only payments, and/or reductions to the outstanding loan balance. Such loans may be placed on nonaccrual status when there is doubt concerning the full repayment of principal and interest or the loan has been delinquent for a period of 90 days or more. These loans may be returned to accrual status when all contractual amounts past due have been brought current, and the borrower’s performance under the modified terms of the loan agreement and the ultimate collectability of all contractual amounts due under the modified terms is no longer in doubt. The Company typically measures the ACL on modified loans to borrowers experiencing financial difficulty on an individual basis when the loans are deemed to no longer share risk characteristics that are similar with other loans in the portfolio. The calculation of the ACL for these loans is based on a discounted cash flow approach for both those measured collectively and individually, unless the loan is deemed collateral dependent, which requires measurement of the ACL based on the estimated expected fair value of the underlying collateral, less costs to sell. GAAP requires the Company to make certain disclosures related to these loans, including certain types of modifications, as well as how such loans have performed since their modifications. Provision for Credit Losses A provision for estimated losses on loans is charged to income based upon management’s evaluation of the potential losses. Such an evaluation, which includes a review of all loans for which full repayment may not be reasonably assured, considers, among other matters, the estimated net realizable value of the underlying collateral, as applicable, economic conditions, loan loss experience, and other factors that are particularly susceptible to changes that could result in a material adjustment in the near term. While management attempts to use the best information available in making its evaluations, future ACL adjustments may be necessary if conditions change substantially from the assumptions used in making the evaluations. Policy for Charging Off Loans The Company’s policy is to charge off a loan at any point in time when it no longer can be considered a bankable asset, meaning collectible within the parameters of policy. Commercial loans are generally charged off when management determines they are uncollectible. Consumer loans are generally charged off when they reach a specified level of delinquency, unless they are well secured and in the process of collection. 18 The following tables present changes in the balance of the ACL during the three months ended March 31, 2026 and 2025. (amounts in thousands) Three Months Ended March 31, 2026 Allowance for credit losses: Balance, Beginning of Period Provision (Credit) Charged to Expense Charge-Offs Recoveries Balance, End of Period Commercial and industrial $ 1,942 $ 152 $ ( 202 ) $ 11 $ 1,903 Owner-occupied commercial real estate 264 ( 8 ) — — 256 Investor commercial real estate 2,255 127 — — 2,382 Construction 2,446 290 — — 2,736 Single tenant lease financing 816 191 — — 1,007 Public finance 411 ( 17 ) — — 394 Healthcare finance 605 ( 199 ) ( 38 ) — 368 Small business lending 27,796 7,119 ( 9,400 ) 360 25,875 Franchise finance 14,028 8,513 ( 6,047 ) 64 16,558 Residential mortgage 2,142 107 ( 80 ) — 2,169 Home equity 38 ( 4 ) — 1 35 Other consumer loans 2,943 335 ( 573 ) 108 2,813 Total $ 55,686 $ 16,606 $ ( 16,340 ) $ 544 $ 56,496 (amounts in thousands) Three Months Ended March 31, 2025 Allowance for credit losses: Balance, Beginning of Period Provision (Credit) Charged to Expense Charge-Offs Recoveries Balance, End of Period Commercial and industrial $ 1,265 $ 93 $ — $ 2 $ 1,360 Owner-occupied commercial real estate 528 ( 58 ) — — 470 Investor commercial real estate 1,149 ( 290 ) — — 859 Construction 1,984 183 — — 2,167 Single tenant lease financing 4,782 ( 469 ) — — 4,313 Public finance 703 ( 174 ) — — 529 Healthcare finance 1,412 ( 102 ) — — 1,310 Small business lending 16,161 4,929 ( 3,668 ) 133 17,555 Franchise finance 8,976 8,072 ( 5,848 ) — 11,200 Residential mortgage 2,136 ( 241 ) ( 11 ) 6 1,890 Home equity 106 ( 12 ) — 2 96 Other consumer loans 5,567 190 ( 314 ) 46 5,489 Total $ 44,769 $ 12,121 $ ( 9,841 ) $ 189 $ 47,238 Accrued interest receivable on loans totaled $ 23.1 million at both March 31, 2026 and December 31, 2025 and is excluded from the estimate of credit losses. The Company made the accounting policy election to not measure an ACL for accrued interest receivable. Accrued interest deemed uncollectible will be written off through interest income. In addition to the ACL, the Company maintains a reserve for off-balance sheet commitments, classified in other liabilities. This reserve is at a level management believes to be sufficient to absorb losses arising from unfunded loan commitments. The adequacy of the reserve for unfunded commitments is determined quarterly based on methodology similar to the methodology for determining the ACL. The following tables detail activity in the (benefit) provision for credit losses on off-balance sheet commitments for the three months ended March 31, 2026 and 2025. 19 (amounts in thousands) Balance December 31, 2025 (Benefit) Provision for Credit Losses Balance March 31, 2026 Off-balance sheet commitments Commercial loans Commercial and industrial $ 177 $ 9 $ 186 Investor commercial real estate 36 20 56 Construction 2,259 ( 284 ) 1,975 Single tenant lease financing 1 2 3 Small business lending 112 ( 42 ) 70 Total commercial loans 2,585 ( 295 ) 2,290 Total allowance for off-balance sheet commitments $ 2,585 $ ( 295 ) $ 2,290 (amounts in thousands) Balance December 31, 2024 (Benefit) Provision for Credit Losses Balance March 31, 2025 Off-balance sheet commitments Commercial loans Commercial and industrial $ 233 $ ( 63 ) $ 170 Owner-occupied commercial real estate 11 ( 11 ) — Investor commercial real estate 1 — 1 Construction 1,568 ( 94 ) 1,474 Single tenant lease financing 19 ( 7 ) 12 Small business lending 263 11 274 Total commercial loans 2,095 ( 164 ) 1,931 Consumer loans Residential mortgage 1 — 1 Home equity 35 ( 3 ) 32 Other consumer loans 9 ( 1 ) 8 Total consumer loans 45 ( 4 ) 41 Total allowance for off-balance sheet commitments $ 2,140 $ ( 168 ) $ 1,972 20 The Company utilizes a risk grading matrix to assign a risk grade to each of its commercial loans, which are evaluated annually. A description of the general characteristics of the risk grades is as follows: • “Pass” - Higher quality loans that do not fit any of the other categories described below. • “Special Mention” - Loans that possess some potential credit deficiency or weakness, which deserve close attention. • “Substandard” - Loans that possess a defined weakness or weaknesses that jeopardize the liquidation of the debt. Loans characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. • “Doubtful” - Such loans have been placed on nonaccrual status and may be heavily dependent upon collateral possessing a value that is difficult to determine or based upon some near-term event that lacks clear certainty. These loans have all of the weaknesses of those classified as Substandard; however, based on existing conditions, these weaknesses make full collection of the principal balance highly improbable. The Company does not risk grade its consumer loans. It classifies them as either performing or nonperforming. Below is a description of those classifications: • “Performing” - Loans that are accruing and full collection of principal and interest is expected. • “Nonperforming” - Loans that are 90 days delinquent or for which the full collection of principal and interest may be in doubt. 21 The following tables present the credit risk profile of the Company’s commercial and consumer loan portfolios by loan class and by year of origination for the years indicated based on rating category and payment activity as of March 31, 2026 and December 31, 2025. March 31, 2026 Term Loans (amortized cost basis by origination year) Revolving loans amortized cost basis Revolving loans converted to term (amounts in thousands) 2026 2025 2024 2023 2022 Prior Total Commercial and industrial Pass $ 20,282 $ 87,930 $ 16,341 $ 6,683 $ 10,155 $ 14,389 $ 54,659 $ — $ 210,439 Special Mention — 157 58 — 581 4,239 9,671 — 14,706 Substandard — 90 52 138 — — — — 280 Doubtful — — — — — — — — — Total commercial and industrial 20,282 88,177 16,451 6,821 10,736 18,628 64,330 — 225,425 Year-to-date gross charge-offs — 189 13 — — — — — 202 Owner-occupied commercial real estate Pass 192 4,114 6,135 1,411 5,127 20,860 — — 37,839 Special Mention — — — — — 8,650 — — 8,650 Substandard — — — — — 1,647 — — 1,647 Doubtful — — — — — — — — — Total owner-occupied commercial real estate 192 4,114 6,135 1,411 5,127 31,157 — — 48,136 Year-to-date gross charge-offs — — — — — — — — — Investor commercial real estate Pass 32,043 61,471 28,713 198,472 175,145 99,358 — — 595,202 Special Mention — — — — — 3,731 — — 3,731 Substandard — — — — — — — — — Doubtful — — — — — — — — — Total investor commercial real estate 32,043 61,471 28,713 198,472 175,145 103,089 — — 598,933 Year-to-date gross charge-offs — — — — — — — — — Construction Pass 26,913 85,845 173,328 137,076 23,422 1,911 1,393 — 449,888 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful — — — — — — — — — Total construction 26,913 85,845 173,328 137,076 23,422 1,911 1,393 — 449,888 Year-to-date gross charge-offs — — — — — — — — — Single tenant lease financing Pass 46,416 144,301 1,638 1,003 10,315 23,473 — — 227,146 Special Mention — — — — 18,537 6,696 — — 25,233 Substandard — — — — — 1,665 — — 1,665 Doubtful — — — — — — — — — Total single tenant lease financing 46,416 144,301 1,638 1,003 28,852 31,834 — — 254,044 Year-to-date gross charge-offs — — — — — — — — — Public finance Pass 22,733 38,306 7,845 — 5,106 365,834 — — 439,824 Special Mention — — — — — 1,910 — — 1,910 Substandard — — — — — — — — — Doubtful — — — — — — — — — Total public finance 22,733 38,306 7,845 — 5,106 367,744 — — 441,734 Year-to-date gross charge-offs — — — — — — — — — 22 March 31, 2026 Term Loans (amortized cost basis by origination year) Revolving loans amortized cost basis Revolving loans converted to term (amounts in thousands) 2026 2025 2024 2023 2022 Prior Total Healthcare finance Pass — — — — — 128,837 — — 128,837 Special Mention — — — — — 887 — — 887 Substandard — — — — — 1,437 — — 1,437 Doubtful — — — — — — — — — Total healthcare finance — — — — — 131,161 — — 131,161 Year-to-date gross charge-offs — — — — — 38 — — 38 Small business lending Pass 15,926 151,558 97,039 55,854 20,335 20,360 28,642 — 389,714 Special Mention — 627 5,111 4,994 617 1,237 2,936 — 15,522 Substandard — 2,236 7,191 11,410 1,412 1,436 5,043 — 28,728 Doubtful — — — — — — — — — Total small business lending 15,926 154,421 109,341 72,258 22,364 23,033 36,621 — 433,964 Year-to-date gross charge-offs — 1,437 3,927 3,852 6 178 — — 9,400 Franchise finance Pass — 695 54,782 157,369 106,817 21,705 — — 341,368 Special Mention 100 501 944 10,152 9,405 3,428 — — 24,530 Substandard — — 1,281 6,957 8,813 4,232 — — 21,283 Doubtful — — — 1,068 600 400 — — 2,068 Total franchise finance 100 1,196 57,007 175,546 125,635 29,765 — — 389,249 Year-to-date gross charge-offs — — — 690 1,045 4,312 — — 6,047 Consumer loans Residential mortgage Performing — 4,730 6,216 10,827 161,647 149,855 — — 333,275 Nonperforming — — — — 2,713 2,070 — — 4,783 Total residential mortgage — 4,730 6,216 10,827 164,360 151,925 — — 338,058 Year-to-date gross charge-offs — — — — 76 4 — — 80 Home equity Performing — — — 598 875 793 10,564 1,389 14,219 Nonperforming — — — — — — — — — Total home equity — — — 598 875 793 10,564 1,389 14,219 Year-to-date gross charge-offs — — — — — — — — — Other consumer loans Performing 28,147 96,299 80,711 73,016 69,379 82,910 721 — 431,183 Nonperforming — 18 67 — 39 31 — — 155 Total other consumer loans 28,147 96,317 80,778 73,016 69,418 82,941 721 — 431,338 Year-to-date gross charge-offs 11 28 62 275 57 140 — — 573 Total Loans $ 192,752 $ 678,878 $ 487,452 $ 677,028 $ 631,040 $ 973,981 $ 113,629 $ 1,389 $ 3,756,149 Total year-to-date gross charge-offs $ 11 $ 1,654 $ 4,002 $ 4,817 $ 1,184 $ 4,672 $ — $ — $ 16,340 23 December 31, 2025 Term Loans (amortized cost basis by origination year) Revolving loans amortized cost basis Revolving loans converted to term (amounts in thousands) 2025 2024 2023 2022 2021 Prior Total Commercial and industrial Pass $ 91,592 $ 18,608 $ 6,984 $ 10,450 $ 530 $ 14,152 $ 60,071 $ — $ 202,387 Special Mention 177 256 — 4,746 4,237 — 9,671 — 19,087 Substandard 64 38 138 — — — — — 240 Doubtful — — — — — — — — — Total commercial and industrial 91,833 18,902 7,122 15,196 4,767 14,152 69,742 — 221,714 Year-to-date gross charge-offs 94 59 — — — — — — 153 Owner-occupied commercial real estate Pass 4,159 6,202 1,421 5,174 4,155 15,966 — — 37,077 Special Mention — — — — 852 8,991 — — 9,843 Substandard — — — — — 1,655 — — 1,655 Doubtful — — — — — — — — — Total owner-occupied commercial real estate 4,159 6,202 1,421 5,174 5,007 26,612 — — 48,575 Year-to-date gross charge-offs — — — — — — — — — Investor commercial real estate Pass 61,333 80,798 195,528 179,155 91,708 35,141 — — 643,663 Special Mention — — — — — 3,731 — — 3,731 Substandard — — — — — — — — — Doubtful — — — — — — — — — Total investor commercial real estate 61,333 80,798 195,528 179,155 91,708 38,872 — — 647,394 Year-to-date gross charge-offs — — — — — — — — — Construction Pass 65,190 147,941 132,835 23,114 — 2,042 1,546 — 372,668 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful — — — — — — — — — Total construction 65,190 147,941 132,835 23,114 — 2,042 1,546 — 372,668 Year-to-date gross charge-offs — — — — — — — — — Single tenant lease financing Pass 144,764 1,370 1,007 10,377 2,021 29,524 — — 189,063 Special Mention — — — 18,628 4,168 9,401 — — 32,197 Substandard — — — — — 1,665 — — 1,665 Doubtful — — — — — — — — — Total single tenant lease financing 144,764 1,370 1,007 29,005 6,189 40,590 — — 222,925 Year-to-date gross charge-offs — — — — — — — — — Public finance Pass 44,077 11,119 — 5,301 10,385 369,442 — — 440,324 Special Mention — — — — — 1,910 — — 1,910 Substandard — — — — — — — — — Doubtful — — — — — — — — — Total public finance 44,077 11,119 — 5,301 10,385 371,352 — — 442,234 Year-to-date gross charge-offs — — — — — — — — — 24 December 31, 2025 Term Loans (amortized cost basis by origination year) Revolving loans amortized cost basis Revolving loans converted to term (amounts in thousands) 2025 2024 2023 2022 2021 Prior Total Healthcare finance Pass — — — — 7,317 128,623 — — 135,940 Special Mention — — — — — 933 — — 933 Substandard — — — — — 2,596 — — 2,596 Doubtful — — — — — — — — — Total healthcare finance — — — — 7,317 132,152 — — 139,469 Year-to-date gross charge-offs — — — — — — — — — Small business lending Pass 152,566 103,270 62,754 21,651 7,851 13,779 27,048 — 388,919 Special Mention — 7,519 5,276 514 — 1,475 1,953 — 16,737 Substandard — 5,838 11,637 1,315 270 1,416 3,892 — 24,368 Doubtful — — — — — — — — — Total small business lending 152,566 116,627 79,667 23,480 8,121 16,670 32,893 — 430,024 Year-to-date gross charge-offs 400 16,668 17,755 2,821 1,087 919 — — 39,650 Franchise finance Pass 718 56,732 172,080 120,012 29,064 — — — 378,606 Special Mention 510 628 3,351 6,972 — — — — 11,461 Substandard — 1,281 6,831 10,877 7,989 — — — 26,978 Doubtful — — — — — — — — — Total franchise finance 1,228 58,641 182,262 137,861 37,053 — — — 417,045 Year-to-date gross charge-offs — 370 7,664 9,576 4,144 — — — 21,754 Consumer loans Residential mortgage Performing 4,770 6,271 10,901 163,760 78,631 73,883 — — 338,216 Nonperforming — — — 2,721 597 1,576 — — 4,894 Total residential mortgage 4,770 6,271 10,901 166,481 79,228 75,459 — — 343,110 Year-to-date gross charge-offs — — — 75 — — — — 75 Home equity Performing — — 628 1,009 187 761 11,330 810 14,725 Nonperforming — — — — — — — — — Total home equity — — 628 1,009 187 761 11,330 810 14,725 Year-to-date gross charge-offs — — — — — — — — — Other consumer loans Performing 98,688 85,148 77,999 72,978 26,284 63,224 903 — 425,224 Nonperforming — 96 84 9 34 11 — — 234 Total other consumer loans 98,688 85,244 78,083 72,987 26,318 63,235 903 — 425,458 Year-to-date gross charge-offs 79 279 491 189 31 388 — — 1,457 Total Loans $ 668,608 $ 533,115 $ 689,454 $ 658,763 $ 276,280 $ 781,897 $ 116,414 $ 810 $ 3,725,341 Total year-to-date gross charge-offs $ 573 $ 17,376 $ 25,910 $ 12,661 $ 5,262 $ 1,307 $ — $ — $ 63,089 25 The following tables present the Company’s loan portfolio delinquency, including nonperforming loans, as of March 31, 2026 and December 31, 2025. March 31, 2026 (amounts in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Commercial and industrial $ 407 $ 667 $ — $ 1,074 $ 224,351 $ 225,425 Owner-occupied commercial real estate — — — — 48,136 48,136 Investor commercial real estate — — — — 598,933 598,933 Construction — — — — 449,888 449,888 Single tenant lease financing — 2,652 — 2,652 251,392 254,044 Public finance — — — — 441,734 441,734 Healthcare finance — — — — 131,161 131,161 Small business lending 11,238 2,476 11,115 24,829 409,135 433,964 Franchise finance 3,724 9,254 28,328 41,306 347,943 389,249 Residential mortgage 99 2,498 4,463 7,060 330,998 338,058 Home equity — 236 — 236 13,983 14,219 Other consumer loans 205 121 92 418 430,920 431,338 Total $ 15,673 $ 17,904 $ 43,998 $ 77,575 $ 3,678,574 $ 3,756,149 December 31, 2025 (amounts in thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Commercial and industrial $ 515 $ 200 $ — $ 715 $ 220,999 $ 221,714 Owner-occupied commercial real estate — — — — 48,575 48,575 Investor commercial real estate — — — — 647,394 647,394 Construction — — — — 372,668 372,668 Single tenant lease financing — — — — 222,925 222,925 Public finance — — — — 442,234 442,234 Healthcare finance — — 1,150 1,150 138,319 139,469 Small business lending 20,325 4,277 9,445 34,047 395,977 430,024 Franchise finance 11,641 1,110 24,912 37,663 379,382 417,045 Residential mortgage — 3,079 4,622 7,701 335,409 343,110 Home equity — — — — 14,725 14,725 Other consumer loans 243 102 141 486 424,972 425,458 Total $ 32,724 $ 8,768 $ 40,270 $ 81,762 $ 3,643,579 $ 3,725,341 Loans are reclassified to a non-accruing status when, in management’s judgment, the collateral value and financial condition of the borrower do not justify accruing interest. At the time the accrual is discontinued, all unpaid accrued interest is reversed against earnings. Interest income accrued in prior years, if any, is charged to the allowance for credit losses. Payments subsequently received on nonaccrual loans are applied to principal. A loan is returned to accrual status when principal and interest are no longer past due and collectability is probable, typically after a minimum of nine consecutive months of performance. 26 The following table summarizes the Company’s nonaccrual loans and loans past due 90 days or more and still accruing by loan class for the periods indicated: March 31, 2026 December 31, 2025 (amounts in thousands) Nonaccrual Loans Nonaccrual Loans with No Allowance for Credit Losses Total Loans 90 Days or More Past Due and Accruing Nonaccrual Loans Nonaccrual Loans with No Allowance for Credit Losses Total Loans 90 Days or More Past Due and Accruing Commercial and industrial $ 261 $ 27 $ — $ 240 $ — $ — Single tenant lease financing 1,665 — — 1,665 — — Healthcare finance 1,437 1,437 — 2,596 2,596 — Small business lending 1 21,292 20,496 268 19,781 18,928 — Franchise finance 23,350 1,668 6,779 26,978 4,463 1,144 Residential mortgage 4,781 4,781 1,608 4,893 4,893 1,007 Other consumer loans 155 155 — 234 234 — Total loans $ 52,941 $ 28,564 $ 8,655 $ 56,387 $ 31,114 $ 2,151 1 Balance includes $ 15.5 million and $ 13.6 million at March 31, 2026 and December 31, 2025, respectively, of loans guaranteed by the U.S. government. Interest income recognized on nonaccrual loans was $ 0.1 million for both the three months ended March 31, 2026 and 2025. Determining fair value for collateral dependent loans requires obtaining a current independent appraisal of the collateral and applying a discount factor, which includes selling costs if applicable, to the value. The fair value of real estate is generally based on appraisals by qualified licensed appraisers. The appraisers typically determine the value of the real estate by utilizing an income or market valuation approach. If an appraisal is not available, the fair value may be determined by using a cash flow analysis. Fair value on other collateral such as business assets is typically ascertained by assessing, either singularly or some combination of, asset appraisals, accounts receivable aging reports, inventory listings and/or customer financial statements. The following tables present the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses as of March 31, 2026 and December 31, 2025. March 31, 2026 (amounts in thousands) Commercial Real Estate Residential Real Estate Other (Includes Equipment, Machinery and Other Assets) Total Allowance on Collateral Dependent Loans Small business lending 1 $ 6,591 $ — $ 6,707 $ 13,298 $ 377 Residential mortgage — 4,781 — 4,781 — Other consumer loans — — 155 155 — Total loans $ 6,591 $ 4,781 $ 6,862 $ 18,234 $ 377 1 Balance includes $ 8.3 million of loans guaranteed by the U.S. government. 27 December 31, 2025 (amounts in thousands) Commercial Real Estate Residential Real Estate Other (Includes Equipment, Machinery and Other Assets) Total Allowance on Collateral Dependent Loans Owner-occupied commercial real estate $ 1,654 $ — $ — $ 1,654 $ — Small business lending 1 6,732 — 7,681 14,413 411 Residential mortgage — 4,893 — 4,893 — Other consumer loans — — 234 234 — Total loans $ 8,386 $ 4,893 $ 7,915 $ 21,194 $ 411 1 Balance includes $ 8.5 million of loans guaranteed by the U.S. government. Loan Modifications to Borrowers Experiencing Financial Difficulty The Company may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty as a part of ongoing loss mitigation strategies. These modifications may include interest rate reductions, principal or interest forgiveness, other-than-insignificant payment delays, term extensions and other actions intended to minimize loss and to avoid foreclosure or repossession of collateral. The Company had one loan modification made to borrowers experiencing financial difficulty during the three months ended March 31, 2026. The Company had two loan modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2025. The following tables present loans that were both experiencing financial difficulty and modified during the three months ended March 31, 2026 and 2025. Three Months Ended March 31, 2026 (dollars in thousands) Payment Delay Total Modification by Loan Class % of Class of Loans Commercial and industrial $ 19 $ 19 0.01 % Total $ 19 $ 19 Three Months Ended March 31, 2025 (dollars in thousands) Payment Delay Total Modification by Loan Class % of Class of Loans Healthcare finance 2,658 2,658 1.60 % Total $ 2,658 $ 2,658 The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of loans that were modified within the twelve months ended March 31, 2026. Twelve Months Ended March 31, 2026 (amounts in thousands) Current 30 - 89 Days Past Due 90+ Days Past Due Commercial and industrial $ 52 $ 138 $ — Single tenant lease financing — 1,665 — Healthcare finance 130 — — Small business lending 2,783 — 19 Franchise finance 501 — — Total $ 3,466 $ 1,803 $ 19 There were no loans that were modified within the twelve months ended March 31, 2026 that subsequently defaulted during the period presented. 28 Other Real Estate Owned The Company had $ 1.9 million in other real estate owned (“OREO”) as of March 31, 2026, which consisted of two small business lending properties. The Company had $ 2.6 million in OREO as of December 31, 2025, which consisted of three small business lending properties. There were eight loans totaling $ 1.9 million and eight loans totaling $ 2.5 million, in the process of foreclosure at March 31, 2026 and December 31, 2025, respectively. 29 Note 5: Premises and Equipment The following table summarizes premises and equipment at March 31, 2026 and December 31, 2025. (amounts in thousands) March 31, 2026 December 31, 2025 Land $ 5,598 $ 5,598 Construction in process — 17 Right of use leased asset 62 88 Building and improvements 63,437 63,382 Furniture and equipment 23,079 22,818 Less: accumulated depreciation ( 25,170 ) ( 23,969 ) Total $ 67,006 $ 67,934 Note 6: Goodwill As of March 31, 2026 and December 31, 2025, the carrying amount of goodwill was $ 4.7 million. There have been no changes in the carrying amount of goodwill for the three months ended March 31, 2026 or March 31, 2025. Goodwill is assessed for impairment annually as of August 31, or more frequently if events occur or circumstances change that indicate an impairment may exist. When assessing goodwill for impairment, first, a qualitative assessment can be made to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its estimated carrying value. If the results of the qualitative assessment are not conclusive, a quantitative goodwill test is performed. Alternatively, a quantitative goodwill test can be performed without performing a qualitative assessment. Goodwill was assessed for impairment using a quantitative test performed as of August 31, 2025. The estimated fair value of the reporting unit exceeded the net carrying value, and therefore no goodwill impairment existed as of that date. However, there is a risk for impairment in the event of declines in general economic, market or business conditions and the resultant effect on forecasted growth rates, or any significant unfavorable change in the Company’s forecasted operations resulting from elevated levels of net charge-offs in the franchise finance and small business lending portfolios. If current and long-term projections decrease materially, the Company may be required to recognize impairment charges, which could be material to the results of operations. Note 7: Servicing Asset Activity for the servicing asset and the related changes in fair value for the three months ended March 31, 2026 and 2025 are shown in the table below. Three Months Ended (amounts in thousands) March 31, 2026 March 31, 2025 Balance, beginning of period $ 22,793 $ 16,389 Additions: Originated 1,881 2,237 Subtractions: Paydowns ( 1,562 ) ( 964 ) Changes in fair value due to changes in valuation inputs or assumptions used in the valuation model 502 ( 217 ) Loan servicing asset revaluation $ ( 1,060 ) $ ( 1,181 ) Balance, end of period $ 23,614 $ 17,445 30 Loans serviced for others are not included in the condensed consolidated balance sheets. The unpaid principal balances of these loans serviced for others as of March 31, 2026 and December 31, 2025 are shown in the table below. ​ (amounts in thousands) March 31, 2026 December 31, 2025 Loan portfolios serviced for: SBA guaranteed loans $ 1,169,534 $ 1,120,553 Single tenant lease financing 783,161 825,207 Total $ 1,952,695 $ 1,945,760 Loan servicing revenue totaled $ 2.9 million and $ 2.0 million for the three months ended March 31, 2026 and March 31, 2025, respectively. Loan servicing asset revaluation, which represents the change in fair value of the servicing asset, resulted in a $ 1.1 million and $ 1.2 million downward valuation for the three months ended March 31, 2026 and March 31, 2025, respectively. The fair value of servicing rights is highly sensitive to changes in underlying assumptions. Though fluctuations in prepayment speeds and changes in secondary market premiums generally have the most substantial impact on the fair value of servicing rights, other influencing factors include changing economic conditions, changes to the discount rate assumption and the weighted average life of the servicing portfolio. Measurement of fair value is limited to the conditions existing and the assumptions used as of a particular point in time; however, those assumptions may change over time. Refer to Note 11 - Fair Value of Financial Instruments for further details. Note 8: Subordinated Debt In June 2019, the Company issued $ 37.0 million aggregate principal amount of 6.0 % Fixed-to-Floating Rate Subordinated Notes due 2029 (the “2029 Notes”) in a public offering. The 2029 Notes bear interest at a floating rate equal to three-month Term SOFR plus 4.376 %. All interest on the 2029 Notes is payable quarterly. The 2029 Notes are scheduled to mature on June 30, 2029. The 2029 Notes are unsecured subordinated obligations of the Company and may be repaid at any time, without penalty. The 2029 Notes are intended to qualify as Tier 2 capital under regulatory guidelines. In October 2020, the Company entered into a term loan in the principal amount of $ 10.0 million, evidenced by a term note due 2030 (the “2030 Note”). The 2030 Note initially accrued interest at a fixed rate of 6.0 % per year to, but excluding, November 1, 2025 and thereafter at a floating rate equal to three-month Term SOFR plus 5.795 %. The 2030 Note is an unsecured subordinated obligation of the Company and may be repaid, without penalty, on any interest payment date on or after November 1, 2025. The 2030 Note is intended to qualify as Tier 2 capital under regulatory guidelines. The Company used the net proceeds from the issuance of the 2030 Note to redeem a subordinated term note that had been entered into in October 2015. In August 2021, the Company issued $ 60.0 million aggregate principal amount of 3.75 % Fixed-to-Floating Rate Subordinated Notes due 2031 (the “2031 Notes”) in a private placement. The 2031 Notes initially bear a fixed interest rate of 3.75 % per year to, but excluding, September 1, 2026, and thereafter at a floating rate equal to the then-current benchmark rate (initially three-month Term SOFR) plus 3.11 %. The 2031 Notes are scheduled to mature on September 1, 2031. The 2031 Notes are unsecured subordinated obligations of the Company and may be repaid, without penalty, on any interest payment date on or after September 1, 2026. The 2031 Notes are intended to qualify as Tier 2 capital under regulatory guidelines. The Company used a portion of the net proceeds from the issuance of the 2031 Notes to redeem subordinated notes issued by the Company in 2016. Pursuant to the terms of a Registration Rights Agreement between the Company and the initial purchasers of the 2031 Notes, the Company offered to exchange the 2031 Notes for subordinated notes that are registered under the Securities Act of 1933, as amended, and have substantially the same terms as the 2031 Notes. On December 30, 2021, we completed an exchange of $ 59.3 million principal amount of the unregistered 2031 Notes for registered 2031 Notes in satisfaction of our obligations under the registration rights agreement. Holders of $ 0.7 million of unregistered 2031 Notes did not participate in the exchange. 31 The following table presents the principal balance and unamortized discount and debt issuance costs for the 2029 Notes, the 2030 Note, and the 2031 Notes as of March 31, 2026 and December 31, 2025. March 31, 2026 December 31, 2025 (amounts in thousands) Principal Unamortized Discount and Debt Issuance Costs Principal Unamortized Discount and Debt Issuance Costs 2029 Notes $ 37,000 $ ( 506 ) $ 37,000 $ ( 546 ) 2030 Note 10,000 ( 107 ) 10,000 ( 114 ) 2031 Notes 60,000 ( 841 ) 60,000 ( 875 ) Total $ 107,000 $ ( 1,454 ) $ 107,000 $ ( 1,535 ) Note 9: Benefit Plans Employment Agreements The Company is party to certain employment agreements with each of its Chief Executive Officer, President and Chief Operating Officer, and Executive Vice President and Chief Financial Officer. The employment agreements each provide for annual base salaries and annual bonuses, if any, as determined from time to time by the Compensation Committee of our Board of Directors. The annual bonuses are to be determined with reference to the achievement of annual performance objectives established by the Compensation Committee. The agreements also provide that each of the Chief Executive Officer, President and Chief Operating Officer, and Executive Vice President and Chief Financial Officer, may be awarded additional compensation, benefits, or consideration as the Compensation Committee may determine. The agreements also provide for the continuation of salary and certain other benefits for a specified period of time upon termination of employment under certain circumstances, including resignation for “good reason,” termination by the Company without “cause” at any time or any termination of employment within twelve months following a “change in control,” along with other specific conditions. 2022 Equity Incentive Plan The First Internet Bancorp 2022 Equity Incentive Plan (the “2022 Plan”) was approved by our Board of Directors and ratified by our shareholders on May 16, 2022. The plan permits awards of incentive and non-statutory stock options, stock appreciation rights, restricted stock awards, stock unit awards, performance awards and other stock-based awards. All employees, consultants and advisors of the Company or any subsidiary, as well as all non-employee directors of the Company, are eligible to receive awards under the 2022 Plan. The 2022 Plan initially authorized the issuance of 400,000 new shares of the Company’s common stock plus all shares of common stock that remained available for future grants under the First Internet Bancorp 2013 Equity Incentive Plan (the “2013 Plan”). 32 Award Activity Under 2022 Plan The Company recorded $ 0.6 million and less than $ 0.1 million o f share-based compensation expense for the three months ended March 31, 2026, and March 31, 2025, respectively, related to stock-based awards under the 2022 Plan. The following table summarizes the stock-based award activity under the 2022 Plan for the three months ended March 31, 2026. (dollars in thousands, except per share data) Restricted Stock Units Weighted-Average Grant Date Fair Value Per Share Restricted Stock Awards Weighted-Average Grant Date Fair Value Per Share Deferred Stock Units Weighted-Average Grant Date Fair Value Per Share Unvested at December 31, 2025 157,504 $ 27.97 16,009 $ 24.72 — $ — Granted 98,177 21.30 — — — — Vested ( 39,417 ) 27.28 — — — — Unvested at March 31, 2026 216,264 $ 25.07 16,009 $ 24.72 — $ — At March 31, 2026, the total unrecognized compensation cost related to unvested stock-based awards under the 2022 Plan was $ 3.6 million with a weighted-average expense recognition period of 2.2 years. 2013 Equity Incentive Plan The 2013 Plan authorized the issuance of 750,000 shares of the Company’s common stock in the form of stock-based awards to employees, directors, and other eligible persons. No awards under the 2013 Plan remain outstanding and our authority to grant new awards under the 2013 Plan terminated upon shareholder approval of the 2022 Plan. Award Activity Under 2013 Plan The Company recorded no share-based compensation expense for the three months ended March 31, 2026 , and less than $ 0.1 million of share-based compensation expense for the three months ended March 31, 2025, related to stock-based awards under the 2013 Plan . At March 31, 2026, there were no unrecognized compensation costs related to unvested stock-based awards under the 2013 Plan. Directors Deferred Stock Plan Until January 2014, the Company had a practice of granting awards under a stock compensation plan for members of the Board of Directors (“Directors Deferred Stock Plan”). The Company reserved 180,000 shares of common stock that could have been issued pursuant to the Directors Deferred Stock Plan. The plan provided directors the option to elect to receive up to 100 % of their annual retainer in either common stock or deferred stock rights. Deferred stock rights were to be settled in common stock following the end of the deferral period payable on the basis of one share of common stock for each deferred stock right. The following table summarizes the status of deferred stock rights related to the Directors Deferred Stock Plan for the three months ended March 31, 2026. Deferred Stock Rights Outstanding, beginning of period 29,013 Granted 85 Outstanding, end of period 29,098 All deferred stock rights granted during the 2026 period were additional rights issued in lieu of cash dividends payable on outstanding deferred stock rights. 33 Note 10: Commitments and Credit Risk In the normal course of business, the Company makes various commitments to extend credit which are not reflected in the accompanying condensed consolidated financial statements. At March 31, 2026 and December 31, 2025, the Company had outstanding loan commitments totaling approximately $ 610.6 million and $ 617.6 million, respectively. Note 11: Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurement , defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 also specifies a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying condensed consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. Available-for-Sale Securities Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. The Company did not own any securities classified within Level 1 of the hierarchy as of March 31, 2026 and December 31, 2025. Level 2 securities include U.S. Government-sponsored agencies, municipal securities, mortgage and asset-backed securities and corporate securities. Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair values are calculated using discounted cash flows. Discounted cash flows are calculated based off of the anticipated future cash flows updated to incorporate loss severities. Rating agency and industry research reports as well as default and deferral activity are reviewed and incorporated into the calculation. The Company did not own any securities classified within Level 3 of the hierarchy as of March 31, 2026 or December 31, 2025. Servicing Asset Fair value is based on a loan-by-loan basis taking into consideration the origination to maturity dates of the loans, the current age of the loans and the remaining term to maturity. The valuation methodology utilized for the servicing asset begins with generating estimated future cash flows for each servicing asset based on their unique characteristics and market-based assumptions for prepayment speeds and costs to service. The present value of the future cash flows is then calculated utilizing market-based discount rate assumptions (Level 3). Interest Rate Swap Agreements Back-to-Back The Company offers interest rate swaps to certain loan customers to allow them to hedge the risk of rising interest rates on their variable rate loans. The Company originates a variable rate loan and enters into a variable-to-fixed interest rate contract with the customer. The Company also enters into an offsetting interest rate swap with a correspondent bank. These back-to-back swap agreements are intended to offset each other and allow the Company 34 to originate a variable rate loan, while providing a contract for fixed interest payments for the customer. The net cash flow for the Company is equal to the interest income received from a variable rate loan originated with the customer. The fair value of these derivatives is based on a discounted cash flow approach. The fair value assets and liabilities of centrally clear interest rate swaps are net of variation margin settled-to-market (Level 2). The following tables present the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at March 31, 2026 and December 31, 2025. March 31, 2026 Fair Value Measurements Using (amounts in thousands) Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) U.S. Government-sponsored agencies $ 59,150 $ — $ 59,150 $ — Municipal securities 57,105 — 57,105 — Agency mortgage-backed securities - residential 402,078 — 402,078 — Agency mortgage-backed securities - commercial 61,167 — 61,167 — Private label mortgage-backed securities - residential 115,746 — 115,746 — Asset-backed securities 39,294 — 39,294 — Corporate securities 37,495 — 37,495 — Total available-for-sale securities $ 772,035 $ — $ 772,035 $ — Servicing asset 23,614 — — 23,614 Interest rate swap agreements - assets (back-to-back) 115 — 115 — Interest rate swap agreements - liabilities (back-to-back) ( 115 ) — ( 115 ) — December 31, 2025 Fair Value Measurements Using (amounts in thousands) Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) U.S. Government-sponsored agencies $ 63,764 $ — $ 63,764 $ — Municipal securities 63,386 — 63,386 — Agency mortgage-backed securities - residential 389,457 — 389,457 — Agency mortgage-backed securities - commercial 58,477 — 58,477 — Private label mortgage-backed securities - residential 123,673 — 123,673 — Asset-backed securities 42,553 — 42,553 — Corporate securities 37,377 — 37,377 — Total available-for-sale securities $ 778,687 $ — $ 778,687 $ — Servicing asset 22,793 — — 22,793 Interest rate swap agreements - assets (back-to-back) 210 — 210 — Interest rate swap agreements - liabilities (back-to-back) ( 210 ) — ( 210 ) — 35 The following tables reconcile the beginning and ending balances of recurring fair value measurements recognized in the accompanying condensed consolidated balance sheets using significant unobservable (Level 3) inputs for the three months ended March 31, 2026 and 2025. (amounts in thousands) Servicing Asset Balance as of January 1, 2026 $ 22,793 Total realized gains Additions 1,881 Paydowns ( 1,562 ) Change in fair value 502 Balance as of March 31, 2026 $ 23,614 Balance as of January 1, 2025 $ 16,389 Total realized gains Additions 2,237 Paydowns ( 964 ) Change in fair value ( 217 ) Balance as of March 31, 2025 $ 17,445 The following describes the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis, as well as the general classification of such assets pursuant to the valuation hierarchy. Individually Analyzed Collateral Dependent Loans Loans for which it is probable that the Company will not collect all principal and interest due according to contractual terms are measured for impairment. The amount of impairment may be determined based on the fair value of the underlying collateral, less costs to sell, the estimated present value of future cash flows, or the loan’s observable market price. If the individually evaluated loan is identified as collateral dependent, the fair value of the underlying collateral, less costs to sell, is used to measure impairment. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor to the value. If the individually evaluated loan is not collateral dependent, the Company utilizes a discounted cash flow analysis to measure impairment. Individually evaluated loans with a specific valuation allowance based on the value of the underlying collateral or a discounted cash flow analysis are classified as Level 3 assets. The following table presents the fair value measurements of assets and liabilities recognized in the accompanying condensed consolidated balance sheets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurement falls at March 31, 2026 and December 31, 2025. March 31, 2026 (amounts in thousands) Fair Value Measurements Using Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Collateral dependent loans $ 282 $ — $ — $ 282 Other real estate owned 1,945 — — 1,945 36 December 31, 2025 (amounts in thousands) Fair Value Measurements Using Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Collateral dependent loans $ 336 $ — $ — $ 336 Other real estate owned 2,631 — — 2,631 Significant Unobservable (Level 3) Inputs The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements. (dollars in thousands) Fair Value at March 31, 2026 Valuation Technique Significant Unobservable Inputs Range Weighted-Average Range Collateral dependent loans $ 282 Fair value of collateral Discount for type of property and current market conditions 0 % - 40 % 30.8 % Servicing asset 23,614 Discounted cash flow Prepayment speeds Discount rate 0 % - 25 % 13 % - 14 % 12.1 % 13.0 % Other real estate owned 1,945 Fair value of collateral Discount to reflect current market conditions 30 % - 35 % 33.0 % (dollars in thousands) Fair Value at December 31, 2025 Valuation Technique Significant Unobservable Inputs Range Weighted-Average Range Collateral dependent loans $ 336 Fair value of collateral Discount for type of property and current market conditions 0 % - 40 % 30.8 % Servicing asset 22,793 Discounted cash flow Prepayment speeds Discount rate 0 % - 25 % 13 % - 15 % 11.9 % 13.0 % Other real estate owned 2,631 Fair value of collateral Discount to reflect current market conditions 30 % - 35 % 32.0 % The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying condensed consolidated balance sheets at amounts other than fair value. Cash and Cash Equivalents For these instruments, the carrying amount is a reasonable estimate of fair value. Securities Held-to-Maturity Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. Level 2 securities include agency mortgage-backed securities - residential, municipal securities and corporate securities. Matrix pricing is a mathematical technique widely used in the banking industry to value investment securities. 37 In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy. Fair values are calculated using discounted cash flows. Discounted cash flows are calculated based off of the anticipated future cash flows updated to incorporate loss severities. Rating agency and industry research reports as well as default and deferral activity are reviewed and incorporated into the calculation. The Company did not own any securities classified within Level 3 of the hierarchy as of March 31, 2026 or December 31, 2025. Loans Held-for-Sale For loans that are sold in an active secondary market, the fair value of these loans is estimated based on secondary market price indications for loans with similar interest rate and maturity characteristics. The fair value of other loans held-for-sale approximates carrying value. Net Loans The fair value of loans is estimated on an exit price basis incorporating discounts for credit, liquidity and marketability factors. Accrued Interest Receivable The fair value of these financial instruments approximates carrying value. Federal Home Loan Bank of Indianapolis Stock The fair value of this financial instrument approximates carrying value. Deposits The fair value of noninterest-bearing and interest-bearing demand deposits, savings and money market accounts approximates carrying value. The fair value of fixed maturity certificates of deposit and brokered deposits are estimated using rates currently offered for deposits of similar remaining maturities. Advances from Federal Home Loan Bank The fair value of fixed rate advances is estimated using rates currently available for advances with similar remaining maturities. The carrying value of variable rate advances approximates fair value. Subordinated Debt The fair value of the Company’s publicly traded subordinated debt is obtained from quoted market prices. The fair value of the Company’s remaining subordinated debt is estimated using discounted cash flow analysis, based on current borrowing rates for similar types of debt instruments. Accrued Interest Payable The fair value of these financial instruments approximates carrying value. Commitments The fair value of commitments to extend credit are based on fees currently charged to enter into similar agreements with similar maturities and interest rates. The Company determined that the fair value of commitments was zero based on the contractual value of outstanding commitments at each of March 31, 2026 and December 31, 2025. 38 The following tables present the carrying value and estimated fair value of all financial assets and liabilities that are not measured at fair value on a recurring basis at March 31, 2026 and December 31, 2025. March 31, 2026 Fair Value Measurements Using (amounts in thousands) Carrying Amount Fair Value Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents $ 601,805 $ 601,805 $ 601,805 $ — $ — Securities held-to-maturity, net 276,042 262,416 — 262,416 — Loans held-for-sale 55,240 60,440 — 60,440 — Net loans 3,719,374 3,672,564 — — 3,672,564 Accrued interest receivable 28,182 28,182 28,182 — — Federal Home Loan Bank of Indianapolis stock 28,350 28,350 — 28,350 — Deposits 4,981,650 4,987,625 2,853,259 — 2,134,366 Advances from Federal Home Loan Bank 239,500 240,906 — 240,906 — Subordinated debt 105,546 106,121 37,059 69,062 — Accrued interest payable 1,232 1,232 1,232 — — December 31, 2025 Fair Value Measurements Using (amounts in thousands) Carrying Amount Fair Value Quoted Prices In Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents $ 456,777 $ 456,777 $ 456,777 $ — $ — Securities held-to-maturity, net 250,609 238,815 — 238,815 — Loans held-for-sale 108,608 117,917 — 117,917 — Net loans 3,691,042 3,642,632 — — 3,642,632 Accrued interest receivable 27,909 27,909 27,909 — — Federal Home Loan Bank of Indianapolis stock 28,350 28,350 — 28,350 — Deposits 4,839,813 4,853,941 2,559,565 — 2,294,376 Advances from Federal Home Loan Bank 249,500 252,046 — 252,046 — Subordinated debt 105,465 105,492 37,059 68,433 — Accrued interest payable 1,744 1,744 1,744 — — Note 12: Derivative Financial Instruments The Company uses derivative financial instruments from time to time to help manage exposure to interest rate risk and the effects that changes in interest rates may have on net income and the fair value of assets and liabilities. The Company enters into interest rate swap agreements as part of its asset/liability management strategy to help manage its interest rate risk position. 39 The Company entered into offsetting interest rate swaps with a correspondent bank. These back-to-back swap agreements are intended to offset each other and allow the Company to originate a variable rate loan, while providing a contract for fixed interest payments for the customer. The net cash flow for the Company is equal to the interest income received from a variable rate loan originated with the customer. The fair value of these derivatives is based on a discounted cash flow approach. The fair value assets and liabilities of centrally cleared interest rate swaps are net of variation margin settled-to-market. In March 2021, the Company terminated the last layer of interest rate swaps associated with available-for-sale agency mortgage-backed securities - residential, which resulted in swap termination payments to counterparties totaling $ 1.9 million. The corresponding fair value hedging adjustment was allocated pro-rata to the underlying hedged securities and is being amortized over the remaining lives of the designated securities. The Company had amortization expense totaling less than $ 0.1 million for both the three months ended March 31, 2026 and 2025, which was recognized as a reduction to interest income on securities. In June 2020, the Company terminated all fair value hedging relationships associated with loans, which resulted in swap termination payments to counterparties totaling $ 46.1 million. The corresponding loan fair value hedging adjustment as of the date of termination is being amortized over the remaining lives of the designated loans, which have a weighted average term to maturity of 8.6 years as of March 31, 2026. The Company had amortization expense totaling $ 1.0 million and $ 0.9 million for the three months ended March 31, 2026, and 2025, respectively, related to these previously terminated fair value hedges which was recognized as a reduction to interest income on loans. The following table presents the notional amount and fair value of interest rate swaps utilized by the Company at March 31, 2026 and December 31, 2025. March 31, 2026 December 31, 2025 (amounts in thousands) Notional Amount Fair Value Notional Amount Fair Value Asset Derivatives Derivatives not designated as hedging instruments Back-to-back swaps $ 62,655 $ 115 $ 45,050 $ 210 Total contracts $ 62,655 $ 115 $ 45,050 $ 210 Liability Derivatives Derivatives not designated as hedging instruments Back-to-back swaps $ 62,655 $ ( 115 ) $ 45,050 $ ( 210 ) Total contracts $ 62,655 $ ( 115 ) $ 45,050 $ ( 210 ) The fair value of interest rate swaps was estimated using a discounted cash flow method that incorporates current market interest rates as of the balance sheet date. Back-to-back swaps consist of two interest-rate swaps (a customer swap and an offsetting counterparty swap). As a result of this offsetting relationship, no net gains or losses are recognized in income. The Company received no cash collateral from counterparties as security for their obligations related to these swap transactions at both March 31, 2026 and December 31, 2025. The Company pledged cash collateral of $ 0.3 million to counterparties as security for its obligations related to these agreements at both March 31, 2026 and December 31, 2025. 40 Note 13: Accumulated Other Comprehensive Loss The components of accumulated other comprehensive loss, included in stockholders' equity, for the three months ended March 31, 2026 and 2025, respectively, are presented in the table below. (amounts in thousands) Unrealized Losses On Debt Securities Unrealized Losses On Debt Securities Transferred From Available-For-Sale To Held-To-Maturity Total Balance, January 1, 2026 $ ( 18,277 ) $ ( 1,853 ) ( 20,130 ) Other comprehensive loss before reclassifications from accumulated other comprehensive loss before tax ( 1,623 ) — ( 1,623 ) Reclassifications from accumulated other comprehensive income to earnings before tax — 100 100 Other comprehensive (loss) income before tax ( 1,623 ) 100 ( 1,523 ) Income tax (benefit) provision ( 374 ) 26 ( 348 ) Other comprehensive (loss) income - net of tax ( 1,249 ) 74 ( 1,175 ) Balance, March 31, 2026 $ ( 19,526 ) $ ( 1,779 ) $ ( 21,305 ) Balance, January 1, 2025 $ ( 30,413 ) $ ( 2,240 ) ( 32,653 ) Other comprehensive income before reclassifications from accumulated other comprehensive loss before tax 4,424 — 4,424 Reclassifications from accumulated other comprehensive income to earnings before tax — 120 120 Other comprehensive income before tax 4,424 120 4,544 Income tax provision 1,017 31 1,048 Other comprehensive income - net of tax 3,407 89 3,496 Balance, March 31, 2025 $ ( 27,006 ) $ ( 2,151 ) $ ( 29,157 ) (amounts in thousands) Amounts Reclassified from Accumulated Other Comprehensive Income for the Three Months Ended Details About Accumulated Other Comprehensive Loss Components March 31, 2026 March 31, 2025 Affected Line Item in the Statements of Income Reclassifications from accumulated other comprehensive income to earnings before tax $ ( 100 ) ( 120 ) Interest Income Total amount reclassified before tax ( 100 ) ( 120 ) Income before income taxes Tax benefit ( 26 ) ( 31 ) Income tax (benefit) provision Total reclassifications from accumulated other comprehensive (loss) income $ ( 74 ) $ ( 89 ) Net income 41 Note 14: Segment Information The Company operates as a single reportable segment, managing the business and assessing financial performance on a consolidated basis. While there are several lines of business within the operating segment, they are closely interrelated and cannot operate independently. Accordingly, the Chief Operating Decision Maker (“CODM”) evaluates operations and financial performance on a Company-wide basis and all of the Company’s operations are aggregated into one reportable operating segment. The CODM regularly receives and reviews the Company’s net income on a consolidated basis and uses key metrics to evaluate the overall performance of the Company and make decisions regarding the allocation of resources. Additionally, the CODM reviews budget-to-actual variances to analyze these profit measures as a single operating segment. The function of the CODM is performed by the Finance Committee. This Committee consists of the highest level of management that is responsible for the Company’s overall resource allocation and performance. The Finance Committee includes the Chairman and Chief Executive Officer, President and Chief Operating Officer and Executive Vice President and Chief Financial Officer. Note 15: Recent Accounting Pronouncements Recently Adopted Accounting Standards ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures (December 2023) In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. This ASU enhances the transparency and usefulness of income tax disclosures, which addresses investor requests for more transparency about income tax disclosures related primarily to the rate reconciliation and income taxes paid information. The Company adopted this guidance on January 1, 2025 and it did not have a material impact on its consolidated financial statements. Newly Issued But Not Yet Effective Accounting Standards ASU 2024-03 - Income Statement-Reporting Comprehensive Income - Expense Disaggregations Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (November 2024) In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregations Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires additional disclosures of the nature of expenses included in the Company’s income statement. The new standard requires disclosures about specific types of expenses included the income statement. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. ASU 2025-08 - Financial Instruments - Credit Losses (Topic 326) - Purchased Loans (November 2025) In November 2025, the FASB issued ASU No. 2025-08, Financial Instruments - Credit Losses (Topic 326) - Purchased Loans. This ASU changes the accounting for certain acquired purchased seasoned loans ("PSL") by applying the gross‑up method, which records an allowance for expected credit losses at acquisition as an adjustment to amortized cost basis rather than a day one provision through earnings. The guidance is intended to simplify post‑acquisition accounting, reduce inconsistency between PCD and non-PCD loans, and eliminate day one credit loss expense for in‑scope PSLs. The amendments are effective for public business entities for annual periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements. 42 ASU 2025-09 - Derivatives and Hedging (Topic 815) - Hedge Accounting Improvements (November 2025) In November 2025, the FASB issued ASU No. 2025-09 Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. This ASU intends to better align hedge accounting with entities’ risk management activities. Key amendments include expanding the ability to group forecasted transactions with similar (rather than identical) risk exposure, establishing a model for hedging interest payments on choose‑your‑rate debt, expanding hedge accounting for certain forecasted nonfinancial transactions, and updating guidance on net written options and foreign‑currency‑denominated debt. The amendments are effective for public business entities for annual periods beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements.