What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-06 · 219 added, 116 removed, 390 unchanged (46% of the section changed)

21 unchanged sentences

We believe that we differentiate ourselves from larger financial institutions by providing a full suite of services to emerging small businesses and entrepreneurs on a nationwide basis.

We are an active lender in the Small Business

Administration (“SBA”) 7(a) program, closing $72.5 million in SBA 7(a) loans during the three months ended March 31,2026.

We are an active lender in the Small Business Administration (“SBA”) 7(a) program, closing $437.7 million in SBA 7(a) loans during the twelve months ended June 30,2026.

We also offer a top-ranked small business checking account product to our country’s entrepreneurs.

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Furthermore, we believe partnering with select fintechs will allow us to further diversify our revenue sources, acquire deposits and pursue additional asset generation capabilities.

As of March 31, 2026, the Company had consolidated assets of $5.7 billion, consolidated deposits of $5.0 billion and stockholders’ equity of $361.0 million.

As of June 30, 2026, the Company had consolidated assets of $5.6 billion, consolidated deposits of $4.8 billion and shareholders’ equity of $363.5 million.

Results of Operations

During the first quarter 2026, net income was $2.5 million, or $0.29 diluted earnings per share, compared to net income of $0.9 million, or $0.11 diluted earnings per share, during the first quarter 2025, representing an increase in net income of $1.6 million, or 166.1%, and an increase in diluted earnings per share of $0.18, or 163.6%.

The $1.6 million increase in net income for the first quarter 2026 compared to the first quarter 2025 was due primarily to increases of $6.5 million, or 25.9%, in net interest income and $1.1 million, or 10.5%, in noninterest income, partially offset by increases of $4.4 million, or 36.6%, in the provision for credit losses and $1.5 million, or 6.2%, in noninterest expense, as well as a decrease of $0.2 million in income tax benefit.

During the first quarter 2026, return on average assets (“ROAA”), return on average shareholders’ equity (“ROAE”), and return on average tangible common equity (“ROATCE”) were 0.18%, 2.72% and 2.75%, respectively, compared to 0.07%, 0.98% and 0.99%, respectively, for the first quarter 2025.

During the first quarter 2026, pre-provision net revenue (“PPNR”) was $18.1 million, an increase of 51.2% from PPNR of $12.0 million for the first quarter 2025.

The $6.1 million increase was due to an increase of $6.5 million, or 25.9%, in net interest income and an increase of $1.1 million, or 10.5%, in noninterest income, partially offset by an increase of $1.5 million, or 6.2%, in noninterest expense.

During the second quarter 2026, net income was $2.4 million, or $0.27 diluted earnings per share, compared to net income of $0.2 million, or $0.02 diluted earnings per share, during the second quarter 2025, representing an increase in net income of $2.2 million, or 1,126.4%, and an increase in diluted earnings per share of $0.25, or 1,250.0%.

During the six months ended June 30, 2026, net income was $4.9 million, or $0.55 diluted earnings per share, compared to the six months ended June 30, 2025 net income of $1.1 million, or $0.13 per diluted share, resulting in an increase in net income of $3.7 million, or 329.2%, and an increase in diluted earnings per share of $0.42, or 323.1%.

The $2.2 million increase in net income for the second quarter 2026 compared to the second quarter 2025 was due primarily to increases of $4.4 million, or 15.9%, in net interest income and $3.1 million, or 56.3%, in noninterest income, as well as a decrease of $0.2 million, or 1.4%, in the provision for credit losses, partially offset by an increase of $4.3 million, or 19.8%, in noninterest expense and a decrease of $1.3 million in income tax benefit.

The $3.7 million increase in net income for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to increases of $11.0 million, or 20.6%, in net interest income and $4.2 million, or 26.4% in noninterest income, partially offset by increases of $5.8 million, or 12.8%, in noninterest expense and $4.2 million, or 16.4%, in the provision for credit losses, as well as a decrease of $1.5 million in income tax benefit.

During the second quarter 2026, return on average assets (“ROAA”), return on average shareholders’ equity (“ROAE”), and return on average tangible common equity (“ROATCE”) were 0.17%, 2.56% and 2.60%, respectively, compared to 0.01%, 0.20% and 0.20%, respectively, for the second quarter 2025.

During the six months ended June 30, 2026, ROAA, ROAE and ROATCE were 0.17%, 2.64%, and 2.68%, respectively, compared to 0.04%, 0.58%, and 0.59%, respectively, for the six months ended June 30, 2025.

During the second quarter 2026, pre-provision net revenue (“PPNR”) was $15.0 million, an increase of 27.7% from PPNR of $11.7 million for the second quarter 2025.

The $3.3 million increase was due to increases of $4.4 million, or 15.9%, in net interest income and $3.1 million, or 56.3%, in noninterest income, partially offset by an increase of $4.3 million, or 19.8%, in noninterest expense.

During the six months ended June 30, 2026, PPNR was $33.1 million, an increase of 39.5% from PPNR of $23.7 million for the six months ended June 30, 2025.

The $9.4 million increase was due to increases of $11.0 million, or 20.6%, in net interest income and $4.2 million, or 26.4%, in noninterest income, partially offset by an increase of $5.8 million, or 12.8%, in noninterest expense.

Refer to the “Reconciliation of Non-GAAP Financial Measures” section of Part I, Item 2 of this report, Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.

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Three Months Ended

March 31, 2026 March 31, 2025

June 30, 2026 June 30, 2025

(dollars in thousands) Average Balance Interest /Dividends Yield / Cost Average Balance Interest /Dividends Yield /Cost

Interest-earning assets

Loans, including

loans held-for-sale $ 3,880,131 $ 60,839 6.36 % $ 4,242,933 $ 62,662 5.99 %

Loans, including loans held-for-sale $ 3,838,432 $ 60,693 6.34 % $ 4,407,196 $ 66,685 6.07 %

Securities - taxable 974,877 9,948 4.09 % 856,070 9,062 4.25 %

9 unchanged sentences

Money market accounts 1,304,538 10,334 3.18 % 1,187,782 11,087 3.74 %

Fintech - brokered deposits 57,492 487 3.40 % — — — %

Certificates and brokered deposits 2,047,005 20,555 4.03 % 2,356,958 25,894 4.41 %

19 unchanged sentences

See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of this measure to its most directly comparable GAAP measure.

Six Months Ended

June 30, 2026 June 30, 2025

(dollars in thousands) Average Balance Interest /Dividends Yield /Cost Average Balance Interest /Dividends Yield /Cost

Interest-earning assets

Loans, including loans held-for-sale $ 3,859,166 $ 121,532 6.35 % $ 4,325,518 $ 129,347 6.03 %

Securities - taxable 959,066 19,444 4.09 % 838,222 17,525 4.22 %

Securities - non-taxable 76,813 1,283 3.37 % 80,325 1,315 3.30 %

Other earning assets 541,585 10,187 3.79 % 420,921 9,528 4.56 %

Total interest-earning assets 5,436,630 152,446 5.65 % 5,664,986 157,715 5.61 %

Allowance for credit losses - loans (56,728) (47,378)

Noninterest-earning assets 266,152 230,079

Total assets $ 5,646,054 $ 5,847,687

Interest-bearing liabilities

Interest-bearing demand deposits $ 1,300,087 $ 17,073 2.65 % $ 1,092,127 $ 16,742 3.09 %

Savings accounts 19,151 80 0.84 % 21,167 88 0.84 %

Money market accounts 1,298,366 20,437 3.17 % 1,204,695 22,449 3.76 %

Fintech - brokered deposits 28,905 487 3.40 % — — — %

Certificates and brokered deposits 2,117,596 42,602 4.06 % 2,486,407 55,141 4.47 %

Total interest-bearing deposits 4,764,105 80,679 3.42 % 4,804,396 94,420 3.96 %

Other borrowed funds 350,240 7,730 4.45 % 484,897 10,209 4.25 %

Total interest-bearing liabilities 5,114,345 88,409 3.49 % 5,289,293 104,629 3.99 %

Noninterest-bearing deposits 138,710 144,494

Other noninterest-bearing liabilities 20,749 21,948

Total liabilities 5,273,804 5,455,735

Shareholders’ equity 372,250 391,952

Total liabilities and shareholders’ equity $ 5,646,054 $ 5,847,687

Net interest income $ 64,037 $ 53,086

Interest rate spread 1

Net interest margin 2

Net interest margin - FTE 3

1 Yield on total interest-earning assets minus cost of total interest-bearing liabilities.

2 Net interest income divided by total average interest-earning assets (annualized).

3 On an FTE basis assuming a 21% tax rate.

Net interest income is adjusted to reflect income from assets such as municipal loans and securities that are exempt from Federal income taxes.

This is to recognize the income tax savings that facilitates a comparison between taxable and tax-exempt assets.

The Company believes that it is a standard practice in the banking industry to present net interest margin and net interest income on a fully-taxable equivalent basis, as these measures provide useful information to make peer comparisons.

Net interest margin - FTE represents a non-GAAP financial measure.

See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of this measure to its most directly comparable GAAP measure.

Rate/Volume Analysis

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The change in interest not due solely to volume or rate has been allocated in proportion to the absolute dollar amounts of the change in each.

Three Months Ended March 31, 2026 vs.

March 31, 2025 Due to Changes in

(amounts in thousands) Volume Rate Net

Three Months Ended June 30, 2026 vs.

June 30, 2025 Due to Changes in Six Months Ended June 30, 2026 vs.

June 30, 2025 Due to Changes in

(amounts in thousands) Volume Rate Net Volume Rate Net

Interest income

9 unchanged sentences

(Decrease) increase in net interest income $ (11,048) $ 15,497 $ 4,449 $ (11,440) $ 22,391 $ 10,951

Net interest income for the first quarter 2026 was $31.6 million, an increase of $6.5 million, or 25.9%, compared to $25.1 million for the first quarter 2025.

The increase in net interest income was the result of a decrease of $7.5 million, or 14.5%, in total interest expense to $44.2 million for the first quarter 2026 from $51.7 million for the first quarter 2025, which was partially offset by a $1.0 million, or 1.3%, decrease in total interest income to $75.8 million for the first quarter 2026 from $76.8 million for the first quarter 2025.

The decrease in total interest income for the first quarter 2026 compared to first quarter 2025 was due primarily to a decrease in interest earned on loans, resulting from a decrease of $362.8 million, or 8.6%, in the average balance of loans including loans held-for-sale, partially offset by an increase of 37 bps in the yield earned on loans, including loans held-for-sale.

Additionally, the average balance of other earning assets increased $76.4 million, or 17.2%, while the yield on other earning assets decreased 84 bps.

Net interest income for the second quarter 2026 was $32.4 million, an increase of $4.4 million, or 15.9%, compared to $28.0 million for the second quarter 2025.

The increase in net interest income was the result of a decrease of $8.7 million, or 16.4%, in total interest expense to $44.2 million for the second quarter 2026 from $52.9 million for the second quarter 2025, which was partially offset by a $4.3 million, or 5.3%, decrease in total interest income to $76.6 million for the second quarter 2026 from $80.9 million for the second quarter 2025.

Net interest income for the six months ended June 30, 2026 was $64.0 million, an increase of $11.0 million, or 20.6%, compared to $53.1 million for the six months ended June 30, 2025.

The increase in net interest income was the result of a decrease of $16.2 million, or 15.5%, in total interest expense to $88.4 million for the six months ended June 30, 2026 from $104.6 million for the six months ended June 30, 2025, which was partially offset by a $5.3 million, or 3.3%, decrease in total interest income to $152.4 million for the six months ended June 30, 2026 from $157.7 million for the six months ended June 30, 2025.

The decrease in total interest income for the second quarter 2026 compared to second quarter 2025 was due primarily to a decrease in interest earned on loans, resulting from a decrease of $568.8 million, or 12.9%, in the average balance of loans including loans held-for-sale, partially offset by an increase of 27 bps in the yield earned on loans, including loans held-for-sale.

The decrease in the average balance of loans was driven primarily by the sale of $851.2 million in single tenant lease financing loans that occurred in the second half of 2025, partially offset by an increase in loan growth for other portfolio segments.

The decrease in total interest earned on loans was partially offset by increases in interest income related to other earning assets and securities.

The average balance of other earning assets increased $164.4 million, or 41.4%, but was partially offset by a decrease of 70 bps in the yield earned on other earning assets.

The decrease in the yield earned on other earning assets was due mainly to the impact of decreases in the Fed Funds rates on cash balances held at the Federal Reserve.

The decrease in total interest income was partially offset by increases in interest income related to securities.

The average balance of securities increased $121.0 million, or 13.4%, but was partially offset by a decrease of 8 bps in the yield earned on securities for the first quarter 2026 compared to the first quarter 2025.

The yield on funded portfolio loan originations was 6.58% for the first quarter 2026, a decrease of 120 bps compared to the first quarter 2025, but still higher than the overall yield on the loan portfolio.

The decrease in total interest expense for the first quarter 2026 compared to the first quarter 2025 was due primarily to decreases of $7.2 million, or 24.6%, in interest expense associated with certificates and brokered deposits, $1.2 million, or 11.1%, in interest expense associated with money market accounts and $0.3 million, or 6.2%, in other borrowed funds, partially offset by an increase of $1.2 million, or 17.1%, in interest expense associated with interest-bearing demand deposits.

Additionally, the average balance of securities increased $113.7 million, or 12.2%, while the yield earned on securities decreased 12 bps for the second quarter 2026 compared to the second quarter 2025.

The yield on funded portfolio loan originations was 7.26% for the second quarter 2026, a decrease of 29 bps compared to the second quarter 2025, but still higher than the overall yield on the loan portfolio.

The decrease in total interest income for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to a decrease in interest earned on loans, resulting from a decrease of $446.4 million, or 10.8%, in the average balance of loans, including loans held-for-sale, partially offset by an increase of 32 bps in the yield on loans, including loans held-for-sale.

other portfolio segments.

The decrease in total interest income was partially offset by increases in interest income related to securities and other earning assets.

The average balance of securities increased $117.3 million, or 12.8%, but was partially offset by a decrease of 10 bps in the yield earned on securities.

Additionally, the average balance of other earning assets increased $120.7 million, or 28.7%;

however, the yield on other earning assets decreased 77 bps for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

The decrease in the yield earned on other earning assets was due mainly to the impact of decreases in the Fed Funds rates on cash balances held at the Federal Reserve.

The yield on funded portfolio loan originations was 6.88% for the six months ended June 30, 2026, a decrease of 60 bps compared to the six months ended June 30, 2025, but still higher than the overall yield on the loan portfolio.

The decrease in total interest expense for the second quarter 2026 compared to the second quarter 2025 was due primarily to decreases of $5.3 million, or 20.6%, in interest expense associated with certificates and brokered deposits, $2.2 million, or 36.5%, in interest expense related to other borrowed funds, $0.9 million, or 8.8%, in interest expense associated with interest-bearing demand deposits and $0.8 million or 6.8% in interest expense associated with money market accounts.

The decrease in interest expense related to certificates and brokered deposits was driven by a decrease of 38 bps in the cost of these deposits, as well as a decrease in the average balance of these deposits of $310.0 million, or 13.2%.

The decrease in interest expense related to money market accounts was driven by a 60 bp decrease in the cost of these deposits, partially offset by an increase in the average balance of these deposits of $70.3 million, or 5.8%.

The decrease in interest expense related to other borrowed funds was driven by a decrease in the average balance of $219.2 million, or 38.6%, partially offset by an increase of 15 bps in the cost of these funds.

The decrease in interest expense related to interest-bearing demand deposits was driven by a decrease of 56 bps in the cost of these deposits, partially offset by an increase in the average balance of $129.6 million, or 10.6%.

The decrease in interest expense related to money market deposits was driven by a decrease of 56 bps in the cost of these deposits, partially offset by an increase in the average balance of these deposits of $116.8 million, or 9.8%.

The decreases in the cost of funds related to deposits was due primarily to declines in short term interest rates as well as lower pricing on certificates of deposits across all maturities.

The decrease in total interest expense for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to decreases of $12.5 million, or 22.7%, in interest expense associated with certificates and brokered deposits, $2.5 million, or 24.3%, in interest expense associated with other borrowed funds and $2.0 million, or 9.0%, in interest expense related to money market deposits.

The decrease in interest expense related to certificates and brokered deposits was driven by a decrease of 41 bps in the cost of these deposits, as well as a decrease of $368.8 million, or 14.8%, in the average balance of these deposits.

The decrease in interest expense related to other borrowed funds was driven by a decrease in the average balance of $134.7 million, or 27.8%, partially offset by a 20 bp increase in the cost of these funds.

The increase in interest expense related to interest-bearing demand deposits was driven by an increase in the average balance of $287.2 million, or 30%, partially offset by 30 bp decrease in the cost of these deposits.

Overall, the cost of total interest-bearing liabilities for the first quarter 2026 decreased 50 bps to 3.52% from 4.02% for the first quarter 2025.

Net interest margin (“NIM”) was 2.36% for the first quarter 2026 compared to 1.82% for the first quarter 2025, an increase of 54 bps.

On a fully-taxable equivalent (“FTE”) basis, NIM was 2.45% for the first quarter 2026 compared to 1.91% for the first quarter 2025, an increase of 54 bps.

The increase in the first quarter 2026 NIM and FTE NIM compared to the first

quarter 2025 reflects the combination of higher yields on loans and continued improvement in the cost of funds related to deposits.

The decrease in interest expense related to money market deposits was driven primarily by a decrease of 59 bps in the cost of these deposits, partially offset by an increase of $93.7 million, or 7.8%, in the average balance of these deposits.

The decreases in the cost of funds related to deposits was due primarily to declines in short term interest rates as well as lower pricing on certificates of deposits across all maturities.

Overall, the cost of total interest-bearing liabilities for the second quarter 2026 decreased 51 bps to 3.45% from 3.96% for the second quarter 2025.

The cost of total interest-bearing liabilities for the six months ended June 30, 2026 decreased 50 bps to 3.49% from 3.99% for the six months ended June 30, 2025.

Net interest margin (“NIM”) was 2.39% for the second quarter 2026 compared to 1.96% for the second quarter 2025, an increase of 43 bps.

On a fully-taxable equivalent (“FTE”) basis, NIM was 2.47% for the second quarter 2026 compared to 2.04% for the second quarter 2025, an increase of 43 bps.

NIM was 2.38% for the six months ended June 30, 2026 compared to

1.89% for the six months ended June 30, 2025, an increase of 49 bps.

FTE NIM was 2.46% for the six months ended June 30, 2026 compared to 1.97% for the six months ended June 30, 2025, an increase of 49 bps.

The increase in the second quarter and six months ended June 30, 2026 NIM and FTE NIM compared to the second quarter and six months ended June 30, 2025 reflects the combination of higher yields on loans and continued improvement in the cost of funds related to deposits.

Noninterest Income

The following table shows noninterest income for each of the periods presented.

Three Months Ended

(amounts in thousands) March 31,

2026 March 31,

Three Months Ended Six Months Ended

(amounts in thousands) June 30,

2026 June 30,

2025 June 30,

2026 June 30,

Service charges and fees $ 1,112 $ 278 $ 1,956 $ 543

4 unchanged sentences

Total noninterest income $ 8,685 $ 5,557 $ 20,203 $ 15,984

During the first quarter 2026, noninterest income was $11.5 million, representing an increase of $1.1 million, or 10.5%, compared to $10.4 million of noninterest income for the first quarter 2025.

The increase in noninterest income was driven primarily by increases in net loan servicing, other noninterest income and service charges and fees, partially offset by a decrease in gain on sale of loans.

The increase of $1.0 million, or 123.9%, in net loan servicing was due to growth in the balance of the Company’s SBA 7(a) and single tenant lease financing servicing portfolios.

The increase of $0.8 million, or 110.5%, in other noninterest income was due primarily to an increase in fintech partnership revenue.

The increase of $0.6 million, or 218.5%, in service charges and fees reflects higher fees earned on fintech deposits moved off-balance sheet into deposit networks, which increased substantially from the prior year.

The decrease in gain on sale of loans of $1.3 million, or 14.7%, was due primarily to a lower volume of SBA loans sold in the first quarter 2026 compared to the first quarter 2025, partially offset by a 27 bp increase in net premiums.

During the second quarter 2026, noninterest income was $8.7 million, representing an increase of $3.1 million, or 56.3%, compared to $5.6 million of noninterest income for the second quarter 2025.

The increase in noninterest income was driven primarily by increases in gain on sale of loans, service charges and fees and net loan servicing, partially offset by a decrease in other noninterest income.

The increase of $3.0 million, or 180.3%, in gain on sale of loans was due primarily to higher volume of loan sales in the second quarter 2026 compared to the second quarter 2025 when the Company implemented a process change to hold SBA loans for a longer period of time before selling them in the secondary market.

The increase of $0.8 million, or 300.0%, in service charges and fees reflects higher fees earned on fintech deposits moved off-balance sheet into deposit networks.

The increase of $0.4 million, or 54.2% in net loan servicing was due primarily to growth in the balance of the Company’s single tenant lease financing servicing portfolio, partially offset by the fair value adjustment to the loan servicing asset.

The decrease of $1.2 million, or 42.1%, in other noninterest income was due primarily to lower distributions from fund investments, partially offset by an increase in fintech partnership revenue.

During the six months ended June 30, 2026, noninterest income was $20.2 million, an increase of $4.2 million, or 26.4%, compared to $16.0 million for the six months ended June 30, 2025.

The increase in noninterest income was due primarily to increases in gain on sale of loans, net loan servicing and service charges and fees, partially offset by a decrease in other noninterest income.

The increase of $1.7 million, or 16.9%, in gain on sale of loans was due primarily to higher volume of loan sales for the six months ended June 30, 2026 compared to the same period in 2025 when the Company implemented a process change to hold SBA loans for a longer period of time before selling them in the secondary market.

The increase of $1.4 million, or 88.6%, in net loan servicing was due to growth in the balance of the Company’s single tenant lease financing servicing portfolio, partially offset by the fair value adjustment to the loan servicing asset.

The increase of $1.4 million, or 260.2%, in service charges and fees reflect higher fees earned on fintech deposits moved off-balance sheet into deposit networks.

The decrease of $0.4 million, or 11.0%, in other noninterest income was due primarily to a planned distribution from a fund investment that occurred during the six months ended June 30, 2025, partially offset by an increase in fintech partnership revenue.

Noninterest Expense

The following table shows noninterest expense for each of the periods presented.

Three Months Ended

(amounts in thousands) March 31,

2026 March 31,

Three Months Ended Six Months Ended

(amounts in thousands) June 30,

2026 June 30,

2025 June 30,

2026 June 30,

Salaries and employee benefits $ 13,570 $ 10,867 $ 26,806 $ 23,974

7 unchanged sentences

Total noninterest expense $ 26,122 $ 21,800 $ 51,149 $ 45,357

Noninterest expense for the first quarter 2026 was $25.0 million, representing an increase of $1.5 million, or 6.2%, compared to $23.6 million for the first quarter 2025.

The increase in noninterest expense was due primarily to increases in loan expenses and premises and equipment.

The increase of $0.6 million, or 42.3%, in loan expenses was due primarily to collection expense, as well as third party servicing associated with SBA and fintech lending.

Noninterest expense for the second quarter 2026 was $26.1 million, representing an increase of $4.3 million, or 19.8%, compared to $21.8 million for the second quarter 2025.

The increase in noninterest expense was due primarily to increases in salaries and employee benefits, loan expenses, premises and equipment, and consulting and professional services.

The increase of $2.7 million, or 24.9%, in salaries and employee benefits was due primarily to an increase in incentive compensation, as well as an increase in staffing related to small business lending and risk management.

The increase of $0.6 million, or 38.8%, in loan expenses was due primarily to collection expense, as well as third party servicing associated with small business lending and fintech lending.

The increase of $0.4 million, or 13.3%, in premises and equipment was due primarily to continued investment in technology to enhance the user experience in consumer and small business banking.

The Company recorded an income tax benefit of $0.7 million for the first quarter 2026, compared to an income tax benefit of $0.9 million for the first quarter 2025.

The increase of $0.4 million, or 46.6%, in consulting and professional services was due primarily to an increase in consulting and audit fees.

Noninterest expense for the six months ended June 30, 2026 was $51.1 million, an increase of $5.8 million, or 12.8%, compared to $45.4 million for the six months ended June 30, 2025.

The increase was due primarily to increases in salaries and employee benefits, loan expenses, premises and equipment, consulting and professional services and data processing.

The increase of $2.8 million, or 11.8%, in salaries and employee benefits was due primarily to an increase in incentive compensation, as well as an increase in staffing related to small business lending and risk management.

The increase of $1.2 million, or 40.5%, in loan expenses was due primarily to collection expense, as well as third party servicing associated with small business lending and fintech lending.

The increase of $1.0 million, or 15.6%, in premises and equipment was due primarily to continued investment in technology to enhance the user experience in consumer and small business banking.

The increase of $0.3 million, or 13.3%, in consulting and professional services was due primarily to an increase in consulting fees.

The increase of $0.3 million, or 20.0%, in data processing was the result of an increase in fees associated with the growth in fintech partnerships.

The Company recorded an income tax benefit of $0.8 million for the second quarter 2026, compared to an income tax benefit of $2.1 million for the second quarter 2025.

The Company recorded an income tax benefit of $1.5 million for the six months ended June 30, 2026, compared to an income tax benefit of $3.0 million for the six months ended June 30, 2025.

The income tax benefits recognized during the second quarter 2026 and 2025 as well as the six months ended June 30, 2026 and June 30, 2025 reflect lower pre-tax earnings, as well as the benefit of tax exempt income.

Financial Condition

13 unchanged sentences

Total shareholders’ equity 363,547 359,767

Total assets increased $140.0 million, or 2.5%, to $5.7 billion at March 31, 2026 compared to $5.6 billion at December 31, 2025.

The increase was due primarily to an increase in deposits driven by growth in fintech partnerships, which was used in conjunction with on-balance sheet liquidity to fund loan growth, purchase securities and pay down higher cost certificates of deposits and FHLB advances.

Total liabilities increased $138.9 million, or 2.7%, to $5.4 billion at March 31, 2026 compared to $5.2 billion at December 31, 2025.

The increase was due mainly to an increase in total deposits.

As of March 31, 2026, total shareholders’ equity was $361.0 million, an increase of $1.2 million, or 0.3%, compared to December 31, 2025.

The increase in shareholders’ equity was due primarily to current period net income and was partially offset by an increase in accumulated other comprehensive loss as unrealized losses on debt securities increased during the quarter due to changes in market interest rates.

Tangible common equity totaled $356.3 million as of March 31, 2026, representing an increase of $1.2 million, or 0.3%, compared to December 31, 2025.

The ratio of total shareholders’ equity to total assets decreased to 6.32% as of March 31, 2026 from 6.46% as of December 31, 2025, and the ratio of tangible common equity to tangible assets decreased to 6.24% as of March 31, 2026 from 6.38% as of December 31, 2025.

Book value per common share was $41.41 for both March 31, 2026 and December 31, 2025 and tangible book value per common share was $40.87 for both March 31, 2026 and December 31, 2025.

The slight increase in total shareholders’ equity and tangible common equity was offset by a higher number of shares outstanding.

Total assets decreased $15.3 million, or 0.3%, to $5.6 billion at June 30, 2026 compared to $5.6 billion at December 31, 2025.

The modest decline in balance sheet size was driven by the continued mix shift in the funding base as growth in fintech deposits was used to pay down higher-cost certificates and brokered deposits as well as maturing FHLB advances.

Additionally, cash balances and proceeds from loan sales were used to fund new loan originations, construction draws and securities purchases.

As of June 30, 2026, total shareholders’ equity was $363.5 million, an increase of $3.8 million, or 1.1%, compared to December 31, 2025.

The increase in shareholders’ equity was due primarily to current period net income, partially offset by an increase in accumulated other comprehensive loss as unrealized losses on debt securities increased modestly during the quarter due to changes in market interest rates.

Tangible common equity totaled $358.9 million as of June 30, 2026, representing an increase of $3.8 million, or 1.1%, compared to December 31, 2025.

The ratio of total shareholders’ equity to total assets

increased to 6.54% as of June 30, 2026 from 6.46% as of December 31, 2025, and the ratio of tangible common equity to tangible assets increased to 6.46% as of June 30, 2026 from 6.38% as of December 31, 2025.

Book value per common share increased 0.5% to $41.63 as of June 30, 2026 from $41.41 as of December 31, 2025 and tangible book value per common share increased 0.5% to $41.09 as of June 30, 2026 from $40.87 as of December 31, 2025.

The increase in total shareholders’ equity and tangible common equity was partially offset by a small increase in the number of shares outstanding.

1 unchanged sentence

The following table shows a summary of the Company’s loan portfolio for each of the periods presented.

(dollars in thousands) March 31,

(dollars in thousands) June 30,

2026 December 31,

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1 Balances include $59.8 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 adjustments 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.

Total loans were $3.8 billion as of March 31, 2026, an increase of $29.1 million, or 0.8%, compared to December 31, 2025.

Total commercial loan balances were $3.0 billion as of March 31, 2026, an increase of $30.5 million, or 1.0%, from December 31, 2025.

Total consumer loan balances were $783.6 million as of March 31, 2026, an increase of $0.3 million, or less than 0.1%, compared to December 31, 2025.

Compared to December 31, 2025, the increase in commercial loan balances was driven by construction and single tenant lease financing loans, partially offset by early payoffs in investor commercial real estate and planned run-off in the franchise finance and healthcare finance portfolios.

The slight increase in consumer loan balances was due primarily to origination activity in the other consumer loans portfolio.

government as of June 30, 2026 and December 31, 2025, respectively.

2 Includes carrying value adjustments of $17.3 million and $19.1 million related to terminated interest rate swaps associated with public finance loans as of June 30, 2026 and December 31, 2025, respectively.

Total loans were $3.8 billion as of June 30, 2026, an increase of $64.3 million, or 1.7%, compared to December 31, 2025.

Total commercial loan balances were $3.0 billion as of June 30, 2026, an increase of $67.8 million, or 2.3%, from December 31, 2025.

Total consumer loan balances were $782.1 million as of June 30, 2026, a decrease of $1.1 million, or 0.2%, compared to December 31, 2025.

Compared to December 31, 2025, the increase in commercial loan balances was driven by single tenant lease financing, investor commercial real estate and construction loans, partially offset by planned run-off in the franchise finance and healthcare finance portfolios.

The Company made the strategic decision to allow the franchise finance and healthcare finance portfolios to run off and is not originating new loans in these segments.

The Company expects these portfolios to continue to decline over time and is replacing this loan production with focused growth in other commercial lending areas such as single tenant lease financing, investor commercial real estate, construction, and small business lending segments.

The slight decrease in consumer loan balances was due primarily to early payoff and principal amortization in the residential mortgage portfolio, partially offset by new origination activity in the other consumer loans portfolio.

Asset Quality

Nonperforming loans are comprised of nonaccrual loans and loans 90 days past due and accruing.

Nonperforming assets include nonperforming loans, other real estate owned (“OREO”) and other nonperforming assets, which consist of repossessed assets.

Nonperforming assets include nonperforming loans, other real estate owned (“OREO”) and other nonperforming assets, which generally consist of repossessed assets.

The following table provides a summary of the Company’s nonperforming assets for each of the periods presented.

(dollars in thousands) March 31,

(dollars in thousands) June 30,

2026 December 31,

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Small business lending 2,435 2,631

Single tenant lease financing 1,686 —

Total other real estate owned 4,121 2,631

8 unchanged sentences

1 Balances include $19.2 million and $13.6 million that are guaranteed by the U.S.

government as of March 31, 2026 and December 31, 2025, respectively.

Total nonperforming loans increased $3.1 million, or 5.2%, to $61.6 million as of March 31, 2026 compared to $58.5 million as of December 31, 2025 due primarily to an increase in accruing loans past due 90 days or more and nonperforming

loans in the small business lending portfolio, partially offset by decreases in nonperforming loans in the franchise finance and healthcare finance portfolios.

Total nonperforming assets increased $2.3 million, or 3.8%, to $63.7 million as of March 31, 2026, compared to $61.4 million as of December 31, 2025, due primarily to the accruing loans past due 90 days or more mentioned above.

As of March 31, 2026, the Company had two small business lending properties in OREO with carrying values of $1.9 million.

government as of June 30, 2026 and December 31, 2025, respectively.

Total nonperforming loans increased $1.5 million, or 2.5%, to $60.1 million as of June 30, 2026 compared to $58.5 million as of December 31, 2025 due primarily to an increase in accruing loans past due 90 days or more and nonaccrual loans in the small business lending portfolio, which generally consisted of SBA 7(a) guaranteed balances.

These partially offset by decreases in nonaccrual loans in the franchise finance and healthcare finance portfolios.

Total nonperforming assets increased $3.2 million, or 5.1%, to $64.6 million as of June 30, 2026, compared to $61.4 million as of December 31, 2025, due primarily to the accruing loans past due 90 days or more mentioned above.

As of June 30, 2026, the Company had three small business lending properties and one single tenant lease financing property in OREO with a carrying value of $4.1 million.

As of December 31, 2025, the Company had three small business lending properties in OREO with a carrying value of $2.6 million.

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however, allocation of a portion of the allowance to one segment does not preclude its availability to absorb losses in other segments.

Three Months Ended Year Ended

(dollars in thousands) March 31,

2026 March 31,

Three Months Ended Six Months Ended Year Ended

(dollars in thousands) June 30,

2026 June 30,

2025 June 30,

2026 June 30,

2025 December 31,

29 unchanged sentences

Total net charge-offs to average loans 1.77 % 1.31 % 1.71 % 1.12 % 1.45 %

The allowance for credit losses - loans (“ACL”) was $56.5 million as of March 31, 2026, compared to $55.7 million as of December 31, 2025.

The ACL as a percentage of total loans was 1.50% at March 31, 2026, compared to 1.49% at December 31, 2025.

The ACL as a percentage of nonperforming loans decreased to 91.7% as of March 31, 2026, compared to 95.1% as of December 31, 2025, as the increase in nonperforming loans outweighed the increase in the ACL.

Net charge-offs of $15.8 million were recognized during the first quarter 2026, resulting in net charge-offs to average loans of 1.65%, compared to net charge-offs of $9.7 million, or 0.92% of average loans, for the first quarter 2025.

Net charge-offs in the first quarter 2026 were elevated as the Company continued to take action to resolve problem loans in the small business lending and franchise finance portfolios.

The provision for credit losses - loans in the first quarter 2026 was $16.6 million, compared to $12.1 million for the first quarter 2025.

The increase in the provision for credit losses - loans for the first quarter 2026 was driven primarily by the net charge-offs mentioned above and additional specific reserves related to franchise finance loans.

The allowance for credit losses - loans (“ACL”) was $53.1 million as of June 30, 2026, compared to $55.7 million as of December 31, 2025.

The ACL as a percentage of total loans was 1.39% at June 30, 2026, compared to 1.49% at December 31, 2025.

The ACL as a percentage of nonperforming loans decreased to 88.4% as of June 30, 2026, compared to 95.1% as of December 31, 2025, due primarily to a decrease in the ACL related to franchise finance loans with specific reserves that were charged off.

Excluding nonaccrual guaranteed balances, the ACL as a percentage of nonperforming loans increased to 129.8% as of June 30, 2026 compared to 124.0% as of December 31, 2025.

Net charge-offs of $16.9 million were recognized during the second quarter 2026, resulting in net charge-offs to average loans of 1.77%, compared to net charge-offs of $14.3 million, or 1.31% of average loans, for the second quarter 2025.

The increase in net charge-offs for the second quarter 2026 compared to the second quarter 2025 was driven primarily by an increase of $9.3 million in franchise finance net charge-offs, partially offset by a decrease of $6.5 million in small business lending net charge-offs.

During the six months ended June 30, 2026, the Company recorded net charge-offs of $32.7 million, resulting in net charge-offs to average loans of 1.71%, compared to net charge-offs of $24.0 million, or 1.12% of average loans, during the six months ended June 30, 2025.

The increase in net charge-offs for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was driven primarily by an increase of $9.7 million in franchise finance net charge-offs, partially offset by a decrease of $1.1 million in small business lending net charge-offs.

The elevated franchise finance charge-offs include a concentration of specific borrower credits that had been identified in prior periods and reserved for through specific reserves, as the franchise finance portfolio continues to run off in connection with the Company’s strategic focus on other commercial lending areas.

The provision for credit losses - loans for the second quarter 2026 declined slightly to $13.5 million, compared to $13.6 million for the second quarter 2025.

The decrease in the provision for credit losses - loans for the second quarter 2026 compared to the second quarter 2025 was driven primarily by decreases in specific reserves and loan provision, partially offset by increases in net charge-offs.

The provision for credit losses - loans during the six months ended June 30, 2026 was $30.1 million, compared to $25.7 million for the six months ended June 30, 2025.

The increase in the provision for credit losses - loans for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was driven primarily by the increase in net charge-offs, partially offset by decreases in specific reserves and loan provision.

Investment Securities Portfolio

1 unchanged sentence

(amounts in thousands)

Amortized Cost March 31,

Amortized Cost June 30,

2026 December 31,

16 unchanged sentences

(amounts in thousands)

Approximate Fair Value March 31,

Approximate Fair Value June 30,

2026 December 31,

15 unchanged sentences

Total securities $ 1,037,247 $ 1,017,502

The approximate fair value of available-for-sale investment securities decreased $6.7 million, or 0.9%, to $772.0 million as of March 31, 2026, compared to $778.7 million as of December 31, 2025.

The decrease was due primarily to decreases of $7.9 million in private label mortgage-backed securities - residential, $6.3 million in municipal securities, $4.6 million in U.S.

Government-sponsored agencies and $3.3 million in asset-backed securities, partially offset by increases of $12.6 million in agency mortgage-backed securities - residential and $2.7 million in agency mortgage-backed securities - commercial.

The Company deployed available liquidity during the first quarter 2026 into new purchases of available-for-sale short-duration agency mortgage-backed securities - residential and agency mortgage-backed securities - commercial, which was partially offset by net pay down activity in other security types.

As of March 31, 2026, the Company had securities with a net carrying value of $276.0 million designated as held-to-maturity, compared to $250.6 million as of December 31, 2025.

The increase was due primarily to purchases of CRA-eligible agency mortgage-backed securities - residential made in the first quarter 2026.

The approximate fair value of available-for-sale investment securities increased $8.0 million, or 1.0%, to $786.7 million as of June 30, 2026, compared to $778.7 million as of December 31, 2025.

The increase was due primarily to increases of $26.7 million in agency mortgage-backed securities - residential and $5.1 million in corporate securities, partially offset by decreases of $9.5 million in U.S.

Government-sponsored agencies, $7.4 million in municipal securities, $5.7 million in private label mortgage-backed securities - residential and $1.8 million in agency mortgage-backed securities - commercial.

The Company deployed available liquidity during the first half of 2026 into new purchases of short-duration agency securities, asset-backed securities and investment grade corporate securities, which was partially offset by net pay down activity in other security types.

As of June 30, 2026, the Company had securities with a net carrying value of $264.7 million designated as held-to-maturity, compared to $250.6 million as of December 31, 2025.

The increase was due primarily to purchases of CRA-eligible agency mortgage-backed securities - residential made in the first half of 2026.

Accrued Income and Other Assets

Accrued income and other assets increased $1.5 million, or 1.7%, to $90.5 million at March 31, 2026, compared to $89.1 million at December 31, 2025.

The increase was due primarily to increases of $1.3 million in various receivables, $0.5 million in deferred tax assets and $0.4 million in investments in fund partnerships, partially offset by a decrease of $0.6 million in prepaid assets.

Accrued income and other assets increased $3.8 million, or 4.3%, to $92.9 million at June 30, 2026, compared to $89.1 million at December 31, 2025.

The increase was due primarily to increases of $3.2 million in various receivables and $1.0 million in equity investments, partially offset by a decrease of $0.5 million in prepaid assets.

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities increased $7.4 million, or 48.5%, to $22.8 million at March 31, 2026, compared to $15.4 million at December 31, 2025.

The increase was due primarily to an increase related to securities purchased at the end of March that did not settle until April and accrued interest, partially offset by decreases of $0.3 million in both unfunded commitments and the reserve for unfunded loan commitments.

Accrued expenses and other liabilities decreased $0.6 million, or 4.1%, to $14.7 million at June 30, 2026, compared to $15.4 million at December 31, 2025.

The decrease was due primarily to a decrease of $1.0 million in other liabilities, including unfunded loan commitment reserves, unfunded investment fund partnership commitments and lease liabilities, partially offset by an increase of $0.4 million in accrued salary and benefits.

The following table shows the composition of the Company’s deposit base for each of the periods presented.

(dollars in thousands) March 31,

(dollars in thousands) June 30,

2026 December 31,

3 unchanged sentences

Money market accounts 1,245,591 25.8 % 1,272,845 26.3 %

Fintech - brokered deposits 23,344 0.5 % — 0.0 %

Certificates of deposits 1,683,450 34.8 % 2,004,909 41.4 %

1 unchanged sentence

Total deposits $ 4,831,378 100.0 % $ 4,839,813 100.0 %

Total deposits increased $141.8 million, or 2.9%, to $5.0 billion as of March 31, 2026, compared to $4.8 billion as of December 31, 2025.

The increase was due primarily to increases of $237.2 million, or 21.2%, in interest-bearing demand deposits and $52.5 million, or 4.1%, in money market accounts, partially offset by decreases of $135.8 million, or 6.8%, in certificates of deposits and $16.1 million, or 5.9%, in brokered deposits.

The increase in interest-bearing demand deposits was driven by growth in fintech partnership deposits, which provided the ability to pay down higher-cost brokered deposits and certificates of deposits.

Uninsured deposit balances represented 39% of total deposits at March 31, 2026, up from 33% at December 31, 2025.

Total deposits of $4.8 billion at June 30, 2026 were virtually flat with December 31, 2025.

However, there were increases of $372.3 million, or 33.2%, in interest-bearing demand deposits and $23.3 million in fintech - brokered deposits, more than offset by decreases of $321.5 million, or 16.0%, in certificates of deposits, $39.6 million, or 14.4%, in brokered deposits, $27.3 million, or 2.1%, in money market accounts and $15.5 million, or 10.6%, in noninterest-bearing deposits.

The increase in interest-bearing demand deposits was driven by growth in fintech partnership deposits, which provided the ability to pay down certificates of deposits, higher-cost brokered deposits and money market accounts.

Uninsured deposit balances represented 37% of total deposits at June 30, 2026, up from 33% at December 31, 2025.

These balances include Indiana-based municipal deposits, which are insured by the Indiana Board for Depositories, as well as larger balance accounts under contractual agreements that only allow withdrawal under certain conditions.

After subtracting these types of deposits, the adjusted uninsured deposit balance drops to 34% as of March 31, 2026, compared to 27% as of December 31, 2025.

After subtracting these types of deposits, the adjusted uninsured deposit balance drops to 31% as of June 30, 2026, compared to 27% as of December 31, 2025.

The increase in uninsured deposit balances was impacted by increases in fintech payment volumes experienced on the last day of the quarter.

12 unchanged sentences

Failure to maintain the minimum Common Equity Tier 1 capital ratio plus the capital conservation buffer will result in potential restrictions on a banking institution’s ability to pay dividends, repurchase stock and/or pay discretionary compensation to its employees.

The following tables present actual and required capital ratios as of March 31, 2026 and December 31, 2025 for the Company and the Bank under the Basel III Capital Rules.

The minimum required capital amounts presented include the minimum required capital levels as of March 31, 2026 and December 31, 2025, which are based on the Basel III Capital Rules.

The following tables present actual and required capital ratios as of June 30, 2026 and December 31, 2025 for the Company and the Bank under the Basel III Capital Rules.

The minimum required capital amounts presented include the minimum required capital levels as of June 30, 2026 and December 31, 2025, which are based on the Basel III Capital Rules.

Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

1 unchanged sentence

(dollars in thousands) Capital Amount Ratio Capital Amount Ratio Capital Amount Ratio

As of March 31, 2026:

As of June 30, 2026:

Common equity tier 1 capital to risk-weighted assets

26 unchanged sentences

Shareholders’ Dividends

The Company’s Board of Directors declared a cash dividend of $0.06 per share of common stock payable April 15, 2026 to shareholders of record as of March 31, 2026.

The Company’s Board of Directors declared a cash dividend of $0.06 per share of common stock payable July 15, 2026 to shareholders of record as of June 30, 2026.

The Company expects to continue to pay cash dividends on a quarterly basis;

however, the declaration and amount of any future cash dividends will be subject to the sole discretion of the Board of Directors and will depend upon many factors, including the Company’s results of operations, financial condition, capital requirements, regulatory and contractual restrictions (including with respect to the Company’s outstanding subordinated debt), business strategy and other factors deemed relevant by the Board of Directors.

As of March 31, 2026, the Company had $107.0 million principal amount of subordinated debt outstanding evidenced by the 2029 Notes, 2030 Note and 2031 Notes.

As of June 30, 2026, the Company had $107.0 million principal amount of subordinated debt outstanding evidenced by the 2029 Notes, 2030 Note and 2031 Notes.

The agreements that govern our outstanding subordinated debt prohibit the Company from paying any dividends on its common stock or making any other distributions to shareholders at any time when there shall have occurred, and be continuing to occur, an event of default under the applicable agreement.

5 unchanged sentences

On October 20, 2025, the Board of Directors of the Company authorized the repurchase of up to $25.0 million of the Company's outstanding common stock from time to time on the open market or in privately negotiated transactions.

Under the program, the Company repurchased 27,998 shares of common stock, at an average price of $18.64, for a total investment of $0.5 million as of March 31, 2026.

Under the program, the Company repurchased 27,998 shares of common stock, at an average price of $18.64, for a total investment of $0.5 million as of June 30, 2026.

The stock repurchase authorization is scheduled to expire on September 30, 2027.

5 unchanged sentences

While scheduled payments and maturities of loans and investment securities are relatively predictable sources of funds, deposit flows are greatly influenced by interest rates, general economic conditions and competition.

Therefore, the Company may supplement deposit growth and enhances interest rate risk management through borrowings and wholesale funding, which are generally advances from the Federal Home Loan Bank (“FHLB”) and brokered deposits.

Therefore, the Company may supplement deposit growth and enhance interest rate risk management through borrowings and wholesale funding, which are generally advances from the Federal Home Loan Bank (“FHLB”) and brokered deposits.

The Company holds cash and investment securities that qualify as liquid assets to maintain adequate liquidity to ensure safe and sound operations and meet its financial commitments.

At March 31, 2026, on a consolidated basis, the Company had $1.4 billion in cash and cash equivalents and investment securities available-for-sale and $55.2 million in loans held-for-sale that were generally available for its cash needs.

At June 30, 2026, on a consolidated basis, the Company had $1.2 billion in cash and cash equivalents and investment securities available-for-sale and $44.8 million in loans held-for-sale that were generally available for its cash needs.

Additionally, the Company uses a custodial deposit arrangement for certain deposit programs whereby the Company, acting as custodian of account holder funds, places a portion of such account holder funds that are not needed to support near term liquidity needs at one or more third-party banks insured by the FDIC through the IntraFi One-Way Sell network.

The Company remains the issuer of, and maintains the records for, all accounts under the applicable account holder agreements and, importantly, retains transactional authority to move funds on-and-off balance sheet as liquidity needs merit.

Such off-balance sheet deposits totaled $1.5 billion at March 31, 2026 and $1.1 billion at December 31, 2025 and primarily consist of fintech partnership deposits.

Such off-balance sheet deposits totaled $2.4 billion at June 30, 2026 and $1.1 billion at December 31, 2025 and primarily consist of fintech partnership deposits.

The Company can also generate funds from wholesale funding sources and collateralized borrowings.

At March 31, 2026, the Bank had the ability to borrow an additional $1.7 billion from the FHLB, the Federal Reserve and correspondent bank Fed Funds lines of credit.

At June 30, 2026, the Bank had the ability to borrow an additional $1.5 billion from the FHLB, the Federal Reserve and correspondent bank Fed Funds lines of credit.

The Company is a separate legal entity from the Bank and must provide for its own liquidity.

1 unchanged sentence

The Company’s primary sources of funds are cash maintained at the holding company level and dividends from the Bank, the payment of which is subject to regulatory limits.

At March 31, 2026, the Company, on an unconsolidated basis, had $9.0 million in cash for debt servicing and operating expenses.

At June 30, 2026, the Company, on an unconsolidated basis, had $5.9 million in cash for debt servicing and operating expenses.

The Company uses its sources of funds primarily to meet ongoing financial commitments, including withdrawals by depositors, credit commitments to borrowers, operating expenses and capital expenditures.

At March 31, 2026, approved outstanding loan commitments, including unused lines of credit and standby letters of credit, amounted to $610.6 million.

Certificates of deposits and brokered deposits scheduled to mature in one year or less at March 31, 2026 totaled $1.4 billion.

At June 30, 2026, approved outstanding loan commitments, including unused lines of credit and standby letters of credit, amounted to $579.7 million.

Certificates of deposits and brokered deposits scheduled to mature in one year or less at June 30, 2026 totaled $1.3 billion.

Management is not aware of any other events or regulatory requirements that, if implemented, are likely to have a material effect on either the Company’s or the Bank’s liquidity.

5 unchanged sentences

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the following table for each of the periods presented.

(dollars in thousands, except share and per share data) Three Months Ended

2026 March 31,

(dollars in thousands, except share and per share data) Three Months Ended Six Months Ended

2026 June 30,

2025 June 30,

2026 June 30,

Total equity - GAAP $ 363,547 $ 390,239 $ 363,547 $ 390,239

17 unchanged sentences

Return on average tangible common equity 2.60 % 0.20 % 2.68 % 0.59 %

(dollars in thousands, except share and per share data) Three Months Ended

2026 March 31,

(dollars in thousands, except share and per share data) Three Months Ended Six Months Ended

2026 June 30,

2025 June 30,

2026 June 30,

Total interest income $ 76,636 $ 80,886 $ 152,446 $ 157,715

Fully-taxable equivalent adjustments 1

1,142 1,157 2,302 2,326

Total interest income - FTE $ 77,778 $ 82,043 $ 154,748 $ 160,041

1 unchanged sentence

Fully-taxable equivalent adjustments 1

1,142 1,157 2,302 2,326

Net interest income - FTE $ 33,581 $ 29,147 $ 66,339 $ 55,412

10 unchanged sentences

Critical Accounting Policies and Estimates

There have been no material changes in the Company’s critical accounting policies or estimates from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025, except as described below.

There have been no material changes in the Company’s critical accounting policies or estimates from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

1 unchanged sentence

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis