Investar Holding Corp 10-K

Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the Nasdaq Global Market under the symbol “ISTR.” As of March 12, 2026, there were approximately 732 holders of record of our common stock including participants in security position listings. Dividend Policy The Company has paid a quarterly dividend on its common stock since 2011 and intends to continue to declare dividends on its common on a quarterly basis; however, we are not obligated to pay dividends on either our common or preferred stock. Pursuant to the Company's Restated Articles of Incorporation, subject to certain exceptions, we are prohibited from paying dividends on our common stock unless full dividends for the Series A Preferred Stock’s most recently completed dividend period have been declared and paid on all outstanding shares of Series A Preferred Stock. The declaration of dividends on our common and preferred stock is at the discretion of our Board and will depend on our financial performance, future prospects, regulatory requirements and other factors deemed relevant by the Board. Since we are a holding company with no material business activities, our ability to pay dividends is substantially dependent upon the ability of the Bank to transfer funds to us in the form of dividends, loans and advances. The Bank’s ability to pay dividends and make other distributions and payments to us depends upon the Bank’s earnings, financial condition, general economic conditions, compliance with regulatory requirements and other factors. In addition, the Bank’s ability to pay dividends to us is itself subject to various legal, regulatory and other restrictions. See Item 1. Business – Supervision and Regulation – Dividends , above for a discussion of the restrictions on dividends under federal banking laws and regulations. In addition, as a Louisiana corporation, we are subject to certain restrictions on dividends under the Louisiana Business Corporation Act. Generally, a Louisiana corporation may pay dividends to its shareholders unless, after giving effect to the dividend, either (1) the corporation would not be able to pay its debts as they come due in the usual course of business or (2) the corporation’s total assets are less than the sum of its total liabilities and the amount that would be needed, if the corporation were to be dissolved at the time of the payment of the dividend, to satisfy the preferential rights of shareholders whose preferential rights are superior to those receiving the dividend. In addition, our existing and future debt agreements limit, or may limit, our ability to pay dividends. Under the terms of our 2032 Notes, we are prohibited from paying dividends upon and during the continuance of any Event of Default under such notes. Finally, our ability to pay dividends may be limited on account of the junior subordinated debentures that we assumed through acquisitions. We must make payments on the junior subordinated debentures before any dividends can be paid on our common stock. These restrictions do not, and are not expected in the future to, materially limit the Company’s ability to pay dividends to its shareholders in an amount consistent with the Company’s history of paying dividends. 32 Table of Contents Stock Performance Graph The above graph compares the cumulative total shareholder return on the Company’s common stock over a measurement period beginning at the market close on the last trading day of 2020, with (i) the cumulative total return on the stocks included in the Russell 3000 Index and (ii) the cumulative total return on the stocks included in the S&P United States SmallCap Banks Index, which includes banks with market capitalizations of $250 million to $1 billion. The performance graph assumes that the value of the investment in our common stock, the Russell 3000 Index and the S&P United States SmallCap Banks Index was $100 at December 31, 2020 and that all dividends were reinvested. Period ending December 31, Index 2020 2021 2022 2023 2024 2025 Investar Holding Corporation $ 100.00 $ 112.98 $ 134.49 $ 96.07 $ 144.76 $ 179.78 Russell 3000 100.00 139.21 122.74 123.35 145.82 160.37 S&P US SmallCap Banks 100.00 125.66 101.53 127.88 158.32 185.47 There can be no assurance that our common stock performance will continue in the future with the same or similar trends depicted in the performance graph above. We will not make or endorse any predictions as to future stock performance. The information provided under the heading “ Stock Performance Graph ” shall not be deemed to be “ soliciting material ” or to be “ filed ” with the SEC or subject to its proxy regulations or to the liabilities of Section 18 of the Exchange Act other than as provided in Item 201 of Regulation S-K. The information provided in this section shall not be deemed to be incorporated by reference into any filing under the Securities Act or Exchange Act. 33 Table of Contents Unregistered Sales of Equity Securities Not applicable. Issuer Purchases of Equity Securities Period (a) Total Number of Shares (or Units) Purchased (1) (b) Average Price Paid per Share (or Unit) (2) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Be Purchased Under the Plans or Programs (3) October 1, 2025 to October 31, 2025 16,446 $ 24.20 16,129 393,737 November 1, 2025 to November 30, 2025 12,601 23.58 12,341 381,396 December 1, 2025 to December 31, 2025 — — — 381,396 Total 29,047 $ 23.93 28,470 381,396 (1) I ncludes 577 shares surrendered to cover the payroll taxes due upon the vesting of restricted stock. (2) The average price paid per share does not include the effect of excise tax expense incurred on net stock repurchases. (3) The Company has had a share repurchase program, which has no expiration date, since 2015. On July 19, 2023 and September 21, 2022, the Board approved an additional 350,000 shares and 300,000 shares, respectively, of the Company’s common stock for repurchase under the share repurchase program. Securities Authorized for Issuance under Equity Compensation Plans Please refer to the information under the heading “ Securities Authorized for Issuance under Equity Compensation Plans ” in Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters , for a discussion of the securities authorized for issuance under the Company’s equity compensation plans. Item 6. [Reserved] 34 Table of Contents Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations This section presents management’s perspective on the financial condition and results of operations of Investar Holding Corporation and its wholly-owned subsidiary, Investar Bank, National Association. The following discussion and analysis should be read in conjunction with the Company’s consolidated financial statements and related notes and other supplemental information included herein. Certain risks, uncertainties and other factors, including those set forth under Cautionary Note Regarding Forward-Looking Statements at the beginning of this document, Item 1A. Risk Factors in Part I, and elsewhere in this Annual Report on Form 10-K, may cause actual results to differ materially from those projected results discussed in the forward-looking statements appearing in this discussion and analysis. Discussion in this Annual Report on Form 10-K includes results of operations and financial condition for 2025 and 2024 and year-over-year comparisons between 2025 and 2024. For discussion on results of operations and financial condition pertaining to 2024 and 2023 and year-over-year comparisons between 2024 and 2023, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 12, 2025. Overview The Bank commenced operations in 2006 and we completed our initial public offering in July 2014. On July 1, 2019, the Bank changed from a Louisiana state bank charter to a national bank charter and its name changed to Investar Bank, National Association. Through the Bank, we provide full banking services, excluding trust services, tailored primarily to meet the needs of individuals, professionals, and small to medium-sized businesses. Our primary areas of operation are south Louisiana (approximat ely 77% of our tota l deposits as of December 31, 2025), including Baton Rouge, New Orleans, Lafayette, Lake Charles, and their surrounding areas; Texas, including Houston and its surrounding area, and, as of January 1, 2026, north Dallas and Wichita Falls and their surrounding areas; and Alabama, including York and Oxford and their surrounding areas. As of March 16, 2026 , we operated 36 fu ll-service bran ches comprised of 20 full-service branches in Louisiana, ten full-service branches in Texas, and six full-service branches in Alabama. Our strategy focuses on consistent, quality earnings through the optimization of our balance sheet. Our strategy includes originating and renewing high quality, primarily variable-rate, loans and allowing higher risk credit relationships to run off. We have kept duration short on our liabilities to provide flexibility to secure lower cost funding that was accretive to our net interest margin. Our strategy also includes growth through acquisitions, including whole-bank acquisitions, strategic branch acquisitions and asset acquisitions. We have completed eight whole-bank acquisitions since 2011 and regularly review acquisition opportunities. Our most recent whole bank acquisition was completed in January 2026. For additional information, see Item 1. Business – Acquisition Activity – Recent Acquisitions . Our principal business is lending to and accepting deposits from individuals and small to medium-sized businesses in our areas of operation. As a financial holding company operating through one reportable segment, we g enerate our income principally from interest on loans and, to a lesser extent, our securities investments, as well as from fees charged in connection with our various loan and deposit services. Our principal expenses are interest expense on interest-bearing customer deposits and borrowings, salaries and employee benefits, occupancy costs, data processing and other operating expenses. We measure our performance through our net interest margin, return on average assets, and return on average common equity, among other metrics, while seeking to maintain appropriate regulatory leverage and risk-based capital ratios. Acquisition of WFB On July 1, 2025, we announced that we had entered into the Agreement and Plan of Merger by and between Investar and WFB, headquartered in Wichita Falls, Texas, which provided for the merger of WFB with and into Investar, with Investar as the surviving corporation, followed by the merger of FNB, WFB’s wholly-owned subsidiary, with and into the Bank, with the Bank as the surviving bank. The Company completed its acquisition of WFB and FNB on January 1, 2026. All of the issued and outstanding shares of WFB common stock were converted into aggregate merger consideration consisting of $7.2 million in cash and 3,955,272 shares of Company common stock for an aggregate transaction value of $112.9 million. This value is based on the Company’s closing stock price on December 31, 2025 of $26.72 per common share. At December 31, 2025, WFB had $1.2 billion in total assets, $1.0 billion in net loans and $1.0 billion in total deposits. Private Placement of Series A Preferred Stock In connection with the WFB transaction, on July 1, 2025, we completed a private placement of 32,500 shares of our newly designated Series A Preferred Stock with selected institutional and other accredited investors at a price of $1,000 per share, for aggregate gross proceeds of $32.5 million. The net proceeds were $30.4 million, after deducting placement agent fees and other offering-related expenses. Investar utilized the net proceeds from the offering to support the acquisition of WFB and for general corporate purposes, including organic growth and other potential acquisitions. For additional information, see Note 13. Stockholders ’ Equity. 35 Table of Contents For certain GAAP performance measures, see “ Certain Performance Indicators: GAAP Financial Measures ” below. We also monitor changes in our tangible equity, tangible assets, and tangible book value per common share, shown in the section “ Certain Performance Indicators: Non-GAAP Financial Measures ” below. Certain Performance Indicators: GAAP Financial Measures As of and for the years ended December 31, (In thousands, except per share data) 2025 2024 2023 (1) 2022 2021 (2) Financial Information Total assets $ 2,833,048 $ 2,722,812 $ 2,815,155 $ 2,753,807 $ 2,513,203 Total common stockholders’ equity 270,720 241,296 226,768 215,782 242,598 Net interest income 80,773 69,753 74,520 89,785 83,814 Noninterest income 9,463 14,205 6,538 18,350 12,042 Noninterest expense 65,741 63,032 62,630 60,865 63,062 Net income 22,904 20,252 16,678 35,709 8,000 Net income available to common shareholders 21,848 20,252 16,678 35,709 8,000 Diluted earnings per common share 2.13 2.04 1.69 3.50 0.76 Performance Ratios Return on average assets 0.83 % 0.73 % 0.60 % 1.37 % 0.31 % Return on average common equity 8.45 8.60 7.63 15.63 3.22 Net interest margin 3.07 2.63 2.83 3.67 3.53 Efficiency ratio (3) 72.85 75.08 77.26 56.29 65.79 Dividend payout ratio 19.59 19.90 23.37 10.31 40.26 Capital Ratios Total common equity to total assets 9.56 % 8.86 % 8.06 % 7.84 % 9.65 % (1) During 2023 we purchased commercial and industrial lines of credit with an unpaid principal balance of $162.7 million. We also sold certain assets, deposits, and other liabilities associated with two branches in Texas previously acquired from PlainsCapital Bank. (2) On April 1, 2021, the Company acquired Cheaha Financial Group, Inc. and its wholly-owned subsidiary Cheaha Bank, by merger with and into the Company and Bank, respectively. (3) Calculated as noninterest expense divided by the sum of net interest income (before provision for (reversal of) credit losses) and noninterest income. Certain Performance Indicators: Non-GAAP Financial Measures Our accounting and reporting policies conform to accounting principles generally accepted in the United States, or GAAP, and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional non-GAAP metrics, including tangible book value, tangible assets, tangible book value per common share, and tangible common equity to tangible assets. These measures are not financial measures recognized under GAAP and, therefore, are considered non-GAAP financial measures. 36 Table of Contents Our management, banking regulators, financial analysts and investors use these non-GAAP financial measures to compare the capital adequacy of banking organizations with significant amounts of preferred stock and/or goodwill or other intangible assets, which typically stem from the use of the purchase accounting method of accounting for mergers and acquisitions. Tangible equity, tangible assets, tangible book value per common share or related measures should not be considered in isolation or as a substitute for total stockholders’ equity, total assets, book value per common share or any other measure calculated in accordance with GAAP. Moreover, the manner in which we calculate tangible equity, tangible assets, tangible book value per common share and any other related measures may differ from that of other companies reporting measures with similar names. The following table reconciles, as of the dates set forth below, stockholders’ equity (on a GAAP basis) to tangible equity and total assets (on a GAAP basis) to tangible assets and calculates our tangible book value per common share (dollars in thousands). As of and for the years ended December 31, 2025 2024 2023 2022 2021 Tangible common equity Total stockholders’ equity - GAAP $ 301,073 $ 241,296 $ 226,768 $ 215,782 $ 242,598 Less: preferred stock 30,353 — — — — Total common stockholders’ equity 270,720 241,296 226,768 215,782 242,598 Adjustments: Goodwill 40,088 40,088 40,088 40,088 40,088 Core deposit intangible 996 1,508 2,132 2,959 3,848 Trademark intangible 100 100 100 100 100 Tangible common equity $ 229,536 $ 199,600 $ 184,448 $ 172,635 $ 198,562 Tangible assets Total assets - GAAP $ 2,833,048 $ 2,722,812 $ 2,815,155 $ 2,753,807 $ 2,513,203 Adjustments: Goodwill 40,088 40,088 40,088 40,088 40,088 Core deposit intangible 996 1,508 2,132 2,959 3,848 Trademark intangible 100 100 100 100 100 Tangible assets $ 2,791,864 $ 2,681,116 $ 2,772,835 $ 2,710,660 $ 2,469,167 Total common shares outstanding 9,798,948 9,828,413 9,748,067 9,901,847 10,343,494 Book value per common share $ 27.63 $ 24.55 $ 23.26 $ 21.79 $ 23.45 Effect of adjustments (4.21 ) (4.24 ) (4.34 ) (4.36 ) (4.25 ) Tangible book value per common share 23.42 20.31 18.92 17.43 19.20 Total common equity to total assets 9.56 % 8.86 % 8.06 % 7.84 % 9.65 % Effect of adjustments $ (1.34 ) $ (1.42 ) $ (1.41 ) $ (1.47 ) $ (1.61 ) Tangible common equity to tangible assets 8.22 % 7.44 % 6.65 % 6.37 % 8.04 % Certain Events That Affect Year-over-Year Comparability Changing Inflation and Interest Rates . During 2024, beginning in September 2024, the Federal Reserve reduced the federal funds target rate three times by 100 basis points on a cumulative basis to 4.25% to 4.50%. During 2025, beginning in September 2025, the Federal Reserve reduced the federal funds target rate three times by 75 basis points on a cumulative basis to 3.50% to 3.75%. Accordingly, the prevailing federal funds target rate for the year ended December 31, 2025 was lower than for the year ended December 31, 2024. Disruptions in the Banking Industry . Between March 10, 2023 and March 12, 2023, state banking supervisors closed Silicon Valley Bank and Signature Bank and named the FDIC as receiver. At the time of closure, they were among the 30 largest U.S. banks. While the reasons for their failure are complex and have not been fully investigated, reports indicate that, among other things, both banks had grown in asset size in recent periods at a faster rate than their peers, had large proportions of uninsured deposits (approximately 87.5% and 89.7% of total deposits, respectively) and high unrealized losses on investment securities. Silicon Valley Bank’s business strategy focused on serving the technology and venture capital sectors, and Signature Bank had significant exposure to deposits from the digital asset industry. Prior to their closure, both banks experienced sudden and rapid deposit withdrawals. These events caused bank deposit customers, particularly those with uninsured deposits, to become concerned regarding the safety of their deposits, and in some cases caused customers to withdraw deposits. In response to the disruptions, among other things, the Federal Reserve announced a new BTFP to provide eligible banks with loans of up to one-year maturity backed by collateral pledged at par value. On April 24, 2023, San Francisco-based First Republic Bank, also among the 30 largest U.S. banks, reported a large deposit outflow and substantially reduced net income. First Republic Bank also had a large proportion of uninsured deposits (67% as of December 31, 2022). On May 1, 2023, regulators seized First Republic Bank and sold all of its deposits and most of its assets to JPMorgan Chase Bank. In response to the disruptions and related publicity, we formed an internal task force that included members of our ALCO. The task force met frequently to review our liquidity position and liquidity sources, and oversaw the Bank’s process to qualify for the BTFP. In addition, we took steps to inform our customers about our financial position, liquidity and insured deposit products. During the second quarter of 2023, we utilized the BTFP and reduced FHLB advances. The Bank utilized this source of funding due to its lower rate, the ability to prepay the obligations without penalty, and as a means to lock in funding. During the fourth quarter of 2023 and again in the first quarter of 2024, the Bank refinanced its BTFP borrowings with new borrowings under the program due to more favorable rates. The Federal Reserve ceased making new loans under the BTFP on March 11, 2024. During the third quarter of 2024, we began paying down borrowings under the BTFP and repaid all of the remaining borrowings under the BTFP in the fourth quarter of 2024. As of December 31, 2025, estimated uninsured deposits represented approximately 34% of our total deposits. For additional information, see “ Discussion and Analysis of Financial Condition – Deposits ,” “ Borrowings ,” and “ Liquidity and Capital Resources ” and Part I. Item 1A. Risk Factors . Hurricane Ida. On August 29, 2021, Hurricane Ida hit the Louisiana coast as a category 4 hurricane. Though Hurricane Ida did not cause significant physical damage to our branch locations, the storm devastated some of our market areas. The Company set up programs to help employees and customers experiencing financial difficulty as a result of the hurricane, including a deferral program. Additionally, the Company recorded an impairment charge of $21.6 million in the third quarter of 2021 related to a lending relationship with related borrowers (collectively, the “Borrower”) consisting of multiple loans secured by various types of collateral, including real estate, inventory, and equipment. As a result of Hurricane Ida’s impact on the Borrower’s business operations, some of the collateral securing the loan relationship, including real estate, inventory, and equipment, experienced a significant reduction in value. As of December 31, 2025, we have recorded total recoveries on the relationship of approximately $7.9 million on a cumulative basis. During 2025, we recorded a $3.3 million recovery of loans previously charged off as a result of a property insurance settlement related to a loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida, and we also recorded related noninterest expense of $0.2 million. D uring 2024, we recorded a gain on sale of other real estate owned of $0.7 million and noninterest income of $1.1 million from a legal settlement related to this loan relationship. 37 Table of Contents Branch Activity. In January 2024, we closed one branch in Alabama. In October 2024, we converted an existing loan and deposit production office in our Texas market to a full-service branch location. Subordinated Debt Repurchases and Redemptions. During the first quarter of 2024, we repurchased $1.0 million in principal amount of our 2032 Notes. During the second quarter of 2024, we repurchased $5.0 million in principal amount of our 2029 Notes and $2.0 million in principal amount of our 2032 Notes. During the fourth quarter of 2024, we redeemed all of the remaining $20.0 million in principal amount of the 2029 Notes. As of December 31, 2025 and December 31, 2024, our outstanding subordinated debt consisted of $17.0 million in principal amount of our 2032 Notes. Legal Settlement. During the third quarter of 2024, we recorded noninterest income of $1.1 million from a legal settlement related to a lending relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida. BOLI Restructuring. During the first quarter of 2024, we surrendered approximately $8.4 million of BOLI and reinvested the proceeds in higher yielding policies. BOLI Death Benefit Proceeds. During the fourth quarter of 2024, we received BOLI death benefit proceeds totaling $5.5 million, and recorded a related $3.1 million in nontaxable noninterest income from BOLI. Acquisition of WFB. During 2025, we recorded acquisition expense of $1.0 million related to the acquisition of WFB completed on January 1, 2026. Private Placement of Series A Preferred Stock. During the third quarter of 2025, we completed a private placement of 32,500 shares of our newly designated Series A Preferred Stock with selected institutional and other accredited investors at a price of $1,000 per share, for aggregate gross proceeds of $32.5 million. The net proceeds were $30.4 million, after deducting placement agent fees and other offering-related expenses. 38 Table of Contents Overview of Financial Condition and Results of Operations Total assets were $2.8 billion at December 31, 2025, an increase of $0.1 million, or 4.0%, compared to total assets of $2.7 billion at December 31, 2024. Net income available to common shareholders for the year ended December 31, 2025 totaled $21.8 million, or $2.13 per diluted common share, compared to $20.3 million, or $2.04 per diluted common share, for the year ended December 31, 2024 . This represents a $1.6 million, or a 7.9% , increase in net income available to common shareholders. At December 31, 2025, the Company and the Bank each were in compliance with all regulatory capital requirements, and the Bank was considered “well-capitalized” under prompt corrective action regulations. Key components of the Company’s performance during the year ended December 31, 2025 are summarized below. • N et interest income for the year ended December 31, 2025 was $80.8 million, an increase of $11.0 million, or 15.8% , compared to $69.8 million for the year ended December 31, 2024 . W e experienced margin expansion as our cost of funds decreased and our yield on interest-earning assets increased. • For the year ended December 31, 2025 , our net interest margin was 3.07% compared to 2.63% for the year ended December 31, 2024 . • Return on average assets increased to 0.83% for the year ended December 31, 2025 compared to 0.73% for the year ended December 31, 2024. • Return on average common equity decreased to 8.45% for the year ended December 31, 2025 compared to 8.60% for the year ended December 31, 2024. • Book value per common share increased to $27.63 at December 31, 2025, or 12.5% compared to $24.55 at December 31, 2024. • Total loans increased $50.9 million, or 2.4%, to $2.18 billion at December 31, 2025 compared to $2.13 billion at December 31, 2024. Variable-rate loans as a percentage of total loans was 38% at December 31, 2025 compared to 32% at December 31, 2024. • We recorded a $3.4 million reversal of credit losses for t he year ended December 31, 2025 compared to a reversal of credit losses of $3.5 million for the year ended December 31, 2024. • Nonperforming loans were 0.43% of total loans at December 31, 2025 compared to 0.42% at December 31, 2024. • Total deposits were $2.35 billion at December 31, 2025, an increase of $4.3 million, or 0.2%, compared to deposits of $2.35 billion at December 31, 2024. Noninterest-bearing deposits increased $13.8 million, or 3.2%, to $446.0 million compared to $432.1 million at December 31, 2024. • We repurchased 114,249 shares of our common stock at an average price of $19.84 per share during 2025 and repurchased 18,621 shares of our common stock at an average price of $16.13 per share during 2024. We increased dividends by 6.1% to $0.435 per common share for 2025 from $0.41 per common share for 2024. • Stockholders’ equity increased 24.8% to $301.1 million at December 31, 2025, compared to December 31, 2024. 39 Table of Contents Discussion and Analysis of Financial Condition Loans General . Loans, constitute our most significant asset, comprising 77% and 78% of our total assets at December 31, 2025 and 2024, respectively. Loans increased $50.9 million, or 2.4%, to $2.18 billion at December 31, 2025 from $2.13 billion at December 31, 2024. The increase in loans was primarily the result of organic growth. We emphasize the origination of high margin loans that promote long-term profitability and proactively exiting credit relationships that do not fit this strategy. Our variable-rate loans as a percentage of total loans increased to 38% at December 31, 2025 compared to 32% at December 31, 2024. The table below sets forth the balance of loans outstanding by loan type as of the dates presented, and the percentage of each loan type to total loans (dollars in thousands). December 31, 2025 2024 Amount Percentage of Total Loans Amount Percentage of Total Loans Mortgage loans on real estate: Construction and development $ 147,980 6.8 % $ 154,553 7.3 % 1-4 Family 376,238 17.3 396,815 18.7 Multifamily 130,005 6.0 84,576 4.0 Farmland 4,788 0.2 6,977 0.3 Commercial real estate Owner-occupied (1) 460,126 21.1 449,259 21.1 Nonowner-occupied 452,142 20.8 495,289 23.3 Commercial and industrial (1) 595,263 27.4 526,928 24.8 Consumer 9,431 0.4 10,687 0.5 Total loans $ 2,175,973 100 % $ 2,125,084 100 % (1) The Company’s business lending portfolio consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans. At December 31, 2025, the Company’s total business lending portfolio, which consists of loans secured by owner-occupied commercial real estate properties and commercial and industrial loans, was $1.06 billion, an increase of $79.2 million, or 8.1%, compared to the business lending portfolio of $976.2 million at December 31, 2024. The increase in the business lending portfolio was primarily driven by organic growth and higher utilization of credit lines, particularly on commercial and industrial relationships. Nonowner-occupied commercial real estate loans totaled $452.1 million at December 31, 2025, a decrease of $43.1 million, or 8.7% compared to $495.3 million at December 31, 2024. The decrease in nonowner-occupied loans was primarily due to loan amortization and payoffs that aligned with our continued strategy to optimize and de-risk the mix of the portfolio. During the third quarter of 2023, we exited the consumer mortgage loan origination business to transition into shorter duration, higher risk-adjusted return asset classes, in an effort to focus more on our core business and optimize profitability. The consumer mortgage portfolio was approximately $224.5 million at December 31, 2025 , a decrease of $18.0 million, or 7.4%, compared to $242.5 million at December 31, 2024, substantially all of which is included in the 1-4 family category. The remaining loans in the category consisted primarily of second mortgages, home equity loans, home equity lines of credit, and business purpose loans secured by 1-4 family residential real estate. Loan Concentrations . Loan concentrations are considered to exist when there are amounts loaned to multiple borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At December 31, 2025 and December 31, 2024, we had no concentrations of loans exceeding 10% of total loans other than loans in the categories listed in the table above. The table below sets forth the balance of owner-occupied c ommercial real estate loans by industry based on NAICS code and nonowner-occupied loans by property type as of the dates presented (dollars in thousands). December 31, 2025 2024 Amount Percentage of Total Amount Percentage of Total Owner-Occupied Retail trade $ 129,973 28 % $ 136,350 30 % Wholesale trade 59,282 13 48,930 11 Healthcare and social assistance 42,522 9 38,950 9 Real estate 39,930 9 67,590 15 Mining, quarrying, and oil and gas extraction 34,119 7 3,415 1 Other services (except public administration) 32,147 7 32,532 7 Accommodation and food services 30,884 7 30,071 7 Manufacturing 20,733 5 16,618 4 Construction 16,193 4 18,276 4 All other (1) 54,343 11 56,527 12 Total owner-occupied $ 460,126 100 % $ 449,259 100 % Nonowner-Occupied Retail $ 157,272 35 % $ 168,033 34 % Healthcare 85,921 19 95,641 19 Office 82,833 18 97,261 20 Warehouse 49,254 11 57,684 12 Hotel/motel 29,956 7 30,875 6 All other 46,906 10 45,795 9 Total nonowner-occupied $ 452,142 100 % $ 495,289 100 % (1) No individual category within “All other” represents more than 4% of total owner-occupied loans. 40 Table of Contents The following table reflects contractual loan maturities of loans in our loan portfolio and the amount of such loans with fixed and variable interest rates in each maturity range as of December 31, 2025. (dollars in thousands) One Year or Less After One Year Through Five Years After Five Years Through Fifteen Years After Fifteen Years Total Mortgage loans on real estate: Construction and development $ 106,203 $ 34,602 $ 7,029 $ 146 $ 147,980 1-4 Family 38,625 65,667 38,333 233,613 376,238 Multifamily 43,129 72,185 4,494 10,197 130,005 Farmland 961 2,936 891 — 4,788 Commercial real estate Owner-occupied 104,215 173,043 180,268 2,600 460,126 Nonowner-occupied 154,618 201,701 95,131 692 452,142 Commercial and industrial 301,621 159,051 133,474 1,117 595,263 Consumer 2,814 5,449 1,085 83 9,431 Total loans $ 752,186 $ 714,634 $ 460,705 $ 248,448 $ 2,175,973 Loans with fixed rates: Mortgage loans on real estate: Construction and development $ 19,012 $ 16,705 $ 4,167 $ 146 $ 40,030 1-4 Family 12,592 58,346 36,589 193,206 300,733 Multifamily 19,844 44,296 3,288 847 68,275 Farmland 417 2,483 269 — 3,169 Commercial real estate Owner-occupied 12,285 121,374 177,543 1,455 312,657 Nonowner-occupied 93,448 193,653 87,955 154 375,210 Commercial and industrial 39,354 75,662 113,252 — 228,268 Consumer 2,558 5,264 954 83 8,859 Total loans with fixed rates $ 199,510 $ 517,783 $ 424,017 $ 195,891 $ 1,337,201 Loans with variable rates: Mortgage loans on real estate: Construction and development $ 87,191 $ 17,897 $ 2,862 $ — $ 107,950 1-4 Family 26,033 7,321 1,744 40,407 75,505 Multifamily 23,285 27,889 1,206 9,350 61,730 Farmland 544 453 622 — 1,619 Commercial real estate Owner-occupied 91,930 51,669 2,725 1,145 147,469 Nonowner-occupied 61,170 8,048 7,176 538 76,932 Commercial and industrial 262,267 83,389 20,222 1,117 366,995 Consumer 256 185 131 — 572 Total loans with variable rates $ 552,676 $ 196,851 $ 36,688 $ 52,557 $ 838,772 41 Table of Contents Investment Securities We purchase investment securities primarily to provide a source for meeting liquidity needs, with return on investment as a secondary consideration. We also use investment securities as collateral for certain deposits and other types of borrowings. Investment securities represented 15% of our total assets and totaled $418.8 million at December 31, 2025, an increase of $45.0 million, or 12.0%, from $373.8 million at December 31, 2024. The increase in investment securities was driven primarily by a $38.4 million increase in residential mortgage-backed securities and a $5.9 million increase in obligations of state and political subdivisions. Due in large part to higher interest rates and market volatility, net unrealized losses in our AFS investment securities portfolio totaled $45.4 million at December 31, 2025 and $61.4 million at December 31, 2024. The table below shows the carrying value of our investment securities portfolio by investment type and the percentage that such investment type comprises of our entire portfolio as of the dates indicated (dollars in thousands). December 31, 2025 2024 Balance Percentage of Portfolio Balance Percentage of Portfolio Obligations of the U.S. Treasury and U.S. government agencies and corporations $ 18,751 4.5 % $ 15,707 4.2 % Obligations of state and political subdivisions 62,613 14.9 56,738 15.2 Corporate bonds 24,682 5.9 27,267 7.3 Residential mortgage-backed securities 249,247 59.5 210,837 56.4 Commercial mortgage-backed securities 63,520 15.2 63,259 16.9 Total investment securities $ 418,813 100 % $ 373,808 100 % The investment portfolio consists of AFS and HTM securities. We do not hold any investments classified as trading. We classify debt securities as HTM if management has the positive intent and ability to hold the securities to maturity. HTM securities are stated at amortized cost. Securities not classified as HTM are classified as AFS and are stated at fair value. At December 31, 2025, AFS securities comprised 88% of our total investment portfolio. Due to the nature of the investments, current market prices, and the current interest rate environment, we determined that the declines in the fair values of the AFS and HTM securities portfolio were not attributable to credit losses. Accordingly, no ACL was recorded related to our investment securities. The carrying values of our AFS securities are adjusted for unrealized gains or losses not attributable to credit losses as valuation allowances, and any gains or losses are reported on an after-tax basis as a component of other comprehensive income (loss). For additional information regarding accounting for our investment securities, see Note 1. Summary of Significant Accounting Policies – Allowance for Credit Losses. During the year ended December 31, 2025, we purchased $8.3 million of HTM securities classified as obligations of state and political subdivisions, compared to $27.0 million during the year ended December 31, 2024. During the year ended December 31, 2025, we purchased $75.0 million of AFS investment securities, compared to $27.6 million during the year ended December 31, 2024. Proceeds from maturities, prepayments and calls of AFS securities were $52.2 million in 2025 compared to $35.6 million in 2024, and we had no sales of AFS investment securities in 2025 compared to $18.0 million in 2024. Proceeds from maturities, prepayments and calls of HTM securities were $2.8 million in 2025 compared to $4.8 million in 2024. Mortgage-backed securities represente d 80% and 55% of the AFS securities we purchased in 2025 and 2024 , respectively. U.S. Treasury and U.S. government agencies and corporations securities represented 10% and 23% of the AFS securities we purchased in 2025 and 2024 , respectively. Of the remaining AFS securities purchased in 2025 and 2024 , 1% and 13%, respectively, were obligations of state and political subdivisions and 9% for each period were corporate bonds. We only purchase corporate bonds that are investment grade securities issued by seasoned corporations. 42 Table of Contents The table below sets forth the stated maturities and weighted average yields of our investment debt securities based on the amortized cost of our investment portfolio as of December 31, 2025 (dollars in thousands). One Year or Less After One Year Through Five Years After Five Years Through Ten Years After Ten Years Amount Yield Amount Yield Amount Yield Amount Yield Held to maturity: Obligations of states and political subdivisions $ — — % $ 2,064 3.77 % $ 7,540 5.89 % $ 36,727 7.07 % Residential mortgage-backed securities — — — — — — 1,868 3.14 Available for sale: Obligations of the U.S. Treasury and U.S. government agencies and corporations 5,056 4.03 5,369 6.14 7,141 4.23 1,344 4.73 Obligations of states and political subdivisions 104 3.83 4,032 2.77 6,444 2.38 7,156 2.87 Corporate bonds — — 9,880 4.75 12,542 4.08 3,500 4.59 Residential mortgage-backed securities — — 292 1.96 3,023 2.75 279,534 2.75 Commercial mortgage-backed securities 17 1.66 5,737 4.16 1,561 3.52 63,270 3.37 $ 5,177 $ 27,374 $ 38,251 $ 393,399 The maturity of mortgage-backed securities reflects scheduled repayments based upon the contractual maturities of the securities. Weighted average yields on tax-exempt securities are calculated based on amortized cost on a fully tax equivalent basis assuming a federal tax rate of 21%, when applicable. Premises and Equipment Bank premises and equipment decreased $1.2 million, or 2.9%, to $39.5 million at December 31, 2025 from $40.7 million at December 31, 2024. The decrease was primarily attributable to depreciation. Deferred Tax Asset At December 31, 2025 , the net deferred tax asset was $14.1 million, compared to $17.1 million at December 31, 2024 . The decrease in the deferred tax asset was primarily driven by a decrease in the net unrealized losses of the Bank’s AFS securities portfolio. 43 Table of Contents Deposits The following table sets forth the composition of our deposits and the percentage of each deposit type to total deposits at December 31, 2025 and 2024 (dollars in thousands). December 31, 2025 2024 Amount Percentage of Total Deposits Amount Percentage of Total Deposits Noninterest-bearing demand deposits $ 445,986 19.0 % $ 432,143 18.4 % Interest-bearing demand deposits 608,807 25.9 554,777 23.7 Money market deposits 255,500 10.9 191,548 8.2 Brokered demand deposits 2 — 47,320 2.0 Savings deposits 136,124 5.8 134,879 5.7 Brokered time deposits 204,069 8.7 245,520 10.5 Time deposits 699,761 29.7 739,757 31.5 Total deposits $ 2,350,249 100 % $ 2,345,944 100 % Total deposits were $2.35 billion at December 31, 2025, an increase of $4.3 million, or 0.2%, from total deposits of $2.35 billion at December 31, 2024. The increase in noninterest-bearing demand deposits, interest-bearing demand deposits and money market deposits was primarily due to organic growth. We increased rates on our interest-bearing demand deposits during 2025 compared to 2024 to attract and retain lower cost deposits relative to higher-cost short-term borrowings. The decrease in time deposits was primarily due to maturities of higher cost time deposits as a result of our strategy to keep duration short and lower rates. Brokered time deposits decreased to $204.1 million at December 31, 2025 from $245.5 million at December 31, 2024. We utilize brokered time deposits, entirely in denominations of less than $250,000, to secure fixed cost funding and reduce short-term borrowings. At December 31, 2025, the balance of brokered time deposits remained below 10% of total assets, and the remaining weighted average duration was approxim ately five months with a weighted average rate of 4.03%. The Company had de minimis brokered demand deposits at December 31, 2025 compared to $47.3 million at December 31, 2024. We utilize brokered demand deposits when pricing is more favorable than other short-term borrowings. Estimated uninsured deposits were $793.2 million, or approximately 34% of total deposits, at December 31, 2025 , compared to $737.6 m illion , or approximately 31% of total deposits, at December 31, 2024. T he estimates are based on the same methodologies and assumptions used for our regulatory reporting requirements. The insured deposit data for 2025 and 2024 does not reflect an evaluation of all of the account ownership category distinctions that would determine the availability of deposit insurance to individual accounts based on FDIC regulations. The following table shows scheduled maturities of time deposits in excess of the FDIC insurance limit of $250,000 at December 31, 2025 and 2024 (dollars in thousands). December 31, Time remaining until maturity: 2025 2024 Three months or less $ 103,130 $ 119,312 Over three months through six months 60,840 76,073 Over six months through twelve months 62,241 44,570 Over twelve months 10,320 16,823 Total $ 236,531 $ 256,778 Borrowings At December 31, 2025 , total borrowings included securities sold under agreements to repurchase, advances from the FHLB, subordinated debt issued in 2022, and junior subordinated debentures assumed through acquisitions. We had $11.2 million of securities sold under agreements to repurchase at December 31, 2025 compared to $8.4 million at December 31, 2024 . Our advances from the FHLB were $116.0 million at December 31, 2025 , an increase of $48.8 million from FHLB advances of $67.2 million at December 31, 2024 . FHLB advances are used to fund loan and investment activity that is not funded by deposits or other borrowings. Based on original maturities, at December 31, 2025, $36.0 million were short-term and $80.0 million of FHLB advances were long-term, com pared to $7.2 million short-term and $60.0 million long-term FHLB advances at December 31, 2024. We utilized federal funds purchased during the years ended December 31, 2025 and 2024, although none were outstanding at the year-ends. FHLB advances are used to fund new loan and investment activity that is not funded by deposits or other borrowings. At December 31, 2025 and December 31, 2024, we had $17.0 million in principal amount of our 2032 Notes outstanding. The carrying value of this subordinated debt was $16.7 million at December 31, 2025 and December 31, 2024. Junior subordinated debt of $8.8 million and $8.7 million at December 31, 2025 and 2024 , respect ively, represents the junior subordinated debentures that we assumed in connection with our acquisitions of Cheaha Financial Group Inc. in 2021, BOJ Bancshares, Inc. in 2017, and First Community Bank in 2013. On March 12, 2023, the Federal Reserve established the BTFP. The BTFP was a one-year program which provided additional liquidity through borrowings for a term of up to one year secured by the pledging of certain qualifying securities and other assets valued at par. Beginning in the second quarter of 2023, we utilized the BTFP to secure fixed rate funding for a one-year term and reduce short-term FHLB advances, which are priced daily. We utilized this source of funding due to its lower rate and the ability to prepay the obligations without penalty. The rates on the borrowings under the BTFP were fixed for one year from the day each borrowing was made. During the fourth quarter of 2023 and again in the first quarter of 2024, we refinanced all of our borrowings under the BTFP with new loans under the BTFP with a one-year term due to more favorable rates. During the third quarter of 2024, we began paying down borrowings under the BTFP and repaid all of the remaining borrowings under the BTFP in the fourth quarter of 2024. At December 31, 2025 and 2024, we had no outstanding borrowings under the BTFP. The BTFP ceased making new loans as scheduled on March 11, 2024. Typically, the main source of our short-term borrowings are advances from the FHLB; however, during the year ended December 31, 2024, our primary source of short-term borrowings were borrowings under the BTFP due to more favorable rates. The rate charged for advances from the FHLB is directly tied to the Federal Reserve’s federal funds target rate. As of December 31, 2025, the federal funds target rate was 3.50% to 3.75%. 44 Table of Contents The average balances and cost of short-term borrowings for the years ended December 31, 2025, 2024 and 2023 are summarized in the table below (dollars in thousands). Average Balances Cost of Short-term Borrowings December 31, December 31, 2025 2024 2023 2025 2024 2023 Federal funds purchased and short-term FHLB advances $ 28,021 $ 6,069 $ 124,191 4.25 % 5.09 % 4.93 % Borrowings under BTFP — 174,357 131,952 — 4.78 5.09 Repurchase agreements 12,097 9,486 4,587 0.75 0.65 0.13 Total short-term borrowings $ 40,118 $ 189,912 $ 260,730 3.19 % 4.58 % 4.93 % The following table sets forth certain information regarding securities sold under agreements to repurchase for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands). December 31, 2025 2024 2023 Repurchase agreements: Amount outstanding at period end $ 11,183 $ 8,376 $ 8,633 Average amount outstanding during the period 12,097 9,486 4,587 Maximum amount at any month end during the period 16,082 28,894 13,930 Weighted-average interest rate at period end 0.75 % 0.75 % 0.13 % Weighted-average interest rate during period 0.75 0.65 0.13 2032 Notes. At December 31, 2025 and 2024, we had $17.0 million in principal amount of our 2032 Notes outstanding. On April 6, 2022, we entered into a Subordinated Note Purchase Agreement with certain institutional accredited investors and qualified institutional buyers (the “Purchasers”) under which we issued $20.0 million in aggregate principal amount of our 2032 Notes to the Purchasers at a price equal to 100% of the aggregate principal amount of the 2032 Notes. The 2032 Notes were issued under an indenture, dated April 6, 2022 (the “Indenture”), by and among the Company and UMB Bank, National Association, as trustee. The 2032 Notes have a stated maturity date of April 15, 2032 and bear interest at a fixed rate of 5.125% per year from and including April 6, 2022 to but excluding April 15, 2027 or earlier redemption date. From April 15, 2027 to but excluding the stated maturity date or earlier redemption date, the 2032 Notes will bear interest at a floating rate equal to the then current three-month term SOFR, plus 277 basis points. As provided in the 2032 Notes, the interest rate on the 2032 Notes during the applicable floating rate period may be determined based on a rate other than three-month term SOFR. The 2032 Notes may be redeemed, in whole or in part, on or after April 15, 2027 or, in whole but not in part, under certain other limited circumstances set forth in the Indenture. Any redemption we made would be at a redemption price equal to 100% of the principal balance being redeemed, together with any accrued and unpaid interest to the date of redemption. Principal and interest on the 2032 Notes are subject to acceleration only in limited circumstances in the case of certain bankruptcy and insolvency-related events. The 2032 Notes are the unsecured, subordinated obligations of the Company and rank junior in right of payment to our current and future senior indebtedness and to our obligations to our general creditors. The 2032 Notes are intended to qualify as Tier 2 capital for regulatory purposes. We used the majority of the net proceeds from the 2032 Notes to redeem our 2027 Notes in June 2022, and utilized the remaining proceeds for share repurchases and for general corporate purposes. During the year ended December 31, 2024, we repurchased $3.0 million in principal amount of the 2032 Notes. 2029 Notes . At December 31, 2025 and 2024, none of our 2029 Notes were outstanding. On November 12, 2019, the Company issued $25.0 million in aggregate principal amount of its 2029 Notes at 100% of their face amount in a private placement to certain institutional and other accredited investors. The 2029 Notes had a maturity date of December 30, 2029. From and including the date of issuance to, but excluding December 30, 2024, the 2029 Notes bore interest at an initial fixed rate of 5.125% per annum, payable semi-annually in arrears. From and including December 30, 2024 and thereafter, the 2029 Notes were to bear interest at a floating rate equal to the then-current three-month LIBOR as calculated on each applicable date of determination, or an alternative rate determined in accordance with the terms of the 2029 Notes if the three-month LIBOR could not be determined, plus 3.490%, payable quarterly in arrears. The Company could redeem the 2029 Notes, in whole or in part, on or after December 30, 2024 or, in whole but not in part, under certain limited circumstances set forth in the 2029 Notes. Any redemption by the Company would be at a redemption price equal to 100% of the principal balance being redeemed, together with any accrued and unpaid interest to the date of redemption. Principal and interest on the 2029 Notes were not subject to acceleration, except upon certain bankruptcy-related events. The 2029 Notes were unsecured, subordinated obligations of the Company and ranked junior in right of payment to the Company’s current and future senior indebtedness and to the Company’s obligations to its general creditors. The 2029 Notes were obligations of the Company only and were not obligations of, and were not guaranteed by, any of the Company’s subsidiaries. The 2029 Notes were intended to qualify as Tier 2 capital for regulatory capital purposes. During the second quarter of 2024, we repurchased $5.0 million in principal amount of our 2029 Notes. On December 30, 2024, we redeemed the remaining $20.0 million in principal amount i n full accordance with their terms at a redemption price equal to 100% of the outstanding principal balance plus accrued and unpaid interest up to but excluding the December 30, 2024 redemption date. Stockholders’ Equity Stockholders’ equity was $301.1 million at December 31, 2025, an increase of $59.8 million, or 24.8%, compared to December 31, 2024. The increase in stockholders’ equity was primarily attributable to the issuance of the Series A Preferred Stock, discussed above, net income for fiscal year 2025, a decrease in accumulated other comprehensive loss due to an increase in the fair value of the Bank’s AFS securities portfolio, partially offset by $4.3 million in dividends declared on common stock, $2.3 million for share repurchases, and $1.1 million in dividends declared on the Series A Preferred Stock. 45 Table of Contents Results of Operations Performance Summary As of and for the year ended December 31, 2025 2024 2023 Net income $ 22,904 $ 20,252 $ 16,678 Net income available to common shareholders 21,848 20,252 16,678 Diluted earnings per common share 2.13 2.04 1.69 Performance Ratios Return on average assets 0.83 % 0.73 % 0.60 % Return on average common equity 8.45 8.60 7.63 Book value per common share $ 27.63 $ 24.55 $ 23.26 Net Interest Income and Net Interest Margin Net interest income, our principal source of earnings, is the difference between the interest income generated by earning assets and the total interest cost of the deposits and borrowings obtained to fund those assets. Factors affecting the level of net interest income include the volume of earning assets and interest-bearing liabilities, yields earned on loans and investments and rates paid on deposits and other borrowings, the level of nonperforming loans, the amount of noninterest-bearing liabilities supporting earning assets, and the interest rate environment. Net interest margin is the ratio of net interest income to average interest-earning assets. The primary factors affecting net interest margin are changes in interest rates, competition, and the shape of the interest rate yield curve. The Federal Reserve Board sets various benchmark rates, including the federal funds target rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions. During 2024, beginning in September, the Federal Reserve reduced the federal funds target rate three times by 100 basis points on a cumulative basis to 4.25% to 4.50% where it remained until September 2025. During 2025, beginning in September, the Federal Reserve reduced the federal funds target rate three times by 75 basis points on a cumulative basis to 3.50% to 3.75%, where it remained as of March 16, 2026. Accordingly, the prevailing federal funds target rate during year ended December 31, 2025 was lower than during the year ended December 31, 2024. For additional discussion, see Certain Events That Affect Year-over-Year Comparability – Changing Inflation and Interest Rates. 2025 vs. 2024. Net interest income increased 15.8% to $80.8 million for the year ended December 31, 2025 from $69.8 million for the same period in 2024. Net interest margin was 3.07% for the year ended December 31, 2025, an increase of 44 basis points from 2.63% for the year ended December 31, 2024. The increase in net interest income resulted primarily from a lower average balance of short-term borrowings and a lower average balance of, and a decrease in the rates paid on, time deposits, partially offset by a lower average balance of loans and an increase in the average balance of, and rates paid on, interest-bearing demand deposits. Average short-term borrowings decreased $149.8 million, as we repaid our borrowings under the BTFP, which along with lower rates paid, resulted in a $7.4 million decrease in interest expense compared to the year ended December 31, 2024. Average time deposits decreased $34.4 million, which along with lower rates paid, resulted in a $6.0 million decrease in interest expense compared to the year ended December 31, 2024. Average loans decreased $36.6 million in accordance with our strategy to optimize the balance sheet, which, partially offset by higher loan yields, resulted in a $1.8 million decrease in interest income compared to the year ended December 31, 2024. Average interest-bearing demand deposits increased $126.8 million, which, combined with an increase in rates, resulted in a $4.2 million increase in interest expense compared to the year ended December 31, 2024. Average brokered time deposits were $237.3 million during the year ended December 31, 2025 compared to $249.7 million during the year ended December 31, 2024, which along with lower rates paid resulted in a $1.9 million decrease in interest expense compared to the year ended December 31, 2024. Average noninterest-bearing deposits increased $15.5 million during the year ended December 31, 2025 compared to the same period in 2024. Rates paid on interest-bearing liabilities decreased primarily as a result of the overall decrease in prevailing interest rates and our strategy to optimize the balance sheet. Our yield on interest-earning assets increased due to an increase in yield on loans and the investment securities portfolio. 46 Table of Contents Interest income was $144.0 million for the year ended December 31, 2025 compared to $143.9 million for the same period in 2024. Loan interest income made up substantially all of our interest income for the years ended December 31, 2025 and 2024, although interest on investment securities contributed 10.2% of interest income for the year ended December 31, 2025 compared to 8.5% for the year ended December 31, 2024. Interest on our commercial real estate loans, commercial and industrial loans, and 1-4 family residential real estate loans constituted the three largest components of our loan interest income for the years ended December 31, 2025 and 2024 at 85% of total interest income on loans. The overall yield on interest-earning assets increased four basis points to 5.47% for the year ended December 31, 2025 compared to 5.43% for the same period in 2024. The loan portfolio yielded 5.96% for the year ended December 31, 2025 compared to 5.94% for the year ended December 31, 2024. The increase in yield on our loan portfolio was driven primarily by higher yields on commercial real estate loans and multifamily loans. In addition, the yield on the investment portfolio was 3.23% for the year ended December 31, 2025 compared to 2.86% for the year ended December 31, 2024. Interest expense was $63.2 million for the year ended December 31, 2025, a decrease of $10.9 million compared to interest expense of $74.1 million for the year ended December 31, 2024. A decrease in interest expense of $6.0 million resulted from a decrease in the volume of interest-bearing liabilities, primarily short-term borrowings and time deposits partially offset by an increase in volume of interest-bearing demand deposits and long-term debt. A decrease in interest expense of $4.9 million resulted from the decrease in the cost of interest-bearing liabilities, primarily time deposits and brokered time deposits, partially offset by an increase in the cost of interest-bearing demand deposits. Average interest-bearing liabilities decreased by $56.0 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, as average short-term borrowings decreased by $149.8 million while average interest-bearing deposits increased by $126.8 million. For the year ended December 31, 2025, the cost of interest-bearing deposits decreased 34 basis points to 3.04% primarily due to lower prevailing market interest rates. As previously discussed, the federal funds target rate decreased during 2025 to 3.50% to 3.75%, which affects the rate the Company pays for deposits, immediately available overnight funds, and long-term borrowings. We increased rates on our interest-bearing demand deposits during the year ended December 31, 2025 compared to the to the year ended December 31, 2024 to attract and retain lower cost deposits relative to higher cost short-term borrowings. The cost of short-term borrowings decreased 139 basis points to 3.19% primarily due to our payoff of our borrowings under the BTFP during the year ended December 31, 2024. For the year ended December 31, 2025, the cost of interest-bearing liabilities decreased 44 basis points to 3.11% compared to the same period in 2024. Average Balances and Yields . The following table sets forth average balance sheet data, including all major categories of interest-earning assets and interest-bearing liabilities, together with the interest earned or paid and the average yield or rate paid on each such category as of and for the years ended December 31, 2025, 2024 and 2023. Averages presented below are daily averages (dollars in thousands). As of and for the year ended December 31, 2025 2024 2023 Interest Interest Interest Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Balance Expense (1) Rate (1) Balance Expense (1) Rate (1) Balance Expense (1) Rate (1) Assets Interest-earning assets: Loans $ 2,126,514 $ 126,732 5.96 % $ 2,163,161 $ 128,498 5.94 % $ 2,123,234 $ 117,892 5.55 % Securities: Taxable 402,353 11,940 2.97 399,855 11,047 2.76 447,442 12,372 2.76 Tax-exempt 51,648 2,743 5.31 29,930 1,249 4.17 22,051 693 3.14 Interest-earning balances with banks 54,308 2,601 4.79 56,851 3,071 5.40 38,561 2,244 5.82 Total interest-earning assets 2,634,823 144,016 5.47 2,649,797 143,865 5.43 2,631,288 133,201 5.06 Cash and due from banks 27,109 25,890 29,142 Intangible assets 41,434 42,006 42,695 Other assets 98,856 95,391 86,712 Allowance for credit losses (26,746 ) (28,933 ) (30,242 ) Total assets $ 2,775,476 $ 2,784,151 $ 2,759,595 Liabilities and stockholders’ equity Interest-bearing liabilities: Deposits: Interest-bearing demand deposits $ 819,182 $ 18,188 2.22 % $ 692,390 $ 14,024 2.03 % $ 688,786 $ 8,941 1.30 % Brokered demand deposits 2,464 109 4.44 455 22 4.76 — — — Savings deposits 135,716 1,447 1.07 130,553 1,418 1.09 134,817 534 0.40 Brokered time deposits 237,294 10,983 4.63 249,668 12,878 5.16 163,873 8,224 5.02 Time deposits 710,610 27,141 3.82 745,002 33,168 4.45 699,648 24,373 3.48 Total interest-bearing deposits 1,905,266 57,868 3.04 1,818,068 61,510 3.38 1,687,124 42,072 2.49 Short-term borrowings (2) 40,118 1,282 3.19 189,912 8,699 4.58 260,730 12,845 4.93 Long-term debt 87,751 4,093 4.66 81,152 3,903 4.81 82,844 3,764 4.54 Total interest-bearing liabilities 2,033,135 63,243 3.11 2,089,132 74,112 3.55 2,030,698 58,681 2.89 Noninterest-bearing demand deposits 445,929 430,433 489,175 Other liabilities 22,407 28,986 21,220 Stockholders’ equity 274,005 235,600 218,502 Total liabilities and stockholders’ equity $ 2,775,476 $ 2,784,151 $ 2,759,595 Net interest income/net interest margin $ 80,773 3.07 % $ 69,753 2.63 % $ 74,520 2.83 % (1) Interest income and net interest margin are expressed as a percentage of average interest-earning assets outstanding for the indicated periods and are not presented on a tax equivalent basis. Interest expense is expressed as a percentage of average interest-bearing liabilities for the indicated periods. (2) For additional information, see Discussion and Analysis of Financial Condition – Borrowings . Nonaccrual loans were included in the computation of average loan balances but carry a zero yield. The yields include the effect of loan fees of $2.0 million, $1.7 million and $2.0 million for the years ended December 31, 2025, 2024 and 2023, respectively, and discounts and premiums that are amortized or accreted to interest income or expense. 47 Table of Contents Volume/Rate Analysis . The following tables set forth a summary of the changes in interest earned and interest paid resulting from changes in volume and rates for the year ended December 31, 2025 compared to the year ended December 31, 2024 and the year ended December 31, 2024 compared to the year ended December 31, 2023 (dollars in thousands). Year ended December 31, 2025 vs. Year ended December 31, 2024 Volume Rate Net (1) Interest income: Loans $ (2,177 ) $ 411 $ (1,766 ) Securities: Taxable 69 824 893 Tax-exempt 906 588 1,494 Interest-earning balances with banks (137 ) (333 ) (470 ) Total interest-earning assets (1,339 ) 1,490 151 Interest expense: Interest-bearing demand deposits 2,569 1,595 4,164 Brokered demand deposits 95 (8 ) 87 Savings deposits 56 (27 ) 29 Brokered time deposits (638 ) (1,257 ) (1,895 ) Time deposits (1,531 ) (4,496 ) (6,027 ) Short-term borrowings (6,861 ) (556 ) (7,417 ) Long-term debt 317 (127 ) 190 Total interest-bearing liabilities (5,993 ) (4,876 ) (10,869 ) Change in net interest income $ 4,654 $ 6,366 $ 11,020 Year ended December 31, 2024 vs. Year ended December 31, 2023 Volume Rate Net (1) Interest income: Loans $ 2,217 $ 8,389 $ 10,606 Securities: Taxable (1,316 ) (9 ) (1,325 ) Tax-exempt 248 308 556 Interest-earning balances with banks 1,064 (237 ) 827 Total interest-earning assets 2,213 8,451 10,664 Interest expense: Interest-bearing demand deposits 47 5,036 5,083 Brokered demand deposits 22 — 22 Savings deposits (17 ) 901 884 Brokered time deposits 4,305 349 4,654 Time deposits 1,580 7,215 8,795 Short-term borrowings (3,489 ) (657 ) (4,146 ) Long-term debt (77 ) 216 139 Total interest-bearing liabilities 2,371 13,060 15,431 Change in net interest income $ (158 ) $ (4,609 ) $ (4,767 ) (1) Changes in interest due to both volume and rate have been allocated entirely to rate. 48 Table of Contents Noninterest Income We expect to continue to develop new products that generate noninterest income, and enhance our existing products, in order to diversify our revenue sources. The following table illustrates the primary components of noninterest income for the year ended December 31, 2025 compared to the year ended December 31, 2024 (dollars in thousands). For the Years Ended December 31, Increase (Decrease) 2025 2024 $ % Noninterest income: Service charges on deposit accounts $ 3,256 $ 3,241 $ 15 0.5 % Gain (loss) on call or sale of investment securities, net 18 (753 ) 771 102.4 (Loss) gain on sale or disposition of fixed assets, net (8 ) 427 (435 ) (101.9 ) Gain on sale of other real estate owned, net 29 683 (654 ) (95.8 ) Interchange fees 1,574 1,615 (41 ) (2.5 ) Income from BOLI 1,985 4,886 (2,901 ) (59.4 ) Change in the fair value of equity securities 261 413 (152 ) (36.8 ) Income from legal settlement — 1,122 (1,122 ) (100.0 ) Other operating income 2,348 2,571 (223 ) (8.7 ) Total noninterest income $ 9,463 $ 14,205 $ (4,742 ) (33.4 )% 2025 vs. 2024. Total noninterest income decreased $4.7 million, or 33.4%, to $9.5 million for the year ended December 31, 2025 compared to $14.2 million for the year ended December 31, 2024. The decrease was mainly attributable to nonrecurring items occurring during the year ended December 31, 2024. We recorded $3.1 million in income from BOLI for the receipt of death benefit proceeds during the year ended December 31, 2024. There was also $1.1 million of income from legal settlement recorded for the year ended December 31, 2024 related to a lending relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida. During the first quarter of 2024, we recorded a $0.4 million gain on sale or disposition of fixed assets as a result of the closure of one branch in the Alabama market. Service charges on deposit accounts include maintenance fees on accounts, account enhancement charges for additional deposit account features, per item charges, overdraft fees, and treasury management charges. Service charges on deposit accounts increased 0.5% to $3.3 million for the year ended December 31, 2025 compared to $3.2 million for the same period in 2024. There was a de minimis gain on call or sale of investment securities for the year ended December 31, 2025 compared to a $0.8 million loss for the year ended December 31, 2024. We sold no securities during the year ended December 31, 2025 compared to $18.0 million during the year ended December 31, 2024. There was a de minimis gain on sale of other real estate owned for the year ended December 31, 2025 compared to a $0.7 million gain for the year ended December 31, 2024. We sold approximately $3.1 million of other real estate owned during the year ended December 31, 2025 compared to $2.1 million of sales during the year ended December 31, 2024. Interchange fees, which are fees earned on the usage of the Bank’s credit and debit cards, decreased $41,000, or 2.5%, to $1.6 million for year ended December 31, 2025 from $1.6 million for the year ended December 31, 2024. The decrease in interchange fees can primarily be attributed to the decrease in the volume of debit and credit card transactions. Income from BOLI decreased $2.9 million to $2.0 million for the year ended December 31, 2025 from $4.9 million for the year ended December 31, 2024. During the year ended December 31, 2024 , we received BOLI death benefit proceeds totaling $5.5 million and recorded $3.1 million in nontaxable income from BOLI. During the year ended December 31, 2025, we purchased $7.5 million in BOLI policies, which resulted in increased interest earning on our BOLI policies. Other operating income includes, among other things, credit card, ATM and wire fees, derivative fee income, changes in the net asset value of other investments and lease income. The $0.2 million decrease in other operating income for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily attributable to a $0.6 million decrease in the change in net asset value of other investments and a $0.2 million decrease in derivative fee income, partially offset by a $0.3 million increase in distributions from other investments and $0.3 million of insurance proceeds received in the second quarter of 2025 for damages to a property recorded in other real estate owned. 49 Table of Contents Noninterest Expense Noninterest expense includes salaries and employee benefits and other cos ts associated with the conduct of our operations. Our goal is to manage our costs within the framework of our operating strategy of generating consistent, quality earnings. The following table illustrates the primary components of noninterest expense for the year ended December 31, 2025 compared to the year ended December 31, 2024 (dollars in thousands). For the Years Ended December 31, Increase (Decrease) 2025 2024 $ % Noninterest expense: Depreciation and amortization $ 2,792 $ 3,095 $ (303 ) (9.8 )% Salaries and employee benefits 40,228 38,615 1,613 4.2 Occupancy 2,667 2,576 91 3.5 Data processing 3,456 3,611 (155 ) (4.3 ) Marketing 429 370 59 15.9 Professional fees 2,076 1,797 279 15.5 Gain on early extinguishment of subordinated debt — (292 ) 292 100.0 Acquisition expense 1,036 — 1,036 — Other operating expenses 13,057 13,260 (203 ) (1.5 ) Total noninterest expense $ 65,741 $ 63,032 $ 2,709 4.3 % 2025 vs. 2024. Total noninterest expense was $65.7 million for the year ended December 31, 2025, an increase of $2.7 million, or 4.3%, from $63.0 million for the year ended December 31, 2024. This increase was primarily driven by increases in salaries and employee benefits and acquisition expense, partially offset by decreases in depreciation and amortization and other operating expenses. Salaries and employee benefits increased $1.6 million, or 4.2%, to $40.2 million for the year ended December 31, 2025, compared to $38.6 million for the year ended December 31, 2024. The increase in salaries and employee benefits was primarily due to investment in people with an emphasis on our Texas markets to remix and strengthen our balance sheet and an increase in health insurance claims, partially offset by a decrease in deferred compensation expense. As of December 31, 2025, we had 319 full-time and eight part-time employees, compared to 327 full-time and eight part-time employees as of December 31, 2024. Depreciation and amortization decreased $0.3 million, or 9.8%, to $2.8 million for the year ended December 31, 2025, compared to $3.1 million for the year ended December 31, 2024. The decrease in depreciation and amortization was primarily driven by the closure of one branch during the first quarter of 2024. Data processing decreased $0.2 million, or 4.3%, to $3.5 million for the year ended December 31, 2025 from $3.6 million for the same period in 2024. We did not complete any acquisitions, which typically drive higher data processing expenses, during the years ended December 31, 2025 and 2024. We regularly review existing contracts with the goal of negotiating favorable terms to offset the increased variable cost components of our data processing costs, such as new accounts and increased transaction volume. Occupancy expense increased $0.1 million, or 3.5%, to $2.7 million for the year ended December 31, 2025 from $2.6 million for the year ended December 31, 2024. This increase was primarily attributable to utilities and insurances expense. Acquisition expense increased to $1.0 million for the year ended December 31, 2025 compared to none for the year ended December 31, 2024. This increase was attributable to the acquisition of WFB completed on January 1, 2026. Other operating expenses include security, business development, FDIC and OCC assessments, bank shares and property taxes, collection and repossession, charitable contributions, repair and maintenance costs, personnel training and development, filing fees, and other costs related to the operation of our business. Other operating expenses decreased $0.2 million, or 1.5%, to $13.1 million for the year ended December 31, 2025 from $13.3 million for the year ended December 31, 2024. The decrease in other operating expenses was primarily due to decreases in collection and repossession expenses and FDIC assessments, partially offset by increases in write-down of other real estate owned and bank shares taxes. Income Tax Expense Income tax expense for the years ended December 31, 2025 and 2024, was $5.0 million and $4.2 million, respectively. The effective tax rates for the years ended December 31, 2025 and 2024 were 17.9% and 17.0%, respectively. During the first quarter of 2024, we surrendered approximately $8.4 million of BOLI contracts and reinvested the proceeds in higher yielding policies, which resulted in $0.3 million of income tax expense. The restructuring had an expected earn-back period of just over one year. During the fourth quarter of 2024 , we received BOLI death benefit proceeds totaling $5.5 million and recorded $3.1 million in nontaxable income from BOLI. For the year ended December 31, 2025, the effective tax rate differs from the statutory rate of 21% primarily due to tax-exempt interest income earned on certain loans and investment securities and income from BOLI. For the year ended December 31, 2024, the effective tax rate differs from the statutory rate of 21% primarily due to tax-exempt interest income earned on certain loans and investment securities and income from BOLI, partially offset by the surrender of BOLI contracts. On July 4, 2025, the OBBBA, which contains a broad range of tax reform provisions affecting businesses, was signed into law. The OBBBA did not have a significant impact on 2025 income tax expense. 50 Table of Contents Risk Management The primary risks associated with our operations are credit, interest rate and liquidity risk. Higher inflation also presents risks. Credit, inflation and interest rate risk are discussed below, while liquidity risk is discussed in this section under the heading Liquidity and Capital Resources below. Credit Risk and the Allowance for Credit Losses General . The risk of loss should a borrower default on a loan is inherent in any lending activity. Our portfolio and related credit risk are monitored and managed on an ongoing basis by our risk management department, the Board’s loan committee and the full Board. We utilize a ten-point risk-rating system, which assigns a risk grade to each borrower based on a number of quantitative and qualitative factors associated with a loan transaction. The risk grade categorizes the loan into one of five risk categories, based on information about the ability of borrowers to service the debt. The information includes, among other factors, current financial information about the borrower, historical payment experience, credit documentation, public information and current economic trends. These categories assist management in monitoring our credit quality. The risk categories, which are consistent with the definitions used in guidance promulgated by federal banking regulators are Pass (grades 1-6), Special Mention (grade 7), Substandard (grade 8), Doubtful (grade 9) and Loss (grade 10). For additional information, see Note 3. Loans and Allowance for Credit Losses – Credit Quality Indicators . At December 31, 2025 and December 31, 2024, there were no loans classified as Loss or Doubtful, $38.1 million and $32.7 million, respectively, of loans classified as Substandard, and $9.7 million and $7.8 million, respectively, of loans classified as Special Mention. Of our aggregate $47.8 million and $40.5 million Substandard and Special Mention loans at December 31, 2025 and December 31, 2024, respectively, $1.7 million and $2.0 million, respectively, were acquired and marked to fair value at the time of their acquisition. The increase in loans classified as Substandard was primarily due to two relationships in which $9.7 million of commercial real estate loans were downgraded and are still accruing. An independent loan review is conducted annually, whether internally or externally, on at least 40% of commercial loans utilizing a risk-based approach designed to maximize the effectiveness of the review. Internal loan review is independent of the loan underwriting and approval process. In addition, credit analysts periodically review certain commercial loans to identify negative financial trends related to any one borrower, any related groups of borrowers or an industry. All loans not categorized as pass are put on an internal watch list, with quarterly reports to the Board. In addition, a written status report is maintained by our special assets division for all commercial loans categorized as Substandard or worse. We use this information in connection with our collection efforts. If our collection efforts are unsuccessful, collateral securing loans may be repossessed and sold or, for loans secured by real estate, foreclosure proceedings initiated. The collateral is sold at public auction for fair market value (based upon recent appraisals), with fees associated with the foreclosure being deducted from the sales price. The purchase price is applied to the outstanding loan balance. If the loan balance is greater than the sales proceeds, the deficient balance is charged off. Allowance for Credit Losses . We account for the ACL in accordance with FASB ASC Topic 326, “ Financial Instruments – Credit Losses ” (“ASC 326”), which uses the CECL accounting methodology. The CECL methodology requires that lifetime expected credit losses be recorded at the time the financial asset is originated or acquired and be adjusted each period through a provision for credit losses for changes in the expected lifetime credit losses. The ACL was $26.3 million at December 31, 2025, a decrease compared to $26.7 million at December 31, 2024. We maintain a separate ACL on unfunded loan commitments, which is included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheets. The ACL is generally increased by the provision for credit losses and decreased by charge-offs, net of recoveries. For the years ended December 31, 2025 and 2024, the reversal of credit losses was $3.4 million and $3.5 million, respectively. The reversal of credit losses for the year ended December 31, 2025 was primarily due to a $3.3 million recovery during the first quarter of 2025 of loans previously charged off as a result of a property insurance settlement related to one loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida. The reversal of credit losses for the year ended December 31, 2024 was primarily driven by a decrease in total loans, aging of existing loans, an improvement in the economic forecast and, to a lesser extent, the completion of our annual CECL allowance model recalibration, which resulted in lower historical loss rates. We complete our annual model recalibration process in the first quarter of each year. Our annual review includes peer group analysis, updates to our probability of default and loss-given default models, including prepayment and curtailment assumptions, and qualitative factor scorecard ranges, as needed. The changes resulting from the model recalibration reduced the ACL by approximately $0.5 million during each of the years ended December 31, 2025 and 2024. Refer to Note 1. Summary of Significant Accounting Policies – Allowance for Credit Losses for further discussion of our ACL accounting policy. Refer to “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates ” for further discussion. 51 Table of Contents The following table presents the allocation of the ACL by loan category as of the dates indicated (dollars in thousands). December 31, 2025 2024 2023 Allowance for Credit Losses % of Loans in each Category to Total Loans Allowance for Credit Losses % of Loans in each Category to Total Loans Allowance for Credit Losses % of Loans in each Category to Total Loans Mortgage loans on real estate: Construction and development $ 1,327 6.8 % $ 1,145 7.3 % $ 2,471 8.6 % 1-4 Family 6,053 17.3 5,603 18.7 9,129 18.7 Multifamily 1,814 6.0 1,185 4.0 1,124 4.8 Farmland 6 0.2 8 0.3 2 0.4 Commercial real estate 11,388 41.9 11,759 44.4 10,691 42.4 Commercial and industrial 5,680 27.4 6,933 24.8 6,920 24.6 Consumer 81 0.4 88 0.5 203 0.5 Total $ 26,349 100 % $ 26,721 100 % $ 30,540 100 % The following table presents the amount of the ACL allocated to each loan category as a percentage of total loans as of the dates indicated. December 31, 2025 2024 2023 Mortgage loans on real estate: Construction and development 0.06 % 0.05 % 0.11 % 1-4 Family 0.28 0.26 0.41 Multifamily 0.08 0.06 0.05 Farmland — — — Commercial real estate 0.52 0.55 0.49 Commercial and industrial 0.26 0.33 0.31 Consumer 0.01 0.01 0.01 Total 1.21 % 1.26 % 1.38 % 52 Table of Contents As discussed above, the balance in the ACL is principally influenced by the provision for (reversal of) credit losses and by net loan loss experience. Additions to the allowance are charged to the provision for credit losses. Losses are charged to the allowance as incurred and recoveries on losses previously charged to the allowance are credited to the allowance at the time recovery is collected. The table below reflects the activity in the ACL and key ratios for the periods indicated (dollars in thousands). Year ended December 31, 2025 2024 2023 Allowance for credit losses at beginning of period $ 26,721 $ 30,540 $ 24,364 ASC 326 adoption impact (1) — — 5,865 Reversal of credit losses on loans (2) (3,774 ) (3,191 ) (1,964 ) Net recoveries (charge-offs) 3,402 (628 ) 2,275 Allowance for credit losses at end of period $ 26,349 $ 26,721 $ 30,540 Total loans - period end 2,175,973 2,125,084 2,210,619 Nonaccrual loans - period end 9,259 8,824 5,770 Key Ratios: Allowance for credit losses to total loans - period end 1.21 % 1.26 % 1.38 % Allowance for credit losses to nonaccrual loans - period end 284.6 % 302.8 % 529.3 % Nonaccrual loans to total loans - period end 0.43 % 0.42 % 0.26 % (1) On January 1, 2023, the Company adopted ASC 326, which introduced a new model known as CECL. (2) For the year ended December 31, 2025, the $3.4 million reversal of credit losses on the consolidated statement of income includes a $3.8 million reversal of loan losses and a $0.4 million provision for unfunded loan commitments. For the year ended December 31, 2024, the $3.5 million reversal of credit losses on the consolidated statement of income includes a $3.2 million reversal of loan losses and a $0.3 million reversal of credit losses on unfunded loan commitments. For the year ended December 31, 2023, the $2.0 million reversal of credit losses on the consolidated statement of income includes a $2.0 million reversal of loan losses and a $36,000 reversal of credit losses on unfunded loan commitments. The ACL to total loans decreased to 1.21% at December 31, 2025 compared to 1.26% at December 31, 2024, and the ACL to nonaccrual loans ratio decreased to 284.6% at December 31, 2025 from 302.8% at December 31, 2024. The decrease in the ACL to total loans at December 31, 2025 compared to December 31, 2024 was primarily due to an increase in total loans, aging of existing loans and an improvement in the economic forecast. The decrease in the ACL to nonaccrual loans and the increase in nonaccrual loans to total loans was primarily due to the increase in nonaccrual loans. Nonaccrual loans were $9.3 million, or 0.43% of total loans, at December 31, 2025, an increase of $0.4 million compared to $8.8 million, or 0.42% of total loans, at December 31, 2024. The following table presents the allocation of net (charge-offs) recoveries by loan category for the periods indicated (dollars in thousands). Year ended December 31, 2025 2024 2023 Net (Charge-offs) Recoveries Average balance Ratio of Net Charge-offs (Recoveries) to Average Loans Net (Charge-offs) Recoveries Average balance Ratio of Net Charge-offs (Recoveries) to Average Loans Net (Charge-offs) Recoveries Average balance Ratio of Net Charge-offs (Recoveries) to Average Loans Mortgage loans on real estate: Construction and development $ 6 $ 138,658 (0.00 )% $ 291 $ 169,406 (0.17 )% $ 75 $ 200,691 (0.04 )% 1-4 Family 21 387,241 (0.01 ) (235 ) 408,297 0.06 (24 ) 410,320 0.01 Multifamily — 114,043 — — 96,791 — — 86,668 — Farmland 1 5,333 (0.02 ) 36 7,486 (0.48 ) — 9,206 — Commercial real estate 3,321 932,075 (0.36 ) — 956,318 — 2,219 961,617 (0.23 ) Commercial and industrial 128 539,129 (0.02 ) (615 ) 513,564 0.12 171 442,299 (0.04 ) Consumer (75 ) 10,035 0.75 (105 ) 11,299 0.93 (166 ) 12,433 1.34 Total $ 3,402 $ 2,126,514 (0.16 )% $ (628 ) $ 2,163,161 0.03 % $ 2,275 $ 2,123,234 (0.11 )% Charge-offs reflect the realization of losses in the portfolio that were recognized previously through the provision for credit losses. Net charge-offs include recoveries of amounts previously charged off. Net recoveries for the year ended December 31, 2025 were $3.4 million, or 0.16% of the average loan balance. Net charge-offs for the years ended December 31, 2024 were $0.6 million, equal to 0.03% of the average loan balance for the period. Net recoveries for the year ended December 31, 2025 were primarily the result of a property insurance settlement related to a loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida. Net charge-offs for the year ended December 31, 2024 were primarily attributable to a charge-off on one $0.7 million commercial and industrial loan relationship. 53 Table of Contents Management believes the ACL at December 31, 2025 is sufficient to provide adequate protection against losses in our portfolio. However, there can be no assurance that this allowance will prove to be adequate over time to cover ultimate losses in connection with our loans. This ACL may prove to be inadequate due to many factors, including those set forth under Cautionary Note Regarding Forward-Looking Statements at the beginning of this document and in Item 1A. Risk Factors . These factors could cause deterioration in credit quality that could lead us to increase our ACL in future periods. Our results of operations and financial condition could be materially adversely affected to the extent that the ACL is insufficient to cover such changes or events. Nonperforming assets . Nonperforming assets consist of nonperforming loans and other real estate owned. Nonperforming loans are those on which the accrual of interest has stopped or loans that are contractually 90 days past due and accruing. Loans are ordinarily placed on nonaccrual when a loan is specifically determined to be impaired or when principal and interest is delinquent for 90 days or more. Additionally, management may elect to continue the accrual when the estimated net available value of collateral is sufficient to cover the principal balance and accrued interest. It is our policy to discontinue the accrual of interest income on any loan for which we have reasonable doubt as to the payment of interest or principal. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period of repayment performance by the borrower. Nonperforming loans were $9.3 million, or 0.43% of total loans, at December 31, 2025, an increase of $0.5 million compared to $8.8 million, or 0.42% of total loans, at December 31, 2024. Loan Modifications to Borrowers Experiencing Financial Difficulty. Occasionally, we modify loans to borrowers in financial distress by providing certain concessions, such as principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension, excluding covenant waivers and modification of contingent acceleration clauses, or a combination of such concessions. When principal forgiveness is provided, the amount of forgiveness is charged off against the ACL. Upon the Company’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off. During the years months ended December 31, 2025 and 2024 , we did not provide any modifications under these circumstances to borrowers experiencing financial difficulty. Other Real Estate Owned . Other real estate owned consists of properties acquired through foreclosure or acceptance of a deed in lieu of foreclosure and real property no longer used in the Bank’s business operations. Real estate acquired through foreclosure is initially recorded at fair value at the time of foreclosure, less estimated selling cost, and any related write-down is charged to the ACL. Real property no longer used in the Bank’s business operations is recorded at the lower of its net book value or fair value at the date of transfer to other real estate owned. For the year ended December 31, 2025, additions to other real estate owned were $1.7 million, which were driven by transfers of commercial real estate and 1-4 family loans to other real estate owned. Also during the year ended December 31, 2025, we recorded a $0.4 million of write-downs of other real estate owned related to a property that was part of the loan relationship that became impaired in the third quarter of 2021 as a result of Hurricane Ida, a former branch location based on a third-party appraisal, and a 1-4 family property. For the year ended December 31, 2024, additions to other real estate owned were $2.0 million, which were primarily driven by transfers of 1-4 family loans to other real estate owned. During the same year, we transferred land that was previously being held for a future branch location from bank premises and equipment to other real estate owned, as we did not intend to use the property for banking operations. Also during the year ended December 31, 2024, we recorded a $0.2 million write-down of other real estate owned primarily related to a former branch location based on a third-party appraisal. Other real estate owned with a cost basis of $3.1 million and $2.1 million was sold during the years ended December 31, 2025 and 2024, respectively, resulting in a de minimis net gain and a net gain of $0.7 million for the respective periods. The following table provides details of our other real estate owned as of the dates indicated (dollars in thousands). December 31, 2025 December 31, 2024 1-4 Family $ 736 $ 1,684 Commercial real estate 2,638 3,358 Commercial and industrial — 176 Total other real estate owned $ 3,374 $ 5,218 Changes in our other real estate owned are summarized in the table below for the periods indicated (dollars in thousands). Year ended Year ended December 31, 2025 December 31, 2024 Balance, beginning of period $ 5,218 $ 4,438 Additions 1,687 1,975 Transfers from bank premises and equipment — 424 Sales of other real estate owned (3,097 ) (1,386 ) Write-downs (434 ) (233 ) Balance, end of period $ 3,374 $ 5,218 Please refer to Note 4. Other Real Estate Owned, for additional information. 54 Table of Contents Swap Contracts. The Bank historically has entered into interest rate swap contracts, some of which have been forward starting, to manage exposure against the variability in the expected future cash flows (future interest payments) attributable to changes in the 1-month SOFR associated with the forecasted issuances of 1-month fixed rate debt arising from a rollover strategy. An interest rate swap is an agreement whereby one party agrees to pay a fixed rate of interest on a notional principal amount in exchange for receiving a floating rate of interest on the same notional amount for a predetermined period of time, from a second party. At December 31, 2025 and December 31, 2024, the Company had no current or forward starting interest rate swap agreements. For additional information, see Note 12. Derivative Financial Instruments. The Company also enters into interest rate swap contracts that allow commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate loan into a fixed-rate loan. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreemen t. The interest rate swaps with both the customers and third parties are not designated as hedges and changes in fair value are recognized through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings. The Company did not recognize any net impact in other income resulting from fair value adjustments during the years ended December 31, 2025 , 2024 and 2023 . At December 31, 2025 and 2024 , we had notional amounts of $180.8 million and $186.9 million, respectively, in interest rate swap contracts with customers and $180.8 million and $186.9 million, respectively, in offsetting interest rate swap contracts with other financial institutions. At December 31, 2025 and 2024 , the fair values of the swap contracts consisted of gross assets of $11.7 million and $17.2 million, respectively, and gross liabilities of $11.7 million and $17.2 million, respectively, recorded in “Other assets” and “Accrued taxes and other liabilities,” respectively, in the accompanying consolidated balance sheets. Impact of Inflation. Inflation reached a near 40-year high in late 2021 primarily due to effects of the COVID-19 pandemic, and continued rising through June 2022. After June 2022, the rate of inflation generally declined; however, it has remained higher than the Federal Reserve’s target inflation rate of two percent. In response to higher inflation, the Federal Reserve increased the federal funds target rate during 2022 and 2023 as discussed in Certain Events That Affect Year-over-Year Comparability – Changing Inflation and Interest Rates , which generally increased the amount we earn on our interest-earning assets but also increased the amount we pay on our interest-bearing liabilities as discussed throughout this report. We believe that higher rates resulting from inflation and related factors led to constrained loan demand during 2023 and 2024 and to a lesser extent in 2025. When the rate of inflation accelerates, there is an erosion of consumer and customer purchasing power. Accordingly, if the rate of inflation accelerates in the future, this could impact our business by reducing our tolerance for extending credit, and our customer’s desire to obtain credit, or causing us to incur additional provisions for credit losses resulting from a possible increased default rate. Inflation and related higher rates have led and may continue to lead to lower loan re-financings. Inflation has also increased and may continue to increase the costs of goods and services we purchase, including the costs of salaries and benefits. As noted above, we are monitoring changes and potential changes to U.S. tariff and trade policies that could have an adverse impact on inflation and economic growth, at least in the near term, and which make forecasting difficult. As also noted above, the rate of inflation generally declined after June 2022. In response, from September 2024 to December 2024, the Federal Reserve reduced the federal funds target rate by 100 basis points to 4.25% to 4.50%. During 2025, beginning in September 2025, the Federal Reserve reduced the federal funds target rate three times by 75 basis points on a cumulative basis to 3.50% to 3.75%, where it remained as of March 16, 2026. The inflationary outlook in the U.S. remains uncertain. A decrease in the general level of interest rates may lead to, among other things, prepayments on our loan and mortgage-backed securities portfolios as borrowers refinance their loans at lower rates, lower rates on new loans, lower rates on existing variable rate loans and lower yields on investment securities, which may be offset by lower costs of interest-bearing liabilities. If interest-earning assets mature or reprice more quickly, or to a greater degree than interest-bearing liabilities, falling interest rates could reduce net interest income. Significant fluctuations in interest rates makes our business and balance sheet more challenging to manage. For additional information, see Interest Rate Risk below, and Item 1A. Risk Factors – Risks Related to our Business – Changes in interest rates could have an adverse effect on our profitability and – Inflation and rising prices may continue to adversely affect our results of operations and financial condition. Interest Rate Risk Market risk is the risk of loss from adverse changes in market prices and rates. Since the majority of our assets and liabilities are monetary in nature, our market risk arises primarily from interest rate risk inherent in our lending and deposit activities. A sudden and substantial change in interest rates may adversely impact our earnings and profitability because the interest rates borne by assets and liabilities do not change at the same speed, to the same extent, or on the same basis. Accordingly, our ability to proactively structure the volume and mix of our assets and liabilities to address anticipated changes in interest rates, as well as to react quickly to such fluctuations, can significantly impact our financial results. To that end, management actively monitors and manages our interest rate risk exposure. The ALCO has been authorized by the Board to implement our asset/liability management policy, which establishes guidelines with respect to our exposure to interest rate fluctuations, liquidity, loan limits as a percentage of funding sources, exposure to correspondent banks and brokers and reliance on non-core deposits. The goal of the policy is to enable us to maximize our interest income and maintain our net interest margin without exposing the Bank to excessive interest rate risk, credit risk and liquidity risk. Within that framework, the ALCO monitors our interest rate sensitivity and makes decisions relating to our asset/liability composition. Net interest income simulation is the Bank’s primary tool for benchmarking near term earnings exposure. Given the ALCO’s objective to understand the potential risk and volatility embedded within the current mix of assets and liabilities, standard rate scenario simulations assume total assets remain static (i.e. no growth). The Bank may also use a standard gap report in its interest rate risk management process. The primary use for the gap report is to provide supporting detailed information to the ALCO’s discussion. The Bank has particular concerns with the utility of the gap report as a risk management tool because of difficulties in relating gap directly to changes in net interest income. Hence, the income simulation is the key indicator for earnings-at-risk since it expressly measures what the gap report attempts to estimate. Short term interest rate risk management tactics are decided by the ALCO where risk exposures exist out into the one to two-year horizon. Tactics are formulated and presented to the ALCO for discussion, modification, and/or approval. Such tactics may include asset and liability acquisitions of appropriate maturities in the cash market, loan and deposit product/pricing strategy modification, and derivatives hedging activities to the extent such activity is authorized by the Board. Since the impact of rate changes due to mismatched balance sheet positions in the short-term can quickly and materially affect the current year’s income statement, they require constant monitoring and management. Within the gap position that management directs, we attempt to structure our assets and liabilities to minimize the risk of either a rising or falling interest rate environment. We manage our gap position for time horizons of one month, two months, three months, four to six months, seven to twelve months, 13-24 months, 25-36 months, 37-60 months and more than 60 months. The goal of our asset/liability management is for the Bank to maintain a net interest income at risk in an up or down 100 basis point environment at less than (5)%. At December 31, 2025, the Bank was within the policy guidelines for asset/liability management. The following table depicts the estimated impact on net interest income of immediate changes in interest rates at the specified levels for the periods presented. As of December 31, 2025 Estimated Changes in Interest Rates Increase/Decrease in (in basis points) Net Interest Income (1) +300 0.4 % +200 0.2 % +100 0.4 % -100 0.7 % -200 1.2 % -300 1.6 % (1) The percentage change in this column represents the projected net interest income for 12 months on a static balance sheet in a stable interest rate environment versus the projected net interest income in the various rate scenarios. The computation of the prospective effects of hypothetical interest rate changes requires numerous assumptions regarding characteristics of new business and the behavior of existing positions. These business assumptions are based upon our experience, business plans and published industry experience. Key assumptions include asset prepayment speeds, competitive factors, the relative price sensitivity of certain assets and liabilities, and the expected life of non-maturity deposits. However, there are a number of factors that influence the effect of interest rate fluctuations on us that are difficult to measure and predict. For example, a rapid drop in interest rates might cause our loans to be repaid at a more rapid pace and certain mortgage-related investments to prepay more quickly than projected. This could mitigate some of the benefits of falling rates as are expected when we are in a negatively-gapped position. Conversely, a rapid rise in rates could give us an opportunity to increase our margins and stifle the rate of repayment on our mortgage-related loans, which would increase our returns; however, we may need to increase the rates we offer to maintain or increase deposits, which would adversely impact our margins. As a result, because these assumptions are inherently uncertain, actual results will differ from simulated results. 55 Table of Contents Liquidity and Capital Resources Liquidity . Liquidity is a measure of the ability to fund loan commitments and meet deposit maturities and withdrawals in a timely and cost-effective way. Our primary sources of funds are from deposits, amortization of loans, loan prepayments and the maturities of loans, payments and maturities of investment securities and other investments and other cash flows provided from operations. Uses of funds include deposits, debt service, lease commitments, unfunded commitments, and dividends. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit outflows, loan prepayments, and borrowings are greatly influenced by general interest rates, economic conditions, and the competitive environment in which we operate. To minimize funding risks, we closely monitor our liquidity position through periodic reviews of maturity profiles, yield and rate behaviors, and loan and deposit forecasts. Excess short-term liquidity is usually invested in overnight federal funds sold. Our core deposits, which are deposit s excluding brokered demand deposits, brokered time deposits, and t ime deposits greater than $250,000 are our most stable source of liquidity to meet our cash flow needs due to the nature of the long-term relationships generally established with our customers. Maintaining the ability to acquire these funds as needed in a variety of markets, and within ALCO compliance targets, is essential to ensuring our liquidity. At December 31, 2025 and 2024, 68% of our total assets, were funded by core deposits. Our investment portfolio is another alternative for meeting our cash flow requirements. Investment securities generate cash flow through principal payments and maturities, and they generally have readily available markets that allow for their conversion to cash. At December 31, 2025, 88% of our investment securities portfolio was classified as AFS, and we had gross unrealized losses in our AFS investment securities portfolio of $46.4 million and gross unrealized gains of $1.0 million. The sale of securities in a loss position would cause us to record a loss on sale of investment securities in noninterest income in the period during which the securities were sold. Some securities are pledged to secure certain deposit types or short-term borrowings, such as FHLB advances, which impacts their liquidity. At December 31, 2025 , securities with a carrying value of $75.6 million were pledged to secure certain deposits, borrowings, and other liabilities compared to $68.1 million in pledged securities at December 31, 2024 . Other sources available for meeting liquidity needs include advances from the FHLB, repurchase agreements and other borrowings. FHLB advances may be used to meet day to day liquidity needs, particularly if the prevailing interest rate on an FHLB advance compares favorably to the rates that we would be required to pay to attract deposits. At December 31, 2025, the balance of our outstanding advances with the FHLB was $116.0 million, consisting of $36.0 million short-term and $80.0 million long-term advances based on original maturity, an increase from $67.2 million, consisting of $7.2 million short-term and $60.0 million long-term advances based on or iginal maturity, at December 31, 2024 . The total amount of remaining credit available to us from the FHLB at December 31, 2025 was approximately $651.5 million. At December 31, 2025 , our FHLB borrowings were collateralized by a blanket pledge of certain loans totaling approximately $934.5 million. Repurchase agreements are contracts for the sale of securities which we own with a corresponding agreement to repurchase those securities at an agreed upon price and date. Our policies limit the use of repurchase agreements to those collateralized by certain investment securities. We had $11.2 million and $8.4 million of repurchase agreements outstanding at December 31, 2025 and 2024, respectively. We maintain unsecured lines of credit with First National Bankers Bank and The Independent Bankers Bank totalin g $60.0 million. The se lines of credit are federal funds lines of credit and are used for overnight borrowing only. There w ere no outstandi ng balances on our unsecured lines of credit at December 31, 2025 or 2024. At December 31, 2025, w e held $41.5 million of cash and cash equivalents, maintained approximately $651.5 million of available funding from FHLB advances and maintained $60.0 million in unsecured lines of credit with correspondent banks, totaling $753.0 million, which represents 95% of uninsured deposits of $793.2 million at December 31, 2025. In addition, at December 31, 2025 and 2024 we had $17.0 million in aggregate principal amount of subordinated debt outstanding. During the year ended December 31, 2024, we redeemed $20.0 million in principal amount and repurchased $8.0 million in principal amount of our subordinated debt. For additional information, see Note 10. Subordinated Debt Securities and see Discussion and Analysis of Financial Condition – Borrowings above. Our liquidity strategy is focused on using the least costly funds available to us in the context of our balance sheet composition and interest rate risk position. Accordingly, we target growth of noninterest-bearing deposits. Although we cannot directly control the types of deposit instruments our customers choose, we can influence those choices with the interest rates and deposit specials we offer. In recent periods, the proportion of our deposits represented by noninterest-bearing deposits has declined primarily due to rising market interest rates as customers have migrated to higher yielding alternatives. At December 31, 2025, we held $204.1 million of brokered time deposits and de minimis brokered demand deposits, as defined for federal regulatory purposes. At December 31, 2024, we held $245.5 million of brokered time deposits and $47.3 million of brokered demand deposits, as defined for federal regulatory purposes. We utilize brokered time deposits to secure fixed cost funding and reduce short-term borrowings. We utilize brokered demand deposits when pricing is more favorable than other short-term borrowings. We also hold QwickRate® deposits, included in our time deposit balances, which we obtain through a qualified network, to address liquidity needs when rates on such deposits compare favorably with deposit rates in our markets. At December 31, 2025, we hel d $11.3 million of QwickRate® deposits, a decrease com pared to $12.9 million at December 31, 2024. The following table presents, by type, our funding sources, which consist of total average deposits and borrowed funds, as a percentage of total funds and the total cost of each funding source for the years ended December 31, 2025 and 2024. Percentage of Total Average Deposits and Borrowed Funds Cost of Funds Year ended December 31, Year ended December 31, 2025 2024 2025 2024 Noninterest-bearing demand deposits 18 % 17 % — % — % Interest-bearing demand deposits 33 27 2.22 2.03 Brokered demand deposits — — 4.44 4.76 Savings deposits 5 5 1.07 1.09 Brokered time deposits 10 10 4.63 5.16 Time deposits 29 30 3.82 4.45 Short-term borrowings 2 8 3.19 4.58 Borrowed funds 3 3 4.66 4.81 Total deposits and borrowed funds 100 % 100 % 2.55 % 2.94 % 56 Table of Contents Capital Resources . Our primary sources of capital include retained earnings, capital obtained through acquisitions and proceeds from the sale of our capital stock and subordinated debt. We may issue capital stock and debt securities from time to time to fund acquisitions and support our organic growth. As noted elsewhere in this report, on July 1, 2025 we completed a private placement of Series A Preferred Stock. We used the net proceeds from the offering to support the acquisition of WFB and for general corporate purposes, including organic growth and other potential acquisitions. The Series A Preferred Stock is intended to qualify as additional Tier 1 capital. For additional information see Discussion and Analysis of Financial Condition – Borrowings . During 2025, we paid $4.2 million in dividends on our common stock, compared to $4.0 million in 2024 and $3.8 million in 2023. During 2025, we paid $0.5 million in dividends on our Series A Preferred Stock, compared to none in 2024 and 2023. Our Board has authorized a share repurchase program and during 2025 we paid $2.3 million to repurchase our shares, compared to $0.3 million in 2024 and $3.0 million in 2023 . The aggregate purchase price does not include the effect of excise tax expense incurred on net share repurchases. On July 19, 2023 and September 21, 2022, the Board approved an additional 350,000 shares and 300,000 shares, respectively, of the Company’s common stock for repurchase. At December 31, 2025 , we had 381,396 shares of our common stock remaining authorized for repurchase under the program. For additional information, see Note 13. Stockholders ’ Equity. We are subject to restrictions on dividends under applicable banking laws and regulations. Please refer to the discussion under the heading “ Supervision and Regulation – Dividends ” in Item 1. Business , for more information. We are also subject to additional legal and contractual restrictions on dividends. Please refer to the discussion under the heading “ Dividend Policy ” in Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities and under the heading “ Common Stock – Dividend Restrictions ” in Note 13. Stockholders’ Equity . We are subject to various regulatory capital requirements administered by the Federal Reserve and the OCC. These requirements are described in greater detail under the heading “Supervision and Regulation – Regulatory Capital Requirements” of Item 1. Business . Those guidelines specify capital tiers, which include the following classifications: Capital Tiers (1) Tier 1 Leverage Ratio Common Equity Tier 1 Capital Ratio Tier 1 Capital Ratio Total Capital Ratio Ratio of Tangible Equity to Total Assets Well capitalized 5% or above 6.5% or above 8% or above 10% or above Adequately capitalized 4% or above 4.5% or above 6% or above 8% or above Undercapitalized Less than 4% Less than 4.5% Less than 6% Less than 8% Significantly undercapitalized Less than 3% Less than 3% Less than 4% Less than 6% Critically undercapitalized 2% or less (1) In order to be well-capitalized or adequately capitalized, a bank must satisfy each of the required ratios in the table. In order to be undercapitalized or significantly undercapitalized, a bank would need to fall below just one of the relevant ratio thresholds in the table. In order to be well-capitalized, the Bank cannot be subject to any written agreement or order requiring it to maintain a specific level of capital for any capital measure. The Company and the Bank were each in compliance with all regulatory capital requirements as of December 31, 2025, 2024 and 2023. The Bank also was considered “well-capitalized” under the OCC’s prompt corrective action regulations as of these dates. 57 Table of Contents The following table presents the actual capital amounts and regulatory capital ratios for the Company and the Bank as of the dates presented (dollars in thousands). Actual Minimum Capital Requirement to be Well Capitalized Amount Ratio Amount Ratio December 31, 2025 Investar Holding Corporation: Tier 1 capital to average assets (leverage) $ 305,810 10.73 % $ — — % Tier 1 common equity to risk-weighted assets 265,957 11.18 — — Tier 1 capital to risk-weighted assets 305,810 12.85 — — Total capital to risk-weighted assets 348,943 14.66 — — Investar Bank: Tier 1 capital to average assets (leverage) 308,528 10.85 142,230 5.00 Tier 1 common equity to risk-weighted assets 308,528 13.00 154,291 6.50 Tier 1 capital to risk-weighted assets 308,528 13.00 189,897 8.00 Total capital to risk-weighted assets 334,923 14.11 237,371 10.00 December 31, 2024 Investar Holding Corporation: Tier 1 capital to average assets (leverage) $ 258,178 9.27 % $ — — % Tier 1 common equity to risk-weighted assets 248,678 10.84 — — Tier 1 capital to risk-weighted assets 258,178 11.25 — — Total capital to risk-weighted assets 301,259 13.13 — — Investar Bank: Tier 1 capital to average assets (leverage) 269,733 9.70 139,092 5.00 Tier 1 common equity to risk-weighted assets 269,733 11.77 148,925 6.50 Tier 1 capital to risk-weighted assets 269,733 11.77 183,293 8.00 Total capital to risk-weighted assets 296,117 12.92 229,116 10.00 58 Table of Contents Off-Balance Sheet Transactions Unfunded Commitments. The Bank enters into loan commitments and standby letters of credit in the normal course of its business. Loan commitments are made to meet the financing needs of our customers, while standby letters of credit commit the Bank to make payments on behalf of customers when certain specified future events occur. The credit risks associated with loan commitments and standby letters of credit are essentially the same as those involved in making loans to our customers. Accordingly, our normal credit policies apply to these arrangements. Collateral (e.g., securities, receivables, inventory, equipment, etc.) is obtained based on management’s credit assessment of the customer. The credit risk associated with these commitments is evaluated in a manner similar to the ACL. The ACL on unfunded loan commitments is included in “Accrued taxes and other liabilities” in the accompanying consolidated balance sheets. At December 31, 2025 and 2024, the ACL on unfunded loan commitments was $0.4 million and $42,000, respectively. Loan commitments and standby letters of credit do not necessarily represent future cash requirements, in that while the customer typically has the ability to draw upon these commitments at any time, these commitments often expire without being drawn upon in full or at all. Virtually all of our standby letters of credit expire within one year. Our unfunded loan commitments and standby letters of credit outstanding are summarized below as of the dates indicated (dollars in thousands). December 31, 2025 December 31, 2024 Commitments to extend credit: Loan commitments $ 431,795 $ 377,301 Standby letters of credit 5,436 7,658 The Company closely monitors the amount of remaining future commitments to borrowers in light of prevailing economic conditions and adjusts these commitments as necessary. The Company will continue this process as new commitments are entered into or existing commitments are renewed. Additionally, at December 31, 2025, the Company had unfunded commitments of $1.5 million for its investment in SBIC qualified funds. For each of the years ended December 31, 2025 and 2024, we did not engage in any off-balance sheet transactions reasonably likely to have a material effect on our financial condition, results of operations, or cash flows currently or in the future. 59 Table of Contents Lease Obligations The Company’s primary leasing activities relate to certain real estate leases entered into in support of the Company’s branch operations. The Company’s branch locations operated under lease agreements have all been designated as operating leases. The Company does not lease equipment under operating leases, nor does it have leases designated as finance leases. The following table presents, as of December 31, 2025, contractually obligated lease payments due under non-cancelable operating leases by payment date (dollars in thousands). Less than one year $ 459 One to three years 864 Three to five years 560 Over five years 127 Total $ 2,010 Critical Accounting Estimates The preparation of our consolidated financial statements in accordance with GAAP requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, income and expenses and related disclosure of contingent assets and liabilities. Although independent third parties are often engaged to assist us in the estimation process, management evaluates the results, challenges assumptions used and considers other factors that could impact these estimates. Actual results may differ from these estimates under different assumptions or conditions. For more detailed information about our accounting policies, please refer to Note 1. Summary of Significant Accounting Policies. The following discussion presents our critical accounting estimates, which are those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We believe that the judgments, estimates and assumptions that we use in the preparation of our consolidated financial statements are appropriate. Allowance for Credit Losses . The CECL methodology requires that lifetime expected credit losses be recorded at the time the financial asset is originated or acquired, and be adjusted each period for changes in expected lifetime credit losses. The ACL is sensitive to external factors including the general health of the economy, as evidenced by changes in interest rates, gross domestic product, unemployment rates, and changes in real estate demand and values. Management considers these variables and all other available information when establishing the final level of the allowance. These variables and others have the ability to result in actual loan losses that differ from the originally estimated amounts. Changes in the factors used by management to determine the appropriateness of the allowance or the availability of new information could cause the allowance to be increased or decreased in future periods. The Company’s management considers available forecasts, current events not captured and our specific portfolio characteristics and applies weights to the scenario output based on a best estimate of likely outcomes. Changing economic conditions have introduced enhanced estimation uncertainty in the forecasts used to estimate expected credit loss. Our credit loss models were built using historical data that may not correlate to existing economic conditions. Such forecasted information is inherently uncertain and, therefore, actual results may differ significantly from management’s estimates. The quantitative loss rate analysis is supplemented by a review of qualitative factors that considers whether conditions differ from those existing during the historical periods used in the development of the credit loss models. Such factors include, but are not limited to, changes in current and expected future economic conditions, changes in the nature and volume of the portfolio, changes in levels of concentrations, changes in the volume and severity of past due loans, changes in lending policies and personnel, changes in the competitive and regulatory environment of the banking industry and changes in other external factors. While quantitative data for these factors is used where available, there is significant judgment applied in these processes. 60 Table of Contents For credits that are individually evaluated, a specific allowance is calculated as the shortfall between the credit’s value and the Bank’s exposure. The loan’s value is measured by either the fair value of the collateral of the loan based on third-party appraisals if it is collateral dependent, or based on a discounted cash flow methodology. Collatera l on impaired loans may include, but is not limited to, commercial and residential real estate and accounts receivable. Values for impaired credits are highly subjective and based on information available at the time of valuation and the current resolution strategy. These values are difficult to assess and have heightened uncertainty resulting from current market conditions. Actual results could differ from these estimates. Management considers the appropriateness of these critical assumptions as part of its allowance review and believes the ACL level is appropriate based on information available through the financial statement date. Please refer to Note 3. Loans and Allowance for Credit Losses, and Note 1. Summary of Significant Accounting Policies – Allowance for Credit Losses for additional discussion. Loan Acquisition Accounting . Financial assets acquired in business combinations are initially recorded at fair value, which includes an estimate of credit losses expected to be realized over the remaining lives of the loans. The fa ir value of acquired loans is determined using a discounted cash flow model based on assumptions regarding the amount and timing of principal and interest prepayments, estimated payments, estimated default rates, estimated loss severity in the event of defaults, and current market rates. Purchased financial assets are accounted for based upon a determination of whether they were purchased as PCD loans, loans with more-than insignificant amount of credit deterioration, or non-PCD loans, loans with an insignificant amount of credit deterioration. For PCD loans, the CECL estimate is recognized through the ACL with an offset to the amortized cost basis of the PCD loan at the date of acquisition. Subsequent changes in the ACL for PCD assets are recognized through a provision for credit losses on loans. Please refer to Note 1. Summary of Significant Accounting Policies – Acquisition Accounting , for additional discussion. Item 7A. Quantitative and Qualitative Disclosures about Market Risk The information contained in Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations – Risk Management hereof is incorporated herein by reference. 61 Table of Contents