What changed in this filing

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Item 1. Financial Statements

2025-04-30 compared with 2024-10-30 · 138 added, 295 removed, 994 unchanged (30% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data)

September 30,

2025 December 31,

18 unchanged sentences

Total deposits 5,960,194 5,900,966

Federal Funds purchased 30,000 0

Federal Home Loan Bank advances 0 50,000

Total borrowings 30,000 50,000

Borrowings - Federal Home Loan Bank advances 108,200 0

Accrued interest payable 14,699 15,117

4 unchanged sentences

90,000,000 shares authorized, no par value

25,974,017 shares issued and 25,506,084 outstanding as of September 30, 2024

26,016,494 shares issued and 25,556,904 outstanding as of March 31, 2025

25,978,831 shares issued and 25,509,592 outstanding as of December 31, 2024

2 unchanged sentences

Accumulated other comprehensive income (loss) ( 163,879 ) ( 166,500 )

Treasury stock at cost ( 467,933 shares as of September 30, 2024, 473,120 shares as of December 31, 2023)

Treasury stock at cost ( 459,590 shares as of March 31, 2025, 469,239 shares as of December 31, 2024)

( 15,594 ) ( 15,754 )

6 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

NET INTEREST INCOME

20 unchanged sentences

Bank owned life insurance income 322 1,036

Interest rate swap fee income 0 0 0 794

Mortgage banking income (loss) ( 51 ) 52

Net securities gains (losses) 0 ( 46 )

Net gain (loss) on Visa shares ( 15 ) 0 8,996 0

Other income 858 2,187

8 unchanged sentences

Professional fees 2,380 2,463

Wire fraud loss 0 0 0 18,058

Other expense 2,648 2,248

9 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited - dollars in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net income $ 20,085 $ 23,401

13 unchanged sentences

Total other comprehensive income (loss), net of tax 2,621 ( 11,718 )

Comprehensive income (loss) $ 55,660 $ ( 25,214 ) $ 86,347 $ 24,953

Comprehensive income $ 22,706 $ 11,683

The accompanying notes are an integral part of these consolidated financial statements.

7 unchanged sentences

Interest Total

Balance at July 1, 2023

25,429,216 $ 123,367 $ 661,447 $ ( 177,645 ) $ ( 15,263 ) $ 591,906 $ 89 $ 591,995

Comprehensive loss:

Net income 25,252 25,252 25,252

Other comprehensive income (loss), net of tax ( 50,466 ) ( 50,466 ) ( 50,466 )

Cash dividends declared and paid, $ 0.46 per share

( 11,782 ) ( 11,782 ) ( 11,782 )

Treasury shares purchased under deferred directors' plan ( 3,992 ) 206 ( 206 ) 0 0

Stock activity under equity compensation plans 6,500 0 0 0

Stock based compensation expense 2,185 2,185 2,185

Balance at September 30, 2023

25,431,724 $ 125,758 $ 674,917 $ ( 228,111 ) $ ( 15,469 ) $ 557,095 $ 89 $ 557,184

Balance at July 1, 2024

25,503,744 $ 126,871 $ 713,541 $ ( 170,458 ) $ ( 15,453 ) $ 654,501 $ 89 $ 654,590

Comprehensive income:

Net income 23,338 23,338 23,338

Other comprehensive income (loss), net of tax 32,322 32,322 32,322

Cash dividends declared and paid, $ 0.48 per share

( 12,329 ) ( 12,329 ) ( 12,329 )

Treasury shares purchased under deferred directors' plan ( 3,510 ) 215 ( 215 ) 0 0

Stock activity under equity compensation plans 5,850 0 0 0

Stock based compensation expense 1,260 1,260 1,260

Balance at September 30, 2024

25,506,084 $ 128,346 $ 724,550 $ ( 138,136 ) $ ( 15,668 ) $ 699,092 $ 89 $ 699,181

The accompanying notes are an integral part of these consolidated financial statements.

Nine Months Ended

Common Stock Retained

Earnings Accumulated Other Comprehensive

Income (Loss) Treasury

Stock Total Stockholders’

Equity Noncontrolling

Interest Total

Balance at January 1, 2024

25,430,566 $ 127,692 $ 692,760 $ ( 155,195 ) $ ( 15,553 ) $ 649,704 $ 89 $ 649,793

Impact of ASU 2023-02 adoption, net of tax ( 532 ) ( 532 ) ( 532 )

Adjusted balance at January 1, 2024 25,430,566 127,692 692,228 ( 155,195 ) ( 15,553 ) 649,172 89 649,261

Comprehensive income:

7 unchanged sentences

Stock based compensation expense 880 880 880

Balance at September 30, 2023

Balance at March 31, 2024

25,503,425 $ 125,873 $ 703,330 $ ( 166,913 ) $ ( 15,370 ) $ 646,920 $ 89 $ 647,009

1 unchanged sentence

25,509,592 $ 129,664 $ 736,412 $ ( 166,500 ) $ ( 15,754 ) $ 683,822 $ 89 $ 683,911

Impact of adoption ASU 2023-02, net of tax ( 532 ) ( 532 ) ( 532 )

Adjusted Balance at January 1, 2024 25,430,566 127,692 692,228 ( 155,195 ) ( 15,553 ) 649,172 89 649,261

Comprehensive income:

7 unchanged sentences

Stock based compensation expense 2,232 2,232 2,232

Balance at September 30, 2024

Balance at March 31, 2025

25,556,904 $ 130,243 $ 743,650 $ ( 163,879 ) $ ( 15,594 ) $ 694,420 $ 89 $ 694,509

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited - in thousands)

Nine Months Ended September 30, 2024 2023

Three Months Ended March 31, 2025 2024

Cash flows from operating activities:

7 unchanged sentences

Proceeds from sale of loans, including participations 2,986 4,112

Net (gain) loss on Visa shares ( 8,996 ) 0

Net (gain) loss on sales of premises and equipment 0 13

4 unchanged sentences

Gain on life insurance 0 ( 243 )

Tax benefit of stock award issuances ( 208 ) ( 720 )

Tax expense (benefit) of stock award issuances 136 ( 201 )

Interest receivable and other assets ( 2,754 ) 3,298

4 unchanged sentences

Proceeds from sale of securities available-for-sale 0 7,136

Proceeds from sale of Visa shares 8,996 0

Proceeds from maturities, calls and principal paydowns of securities available-for-sale 14,655 13,537

Proceeds from maturities, calls and principal paydowns of securities held-to-maturity 0 6

Purchases of securities available-for-sale ( 22,210 ) 0

3 unchanged sentences

Purchases of land, premises and equipment ( 1,787 ) ( 1,541 )

Purchase of Federal Home Loan Bank stock 0 ( 5,625 )

Proceeds from life insurance 0 536

2 unchanged sentences

Net increase (decrease) in total deposits 59,228 ( 102,440 )

Net increase (decrease) in short-term borrowings 30,000 ( 22,000 )

Net payments on short-term FHLB borrowings ( 50,000 ) ( 185,000 )

Proceeds from long-term FHLB borrowings 1,200 0

Proceeds from short-term FHLB borrowings 107,000 150,000

Common dividends paid ( 12,847 ) ( 12,299 )

Preferred dividends paid ( 13 ) ( 13 )

Payments related to equity incentive plans ( 1,493 ) ( 2,516 )

7 unchanged sentences

Interest $ 37,998 49,988

Income taxes 17,100 9,275

Supplemental non-cash disclosures:

Loans transferred to other real estate owned 0 284

Right-of-use assets obtained in exchange for lease liabilities, net 20 0

11 unchanged sentences

In the opinion of management, all adjustments (all of which are normal and recurring in nature) considered necessary for a fair presentation have been included.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for any subsequent reporting periods, including the year ending December 31, 2024.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for any subsequent reporting periods, including the year ending December 31, 2025.

The Company’s 2024 Annual Report on Form 10-K should be read in conjunction with these statements.

Operating Segments

All of the Company's financial results are similar and considered by management to be aggregated into one reportable segment.

While the Company has assigned certain management responsibilities by region and business-line, the Company's Chief Operating Decision Maker ("CODM") evaluates financial performance on a Company-wide basis.

The majority of the Company's revenue is from the business of banking and the Company's assigned regions have similar economic characteristics, products, services and customers.

Financial performance is reported to the CODM monthly, and the primary measure of performance is consolidated net income.

The allocation of resources throughout the Company is determined annually based upon consolidated net income performance.

The presentation of financial performance to the CODM is consistent with amounts and financial statement line items shown in the Company's consolidated balance sheets and consolidated statements of income.

Additionally, the Company's significant expenses are adequately segmented by category and amount in the consolidated statements of income to include all significant items when considering both qualitative and quantitative factors.

Significant expenses of the Company include salaries and employee benefits, net occupancy expense, equipment costs, data processing fees and supplies and professional fees.

Adoption of New Accounting Standards

On March 28, 2023, the FASB issued ASU 2023-02, "Investments - Equity Method and Join Ventures (ASC 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method." ASU 2014-01, "Investments - Equity method and Joint Ventures (ASC 323):

Accounting for Investments in Qualified Affordable Housing Projects", previously introduced the option to apply the proportional amortization method to account for investments made primarily for the purpose of receiving income tax credits and other income tax benefits when certain requirements are met;

however, this guidance limited the proportional amortization method to investments in low-income-housing tax credit (LIHTC) structures.

The proportional amortization method results in the cost of the investment being amortized in proportion to the income tax credits and other income tax benefits received, with the amortization of the investment and the income tax credits being presented net in the income statement as a component of net income tax expense (benefit).

Equity investments in other tax credit structures are typically accounted for using the equity method, which results in investment income, gains and losses, and tax credits being presented gross on the income statement in their respective line items.

The amendments in this update permit reporting entities to elect to account for certain tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.

Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the income tax benefits in the income statement as a component of income tax expense (benefit).

To qualify for the proportional amortization method, all of the following conditions must be met:

(1) it is probable that the income tax credits allocated to the tax equity investor will be available;

(2) the tax equity investor does not have the ability to exercise significant influence over the operating and financial policies of the underlying project;

(3) substantially all of the projected benefits are from income tax credits and other income tax benefits (projected benefits included income tax credits, other income tax benefits, and other non-income tax -related benefits and are determined on a discounted basis, using a discount rate that is consistent with the cash flow assumptions used by the tax equity investor in making its decision to invest in the project);

(4) the tax equity investor's projected yield based solely on the cash flows from the income tax credits and other income tax benefits is positive;

and (5) the tax equity investor is a limited liability investor in the limited liability entity for both legal and tax purposes, and the tax equity investor's liability is limited to its capital investment.

An accounting policy election is allowed to apply the proportional amortization method on a tax-credit-program-by-tax-credit-program basis rather than electing to apply the proportional amortization method at the reporting entity level or to individual investments.

The amendments in this update require specific disclosures that must be applied to all investments that generate income tax credits and other income tax benefits from a tax credit program for which the entity has elected to apply the proportional amortization method.

The amendments require that a reporting entity disclose certain information in annual and interim reporting periods that enable investors to understanding the following information about its investments that generate income tax credits and other income tax benefits from a tax credit program including:

(1) the nature of its tax equity investments;

and (2) the effect of its tax equity investments and related income tax credits and other income tax benefits on its financial position and results of operations.

For public business entities, the amendments in this update were effective for fiscal years beginning after December 31, 2023, including interim periods within those fiscal years.

The amendments in this update must be applied on either a modified retrospective or a retrospective basis.

The Company chose the modified retrospective approach and recorded a day one adjustment of ($ 532,000 ), net of tax, to beginning retained earnings on January 1, 2024, which did not have a material impact on the consolidated financial statements.

Newly Issued But Not Yet Effective Accounting Standards

On October 9, 2023, the FASB issued ASU 2023-06, "Disclosure Improvements:

Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative" , which modified the disclosure or presentation requirements of a variety of Topics in the Codification and was intended to both clarify or improve such requirements and align the requirements with the SEC's regulations.

The amendments to Topics of Codification provided in this update apply to all reporting entities within the scope of the affected Topics unless otherwise indicated by the update.

Given the variety of Topics amended, a broad range of entities may be affected by one or more of the amendments provided in the update.

The Company evaluated the amendments provided in the update and believes certain of the disclosure improvements are applicable to the Company's interim or annual disclosures.

Subtopic 230-10, as amended, requires disclosure within the accounting policy in annual periods of where cash flows associated with derivative instruments and their related gains and losses are presented within the statement of cash flows.

Subtopic 260-10, as amended, requires disclosure of the methods used in the diluted earnings-per-share computation for each dilutive security and clarifies that certain disclosures should be made during interim periods.

Subtopic 470-10, as amended, requires disclosure of amounts and terms of unused lines of credit and unfunded commitments and the weighted-average interest rate on short-term borrowings outstanding as of the date of each balance sheet presented.

The effective date for each amendment for entities subject to the SEC's existing disclosure requirements is the effective date of the removal of the related disclosure from Regulation S-X or Regulation S-K, with early adoption prohibited.

The amendments in the update are to be applied prospectively.

The Company will apply prospectively the provisions provided in the amendments as such provisions become effective, and does not believe the application of these modified disclosure requirements will have a material impact on the consolidated financial statements.

If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment in the update will be removed from the Codification and will not become effective.

On November 27, 2023, the FASB issued ASU 2023-07, "Segment Reporting (ASC 280):

Improvements to Reportable Segment Disclosures" , intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

Provisions in the amendment include:

(1) requirement that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss (collectively referred to as the "significant expense principle");

(2) requirement that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition (the other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss);

(3) requirement that a public entity provide all annual disclosures about a reportable segment's profit or loss and assets currently required by ASC 280 in interim periods;

(4) clarification that if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocation resources, a public entity may report one or more of those additional measures of segment profit (at least one of the reported segment profit or loss measures, or the single reported measure if only one is disclosed, should be the measure that is the most consistent with the measurement principles used in measuring the corresponding amounts in the public entity's consolidated financial statements);

(5) requirement that a public entity disclose the title and position of the CODM and explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources;

and (6) requirement that a public entity that has a single reportable segment provide all the disclosures by the amendments in the update and all existing segment disclosures in ASC 280.

The amendments in the update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

For public business entities, amendments in the update should be applied retrospectively to all periods presented in the financial statements, and upon transition to the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The Company is currently evaluating the impact of this standard on its disclosures, however does not expect adoption of the update to have a material impact of the consolidated financial statements.

On December 13, 2023, the FASB issued ASU 2023-08, "Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60):

1 unchanged sentence

Stakeholders stated that current accounting guidance, except as provided in GAAP for certain specialized industries, surrounding crypto asset holdings as indefinite-lived intangible assets fails to provide financial statement users with decision-useful information.

To remedy these shortcomings, the amendments in this update require an entity present (1) crypto assets measured at fair value separately from other intangible assets reported in the balance sheet and (2) changes from the remeasurement of crypto assets separately from changes in the carrying amounts of other intangible assets in the income

While the amendments in the update do not otherwise change the presentation requirements for the statement of cash flows, they do require specific presentation of cash receipts arising from crypto assets that are received as noncash consideration in the ordinary course of business and are converted nearly immediately into cash.

12 unchanged sentences

The amendments in this update require a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets) as of the beginning of the annual reporting period in which an entity adopts the amendments.

The Company is currently evaluating the impact of this update on its disclosures, however does not expect the adoption of this update to have a material impact on the consolidated financial statements based upon the nature of the Company's current operations.

This standard did not have an impact on the consolidated financial statements based upon the nature of the Company's current operations.

On March 18, 2025, the FASB issued ASU 2025-02, which provided amendments to SEC paragraphs pursuant to Staff Accounting Bulletin 122.

This amendment removed text related to "Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for Its Platform Users," from ASU 405-10-S99-1 as Staff Accounting Bulletin 122 rescinded the topic.

Newly Issued But Not Yet Effective Accounting Standards

On October 9, 2023, the FASB issued ASU 2023-06, "Disclosure Improvements:

The amendments to Topics of Codification provided in this update apply to all reporting entities within the scope of the affected Topics unless otherwise indicated by the update.

Given the variety of Topics amended, a broad range of entities may be affected by one or more of the amendments provided in the update.

The Company evaluated the amendments provided in the update and believes certain of the disclosure improvements are applicable to the Company's interim or annual disclosures.

The amendments in the update are to be applied prospectively.

On December 14, 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

8 unchanged sentences

The amendments in this update should be applied on a prospective basis, however retrospective application is permitted.

The Company is currently evaluating the impact of this update on its disclosures, however does not expect the adoption of this update to have a material impact on the year-end consolidated financial statements.

On November 8, 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income— Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses" , to improve the disclosures about a public business entity's expenses and address requests from investors for more detailed information about

the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development).

The amendments in this update require disclosure, in the notes to the financial statements, of specified information about certain costs and expenses.

The amendments require that at each interim and annual reporting period an entity (1) Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization and (e) depreciation, depletion and amortization recognized as part of oil- and gas-producing activities (DD&A) (or other amounts of depletion expense) included in each relevant expense caption.

A relevant expense caption is an is an expense caption presented on the face of the income statement within continuing operations that contains any of the following expense categories listed in (a)-(e);

(2) Include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as other disaggregation requirements;

(3) Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively;

and (4) Disclose the total amount of selling expenses, and in annual reporting periods, an entity's definition of selling expenses.

An entity is not precluded from providing additional voluntarily disclosures that may provide investors with additional decision-useful information.

On January 6, 2025, the FASB issued ASU 2025-01, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date" , to clarify the effective date of the ASU 2024-03.

The update amends the effective date of Update 2024-03 to annual reporting periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027.

Reclassification

Certain amounts appearing in the consolidated financial statements and notes thereto for prior periods have been reclassified to conform with the current presentation.

The reclassifications had no effect on net income or stockholders' equity as previously reported.

Debt securities purchased with the intent and ability to hold to their maturity are classified as held-to-maturity securities.

4 unchanged sentences

Cost Gross Unrealized Gain Gross Unrealized Losses Allowance for Credit Losses Fair Value

September 30, 2024

March 31, 2025

government sponsored agencies $ 139,872 $ 44 $ ( 24,798 ) $ 0 $ 115,118

13 unchanged sentences

Cost Gross Unrealized Gain Gross Unrealized Losses Allowance for Credit Losses Fair Value

September 30, 2024

March 31, 2025

State and municipal securities $ 131,979 $ 0 $ ( 22,498 ) $ 0 $ 109,481

4 unchanged sentences

The net unrealized gain or loss on the transferred securities was recorded as a component of accumulated other comprehensive income (loss) at the time of the transfer and is amortized over the remaining life of the underlying securities as an adjustment to the yield on those securities.

The net amount of the unamortized unrealized loss on the transferred securities included in accumulated other comprehensive income (loss) was $ 19.5 million ($ 15.4 million, net of tax) at September 30, 2024.

Information regarding the amortized cost and fair value of available-for-sale and held-to-maturity debt securities by maturity as of September 30, 2024 is presented below.

The net amount of the unamortized unrealized loss on the transferred securities included in accumulated other comprehensive income (loss) was $ 18.5 million ($ 14.6 million, net of tax) at March 31, 2025.

Information regarding the amortized cost and fair value of available-for-sale and held-to-maturity debt securities by maturity as of March 31, 2025 is presented below.

Maturity information is based on contractual maturity for all securities other than mortgage-backed securities.

11 unchanged sentences

Available-for-sale securities proceeds, gross gains and gross losses are presented below.

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands) 2025 2024

7 unchanged sentences

Gains and losses on sales are based on the amortized cost of the security sold and recorded on the trade date.

Securities with fair values of $ 592.6 million and $ 792.0 million were pledged as of September 30, 2024 and December 31, 2023, respectively, as collateral for borrowings from the Federal Home Loan Bank ("FHLB") and Federal Reserve Bank and for other purposes as permitted or required by law.

Securities with fair values of $ 554.0 million and $ 560.2 million were pledged as of March 31, 2025 and December 31, 2024, respectively, as collateral for borrowings from the Federal Home Loan Bank ("FHLB") and Federal Reserve Bank and for other purposes as permitted or required by law.

Unrealized Loss Analysis on Available-for-Sale and Held-to-Maturity Securities

Information regarding available-for-sale securities with unrealized losses as of September 30, 2024 and December 31, 2023 is presented on the following page.

The tables divide the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.

Information regarding available-for-sale securities with unrealized losses as of March 31, 2025 and December 31, 2024 is presented on the following page.

The table divides the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.

Less than 12 months 12 months or more Total

3 unchanged sentences

Value Unrealized

September 30, 2024

March 31, 2025

government sponsored agencies $ 0 $ 0 $ 110,076 $ 24,798 $ 110,076 $ 24,798

9 unchanged sentences

Total available-for-sale $ 36,132 $ 688 $ 943,487 $ 190,487 $ 979,619 $ 191,175

Information regarding held-to-maturity securities with unrealized losses as of September 30, 2024 and December 31, 2023 is presented below.

Information regarding held-to-maturity securities with unrealized losses as of March 31, 2025 and December 31, 2024 is presented below.

The table divides the securities between those with unrealized losses for less than twelve months and those with unrealized losses for twelve months or more.

4 unchanged sentences

Value Unrealized

September 30, 2024

March 31, 2025

State and municipal securities $ 0 $ 0 $ 109,481 $ 22,498 $ 109,481 $ 22,498

1 unchanged sentence

State and municipal securities $ 0 $ 0 $ 113,107 $ 18,461 $ 113,107 $ 18,461

The total number of securities with unrealized losses as of September 30, 2024 and December 31, 2023 is presented below.

The total number of securities with unrealized losses as of March 31, 2025 and December 31, 2024 is presented below.

Available-for-Sale Held-to-Maturity

3 unchanged sentences

or more Total

September 30, 2024

March 31, 2025

government sponsored agencies 0 17 17 0 0 0

18 unchanged sentences

For available-for-sale debt securities, any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss), net of applicable taxes.

No allowance for credit losses for available-for-sale or held-to-maturity debt securities was recorded at September 30, 2024 or December 31, 2023.

Accrued interest receivable on securities totaled $ 7.0 million and $ 7.6 million at September 30, 2024 and December 31, 2023, respectively, and is excluded from the estimate of credit losses.

No allowance for credit losses for available-for-sale or held-to-maturity debt securities was recorded at March 31, 2025 or December 31, 2024.

Accrued interest receivable on securities totaled $ 7.0 million and $ 7.5 million at March 31, 2025 and December 31, 2024, respectively, and is excluded from the estimate of credit losses.

government sponsored agencies and mortgage-backed securities are either explicitly or implicitly guaranteed by the U.S.

2 unchanged sentences

State and municipal securities credit losses are benchmarked against highly rated municipal securities of similar duration, as published by Moody's, resulting in an immaterial allowance for credit losses.

(dollars in thousands) September 30,

(dollars in thousands) March 31,

2025 December 31,

27 unchanged sentences

Loans, net $ 5,130,788 $ 5,031,988

The recorded investment in loans does not include accrued interest, which totaled $ 20.7 million and $ 21.5 million as of September 30, 2024 and December 31, 2023, respectively.

The Company h ad $ 432,000 and $ 238,000 in residential real estate loans in the process of foreclosure as of September 30, 2024 and December 31, 2023, respectively.

The recorded investment in loans does not include accrued interest, which totaled $ 21.1 million and $ 20.3 million as of March 31, 2025 and December 31, 2024, respectively.

The Company h ad $ 821,000 and $ 424,000 in residential real estate loans in the process of foreclosure as of March 31, 2025 and December 31, 2024, respectively.

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

The Company maintains an allowance for credit losses to provide for expected credit losses.

Losses are charged against the allowance when management believes that the principal is uncollectable.

Losses are charged against the allowance when management believes that the principal is uncollectible.

Subsequent recoveries, if any, are credited to the allowance.

54 unchanged sentences

For off balance sheet credit exposures outlined in the ASU at 326-20-30-11, it is the Company’s position that nearly all of the unfunded amounts on lines of credit are unconditionally cancellable, and therefore not subject to having a liability recorded.

The following tables present the activity in the allowance for credit losses by portfolio segment for the periods ended:

(dollars in thousands) Commercial and Industrial Commercial Real Estate and Multifamily Residential Agri-business and Agricultural Other Commercial Consumer 1-4 Family Mortgage Other Consumer Unallocated Total

Three Months Ended September 30, 2024

Beginning balance, July 1 $ 39,161 $ 31,687 $ 3,668 $ 820 $ 3,586 $ 1,390 $ 399 $ 80,711

Provision for credit losses 3,498 ( 355 ) ( 254 ) ( 86 ) ( 16 ) 308 ( 36 ) 3,059

Loans charged-off ( 72 ) 0 0 0 ( 3 ) ( 156 ) 0 ( 231 )

Recoveries 18 26 0 0 4 40 0 88

Net loans (charged-off) recovered ( 54 ) 26 0 0 1 ( 116 ) 0 ( 143 )

Ending balance $ 42,605 $ 31,358 $ 3,414 $ 734 $ 3,571 $ 1,582 $ 363 $ 83,627

Three Months Ended September 30, 2023

Beginning balance, July 1 $ 30,978 $ 30,913 $ 4,402 $ 1,120 $ 3,448 $ 846 $ 351 $ 72,058

Provision for credit losses ( 167 ) 230 ( 139 ) ( 102 ) 197 283 98 400

Loans charged-off ( 193 ) 0 0 0 ( 149 ) ( 138 ) 0 ( 480 )

Recoveries 21 12 0 0 3 91 0 127

Net loans (charged-off) recovered ( 172 ) 12 0 0 ( 146 ) ( 47 ) 0 ( 353 )

Ending balance $ 30,639 $ 31,155 $ 4,263 $ 1,018 $ 3,499 $ 1,082 $ 449 $ 72,105

The following tables present the activity in the allowance for credit losses by portfolio segment for the periods shown:

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Beginning balance, January 1 $ 45,539 $ 30,865 $ 3,541 $ 743 $ 3,358 $ 1,531 $ 383 $ 85,960

5 unchanged sentences

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Beginning balance, January 1 $ 30,338 $ 31,335 $ 4,150 $ 1,129 $ 3,474 $ 1,174 $ 372 $ 71,972

19 unchanged sentences

Loans listed as Not Rated are consumer loans or commercial loans with consumer characteristics included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status.

The following table summarizes the risk category of loans by loan segment and year of origination as of September 30, 2024:

The following table summarizes the risk category of loans by loan segment and year of origination as of March 31, 2025:

(dollars in thousands) 2025 2024 2023 2022 2021 Prior Term Total Revolving Total

20 unchanged sentences

Pass 16,094 24,839 58,263 40,754 24,140 0 164,090 458,160 622,250

Special Mention 603 0 0 0 0 0 603 1,832 2,435

Total 16,094 24,839 58,263 40,754 24,140 0 164,090 458,160 622,250

9 unchanged sentences

Nonowner occupied loans:

Pass (continued) 108,277 123,755 152,690 107,647 121,272 80,108 693,749 50,584 744,333

Pass 26,755 156,586 116,164 150,467 104,684 170,940 725,596 107,705 833,301

(dollars in thousands) 2025 2024 2023 2022 2021 Prior Term Total Revolving Total

Nonowner occupied loans (continued):

Special Mention 0 588 15,506 106 0 0 16,200 1,930 18,130

Nonowner occupied loans:

Total 26,755 157,174 131,670 150,573 104,684 170,940 741,796 109,635 851,431

10 unchanged sentences

Pass 3,602 15,147 18,955 33,162 22,760 42,785 136,411 17,313 153,724

Special Mention 2,000 122 205 0 0 0 2,327 0 2,327

Substandard 0 0 0 0 0 67 67 0 67

17 unchanged sentences

Pass 4,697 11,361 8,085 8,666 11,024 10,284 54,117 6,821 60,938

(dollars in thousands) 2025 2024 2023 2022 2021 Prior Term Total Revolving Total

Closed end first mortgage loans (continued):

Special Mention 0 121 223 163 64 0 571 0 571

Substandard 0 0 263 317 89 611 1,280 0 1,280

Not Rated (continued) 18,866 58,659 47,720 34,711 16,226 24,767 200,949 0 200,949

Not Rated 6,298 29,141 53,471 46,886 32,157 34,747 202,700 0 202,700

Total 10,995 40,623 62,042 56,032 43,334 45,642 258,668 6,821 265,489

24 unchanged sentences

Total period gross write offs $ 0 $ 20 $ 82 $ 8 $ 58 $ 24 $ 192 $ 316 $ 508

As of September 30, 2024, $ 1.2 million in PPP loans were included in the "Pass" category of non-working capital commercial and industrial loans.

These loans were included in this risk rating category because they are fully guaranteed by the Small Business Administration ("SBA").

The following table summarizes the risk category of loans by loan segment and year of origination as of December 31, 2024:

5 unchanged sentences

Substandard 0 0 933 0 195 219 1,347 25,878 27,225

Doubtful 0 3,090 39,994 0 0 0 43,084 0 43,084

Total 1,599 3,204 42,567 1,647 846 219 50,082 599,358 649,440

5 unchanged sentences

Substandard 0 2,986 1,598 107 4,142 584 9,417 406 9,823

Doubtful 0 0 0 21 386 0 407 0 407

Not Rated 1,297 1,657 1,149 395 395 23 4,916 0 4,916

5 unchanged sentences

Pass 23,264 69,737 43,228 2,566 0 0 138,795 426,577 565,372

Special Mention 603 0 0 0 0 0 603 0 603

Total 23,867 69,737 43,228 2,566 0 0 139,398 426,577 565,975

8 unchanged sentences

Current period gross write offs 0 0 0 0 0 840 840 0 840

Nonowner occupied loans:

Pass 123,633 158,415 112,582 134,050 87,288 66,755 682,723 27,860 710,583

(dollars in thousands) 2024 2023 2022 2021 2020 Prior Term Total Revolving Total

Nonowner occupied loans (continued):

Pass 152,963 118,517 168,387 101,064 119,612 77,497 738,040 110,441 848,481

Special Mention 0 15,650 108 5,868 0 0 21,626 1,895 23,521

11 unchanged sentences

Pass 14,574 21,241 29,601 23,043 25,192 18,312 131,963 24,249 156,212

Special Mention 122 209 0 0 0 0 331 0 331

Substandard 0 0 0 0 0 71 71 0 71

17 unchanged sentences

Pass 11,104 8,511 9,274 11,278 6,252 4,685 51,104 4,299 55,403

(dollars in thousands) 2024 2023 2022 2021 2020 Prior Term Total Revolving Total

Closed end first mortgage loans (continued):

Special Mention 122 226 165 66 0 0 579 0 579

1 unchanged sentence

Not Rated 28,706 55,641 47,355 34,173 13,543 22,396 201,814 0 201,814

Closed end first mortgage loans (continued):

Total 39,932 64,461 57,113 45,607 19,795 27,710 254,618 4,299 258,917

3 unchanged sentences

Pass 574 738 0 438 0 5 1,755 10,090 11,845

Special Mention 0 0 0 0 309 0 309 0 309

Substandard 0 104 0 15 0 81 200 118 318

10 unchanged sentences

Pass 79 971 234 109 0 0 1,393 20,742 22,135

Special Mention 0 0 475 0 157 0 632 0 632

Substandard 0 128 54 76 17 0 275 0 275

5 unchanged sentences

Total current period gross write offs $ 49 $ 686 $ 409 $ 575 $ 179 $ 910 $ 2,808 $ 660 $ 3,468

As of December 31, 2023, $ 1.3 million in PPP loans were included in the "Pass" category of non-working capital commercial and industrial loans.

These loans were included in this risk rating category because they are fully guaranteed by the SBA.

Nonaccrual and Past Due Loans:

4 unchanged sentences

Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for a prescribed period, and future payments are reasonably assured.

The following table presents the aging of the amortized cost basis in past due loans as of September 30, 2024 by class of loans and loans past due 90 days or more and still accruing by class of loan:

The following table presents the aging of the amortized cost basis in past due loans as of March 31, 2025 by class of loans and loans past due 90 days or more and still accruing by class of loan:

(dollars in thousands) Loans Not Past Due 30-89 Days Past Due Greater than 89 Days Past Due and Accruing Total Accruing Total Nonaccrual Nonaccrual With No Allowance For Credit Loss Total

17 unchanged sentences

Total $ 5,161,508 $ 4,309 $ 7 $ 5,165,824 $ 57,397 $ 1,923 $ 5,223,221

An insignificant amount of interest income was recognized on nonaccrual loans during the nine month period ended September 30, 2024.

An insignificant amount of interest income was recognized on nonaccrual loans during the three month period ended March 31, 2025.

The following table presents the aging of the amortized cost basis in past due loans as of December 31, 2024 by class of loans and loans past due 90 days or more and still accruing by class of loan:

24 unchanged sentences

The following tables present the amortized cost basis of collateral dependent loans by class of loan as of:

September 30, 2024

March 31, 2025

(dollars in thousands) Real Estate General

10 unchanged sentences

Open end and junior lien loans 222 0 0 222

Residential construction and land development loans 0 0 0 0

Other consumer loans 0 0 359 359

23 unchanged sentences

In the event forgiveness of principal is provided, the amount of the forgiveness is charged off against the allowance for credit losses.

During the three and nine months ended September 30, 2024, there were no material modifications made to borrowers experiencing financial difficulty.

The following tables present the amortized cost basis of loans that were experiencing financial difficulty and received a modification of terms during the three and nine months ended September 30, 2023, by class and type of modification.

The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivables is also presented below:

(dollars in thousands) Interest Rate Reduction Combination Interest Rate Reduction, Term Extension and Payment Delay Combination Principal Forgiveness, Interest Rate Reduction, Term Extension and Payment Delay Total Modifications Total Class of Financing Receivable

Three Months Ended September 30, 2023

Commercial and industrial loans:

Working capital lines of credit loans $ 931 $ 0 $ 0 $ 931 0.16 %

Non-working capital loans 0 2,000 0 2,000 0.25

Total commercial and industrial loans 931 2,000 0 2,931 0.21

Total loan modifications made to borrowers experiencing financial difficulty $ 931 $ 2,000 $ 0 $ 2,931 0.06 %

Nine Months Ended September 30, 2023

Commercial and industrial loans:

Working capital lines of credit loans $ 931 $ 0 $ 0 $ 931 0.16 %

Non-working capital loans 0 2,000 1,596 3,596 0.44

Total commercial and industrial loans 931 2,000 1,596 4,527 0.32

Total loan modifications made to borrowers experiencing financial difficulty $ 931 $ 2,000 $ 1,596 $ 4,527 0.09 %

The Company had committed, as of September 30, 2024, to lend additional funds of $ 694,000 to borrowers included in the previous tables .

The following tables present the financial effect of the loan modifications presented above for borrowers experiencing financial difficulty for the three and nine months ended September 30, 2023:

(dollars in thousands) Principal Forgiveness Weighted Average Interest Rate Reduction Weighted Average Term Extension Payment Delay

Three Months Ended September 30, 2023

Commercial and industrial loans:

Working capital lines of credit loans $ 0 7.50 % None None

Non-working capital loans 0 8.50 180 months Extension of payment terms from monthly variable rate interest only payments with balloon payment at end of term to fully amortizing ten year fixed rate principal and interest payment schedule

Total $ 0 8.15 % 70 months

(dollars in thousands) Principal Forgiveness Weighted Average Interest Rate Reduction Weighted Average Term Extension Payment Delay

Nine Months Ended September 30, 2023

Commercial and industrial loans:

Working capital lines of credit loans $ 0 7.50 % None None

Non-working capital loans (1) 9,380 7.87 58 months Extension of payment terms from fully amortizing variable rate 40 month term to 60 month fixed rate term with 480 month amortization schedule, monthly interest and semiannual principal payments, and excess cash flow recapture provisions

Extension of payment terms from monthly variable rate interest only payments with balloon payment at end of term to fully amortizing ten year fixed rate principal and interest payment schedule

Total $ 9,380 7.84 % 44 months

(1) Principal forgiveness of $ 9.4 million represents one $ 11.0 million non-working capital loan, of which $ 9.3 million was charged off.

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

At September 30, 2024, no loans receiving such a modification within the last twelve months were 30 days or greater past due.

At September 30, 2024, no loans receiving a modification due to borrower financial difficulty within the last twelve months experienced a payment default.

During the three months ended March 31, 2025 and 2024, there were no material modifications made to borrowers experiencing financial difficulty.

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty by reviewing the delinquency and payment default status of such loans to understand the effectiveness of its relief efforts.

At March 31, 2025, no loans within the previous twelve months received a modification due to a borrower experiencing financial difficulty.

Upon the Company's determination that a modified loan (or portion thereof) has subsequently been deemed uncollectible, the loan (or a portion thereof) is written off.

Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

For the period ended September 30, 2024, the Company had no outstanding advances from the FHLB.

For the period ended December 31, 2023, the Company had a fixed rate bullet advance from the FHLB with an interest rate of 5.55 % in the amount of $ 50.0 million that matured on January 5, 2024.

Federal Funds purchased were $ 30.0 million at September 30, 2024, and there were none at December 31, 2023.

For the periods ended below, advances from the Federal Home Loan Bank of Indianapolis ("FHLBI") were as follows:

(dollars in thousands) March 31, 2025 December 31, 2024

Short-term fixed rate bullet advance, 4.49 %, due April 3, 2025

$ 107,000 $ 0

Long-term fixed rate bullet advance, 0.00 %, due March 12, 2035

Total $ 108,200 $ 0

For the period ended March 31, 2025, the Company had advances outstanding from the FHLBI of $ 108.2 million.

The fixed rate bullet advance due April 3, 2025 had an interest rate of 4.49 % in the amount $ 107.0 million and was paid at maturity.

The fixed rate bullet advance due March 12, 2035 has an interest rate of 0.00 % in the amount of $ 1.2 million.

The $ 1.2 million advance is a rate-subsidized Community Development Financial Institution ("CDFI") Rate Buydown Advance offered by the FHLBI.

The Company extended a low cost loan to a qualifying CDFI within its operating footprint that was then funded by the fixed rate advance from the Rate Buydown Advance program.

For the period ended December 31, 2024, the Company had no advances outstanding with the FHLBI.

There were no Federal Funds purchased outstanding at March 31, 2025 and December 31, 2024.

On October 2, 2024, the Company renewed an unsecured revolving credit agreement with a financial institution allowing the Company to borrow up to $ 30.0 million.

2 unchanged sentences

The credit agreement includes a negative pledge agreement whereby the Company agrees not to pledge or otherwise encumber the stock of the Bank.

There were no outstanding borrowings on the credit agreement at September 30, 2024 and December 31, 2023.

There were no outstanding borrowings on the credit agreement at March 31, 2025 and December 31, 2024.

FAIR VALUE DISCLOSURES

11 unchanged sentences

These models utilize the market approach with standard inputs that include, but are not limited to benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data.

For certain municipal securities that are not rated and observable inputs about the specific issuer are not available, fair values are estimated using observable data from other municipal securities presumed to be similar or other market data on other non-rated municipal securities (Level 3 inputs).

municipal securities that are not rated and observable inputs about the specific issuer are not available, fair values are estimated using observable data from other municipal securities presumed to be similar or other market data on other non-rated municipal securities (Level 3 inputs).

The Company’s Finance Department, which is responsible for all accounting and SEC disclosure compliance, and the Company’s Treasury Department, which is responsible for investment portfolio management and asset/liability modeling, are the two areas that determine the Company’s valuation policies and procedures.

21 unchanged sentences

Fair value is determined using several methods.

Generally, the fair value of real estate is based on appraisals by qualified third party

Generally, the fair value of real estate is based on appraisals by qualified third party appraisers.

These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

12 unchanged sentences

Mortgage servicing rights:

As of September 30, 2024, the value of the Company’s Level 3 servicing assets for residential mortgage loans (“MSRs”) was $ 1.9 million, carried at amortized cost and no valuation reserve.

These residential mortgage loans have a weighted average interest rate of 3.7 %, a weighted average maturity of 20 years and are secured by homes generally within the Company’s market area of Northern Indiana and Indianapolis.

As of March 31, 2025, the value of the Company’s Level 3 servicing assets for residential mortgage loans (“MSRs”) was $ 1.8 million, carried at amortized cost and no valuation reserve.

These residential mortgage loans have a

weighted average interest rate of 3.8 %, a weighted average maturity of 20 years and are secured by homes generally within the Company’s market area of Northern Indiana and Indianapolis.

A third-party valuation is used to estimate fair value by stratifying the portfolios on the basis of certain risk characteristics, including loan type and interest rate.

4 unchanged sentences

The most significant unobservable assumption is the discount rate.

At September 30, 2024, the constant prepayment speed (“PSA”) used was 160 and used a discount rate range of 10.0 %- 12.0 %.

At March 31, 2025, the constant prepayment speed (“PSA”) used was 162 and used a discount rate of 10.0 %.

At December 31, 2024, the PSA used was 157 and the discount rate used was 10.0 %.

9 unchanged sentences

The tables below present the balances of assets measured at fair value on a recurring basis:

September 30, 2024

March 31, 2025

Fair Value Measurements Using Assets

24 unchanged sentences

Total assets $ 0 $ 1,012,263 $ 4,660 $ 1,016,923

Mortgage banking derivative $ 0 $ 11 $ 0 $ 11

Interest rate swap derivative 0 25,403 0 25,403

2 unchanged sentences

The tables below present the balances of assets measured at fair value on a nonrecurring basis:

September 30, 2024

March 31, 2025

Fair Value Measurements Using Assets

10 unchanged sentences

Total collateral dependent loans 0 0 22,384 22,384

Other real estate owned 0 0 384 384

Total assets $ 0 $ 0 $ 22,384 $ 22,384

12 unchanged sentences

Total collateral dependent loans 0 0 27,151 27,151

Other real estate owned 0 0 384 384

Total assets $ 0 $ 0 $ 27,151 $ 27,151

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at September 30, 2024:

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at March 31, 2025:

(dollars in thousands) Fair Value Valuation Methodology Unobservable Inputs Average Range of Inputs

5 unchanged sentences

Agri-business and agricultural 30 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 56 %

Other real estate owned 384 Appraisals Discount to reflect current market conditions and ultimate collectability 36 %

The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a non-recurring basis at December 31, 2024:

6 unchanged sentences

Agri-business and agricultural 32 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 54 %

Other real estate owned 384 Appraisals Discount to reflect current market conditions and ultimate collectability 36 %

The following tables contain the estimated fair values and the related carrying values of the Company’s financial instruments.

Items that are not financial instruments are not included.

September 30, 2024

March 31, 2025

Value Estimated Fair Value

13 unchanged sentences

All other deposits 5,144,985 5,144,985 0 0 5,144,985

Federal Funds purchased 30,000 0 30,000 0 30,000

Federal Home Loan Bank advances:

Short-term advance 107,000 107,000 0 0 107,000

Long-term advance 1,200 754 0 0 754

Mortgage banking derivative 23 0 23 0 23

18 unchanged sentences

All other deposits 5,045,090 5,045,090 0 0 5,045,090

Federal Home Loan Bank advances 50,000 50,000 0 0 50,000

Mortgage banking derivative 11 0 11 0 11

Interest rate swap derivative 25,403 0 25,403 0 25,403

2 unchanged sentences

OFFSETTING ASSETS AND LIABILITIES

The following tables summarize gross and net information about financial instruments and derivative instruments that are offset in the statement of financial position or that are subject to an enforceable master netting arrangement at September 30, 2024 and December 31, 2023.

September 30, 2024

March 31, 2025

Gross Amounts of Recognized Assets/Liabilities Gross Amounts Offset in the Statement of Financial Position Net Amounts presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Net Amount

16 unchanged sentences

Diluted earnings per common share includes the dilutive effect of additional potential common shares issuable under stock based awards and warrants, none of which were antidilutive.

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Weighted average shares outstanding for basic earnings per common share 25,714,818 25,657,063

4 unchanged sentences

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the changes within each classification of accumulated other comprehensive income (loss) for the three months ended September 30, 2024 and 2023, all shown net of tax:

(dollars in thousands) Unrealized Gains and Losses on Available-

for-Sales Securities Defined Benefit Pension Items Total

Balance at July 1, 2024

$ ( 169,746 ) $ ( 712 ) $ ( 170,458 )

Other comprehensive income (loss) before reclassification 31,925 0 31,925

Amounts reclassified from accumulated other comprehensive income (loss) 385 12 397

Net current period other comprehensive income (loss) 32,310 12 32,322

Balance at September 30, 2024 $ ( 137,436 ) $ ( 700 ) $ ( 138,136 )

(dollars in thousands) Unrealized Gains and Losses on Available-

for-Sales Securities Defined Benefit Pension Items Total

Balance at July 1, 2023

$ ( 176,898 ) $ ( 747 ) $ ( 177,645 )

Other comprehensive income (loss) before reclassification ( 50,900 ) 0 ( 50,900 )

Amounts reclassified from accumulated other comprehensive income (loss) 423 11 434

Net current period other comprehensive income (loss) ( 50,477 ) 11 ( 50,466 )

Balance at September 30, 2023 $ ( 227,375 ) $ ( 736 ) $ ( 228,111 )

The following tables summarize the changes within each classification of accumulated other comprehensive income (loss) for the nine months ended September 30, 2024 and 2023, all shown net of tax:

The following tables summarize the changes within each classification of accumulated other comprehensive income (loss) for the three months ended March 31, 2025 and 2024, all shown net of tax:

(dollars in thousands) Unrealized Gains and Losses on Available-

4 unchanged sentences

Net current period other comprehensive income (loss) 2,611 10 2,621

Balance at September 30, 2024

Balance at March 31, 2025

$ ( 163,321 ) $ ( 558 ) $ ( 163,879 )

5 unchanged sentences

Net current period other comprehensive income (loss) ( 11,729 ) 11 ( 11,718 )

Balance at September 30, 2023

Balance at March 31, 2024

$ ( 166,189 ) $ ( 724 ) $ ( 166,913 )

Reclassifications out of other accumulated other comprehensive income (loss) for the three months ended September 30, 2024 are as follows:

Details about

Accumulated Other

Comprehensive

Income (Loss) Components Amount

Reclassified From Accumulated Other Comprehensive Income (Loss) Affected Line Item

in the Statement Where Net Income is Presented

(dollars in thousands)

Amortization of unrealized losses on held-to-maturity securities $ ( 488 ) Interest income

Realized gains and (losses) on available-for-sale securities 0 Net securities gains (losses)

Tax effect 103 Income tax expense

( 385 ) Net of tax

Amortization of defined benefit pension items ( 16 ) Other expense

Tax effect 4 Income tax expense

( 12 ) Net of tax

Total reclassifications for the period $ ( 397 ) Net income

Reclassifications out of other accumulated comprehensive income (loss) for the three months ended September 30, 2023 are as follows:

Details about

Accumulated Other

Comprehensive

Income (Loss) Components Amount

Reclassified From Accumulated Other Comprehensive Income (Loss) Affected Line Item

in the Statement Where Net Income is Presented

(dollars in thousands)

Amortization of unrealized losses on held-to-maturity securities $ ( 501 ) Interest income

Realized gains and (losses) on available-for-sale securities ( 35 ) Net securities gains (losses)

Tax effect 113 Income tax expense

( 423 ) Net of tax

Amortization of defined benefit pension items ( 15 ) Other expense

Tax effect 4 Income tax expense

( 11 ) Net of tax

Total reclassifications for the period $ ( 434 ) Net income

Reclassifications out of accumulated comprehensive income (loss) for the nine months ended September 30, 2024 are as follows:

Reclassifications out of accumulated comprehensive income (loss) for the three months ended March 31, 2025 are as follows:

Details about

6 unchanged sentences

Amortization of unrealized losses on held-to-maturity securities $ ( 490 ) Interest income

Realized gains and (losses) on available-for-sale securities ( 46 ) Net securities gains (losses)

Tax effect 103 Income tax expense

4 unchanged sentences

Total reclassifications for the period $ ( 397 ) Net income

Reclassifications out of accumulated other comprehensive income (loss) for the nine months ended September 30, 2023 are as follows:

Reclassifications out of accumulated other comprehensive income (loss) for the three months ended March 31, 2024 are as follows:

Details about

29 unchanged sentences

The Company recognizes short-term leases on a straight-line basis and does not record a related lease asset or liability for such leases, as allowed as a practical expedient of the standard.

The following is a maturity analysis of the operating lease liabilities as of September 30, 2024:

The following is a maturity analysis of the operating lease liabilities as of March 31, 2025:

Years ending December 31, (in thousands) Operating Lease Obligation

4 unchanged sentences

Right-of-use asset $ 6,653

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands) 2025 2024

4 unchanged sentences

Operating cash outflows from operating leases $ 198 $ 185

Weighted-average remaining lease term - operating leases 7.9 years 6.5 years 7.9 years 6.5 years

Weighted-average remaining lease term - operating leases 7.6 years 6.0 years

Weighted average discount rate - operating leases 3.7 % 2.5 %

LOSS CONTINGENCIES

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.

As previously disclosed, in July 2019, the Bank discovered potentially fraudulent activity by a former treasury management client involving multiple banks.

The former client subsequently filed several related bankruptcy cases, captioned In re Interlogic Outsourcing, Inc., et al.

, which were filed in the United States Bankruptcy Court for the Western District of Michigan.

The Bank and the other remaining individual defendants have settled the matter with the liquidating trustee and the case was dismissed with prejudice on June 21, 2024.

A $ 4.5 million accrual was recorded and recognized during the second quarter of 2024 related to the resolution of this matter.

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

What changed 10-Q

Item 1. Financial Statements