LAKELAND FINANCIAL CORP 10-Q

ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS (dollars in thousands, except share data) March 31, 2026 December 31, 2025 (unaudited) ASSETS Cash and due from banks $ 65,698 $ 57,139 Short-term investments 85,626 84,179 Total cash and cash equivalents 151,324 141,318 Securities available-for-sale, at fair value 1,026,991 1,052,062 Securities held-to-maturity, at amortized cost (fair value of $ 114,241 and $ 117,510 , respectively) 133,617 133,208 Real estate mortgage loans held-for-sale 1,086 2,707 Loans, net of allowance for credit losses of $ 68,914 and $ 68,995 5,404,444 5,306,354 Land, premises and equipment, net 68,761 65,542 Bank owned life insurance 130,710 129,978 Federal Reserve and Federal Home Loan Bank stock 21,420 21,420 Accrued interest receivable 29,703 28,997 Goodwill 4,970 4,970 Other assets 110,654 103,466 Total assets $ 7,083,680 $ 6,990,022 LIABILITIES Noninterest bearing deposits $ 1,301,547 $ 1,221,327 Interest bearing deposits 4,888,713 4,752,023 Total deposits 6,190,260 5,973,350 Borrowings - Federal Home Loan Bank advances: Short-term advance 50,000 170,000 Long-term advance 1,200 1,200 Other borrowings 17,000 13,000 Total borrowings 68,200 184,200 Accrued interest payable 8,591 8,868 Other liabilities 67,636 61,112 Total liabilities 6,334,687 6,227,530 STOCKHOLDERS’ EQUITY Common stock: 90,000,000 shares authorized, no par value 26,062,063 shares issued and 24,929,650 outstanding as of March 31, 2026 26,023,644 shares issued and 25,219,634 outstanding as of December 31, 2025 137,929 136,965 Retained earnings 801,617 788,345 Accumulated other comprehensive income (loss) ( 135,622 ) ( 127,137 ) Treasury stock at cost ( 1,132,413 shares as of March 31, 2026, 804,010 shares as of December 31, 2025) ( 55,020 ) ( 35,770 ) Total stockholders’ equity 748,904 762,403 Noncontrolling interest 89 89 Total equity 748,993 762,492 Total liabilities and equity $ 7,083,680 $ 6,990,022 The accompanying notes are an integral part of these consolidated financial statements. 1 Table of Contents CONSOLIDATED STATEMENTS OF INCOME (unaudited - dollars in thousands, except share and per share data) Three Months Ended March 31, 2026 2025 NET INTEREST INCOME Interest and fees on loans Taxable $ 83,111 $ 81,740 Tax exempt 279 292 Interest and dividends on securities Taxable 3,841 3,389 Tax exempt 3,907 3,910 Other interest income 849 1,124 Total interest income 91,987 90,455 Interest on deposits 33,431 36,458 Interest on short-term borrowings 1,783 1,122 Total interest expense 35,214 37,580 NET INTEREST INCOME 56,773 52,875 Provision for credit losses 2,000 6,800 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 54,773 46,075 NONINTEREST INCOME Wealth advisory fees 3,063 2,867 Investment brokerage fees 524 452 Service charges on deposit accounts 2,874 2,774 Loan and service fees 3,207 2,884 Merchant and interchange fee income 777 822 Bank owned life insurance income 976 322 Interest rate swap fee income 701 0 Mortgage banking income (loss) 81 ( 51 ) Other income 730 858 Total noninterest income 12,933 10,928 NONINTEREST EXPENSE Salaries and employee benefits 20,295 17,902 Net occupancy expense 2,104 1,980 Equipment costs 1,464 1,382 Data processing fees and supplies 4,259 4,265 Corporate and business development 1,493 1,406 FDIC insurance and other regulatory fees 873 800 Professional fees 1,937 2,380 Other expense 2,726 2,648 Total noninterest expense 35,151 32,763 INCOME BEFORE INCOME TAX EXPENSE 32,555 24,240 Income tax expense 6,077 4,155 NET INCOME $ 26,478 $ 20,085 BASIC WEIGHTED AVERAGE COMMON SHARES 25,344,757 25,714,818 BASIC EARNINGS PER COMMON SHARE $ 1.04 $ 0.78 DILUTED WEIGHTED AVERAGE COMMON SHARES 25,493,920 25,802,865 DILUTED EARNINGS PER COMMON SHARE $ 1.04 $ 0.78 The accompanying notes are an integral part of these consolidated financial statements. 2 Table of Contents CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited - dollars in thousands) Three months ended March 31, 2026 2025 Net income $ 26,478 $ 20,085 Other comprehensive income (loss) Change in available-for-sale and transferred securities: Unrealized holding gain (loss) on securities available-for-sale arising during the period ( 11,245 ) 2,815 Reclassification adjustment for amortization of unrealized losses on securities transferred to held-to-maturity 489 490 Net securities gain (loss) activity during the period ( 10,756 ) 3,305 Tax effect 2,259 ( 694 ) Net of tax amount ( 8,497 ) 2,611 Defined benefit pension plans: Amortization of net actuarial loss 16 13 Net gain activity during the period 16 13 Tax effect ( 4 ) ( 3 ) Net of tax amount 12 10 Total other comprehensive income (loss), net of tax ( 8,485 ) 2,621 Comprehensive income $ 17,993 $ 22,706 The accompanying notes are an integral part of these consolidated financial statements. 3 Table of Contents CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (unaudited - dollars in thousands, except share and per share data) Three Months Ended Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Stockholders’ Equity Noncontrolling Interest Total Equity Shares Stock Balance at January 1, 2025 25,509,592 $ 129,664 $ 736,412 $ ( 166,500 ) $ ( 15,754 ) $ 683,822 $ 89 $ 683,911 Comprehensive income: Net income 20,085 20,085 20,085 Other comprehensive income (loss), net of tax 2,621 2,621 2,621 Cash dividends declared and paid, $ 0.50 per share ( 12,847 ) ( 12,847 ) ( 12,847 ) Treasury shares purchased under deferred directors' plan ( 3,095 ) 215 ( 215 ) 0 0 Treasury shares sold and distributed under deferred directors' plan 12,744 ( 375 ) 375 0 0 Stock activity under equity compensation plans 37,663 ( 1,493 ) ( 1,493 ) ( 1,493 ) Stock based compensation expense 2,232 2,232 2,232 Balance at March 31, 2025 25,556,904 $ 130,243 $ 743,650 $ ( 163,879 ) $ ( 15,594 ) $ 694,420 $ 89 $ 694,509 Balance at January 1, 2026 25,219,634 $ 136,965 $ 788,345 $ ( 127,137 ) $ ( 35,770 ) $ 762,403 $ 89 $ 762,492 Comprehensive income: Net income 26,478 26,478 26,478 Other comprehensive income (loss), net of tax ( 8,485 ) ( 8,485 ) ( 8,485 ) Cash dividends declared and paid, $ 0.52 per share ( 13,206 ) ( 13,206 ) ( 13,206 ) Treasury shares purchased under share repurchase plan ( 336,853 ) ( 19,369 ) ( 19,369 ) ( 19,369 ) Treasury shares purchased under deferred directors' plan ( 4,090 ) 239 ( 239 ) 0 0 Treasury shares sold and distributed under deferred directors' plan 12,540 ( 358 ) 358 0 0 Stock activity under equity compensation plans 38,419 ( 1,292 ) ( 1,292 ) ( 1,292 ) Stock based compensation expense 2,375 2,375 2,375 Balance at March 31, 2026 24,929,650 $ 137,929 $ 801,617 $ ( 135,622 ) $ ( 55,020 ) $ 748,904 $ 89 $ 748,993 The accompanying notes are an integral part of these consolidated financial statements. 4 Table of Contents CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited - dollars in thousands) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net income $ 26,478 $ 20,085 Adjustments to reconcile net income to net cash from operating activities: Depreciation 1,496 1,479 Provision for credit losses 2,000 6,800 Amortization of loan servicing rights 103 106 Loans originated for sale, including participations ( 3,083 ) ( 2,533 ) Net gain on sales of loans ( 155 ) ( 85 ) Proceeds from sale of loans, including participations 4,822 2,986 Net securities amortization 870 1,000 Stock based compensation expense 2,375 2,232 Earnings on life insurance ( 976 ) ( 322 ) Gain on life insurance ( 171 ) 0 Tax expense of stock award issuances 71 136 Net change: Interest receivable and other assets ( 5,616 ) ( 2,754 ) Interest payable and other liabilities 6,452 ( 206 ) Total adjustments 8,188 8,839 Net cash from operating activities 34,666 28,924 Cash flows from investing activities: Proceeds from maturities, calls and principal paydowns of securities available-for-sale 18,120 14,655 Purchases of securities available-for-sale ( 5,084 ) ( 22,210 ) Purchase of life insurance ( 53 ) ( 211 ) Net (increase) decrease in total loans ( 100,090 ) ( 105,600 ) Purchases of land, premises and equipment ( 4,715 ) ( 1,787 ) Net cash from investing activities ( 91,822 ) ( 115,153 ) Cash flows from financing activities: Net increase (decrease) in total deposits 216,910 59,228 Net increase (decrease) in other borrowings 4,000 0 Net proceeds from (payments on) short-term FHLB borrowings ( 120,000 ) 107,000 Proceeds from long-term FHLB borrowings 0 1,200 Common dividends paid ( 13,206 ) ( 12,847 ) Payments related to equity incentive plans ( 1,292 ) ( 1,493 ) Purchase of treasury stock ( 19,608 ) ( 215 ) Sale of treasury stock 358 375 Net cash from financing activities 67,162 153,248 Net change in cash and cash equivalents 10,006 67,019 Cash and cash equivalents at beginning of the period 141,318 168,205 Cash and cash equivalents at end of the period $ 151,324 $ 235,224 Cash paid during the period for: Interest $ 35,491 $ 37,998 Income taxes 97 0 Supplemental non-cash disclosures: Right-of-use assets obtained in exchange for lease liabilities 0 20 The accompanying notes are an integral part of these consolidated financial statements. 5 Table of Contents NOTE 1. BASIS OF PRESENTATION This report is filed for Lakeland Financial Corporation (the "Company"), which has one wholly owned subsidiary, Lake City Bank (the "Bank"). Also included in this report are results for the Bank’s wholly owned subsidiary, LCB Investments II, Inc. ("LCB Investments"), which manages the Bank’s investment securities portfolio. LCB Investments II, Inc. owns LCB Funding, Inc. ("LCB Funding"), a real estate investment trust. All significant inter-company balances and transactions have been eliminated in consolidation. The unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions for Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and are unaudited. 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 months ended March 31, 2026 are not necessarily indicative of the results that may be expected for any subsequent reporting periods, including the year ending December 31, 2026. The Company’s 2025 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. 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 could be 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. 6 Table of Contents 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 surrounding 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 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. 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. On September 18, 2025, the FASB issued ASU 2025-06, "Intangibles—Goodwill and Other—Internal Use-Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software" , to modernize the accounting for software costs to better align the guidance with current software development practices. Specifically, many entities have shifted from using a prescriptive and sequential ("linear") development method to using an incremental and iterative ("agile") development method, the latter of which is not contemplated in the current guidance and presents a challenge to stakeholders in determining when to begin capitalizing internal-use software costs. The amendments in this update remove all references to linear project stages, and instead require an entity to start capitalizing software costs when both of the following occur: (1) Management has authorized and committed to funding the software project and (2) It is probable that the project will be completed and the software will be used to perform the function intended (referred to as the "probable-to-complete recognition threshold"). In evaluating the probable-to-complete recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software (referred to as "significant development uncertainty".) The two factors to consider in determining whether there is significant development uncertainty are whether: (1) The software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, if identified, has not been resolved through coding and testing and (2) The entity has determined what it needs the software to do, including whether the entity has identified or continues to substantially revise the software's significant performance requirements. The amendments in the update specify that internal-use software costs must be disclosed according to applicable property, plant and equipment guidance, regardless of how such costs are presented in the financial statements. Furthermore, the amendments in the update supersede website development costs guidance and incorporate the recognition requirements for website-specific development costs into Subtopic 350-40. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in the update may be applied using a prospective transition approach, a modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption or a retrospective transition approach. 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. On November 12, 2025, the FASB issued ASU 2025-08, "Financial Instruments - Credit Losses (Topic 326): Purchased Loans" , to expand the population of acquired financial assets subject to the gross-up approach in Topic 326. In accordance with the amendments in this update, loans (excluding credit cards) acquired without credit deterioration and deemed "seasoned" are purchased seasoned loans and are accounted for using the gross-up approach at acquisition. Specifically, after 7 Table of Contents an entity determines that a loan is a non-purchased financial asset with credit deterioration ("PCD") asset based on its assessment of credit deterioration experienced since origination, the entity should apply the guidance described in the amendments to determine whether the loan is seasoned and, therefore, should be accounted for using the gross-up approach. All non-PCD loans (excluding credit cards) that are acquired in a business combination are deemed seasoned. Other non-PCD loans (excluding credit cards) are seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans. The amendments in this update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual periods. The amendments in this update should be applied prospectively to loans that are acquired on or after the initial application date. Early adoption is permitted in an interim or annual reporting period in which the financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim reporting period, it should apply the amendments as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period. The Company does not anticipate this standard will have an impact on the Company's financial statements based upon the nature of the Company's current operations. On December 8, 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270): Narrow Scope Improvements" , to improve the guidance in Topic 270, by clarifying interim disclosure requirements and the applicability of Topic 270. The amendments in this update result in a comprehensive list of interim disclosures that are required by GAAP. In developing the list of disclosures required by other Topics, the FASB board focused on identifying the interim disclosures that are currently required under GAAP. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in this update also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The intent of the disclosure principle, which is modeled after a previous SEC disclosure requirement, is to help entities determine whether disclosures not specified in Topic 270 should be provided in interim reporting periods. The amendments in this update also clarify the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with GAAP. The FASB board expects these clarifications will enhance consistency in interim financial reporting in interim for all entities and considers the amendments to be necessary to reflect the development of interim reporting over time. The amendments in this update are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities and for interim reporting periods within annual reporting periods beginning after December 15, 2027, for entities other than public business entities. Early adoption is permitted for all entities, and can be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of this update on its financial disclosures, however does not expect the adoption of this update to have a material impact on the consolidated financial statements. On December 17, 2025, the FASB issued ASU 2025-12, "Codification Improvements" . The amendments in this update represent changes that (1) clarify, (2) correct errors or (3) make minor improvements to the Codification. The amendments are intended to make the Codification easier to understand and apply. The amendments in this update are varied in nature and may affect the application of guidance in cases in which the original guidance may have been unclear. The amendments in this update are effective for all entities for annual reporting beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in this update in an interim period, it must adopt them as of the beginning of the annual reporting period that includes the interim period. An entity may elect to early adopt the amendments on an issue-by-issue basis. For example, an entity may decide to early adopt certain amendments and adopt the remaining amendments at the effective date. An entity may also elect the transition method on an issue-by-issue basis. For example, it may apply certain amendments prospectively while applying others retrospectively. The Company is currently evaluating the impact of the update on its financial disclosures, however does not expect the adoption of this update to have a material impact on the consolidated financial statements. 8 Table of Contents NOTE 2. SECURITIES Debt securities purchased with the intent and ability to hold to their maturity are classified as held-to-maturity securities. All other investment securities are classified as available-for-sale securities. Available-for-Sale Securities Information related to the amortized cost, fair value and allowance for credit losses of securities available-for-sale and the related gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) is provided in the table below. (dollars in thousands) Amortized Cost Gross Unrealized Gain Gross Unrealized Losses Allowance for Credit Losses Fair Value March 31, 2026 U.S. Treasury securities $ 15,185 $ 0 $ ( 81 ) $ 0 $ 15,104 U.S. government sponsored agencies 134,037 75 ( 20,630 ) 0 113,482 Mortgage-backed securities: residential 493,336 487 ( 53,612 ) 0 440,211 State and municipal securities 538,933 91 ( 80,830 ) 0 458,194 Total $ 1,181,491 $ 653 $ ( 155,153 ) $ 0 $ 1,026,991 December 31, 2025 U.S. Treasury securities $ 10,117 $ 2 $ 0 $ 0 $ 10,119 U.S. government sponsored agencies 136,772 82 ( 21,164 ) 0 115,690 Mortgage-backed securities: residential 506,734 892 ( 53,463 ) 0 454,163 State and municipal securities 541,694 131 ( 69,735 ) 0 472,090 Total $ 1,195,317 $ 1,107 $ ( 144,362 ) $ 0 $ 1,052,062 Held-to-Maturity Securities Information related to the amortized cost, fair value and allowance for credit losses of securities held-to-maturity and the related gross unrealized gains and losses is presented in the table below. (dollars in thousands) Amortized Cost Gross Unrealized Gain Gross Unrealized Losses Allowance for Credit Losses Fair Value March 31, 2026 State and municipal securities $ 133,617 $ 0 $ ( 19,376 ) $ 0 $ 114,241 December 31, 2025 State and municipal securities $ 133,208 $ 0 $ ( 15,698 ) $ 0 $ 117,510 The Company has the current intent and ability to hold held-to-maturity securities until maturity. All of the Company's securities designated as held-to-maturity were transferred from the available-for-sale classification. 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 $ 16.5 million ($ 13.1 million, net of tax) at March 31, 2026. 9 Table of Contents Information regarding the amortized cost and fair value of available-for-sale and held-to-maturity debt securities by maturity as of March 31, 2026 is presented below. Maturity information is based on contractual maturity for all securities other than mortgage-backed securities. Actual maturities of securities may differ from contractual maturities because borrowers may have the right to prepay the obligation without a prepayment penalty. Available-for-Sale Held-to-Maturity (dollars in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due in one year or less $ 500 $ 501 $ 0 $ 0 Due after one year through five years 29,131 28,646 0 0 Due after five years through ten years 94,718 86,936 7,391 6,574 Due after ten years 563,806 470,697 126,226 107,667 688,155 586,780 133,617 114,241 Mortgage-backed securities 493,336 440,211 0 0 Total debt securities $ 1,181,491 $ 1,026,991 $ 133,617 $ 114,241 There were no sales of available-for-sale securities during the three months ended March 31, 2026 and 2025 . Securities with fair values of $ 535.2 million and $ 546.8 million were pledged as of March 31, 2026 and December 31, 2025, 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 March 31, 2026 and December 31, 2025 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. Less than 12 months 12 months or more Total (dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses March 31, 2026 U.S. Treasury securities $ 15,104 $ 81 $ 0 $ 0 $ 15,104 $ 81 U.S. government sponsored agencies 4,966 29 103,498 20,601 108,464 20,630 Mortgage-backed securities: residential 32,786 385 356,613 53,227 389,399 53,612 State and municipal securities 33,073 643 408,923 80,187 441,996 80,830 Total available-for-sale $ 85,929 $ 1,138 $ 869,034 $ 154,015 $ 954,963 $ 155,153 December 31, 2025 U.S. Treasury securities $ 5,107 $ 0 $ 0 $ 0 $ 5,107 $ 0 U.S. government sponsored agencies 0 0 105,609 21,164 105,609 21,164 Mortgage-backed securities: residential 14,397 106 374,383 53,357 388,780 53,463 State and municipal securities 13,807 24 440,935 69,711 454,742 69,735 Total available-for-sale $ 33,311 $ 130 $ 920,927 $ 144,232 $ 954,238 $ 144,362 Information regarding held-to-maturity securities with unrealized losses as of March 31, 2026 and December 31, 2025 is presented on the next 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. 10 Table of Contents Less than 12 months 12 months or more Total (dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses March 31, 2026 State and municipal securities $ 0 $ 0 $ 114,241 $ 19,376 $ 114,241 $ 19,376 December 31, 2025 State and municipal securities $ 0 $ 0 $ 117,510 $ 15,698 $ 117,510 $ 15,698 The total number of securities with unrealized losses as of March 31, 2026 and December 31, 2025 is presented below. Available-for-Sale Held-to-Maturity Less than 12 months 12 months or more Total Less than 12 months 12 months or more Total March 31, 2026 U.S. Treasury securities 3 0 3 0 0 0 U.S. government sponsored agencies 1 17 18 0 0 0 Mortgage-backed securities: residential 7 116 123 0 0 0 State and municipal securities 45 354 399 0 41 41 Total temporarily impaired 56 487 543 0 41 41 December 31, 2025 U.S. Treasury securities 1 0 1 0 0 0 U.S. government sponsored agencies 0 17 17 0 0 0 Mortgage-backed securities: residential 3 120 123 0 0 0 State and municipal securities 17 378 395 0 41 41 Total temporarily impaired 21 515 536 0 41 41 Available-for-sale debt securities in unrealized loss positions are evaluated for impairment related to credit losses at least quarterly. For available-for-sale debt securities in an unrealized loss position, management first assesses whether it intends to sell, or it is more likely than not that the Company will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through the consolidated income statement. For available-for-sale debt securities that do not meet the above criteria and for held-to-maturity securities, management evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security and the issuer, among other factors. If this assessment indicates that a credit loss exists, management compares the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis for the security, a credit loss exists and an allowance for credit losses is recorded, limited to the amount that the fair value of the security is less than its amortized cost basis. 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 March 31, 2026 or December 31, 2025. Accrued interest receivable on securities totaled $ 7.1 million and $ 7.8 million at March 31, 2026 and December 31, 2025, respectively, and is excluded from the estimate of credit losses. The U.S. Treasury, U.S. government sponsored agencies and mortgage-backed securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major credit rating agencies, and have a long history of no credit losses. Therefore, for those securities, we do not record expected credit losses. 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. 11 Table of Contents NOTE 3. LOANS (dollars in thousands) March 31, 2026 December 31, 2025 Commercial and industrial loans: Working capital lines of credit loans $ 742,655 13.6 % $ 711,742 13.2 % Non-working capital loans 836,121 15.3 841,947 15.7 Total commercial and industrial loans $ 1,578,776 28.9 $ 1,553,689 28.9 Commercial real estate and multi-family residential loans: Construction and land development loans 509,143 9.3 497,239 9.2 Owner occupied loans 807,813 14.8 807,335 15.0 Nonowner occupied loans 960,395 17.5 923,708 17.2 Multifamily loans 462,984 8.5 438,233 8.1 Total commercial real estate and multi-family residential loans $ 2,740,335 50.1 $ 2,666,515 49.5 Agri-business and agricultural loans: Loans secured by farmland 177,823 3.2 155,073 2.9 Loans for agricultural production 196,258 3.6 251,783 4.7 Total agri-business and agricultural loans $ 374,081 6.8 $ 406,856 7.6 Other commercial loans 95,764 1.7 97,381 1.8 Total commercial loans $ 4,788,956 87.5 $ 4,724,441 87.8 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 292,724 5.3 267,134 5.0 Open end and junior lien loans 263,600 4.8 251,185 4.7 Residential construction and land development loans 14,429 0.3 18,873 0.3 Total consumer 1-4 family mortgage loans $ 570,753 10.4 $ 537,192 10.0 Other consumer loans 116,158 2.1 116,224 2.2 Total consumer loans $ 686,911 12.5 $ 653,416 12.2 Subtotal $ 5,475,867 100.0 % $ 5,377,857 100.0 % Less: Allowance for credit losses ( 68,914 ) ( 68,995 ) Net deferred loan fees ( 2,509 ) ( 2,508 ) Loans, net $ 5,404,444 $ 5,306,354 The recorded investment in loans does not include accrued interest, which totaled $ 22.1 million and $ 20.7 million as of March 31, 2026 and December 31, 2025, respectively. The Company h ad $ 1.0 million and $ 1.5 million in residential real estate loans in the process of foreclosure as of March 31, 2026 and December 31, 2025, respectively. NOTE 4. 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 uncollectible. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance are made for specific loans and for pools of similar types of loans, although the entire allowance is available for any loan that, in management’s judgment, should be charged against the allowance. A provision for credit losses is taken based on management’s ongoing evaluation of the appropriate allowance balance. A formal evaluation of the adequacy of the credit loss allowance is conducted monthly. The ultimate recovery of all loans is susceptible to future market factors beyond the Company’s control. The level of credit loss provision is influenced by growth in the overall loan portfolio, emerging market risk, emerging concentration risk, commercial loan focus and large credit concentration, new industry lending activity, general economic conditions and historical loss analysis. In addition, management gives consideration to changes in the facts and circumstances 12 Table of Contents of watch list credits, which includes the security position of the borrower, in determining the appropriate level of the credit loss provision. Furthermore, management’s overall view on credit quality is a factor in the determination of the provision. The determination of the appropriate allowance is inherently subjective, as it requires significant estimates by management. The Company has an established process to determine the adequacy of the allowance for credit losses that generally includes consideration of changes in the nature and volume of the loan portfolio and overall portfolio quality, along with current and forecasted economic conditions that may affect borrowers' ability to repay. Consideration is not limited to these factors although they represent the most commonly cited factors. To determine the specific allocation levels for individual credits, management considers the current valuation of collateral and the amounts and timing of expected future cash flows as the primary measures. Management also considers trends in adversely classified loans based upon an ongoing review of those credits. With respect to pools of similar loans, an appropriate level of general allowance is determined by portfolio segment using a probability of default-loss given default ("PD/LGD") model, subject to a floor. A default can be triggered by one of several different asset quality factors, including past due status, nonaccrual status, material modification to a borrower experiencing financial difficulty status or if the loan has had a charge-off. This PD is then combined with a LGD derived from historical charge-off data to construct a loss rate. This loss rate is then supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, particularly the unemployment rate forecast from the Federal Open Market Committee's Summary of Economic Projections, as well as portfolio trends based on the risks present for each portfolio segment. These environmental factors include consideration of the following: levels of, and trends in, delinquencies and nonperforming loans; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedure, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. As a result of this detailed process, the allowance results in two forms of allocations, specific and pooled. These two components represent the total allowance for credit losses deemed adequate to cover expected losses within the loan portfolio. Commercial loans are subject to a dual standardized grading process administered by the credit administration function. These grade assignments are performed independent of each other and a consensus is reached by credit administration and the loan officer. Individual allowances are established in cases where management has identified significant conditions or circumstances related to a specific credit that indicate it should be analyzed on an individual basis. Considerations with respect to allocations for these individually analyzed credits include, but are not limited to, the following: (a) the sufficiency of the customer's cash flow or net worth to repay the loan; (b) the adequacy of the discounted value of collateral relative to the loan balance; (c) whether the loan has been criticized in a regulatory examination; (d) whether the loan is nonperforming; (e) any other reasons the ultimate collectability of the loan may be in question; or (f) any unique loan characteristics that require special monitoring. Allocations are also applied to categories of loans considered not to be individually analyzed, but for which the rate of loss is expected to be consistent with or greater than historical averages. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values. These general pooled loan allocations are performed for portfolio segments of commercial and industrial; commercial real estate, multi-family, and construction; agri-business and agricultural; other commercial loans; and consumer 1-4 family mortgage and other consumer loans. Pooled allocations of the allowance are determined by a historical loss rate based on the calculation of each pool's probability of default-loss given default, subject to a floor. The length of the historical period for each pool is based on the average life of the pool, which is updated at least annually. The historical loss rates are all supplemented with consideration of economic conditions and portfolio trends. Due to the imprecise nature of estimating the allowance for credit losses, the Company's allowance for credit losses includes an immaterial unallocated component. The unallocated component of the allowance for credit losses incorporates the Company’s judgmental determination of potential expected losses that may not be fully reflected in other allocations. As a practical expedient, the Company has elected to disclose accrued interest separately from loan principal balances on the consolidated balance sheet. Additionally, when a loan is placed on non-accrual, interest payments are reversed through interest income. For off balance sheet credit exposures outlined in the ASC 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. 13 Table of Contents The following tables present the activity in the allowance for credit losses by portfolio segment for the periods shown: (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 March 31, 2026 Beginning balance, January 1 $ 28,436 $ 30,163 $ 3,315 $ 1,041 $ 3,996 $ 1,719 $ 325 $ 68,995 Provision for credit losses 1,587 429 106 ( 226 ) 247 157 ( 300 ) 2,000 Loans charged-off ( 1,986 ) 0 0 0 ( 65 ) ( 145 ) 0 ( 2,196 ) Recoveries 16 26 0 0 7 66 0 115 Net loans (charged-off) recovered ( 1,970 ) 26 0 0 ( 58 ) ( 79 ) 0 ( 2,081 ) Ending balance $ 28,053 $ 30,618 $ 3,421 $ 815 $ 4,185 $ 1,797 $ 25 $ 68,914 (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 March 31, 2025 Beginning balance, January 1 $ 45,539 $ 30,865 $ 3,541 $ 743 $ 3,358 $ 1,531 $ 383 $ 85,960 Provision for credit losses 6,741 ( 423 ) ( 41 ) ( 20 ) 124 343 76 6,800 Loans charged-off ( 10 ) 0 0 0 ( 24 ) ( 474 ) 0 ( 508 ) Recoveries 32 26 0 0 6 117 0 181 Net loans (charged-off) recovered 22 26 0 0 ( 18 ) ( 357 ) 0 ( 327 ) Ending balance $ 52,302 $ 30,468 $ 3,500 $ 723 $ 3,464 $ 1,517 $ 459 $ 92,433 Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $ 250,000 . The Company uses the following definitions for risk ratings: Special Mention. Loans classified as Special Mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Substandard. Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans are considered to be "Pass" rated when they are reviewed as part of the previously described process and do not meet the criteria above, which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans, which are evaluated individually and listed with “Not Rated” loans. 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. 14 Table of Contents The following table summarizes the risk category of loans by loan segment and year of origination as of March 31, 2026: (dollars in thousands) 2026 2025 2024 2023 2022 Prior Term Total Revolving Total Commercial and industrial loans: Working capital lines of credit loans: Pass $ 0 $ 996 $ 2,252 $ 0 $ 55 $ 1,290 $ 4,593 $ 667,590 $ 672,183 Special Mention 0 0 0 0 0 0 0 39,195 39,195 Substandard 0 300 97 2,057 922 377 3,753 27,258 31,011 Total 0 1,296 2,349 2,057 977 1,667 8,346 734,043 742,389 Working capital lines of credit loans: Current period gross write offs 0 1,975 0 0 0 0 1,975 0 1,975 Non-working capital loans: Pass 31,623 222,567 97,357 95,291 109,672 40,386 596,896 194,456 791,352 Special Mention 768 5,391 2,090 139 7,445 10,201 26,034 6,773 32,807 Substandard 0 314 647 1,986 1,490 4,011 8,448 387 8,835 Doubtful 0 0 0 0 0 73 73 0 73 Not Rated 45 1,038 263 621 471 224 2,662 0 2,662 Total 32,436 229,310 100,357 98,037 119,078 54,895 634,113 201,616 835,729 Non-working capital loans: Current period gross write offs 0 0 0 0 0 0 0 11 11 Commercial real estate and multi-family residential loans: Construction and land development loans: Pass 8,069 20,475 29,894 5,263 491 709 64,901 436,730 501,631 Special Mention 0 0 0 0 0 0 0 5,798 5,798 Total 8,069 20,475 29,894 5,263 491 709 64,901 442,528 507,429 Construction and land development loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Owner occupied loans: Pass 45,626 147,291 102,710 92,857 116,224 237,806 742,514 28,509 771,023 Special Mention 0 3,003 695 1,724 14,500 12,877 32,799 0 32,799 Substandard 0 0 303 277 0 2,959 3,539 0 3,539 Total 45,626 150,294 103,708 94,858 130,724 253,642 778,852 28,509 807,361 Owner occupied loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Nonowner occupied loans: Pass 64,830 186,611 110,685 107,868 124,997 227,096 822,087 124,372 946,459 15 Table of Contents (dollars in thousands) 2026 2025 2024 2023 2022 Prior Term Total Revolving Total Nonowner occupied loans (continued): Special Mention 0 0 0 11,223 58 0 11,281 0 11,281 Substandard 0 0 0 0 0 0 0 1,958 1,958 Total 64,830 186,611 110,685 119,091 125,055 227,096 833,368 126,330 959,698 Nonowner occupied loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Multifamily loans: Pass 86,361 151,498 5,419 93,564 19,839 41,044 397,725 64,498 462,223 Special Mention 0 0 0 0 287 0 287 0 287 Total 86,361 151,498 5,419 93,564 20,126 41,044 398,012 64,498 462,510 Multifamily loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Agri-business and agricultural loans: Loans secured by farmland: Pass 32,464 27,911 12,823 14,781 35,519 41,893 165,391 9,972 175,363 Special Mention 0 1,970 114 189 0 153 2,426 0 2,426 Substandard 0 0 0 0 0 44 44 0 44 Total 32,464 29,881 12,937 14,970 35,519 42,090 167,861 9,972 177,833 Loans secured by farmland: Current period gross write offs 0 0 0 0 0 0 0 0 0 Loans for agricultural production: Pass 745 5,216 12,421 6,318 18,077 13,436 56,213 132,926 189,139 Special Mention 0 0 0 643 251 0 894 6,323 7,217 Total 745 5,216 12,421 6,961 18,328 13,436 57,107 139,249 196,356 Loans for agricultural production: Current period gross write offs 0 0 0 0 0 0 0 0 0 Other commercial loans: Pass 3,091 10,737 1,033 12,968 24,259 14,582 66,670 28,897 95,567 Total 3,091 10,737 1,033 12,968 24,259 14,582 66,670 28,897 95,567 Other commercial loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Consumer 1-4 family mortgage loans: Closed end first mortgage loans: Pass 14,765 14,535 9,890 6,216 6,547 14,605 66,558 4,101 70,659 Special Mention 0 188 118 212 154 60 732 0 732 16 Table of Contents (dollars in thousands) 2026 2025 2024 2023 2022 Prior Term Total Revolving Total Closed end first mortgage loans (continued): Substandard 0 24 0 226 429 573 1,252 0 1,252 Doubtful 0 0 0 0 0 0 0 0 0 Not Rated 14,691 36,025 22,699 48,765 42,307 55,223 219,710 0 219,710 Total 29,456 50,772 32,707 55,419 49,437 70,461 288,252 4,101 292,353 Closed end first mortgage loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Open end and junior lien loans: Pass 0 654 475 670 0 184 1,983 9,243 11,226 Special Mention 0 279 0 0 0 0 279 0 279 Substandard 0 1,711 38 116 73 1 1,939 566 2,505 Not Rated 12,092 23,539 11,339 8,282 8,823 2,394 66,469 185,372 251,841 Total 12,092 26,183 11,852 9,068 8,896 2,579 70,670 195,181 265,851 Open end and junior lien loans: Current period gross write offs 0 0 0 0 0 0 0 65 65 Residential construction loans: Not Rated 789 6,785 1,814 557 1,557 2,838 14,340 0 14,340 Total 789 6,785 1,814 557 1,557 2,838 14,340 0 14,340 Residential construction loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Other consumer loans: Pass 4 373 0 930 104 14 1,425 40,179 41,604 Substandard 0 0 28 230 82 61 401 0 401 Not Rated 3,973 17,487 14,482 12,246 6,759 6,933 61,880 12,057 73,937 Total 3,977 17,860 14,510 13,406 6,945 7,008 63,706 52,236 115,942 Other consumer loans: Current period gross write offs 0 9 3 37 12 0 61 84 145 Total Loans $ 319,936 $ 886,918 $ 439,686 $ 526,219 $ 541,392 $ 732,047 $ 3,446,198 $ 2,027,160 $ 5,473,358 Total period gross write offs $ 0 $ 1,984 $ 3 $ 37 $ 12 $ 0 $ 2,036 $ 160 $ 2,196 17 Table of Contents The following table summarizes the risk category of loans by loan segment and year of origination as of December 31, 2025: (dollars in thousands) 2025 2024 2023 2022 2021 Prior Term Total Revolving Total Commercial and industrial loans: Working capital lines of credit loans: Pass $ 5,863 $ 1,405 $ 19 $ 63 $ 1,066 $ 334 $ 8,750 $ 633,270 $ 642,020 Special Mention 0 0 0 0 0 0 0 38,014 38,014 Substandard 300 0 2,057 924 211 230 3,722 27,759 31,481 Total 6,163 1,405 2,076 987 1,277 564 12,472 699,043 711,515 Working capital lines of credit loans: Current period gross write offs 0 0 0 28,607 0 12 28,619 45 28,664 Non-working capital loans: Pass 210,230 109,036 101,984 114,735 32,420 20,755 589,160 204,275 793,435 Special Mention 5,819 2,671 154 8,359 7,024 5,060 29,087 7,493 36,580 Substandard 314 327 1,998 1,543 105 3,913 8,200 391 8,591 Doubtful 0 0 0 0 0 74 74 0 74 Not Rated 939 322 767 558 107 173 2,866 0 2,866 Total 217,302 112,356 104,903 125,195 39,656 29,975 629,387 212,159 841,546 Non-working capital loans: Current period gross write offs 1 2 0 0 0 0 3 201 204 Commercial real estate and multi-family residential loans: Construction and land development loans: Pass 20,946 25,430 11,990 20,692 720 0 79,778 414,386 494,164 Special Mention 1,242 0 0 0 0 0 1,242 0 1,242 Total 22,188 25,430 11,990 20,692 720 0 81,020 414,386 495,406 Construction and land development loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Owner occupied loans: Pass 151,944 106,040 89,724 118,976 128,712 143,199 738,595 31,378 769,973 Special Mention 3,083 163 1,810 14,683 0 13,069 32,808 550 33,358 Substandard 0 306 284 0 1,520 1,442 3,552 0 3,552 Total 155,027 106,509 91,818 133,659 130,232 157,710 774,955 31,928 806,883 Owner occupied loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Nonowner occupied loans: Pass 184,183 114,323 108,411 128,867 93,880 154,390 784,054 125,655 909,709 18 Table of Contents (dollars in thousands) 2025 2024 2023 2022 2021 Prior Term Total Revolving Total Nonowner occupied loans (continued): Special Mention 0 0 11,321 59 0 0 11,380 0 11,380 Substandard 0 0 0 0 0 0 0 1,957 1,957 Total 184,183 114,323 119,732 128,926 93,880 154,390 795,434 127,612 923,046 Nonowner occupied loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Multifamily loans: Pass 191,399 21,552 63,810 21,472 8,485 32,995 339,713 97,877 437,590 Special Mention 0 0 0 291 0 0 291 0 291 Total 191,399 21,552 63,810 21,763 8,485 32,995 340,004 97,877 437,881 Multifamily loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Agri-business and agricultural loans: Loans secured by farmland: Pass 28,600 13,595 15,258 31,324 19,915 30,669 139,361 13,202 152,563 Special Mention 1,987 118 193 0 25 148 2,471 0 2,471 Substandard 0 0 0 0 0 49 49 0 49 Total 30,587 13,713 15,451 31,324 19,940 30,866 141,881 13,202 155,083 Loans secured by farmland: Current period gross write offs 0 0 0 0 0 0 0 0 0 Loans for agricultural production: Pass 5,560 13,158 21,355 18,848 21,215 12,502 92,638 151,443 244,081 Special Mention 0 0 654 258 0 1 913 6,891 7,804 Total 5,560 13,158 22,009 19,106 21,215 12,503 93,551 158,334 251,885 Loans for agricultural production: Current period gross write offs 0 0 0 0 0 0 0 0 0 Other commercial loans: Pass 11,178 1,199 13,637 24,506 2,504 11,665 64,689 30,722 95,411 Special Mention 0 0 0 0 0 1,754 1,754 0 1,754 Total 11,178 1,199 13,637 24,506 2,504 13,419 66,443 30,722 97,165 Other commercial loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Consumer 1-4 family mortgage loans: Closed end first mortgage loans: Pass 14,058 9,978 6,465 6,793 10,248 5,525 53,067 2,427 55,494 19 Table of Contents (dollars in thousands) 2025 2024 2023 2022 2021 Prior Term Total Revolving Total Closed end first mortgage loans (continued): Special Mention 189 119 215 156 61 0 740 0 740 Substandard 55 305 232 436 0 755 1,783 0 1,783 Not Rated 36,511 23,578 50,011 42,657 24,998 31,020 208,775 0 208,775 Total 50,813 33,980 56,923 50,042 35,307 37,300 264,365 2,427 266,792 Closed end first mortgage loans: Current period gross write offs 0 0 0 0 0 24 24 0 24 Open end and junior lien loans: Pass 665 487 684 0 190 4 2,030 8,477 10,507 Special Mention 286 0 0 0 0 0 286 0 286 Substandard 1,728 38 99 0 3 0 1,868 317 2,185 Not Rated 28,327 13,016 9,566 10,347 1,849 1,138 64,243 176,160 240,403 Total 31,006 13,541 10,349 10,347 2,042 1,142 68,427 184,954 253,381 Open end and junior lien loans: Current period gross write offs 0 0 0 29 2 22 53 149 202 Residential construction loans: Not Rated 6,684 6,852 575 1,680 1,189 1,798 18,778 0 18,778 Total 6,684 6,852 575 1,680 1,189 1,798 18,778 0 18,778 Residential construction loans: Current period gross write offs 0 0 0 0 0 0 0 0 0 Other consumer loans: Pass 384 0 939 120 22 0 1,465 37,683 39,148 Substandard 0 35 273 91 6 11 416 0 416 Not Rated 19,055 15,982 13,837 7,631 4,301 3,349 64,155 12,269 76,424 Total 19,439 16,017 15,049 7,842 4,329 3,360 66,036 49,952 115,988 Other consumer loans: Current period gross write offs 4 187 306 161 58 0 716 604 1,320 Total loans $ 931,529 $ 480,035 $ 528,322 $ 576,069 $ 360,776 $ 476,022 $ 3,352,753 $ 2,022,596 $ 5,375,349 Total current period gross write offs $ 5 $ 189 $ 306 $ 28,797 $ 60 $ 58 $ 29,415 $ 999 $ 30,414 20 Table of Contents Nonaccrual and Past Due Loans: The Company does not record interest on nonaccrual loans until principal is recovered. For all loan classes, a loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectability of principal or interest. Interest accrued but not received is reversed against earnings. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. 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 March 31, 2026 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 Commercial and industrial loans: Working capital lines of credit loans $ 737,163 $ 0 $ 0 $ 737,163 $ 5,226 $ 1,433 $ 742,389 Non-working capital loans 828,036 24 0 828,060 7,669 82 835,729 Commercial real estate and multi-family residential loans: Construction and land development loans 507,429 0 0 507,429 0 0 507,429 Owner occupied loans 801,433 4,041 0 805,474 1,887 170 807,361 Nonowner occupied loans 957,740 0 0 957,740 1,958 0 959,698 Multifamily loans 462,510 0 0 462,510 0 0 462,510 Agri-business and agricultural loans: Loans secured by farmland 177,789 0 0 177,789 44 0 177,833 Loans for agricultural production 195,808 548 0 196,356 0 0 196,356 Other commercial loans 95,567 0 0 95,567 0 0 95,567 Consumer 1‑4 family mortgage loans: Closed end first mortgage loans 289,255 1,839 7 291,101 1,252 507 292,353 Open end and junior lien loans 262,924 422 0 263,346 2,505 403 265,851 Residential construction loans 14,340 0 0 14,340 0 0 14,340 Other consumer loans 115,009 532 0 115,541 401 9 115,942 Total $ 5,445,003 $ 7,406 $ 7 $ 5,452,416 $ 20,942 $ 2,604 $ 5,473,358 An insignificant amount of interest income was recognized on nonaccrual loans during the three month periods ended March 31, 2026. 21 Table of Contents The following table presents the aging of the amortized cost basis in past due loans as of December 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 Commercial and industrial loans: Working capital lines of credit loans $ 706,317 $ 0 $ 0 $ 706,317 $ 5,198 $ 1,434 $ 711,515 Non-working capital loans 834,134 0 0 834,134 7,412 86 841,546 Commercial real estate and multi-family residential loans: Construction and land development loans 495,406 0 0 495,406 0 0 495,406 Owner occupied loans 804,986 0 0 804,986 1,897 170 806,883 Nonowner occupied loans 921,089 0 0 921,089 1,957 0 923,046 Multifamily loans 437,881 0 0 437,881 0 0 437,881 Agri-business and agricultural loans: Loans secured by farmland 155,035 0 0 155,035 48 0 155,083 Loans for agricultural production 251,885 0 0 251,885 0 0 251,885 Other commercial loans 97,165 0 0 97,165 0 0 97,165 Consumer 1‑4 family mortgage loans: Closed end first mortgage loans 263,385 1,617 7 265,009 1,783 690 266,792 Open end and junior lien loans 251,009 186 0 251,195 2,186 405 253,381 Residential construction loans 18,778 0 0 18,778 0 0 18,778 Other consumer loans 115,046 526 0 115,572 416 6 115,988 Total $ 5,352,116 $ 2,329 $ 7 $ 5,354,452 $ 20,897 $ 2,791 $ 5,375,349 An insignificant amount of interest income was recognized on nonaccrual loans during the year ended December 31, 2025. 22 Table of Contents When management determines that foreclosure is probable, expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of the collateral. The class of loan represents the primary collateral type associated with the loan. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following tables present the amortized cost basis of collateral dependent loans by class of loan as of: March 31, 2026 (dollars in thousands) Real Estate General Business Assets Other Total Commercial and industrial loans: Working capital lines of credit loans $ 2,388 $ 23,997 $ 570 $ 26,955 Non-working capital loans 25 4,455 43 4,523 Commercial real estate and multi-family residential loans: Owner occupied loans 473 1,716 0 2,189 Nonowner occupied loans 1,958 0 0 1,958 Agri-business and agricultural loans: Loans secured by farmland 0 44 0 44 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 3,100 0 0 3,100 Open end and junior lien loans 657 0 0 657 Other consumer loans 0 0 401 401 Total $ 8,601 $ 30,212 $ 1,014 $ 39,827 December 31, 2025 (dollars in thousands) Real Estate General Business Assets Other Total Commercial and industrial loans: Working capital lines of credit loans $ 2,388 $ 23,827 $ 673 $ 26,888 Non-working capital loans 464 3,715 49 4,228 Commercial real estate and multi-family residential loans: Owner occupied loans 476 1,726 0 2,202 Nonowner occupied loans 1,958 0 0 1,958 Agri-business and agricultural loans: Loans secured by farmland 0 49 0 49 Consumer 1-4 family mortgage loans: Closed end first mortgage loans 1,725 0 0 1,725 Open end and junior lien loans 2,186 0 0 2,186 Other consumer loans 0 0 416 416 Total $ 9,197 $ 29,317 $ 1,138 $ 39,652 23 Table of Contents Loan Modifications Made to Borrowers Experiencing Financial Difficulty The allowance for credit losses incorporates an estimate of lifetime expected credit losses using historical loss information. The Company uses a probability of default/loss given default model to determine an estimate which is recorded for each asset upon origination. Occasionally, the Company has reason to modify certain terms of loans for borrowers experiencing financial distress by providing the following forms of relief: forgiveness of loan principal, extension of repayment terms, interest rate reduction or an other than insignificant payment delay. The Company can make any or all of these types of concessions as part of such modifications. Since an estimate for historical losses is already included as a component of the allowance for credit losses, a change to the allowance for credit losses is generally not recorded at the time of such modifications unless the loan is individually analyzed and the modification changes the specific reserve allocation. 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 months ended March 31, 2026 and 2025, 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, 2026, no loans receiving a modification due to borrower financial difficulty within the previous twelve months were greater than 30 days or more past due or had experienced a payment default. 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. NOTE 5. BORROWINGS For the periods ended below, advances from the Federal Home Loan Bank of Indianapolis ("FHLBI") were as follows: (dollars in thousands) March 31, 2026 December 31, 2025 Short-term advance $ 50,000 $ 170,000 Long-term advance 1,200 1,200 Total $ 51,200 $ 171,200 For the period ended March 31, 2026, the Company had advances outstanding from the FHLBI of $ 51.2 million. The short-term advance of $ 50.0 million was a floating rate advance due June 1, 2026 and had an interest rate of 3.79 %. The long-term advance of $ 1.2 million was a fixed rate bullet advance due March 12, 2035 and had an interest rate of 0.00 %. This advance is a rate-subsidized Community Development Financial Institution ("CDFI") Rate Buydown Advance offered by the FHLBI that funded a low cost loan to a qualifying CDFI. For the period ended December 31, 2025, the Company had advances outstanding with the FHLBI of $ 171.2 million. The $ 170.0 million short-term FHLBI advance was repaid on January 8, 2026. There were no Federal Funds purchased outstanding at March 31, 2026 and December 31, 2025. On October 10, 2025, the Company renewed an unsecured revolving credit agreement with a financial institution allowing the Company to borrow up to $ 30.0 million. The credit agreement has a one year term which may be amended, extended, modified or renewed. Funds provided under the agreement can be used to repurchase shares of the Company’s common stock under the share repurchase program, which was reauthorized by the Company’s board of directors on April 8, 2025, amended on March 5, 2026, and expires on April 30, 2027, and for general operations. The credit agreement includes a negative pledge agreement whereby the Company agrees not to pledge or otherwise encumber the stock of the Bank. There was an outstanding balance on the credit agreement of $ 17.0 million at March 31, 2026 and $ 13.0 million at December 31, 2025. The outstanding balance of the credit agreement was repaid on April 15, 2026. 24 Table of Contents NOTE 6. FAIR VALUE DISCLOSURES Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1 Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2 Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: Securities: Securities available-for-sale are valued primarily by a third party pricing service. The fair values of securities available-for-sale are determined on a recurring basis by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or pricing models which utilize significant observable inputs such as matrix pricing. This is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). 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). 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. Both of these areas report directly to the Executive Vice President and Chief Financial Officer of the Company. For assets or liabilities that may be considered for Level 3 fair value measurement on a recurring basis, these two departments and the Executive Vice President and Chief Financial Officer determine the appropriate level of the assets or liabilities under consideration. If there are new assets or liabilities that are determined to be Level 3 by this group, the Risk Management Committee of the Company and the Audit Committee of the Board are made aware of such assets at their next scheduled meeting. Securities pricing is obtained from a third party pricing service and all security prices are tested annually against prices from another third party provider and reviewed with a market value price tolerance variance that varies by sector: municipal securities +/- 5 %, government MBS/CMO +/- 3 % and U.S. treasuries +/- 1 %. If any securities fall outside the tolerance threshold and have a variance of $ 100,000 or more, a determination of materiality is made for the amount over the threshold. Any security that would have a material threshold difference would be further investigated to determine why the variance exists and if any action is needed concerning the security pricing for that individual security. Changes in market value are reviewed monthly in aggregate by security type and any material changes are reviewed to determine why they exist. At least annually, the pricing methodology of the pricing service is received and reviewed to support the fair value levels used by the Company. A detailed pricing evaluation is requested and reviewed on any security determined to be fair valued using unobservable inputs by the pricing service. Mortgage banking derivative: The fair values of mortgage banking derivatives are based on observable market data as of the measurement date (Level 2). Interest rate swap derivatives: Our derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The majority of market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing 25 Table of Contents services. The fair value of interest rate swap derivatives is determined by pricing or valuation models using observable market data as of the measurement date (Level 2). Collateral dependent loans: Collateral dependent loans with specific allocations of the allowance for credit losses are generally based on the fair value of the underlying collateral when repayment is expected solely from the collateral. Fair value is determined using several methods. 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. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and result in a Level 3 classification of the inputs for determining fair value. In addition, the Company’s management routinely applies internal discount factors to the value of appraisals used in the fair value evaluation of collateral dependent loans. The deductions to the appraisals take into account changing business factors and market conditions, as well as value impairment in cases where the appraisal date predates a likely change in market conditions. Commercial real estate is generally discounted from its appraised value by 30 - 50 % with the higher discounts applied to real estate that is determined to have a thin trading market or to be specialized collateral. In addition to real estate, the Company’s management evaluates other types of collateral as follows: (a) raw materials inventory is discounted from its cost or book value by 40 - 60 %, depending on the marketability of the goods; (b) finished goods are generally discounted by 40 - 60 %, depending on the ease of marketability, cost of transportation or scope of use of the finished good; (c) work in process inventory is typically discounted by 60 %- 100 %, depending on the length of manufacturing time, types of components used in the completion process, and the breadth of the user base; (d) equipment is valued at a percentage of depreciated book value or recent appraised value, if available, and is typically discounted at 20 - 50 % after various considerations including age and condition of the equipment, marketability, breadth of use, and whether the equipment includes unique components or add-ons; and (e) marketable securities are discounted by 10 %- 30 %, depending on the type of investment, age of valuation report and general market conditions. This methodology is based on a market approach and typically results in a Level 3 classification of the inputs for determining fair value. Mortgage servicing rights: As of March 31, 2026, the value of the Company’s Level 3 servicing assets for residential mortgage loans (“MSRs”) was $ 1.5 million, carried at amortized cost and an immaterial valuation reserve. These residential mortgage loans have a weighted average interest rate of 4.0 %, 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. Impairment is estimated based on an income approach. The inputs used include estimates of prepayment speeds, discount rate, cost to service, escrow account earnings, contractual servicing fee income, ancillary income, late fees and float income. The most significant assumption used to value MSRs is prepayment rate. Prepayment rates are estimated based on published industry consensus prepayment rates. The most significant unobservable assumption is the discount rate. At March 31, 2026, the constant prepayment speed (“PSA”) used was 188 and used a discount rate of 9.5 %. At December 31, 2025, the PSA used was 168 and the discount rate used was 9.5 %. Other real estate owned: Nonrecurring adjustments to certain commercial and residential real estate properties, classified as other real estate owned, are measured at the lower of carrying amount or fair value less costs to sell. Fair values are generally based on third party appraisals of the property and are reviewed by the Company’s internal appraisal officer. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable properties used to determine value. Such adjustments are usually significant and result in a Level 3 classification. In addition, the Company’s management may apply discount factors to the appraisals to take into account changing business factors and market conditions, as well as value impairment in cases where the appraisal date predates a likely change in market conditions. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized. Real estate mortgage loans held-for-sale : Real estate mortgage loans held-for-sale are carried at the lower of cost or fair value, as determined by outstanding commitments, from third party investors, and result in a Level 2 classification. 26 Table of Contents The tables below present the balances of assets measured at fair value on a recurring basis: March 31, 2026 Fair Value Measurements Using Assets at Fair Value (dollars in thousands) Level 1 Level 2 Level 3 Assets: U.S. Treasury securities $ 15,104 $ 0 $ 0 $ 15,104 U.S. government sponsored agency securities 0 113,482 0 113,482 Mortgage-backed securities: residential 0 440,211 0 440,211 State and municipal securities 0 453,613 4,581 458,194 Total securities available-for-sale 15,104 1,007,306 4,581 1,026,991 Mortgage banking derivative 0 136 0 136 Interest rate swap derivative 0 14,272 0 14,272 Total assets $ 15,104 $ 1,021,714 $ 4,581 $ 1,041,399 Liabilities: Interest rate swap derivative $ 0 $ 14,273 $ 0 $ 14,273 Total liabilities $ 0 $ 14,273 $ 0 $ 14,273 December 31, 2025 Fair Value Measurements Using Assets at Fair Value (dollars in thousands) Level 1 Level 2 Level 3 Assets: U.S. Treasury securities $ 10,119 $ 0 $ 0 $ 10,119 U.S. government sponsored agency securities 0 115,690 0 115,690 Mortgage-backed securities: residential 0 454,163 0 454,163 State and municipal securities 0 467,589 4,501 472,090 Total securities available-for-sale 10,119 1,037,442 4,501 1,052,062 Mortgage banking derivative 0 115 0 115 Interest rate swap derivative 0 14,634 0 14,634 Total assets $ 10,119 $ 1,052,191 $ 4,501 $ 1,066,811 Liabilities: Mortgage banking derivative $ 0 $ 8 $ 0 $ 8 Interest rate swap derivative 0 14,634 0 14,634 Total liabilities $ 0 $ 14,642 $ 0 $ 14,642 The fair value of Level 3 available-for-sale securities was immaterial and thus did not require additional recurring fair value disclosure. 27 Table of Contents The tables below present the balances of assets measured at fair value on a nonrecurring basis: March 31, 2026 Fair Value Measurements Using Assets at Fair Value (dollars in thousands) Level 1 Level 2 Level 3 Assets Collateral dependent loans: Commercial and industrial loans: Working capital lines of credit loans $ 0 $ 0 $ 1,624 $ 1,624 Non-working capital loans 0 0 1,574 1,574 Commercial real estate and multi-family residential loans: Owner occupied loans 0 0 777 777 Nonowner occupied loans 0 0 1,515 1,515 Agri-business and agricultural loans: Loans secured by farmland 0 0 16 16 Consumer 1‑4 family mortgage loans: Open end and junior lien loans 0 0 1,541 1,541 Total collateral dependent loans 0 0 7,047 7,047 Total assets $ 0 $ 0 $ 7,047 $ 7,047 December 31, 2025 Fair Value Measurements Using Assets at Fair Value (dollars in thousands) Level 1 Level 2 Level 3 Assets Collateral dependent loans: Commercial and industrial loans: Working capital lines of credit loans $ 0 $ 0 $ 1,719 $ 1,719 Non-working capital loans 0 0 1,672 1,672 Commercial real estate and multi-family residential loans: Owner occupied loans 0 0 811 811 Nonowner occupied loans 0 0 1,543 1,543 Agri-business and agricultural loans: Loans secured by farmland 0 0 18 18 Consumer 1‑4 family mortgage loans: Open end and junior lien loans 0 0 1,523 1,523 Total collateral dependent loans 0 0 7,286 7,286 Total assets $ 0 $ 0 $ 7,286 $ 7,286 28 Table of Contents 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, 2026: (dollars in thousands) Fair Value Valuation Methodology Unobservable Inputs Average Range of Inputs Collateral dependent loans: Commercial and industrial $ 3,198 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 52 % 1 %- 99 % Collateral dependent loans: Commercial real estate and multi-family residential loans 2,292 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 28 % 1 %- 65 % Collateral dependent loans: Agri-business and agricultural 16 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 65 % Collateral dependent loans: Consumer 1-4 family mortgage 1,541 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 10 % 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, 2025: (dollars in thousands) Fair Value Valuation Methodology Unobservable Inputs Average Range of Inputs Collateral dependent loans: Commercial and industrial $ 3,391 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 52 % 6 %- 99 % Collateral dependent loans: Commercial real estate and multi-family residential loans 2,354 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 28 % 7 %- 62 % Collateral dependent loans: Agri-business and agricultural 18 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 62 % Collateral dependent loans: Consumer 1-4 family mortgage 1,523 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 12 % 29 Table of Contents 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. March 31, 2026 Carrying Value Estimated Fair Value (dollars in thousands) Level 1 Level 2 Level 3 Total Financial Assets: Cash and cash equivalents $ 151,324 $ 151,324 $ 0 $ 0 $ 151,324 Securities available-for-sale 1,026,991 15,104 1,007,306 4,581 1,026,991 Securities held-to-maturity 133,617 0 114,241 0 114,241 Real estate mortgages held-for-sale 1,086 0 1,107 0 1,107 Loans, net 5,404,444 0 0 5,359,405 5,359,405 Mortgage banking derivative 136 0 136 0 136 Interest rate swap derivative 14,272 0 14,272 0 14,272 Federal Reserve and Federal Home Loan Bank Stock 21,420 N/A N/A N/A N/A Accrued interest receivable 29,703 0 7,647 22,056 29,703 Financial Liabilities: Certificates of deposit $ 947,949 $ 0 $ 945,314 $ 0 $ 945,314 All other deposits 5,242,311 5,242,311 0 0 5,242,311 Federal Home Loan Bank advances: Short-term advance 50,000 50,000 0 0 50,000 Long-term advance 1,200 0 793 0 793 Other borrowings 17,000 0 16,998 0 16,998 Interest rate swap derivative 14,273 0 14,273 0 14,273 Standby letters of credit 251 0 0 251 251 Accrued interest payable 8,591 398 8,193 0 8,591 30 Table of Contents December 31, 2025 Carrying Value Estimated Fair Value (dollars in thousands) Level 1 Level 2 Level 3 Total Financial Assets: Cash and cash equivalents $ 141,318 $ 141,318 $ 0 $ 0 $ 141,318 Securities available-for-sale 1,052,062 10,119 1,037,442 4,501 1,052,062 Securities held-to-maturity 133,208 0 117,510 0 117,510 Real estate mortgages held-for-sale 2,707 0 2,753 0 2,753 Loans, net 5,306,354 0 0 5,257,552 5,257,552 Mortgage banking derivative 115 0 115 0 115 Interest rate swap derivative 14,634 0 14,634 0 14,634 Federal Reserve and Federal Home Loan Bank Stock 21,420 N/A N/A N/A N/A Accrued interest receivable 28,997 0 8,306 20,691 28,997 Financial Liabilities: Certificates of deposit $ 750,726 $ 0 $ 748,798 $ 0 $ 748,798 All other deposits 5,222,624 5,222,624 0 0 5,222,624 Federal Home Loan Bank advances: Short-term advance 170,000 169,998 0 0 169,998 Long-term advance 1,200 0 792 0 792 Other borrowings 13,000 0 12,997 0 12,997 Mortgage banking derivative 8 0 8 0 8 Interest rate swap derivative 14,634 0 14,634 0 14,634 Standby letters of credit 296 0 0 296 296 Accrued interest payable 8,868 410 8,458 0 8,868 NOTE 7. 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 March 31, 2026 and December 31, 2025. March 31, 2026 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 (dollars in thousands) Financial Instruments Cash Collateral Position Assets Interest Rate Swap Derivatives $ 14,272 $ 0 $ 14,272 $ 0 $ ( 11,815 ) $ 2,457 Total Assets $ 14,272 $ 0 $ 14,272 $ 0 $ ( 11,815 ) $ 2,457 Liabilities Interest Rate Swap Derivatives $ 14,273 $ 0 $ 14,273 $ 0 $ 0 $ 14,273 Total Liabilities $ 14,273 $ 0 $ 14,273 $ 0 $ 0 $ 14,273 31 Table of Contents December 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 (dollars in thousands) Financial Instruments Cash Collateral Position Assets Interest Rate Swap Derivatives $ 14,634 $ 0 $ 14,634 $ 0 $ ( 13,075 ) $ 1,559 Total Assets $ 14,634 $ 0 $ 14,634 $ 0 $ ( 13,075 ) $ 1,559 Liabilities Interest Rate Swap Derivatives $ 14,634 $ 0 $ 14,634 $ 0 $ 0 $ 14,634 Total Liabilities $ 14,634 $ 0 $ 14,634 $ 0 $ 0 $ 14,634 If an event of default occurs causing an early termination of an interest rate swap derivative, any early termination amount payable to one party by the other party may be reduced by set-off against any other amount payable by the one party to the other party. If a default in performance of any obligation of a repurchase agreement occurs, each party will set-off property held in respect of transactions against obligations owing in respect of any other transactions. NOTE 8. LEASES The Company leases certain office facilities under long-term operating lease agreements. The leases expire at various dates through 2044 and some include renewal options. Many of these leases require the payment of property taxes, insurance premiums, maintenance, utilities and other costs. In many cases, rentals are subject to increase in relation to a cost-of-living index. The Company accounts for lease and non-lease components together as a single lease component. The Company determines if an arrangement is a lease at inception. Operating leases are recorded as a right-of-use ("ROU") lease asset and are included in other assets on the consolidated balance sheet. The Company's corresponding lease obligations are included in other liabilities on the consolidated balance sheet. ROU lease assets represent the Company's right to use an underlying asset for the lease term and lease obligations represent the Company's obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The ROU lease asset also includes any lease payments made and excludes lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Short-term leases are leases having a term of twelve months or less. 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 March 31, 2026: Years ending December 31, (in thousands) Operating Lease Obligation 2026 $ 728 2027 919 2028 869 2029 743 2030 661 2031 and thereafter 5,191 Total undiscounted lease payments 9,111 Less imputed interest ( 2,219 ) Lease liability $ 6,892 Right-of-use asset $ 6,892 The lease liability and right-of-use asset were $ 7.1 million and $ 7.1 million, respectively, at December 31, 2025. 32 Table of Contents Three Months Ended March 31, (dollars in thousands) 2026 2025 Lease cost Operating lease cost $ 242 $ 198 Short-term lease cost 1 1 Total lease cost $ 243 $ 199 Other information Operating cash outflows from operating leases $ 242 $ 198 Weighted-average remaining lease term - operating leases 6.3 years 7.6 years Weighted average discount rate - operating leases 3.9 % 3.7 % NOTE 9. 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 March 31, 2026 and 2025, all shown net of tax: (dollars in thousands) Unrealized Gains and Losses on Available- for-Sale Securities Defined Benefit Pension Items Total Balance at January 1, 2026 $ ( 126,609 ) $ ( 528 ) $ ( 127,137 ) Other comprehensive income (loss) before reclassification ( 8,884 ) 0 ( 8,884 ) Amounts reclassified from accumulated other comprehensive income (loss) 387 12 399 Net current period other comprehensive income (loss) ( 8,497 ) 12 ( 8,485 ) Balance at March 31, 2026 $ ( 135,106 ) $ ( 516 ) $ ( 135,622 ) (dollars in thousands) Unrealized Gains and Losses on Available- for-Sale Securities Defined Benefit Pension Items Total Balance at January 1, 2025 $ ( 165,932 ) $ ( 568 ) $ ( 166,500 ) Other comprehensive income (loss) before reclassification 2,224 0 2,224 Amounts reclassified from accumulated other comprehensive income (loss) 387 10 397 Net current period other comprehensive income (loss) 2,611 10 2,621 Balance at March 31, 2025 $ ( 163,321 ) $ ( 558 ) $ ( 163,879 ) 33 Table of Contents Reclassifications out of accumulated comprehensive income (loss) for the three months ended March 31, 2026 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 $ ( 489 ) Interest income Tax effect 102 Income tax expense ( 387 ) Net of tax Amortization of defined benefit pension items ( 16 ) Salaries and employee benefits Tax effect 4 Income tax expense ( 12 ) Net of tax Total reclassifications for the period $ ( 399 ) Net income Reclassifications out of accumulated other comprehensive income (loss) for the three months ended March 31, 2025 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 $ ( 490 ) Interest income Tax effect 103 Income tax expense ( 387 ) Net of tax Amortization of defined benefit pension items ( 13 ) Salaries and employee benefits Tax effect 3 Income tax expense ( 10 ) Net of tax Total reclassifications for the period $ ( 397 ) Net income NOTE 10. EARNINGS PER SHARE Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period, which includes shares held in treasury on behalf of participants in the Company’s Directors Fee Deferral Plan, and share repurchases. 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 March 31, 2026 2025 Weighted average shares outstanding for basic earnings per common share 25,344,757 25,714,818 Dilutive effect of stock based awards 149,163 88,047 Weighted average shares outstanding for diluted earnings per common share 25,493,920 25,802,865 Basic earnings per common share $ 1.04 $ 0.78 Diluted earnings per common share $ 1.04 $ 0.78 34 Table of Contents NOTE 11. INCOME TAXES Pretax income is entirely related to domestic activities. The Company did not have any foreign operations or foreign tax expense for the periods presented below. Income tax expense for the three months ended March 31, 2026 consisted of the following: (dollars in thousands) 2026 Current federal $ 5,040 Deferred federal 842 Current state 853 Deferred state ( 658 ) Total income tax expense $ 6,077 For the year ended December 31, 2025, the Company adopted ASU 2023-09, " Income Taxes (Topic 740): Improvements to Income Tax Disclosures " on a prospective basis. Differences between financial statement tax expense and amounts computed by applying the statutory federal income tax rate of 21% to income before income taxes for the three months ended March 31, 2026 were as follows: (dollars in thousands) 2026 Federal statutory rate $ 6,837 21.0 % Effect of: State and local income taxes, net of federal benefits 154 0.5 Tax credits, net of amortization and losses 15 0.0 Nontaxable or nondeductible items: Tax exempt income ( 870 ) ( 2.7 ) Bank owned life insurance ( 235 ) ( 0.1 ) Long-term incentive plan and deferred compensation 0 0.0 Nondeductible compensation expense 37 0.0 Other nondeductible expenses 57 0.0 Other 82 0.0 Total income tax expense $ 6,077 18.7 % During the three months ended March 31, 2026, the Company paid no federal income taxes or state income taxes . 35 Table of Contents The net deferred tax asset recorded in the consolidated balance sheet at March 31, 2026 and December 31, 2025 consisted of the following: (dollars in thousands) March 31, 2026 December 31, 2025 Deferred tax assets: Bad debts $ 18,326 $ 17,574 Pension and deferred compensation liability 2,418 2,430 Nonaccrual loan interest 521 1,403 Long-term incentive plan 2,184 2,685 Lease liability 2,968 2,370 Deferred loan fees 530 540 Net operating loss carryforward 1,936 1,900 Other 787 733 29,670 29,635 Deferred tax liabilities: Depreciation 5,081 5,333 Loan servicing rights 423 433 State taxes 1,070 1,096 Intangible assets 1,266 1,266 REIT spillover dividend 1,750 1,750 Prepaid expenses 1,067 1,155 Lease right of use 2,968 2,370 Other 244 247 13,869 13,650 Valuation allowance 0 0 Net deferred tax asset $ 15,801 $ 15,985 The Company has Indiana net operating loss carryforwards of approximately $ 39.5 million at March 31, 2026 that will expire in 2039 if not used. Management has concluded that the state net operating losses will be fully utilized and therefore no valuation allowance is necessary on the state operating loss. In addition to the net deferred tax assets included above, the deferred income tax asset (liability) allocated to the unrealized gain (loss) on securities available for sale was $ 35.9 million and $ 33.7 million for March 31, 2026 and December 31, 2025, respectively. The deferred income tax asset allocated to the pension plan and SERP included in equity was $ 171,000 and $ 175,000 at March 31, 2026 and December 31, 2025, respectively. The Company evaluated its deferred tax asset at year end 2025 and has concluded that it is more likely than not that it will be realized. The Company expects to have taxable income in the future such that the deferred tax asset will be realized. Therefore, no valuation allowance is required. Unrecognized Tax Benefits The Company did not have any unrecognized tax benefits at March 31, 2026 and December 31, 2025. No interest or penalties were recorded in the income statement and no amount was accrued for interest and penalties for the three months ended March 31, 2026. Should the accrual of any interest or penalties relative to unrecognized tax benefits be necessary, it is the Company's policy to record such accruals in its income taxes accounts. The Company and its subsidiaries file a consolidated U.S. federal tax return and a combined unitary return in the State of Indiana. These returns are subject to examinations by authorities for all years after 2021. 36 Table of Contents