What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-02 compared with 2025-07-01 · 470 added, 781 removed, 1898 unchanged (40% of the section changed)

13 unchanged sentences

Derivative Instruments

FHLB Advances and Other Borrowings

FHLB Advances

Subordinated Debt

11 unchanged sentences

Parent Company Only Financial Information

Restatement of Prior Period Financial Statements

Subsequent Events

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Table of C ontents

Shareholders and the Board of Directors of Midland States Bancorp, Inc.

1 unchanged sentence

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Midland Sates Bancorp, Inc.

We have audited the accompanying consolidated balance sheets of Midland States Bancorp, Inc.

(the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements").

2 unchanged sentences

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, because of the effects of the material weaknesses discussed in the following paragraphs, the Company has not maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework:

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework:

(2013) issued by COSO.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weaknesses have been identified and included in management's report:

• The Company did not design and maintain controls to assess the risk of material misstatement with contracts related to non-routine transactions.

• The Company did not design and maintain an effective internal control activities for evaluating the accounting and financial reporting related to third-party credit enhancement contracts.

• The Company did not design and maintain effective internal controls over loan data, including the activities performed by certain third-party service organizations that perform core lending functions.

The loan data control deficiencies affect the allowance for credit losses, loan balances, accrued interest, interest income, servicing fees, and the fair value of the credit enhancement derivative.

We considered these material weaknesses identified above in determining the nature, timing, and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and our opinion on Internal Control over Financial Reporting does not affect our opinion on the financial statements.

Restatement of Previously Issued Financial Statements

As discussed in Note 1 to the consolidated financial statements, the 2023 and 2022 consolidated financial statements have been restated to correct misstatements.

Basis for Opinions

22 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Allowance for Credit Losses on Loans – Qualitative Factors

As described in Notes 1 and 3 to the consolidated financial statements, the Allowance for Credit Losses on Loans (“ACL”) represents the Company’s estimate of amounts that are not expected to be collected over the contractual life of the Company’s held for investment loan portfolio.

The estimate of the ACL is based on historical experience, current conditions, and reasonable and supportable forecasts.

Allowance for Credit Losses on Loans

As described in Notes 1 and 3 to the consolidated financial statements, the Allowance for Credit Losses on Loans (“ACL”) represents the Company’s estimate of expected credit losses over the contractual life of loans held for investment.

The estimate is based on historical loss experience, current conditions, and reasonable and supportable forecasts.

As of December 31, 2025, the Company’s ACL was $69.2 million, and the provision for credit losses on loans was $60.5 million for the year then ended.

The Company measures expected credit losses by utilizing a probability of default, loss given default, and exposure at default model to estimate the quantitative component of the allowance for credit losses for loans.

Management qualitatively adjusts the quantitative model results for risk factors that are not considered within the modeling process but are relevant in assessing the expected credit losses.

These qualitative factors are based upon management judgment and current assessment as to the impact of risks related to actual and expected changes in economic and business conditions and developments that affect the collectability of the loan pools, changes in volume and severity of past due financial assets, the volume of non-accrual assets, and the volume and severity of adversely classified or graded assets, changes in the value of the underlying collateral for loans that are non-collateral dependent, and other internal and external factors.

We have identified auditing the qualitative factors as a critical audit matter as management’s determination of the qualitative factors is subjective and involves significant management judgments;

and our audit procedures related to certain of the qualitative factors involved a high degree of auditor judgment and required significant audit effort, including the need to involve more experienced audit personnel.

The primary audit procedures we performed to address this critical audit matter included:

• Tested the operating effectiveness of the Company’s controls over the:

▪ Review over the appropriateness of the framework for the qualitative factors.

▪ Completeness and accuracy of internal data used in the qualitative factors.

▪ Review over the relevance and reliability of external data used in the qualitative factors.

▪ Mathematical accuracy of the qualitative factors.

• Substantive tests included:

◦ Testing the completeness and accuracy of internal data and relevance and reliability of external data used in the qualitative factors

◦ Assessing the appropriateness and reasonableness of the framework developed for the qualitative factors including evaluating management’s judgments as to which factors impacted the qualitative analysis for each portfolio segment.

◦ Performing testing over the accuracy of inputs utilized in the calculation of qualitative factors for each portfolio segment.

◦ Testing the mathematical accuracy of the calculation of the qualitative factors.

Goodwill Impairment Assessment

As described in Notes 1 and 7 to the consolidated financial statements, goodwill is the excess of the purchase price over the fair value of the net assets of the business acquired and is periodically evaluated for impairment.

The Company’s goodwill balance was $161.9 million as of December 31, 2024, of which $157.2 million is allocated to the Company’s banking segment.

The Company tests for impairment at least annually or, more frequently, if an event occurs or circumstances change that indicate that the fair value of the reporting unit may be below its carrying amount (triggering event).

The Company determined that a triggering event occurred and performed a quantitative assessment of goodwill for the Company’s bank reporting unit as of December 31, 2024.

The Company engaged a third-party service provider in performing its quantitative impairment assessment.

The Company's impairment assessment estimated fair value using an income approach that incorporated a discounted cash flow model that involves management assumptions based upon internal forecasts.

We identified the auditing of the impairment assessment of goodwill as of December 31, 2024 as a critical audit matter due to the significant management judgments related to determining the fair value of the reporting unit, which in turn led to a high degree of auditor judgment and subjectivity in evaluating the fair value of the reporting unit, specifically the significant assumptions related to the multi-year cash projections that rely on internal forecasts and the discount rate.

In addition, we used auditor employed specialists to assist in evaluating the significant assumptions.

The Company estimates expected credit losses using a quantitative model and qualitative adjustments.

The quantitative component is based on a probability of default, loss given default, and exposure at default framework that incorporates historical default experience, loan-level risk characteristics, and forecasted macroeconomic variables over a reasonable and supportable forecast period, with losses reverting to long-term historical averages thereafter.

The macroeconomic variables used in the model are selected based on statistical relevancy and correlation to historical credit losses by performing regression analyses.

Management then applies qualitative factor adjustments to the modeled results for risks not fully captured in the model, including changes in economic and business conditions, portfolio credit quality, delinquency and nonaccrual trends, collateral values, and other internal and external factors.

We identified auditing the allowance for credit losses on loans, including the selection and application of forecasted macroeconomic variables and qualitative factor adjustments, as a critical audit matter.

Auditing these judgments involved a high degree of auditor judgment and significant audit effort to evaluate the significant subjective and complex judgments made by management throughout the application processes for the forecasted macroeconomic variables and qualitative factor adjustments, including the need to involve our valuation services specialists.

The primary audit procedures we performed to address this critical audit matter included:

• Tested the operating effectiveness of the Company’s controls over the:

◦ Review for completeness and accuracy of internal data and evaluation of the relevance and reliability of external data used in the impairment assessment.

◦ Review of the reasonableness of the Company’s internal forecasts utilized in the impairment assessment.

◦ Evaluation of the reasonableness of the valuation methodologies and the significant assumptions, including discount rate.

• Testing the operating effectiveness of the Company’s controls over the:

◦ Selection and application of forecasted macroeconomic variables and related forecast scenarios.

◦ Review of the reasonableness of the calculation output and tested the completeness and accuracy of inputs used in the quantitative model and qualitative factor adjustments.

◦ Review over the relevance and reliability of external data used in the analysis to select the forecasted macroeconomic variables and qualitative factor adjustments.

◦ Review over the appropriateness of the framework for the qualitative factor adjustments.

◦ Mathematical accuracy of the qualitative factor adjustments.

• Substantive tests included:

◦ Evaluating the reasonableness of the valuation methodologies used to determine the fair value of the reporting unit.

◦ Testing the completeness and accuracy of internal data, and evaluating the relevance and reliability of external data.

◦ Evaluating the reasonableness of the internal forecasts utilized in the impairment assessment.

◦ Utilization of auditor employed specialists to assist with the evaluation of the appropriateness of the valuation methodologies, reasonableness of the discount rate, and overall reasonableness of the fair value of the reporting unit.

◦ Evaluating the relevance and reliability of the external data used in the selection of forecasted macroeconomic variables.

◦ Evaluating the reasonableness of the selection and application of the forecasted macroeconomic variables and scenarios used in the reasonable and supportable forecast period.

◦ Testing the completeness and accuracy of inputs used in the quantitative model and evaluating the reasonableness of the calculation output.

◦ Assessing the appropriateness and reasonableness of the framework developed for the qualitative factor adjustments including evaluating management’s judgments as to which factors impacted the qualitative analysis for each portfolio segment.

◦ Testing the completeness and accuracy of internal data and relevance and reliability of external data used in determining the qualitative factor adjustments.

◦ Testing the mathematical accuracy of the calculation of the qualitative factor adjustments.

Credit Enhancements Contained Within Third-Party Agreements

The Company has agreements with third parties to originate and service consumer and commercial loans that are included in the Company’s loan portfolio as described in Notes 1 and 3 to the consolidated financial statements.

As part of these programs, the third-party provider offered various credit enhancements with respect to loans originated under the programs, including contributions to reserve accounts, yield maintenance and certain other payments.

The Company has determined that the borrower payments and credit enhancement payments under the programs should be accounted for on a separate unit of account or gross basis, with loan yields and interest income recorded at the gross borrower loan rate, and credit losses and associated provisions for credit losses recorded on a gross basis over the life of the loans, and with all credit enhancement payments accounted for separately as a credit enhancement derivative.

As of December 31, 2024, the Company recorded a credit enhancement asset of $16.8 million, which represents the fair value of the credit enhancement derivative associated with the agreements related to loans recorded on the consolidated balance sheet as of the same date.

The Company has an agreement with a third party to originate and service consumer and commercial loans that are included in the Company’s loan portfolio as described in Notes 1 and 3 to the consolidated financial statements.

The Company recorded a credit enhancement asset of $12.6 million as of December 31, 2025 related to the agreement associated with loans recorded on the balance sheet as of December 31, 2025.

The Company also recorded a $12.6 million allowance for credit losses for these consumer and commercial loans as of December 31, 2025.

We identified auditing the accounting associated with the credit enhancement contained within the third-party agreements as a critical audit matter due to the nature and extent of audit effort required, including the need for individuals with specialized knowledge.

Additionally, material weaknesses were identified by the Company related to the accounting and financial reporting associated with the credit enhancement contained within the third-party agreements and its impact on consolidated financial statements.

The primary procedure we performed to address this critical audit matter included engaging our internal specialists to evaluate the third-party agreements and the related accounting treatment.

The primary procedures we performed to address this critical audit matter included engaging our internal specialists to evaluate the third-party agreement and the related accounting treatment;

and testing the operating effectiveness of the control over the evaluation of the accounting and financial reporting impact related to this third-party agreement.

We have served as the Company’s auditor since 2017.

Oakbrook Terrace, Illinois

March 2, 2026

Table of C ontents

MIDLAND STATES BANCORP, INC.

16 unchanged sentences

Loan servicing rights, at lower of cost or fair value 11,932 17,842

Loan servicing rights, held for sale 3,661 —

Goodwill 7,927 161,904

9 unchanged sentences

Short-term borrowings 60,181 87,499

Federal Home Loan Bank advances and other borrowings 258,000 476,000

Federal Home Loan Bank advances

293,000 258,000

Subordinated debt 27,019 77,749

5 unchanged sentences

4,000,000 shares authorized;

115,000 Series A shares, $ 1,000 per share liquidation preference, issued and outstanding at December 31, 2024 and 2023, respectively

115,000 Series A shares, $ 1,000 per share liquidation preference, issued and outstanding at December 31, 2025 and December 31, 2024, respectively

110,548 110,548

1 unchanged sentence

40,000,000 shares authorized;

21,494,485 and 21,551,402 shares issued and outstanding at December 31, 2024 and 2023, respectively

21,169,854 and 21,494,485 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively

Capital surplus 428,247 434,346

4 unchanged sentences

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

Table of C ontents

MIDLAND STATES BANCORP, INC.

2 unchanged sentences

Years Ended December 31,

2025 2024 2023

Interest income:

12 unchanged sentences

Short-term borrowings 2,807 1,960 68

Federal Home Loan Bank advances and other borrowings 16,495 20,709 9,335

Federal Home Loan Bank advances

14,621 16,495 20,709

Subordinated debt 4,554 5,271 5,266

4 unchanged sentences

Provision for credit losses on loans 60,549 119,262 82,560

Provision for credit losses on unfunded commitments 1,070 — 1,550

Recapture of other credit losses — — ( 221 )

(Recapture of) provision for credit losses on unfunded commitments ( 700 ) 1,070 —

Total provision for credit losses 59,849 120,332 82,560

6 unchanged sentences

Income on company-owned life insurance 8,564 7,683 4,439

Loss on sales of investment securities, net ( 230 ) ( 9,372 ) ( 230 )

Gain on termination of hedged interest rate swaps — — 17,531

Impairment on commercial mortgage servicing rights — — ( 1,263 )

Gain (loss) on sales of investment securities, net 14 ( 230 ) ( 9,372 )

Credit enhancement income 9,904 60,998 48,194

11 unchanged sentences

Loan servicing fees 4,578 12,864 19,181

Impairment on goodwill 153,977 — —

Amortization of intangible assets 3,224 4,008 4,758

Other real estate owned 281 5,569 333

Loss on mortgage servicing rights held for sale — — 3,250

Loss on sale of loan portfolios 23,051 — —

Impairment on leased assets and surrendered assets 684 7,858 —

1 unchanged sentence

Total noninterest expense 380,003 207,855 193,083

Income before income taxes 46,900 87,962 131,386

Income (loss) before income taxes ( 114,868 ) 46,900 87,962

Income tax expense 9,413 8,856 26,807

Net income 38,044 61,155 100,237

Net income (loss) ( 124,281 ) 38,044 61,155

Preferred dividends 8,913 8,913 8,913

Net income available to common shareholders $ 29,131 $ 52,242 $ 97,068

Net income (loss) available to common shareholders $ ( 133,194 ) $ 29,131 $ 52,242

Per common share data:

Basic earnings per common share $ 1.32 $ 2.33 $ 4.29

Diluted earnings per common share $ 1.32 $ 2.33 $ 4.28

Basic earnings (loss) per common share $ ( 6.12 ) $ 1.32 $ 2.33

Diluted earnings (loss) per common share $ ( 6.12 ) $ 1.32 $ 2.33

Weighted average common shares outstanding 21,833,098 21,731,689 22,115,869

1 unchanged sentence

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

Table of C ontents

MIDLAND STATES BANCORP, INC.

2 unchanged sentences

Years Ended December 31,

Net income $ 38,044 $ 61,155 $ 100,237

Other comprehensive (loss) income:

Investment securities available for sale:

Unrealized losses that occurred during the period ( 9,278 ) ( 2,536 ) ( 106,927 )

Recapture of credit loss expense — — ( 221 )

Reclassification adjustment for realized net losses on sales of investment securities included in net income

2025 2024 2023

Net income (loss) $ ( 124,281 ) $ 38,044 $ 61,155

Other comprehensive income (loss):

Investment securities available for sale:

Unrealized gains that occurred during the period 27,421 ( 9,278 ) ( 2,536 )

Reclassification adjustment for realized net (gains) losses on sales of investment securities included in net income ( 14 ) 230 9,372

Reclassification adjustment for gains on fair value hedges included in net income

2 unchanged sentences

Cash flow hedges:

Net unrealized derivative losses on cash flow hedges ( 1,692 ) ( 2,452 ) 2,551

Reclassification adjustment for net losses (gains) realized in net income 4,891 5,264 ( 17,644 )

Net unrealized derivative gains (losses) on cash flow hedges 1,730 ( 1,692 ) ( 2,452 )

Reclassification adjustment for net losses realized in net income 693 4,891 5,264

Income tax effect ( 600 ) ( 893 ) ( 759 )

Change in cash flow hedges, net of tax 1,823 2,306 2,053

Other comprehensive (loss) income, net of tax ( 5,207 ) 7,044 ( 89,034 )

Total comprehensive income $ 32,837 $ 68,199 $ 11,203

Other comprehensive income (loss), net of tax 21,627 ( 5,207 ) 7,044

Total comprehensive income (loss) $ ( 102,654 ) $ 32,837 $ 68,199

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

Table of C ontents

MIDLAND STATES BANCORP, INC.

9 unchanged sentences

Balances, December 31, 2022 $ 110,548 $ 222 $ 449,196 $ 219,970 $ ( 83,797 ) $ 696,139

Prior period adjustment from restatement — — — ( 63,647 ) — ( 63,647 )

Balances, January 1, 2022 (Restated)

— 221 445,907 148,825 5,237 600,190

Net income — — — 61,155 — 61,155

Other comprehensive loss — — — — ( 89,034 ) ( 89,034 )

Other comprehensive income — — — — 7,044 7,044

Issuance of preferred stock, net of offering costs — — — — — —

5 unchanged sentences

Issuance of common stock under employee benefit plans — 2 1,668 — — 1,670

Balances, December 31, 2022 (Restated)

$ 110,548 $ 222 $ 449,196 $ 219,970 $ ( 83,797 ) $ 696,139

Balances, December 31, 2023 $ 110,548 $ 216 $ 435,463 $ 245,639 $ ( 76,753 ) $ 715,113

Net income — — — 38,044 — 38,044

Other comprehensive income — — — — 7,044 7,044

Other comprehensive loss — — — — ( 5,207 ) ( 5,207 )

Common dividends declared ($ 1.24 per share)

4 unchanged sentences

Issuance of common stock under employee benefit plans — 1 1,325 — — 1,326

Balances, December 31, 2023 (Restated)

$ 110,548 $ 216 $ 435,463 $ 245,639 $ ( 76,753 ) $ 715,113

Net income — — — 38,044 — 38,044

Other comprehensive loss — — — — ( 5,207 ) ( 5,207 )

Balances, December 31, 2024 $ 110,548 $ 215 $ 434,346 $ 247,698 $ ( 81,960 ) $ 710,847

Net loss — — — ( 124,281 ) — ( 124,281 )

Other comprehensive income — — — — 21,627 21,627

Common dividends declared ($ 1.26 per share)

6 unchanged sentences

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

Table of C ontents

MIDLAND STATES BANCORP, INC.

2 unchanged sentences

Years Ended December 31,

2025 2024 2023

Cash flows from operating activities:

Net income $ 38,044 $ 61,155 $ 100,237

Net income (loss) $ ( 124,281 ) $ 38,044 $ 61,155

Adjustments to reconcile net income to net cash provided by operating activities:

1 unchanged sentence

Depreciation on premises and equipment 4,892 4,993 4,778

Impairment on goodwill 153,977 — —

Amortization of intangible assets 3,224 4,008 4,758

4 unchanged sentences

Gain on proceeds from company-owned life insurance ( 343 ) — —

Investment securities (accretion) amortization, net ( 6,789 ) ( 2,414 ) 2,311

Gain on termination of hedged interest rate swaps — — ( 17,531 )

Loss on sales of investment securities, net 230 9,372 230

Investment securities accretion, net ( 13,696 ) ( 6,789 ) ( 2,414 )

(Gain) loss on sales of investment securities, net ( 14 ) 230 9,372

Gain on repurchase of subordinated debt — ( 231 ) ( 676 )

(Gain) loss on sales of other real estate owned ( 26 ) ( 819 ) 118

Gain on sales of other real estate owned ( 124 ) ( 26 ) ( 819 )

Impairment on other real estate owned — 4,866 —

2 unchanged sentences

Gain on sale of loans held for sale ( 2,560 ) ( 2,307 ) ( 2,395 )

Impairment on commercial mortgage servicing rights — — 1,263

Loss on mortgage servicing rights held for sale ( 18 ) —

Loss on sale of loan portfolios 23,051 — —

Impairment on leased assets and surrendered assets 684 7,858 —

11 unchanged sentences

Proceeds from sales of equity securities — — 5,148

Net decrease (increase) in loans 346,883 72,877 ( 1,216,352 )

Proceeds from loans held for sale previously classified as portfolio loans 84,283 40,899 —

Net decrease in loans 438,907 346,883 72,877

Proceeds from sales of consumer loans held for sale 61,099 — —

Proceeds from sales of loan portfolios 517,430 84,283 40,899

Purchases of premises and equipment ( 5,346 ) ( 6,901 ) ( 8,731 )

3 unchanged sentences

Proceeds from sales of other real estate owned 4,862 466 7,547

(Purchases of) proceeds from company-owned life insurance, net — ( 48,603 ) 1,518

Net cash acquired in acquisitions — — 60,275

Proceeds from company-owned life insurance, net 1,166 — ( 48,603 )

Net cash provided by (used in) investing activities 748,905 136,708 ( 74,800 )

Cash flows from financing activities:

Net (decrease) increase in deposits ( 112,286 ) ( 55,123 ) 174,210

Net decrease in deposits ( 772,864 ) ( 112,286 ) ( 55,123 )

Net increase (decrease) in short-term borrowings ( 27,318 ) 52,634 ( 7,446 )

Net (decrease) increase in short-term FHLB borrowings ( 166,000 ) ( 174,000 ) 250,000

Proceeds from long-term FHLB borrowings 263,000 215,000 —

Payments made on long-term FHLB borrowings and other borrowings ( 315,000 ) ( 25,000 ) ( 100,171 )

Payments made on subordinated debt ( 15,763 ) ( 5,845 ) ( 40,000 )

Proceeds from issuance of preferred stock — — 110,548

Net increase (decrease) in short-term FHLB advances ( 20,000 ) ( 166,000 ) ( 174,000 )

Proceeds from long-term FHLB advances 328,000 263,000 215,000

Payments made on long-term FHLB advances and other borrowings ( 273,000 ) ( 315,000 ) ( 25,000 )

Payments and subordinated debt redemption ( 50,750 ) ( 15,763 ) ( 5,845 )

Cash dividends paid on preferred stock ( 8,913 ) ( 8,913 ) ( 8,913 )

2 unchanged sentences

Proceeds from issuance of common stock under employee benefit plans 643 1,326 1,670

Net cash (used in) provided by financing activities ( 333,549 ) ( 104,128 ) 332,082

Net decrease in cash and cash equivalents ( 20,295 ) ( 25,570 ) ( 519,740 )

Net cash used in financing activities ( 861,539 ) ( 333,549 ) ( 104,128 )

Net increase (decrease) in cash and cash equivalents 13,045 ( 20,295 ) ( 25,570 )

Cash and cash equivalents:

2 unchanged sentences

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

Table of C ontents

MIDLAND STATES BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (RESTATED)

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

1 unchanged sentence

is a diversified financial holding company headquartered in Effingham, Illinois.

Our wholly owned banking subsidiary, Midland States Bank, has branches across Illinois and in Missouri, and provides a full range of commercial and consumer banking products and services, business equipment financing, merchant credit card services, trust and investment management services, and insurance and financial planning services.

Our wholly owned banking subsidiary, Midland States Bank, has branches across Illinois and in Missouri, and provides a full range of commercial and consumer banking products and services, merchant credit card services, trust and investment management services, and insurance and financial planning services.

Our principal business activity has been lending to and accepting deposits from individuals, businesses, municipalities and other entities.

5 unchanged sentences

and, from time to time, gains on sales of assets.

Our principal expenses include interest expense on deposits and borrowings, operating expenses, such as salaries and employee benefits, occupancy and equipment expenses, data processing costs, professional fees and other noninterest expenses, provisions for credit losses and income tax expense.

Basis of Presentation

The accompanying consolidated financial statements of the Company have been prepared in accordance with GAAP and conform to predominant practices within the banking industry.

Management of the Company has made a number of estimates and assumptions related to the reporting assets and liabilities to prepare the consolidated financial statements in conformity with GAAP.

Management of the Company has made a number of estimates and assumptions related to the reporting assets and liabilities to prepare the consolidated financial statement in conformity with GAAP.

Actual results may differ from these estimates.

Certain reclassifications of 2023 or 2022 amounts may have been made to conform to the 2024 presentation, but do not have an effect on net income or shareholders' equity.

The accompanying consolidated financial statements include a restatement of the financial statements (i) as of and for the year ended December 31, 2023 and (ii) for the year ended December 31, 2022 as referenced below.

Certain reclassifications of 2024 or 2023 amounts may have been made to conform to the 2025 presentation, but do not have an effect on net income in 2024 or in 2023 or shareholders' equity.

Subsequent Events

Management has evaluated subsequent events for recognition and disclosure through July 1, 2025, which is the date the financial statements were available to be issued.

Business Combinations

The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, Business Combinations .

Under the acquisition method of accounting, tangible and intangible identifiable assets acquired, liabilities assumed and any noncontrolling interests in the acquiree are recorded at fair value as of the acquisition date.

The Company includes the results of operations of the acquired company in the consolidated statements of income from the date of acquisition.

Transaction costs and costs to restructure the acquired company are expensed as incurred.

Goodwill is recognized as the excess of the acquisition price over the estimated fair value of the net assets acquired.

If the fair value of the net assets acquired is greater than the acquisition price, a bargain purchase gain is recognized and recorded in noninterest income.

Restatement of prior period Financial Statements

In connection with the preparation of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, the Audit Committee, after discussion with management and the Company's independent registered public accounting firm, Crowe LLP, concluded that the Company's audited consolidated financial statements for the Restated Financial Periods should no longer be relied upon because of errors identified in such financial statements, as described below.

The errors relate to the Company’s accounting for loans originated pursuant to third-party loan origination programs.

These programs go back as far as 2012.

As part of these programs, the third-party providers offered various credit enhancements with respect to loans originated under the programs, including contributions to reserve accounts, yield maintenance and certain other payments.

Historically, the Company accounted for all borrower payments and credit enhancement payments under these programs on a single unit, or net basis, with all such payments presented as interest income representing the Company’s effective yield on the portfolios.

The Company has determined that these payments should instead

be accounted for on a separate unit of account, or gross basis, with loan yields and interest income recorded at the gross borrower loan rate, credit losses and associated provisions for credit losses recorded on a gross basis over the life of the loans, and with all credit enhancement payments recorded separately as a credit enhancement derivative.

As a result of the above, the Company is restating the financial statements (i) as of and for the year ended December 31, 2023 and (ii) for the year ended December 31, 2022, as presented in the audited financial statements as of and for the period ended December 31, 2024 in this Annual Report on Form 10-K.

The impact of the errors for years prior to January 1, 2022 have been adjusted through opening equity as of January 1, 2022 in the audited consolidated financial statements presented herein.

See Note 25 - Restatement of Prior Period Financial Statements for additional information, including the impact on the specific accounts.

Management has evaluated subsequent events for recognition and disclosure through March 2, 2026, which is the date the financial statements were available to be issued.

Cash and Cash Equivalents and Cash Flows

1 unchanged sentence

Generally, federal funds are sold for one-day periods, but not longer than 30 days.

Table of C ontents

The following table summarizes supplemental cash flow information:

7 unchanged sentences

Transfer of loans to loans held for sale 492,770 406,561 —

Transfer of operating assets to assets held for sale 20,439 — —

Transfer of loans to other real estate owned 403 1,031 9,112

Transfer of premises and equipment, net to assets held for sale 245 — —

Transfer of loan servicing rights, at lower of cost or market to loan servicing rights held for sale 3,661 — —

Transfer of loan servicing rights held for sale to loan servicing rights, at lower of cost or market — — 20,745

Loans provided for sale of consumer loans held for sale 219,212 — —

Right of use assets obtained in exchange for lease obligations 873 2,889 2,470

16 unchanged sentences

For debt securities available for sale that do not meet the aforementioned criteria, the Company 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, among 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, among other factors.

If this assessment indicates that a credit loss exists, and the present value of cash flows expected to be collected from the security is less than the amortized cost basis, an allowance for credit losses is recorded.

6 unchanged sentences

Equity securities are recorded at fair value with unrealized gains and losses recognized in noninterest income.

Table of C ontents

Nonmarketable Equity Securities

16 unchanged sentences

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The Company provides financing leases to small businesses for purchases of business equipment.

Under the direct financing method of accounting, the minimum lease payments to be received under the lease contract, together with the guaranteed residual values, which range from 1 % to 45 % of the cost of related equipment which average 3 %, are recorded as lease receivables when the lease is signed and the leased property is delivered to the customer.

The Company has historically provided financing leases to small businesses for purchases of business equipment.

Under the direct financing method of accounting, the minimum lease payments to be received under the lease contract, together with the guaranteed residual values (which typically range from 1 % to 21 % of the cost of the related equipment which average 1 %), are recorded as lease receivables when the lease is signed and the leased property is delivered to the customer.

The excess of the minimum lease payments and residual values over the cost of the equipment is recorded as unearned lease income.

15 unchanged sentences

While historical credit loss experience provides the basis for the estimation of expected credit losses, adjustments to historical loss information may be made for differences in current loan-specific risk characteristics, environmental conditions or other relevant factors.

Table of C ontents

The allowance for credit losses on loans is measured on a collective basis and reflects impairment in groups of loans aggregated on the basis of similar risk characteristics.

27 unchanged sentences

We have determined that we are reasonably able to forecast the macroeconomic variables used in our modeling processes with an acceptable degree of confidence for a total of two years with the last twelve months of the forecast period encompassing a reversion process whereby the forecasted macroeconomic variables are reverted to their historical mean utilizing a straight line basis.

The macroeconomic variables utilized as inputs in our modeling processes were subjected to a variety of analysis procedures and were selected primarily based on statistical relevancy and correlation to our historical credit losses.

Table of C ontents

By reverting these modeling inputs to their historical mean and considering loan and borrower specific attributes, our models are intended to yield a measurement of expected credit losses that reflects our average historical loss rates for periods subsequent to the twelve-month reversion period.

3 unchanged sentences

These Q-Factor adjustments may increase or decrease management's estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk.

The various risks that may be considered in making Q-Factor adjustments include, among other things, the impact of (i) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, charge-offs, and recoveries, (ii) actual and expected changes in economic and business conditions and developments that affect the collectability of the loan pools, (iii) changes in the nature and volume of the loan pools and in the terms of the underlying loans, (iv) changes in the experience, ability, and depth of our lending management and staff, (v) changes in volume and severity of past due financial assets, the volume of non-accrual assets, and the volume and severity of adversely classified or graded assets, (vi) changes in the quality of our credit review function, (vii) changes in the value of the underlying collateral for loans that are non-collateral dependent, (viii) the existence, growth, and effect of any concentrations of credit and (ix) other factors such as the regulatory, legal and technological environments;

The various risks that may be considered in making Q-Factor adjustments include, among other things, the impact of (i) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, charge-offs, and recoveries, (ii) actual and expected changes in economic and business conditions and developments that affect the collectibility of the loan pools, (iii) changes in the nature and volume of the loan pools and in the terms of the underlying loans, (iv) changes in the experience, ability, and depth of our lending management and staff, (v) changes in volume and severity of past due financial assets, the volume of non-accrual assets, and the volume and severity of adversely classified or graded assets, (vi) changes in the quality of our credit review function, (vii) changes in the value of the underlying collateral for loans that are non-collateral dependent, (viii) the existence, growth, and effect of any concentrations of credit and (ix) other factors such as the regulatory, legal and technological environments;

and events such as natural disasters or health pandemics.

11 unchanged sentences

Loans Held for Sale

Loans held for sale consist of residential mortgage loans originated with the intent to sell as well as the GreenSky portfolio which the Company had committed to a plan to sell at December 31, 2024.

Prior to 2023, loans held for sale also

included commercial FHA mortgage loans originated with the intent to sell.

At December 31, 2025, loans held for sale consisted of residential real estate loans with the intent to sell.

At December 31, 2024, loans held for sale consisted of residential mortgage loans originated with the intent to sell as well as the GreenSky portfolio which the Company had committed a plan to sell.

Loans held for sale are carried at fair value, determined individually, as of the balance sheet date.

6 unchanged sentences

The Company’s agreements to sell residential mortgage loans usually require general representations and warranties on the underlying loans sold, related to credit information, loan documentation, collateral, and insurability, which if subsequently untrue or breached, could require the Company to indemnify or repurchase certain loans affected.

The balance in the repurchase reserve at the balance sheet date reflects the estimated amount of potential loss the Company could incur from repurchasing a loan, as well as loss reimbursements, indemnification, and other “make whole” settlement resolutions.

Table of C ontents

whole” settlement resolutions.

There were no losses as a result of make-whole requests and loan repurchases for the years ended December 31, 2025, 2024 and 2023.

11 unchanged sentences

Operating leases are capitalized at commencement and are discounted using the Company’s FHLB borrowing rate for a similar term borrowing unless the lease defines an implicit rate within the contract.

The Company assesses operating lease right-of-use assets for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable.

The operating lease right of use assets represent the Company’s right to use an underlying asset for the lease term, and the operating lease liabilities represent the obligation to make lease payments arising from the lease.

18 unchanged sentences

If the carrying amount of the reporting unit exceeds the fair value, the amount by which the carrying amount exceeds fair value, up to the carrying value of goodwill, is recorded through earnings as an impairment charge.

If the results of the qualitative assessment indicate that it is not more likely than not that an impairment has occurred, or if the quantitative impairment test results in a fair value of the reporting unit that is greater than the carrying amount, then no impairment charge is recorded.

Annually, the Company performs an impairment test of goodwill as of August 31.

During the year ended December 31, 2024, management performed quarterly qualitative assessments and an annual qualitative impairment test, as a result of the economic uncertainty and increased market volatility resulting from the elevated interest rate environment.

The Company's annual impairment test of goodwill and other intangible assets did not identify any impairment.

The Company performed a quantitative impairment test on its Banking reporting unit as of December 31, 2024.

The Company engaged a third-party service provider to assist Management with the determination of the fair value of the Company in the fourth quarter of 2024.

The resulting calculation indicated that the fair value exceeded the carrying amount of the Company's Banking reporting unit by approximately 7 % as of December 31, 2024, which resulted in a determination of no impairment loss.

If the results of the qualitative assessment indicate that it is

Table of C ontents

not more likely than not that an impairment has occurred, or if the quantitative impairment test results in a fair value of the reporting unit that is greater than the carrying amount, then no impairment charge is recorded.

We evaluate goodwill for impairment annually as of August 31st, or earlier if conditions indicate there may be potential for impairment, such as significant adverse changes in business climate or operating results, changes in our strategy, significant declines in our stock price or other triggering events.

Based on the results of our annual impairment tests, we concluded that no goodwill impairment existed as of December 31, 2025 and December 31, 2024.

During the first quarter of 2025, we determined that a triggering event had occurred in the Company's Banking reporting unit as a result of deteriorated credit quality coupled with trends in the Company's stock price.

The Company performed a quantitative impairment test on its Banking reporting unit as of March 31, 2025, and engaged a third-party service provider to assist with the determination of the fair value.

The resulting calculation indicated that the carrying amount exceeded the fair value of the Company's Banking reporting unit.

As a result of the assessment, the Company recognized a $ 154.0 million goodwill impairment charge in the first quarter of 2025.

Significant judgment is necessary in the determination of the fair value of a reporting unit.

4 unchanged sentences

The discount rate was calculated as the cost of equity capital using the modified capital asset pricing model, which includes variables including the risk-free interest rate, beta, equity risk premium, size premium, and company-specific risk premium.

Future events could cause the Company to conclude that the Company’s goodwill has become impaired, which would result in recording an impairment charge.

Management has evaluated and will continue to evaluate economic conditions in interim periods for triggering events.

Other intangible assets, which consist of core deposit and acquired customer relationship intangible assets, are typically amortized over a period ranging from 1 to 20 years using an accelerated method of amortization.

6 unchanged sentences

The Company’s servicing portfolio consists of distinct portfolios of government-insured residential and commercial mortgages, conventional residential mortgages and SBA loans.

The Company periodically evaluates

its loan servicing rights asset for impairment.

The Company periodically evaluates its loan servicing rights asset for impairment.

Impairment is assessed based on the fair value of net servicing cash flows at each reporting date using estimated prepayment speeds of the underlying loans serviced and stratifications based on the risk characteristics of the underlying loans.

2 unchanged sentences

This revenue, along with amortization of and changes in impairment on servicing rights, is reported in residential mortgage banking revenue and other noninterest income, respectively, in the consolidated statements of income.

Table of C ontents

Loan Servicing Rights Held For Sale

Loan servicing rights held for sale consisted of residential and commercial mortgage servicing rights with the intent to sell at December 31, 2025.

Servicing rights held for sale are measured at fair value.

Fair value is estimated using a market approach based on indicative pricing from third parties, including a letter of intent to purchase, corroborated by available market data for comparable transactions less estimated prepayments, paydowns, amortizations and sales in the portfolio for the projected closing period.

The changes in the fair value of loan servicing rights held for sale are reflected in noninterest income on the consolidated statements of income.

Cash Surrender Value of Life Insurance Policies

4 unchanged sentences

The Company is party to third-party loan origination programs.

As part of these programs the third-party providers offer various credit enhancements with respect to loans originated under the programs, including contributions to reserve accounts, yield maintenance and certain other payments.

As part of these programs, the third-party providers offer various credit enhancements with respect to loans originated under the programs.

In 2024, this included contributions to reserve accounts, yield maintenance and certain other payments.

In accordance with accounting guidance, we estimate and record an allowance for expected losses for these loans.

When the allowance for credit losses on loans is recorded, a credit enhancement derivative is also recorded on the balance sheet with a corresponding entry to noninterest income in recognition of the partner's legal commitment to indemnify or reimburse the Company.

The credit enhancement asset is relieved as credit enhancement payments and recoveries are received from the partner or taken from the partner's cash reserve account.

In 2024 and through December 30, 2025, when the allowance for credit losses on loans was recorded, a credit enhancement derivative was also recorded on our balance sheet with a corresponding entry to noninterest income in recognition of the partner's legal commitment to indemnify or reimburse the Company.

The credit enhancement asset was relieved as credit enhancement payments and recoveries were received from the partner or taken from the partner's cash reserve account.

As of December 31, 2025, based on revised contractual terms of these arrangements which were effective as of that date, when the allowance for credit losses on loans is recorded, a credit enhancement asset is also recorded on the balance sheet with a corresponding entry to noninterest income in recognition of the partner's legal commitment to reimburse losses.

The credit enhancement asset is relieved as credit enhancement payments and recoveries are received from the partner.

Derivative Financial Instruments

11 unchanged sentences

(b) the derivative expires or is sold, terminated, or exercised;

(c) the derivative is no longer designated as a hedge instrument because it is unlikely that a forecasted transaction will occur;

Table of C ontents

transaction will occur;

or (d) management determines that designation of the derivative as a hedge instrument is no longer appropriate.

29 unchanged sentences

The fair value of restricted stock is determined based on the Company’s current market price on the date of grant.

Compensation cost is recognized in the consolidated financial statements on a straight-line basis over the requisite service period, which is generally defined as the vesting period.

Compensation cost is recognized in the

Table of C ontents

consolidated financial statements on a straight-line basis over the requisite service period, which is generally defined as the vesting period.

Additionally, the Company accounts for forfeitures as they occur.

12 unchanged sentences

Accounting Guidance Adopted in 2025

2023-02, Investments—Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method – In March 2023, the FASB issued ASU No.

2023-02, which allows for reporting entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the type of program the tax credits are related to.

The ASU is effective for fiscal years beginning after December 15, 2023.

The Company adopted this guidance on January 1, 2024 on a prospective basis.

The adoption of this accounting pronouncement did not have a material impact on the consolidated financial statements.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures - In December 2023, the FASB issued ASU No.

2023-07, which requires public entities to disclose significant segment expenses, an amount and description for other segment items, the title and position of the entity's chief operating decision maker and an explanation of how the chief operating decision maker uses the reported measures of profit or loss to assess segment performance, and, on an interim basis, certain segment related disclosures that previously were required only on an annual basis.

The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company has updated the related disclosures for the current fiscal year.

Accounting Guidance Not Yet Adopted

2023-09, Income Taxes (Topic 740):

1 unchanged sentence

2023-09, which requires public entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold.

The pronouncement also requires entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things.

The ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company will update the related disclosures upon adoption.

The Company adopted the ASU retrospectively and has updated the related disclosures for the current fiscal year.

Accounting Guidance Not Yet Adopted

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

5 unchanged sentences

The Company will update the related disclosures upon adoption.

Table of C ontents

NOTE 2 – INVESTMENT SECURITIES

3 unchanged sentences

(dollars in thousands) Amortized

losses Basis Adjustments (2)

Investment securities available for sale

3 unchanged sentences

Mortgage-backed securities - agency (1)

1,265,954 3,272 ( 75,476 ) 1,193,750

Mortgage-backed securities - non-agency 97,921 1,499 ( 2,331 ) 97,089

Asset-backed student loans 34,262 39 ( 86 ) 34,215

State and municipal securities 77,054 388 ( 3,984 ) 73,458

Collateralized loan obligations 46,800 54 — 46,854

Corporate securities 60,075 69 ( 2,332 ) 57,812

Other securities (1)

90,372 158 ( 107 ) — 90,423

Total available for sale securities $ 1,602,810 $ 5,328 $ ( 85,137 ) $ 1,523,001

(1) The fair value of other securities includes student loan asset backed securities of $ 50.0 million and structured financial products of $ 40.4 million.

(2) Basis adjustments represent the amount of fair value hedging adjustments included in the carrying amount of fixed-rate investment securities designated in fair value hedging arrangements.

(1) The amount of fair value hedging adjustment included in the amortized cost amount of the hedged investment securities available-for-sale as of December 31, 2025 was $( 2.3 ) million.

See Note 8 - Derivative Instruments for additional information regarding these derivative financial instruments.

2 unchanged sentences

Investment securities available for sale

Treasury securities $ 1,097 $ — $ — $ 1,097

government sponsored entities and U.S.

1 unchanged sentence

Mortgage-backed securities - agency (1)

938,513 3,411 ( 94,868 ) 847,056

Mortgage-backed securities - non-agency 103,051 1,410 ( 3,449 ) 101,012

Asset-backed student loans 50,007 66 ( 100 ) 49,973

State and municipal securities 75,597 96 ( 6,632 ) 69,061

Collateralized loan obligations 40,365 92 ( 7 ) 40,450

Corporate securities 85,602 42 ( 5,763 ) 79,881

Other securities (1)

27,646 3 ( 84 ) 27,565

Total available for sale securities $ 1,314,790 $ 5,142 $ ( 112,358 ) $ 1,207,574

(1) The fair value of other securities includes structured financial products of $ 27.6 million.

(1) The amount of fair value hedging adjustment included in the amortized cost amount of the hedged investment securities available-for-sale as of December 31, 2024 was $ 1.9 million.

See Note 8 - Derivative Instruments for additional information regarding these derivative financial instruments.

Investment securities with a carrying amount of $ 243.9 million and $ 283.7 million were pledged for public deposits at December 31, 2025 and 2024 , respectively.

Excluding securities issued or backed by U.S.

government or its sponsored entities and agencies, there were no investments in securities from one issuer that exceeded 10% of shareholders' equity as of December 31, 2024 and 2023.

government or its sponsored entities and agencies, there were no investments in securities from one issuer that exceeded 10% of shareholders' equity as of December 31, 2025 and December 31, 2024 .

Table of C ontents

The table below shows the amortized cost and fair value of the investment securities portfolio by contractual maturity for all securities other than mortgage-backed securities, at December 31, 2025.

Expected maturities may differ from

contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Securities not due at a single maturity date are shown separately.

26 unchanged sentences

Mortgage-backed securities - non-agency 42 — 22,386 2,331 22,428 2,331

Asset-backed student loans 5,166 13 14,378 73 19,544 86

State and municipal securities 3,826 12 46,204 3,972 50,030 3,984

Collateralized loan obligations — — — — — —

Corporate securities 2,502 1 47,241 2,331 49,743 2,332

Other securities 25,202 106 2,130 1 27,332 107

Total available for sale securities $ 222,626 $ 1,222 $ 663,757 $ 83,915 $ 886,383 $ 85,137

Table of C ontents

December 31, 2024

9 unchanged sentences

Mortgage-backed securities - non-agency 12,433 33 24,153 3,416 36,586 3,449

Asset-backed student loans 17,734 99 2,130 1 19,864 100

State and municipal securities 21,209 365 43,131 6,267 64,340 6,632

Collateralized loan obligations 7,468 7 — — 7,468 7

Corporate securities 23,833 1,910 52,271 3,853 76,104 5,763

Other securities 14,763 84 — — 14,763 84

Total available for sale securities $ 388,077 $ 12,176 $ 515,505 $ 100,182 $ 903,582 $ 112,358

22 unchanged sentences

Total loans $ 4,352,004 $ 5,167,574

Total loans include net deferred loan costs of $ 1.4 million and $ 3.8 million at December 31, 2024 and December 31, 2023, respectively, and unearned discounts of $ 56.7 million and $ 66.4 million within the lease financing portfolio at December 31, 2024 and December 31, 2023, respectively.

Total loans included net deferred loan fees of $ 8.2 million and net deferred loan costs of $ 1.4 million at December 31, 2025 and December 31, 2024, respectively, and unearned discounts of $ 4.7 million and $ 56.7 million within the lease financing portfolio at December 31, 2025 and December 31, 2024, respectively.

Table of C ontents

Classifications of Loan Portfolio

15 unchanged sentences

Consumer loans consist of relatively small amounts that are spread across many individual borrowers.

Lease financing —Our leasing business provides financing leases to varying types of businesses, nationwide, for purchases of business equipment.

Lease financing —Our leasing business historically provided financing leases to varying types of businesses, nationwide, for purchases of business equipment.

The financing is secured by a first priority interest in the financed assets and generally requires monthly payments.

We ceased originating new equipment financing leases and loans effective September 30, 2025 and sold substantially all of our equipment finance portfolio during the fourth quarter of 2025.

Commercial, commercial real estate, and construction and land development loans are collectively referred to as the Company’s commercial loan portfolio, while residential real estate, consumer loans and lease financing receivables are collectively referred to as the Company’s other loan portfolio.

8 unchanged sentences

Ending balance $ 46,999 $ 40,410

Table of C ontents

The following table represents, by loan portfolio segment, a summary of changes in the allowance for credit losses on loans for the years ended December 31, 2025, 2024 and 2023:

11 unchanged sentences

Balance, end of period $ 23,676 $ 28,284 $ 2,619 $ 6,652 $ 4,804 $ 3,184 $ 69,219

Changes in allowance for credit losses on loans for the year ended December 31, 2023 (restated) :

Changes in allowance for credit losses on loans for the year ended December 31, 2024:

Balance, beginning of period $ 29,672 $ 20,229 $ 4,163 $ 5,553 $ 86,762 $ 12,940 $ 159,319

3 unchanged sentences

Balance, end of period $ 42,776 $ 36,837 $ 3,550 $ 8,002 $ 5,400 $ 14,639 $ 111,204

Changes in allowance for credit losses on loans for the year ended December 31, 2022 (restated) :

Changes in allowance for credit losses on loans for the year ended December 31, 2023:

Balance, beginning of period $ 26,035 $ 29,290 $ 2,435 $ 4,301 $ 60,041 $ 6,787 $ 128,889

18 unchanged sentences

When historical credit loss experience is not sufficient for a specific portfolio, the Company may supplement its own portfolio data with external models or data.

Table of C ontents

Historical data is evaluated in multiple components of the expected credit loss, including the reasonable and supportable forecast and the post-reversion period of each loan segment.

16 unchanged sentences

Expected Credit Losses

In calculating expected credit losses, the Company individually evaluates loans on nonaccrual status with a balance greater than $ 500,000 , loans past due 90 days or more and still accruing interest, and loans that do not share similar risk characteristics with other loans in the pool.

In calculating expected credit losses, the Company individually evaluates loans on nonaccrual status, loans past due 90 days or more and still accruing interest, and loans that do not share similar risk characteristics with other loans in the pool.

Table of C ontents

The following table presents the amortized cost basis of individually evaluated loans on nonaccrual status as of December 31, 2025 and December 31, 2024:

17 unchanged sentences

There was no interest income recognized on nonaccrual loans during the years ended December 31, 2025 and 2024 while the loans were in nonaccrual status.

Additional interest income that would have been recorded on nonaccrual loans had they been current in accordance with their original terms was $ 9.6 million, $ 3.4 million and $ 2.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Additional interest income that would have been recorded on nonaccrual loans had they been current in accordance with their original terms was $ 11.3 million and $ 9.6 million and $ 3.4 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Collateral Dependent Financial Assets

4 unchanged sentences

However, as other sources of repayment become inadequate over time, the significance of the collateral’s value increases and the loan may become collateral dependent.

Table of C ontents

The table below presents the amortized cost basis of individually evaluated, collateral dependent loans by loan class, for borrowers experiencing financial difficulty, as of December 31, 2025 and December 31, 2024:

3 unchanged sentences

Commercial $ — $ 3,850 $ — $ 3,850

Commercial other — 2,157 — 2,157

Commercial real estate:

2 unchanged sentences

Multi-family 16,448 — — 16,448

Farmland — 401 — 401

Construction and land development — — — —

Residential real estate

Residential first lien — — — —

Other residential — — — —

Lease financing — — — —

7 unchanged sentences

Multi-family 54,133 — — 54,133

Construction and land development 8,399 — — 8,399

Lease financing — — 465 465

Total collateral dependent loans $ 96,004 $ 14,661 $ 465 $ 111,130

The aging status of the recorded investment in loans by portfolio as of December 31, 2024 was as follows:

Table of C ontents

The aging status of the recorded investment in loans by class as of December 31, 2025 was as follows:

Accruing loans

(dollars in thousands) 30-59

(dollars in thousands) Current 30-59

past due 60-89 days past due Past due

or more Total

past due Nonaccrual Current Total

past due Nonaccrual Total

Commercial $ 1,053,096 $ 2,035 $ 341 $ — $ 2,376 $ 7,219 $ 1,062,691

15 unchanged sentences

Total loans $ 4,269,442 $ 12,651 $ 4,428 $ 4,544 $ 21,623 $ 60,939 $ 4,352,004

The aging status of the recorded investment in loans by portfolio as of December 31, 2023 (restated) was as follows:

The aging status of the recorded investment in loans by class as of December 31, 2024 was as follows:

Accruing loans

(dollars in thousands) 30-59

(dollars in thousands) Current 30-59

past due 60-89

1 unchanged sentence

or more Total

past due Nonaccrual Current Total

past due Nonaccrual Total

Commercial $ 803,833 $ 4,562 $ 349 $ — $ 4,911 $ 9,752 $ 818,496

14 unchanged sentences

Total loans $ 4,972,986 $ 32,355 $ 11,326 $ 10,769 $ 54,450 $ 140,138 $ 5,167,574

Table of C ontents

Loan Restructurings

17 unchanged sentences

Multi-family — — 27,354 2

Farmland 380 2 — —

Construction and land development 1,588 1 17,033 3

6 unchanged sentences

Total loan restructurings $ 34,760 19 $ 149,416 64

Balance Count Balance Count

Interest Rate Reduction $ 10,037 2 $ — —

Term Extension 75,365 33 1,191 8

Payment Deferral 8,153 15 — —

Forgiveness of Principal or Interest 213 1 — —

Interest Rate Reduction and Term Extension 49,051 5 1,138 4

Interest Rate Reduction and Payment Deferral 312 2 — —

Interest Rate Reduction and Principal Forgiveness 77 1 — —

Term Extension and Payment Deferral 6,208 5 — —

Total loan restructurings $ 149,416 64 $ 2,329 12

Table of C ontents

For the year ended December 31, 2025

(dollars in thousands) Payment Deferral ($) Term Extension ($) Interest Rate Reduction / Term Extension

($) Payment Deferral / Term Extension ($) Total Modifications

($) Total Class of Financing Receivable

Commercial $ — $ 11,936 $ 97 $ — $ 12,033 1.13 %

Commercial other — — — 552 552 0.48

Commercial real estate:

Commercial real estate non-owner occupied — 11,986 8,027 — 20,013 1.38

Commercial real estate owner occupied — — — — — —

Multi-family — — — — — —

Farmland 113 — — 267 380 0.57

Construction & land development

— 1,588 — — 1,588 0.55

Total commercial loans $ 113 $ 25,510 $ 8,124 $ 819 $ 34,566 0.91 %

Residential real estate:

Residential first lien — 185 — — 185 0.06

Other residential — 9 — — 9 0.01

Consumer — — — — — —

Consumer other — — — — — —

Lease financing — — — — — —

Total $ 113 $ 25,704 $ 8,124 $ 819 $ 34,760 0.80 %

Table of C ontents

For the year ended December 31, 2024

(dollars in thousands) Principal Forgiveness ($) Payment Deferral ($) Term Extension ($) Interest Rate Reduction

($) Interest Rate Reduction / Principal Forgiveness ($) Interest Rate Reduction / Payment Deferral

($) Interest Rate Reduction / Term Extension

($) Payment Deferral / Term Extension ($) Total Modifications

($) Total Class of Financing Receivable

Commercial $ — $ — $ 61,652 $ — $ — $ — $ — $ 77 $ 61,729 7.54 %

Commercial other — 524 954 — — 312 — — 1,790 0.33

Commercial real estate:

Commercial real estate non-owner occupied — 6,301 3,552 — — — 21,697 — 31,550 1.94

Commercial real estate owner occupied — — — — — — — 6,131 6,131 1.39

Multi-family — — — — — — 27,354 — 27,354 6.02

Farmland — — — — — — — — — —

Construction & land development

— — 7,182 9,851 — — — — 17,033 5.68

Total commercial loans $ — $ 6,825 $ 73,340 $ 9,851 $ — $ 312 $ 49,051 $ 6,208 $ 145,587 3.42 %

Residential real estate:

Residential first lien — — 402 — — — — — 402 0.13

Other residential — — 82 — — — — — 82 0.13

Consumer — — 44 — — — — — 44 0.05

Consumer other — — — — — — — — — —

Lease financing 213 1,328 1,497 186 77 — — — 3,301 0.84

Total $ 213 $ 8,153 $ 75,365 $ 10,037 $ 77 $ 312 $ 49,051 $ 6,208 $ 149,416 2.89 %

The Company has not committed to lend any additional amounts to the borrowers that have been granted a loan modification.

Table of C ontents

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

The following table presents the performance of such loans that have been modified in the last twelve months for the year ended December 31, 2024:

The following table presents the performance of such loans that have been modified in the last twelve months as of December 31, 2025:

(dollars in thousands) 30-59

past due 60-89

past due Total

past due Nonaccrual Current Total

past due Past due

or more Total

past due Current Total

Commercial $ — $ — $ — $ — $ 12,033 $ 12,033

4 unchanged sentences

Multi-family — — — — — —

Farmland — — — — 380 380

Construction and land development — — — — 1,588 1,588

6 unchanged sentences

Total loan restructurings $ — $ 5 $ 2 $ 7 $ 34,753 $ 34,760

The following table presents the performance of such loans that have been modified in the last twelve months for the year ended December 31, 2023:

The following table presents the performance of such loans that have been modified in the last twelve months as of December 31, 2024:

(dollars in thousands) 30-59

past due 60-89

past due Total

past due Nonaccrual Current Total

past due Past due

or more Total

past due Current Total

Commercial $ 2,722 $ — $ — $ 2,722 $ 59,007 $ 61,729

Commercial other 503 36 22 561 1,229 1,790

Commercial real estate:

Commercial real estate non-owner occupied — — 6,301 6,301 25,249 31,550

Commercial real estate owner occupied — — — — 6,131 6,131

Multi-family — — 27,354 27,354 — 27,354

Construction and land development — — — — 17,033 17,033

Total commercial loans 3,225 36 33,677 36,938 108,649 145,587

1 unchanged sentence

Residential first lien — — — — 402 402

Other residential — — — — 82 82

Consumer — — — — 44 44

4 unchanged sentences

These standards include making loans generally within the Company’s four geographic regions.

In addition, our specialty finance division does nationwide bridge lending for FHA and HUD developments and originates loans for multifamily, assisted and senior living and multi-use properties.

Our equipment leasing business provides financing to business customers across the country.

In addition, our specialty finance division does nationwide bridge lending for FHA and HUD developments and originates loans for multifamily, assisted

Table of C ontents

and senior living and multi-use properties.

Our equipment leasing business provided financing to business customers across the country.

The Company has a loan approval process involving underwriting and individual and group loan approval authorities to consider credit quality and loss exposure at loan origination.

The loans in the Company’s commercial loan portfolio are risk rated at origination based on the grading system set forth below.

The loans in the Company’s commercial loan portfolio are risk rated based on the grading system set forth below.

All loan authority is based on the aggregate credit to a borrower and its related entities.

Loans in the commercial loan portfolio tend to be larger and more complex than those in the other loan portfolio, and therefore, are subject to more intensive monitoring.

All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the relationship managers to stay abreast of credit quality during the life of the loans.

The risk ratings of loans in the commercial loan portfolio are reassessed at least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various individuals within the Company at least quarterly.

The Company’s consumer loan portfolio is primarily comprised of both secured and unsecured loans that are relatively small and are evaluated at origination on a centralized basis against standardized underwriting criteria.

3 unchanged sentences

Credit quality for the entire consumer loan portfolio is measured by the periodic delinquency rate, nonaccrual amounts and actual losses incurred.

Loans in the commercial loan portfolio tend to be larger and more complex than those in the other loan portfolio, and therefore, are subject to more intensive monitoring.

The Company maintains a centralized independent loan review function that monitors the approval process and ongoing asset quality of the loan portfolio, including the accuracy of loan grades.

13 unchanged sentences

Modified loans with terms at least as favorable to the lender as the terms for other customers with similar collection risks and with terms that are more than minor compared to the original terms are treated as a new loan to the borrower.

Table of C ontents

The following tables present the recorded investment of the commercial loan portfolio by risk category as of December 31, 2025 and December 31, 2024:

58 unchanged sentences

Total commercial loans $ 1,097,142 $ 569,783 $ 280,787 $ 685,254 $ 365,163 $ 306,298 $ 502,898 $ 3,807,325

Table of C ontents

December 31, 2024

57 unchanged sentences

Total commercial loans $ 913,082 $ 511,943 $ 1,132,813 $ 613,100 $ 227,506 $ 350,045 $ 502,837 $ 4,251,326

Table of C ontents

The following table presents the gross charge-offs by class of loan and year of origination on the commercial loan portfolio for the years ended December 31, 2025 and 2024:

12 unchanged sentences

Term Loans by Origination Year

2023 2022 2021 2020 2019 Prior Revolving Loans Total

For the year ended December 31, 2023 (restated)

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

For the year ended December 31, 2024

Commercial Commercial $ — $ 677 $ 5,174 $ 827 $ 90 $ 967 $ 342 $ 8,077

3 unchanged sentences

Multi-family — — 4,545 — — 1,539 — 6,084

Farmland — — — 115 — — — 115

Construction and land development

1 unchanged sentence

Total gross commercial charge-offs $ — $ 5,473 $ 27,431 $ 20,477 $ 377 $ 4,342 $ 342 $ 58,442

The Company evaluates the credit quality of its other loan portfolios, which includes residential real estate, consumer and lease financing loans, based primarily on the aging status of the loan and payment activity.

The Company evaluates the credit quality of its other loan portfolios, which includes residential real estate, consumer and leases, based primarily on the aging status of the loan and payment activity.

Accordingly, loans on nonaccrual status and loans past due 90 days or more and still accruing interest are considered to be nonperforming for purposes of credit quality evaluation.

The following tables present the recorded investment of our other loan portfolio based on the credit risk profile of loans that are performing and loans that are nonperforming as of December 31, 2025 and December 31, 2024:

Table of C ontents

December 31, 2025

19 unchanged sentences

Total other loans $ 50,160 $ 54,951 $ 67,628 $ 122,032 $ 58,567 $ 136,147 $ 55,194 $ 544,679

Table of C ontents

December 31, 2024

29 unchanged sentences

Total gross other charge-offs $ 2,207 $ 5,819 $ 11,103 $ 9,785 $ 2,845 $ 2,893 $ 100 $ 34,752

Term Loans by Origination Year

2023 2022 2021 2020 2019 Prior Revolving Loans Total

For the year ended December 31, 2023 (restated)

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

For the year ended December 31, 2024

Residential real estate Residential first lien $ — $ 128 $ 11 $ 25 $ — $ 483 $ — $ 647

4 unchanged sentences

Total gross other charge-offs $ 18 $ 32,079 $ 54,254 $ 14,894 $ 5,974 $ 5,815 $ 157 $ 113,191

Table of C ontents

NOTE 4 – PREMISES, EQUIPMENT AND LEASES

10 unchanged sentences

Depreciation expense for the years ended December 31, 2025, 2024 and 2023 was $ 4.9 million, $ 5.0 million, and $ 4.8 million, respectively.

The Company has entered into operating leases, primarily for banking offices and operating facilities, which have remaining lease terms of 3 months to 13 years, some of which may include options to extend the lease terms for up to an additional 10 years.

The Company has entered into operating leases, primarily for banking offices, operating facilities and ATMs, which have remaining lease terms of 8 months to 12 years, some of which may include options to extend the lease terms for up to an additional 10 years.

The options to extend are included in the remaining lease term if they are reasonably certain to be exercised.

The Company had operating lease right-of-use assets of $ 8.8 million and $ 7.7 million as of December 31, 2024 and December 31, 2023, respectively, included in premises and equipment on our consolidated balance sheets.

The operating lease liabilities of the Company were $ 10.1 million and $ 9.3 million as of December 31, 2024 and December 31, 2023, respectively, and are included in accrued interest payable and other liabilities on our consolidated balance sheets.

The Company had operating lease right-of-use assets of $ 8.1 million and $ 8.8 million as of December 31, 2025 and December 31, 2024, respectively, included in premises and equipment, net on our consolidated balance sheets.

The operating lease liabilities of the Company were $ 9.3 million as of December 31, 2025, and $ 10.1 million as of December 31, 2024, and are included in accrued interest payable and other liabilities on our consolidated balance sheets.

Information related to operating leases for the years ended December 31, 2025 and 2024 was as follows:

14 unchanged sentences

Total operating lease liabilities $ 9,309

Table of C ontents

NOTE 5 - OPERATING LEASES - LESSOR

The Company provides financing for various types of equipment through operating leasing arrangements.

The equipment leased to others is carried at cost less accumulated depreciation in other assets on our consolidated balance sheets.

The Company had equipment leased to others of $ 30.7 million and $ 58.0 million at December 31, 2024 and December 31, 2023, respectively, net of accumulated depreciation of $ 18.1 million and $ 21.2 million at December 31, 2024 and December 31, 2023, respectively.

The Company recorded lease income of $ 16.1 million and $ 18.0 million related to lease payments for operating leases in other income on our consolidated statements of income for the years ended December 31, 2024 and 2023, respectively.

Depreciation expense related to leased equipment was $ 12.6 million and $ 14.7 million for the years ended December 31, 2024 and 2023, respectively.

The Company performs assessment of the recoverability of long-lived assets when events or changes in circumstances indicate their carrying values may not be recoverable.

During the year ended December 31, 2024, the Company recognized impairment losses of $ 6.0 million associated with equipment leased to others in other expenses on our consolidated statements of income.

The future lease payments receivable from operating leases as of December 31, 2024 are as follows:

(dollars in thousands) Amount

Year ending December 31:

Thereafter 48

Total future minimum lease payments 17,174

The Company provided financing for various types of equipment through operating leasing arrangements, which was carried at cost less accumulated depreciation in other assets on our consolidated balance sheets.

During the fourth quarter of 2025, the Company sold $ 21.8 million in operating leases, which represented all operating leases carried on our balance sheet prior to the sale.

The Company had equipment leased to others of $ 30.7 million, net of accumulated depreciation of $ 18.1 million at December 31, 2024.

The Company recorded lease income related to lease payments for operating leases in other income on our consolidated statements of income of $ 10.0 million and $ 16.1 million for the year ended December 31, 2025 and 2024, respectively.

Depreciation expense related to leased equipment was $ 7.8 million and $ 12.6 million for the year ended December 31, 2025 and 2024, respectively.

NOTE 6 – LOAN SERVICING RIGHTS

5 unchanged sentences

Residential — — 197,161 338

Commercial FHA held for sale 540,842 3,409 — —

Residential held for sale 164,671 252 — —

Total $ 1,964,005 $ 15,593 $ 2,144,156 $ 17,842

4 unchanged sentences

Significant increases or decreases in any one of these assumptions would result in a significantly lower or higher fair value measurement.

The weighted average prepayment rate and weighted average discount rate was 10.00 % and 8.18 % at December 31, 2024.

The weighted average prepayment rate and weighted average discount rate was 8.50 % and 8.36 % , respectively, at December 31, 2025.

Changes in our commercial FHA loan servicing rights for the years ended December 31, 2025, 2024 and 2023 are summarized as follows:

5 unchanged sentences

Amortization ( 2,040 ) ( 2,220 ) ( 1,200 )

Refinancing fee received from third party — — ( 221 )

Permanent impairment — — ( 1,263 )

Balance, end of period $ 11,604 $ 17,053 $ 19,273

1 unchanged sentence

At end of period 19,597 25,916 32,469

Table of C ontents

NOTE 7 – GOODWILL AND INTANGIBLE ASSETS

The carrying amount of goodwill by segment at December 31, 2024 and December 31, 2023 is summarized as follows:

(dollars in thousands) 2024 2023

Banking $ 157,158 $ 157,158

A summary of the changes in goodwill during the years ended December 31, 2025 and December 31, 2024, by reportable segment, is as follows:

(dollars in thousands) Banking

Wealth Management

Total goodwill $ 161,904 $ 161,904

Balance at December 31, 2023 $ 157,158 $ 4,746 $ 161,904

Accumulated impairment losses — — —

Balance at December 31, 2024 157,158 4,746 161,904

Accumulated impairment losses 153,977 — 153,977

Balance at December 31, 2025 $ 3,181 $ 4,746 $ 7,927

Annually, the Company performs an impairment test of goodwill as of August 31.

See Note 1 for additional information.

Based on the results of our annual impairment tests, we concluded that no goodwill impairment existed as of December 31, 2025 and December 31, 2024.

In the first quarter of 2025, we determined that a triggering event had occurred at in the Company's Banking reporting unit as a result of deteriorated credit quality coupled with trends in the Company's stock price.

The Company performed a quantitative impairment test on its Banking reporting unit as of March 31, 2025, and engaged a third-party service provider to assist with the determination of the fair value.

The resulting calculation indicated that the carrying amount exceeded the fair value of the Company's Banking reporting unit.

As a result of the assessment, the Company recognized a $ 154.0 million goodwill impairment charge in the first quarter of 2025.

The Company’s intangible assets, consisting of core deposit and customer relationship intangibles, as of December 31, 2025 and December 31, 2024 are summarized as follows:

14 unchanged sentences

Total $ 8,876

Table of C ontents

NOTE 8 – DERIVATIVE INSTRUMENTS

5 unchanged sentences

We use a mix of both derivatives that qualify for hedge accounting treatment and economic hedges that do not qualify for hedge accounting treatment.

Derivatives qualifying for hedge accounting treatment can include receive-fixed swaps designated as fair value hedges of specific fixed-rate unsecured debt obligations, receive-fixed swaps designated as fair value hedges of specific fixed-rate FHLB advances, and pay-fixed swaps designated as fair value hedges of securities within our available-for-sale portfolio.

Other derivatives qualifying for hedge accounting consist of interest rate floor contracts designated as cash flow hedges of the expected future cash flows in the form of interest receipts on a portion of our commercial and commercial real estate loans.

Both the fair value hedges and cash flow hedges were determined to be effective during all periods presented and the Company expects the hedges to remain effective during the remaining terms of the swaps.

We have the ability to execute economic hedges, which could consist of interest rate swaps, interest rate caps, forwards, and options to mitigate interest rate risk.

Derivatives qualifying for hedge accounting include pay-fixed swaps designated as fair value hedges of securities within our available-for-sale portfolio.

Derivatives designated as fair value hedges include pay-fixed swaps of certain securities within our available-for-sale portfolio, interest rate floor contracts of the expected future cash flows in the form of interest receipts on a portion of our commercial and commercial real estate loans, and receive-fixed swaps of specific fixed-rate unsecured debt obligations and fixed-rate FHLB advances.

Both the cash flow and fair value hedges were determined to be effective during all periods presented and the Company expects the hedges to remain effective during the remaining terms of the swaps.

We also enter into interest rate lock commitments and forward commitments that are executed as part of our mortgage business that do not meet the accounting definition of hedges, as well as interest rate swap contracts sold to commercial customers who wish to modify their interest rate sensitivity.

7 unchanged sentences

In our view, derivative notional is not an accurate measure of our derivative exposure when viewed in isolation from other factors, such as market rate fluctuations and counterparty credit risk.

December 31, 2024 December 31, 2023 (restated)

Table of C ontents

December 31, 2025 December 31, 2024

Fair Value Fair Value

2 unchanged sentences

Interest rate contracts

Fixed-rate mortgage-backed securities $ 2,653 $ 654 $ 167,363 $ — $ 1,324 $ 150,000

Fair value hedges

Investment securities available for sale $ 608 $ 2,901 $ 228,157 $ 2,653 $ 654 $ 167,363

Cash flow hedges

Investment securities available for sale 754 — 90,000 — — —

Pools of commercial and commercial real estate loans 1,528 1,180 300,000 — 4,502 200,000

9 unchanged sentences

Carrying amount of the hedged items Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items

(dollars in thousands) December 31, 2024 December 31, 2023 (restated)

December 31, 2024 December 31, 2023 (restated)

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

Investment securities available for sale $ 352,968 $ 286,982 $ ( 2,293 ) $ 3,323

6 unchanged sentences

Interest rate contracts

Fixed-rate mortgage-backed securities Interest income on investment securities available for sale $ 9,341 $ — Interest income on investment securities available for sale $ ( 9,484 ) $ —

Investment securities available for sale Interest income on investment securities available for sale $ ( 4,292 ) $ 3,362 Interest income on investment securities available for sale $ 4,444 $ ( 3,257 )

Table of C ontents

The following table summarizes the effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income.

5 unchanged sentences

Pools of commercial and commercial real estate loans $ 3,202 $ ( 3,705 ) $ ( 2,242 ) Interest income on loans $ ( 393 ) $ ( 5,857 ) $ ( 5,588 )

Other noninterest income — — 17,531

Investment securities available for sale ( 52 ) — Interest income on investment securities ( 192 ) —

FHLB advances, brokered CDs and other borrowings ( 1,420 ) 2,013 ( 210 ) Interest expense ( 108 ) 966 324

9 unchanged sentences

Credit Enhancement Derivatives

The Company has recognized derivative instruments associated with agreements entered into with third-party providers that support loan programs for which the Company originates and holds loans on its balance sheet.

These third-party agreements include contractual credit enhancements that transfer certain risks and benefits to or from the Company, resulting in recognition of a derivative.

The value of these derivatives consists primarily of two components:

Through December 30, 2025 and in 2024, the Company recognized derivative instruments associated with agreements entered into with third-party providers that support loan programs for which the Company originates and holds loans on its balance sheet.

These third-party agreements included contractual credit enhancements that transfer certain risks and benefits to or from the Company, resulting in recognition of a derivative.

Effective December 31, 2025, the Company revised its contract pertaining to its sole third-party lending arrangement program, and as a result of those contractual changes, the credit enhancements no longer met the definition of a derivative under ASC 815.

The value of the derivatives as of December 31, 2024 consisted primarily of two components:

(1) the credit loss reimbursement value, representing the present value of expected future payments from the third party for loan losses, and (2) the interest yield guarantee value, representing the present value of cash flows the Company expects to receive to ensure a minimum yield (e.g., Prime + 2%) on the portfolio when actual borrower payments fall short.

Under certain programs, additional features such as reimbursement for waived promotional interest are also included in the derivative valuation.

The fair value of these derivative instruments was $ 16.8 million and $ 15.4 million as of December 31, 2024 and 2023, respectively.

The Company utilizes a third-party valuation specialist to estimate fair value using the income approach, based on the present value of expected future cash flows.

The fair value of these derivative instruments was $ 16.8 million as of December 31, 2024.

The Company utilized a third-party valuation specialist to estimate fair value using the income approach, based on the present value of expected future cash flows.

The valuation relies on Level 3 unobservable inputs, including assumptions regarding credit loss rates, borrower prepayments, program yield performance, and discount rates.

Changes in fair value are recorded in noninterest income, and the Company does not apply hedge accounting to these instruments

The following table summarizes the most significant inputs and assumptions in determining the value of the credit enhancement derivatives as well as the resulting fair value as of December 31, 2024 and December 31, 2023:

December 31, 2024 December 31, 2023

MacTools commercial portfolio Greensky consumer portfolio LendingPoint consumer portfolio MacTools commercial portfolio

Changes in fair value were recorded in noninterest income, and the Company does not apply hedge accounting to these instruments.

Table of C ontents

The following table summarizes the most significant inputs and assumptions in determining the value of the credit enhancement derivatives as well as the resulting fair value as of December 31, 2024:

December 31, 2024

MacTools commercial portfolio

Weighted average interest rate 9.50 %

5 unchanged sentences

Fair value of derivative 10.61 %

The LendingPoint consumer portfolio was sold during the fourth quarter of 2024.

The GreenSky consumer portfolio was written down to net realizable value and classified as held for sale as of December 31, 2024.

NOTE 9 – DEPOSITS

14 unchanged sentences

Total $ 792,069

NOTE 10 – FHLB ADVANCES AND OTHER BORROWINGS

The following table summarizes our FHLB advances and other borrowings as of December 31, 2024 and December 31, 2023:

NOTE 10 – FHLB ADVANCES

The following table summarizes our FHLB advances as of December 31, 2025 and December 31, 2024:

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

3 unchanged sentences

125,000 125,000

FHLB advances – Short term fixed rate at rates of 5.45 % at December 31, 2023

Total FHLB advances and other borrowings $ 258,000 $ 476,000

Total FHLB advances

$ 293,000 $ 258,000

Table of C ontents

The Company’s advances from the FHLB are collateralized by a blanket collateral agreement of qualifying mortgage and home equity line of credit loans and certain commercial real estate loans totaling approximately $ 2.87 billion and $ 3.23 billion at December 31, 2025 and December 31, 2024, respectively.

Based on this collateral, the Company was eligible to borrow $ 1.11 billion from the FHLB at December 31, 2025.

Contractual payments over the next five years for FHLB advances and other borrowings were as follows:

Contractual payments over the next five years for FHLB advances were as follows:

(dollars in thousands) Amount

26 unchanged sentences

All of the subordinated debentures above may be included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

On September 30, 2025, the Company redeemed all of our outstanding Fixed-to-Floating Rate Subordinated Notes due September 30, 2029, with an interest rate of 7.91 %, which had an aggregate principal amount of $ 50.8 million.

The aggregate redemption price was 100 % of the aggregate principal amount of the subordinated notes, plus accrued and unpaid interest.

The interest rate on the subordinated notes was 7.91 % (resulting in approximately $ 4 million of annual interest expense).

The Company's $ 27.3 million aggregate principal amount of Fixed-to-Floating Rate Subordinated Notes due September 30, 2034, with an interest rate of 5.50 % as of September 30, 2025, remain outstanding.

Table of C ontents

NOTE 12 – TRUST PREFERRED DEBENTURES

27 unchanged sentences

All of the trust preferred debentures above may be included in Tier 1 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

Table of C ontents

NOTE 13 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

19 unchanged sentences

Balance, end of period $ ( 71,508 ) $ ( 5,245 ) $ ( 76,753 )

(1) See table below for details about reclassifications to income .

(1) S ee table below for details related to reclassifications to income.

The following table summarizes the significant amounts reclassified out of each component of AOCI:

3 unchanged sentences

Unrealized gains and losses on investment securities available for sale $ 152 $ 142 $ — Interest income (expense)

— — 221 Recapture of credit losses

( 230 ) ( 9,372 ) ( 230 ) Loss on sales of investment securities, net

14 ( 230 ) ( 9,372 ) Gain (loss) on sales of investment securities, net

( 44 ) 24 2,481 Income tax (expense) benefit

$ ( 64 ) $ ( 6,891 ) $ ( 6 ) Net income

$ 122 $ ( 64 ) $ ( 6,891 ) Net income (loss)

Gains and losses on cash flow hedges $ ( 693 ) $ ( 4,891 ) $ ( 5,264 ) Interest income (expense)

— — 17,531 Other noninterest income

182 1,309 1,471 Income tax (expense) benefit

$ ( 3,582 ) $ ( 3,793 ) $ 12,879 Net income

$ ( 511 ) $ ( 3,582 ) $ ( 3,793 ) Net income (loss)

Table of C ontents

NOTE 14 – INCOME TAXES

The Company operates solely within the United States, and as a result all pre-tax book income is derived from domestic operations.

The components of income taxes for the years ended December 31, 2025, 2024 and 2023 were as follows:

7 unchanged sentences

(dollars in thousands) 2025 2024 2023

Expected income taxes $ 9,849 $ 18,472 $ 27,591

Less income tax effect of:

US federal statutory income tax rate $ ( 24,122 ) 21.00 % $ 9,849 21.00 % $ 18,472 21.00 %

Domestic state and local taxes, net of federal effect (1)

3,431 ( 2.99 ) 1,196 2.55 5,682 6.46

Domestic federal

Tax credits, net of amortization ( 80 ) 0.07 409 0.87 ( 155 ) ( 0.18 )

Nontaxable and nondeductible items

Tax-exempt income, net (2)

State tax, net of federal benefit 1,192 5,666 6,372

Equity-based compensation benefit ( 120 ) ( 21 ) ( 186 )

( 2,418 ) 2.10 ( 2,116 ) ( 4.51 ) ( 1,762 ) ( 2.00 )

Surrender of company-owned life insurance policies — — — — 3,756 4.27

Nondeductible goodwill impairment 32,335 ( 28.15 ) — — — —

Other nontaxable and nondeductible items 124 ( 0.11 ) 198 0.42 201 0.23

Valuation allowance 103 ( 0.09 ) 40 0.09 53 0.06

Other 40 ( 0.03 ) ( 720 ) ( 1.54 ) 560 0.64

Actual income tax expense $ 8,856 $ 26,807 $ 31,149

Actual income tax expense and effective tax rate $ 9,413 ( 8.20 ) % $ 8,856 18.88 % $ 26,807 30.48 %

(1) During the years ended December 31, 2025, 2024 and 2023, state taxes in Illinois comprised greater than 50% of the tax effect in this category.

(2) During the years ended December 31, 2025 2024 and 2023, tax-exempt income, net, primarily included tax-exempt interest income on municipal securities and increases in the cash surrender value of bank-owned life insurance.

During the year ended December 31, 2023, tax-exempt income, net, also included underwriting income earned by the Company's captive insurance subsidiary that has elected to be taxed under Internal Revenue Code Section 831(b).

Table of C ontents

Deferred tax assets, net in the accompanying consolidated balance sheets at December 31, 2025 and 2024 include the following amounts of deferred tax assets and liabilities:

1 unchanged sentence

Allowance for credit losses on loans $ 18,170 $ 29,191

Deferred loan costs, net of fees 1,419 —

Deferred compensation 1,986 2,050

Loans 877 1,069

Tax credits 591 8,796

17 unchanged sentences

Deferred tax assets, net $ 39,315 $ 48,019

The components of income taxes paid for the years ended December 31, 2025, 2024 and 2023 were as follows:

(dollars in thousands) 2025 2024 2023

US federal $ 812 $ 15,000 $ 15,000

US state and local

California 105 * *

Florida 120 * *

Illinois — 4,500 5,600

Indiana 125 * *

Texas 152 * *

Other 266 3,043 4,520

Total income taxes paid $ 1,580 $ 22,543 $ 25,120

*Jurisdiction below the 5% disclosure threshold for the period presented.

At December 31, 2025 and 2024, the accumulation of the prior year’s earnings representing tax bad debt deductions was approximately $ 3.1 million for both years.

1 unchanged sentence

It is not expected that such tax-restricted retained earnings will be used in a manner that would create federal income tax liabilities.

The Company had $ 29.7 million of federal net operating loss carryforwards expiring 2025 through 2035, $ 13.3 million of Illinois post-apportioned net operating loss carryforwards expiring 2029 and 2030, $ 29.7 million of Missouri pre-apportioned net operating loss carryforwards expiring 2025 through 2035, and $ 5.2 million of other state net operating loss carryforwards expiring 2029 through 2044, at December 31, 2024.

Table of C ontents

The Company had $ 25.7 million of federal net operating loss carryforwards expiring 2026 through 2035, $ 12.8 million of Illinois post-apportioned net operating loss carryforwards expiring 2030 through 2031 and $ 25.7 million of Missouri pre-apportioned net operating loss carryforwards expiring 2026 through 2035 at December 31, 2025.

The utilization of the federal and Missouri net operating losses are subject to the limitations of Internal Revenue Code Section 382.

The utilization of the Illinois net operating loss is limited to $100,000 per year for years 2021 through 2023 and $500,000 in 2024, and years under which net operating losses are suspended do not count toward the number of carryforward years.

The utilization of the Illinois net operating loss is limited to $100,000 per year for years 2021 through 2023 and $500,000 per year for years 2024 and 2025, and years under which net operating losses are suspended do not count toward the number of carryforward years.

The Company has state tax credit carryforwards of $ 0.7 million with a five year carryforward period, expiring between 2026 and 2030.

25 unchanged sentences

The change in value associated with the gains and losses, which are due to the employee upon distribution, is recognized in salaries and employee benefits.

Table of C ontents

The following table summarizes the activity in the asset and liability balances of the executive officer nonqualified deferred compensation arrangement for the years ended December 31, 2025, 2024, and 2023:

26 unchanged sentences

On June 30, 2023, we terminated the plan and notified the IRS, seeking a final determination letter.

The final determination letter was received in January 2025 and we expect to begin distributing assets to plan participants in early 2025.

The following table details the components of the net periodic benefit cost for the years ended December 31, 2024 and 2023:

Table of C ontents

The final determination letter was received in January 2025, and we distributed assets to plan participants totaling $ 0.5 million in 2025.

There was no net periodic benefit cost for the year ended December 31, 2025.

The following table details the components of the net periodic benefit cost for the year ended December 31, 2024:

(dollars in thousands) 2024

4 unchanged sentences

Net periodic benefit cost $ 161

Assumptions used to determine net periodic benefit cost:

Assumptions used to determine net periodic benefit cost in 2024:

Discount rate 4.85 %

Expected long-term return on plan assets 4.85 %

Rate of compensation increase N/A N/A

Rate of compensation increase N/A

Previously, costs for administration, shortfalls in funds to maintain the frozen level of benefit coverage and differences of actuarial assumptions related to the frozen benefits were expensed as incurred.

The following table provides a comparison of obligations to plan assets:

(dollars in thousands) December 31, 2024 December 31, 2023

The following table provides a comparison of obligations to plan assets in 2024:

(dollars in thousands) December 31, 2024

Projected benefit obligation $ 12,482

1 unchanged sentence

Fair value of plan assets 11,791

The minimum required contribution for 2024 is expected to be zero.

NOTE 16 – SHARE-BASED COMPENSATION

7 unchanged sentences

Compensation expense is recognized on a straight-line basis over the vesting period of the award based on the fair value of the stock at the date of grant.

Table of C ontents

A summary of the activity for restricted stock awards and restricted stock unit awards for the year follows:

17 unchanged sentences

Treasury yield curve in effect at the time of the grant.

The Company did not grant stock options in the years ended December 31, 2024 and 2023.

The fair value of options granted during the year ended December 31, 2022 was determined using the following weighted-average assumptions as of the grant date.

Dividend yield 4.24 %

Expected volatility 23.81 %

Risk free interest rate 4.23 %

Expected life 6.25 years

The weighted average fair value of stock options granted during the year ended December 31, 2022 was $ 4.92 .

The Company did not grant stock options in the years ended 2025, 2024, or 2023.

The summary of our stock option activity for the year ended December 31, 2025 is as follows:

3 unchanged sentences

Options granted — N/A

Options exercised ( 60,961 ) 21.51

Options exercised — N/A

Options forfeited ( 28,201 ) 28.43

3 unchanged sentences

Options vested and expected to vest 175,863 28.46 5.39 years

The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2024 was $ 0.1 million.

As of December 31, 2025, the Company had 175,863 stock options outstanding, of which 143,628 were exercisable, with a weighted-average exercise price of $ 28.47 .

As of December 31, 2025, there was $ 0.1 million of total unrecognized compensation cost related to nonvested stock options granted under our 2019 Incentive Plan.

1 unchanged sentence

The following table includes information related to stock option exercises for the years ended December 31, 2025, 2024, and 2023.

Table of C ontents

(dollars in thousands) 2025 2024 2023

9 unchanged sentences

Neither the holders of the Series A preferred stock nor holders of the Depositary Shares will have the right to require the redemption or repurchase of the Series A preferred stock.

Table of C ontents

NOTE 18 – EARNINGS PER COMMON SHARE

5 unchanged sentences

(dollars in thousands, except per share data) 2025 2024 2023

Net income $ 38,044 $ 61,155 $ 100,237

Net income (loss) $ ( 124,281 ) $ 38,044 $ 61,155

Preferred dividends declared ( 8,913 ) ( 8,913 ) ( 8,913 )

Net income available to common shareholders 29,131 52,242 97,068

Net income (loss) available to common shareholders ( 133,194 ) 29,131 52,242

Common shareholder dividends ( 27,147 ) ( 26,622 ) ( 26,234 )

1 unchanged sentence

Undistributed earnings to unvested restricted stock awards — ( 33 ) ( 311 )

Undistributed earnings to common shareholders $ 2,026 $ 25,358 $ 70,322

Undistributed earnings (loss) to common shareholders $ ( 160,873 ) $ 2,026 $ 25,358

Distributed earnings to common shareholders $ 27,147 $ 26,622 $ 26,234

Undistributed earnings to common shareholders 2,026 25,358 70,322

Total common shareholders earnings, basic $ 28,648 $ 51,592 $ 95,950

Undistributed earnings (loss) to common shareholders ( 160,873 ) 2,026 25,358

Total common shareholders earnings (loss), basic $ ( 133,726 ) $ 28,648 $ 51,592

Distributed earnings to common shareholders $ 27,147 $ 26,622 $ 26,234

Undistributed earnings to common shareholders 2,026 25,358 70,322

Total common shareholders earnings 28,648 51,592 95,950

Undistributed earnings (loss) to common shareholders ( 160,873 ) 2,026 25,358

Total common shareholders earnings (loss) ( 133,726 ) 28,648 51,592

Undistributed earnings reallocated from unvested restricted stock awards — — —

Total common shareholders earnings, diluted $ 28,648 $ 51,592 $ 95,952

Total common shareholders earnings (loss), diluted $ ( 133,726 ) $ 28,648 $ 51,592

Weighted average common shares outstanding, basic 21,833,098 21,731,689 22,115,869

1 unchanged sentence

Weighted average common shares outstanding, diluted 21,833,098 21,737,958 22,124,402

Basic earnings per common share $ 1.32 $ 2.33 $ 4.29

Diluted earnings per common share 1.32 2.33 4.28

Basic earnings (loss) per common share $ ( 6.12 ) $ 1.32 $ 2.33

Diluted earnings (loss) per common share $ ( 6.12 ) $ 1.32 $ 2.33

Antidilutive stock options (1)

9 unchanged sentences

As a practical matter, the Bank restricts dividends to a lesser amount because of the need to maintain an adequate capital structure.

Table of C ontents

At December 31, 2025, the Company and the Bank exceeded the regulatory minimums and the Bank met the regulatory definition of "well-capitalized" based on the most recent regulatory notification.

24 unchanged sentences

Midland States Bank 654,494 9.63 271,806 4.00 339,758 5.00

December 31, 2023 (restated)

December 31, 2024

Total risk-based capital ratio

15 unchanged sentences

(1) Total risk-based capital ratio, Tier 1 risk-based capital ratio and Common equity tier 1 risk-based capital ratio include the capital conservation buffer of 2.5%.

In December 2018, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the FDIC approved a final rule to address changes to credit loss accounting under GAAP, including banking organizations’ implementation of CECL.

The final rule provides banking organizations the option to phase in over a three-year period the day-one adverse effects on regulatory capital that may result from the adoption of the new accounting standard.

In March 2020, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the FDIC published an interim final rule to delay the estimated impact on regulatory capital stemming from the implementation of CECL.

The interim final rule maintains the three-year transition option in the previous rule and provides banks the option to delay for two years an estimate of CECL’s effect on regulatory capital, relative to the incurred loss methodology’s effect on regulatory capital, followed by a three-year transition period (five-year transition option).

The Company adopted the capital transition relief over the permissible five-year period.

NOTE 20 – FAIR VALUE OF FINANCIAL INSTRUMENTS

3 unchanged sentences

Significant other observable inputs other than Level 1, including quoted prices for similar assets and liabilities in active markets, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data.

Table of C ontents

Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

14 unchanged sentences

Nonperforming loans.

All of our nonaccrual loans are considered nonperforming and are reviewed individually for the amount of impairment, if any.

Nonaccrual loans are considered nonperforming and are reviewed individually for the amount of impairment, if any.

We measure collateral dependent nonperforming loans based on the estimated fair value of such collateral.

4 unchanged sentences

Consumer loans held for sale.

The fair value of consumer loans held for sale was derived from a purchase agreement with a third party (Level 3).

The fair value of consumer loans held for sale are calculated using discounted cash flows or other market indicators (Level 3).

Other Real Estate Owned.

9 unchanged sentences

Assets and liabilities measured and recorded at fair value, including financial assets for which the Company has elected the fair value option, on a recurring and nonrecurring basis at December 31, 2025 and December 31, 2024, are summarized below:

Table of C ontents

December 31, 2025

10 unchanged sentences

Mortgage-backed securities - non-agency 97,089 — 97,089 —

Asset-backed student loans 34,215 — 34,215 —

State and municipal securities 73,458 — 73,458 —

Collateralized loan obligations 46,854 — 46,854 —

Corporate securities 57,812 — 57,812 —

Other securities 90,423 — 90,423 —

Equity securities 4,235 4,235 — —

Residential loans held for sale 7,781 — 7,781 —

Credit enhancement asset 12,557 — — 12,557

Derivative assets 3,451 — 3,451 —

4 unchanged sentences

Nonperforming loans:

Consumer loans held for sale 336,719 — — 336,719

Commercial $ 8,136 $ — $ — $ 8,136

Commercial real estate 40,324 — — 40,324

Residential real estate 592 — — 592

Other real estate owned 606 — — 606

Credit enhancement asset 16,804 — — 16,804

Table of C ontents

December 31, 2024

6 unchanged sentences

Investment securities available for sale:

Treasury securities $ 1,097 $ 1,097 $ — $ —

government sponsored entities and U.S.

2 unchanged sentences

Mortgage-backed securities - non-agency 101,012 — 101,012 —

Asset-backed student loans 49,973 — 49,973 —

State and municipal securities 69,061 — 69,061 —

Collateralized loan obligations 40,450 — 40,450 —

Corporate securities 79,881 — 79,881 —

Other securities 27,565 — 27,565 —

Equity securities 4,792 4,792 — —

Residential loans held for sale

8,228 — 8,228 —

Derivative assets 3,837 — 3,837 —

4 unchanged sentences

Nonperforming loans:

Commercial $ 8,628 $ — $ — $ 8,628

Commercial real estate 102,548 — — 102,548

Construction and land development 8,438 — — 8,438

Residential real estate 302 — — 302

Lease financing 306 — — 306

Consumer loans held for sale 336,719 — — 336,719

Other real estate owned 4,941 — — 4,941

3 unchanged sentences

(dollars in thousands) 2025 2024 2023

Commercial mortgage servicing rights $ — $ — $ 1,263

Loan servicing rights held for sale — — 3,250

Nonperforming loans $ 21,619 $ 21,317 $ 19,421

1 unchanged sentence

Total losses on assets measured on a nonrecurring basis $ 21,619 $ 26,183 $ 19,421

Table of C ontents

The following tables present quantitative information about significant unobservable inputs used in fair value measurements of Level 3 assets measured on a nonrecurring basis at December 31, 2025 and December 31, 2024:

1 unchanged sentence

technique Unobservable

input / assumptions Range (weighted average) (1)

input / assumptions Discount Rate Range (weighted average) (1)

December 31, 2025

Nonperforming loans $ 120,222 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 0.00 % - 34.15 % ( 0.67 %)

Other real estate loans 4,941 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 0.00 % - 43.54 % ( 10.68 %)

Nonperforming loans:

Commercial $ 8,136 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 0.00 %- 0.00 % ( 0.00 %)

Commercial real estate 40,324 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 0.00 % - 100.00 % ( 4.79 %)

Residential real estate 592 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 0.00 %- 0.00 % ( 0.00 %)

Other real estate owned 606 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 54.10 % - 70.67 % ( 58.17 %)

December 31, 2024

Nonperforming loans:

Commercial $ 8,628 Fair value of collateral Discount to reflect current market conditions and ultimate collectability 0.00 % - 0.00 % ( 0.00 %)

Commercial real estate 102,548 Fair value of collateral Discount to reflect current market conditions and ultimate collectability 0.00 % - 9.20 % ( 0.62 %)

Construction and land development 8,438 Fair value of collateral Discount to reflect current market conditions and ultimate collectability 0.00 % - 0.00 % ( 0.00 %)

Residential real estate 302 Fair value of collateral Discount to reflect current market conditions and ultimate collectability 0.00 % - 0.00 %( 0.00 %)

Lease financing 306 Fair value of collateral Discount to reflect current market conditions and ultimate collectability 34.15 % - 34.15 % ( 34.15 %)

Other real estate owned 4,941 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 0.00 % - 43.54 % ( 10.68 %.)

Consumer loans held for sale (2)

336,719 Discounted cash flow Discount rate 8.98 %

Credit enhancement asset 16,804 Income approach Discount rate 10.61 %

December 31, 2023 (restated)

Nonperforming loans $ 4,633 Collateral based measurements Discount to reflect current market conditions and ultimate collectability 24.38 % - 100.00 % ( 27.46 %)

Other real estate loans 9,112 Fair value of collateral Discount for type of property, age of appraisal, and/or current status

Credit enhancement asset 15,389 Income approach Discount rate ( 0.34 )% - 10.31 % ( 1.80 %)

Credit enhancement asset

16,804 Income approach

Discount rate

(1) Unobservable inputs were weighted by the relative fair value of the instruments.

12 unchanged sentences

Residential loans held for sale $ 7,781 $ 390 $ 7,391 $ 8,228 $ 282 $ 7,946

The following table presents the amount of gains (losses) from fair value changes included in income before income taxes for financial assets carried at fair value for the years ended December 31, 2024, 2023 and 2022:

Table of C ontents

The following table presents the amount of gains from fair value changes included in income before income taxes for financial assets carried at fair value for the years ended December 31, 2025, 2024 and 2023:

Years Ended December 31,

10 unchanged sentences

Federal funds sold 532 532 532 — —

Loans 5,167,574 4,979,885 — — 4,979,885

4,282,785 4,229,483 — — 4,229,483

Accrued interest receivable 23,824 23,824 — 23,824 —

12 unchanged sentences

Federal funds sold 711 711 711 — —

Loans 6,103,592 6,129,244 — — 6,129,244

5,056,370 4,872,824 — — 4,872,824

Accrued interest receivable 25,329 25,329 — 25,329 —

6 unchanged sentences

however, an actual exit price may differ.

Table of C ontents

NOTE 21 – COMMITMENTS, CONTINGENCIES AND CREDIT RISK

In the normal course of business, there are outstanding various contingent liabilities such as claims and legal actions, which are not reflected in the consolidated financial statements.

During the second quarter of 2024, the Company recorded an accrual related to various legal actions.

No other material losses are anticipated as a result of these actions or claims.

No material losses are anticipated as a result of these actions or claims.

We are a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of our customers.

These financial instruments include commitments to extend credit and standby letters of credit.

Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance

Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the balance sheet.

The contract amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments.

Our exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments.

The Bank used the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

The Company used the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.

The commitments are principally tied to variable rates.

11 unchanged sentences

The Banking segment provides a wide range of financial products and services to consumers and businesses, including commercial, commercial real estate, mortgage and other consumer loan products;

commercial equipment financing;

mortgage loan sales and servicing;

5 unchanged sentences

The Corporate segment includes the holding company financing and investment activities, administrative expenses, as well as the elimination of intercompany transactions.

The Corporate segment also included our captive insurance business unit for the year ended December 31, 2023.

This business was dissolved as of December 31, 2023.

Reported segments and the financial information of the reported segments are not necessarily comparable with similar information reported by other financial institutions.

1 unchanged sentence

Changes in management structure or allocation methodologies and procedures may result in future changes to previously reported segment financial data.

The accounting policies of the segments are substantially the same as those described in the “Summary of Significant Accounting Policies” in Note 1 of the Company’s 2023 Annual Report on Form 10-K.

See Note 1 for additional information regarding the accounting policies of the Company's segments.

Transactions between segments consist primarily of borrowed funds and servicing fees.

Noninterest income and expense directly attributable to a segment are assigned to it with various shared service costs such as human resources, accounting, finance, risk management and information technology expense assigned to the Banking segment.

Table of C ontents

Selected business segment financial information for the years ended December 31, 2025, 2024 and 2023 were as follows:

13 unchanged sentences

Amortization of intangible assets 2,199 1,025 — 3,224

Impairment on goodwill 153,977 — — 153,977

Other noninterest expense (1)

2 unchanged sentences

Income (loss) before income taxes (benefit) ( 111,897 ) 6,863 ( 9,834 ) ( 114,868 )

Income taxes (benefit) 10,037 3,257 ( 4,438 ) 8,856

Income tax expense 7,008 2,181 224 9,413

Net income (loss) $ ( 118,905 ) $ 4,682 $ ( 10,058 ) $ ( 124,281 )

Total assets $ 6,525,874 $ 36,548 $ ( 49,002 ) $ 6,513,420

Year Ended December 31, 2023 (restated)

(dollars in thousands) Banking Wealth

Management Corporate Total

Year Ended December 31, 2024

Interest income $ 426,113 $ — $ 15 $ 426,128

13 unchanged sentences

Income (loss) before income taxes (benefit) 46,543 6,756 ( 6,399 ) 46,900

Income taxes (benefit) 27,348 2,309 ( 2,850 ) 26,807

Income tax expense (benefit) 10,037 3,257 ( 4,438 ) 8,856

Net income (loss) $ 36,506 $ 3,499 $ ( 1,961 ) $ 38,044

Total assets $ 7,486,121 $ 32,303 $ ( 11,615 ) $ 7,506,809

Table of C ontents

(dollars in thousands) Banking Wealth

Management Corporate Total

Year Ended December 31, 2022 (restated)

Year Ended December 31, 2023

Interest income $ 416,997 $ — $ 103 $ 417,100

13 unchanged sentences

Income (loss) before income taxes (benefit) 89,477 5,313 ( 6,828 ) 87,962

Income taxes (benefit) 35,391 2,136 ( 6,378 ) 31,149

Income tax expense (benefit) 27,348 2,309 ( 2,850 ) 26,807

Net income (loss) $ 62,129 $ 3,004 $ ( 3,978 ) $ 61,155

3 unchanged sentences

Other noninterest expense for Corporate includes data processing, professional services, marketing and other miscellaneous expenses.

Table of C ontents

NOTE 23 – REVENUE FROM CONTRACTS WITH CUSTOMERS

38 unchanged sentences

Payment for service charges on deposit accounts is typically received immediately or in the following month through a direct charge to a customer’s account.

Table of C ontents

Interchange Revenue

28 unchanged sentences

Total liabilities and shareholders’ equity $ 645,496 $ 840,981

Table of C ontents

Condensed Statements of Income

1 unchanged sentence

Years Ended December 31,

2025 2024 2023

Dividends from subsidiaries $ 98,000 $ 54,000 $ 54,000

(Loss) earnings of consolidated subsidiaries, net of dividends ( 10,347 ) 13,981 91,233

Earnings (loss) of consolidated subsidiaries, net of dividends ( 213,001 ) ( 10,347 ) 13,981

Interest income on note due from bank subsidiary 1,007 1,512 1,578

Other (loss) income ( 11 ) 323 4

Total income 45,154 69,882 106,012

Other income (loss) 245 ( 11 ) 323

Total income (loss) ( 113,749 ) 45,154 69,882

Interest expense 9,364 10,651 10,555

1 unchanged sentence

Total expense 10,308 11,548 11,599

Income before income tax benefit 33,606 58,283 93,853

Income tax benefit 4,438 2,872 6,384

Net income $ 38,044 $ 61,155 $ 100,237

Income (loss) before income taxes ( 124,057 ) 33,606 58,283

Income tax benefit (expense)

( 224 ) 4,438 2,872

Net income (loss) $ ( 124,281 ) $ 38,044 $ 61,155

Condensed Statements of Cash Flows

1 unchanged sentence

Years Ended December 31,

2025 2024 2023

Cash flows from operating activities:

Net income $ 38,044 $ 61,155 $ 100,237

Net income (loss) $ ( 124,281 ) $ 38,044 $ 61,155

Adjustments to reconcile net income to net cash provided by operating activities:

5 unchanged sentences

Cash flows from investing activities:

Capital injection to bank subsidiary — — ( 50,000 )

Change in note receivable due from bank subsidiary 2,100 5,150 10,000

Net cash received in dissolution of subsidiary — — 2,674

Net cash provided by (used in) investing activities 5,150 12,674 ( 90,000 )

Net cash provided by investing activities 2,100 5,150 12,674

Cash flows from financing activities:

Payments on other borrowings — — ( 171 )

Payments made on subordinated debt ( 15,763 ) ( 5,845 ) ( 40,000 )

Payments and subordinated debt redemption ( 50,750 ) ( 15,763 ) ( 5,845 )

Common stock repurchased ( 9,657 ) ( 5,475 ) ( 17,898 )

1 unchanged sentence

Cash dividends paid on preferred stock ( 8,913 ) ( 8,913 ) ( 8,913 )

Proceeds from issuance of preferred stock — — 110,548

Proceeds from issuance of common stock under employee benefit plans 643 1,326 1,670

Net cash (used in) provided by financing activities ( 55,897 ) ( 57,559 ) 42,364

Net cash used in financing activities ( 96,356 ) ( 55,897 ) ( 57,559 )

Net (decrease) increase in cash ( 556 ) ( 2,597 ) 5,042

3 unchanged sentences

The note has a rolling 13 month maturity, and the interest rate is a variable rate equal to the one year treasury rate.

NOTE 25 - RESTATEMENT OF PRIOR PERIOD FINANCIAL STATEMENTS

The Company has restated herein the impacted line items to the Consolidated Balance Sheet as of December 31, 2023 and the Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Shareholders' Equity and Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022.

In addition, the Company has restated the impacted line items to its unaudited quarterly Consolidated Balance Sheets, Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Shareholders' Equity and Consolidated Statements of Cash Flows as of and for the three months ended March 31, 2024 and 2023, for the three and six months ended June 30, 2024 and 2023, and for the three and nine months ended September 30, 2024 and 2023.

Description of Misstatements

The errors relate to the Company’s accounting for loans originated pursuant to third-party loan origination programs.

Historically, the Company accounted for all borrower payments and credit enhancement payments under these programs on a single unit, or net

basis, with all such payments presented as interest income representing the Company’s effective yield on the portfolios.

The Company has determined that these payments should instead be accounted for on a separate unit of account, or gross basis, with loan yields and interest income recorded at the gross borrower loan rate, credit losses and associated provisions for credit losses recorded on a gross basis over the life of the loans, and with all credit enhancement payments recorded separately as a credit enhancement derivative.

Description of Restated Tables

The following tables present the amounts previously reported and a reconciliation of the restated amounts reported on the restated Consolidated Balance Sheets, the restated Consolidated Statements of Income and the restated Consolidated Statements of Cash Flows for the periods presented.

Restated Audited Financial Statements

Restated Consolidated Balance Sheet

December 31, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated

Loans $ 6,131,079 $ ( 27,487 ) $ 6,103,592

Allowance for credit losses on loans ( 68,502 ) ( 90,817 ) ( 159,319 )

Total loans, net 6,062,577 ( 118,304 ) 5,944,273

Accrued interest receivable 24,934 9,199 34,133

Credit enhancement asset — 15,389 15,389

Other assets 182,992 16,894 199,886

Total assets $ 7,866,868 $ ( 76,822 ) $ 7,790,046

Accrued interest payable and other liabilities $ 110,459 $ ( 82 ) $ 110,377

Total liabilities 7,075,015 ( 82 ) 7,074,933

Retained earnings 322,379 ( 76,740 ) 245,639

Total shareholders' equity 791,853 ( 76,740 ) 715,113

Total liabilities and shareholders' equity $ 7,866,868 $ ( 76,822 ) $ 7,790,046

Restated Consolidated Statements of Income

Years Ended December 31,

(dollars in thousands.

except per share data) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Interest income:

Loans including fees:

Taxable $ 365,529 $ 12,804 $ 378,333 $ 274,617 $ 10,960 $ 285,577

Total interest income 404,296 12,804 417,100 301,755 10,960 312,715

Net interest income 236,017 12,804 248,821 245,735 10,960 256,695

Provision for credit losses:

Provision for credit losses on loans 21,132 61,428 82,560 18,797 56,638 75,435

Total provision for credit losses 21,132 61,428 82,560 20,126 56,638 76,764

Net interest income after provision for credit losses 214,885 ( 48,624 ) 166,261 225,609 ( 45,678 ) 179,931

Noninterest income:

Credit enhancement income — 48,194 48,194 — 69,976 69,976

Total noninterest income 66,590 48,194 114,784 79,891 69,976 149,867

Noninterest expense:

Loan servicing fees — 19,181 19,181 — 22,750 22,750

Total noninterest expense 173,902 19,181 193,083 175,662 22,750 198,412

Income before income taxes 107,573 ( 19,611 ) 87,962 129,838 1,548 131,386

Income tax expense 32,113 ( 5,306 ) 26,807 30,813 336 31,149

Net income 75,460 ( 14,305 ) 61,155 99,025 1,212 100,237

Net income available to common shareholders $ 66,547 $ ( 14,305 ) $ 52,242 $ 95,856 $ 1,212 $ 97,068

Restated Consolidated Statement of Comprehensive Income

Years Ended December 31,

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net income $ 75,460 $ ( 14,305 ) $ 61,155 $ 99,025 $ 1,212 $ 100,237

Other comprehensive income (loss) 7,044 — 7,044 ( 89,034 ) — ( 89,034 )

Total comprehensive income $ 82,504 $ ( 14,305 ) $ 68,199 $ 9,991 $ 1,212 $ 11,203

Restated Consolidated Statements of Shareholders' Equity

Retained earnings Total shareholders' equity

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Balances, December 31, 2021 $ 212,472 $ ( 63,647 ) $ 148,825 $ 663,837 $ ( 63,647 ) $ 600,190

Net income 99,025 1,212 100,237 99,025 1,212 100,237

Balances, December 31, 2022 282,405 ( 62,435 ) 219,970 758,574 ( 62,435 ) 696,139

Net income 75,460 ( 14,305 ) 61,155 75,460 ( 14,305 ) 61,155

Balances, December 31, 2023 $ 322,379 $ ( 76,740 ) $ 245,639 $ 791,853 $ ( 76,740 ) $ 715,113

Restated Consolidated Statements of Cash Flows

Years Ended December 31,

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net income $ 75,460 $ ( 14,305 ) $ 61,155 $ 99,025 $ 1,212 $ 100,237

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses 21,132 61,428 82,560 20,126 56,638 76,764

Proceeds from sales of loans held for sale 98,851 ( 40,899 ) 57,952 269,958 — 269,958

Net change in operating assets and liabilities:

Accrued interest receivable ( 4,621 ) 261 ( 4,360 ) ( 807 ) ( 641 ) ( 1,448 )

Credit enhancement asset — ( 2,376 ) ( 2,376 ) — ( 18,792 ) ( 18,792 )

Other assets ( 18,731 ) ( 5,307 ) ( 24,038 ) 876 337 1,213

Accrued expenses and other liabilities 27,661 ( 82 ) 27,579 ( 13,579 ) — ( 13,579 )

Net cash provided by operating activities 154,638 ( 1,280 ) 153,358 247,065 38,754 285,819

Cash flows from investing activities:

Net decrease (increase) in loans 112,496 ( 39,619 ) 72,877 ( 1,177,598 ) ( 38,754 ) ( 1,216,352 )

Proceeds from loans held for sale previously classified as portfolio loans — 40,899 40,899 — — —

Net cash (used in) provided by investing activities $ ( 76,080 ) $ 1,280 $ ( 74,800 ) $ ( 1,098,887 ) $ ( 38,754 ) $ ( 1,137,641 )

Restated Unaudited Quarterly Financial Statements

Restated Consolidated Balance Sheets (unaudited)

September 30, 2024 June 30, 2024

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Loans $ 5,748,819 $ ( 20,582 ) $ 5,728,237 $ 5,851,994 $ ( 22,937 ) $ 5,829,057

Allowance for credit losses on loans ( 85,804 ) ( 65,263 ) ( 151,067 ) ( 92,183 ) ( 63,260 ) ( 155,443 )

Total loans, net 5,663,015 ( 85,845 ) 5,577,170 5,759,811 ( 86,197 ) 5,673,614

Accrued interest receivable 27,099 7,938 35,037 25,756 8,359 34,115

Credit enhancement asset — 20,633 20,633 — 18,202 18,202

Other assets 177,663 9,980 187,643 199,487 10,436 209,923

Total assets $ 7,751,483 $ ( 47,294 ) $ 7,704,189 $ 7,757,274 $ ( 49,200 ) $ 7,708,074

Accrued interest payable and other liabilities $ 103,737 $ ( 256 ) $ 103,481 $ 103,694 $ ( 207 ) $ 103,487

Total liabilities 6,933,224 $ ( 256 ) 6,932,968 6,971,502 ( 207 ) 6,971,295

Retained earnings 334,522 ( 47,038 ) 287,484 325,022 ( 48,993 ) 276,029

Total shareholders' equity 818,259 ( 47,038 ) 771,221 785,772 ( 48,993 ) 736,779

Total liabilities and shareholders' equity $ 7,751,483 $ ( 47,294 ) $ 7,704,189 $ 7,757,274 $ ( 49,200 ) $ 7,708,074

Restated Consolidated Balance Sheets (unaudited) (continued)

March 31, 2024 September 30, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Loans $ 5,958,462 $ ( 25,304 ) $ 5,933,158 $ 6,280,883 $ ( 27,448 ) $ 6,253,435

Allowance for credit losses on loans ( 78,057 ) ( 82,787 ) ( 160,844 ) ( 66,669 ) ( 91,146 ) ( 157,815 )

Total loans, net 5,880,405 ( 108,091 ) 5,772,314 6,214,214 ( 118,594 ) 6,095,620

Credit enhancement asset — 16,369 16,369 — 15,111 15,111

Other assets 182,201 14,850 197,051 222,966 17,593 240,559

Total assets $ 7,831,809 $ ( 68,101 ) $ 7,763,708 $ 7,969,285 $ ( 76,176 ) $ 7,893,109

Accrued interest payable and other liabilities $ 102,966 $ ( 139 ) $ 102,827 $ 106,743 $ ( 39 ) $ 106,704

Total liabilities 7,040,803 ( 139 ) 7,040,664 7,211,675 ( 39 ) 7,211,636

Retained earnings 327,264 ( 67,962 ) 259,302 310,461 ( 76,137 ) 234,324

Total shareholders' equity 791,006 ( 67,962 ) 723,044 757,610 ( 76,137 ) 681,473

Total liabilities and shareholders' equity $ 7,831,809 $ ( 68,101 ) $ 7,763,708 $ 7,969,285 $ ( 76,176 ) $ 7,893,109

June 30, 2023 March 31, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Loans $ 6,367,344 $ ( 27,922 ) $ 6,339,422 $ 6,354,271 $ ( 27,347 ) $ 6,326,924

Allowance for credit losses on loans ( 64,950 ) ( 86,465 ) ( 151,415 ) ( 62,067 ) ( 78,797 ) ( 140,864 )

Total loans, net 6,302,394 ( 114,387 ) 6,188,007 6,292,204 ( 106,144 ) 6,186,060

Credit enhancement asset — 14,720 14,720 — 13,959 13,959

Other assets 175,821 16,404 192,225 160,272 14,195 174,467

Total assets $ 8,034,721 $ ( 73,425 ) $ 7,961,296 $ 7,930,174 $ ( 68,385 ) $ 7,861,789

Retained earnings $ 307,888 $ ( 73,425 ) $ 234,463 $ 295,200 $ ( 68,385 ) $ 226,815

Total shareholders' equity 776,821 $ ( 73,425 ) 703,396 775,643 ( 68,385 ) 707,258

Total liabilities and shareholders' equity $ 8,034,721 $ ( 73,425 ) $ 7,961,296 $ 7,930,174 $ ( 68,385 ) $ 7,861,789

Restated Consolidated Statements of Income (unaudited)

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2024

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Interest income:

Loans including fees:

Taxable $ 88,860 $ 4,160 $ 93,020 $ 266,107 $ 11,854 $ 277,961

Total interest income 104,834 4,160 108,994 309,804 11,854 321,658

Net interest income 54,950 4,160 59,110 165,922 11,854 177,776

Provision for credit losses:

Provision for credit losses on loans 5,000 12,925 17,925 36,000 10,349 46,349

Total provision for credit losses 5,000 12,925 17,925 35,800 10,349 46,149

Net interest income after provision for credit losses 49,950 ( 8,765 ) 41,185 130,122 1,505 131,627

Noninterest income:

Credit enhancement income — 14,206 14,206 — 45,188 45,188

Total noninterest income 19,339 14,206 33,545 58,182 45,188 103,370

Noninterest expense:

Loan servicing fees — 3,031 3,031 — 10,077 10,077

Total noninterest expense 46,733 3,031 49,764 139,079 10,077 149,156

Income before income taxes 22,556 2,410 24,966 49,225 36,616 85,841

Income tax expense 4,080 455 4,535 10,114 6,914 17,028

Net income 18,476 1,955 20,431 39,111 29,702 68,813

Net income available to common shareholders $ 16,247 $ 1,955 $ 18,202 $ 32,426 $ 29,702 $ 62,128

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2024

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Interest income:

Loans including fees:

Taxable $ 88,252 $ 3,843 $ 92,095 $ 177,247 $ 7,694 $ 184,941

Total interest income 103,295 3,843 107,138 204,970 7,694 212,664

Net interest income 55,052 3,843 58,895 110,972 7,694 118,666

Provision for credit losses:

Provision for credit losses on loans 17,000 ( 8,518 ) 8,482 31,000 ( 2,576 ) 28,424

Total provision for credit losses 16,800 ( 8,518 ) 8,282 30,800 ( 2,576 ) 28,224

Net interest income after provision for credit losses 38,252 12,361 50,613 80,172 10,270 90,442

Noninterest income:

Credit enhancement income — 14,328 14,328 — 30,982 30,982

Total noninterest income 17,656 14,328 31,984 38,843 30,982 69,825

Noninterest expense:

Loan servicing fees — 3,305 3,305 — 7,046 7,046

Total noninterest expense 47,479 3,305 50,784 92,346 7,046 99,392

Income before income taxes 8,429 23,384 31,813 26,669 34,206 60,875

Income tax expense 1,679 4,415 6,094 6,034 6,459 12,493

Net income 6,750 18,969 25,719 20,635 27,747 48,382

Net income available to common shareholders $ 4,522 $ 18,969 $ 23,491 $ 16,179 $ 27,747 $ 43,926

Restated Consolidated Statement of Income (unaudited) (continued)

Three Months Ended

March 31, 2024

(dollars in thousands) As Previously Reported Adjustment As Restated

Interest income:

Loans including fees:

Taxable $ 88,995 $ 3,851 $ 92,846

Total interest income 101,675 3,851 105,526

Net interest income 55,920 3,851 59,771

Provision for credit losses:

Provision for credit losses on loans 14,000 5,942 19,942

Total provision for credit losses 14,000 5,942 19,942

Net interest income after provision for credit losses 41,920 ( 2,091 ) 39,829

Noninterest income:

Credit enhancement income — 16,654 16,654

Total noninterest income 21,187 16,654 37,841

Noninterest expense:

Loan servicing fees — 3,741 3,741

Total noninterest expense 44,867 3,741 48,608

Income before income taxes 18,240 10,822 29,062

Income tax expense 4,355 2,044 6,399

Net income 13,885 8,778 22,663

Net income available to common shareholders $ 11,657 $ 8,778 $ 20,435

Three Months Ended Nine Months Ended

September 30, 2023 September 30, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Interest income:

Loans including fees:

Taxable $ 93,488 $ 3,029 $ 96,517 $ 272,297 $ 9,188 $ 281,485

Total interest income 103,585 3,029 106,614 299,615 9,188 308,803

Net interest income 58,596 3,029 61,625 177,940 9,188 187,128

Provision for credit losses:

Provision for credit losses on loans 5,168 17,194 22,362 14,182 52,278 66,460

Total provision for credit losses 5,168 17,194 22,362 14,182 52,278 66,460

Net interest income after provision for credit losses 53,428 ( 14,165 ) 39,263 163,758 ( 43,090 ) 120,668

Noninterest income:

Credit enhancement income — 14,918 14,918 — 38,380 38,380

Total noninterest income 11,545 14,918 26,463 46,077 38,380 84,457

Noninterest expense:

Loan servicing fees — 4,654 4,654 — 14,998 14,998

Total noninterest expense 42,038 4,654 46,692 129,414 14,998 144,412

Income before income taxes 22,935 ( 3,901 ) 19,034 80,421 ( 19,708 ) 60,713

Income tax expense 11,533 ( 1,189 ) 10,344 25,672 ( 6,006 ) 19,666

Net income 11,402 ( 2,712 ) 8,690 54,749 ( 13,702 ) 41,047

Net income available to common shareholders $ 9,173 $ ( 2,712 ) $ 6,461 $ 48,064 $ ( 13,702 ) $ 34,362

Restated Consolidated Statements of Income (unaudited) (continued)

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Interest income:

Loans including fees:

Taxable $ 91,350 $ 3,614 $ 94,964 $ 178,809 $ 6,159 $ 184,968

Total interest income 100,491 3,614 104,105 196,030 6,159 202,189

Net interest income 58,840 3,614 62,454 119,344 6,159 125,503

Provision for credit losses:

Provision for credit losses on loans 5,879 15,937 21,816 9,014 35,084 44,098

Total provision for credit losses 5,879 15,937 21,816 9,014 35,084 44,098

Net interest income after provision for credit losses 52,961 ( 12,323 ) 40,638 110,330 ( 28,925 ) 81,405

Noninterest income:

Credit enhancement income — 10,082 10,082 — 23,462 23,462

Total noninterest income 18,753 10,082 28,835 34,532 23,462 57,994

Noninterest expense:

Loan servicing fees — 5,008 5,008 — 10,344 10,344

Total noninterest expense 42,894 5,008 47,902 87,376 10,344 97,720

Income before income taxes 28,820 ( 7,249 ) 21,571 57,486 ( 15,807 ) 41,679

Income tax expense 7,245 ( 2,209 ) 5,036 14,139 ( 4,817 ) 9,322

Net income 21,575 ( 5,040 ) 16,535 43,347 ( 10,990 ) 32,357

Net income available to common shareholders $ 19,347 $ ( 5,040 ) $ 14,307 $ 38,891 $ ( 10,990 ) $ 27,901

Three Months Ended

March 31, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated

Interest income:

Loans including fees:

Taxable $ 87,459 $ 2,545 $ 90,004

Total interest income 95,539 2,545 98,084

Net interest income 60,504 2,545 63,049

Provision for credit losses:

Provision for credit losses on loans 3,135 19,147 22,282

Total provision for credit losses 3,135 19,147 22,282

Net interest income after provision for credit losses 57,369 ( 16,602 ) 40,767

Noninterest income:

Credit enhancement income — 13,380 13,380

Total noninterest income 15,779 13,380 29,159

Noninterest expense:

Loan servicing fees — 5,336 5,336

Total noninterest expense 44,482 5,336 49,818

Income before income taxes 28,666 ( 8,558 ) 20,108

Income tax expense 6,894 ( 2,608 ) 4,286

Net income 21,772 ( 5,950 ) 15,822

Net income available to common shareholders $ 19,544 $ ( 5,950 ) $ 13,594

Restated Consolidated Statement of Comprehensive Income (unaudited)

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2024

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net income 18,476 1,955 20,431 39,111 29,702 68,813

Other comprehensive income 21,941 — 21,941 16,113 — 16,113

Total comprehensive income 40,417 1,955 42,372 55,224 29,702 84,926

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2024

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net income 6,750 18,969 25,719 20,635 27,747 48,382

Other comprehensive loss ( 1,162 ) — ( 1,162 ) ( 5,828 ) — ( 5,828 )

Total comprehensive income 5,588 18,969 24,557 14,807 27,747 42,554

Three Months Ended

March 31, 2024

(dollars in thousands) As Previously Reported Adjustment As Restated

Net income 13,885 8,778 22,663

Other comprehensive loss ( 4,666 ) — ( 4,666 )

Total comprehensive income 9,219 8,778 17,997

Three Months Ended Nine Months Ended

September 30, 2023 September 30, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net income 11,402 ( 2,712 ) 8,690 54,749 ( 13,702 ) 41,047

Other comprehensive loss ( 16,462 ) — ( 16,462 ) ( 17,384 ) — ( 17,384 )

Total comprehensive (loss) income ( 5,060 ) ( 2,712 ) ( 7,772 ) 37,365 ( 13,702 ) 23,663

Three Months Ended Six Months Ended

June 30, 2023 June 30, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net income 21,575 ( 5,040 ) 16,535 43,347 ( 10,990 ) 32,357

Other comprehensive loss ( 6,922 ) — ( 6,922 ) ( 922 ) — ( 922 )

Total comprehensive income 14,653 ( 5,040 ) 9,613 42,425 ( 10,990 ) 31,435

Three Months Ended

March 31, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated

Net income 21,772 ( 5,950 ) 15,822

Other comprehensive income 6,000 — 6,000

Total comprehensive income 27,772 ( 5,950 ) 21,822

Restated Consolidated Statements of Shareholders' Equity (unaudited)

Retained earnings Total shareholders' equity

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

For the three months ended September 30, 2024

Balances, June 30, 2024 $ 325,022 $ ( 48,993 ) $ 276,029 $ 785,772 $ ( 48,993 ) $ 736,779

Net income 18,476 1,955 20,431 18,476 1,955 20,431

Balances, September 30, 2024 $ 334,522 $ ( 47,038 ) $ 287,484 $ 818,259 $ ( 47,038 ) $ 771,221

For the nine months ended September 30, 2024

Balances, December 31, 2023 $ 322,379 $ ( 76,740 ) $ 245,639 $ 791,853 $ ( 76,740 ) $ 715,113

Net income 39,111 29,702 68,813 39,111 29,702 68,813

Balances, September 30, 2024 $ 334,522 $ ( 47,038 ) $ 287,484 $ 818,259 $ ( 47,038 ) $ 771,221

For the three months ended June 30, 2024

Balances, March 31, 2024 $ 327,264 $ ( 67,962 ) $ 259,302 $ 791,006 $ ( 67,962 ) $ 723,044

Net income 6,750 18,969 25,719 6,750 18,969 25,719

Balances, June 30, 2024 $ 325,022 $ ( 48,993 ) $ 276,029 $ 785,772 $ ( 48,993 ) $ 736,779

For the six months ended June 30, 2024

Balances, December 31, 2023 $ 322,379 $ ( 76,740 ) $ 245,639 $ 791,853 $ ( 76,740 ) $ 715,113

Net income 20,635 27,747 48,382 20,635 27,747 48,382

Balances, June 30, 2024 $ 325,022 $ ( 48,993 ) $ 276,029 $ 785,772 $ ( 48,993 ) $ 736,779

For the three months ended March 31, 2024

Balances, December 31, 2023 $ 322,379 $ ( 76,740 ) $ 245,639 $ 791,853 $ ( 76,740 ) $ 715,113

Net income 13,885 8,778 22,663 13,885 8,778 22,663

Balances, March 31, 2024 $ 327,264 $ ( 67,962 ) $ 259,302 $ 791,006 $ ( 67,962 ) $ 723,044

For the three months ended September 30, 2023

Balances, June 30, 2023 $ 307,888 $ ( 73,425 ) $ 234,463 $ 776,821 $ ( 73,425 ) $ 703,396

Net income 11,402 ( 2,712 ) 8,690 11,402 ( 2,712 ) 8,690

Balances, September 30, 2023 $ 310,461 $ ( 76,137 ) $ 234,324 $ 757,610 $ ( 76,137 ) $ 681,473

For the nine months ended September 30, 2023

Balances, December 31, 2022 $ 282,405 $ ( 62,435 ) $ 219,970 $ 758,574 $ ( 62,435 ) $ 696,139

Net income 54,749 ( 13,702 ) 41,047 54,749 ( 13,702 ) 41,047

Balances, September 30, 2023 $ 310,461 $ ( 76,137 ) $ 234,324 $ 757,610 $ ( 76,137 ) $ 681,473

For the three months ended June 30, 2023

Balances, March 31, 2023 $ 295,200 $ ( 68,385 ) $ 226,815 $ 775,643 $ ( 68,385 ) $ 707,258

Net income 21,575 ( 5,040 ) 16,535 21,575 ( 5,040 ) 16,535

Balances, June 30, 2023 $ 307,888 $ ( 73,425 ) $ 234,463 $ 776,821 $ ( 73,425 ) $ 703,396

For the six months ended June 30, 2023

Balances, December 31, 2022 $ 282,405 $ ( 62,435 ) $ 219,970 $ 758,574 $ ( 62,435 ) $ 696,139

Net income 43,347 ( 10,990 ) 32,357 43,347 ( 10,990 ) 32,357

Balances, June 30, 2023 $ 307,888 $ ( 73,425 ) $ 234,463 $ 776,821 $ ( 73,425 ) $ 703,396

For the three months ended March 31, 2023

Balances, December 31, 2022 282,405 ( 62,435 ) 219,970 758,574 ( 62,435 ) 696,139

Net income 21,772 ( 5,950 ) 15,822 21,772 ( 5,950 ) 15,822

Balances, March 31, 2023 295,200 ( 68,385 ) 226,815 775,643 ( 68,385 ) 707,258

Restated Consolidated Statements of Cash Flows (unaudited)

Nine Months Ended Six Months Ended

September 30, 2024 June 30, 2024

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net income $ 39,111 $ 29,702 $ 68,813 $ 20,635 $ 27,747 $ 48,382

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses 35,800 10,349 46,149 30,800 ( 2,576 ) 28,224

Net change in operating assets and liabilities:

Accrued interest receivable ( 2,165 ) 1,261 ( 904 ) ( 822 ) 840 18

Credit enhancement asset — ( 5,244 ) ( 5,244 ) — ( 2,813 ) ( 2,813 )

Other assets 5,203 6,914 12,117 ( 16,278 ) 6,458 ( 9,820 )

Accrued expenses and other liabilities ( 13,501 ) ( 174 ) ( 13,675 ) ( 4,676 ) ( 125 ) ( 4,801 )

Net cash provided by operating activities 78,214 42,808 121,022 44,983 29,531 74,514

Cash flows from investing activities:

Net decrease in loans 348,351 ( 42,808 ) 305,543 257,249 ( 29,531 ) 227,718

Net cash provided by (used in) investing activities $ 75,020 $ ( 42,808 ) $ 32,212 $ 63,892 $ ( 29,531 ) $ 34,361

Three Months Ended Nine Months Ended

March 31, 2024 September 30, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net income $ 13,885 $ 8,778 $ 22,663 $ 54,749 $ ( 13,702 ) $ 41,047

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses 14,000 5,942 19,942 14,182 52,278 66,460

Net change in operating assets and liabilities:

Accrued interest receivable ( 997 ) 428 ( 569 ) ( 3,970 ) ( 254 ) ( 4,224 )

Credit enhancement asset — ( 980 ) ( 980 ) — ( 2,098 ) ( 2,098 )

Other assets 1,034 2,044 3,078 ( 58,408 ) ( 6,005 ) ( 64,413 )

Accrued expenses and other liabilities ( 5,100 ) ( 57 ) ( 5,157 ) 30,874 ( 40 ) 30,834

Net cash provided by operating activities 26,917 16,155 43,072 67,283 30,179 97,462

Cash flows from investing activities:

Net decrease (increase) in loans 163,694 ( 16,155 ) 147,539 ( 6,195 ) ( 30,179 ) ( 36,374 )

Net cash provided by (used in) investing activities $ 43,069 $ ( 16,155 ) $ 26,914 $ ( 143,849 ) $ ( 30,179 ) $ ( 174,028 )

Six Months Ended Three Months Ended

June 30, 2023 March 31, 2023

(dollars in thousands) As Previously Reported Adjustment As Restated As Previously Reported Adjustment As Restated

Net income $ 43,347 $ ( 10,990 ) $ 32,357 $ 21,772 $ ( 5,950 ) $ 15,822

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses 9,014 35,084 44,098 3,135 19,147 22,282

Net change in operating assets and liabilities:

Accrued interest receivable ( 687 ) ( 378 ) ( 1,065 ) ( 221 ) ( 145 ) ( 366 )

Credit enhancement asset — ( 1,707 ) ( 1,707 ) — ( 946 ) ( 946 )

Other assets ( 11,380 ) ( 4,817 ) ( 16,197 ) 4,423 ( 2,608 ) 1,815

Accrued expenses and other liabilities 9,995 — 9,995 ( 14,949 ) — ( 14,949 )

Net cash provided by operating activities 60,803 17,192 77,995 16,008 9,498 25,506

Cash flows from investing activities:

Net increase in loans ( 76,502 ) ( 17,192 ) ( 93,694 ) ( 49,923 ) ( 9,498 ) ( 59,421 )

Net cash used in investing activities $ ( 185,892 ) $ ( 17,192 ) $ ( 203,084 ) $ ( 98,412 ) $ ( 9,498 ) $ ( 107,910 )

NOTE 26 – SUBSEQUENT EVENTS

During the first quarter of 2025, Management determined that a triggering event had occurred at its Banking reporting unit as a result of further deteriorated credit quality coupled with the trends in the stock price.

The Company performed a quantitative impairment test on its Banking reporting unit as of March 31, 2025, and engaged a third-party service provider to assist Management with the determination of the fair value.

The resulting calculation indicated that the carrying amount exceeded the fair value of the Company's Banking reporting unit.

As a result of the assessment, the Company expects to recognize goodwill impairment expense between $ 135.0 million and $ 154.0 million in the first quarter of 2025.

Impairment will not impact our regulatory capital ratios, tangible common equity ratio nor our liquidity position.

The Company continues to take steps in 2025 to resolve nonperforming assets and improve its overall credit profile.

These steps include foreclosures, short sales, pursuit of guarantors and sales of notes.

The Company has continued to monitor credit actions and subsequent losses in order to determining the appropriate time period for recognition.

Notable credit actions and subsequent losses are presented in the table below, in thousands.

Losses taken by period

Asset Type of property Action taken Balance

December 31, 2024 2024 First

2025 Total Losses taken Reduction in nonperforming assets

OREO Assisted living Property sold

May 2025 $ 5,434 $ ( 1,472 ) $ — $ — $ ( 1,472 ) $ (1,472) $ ( 5,434 )

Loans Multi-Family Collateral sold

May 2025 3,722 ( 337 ) ( 1,113 ) — ( 1,450 ) ( 3,722 )

Loans Memory care Note sale

June 2025 7,737 — — ( 3,675 ) ( 3,675 ) ( 7,737 )

Loans Assisted living Charge off

May 2025 7,798 ( 7,798 ) — — ( 7,798 ) ( 7,798 )

Loans Multi-Family Note sale agreement June 2025

Expected close third quarter 2025 27,354 ( 2,354 ) — — ( 2,354 ) ( 2,354 )

Loans C&I Operating Charge off

May 2025 11,292 — — ( 5,847 ) ( 5,847 ) ( 5,847 )

Total $ 63,337 $ ( 11,961 ) $ ( 1,113 ) $ ( 9,522 ) $ ( 22,596 ) $ ( 32,892 )

Table of C ontents

ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data