Midland States Bancorp, Inc. 10-Q

msbi-20260331 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2026 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to _______________ Commission File Number 001-35272 MIDLAND STATES BANCORP, INC. (Exact name of registrant as specified in its charter) Illinois 37-1233196 (State of other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1201 Network Centre Drive 62401 Effingham , IL (Zip Code) (Address of principal executive offices) ( 217 ) 342-7321 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol(s) Name of each exchange on which registered Common stock, $0.01 par value MSBI The Nasdaq Stock Market LLC Depositary Shares, each representing a 1/40th interest in a share of 7.75% fixed rate reset non-cumulative perpetual preferred stock, Series A MSBIP The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No As of April 20, 2026 , the Registrant had 20,729,799 shares of outstanding common stock, $0.01 par value. Table of Contents MIDLAND STATES BANCORP, INC. TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements: Consolidated Balance Sheets at March 31, 2026 (Unaudited) and December 31, 2025 3 Consolidated Statements of Income (Unaudited) for the three months ended March 31, 2026 and 2025 4 Consolidated Statements of Comprehensive Income (Unaudited) for the three months ended March 31, 2026 and 2025 5 Consolidated Statements of Shareholders’ Equity (Unaudited) for the three months ended March 31, 2026 and 2025 6 Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2026 and 2025 7 Notes to Consolidated Financial Statements (Unaudited) 8 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 43 Item 3. Quantitative and Qualitative Disclosures about Market Risk 62 Item 4. Controls and Procedures 63 PART II. OTHER INFORMATION Item 1. Legal Proceedings 63 Item 1A. Risk Factors 63 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 64 Item 5. Other Information 64 Item 6. Exhibits 65 SIGNATURES 66 1 Table of Contents GLOSSARY OF ABBREVIATIONS AND ACRONYMS As used in this report, references to the "Company," "we," "our," "us," and similar terms refer to the consolidated entity consisting of Midland States Bancorp, Inc. and its wholly owned subsidiaries. Midland States Bancorp, Inc. refers solely to the parent holding company and Midland States Bank (the "Bank") refers to our wholly owned banking subsidiary. The acronyms and abbreviations identified below are used throughout this report, including the Notes to the Consolidated Financial Statements. You may find it helpful to refer to this page as you read this report. 2019 Incentive Plan The Amended and Restated Midland States Bancorp, Inc. 2019 Long-Term Incentive Plan ACL Allowance for credit losses on loans AFX American Financial Exchange AMERIBOR American Interbank Offered Rate AOCI Accumulated Other Comprehensive Income (Loss) ASU Accounting Standards Update ATM Automated teller machine BaaS Banking-as-a-Service Basel III Rule Basel III regulatory capital reforms required by the Dodd-Frank Act BHCA Bank Holding Company Act of 1956, as amended CBLR Community Bank Leverage Ratio CFPB Consumer Financial Protection Bureau CISA Cybersecurity and Infrastructure Security Agency CRA Community Reinvestment Act CRA Proposal Joint Proposal to Strengthen and Modernize Community Reinvestment Act Regulations CRE Commercial Real Estate CRE Guidance Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices guidance DFPR Illinois Department of Financial and Professional Regulation DIF Deposit Insurance Fund Exchange Act Securities Exchange Act of 1934 FASB Financial Accounting Standards Board FDIC Federal Deposit Insurance Corporation Federal Reserve Board of Governors of the Federal Reserve System FHA Federal Housing Administration FHLB Federal Home Loan Bank FinTech Financial Technology FOMC Federal Open Market Committee FRB Federal Reserve Bank GAAP U.S. generally accepted accounting principles GreenSky GreenSky, LLC Illinois CRA Illinois Community Reinvestment Act LendingPoint LendingPoint, LLC LGD Loss given default Midland Trust Midland States Preferred Securities Trust Nasdaq Nasdaq Global Select Market NII at Risk Net Interest Income at Risk OREO Other real estate owned PCAOB Public Company Accounting Oversight Board PCD Purchased credit deteriorated PD Probability of default Q-Factor Qualitative factor Regulatory Relief Act Economic Growth, Regulatory Relief and Consumer Protection Act SBA Small Business Administration SEC U.S. Securities and Exchange Commission SOFR Secured Overnight Financing Rate Treasury U.S. Department of the Treasury 2 Table of Contents PART I – FINANCIAL INFORMATION ITEM 1 – FINANCIAL STATEMENTS MIDLAND STATES BANCORP, INC. CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data) March 31, 2026 December 31, 2025 (unaudited) Assets Cash and due from banks $ 113,024 $ 127,279 Federal funds sold 634 532 Cash and cash equivalents 113,658 127,811 Investment securities available for sale, at fair value 1,592,555 1,523,001 Equity securities, at fair value 3,665 4,235 Loans 4,338,573 4,352,004 Allowance for credit losses on loans ( 67,875 ) ( 69,219 ) Total loans, net 4,270,698 4,282,785 Loans held for sale 6,709 7,781 Premises and equipment, net 84,169 85,134 Other real estate owned 514 606 Nonmarketable equity securities 29,835 32,598 Accrued interest receivable 25,875 23,824 Loan servicing rights, at lower of cost or fair value 11,688 11,932 Loan servicing rights, held for sale — 3,661 Goodwill 7,927 7,927 Other intangible assets, net 8,159 8,876 Company-owned life insurance 220,630 218,554 Credit enhancement asset 13,476 12,557 Other assets 158,405 162,138 Total assets $ 6,547,963 $ 6,513,420 Liabilities and Shareholders’ Equity Liabilities: Deposits: Noninterest-bearing demand deposits $ 1,013,808 $ 1,040,411 Interest-bearing deposits 4,426,259 4,383,968 Total deposits 5,440,067 5,424,379 Short-term borrowings 153,425 60,181 Federal Home Loan Bank advances 238,000 293,000 Subordinated debt 27,024 27,019 Trust preferred debentures 52,035 51,857 Accrued interest payable and other liabilities 78,458 91,485 Total liabilities 5,989,009 5,947,921 Shareholders’ Equity: Preferred stock, $ 2.00 par value; 4,000,000 shares authorized; 115,000 Series A shares, $ 1,000 per share liquidation preference, issued and outstanding at March 31, 2026 and December 31, 2025, respectively 110,548 110,548 Common stock, $ 0.01 par value; 40,000,000 shares authorized; 20,813,975 and 21,169,854 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively 208 212 Capital surplus 421,609 428,247 Retained earnings 96,171 86,825 Accumulated other comprehensive loss, net of tax ( 69,582 ) ( 60,333 ) Total shareholders’ equity 558,954 565,499 Total liabilities and shareholders’ equity $ 6,547,963 $ 6,513,420 The accompanying notes are an integral part of the consolidated financial statements. 3 Table of Contents MIDLAND STATES BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME — (UNAUDITED) (dollars in thousands, except per share data) Three Months Ended March 31, 2026 2025 Interest income: Loans including fees: Taxable $ 65,559 $ 77,668 Tax exempt 383 356 Loans held for sale 102 4,563 Investment securities: Taxable 18,150 14,975 Tax exempt 436 428 Nonmarketable equity securities 583 647 Federal funds sold and cash investments 809 718 Total interest income 86,022 99,355 Interest expense: Deposits 24,203 34,615 Short-term borrowings 231 700 Federal Home Loan Bank advances 2,670 3,163 Subordinated debt 380 1,387 Trust preferred debentures 1,121 1,200 Total interest expense 28,605 41,065 Net interest income 57,417 58,290 Provision for credit losses: Provision for credit losses on loans 5,403 10,850 Recapture of credit losses on unfunded commitments ( 400 ) — Total provision for credit losses 5,003 10,850 Net interest income after provision for credit losses 52,414 47,440 Noninterest income: Wealth management revenue 8,248 7,350 Service charges on deposit accounts 3,355 3,305 Interchange revenue 3,528 3,151 Residential mortgage banking revenue 626 676 Income on company-owned life insurance 2,076 2,334 Loss on sales of investment securities, net ( 1,731 ) — Credit enhancement income (loss) 3,360 ( 578 ) Other income 2,660 1,525 Total noninterest income 22,122 17,763 Noninterest expense: Salaries and employee benefits 26,157 26,416 Occupancy and equipment 4,535 4,498 Data processing 7,065 6,919 FDIC insurance 529 1,463 Professional services 2,242 2,741 Marketing 1,241 793 Communications 431 329 Loan expense 3,305 1,335 Loan servicing fees 1,116 750 Impairment on goodwill — 153,977 Amortization of intangible assets 717 911 Other expense 3,086 2,873 Total noninterest expense 50,424 203,005 Income (loss) before income taxes 24,112 ( 137,802 ) Income tax expense 5,649 3,172 Net income (loss) 18,463 ( 140,974 ) Preferred dividends 2,228 2,228 Net income (loss) available to common shareholders $ 16,235 $ ( 143,202 ) Per common share data: Basic earnings (loss) per common share $ 0.74 $ ( 6.58 ) Diluted earnings (loss) per common share $ 0.74 $ ( 6.58 ) Weighted average common shares outstanding 21,301,246 21,795,570 Weighted average diluted common shares outstanding 21,301,246 21,795,570 The accompanying notes are an integral part of the consolidated financial statements. 4 Table of Contents MIDLAND STATES BANCORP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME — (UNAUDITED) (dollars in thousands) Three Months Ended March 31, 2026 2025 Net income (loss) $ 18,463 $ ( 140,974 ) Other comprehensive income (loss): Investment securities available for sale: Unrealized (losses) gains that occurred during the period ( 14,785 ) 11,397 Reclassification adjustment for realized net losses on sales of investment securities included in net income 1,731 — Income tax effect 3,475 ( 3,043 ) Change in investment securities available for sale, net of tax ( 9,579 ) 8,354 Cash flow hedges: Net unrealized derivative gains on cash flow hedges 505 864 Reclassification adjustment for net (gains) losses realized in net income ( 39 ) 837 Income tax effect ( 136 ) ( 434 ) Change in cash flow hedges, net of tax 330 1,267 Other comprehensive income (loss), net of tax ( 9,249 ) 9,621 Total comprehensive income (loss) $ 9,214 $ ( 131,353 ) The accompanying notes are an integral part of the consolidated financial statements . 5 Table of Contents MIDLAND STATES BANCORP, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY — (UNAUDITED) (dollars in thousands, except share and per share data) Number of common shares Preferred stock Common stock Capital surplus Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity Balances, December 31, 2025 21,169,854 $ 110,548 $ 212 $ 428,247 $ 86,825 $ ( 60,333 ) $ 565,499 Net income — — — — 18,463 — 18,463 Other comprehensive loss — — — — — ( 9,249 ) ( 9,249 ) Common dividends declared ($ 0.32 per share) — — — — ( 6,889 ) — ( 6,889 ) Preferred dividends declared ($ 19.375 per share) — — — — ( 2,228 ) — ( 2,228 ) Common stock repurchased ( 365,507 ) — ( 4 ) ( 7,920 ) — — ( 7,924 ) Share-based compensation expense — — — 939 — — 939 Issuance of common stock under employee benefit plans 9,628 — — 343 — — 343 Balances, March 31, 2026 20,813,975 $ 110,548 $ 208 $ 421,609 $ 96,171 $ ( 69,582 ) $ 558,954 Balances, December 31, 2024 21,494,485 $ 110,548 $ 215 $ 434,346 $ 247,698 $ ( 81,960 ) $ 710,847 Net loss — — — — ( 140,974 ) — ( 140,974 ) Other comprehensive income — — — — — 9,621 9,621 Common dividends declared ($ 0.31 per share) — — — — ( 6,782 ) — ( 6,782 ) Preferred dividends declared ($ 19.375 per share) — — — — ( 2,228 ) — ( 2,228 ) Share-based compensation expense — — — 784 — — 784 Issuance of common stock under employee benefit plans 8,551 — — 169 — — 169 Balances, March 31, 2025 21,503,036 $ 110,548 $ 215 $ 435,299 $ 97,714 $ ( 72,339 ) $ 571,437 The accompanying notes are an integral part of the consolidated financial statements. 6 Table of Contents MIDLAND STATES BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS — (UNAUDITED) (dollars in thousands) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net income (loss) $ 18,463 $ ( 140,974 ) Adjustments to reconcile net income to net cash provided by operating activities: Provision for credit losses 5,003 10,850 Depreciation on premises and equipment 1,217 1,238 Impairment on goodwill — 153,977 Amortization of intangible assets 717 911 Amortization of operating lease right-of-use asset 395 405 Amortization of loan servicing rights 385 570 Share-based compensation expense 939 784 Increase in cash surrender value of life insurance ( 2,076 ) ( 1,991 ) Investment securities accretion, net ( 4,387 ) ( 2,877 ) Loss on sales of investment securities, net 1,731 — Origination of loans held for sale ( 27,193 ) ( 17,832 ) Proceeds from sales of loans and leases held for sale 30,531 19,044 Gain on mortgage servicing rights held for sale ( 2,077 ) — Net change in operating assets and liabilities: Accrued interest receivable ( 2,051 ) 1,060 Credit enhancement asset ( 919 ) 11,189 Other assets 3,613 5,466 Accrued expenses and other liabilities ( 7,324 ) ( 17,120 ) Net cash provided by operating activities 16,967 24,700 Cash flows from investing activities: Purchases of investment securities available for sale ( 241,888 ) ( 181,409 ) Proceeds from sales of investment securities available for sale 98,599 — Maturities and payments on investment securities available for sale 61,993 42,543 Purchases of equity securities ( 59 ) ( 18 ) Net decrease in loans 4,737 189,065 Purchases of premises and equipment ( 619 ) ( 1,846 ) Proceeds from sale of premises and equipment 195 — Purchases of nonmarketable equity securities ( 50 ) ( 37,237 ) Proceeds from redemptions of nonmarketable equity securities 2,813 26,418 Proceeds from sales of mortgage servicing rights held for sale 5,727 — Proceeds from sales of other real estate owned 198 783 Proceeds from company-owned life insurance, net — 1,166 Net cash provided by (used in) investing activities ( 68,354 ) 39,465 Cash flows from financing activities: Net increase (decrease) in deposits 15,688 ( 260,809 ) Net increase (decrease) in short-term borrowings 93,244 ( 47,275 ) Net increase (decrease) in short-term FHLB advances ( 25,000 ) 240,000 Proceeds from long-term FHLB advances — 75,000 Payments made on long-term FHLB advances ( 30,000 ) ( 75,000 ) Cash dividends paid on preferred stock ( 2,228 ) ( 2,228 ) Cash dividends paid on common stock ( 6,889 ) ( 6,782 ) Common stock repurchased ( 7,924 ) — Proceeds from issuance of common stock under employee benefit plans 343 169 Net cash provided by (used in) financing activities 37,234 ( 76,925 ) Net decrease in cash and cash equivalents ( 14,153 ) ( 12,760 ) Cash and cash equivalents: Beginning of period 127,811 114,766 End of period $ 113,658 $ 102,006 Supplemental disclosures of cash flow information: Cash payments for: Interest paid on deposits and borrowed funds $ 30,292 $ 43,557 Income tax paid (net of refunds) 302 754 Supplemental disclosures of noncash investing and financing activities: Transfer of loans to loans held for sale 1,870 — Transfer of loans to other real estate owned 120 9 Right of use assets obtained in exchange for lease obligations 36 837 Transfer of loan servicing rights held for sale to loan servicing rights, at lower of cost or market 125 — The accompanying notes are an integral part of the consolidated financial statements . 7 Table of Contents MIDLAND STATES BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (UNAUDITED) Note 1: Summary of Significant Accounting Policies 8 Note 2: Investment Securities 10 Note 3: Loans 12 Note 4: Premises, Equipment and Leases 27 Note 5 : Goodwill 28 Note 6 : Derivative Instruments 28 Note 7 : Deposits 30 Note 8 : Short- T erm Borrowings 30 Note 9 : FHLB Advances 31 Note 10 : Subordinated Debt 31 Note 11 : Accumulated Other Comprehensive Income (Loss) 32 Note 12 : Earnings per Common Share 33 Note 13 : Fair Value of Financial Instruments 33 Note 14 : Commitments, Contingencies and Credit Risk 38 Note 1 5 : Segment Information 39 Note 1 6 : Revenue from Contracts with Customers 41 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Midland States Bancorp, Inc. 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, merchant credit card services, trust and investment management services, and insurance and financial planning services. Our principal business activity is lending to and accepting deposits from individuals, businesses, municipalities and other entities. We have derived income principally from interest charged on loans and, to a lesser extent, from interest and dividends earned on investment securities. We have also derived income from noninterest sources, such as: fees received in connection with various lending and deposit services; wealth management services; mortgage loan originations, sales and servicing; 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 taxes. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with GAAP and guidance provided by the SEC for interim financial information. Accordingly, the condensed financial statements do not include all of the information and footnotes required by GAAP for completed financial statements. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from these estimates. The consolidated financial statements of the Company should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 2, 2026. Certain reclassifications of 2025 amounts have been made to conform to the 2026 presentation. All significant transactions and accounts between subsidiaries have been eliminated. Assets held for customers in a fiduciary or agency capacity are not assets of the Company and, accordingly, other than trust cash on deposit with the Bank, are not included in the accompanying unaudited balance sheets. Management has evaluated subsequent events for potential recognition or disclosure. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or any other period. 8 Table of Contents Accounting Guidance Not Yet Adopted FASB ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses - In November 2024, the FASB issued ASU 2024-03 in order to improve the disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in ASU 2024-03 require disclosure, in the notes to the financial statements, of specified information about certain costs and expenses in interim and year-end reporting periods. The amendments in this ASU apply to all public business entities and are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments are to be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company will update the related disclosures upon adoption. FASB ASU No. 2025-06, Intangibles - Goodwill and Other--Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software - In September 2025, the FASB issued ASU 2025-06, changing the criteria for capitalizing software costs to the following: (1) a commitment has been made to fund the software project, and (2) it is probable the project will be completed and used to perform its intended function. Under this update, software development stages are no longer a consideration in the determination of which costs are capitalized. The amendments in this update may be adopted on a prospective, modified transition, or retrospective basis, and will be effective for the Company for annual and interim reporting periods beginning January 1, 2028. Early adoption is permitted. The Company is currently evaluating the effect this ASU may have on its financial position and results of operations. 9 Table of Contents NOTE 2 – INVESTMENT SECURITIES Investment Securities Available for Sale Investment securities available for sale at March 31, 2026 and December 31, 2025 were as follows: March 31, 2026 (dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value Investment securities available for sale U.S. government sponsored entities and U.S. agency securities $ 25,381 $ 18 $ ( 180 ) $ 25,219 Mortgage-backed securities - agency (1) 1,337,062 2,964 ( 87,975 ) 1,252,051 Mortgage-backed securities - non-agency 84,099 1,364 ( 2,461 ) 83,002 Asset-backed student loans 20,484 9 ( 119 ) 20,374 State and municipal securities 75,981 259 ( 4,586 ) 71,654 Collateralized loan obligations 84,865 — ( 288 ) 84,577 Corporate securities 57,546 69 ( 1,937 ) 55,678 Total available for sale securities $ 1,685,418 $ 4,683 $ ( 97,546 ) $ 1,592,555 (1) The amount of fair value hedging adjustment included in the amortized cost amount of the hedged investment securities available-for-sale as of March 31, 2026 was $( 0.9 ) million. See Note 6 - Derivative Instruments for additional information regarding these derivative financial instruments. December 31, 2025 (dollars in thousands) Amortized cost Gross unrealized gains Gross unrealized losses Fair value Investment securities available for sale U.S. government sponsored entities and U.S. agency securities $ 20,744 $ 7 $ ( 928 ) $ 19,823 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 Total available for sale securities $ 1,602,810 $ 5,328 $ ( 85,137 ) $ 1,523,001 (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 6 - Derivative Instruments for additional information regarding these derivative financial instruments. 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 March 31, 2026 and December 31, 2025 . 10 Table of Contents 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, as of March 31, 2026. 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. (dollars in thousands) Amortized cost Fair value Investment securities available for sale Within one year $ 3,738 $ 3,779 After one year through five years 35,575 34,270 After five years through ten years 105,681 101,333 After ten years 119,263 118,120 Mortgage-backed securities 1,421,161 1,335,053 Total available for sale securities $ 1,685,418 $ 1,592,555 Proceeds and gross realized gains and losses on sales of investment securities available for sale for the three months ended March 31, 2026 are summarized as follows: Three Months Ended March 31, (dollars in thousands) 2026 Investment securities available for sale Proceeds from sales $ 98,599 Gross realized gains on sales 248 Gross realized losses on sales ( 1,979 ) There were no gross realized gains or losses on sales of investment securities available for sale for the three months ended March 31, 2025. Unrealized losses and fair values for investment securities available for sale as of March 31, 2026 and December 31, 2025, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are summarized as follows: March 31, 2026 Less than 12 Months 12 Months or more Total (dollars in thousands) Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss Investment securities available for sale U.S. government sponsored entities and U.S. agency securities $ 19,406 $ 180 $ — $ — $ 19,406 $ 180 Mortgage-backed securities - agency 479,269 8,766 485,672 79,209 964,941 87,975 Mortgage-backed securities - non-agency 21,370 54 16,120 2,407 37,490 2,461 Asset-backed student loans 3,691 11 14,104 108 17,795 119 State and municipal securities 11,524 83 43,461 4,503 54,985 4,586 Collateralized loan obligations 43,577 288 — — 43,577 288 Corporate securities 3,999 1 43,610 1,936 47,609 1,937 Total available for sale securities $ 582,836 $ 9,383 $ 602,967 $ 88,163 $ 1,185,803 $ 97,546 11 Table of Contents December 31, 2025 Less than 12 Months 12 Months or more Total (dollars in thousands) Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss Investment securities available for sale U.S. government sponsored entities and U.S. agency securities $ 9,668 $ 5 $ 9,077 $ 923 $ 18,745 $ 928 Mortgage-backed securities - agency 201,422 1,191 524,471 74,285 725,893 75,476 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 Total available for sale securities $ 222,626 $ 1,222 $ 663,757 $ 83,915 $ 886,383 $ 85,137 At March 31, 2026, 295 investment securities available for sale had unrealized losses with aggregate depreciation of 7.37 % from their amortized cost basis. For all of the above investment securities, the unrealized losses were generally due to changes in interest rates and other market conditions that do not represent credit-related impairments. The Company expects the fair value to recover as the securities approach their respective maturity dates and principal is paid back in full. The Company does not intend to sell and it is not more likely than not that the Company will be required to sell the securities prior to their anticipated recovery of their amortized cost. NOTE 3 – LOANS The following table presents total loans outstanding by portfolio class, as of March 31, 2026 and December 31, 2025: (dollars in thousands) March 31, 2026 December 31, 2025 Commercial: Commercial $ 1,109,478 $ 1,062,691 Commercial other 107,033 115,830 Commercial real estate: Commercial real estate non-owner occupied 1,419,542 1,447,894 Commercial real estate owner occupied 461,699 444,443 Multi-family 376,242 383,377 Farmland 64,715 66,950 Construction and land development 276,469 286,140 Total commercial loans 3,815,178 3,807,325 Residential real estate: Residential first lien 280,205 286,178 Other residential 64,306 63,445 Consumer: Consumer 93,332 99,692 Consumer other 41,749 44,383 Lease financing 43,803 50,981 Total loans $ 4,338,573 $ 4,352,004 Total loans included net deferred loan fees of $ 8.4 million and $ 8.2 million at March 31, 2026 and December 31, 2025, respectively, and unearned discounts of $ 3.9 million and $ 4.7 million within the lease financing portfolio at March 31, 2026 and December 31, 2025, respectively. 12 Table of Contents Classifications of Loan Portfolio The Company monitors and assesses the credit risk of its loan portfolio using the classes set forth below. These classes also represent the segments by which the Company monitors the performance of its loan portfolio and estimates its allowance for credit losses on loans. Commercial —Loans to varying types of businesses, including municipalities, school districts and nonprofit organizations, for the purpose of supporting working capital, operational needs and term financing of equipment. Repayment of such loans is generally provided through operating cash flows of the business. Commercial loans are predominately secured by equipment, inventory, accounts receivable, and other sources of repayment. Commercial real estate —Loans secured by real estate occupied by the borrower for ongoing operations, including loans to borrowers engaged in agricultural production, and non-owner occupied real estate leased to one or more tenants, including commercial office, industrial, special purpose, retail and multi-family residential real estate loans. Construction and land development —Secured loans for the construction of business and residential properties. Real estate construction loans often convert to a real estate commercial loan at the completion of the construction period. Secured development loans are made to borrowers for the purpose of infrastructure improvements to vacant land to create finished marketable residential and commercial lots/land. Most land development loans are originated with the intention that the loans will be paid through the sale of developed lots/land by the developers within twelve months of the completion date. Interest reserves may be established on real estate construction loans. Residential real estate —Loans secured by residential properties that generally do not qualify for secondary market sale; however, the risk to return and/or overall relationship are considered acceptable to the Company. This category also includes loans whereby consumers utilize equity in their personal residence, generally through a second mortgage, as collateral to secure the loan. Consumer —Loans to consumers primarily for the purpose of home improvements or acquiring automobiles, recreational vehicles and boats. Consumer loans consist of relatively small amounts that are spread across many individual borrowers. 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. We have extended loans to certain of our directors, executive officers, principal shareholders and their affiliates. These loans were made in the ordinary course of business upon substantially the same terms as comparable transactions with non-insiders, including collateralization and interest rates prevailing at the time. The new loans, other additions, repayments and other reductions for the three months ended March 31, 2026 and 2025, are summarized as follows: Three Months Ended March 31, (dollars in thousands) 2026 2025 Beginning balance $ 46,999 $ 40,410 New loans and other additions 496 2,358 Repayments and other reductions ( 410 ) ( 740 ) Ending balance $ 47,085 $ 42,028 13 Table of Contents The following table represents, by loan portfolio segment, a summary of changes in the allowance for credit losses on loans for the three months ended March 31, 2026 and 2025: Commercial Loan Portfolio Other Loan Portfolio (dollars in thousands) Commercial Commercial real estate Construction and land development Residential real estate Consumer Lease financing Total Balances, December 31, 2025 $ 23,676 $ 28,284 $ 2,619 $ 6,652 $ 4,804 $ 3,184 $ 69,219 Provision for credit losses on loans 2,489 3,206 ( 16 ) ( 459 ) 137 46 5,403 Charge-offs ( 2,062 ) ( 3,838 ) ( 35 ) ( 65 ) ( 896 ) ( 737 ) ( 7,633 ) Recoveries 474 1 — 75 158 178 886 Balances, March 31, 2026 $ 24,577 $ 27,653 $ 2,568 $ 6,203 $ 4,203 $ 2,671 $ 67,875 Balances, December 31, 2024 $ 42,776 $ 36,837 $ 3,550 $ 8,002 $ 5,400 $ 14,639 $ 111,204 Provision for credit losses on loans 3,580 2,954 ( 529 ) ( 74 ) 940 3,979 10,850 Charge-offs ( 13,300 ) ( 723 ) — ( 72 ) ( 453 ) ( 3,448 ) ( 17,996 ) Recoveries 498 1 — 18 48 553 1,118 Balances, March 31, 2025 $ 33,554 $ 39,069 $ 3,021 $ 7,874 $ 5,935 $ 15,723 $ 105,176 The Company utilizes a combination of models which measure probability of default and loss given default in determining expected future credit losses. The probability of default is the risk that the borrower will be unable or unwilling to repay its debt in full or on time. The risk of default is derived by analyzing the obligor’s capacity to repay the debt in accordance with contractual terms. Probability of default is generally associated with financial characteristics such as inadequate cash flow to service debt, declining revenues or operating margins, high leverage, declining or marginal liquidity, and the inability to successfully implement a business plan. In addition to these quantifiable factors, the borrower’s willingness to repay also must be evaluated. The probability of default is forecasted, for most commercial and retail loans, using a regression model that determines the likelihood of default within the twelve month time horizon. The regression model uses forward-looking economic forecasts including variables such as gross domestic product, housing price index, and real disposable income to predict default rates. The loss given default component is the percentage of defaulted loan balance that is ultimately charged off. As a method for estimating the allowance, a form of migration analysis is used that combines the estimated probability of loans experiencing default events and the losses ultimately associated with the loans experiencing those defaults. Multiplying one by the other gives the Company its loss rate, which is then applied to the loan portfolio balance to determine expected future losses. Within the model, the loss given default approach produces segmented loss given default estimates using a loss curve methodology, which is based on historical net losses from charge-off and recovery information. The main principle of a loss curve model is that the loss follows a steady timing schedule based on how long the defaulted loan has been on the books. The Company’s expected loss estimate is anchored in historical credit loss experience, with an emphasis on all available portfolio data. The Company’s historical look-back period includes January 2012 through the current period on a monthly basis. 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. Historical data is evaluated in multiple components of the expected credit loss, including a reasonable and supportable forecast and the post-reversion period of each loan segment. The historical experience is used to infer probability of default and loss given default in the reasonable and supportable forecast period. In the post-reversion period, long-term average loss rates are segmented by loan pool. Qualitative reserves reflect management’s overall estimate of the extent to which current expected credit losses on collectively evaluated loans will differ from historical loss experience. The analysis takes into consideration other analytics performed within the organization, such as enterprise and concentration management, along with other credit-related analytics as deemed appropriate. Management attempts to quantify qualitative reserves whenever possible. 14 Table of Contents The Company segments the loan portfolio into pools based on the following risk characteristics: financial asset type, collateral type, loan characteristics, credit characteristics, outstanding loan balances, contractual terms and prepayment assumptions, industry of borrower and concentrations, historical or expected credit loss patterns, and reasonable and supportable forecast periods. Within the probability of default segmentation, credit metrics are identified to further segment the financial assets. The Company utilizes risk ratings for the commercial portfolios and days past due for the consumer and the lease financing portfolios. The Company has defined five transitioning risk states for each asset pool within the expected credit loss model. The below table illustrates the transition matrix: Risk state Commercial loans risk rating Consumer loans and equipment finance loans and leases days past due 1 0-5 0 - 14 2 6 15 - 29 3 7 30 - 59 4 8 60 - 89 Default 9+ and nonaccrual 90 + and nonaccrual Expected Credit Losses 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. The following table presents the amortized cost basis of individually evaluated loans on nonaccrual status as of March 31, 2026 and December 31, 2025: March 31, 2026 December 31, 2025 (dollars in thousands) Nonaccrual with allowance Nonaccrual with no allowance Total nonaccrual Nonaccrual with allowance Nonaccrual with no allowance Total nonaccrual Commercial: Commercial $ 3,192 $ 3,850 $ 7,042 $ 3,370 $ 3,849 $ 7,219 Commercial other 1,203 1,301 2,504 1,040 2,157 3,197 Commercial real estate: Commercial real estate non-owner occupied 11,100 5 11,105 1,537 13,547 15,084 Commercial real estate owner occupied 3,533 8,684 12,217 3,455 8,684 12,139 Multi-family — 15,258 15,258 14,336 2,112 16,448 Farmland 1,148 254 1,402 1,260 402 1,662 Construction and land development — — — 155 — 155 Total commercial loans 20,176 29,352 49,528 25,153 30,751 55,904 Residential real estate: Residential first lien 3,011 255 3,266 3,087 313 3,400 Other residential 613 — 613 426 — 426 Consumer: Consumer 77 — 77 47 — 47 Lease financing 674 — 674 1,162 — 1,162 Total loans $ 24,551 $ 29,607 $ 54,158 $ 29,875 $ 31,064 $ 60,939 There was no interest income recognized on nonaccrual loans during the three months ended March 31, 2026 and 2025 while the loans were in nonaccrual status. 15 Table of Contents Collateral Dependent Financial Assets A collateral dependent financial asset is a loan that relies solely on the operation or sale of the collateral for repayment. In evaluating the overall risk associated with a loan, the Company considers character, overall financial condition and resources, and payment record of the borrower; the prospects for support from any financially responsible guarantors; and the nature and degree of protection provided by the cash flow and value of any underlying collateral. 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. The table below presents the amortized cost basis of individually evaluated, collateral dependent loans by loan class, for borrowers experiencing financial difficulty, as of March 31, 2026 and December 31, 2025: Type of Collateral (dollars in thousands) Real Estate Blanket Lien Total March 31, 2026 Commercial: Commercial $ — $ 3,850 $ 3,850 Commercial other — 1,889 1,889 Commercial real estate: Non-owner occupied 10,030 — 10,030 Owner occupied 8,576 1,595 10,171 Multi-family 15,258 — 15,258 Farmland — 254 254 Total collateral dependent loans $ 33,864 $ 7,588 $ 41,452 December 31, 2025 Commercial: Commercial $ — $ 3,850 $ 3,850 Commercial other — 2,157 2,157 Commercial real estate: Non-owner occupied 13,951 — 13,951 Owner occupied 8,576 1,595 10,171 Multi-family 16,448 — 16,448 Farmland — 401 401 Total collateral dependent loans $ 38,975 $ 8,003 $ 46,978 16 Table of Contents The aging status of the recorded investment in loans by class as of March 31, 2026 was as follows: Accruing loans (dollars in thousands) Current 30-59 days past due 60-89 days past due Past due 90 days or more Total past due Nonaccrual Total Commercial: Commercial $ 1,098,490 $ 3,919 $ 27 $ — $ 3,946 $ 7,042 $ 1,109,478 Commercial other 94,049 5,239 747 4,494 10,480 2,504 107,033 Commercial real estate: Commercial real estate non-owner occupied 1,408,265 172 — — 172 11,105 1,419,542 Commercial real estate owner occupied 448,994 — 488 — 488 12,217 461,699 Multi-family 355,871 5,113 — — 5,113 15,258 376,242 Farmland 63,136 21 156 — 177 1,402 64,715 Construction and land development 276,469 — — — — — 276,469 Total commercial loans 3,745,274 14,464 1,418 4,494 20,376 49,528 3,815,178 Residential real estate: Residential first lien 275,596 1,328 15 — 1,343 3,266 280,205 Other residential 63,312 110 271 — 381 613 64,306 Consumer: Consumer 93,055 143 57 — 200 77 93,332 Consumer other 41,270 376 103 — 479 — 41,749 Lease financing 41,009 1,267 714 139 2,120 674 43,803 Total loans $ 4,259,516 $ 17,688 $ 2,578 $ 4,633 $ 24,899 $ 54,158 $ 4,338,573 The aging status of the recorded investment in loans by class as of December 31, 2025 was as follows: Accruing loans (dollars in thousands) Current 30-59 days past due 60-89 days past due Past due 90 days or more Total past due Nonaccrual Total Commercial: Commercial $ 1,053,096 $ 2,035 $ 341 $ — $ 2,376 $ 7,219 $ 1,062,691 Commercial other 101,686 4,113 2,325 4,509 10,947 3,197 115,830 Commercial real estate: Commercial real estate non-owner occupied 1,432,637 173 — — 173 15,084 1,447,894 Commercial real estate owner occupied 430,972 701 631 — 1,332 12,139 444,443 Multi-family 366,929 — — — — 16,448 383,377 Farmland 65,267 21 — — 21 1,662 66,950 Construction and land development 282,169 3,718 98 — 3,816 155 286,140 Total commercial loans 3,732,756 10,761 3,395 4,509 18,665 55,904 3,807,325 Residential real estate: Residential first lien 282,320 22 401 35 458 3,400 286,178 Other residential 62,459 450 110 — 560 426 63,445 Consumer: Consumer 99,474 153 18 — 171 47 99,692 Consumer other 43,618 320 445 — 765 — 44,383 Lease financing 48,815 945 59 — 1,004 1,162 50,981 Total loans $ 4,269,442 $ 12,651 $ 4,428 $ 4,544 $ 21,623 $ 60,939 $ 4,352,004 17 Table of Contents Loan Restructurings The Company may offer various types of concessions when a borrower is experiencing financial difficulties that result in a direct change in the timing or amount of contractual cash flows including principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. Commercial loans modified in a loan restructuring often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. Loans modified in a loan restructuring for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for loans that have been modified in a loan restructuring is measured based on the probability of default and loss given default model, the loan's observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates. Commercial and consumer loans modified in a loan restructuring are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a loan restructuring subsequently default, the Company evaluates the loan for possible further loss. The allowance may be increased, adjustments may be made in the allocation of the allowance, or partial charge-offs may be taken to further write-down the carrying value of the loan. The following table presents, by loan portfolio segment, a summary of loan restructurings for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, 2026 2025 (dollars in thousands) Balance Count Balance Count Commercial: Commercial $ 1,369 1 $ 973 1 Commercial other — — 306 2 Commercial real estate: Farmland 100 1 — — Construction and land development 9,000 1 — — Total commercial loans 10,469 3 1,279 3 Residential real estate: Residential first lien 37 1 150 3 Other residential — — 11 1 Total loan restructurings $ 10,506 4 $ 1,440 7 18 Table of Contents The following tables present a summary of loan restructurings, by loan portfolio segment and type of restructuring, for the three months ended March 31, 2026 and 2025: For the three months ended March 31, 2026 (dollars in thousands) Term Extension ($) Total Modifications ($) Total Class of Financing Receivable (%) Commercial: Commercial $ 1,369 $ 1,369 0.12 % Commercial other — — — Commercial real estate: Farmland 100 100 0.15 Construction & land development 9,000 9,000 3.26 Total commercial loans $ 10,469 $ 10,469 0.27 % Residential real estate: Residential first lien 37 37 0.01 Other residential — — — Total $ 10,506 $ 10,506 0.24 % For the three months ended March 31, 2025 (dollars in thousands) Term Extension ($) Interest Rate Reduction ($) Total Modifications ($) Total Class of Financing Receivable (%) Commercial: Commercial $ 973 $ — $ 973 0.09 % Commercial other — 306 306 0.26 Commercial real estate: Farmland — — — — Construction & land development — — — — Total commercial loans $ 973 $ 306 $ 1,279 0.03 % Residential real estate: Residential first lien 150 — 150 0.05 Other residential 11 — 11 0.02 Total $ 1,134 $ 306 $ 1,440 0.03 % The Company has not committed to lend any additional amounts to the borrowers that have been granted a loan modification. 19 Table of Contents 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 as of March 31, 2026: (dollars in thousands) 30-59 days past due 60-89 days past due Past due 90 days or more Total past due Current Total Commercial: Commercial $ — $ — $ — $ — $ 12,158 $ 12,158 Commercial other 169 — — 169 — 169 Commercial real estate: Commercial real estate non-owner occupied — — — — 19,864 19,864 Farmland 221 — — 221 100 321 Construction and land development — — — — 10,589 10,589 Total commercial loans 390 — — 390 42,711 43,101 Residential real estate: Residential first lien — — — — 78 78 Other residential — — — — — — Total loan restructurings $ 390 $ — $ — $ 390 $ 42,789 $ 43,179 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 days past due 60-89 days past due Past due 90 days or more Total past due Current Total Commercial: Commercial $ — $ — $ — $ — $ 12,033 $ 12,033 Commercial other — — — — 552 552 Commercial real estate: Commercial real estate non-owner occupied — — — — 20,013 20,013 Farmland — — — — 380 380 Construction and land development — — — — 1,588 1,588 Total commercial loans — — — — 34,566 34,566 Residential real estate: Residential first lien — 5 2 7 178 185 Other residential — — — — 9 9 Total loan restructurings $ — $ 5 $ 2 $ 7 $ 34,753 $ 34,760 Credit Quality Monitoring The Company maintains loan policies and credit underwriting standards as part of the process of managing credit risk. 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 historically 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 based on the grading system set forth below. All loan authority is based on the aggregate credit to a borrower and its related entities. 20 Table of Contents 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. The ongoing measurement of credit quality of the consumer loan portfolio is largely done on an exception basis. If payments are made on schedule, as agreed, then no further monitoring is performed. However, if delinquency occurs, the delinquent loans are turned over to the Company’s Consumer Collections Group for resolution. Credit quality for the entire consumer loan portfolio is measured by the periodic delinquency rate, nonaccrual amounts and actual losses incurred. 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. The Company also maintains an independent appraisal review function that participates in the review of all appraisals obtained by the Company. Credit Quality Indicators The Company uses a ten grade risk rating system to monitor the ongoing credit quality of its commercial loan portfolio. These loan grades rank the credit quality of a borrower by measuring liquidity, debt capacity, and coverage and payment behavior as shown in the borrower’s financial statements. The risk grades also measure the quality of the borrower’s management and the repayment support offered by any guarantors. The Company considers all loans with Risk Grades 1 - 6 as acceptable credit risks and structures and manages such relationships accordingly. Periodic financial and operating data combined with regular loan officer interactions are deemed adequate to monitor borrower performance. Loans with Risk Grades of 7 are considered "watch credits" categorized as special mention and the frequency of loan officer contact and receipt of financial data is increased to stay abreast of borrower performance. Loans with Risk Grades of 8 - 10 are considered problematic and require special care. Risk Grade 8 is categorized as substandard, 9 as substandard - nonaccrual and 10 as doubtful. Further, loans with Risk Grades of 7 - 10 are managed regularly through a number of processes, procedures and committees, including oversight by a loan administration committee comprised of executive and senior management of the Company, which includes highly structured reporting of financial and operating data, intensive loan officer intervention and strategies to exit, as well as potential management by the Company's Special Assets Group. Loans not graded in the commercial loan portfolio are monitored by aging status and payment activity. As discussed previously in Loan Restructurings, the Company does provide various types of concessions when a borrower is experiencing financial difficulties that result in a direct change in the timing or amount of contractual cash flows. 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. 21 Table of Contents The following tables present the recorded investment of the commercial loan portfolio by risk category as of March 31, 2026 and December 31, 2025: March 31, 2026 Term Loans Amortized Cost Basis by Origination Year (dollars in thousands) 2026 2025 2024 2023 2022 Prior Revolving loans Total Commercial Commercial Acceptable credit quality $ 75,899 $ 418,424 $ 87,281 $ 29,812 $ 12,768 $ 58,726 $ 400,925 $ 1,083,835 Special mention — — — 5,229 — — — 5,229 Substandard — 680 1,442 2,511 191 5,239 3,309 13,372 Substandard – nonaccrual — — 67 1,034 4,200 1,038 703 7,042 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 75,899 419,104 88,790 38,586 17,159 65,003 404,937 1,109,478 Commercial other Acceptable credit quality 1,888 3,611 1,452 1,400 5,503 788 87,291 101,933 Special mention — 201 — 59 189 56 1,183 1,688 Substandard — — — 24 — 64 820 908 Substandard – nonaccrual — — — 464 104 238 1,698 2,504 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 1,888 3,812 1,452 1,947 5,796 1,146 90,992 107,033 Commercial real estate Non-owner occupied Acceptable credit quality 79,175 291,851 244,596 126,614 302,152 279,611 11,738 1,335,737 Special mention — 3,104 — — 2,761 16,016 — 21,881 Substandard 4,247 8,203 8,003 — 15,645 14,721 — 50,819 Substandard – nonaccrual — 82 5,256 — 59 5,708 — 11,105 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 83,422 303,240 257,855 126,614 320,617 316,056 11,738 1,419,542 Owner occupied Acceptable credit quality 26,869 106,576 82,922 37,064 85,621 107,425 1,149 447,626 Special mention — — 217 — — 619 — 836 Substandard — — 317 — — 703 — 1,020 Substandard – nonaccrual — 909 184 — 9,640 1,180 304 12,217 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 26,869 107,485 83,640 37,064 95,261 109,927 1,453 461,699 Multi-family Acceptable credit quality 38,466 96,290 7,273 10,180 135,989 42,158 1,002 331,358 Special mention — — — 7,525 — — — 7,525 Substandard — — — — 16,955 5,146 — 22,101 Substandard – nonaccrual — — — — 15,258 — — 15,258 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 38,466 96,290 7,273 17,705 168,202 47,304 1,002 376,242 Farmland Acceptable credit quality 3,979 17,338 1,875 6,482 3,101 26,968 721 60,464 Special mention — — — — — 1,077 — 1,077 Substandard 1,294 358 — — — 120 — 1,772 Substandard – nonaccrual — 33 — — — 1,321 48 1,402 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 5,273 17,729 1,875 6,482 3,101 29,486 769 64,715 Construction and land development Acceptable credit quality 17,016 118,408 51,770 954 28,559 24,564 16,459 257,730 Special mention — 1,103 — — 9,000 — — 10,103 Substandard — — 1,588 — — 73 — 1,661 Substandard – nonaccrual — — — — — — — — Doubtful — — — — — — — — Not graded 1,271 4,431 759 294 152 68 — 6,975 Subtotal 18,287 123,942 54,117 1,248 37,711 24,705 16,459 276,469 Total Acceptable credit quality 243,292 1,052,498 477,169 212,506 573,693 540,240 519,285 3,618,683 Special mention — 4,408 217 12,813 11,950 17,768 1,183 48,339 Substandard 5,541 9,241 11,350 2,535 32,791 26,066 4,129 91,653 Substandard – nonaccrual — 1,024 5,507 1,498 29,261 9,485 2,753 49,528 Doubtful — — — — — — — — Not graded 1,271 4,431 759 294 152 68 — 6,975 Total commercial loans $ 250,104 $ 1,071,602 $ 495,002 $ 229,646 $ 647,847 $ 593,627 $ 527,350 $ 3,815,178 22 Table of Contents December 31, 2025 Term Loans Amortized Cost Basis by Origination Year (dollars in thousands) 2025 2024 2023 2022 2021 Prior Revolving loans Total Commercial Commercial Acceptable credit quality $ 430,303 $ 90,583 $ 68,878 $ 13,508 $ 25,150 $ 37,678 $ 369,376 $ 1,035,476 Special mention 647 1,442 5,229 — — 21 — 7,339 Substandard 37 — 2,556 216 4,099 1,181 4,568 12,657 Substandard – nonaccrual — 70 996 4,200 426 818 709 7,219 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 430,987 92,095 77,659 17,924 29,675 39,698 374,653 1,062,691 Commercial other Acceptable credit quality 4,966 1,732 1,735 6,396 693 312 94,573 110,407 Special mention 201 — 64 209 — 8 663 1,145 Substandard — — 26 — — 63 992 1,081 Substandard – nonaccrual — — 500 79 311 311 1,996 3,197 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 5,167 1,732 2,325 6,684 1,004 694 98,224 115,830 Commercial real estate Non-owner occupied Acceptable credit quality 317,256 253,999 121,375 327,996 187,171 132,080 12,556 1,352,433 Special mention 104 7,630 3,113 2,780 12,508 3,600 — 29,735 Substandard 342 8,088 — 10,254 — 31,958 — 50,642 Substandard – nonaccrual — 9,178 — 59 — 5,847 — 15,084 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 317,702 278,895 124,488 341,089 199,679 173,485 12,556 1,447,894 Owner occupied Acceptable credit quality 92,863 82,708 39,146 86,498 66,979 59,816 835 428,845 Special mention — 841 — — — 630 — 1,471 Substandard 287 358 — — 18 1,325 — 1,988 Substandard – nonaccrual 909 184 — 9,643 264 835 304 12,139 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 94,059 84,091 39,146 96,141 67,261 62,606 1,139 444,443 Multi-family Acceptable credit quality 102,138 30,280 10,233 150,482 38,456 4,473 1,101 337,163 Special mention — — 7,562 17,045 — — — 24,607 Substandard — — — — 5,124 35 — 5,159 Substandard – nonaccrual — — — 16,448 — — — 16,448 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 102,138 30,280 17,795 183,975 43,580 4,508 1,101 383,377 Farmland Acceptable credit quality 19,081 1,906 6,858 3,415 6,418 23,454 775 61,907 Special mention — — — — 827 94 — 921 Substandard 958 — 1,210 — 12 280 — 2,460 Substandard – nonaccrual 246 — — — 267 1,101 48 1,662 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 20,285 1,906 8,068 3,415 7,524 24,929 823 66,950 Construction and land development Acceptable credit quality 122,570 78,267 11,000 26,771 16,363 359 14,402 269,732 Special mention 942 — — 9,000 — — — 9,942 Substandard — 1,588 — — 77 — — 1,665 Substandard – nonaccrual — 155 — — — — — 155 Doubtful — — — — — — — — Not graded 3,292 774 306 255 — 19 — 4,646 Subtotal 126,804 80,784 11,306 36,026 16,440 378 14,402 286,140 Total Acceptable credit quality 1,089,177 539,475 259,225 615,066 341,230 258,172 493,618 3,595,963 Special mention 1,894 9,913 15,968 29,034 13,335 4,353 663 75,160 Substandard 1,624 10,034 3,792 10,470 9,330 34,842 5,560 75,652 Substandard – nonaccrual 1,155 9,587 1,496 30,429 1,268 8,912 3,057 55,904 Doubtful — — — — — — — — Not graded 3,292 774 306 255 — 19 — 4,646 Total commercial loans $ 1,097,142 $ 569,783 $ 280,787 $ 685,254 $ 365,163 $ 306,298 $ 502,898 $ 3,807,325 23 Table of Contents The following table presents the gross charge-offs by class of loan and year of origination on the commercial loan portfolio for the three months ended March 31, 2026 and 2025: Term Loans by Origination Year (dollars in thousands) 2026 2025 2024 2023 2022 Prior Revolving Loans Total For the three months ended March 31, 2026 Commercial Commercial $ — $ — $ — $ — $ — $ — $ — $ — Commercial other — 22 4 21 15 3 1,997 2,062 Commercial real estate Non-owner occupied — — — — — 2,710 — 2,710 Multi-family — — — — 1,128 — — 1,128 Construction and land development — — 35 — — — — 35 Total gross commercial charge-offs $ — $ 22 $ 39 $ 21 $ 1,143 $ 2,713 $ 1,997 $ 5,935 Term Loans by Origination Year (dollars in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Total For the three months ended March 31, 2025 Commercial Commercial $ — $ — $ — $ — $ — $ 64 $ — $ 64 Commercial other — 42 792 1,015 227 78 11,082 13,236 Commercial real estate Non-owner occupied — — — — — — — — Multi-family — — — — — 723 — 723 Construction and land development — — — — — — — — Total gross commercial charge-offs $ — $ 42 $ 792 $ 1,015 $ 227 $ 865 $ 11,082 $ 14,023 24 Table of Contents 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 March 31, 2026 and December 31, 2025: March 31, 2026 Term Loans Amortized Cost Basis by Origination Year (dollars in thousands) 2026 2025 2024 2023 2022 Prior Revolving Loans Total Residential real estate Residential first lien Performing $ 1,457 $ 7,114 $ 27,533 $ 37,108 $ 60,017 $ 143,631 $ 80 $ 276,940 Nonperforming — 23 — 472 180 2,590 — 3,265 Subtotal 1,457 7,137 27,533 37,580 60,197 146,221 80 280,205 Other residential Performing 317 2,893 2,035 1,653 588 1,471 54,735 63,692 Nonperforming — — — — — 93 521 614 Subtotal 317 2,893 2,035 1,653 588 1,564 55,256 64,306 Consumer Consumer Performing 2,386 30,456 14,207 13,075 10,495 21,744 892 93,255 Nonperforming — — 43 20 — 12 2 77 Subtotal 2,386 30,456 14,250 13,095 10,495 21,756 894 93,332 Consumer other Performing — — — 323 29,752 11,674 — 41,749 Nonperforming — — — — — — — — Subtotal — — — 323 29,752 11,674 — 41,749 Leases financing Performing 229 4,483 7,323 11,436 14,894 4,625 — 42,990 Nonperforming — — 146 249 339 79 — 813 Subtotal 229 4,483 7,469 11,685 15,233 4,704 — 43,803 Total Performing 4,389 44,946 51,098 63,595 115,746 183,145 55,707 518,626 Nonperforming — 23 189 741 519 2,774 523 4,769 Total other loans $ 4,389 $ 44,969 $ 51,287 $ 64,336 $ 116,265 $ 185,919 $ 56,230 $ 523,395 25 Table of Contents December 31, 2025 Term Loans Amortized Cost Basis by Origination Year (dollars in thousands) 2025 2024 2023 2022 2021 Prior Revolving loans Total Residential real estate Residential first lien Performing $ 8,254 $ 28,464 $ 37,936 $ 60,875 $ 29,331 $ 117,847 $ 35 $ 282,742 Nonperforming 25 — 475 239 296 2,401 — 3,436 Subtotal 8,279 28,464 38,411 61,114 29,627 120,248 35 286,178 Other residential Performing 3,104 2,092 1,761 642 194 1,441 53,786 63,020 Nonperforming — — — — — 93 332 425 Subtotal 3,104 2,092 1,761 642 194 1,534 54,118 63,445 Consumer Consumer Performing 33,113 16,117 14,210 11,576 18,018 5,571 1,040 99,645 Nonperforming — 3 23 4 — 16 1 47 Subtotal 33,113 16,120 14,233 11,580 18,018 5,587 1,041 99,692 Consumer other Performing — — 326 30,970 5,874 7,213 — 44,383 Nonperforming — — — — — — — — Subtotal — — 326 30,970 5,874 7,213 — 44,383 Leases financing Performing 5,664 7,833 12,837 17,399 4,533 1,553 — 49,819 Nonperforming — 442 60 327 321 12 — 1,162 Subtotal 5,664 8,275 12,897 17,726 4,854 1,565 — 50,981 Total Performing 50,135 54,506 67,070 121,462 57,950 133,625 54,861 539,609 Nonperforming 25 445 558 570 617 2,522 333 5,070 Total other loans $ 50,160 $ 54,951 $ 67,628 $ 122,032 $ 58,567 $ 136,147 $ 55,194 $ 544,679 The following table presents the gross charge-offs by class of loan and year of origination on the other loan portfolio for the three months ended March 31, 2026 and 2025: Term Loans by Origination Year (dollars in thousands) 2026 2025 2024 2023 2022 Prior Revolving Loans Total For the three months ended March 31, 2026 Residential real estate Residential first lien $ — $ — $ — $ — $ 59 $ — $ — $ 59 Other residential — — — — — — 6 6 Consumer Consumer — 1 12 28 2 1 1 45 Consumer other 1 84 18 28 465 255 — 851 Lease financing — — 284 24 168 261 — 737 Total gross other charge-offs $ 1 $ 85 $ 314 $ 80 $ 694 $ 517 $ 7 $ 1,698 Term Loans by Origination Year (dollars in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Total For the three months ended March 31, 2025 Residential real estate Residential first lien $ — $ — $ — $ — $ — $ 27 $ — $ 27 Other residential — — — 25 — 1 19 45 Consumer Consumer — 1 5 2 — 1 4 13 Consumer other 4 52 17 15 5 347 — 440 Lease financing — 143 1,706 1,231 209 159 — 3,448 Total gross other charge-offs $ 4 $ 196 $ 1,728 $ 1,273 $ 214 $ 535 $ 23 $ 3,973 26 Table of Contents NOTE 4 – PREMISES, EQUIPMENT AND LEASES A summary of premises, equipment and leases at March 31, 2026 and December 31, 2025 is as follows: March 31, December 31, (dollars in thousands) 2026 2025 Land $ 15,856 $ 15,856 Buildings and improvements 86,866 86,429 Furniture and equipment 38,444 38,303 Lease right-of-use assets 7,757 8,117 Total 148,923 148,705 Accumulated depreciation ( 64,754 ) ( 63,571 ) Premises and equipment, net $ 84,169 $ 85,134 Depreciation expense in each of the three months ended March 31, 2026 and 2025 was $ 1.2 million. The Company has entered into operating leases, primarily for banking offices, operating facilities and ATMs, which have remaining lease terms of 5 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 $ 7.8 million and $ 8.1 million as of March 31, 2026 and December 31, 2025, respectively, included in premises and equipment, net on our consolidated balance sheets. The operating lease liabilities of the Company were $ 9.0 million and $ 9.3 million as of March 31, 2026 and December 31, 2025, respectively, and are included in accrued interest payable and other liabilities on our consolidated balance sheets. Information related to operating leases for the three months ended March 31, 2026 and 2025 was as follows: Three Months Ended March 31, (dollars in thousands) 2026 2025 Operating lease cost $ 481 $ 498 Operating cash flows from leases 503 518 Right-of-use assets obtained in exchange for lease obligations 36 837 Weighted average remaining lease term 5.9 years 6.7 years Weighted average discount rate 3.72 % 3.72 % The projected minimum rental payments under the terms of the leases as of March 31, 2026 were as follows: (dollars in thousands) Amount Year ending December 31: 2026 remaining $ 1,363 2027 1,908 2028 1,855 2029 1,655 2030 1,073 Thereafter 2,190 Total future minimum lease payments 10,044 Less imputed interest ( 1,061 ) Total operating lease liabilities $ 8,983 27 Table of Contents NOTE 5 – GOODWILL The carrying amount of goodwill at March 31, 2026 and December 31, 2025 was $ 7.9 million. For the three months ended March 31, 2026, there were no changes in the carrying amount of goodwill. Additionally, the Company did not identify any events or changes in circumstances during the quarter that would indicate that it is more likely than not that the fair value of any reporting unit was less than its carrying amount. Accordingly, no interim goodwill impairment test was considered required or performed. In the first quarter of 2025, we determined that a triggering event had occurred at 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. NOTE 6 – DERIVATIVE INSTRUMENTS The Company enters into derivative instruments, which may include interest rate swaps and interest rate options, in connection with our risk-management activities. Our primary objective for using derivative financial instruments is to manage interest rate risk associated with our fixed-rate and variable-rate assets and liabilities. Interest Rate Risk We monitor our mix of fixed-rate and variable-rate assets and liabilities and may enter into interest rate swaps, forwards, and options to achieve a more desired mix of fixed-rate and variable-rate assets and liabilities. We execute these trades to modify our exposure to interest rate risk by converting certain fixed-rate instruments to a variable-rate and certain variable-rate instruments to a fixed-rate. 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 include fair value hedges and cash flow hedges. Fair value hedges include pay-fixed swaps of securities within our available-for-sale portfolio, and cash flow hedges include interest rate option contracts on certain securities within our available-for-sale portfolio, a portion of 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. These swaps are offset by contracts simultaneously purchased by the Company from other financial dealer institutions with mirror-image terms. Because of the mirror-image terms of the offsetting contracts, in addition to collateral provisions which mitigate the impact of non-performance risk, changes in the fair value subsequent to initial recognition have a minimal effect on earnings. Balance Sheet Presentation The following table summarizes the fair value of derivative instruments reported on our consolidated balance sheets. The amounts are presented on a gross basis, are segregated by derivatives that are designated and qualifying as hedging instruments or those that are not, and are further segregated by type of contract within those two categories. Derivative assets and derivative liabilities are included in other assets and accrued interest payable and other liabilities, respectively, on the consolidated balance sheets. Notional amounts are reference amounts from which contractual obligations are derived and are not recorded on the balance sheet. 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. 28 Table of Contents March 31, 2026 December 31, 2025 Fair Value Fair Value (dollars in thousands) Assets Liabilities Notional amount Assets Liabilities Notional amount Derivatives designated as accounting hedges: Interest rate contracts Fair value hedges Investment securities available for sale $ 952 $ 1,901 $ 187,798 $ 608 $ 2,901 $ 228,157 Cash flow hedges Investment securities available for sale 659 — 90,000 754 — 90,000 Pools of commercial and commercial real estate loans 1,297 999 225,000 1,528 1,180 300,000 FHLB advances, brokered CDs and other borrowings 186 9 100,000 29 502 125,000 Total derivatives designated as accounting hedges $ 3,094 $ 2,909 $ 602,798 $ 2,919 $ 4,583 $ 743,157 Derivatives not designated as accounting hedges: Interest rate contracts Swaps $ 233 $ 233 $ 52,199 $ 395 $ 395 $ 52,637 Interest rate lock commitments 175 — 9,830 137 — 4,594 Forward commitments to sell mortgage-backed securities 150 — 11,630 — 21 9,179 Total derivatives not designated as accounting hedges $ 558 $ 233 $ 73,659 $ 532 $ 416 $ 66,410 The following table presents amounts recorded in the consolidated balance sheets related to cumulative basis adjustments for fair value hedges: 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) March 31, 2026 December 31, 2025 March 31, 2026 December 31, 2025 Investment securities available for sale $ 172,154 $ 352,968 $ ( 949 ) $ ( 2,293 ) Statement of Income Presentation The following table summarizes the effect of derivative instruments in fair value hedging relationships on the consolidated statements of income: Location of gain (loss) recognized in income on derivative Gain (loss) recognized in income on derivative Location of gain (loss) recognized in income on related hedged item Gain (loss) recognized in income on related hedged items (dollars in thousands) 2026 2025 2026 2025 Three Months Ended March 31, Gain (loss) on fair value hedging relationships Interest rate contracts Fixed-rate mortgage-backed securities Interest income on investment securities available for sale $ 1,343 $ ( 3,486 ) Interest income on investment securities available for sale $ ( 1,159 ) $ 3,491 29 Table of Contents The following table summarizes the effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income: Gain (loss) recognized in AOCI on derivative Location of gain (loss) recognized in income on derivative Gain (loss) reclassified from AOCI into income (dollars in thousands) 2026 2025 2026 2025 Three Months Ended March 31, Gain (loss) on cash flow hedging relationships Interest rate contracts Pools of commercial and commercial real estate loans $ ( 50 ) $ 1,117 Interest income on loans $ 109 $ ( 1,005 ) Investment securities available for sale ( 95 ) 446 Interest income on investment securities 54 28 FHLB advances, brokered CDs and other borrowings 650 ( 699 ) Interest expense 30 140 FHLB advances, brokered CDs and other borrowings — — Noninterest expense ( 154 ) — Total gain (loss) on cash flow hedging relationships $ 505 $ 864 $ 39 $ ( 837 ) During the next 12 months, we estimate $ 1.7 million of losses will be reclassified into pre-tax earnings from derivatives designated as cash flow hedges. The following table summarizes the effect of derivative instruments not designated as accounting hedges on the consolidated statements of income: (dollars in thousands) Location of gain recognized in income on derivative 2026 2025 Three Months Ended March 31, Gain on derivative instruments not designated as accounting hedges Interest rate contracts Residential mortgage banking revenue $ 209 $ 70 Total gain on derivative instruments not designated as accounting hedges $ 209 $ 70 NOTE 7 – DEPOSITS The following table summarizes the classification of deposits as of March 31, 2026 and December 31, 2025: (dollars in thousands) March 31, 2026 December 31, 2025 Noninterest-bearing demand $ 1,013,808 $ 1,040,411 Interest-bearing: Checking 1,886,212 1,855,215 Money market 1,295,781 1,248,942 Savings 495,899 487,742 Time 748,367 792,069 Total deposits $ 5,440,067 $ 5,424,379 NOTE 8 – SHORT-TERM BORROWINGS The following table summarizes our short-term borrowings as of March 31, 2026 and December 31, 2025: (dollars in thousands) March 31, 2026 December 31, 2025 Securities sold under repurchase agreements $ 8,425 $ 10,181 AFX borrowings 145,000 50,000 Total short-term borrowings $ 153,425 $ 60,181 Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature within one to four days from the transaction date. Securities sold under agreements to repurchase are reflected at the amount of cash 30 Table of Contents received in connection with the transaction, which represents the amount of the Bank’s obligation. The Bank may be required to provide additional collateral based on the fair value of the underlying securities. The weighted-average interest rate on securities sold under agreements to repurchase was 0.25 % and 0.26 % at March 31, 2026 and December 31, 2025, respectively. Investment securities with a carrying amount of $ 10.1 million and $ 12.2 million at March 31, 2026 and December 31, 2025, respectively, were pledged for securities sold under agreements to repurchase. The Bank also utilizes unsecured short-term borrowings, including transactions executed through the AFX, to manage liquidity needs. AFX borrowings are generally overnight in nature and are priced at market rates, typically based on AMERIBOR, which ranged from 3.68 % to 3.695 % at March 31, 2026 and 3.695 % to 3.74 % at December 31, 2025. NOTE 9 – FHLB ADVANCES The following table summarizes our FHLB advances as of March 31, 2026 and December 31, 2025: (dollars in thousands) March 31, 2026 December 31, 2025 FHLB advances – fixed rate, fixed term at rates averaging 3.97 % and 4.08 % at March 31, 2026 and December 31, 2025 - maturing through October 2029 $ 113,000 $ 168,000 FHLB advances – putable fixed rate at rates averaging 3.68 % and 4.00 % at March 31, 2026 and December 31, 2025, respectively – maturing through July 2034 with call provisions through May 2026 125,000 125,000 Total FHLB advances $ 238,000 $ 293,000 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 $ 2.77 billion and $ 2.87 billion at March 31, 2026 and December 31, 2025, respectively. Based on this collateral, the Company was eligible to borrow $ 0.87 billion from the FHLB at March 31, 2026. NOTE 10 – SUBORDINATED DEBT The following table summarizes the Company’s subordinated debt at March 31, 2026 and December 31, 2025: Subordinated debt Fixed to Float (dollars in thousands) Issued September 2019 At March 31, 2026 Outstanding amount $ 27,250 Carrying amount 27,024 Current rate 5.50 % At December 31, 2025 Outstanding amount $ 27,250 Carrying amount 27,019 Current rate 5.50 % Maturity date 9/30/2034 Optional redemption date 9/30/2029 Fixed to variable conversion date 9/30/2029 Variable rate 3-month SOFR plus 4.05 % Interest payment terms Semiannually through 9/30/2029; Quarterly for all subsequent periods The value of subordinated debentures has been reduced by the debt issuance costs, which are being amortized on a straight line basis through the earlier of the redemption option or maturity date. The subordinated debentures above may be included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations. 31 Table of Contents NOTE 11 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following table summarizes the changes within each classification of AOCI, net of tax: (dollars in thousands) Unrealized gains and losses on investment securities available for sale Unrealized gains and losses on cash flow hedges Total Changes in AOCI for the three months ended March 31, 2026 Balances, December 31, 2025 $ ( 59,217 ) $ ( 1,116 ) $ ( 60,333 ) Other comprehensive income (loss) before reclassifications ( 10,870 ) 359 ( 10,511 ) Amounts reclassified from AOCI to income (1) 1,291 ( 29 ) 1,262 Balances, March 31, 2026 $ ( 68,796 ) $ ( 786 ) $ ( 69,582 ) Changes in AOCI for the three months ended March 31, 2025 Balances, December 31, 2024 $ ( 79,021 ) $ ( 2,939 ) $ ( 81,960 ) Other comprehensive income (loss) before reclassifications 8,358 650 9,008 Amounts reclassified from AOCI to income (1) ( 4 ) 617 613 Balances, March 31, 2025 $ ( 70,667 ) $ ( 1,672 ) $ ( 72,339 ) (1) See table below for details related to reclassifications to income. The following table summarizes the significant amounts reclassified out of each component of AOCI: Three Months Ended March 31, (dollars in thousands) 2026 2025 Details about AOCI components Amounts reclassified from AOCI Affected line item in the statement of income Unrealized gains and losses on investment securities available for sale $ ( 20 ) $ 5 Interest income (expense) ( 1,731 ) — Loss on sales of investment securities, net 460 ( 1 ) Income tax (expense) benefit $ ( 1,291 ) $ 4 Net income (loss) Gains and losses on cash flow hedges $ 193 $ ( 837 ) Interest income (expense) ( 154 ) — Loss on termination of interest rate swaps ( 10 ) 220 Income tax (expense) benefit $ 29 $ ( 617 ) Net income (loss) 32 Table of Contents NOTE 12 – EARNINGS PER COMMON SHARE Earnings per common share is calculated utilizing the two-class method. Basic earnings per common share is calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding. Diluted earnings per common share is calculated by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares adjusted for the dilutive effect of common stock awards. Presented below are the calculations for basic and diluted earnings per common share for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, (dollars in thousands, except per share data) 2026 2025 Net income (loss) $ 18,463 $ ( 140,974 ) Preferred dividends declared ( 2,228 ) ( 2,228 ) Net income (loss) available to common shareholders 16,235 ( 143,202 ) Common shareholder dividends ( 6,717 ) ( 6,666 ) Unvested restricted stock award dividends ( 172 ) ( 116 ) Undistributed earnings to unvested restricted stock awards ( 228 ) — Undistributed earnings (loss) to common shareholders $ 9,118 $ ( 149,984 ) Basic Distributed earnings to common shareholders $ 6,717 $ 6,666 Undistributed earnings (loss) to common shareholders 9,118 ( 149,984 ) Total common shareholders earnings (loss), basic $ 15,835 $ ( 143,318 ) Diluted Distributed earnings to common shareholders $ 6,717 $ 6,666 Undistributed earnings (loss) to common shareholders 9,118 ( 149,984 ) Total common shareholders earnings (loss) 15,835 ( 143,318 ) Add back: Undistributed earnings reallocated from unvested restricted stock awards — — Total common shareholders earnings (loss), diluted $ 15,835 $ ( 143,318 ) Weighted average common shares outstanding, basic 21,301,246 21,795,570 Dilutive effect of options — — Weighted average common shares outstanding, diluted 21,301,246 21,795,570 Basic earnings (loss) per common share $ 0.74 $ ( 6.58 ) Diluted earnings (loss) per common share 0.74 ( 6.58 ) Antidilutive stock options (1) 151,315 253,061 (1) The diluted earnings per common share computation excludes antidilutive stock options because the exercise prices of these stock options exceeded the average market prices of the Company's common shares for those respective periods. NOTE 13 – FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date reflecting assumptions that a market participant would use when pricing an asset or liability. The hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows: • Level 1: Unadjusted quoted prices for identical assets or liabilities traded in active markets. • Level 2: 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. 33 Table of Contents • Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: Investment securities. The fair value of investment securities available for sale are determined by quoted market prices, if available (Level 1). For investment securities available for sale where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For investment securities available for sale where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Securities classified as Level 3 are not actively traded, and as a result, fair value is determined utilizing third-party valuation services through consensus pricing. There were no transfers between Levels 1, 2 or 3 during the period presented for assets measured at fair value on a recurring basis. The fair value of equity securities is determined using quoted prices or market prices for similar securities (Level 1). Residential loans held for sale. The fair value of residential loans held for sale is determined using quoted prices for a similar asset, adjusted for specific attributes of that loan (Level 2). Credit enhancement asset. The fair value of the credit enhancement asset is calculated using the Income Approach Valuation Method (Level 3). Derivative instruments. The fair value of derivative instruments are determined based on derivative valuation models using observable market data as of the measurement date (Level 2). Collateral dependent loans. Collateral dependent loans are reviewed individually for estimated credit losses. For collateral dependent loans for which repayment is expected to be provided substantially through the operation or sale of the collateral, the Company estimates expected credit losses based on the fair value of the collateral, adjusted for estimated costs to sell when repayment is expected from sale. The fair value of collateral is generally based on independent appraisals, broker price opinions, observable market data, or other valuation techniques, as adjusted for changes in market conditions, collateral condition, liquidation costs, and other relevant factors. Measurements based on observable market information with no significant unobservable adjustments are classified as Level 2. Measurements that include significant unobservable inputs, including management adjustments to appraised values, liquidation discounts, collateral condition assumptions, guarantor support, or discounted cash flow assumptions, are classified as Level 3. Commercial loans held for sale. The fair value of commercial loans held for sale may be based upon third party bids to purchase the specific notes, or the estimated fair value of the underlying collateral. The fair value of the collateral is based on estimated market prices from an independently prepared appraisal, which is adjusted to reflect the cost of liquidating such collateral, and various other factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable (Level 3). Other real estate owned. OREO is initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost basis. After foreclosure, OREO is held for sale and is carried at the lower of cost or fair value less estimated costs of disposal. Fair value for OREO is based on an appraisal performed upon foreclosure. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between comparable sales and income data available. Property is evaluated regularly to ensure the recorded amount is supported by its fair value less estimated costs to dispose. After the initial foreclosure appraisal, fair value is generally determined by an annual appraisal unless known events warrant adjustments to the recorded value (Level 2). When adjustments are made to an appraised value to reflect various factors such as the age of the appraisal or known changes in the market or the collateral, such valuation inputs are considered unobservable (Level 3). Appraisals for both collateral-dependent loans and OREO are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, a member of the Company’s asset quality or collections department reviews the assumptions and approaches utilized in the appraisal. 34 Table of Contents 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 March 31, 2026 and December 31, 2025, are summarized below: March 31, 2026 (dollars in thousands) Carrying amount Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets and liabilities measured at fair value on a recurring basis: Assets Investment securities available for sale: U.S. government sponsored entities and U.S. agency securities $ 25,219 $ — $ 25,219 $ — Mortgage-backed securities - agency 1,252,051 — 1,252,051 — Mortgage-backed securities - non-agency 83,002 — 83,002 — Asset-backed student loans 20,374 — 20,374 — State and municipal securities 71,654 — 71,654 — Collateralized loan obligations 84,577 — 84,577 — Corporate securities 55,678 — 55,678 — Equity securities 3,665 3,665 — — Residential loans held for sale 4,839 — 4,839 — Credit enhancement asset 13,476 — — 13,476 Derivative assets 3,652 — 3,652 — Total $ 1,618,187 $ 3,665 $ 1,601,046 $ 13,476 Liabilities Derivative liabilities $ 3,142 $ — $ 3,142 $ — Total $ 3,142 $ — $ 3,142 $ — Assets measured at fair value on a non-recurring basis: Collateral dependent loans: Commercial $ 7,209 $ — $ — $ 7,209 Commercial real estate 35,687 — — 35,687 Residential real estate 821 — — 821 Commercial loans held for sale 1,870 — — 1,870 Other real estate owned 514 — — 514 35 Table of Contents December 31, 2025 (dollars in thousands) Carrying amount Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets and liabilities measured at fair value on a recurring basis: Assets Investment securities available for sale: U.S. government sponsored entities and U.S. agency securities $ 19,823 $ — $ 19,823 $ — Mortgage-backed securities - agency 1,193,750 — 1,193,750 — 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 — 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 — Total $ 1,551,025 $ 4,235 $ 1,534,233 $ 12,557 Liabilities Derivative liabilities $ 4,999 $ — $ 4,999 $ — Total $ 4,999 $ — $ 4,999 $ — Assets measured at fair value on a non-recurring basis: Collateral dependent loans: Commercial $ 8,136 $ — $ — $ 8,136 Commercial real estate 40,324 — — 40,324 Residential real estate 592 — — 592 Other real estate owned 606 — — 606 The following table presents losses recognized on assets measured at fair value on a nonrecurring basis for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, (dollars in thousands) 2026 2025 Collateral dependent loans $ 1,170 $ 2,012 Total losses on assets measured on a nonrecurring basis $ 1,170 $ 2,012 36 Table of Contents 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 March 31, 2026 and December 31, 2025: (dollars in thousands) Fair value Valuation technique Unobservable input / assumptions Discount Rate Range (weighted average) (1) March 31, 2026 Collateral dependent loans: Commercial $ 7,209 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 0.00 %- 100.00 % ( 7.55 %) Commercial real estate 35,687 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 0.00 % - 100.00 % ( 3.48 %) Residential real estate 821 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 514 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 7.54 % - 70.67 % ( 45.63 %) Commercial loans held for sale 1,870 Market approach None - Fair value equals contracted sales price; no significant unobservable inputs N/A December 31, 2025 Collateral dependent 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 %.) (1) Unobservable inputs were weighted by the relative fair value of the instruments. ASC Topic 825, Financial Instruments , requires disclosure of the estimated fair value of certain financial instruments and the methods and significant assumptions used to estimate such fair values. Additionally, certain financial instruments and all nonfinancial instruments are excluded from the applicable disclosure requirements. The Company has elected the fair value option for newly originated residential loans held for sale. These loans are intended for sale and are hedged with derivative instruments. We have elected the fair value option to mitigate accounting mismatches in cases where hedge accounting is complex and to achieve operational simplification. The following table presents the difference between the aggregate fair value and the aggregate remaining principal balance for loans for which the fair value option has been elected as of March 31, 2026 and December 31, 2025: March 31, 2026 December 31, 2025 (dollars in thousands) Aggregate fair value Difference Contractual principal Aggregate fair value Difference Contractual principal Residential loans held for sale $ 4,839 $ 116 $ 4,723 $ 7,781 $ 390 $ 7,391 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 three months ended March 31, 2026 and 2025: Three Months Ended March 31, (dollars in thousands) 2026 2025 Residential loans held for sale $ ( 238 ) $ 87 37 Table of Contents The carrying values and estimated fair value of certain financial instruments not carried at fair value at March 31, 2026 and December 31, 2025 were as follows: March 31, 2026 (dollars in thousands) Carrying amount Fair value Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets Cash and due from banks $ 113,024 $ 113,024 $ 113,024 $ — $ — Federal funds sold 634 634 634 — — Loans, net 4,270,698 4,163,576 — — 4,163,576 Accrued interest receivable 25,875 25,875 — 25,875 — Liabilities Deposits $ 5,440,067 $ 5,434,700 $ — $ 5,434,700 $ — Short-term borrowings 153,425 153,425 145,000 8,425 — FHLB and other borrowings 238,000 238,341 — 238,341 — Subordinated debt 27,024 22,948 — 22,948 — Trust preferred debentures 52,035 48,478 — 48,478 — December 31, 2025 (dollars in thousands) Carrying amount Fair value Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets Cash and due from banks $ 127,279 $ 127,279 $ 127,279 $ — $ — Federal funds sold 532 532 532 — — Loans, net 4,282,785 4,229,483 — — 4,229,483 Accrued interest receivable 23,824 23,824 — 23,824 — Liabilities Deposits $ 5,424,379 $ 5,421,497 $ — $ 5,421,497 $ — Short-term borrowings 60,181 60,181 50,000 10,181 — FHLB and other borrowings 293,000 295,047 — 295,047 — Subordinated debt 27,019 23,005 — 23,005 — Trust preferred debentures 51,857 48,626 — 48,626 — The methods utilized to measure fair value of financial instruments at March 31, 2026 and December 31, 2025 represent an approximation of exit price; however, an actual exit price may differ. NOTE 14 – 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. 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 38 Table of Contents 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 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. Loan commitments as of March 31, 2026 and December 31, 2025 were as follows: (dollars in thousands) March 31, 2026 December 31, 2025 Commitments to extend credit $ 776,964 $ 821,801 Financial guarantees – standby letters of credit 32,453 30,808 NOTE 15 – SEGMENT INFORMATION The Company's reportable segments are determined by the Chief Executive Officer, who is the designated chief operating decision maker, based upon information provided about the Company's products and services offered, primarily distinguished between Banking, Wealth Management and Corporate. They are also distinguished by the level of information provided to the chief operating decision maker, who uses such information to review performance of various components of the business, which are then aggregated if operating performance, products and services, and customers are similar. The chief operating decision maker analyzes the financial performance of the Company's segments, allocates resources and assesses compensation of certain employees by evaluating revenue streams, significant expenses and budget to actual results. The performance of the Banking segment is assessed by monitoring the margin between interest income and interest expense related to loans, investments, deposits and other borrowings. Pre-tax profit and loss is used to assess the performance of the Wealth Management segment. Interest expense, provisions for credit losses and payroll provide the significant expenses in the Banking segment, while payroll provides the significant expenses in the Wealth Management segment. 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; mortgage loan sales and servicing; letters of credit; various types of deposit products, including checking, savings and time deposit accounts; merchant services; and corporate treasury management services. The Wealth Management segment consists of trust and fiduciary services, brokerage and retirement planning services. The Corporate segment includes the holding company financing and investment activities, administrative expenses, as well as the elimination of intercompany transactions. Reported segments and the financial information of the reported segments are not necessarily comparable with similar information reported by other financial institutions. Additionally, because of the interrelationships of the various segments, the information presented is not indicative of how the segments would perform if they operated as independent entities. 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 2025 Annual Report on Form 10-K. 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. 39 Table of Contents Selected business segment financial information for the three months ended March 31, 2026 and 2025 were as follows: (dollars in thousands) Banking Wealth Management Corporate Total Three Months Ended March 31, 2026 Interest income $ 86,022 $ — $ — $ 86,022 Interest expense 27,238 20 1,347 28,605 Net interest income (expense) 58,784 ( 20 ) ( 1,347 ) 57,417 Provision for credit losses 5,003 — — 5,003 Wealth management revenue — 8,248 — 8,248 Other noninterest income 15,006 — ( 1,132 ) 13,874 Total noninterest income 15,006 8,248 ( 1,132 ) 22,122 Salaries and employee benefits 21,763 4,394 — 26,157 Depreciation expense 1,206 11 — 1,217 Amortization of intangible assets 471 246 — 717 Other noninterest expense 21,018 1,815 ( 500 ) 22,333 Total noninterest expense 44,458 6,466 ( 500 ) 50,424 Income (loss) before income taxes 24,329 1,762 ( 1,979 ) 24,112 Income tax expense (benefit) 5,305 759 ( 415 ) 5,649 Net income (loss) $ 19,024 $ 1,003 $ ( 1,564 ) $ 18,463 Total assets $ 6,561,452 $ 37,760 $ ( 51,249 ) $ 6,547,963 (dollars in thousands) Banking Wealth Management Corporate Total Three Months Ended March 31, 2025 Interest income $ 99,355 $ — $ — $ 99,355 Interest expense 38,730 17 2,318 41,065 Net interest income (expense) 60,625 ( 17 ) ( 2,318 ) 58,290 Provision for credit losses 10,850 — — 10,850 Wealth management revenue — 7,350 — 7,350 Other noninterest income 11,350 — ( 937 ) 10,413 Total noninterest income 11,350 7,350 ( 937 ) 17,763 Salaries and employee benefits 22,914 3,502 — 26,416 Depreciation expense 1,228 10 — 1,238 Amortization of intangible assets 644 267 — 911 Other noninterest expense 173,513 1,716 ( 789 ) 174,440 Total noninterest expense 198,299 5,495 ( 789 ) 203,005 Income (loss) before income taxes ( 137,174 ) 1,838 ( 2,466 ) ( 137,802 ) Income tax expense (benefit) 3,107 760 ( 695 ) 3,172 Net income (loss) $ ( 140,281 ) $ 1,078 $ ( 1,771 ) $ ( 140,974 ) Total assets $ 7,290,894 $ 33,541 $ ( 39,631 ) $ 7,284,804 (1) Other noninterest expense for Banking includes occupancy and equipment, data processing, FDIC insurance, professional services, marketing, communications, loan expense and other miscellaneous expenses. Other noninterest expense for Wealth Management includes occupancy and equipment, data processing, professional services, marketing, communications and other miscellaneous expenses. Other noninterest expense for Corporate includes data processing, professional services, marketing and other miscellaneous expenses. 40 Table of Contents NOTE 16 – REVENUE FROM CONTRACTS WITH CUSTOMERS The Company’s revenue from contracts with customers in the scope of Topic 606 is recognized within noninterest income in the consolidated statements of income. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, (dollars in thousands) 2026 2025 Noninterest income - in-scope of Topic 606 Wealth management revenue: Trust management/administration fees $ 7,170 $ 6,444 Investment advisory and brokerage fees 653 483 Other 425 423 Service charges on deposit accounts: Nonsufficient fund fees 2,088 1,953 Other 1,267 1,352 Interchange revenues 3,528 3,151 Other income: Merchant services revenue 334 338 Other 644 293 Noninterest income - out-of-scope of Topic 606 6,013 3,326 Total noninterest income $ 22,122 $ 17,763 Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and investment securities. In addition, certain noninterest income streams such as commercial FHA revenue, residential mortgage banking revenue, credit enhancement income, and gain on sales of investment securities, net, are also not in scope of Topic 606. Topic 606 is applicable to noninterest income streams such as wealth management revenue, service charges on deposit accounts, interchange revenue, gain on sales of other real estate owned and certain other noninterest income streams. The noninterest income streams considered in-scope by Topic 606 are discussed below. Wealth Management Revenue Wealth management revenue is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company also earns investment advisory fees through its SEC registered investment advisory subsidiary. The Company’s performance obligation in both of these instances is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and contractually determined fee schedules. Payment is generally received a few days after month end through a direct charge to each customer’s account. The Company does not earn performance-based incentives. Optional services such as real estate sales and tax return preparation services are also available to existing trust and asset management customers. The Company’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered. Fees generated from transactions executed by the Company’s third party broker dealer are remitted to the Company on a monthly basis for that month’s transactional activity. Service Charges on Deposit Accounts Service charges on deposit accounts consist of fees received under depository agreements with customers to provide access to deposited funds, serve as custodian of deposited funds, and when applicable, pay interest on deposits. These service charges primarily include non-sufficient fund fees and other account related service charges. Non-sufficient fund fees are earned when a depositor presents an item for payment in excess of available funds, and the Company, at its discretion, provides the necessary funds to complete the transaction. The Company generates other account related service charge revenue by providing depositors proper safeguard and remittance of funds as well as by delivering optional services for depositors, such as check imaging or treasury management, that are performed upon the depositor’s request. The Company’s performance obligation for the proper safeguard and remittance of funds, monthly account analysis and any other monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. 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. 41 Table of Contents Interchange Revenue Interchange revenue includes debit / credit card income and ATM user fees. Card income is primarily comprised of interchange fees earned for standing ready to authorize and providing settlement on card transactions processed through the MasterCard interchange network. The levels and structure of interchange rates are set by MasterCard and can vary based on cardholder purchase volumes. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with completion of the Company’s performance obligation, the transaction processing services provided to the cardholder. Payment is typically received immediately or in the following month. ATM fees are primarily generated when a Company cardholder withdraws funds from a non-Company ATM or a non-Company cardholder withdraws funds from a Company ATM. The Company satisfies its performance obligation for each transaction at the point in time when the ATM withdrawal is processed. Other Noninterest Income The other noninterest income revenue streams within the scope of Topic 606 consist of merchant services revenue, safe deposit box rentals, wire transfer fees, paper statement fees, check printing commissions, gain on sales of other real estate owned and other noninterest related fees. Revenue from the Company’s merchant services business consists principally of transaction and account management fees charged to merchants for the electronic processing of transactions. These fees are net of interchange fees paid to the credit card issuing bank, card company assessments, and revenue sharing amounts. Account management fees are considered earned at the time the merchant’s transactions are processed or other services are performed. Fees related to the other components of other noninterest income within the scope of Topic 606 are largely transactional based, and therefore, the Company’s performance obligation is satisfied and related revenue recognized, at the point in time the customer uses the selected service to execute a transaction. 42 Table of Contents ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is Management's discussion and analysis of certain significant factors which have affected the financial condition and results of operations of the Company as reflected in the unaudited consolidated balance sheet as of March 31, 2026, as compared to December 31, 2025, and unaudited consolidated operating results for the three months ended March 31, 2026 and 2025. This disclosure should be read in conjunction with the Company's unaudited consolidated financial statements and accompanying notes appearing elsewhere herein and the audited financial statements and accompanying notes provided in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 2, 2026. In addition to the historical information contained herein, this Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of such term under the Private Securities Litigation Reform Act of 1995. These statements are subject to many risks and uncertainties, including interest rates and other general economic, business and political conditions; the impact of federal trade policy, inflation, deposit volatility and potential regulatory developments; the performance of our loan portfolio and our ability to manage credit risk; changes in the financial markets; the effects of armed conflict, including the scope and duration of disruptions in global energy markets relating to war in Iran; changes in the business environment resulting from the adoption of artificial intelligence, including fraud and cybersecurity risk; operational risks, including with respect to fraud and information technology; changes in business plans as circumstances warrant; risks related to legal proceedings; risks related to mergers and acquisitions and the integration of acquired businesses; changes to U.S. and state tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the SEC. Readers should note that the forward-looking statements included herein are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “will,” “propose,” “may,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” or “continue,” or similar terminology. Any forward-looking statements presented herein are made only as of the date of this document, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise . CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of our consolidated financial statements requires Management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates are based upon historical experience and on various other assumptions that management believes are reasonable under current circumstances. These estimates form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily available from other sources. Actual results may differ from these estimates under different assumptions or conditions. The estimates and judgments that management believes have the greatest effect on the Company’s reported financial position and results of operations are set forth in “Note 1 – Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements, included in our Annual Report on Form 10-K for the year ended December 31, 2025. For additional information regarding critical accounting estimates, see the section titled “Critical Accounting Estimates” included in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes in the Company’s application of critical accounting estimates since December 31, 2025. Allowance for Credit Losses on Loans Management’s evaluation process used to determine the appropriateness of the allowance for credit losses on loans is subject to the use of estimates, assumptions, and judgments. The evaluation process combines many factors: Management’s ongoing review and grading of the loan portfolio leveraging probability of default and loss given default, consideration of historical loan loss and delinquency experience, trends in past due and nonaccrual loans, risk characteristics of the various classifications of loans, concentrations of loans to specific borrowers or industries, existing economic conditions and forecasts, the fair value of underlying collateral, and other qualitative and quantitative factors which could affect future credit losses. Because current economic conditions and forecasts can change and future events are inherently difficult to predict, the anticipated amount of estimated credit losses on loans, and therefore the appropriateness of the allowance for credit losses on loans, could change significantly. It is difficult to estimate how potential changes in any one economic factor or input might affect the overall allowance because a wide variety of factors and inputs are considered in estimating the allowance and changes in those factors and inputs considered may not occur at the same rate and may not be consistent across all product types. Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others. As an integral part of their examination process, various regulatory agencies also review the allowance for credit losses on loans. Such agencies may require additions to the allowance for credit losses on loans or may require that certain loan balances be charged-off or downgraded into criticized loan categories when their credit evaluations differ from 43 Table of Contents those of management, based on their judgments about information available to them at the time of their examination. The Company believes the level of the allowance for credit losses on loans is appropriate. Factors Affecting Comparability Each factor listed below affects the comparability of our results of operations for the three months ended March 31, 2026 and 2025, and our financial condition as of March 31, 2026 and December 31, 2025, and may affect the comparability of financial information we report in future fiscal periods. Sale of equipment finance portfolio. During the fourth quarter of 2025, we sold substantially all of our equipment finance portfolio resulting in a loss on sale of $21.4 million. As previously disclosed, we ceased originating new equipment finance loans and leases effective as of September 30, 2025. Redemption of Subordinated Notes. On September 30, 2025, we 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. Goodwill impairment. During the first quarter of 2025, we determined that a triggering event had occurred at our Banking reporting unit as a result of further deteriorated credit quality coupled with trends in our stock price. We performed a quantitative impairment test on our 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 our Banking reporting unit. As a result of the assessment, we recognized $154.0 million of goodwill impairment expense. The impairment expense did not impact our regulatory capital ratios, tangible common equity ratio or our liquidity position. Results of Operations Overview. The following table sets forth condensed income statement information of the Company for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, (dollars in thousands, except per share data) 2026 2025 Income Statement Data: Interest income $ 86,022 $ 99,355 Interest expense 28,605 41,065 Net interest income 57,417 58,290 Provision for credit losses 5,003 10,850 Noninterest income 22,122 17,763 Noninterest expense 50,424 203,005 Income (loss) before income taxes 24,112 (137,802) Income tax expense 5,649 3,172 Net income (loss) 18,463 (140,974) Preferred dividends 2,228 2,228 Net income (loss) available to common shareholders $ 16,235 $ (143,202) Per Share Data: Basic earnings (loss) per common share $ 0.74 $ (6.58) Diluted earnings (loss) per common share $ 0.74 $ (6.58) Performance Metrics: Return on average assets 1.16 % (7.66) % Return on average shareholders' equity 13.15 % (79.89) % During the three months ended March 31, 2026, we generated net income of $18.5 million, or diluted earnings per common share of $0.74, compared to a net loss of $141.0 million, or diluted loss per common share of $6.58, in the three months ended March 31, 2025. Earnings for the first quarter of 2026 compared to the first quarter of 2025 increased primarily due to a $152.6 million decrease in noninterest expense (which included the prior year goodwill impairment charge), a $5.8 44 Table of Contents million decrease in provision for credit losses and a $4.4 million increase in noninterest income. These results were partially offset by a $0.9 million decrease in net interest income and a $2.5 million increase in income tax expense. Net Interest Income and Margin. Our primary source of revenue is net interest income, which is the difference between interest income from interest-earning assets (primarily loans and securities) and interest expense of funding sources (primarily interest-bearing deposits and borrowings). Net interest income is influenced by many factors, primarily the volume and mix of interest-earning assets, funding sources and interest rate fluctuations. Noninterest-bearing sources of funds, such as demand deposits and shareholders’ equity, also support interest-earning assets. Net interest margin is calculated as net interest income divided by average interest-earning assets. Net interest margin is presented on a tax-equivalent basis, which means that tax-free interest income has been adjusted to a pretax-equivalent income, assuming a federal income tax rate of 21% for both 2026 and 2025. The FOMC concluded its April 2026 meeting by leaving interest rates unchanged, citing low average job gains, elevated inflation, and a high level of uncertainty about the economic outlook stemming from developments in the Middle East. Federal Reserve policymakers voted to leave the benchmark federal funds rate unchanged at its current range of 3.50% to 3.75%. The move follows the central bank's decision to hold rates steady in January and March 2026 after three successive 25-basis-point rate cuts in September, October and December 2025. Economic data showing a slowdown in the labor market, inflation continuing to run higher than the Federal Reserve's 2% target and the unrest in Iran prompted policymakers to continue to pause rate cuts. During the three months ended March 31, 2026, net interest income, on a tax-equivalent basis, decreased to $57.6 million compared to $58.5 million for the three months ended March 31, 2025. The tax-equivalent net interest margin increased to 3.91% for the first quarter of 2026 compared to 3.49% in the first quarter of 2025. 45 Table of Contents Average Balance Sheet, Interest and Yield/Rate Analysis. The following table presents average balance sheet information, interest income, interest expense and the corresponding average yields earned and rates paid for the three months ended March 31, 2026 and 2025. The average balances are principally daily averages and, for loans, include both performing and nonperforming balances. Interest income on loans includes the effects of discount accretion and net deferred loan origination costs accounted for as yield adjustments. Three Months Ended March 31, 2026 2025 (tax-equivalent basis, dollars in thousands) Average balance Interest & fees Yield/ Rate Average balance Interest & fees Yield/ Rate Interest-earning assets: Federal funds sold and cash investments $ 89,412 $ 809 3.67 % $ 68,671 $ 718 4.24 % Investment securities : Taxable investment securities 1,530,737 18,150 4.81 1,253,976 14,975 4.84 Investment securities exempt from federal income tax (1) 61,696 552 3.63 57,911 542 3.80 Total securities 1,592,433 18,702 4.76 1,311,887 15,517 4.80 Loans : Loans (2) 4,211,988 65,559 6.31 5,014,364 77,668 6.28 Loans exempt from federal income tax (1) 42,333 485 4.64 43,030 450 4.24 Total loans 4,254,321 66,044 6.30 5,057,394 78,118 6.26 Loans held for sale 6,892 102 6.01 326,348 4,563 5.67 Nonmarketable equity securities 31,547 583 7.50 35,614 647 7.37 Total interest-earning assets 5,974,605 86,240 5.85 6,799,914 99,563 5.94 Noninterest-earning assets 496,233 667,940 Total assets $ 6,470,838 $ 7,467,854 Interest-bearing liabilities: Deposits: Checking and money market deposits $ 3,172,416 $ 18,031 2.31 % $ 3,509,814 $ 25,140 2.90 % Savings deposits 491,073 321 0.27 516,784 329 0.26 Time deposits 736,018 5,541 3.05 821,706 6,831 3.37 Brokered time deposits 31,366 310 4.01 225,703 2,315 4.16 Total interest-bearing deposits 4,430,873 24,203 2.22 5,074,007 34,615 2.77 Short-term borrowings 33,236 231 2.82 73,767 700 3.85 FHLB advances 273,444 2,670 3.96 299,578 3,163 4.28 Subordinated debt 27,022 380 5.70 77,752 1,387 7.23 Trust preferred debentures 51,948 1,121 8.75 51,283 1,200 9.49 Total interest-bearing liabilities 4,816,523 28,605 2.41 5,576,387 41,065 2.99 Noninterest-bearing liabilities: Noninterest-bearing deposits 996,926 1,052,181 Other noninterest-bearing liabilities 87,907 123,613 Total noninterest-bearing liabilities 1,084,833 1,175,794 Shareholders’ equity 569,482 715,673 Total liabilities and shareholders’ equity $ 6,470,838 $ 7,467,854 Net interest income / net interest margin (3) $ 57,635 3.91 % $ 58,498 3.49 % (1) Interest income and average rates for tax-exempt loans and securities are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%. Tax-equivalent adjustments totaled $0.2 million for both the three months ended March 31, 2026 and 2025. (2) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs. (3) Net interest margin during the periods presented represents: (i) the difference between interest income on interest-earning assets and the interest expense on interest-bearing liabilities, divided by (ii) average interest-earning assets for the period. 46 Table of Contents Interest Rates and Operating Interest Differential. Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table shows the effect that these factors had on the interest earned on our interest-earning assets and the interest incurred on our interest-bearing liabilities. The effect of changes in volume is determined by multiplying the change in volume by the previous period’s average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the previous period’s volume. Changes which are not due solely to volume or rate have been allocated proportionally to the change due to volume and the change due to rate. Three Months Ended March 31, 2026 compared with Three Months Ended March 31, 2025 Change due to: Interest Variance (tax-equivalent basis, dollars in thousands) Volume Rate Earning assets: Federal funds sold and cash investments $ 202 $ (111) $ 91 Investment securities: Taxable investment securities 3,317 (142) 3,175 Investment securities exempt from federal income tax 35 (25) 10 Total securities 3,352 (167) 3,185 Loans: Loans (12,459) 350 (12,109) Loans exempt from federal income tax (7) 42 35 Total loans (12,466) 392 (12,074) Loans held for sale (4,600) 139 (4,461) Nonmarketable equity securities (75) 11 (64) Total earning assets (13,587) 264 (13,323) Interest-bearing liabilities: Checking and money market deposits (2,167) (4,942) (7,109) Savings deposits (16) 8 (8) Time deposits (679) (611) (1,290) Brokered deposits (1,959) (46) (2,005) Total interest-bearing deposits (4,821) (5,591) (10,412) Short-term borrowings (333) (136) (469) FHLB advances (265) (228) (493) Subordinated debt (813) (194) (1,007) Trust preferred debentures 15 (94) (79) Total interest-bearing liabilities (6,217) (6,243) (12,460) Net interest income $ (7,370) $ 6,507 $ (863) 47 Table of Contents Interest Income. For the three months ended March 31, 2026, interest income, on a tax-equivalent basis, decreased $13.3 million to $86.2 million as compared to the same period in 2025, primarily due to a decline in earning assets as described below. The yield on earning assets decreased nine basis points to 5.85% from 5.94%. Average earning assets decreased to $5.97 billion in the first quarter of 2026 from $6.80 billion in the same quarter of 2025. Average loans and average loans held for sale decreased $803.1 million and $319.5 million, respectively. These decreases were partially offset by an increase in investment securities of $280.5 million. Average loans decreased $803.1 million in the first quarter of 2026 compared to the same quarter of 2025. During the fourth quarter of 2025, the Company sold substantially all of its equipment finance portfolio. As a result, equipment finance loan and lease average balances decreased $728.7 million (to $55.4 million) for the three months ended March 31, 2026 compared to the same period of 2025. Proceeds from the sale of substantially all of the portfolio were used to purchase investment securities and reduce higher-cost funding for the Company. The $326.3 million of average loans held for sale in the first quarter of 2025 included $320.9 million of GreenSky consumer loans. The Company completed the sale of this portfolio in the second quarter of 2025. Interest Expense. Interest expense decreased $12.5 million to $28.6 million f or the three months ended March 31, 2026 compared to the same period in 2025. The cost of interest-bearing liabilities decreased to 2.41% for the first quarter of 2026, compared to 2.99% for the first quarter of 2025 due to a decrease in both the rates paid on deposits and a decrease in average balances. I nterest expense on deposits decreased $10.4 million to $24.2 million for the three months ended March 31, 2026 compared to $34.6 million in the same quarter of 2025, driven primarily by the rate cuts enacted by the Federal Reserve Bank beginning in late 2024. Average balances of interest-bearing deposit accounts decreased $643.1 million, or 12.7%, to $4.43 billion for the three months ended March 31, 2026 compared to the same period one year earlier. Proceeds from the sales of substantially all of our equipment financing portfolio and non-core consumer loan portfolios in 2025 were used to reduce higher-cost deposit funding for the Company, including servicing deposits and brokered deposits. Interest expense on subordinated debt decreased $1.0 million for the three months ended March 31, 2026 , compared to the prior year, due to a decrease in average balances. The average balance decreased $50.7 million for the three months ended March 31, 2026 , compared to the same period in 2025, due the redemption of $50.8 million of de bt as of September 30, 2025. Provision for Credit Losses . The Company's provision for credit losses totaled $5.0 million and $10.9 million for the three months ended March 31, 2026 and 2025 , respectively. Provision expense for the first quarter of 2026 included $0.4 million recapture of provision for credit losses on unfunded commitments. The decrease in the provision for credit losses for the three months ended March 31, 2026 compared to the same period in 2025 was due in part to the sale of the equipment finance portfolio that occurred in late 2025, and the Company's continued efforts to remediate nonperforming loans and improve credit underwriting. The provision for credit losses on loans recognized during the three months ended March 31, 2026 was made at a level deemed necessary by Management to absorb estimated losses in the loan portfolio. A detailed evaluation of the adequacy of the allowance for credit losses is completed quarterly by Management, the results of which are used to determine provision for credit losses. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and reasonable and supportable forecasts along with other qualitative and quantitative factors. 48 Table of Contents Noninterest Income. The following table presents the major components of our noninterest income for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, Increase (decrease) (dollars in thousands) 2026 2025 Noninterest income: Wealth management revenue $ 8,248 $ 7,350 $ 898 Service charges on deposit accounts 3,355 3,305 50 Interchange revenue 3,528 3,151 377 Residential mortgage banking revenue 626 676 (50) Income on company-owned life insurance 2,076 2,334 (258) Loss on sales of investment securities, net (1,731) — (1,731) Credit enhancement income 3,360 (578) 3,938 Other income 2,660 1,525 1,135 Total noninterest income $ 22,122 $ 17,763 $ 4,359 Wealth management revenue . Wealth management revenue increased $0.9 million , or 12.2%, for three months ended March 31, 2026 as compared to the same period in 2025, driven by growth in assets under administration. Assets under administration increased 9.1% to $4.47 billion at March 31, 2026 from $4.10 billion at March 31, 2025. Credit enhancement income. In 2025 and through December 30, 2025, the Company was party to one third-party loan origination program, wherein the third-party provider offered various credit enhancements with respect to loans originated under the program, including contributions to reserve accounts, yield maintenance and certain other payments. 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 credit enhancement 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. Effective December 31, 2025, the Company modified its third-party lending and servicing arrangements with its sole partner, eliminating the credit enhancement derivative. The new arrangements provide a credit enhancement by the partner which protects the Company by indemnifying or reimbursing incurred losses. We estimate and record an allowance for expected credit losses and a corresponding credit enhancement asset on the balance sheet through credit enhancement income. The Company recognized $3.4 million of credit enhancement income during the three months ended March 31, 2026, which correlated to a similar amount of provision for credit losses as a result of the new arrangement entered into at December 31, 2025. Other noninterest income. Other income increased $1.1 million for the three months ended March 31, 2026, as compared to the same period in 2025. In 2026, the Company recognized $2.1 million in gains from the sale of mortgage servicing rights and $0.6 million in servicing fees related to GreenSky consumer loans, which were sold in the second quarter of 2025. These gains were partially offset by $1.7 million of losses in our limited partnership investments and the elimination of operating lease revenue due to the sale of our equipment finance portfolio in the fourth quarter of 2025. Operating lease revenue totaled $0.8 million in the first quarter of 2025. 49 Table of Contents Noninterest Expense. The following table sets forth the major components of noninterest expense for the three months ended March 31, 2026 and 2025 : Three Months Ended March 31, Increase (decrease) (dollars in thousands) 2026 2025 Noninterest expense: Salaries and employee benefits $ 26,157 $ 26,416 $ (259) Occupancy and equipment 4,535 4,498 37 Data processing 7,065 6,919 146 FDIC insurance 529 1,463 (934) Professional services 2,242 2,741 (499) Marketing 1,241 793 448 Communications 431 329 102 Loan expense 3,305 1,335 1,970 Loan servicing fees 1,116 750 366 Impairment on goodwill — 153,977 (153,977) Amortization of intangible assets 717 911 (194) Other expense 3,086 2,873 213 Total noninterest expense $ 50,424 $ 203,005 $ (152,581) Salaries and employee benefits. For the three months ended March 31, 2026, salaries and employee benefits expense decreased $0.3 million as compared to the same period in 2025. The Company incurred severance expense of $0.4 million and $1.4 million for the three months ended March 31, 2026 and 2025, respectively. In addition, the decrease was partially offset by increased medical insurance expense. FDIC insurance expense. The decrease in FDIC insurance expense for the three months ended March 31, 2026, as compared to the same period of 2025 was due to a lower assessment base in the first quarter of 2026, a shift in loan mix due to the sale of the equipment finance and non-core loan portfolios in 2025, and the decline in nonperforming loans. Professional services expense. For the three months ended March 31, 2026, professional services expense decreased $0.5 million as compared to the same period in 2025. The Company incurred additional audit and consulting expenses in 2025 as a result of the restatements of prior years' financial statements and as a result of contractual changes in the Company's third-party lending and servicing arrangements. Marketing expense. The increase in marketing expense for the three months ended March 31, 2026, as compared to the same period of 2025, was primarily the result of increased brand marketing and program expenses related to deposit account acquisition. Loan expense. Effective December 31, 2025, the Company modified its third-party lending and servicing arrangements with its sole partner, whereby the Company pays credit insurance to the program sponsor in exchange for the sponsor to reimburse the Company for incurred loan losses. Incurred losses are recognized as loans are charged-off through the allowance for credit losses. Reimbursements of incurred losses are recognized as a reduction of our credit enhancement asset. Credit insurance expense totaled $2.2 million in the first quarter of 2026. Impairment on goodwill. As mentioned previously, the Company recognized $154.0 million of goodwill impairment expense during the first quarter of 2025 in its Banking reporting unit. Income Tax Expense. Income tax expense was $5.6 million for the three months ended March 31, 2026, as compared to $3.2 million for the three months ended March 31, 2025. The resulting effective tax rates were 23.4% and 19.6% for the three months ended March 31, 2026 and 2025, respectively. The effective tax rate calculation for the three months ended March 31, 2025, excludes the goodwill impairment charge of $154.0 million, as this item is not deductible for tax purposes. Financial Condition Assets. Total assets were $6.55 billion at March 31, 2026, as compared to $6.51 billion at December 31, 2025. 50 Table of Contents Loans. The loan portfolio is the largest category of our assets. The principal segments of our loan portfolio are discussed below: Commercial loans. We provide a mix of variable and fixed rate commercial loans. The loans are typically made to small and medium-sized manufacturing, wholesale, retail and service businesses for working capital needs, business expansions and farm operations. Commercial loans generally include lines of credit and loans with maturities of five years or less. The loans are generally made with business operations as the primary source of repayment, but may also include collateralization by inventory, accounts receivable and equipment, and generally include personal guarantees. The commercial loan category also includes loans originated by the equipment financing business that are secured by the underlying equipment, of which we sold substantially all of our equipment finance portfolio during the fourth quarter of 2025. Commercial real estate loans. Our commercial real estate loans consist of both real estate occupied by the borrower for ongoing operations and non-owner occupied real estate properties. The real estate securing our existing commercial real estate loans includes a wide variety of property types, such as owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, skilled nursing and assisted living facilities. Our commercial real estate loan portfolio also includes farmland loans. Farmland loans are generally made to a borrower actively involved in farming rather than to passive investors. Construction and land development loans. Our construction and land development loans are comprised of residential construction, commercial construction and land acquisition and development loans. Interest reserves are generally established on real estate construction loans. Residential real estate loans. Our residential real estate loans are loans secured by residential properties that generally do not qualify for secondary market sale. Consumer loans. Our consumer loans include direct personal loans, indirect automobile loans, lines of credit and installment loans originated through home improvement specialty retailers and contractors. Personal loans are generally secured by automobiles, boats and other types of personal property and are made on an installment basis. Lease financing. Our equipment leasing business provides financing leases to varying types of businesses nationwide for purchases of business equipment and software. The financing is secured by a first priority interest in the financed asset and generally requires monthly payments. As previously disclosed, we ceased originating new equipment finance loans and leases effective as of September 30, 2025. 51 Table of Contents The following table presents the balance and associated percentage of each major category in our loan portfolio at March 31, 2026 and December 31, 2025: March 31, 2026 December 31, 2025 (dollars in thousands) Book Value % Book Value % Loans: Commercial $ 1,216,511 28.0 % $ 1,178,521 27.1 % Commercial real estate 2,322,198 53.5 2,342,664 53.8 Construction and land development 276,469 6.4 286,140 6.6 Residential real estate 344,511 8.0 349,623 8.0 Consumer 135,081 3.1 144,075 3.3 Lease financing 43,803 1.0 50,981 1.2 Total loans, gross 4,338,573 100.0 % 4,352,004 100.0 % Allowance for credit losses on loans (67,875) (69,219) Total loans, net $ 4,270,698 $ 4,282,785 Total loans decreased $13.4 million, or 0.3%, to $4.34 billion at March 31, 2026, compared to December 31, 2025. The portfolio mix remained stable during the first quarter of 2026. The following tables present our outstanding loans by business sector at March 31, 2026 and December 31, 2025. The Company's loan portfolio is assigned to the following internal business sectors: • Community bank represents predominately in-market loans originated through our banking center network. • Specialty finance provides bridge loan financing for commercial real estate projects, primarily multi-family and healthcare. These projects can include construction and short term financing in anticipation of obtaining permanent secondary market financing. The loans are typically outside of the Company’s primary market areas. • Non-core and other includes our third-party origination and servicing programs, our equipment finance portfolio of loans and leases originated to varying types of businesses throughout the United States for purchases of business equipment and software and capital market credits, including loans to finance the sale of the GreenSky portfolio. 52 Table of Contents March 31, 2026 (dollars in thousands) Community bank Specialty finance Non-core and other Total Commercial $ 728,215 $ 261,247 $ 227,049 $ 1,216,511 Commercial real estate 2,007,309 311,701 3,188 2,322,198 Construction and land development 237,684 38,772 13 276,469 Residential real estate 339,478 1,794 3,239 344,511 Consumer 84,291 — 50,790 135,081 Lease financing — — 43,803 43,803 Total $ 3,396,977 $ 613,514 $ 328,082 $ 4,338,573 December 31, 2025 (dollars in thousands) Community bank Specialty finance Non-core and other Total Commercial $ 688,277 $ 248,112 $ 242,132 $ 1,178,521 Commercial real estate 1,979,383 358,457 4,824 2,342,664 Construction and land development 226,295 59,832 13 286,140 Residential real estate 344,523 1,782 3,318 349,623 Consumer 89,749 — 54,326 144,075 Lease financing — — 50,981 50,981 Total $ 3,328,227 $ 668,183 $ 355,594 $ 4,352,004 Community bank portfolio increased $68.8 million, or 2.1%, between December 31, 2025 and March 31, 2026. This growth partially offset the anticipated declines in the specialty finance and non-core and other business sectors of $54.7 million and $27.5 million, respectively. The following table shows the contractual maturities of our loan portfolio and the distribution between fixed and adjustable interest rate loans at March 31, 2026: March 31, 2026 Within One Year One Year to Five Years Five Years to 15 Years After 15 Years (dollars in thousands) Fixed Rate Adjustable Rate Fixed Rate Adjustable Rate Fixed Rate Adjustable Rate Fixed Rate Adjustable Rate Total Commercial $ 80,035 $ 463,253 $ 223,706 $ 117,038 $ 190,225 $ 101,970 $ — $ 40,284 $ 1,216,511 Commercial real estate 357,842 181,970 906,850 333,309 264,501 258,816 5,494 13,416 2,322,198 Construction and land development 33,836 78,108 17,266 90,952 388 55,874 — 45 276,469 Total commercial loans 471,713 723,331 1,147,822 541,299 455,114 416,660 5,494 53,745 3,815,178 Residential real estate 4,695 6,487 6,519 18,504 17,135 36,681 170,521 83,969 344,511 Consumer 19,585 649 64,437 274 44,018 6,118 — — 135,081 Lease financing 3,708 — 38,199 — 1,896 — — — 43,803 Total loans $ 499,701 $ 730,467 $ 1,256,977 $ 560,077 $ 518,163 $ 459,459 $ 176,015 $ 137,714 $ 4,338,573 Loan Quality We use what we believe is a comprehensive methodology to monitor credit quality and prudently manage credit concentration within our loan portfolio. Our underwriting policies and practices govern the risk profile, credit and geographic concentration for our loan portfolio. We also have what we believe to be a comprehensive methodology to monitor these credit quality standards, including a risk classification system that identifies potential problem loans based on risk characteristics by loan type as well as the early identification of deterioration at the individual loan level. Analysis of the Allowance for Credit Losses on Loans. The allowance for credit losses on loans was $67.9 million, or 1.56% of total loans, at March 31, 2026, compared to $69.2 million, or 1.59% of total loans, at December 31, 2025. The 53 Table of Contents following table allocates the allowance for credit losses on loans by loan category: March 31, 2026 December 31, 2025 (dollars in thousands) Allowance Percent (1) Allowance Percent (1) Commercial $ 24,577 2.02 % $ 23,676 2.01 % Commercial real estate 27,653 1.19 28,284 1.21 Construction and land development 2,568 0.93 2,619 0.92 Total commercial loans 54,798 1.44 54,579 1.43 Residential real estate 6,203 1.80 6,652 1.90 Consumer 4,203 3.11 4,804 3.33 Lease financing 2,671 6.10 3,184 6.25 Total allowance for credit losses on loans $ 67,875 1.56 % $ 69,219 1.59 % (1) Represents the percentage of the allowance to total loans in the respective category. We measure expected credit losses over the life of each loan utilizing a combination of models which measure probability of default and loss given default, among other things. The measurement of expected credit losses is impacted by loan and borrower attributes and certain macroeconomic variables. Models are adjusted to reflect the impact of certain current macroeconomic variables as well as their expected changes over a reasonable and supportable forecast period. In estimating expected credit losses as of March 31, 2026, we utilized certain forecasted macroeconomic variables from Oxford Economics in our models. The forecasted projections included, among other things, (i) U.S. gross domestic product ranging from 1.9% to 2.4% over the next four quarters; (ii) the 10-year treasury rate averaging 4.2% over the next four quarters; and (iii) Illinois unemployment rate averaging 4.7% through the first quarter of 2027. We qualitatively adjust the model results based on this scenario for various risk factors that are not considered within our modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. These Q-Factor adjustments are based upon management judgment and current assessment as to the impact of risks related to changes in lending policies and procedures; economic and business conditions; loan portfolio attributes and credit concentrations; and external factors, among other things, that are not already fully captured within the modeling inputs, assumptions and other processes. Management assesses the potential impact of such items within a range of severely negative impact to positive impact and adjusts the modeled expected credit loss by an aggregate adjustment percentage based upon the assessment. The qualitative factor adjustment at March 31, 2026, was approximately 55 basis points of total loans, decreasing slightly from 57 basis points at December 31, 2025. The allowance allocated to commercial loans totaled $24.6 million, or 2.02% of total commercial loans, at March 31, 2026, compared to $23.7 million, or 2.01%, at December 31, 2025. Outstanding loan balances increased $38.0 million, or 3.2%, during the first three months of 2026. Specific allocations for loans that were individually evaluated increased $0.7 million, and quantitative factor adjustments increased $0.2 million. The allowance allocated to commercial real estate loans totaled $27.7 million, or 1.19% of total commercial real estate loans, at March 31, 2026, decreasing $0.6 million, from $28.3 million, or 1.21% of total commercial real estate loans, at December 31, 2025. Outstanding loan balances decreased $20.5 million, or 0.9%, during the first three months of 2026. Specific allocations for loans that were individually evaluated decreased $0.7 million. Modeled expected credit losses increased $0.7 million and qualitative factor adjustments decreased $0.6 million. The commercial real estate portfolio does not include significant exposure to urban office properties. The allowance allocated to construction and land development loans totaled $2.6 million, or 0.93% of total construction and land development loans, at March 31, 2026, compared to $2.6 million, or 0.92% of total constructions loans, at December 31, 2025. Modeled expected credit losses increased $0.1 million and qualitative factor adjustments related to construction loans decreased $0.1 million. There were no specific allocations for construction loans that were evaluated for expected credit losses on an individual basis at March 31, 2026, or December 31, 2025. The allowance allocated to residential real estate loans totaled $6.2 million, or 1.80% of total residential real estate loans, at March 31, 2026, decreasing $0.5 million, from $6.7 million, or 1.90% of total residential real estate loans, at December 31, 2025. Modeled expected credit losses decreased $0.6 million and qualitative factor adjustments increased $0.1 million. There were no specific allocations for residential real estate loans that were evaluated for expected credit losses on an individual basis at March 31, 2026, or December 31, 2025. 54 Table of Contents The allowance allocated to consumer loans totaled $4.2 million, or 3.11% of total consumer loans, at March 31, 2026, compared to $4.8 million, or 3.33%, at December 31, 2025. Modeled expected credit losses decreased $0.6 million. The allowance allocated to the lease portfolio totaled $2.7 million, or 6.10% of total commercial leases, at March 31, 2026, decreasing $0.5 million, from $3.2 million, or 6.25% of total commercial leases at December 31, 2025. Outstanding lease balances decreased $7.2 million, or 14.08%, during the first three months of 2026. The Company ceased originating leases as of September 30, 2025. The following table provides an analysis of the allowance for credit losses on loans, provision for credit losses on loans and net charge-offs for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, (dollars in thousands) 2026 2025 Balance, beginning of period $ 69,219 $ 111,204 Charge-offs: Commercial 2,062 13,300 Commercial real estate 3,838 723 Construction and land development 35 — Residential real estate 65 72 Consumer 896 453 Lease financing 737 3,448 Total charge-offs 7,633 17,996 Recoveries: Commercial 474 498 Commercial real estate 1 1 Construction and land development — — Residential real estate 75 18 Consumer 158 48 Lease financing 178 553 Total recoveries 886 1,118 Net charge-offs 6,747 16,878 Provision for credit losses on loans 5,403 10,850 Balance, end of period $ 67,875 $ 105,176 Gross loans, end of period $ 4,338,573 $ 5,018,053 Average total loans $ 4,254,321 $ 5,057,394 Net charge-offs to average loans 0.64 % 1.35 % Allowance for credit losses to total loans 1.56 % 2.10 % Individual loans considered to be uncollectible are charged-off against the allowance. Factors used in determining the amount and timing of charge-offs on loans include consideration of the loan type, length of delinquency, sufficiency of collateral value, lien priority and the overall financial condition of the borrower. Collateral value is determined using updated appraisals and/or other market comparable information. Charge-offs are generally taken on loans when the collectability of a loan balance is unlikely. Recoveries on loans previously charged-off are added to the allowance. 55 Table of Contents The following tables present charge-offs by business sector for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, 2026 (dollars in thousands) Community bank Specialty finance Non-core and other Total charge-offs Commercial $ 41 $ — $ 2,021 $ 2,062 Commercial real estate 3,838 — — 3,838 Construction and land development 35 — — 35 Residential real estate 65 — — 65 Consumer 221 — 675 896 Lease financing — — 737 737 Total $ 4,200 $ — $ 3,433 $ 7,633 Three Months Ended March 31, 2025 (dollars in thousands) Community bank Specialty finance Non-core and other Total charge-offs Commercial $ 37 $ 64 $ 13,199 $ 13,300 Commercial real estate 723 — — 723 Construction and land development — — — — Residential real estate 72 — — 72 Consumer 183 — 270 453 Lease financing — — 3,448 3,448 Total $ 1,015 $ 64 $ 16,917 $ 17,996 Charge-offs for the three months ended March 31, 2026 were $7.6 million, compared to $18.0 million for the three months ended March 31, 2025. Commercial real estate charge-offs in the first quarter of 2026 included $2.6 million related to a loan that was moved to held for sale in the quarter. The Company expects this note sale to close in the second quarter of 2026. In the first quarter of 2025, non-core commercial loan charge-offs included $11.1 million related to a third-party loan program, and $2.1 million related to our equipment finance portfolio. Nonperforming Loans. The following table sets forth our nonperforming assets by asset category as of the dates presented. Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing interest. The balance of nonperforming loans reflect the net investment in these assets. (dollars in thousands) March 31, 2026 December 31, 2025 Nonperforming loans: Commercial $ 14,040 $ 14,925 Commercial real estate 39,982 45,333 Construction and land development — 155 Residential real estate 3,879 3,861 Consumer 77 47 Lease financing 813 1,162 Total nonperforming loans 58,791 65,483 Other real estate owned and other repossessed assets 514 606 Nonperforming assets $ 59,305 $ 66,089 Nonperforming loans to total loans 1.36 % 1.50 % Nonperforming assets to total assets 0.91 % 1.01 % Allowance for credit losses to nonperforming loans 115.45 % 105.71 % In 2025, the Company prioritized improving its credit quality by tightening its loan underwriting standards and pursuing opportunities to resolve nonperforming loans, which included the sale of specific loans or portfolios. The Company 56 Table of Contents ceased originations of new construction loans included in our Specialty finance portfolio in the fourth quarter of 2024. In the third quarter of 2025, the Company ceased originations in the equipment finance portfolio, selling substantially all of the portfolio during the fourth quarter of 2025. These actions are reflected in the continued reduction of nonperforming loans. Nonperforming loans decreased to $58.8 million, or 1.36% of total loans, at March 31, 2026, compared to $65.5 million, or 1.50% of total loans at December 31, 2025. We did not recognize interest income on nonaccrual loans during the three months ended March 31, 2026 or 2025 while the loans were in nonaccrual status. Investment Securities. Our investment strategy aims to maximize earnings while maintaining liquidity in securities with minimal credit risk. The types and maturities of securities purchased are primarily based on our current and projected liquidity and interest rate sensitivity positions. In the periods presented, all investment securities of the Company are classified as available for sale and, therefore, the book value of investment securities is equal to the fair market value. The following table sets forth the book value and percentage of each category of investment securities at March 31, 2026 and December 31, 2025: March 31, 2026 December 31, 2025 (dollars in thousands) Balance Percent Balance Percent Investment securities available for sale: U.S. government sponsored entities and U.S. agency securities $ 25,219 1.6 % $ 19,823 1.3 % Mortgage-backed securities - agency 1,252,051 78.6 1,193,750 78.4 Mortgage-backed securities - non-agency 83,002 5.2 97,089 6.4 Asset-backed student loans 20,374 1.3 34,215 2.2 State and municipal securities 71,654 4.5 73,458 4.8 Collateralized loan obligations 84,577 5.3 46,854 3.1 Corporate securities 55,678 3.5 57,812 3.8 Total investment securities, available for sale, at fair value $ 1,592,555 100.0 % $ 1,523,001 100.0 % 57 Table of Contents The following table sets forth the book value, maturities and weighted average yields for our investment portfolio at March 31, 2026: (dollars in thousands) Balance Percent Weighted average yield Investment securities available for sale: U.S. government sponsored entities and U.S. agency securities: Maturing within one year $ — — % — % Maturing in one to five years — — — Maturing in five to ten years 4,657 0.3 4.95 Maturing after ten years 20,562 1.3 5.17 Total U.S. government sponsored entities and U.S. agency securities $ 25,219 1.6 % 5.13 % Mortgage-backed securities - agency: Maturing within one year $ 2 — % 2.51 % Maturing in one to five years 17,485 1.1 1.66 Maturing in five to ten years 3,011 0.2 1.78 Maturing after ten years 1,231,553 77.3 4.46 Total mortgage-backed securities - agency $ 1,252,051 78.6 % 4.42 % Mortgage-backed securities - non-agency: Maturing within one year $ — — % — % Maturing in one to five years 10,074 0.6 6.41 Maturing in five to ten years — — — Maturing after ten years 72,928 4.6 4.71 Total mortgage-backed securities - non-agency $ 83,002 5.2 % 4.91 % Asset-backed student loans: Maturing within one year $ — — % — % Maturing in one to five years — — — Maturing in five to ten years 340 — 4.56 Maturing after ten years 20,034 1.3 4.48 Total asset-backed student loans $ 20,374 1.3 % 4.49 % State and municipal securities (1) : Maturing within one year $ 727 — % 3.05 % Maturing in one to five years 13,460 0.8 2.36 Maturing in five to ten years 25,743 1.6 2.78 Maturing after ten years 31,724 2.1 5.12 Total state and municipal securities $ 71,654 4.5 % 3.74 % Collateralized loan obligations: Maturing within one year $ — — % — % Maturing in one to five years 5,994 0.4 5.44 Maturing in five to ten years 32,782 2.1 5.77 Maturing after ten years 45,801 2.8 5.64 Total collateralized loan obligations $ 84,577 5.3 % 5.67 % Corporate securities: Maturing within one year $ 3,052 0.2 % 8.60 % Maturing in one to five years 14,816 0.9 5.65 Maturing in five to ten years 37,810 2.4 3.79 Maturing after ten years — — — Total corporate securities $ 55,678 3.5 % 4.55 % Total investment securities, available for sale $ 1,592,555 100.0 % 4.50 % (1) Weighted average yield for tax-exempt securities are presented on a tax-equivalent basis assuming a federal income tax rate of 21%. 58 Table of Contents The table below presents the credit ratings for our investment securities classified as available for sale, at fair value, at March 31, 2026: Amortized Fair Average credit rating (dollars in thousands) cost Value AAA AA+/- A+/- BBB+/- <BBB- Not Rated Investment securities available for sale: U.S. government sponsored entities and U.S. agency securities $ 25,381 $ 25,219 $ — $ 25,219 $ — $ — $ — $ — Mortgage-backed securities - agency 1,337,062 1,252,051 — 1,252,051 — — — — Mortgage-backed securities - non-agency 84,099 83,002 16,120 66,882 — — — — Asset-backed student loans 20,484 20,374 — 20,374 — — — — State and municipal securities 75,981 71,654 7,400 61,663 170 — — 2,421 Collateralized loan obligations 84,865 84,577 61,577 23,000 — — — — Corporate securities 57,546 55,678 — — 7,436 38,130 7,672 2,440 Total investment securities, available for sale $ 1,685,418 $ 1,592,555 $ 85,097 $ 1,449,189 $ 7,606 $ 38,130 $ 7,672 $ 4,861 Liabilities. At March 31, 2026, liabilities totaled $5.99 billion compared to $5.95 billion at December 31, 2025. Deposits. We emphasize developing total client relationships with our customers in order to increase our retail and commercial core deposit bases, which are our primary funding sources. Our deposits consist of noninterest-bearing and interest-bearing demand, savings and time deposit accounts. Total deposits increased $15.7 million to $5.44 billion at March 31, 2026, compared to December 31, 2025. Retail deposits increased $81.6 million driven primarily by growth in existing consumer and small business customer relationships as a result of targeted initiatives. Deposits among wealth management clients declined $22.8 million, reflecting normal fluctuations in client cash balances. Servicing deposits decreased $20.0 million due the sales of the residential servicing portfolio and a portion of the commercial servicing portfolio. Brokered deposits decreased $17.2 million. (dollars in thousands) March 31, 2026 December 31, 2025 Balance Percent Balance Percent Noninterest-bearing demand $ 1,013,808 18.6 % $ 1,040,411 19.2 % Interest-bearing: Checking 1,886,212 34.7 1,855,215 34.2 Money market 1,295,781 23.8 1,248,942 23.0 Savings 495,899 9.1 487,742 9.0 Time 748,367 13.8 792,069 14.6 Total deposits $ 5,440,067 100.0 % $ 5,424,379 100.0 % The following table presents the maturity of uninsured time deposits as of March 31, 2026: (dollars in thousands) Amount Three months or less $ 31,204 Three to six months 18,578 Six to 12 months 15,299 After 12 months 4,455 Total $ 69,536 59 Table of Contents Capital Resources and Liquidity Management Capital Resources. Shareholders’ equity is influenced primarily by earnings, dividends, issuances and redemptions of common and preferred stock and changes in accumulated other comprehensive income caused primarily by fluctuations in unrealized holding gains or losses, net of taxes, on available-for-sale investment securities, fair value hedges and cash flow hedges. Shareholders’ equity decreased $6.5 million to $559.0 million at March 31, 2026, compared to December 31, 2025. The change in shareholders’ equity was the result of dividends to common shareholders of $6.9 million, dividends to preferred shareholders of $2.2 million, repurchases of common stock of $7.9 million, and an increase in accumulated other comprehensive losses of $9.2 million, partially offset by net income of $18.5 million. In the fourth quarter of 2025, the Company’s board of directors authorized a new share repurchase program, pursuant to which the Company is authorized to repurchase up to $25.0 million of common stock through November 2, 2026. The stock repurchase program became effective on November 3, 2025. As of March 31, 2026, $17.4 million, or 822,729 shares of the Company’s common stock, had been repurchased under the current program. Liquidity Management. Liquidity refers to the measure of our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow needs, all at a reasonable cost. We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all short-term and long-term cash requirements. We manage our liquidity position to meet the daily cash flow needs of customers, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of our shareholders. Integral to our liquidity management is the administration of short-term borrowings. To the extent we are unable to obtain sufficient liquidity through core deposits, we seek to meet our liquidity needs through wholesale funding or other borrowings on either a short- or long-term basis. Securities sold under agreements to repurchase, which are classified as secured borrowings, generally mature within one to four days from the transaction date. Securities sold under agreements to repurchase are reflected at the amount of cash received in connection with the transaction, which represents the amount of the Bank’s obligation. The Bank may be required to provide additional collateral based on the fair value of the underlying securities. Investment securities with a carrying amount of $10.1 million and $12.2 million at March 31, 2026 and December 31, 2025, respectively, were pledged for securities sold under agreements to repurchase. The table below presents our sources of liquidity as of March 31, 2026 and December 31, 2025: (dollars in thousands) March 31, 2026 December 31, 2025 Cash and cash equivalents $ 113,658 $ 127,811 Unpledged securities 894,933 812,587 FHLB committed liquidity 872,234 1,114,294 FRB discount window availability 331,924 349,026 Total Estimated Liquidity $ 2,212,749 $ 2,403,718 Conditional Funding Based on Market Conditions Additional credit facility $ 255,000 $ 351,000 Brokered CDs (additional capacity) 500,000 450,000 ICS One Way Buy (additional capacity) 600,000 600,000 The Company is a corporation separate and apart from the Bank and, therefore, must provide for its own liquidity. The Company’s main source of funding is dividends declared and paid to it by the Bank. There are statutory, regulatory and debt covenant limitations that affect the ability of the Bank to pay dividends to the Company. Management believed at March 31, 2026, that these limitations will not impact our ability to meet our ongoing short-term cash obligations. 60 Table of Contents Regulatory Capital Requirements We are subject to various regulatory capital requirements administered by the federal and state banking regulators. Failure to meet regulatory capital requirements may result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for “prompt corrective action”, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting policies. At March 31, 2026, the Company and the Bank exceeded the regulatory minimums and met the regulatory definition of well capitalized. The following table presents the Company's and the Bank’s capital ratios and the minimum requirements at March 31, 2026: Ratio Actual Minimum Regulatory Requirements (1) Well Capitalized Total risk-based capital ratio Midland States Bancorp, Inc. 15.27 % 10.50 % N/A Midland States Bank 14.42 10.50 10.00 % Tier 1 risk-based capital ratio Midland States Bancorp, Inc. 13.48 8.50 N/A Midland States Bank 13.17 8.50 8.00 Common equity tier 1 risk-based capital ratio Midland States Bancorp, Inc. 9.98 7.00 N/A Midland States Bank 13.17 7.00 6.50 Tier 1 leverage ratio Midland States Bancorp, Inc. 10.35 4.00 N/A Midland States Bank 10.10 4.00 5.00 (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%. Quantitative and Qualitative Disclosures About Market Risk Market Risk. Market risk represents the risk of loss due to changes in market values of assets and liabilities. We incur market risk in the normal course of business through exposures to market interest rates, equity prices, and credit spreads. We are primarily exposed to interest rate risk as a result of offering a wide array of financial products to our customers and secondarily to price risk from investments in securities. Interest Rate Risk. Interest rate risk is the risk to earnings arising from changes in market interest rates. Interest rate risk arises from timing differences in the repricing and maturities of interest-earning assets and interest-bearing liabilities (reprice risk), changes in the expected maturities of assets and liabilities arising from embedded options, such as borrowers’ ability to prepay residential mortgage loans at any time and depositors’ ability to redeem certificates of deposit before maturity (option risk), changes in the shape of the yield curve where interest rates increase or decrease in a nonparallel fashion (yield curve risk), and changes in spread relationships between different yield curves, such as U.S. Treasuries and SOFR (basis risk). Interest rate risk management is an active process that encompasses monitoring loan and deposit flows complemented by investment, funding and hedging activities. Effective management of interest rate risk begins with understanding the dynamic characteristics of assets and liabilities and determining the appropriate interest rate risk posture given business forecasts, management objectives, market expectations, and policy constraints. Changes in market interest rates may result in changes in the fair market value of our financial instruments, cash flows, and net interest income. We seek to achieve a stable net interest income profile while managing volatility arising from shifts in market interest rates. Our Board of Directors’ Risk Policy and Compliance Committee oversees interest rate risk, as well as the establishment of risk measures, limits, and policy guidelines for managing the amount of interest rate risk and its effect on net interest income. The Committee meets quarterly to monitor the level of interest rate risk sensitivity to ensure compliance with the board of directors’ approved risk limits. 61 Table of Contents An asset sensitive position refers to a balance sheet position in which an increase in short-term interest rates is expected to generate higher net interest income, as rates earned on our interest-earning assets would reprice upward more quickly than rates paid on our interest-bearing liabilities, thus expanding our net interest margin. Conversely, a liability sensitive position refers to a balance sheet position in which an increase in short-term interest rates is expected to generate lower net interest income, as rates paid on our interest-bearing liabilities would reprice upward more quickly than rates earned on our interest-earning assets, thus compressing our net interest margin. Interest rate risk measurement is calculated and reported to the Risk Policy and Compliance Committee at least quarterly. The information reported includes period-end results and identifies any policy limits exceeded, along with an assessment of the policy limit breach and the action plan and timeline for resolution, mitigation, or assumption of the risk. We use NII at Risk to model interest rate risk utilizing various assumptions for assets, liabilities, and derivatives. NII at Risk uses net interest income simulation analysis which involves forecasting net interest earnings under a variety of scenarios including changes in the level of interest rates, the shape of the yield curve, and spreads between market interest rates. The sensitivity of net interest income to changes in interest rates is measured using numerous interest rate scenarios including shocks, gradual ramps, curve flattening, curve steepening as well as forecasts of likely interest rates scenarios. Modeling the sensitivity of net interest earnings to changes in market interest rates is highly dependent on numerous assumptions incorporated into the modeling process. To the extent that actual performance is different than what was assumed, actual net interest earnings sensitivity may be different than projected. We use various ad-hoc reports to continuously refine, stress and validate these assumptions. Assumptions and methodologies regarding administered rate liabilities (e.g., savings accounts, money market accounts and interest-bearing checking accounts), balance trends, and repricing relationships reflect our best estimate of expected behavior and these assumptions are reviewed periodically. The following table shows NII at Risk at the dates indicated: Net interest income sensitivity (Shocks) Immediate change in rates (dollars in thousands) -200 -100 +100 +200 March 31, 2026: Dollar change $ 2,729 $ 201 $ 2,545 $ 5,813 Percent change 1.2 % 0.1 % 1.1 % 2.5 % December 31, 2025: Dollar change $ 921 $ (517) $ 2,606 $ 5,458 Percent change 0.4 % (0.2) % 1.2 % 2.5 % We report NII at Risk to isolate the change in income related solely to interest-earning assets and interest-bearing liabilities. The NII at Risk results included in the table above reflect the analysis used quarterly by management. It models -200, −100, +100 and +200 basis point parallel shifts in market interest rates. We were within board policy limits for all scenarios at March 31, 2026. Tolerance levels for risk management require the continuing development of remedial plans to maintain residual risk within approved levels as we adjust the balance sheet. NII at Risk reported at March 31, 2026 projects that our earnings exhibit increasing profitability in all of our first year rate shock scenarios. Throughout the course of 2025, the Bank has been holding to its non-maturity beta assumptions and lowering rates along with the industry overall. Coupled with market expectations, the Bank continued its strategy of layering on protection to changes in rates through deposit pricing, securities purchase selection and hedging. Price Risk. Price risk represents the risk of loss arising from adverse movements in the prices of financial instruments that are carried at fair value and are subject to fair value accounting. We have price risk from investment securities, derivative instruments, and equity investments. ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The quantitative and qualitative disclosures about market risk are included under “Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Quantitative and Qualitative Disclosures about Market Risk”. 62 Table of Contents ITEM 4 – CONTROLS AND PROCEDURES Evaluation of disclosure controls and procedures. The Company’s Management, including our President and Chief Executive Officer and our interim Chief Financial Officer, have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on such evaluation, our President and Chief Executive Officer and our interim Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective as of that date to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its President and Chief Executive Officer and its interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Changes in internal control over financial reporting. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. P ART II – O THER I NFORMATION ITEM 1 – LEGAL PROCEEDINGS There are no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which we or any of our subsidiaries is a party or of which any of our property is the subject. However, given the nature, scope and complexity of the extensive legal and regulatory landscape applicable to our business, we, like all banking organizations, are subject to various legal proceedings from time to time, including those referenced in "Note 14 - Commitments, Contingencies and Credit Risk" to our consolidated financial statements. ITEM 1A– RISK FACTORS There have been no material changes from the risk factors previously disclosed in the “Risk Factors” section included in our Annual Report on Form 10-K for the year ended December 31, 2025. 63 Table of Contents ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Unregistered Sales of Equity Securities None. Issuer Purchases of Equity Securities The following table sets forth information regarding the Company’s repurchase of shares of its outstanding common stock during the first quarter of 2026: Period Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (2) January 1 - 31, 2026 189,893 $ 21.69 189,893 $ 11,295,222 February 1 - 28, 2026 5,751 22.15 5,263 11,179,358 March 1 - 31, 2026 170,351 21.20 170,351 7,568,410 Total 365,995 $ 21.47 365,507 $ 7,568,410 (1) Represents shares of the Company’s common stock repurchased under the stock repurchase program and shares withheld to satisfy tax withholding obligations upon the vesting of awards of restricted stock. (2) As previously disclosed, the board of directors of the Company approved a stock repurchase program on November 3, 2025, pursuant to which the Company is authorized to repurchase up to $25.0 million of common stock through November 2, 2026. Stock repurchases under this programs may be made from time to time on the open market, in privately negotiated transactions, or in any manner that complies with applicable securities laws, at the discretion of the Company. The timing of purchases and the number of shares repurchased under the programs are dependent upon a variety of factors including price, trading volume, corporate and regulatory requirements and market condition. The repurchase program may be suspended or discontinued at any time without notice. As of March 31, 2026, 822,729 shares of the Company’s common stock have been repurchased under the program for an aggregate purchase price of $17.4 million. ITEM 5 – OTHER INFORMATION During the three months ended March 31, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. 64 Table of Contents ITEM 6 – EXHIBITS Exhibit No. Description 31.1 Chief Executive Officer’s Certification required by Rule 13(a)-14(a) – filed herewith. 31.2 Chief Financial Officer’s Certification required by Rule 13(a)-14(a) – filed herewith. 32.1 Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – filed herewith. 32.2 Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – filed herewith. 101 Financial information from the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 formatted in iXBRL (Inline extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements – filed herewith. 104 The cover page from Midland States Bancorp, Inc.’s Form 10-Q Report for the quarterly period ended March 31, 2026 formatted in inline XBRL and contained in Exhibit 101. 65 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Midland States Bancorp, Inc. Date: April 30, 2026 By: /s/ Jeffrey G. Ludwig Jeffrey G. Ludwig President and Chief Executive Officer (Principal Executive Officer) Date: April 30, 2026 By: /s/ Claire A. Stack Claire A. Stack Chief Accounting Officer and interim Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) 66