Midland States Bancorp, Inc. 10-Q

msbi-20260630 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 June 30, 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 or 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 July 20, 2026 , the Registrant had 20,752,112 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 June 30, 2026 (Unaudited) and December 31, 2025 3 Consolidated Statements of Income (Unaudited) for the three and six months ended June 30, 2026 and 2025 4 Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended June 30, 2026 and 2025 5 Consolidated Statements of Shareholders’ Equity (Unaudited) for the three and six months ended June 30, 2026 and 2025 6 Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 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 47 Item 3. Quantitative and Qualitative Disclosures about Market Risk 69 Item 4. Controls and Procedures 69 PART II. OTHER INFORMATION Item 1. Legal Proceedings 69 Item 1A. Risk Factors 69 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 70 Item 5. Other Information 70 Item 6. Exhibits 71 SIGNATURES 72 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) ASC Accounting Standards Codification 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) June 30, 2026 December 31, 2025 (unaudited) Assets Cash and due from banks $ 298,244 $ 127,279 Federal funds sold 503 532 Cash and cash equivalents 298,747 127,811 Investment securities available for sale, at fair value 1,653,460 1,523,001 Equity securities, at fair value 3,853 4,235 Loans 4,243,704 4,352,004 Allowance for credit losses on loans ( 62,519 ) ( 69,219 ) Total loans, net 4,181,185 4,282,785 Loans held for sale 8,944 7,781 Premises and equipment, net 82,898 85,134 Other real estate owned 356 606 Nonmarketable equity securities 30,664 32,598 Accrued interest receivable 23,676 23,824 Loan servicing rights, at lower of cost or fair value 11,316 11,932 Loan servicing rights, held for sale — 3,661 Goodwill 7,927 7,927 Other intangible assets, net 7,495 8,876 Company-owned life insurance 222,757 218,554 Credit enhancement asset 13,642 12,557 Other assets 153,696 162,138 Total assets $ 6,700,616 $ 6,513,420 Liabilities and Shareholders’ Equity Liabilities: Deposits: Noninterest-bearing demand deposits $ 1,010,128 $ 1,040,411 Interest-bearing deposits 4,697,150 4,383,968 Total deposits 5,707,278 5,424,379 Short-term borrowings 7,645 60,181 Federal Home Loan Bank advances 258,000 293,000 Subordinated debt 27,030 27,019 Trust preferred debentures 52,219 51,857 Accrued interest payable and other liabilities 78,756 91,485 Total liabilities 6,130,928 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 June 30, 2026 and December 31, 2025, respectively 110,548 110,548 Common stock, $ 0.01 par value; 40,000,000 shares authorized; 20,725,814 and 21,169,854 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively 207 212 Capital surplus 419,832 428,247 Retained earnings 107,032 86,825 Accumulated other comprehensive loss, net of tax ( 67,931 ) ( 60,333 ) Total shareholders’ equity 569,688 565,499 Total liabilities and shareholders’ equity $ 6,700,616 $ 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Interest income: Loans including fees: Taxable $ 66,761 $ 78,514 $ 132,320 $ 156,182 Tax exempt 343 573 726 929 Loans held for sale 128 377 230 4,940 Investment securities: Taxable 18,989 16,618 37,139 31,593 Tax exempt 435 432 871 860 Nonmarketable equity securities 534 694 1,117 1,341 Federal funds sold and cash investments 987 716 1,796 1,434 Total interest income 88,177 97,924 174,199 197,279 Interest expense: Deposits 24,526 32,290 48,729 66,905 Short-term borrowings 202 573 433 1,273 Federal Home Loan Bank advances 2,349 3,766 5,019 6,929 Subordinated debt 380 1,394 760 2,781 Trust preferred debentures 1,131 1,206 2,252 2,406 Total interest expense 28,588 39,229 57,193 80,294 Net interest income 59,589 58,695 117,006 116,985 Provision for credit losses: Provision for credit losses on loans 7,109 17,369 12,512 28,219 Recapture of credit losses on unfunded commitments ( 290 ) — ( 690 ) — Total provision for credit losses 6,819 17,369 11,822 28,219 Net interest income after provision for credit losses 52,770 41,326 105,184 88,766 Noninterest income: Wealth management revenue 8,768 7,379 17,016 14,729 Service charges on deposit accounts 3,449 3,351 6,804 6,656 Interchange revenue 3,553 3,463 7,081 6,614 Residential mortgage banking revenue 686 756 1,312 1,432 Income on company-owned life insurance 2,127 2,068 4,203 4,402 Loss on sales of investment securities, net — — ( 1,731 ) — Credit enhancement income 3,081 3,848 6,441 3,270 Other income 2,104 2,669 4,764 4,194 Total noninterest income 23,768 23,534 45,890 41,297 Noninterest expense: Salaries and employee benefits 27,354 25,685 53,511 52,101 Occupancy and equipment 4,229 4,166 8,764 8,664 Data processing 6,994 7,035 14,059 13,954 FDIC insurance 781 1,422 1,310 2,885 Professional services 1,665 2,792 3,907 5,533 Marketing 1,211 1,283 2,452 2,076 Communications 359 334 790 663 Loan expense 3,147 1,990 6,451 3,325 Loan servicing fees 1,050 1,386 2,167 2,136 Impairment on goodwill — — — 153,977 Amortization of intangible assets 664 827 1,381 1,738 Other expense 3,301 3,072 6,387 5,945 Total noninterest expense 50,755 49,992 101,179 252,997 Income (loss) before income taxes 25,783 14,868 49,895 ( 122,934 ) Income tax expense 5,895 2,844 11,544 6,016 Net income (loss) 19,888 12,024 38,351 ( 128,950 ) Preferred dividends 2,228 2,228 4,456 4,456 Net income (loss) available to common shareholders $ 17,660 $ 9,796 $ 33,895 $ ( 133,406 ) Per common share data: Basic earnings (loss) per common share $ 0.82 $ 0.44 $ 1.56 $ ( 6.13 ) Diluted earnings (loss) per common share $ 0.82 $ 0.44 $ 1.56 $ ( 6.13 ) Weighted average common shares outstanding 21,074,683 21,820,190 21,187,341 21,808,475 Weighted average diluted common shares outstanding 21,074,683 21,820,190 21,187,341 21,808,475 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income (loss) $ 19,888 $ 12,024 $ 38,351 $ ( 128,950 ) Other comprehensive income (loss): Investment securities available for sale: Unrealized gains (losses) that occurred during the period 2,346 ( 2,915 ) ( 12,440 ) 8,482 Reclassification adjustment for realized net losses on sales of investment securities included in net income — — 1,731 — Reclassification adjustment for (gains) losses on fair value hedges included in net income 6 ( 41 ) ( 178 ) ( 46 ) Income tax effect ( 661 ) 669 2,999 ( 2,369 ) Change in investment securities available for sale, net of tax 1,691 ( 2,287 ) ( 7,888 ) 6,067 Cash flow hedges: Net unrealized derivative gains (losses) on cash flow hedges ( 517 ) 223 ( 166 ) 1,087 Reclassification adjustment for net losses realized in net income 194 642 541 1,479 Income tax effect 283 ( 227 ) ( 85 ) ( 661 ) Change in cash flow hedges, net of tax ( 40 ) 638 290 1,905 Other comprehensive income (loss), net of tax 1,651 ( 1,649 ) ( 7,598 ) 7,972 Total comprehensive income (loss) $ 21,539 $ 10,375 $ 30,753 $ ( 120,978 ) 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, March 31, 2026 20,813,975 $ 110,548 $ 208 $ 421,609 $ 96,171 $ ( 69,582 ) $ 558,954 Net income — — — — 19,888 — 19,888 Other comprehensive income — — — — — 1,651 1,651 Common dividends declared ($ 0.32 per share) — — — — ( 6,799 ) — ( 6,799 ) Preferred dividends declared ($ 19.375 per share) — — — — ( 2,228 ) — ( 2,228 ) Common stock repurchased ( 113,208 ) — ( 1 ) ( 2,743 ) — — ( 2,744 ) Share-based compensation expense — — — 581 — — 581 Issuance of common stock under employee benefit plans 25,047 — — 385 — — 385 Balances, June 30, 2026 20,725,814 $ 110,548 $ 207 $ 419,832 $ 107,032 $ ( 67,931 ) $ 569,688 Balances, December 31, 2025 21,169,854 $ 110,548 $ 212 $ 428,247 $ 86,825 $ ( 60,333 ) $ 565,499 Net income — — — — 38,351 — 38,351 Other comprehensive loss — — — — — ( 7,598 ) ( 7,598 ) Common dividends declared ($ 0.64 per share) — — — — ( 13,688 ) — ( 13,688 ) Preferred dividends declared ($ 38.750 per share) — — — — ( 4,456 ) — ( 4,456 ) Common stock repurchased ( 478,715 ) — ( 5 ) ( 10,663 ) — — ( 10,668 ) Share-based compensation expense — — — 1,520 — — 1,520 Issuance of common stock under employee benefit plans 34,675 — — 728 — — 728 Balances, June 30, 2026 20,725,814 $ 110,548 $ 207 $ 419,832 $ 107,032 $ ( 67,931 ) $ 569,688 Balances, March 31, 2025 21,503,036 $ 110,548 $ 215 $ 435,299 $ 97,714 $ ( 72,339 ) $ 571,437 Net income — — — — 12,024 — 12,024 Other comprehensive loss — — — — — ( 1,649 ) ( 1,649 ) Common dividends declared ($ 0.31 per share) — — — — ( 6,785 ) — ( 6,785 ) Preferred dividends declared ($ 19.375 per share) — — — — ( 2,228 ) — ( 2,228 ) Share-based compensation expense — — — 750 — — 750 Issuance of common stock under employee benefit plans 12,102 — — 156 — — 156 Balances, June 30, 2025 21,515,138 $ 110,548 $ 215 $ 436,205 $ 100,725 $ ( 73,988 ) $ 573,705 Balances, December 31, 2024 21,494,485 $ 110,548 $ 215 $ 434,346 $ 247,698 $ ( 81,960 ) $ 710,847 Net loss — — — — ( 128,950 ) — ( 128,950 ) Other comprehensive income — — — — — 7,972 7,972 Common dividends declared ($ 0.62 per share) — — — — ( 13,567 ) — ( 13,567 ) Preferred dividends declared ($ 38.750 per share) — — — — ( 4,456 ) — ( 4,456 ) Share-based compensation expense — — — 1,534 — — 1,534 Issuance of common stock under employee benefit plans 20,653 — — 325 — — 325 Balances, June 30, 2025 21,515,138 $ 110,548 $ 215 $ 436,205 $ 100,725 $ ( 73,988 ) $ 573,705 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) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income (loss) $ 38,351 $ ( 128,950 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Provision for credit losses 11,822 28,219 Depreciation on premises and equipment 2,430 2,456 Impairment on goodwill — 153,977 Amortization of intangible assets 1,381 1,738 Amortization of operating lease right-of-use asset 819 788 Amortization of loan servicing rights 769 1,139 Share-based compensation expense 1,520 1,534 Increase in cash surrender value of life insurance ( 4,203 ) ( 4,059 ) Investment securities accretion, net ( 8,838 ) ( 6,937 ) Loss on sales of investment securities, net 1,731 — Origination of loans held for sale ( 58,855 ) ( 45,532 ) Proceeds from sales of loans and leases held for sale 58,931 47,026 Gain on sale of loans held for sale ( 1,434 ) ( 1,303 ) Gain on sale of mortgage servicing rights held for sale ( 2,077 ) — Net change in operating assets and liabilities: Accrued interest receivable 148 276 Credit enhancement asset ( 1,085 ) 11,004 Other assets 10,832 12,157 Accrued expenses and other liabilities ( 5,801 ) ( 20,777 ) Net cash provided by operating activities 46,441 52,756 Cash flows from investing activities: Purchases of investment securities available for sale ( 394,250 ) ( 218,307 ) Proceeds from sales of investment securities available for sale 98,599 — Maturities and payments on investment securities available for sale 158,478 95,792 Purchases of equity securities ( 83 ) ( 33 ) Net decrease in loans 87,097 331,643 Proceeds from sales of consumer loans held for sale — 61,099 Purchases of premises and equipment ( 895 ) ( 3,233 ) Proceeds from sale of premises and equipment 195 — Purchases of nonmarketable equity securities ( 1,279 ) ( 80,200 ) Proceeds from redemptions of nonmarketable equity securities 3,213 76,231 Proceeds from sales of mortgage servicing rights held for sale 5,727 — Proceeds from sales of other real estate owned 414 4,774 Proceeds from company-owned life insurance, net — 1,166 Net cash provided by (used in) investing activities ( 42,784 ) 268,932 Cash flows from financing activities: Net increase (decrease) in deposits 282,899 ( 250,324 ) Net decrease in short-term borrowings ( 52,536 ) ( 78,845 ) Net increase in short-term FHLB advances — 82,000 Proceeds from long-term FHLB advances — 203,000 Payments made on long-term FHLB advances ( 35,000 ) ( 198,000 ) Cash dividends paid on preferred stock ( 4,456 ) ( 4,456 ) Cash dividends paid on common stock ( 13,688 ) ( 13,567 ) Common stock repurchased ( 10,668 ) — Proceeds from issuance of common stock under employee benefit plans 728 325 Net cash provided by (used in) financing activities 167,279 ( 259,867 ) Net increase in cash and cash equivalents 170,936 61,821 Cash and cash equivalents: Beginning of period 127,811 114,766 End of period $ 298,747 $ 176,587 Supplemental disclosures of cash flow information: Cash payments for: Interest paid on deposits and borrowed funds $ 58,748 $ 82,580 Income tax paid (net of refunds) 1,132 761 Supplemental disclosures of noncash investing and financing activities: Transfer of loans to loans held for sale 1,870 29,400 Transfer of loans to other real estate owned 178 187 Right of use assets obtained in exchange for lease obligations 128 837 Transfer of premises and equipment, net to assets held for sale — 245 Transfer of loan servicing rights held for sale to loan servicing rights, at lower of cost or fair value 125 — Loans provided for sale of consumer loans held for sale — 219,212 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 29 Note 5: Goodwill 30 Note 6: Derivative Instruments 30 Note 7: Deposits 33 Note 8: Short-Term Borrowings 33 Note 9: FHLB Advances 34 Note 1 0 : Accumulated Other Comprehensive Income (Loss) 35 Note 11 : Earnings per Common Share 36 Note 12 : Fair Value of Financial Instruments 36 Note 13 : Commitments, Contingencies and Credit Risk 41 Note 14 : Segment Information 42 Note 15 : Revenue from Contracts with Customers 45 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 and six months ended June 30, 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 consolidated financial statements or related disclosures. FASB ASU No. 2026-01, Equity (Topic 505): Initial Measurement of Paid-In-Kind Dividends on Equity-Classified Preferred Stock - In April 2026, the FASB issued ASU 2026-01, which amends ASC 505 to add guidance on how an issuer should initially measure paid-in-kind dividends on equity-classified preferred stock and does not affect the timing of dividend recognition. The amendments in this update may be applied either prospectively or on a modified retrospective basis and will be effective for the Company for annual reporting periods beginning after December 15, 2026, including interim reporting periods within those annual reporting periods. Early adoption is permitted. The Company’s preferred stock provides for dividends payable solely in cash, if and when declared, and does not include paid‑in‑kind dividend features. Accordingly, the Company does not expect adoption of the ASU to have any impact on its consolidated financial statements or related disclosures. 9 Table of Contents NOTE 2 – INVESTMENT SECURITIES Investment Securities Available for Sale Investment securities available for sale at June 30, 2026 and December 31, 2025 were as follows: June 30, 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 $ 37,522 $ 102 $ ( 100 ) $ 37,524 Mortgage-backed securities - agency (1) 1,390,919 4,114 ( 88,688 ) 1,306,345 Mortgage-backed securities - non-agency 94,088 1,118 ( 2,444 ) 92,762 Asset-backed student loans 19,201 2 ( 73 ) 19,130 State and municipal securities 74,999 506 ( 4,073 ) 71,432 Collateralized loan obligations 84,552 1 ( 67 ) 84,486 Corporate securities 42,697 122 ( 1,038 ) 41,781 Total available for sale securities $ 1,743,978 $ 5,965 $ ( 96,483 ) $ 1,653,460 (1) The amount of fair value hedging adjustment included in the amortized cost amount of the hedged investment securities available-for-sale as of June 30, 2026 was $ 0.8 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 June 30, 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 June 30, 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 $ 3,737 $ 3,756 After one year through five years 48,294 46,438 After five years through ten years 74,359 71,866 After ten years 132,581 132,293 Mortgage-backed securities 1,485,007 1,399,107 Total available for sale securities $ 1,743,978 $ 1,653,460 Proceeds and gross realized gains and losses on sales of investment securities available for sale for the six months ended June 30, 2026 and 2025 are summarized as follows: Six Months Ended June 30, (dollars in thousands) 2026 2025 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 June 30, 2026 and 2025. Unrealized losses and fair values for investment securities available for sale as of June 30, 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: June 30, 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 $ 19,519 $ 100 $ — $ — $ 19,519 $ 100 Mortgage-backed securities - agency 494,501 9,851 478,263 78,837 972,764 88,688 Mortgage-backed securities - non-agency 13,848 65 15,728 2,379 29,576 2,444 Asset-backed student loans 3,187 3 13,129 70 16,316 73 State and municipal securities 1,816 2 43,777 4,071 45,593 4,073 Collateralized loan obligations 18,686 67 — — 18,686 67 Corporate securities 3,974 26 26,685 1,012 30,659 1,038 Total available for sale securities $ 555,531 $ 10,114 $ 577,582 $ 86,369 $ 1,133,113 $ 96,483 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 June 30, 2026, 292 investment securities available for sale had unrealized losses with aggregate depreciation of 7.85 % 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 June 30, 2026 and December 31, 2025: (dollars in thousands) June 30, 2026 December 31, 2025 Commercial: Commercial $ 1,080,865 $ 1,062,691 Commercial other 104,865 115,830 Commercial real estate: Commercial real estate non-owner occupied 1,341,225 1,447,894 Commercial real estate owner occupied 511,347 444,443 Multi-family 382,981 383,377 Farmland 61,425 66,950 Construction and land development 243,840 286,140 Total commercial loans 3,726,548 3,807,325 Residential real estate: Residential first lien 283,711 286,178 Other residential 63,953 63,445 Consumer: Consumer 88,553 99,692 Consumer other 43,853 44,383 Lease financing 37,086 50,981 Total loans $ 4,243,704 $ 4,352,004 Total loans included net deferred loan fees of $ 7.9 million and $ 8.2 million at June 30, 2026 and December 31, 2025, respectively, and unearned discounts of $ 3.1 million and $ 4.7 million within the lease financing portfolio at June 30, 2026 and December 31, 2025, respectively. 12 Table of Contents Classifications of Loan Portfolio The Company monitors the performance of its loan portfolio, assesses the credit risk, and estimates its allowance for credit losses on loans using the segments set forth below. 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 and six months ended June 30, 2026 and 2025, are summarized as follows: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2026 2025 2026 2025 Beginning balance $ 47,085 $ 42,028 $ 46,999 $ 40,410 New loans and other additions — 3,317 496 5,675 Repayments and other reductions ( 8,297 ) ( 859 ) ( 8,707 ) ( 1,599 ) Ending balance $ 38,788 $ 44,486 $ 38,788 $ 44,486 13 Table of Contents Th e following table represents, by loan portfolio segment, a summary of changes in the allowance for credit losses on loans for the three and six months ended June 30, 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 Changes in allowance for credit losses on loans for the three months ended June 30, 2026: Balances, March 31, 2026 $ 24,577 $ 27,653 $ 2,568 $ 6,203 $ 4,203 $ 2,671 $ 67,875 Provision for credit losses on loans 1,976 6,120 ( 558 ) ( 669 ) 100 140 7,109 Charge-offs ( 3,564 ) ( 8,829 ) — — ( 549 ) ( 334 ) ( 13,276 ) Recoveries 153 382 — 70 139 67 811 Balances, June 30, 2026 $ 23,142 $ 25,326 $ 2,010 $ 5,604 $ 3,893 $ 2,544 $ 62,519 Changes in allowance for credit losses on loans for the six months ended June 30, 2026: Balances, December 31, 2025 $ 23,676 $ 28,284 $ 2,619 $ 6,652 $ 4,804 $ 3,184 $ 69,219 Provision for credit losses on loans 4,465 9,326 ( 574 ) ( 1,128 ) 237 186 12,512 Charge-offs ( 5,626 ) ( 12,667 ) ( 35 ) ( 65 ) ( 1,445 ) ( 1,071 ) ( 20,909 ) Recoveries 627 383 — 145 297 245 1,697 Balances, June 30, 2026 $ 23,142 $ 25,326 $ 2,010 $ 5,604 $ 3,893 $ 2,544 $ 62,519 Changes in allowance for credit losses on loans for the three months ended June 30, 2025: Balances, March 31, 2025 $ 33,554 $ 39,069 $ 3,021 $ 7,874 $ 5,935 $ 15,723 $ 105,176 Provision for credit losses on loans 5,773 10,186 ( 1,181 ) ( 860 ) 296 3,155 17,369 Charge-offs ( 6,161 ) ( 22,453 ) — — ( 884 ) ( 3,886 ) ( 33,384 ) Recoveries 1,013 637 1,029 90 357 403 3,529 Balances, June 30, 2025 $ 34,179 $ 27,439 $ 2,869 $ 7,104 $ 5,704 $ 15,395 $ 92,690 Changes in allowance for credit losses on loans for the six months ended June 30, 2025: Balances, December 31, 2024 $ 42,776 $ 36,837 $ 3,550 $ 8,002 $ 5,400 $ 14,639 $ 111,204 Provision for credit losses on loans 9,355 13,139 ( 1,711 ) ( 934 ) 1,236 7,134 28,219 Charge-offs ( 19,461 ) ( 23,176 ) — ( 72 ) ( 1,337 ) ( 7,334 ) ( 51,380 ) Recoveries 1,509 639 1,030 108 405 956 4,647 Balances, June 30, 2025 $ 34,179 $ 27,439 $ 2,869 $ 7,104 $ 5,704 $ 15,395 $ 92,690 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. 14 Table of Contents 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. 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. 15 Table of Contents The following table presents the amortized cost basis of nonaccrual loans as of June 30, 2026 and December 31, 2025: June 30, 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 $ 3,286 $ 7,335 $ 10,621 $ 3,370 $ 3,849 $ 7,219 Commercial other 707 — 707 1,040 2,157 3,197 Commercial real estate: Commercial real estate non-owner occupied 6,665 12,150 18,815 1,537 13,547 15,084 Commercial real estate owner occupied 2,037 10,172 12,209 3,455 8,684 12,139 Multi-family — 6,650 6,650 14,336 2,112 16,448 Farmland 1,148 — 1,148 1,260 402 1,662 Construction and land development — 1,588 1,588 155 — 155 Total commercial loans 13,843 37,895 51,738 25,153 30,751 55,904 Residential real estate: Residential first lien 2,952 254 3,206 3,087 313 3,400 Other residential 592 — 592 426 — 426 Consumer: Consumer 83 — 83 47 — 47 Lease financing 1,839 — 1,839 1,162 — 1,162 Total loans $ 19,309 $ 38,149 $ 57,458 $ 29,875 $ 31,064 $ 60,939 There was no interest income recognized on nonaccrual loans during the three and six months ended June 30, 2026 and 2025 while the loans were in nonaccrual status. 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. 16 Table of Contents The table below presents the amortized cost basis of collateral dependent loans by loan class, for borrowers experiencing financial difficulty, as of June 30, 2026 and December 31, 2025: Type of Collateral (dollars in thousands) Real Estate Blanket Lien Equipment Total June 30, 2026 Commercial: Commercial $ 3,688 $ 5,021 $ 680 $ 9,389 Commercial other — 65 — 65 Commercial real estate: Non-owner occupied 18,111 — — 18,111 Owner occupied 9,485 1,595 — 11,080 Multi-family 6,650 — — 6,650 Farmland — — — — Construction and land development 1,588 — — 1,588 Residential real estate: Residential first lien 667 — — 667 Other residential 147 — — 147 Total collateral dependent loans $ 40,336 $ 6,681 $ 680 $ 47,697 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 Construction and land development — — — — Total collateral dependent loans $ 38,975 $ 8,003 $ — $ 46,978 17 Table of Contents The aging status of the recorded investment in loans by class as of June 30, 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 $ 1,068,240 $ 2,004 $ — $ — $ 2,004 $ 10,621 $ 1,080,865 Commercial other 95,430 3,566 2,356 2,806 8,728 707 104,865 Commercial real estate: Commercial real estate non-owner occupied 1,322,338 — 72 — 72 18,815 1,341,225 Commercial real estate owner occupied 498,624 313 201 — 514 12,209 511,347 Multi-family 376,331 — — — — 6,650 382,981 Farmland 60,095 182 — — 182 1,148 61,425 Construction and land development 242,252 — — — — 1,588 243,840 Total commercial loans 3,663,310 6,065 2,629 2,806 11,500 51,738 3,726,548 Residential real estate: Residential first lien 279,699 20 171 615 806 3,206 283,711 Other residential 62,952 120 289 — 409 592 63,953 Consumer: Consumer 88,289 160 21 — 181 83 88,553 Consumer other 43,306 404 143 — 547 — 43,853 Lease financing 34,285 239 723 — 962 1,839 37,086 Total loans $ 4,171,841 $ 7,008 $ 3,976 $ 3,421 $ 14,405 $ 57,458 $ 4,243,704 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 18 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 and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (dollars in thousands) Balance Count Balance Count Balance Count Balance Count Commercial: Commercial $ 4,539 2 $ 94 1 $ 4,539 2 $ 1,068 2 Commercial other — — 561 2 — — 861 4 Commercial real estate: Commercial real estate non-owner occupied 7,795 1 — — 7,795 1 — — Commercial real estate owner occupied — — 201 1 — — 201 1 Multi-family 5,113 1 — — 5,113 1 — — Farmland — — 267 1 99 1 267 1 Construction and land development — — — — 9,000 1 — — Total commercial loans 17,447 4 1,123 5 26,546 6 2,397 8 Residential real estate: Residential first lien — — — — 37 1 146 3 Other residential — — — — — — 10 1 Total loan restructurings $ 17,447 4 $ 1,123 5 $ 26,583 7 $ 2,553 12 19 Table of Contents The following tables present a summary of loan restructurings, by loan portfolio segment and type of restructuring, for the three and six months ended June 30, 2026: Three Months Ended June 30, 2026 (dollars in thousands) Payment Deferral ($) Term Extension ($) Total Modifications ($) Total Class of Financing Receivable (%) Commercial: Commercial $ 2,089 $ 2,450 $ 4,539 0.42 % Commercial real estate: Commercial real estate non-owner occupied — 7,795 7,795 0.58 Multi-family 5,113 — 5,113 1.34 Total commercial loans $ 7,202 $ 10,245 $ 17,447 0.47 % Total $ 7,202 $ 10,245 $ 17,447 0.41 % Six Months Ended June 30, 2026 (dollars in thousands) Payment Deferral ($) Term Extension ($) Total Modifications ($) Total Class of Financing Receivable (%) Commercial: Commercial $ 2,089 $ 2,450 $ 4,539 0.42 % Commercial real estate: Commercial real estate non-owner occupied — 7,795 7,795 0.58 Multi-family 5,113 — 5,113 1.34 Farmland — 99 99 0.16 Construction & land development — 9,000 9,000 3.69 Total commercial loans $ 7,202 $ 19,344 $ 26,546 0.71 % Residential real estate: Residential first lien — 37 37 0.01 Total $ 7,202 $ 19,381 $ 26,583 0.63 % 20 Table of Contents The following tables present a summary of loan restructurings, by loan portfolio segment and type of restructuring, for the three and six months ended June 30, 2025: Three Months Ended June 30, 2025 (dollars in thousands) Term Extension ($) Interest Rate Reduction ($) Interest Rate Reduction / Payment Deferral ($) Payment Deferral / Term Extension ($) Total Modifications ($) Total Class of Financing Receivable (%) Commercial: Commercial $ 94 $ — $ — $ — $ 94 0.01 % Commercial other — — — 561 561 0.48 Commercial real estate: Commercial real estate owner occupied — — 201 — 201 0.05 Farmland — — — 267 267 0.40 Total commercial loans $ 94 $ — $ 201 $ 828 $ 1,123 0.03 % Total $ 94 $ — $ 201 $ 828 $ 1,123 0.03 % Six Months Ended June 30, 2025 (dollars in thousands) Term Extension ($) Interest Rate Reduction ($) Interest Rate Reduction / Payment Deferral ($) Payment Deferral / Term Extension ($) Total Modifications ($) Total Class of Financing Receivable (%) Commercial Commercial $ 1,068 $ — $ — $ — $ 1,068 0.10 % Commercial other — 300 — 561 861 0.74 Commercial real estate: Commercial real estate owner occupied — — 201 — 201 0.05 Farmland — — — 267 267 0.40 Total commercial loans $ 1,068 $ 300 $ 201 $ 828 $ 2,397 0.06 % Residential real estate: Residential first lien 146 — — — 146 0.05 Other residential 10 — — — 10 0.02 Total $ 1,224 $ 300 $ 201 $ 828 $ 2,553 0.06 % The Company has not committed to lend any additional amounts to the borrowers that have been granted a loan modification. 21 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 June 30, 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 $ — $ — $ — $ — $ 12,498 $ 12,498 Commercial real estate: Commercial real estate non-owner occupied 7,976 — — 7,976 19,658 27,634 Multi-family — — — — 5,113 5,113 Farmland — — — — 99 99 Construction and land development 1,589 — — 1,589 9,000 10,589 Total commercial loans 9,565 — — 9,565 46,368 55,933 Residential real estate: Residential first lien — — — — 75 75 Total loan restructurings $ 9,565 $ — $ — $ 9,565 $ 46,443 $ 56,008 The following table presents the performance of such loans that have been modified in the last twelve months as of June 30, 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 $ — $ — $ 77 $ 77 $ 1,393 $ 1,470 Commercial other — — 15 15 1,113 1,128 Commercial real estate: Commercial real estate non-owner occupied — — 4,456 4,456 21,422 25,878 Commercial real estate owner occupied 201 — — 201 6,038 6,239 Farmland — — — — 267 267 Construction and land development — — — — 1,571 1,571 Total commercial loans 201 — 4,548 4,749 31,804 36,553 Residential real estate: Residential first lien 133 10 — 143 329 472 Other residential — — — — 10 10 Consumer: Consumer — — — — 15 15 Lease financing — 668 139 807 188 995 Total loan restructurings $ 334 $ 678 $ 4,687 $ 5,699 $ 32,346 $ 38,045 22 Table of Contents 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. 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. 23 Table of Contents The following tables present the recorded investment of the commercial loan portfolio by risk category as of June 30, 2026 and December 31, 2025: June 30, 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 $ 89,556 $ 390,474 $ 89,173 $ 26,230 $ 11,622 $ 51,819 $ 398,219 $ 1,057,093 Special mention — — — 5,229 — — 75 5,304 Substandard 4,539 31 — 10 165 1,370 1,732 7,847 Substandard – nonaccrual — — 67 993 4,200 4,663 698 10,621 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 94,095 390,505 89,240 32,462 15,987 57,852 400,724 1,080,865 Commercial other Acceptable credit quality 1,090 3,416 1,389 994 2,887 735 92,702 103,213 Special mention — 1 — 54 19 54 590 718 Substandard — — — 204 — — 23 227 Substandard – nonaccrual — — — 349 189 70 99 707 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 1,090 3,417 1,389 1,601 3,095 859 93,414 104,865 Commercial real estate Non-owner occupied Acceptable credit quality 159,092 273,985 194,281 101,724 285,221 242,034 12,339 1,268,676 Special mention — 3,035 — — — 12,303 — 15,338 Substandard 14,490 331 19 — 8,037 15,519 — 38,396 Substandard – nonaccrual — 82 13,226 — 59 5,448 — 18,815 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 173,582 277,433 207,526 101,724 293,317 275,304 12,339 1,341,225 Owner occupied Acceptable credit quality 83,156 117,811 81,412 34,439 84,646 94,188 1,708 497,360 Special mention — — 215 — — 610 — 825 Substandard 203 — 275 — — 475 — 953 Substandard – nonaccrual — 909 184 — 9,635 1,177 304 12,209 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 83,359 118,720 82,086 34,439 94,281 96,450 2,012 511,347 Multi-family Acceptable credit quality 47,929 77,939 20,762 10,122 140,445 38,674 760 336,631 Special mention — 1,200 — 7,490 9,000 — — 17,690 Substandard 5,113 — — — 16,867 30 — 22,010 Substandard – nonaccrual — — — — 6,650 — — 6,650 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 53,042 79,139 20,762 17,612 172,962 38,704 760 382,981 Farmland Acceptable credit quality 4,701 15,950 1,564 6,354 3,085 25,228 591 57,473 Special mention 984 — — — — 92 — 1,076 Substandard 1,293 358 — — — 77 — 1,728 Substandard – nonaccrual — — — — — 1,100 48 1,148 Doubtful — — — — — — — — Not graded — — — — — — — — Subtotal 6,978 16,308 1,564 6,354 3,085 26,497 639 61,425 Construction and land development Acceptable credit quality 30,667 104,545 36,468 641 17,681 27,416 17,684 235,102 Special mention — — — — — — — — Substandard — — — — — 70 — 70 Substandard – nonaccrual — — 1,588 — — — — 1,588 Doubtful — — — — — — — — Not graded 1,890 4,208 486 282 147 67 — 7,080 Subtotal 32,557 108,753 38,542 923 17,828 27,553 17,684 243,840 Total Acceptable credit quality 416,191 984,120 425,049 180,504 545,587 480,094 524,003 3,555,548 Special mention 984 4,236 215 12,773 9,019 13,059 665 40,951 Substandard 25,638 720 294 214 25,069 17,541 1,755 71,231 Substandard – nonaccrual — 991 15,065 1,342 20,733 12,458 1,149 51,738 Doubtful — — — — — — — — Not graded 1,890 4,208 486 282 147 67 — 7,080 Total commercial loans $ 444,703 $ 994,275 $ 441,109 $ 195,115 $ 600,555 $ 523,219 $ 527,572 $ 3,726,548 24 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 25 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 and six months ended June 30, 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 June 30, 2026 Commercial Commercial $ — $ — $ — $ — $ — $ 238 $ — $ 238 Commercial other 3 6 8 87 604 15 2,603 3,326 Commercial real estate Non-owner occupied — — — — — 240 — 240 Multi-family — — — — 8,589 — — 8,589 Construction and land development — — — — — — — — Total gross commercial charge-offs $ 3 $ 6 $ 8 $ 87 $ 9,193 $ 493 $ 2,603 $ 12,393 For the six months ended June 30, 2026 Commercial Commercial $ — $ — $ — $ — $ — $ 238 $ — $ 238 Commercial Other 3 28 12 108 619 18 4,600 5,388 Commercial Real Estate Non-owner occupied — — — — — 2,950 — 2,950 Multi-family — — — — 9,717 — — 9,717 Construction and land development — — 35 — — — — 35 Total gross commercial charge-offs $ 3 $ 28 $ 47 $ 108 $ 10,336 $ 3,206 $ 4,600 $ 18,328 Term Loans by Origination Year (dollars in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Total For the three months ended June 30, 2025 Commercial Commercial $ — $ — $ — $ — $ — $ 88 $ — $ 88 Commercial other — 14 243 915 179 39 4,683 6,073 Commercial real estate Non-owner occupied — — — 7,782 — 5,743 — 13,525 Owner occupied — — — 5,847 — — — 5,847 Multi-family — — — 2,354 — 727 — 3,081 Total gross commercial charge-offs $ — $ 14 $ 243 $ 16,898 $ 179 $ 6,597 $ 4,683 $ 28,614 For the six months ended June 30, 2025 Commercial Commercial $ — $ — $ — $ — $ — $ 152 $ — $ 152 Commercial Other — 56 1,035 1,930 406 117 15,765 19,309 Commercial Real Estate Non-owner occupied — — — 7,782 — 5,743 — 13,525 Owner occupied — — — 5,847 — — — 5,847 Multi-family — — — 2,354 — 1,450 — 3,804 Total gross commercial charge-offs $ — $ 56 $ 1,035 $ 17,913 $ 406 $ 7,462 $ 15,765 $ 42,637 26 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 June 30, 2026 and December 31, 2025: June 30, 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 $ 12,262 $ 6,495 $ 27,158 $ 36,393 $ 58,039 $ 139,453 $ 90 $ 279,890 Nonperforming — 22 — 469 697 2,633 — 3,821 Subtotal 12,262 6,517 27,158 36,862 58,736 142,086 90 283,711 Other residential Performing 493 2,868 1,810 1,146 431 1,340 55,273 63,361 Nonperforming — — — — — 93 499 592 Subtotal 493 2,868 1,810 1,146 431 1,433 55,772 63,953 Consumer Consumer Performing 5,121 28,348 12,870 11,872 9,585 19,701 973 88,470 Nonperforming — — 55 18 — 9 1 83 Subtotal 5,121 28,348 12,925 11,890 9,585 19,710 974 88,553 Consumer other Performing — — — 292 28,677 10,444 4,440 43,853 Nonperforming — — — — — — — — Subtotal — — — 292 28,677 10,444 4,440 43,853 Leases financing Performing 255 4,178 6,276 9,315 12,129 3,094 — 35,247 Nonperforming — — 218 734 624 263 — 1,839 Subtotal 255 4,178 6,494 10,049 12,753 3,357 — 37,086 Total Performing 18,131 41,889 48,114 59,018 108,861 174,032 60,776 510,821 Nonperforming — 22 273 1,221 1,321 2,998 500 6,335 Total other loans $ 18,131 $ 41,911 $ 48,387 $ 60,239 $ 110,182 $ 177,030 $ 61,276 $ 517,156 27 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 and six months ended June 30, 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 June 30, 2026 Residential real estate Residential first lien $ — $ — $ — $ — $ — $ — $ — $ — Other residential — — — — — — — — Consumer Consumer — 9 15 3 — — 4 31 Consumer other 29 63 16 6 186 218 — 518 Lease financing — — — 217 109 8 — 334 Total gross other charge-offs $ 29 $ 72 $ 31 $ 226 $ 295 $ 226 $ 4 $ 883 For the six months ended June 30, 2026 Residential real estate Residential first lien $ — $ — $ — $ — $ 59 $ — $ — $ 59 Other residential — — — — — — 6 6 Consumer Consumer — 10 27 31 2 1 5 76 Consumer other 30 147 34 34 651 473 — 1,369 Lease financing — — 284 241 277 269 — 1,071 Total gross other charge-offs $ 30 $ 157 $ 345 $ 306 $ 989 $ 743 $ 11 $ 2,581 28 Table of Contents Term Loans by Origination Year (dollars in thousands) 2025 2024 2023 2022 2021 Prior Revolving Loans Total For the three months ended June 30, 2025 Residential real estate Residential first lien $ — $ — $ — $ — $ — $ — $ — $ — Other residential — — — — — — — — Consumer Consumer — 29 7 — — — 9 45 Consumer other 22 27 33 269 124 364 — 839 Lease financing — 324 1,712 1,187 184 479 — 3,886 Total gross other charge-offs $ 22 $ 380 $ 1,752 $ 1,456 $ 308 $ 843 $ 9 $ 4,770 For the six months ended June 30, 2025 Residential real estate Residential first lien $ — $ — $ — $ — $ — $ 27 $ — $ 27 Other residential — — — 25 — 1 19 45 Consumer Consumer — 30 12 2 — 1 13 58 Consumer other 26 79 50 284 129 711 — 1,279 Lease financing — 467 3,418 2,418 393 638 — 7,334 Total gross other charge-offs $ 26 $ 576 $ 3,480 $ 2,729 $ 522 $ 1,378 $ 32 $ 8,743 NOTE 4 – PREMISES, EQUIPMENT AND LEASES A summary of premises, equipment and leases at June 30, 2026 and December 31, 2025 is as follows: June 30, December 31, (dollars in thousands) 2026 2025 Land $ 15,856 $ 15,856 Buildings and improvements 87,047 86,429 Furniture and equipment 38,534 38,303 Lease right-of-use assets 7,425 8,117 Total 148,862 148,705 Accumulated depreciation ( 65,964 ) ( 63,571 ) Premises and equipment, net $ 82,898 $ 85,134 Depreciation expense for the three and six months ended June 30, 2026 was $ 1.2 million and $ 2.4 million, respectively, and $ 1.2 million and $ 2.5 million for the three and six months ended June 30, 2025, respectively. The Company has entered into operating leases, primarily for banking offices, operating facilities and ATMs, which have remaining lease terms of 2 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 $ 7.4 million and $ 8.1 million as of June 30, 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 $ 8.6 million and $ 9.3 million as of June 30, 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 and six months ended June 30, 2026 and 2025 was as follows: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2026 2025 2026 2025 Operating lease cost $ 507 $ 480 $ 988 $ 978 Operating cash flows from leases 538 485 1,041 1,003 Right-of-use assets obtained in exchange for lease obligations 92 — 128 837 Weighted average remaining lease term 5.7 years 6.5 years 5.7 years 6.5 years Weighted average discount rate 3.72 % 3.72 % 3.72 % 3.72 % 29 Table of Contents The projected minimum rental payments under the terms of the leases as of June 30, 2026 were as follows: (dollars in thousands) Amount Year ending December 31: 2026 remaining $ 903 2027 1,929 2028 1,855 2029 1,655 2030 1,073 Thereafter 2,190 Total future minimum lease payments 9,605 Less imputed interest ( 979 ) Total operating lease liabilities $ 8,626 NOTE 5 – GOODWILL The carrying amount of goodwill at both June 30, 2026 and December 31, 2025 was $ 7.9 million. For the six months ended June 30, 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, the Company 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. 30 Table of Contents 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. June 30, 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 $ 1,621 $ 803 $ 182,645 $ 608 $ 2,901 $ 228,157 Cash flow hedges Investment securities available for sale 323 — 90,000 754 — 90,000 Pools of commercial and commercial real estate loans 635 890 225,000 1,528 1,180 300,000 FHLB advances, brokered CDs and other borrowings 549 — 100,000 29 502 125,000 Total derivatives designated as accounting hedges $ 3,128 $ 1,693 $ 597,645 $ 2,919 $ 4,583 $ 743,157 Derivatives not designated as accounting hedges: Interest rate contracts Swaps $ 211 $ 211 $ 62,974 $ 395 $ 395 $ 52,637 Interest rate lock commitments 166 — 6,944 137 — 4,594 Forward commitments to sell mortgage-backed securities 39 — 9,725 — 21 9,179 Total derivatives not designated as accounting hedges $ 416 $ 211 $ 79,643 $ 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) June 30, 2026 December 31, 2025 June 30, 2026 December 31, 2025 Investment securities available for sale $ 169,641 $ 352,968 $ 818 $ ( 2,293 ) 31 Table of Contents 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 June 30, Gain (loss) on fair value hedging relationships Interest rate contracts Fixed-rate mortgage-backed securities Interest income on investment securities available for sale $ 1,768 $ ( 1,508 ) Interest income on investment securities available for sale $ ( 1,774 ) $ 1,549 Six Months Ended June 30, Gain (loss) on fair value hedging relationships Interest rate contracts Fixed-rate mortgage-backed securities Interest income on investment securities available for sale $ 3,111 $ ( 4,994 ) Interest income on investment securities available for sale $ ( 2,933 ) $ 5,040 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 June 30, Gain (loss) on cash flow hedging relationships Interest rate contracts Pools of commercial and commercial real estate loans $ ( 553 ) $ 238 Interest income on loans $ ( 110 ) $ ( 741 ) Investment securities available for sale ( 336 ) 71 Interest income on investment securities available for sale ( 54 ) ( 5 ) FHLB advances, brokered CDs and other borrowings 372 ( 86 ) Interest expense ( 30 ) 104 Total gain (loss) on cash flow hedging relationships $ ( 517 ) $ 223 $ ( 194 ) $ ( 642 ) Six Months Ended June 30, Gain (loss) on cash flow hedging relationships Interest rate contracts Pools of commercial and commercial real estate loans $ ( 603 ) $ 1,355 Interest income on loans $ ( 219 ) $ ( 1,806 ) Investment securities available for sale ( 431 ) 517 Interest income on investment securities available for sale ( 108 ) 82 FHLB advances, brokered CDs and other borrowings 1,022 ( 785 ) Interest expense ( 60 ) 245 FHLB advances, brokered CDs and other borrowings ( 154 ) — Noninterest expense ( 154 ) — Total gain (loss) on cash flow hedging relationships $ ( 166 ) $ 1,087 $ ( 541 ) $ ( 1,479 ) During the next 12 months, we estimate $ 1.4 million of losses will be reclassified into pre-tax earnings from derivatives designated as cash flow hedges. 32 Table of Contents The following table summarizes the effect of derivative instruments not designated as accounting hedges on the consolidated statements of income: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) Location of gain recognized in income on derivative 2026 2025 2026 2025 Gain (losses) on derivative instruments not designated as accounting hedges Interest rate contracts Residential mortgage banking revenue $ ( 120 ) $ ( 11 ) $ 89 $ 59 Total gain (loss) on derivative instruments not designated as accounting hedges $ ( 120 ) $ ( 11 ) $ 89 $ 59 NOTE 7 – DEPOSITS The following table summarizes the classification of deposits as of June 30, 2026 and December 31, 2025: (dollars in thousands) June 30, 2026 December 31, 2025 Noninterest-bearing demand $ 1,010,128 $ 1,040,411 Interest-bearing: Checking 2,094,880 1,855,215 Money market 1,242,303 1,248,942 Savings 640,292 487,742 Time 719,675 792,069 Total deposits $ 5,707,278 $ 5,424,379 NOTE 8 – SHORT-TERM BORROWINGS The following table summarizes our short-term borrowings as of June 30, 2026 and December 31, 2025: (dollars in thousands) June 30, 2026 December 31, 2025 Securities sold under repurchase agreements $ 7,645 $ 10,181 AFX borrowings — 50,000 Total short-term borrowings $ 7,645 $ 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 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 0.29 % and 0.26 % at June 30, 2026 and December 31, 2025, respectively. Investment securities with a carrying amount of $ 9.2 million and $ 12.2 million at June 30, 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 3.70 % to 3.74 % at December 31, 2025. 33 Table of Contents NOTE 9 – FHLB ADVANCES The following table summarizes our FHLB advances as of June 30, 2026 and December 31, 2025: (dollars in thousands) June 30, 2026 December 31, 2025 FHLB advances – fixed rate, fixed term at rates averaging 3.93 % and 4.08 % at June 30, 2026 and December 31, 2025, respectively - maturing through October 2029 $ 108,000 $ 168,000 FHLB advances – putable fixed rate at rates averaging 3.56 % and 4.00 % at June 30, 2026 and December 31, 2025, respectively – maturing through May 2036 with call provisions through August 2026 150,000 125,000 Total FHLB advances $ 258,000 $ 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 $ 2.58 billion and $ 2.87 billion at June 30, 2026 and December 31, 2025, respectively. Based on this collateral, the Company was eligible to borrow $ 0.77 billion from the FHLB at June 30, 2026. 34 Table of Contents NOTE 10 - 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 June 30, 2026 Balances, March 31, 2026 $ ( 68,796 ) $ ( 786 ) $ ( 69,582 ) Other comprehensive income (loss) before reclassifications 1,687 ( 183 ) 1,504 Amounts reclassified from AOCI to income (1) 4 143 147 Balances, June 30, 2026 $ ( 67,105 ) $ ( 826 ) $ ( 67,931 ) Changes in AOCI for the six months ended June 30, 2026 Balances, December 31, 2025 $ ( 59,217 ) $ ( 1,116 ) $ ( 60,333 ) Other comprehensive income (loss) before reclassifications ( 9,033 ) ( 109 ) ( 9,142 ) Amounts reclassified from AOCI to income (1) 1,145 399 1,544 Balances, June 30, 2026 $ ( 67,105 ) $ ( 826 ) $ ( 67,931 ) Changes in AOCI for the three months ended June 30, 2025 Balances, March 31, 2025 $ ( 70,667 ) $ ( 1,672 ) $ ( 72,339 ) Other comprehensive income (loss) before reclassifications ( 2,257 ) 165 ( 2,092 ) Amounts reclassified from AOCI to income (1) ( 30 ) 473 443 Balances, June 30, 2025 $ ( 72,954 ) $ ( 1,034 ) $ ( 73,988 ) Changes in AOCI for the six months ended June 30, 2025 Balances, December 31, 2024 $ ( 79,021 ) $ ( 2,939 ) $ ( 81,960 ) Other comprehensive income (loss) before reclassifications 6,101 815 6,916 Amounts reclassified from AOCI to income (1) ( 34 ) 1,090 1,056 Balances, June 30, 2025 $ ( 72,954 ) $ ( 1,034 ) $ ( 73,988 ) (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 June 30, Six Months Ended June 30, (dollars in thousands) 2026 2025 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 $ ( 6 ) $ 41 $ 178 $ 46 Interest income (expense) — — ( 1,731 ) — Loss on sales of investment securities, net 2 ( 11 ) 408 ( 12 ) Income tax (expense) benefit $ ( 4 ) $ 30 $ ( 1,145 ) $ 34 Net income (loss) Gains and losses on cash flow hedges $ ( 194 ) $ ( 642 ) $ ( 387 ) $ ( 1,479 ) Interest income (expense) — — ( 154 ) — Loss on termination of interest rate swaps 51 169 142 389 Income tax (expense) benefit $ ( 143 ) $ ( 473 ) $ ( 399 ) $ ( 1,090 ) Net income (loss) 35 Table of Contents NOTE 11 – 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 and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands, except per share data) 2026 2025 2026 2025 Net income (loss) $ 19,888 $ 12,024 $ 38,351 $ ( 128,950 ) Preferred dividends declared ( 2,228 ) ( 2,228 ) ( 4,456 ) ( 4,456 ) Net income (loss) available to common shareholders 17,660 9,796 33,895 ( 133,406 ) Common shareholder dividends ( 6,634 ) ( 6,670 ) ( 13,351 ) ( 13,336 ) Unvested restricted stock award dividends ( 165 ) ( 115 ) ( 337 ) ( 231 ) Undistributed earnings to unvested restricted stock awards ( 252 ) ( 48 ) ( 481 ) — Undistributed earnings (loss) to common shareholders $ 10,609 $ 2,963 $ 19,726 $ ( 146,973 ) Basic Distributed earnings to common shareholders $ 6,634 $ 6,670 $ 13,351 $ 13,336 Undistributed earnings (loss) to common shareholders 10,609 2,963 19,726 ( 146,973 ) Total common shareholders earnings (loss), basic $ 17,243 $ 9,633 $ 33,077 $ ( 133,637 ) Diluted Distributed earnings to common shareholders $ 6,634 $ 6,670 $ 13,351 $ 13,336 Undistributed earnings (loss) to common shareholders 10,609 2,963 19,726 ( 146,973 ) Total common shareholders earnings (loss) 17,243 9,633 33,077 ( 133,637 ) Add back: Undistributed earnings reallocated from unvested restricted stock awards — — — — Total common shareholders earnings (loss), diluted $ 17,243 $ 9,633 $ 33,077 $ ( 133,637 ) Weighted average common shares outstanding, basic 21,074,683 21,820,190 21,187,341 21,808,475 Dilutive effect of options — — — — Weighted average common shares outstanding, diluted 21,074,683 21,820,190 21,187,341 21,808,475 Basic earnings (loss) per common share $ 0.82 $ 0.44 $ 1.56 $ ( 6.13 ) Diluted earnings (loss) per common share $ 0.82 $ 0.44 $ 1.56 $ ( 6.13 ) Antidilutive stock options (1) 151,467 249,277 151,467 249,277 (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 12 – 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. 36 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. 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. 37 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 June 30, 2026 and December 31, 2025, are summarized below: June 30, 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 $ 37,524 $ — $ 37,524 $ — Mortgage-backed securities - agency 1,306,345 — 1,306,345 — Mortgage-backed securities - non-agency 92,762 — 92,762 — Asset-backed student loans 19,130 — 19,130 — State and municipal securities 71,432 — 71,432 — Collateralized loan obligations 84,486 — 84,486 — Corporate securities 41,781 — 41,781 — Equity securities 3,853 3,853 — — Residential loans held for sale 8,944 — 8,944 — Credit enhancement asset 13,642 — — 13,642 Derivative assets 3,544 — 3,544 — Total $ 1,683,443 $ 3,853 $ 1,665,948 $ 13,642 Liabilities Derivative liabilities $ 1,904 $ — $ 1,904 $ — Total $ 1,904 $ — $ 1,904 $ — Assets measured at fair value on a non-recurring basis: Collateral dependent loans: Commercial $ 9,454 $ — $ — $ 9,454 Commercial real estate 35,170 — — 35,170 Construction and land development 1,588 — — 1,588 Residential real estate 814 — — 814 Other real estate owned 356 — — 356 38 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 and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2026 2025 2026 2025 Collateral dependent loans $ 7,843 $ 8,281 $ 9,013 $ 10,293 Total losses on assets measured on a nonrecurring basis $ 7,843 $ 8,281 $ 9,013 $ 10,293 39 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 June 30, 2026 and December 31, 2025: (dollars in thousands) Fair value Valuation technique Unobservable input / assumptions Discount Rate Range (weighted average) (1) June 30, 2026 Collateral dependent loans: Commercial $ 9,454 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 35,170 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 0.00 % - 100.00 % ( 1.87 %) Construction and land development 1,588 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 0.00 % - 0.00 % ( 0.00 %) Residential real estate 814 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 356 Fair value of collateral Discount for type of property, age of appraisal, and/or current status 7.54 % - 71.57 % ( 53.51 %) 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 June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 (dollars in thousands) Aggregate fair value Difference Contractual principal Aggregate fair value Difference Contractual principal Residential loans held for sale $ 8,944 $ 335 $ 8,609 $ 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 and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2026 2025 2026 2025 Residential loans held for sale $ 203 $ 48 $ ( 34 ) $ 135 40 Table of Contents The carrying values and estimated fair value of certain financial instruments not carried at fair value at June 30, 2026 and December 31, 2025 were as follows: June 30, 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 $ 298,244 $ 298,244 $ 298,244 $ — $ — Federal funds sold 503 503 503 — — Loans, net 4,181,185 4,064,819 — — 4,064,819 Accrued interest receivable 23,676 23,676 — 23,676 — Liabilities Deposits $ 5,707,278 $ 5,700,814 $ — $ 5,700,814 $ — Short-term borrowings 7,645 7,645 — 7,645 — FHLB and other borrowings 258,000 255,281 — 255,281 — Subordinated debt 27,030 22,906 — 22,906 — Trust preferred debentures 52,219 48,482 — 48,482 — 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 June 30, 2026 and December 31, 2025 represent an approximation of exit price; however, an actual exit price may differ. NOTE 13 – 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 41 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 June 30, 2026 and December 31, 2025 were as follows: (dollars in thousands) June 30, 2026 December 31, 2025 Commitments to extend credit $ 807,960 $ 821,801 Financial guarantees – standby letters of credit 30,726 30,808 NOTE 14 – 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. 42 Table of Contents Selected business segment financial information for the three and six months ended June 30, 2026 and 2025 was as follows: (dollars in thousands) Banking Wealth Management Corporate Total Three Months Ended June 30, 2026 Interest income $ 88,177 $ — $ — $ 88,177 Interest expense 27,212 14 1,362 28,588 Net interest income (expense) 60,965 ( 14 ) ( 1,362 ) 59,589 Provision for credit losses 6,819 — — 6,819 Wealth management revenue — 8,768 — 8,768 Other noninterest income 16,344 — ( 1,344 ) 15,000 Total noninterest income 16,344 8,768 ( 1,344 ) 23,768 Salaries and employee benefits 22,667 4,687 — 27,354 Depreciation expense 1,202 11 — 1,213 Amortization of intangible assets 430 234 — 664 Other noninterest expense (1) 20,382 1,611 ( 469 ) 21,524 Total noninterest expense 44,681 6,543 ( 469 ) 50,755 Income (loss) before income taxes 25,809 2,211 ( 2,237 ) 25,783 Income tax expense (benefit) 5,457 890 ( 452 ) 5,895 Net income (loss) $ 20,352 $ 1,321 $ ( 1,785 ) $ 19,888 Total assets $ 6,714,958 $ 39,127 $ ( 53,469 ) $ 6,700,616 Six Months Ended June 30, 2026 Interest income $ 174,199 $ — $ — $ 174,199 Interest expense 54,450 34 2,709 57,193 Net interest income (expense) 119,749 ( 34 ) ( 2,709 ) 117,006 Provision for credit losses 11,822 — — 11,822 Wealth management revenue — 17,016 — 17,016 Other noninterest income 31,350 — ( 2,476 ) 28,874 Total noninterest income 31,350 17,016 ( 2,476 ) 45,890 Salaries and employee benefits 44,430 9,081 — 53,511 Depreciation expense 2,408 22 — 2,430 Amortization of intangible assets 901 480 — 1,381 Other noninterest expense (1) 41,400 3,426 ( 969 ) 43,857 Total noninterest expense 89,139 13,009 ( 969 ) 101,179 Income (loss) before income taxes (benefit) 50,138 3,973 ( 4,216 ) 49,895 Income tax expense 10,762 1,649 ( 867 ) 11,544 Net income (loss) $ 39,376 $ 2,324 $ ( 3,349 ) $ 38,351 Total assets $ 6,714,958 $ 39,127 $ ( 53,469 ) $ 6,700,616 43 Table of Contents (dollars in thousands) Banking Wealth Management Corporate Total Three Months Ended June 30, 2025 Interest income $ 97,924 $ — $ — $ 97,924 Interest expense 36,879 18 2,332 39,229 Net interest income (expense) 61,045 ( 18 ) ( 2,332 ) 58,695 Provision for credit losses 17,369 — — 17,369 Wealth management revenue — 7,379 — 7,379 Other noninterest income 16,972 — ( 817 ) 16,155 Total noninterest income 16,972 7,379 ( 817 ) 23,534 Salaries and employee benefits 21,330 4,355 — 25,685 Depreciation expense 1,207 11 — 1,218 Amortization of intangible assets 572 255 — 827 Other noninterest expense (1) 21,297 1,715 ( 750 ) 22,262 Total noninterest expense 44,406 6,336 ( 750 ) 49,992 Income (loss) before income taxes 16,242 1,025 ( 2,399 ) 14,868 Income tax expense (benefit) 3,037 528 ( 721 ) 2,844 Net income (loss) $ 13,205 $ 497 $ ( 1,678 ) $ 12,024 Total assets $ 7,114,866 $ 33,786 $ ( 40,774 ) $ 7,107,878 Six Months Ended June 30, 2025 Interest income $ 197,279 $ — $ — $ 197,279 Interest expense 75,609 35 4,650 80,294 Net interest income (expense) 121,670 ( 35 ) ( 4,650 ) 116,985 Provision for credit losses 28,219 — — 28,219 Wealth management revenue — 14,729 — 14,729 Other noninterest income 28,322 — ( 1,754 ) 26,568 Total noninterest income 28,322 14,729 ( 1,754 ) 41,297 Salaries and employee benefits 44,244 7,857 — 52,101 Depreciation expense 2,435 21 — 2,456 Amortization of intangible assets 1,216 522 — 1,738 Impairment on goodwill 153,977 — — 153,977 Other noninterest expense (1) 40,833 3,431 ( 1,539 ) 42,725 Total noninterest expense 242,705 11,831 ( 1,539 ) 252,997 Income (loss) before income taxes (benefit) ( 120,932 ) 2,863 ( 4,865 ) ( 122,934 ) Income tax expense (benefit) 6,144 1,288 ( 1,416 ) 6,016 Net income (loss) $ ( 127,076 ) $ 1,575 $ ( 3,449 ) $ ( 128,950 ) Total assets $ 7,114,866 $ 33,786 $ ( 40,774 ) $ 7,107,878 (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. 44 Table of Contents NOTE 15 – 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 and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2026 2025 2026 2025 Noninterest income - in-scope of Topic 606 Wealth management revenue: Trust management/administration fees $ 7,672 $ 6,435 $ 14,842 $ 12,879 Investment advisory and brokerage fees 619 522 1,272 1,004 Other 477 422 902 846 Service charges on deposit accounts: Nonsufficient fund fees 2,162 2,018 4,250 3,971 Other 1,287 1,333 2,554 2,685 Interchange revenues 3,553 3,463 7,081 6,614 Other income: Merchant services revenue 345 359 679 697 Other 452 823 1,096 1,116 Noninterest income - out-of-scope of Topic 606 7,201 8,159 13,214 11,485 Total noninterest income $ 23,768 $ 23,534 $ 45,890 $ 41,297 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, 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. 45 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. 46 Table of Contents ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's discussion and analysis explains the significant factors affecting the Company's financial condition and results of operations as reflected in the unaudited consolidated balance sheet as of June 30, 2026, as compared to December 31, 2025, and unaudited consolidated operating results for the three and six months ended June 30, 2026 and 2025. This discussion should be read in conjunction with the Company's unaudited consolidated financial statements and accompanying notes included in this Form 10-Q 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 the Middle East; 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,” "should," “propose,” “may,” “plan,” “seek,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “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 47 Table of Contents certain loan balances be charged-off or downgraded into criticized loan categories when their credit evaluations differ from 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 and six months ended June 30, 2026 and 2025, and our financial condition as of June 30, 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 and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands, except per share data) 2026 2025 2026 2025 Income Statement Data: Interest income $ 88,177 $ 97,924 $ 174,199 $ 197,279 Interest expense 28,588 39,229 57,193 80,294 Net interest income 59,589 58,695 117,006 116,985 Provision for credit losses 6,819 17,369 11,822 28,219 Noninterest income 23,768 23,534 45,890 41,297 Noninterest expense 50,755 49,992 101,179 252,997 Income (loss) before income taxes 25,783 14,868 49,895 (122,934) Income tax expense 5,895 2,844 11,544 6,016 Net income (loss) 19,888 12,024 38,351 (128,950) Preferred dividends 2,228 2,228 4,456 4,456 Net income (loss) available to common shareholders $ 17,660 $ 9,796 $ 33,895 $ (133,406) Per Share Data: Basic earnings (loss) per common share $ 0.82 $ 0.44 $ 1.56 $ (6.13) Diluted earnings (loss) per common share $ 0.82 $ 0.44 $ 1.56 $ (6.13) Performance Metrics: Return on average assets 1.22 % 0.67 % 1.19 % (3.56) % Return on average shareholders' equity 14.20 % 8.43 % 13.67 % (40.41) % Net income for the second quarter of 2026 was $19.9 million, or $0.82 per diluted common share, compared with net income of $12.0 million, or $0.44 per diluted common share, in the second quarter of 2025 . The increase reflected a $0.9 million increase in net interest income, a $10.6 million decrease in provision for credit losses, and a $0.2 million increase in 48 Table of Contents noninterest income. These benefits were partially offset by a $0.8 million increase in noninterest expense, and a $3.1 million increase in income tax expense. Net income for the first six months of 2026 was $38.4 million, or $1.56 per diluted common share, compared with a net loss of $129.0 million, or a diluted loss per common share of $6.13, in the first six months of 2025 . The increase reflected a $151.8 million decrease in noninterest expense (which included the prior year goodwill impairment charge), a $16.4 million decrease in provision for credit losses, and a $4.6 million increase in noninterest income. These benefits were partially offset by a $5.5 million increase in income tax expense. Net interest income was essentially unchanged. 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 Federal Reserve held its interest rates steady during the second quarter of 2026 by maintaining the target range for the federal funds rate at 3.50% to 3.75%. Interest rates have remained unchanged following the three 25-basis-point rate reductions in September, October and December 2025. The FOMC recently noted indicators suggest economic activity has continued to expand at a solid pace, labor market conditions remain solid, and the unemployment rate remains low, while inflation continues to be somewhat elevated. The Committee reiterated that future monetary policy decisions will continue to depend on incoming economic data, the evolving economic outlook, and the balance of risks to its dual mandate of maximum employment and price stability. As a result, the future path of interest rates remains uncertain and will continue to influence loan and deposit repricing, funding costs, and the Company's net interest income and net interest margin. For the second quarter of 2026, net interest income, on a tax-equivalent basis, increased $0.8 million to $59.8 million, and tax-equivalent net interest margin increased 42 basis points to 3.98% compared to the second quarter of 2025. For the first six months of 2026, net interest income, on a tax-equivalent basis, was essentially unchanged at $117.4 million, while tax-equivalent net interest margin increased 42 basis points to 3.94% compared to the first six months of 2025. 49 Table of Contents Average Balance Sheet, Interest and Yield/Rate Analysis. The following table presents average balances, interest income and expense and the corresponding average yields earned and rates paid for the three and six months ended June 30, 2026 and 2025. 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 June 30, 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 $ 108,157 $ 987 3.66 % $ 67,326 $ 716 4.27 % Investment securities : Taxable investment securities 1,557,416 18,989 4.89 1,309,821 16,618 5.09 Investment securities exempt from federal income tax (1) 60,058 551 3.68 57,359 546 3.82 Total investment securities 1,617,474 19,540 4.85 1,367,180 17,164 5.04 Loans : Loans (2) 4,229,736 66,761 6.33 5,063,295 78,514 6.22 Loans exempt from federal income tax (1) 38,432 434 4.53 60,263 726 4.83 Total loans 4,268,168 67,195 6.31 5,123,558 79,240 6.20 Loans held for sale 8,431 128 6.10 44,642 377 3.39 Nonmarketable equity securities 30,285 534 7.07 38,803 694 7.17 Total interest-earning assets 6,032,515 88,384 5.88 6,641,509 98,191 5.93 Noninterest-earning assets 495,663 513,801 Total assets $ 6,528,178 $ 7,155,310 Interest-bearing liabilities: Deposits: Checking and money market deposits $ 3,244,338 $ 18,469 2.28 % $ 3,342,014 $ 23,539 2.83 % Savings deposits 536,329 621 0.46 516,797 326 0.25 Time deposits 706,933 5,188 2.94 821,322 6,702 3.27 Brokered time deposits 25,097 248 3.96 165,476 1,723 4.18 Total interest-bearing deposits 4,512,697 24,526 2.18 4,845,609 32,290 2.67 Short-term borrowings 28,521 202 2.84 60,117 573 3.82 FHLB advances 249,044 2,349 3.78 363,505 3,766 4.16 Subordinated debt 27,027 380 5.64 77,757 1,394 7.19 Trust preferred debentures 52,128 1,131 8.70 51,439 1,206 9.40 Total interest-bearing liabilities 4,869,417 28,588 2.35 5,398,427 39,229 2.91 Noninterest-bearing liabilities: Noninterest-bearing deposits 1,012,592 1,075,945 Other noninterest-bearing liabilities 84,416 108,819 Total noninterest-bearing liabilities 1,097,008 1,184,764 Shareholders’ equity 561,753 572,119 Total liabilities and shareholders’ equity $ 6,528,178 $ 7,155,310 Net interest income / net interest margin (3) $ 59,796 3.98 % $ 58,962 3.56 % (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 and $0.3 million for the three months ended June 30, 2026 and 2025, respectively. (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. 50 Table of Contents Six Months Ended June 30, 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 $ 98,836 $ 1,796 3.66 % $ 67,995 $ 1,434 4.25 % Investment securities : Taxable investment securities 1,544,150 37,139 4.85 1,282,053 31,593 4.97 Investment securities exempt from federal income tax (1) 60,872 1,103 3.65 57,633 1,088 3.81 Total investment securities 1,605,022 38,242 4.80 1,339,686 32,681 4.92 Loans : Loans (2) 4,220,911 132,320 6.32 5,038,964 156,182 6.25 Loans exempt from federal income tax (1) 40,372 919 4.59 51,694 1,177 4.59 Total loans 4,261,283 133,239 6.31 5,090,658 157,359 6.23 Loans held for sale 7,666 230 6.06 184,717 4,940 5.39 Nonmarketable equity securities 30,913 1,117 7.29 37,217 1,341 7.27 Total interest-earning assets 6,003,720 174,624 5.87 6,720,273 197,755 5.93 Noninterest-earning assets 495,946 590,446 Total assets $ 6,499,666 $ 7,310,719 Interest-bearing liabilities: Deposits: Checking and money market deposits $ 3,208,417 $ 36,500 2.29 % $ 3,425,642 $ 48,679 2.87 % Savings deposits 513,826 942 0.37 516,791 655 0.26 Time deposits 721,395 10,729 3.00 821,513 13,533 3.32 Brokered time deposits 28,214 558 3.99 195,423 4,038 4.17 Total interest-bearing deposits 4,471,852 48,729 2.20 4,959,369 66,905 2.72 Short-term borrowings 30,866 433 2.83 66,904 1,273 3.84 FHLB advances 261,177 5,019 3.88 331,718 6,929 4.21 Subordinated debt 27,024 760 5.67 77,754 2,781 7.21 Trust preferred debentures 52,039 2,252 8.73 51,362 2,406 9.45 Total interest-bearing liabilities 4,842,958 57,193 2.38 5,487,107 80,294 2.95 Noninterest-bearing liabilities: Noninterest-bearing deposits 1,004,961 1,063,937 Other noninterest-bearing liabilities 86,151 116,175 Total noninterest-bearing liabilities 1,091,112 1,180,112 Shareholders’ equity 565,596 643,500 Total liabilities and shareholders’ equity $ 6,499,666 $ 7,310,719 Net interest income / net interest margin (3) $ 117,431 3.94 % $ 117,461 3.52 % (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 $0.4 million and $0.5 million for the six months ended June 30, 2026 and 2025, respectively. (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. 51 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 June 30, 2026 compared with Three Months Ended June 30, 2025 Six Months Ended June 30, 2026 compared with Six Months Ended June 30, 2025 Change due to: Interest Variance Change due to: Interest Variance (tax-equivalent basis, dollars in thousands) Volume Rate Volume Rate Interest-earning assets: Federal funds sold and cash investments $ 403 $ (132) $ 271 $ 605 $ (243) $ 362 Investment securities: Taxable investment securities 3,085 (714) 2,371 6,411 (865) 5,546 Investment securities exempt from federal income tax 26 (21) 5 60 (45) 15 Total investment securities 3,111 (735) 2,376 6,471 (910) 5,561 Loans: Loans (13,036) 1,283 (11,753) (25,495) 1,633 (23,862) Loans exempt from federal income tax (255) (37) (292) (258) — (258) Total loans (13,291) 1,246 (12,045) (25,753) 1,633 (24,120) Loans held for sale (431) 182 (249) (5,031) 321 (4,710) Nonmarketable equity securities (151) (9) (160) (227) 3 (224) Total interest-earning assets (10,359) 552 (9,807) (23,935) 804 (23,131) Interest-bearing liabilities: Checking and money market deposits (622) (4,448) (5,070) (2,779) (9,400) (12,179) Savings deposits 17 278 295 (5) 292 287 Time deposits (886) (628) (1,514) (1,569) (1,235) (2,804) Brokered deposits (1,423) (52) (1,475) (3,381) (99) (3,480) Total interest-bearing deposits (2,914) (4,850) (7,764) (7,734) (10,442) (18,176) Short-term borrowings (263) (108) (371) (596) (244) (840) FHLB advances (1,133) (284) (1,417) (1,414) (496) (1,910) Subordinated debt (812) (202) (1,014) (1,618) (403) (2,021) Trust preferred debentures 16 (91) (75) 30 (184) (154) Total interest-bearing liabilities (5,106) (5,535) (10,641) (11,332) (11,769) (23,101) Net interest income $ (5,253) $ 6,087 $ 834 $ (12,603) $ 12,573 $ (30) Interest Income. Interest income, on a tax-equivalent basis, decreased $9.8 million to $88.4 million for the second quarter of 2026 compared to the same period in 2025, primarily due to a decline in average interest-earning assets. The yield on interest-earning assets decreased five basis points to 5.88% from 5.93%. Average interest-earning assets decreased $609.0 million to $6.03 billion in the second quarter of 2026 compared to the same period in 2025. A decrease in average loans of $855.4 million was partially offset by an increase in average investment securities of $250.3 million. Average loans decreased $855.4 million in the second quarter of 2026 compared to the same period in 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 $685.1 million (to $47.6 million) in the second quarter of 2026. Proceeds from the sale of substantially all of the portfolio were used to purchase investment securities and reduce higher-cost funding for the Company. 52 Table of Contents For the first six months of 2026, interest income, on a tax-equivalent basis, decreased $23.1 million to $174.6 million compared to the same period in 2025, primarily due to a decline in average interest-earning assets. The yield on interest-earning assets decreased six basis points to 5.87% from 5.93%. Average interest-earning assets decreased $716.6 million to $6.00 billion in the first six months of 2026 compared to the same period in 2025. Average loans and average loans held for sale decreased $829.4 million and $177.1 million, respectively. These decreases were partially offset by an increase in average investment securities of $265.3 million. Average loans decreased $829.4 million in the first six months of 2026 compared to the same period in 2025, primarily due to the sale of substantially all of its equipment finance portfolio during the fourth quarter of 2025. As a result, equipment finance loan and lease average balances decreased $706.8 million (to $51.5 million) in the first six months of 2026. The $184.7 million of average loans held for sale in the first six months of 2025 included $178.0 million of GreenSky consumer loans. The Company completed the sale of this portfolio in the second quarter of 2025. Interest Expense. Interest expense decreased $10.6 million to $28.6 million for the second quarter of 2026 compared to the same period in 2025. The cost of interest-bearing liabilities decreased to 2.35% from 2.91% due to a decrease in both rates paid on deposits and average balances. Interest expense on deposits decreased $7.8 million to $24.5 million for the second quarter of 2026 compared to t he same period in 2025, driven primarily by the rate cuts enacted by the Federal Reserve Bank beginning in late 2024 and a decrease in average balances. Average balances of interest-bearing deposit accounts decreased $332.9 million to $4.51 billion in the second quarter of 2026 compared to the same period in 2025 . 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 funding for the Company, including servicing deposits and brokered deposits. Interest expense on FHLB advances decreased $1.4 million in the second quarter of 2026 compared to the same period in 2025 , due to a decrease in both rates paid on FHLB advances and average balances. Interest expense on subordinated debt decreased $1.0 million in the second quarter of 2026 compared to the same period in 2025 , driven primarily by a decrease in average balances of $50.7 million, due to the redemption of $50.8 million of de bt in September 2025. For the first six months of 2026, interest expense decreased $23.1 million to $57.2 million compared to the same period in 2025. The cost of interest-bearing liabilities decreased to 2.38% from 2.95% due to a decrease in both the rates paid on deposits and average balances. I nterest expense on deposits decreased $18.2 million to $48.7 million f or the first six months of 2026 compared to the same period in 2025, driven primarily by the rate cuts enacted by the Federal Reserve Bank beginning in late 2024 and a decrease in average balances. Average balances of interest-bearing deposit accounts decreased $487.5 million to $4.47 billion for the first six months of 2026 compared to the same period in 2025 . Interest expense on FHLB advances decreased $1.9 million for the first six months of 2026 compared to the same period in 2025 , due to a decrease in both rates paid on FHLB advances and average balances. Interest expense on subordinated debt decreased $2.0 million for the first six months of 2026 compared to the same period in 2025 , driven primarily by a decrease in average balances of $50.7 million , due to the redemption of $50.8 million of de bt in September 2025. 53 Table of Contents Provision for Credit Losses . The provision for credit losses totaled $6.8 million and $17.4 million for the three months ended June 30, 2026 and 2025 , respectively. For the six months ended June 30, 2026 and 2025 , the Company recorded provision expense of $11.8 million and $28.2 million, respectively. Provision expense for the three and six months ended June 30, 2026 included recapture of provision for credit losses on unfunded commitments of $0.3 million and $0.7 million, respectively. The decrease in provision for credit losses for the three and six months ended June 30, 2026, compared to the same periods 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 and six months ended June 30, 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. Noninterest Income. The following table presents the major components of our noninterest income for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Increase (decrease) Six Months Ended June 30, Increase (decrease) (dollars in thousands) 2026 2025 2026 2025 Noninterest income: Wealth management revenue $ 8,768 $ 7,379 $ 1,389 $ 17,016 $ 14,729 $ 2,287 Service charges on deposit accounts 3,449 3,351 98 6,804 6,656 148 Interchange revenue 3,553 3,463 90 7,081 6,614 467 Residential mortgage banking revenue 686 756 (70) 1,312 1,432 (120) Income on company-owned life insurance 2,127 2,068 59 4,203 4,402 (199) Loss on sales of investment securities, net — — — (1,731) — (1,731) Credit enhancement income 3,081 3,848 (767) 6,441 3,270 3,171 Other income 2,104 2,669 (565) 4,764 4,194 570 Total noninterest income $ 23,768 $ 23,534 $ 234 $ 45,890 $ 41,297 $ 4,593 Wealth management revenue . Wealth management revenue increased $1.4 million, or 18.8%, and $2.3 million, or 15.5%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, driven by growth in assets under administration. Assets under administration increased 14.4% to $4.78 billion at June 30, 2026 from $4.18 billion at June 30, 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 $3.1 million and $6.4 million of credit enhancement income during the three and six months ended June 30, 2026, respectively, 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 decreased $0.6 million for the three months ended June 30, 2026, compared to the same period in 2025, driven primarily by 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 $0.5 million in the second quarter of 2025. For the six months ended June 30, 2026, other income increased $0.6 million, compared to the same period in 2025. In 2026, the Company recognized $2.1 million in gains from the sale of our residential servicing portfolio and a portion of our 54 Table of Contents commercial servicing portfolio, partially offset by 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 $1.3 million in the first half of 2025. Noninterest Expense. The following table sets forth the major components of noninterest expense for the three and six months ended June 30, 2026 and 2025 : Three Months Ended June 30, Increase (decrease) Six Months Ended June 30, Increase (decrease) (dollars in thousands) 2026 2025 2026 2025 Noninterest expense: Salaries and employee benefits $ 27,354 $ 25,685 $ 1,669 $ 53,511 $ 52,101 $ 1,410 Occupancy and equipment 4,229 4,166 63 8,764 8,664 100 Data processing 6,994 7,035 (41) 14,059 13,954 105 FDIC insurance 781 1,422 (641) 1,310 2,885 (1,575) Professional services 1,665 2,792 (1,127) 3,907 5,533 (1,626) Marketing 1,211 1,283 (72) 2,452 2,076 376 Communications 359 334 25 790 663 127 Loan expense 3,147 1,990 1,157 6,451 3,325 3,126 Loan servicing fees 1,050 1,386 (336) 2,167 2,136 31 Impairment on goodwill — — — — 153,977 (153,977) Amortization of intangible assets 664 827 (163) 1,381 1,738 (357) Other expense 3,301 3,072 229 6,387 5,945 442 Total noninterest expense $ 50,755 $ 49,992 $ 763 $ 101,179 $ 252,997 $ (151,818) Salaries and employee benefits. For the three and six months ended June 30, 2026, salaries and employee benefits expense increased $1.7 million and $1.4 million, respectively, compared to the same periods in 2025, primarily due to increased variable compensation expense, including annual bonuses, and increased medical insurance expense. These increases were partially offset by lower severance expense in both periods compared to the same periods in 2025. FDIC insurance expense. The decrease in FDIC insurance expense for the three and six months ended June 30, 2026, compared to the same periods in 2025 was due to a lower assessment base in both the second quarter and first six months of 2026, a shift in loan mix due to the sale of the equipment finance and non-core loan portfolios in 2025, and a decline in nonperforming loans. Professional services expense. For the three and six months ended June 30, 2026, professional services expense decreased $1.1 million and $1.6 million, respectively, compared to the same periods 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. 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 $2.5 million and $4.7 million for the three and six months ended June 30, 2026, respectively. 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 $5.9 million and $11.5 million for the three and six months ended June 30, 2026, respectively, compared to $2.8 million and $6.0 million for the same periods in 2025. Effective tax rates were 22.9% and 23.1% for the three and six months ended June 30, 2026, respectively, compared to 19.1% and 19.4% for the same periods in 2025. The effective tax rate calculation for the six months ended June 30, 2025, excludes the goodwill impairment charge of $154.0 million, as this item is not deductible for tax purposes. 55 Table of Contents Financial Condition Assets. Total assets were $6.70 billion at June 30, 2026, as compared to $6.51 billion at December 31, 2025. 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 historically provided 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. The following table presents the balance and associated percentage of each major category in our loan portfolio at June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 (dollars in thousands) Book Value % Book Value % Loans: Commercial $ 1,185,730 27.9 % $ 1,178,521 27.1 % Commercial real estate 2,296,978 54.1 2,342,664 53.8 Construction and land development 243,840 5.7 286,140 6.6 Residential real estate 347,664 8.3 349,623 8.0 Consumer 132,406 3.1 144,075 3.3 Lease financing 37,086 0.9 50,981 1.2 Total loans, gross 4,243,704 100.0 % 4,352,004 100.0 % Allowance for credit losses on loans (62,519) (69,219) Total loans, net $ 4,181,185 $ 4,282,785 56 Table of Contents Total gross loans decreased $108.3 million, or 2.5%, to $4.24 billion at June 30, 2026, compared to December 31, 2025. The loan portfolio mix remained relatively stable by category during the first six months of 2026, while continuing to shift toward community bank relationships as anticipated runoff occurred in the specialty finance and non-core portfolios. The following tables present our outstanding loans by business sector at June 30, 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 include short term financing in anticipation of obtaining permanent secondary market financing. The loans are typically outside of the Company’s primary market areas. The Company ceased originations of new construction loans in the fourth quarter of 2024. • Non-core and other includes our third-party origination and servicing programs, our remaining equipment finance portfolio of loans and leases and capital market credits, including loans to finance the sale of the GreenSky portfolio. June 30, 2026 (dollars in thousands) Community bank Specialty finance Non-core and other Total Commercial $ 757,472 $ 220,519 $ 207,739 $ 1,185,730 Commercial real estate 1,984,124 309,751 3,103 2,296,978 Construction and land development 243,828 — 12 243,840 Residential real estate 337,121 1,800 8,743 347,664 Consumer 80,685 — 51,721 132,406 Lease financing — — 37,086 37,086 Total $ 3,403,230 $ 532,070 $ 308,404 $ 4,243,704 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 The community bank portfolio increased $75.0 million, or 2.25%, between December 31, 2025 and June 30, 2026. This growth was more than offset by the anticipated declines in the specialty finance and non-core and other business sectors of $136.1 million and $47.2 million, respectively. 57 Table of Contents The following table shows the contractual maturities of our loan portfolio and the distribution between fixed and adjustable interest rate loans at June 30, 2026: June 30, 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 $ 111,596 $ 464,128 $ 191,514 $ 100,225 $ 174,669 $ 103,651 $ — $ 39,947 $ 1,185,730 Commercial real estate 411,865 168,976 835,999 355,627 245,603 259,270 5,114 14,524 2,296,978 Construction and land development 37,955 50,946 20,492 96,556 1,980 35,867 — 44 243,840 Total commercial loans 561,416 684,050 1,048,005 552,408 422,252 398,788 5,114 54,515 3,726,548 Residential real estate 4,638 12,229 5,833 17,912 15,771 37,841 173,012 80,428 347,664 Consumer 18,363 5,161 60,329 433 42,322 5,798 — — 132,406 Lease financing 4,815 — 31,195 — 1,076 — — — 37,086 Total loans $ 589,232 $ 701,440 $ 1,145,362 $ 570,753 $ 481,421 $ 442,427 $ 178,126 $ 134,943 $ 4,243,704 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 $62.5 million, or 1.47% of total loans, at June 30, 2026, compared to $69.2 million, or 1.59% of total loans, at December 31, 2025. The following table allocates the allowance for credit losses on loans by loan category: June 30, 2026 December 31, 2025 (dollars in thousands) Allowance Percent (1) Allowance Percent (1) Commercial $ 23,142 1.95 % $ 23,676 2.01 % Commercial real estate 25,326 1.10 28,284 1.21 Construction and land development 2,010 0.82 2,619 0.92 Total commercial loans 50,478 1.35 54,579 1.43 Residential real estate 5,604 1.61 6,652 1.90 Consumer 3,893 2.94 4,804 3.33 Lease financing 2,544 6.86 3,184 6.25 Total allowance for credit losses on loans $ 62,519 1.47 % $ 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 June 30, 2026, we incorporated certain macroeconomic variables from the Capital Economics forecast dated June 30, 2026 into our credit loss models. The Capital Economics forecast reflected a generally stable macroeconomic outlook relative to the prior quarter, including modest economic growth and unemployment levels that remained consistent with management's assessment of the economic environment. The forecasted projections included, among other things, (i) U.S. gross domestic product ranging from 1.5% to 2.1% over the next four quarters; (ii) annual consumer price index averaging 3.1% over the next four quarters; and (iii) U.S. unemployment rate averaging 4.3% through the second quarter of 2027. These assumptions resulted in lower modeled loss estimates for certain portfolios. In addition, the relative stability of the economic outlook and the absence of incremental economic risks not otherwise reflected in the models supported management's reduction of certain qualitative adjustments. 58 Table of Contents 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 qualitative 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 June 30, 2026, was approximately 49 basis points of total loans, decreasing from 57 basis points at December 31, 2025. The reduction primarily reflected continued improvement in portfolio credit quality and management's assessment that certain risks requiring qualitative adjustments have moderated since December 31, 2025. The allowance for credit losses declined during the first six months of 2026 primarily due to charge-offs of previously reserved relationships, continued runoff within certain higher-risk loan portfolios, lower modeled expected credit losses resulting from updated portfolio characteristics and macroeconomic assumptions, and a reduction in qualitative adjustments reflecting continued improvement in portfolio credit quality. These decreases were partially offset by reserves established for Community Bank loan growth. The allowance allocated to commercial loans totaled $23.1 million, or 1.95% of commercial loans, at June 30, 2026, compared to $23.7 million, or 2.01%, at December 31, 2025. Modeled expected credit losses increased $0.8 million, while qualitative factor adjustments decreased $1.4 million. There were no specific allocations for commercial loans that were evaluated for expected credit losses on an individual basis at June 30, 2026, or December 31, 2025. The allowance allocated to commercial real estate loans totaled $25.3 million, or 1.10% of commercial real estate loans, at June 30, 2026, compared to $28.3 million, or 1.21%, at December 31, 2025. Commercial real estate loan balances decreased $45.7 million, or 2.0%, during the first six months of 2026. Net charge-offs were $12.3 million for the first six months of 2026, including an $8.6 million charge-off in connection with the execution of a resolution strategy for a previously identified nonperforming commercial real estate relationship. Excluding the effect of charge-offs, modeled expected credit losses increased $0.3 million and qualitative factor adjustments decreased $2.0 million. Specific allocations for loans that were individually evaluated decreased $1.3 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 $2.0 million, or 0.82% of construction and land development loans, at June 30, 2026, compared to $2.6 million, or 0.92%, at December 31, 2025. Construction and land development loan balances decreased $42.3 million, or 14.8%, during the first six months of 2026. Modeled expected credit losses decreased $0.1 million and qualitative factor adjustments decreased $0.5 million. There were no specific allocations for construction loans that were evaluated for expected credit losses on an individual basis at June 30, 2026 or December 31, 2025. The allowance allocated to residential real estate loans totaled $5.6 million, or 1.61% of residential real estate loans, at June 30, 2026, compared to $6.7 million, or 1.90%, at December 31, 2025. Modeled expected credit losses decreased $1.1 million. There were no specific allocations for residential real estate loans that were evaluated for expected credit losses on an individual basis at June 30, 2026, or December 31, 2025. The allowance allocated to consumer loans totaled $3.9 million, or 2.94% of consumer loans, at June 30, 2026, compared to $4.8 million, or 3.33%, at December 31, 2025. Consumer loan balances decreased $11.7 million, or 8.1%, during the first six months of 2026. Modeled expected credit losses decreased $0.9 million. The allowance allocated to the lease portfolio totaled $2.5 million, or 6.86% of commercial leases, at June 30, 2026, compared to $3.2 million, or 6.25%, at December 31, 2025. Commercial lease balances decreased $13.9 million, or 27.26%, during the first six months of 2026. The Company ceased originating leases in September 2025. 59 Table of Contents 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 and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (dollars in thousands) 2026 2025 2026 2025 Balance, beginning of period $ 67,875 $ 105,176 $ 69,219 $ 111,204 Charge-offs: Commercial 3,564 6,161 5,626 19,461 Commercial real estate 8,829 22,453 12,667 23,176 Construction and land development — — 35 — Residential real estate — — 65 72 Consumer 549 884 1,445 1,337 Lease financing 334 3,886 1,071 7,334 Total charge-offs 13,276 33,384 20,909 51,380 Recoveries: Commercial 153 1,013 627 1,509 Commercial real estate 382 637 383 639 Construction and land development — 1,029 — 1,030 Residential real estate 70 90 145 108 Consumer 139 357 297 405 Lease financing 67 403 245 956 Total recoveries 811 3,529 1,697 4,647 Net charge-offs 12,465 29,855 19,212 46,733 Provision for credit losses on loans 7,109 17,369 12,512 28,219 Balance, end of period $ 62,519 $ 92,690 $ 62,519 $ 92,690 Gross loans, end of period $ 4,243,704 $ 5,035,295 $ 4,243,704 $ 5,035,295 Average total loans $ 4,268,168 $ 5,123,558 $ 4,261,282 $ 5,090,659 Net charge-offs to average loans (annualized) 1.17 % 2.34 % 0.91 % 1.85 % Allowance for credit losses to total loans 1.47 % 1.84 % 1.47 % 1.84 % 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. 60 Table of Contents The following tables present charge-offs by business sector for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, 2026 (dollars in thousands) Community bank Specialty finance Non-core and other Total charge-offs Commercial $ 1,040 $ — $ 2,524 $ 3,564 Commercial real estate 8,829 — — 8,829 Construction and land development — — — — Residential real estate — — — — Consumer 218 — 331 549 Lease financing — — 334 334 Total $ 10,087 $ — $ 3,189 $ 13,276 Three Months Ended June 30, 2025 (dollars in thousands) Community bank Specialty finance Non-core and other Total charge-offs Commercial $ 77 $ 57 $ 6,027 $ 6,161 Commercial real estate 8,642 13,811 — 22,453 Construction and land development — — — — Residential real estate — — — — Consumer 178 — 706 884 Lease financing — — 3,886 3,886 Total $ 8,897 $ 13,868 $ 10,619 $ 33,384 The following tables present charge-offs by business sector for six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 (dollars in thousands) Community bank Specialty finance Non-core and other Total charge-offs Commercial $ 1,081 $ — $ 4,545 $ 5,626 Commercial real estate 12,667 — — 12,667 Construction and land development 35 — — 35 Residential real estate 65 — — 65 Consumer 439 — 1,006 1,445 Lease financing — — 1,071 1,071 Total $ 14,287 $ — $ 6,622 $ 20,909 Six Months Ended June 30, 2025 (dollars in thousands) Community bank Specialty finance Non-core and other Total charge-offs Commercial $ 83 $ 152 $ 19,226 $ 19,461 Commercial real estate 9,365 13,811 — 23,176 Construction and land development — — — — Residential real estate 72 — — 72 Consumer 360 — 977 1,337 Lease financing — — 7,334 7,334 Total $ 9,880 $ 13,963 $ 27,537 $ 51,380 Charge-offs for the three and six months ended June 30, 2026 were $13.3 million and $20.9 million, respectively, compared to $33.4 million and $51.4 million for the same periods in 2025. The Community Bank commercial real estate charge-offs included $8.6 million in connection with the execution of a resolution strategy for a previously identified nonperforming relationship and a $2.6 million charge-off related to a loan that was sold in the second quarter of 2026. 61 Table of Contents As previously discussed, the Company ceased originations of new construction loans within its specialty finance sector in the fourth quarter of 2024 and sold a significant portion of its non-core consumer lending portfolios and its equipment finance portfolios. These strategic decisions have resulted in the significant decrease of charge-offs in those sectors. 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) June 30, 2026 December 31, 2025 Nonperforming loans: Commercial $ 14,134 $ 14,925 Commercial real estate 38,822 45,333 Construction and land development 1,588 155 Residential real estate 4,413 3,861 Consumer 83 47 Lease financing 1,839 1,162 Total nonperforming loans 60,879 65,483 Other real estate owned and other repossessed assets 356 606 Nonperforming assets $ 61,235 $ 66,089 Nonperforming loans to total loans 1.43 % 1.50 % Nonperforming assets to total assets 0.91 % 1.01 % Allowance for credit losses to nonperforming loans 102.69 % 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 ceased originations of new construction loans included in the 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 $60.9 million, or 1.43% of total loans, at June 30, 2026, compared to $65.5 million, or 1.50% of total loans at December 31, 2025. Although total nonperforming loans declined, certain categories experienced increases, including construction and land development, residential real estate, and the remaining lease portfolio. In addition, $9.6 million of loans modified for borrowers experiencing financial difficulty during the preceding 12 months were 30–59 days past due at June 30, 2026. Management continues to monitor these relationships and has incorporated their risk characteristics into loan grading, individual evaluations, and the allowance assessment, as applicable. We did not recognize interest income on nonaccrual loans during the three and six months ended June 30, 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. 62 Table of Contents The following table sets forth the book value and percentage of each category of investment securities at June 30, 2026 and December 31, 2025: June 30, 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 $ 37,524 2.3 % $ 19,823 1.3 % Mortgage-backed securities - agency 1,306,345 79.0 1,193,750 78.4 Mortgage-backed securities - non-agency 92,762 5.6 97,089 6.4 Asset-backed student loans 19,130 1.2 34,215 2.2 State and municipal securities 71,432 4.3 73,458 4.8 Collateralized loan obligations 84,486 5.1 46,854 3.1 Corporate securities 41,781 2.5 57,812 3.8 Total investment securities, available for sale, at fair value $ 1,653,460 100.0 % $ 1,523,001 100.0 % 63 Table of Contents The following table sets forth the book value, maturities and weighted average yields for our investment portfolio at June 30, 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 9,639 0.6 4.78 Maturing after ten years 27,885 1.7 5.26 Total U.S. government sponsored entities and U.S. agency securities $ 37,524 2.3 % 5.13 % Mortgage-backed securities - agency: Maturing within one year $ 2 — % 2.31 % Maturing in one to five years 17,455 1.1 1.70 Maturing in five to ten years 8,668 0.5 3.70 Maturing after ten years 1,280,220 77.4 4.45 Total mortgage-backed securities - agency $ 1,306,345 79.0 % 4.41 % Mortgage-backed securities - non-agency: Maturing within one year $ — — % — % Maturing in one to five years 8,463 0.5 6.19 Maturing in five to ten years — — — Maturing after ten years 84,299 5.1 4.21 Total mortgage-backed securities - non-agency $ 92,762 5.6 % 4.39 % Asset-backed student loans: Maturing within one year $ — — % — % Maturing in one to five years — — — Maturing in five to ten years — — — Maturing after ten years 19,130 1.2 4.42 Total asset-backed student loans $ 19,130 1.2 % 4.42 % State and municipal securities (1) : Maturing within one year $ 729 — % 3.04 % Maturing in one to five years 14,006 0.8 2.33 Maturing in five to ten years 25,442 1.5 2.78 Maturing after ten years 31,255 2.0 5.04 Total state and municipal securities $ 71,432 4.3 % 3.69 % Collateralized loan obligations: Maturing within one year $ — — % — % Maturing in one to five years 8,485 0.5 5.32 Maturing in five to ten years 25,000 1.5 5.93 Maturing after ten years 51,001 3.1 5.53 Total collateralized loan obligations $ 84,486 5.1 % 5.63 % Corporate securities: Maturing within one year $ 3,027 0.2 % 8.67 % Maturing in one to five years 23,946 1.4 5.33 Maturing in five to ten years 11,785 0.7 5.47 Maturing after ten years 3,023 0.2 6.20 Total corporate securities $ 41,781 2.5 % 5.67 % Total investment securities, available for sale, at fair value $ 1,653,460 100.0 % 4.49 % (1) Weighted average yield for tax-exempt securities are presented on a tax-equivalent basis assuming a federal income tax rate of 21%. 64 Table of Contents The table below presents the credit ratings for our investment securities classified as available for sale, at fair value, at June 30, 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 $ 37,522 $ 37,524 $ — $ 37,524 $ — $ — $ — $ — Mortgage-backed securities - agency 1,390,919 1,306,345 — 1,306,345 — — — — Mortgage-backed securities - non-agency 94,088 92,762 4,520 88,242 — — — — Asset-backed student loans 19,201 19,130 — 19,130 — — — — State and municipal securities 74,999 71,432 6,919 61,905 170 — — 2,438 Collateralized loan obligations 84,552 84,486 84,486 — — — — — Corporate securities 42,697 41,781 — — 11,384 27,953 — 2,444 Total investment securities, available for sale $ 1,743,978 $ 1,653,460 $ 95,925 $ 1,513,146 $ 11,554 $ 27,953 $ — $ 4,882 Liabilities. At June 30, 2026, liabilities totaled $6.13 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, money market, savings and time deposit accounts. Total deposits increased $282.9 million to $5.71 billion at June 30, 2026, compared to December 31, 2025. Retail and commercial deposits increased $180.0 million and $132.0 million, respectively, driven largely by growth in new accounts as a result of targeted initiatives. Public funds deposits increased $102.8 million due to seasonal growth. Deposits among wealth management clients declined $22.2 million, reflecting normal fluctuations in client cash balances. Higher-cost brokered deposits decreased $118.2 million. (dollars in thousands) June 30, 2026 December 31, 2025 Balance Percent Balance Percent Noninterest-bearing demand $ 1,010,128 17.7 % $ 1,040,411 19.2 % Interest-bearing: Checking 2,094,880 36.7 1,855,215 34.2 Money market 1,242,303 21.8 1,248,942 23.0 Savings 640,292 11.2 487,742 9.0 Time 719,675 12.6 792,069 14.6 Total deposits $ 5,707,278 100.0 % $ 5,424,379 100.0 % The following table presents the maturity of uninsured time deposits as of June 30, 2026: (dollars in thousands) Amount Three months or less $ 33,868 Three to six months 12,457 Six to 12 months 15,158 After 12 months 5,074 Total $ 66,557 65 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 increased $4.2 million to $569.7 million at June 30, 2026, compared to December 31, 2025. The change in shareholders’ equity was driven primarily by net income of $38.4 million, partially offset by dividends to common shareholders of $13.7 million, dividends to preferred shareholders of $4.5 million, repurchases of common stock of $10.7 million, and an increase in accumulated other comprehensive losses of $7.6 million. In the fourth quarter of 2025, the Company’s board of directors authorized a new stock repurchase program, pursuant to which the Company was 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. On May 5, 2026, the board of directors of the Company approved an amendment to the stock repurchase program that increased the amount of its common stock authorized for repurchase from $25.0 million to $45.0 million and extended the expiration date of the program to December 31, 2026. As of June 30, 2026, $20.2 million, or 935,937 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 $9.2 million and $12.2 million at June 30, 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 June 30, 2026 and December 31, 2025: (dollars in thousands) June 30, 2026 December 31, 2025 Cash and cash equivalents $ 298,747 $ 127,811 Unpledged securities 906,754 812,587 FHLB committed liquidity 774,767 1,114,294 FRB discount window availability 332,390 349,026 Total Estimated Liquidity $ 2,312,658 $ 2,403,718 Conditional Funding Based on Market Conditions Additional credit facility $ 400,000 $ 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 June 30, 2026 that these limitations will not impact our ability to meet our ongoing short-term cash obligations. 66 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 June 30, 2026, the Company and the Bank exceeded all applicable minimum regulatory capital requirements, and the Bank met the regulatory thresholds to be considered well capitalized under the prompt corrective action framework. The following table presents the Company's and the Bank’s capital ratios and the minimum requirements at June 30, 2026: Ratio Actual Minimum Regulatory Requirements (1) Well Capitalized Total risk-based capital ratio Midland States Bancorp, Inc. 15.77 % 10.50 % N/A Midland States Bank 14.84 10.50 10.00 % Tier 1 risk-based capital ratio Midland States Bancorp, Inc. 13.97 8.50 N/A Midland States Bank 13.59 8.50 8.00 Common equity tier 1 risk-based capital ratio Midland States Bancorp, Inc. 10.39 7.00 N/A Midland States Bank 13.59 7.00 6.50 Tier 1 leverage ratio Midland States Bancorp, Inc. 10.37 4.00 N/A Midland States Bank 10.08 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. 67 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 June 30, 2026: Dollar change $ 1,689 $ (155) $ 3,012 $ 6,514 Percent change 0.7 % (0.1) % 1.3 % 2.9 % 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 June 30, 2026. Tolerance levels for risk management require the continuing development, implementation and monitoring of remedial plans to maintain residual risk within approved levels as we adjust the balance sheet. NII at Risk as of June 30, 2026 indicated that projected net interest income would increase under a majority of the first-year rate shock scenarios. The results of the declining rate scenarios were not linear, as each scenario is modeled independently and reflects differences in the timing and magnitude of asset and liability repricing, cash flows and other behavioral assumptions at the applicable interest rate level, as well as changes in the size and composition of the balance sheet and interest rate risk management activities. Throughout the course of 2025, the Bank held to its non-maturity beta assumptions and lowered rates on interest-bearing deposits 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. 68 Table of Contents 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”. ITEM 4 – CONTROLS AND PROCEDURES Evaluation of disclosure controls and procedures. The Company’s management, including our President and Chief Executive Officer and our 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 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 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 13 - 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. 69 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 second 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) April 1 - 30, 2026 101,108 $ 23.63 101,108 $ 5,179,373 May 1 - 31, 2026 2,773 26.98 — 25,179,373 June 1 - 30, 2026 12,100 27.64 12,100 24,844,955 Total 115,981 $ 24.13 113,208 $ 24,844,955 (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 was authorized to repurchase up to $25.0 million of common stock through November 2, 2026, and on May 5, 2026, the board of directors of the Company approved an amendment to the stock repurchase program that increased the amount of its common stock authorized for repurchase from $25.0 million to $45.0 million and extended the expiration date of the program to December 31, 2026. Stock repurchases under this program 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 conditions. The repurchase program may be suspended or discontinued at any time without notice. As of June 30, 2026, 935,937 shares of the Company’s common stock have been repurchased under the program for an aggregate purchase price of $20.2 million. ITEM 5 – OTHER INFORMATION On June 15, 2026 , Jeffrey G. Ludwig , who serves as President, Chief Executive Officer and a director of the Company, adopted a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The trading arrangement expires on November 16, 2026 , and provides for the sale of up to 8,383 shares of Company common stock that are subject to stock options held by Mr. Ludwig, subject to certain conditions, including the expiration of the cooling-off period described in Rule 10b5-1(c). 70 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. 10.1 Employment Offer Letter, dated as of May 8, 2026, between Midland States Bank and Claire A. Stack 101 Financial information from the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 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 June 30, 2026 formatted in inline XBRL and contained in Exhibit 101. 71 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: July 30, 2026 By: /s/ Jeffrey G. Ludwig Jeffrey G. Ludwig President and Chief Executive Officer (Principal Executive Officer) Date: July 30, 2026 By: /s/ Claire A. Stack Claire A. Stack Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) 72