What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-27 · 160 added, 169 removed, 602 unchanged (35% of the section changed)

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Deeply rooted in our history is a culture committed to providing personalized, relationship banking to businesses, municipalities, and personal clients to enrich the lives of the people in the communities we serve.

We provide a broad range of financial services and currently has over 60 locations from Dallas/Fort Worth, East Texas, Houston, across North Louisiana, Mississippi, South Alabama and into the Florida Panhandle .

We provide a broad range of financial services and currently has more than 56 locations from Dallas/Fort Worth, East Texas, Houston, across North Louisiana, Mississippi, South Alabama and into the Florida Panhandle .

In addition, we provide a broad range of insurance agency products and services through our wholly owned insurance agency subsidiary, Forth Insurance, LLC.

As a financial holding company operating through one segment, we generate the majority of our revenue from interest earned on loans and investments, service charges and fees on deposit accounts.

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Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets.

Net interest income is the difference between interest income on interest-earning assets, such as loans, securities and interest-bearing cash, and interest expense on interest-bearing liabilities, such as deposits and borrowings.

Net interest income is the difference between interest income on interest-earning assets, such as loans, securities and interest-earning cash, and interest expense on interest-bearing liabilities, such as deposits and borrowings.

Net interest spread is the average yield on interest-earning assets minus the average rate on interest-bearing liabilities.

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Results of Operations

The year ended December 31, 2024, was impacted by certain questioned activity involving a former banker which is explained in detail in Part II, Item 8 , Note 18 — Commitments and Contingencies under Loss Contingencies .

The year ended December 31, 2025, was impacted by the Tricolor Holdings, LLC borrower fraud, which was first disclosed in our Current Report on Form 8-K filed on September 10, 2025 and discussed in subsequent filings.

These items negatively impacted our diluted EPS of $2.40 by $0.77 for the year ended December 31, 2025.

The year ended December 31, 2024, was impacted by certain questioned activity involving a former banker which is explained in detail in the Company's 2024 Form 10-K filed with the SEC.

These items negatively impacted our diluted EPS of $2.45 by $0.29 for the year ended December 31, 2024.

Our net income decreased $1.3 million, or 1.7%, to $75.2 million for the year ended December 31, 2025, from $76.5 million for the year ended December 31, 2024.

On a diluted EPS basis, we reported $2.40 per share for the year ended December 31, 2025, compared to $2.45 per share for the year ended December 31, 2024.

Comparison of Results of Operations for the Years Ended December 31, 2025, 2024 and 2023

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Net Interest Income and Net Interest Margin

Net interest income for the year ended December 31, 2024, was $300.4 million, an increase of $809,000, or 0.3%, compared to the year ended December 31, 2023.

The increase was primarily driven by a $50.5 million increase in interest income earned on LHFI and a $15.7 million decrease in interest expense incurred on Federal Home Loan Bank (“FHLB”) advance & other borrowings, offset by a $58.4 million increase in interest expense paid on interest-bearing deposits and a $6.5 million decrease in interest income earned on investment securities, during the year ended December 31, 2024, compared to the year ended December 31, 2023.

Interest income earned on LHFI during the year ended December 31, 2024, increased in substantially all loan categories when compared to the year ended December 31, 2023.

Interest income earned on real estate-based loans, mortgage warehouse lines of credit and commercial and industrial loans contributed $32.4 million, $10.1 million and $8.0 million, respectively, of the $50.5 million total increase in interest income earned on LHFI when compared to the year ended December 31, 2023.

Increases in interest rates drove $17.9 million, $5.5 million and $2.8 million of the increase in interest income earned on real estate-based loans, commercial and industrial loans, and mortgage warehouse lines of credit, and increases in average loan balances drove $14.6 million, $7.3 million and $2.5 million of the increase in interest income earned on real estate-based loans, mortgage warehouse lines of credit and commercial and industrial loans for the comparable periods, respectively.

The increase in average rates and average balances of interest-bearing deposits during the year ended December 31, 2024, contributed increases of $43.3 million and $15.1 million, respectively, to interest expense when compared to the year ended December 31, 2023.

The average rate on interest-bearing deposits was 3.86% for the year ended December 31, 2024, an increase of 65 basis points, from 3.21% for the year ended December 31, 2023.

The increase in average balances of interest-bearing deposits was primarily driven by a $296.2 million increase in average money market deposit balances.

Lower average balances in investment securities contributed a decrease of $7.7 million in interest income and the decrease in average balance in FHLB advances and other borrowings contributed a decrease of $15.5 million in interest expense, during the year ended December 31, 2024, compared to the year ended December 31, 2023, as a result of a strategic decision to sell available for sale securities to pay down borrowings and fund loan growth during the intervening period.

The Federal Reserve Board (“FRB”) sets various benchmark rates, including the federal funds rate, and thereby influences the general market rates of interest, including the loan and deposit rates offered by financial institutions.

On September 18, 2024, the FRB reduced the federal funds target rate range by 50 basis points, to a range of 4.75% to 5.00%, marking the first rate reduction since early 2020.

Prior to this movement, the fed funds rate was at a 23-year high, reflecting a total federal funds target rate range increase of 525 basis points since the FRB started raising rates in early 2022 through the last federal funds target rate range increase in mid-2023.

During the second half of 2024, the federal funds target range has decreased 100 basis points from its cycle high with the current federal funds target range set to 4.25% to 4.50% on December 18, 2024.

While the FRB has eased rates, the impact of higher interest rates for a sustained period of time continues to be reflected in our fully tax equivalent net interest margin (“NIM-FTE”) as well as in other financial metrics.

The NIM-FTE was 3.22% for the year ended December 31, 2024, a one basis point decrease from 3.23% for the year ended December 31, 2023.

The decrease was primarily due to a 51-basis point increase in the rate paid on interest-bearing liabilities to 3.88% for the year ended December 31, 2024, from 3.37% for year ended December 31, 2023, compared to a 42-basis point increase in the yield earned on interest-earning assets to 6.01% from 5.59%.

During the quarter ended December 31, 2024, we executed a bond portfolio optimization strategy aimed at enhancing long-term yields and improving overall portfolio performance.

This strategy involved selling lower-yielding investment securities prior to their maturity and using the proceeds to purchase higher-yielding investments.

As a result, we replaced securities with a total book value of $188.2 million and a weighted average yield of 1.51%, with new securities totaling $173.7 million with a weighted average yield of 5.22%, realizing a loss of $14.6 million.

The weighted average duration of the securities portfolio increased to 4.46 years as of December 31, 2024, compared to 4.28 years as of December 31, 2023.

Due to the timing of this transaction, the optimization positively impacted our NIM-FTE by one basis point for the year ended December 31, 2024, while on an annual basis, the estimated positive impact in NIM-FTE is seven basis points.

While the associated loss, net of the increase in interest income, resulted in a $0.35 negative impact to diluted EPS for the year ended December 31, 2024, we believe the trade-off in yield represents an attractive opportunity with an estimated increase in annual net interest income of $5.6 million and earn-back period of 2.4 years.

Net interest income for the year ended December 31, 2025, was $331.0 million, an increase of $30.6 million, or 10.2%, compared to the year ended December 31, 2024.

The expansion in net interest income was primarily due to a $57.2 million decrease in interest expense, partially offset by a $26.6 million decrease in total interest income during the year ended December 31, 2025, compared to year ended December 31, 2024.

The $57.2 million decrease in interest expense was mainly attributable to a $55.4 million reduction in interest expense on interest-bearing deposits.

Lower interest rates contributed $38.8 million of the decrease, while lower average balances contributed $16.6 million.

The rate-related decrease was driven primarily by money market deposits and interest-bearing demand deposits, which contributed $22.2 million and $11.2 million, respectively.

The average rate on money market deposits declined 67-basis points to 3.39% for the year ended December 31, 2025, from 4.06% for the year ended December 31, 2024.

The average rate on interest-bearing demand deposits decreased 59 basis points to 2.81% for the year ended December 31, 2025, from 3.40% for the year ended December 31, 2024.

Lower average time deposit balances contributed $28.7 million to the decrease in interest expense, partially offset by a $14.3 million increase in interest expense resulting from higher average money market deposit balances.

Average time deposit balances decreased by $577.2 million during the year ended December 31, 2025, when compared to the year ended December 31, 2024, while average money market deposit balances increased by $351.1 million over the same period.

The $26.6 million decrease in interest income was mainly driven by a $39.1 million reduction in interest income on LHFI, partially offset by increases of $8.6 million and $4.1 million in interest income on investment securities and interest-earning balances in banks.

Lower average balances and lower interest rates contributed $22.3 million and $16.9 million, respectively, to the total $39.1 million decrease in interest income on LHFI.

The $333.2 million decrease in average construction/land/land development loans balances, and the 66-basis point decline in the average yield on construction and industrial loans contributed $23.8 million and $13.2 million to the total decrease in interest income on LHFI.

The increase in interest income on investment securities was primarily driven by improved yields resulting from the execution of our bond portfolio optimization strategy during the intervening period, in conjunction with our Optimize Origin initiative.

The increase in interest income on interest-earning balances due from banks was primarily driven by a $152.1 million increase in average balances which generated a $7.9 million increase in interest income, partially offset by a $3.8 million decrease in interest income due to lower market interest rates.

The Federal Reserve Board sets various benchmark rates, including the federal funds rate, and thereby influences the general market rates of interest, including the loan and deposit rates offered by financial institutions.

During 2025, the Federal Reserve reduced the federal funds target rate range three times, by a total of 75 basis points, to a range of 3.50% to 3.75%, bringing the total number of reductions to six for a cumulative decrease of 175 basis points from its recent cycle high set in mid-2023.

The NIM-FTE was 3.61% for the year ended December 31, 2025, a 39-basis point increase from 3.22% for the year ended December 31, 2024.

The improvement was mainly driven by an expanding interest rate spread, as the 70-basis-point decline in the average rate on total interest-bearing liabilities exceeded the 18-basis-point decline in the yield on interest-earning assets for the year ended December 31, 2025, compared to the year ended December 31, 2024.

The average rate on total interest-bearing liabilities for the year ended December 31, 2025, was 3.18%, compared to 3.88% for the year ended December 31, 2024.

The average yield on total interest-earning assets for the year ended December 31, 2025, was 5.83%, compared to 6.01% for the year ended December 31, 2024.

The following table presents average consolidated balance sheet information, interest income, interest expense and the corresponding average yields earned, and rates paid for the year ended December 31, 2025 and 2024.

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Average Balance (1)

Income/Expense Yield/Rate Average Balance (1)

Income/Expense Yield/Rate (2)

Average Balance (1)

Income/Expense Yield/Rate (2)

Average Balance (1)

Income/Expense Yield/Rate (2)

Commercial real estate $ 2,457,523 $ 143,047 5.82 % $ 2,485,800 $ 146,507 5.89 % $ 2,404,530 $ 135,117 5.62 %

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All average balances are daily average balances.

(2) Yields/Rates are calculated on an actual/actual day count basis.

(3) In order to present pre-tax income and resulting yields on tax-exempt investments comparable to those on taxable investments, a tax-equivalent adjustment has been computed.

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Provision for Credit Losses

We recorded a provision expense of $7.4 million for the year ended December 31, 2024, a $9.3 million decrease from $16.8 million for the year ended December 31, 2023, primarily driven by a $8.8 million decrease in the provision for loan credit losses.

The net decrease in provision expense for loan credit losses for the year ended December 31, 2024, compared to the year ended December 31, 2023, was mainly due to decreases of $8.5 million and $7.1 million in collectively and individually evaluated reserves, respectively, which decreases were offset by the $4.1 million provision increase associated with the questioned activity recognized during the year ended December 31, 2024, as discussed in detail in Part II, Item 8, Note 18 — Commitments and Contingencies under Loss Contingencies .

During the period, we experienced a $6.7 million increase in net charge-offs.

The increase in charge-offs was mainly driven by charge-offs relating to four commercial and industrial relationships totaling $15.2 million during the year ended December 31, 2024, compared to four commercial and industrial relationships totaling $6.8 million being the major driver for charge-offs during the year ended December 31, 2023.

The increase in charge-offs was partially offset by increase in recoveries on two commercial and industrial relationships totaling $4.6 million during the year ended December 31, 2024.

We recorded a provision expense of $46.3 million for the year ended December 31, 2025, a $38.8 million increase from $7.4 million for the year ended December 31, 2024, primarily driven by a $36.6 million increase in the provision for loan credit losses.

The increase was primarily related to the borrower fraud impacting the Tricolor Holdings, LLC loan relationship which drove a $29.6 million increase in the total provision, consisting of a $29.3 million provision for loan credit losses and a $338,000 provision for off-balance sheet commitments, during the year ended December 31, 2025.

Net charge-offs increased $25.1 million, to $39.6 million for the year ended December 31, 2025, from $14.5 million for the year ended December 31, 2024.

The increase was largely reflecting net charge-offs of $29.5 million during the year ended December 31, 2025, related to borrower fraud impacting the Tricolor Holdings, LLC loan relationship discussed above.

Our net charge-offs, exclusive of this event, would have been $10.1 million for the year ended December 31, 2025, representing a $4.4 million decrease from the year ended December 31, 2024, primarily resulting from charge-offs on one commercial and industrial loan relationship totaling $6.0 million during the prior year.

Net charge-offs to total average LHFI increased to 0.52% for the year ended December 31, 2025, from 0.18% for the year ended December 31, 2024, primarily due to higher net charge-offs during the year ended December 31, 2025.

Noninterest Income

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Swap fee income 3,413 323 1,277 3,090 N/M (954) (74.7)

(Loss) gain on sales of securities, net (14,799) (11,635) 1,664 (3,164) 27.2 (13,299) N/M

Change in fair value of equity investments 5,188 10,096 — (4,908) (48.6) 10,096 N/A

Other income 3,396 3,264 614 132 4.0 2,650 N/M

Loss on sales of securities, net (14,448) (14,799) (11,635) 351 2.4 (3,164) 27.2

Change in fair value of equity investments 6,972 5,188 10,096 1,784 34.4 (4,908) (48.6)

Equity method investment (loss) income (1,192) 519 405 (1,711) N/M 114 28.1

Other income 5,131 2,877 2,859 2,254 78.3 18 0.6

Total noninterest income $ 59,834 $ 55,379 $ 58,335 $ 4,455 8.0 $ (2,956) (5.1)

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N/M = Not meaningful.

N/A = Not applicable.

Noninterest income for the year ended December 31, 2024, decreased by $3.0 million, or 5.1%, to $55.4 million, compared to $58.3 million for the year ended December 31, 2023.

The decrease was primarily due to a decrease of $4.9 million in the change in fair value of equity investments and a $3.2 million increase in loss on sales of securities, net, partially offset by increases of $3.2 million and $1.7 million in mortgage banking revenue and insurance commission and fee income, respectively.

Noninterest income for the year ended December 31, 2025, increased by $4.5 million, or 8.0%, to $59.8 million, compared to $55.4 million for the year ended December 31, 2024.

The increase was primarily due to increases of $3.1 million, $2.3 million and $1.8 million in swap fee income, other income, and change in fair value of equity investments, respectively.

These increases were partially offset by decreases of $2.9 million and $1.7 million in mortgage banking revenue and equity method investment (loss) income, respectively.

Swap fee income.

The $3.1 million increase in swap fee income during the year ended December 31, 2025, was primarily due to both an attractive interest rate environment which is increasingly conducive to facilitating back-to-back swaps for our customers and an increased focus on the marketing of customer swaps as part of Optimize Origin .

Other income.

The $2.3 million increase in other income was primarily due to insurance recoveries of $2.6 million during the year ended December 31, 2025, in connection with the previously disclosed questioned banker activity, as explained in detail in Part I, Item 1, Note 19 - Commitments and Contingencie s under Loss Contingencies .

Change in fair value of equity investments.

The decrease in change in fair value of equity investments was primarily due to a $5.2 million positive valuation adjustment on a non-marketable equity security during the year ended December 31, 2024, which was more than offset by a $10.1 million positive valuation adjustment on the same non-marketable equity security that occurred during the year ended December 31, 2023.

During the years ended December 31, 2024 and 2023, we observed multiple orderly transactions for this equity security indicating a price change had occurred and adjusted our basis upwards accordingly.

The $1.8 million increase in the change in fair value of equity investments, was driven by an upward adjustment of $7.0 million for the year ended December 31, 2025, compared to a $5.2 million upward adjustment for the year ended December 31, 2024.

During the year ended December 31, 2025, there was an additional investment in Argent Financial which increased our ownership percentage above the threshold required to implement the equity method of accounting.

The equity method of accounting requires the asset be recorded at fair value immediately prior to the purchase, and therefore required an adjustment to its basis.

Mortgage banking revenue.

The $3.2 million increase in mortgage banking revenue compared to the year ended December 31, 2023, was primarily driven by a $1.8 million increase in gain on sale of loans held for sale primarily due to higher profit margins and increased sales volume, and a net $1.3 million increase in mortgage banking revenue caused by $1.8 million MSR asset impairment recorded during the year ended December 31, 2023, which was offset by a $410,000 gain on sale of the MSR asset during the year ended December 31, 2024.

Loss on sales of securities, net.

The $3.2 million increase in loss on sales of securities, net, was mainly driven by a $14.6 million loss recognized in the last quarter of 2024 as a result of our bond portfolio optimization strategy transaction.

This was partially offset by a $11.8 million loss recognized in the second half of 2023, resulting from a strategic decision to use securities sale proceeds to pay down FHLB advances and support loan growth in our markets.

Insurance commission and fee income.

The $1.7 million increase in insurance commission and fee income was mainly due to increases in both direct bill commission and contingency income.

The increase in direct bill commission was mainly driven by higher commissions from property and casualty insurance.

The increase in contingency income was mainly due to new commercial accounts combined with lower claims for catastrophic events experienced by our insurance agency counterparties during the year ended December 31, 2024, compared to the year ended December 31, 2023.

The $2.9 million decrease in mortgage banking revenue compared to the year ended December 31, 2024, was primarily due to decreases in most mortgage banking income categories during the year ended December 31, 2025, primarily due to the restructuring of our mortgage banking operations that was done as part of Optimize Origin .

Equity method investment (loss) income.

The decrease in the equity method investment (loss) income was primarily due to a $3.8 million loss on one limited partnership investment during the year ended December 31, 2025, compared to income of $932,000 recognized on the same investment during the year ended December 31, 2024.

The decrease was partially offset by income of $3.2 million from the Argent investment, which was accounted for under the equity method beginning July 1, 2025, following an increase in ownership.

Noninterest Expense

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Professional services 6,633 6,610 5,931 23 0.3 679 11.4

Loan-related expenses 3,164 5,035 6,097 (1,871) (37.2) (1,062) (17.4)

Electronic banking 5,728 5,162 4,712 566 11.0 450 9.6

Franchise tax expense 2,897 3,334 3,582 (437) (13.1) (248) (6.9)

Merger-related expense — — 6,171 — N/A (6,171) (100.0)

Loan-related expenses 3,034 3,164 5,035 (130) (4.1) (1,871) (37.2)

Bank share tax expense 2,518 2,897 3,334 (379) (13.1) (437) (13.1)

Other expense 6,300 10,548 6,108 (4,248) (40.3) 4,440 72.7

Total noninterest expense $ 248,902 $ 251,038 $ 235,216 $ (2,136) (0.9) $ 15,822 6.7

____________________________

N/A = Not applicable.

Noninterest expense for the year ended December 31, 2024, increased by $15.8 million, or 6.7%, to $251.0 million, compared to $235.2 million for the year ended December 31, 2023, primarily due to increases of $10.0 million, $4.4 million $1.9 million and $1.1 million in salaries and employee benefits, other noninterest, data processing and occupancy and equipment, net expenses, respectively.

These increases were partially offset by decreases of $1.9 million and $1.6 million in loan-related expenses and intangible asset amortization, respectively.

Salaries and employee benefits.

The $10.0 million increase in salaries and employee benefits expense was primarily driven by increases of $6.6 million, $2.0 million, $1.7 million, and $1.5 million in salary expense, incentive compensation bonus, share-based compensation, and medical insurance expenses respectively.

The increase was partially offset by an employee retention credit (“ERC”) of $1.7 million that was recorded during the year ended December 31, 2024, and related to the operations of BTH Bank, N.A., which we acquired in 2022.

The ERC is a refundable tax credit for certain eligible businesses that had employees affected during the COVID-19 pandemic.

The increase in salary expense was mainly attributed to raises given as a result of our annual salary reviews combined with an increase driven by our entry into South Alabama and the Florida Panhandle markets during 2024.

The increase in incentive compensation bonuses can be attributed primarily to elevated anticipated payouts, driven by a greater focus on meeting deposit objectives.

This is evidenced by a larger sum of incentives linked to these deposit goals, alongside an increase in accruals associated with financial targets for the year ended December 31, 2024, compared to the year ended December 31, 2023.

The increase in share-based compensation was primarily due to evaluation adjustments on performance stock units to align with payout expectations based on company performance.

Medical insurance expense increased as a result of higher insurance premiums combined with higher self-insurance claims during the current period.

Noninterest expense for the year ended December 31, 2025, decreased by $2.1 million, or 0.9%, to $248.9 million, compared to $251.0 million for the year ended December 31, 2024, primarily due to a $4.2 million decrease in other expense and $1.4 million decreases in both regulatory assessments and intangible asset amortization.

These decreases were partially offset by increases of $2.1 million, $1.9 million, and $1.3 million in salaries and employee benefits, occupancy and equipment, net, and office and operations expenses, respectively.

Other noninterest expense.

The $4.4 million increase in other noninterest expense was primarily due to $4.3 million in contingency expense related to certain questioned activity involving a former banker in our East Texas market, as explained in detail in Part II, Item 8, Note 18 — Commitments and Contingencies under Loss Contingencies .

Data Processing.

The $1.9 million increase in data processing expense was primarily due to an increase of $1.1 million in software expenses, primarily driven by new services and increased fees for the year ended December 31, 2024, compared to the year ended December 31, 2023.

Also, contributing a combined increase of $749,000 were increased expenses associated with core services, compliance systems and data processing costs.

Occupancy and equipment, net.

The $1.1 million increase in occupancy and equipment, net was primarily due to an increase in expense associated with the accounting for our strategic profitability initiative which includes consolidation of eight banking centers, five in the Dallas-Fort Worth market, with one each in the Houston, Louisiana and Mississippi markets.

We expect to close six of these banking centers at the end of February 2025, which combined with the two branch closures that occurred mid-year 2024, is expected to reduce our occupancy expense by approximately $4.6 million annually.

Loan-related expenses.

The $1.9 million decrease in loan-related expenses was primarily due to decreases of $675,000 and $630,000 in loan related legal fees and servicing costs, respectively.

The $4.2 million decrease in other noninterest expense was primarily due to a $4.3 million contingent liability recognized during the year ended December 31, 2024, related to certain questioned activity involving a former banker in our East Texas market, as explained in detail in Part I, Item 1, Note 19 — Commitments and Contingencies under Loss Contingencies .

Regulatory assessments.

The $1.4 million decrease in regulatory assessment expense was primarily driven by our improved risk-based pricing as a result of an adjustment to our loan mix during the year ended December 31, 2025, compared to the year ended December 31, 2024.

Intangible asset amortization.

The $1.6 million decrease in intangible asset amortization is primarily due to the accelerated amortization method used to measure the amortization expense of the assets, as well as certain intangible assets that were fully amortized during the year ended December 31, 2023.

The $1.4 million decrease in intangible asset amortization is primarily due to the accelerated amortization method used to measure the amortization expense of the assets.

Salaries and employee benefits.

The $2.1 million increase in salaries and employee benefits expense was primarily driven by increases of $1.8 million and $1.1 million in medical costs and incentive compensation, respectively, for the year ended December 31, 2025, compared to the year ended December 31, 2024.

The increase was also attributable to a lower employee retention credit recognized during the year ended December 31, 2025, of $213,000, compared to $1.7 million recognized during the year ended December 31, 2024.

These increases were partially offset by a net decrease of $2.7 million in salaries, reflecting a decline in full time equivalent (“FTE”) employees, partially offset by annual cost-living adjustments.

Our FTE employees declined to 988 at December 31, 2025, from 1,031 at December 31, 2024.

Approximately 70 FTE employees were reduced as part of Optimize Origin , partially offset by net new hires and attrition during the intervening period.

Occupancy and equipment, net.

The $1.9 million increase in occupancy and equipment, net was primarily driven by an increase of $1.4 million in depreciation expense.

Of this increase, $832,000 and $597,000 were related to additional depreciation expense associated with the opening or relocation of four banking centers during 2024 and 2025, and additional fixed asset purchases, respectively.

In addition, depreciation expense increased by $302,000 due to shortened estimated useful lives of certain leasehold improvements and furniture, fixtures and equipment associated with our branch consolidations during the year ended December 31, 2025, compared to the year ended December 31, 2024, as a part of our Optimize Origin initiative.

Office and operations.

The $1.3 million increase in office and operations expense was primarily related to a $724,000 increase in check and card fraud.

Income Tax Expense

For the year ended December 31, 2025, we recognized income tax expense of $20.4 million, compared to $20.8 million for the year ended December 31, 2024.

Our effective tax rate was 21.4% for the year ended December 31, 2024, compared to 20.9% for the year ended December 31, 2023.

Our effective tax rate was 21.4% for both the years ended December 31, 2025 and 2024.

Comparison of Financial Condition at December 31, 2025, and December 31, 2024

Total assets decreased by $43.9 million, or 0.5%, to $9.68 billion at December 31, 2024, from $9.72 billion at December 31, 2023.

The decrease in total assets is primarily due to decreases of $151.1 million and $87.2 million in available for sale securities and LHFI, respectively.

These decreases were partially offset by an increase of $189.8 million in cash and cash equivalents.

LHFI were $7.57 billion at December 31, 2024, a decrease of 1.1%, compared to $7.66 billion at December 31, 2023.

Available for sale securities declined to $1.10 billion, reflecting a 12.1% decrease, at December 31, 2024, compared to $1.25 billion at December 31, 2023.

Cash and cash equivalents increased to $470.2 million, an increase of 67.7%, at December 31, 2024, compared to $280.4 million at December 31, 2023.

Total assets increased by $46.0 million, or 0.5%, to $9.72 billion at December 31, 2025, from $9.68 billion on December 31, 2024.

The increase in total assets is primarily due to increases of $97.2 million and $48.5 million in LHFI and equity method investments, respectively.

LHFI were $7.67 billion at December 31, 2025, an increase of 1.3%, compared to $7.57 billion at December 31, 2024.

Equity method investments were $67.5 million at December 31, 2025, an increase of 255.8%, compared to $19.0 million at December 31, 2024.

These increases were offset by decreases of $46.0 million and $40.6 million in cash and cash equivalents and non-marketable equity securities held in other financial institutions, respectively.

Cash and cash equivalents were $424.2 million at December 31, 2025, a decrease of 9.8%, compared to $470.2 million at December 31, 2024.

Non-marketable equity securities held in other financial institutions were $31.1 million at December 31, 2025, a decrease of 56.6%, compared to $71.6 million at December 31, 2024.

Total liabilities decreased by $55.4 million, or 0.6%, to $8.48 billion at December 31, 2025, from $8.53 billion at December 31, 2024.

Federal Home Loan Bank advances, repurchase obligations and other borrowings decreased $71.1 million, or 85.1%, to $12.5 million at December 31, 2024, from $83.6 million at December 31, 2023.

Subordinated debentures decreased $34.3 million, or 17.7%, to $159.9 million at December 31, 2024, from $194.3 million at December 31, 2023.

Total deposits decreased by $28.0 million, or 0.3%, to $8.22 billion at December 31, 2024, from $8.25 billion at December 31, 2023, primarily due to a decrease of $364.8 million in brokered deposits, which was partially offset by increases of $184.6 million and $157.9 million and interest-bearing demand and money market deposits, respectively.

Subordinated indebtedness decreased $143.4 million, or 89.7%, to $16.5 million at December 31, 2025, from $159.9 million at December 31, 2024, as we redeemed eligible subordinated indebtedness as part of Optimize Origin .

Total deposits increased by $84.1 million, or 1.0%, to $8.31 billion at December 31, 2025, from $8.22 billion at December 31, 2024, primarily due to increases of $351.0 million and $79.2 million in money market and noninterest-bearing deposits, respectively.

These increases were partially offset by decreases of $142.8 million, $111.5 million and $80.2 million in interest-bearing demand deposits, time deposits (excluding brokered time deposits) and brokered deposits, respectively.

Loan Portfolio

Our loan portfolio is our largest category of interest-earning assets, and interest income earned on our loan portfolio is our primary source of income.

At December 31, 2024, 75.2% of the loan portfolio held for investment was comprised of commercial and industrial loans, including mortgage warehouse lines of credit, commercial real estate and construction/land/land development loans, which were primarily originated within our legacy market areas of Texas, North Louisiana, and Mississippi, compared to 77.1% at December 31, 2023.

At December 31, 2025, 73.7% of the loan portfolio held for investment was comprised of commercial and industrial loans, including mortgage warehouse lines of credit, commercial real estate and construction/land/land development loans, which were primarily originated within our existing market areas, compared to 75.2% at December 31, 2024.

The following table presents the ending balance of our loan portfolio held for investment at the dates indicated.

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(1) Includes owner-occupied CRE of $975.9 million and $953.8 million at December 31, 2024 and December 31, 2023, respectively.

At December 31, 2024, total LHFI were $7.57 billion, a decrease of $87.2 million, or 1.1%, compared to $7.66 billion at December 31, 2023.

The decrease was primarily driven by a decline of $206.2 million in construction/land/land development loans, which was partially offset by an increase of $122.7 million in residential real estate loans.

(1) Includes owner-occupied commercial real estate of $1.00 billion and $975.9 million at December 31, 2025 and 2024, respectively.

At December 31, 2025, total LHFI were $7.67 billion, an increase of $97.2 million, or 1.3%, compared to $7.57 billion at December 31, 2024.

The increase was primarily driven by growth of $179.7 million, $140.2 million and $46.5 million in mortgage warehouse lines of credit, residential real estate loans and commercial real estate loans, respectively.

This growth was offset by a decline of $252.8 million in construction/land/land development loans.

The decrease in construction/land/land development loans was primarily due to the normal reclassification of these loans upon completion, resulting in a change in loan category during the current period compared to December 31, 2024.

Total LHFI at December 31, 2025, excluding mortgage warehouse lines of credit, were $7.14 billion, reflecting a decrease of $82.5 million, or 1.1%, compared to December 31, 2024.

A significant portion, 32.7%, of our LHFI portfolio at December 31, 2024, consisted of CRE loans secured by real estate properties.

A significant portion, 32.9%, of our LHFI portfolio at December 31, 2025, consisted of commercial real estate loans secured by real estate properties.

Such loans can involve high principal loan amounts, and the repayment of these loans is dependent, in large part, on a borrower’s ongoing business operations or on income generated from the properties that are leased to third parties.

The table below sets forth the CRE loan portfolio, by portfolio industry sector and collateral location as of December 31, 2024.

The table below sets forth the commercial real estate loan portfolio, by portfolio industry sector and collateral location as of December 31, 2025.

December 31, 2025

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Retail shopping 134,739 18,442 2,884 1,750 157,815

Restaurants 47,634 12,048 2,237 5,357 67,276

Healthcare 58,535 20,206 890 — 79,631

Consumer services 47,039 14,995 241 2,952 65,227

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Total owner-occupied CRE 665,556 210,389 48,205 80,651 1,004,801

Total CRE loans $ 1,544,824 $ 439,711 $ 177,199 $ 315,697 $ 2,477,431

Total commercial real estate loans $ 1,630,136 $ 412,770 $ 169,239 $ 311,760 $ 2,523,905

Loan Portfolio Maturity Analysis

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December 31, 2025

(Dollars in thousands) One Year

or Less After One

Years After Five

Fifteen Years After Fifteen

(Dollars in thousands) One Year or Less After One Year

Through Five Years After Five Years Through Fifteen Years After Fifteen Years Total

Commercial real estate $ 509,408 $ 1,721,797 $ 292,700 $ — $ 2,523,905

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If a loan is determined by management to be uncollectible, regardless of size, the portion of the loan determined to be uncollectible is then charged to the ALCL.

Purchased loans that have experienced more than insignificant credit deterioration since origination are purchased credit deteriorated (“PCD”) loans.

The Company evaluates acquired loans for deterioration in credit quality based on any of, but not limited to, the following:

(1) nonaccrual status;

(2) borrowers are experiencing financial difficulty which results in modification to the loan terms;

(3) risk ratings of special mention, substandard or doubtful;

(4) watchlist credits;

and (5) delinquency status, including loans that are current on merger/acquisition date, but had previously been 60 days delinquent twice.

An allowance for credit losses is determined using the same methodology as other individually evaluated loans.

Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses.

We held approximately $12.3 million of unpaid principal balance PCD loans at December 31, 2024, and $34.8 million of unpaid principal balance PCD loans at December 31, 2023.

We manage the quality of our lending portfolio in part through a disciplined underwriting policy and through continual monitoring of loan performance and borrowers’ financial condition.

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Ratio of nonperforming assets to total assets

As explained in detail in Part II, Item 8, Note 18 — Commitments and Contingencies under Loss Contingencies, our credit metrics were negatively impacted by certain questioned activity involving a former banker in our East Texas market.

Our investigation of this activity remains ongoing and is not final.

The Company continues to work with a third-party forensic accounting team to confirm the Bank’s identification and reconciliation of the activity, and also to assist in evaluating any additional impact from the questioned activity.

At this time, we believe that any ultimate loss arising from the situation will not be material to our financial position.

As explained in detail in Part I, Note 19 — Commitments and Contingencies under Loss Contingencies, and as discussed in previous filings, our classified and nonperforming LHFI were negatively impacted beginning in the second quarter of 2024 as a result of certain questioned activity involving a former banker in our East Texas market.

We continue to work toward a resolution in this matter.

Nonperforming LHFI increased $6.2 million at December 31, 2025, compared to December 31, 2024, and nonperforming LHFI to LHFI increased to 1.06% compared to 0.99%.

The $44.9 million increase in non-performing loans was primarily driven by one loan relationship totaling $29.0 million impacted by the questioned loan activity mentioned above.

Also contributing to the increase in nonperforming LHFI at December 31, 2024, compared to December 31, 2023, were three residential real estate loan relationships totaling $9.7 million.

The increase in nonperforming loans primarily resulted from seven loan relationships totaling $20.9 million placed on non-performing status during the year ended December 31, 2025, partially offset by reductions totaling $11.0 million through pay-off, pay-down or charge-off activities during the intervening period.

Please see Note 5 — Loans to our consolidated financial statements contained in Part II, Item 8 of this report for more information on nonperforming loans.

The steep incline in the interest rate environment over the last several years driven by the FRB’s federal funds rate setting policy, as outlined in the Results of Operations section above, has negatively impacted borrowers with variable or floating rate loans causing their cost of borrowings to increase significantly since mid-2022.

This has put pressure on borrower’s cash flow and contributed to higher overall nonperforming loans at December 31, 2024, compared to December 31, 2023.

Potential Problem Loans

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The fair value estimates associated with the loans include estimates related to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows.

Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans.

Purchased loans that have experienced more than insignificant credit deterioration since origination are purchased credit deteriorated (“PCD”) loans.

We evaluate acquired loans for deterioration in credit quality based on any of, but not limited to, the following:

(1) nonaccrual status;

(2) borrowers are experiencing financial difficulty which results in modification to the loan terms;

(3) risk ratings of special mention, substandard or doubtful;

(4) watchlist credits;

and (5) delinquency status, including loans that are current on merger/acquisition date, but had previously been 60 days delinquent twice.

We held approximately $5.4 million and $12.3 million of unpaid principal balance PCD loans at December 31, 2025 and December 31, 2024, respectively.

An ALCL is determined using the same methodology as other individually evaluated loans.

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(1) Represents the ratio of each loan type to total LHFI.

Our ALCL decreased by $5.8 million, or 6.0%, to $91.1 million at December 31, 2024, from $96.9 million at December 31, 2023.

Changes in qualitative factors across the Company's risk pools drove a $2.6 million decline in the ALCL, driven primarily by an improved economic outlook, including lower interest rate pressures and stabilizing market conditions.

The allowance for individually evaluated loans contributing another $2.7 million of the decrease for the year ended December 31, 2024, when compared to the year ended December 31, 2023.

The ratio of ALCL to total LHFI decreased to 1.20% at December 31, 2024, compared to 1.26% at December 31, 2023.

The following table presents an analysis of the ALCL and other related data at the periods indicated.

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Commercial real estate 18 530

Construction/land/land development — 3

Residential real estate 60 16

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Average LHFI 0.52 0.18

The ALCL to nonperforming LHFI decreased to 121.41% at December 31, 2024, compared to 321.66% at December 31, 2023, primarily driven by a $44.9 million increase in nonperforming LHFI at December 31, 2024.

Past due loans to total LHFI increased to 0.56% at December 31, 2024, compared to 0.34% at December 31, 2023.

Our ALCL increased by $5.7 million, or 6.3%, to $96.8 million at December 31, 2025, from $91.1 million at December 31, 2024.

The increase consisted of $3.1 million in higher reserves on individually evaluated loans and $2.6 million in the collective reserves based on updated credit data and risks embedded in our portfolio.

The ALCL to nonperforming LHFI decreased to 119.21% at December 31, 2025, compared to 121.41% at December 31, 2024, primarily driven by a $6.2 million increase in nonperforming LHFI as explained in the preceding Nonperforming Assets section, during the year ended December 31, 2025.

Our securities portfolio is the second largest component of earning assets and provides a significant source of revenue.

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For further discussion of the valuation components and classification of investment securities, see Note 1 — Significant Accounting Policies to our consolidated financial statements contained in Part II, Item 8 of this report.

Our securities portfolio totaled $1.12 billion at December 31, 2024, representing a decrease of $151.9 million, or 11.9%, from $1.27 billion at December 31, 2023.

The decrease was primarily due to sales, maturities and calls, as well as normal principal paydowns, which was partially offset by purchases and a decrease in unrealized losses during the year ended December 31, 2024.

During the fourth quarter of 2024, we executed a bond portfolio optimization strategy aimed at enhancing long-term yields and improving overall portfolio performance.

As a result, we replaced securities with a total book value of $188.2 million and a weighted average yield of 1.51% with new securities totaling $173.7 million with a weighted average yield of 5.22%, realizing a loss of $14.6 million.

During the second half of 2023, we sold available for sale investment securities with total book value of $260.8 million and realized total loss of $11.8 million, the proceeds of which were used to pay down FHLB advances and support loan operations.

Our available for sale portfolio totaled $1.10 billion at December 31, 2024, which represented 98.4% of our total security portfolio and is comprised of 53.0% mortgage-backed, 23.2% municipal, 1.3% treasury/agency, 15.4% collateralized mortgage obligations and 7.1% corporate/asset-backed securities.

Our available for sale portfolio totaled $1.25 billion at December 31, 2023, which represented 98.6% of our total security portfolio, and was comprised of 47.8% mortgage-backed, 22.5% municipal, 6.4% treasury/agency, 13.2% collateralized mortgage obligations and 10.1% corporate/asset-backed securities.

Our securities portfolio totaled $1.13 billion at December 31, 2025, representing an increase of $13.8 million, or 1.2%, from $1.12 billion at December 31, 2024.

The increase was primarily due to purchases and a decrease in unrealized losses during the year ended December 31, 2025, which was partially offset by sales, maturities and calls, as well as normal principal paydowns.

During the second quarter of 2025 and the fourth quarter of 2024, we executed bond portfolio optimization strategies aimed at enhancing long-term yields and improving overall portfolio performance.

During the second quarter of 2025, we replaced securities with a total book value of $215.8 million and a weighted average yield of 2.60% with new securities totaling $201.8 million with a weighted average yield of 5.23%, realizing a loss of $14.4 million.

As part of the strategy, we also entered into interest rate swaps designated as fair value hedges on certain purchased securities to reduce potential volatility in their fair values resulting from changes in market interest rates.

During the fourth quarter of 2024, we replaced securities with a total book value of $188.2 million and a weighted average yield of 1.51% with new securities totaling $173.7 million with a weighted average yield of 5.22%, realizing a loss of $14.6 million.

Our available for sale portfolio totaled $1.12 billion at December 31, 2025, which represented 98.5% of our total security portfolio and is comprised of 42.0% mortgage-backed, 26.4% municipal, 26.3% collateralized mortgage obligations, 5.0% corporate and 0.3% treasury/agency securities.

Our available for sale portfolio totaled $1.10 billion at December 31, 2024, which represented 98.4% of our total security portfolio, and was comprised of 53.0% mortgage-backed, 23.2% municipal, 15.4% collateralized mortgage obligations, 7.1% corporate and 1.3% treasury/agency securities.

The securities portfolio had a weighted average effective duration of 4.15 years at December 31, 2025, compared to 4.46 years at December 31, 2024.

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Residential collateralized mortgage obligations 210,884 18.9 140,827 12.8

Asset-backed securities — — 43,005 3.4

Total $ 1,117,176 100.0 % $ 1,102,528 100.0 %

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(1) Tax-exempt security yields are calculated without consideration of their tax benefit status.

(2) Yields are calculated without consideration of the impact of certain interest rate swaps designated as fair value hedges.

The contractual maturity of mortgage-backed securities and collateralized mortgage obligations is not a reliable indicator of their expected life because borrowers have the right to prepay their obligations at any time.

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We elected the fair value option on this security to offset corresponding changes in the fair value of related interest rate swap agreements.

Equity Method Investments

On July 1, 2025, the Company purchased additional shares of the common stock of Argent Financial Group, Inc., increasing its ownership to an amount in excess of 20% of the outstanding shares of common stock.

Because the Company’s ownership position exceeded 20% of outstanding shares of Argent’s common stock, the Company began applying the equity method for this investment.

This purchase was the primary reason our equity method investments increased $48.5 million, or 255.8%, to $67.5 million at December 31, 2025, compared to $19.0 million at December 31, 2024.

The implementation of the equity method of accounting resulted in a change in presentation to the underlying asset from non-marketable equity securities held in other financial institutions to equity method investments.

As a result, non-marketable equity securities held in other financial institutions declined $40.6 million, or 56.6%, to $31.1 million at December 31, 2025, compared to $71.6 million at December 31, 2024.

Deposits are the primary funding source used to fund our loans, investments and operating needs.

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We also obtain deposits from local municipalities and state agencies.

Total deposits remained relatively flat at December 31, 2024, compared to December 31, 2023, with increases of $184.6 million, $157.9 million, and $40.1 million in interest-bearing demand, money market, and savings deposits, respectively, being offset by decreases of $364.8 million and $26.9 million in brokered and time deposits.

Typically, higher market interest rates and sustained inflation will cause customers to move liquid asset balances into higher interest-earning vehicles such as money market funds.

Total deposits increased $84.1 million, or 1.0%, at December 31, 2025, compared to December 31, 2024, with increases of $351.0 million and $79.2 million in money market and noninterest-bearing demand, respectively, offset by decreases of $142.8 million, $111.5 million, $80.2 million and $11.5 million in interest-bearing demand, time deposits, brokered deposits and savings, respectively.

The increase in deposits supported loan growth and redemptions in outstanding subordinated indebtedness during the year, reflecting continued balance sheet optimization.

The following table presents our deposit mix at the dates indicated:

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(1) At December 31, 2024, brokered deposits included brokered time deposits and brokered interest-bearing demand of $80.0 million and $236,000, respectively.

At December 31, 2023, brokered deposits included brokered time deposits of $445.0 million.

We manage our interest expense on deposits through specific deposit product pricing that is based on competitive pricing, economic conditions and current and anticipated funding needs.

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2025 2024 2023

(Dollars in thousands) Average

Balance Interest Expense Average

Rate Paid Average

Balance Interest Expense Average

Rate Paid Average

(Dollars in thousands) Average Balance Interest Expense Average Rate Paid Average Balance Interest Expense Average Rate Paid Average

Balance Interest Expense Average Rate Paid

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(1) Average brokered deposits include average brokered time deposits of $24.9 million, for the year ended December 31, 2025.

Average brokered deposits include average brokered time deposits and average brokered interest-bearing demand of $440.0 million and $69.4 million, respectively, for the year ended December 31, 2024.

Average brokered deposits included average brokered time deposits of $470.0 million and $5.0 million for the years ended December 31, 2023, and 2022, respectively.

Our average deposit balances were $8.50 billion for the year ended December 31, 2024, an increase of $226.1 million, or 2.7%, from $8.27 billion for the year ended December 31, 2023.

Our average deposit balances were $8.28 billion for the year ended December 31, 2025, a decrease of $219.9 million, or 2.6%, from $8.50 billion for the year ended December 31, 2024.

The average rate paid on our interest-bearing deposits for the year ended December 31, 2025, was 3.13%, compared to 3.86% for the year ended December 31, 2024.

The increase in the average cost of our deposits was primarily the result of the rapidly rising interest rate environment experienced since March 2022, when the FRB started a series of eleven federal funds target range rate increases cumulating in a 525-basis point increase to a target range of 5.25% to 5.50%.

More recently, in the third and fourth quarters of 2024, the FRB cut the federal funds target range rate three times by a total of 100 basis points from a 23-year high of 5.25% to 5.50% to 4.25% to 4.50%.

Average noninterest-bearing deposits during the year ended December 31, 2024, were $1.89 billion, compared to $2.15 billion at December 31, 2023, a decrease of $259.1 million, or 12.1%, and represented 22.2% and 26.0% of average total deposits for the year ended December 31, 2024 and 2023, respectively.

Noninterest-bearing deposits have been impacted by the higher interest rate environment, as customers have been moving out of noninterest-bearing deposit balances into higher interest-earning investments, however, this trend has been slowing as rates begin to stabilize.

The following table presents the maturity distribution of our time deposits and the amount of such deposits in excess of the FDIC insurance limit at December 31, 2024.

There were no otherwise uninsured time deposits below the FDIC insurance limit at December 31, 2024.

The estimated total amount of uninsured deposits at December 31, 2024 and 2023, was $3.66 billion and $3.58 billion, respectively.

The decrease in the average cost of our deposits was primarily the result of the recent FRB cuts in the federal funds target rate range beginning in late 2024 and continuing through 2025.

The FRB reduced the federal funds target rate range six times, by a total of 175 basis points from its recent cycle high set in mid-2023 of 5.25% to 5.50% to 3.50% to 3.75%.

Average noninterest-bearing deposits were $1.91 billion for the year ended December 31, 2025, an increase of $18.0 million, or 1.0%, from $1.89 billion for the year ended December 31, 2024, and represented 23.0% and 22.2% of average total deposits for the year ended December 31, 2025 and 2024, respectively.

The amount of deposits in excess of the FDIC insurance limit at December 31, 2025 and 2024 was $3.93 billion and $3.66 billion, respectively, including $860.0 million and $862.9 million in public fund deposits collateralized by pledged assets, respectively.

The following table presents the maturity distribution of our time deposits:

(Dollars in thousands)

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(Dollars in thousands) 2025 2024

Short-term FHLB advances $ — $ 70,000

Long-term FHLB advances $ 5,913 $ 6,198

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Subordinated indebtedness, net $ 16,544 $ 159,943

Short-term FHLB advances decreased $70.0 million, or 100.0%, at December 31, 2024, compared to December 31, 2023.

Due to our increasing liquidity, we paid down our short-term advances during the year ended December 31, 2024.

Our long-term debt consists of advances from the FHLB with original maturities greater than one year and the subordinated indebtedness captioned and described below.

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Additionally, at December 31, 2025 and 2024, we had the ability to borrow $1.25 billion and $1.33 billion from the discount window at the Federal Reserve Bank of Dallas (“FRBD”), with $1.41 billion and $1.57 billion in commercial and industrial loans pledged as collateral, respectively.

There were no borrowings against this line at both December 31, 2024 and 2023.

Holding Company Line of Credit

The Company had a line of credit with a maximum aggregate principal balance of $100 million, consisting of an initial $50.0 million extension of credit and any one or more potential incremental revolving loan amounts up to an aggregate principal of $50.0 million.

Consistent with the terms of the agreement, the Company extended the maturity twice in prior years, and the Loan Agreement was terminated as of the October 27, 2024, expiration date.

The Company had no balance outstanding on this revolving credit loan under the Loan Agreement at December 31, 2023.

There were no borrowings against this line at either December 31, 2025 or 2024.

Subordinated Indebtedness

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After the five-year anniversary of issuance, the Company had the right to redeem the BTH Notes, in part or in full, at the Company’s discretion and, if applicable, subject to receipt of any required regulatory approvals.

Primarily due to the declining Tier 2 capital contribution of the BTH Notes, the Company elected to redeem all but $1.1 million of the BTH Notes during the year ended December 31, 2024.

Primarily due to the declining Tier 2 capital contribution of the BTH Notes, the Company elected to redeem all but $1.1 million of the BTH Notes during the year ended December 31, 2024, and redeemed the remaining balance of $1.1 million during the year ended December 31, 2025.

In February 2020, Origin Bank completed an offering of $70.0 million in aggregate principal amount of 4.25% fixed-to-floating rate subordinated notes due 2030 (the “4.25% Notes”) to certain investors in a transaction exempt from registration under Section 3(a)(2) of the Securities Act of 1933, as amended.

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In October 2020, the Company completed of an offering of $80.0 million in aggregate principal amount of 4.50% fixed-to-floating rate subordinated notes due 2030 (the “4.50% Notes”).

The 4.50% Notes bear a fixed interest rate of 4.50%, payable semi-annually in arrears, to but excluding November 1, 2025.

From and including November 1, 2025, to but excluding the maturity date or earlier redemption date, the 4.50% Notes bear a floating interest rate expected to equal the three-month term Secured Overnight Financing Rate plus 432 basis points, payable quarterly in arrears.

The Company may redeem the 4.50% Notes at any time upon certain specified events or in whole or in part on or after November 1, 2025.

The 4.50% Notes qualify as Tier 2 capital for regulatory capital purposes for the Company and a portion of the proceeds was transferred to Origin Bank during the fourth quarter of 2020, which qualifies as Tier 1 capital for regulatory capital purposes for the Bank.

During the years ended December 31, 2024 and 2023, and with the approval of the Board of Governors of the Federal Reserve System, the Company repurchased $1.0 million and $5.0 million, respectively, of the 4.50% notes.

For information regarding our junior subordinated debentures underlying the issuance of trust preferred securities, please see Note 11 — Borrowings in the notes to our consolidated financial statements contained in Part II, Item 8 of this report.

The 4.50% Notes bore a fixed interest rate of 4.50%, payable semi-annually in arrears, to but excluding November 1, 2025.

From and including November 1, 2025, to but excluding the maturity date or earlier redemption date, the 4.50% Notes bore a floating interest rate expected to equal the three-month term Secured Overnight Financing Rate plus 432 basis points, payable quarterly in arrears.

During the years ended December 31, 2025, 2024 and 2023, and with the approval of the Board of Governors of the Federal Reserve System, the Company redeemed or repurchased $74.0 million, $1.0 million and $5.0 million, respectively, of the 4.50% Notes, leaving no 4.50% Notes outstanding as of December 31, 2025.

For information regarding our junior subordinated indebtedness underlying the issuance of trust preferred securities, please see Note 12 — Borrowings in the notes to our consolidated financial statements contained in Part II, Item 8 of this report.

Liquidity and Capital Resources

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Management continually monitors, forecasts and tests our liquidity and non-core dependency ratios to ensure compliance with targets established by our Asset-Liability Management Committee and approved by our board of directors.

The Company, which is a separate legal entity apart from the Bank, must provide for its own liquidity, including the funding of the payment of any dividends that may be declared for our common stockholders and interest and principal on any outstanding debt or trust preferred securities incurred by the Company.

The Company, which is a separate legal entity apart from the Bank, must provide for its own liquidity, including the funding of the payment of any dividends that may be declared for our common stockholders and interest and principal on any outstanding indebtedness or trust preferred securities incurred by the Company.

The available cash balances as noted in the table below are available for the general corporate purposes described above, as well as providing capital support to the Bank.

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Cash and liquid securities as a percentage of total assets

10.6 % 10.9 %

There are regulatory restrictions on the ability of the Bank to pay dividends under federal and state laws, regulations and policies.

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We may also use the Federal Reserve discount window as a source of short-term funding.

Core deposits, which are total deposits excluding time deposits greater than $250,000 and brokered deposits, are a major source of funds used to meet cash flow needs.

Core deposits, which are total deposits excluding time deposits greater than $250,000, brokered, and Certificate of Deposit Account Registry Service deposits, are a major source of funds used to meet cash flow needs.

Maintaining the ability to acquire these funds as needed in a variety of markets is the key to assuring our liquidity.

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Securities in our investment portfolio are also used to secure certain deposit types, such as deposits from state and local municipalities, and can be pledged as collateral for other borrowing sources.

Other sources available for meeting liquidity needs include long- and short-term advances from the FHLB, and federal funds lines of credit.

Other sources available for meeting liquidity needs include long- and short-term advances from the FHLB, and unsecured federal funds lines of credit.

Long-term funds obtained from the FHLB are primarily used as an alternative source to fund long-term growth of the balance sheet by supporting growth in loans and other long-term interest-earning assets.

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We also had unsecured federal funds lines of credit available to us, with no amounts outstanding at either December 31, 2025 or 2024.

These lines of credit primarily provide short-term liquidity and in order to ensure availability of these funds, we test these lines of credit at least annually.

These lines of credit primarily provide short-term liquidity and, in order to ensure the availability of these funds, we test these lines of credit at least annually.

Interest is charged at the prevailing market rate on federal funds purchased and FHLB advances.

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Dividends declared - common stock ($0.60 per share) (19,049)

Repurchase of common stock (15,806)

Balance at December 31, 2025

Stock Repurchases

In July 2022, the Board of Directors of the Company authorized a stock repurchase program pursuant to which the Company was authorized to purchase up to $50.0 million of its outstanding common stock.

The July 2022 repurchase plan expired in July 2025 with the Company having repurchased a total of 136,399 shares of its common stock at an average price per share of $32.13, for an aggregate purchase price of $4.4 million, including broker commissions and applicable excise taxes.

All the common stock repurchases executed under the July 2022 repurchase plan were completed during the second quarter of 2025.

In July 2025, the Board of Directors of the Company authorized a stock repurchase program pursuant to which the Company may, from time to time, purchase up to $50.0 million of its outstanding common stock.

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The stock repurchase program does not obligate the Company to purchase any shares at any time.

There were no stock repurchases during the year ended December 31, 2024 or 2023.

During the second half of 2025, the Company repurchased a total of 314,606 shares of its common stock pursuant to its July 2025 stock repurchase program at an average price per share of $36.31, for an aggregate purchase price of $11.4 million, including broker commissions and applicable excise taxes.

For the year ended December 31, 2025, stock repurchases totaled 451,005 shares of common stock at an average price per share of $35.05, for an aggregate purchase price of $15.8 million, including broker commissions and applicable excise taxes.

There were no stock repurchases during the year ended December 31, 2024.

The Inflation Reduction Act of 2022 signed into law during in August 2022 includes a provision for an excise tax equal to 1% of the fair market value of any stock repurchased by covered corporations during a taxable year, subject to certain limits and provisions.

The excise tax is effective beginning in 2023.

There was no impact to our financial condition or result of operations as a result of this tax.

The excise tax became effective in 2023.

During the year ended December 31, 2025, the Company incurred $91,000 of excise tax related to share repurchases, which was recorded as a cost of the repurchase and reflected as a reduction to retained earnings.

There was no impact to our financial condition or result of operations as a result of this tax in 2024.

Regulatory Capital Requirements

26 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis