SEACOAST BANKING CORP OF FLORIDA 10-Q

Item 1. Financial Statements SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, (In thousands, except per share data) 2025 2024 Interest and fees on loans $ 150,640 $ 147,095 Interest and dividends on securities 29,415 22,427 Interest on interest bearing deposits and other investments 4,200 6,184 Total Interest Income 184,255 175,706 Interest on deposits 43,626 47,534 Interest on time certificates 14,973 17,121 Interest on borrowed money 7,139 5,973 Total Interest Expense 65,738 70,628 Net Interest Income 118,517 105,078 Provision for credit losses 9,250 1,368 Net Interest Income after Provision for Credit Losses 109,267 103,710 Noninterest income: Service charges on deposit accounts 5,180 4,960 Interchange income 1,807 1,888 Wealth management income 4,248 3,540 Mortgage banking fees 404 381 Insurance agency income 1,620 1,291 BOLI income 2,468 2,264 Other 6,257 5,944 21,984 20,268 Securities gains, net 196 229 Total Noninterest Income 22,180 20,497 Noninterest expense: Salaries and wages 42,248 40,304 Employee benefits 8,861 7,889 Outsourced data processing costs 8,504 12,118 Occupancy 7,350 8,037 Furniture and equipment 2,128 2,011 Marketing 2,748 2,655 Legal and professional fees 2,740 2,151 FDIC assessments 2,194 2,158 Amortization of intangibles 5,309 6,292 OREO expense and net loss (gain) on sale 241 ( 26 ) Provision for credit losses on unfunded commitments 150 250 Merger-related charges 1,051 — Other 7,073 6,532 Total Noninterest Expense 90,597 90,371 Income Before Income Taxes 40,850 33,836 4 Table of Contents Income tax expense 9,386 7,830 Net Income $ 31,464 $ 26,006 Net income per share of common stock Diluted $ 0.37 $ 0.31 Basic 0.37 0.31 Average common shares outstanding Diluted 85,388 85,270 Basic 84,648 84,908 See notes to unaudited consolidated financial statements. 5 Table of Contents SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In thousands) Three Months Ended March 31, 2025 2024 Net Income $ 31,464 $ 26,006 Other comprehensive income (loss): Unrealized gains (losses) on available-for-sale securities, net of tax expense of $ 8.6 million for the three months ended March 31, 2025, and net of tax benefit of $ 1.6 million for the three months ended March 31, 2024 27,428 ( 7,916 ) Amortization of unrealized gains on securities transferred to held-to-maturity, net of tax benefit of $ 3 thousand for each of the three months ended March 31, 2025 and 2024 ( 11 ) ( 11 ) Reclassification adjustment for losses included in net income, and net of tax benefit of $ 1.0 million for the three months ended March 31, 2024 — 2,806 Unrealized (losses) gains on derivatives designated as fair value hedges, net of reclassifications to income, net of tax benefit of $ 0.1 million for the three months ended March 31, 2025, and net of tax expense of $ 0.4 million for the three months ended March 31, 2024 ( 270 ) 1,043 Total other comprehensive income (loss) $ 27,147 $ ( 4,078 ) Comprehensive Income $ 58,611 $ 21,928 See notes to unaudited consolidated financial statements. 6 Table of Contents SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, (In thousands, except share data) 2025 2024 Assets Cash and due from banks $ 191,467 $ 171,615 Interest bearing deposits with other banks 309,105 304,992 Total cash and cash equivalents 500,572 476,607 Time deposits with other banks 1,494 3,215 Debt securities: Securities available-for-sale (at fair value) 2,627,959 2,226,543 Securities held-to-maturity (fair value $ 509.8 million at March 31, 2025 and $ 507.6 million at December 31, 2024) 624,650 635,186 Total debt securities 3,252,609 2,861,729 Loans held for sale 16,016 17,277 Loans 10,443,021 10,299,950 Allowance for credit losses ( 140,267 ) ( 138,055 ) Loans, net of allowance for credit losses 10,302,754 10,161,895 Bank premises and equipment, net 108,478 107,555 OREO 7,176 6,421 Goodwill 732,417 732,417 Other intangible assets, net 66,372 71,723 Bank owned life insurance 311,453 308,995 Net deferred tax assets 93,595 102,989 Other assets 339,549 325,485 Total Assets $ 15,732,485 $ 15,176,308 Liabilities Deposits $ 12,574,796 $ 12,242,427 Securities sold under agreements to repurchase 201,128 232,071 FHLB borrowings 465,000 245,000 Long-term debt, net 107,132 106,966 Other liabilities 154,689 166,601 Total Liabilities 13,502,745 12,993,065 Shareholders’ Equity Common stock, par value $ 0.10 per share, authorized 120,000,000 shares, issued 86,333,738 and outstanding 85,618,257 at March 31, 2025, and authorized 120,000,000 , issued 86,284,017 and outstanding 85,567,712 shares at December 31, 2024 8,633 8,628 Additional paid-in capital 1,828,234 1,824,935 Retained earnings 542,665 526,642 Treasury stock ( 19,072 ) ( 19,095 ) 2,360,460 2,341,110 Accumulated other comprehensive loss, net ( 130,720 ) ( 157,867 ) Total Shareholders’ Equity 2,229,740 2,183,243 Total Liabilities and Shareholders’ Equity $ 15,732,485 $ 15,176,308 See notes to unaudited consolidated financial statements. 7 Table of Contents SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, (In thousands) 2025 2024 Cash Flows from Operating Activities Net income $ 31,464 $ 26,006 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 2,205 2,110 Accretion of discounts on securities, net ( 807 ) ( 634 ) Amortization of operating lease ROUAs 2,234 2,044 Other amortization and accretion, net 1,983 232 Stock-based compensation 3,038 2,217 Origination of loans designated for sale ( 15,964 ) ( 31,264 ) Sale of loans designated for sale 18,778 27,199 Provision for credit losses 9,250 1,368 Deferred income taxes 857 4,299 Gains on securities ( 196 ) ( 229 ) Gains on sale of loans ( 1,992 ) ( 934 ) Losses (gains) on sale and write-downs of OREO 134 ( 26 ) Losses on disposition of fixed assets and write-downs upon transfer of bank premises to OREO 86 286 Changes in operating assets and liabilities, net of effects from acquired companies: Net (increase) decrease in other assets ( 8,048 ) 3,127 Net decrease in other liabilities ( 12,016 ) ( 11,129 ) Net cash provided by operating activities $ 31,006 $ 24,672 Cash Flows from Investing Activities Maturities and repayments of debt securities AFS 121,302 50,888 Maturities and repayments of debt securities HTM 10,575 10,441 Proceeds from sale of debt securities AFS — 86,829 Purchases of debt securities AFS ( 485,904 ) ( 260,992 ) Maturities and redemptions of time deposits with other banks 1,721 989 Purchases of time deposits with other banks — ( 2,988 ) Net new loans and principal repayments ( 161,430 ) 87,371 Proceeds from the sale of loans held for investment 14,532 — Proceeds from sale of OREO 97 1,243 Proceeds from sale of FHLB and Federal Reserve Bank stock 9,026 2,483 Purchase of FHLB and Federal Reserve Bank stock ( 20,020 ) ( 5,320 ) Proceeds from sale of Visa Class B shares — 4,104 Additions to bank premises and equipment ( 3,214 ) ( 762 ) Net cash used in investing activities $ ( 513,315 ) $ ( 25,714 ) See notes to unaudited consolidated financial statements. 8 Table of Contents SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, (In thousands) 2025 2024 Cash Flows from Financing Activities Net increase in deposits $ 332,369 $ 238,906 Net decrease in repurchase agreements ( 30,943 ) ( 47,841 ) Repayments of FHLB borrowings with original maturities of more than three months ( 190,000 ) ( 50,000 ) Proceeds from FHLB borrowings with original maturities of more than three months 410,000 110,000 Stock-based employee benefit plans 289 813 Dividends paid ( 15,441 ) ( 15,294 ) Net cash provided by financing activities $ 506,274 $ 236,584 Net increase in cash and cash equivalents 23,965 235,542 Cash and cash equivalents at beginning of period 476,607 447,182 Cash and cash equivalents at end of period $ 500,572 $ 682,724 Supplemental disclosure of cash flow information: Cash paid for interest $ 68,270 $ 70,378 Cash paid for taxes — — Recognition of operating lease ROUAs, other than through bank acquisitions, net of terminations 7,866 — Recognition of operating lease liabilities, other than through bank acquisitions, net of terminations 7,866 — Supplemental disclosure of non-cash investing activities: Transfers from loans to OREO 986 89 Transfers from bank premises to OREO — 883 See notes to unaudited consolidated financial statements. 9 Table of Contents SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’ EQUITY (Unaudited) Common Stock Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) (In thousands) Shares Amount Total Balance at December 31, 2024 85,568 $ 8,628 $ 1,824,935 $ 526,642 $ ( 19,095 ) $ ( 157,867 ) $ 2,183,243 Comprehensive income — — — 31,464 — 27,147 58,611 Stock-based compensation expense — — 3,038 — — — 3,038 Common stock transactions related to stock-based employee benefit plans 50 5 261 — 23 — 289 Dividends on common stock ($ 0.18 per share) — — — ( 15,441 ) — — ( 15,441 ) Three months ended March 31, 2025 50 5 3,299 16,023 23 27,147 46,497 Balance at March 31, 2025 85,618 $ 8,633 $ 1,828,234 $ 542,665 $ ( 19,072 ) $ ( 130,720 ) $ 2,229,740 Common Stock Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Income (Loss) (In thousands) Shares Amount Total Balance at December 31, 2023 84,861 $ 8,486 $ 1,808,883 $ 467,305 $ ( 16,710 ) $ ( 159,878 ) $ 2,108,086 Comprehensive income (loss) — — — 26,006 — ( 4,078 ) 21,928 Stock-based compensation expense — — 2,217 — — — 2,217 Common stock transactions related to stock-based employee benefit plans 74 8 841 — ( 36 ) — 813 Dividends on common stock ($ 0.18 per share) — — — ( 15,294 ) — — ( 15,294 ) Three months ended March 31, 2024 74 8 3,058 10,712 ( 36 ) ( 4,078 ) 9,664 Balance at March 31, 2024 84,935 $ 8,494 $ 1,811,941 $ 478,017 $ ( 16,746 ) $ ( 163,956 ) $ 2,117,750 10 Table of Contents SEACOAST BANKING CORPORATION OF FLORIDA AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1 – Basis of Presentation Basis of Presentation: The accompanying unaudited consolidated financial statements of Seacoast Banking Corporation of Florida and its subsidiaries (the “Company”) have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Certain prior period amounts have been reclassified to conform to the current period presentation. Operating results for the three months ended March 31, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025, or any other period. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Use of Estimates: The preparation of these consolidated financial statements requires management to make judgments in the application of certain accounting policies that involve significant estimates and assumptions. The Company has established policies and control procedures that are intended to ensure valuation methods are well-controlled and applied consistently from period to period. These estimates and assumptions, which may materially affect the reported amounts of certain assets, liabilities, revenues, and expenses, are based on information available as of the date of the financial statements, and changes in this information over time and the use of revised estimates and assumptions could materially affect amounts reported in subsequent financial statements. Specific areas, among others, requiring the application of management’s estimates include the determination of the allowance for credit losses, acquisition accounting and purchased loans, intangible assets and impairment testing, and other fair value measurements. Issued Accounting Standards In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures . ASU 2023-09 requires disclosure of specific categories in the income tax rate reconciliation and requires additional information for reconciling items that meet a quantitative threshold. The standard requires an annual disclosure of income taxes paid, net of refunds received, disaggregated by federal, state and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. The standard is effective for fiscal years beginning after December 15, 2024. The Company does not expect the adoption of the standard to have a material impact on its disclosures. In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures . ASU 2024-03 requires disclosure to disaggregate prescribed expenses within relevant income statement captions. The standard is effective for fiscal years beginning after December 15, 2026 and for interim periods after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the changes to its existing disclosures. 11 Table of Contents Note 2 – Earnings per Share Basic earnings per common share are computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted EPS are based on the weighted-average number of common shares outstanding during each period, plus common share equivalents, calculated for share-based awards outstanding using the treasury stock method. For the three months ended March 31, 2025, 327,620 options to purchase shares of the Company’s common stock were anti-dilutive. For the three months ended March 31, 2024, 327,006 options to purchase shares of the Company’s common stock were anti-dilutive. Three Months Ended March 31, (Dollars in thousands, except per share data) 2025 2024 Basic earnings per share Net income $ 31,464 $ 26,006 Average common shares outstanding 84,648 84,908 Net income per share $ 0.37 $ 0.31 Diluted earnings per share Net income $ 31,464 $ 26,006 Average common shares outstanding 84,648 84,908 Add: Dilutive effect of restricted stock and stock options 740 362 Average diluted shares outstanding 85,388 85,270 Net income per share $ 0.37 $ 0.31 12 Table of Contents Note 3 – Securities The amortized cost, gross unrealized gains and losses and fair value of AFS and HTM securities at March 31, 2025 and December 31, 2024 are summarized as follows: March 31, 2025 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-Sale Debt Securities U.S. Treasury securities and obligations of U.S. government agencies $ 26,631 $ 214 $ ( 422 ) $ 26,423 Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 2,119,865 8,158 ( 165,805 ) 1,962,218 Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 249,246 2,500 ( 8,110 ) 243,636 Private mortgage-backed securities and collateralized mortgage obligations 124,038 210 ( 7,041 ) 117,207 Collateralized loan obligations 265,450 568 ( 639 ) 265,379 Obligations of state and political subdivisions 7,140 — ( 1,512 ) 5,628 Other debt securities 7,389 79 — 7,468 Totals $ 2,799,759 $ 11,729 $ ( 183,529 ) $ 2,627,959 Held-to-Maturity Debt Securities Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities $ 536,529 $ — $ ( 106,635 ) $ 429,894 Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 88,121 — ( 8,264 ) 79,857 Totals $ 624,650 $ — $ ( 114,899 ) $ 509,751 December 31, 2024 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Available-for-Sale Debt Securities U.S. Treasury securities and obligations of U.S. government agencies $ 28,233 $ 29 $ ( 522 ) $ 27,740 Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 1,777,274 1,237 ( 190,536 ) 1,587,975 Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 206,537 1,195 ( 10,283 ) 197,449 Private mortgage-backed securities and collateralized mortgage obligations 129,475 149 ( 8,382 ) 121,242 Collateralized loan obligations 278,342 788 ( 166 ) 278,964 Obligations of state and political subdivisions 7,139 — ( 1,449 ) 5,690 Other debt securities 7,389 94 — 7,483 Totals $ 2,434,389 $ 3,492 $ ( 211,338 ) $ 2,226,543 Held-to-Maturity Debt Securities Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities $ 546,444 $ — $ ( 117,620 ) $ 428,824 Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 88,742 — ( 9,972 ) 78,770 Totals $ 635,186 $ — $ ( 127,592 ) $ 507,594 During the three months ended March 31, 2025, there were no sales of securities. During the three months ended March 31, 2024, debt securities with a fair value of $ 86.8 million were sold, with gross losses of $ 3.8 million. Included in “Securities 13 Table of Contents gains (losses), net” are increases of $ 0.2 million for the three months ended March 31, 2025, and decreases of $ 0.1 million, for the three months ended March 31, 2024 in the value of investments in mutual funds that invest in CRA-qualified debt securities. At March 31, 2025, debt securities with a fair value of $ 1.4 billion were pledged primarily as collateral for public deposits and secured borrowings. The amortized cost and fair value of securities HTM and AFS as of March 31, 2025, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because prepayments of the underlying collateral for these securities may occur, due to the right to call or repay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. Held-to-Maturity Available-for-Sale (In thousands) Amortized Cost Fair Value Amortized Cost Fair Value Due in less than one year $ — $ — $ 100 $ 97 Due after one year through five years — — 6,586 6,595 Due after five years through ten years — — 9,697 9,796 Due after ten years — — 17,388 15,563 — — 33,771 32,051 Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 536,529 429,894 2,119,865 1,962,218 Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 88,121 79,857 249,246 243,636 Private mortgage-backed securities and collateralized mortgage obligations — — 124,038 117,207 Collateralized loan obligations — — 265,450 265,379 Other debt securities — — 7,389 7,468 Totals $ 624,650 $ 509,751 $ 2,799,759 $ 2,627,959 The estimated fair value of a security is determined based on market quotations when available or, if not available, by using quoted market prices for similar securities, pricing models, or discounted cash flow analyses, or using observable market data. The tables below indicate the fair value of AFS debt securities with unrealized losses for which no allowance for credit losses has been recorded. March 31, 2025 Less Than 12 Months 12 Months or Longer Total 1 (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities and obligations of U.S. government agencies $ 11,817 $ ( 97 ) $ 5,404 $ ( 325 ) $ 17,221 $ ( 422 ) Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 546,593 ( 35,096 ) 607,377 ( 130,709 ) 1,153,970 ( 165,805 ) Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 29,937 ( 865 ) 68,150 ( 7,245 ) 98,087 ( 8,110 ) Private mortgage-backed securities and collateralized mortgage obligations 304 ( 6 ) 97,986 ( 7,035 ) 98,290 ( 7,041 ) Collateralized loan obligations 91,511 ( 450 ) 30,396 ( 189 ) 121,907 ( 639 ) Obligations of state and political subdivisions 330 ( 5 ) 5,298 ( 1,507 ) 5,628 ( 1,512 ) Totals $ 680,492 $ ( 36,519 ) $ 814,611 $ ( 147,010 ) $ 1,495,103 $ ( 183,529 ) 1 Comprised of 350 individual securities. 14 Table of Contents December 31, 2024 Less Than 12 Months 12 Months or Longer Total 1 (In thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses U.S. Treasury securities and obligations of U.S. government agencies $ 4,825 $ ( 13 ) $ 18,060 $ ( 509 ) $ 22,885 $ ( 522 ) Residential mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 648,967 ( 7,578 ) 739,363 ( 182,958 ) 1,388,330 ( 190,536 ) Commercial mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities 13,200 ( 222 ) 107,041 ( 10,061 ) 120,241 ( 10,283 ) Private mortgage-backed securities and collateralized mortgage obligations 7,178 ( 16 ) 101,242 ( 8,366 ) 108,420 ( 8,382 ) Collateralized loan obligations 43,410 ( 152 ) 7,596 ( 14 ) 51,006 ( 166 ) Obligations of state and political subdivisions 319 ( 15 ) 5,371 ( 1,434 ) 5,690 ( 1,449 ) Totals $ 717,899 $ ( 7,996 ) $ 978,673 $ ( 203,342 ) $ 1,696,572 $ ( 211,338 ) 1 Comprised of 377 individual securities. At March 31, 2025, the Company had unrealized losses of $ 0.4 million on U.S. Treasury securities and obligations of U.S. government agencies having a fair value of $ 17.2 million. These securities are either explicitly or implicitly guaranteed by the full faith and credit of the U.S. government. The Company does not expect individual securities issued by the U.S. Treasury, a U.S. agency, or a sponsored U.S. agency to incur future losses of principal. Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. Therefore, at March 31, 2025, no allowance for credit losses has been recorded. At March 31, 2025, the Company had unrealized losses of $ 173.9 million on commercial and residential mortgage-backed securities and collateralized mortgage obligations issued by government-sponsored entities having a fair value of $ 1.3 billion. These securities are either explicitly or implicitly guaranteed by the U.S. government and have a long history of no credit losses. The implied government guarantee of principal and interest payments and the high credit rating of the portfolio provide a sufficient basis for the current expectation that there is no risk of loss if default were to occur. Based on the assessment of all relevant factors, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. Therefore, at March 31, 2025, no allowance for credit losses has been recorded. At March 31, 2025, the Company had $ 7.0 million of unrealized losses on private label residential and commercial mortgage-backed securities and collateralized mortgage obligations having a fair value of $ 98.3 million. The securities have weighted- average credit support of 22 %. Based on the evaluation of available information relevant to collectibility, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. Therefore, at March 31, 2025, no allowance for credit losses has been recorded. At March 31, 2025, the Company had $ 0.6 million of unrealized losses in floating rate CLOs having a fair value of $ 121.9 million. CLOs are special purpose vehicles and those in which the Company has invested are nearly all first-lien, broadly syndicated corporate loans across a diversified band of industries while providing support to senior tranche investors. As of March 31, 2025, all positions held by the Company are in AAA and AA tranches, with weighted-average credit support of 36 % and 28 %, respectively. The Company evaluates the securities for potential credit losses by modeling expected loan-level defaults, recoveries, and prepayments for each CLO security. Based on the evaluation of available information relevant to collectibility, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. Therefore, at March 31, 2025, no allowance for credit losses has been recorded. 15 Table of Contents At March 31, 2025, the Company had $ 1.5 million of unrealized losses on municipal securities having a fair value of $ 5.6 million. These securities are highly rated issuances of state or local municipalities, all of which are continuing to make timely contractual payments. Based on the evaluation of available information relevant to collectibility, the Company believes that the unrealized loss positions on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality, and expects to recover the entire amortized cost basis of these securities. As a result, as of March 31, 2025, no allowance for credit losses has been recorded. All HTM debt securities are issued by government-sponsored entities, which are either explicitly or implicitly guaranteed by the U.S. government and have a long history of no credit losses. The implied government guarantee of principal and interest payments, and the high credit rating of the HTM portfolio provide sufficient basis for the current expectation that there is no risk of loss if a default were to occur. As a result, as of March 31, 2025, no allowance for credit losses has been recorded. The Company has the intent and ability to hold these securities until maturity. Included in Other Assets at March 31, 2025 and December 31, 2024 is $ 88.3 million and $ 77.3 million, respectively, of FHLB and FRB stock stated at par value. The Company has not identified events or changes in circumstances which may have a significant adverse effect on the fair value of these cost method investment securities. Accrued interest receivable on AFS and HTM debt securities of $ 10.4 million and $ 1.0 million, respectively, at March 31, 2025, and $ 9.2 million and $ 1.0 million, respectively, at December 31, 2024, is included in Other Assets. Also included in Other Assets are investments in CRA-qualified mutual funds carried at fair value of $ 13.7 million and $ 13.5 million at March 31, 2025 and December 31, 2024, respectively. 16 Table of Contents Note 4 – Loans Loans held for investment are categorized into the following segments: • Construction and land development: Loans are extended to both commercial and consumer customers which are collateralized by and for the purpose of funding land development and construction projects, including commercial, 1-4 family residential, multi-family, and non-farm residential properties where the primary source of repayment is from proceeds of the sale, refinancing or permanent financing of the property. • Commercial real estate - owner occupied: Loans are extended to commercial customers for the purpose of acquiring or refinancing real estate to be occupied by the borrower’s business. These loans are collateralized by the subject property and the repayment of these loans is largely dependent on the performance of the company occupying the property. • Commercial real estate - non-owner occupied: Loans are extended to commercial customers for the purpose of acquiring or refinancing commercial property where occupancy by the borrower is not their primary intent. These loans are viewed primarily as cash flow loans, collateralized by the subject property, and the repayment of these loans is largely dependent on rental income from third parties or from the sale of the property. • Residential real estate: Loans are extended to consumer customers and collateralized primarily by 1-4 family residential properties and include fixed and variable rate mortgages, home equity mortgages, and home equity lines of credit. Loans are primarily written based on conventional loan agency guidelines, including loans that exceed agency value limitations. Sources of repayment are largely dependent on the occupant of the residential property. • Commercial and financial: Loans are extended to commercial customers. The purpose of the loans can be working capital, physical asset expansion, asset acquisition, or other business purposes. Loans may be collateralized by assets owned by the borrower or the borrower’s business. Commercial loans are based primarily on the historical and projected cash flow of the borrower’s business and secondarily on the capacity of credit enhancements, guarantees, and underlying collateral provided by the borrower. • Consumer: Loans are extended to consumer customers. The segment includes both installment loans and lines of credit which may be collateralized or non-collateralized. 17 Table of Contents The following tables present net loan balances by segment for portfolio loans, PCD and loans purchased which are not considered credit deteriorated (“Non-PCD”) as of: March 31, 2025 (In thousands) Portfolio Loans Acquired Non-PCD Loans PCD Loans Total Construction and land development $ 559,883 $ 58,076 $ 534 $ 618,493 Commercial real estate - owner occupied 1,222,670 461,936 28,973 1,713,579 Commercial real estate - non-owner occupied 2,329,640 1,091,992 91,768 3,513,400 Residential real estate 1,934,625 704,205 14,182 2,653,012 Commercial and financial 1,551,312 181,145 20,633 1,753,090 Consumer 154,402 36,846 199 191,447 Totals $ 7,752,532 $ 2,534,200 $ 156,289 $ 10,443,021 December 31, 2024 (In thousands) Portfolio Loans Acquired Non-PCD Loans PCD Loans Total Construction and land development $ 568,148 $ 79,370 $ 535 $ 648,053 Commercial real estate - owner occupied 1,177,538 477,459 31,632 1,686,629 Commercial real estate - non-owner occupied 2,243,056 1,156,849 103,903 3,503,808 Residential real estate 1,882,955 719,589 14,241 2,616,785 Commercial and financial 1,424,689 199,146 27,519 1,651,354 Consumer 155,786 37,282 253 193,321 Totals $ 7,452,172 $ 2,669,695 $ 178,083 $ 10,299,950 The amortized cost basis of loans included net deferred costs of $ 47.0 million at March 31, 2025 and $ 43.9 million at December 31, 2024. At March 31, 2025, the remaining fair value adjustments on acquired loans were $ 119.5 million, or 4.3 % of the outstanding acquired loan balances, compared to $ 128.1 million, or 4.3 % of the acquired loan balances at December 31, 2024. The discount is accreted into interest income over the remaining lives of the related loans on a level yield basis. Accrued interest receivable is included within Other Assets and was $ 39.0 million and $ 38.1 million at March 31, 2025 and December 31, 2024, respectively. 18 Table of Contents The following tables present the status of net loan balances as of March 31, 2025 and December 31, 2024. March 31, 2025 (In thousands) Current Accruing 30-59 Days Past Due Accruing 60-89 Days Past Due Accruing Greater Than 90 Days Nonaccrual Total Portfolio Loans Construction and land development $ 557,384 $ 2,396 $ — $ — $ 103 $ 559,883 Commercial real estate - owner occupied 1,214,804 5,723 — — 2,143 1,222,670 Commercial real estate - non-owner occupied 2,316,118 594 — — 12,928 2,329,640 Residential real estate 1,923,523 3,135 722 — 7,245 1,934,625 Commercial and financial 1,539,318 1,088 167 — 10,739 1,551,312 Consumer 153,068 617 — — 717 154,402 Total Portfolio Loans $ 7,704,215 $ 13,553 $ 889 $ — $ 33,875 $ 7,752,532 Acquired Non-PCD Loans Construction and land development $ 57,295 $ 168 $ 30 $ 64 $ 519 $ 58,076 Commercial real estate - owner occupied 457,542 702 — — 3,692 461,936 Commercial real estate - non-owner occupied 1,089,164 63 — — 2,765 1,091,992 Residential real estate 693,088 892 129 — 10,096 704,205 Commercial and financial 177,773 — — — 3,372 181,145 Consumer 33,510 6 — — 3,330 36,846 Total Acquired Non-PCD Loans $ 2,508,372 $ 1,831 $ 159 $ 64 $ 23,774 $ 2,534,200 PCD Loans Construction and land development $ 42 $ — $ — $ — $ 492 $ 534 Commercial real estate - owner occupied 27,188 — — — 1,785 28,973 Commercial real estate - non-owner occupied 84,579 525 — — 6,664 91,768 Residential real estate 13,319 — 167 — 696 14,182 Commercial and financial 16,926 — — — 3,707 20,633 Consumer 174 — — — 25 199 Total PCD Loans $ 142,228 $ 525 $ 167 $ — $ 13,369 $ 156,289 Total Loans $ 10,354,815 $ 15,909 $ 1,215 $ 64 $ 71,018 $ 10,443,021 19 Table of Contents December 31, 2024 (In thousands) Current Accruing 30-59 Days Past Due Accruing 60-89 Days Past Due Accruing Greater Than 90 Days Nonaccrual Total Portfolio Loans Construction and land development $ 567,896 $ 127 $ — $ — $ 125 $ 568,148 Commercial real estate - owner occupied 1,172,287 3,083 — — 2,168 1,177,538 Commercial real estate - non-owner occupied 2,225,216 833 — — 17,007 2,243,056 Residential real estate 1,866,295 5,466 450 — 10,744 1,882,955 Commercial and financial 1,411,623 1,075 106 — 11,885 1,424,689 Consumer 152,129 331 5 — 3,321 155,786 Total Portfolio Loans $ 7,395,446 $ 10,915 $ 561 $ — $ 45,250 $ 7,452,172 Acquired Non-PCD Loans Construction and land development $ 78,728 $ 8 $ 99 $ — $ 535 $ 79,370 Commercial real estate - owner occupied 473,118 2,414 — — 1,927 477,459 Commercial real estate - non-owner occupied 1,151,541 148 — — 5,160 1,156,849 Residential real estate 706,566 1,064 131 — 11,828 719,589 Commercial and financial 195,853 — — 35 3,258 199,146 Consumer 32,375 11 1 — 4,895 37,282 Total Acquired Non-PCD Loans $ 2,638,181 $ 3,645 $ 231 $ 35 $ 27,603 $ 2,669,695 PCD Loans Construction and land development $ 43 $ — $ — $ — $ 492 $ 535 Commercial real estate - owner occupied 26,987 — — — 4,645 31,632 Commercial real estate - non-owner occupied 96,188 — — — 7,715 103,903 Residential real estate 12,752 — — 167 1,322 14,241 Commercial and financial 22,153 — — — 5,366 27,519 Consumer 200 — — — 53 253 Total PCD Loans $ 158,323 $ — $ — $ 167 $ 19,593 $ 178,083 Total Loans $ 10,191,950 $ 14,560 $ 792 $ 202 $ 92,446 $ 10,299,950 All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest subsequently received on such loans is accounted for under the cost-recovery method, whereby interest income is not recognized until the loan balance is paid down to zero. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, and future payments are reasonably assured. The Company recognized interest income of $ 0.7 million and $ 0.2 million on nonaccrual loans during the three months ended March 31, 2025 and March 31, 2024, respectively. 20 Table of Contents The following tables present net balances of loans on nonaccrual status as of: March 31, 2025 (In thousands) Nonaccrual Loans With No Related Allowance Nonaccrual Loans With an Allowance Total Nonaccrual Loans Construction and land development $ 492 $ 622 $ 1,114 Commercial real estate - owner occupied — 7,620 7,620 Commercial real estate - non-owner occupied 21,426 931 22,357 Residential real estate 5,570 12,467 18,037 Commercial and financial 2,713 15,105 17,818 Consumer — 4,072 4,072 Totals $ 30,201 $ 40,817 $ 71,018 December 31, 2024 (In thousands) Nonaccrual Loans With No Related Allowance Nonaccrual Loans With an Allowance Total Nonaccrual Loans Construction and land development $ 492 $ 660 $ 1,152 Commercial real estate - owner occupied 2,622 6,118 8,740 Commercial real estate - non-owner occupied 29,449 433 29,882 Residential real estate 6,462 17,432 23,894 Commercial and financial 2,703 17,806 20,509 Consumer 2,416 5,853 8,269 Totals $ 44,144 $ 48,302 $ 92,446 Loans by Risk Rating The Company utilizes an internal asset classification system as a means of identifying problem and potential problem loans. The following classifications are used to categorize loans under the internal classification system: • Pass: Loans that are not problem loans or potential problem loans are considered to be pass-rated. • Special Mention: Loans that do not currently expose the Company to sufficient risk to warrant classification in the Substandard or Doubtful categories, but possess weaknesses that deserve management’s close attention are deemed to be Special Mention. • Substandard: Loans with the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. • Doubtful: Loans that have all the weaknesses inherent in those classified Substandard with the added characteristic that the weakness present makes collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. 21 Table of Contents The following tables present the risk rating of loans and year-to-date 1 gross charge offs by year of origination as of: March 31, 2025 (In thousands) 2025 2024 2023 2022 2021 Prior Revolving Total Construction and Land Development Risk Ratings: Pass $ 7,367 $ 143,531 $ 165,481 $ 96,279 $ 39,060 $ 45,935 $ 112,792 $ 610,445 Special Mention — — 6,212 — — 658 — 6,870 Substandard — — — 154 87 937 — 1,178 Doubtful — — — — — — — — Total $ 7,367 $ 143,531 $ 171,693 $ 96,433 $ 39,147 $ 47,530 $ 112,792 $ 618,493 Gross Charge Offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate - owner occupied Risk Ratings: Pass $ 51,751 $ 182,890 $ 142,750 $ 256,132 $ 250,906 $ 752,667 $ 17,004 $ 1,654,100 Special Mention — — 12,696 82 751 19,030 — 32,559 Substandard — 87 1,055 5,727 374 19,276 401 26,920 Doubtful — — — — — — — — Total $ 51,751 $ 182,977 $ 156,501 $ 261,941 $ 252,031 $ 790,973 $ 17,405 $ 1,713,579 Gross Charge Offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate - non-owner occupied Risk Ratings: Pass $ 63,479 $ 493,178 $ 212,315 $ 845,590 $ 563,482 $ 1,203,624 $ 20,077 $ 3,401,745 Special Mention — 26 2,957 616 7,234 18,214 — 29,047 Substandard — — — 29,546 17,847 35,004 — 82,397 Doubtful — — — — 211 — — 211 Total $ 63,479 $ 493,204 $ 215,272 $ 875,752 $ 588,774 $ 1,256,842 $ 20,077 $ 3,513,400 Gross Charge Offs $ — $ — $ — $ — $ — $ 320 $ — $ 320 Residential real estate Risk Ratings: Pass $ 48,840 $ 178,525 $ 171,920 $ 492,408 $ 621,781 $ 584,241 $ 533,777 $ 2,631,492 Special Mention — — 17 — 704 296 1,904 2,921 Substandard — 636 1,224 4,999 1,397 4,196 6,147 18,599 Doubtful — — — — — — — — Total $ 48,840 $ 179,161 $ 173,161 $ 497,407 $ 623,882 $ 588,733 $ 541,828 $ 2,653,012 Gross Charge Offs $ — $ — $ — $ — $ — $ 1 $ — $ 1 Commercial and financial Risk Ratings: Pass $ 161,208 $ 373,240 $ 160,168 $ 237,004 $ 213,537 $ 175,905 $ 385,449 $ 1,706,511 Special Mention — — 797 952 7,257 1,867 4,268 15,141 Substandard — — 108 7,272 8,231 11,552 3,377 30,540 Doubtful — — — — — — 898 898 Total $ 161,208 $ 373,240 $ 161,073 $ 245,228 $ 229,025 $ 189,324 $ 393,992 $ 1,753,090 Gross Charge Offs $ — $ — $ — $ 153 $ 747 $ 5,187 $ 382 $ 6,469 Consumer Risk Ratings: Pass $ 3,798 $ 15,217 $ 12,444 $ 24,567 $ 18,705 $ 40,239 $ 72,330 $ 187,300 Special Mention — — — — — 48 48 Substandard — 25 13 3,423 5 613 20 4,099 Doubtful — — — — — — — — Total $ 3,798 $ 15,242 $ 12,457 $ 27,990 $ 18,710 $ 40,852 $ 72,398 $ 191,447 Gross Charge Offs $ 165 $ 61 $ 7 $ 1,160 $ 43 $ 28 $ 23 $ 1,487 Consolidated Total $ 336,443 $ 1,387,355 $ 890,157 $ 2,004,751 $ 1,751,569 $ 2,914,254 $ 1,158,492 $ 10,443,021 Gross Charge Offs $ 165 $ 61 $ 7 $ 1,313 $ 790 $ 5,536 $ 405 $ 8,277 22 Table of Contents 1 Represents gross charge-offs for the three months ending March 31, 2025. December 31, 2024 (In thousands) 2024 2023 2022 2021 2020 Prior Revolving Total Construction and Land Development Risk Ratings: Pass $ 113,993 $ 160,801 $ 161,122 $ 39,276 $ 8,547 $ 36,342 $ 126,659 $ 646,740 Special Mention — — — — — 75 — 75 Substandard — — 183 90 — 965 — 1,238 Doubtful — — — — — — — — Total $ 113,993 $ 160,801 $ 161,305 $ 39,366 $ 8,547 $ 37,382 $ 126,659 $ 648,053 Gross Charge Offs $ — $ — $ — $ — $ — $ 1 $ — $ 1 Commercial real estate - owner occupied Risk Ratings: Pass $ 184,312 $ 139,197 $ 260,266 $ 257,711 $ 153,702 $ 628,391 $ 20,674 $ 1,644,253 Special Mention — — 4,975 2,344 2,418 7,965 1 17,703 Substandard 89 1,061 2,821 377 5,870 14,106 349 24,673 Doubtful — — — — — — — — Total $ 184,401 $ 140,258 $ 268,062 $ 260,432 $ 161,990 $ 650,462 $ 21,024 $ 1,686,629 Gross Charge Offs $ — $ — $ 179 $ — $ — $ 162 $ — $ 341 Commercial real estate - non-owner occupied Risk Ratings: Pass $ 495,361 $ 236,306 $ 820,739 $ 581,892 $ 237,777 $ 1,012,209 $ 24,752 $ 3,409,036 Special Mention 27 — 4,773 1,269 5,265 25,245 — 36,579 Substandard — — 10,462 10,684 16,437 20,610 — 58,193 Doubtful — — — — — — — — Total $ 495,388 $ 236,306 $ 835,974 $ 593,845 $ 259,479 $ 1,058,064 $ 24,752 $ 3,503,808 Gross Charge Offs $ — $ — $ — $ — $ 89 $ 1,396 $ — $ 1,485 Residential real estate Risk Ratings: Pass $ 130,178 $ 173,606 $ 492,412 $ 631,313 $ 153,786 $ 490,156 $ 517,136 $ 2,588,587 Special Mention — 22 — — — 164 3,434 3,620 Substandard 693 1,019 5,068 1,212 105 7,041 9,440 24,578 Doubtful — — — — — — — — Total $ 130,871 $ 174,647 $ 497,480 $ 632,525 $ 153,891 $ 497,361 $ 530,010 $ 2,616,785 Gross Charge Offs $ — $ — $ — $ — $ 40 $ 62 $ 32 $ 134 Commercial and financial Risk Ratings: Pass $ 373,569 $ 180,423 $ 253,120 $ 232,427 $ 82,964 $ 117,276 $ 362,701 $ 1,602,480 Special Mention — 382 755 2,839 232 1,904 2,163 8,275 Substandard — 115 8,547 9,810 6,147 10,604 5,376 40,599 Doubtful — — — — — — — — Total $ 373,569 $ 180,920 $ 262,422 $ 245,076 $ 89,343 $ 129,784 $ 370,240 $ 1,651,354 Gross Charge Offs $ — $ — $ 2,762 $ 10,669 $ — $ 3,111 $ 1,074 $ 17,616 Consumer Risk Ratings: Pass $ 14,627 $ 14,049 $ 26,332 $ 20,721 $ 11,682 $ 30,022 $ 67,562 $ 184,995 Special Mention — 5 1 — — — 54 60 Substandard 75 25 4,953 40 2,435 737 1 8,266 Doubtful — — — — — — — — Total $ 14,702 $ 14,079 $ 31,286 $ 20,761 $ 14,117 $ 30,759 $ 67,617 $ 193,321 Gross Charge Offs $ 789 $ 457 $ 5,471 $ 4,828 $ 255 $ 221 $ 267 $ 12,288 Consolidated Total $ 1,312,924 $ 907,011 $ 2,056,529 $ 1,792,005 $ 687,367 $ 2,403,812 $ 1,140,302 $ 10,299,950 Gross Charge Offs $ 789 $ 457 $ 8,412 $ 15,497 $ 384 $ 4,953 $ 1,373 $ 31,865 1 Represents gross charge-offs for the year ending December 31, 2024. 23 Table of Contents Troubled Borrower Modifications The following tables present the amortized cost of TBM loans that were modified during the three months ended March 31, 2025 and March 31, 2024. March 31, 2025 (In thousands) Rate Reduction or Rate Reduction with Term Extension Term Extension and/or Payment Delay Total 1 % of Total Class of Loans Construction and land development $ — $ — $ — — % Commercial real estate - owner occupied 94 — 94 0.01 Commercial real estate - non-owner occupied — — — — Residential real estate — 72 72 — Commercial and financial 73 1,367 1,440 0.08 Consumer — — — — Totals $ 167 $ 1,439 $ 1,606 0.02 % 1 At March 31, 2025, the unfunded lending related commitments associated with TBM were immaterial. March 31, 2024 (In thousands) Rate Reduction or Rate Reduction with Term Extension Term Extension and/or Payment Delay Total 1 % of Total Class of Loans Commercial real estate - owner occupied $ 3,324 $ — $ 3,324 0.20 % Commercial real estate - non-owner occupied 810 — 810 0.02 Residential real estate — 31 31 — Commercial and financial 2,631 57 2,688 0.17 Consumer — 523 523 0.22 Totals $ 6,765 $ 611 $ 7,376 0.07 % 1 At March 31, 2024, there were no unfunded lending related commitments associated with TBMs. The following tables present the payment status of TBM loans that were modified in the twelve months prior to March 31, 2025 and in the twelve months prior to March 31, 2024. March 31, 2025 (In thousands) Current Accruing 30-59 Days Past Due Accruing 60-89 Days Past Due Accruing Greater Than 90 Days Nonaccrual Total Construction and Land Development $ 111 $ — $ — $ — $ — $ 111 Commercial real estate - owner occupied 94 — — — — 94 Residential real estate 95 — — — 571 666 Commercial and financial 1,262 — — — 636 1,898 Consumer 28 — — — — 28 Totals $ 1,590 $ — $ — $ — $ 1,207 $ 2,797 24 Table of Contents March 31, 2024 (In thousands) Current Accruing 30-59 Days Past Due Accruing 60-89 Days Past Due Accruing Greater Than 90 Days Nonaccrual Total Commercial real estate - owner occupied $ 522 $ — $ — $ — $ 2,802 $ 3,324 Commercial real estate - non-owner occupied — — — — 810 810 Residential real estate 31 — — — — 31 Commercial and financial 2,185 — — — 13,016 15,201 Consumer 2,299 290 148 231 143 3,111 Totals $ 5,037 $ 290 $ 148 $ 231 $ 16,771 $ 22,477 There were no TBM loans modified in the prior 12 months with a payment default during the three months ended March 31, 2025 and three months ended March 31, 2024. Note 5 – Allowance for Credit Losses Activity in the allowance for credit losses is summarized as follows: Three Months Ended March 31, 2025 (In thousands) Beginning Balance Provision for Credit Losses Charge- Offs Recoveries Ending Balance Construction and land development $ 7,252 $ ( 483 ) $ — $ 3 $ 6,772 Commercial real estate - owner occupied 11,825 772 — 1 12,598 Commercial real estate - non-owner occupied 43,866 878 ( 320 ) 767 45,191 Residential real estate 39,168 1,160 ( 1 ) 21 40,348 Commercial and financial 27,533 6,434 ( 6,469 ) 113 27,611 Consumer 8,411 489 ( 1,487 ) 334 7,747 Totals $ 138,055 $ 9,250 $ ( 8,277 ) $ 1,239 $ 140,267 Three Months Ended March 31, 2024 (In thousands) Beginning Balance Provision for Credit Losses Charge- Offs Recoveries Ending Balance Construction and land development $ 8,637 $ ( 1,640 ) $ — $ 4 $ 7,001 Commercial real estate - owner occupied 5,529 4,484 — 4 10,017 Commercial real estate - non-owner occupied 48,288 ( 1,621 ) ( 84 ) 18 46,601 Residential real estate 39,016 ( 631 ) — 243 38,628 Commercial and financial 34,343 ( 1,501 ) ( 2,656 ) 521 30,707 Consumer 13,118 2,277 ( 1,888 ) 208 13,715 Totals $ 148,931 $ 1,368 $ ( 4,628 ) $ 998 $ 146,669 Management establishes the allowance using relevant available information from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Forecast data is sourced from Moody’s, a firm widely recognized for its research, analysis, and economic forecasts. The forecasts of future economic conditions are over the expected remaining life of the loan using economic forecasts that revert to long-term historical averages over time. As of March 31, 2025 and December 31, 2024, the Company utilized a multiple scenario model comprised of a blend of Moody’s economic scenarios. Outcomes could differ from the scenarios utilized, and the Company incorporated qualitative considerations reflecting the risk of uncertain economic conditions, and for additional dimensions of risk that may not be captured in the quantitative model. 25 Table of Contents The following section discusses changes in the level of the allowance for credit losses for the three months ended March 31, 2025. The allowance increased $ 2.2 million, or 1.6 %, during the first quarter of 2025 to $ 140.3 million, or 1.34 % of loans held for investment as of March 31, 2025. In the Construction and Land Development segment, the decrease in allowance is primarily due to a decrease in outstanding loan balances. In this segment, the primary source of repayment is typically from proceeds of the sale or permanent financing of the underlying property; therefore, industry and collateral type and estimated collateral values are among the relevant factors in assessing expected losses. In the Commercial Real Estate - Owner-Occupied segment, the allowance increased due to an increase in loan balances and increased uncertainty in the macroeconomic environment. Risk characteristics include, but are not limited to, collateral type, note structure and loan seasoning. In the Commercial Real Estate - Non-Owner-Occupied segment, the allowance increase is driven by higher loan balances and increased uncertainty associated with the economy. Repayment is often dependent upon rental income from the successful operation of the underlying property or from the sale of the property. Loan performance may be adversely affected by general economic conditions or conditions specific to the real estate market, including property types. Collateral type, note structure, and loan seasoning are among the risk characteristics analyzed for this segment. The Residential Real Estate segment includes residential mortgage, home equity loans, and HELOCs. The increase in the allowance is reflective of an increase in outstanding loan balances. Risk characteristics considered for this segment include, but are not limited to, borrower FICO score, lien position, loan to value ratios, and loan seasoning. In the Commercial and Financial segment, borrowers are primarily small to medium sized professional firms and other businesses, and loans are generally supported by projected cash flows of the business, collateralized by business assets, and/or guaranteed by the business owners. The allowance change in the first quarter included an increase due to higher loan balances, which was offset by the charge-off of loans that were previously reserved. Industry, collateral type, estimated collateral values, and loan seasoning are among the relevant factors in assessing expected losses. Consumer loans include installment and revolving lines, loans for automobiles, boats, and other personal or family purposes. Risk characteristics considered for this segment include, but are not limited to, collateral type, loan to value ratios, loan seasoning and FICO score. The decrease in allowance for consumer loans was driven by the continued decline in loan balances associated with a portfolio of acquired unsecured loans. Note 6 – Derivatives Interest Rate Contracts The Company offers interest rate swaps when requested by customers to allow them to hedge the risk of rising interest rates on their variable rate loans. Upon entering into these swaps, the Company enters into offsetting positions with counterparties in order to minimize the interest rate risk. These back-to-back swaps are freestanding financial derivatives with the fair values reported in Other Assets and Other Liabilities. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under the arrangements for financial statement presentation purposes. Gains and losses on these back-to-back swaps, which offset, are recorded through noninterest income. Interest Rate Swaps Designated as Fair Value Hedges The Company has entered into interest rate swap contracts to hedge the risk of changes in fair value of the AFS securities portfolio due to changes in the SOFR. The Company considers these derivatives to be highly effective at offsetting changes in interest rates and assesses the effectiveness on a quarterly basis. The effect of changes in interest rates on the fair value of these derivative contracts is recognized in other comprehensive income. These derivative instruments are primarily for risk management purposes. For the three months ended March 31, 2025, the Company recognized, through other comprehensive income, net losses of $ 0.4 million, and reclassified net gains of $ 2 thousand out of accumulated other comprehensive income into interest income. For the three months ended March 31, 2024, the Company recognized through other comprehensive income, net gains of $ 4.0 million, and reclassified net gains of $ 61 thousand out of accumulated other comprehensive income into interest income. 26 Table of Contents The Company has entered into interest rate swap contracts to hedge the risk of changes in the fair value of a pool of residential mortgages due to changes in SOFR. These fair value hedges utilize the portfolio layer method. The Company considers these derivatives to be highly effective at offsetting changes in interest rates and assesses the effectiveness on a quarterly basis. The effect of changes in interest rates on the fair value of these derivative contracts is recognized in interest income. These derivative instruments are primarily for risk management purposes. For the three months ended March 31, 2025 and March 31, 2024, the Company recognized gains through interest income of $ 48 thousand and $ 0.4 million, respectively. (In thousands) Notional Amount Fair Value Balance Sheet Category March 31, 2025 Interest rate contracts 1 $ 957,893 $ 26,848 Other Assets and Other Liabilities Securities fair value hedges 400,000 125 Other Assets Residential mortgage fair value hedges 400,000 16 Other Assets and Other Liabilities December 31, 2024 Interest rate contracts 1 $ 910,640 $ 28,184 Other Assets and Other Liabilities Securities fair value hedges 400,000 436 Other Assets Residential mortgage fair value hedges 400,000 121 Other Assets and Other Liabilities 1 Interest rate contracts include risk participation agreements with notional amounts of $ 28.9 million and $ 28.9 million at March 31, 2025, and December 31, 2024, respectively with nominal fair value in both periods. The following table presents amounts recorded on the Consolidated Balance Sheet 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 (In thousands) March 31, 2025 December 31, 2024 March 31, 2025 December 31, 2024 Securities available-for-sale 1 $ 457,037 $ 460,126 $ 398 $ 35 Loans, net 2 582,314 596,632 234 283 1 At March 31, 2025, and December 31, 2024, the amortized cost basis and unallocated basis adjustments used in hedging relationships was $ 540.4 million and $ 553.8 million, respectively. Refer to “Note 3 - Securities” for a reconciliation of the amortized cost and fair value of AFS securities. 2 These amounts represent the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At March 31, 2025, the portfolio layer method was $ 400 million, of which $ 400 million was designated as hedged. At December 31, 2024, the portfolio layer method was $ 400 million, of which $ 400 million was designated as hedged. Note 7 – Securities Sold Under Agreements to Repurchase Securities sold under agreements to repurchase are accounted for as secured borrowings. For securities sold under agreements to repurchase, the Company is required to pledge collateral with value sufficient to fully collateralize borrowings. Company securities pledged were as follows by collateral type and maturity as of: (In thousands) March 31, 2025 December 31, 2024 Fair value of pledged securities - overnight and continuous: Mortgage-backed securities and collateralized mortgage obligations of U.S. government-sponsored entities $ 235,949 $ 237,074 Note 8 – Regulatory Capital The Company is well-capitalized and at March 31, 2025, the Company and the Company’s principal banking subsidiary, Seacoast Bank, exceeded the CET1 capital ratio regulatory threshold of 6.5 % for well-capitalized institutions under the Basel III standardized transition approach, as well as risk-based and leverage ratio requirements for well-capitalized banks under the regulatory framework for prompt corrective action. 27 Table of Contents Note 9 – Contingent Liabilities The Company and its subsidiaries, because of the nature of their business, are at all times subject to numerous legal actions, threatened or filed. Management presently believes that none of the legal proceedings to which it is a party are likely to have a materially adverse effect on the Company’s consolidated financial condition, operating results or cash flows. Note 10 – Fair Value Under ASC Topic 820, fair value measurements for items measured at fair value on a recurring and nonrecurring basis at March 31, 2025 and December 31, 2024 included: (In thousands) Fair Value Measurements Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) At March 31, 2025 Financial Assets Debt securities available-for-sale 1 $ 2,627,959 $ 197 $ 2,627,762 $ — Derivative financial instruments 2 26,973 — 26,973 — Loans held for sale 2 16,016 — 16,016 — Loans 3 1,950 — — 1,950 OREO 3 7,176 — — 7,176 Equity securities 4 13,717 13,717 — — Financial Liabilities Derivative financial instruments 2 $ 26,864 $ — $ 26,864 $ — At December 31, 2024 Financial Assets Debt securities available-for-sale 1 $ 2,226,543 $ 196 $ 2,226,347 $ — Derivative financial instruments 2 28,741 — 28,741 — Loans held for sale 2 17,277 — 17,277 — Loans 3 1,839 — — 1,839 OREO 3 6,421 — — 6,421 Equity securities 4 13,521 13,521 — — Financial Liabilities Derivative financial instruments 2 $ 28,305 $ — $ 28,305 $ — 1 See “Note 3 – Securities” for further detail of fair value of individual investment categories. 2 Recurring fair value basis determined using observable market data. 3 Fair value is measured on a nonrecurring basis. 4 Investment in shares of mutual funds that invest primarily in CRA-qualified debt securities, reported at fair value in Other Assets. Recurring fair value basis is determined using market quotations. Loans and OREO: Fair values of collateral-dependent real estate loans and OREO are based on recent real estate appraisals less estimated costs of sale. Evaluations may use either a single valuation approach or a combination of approaches, such as comparative sales, cost and/or income approach. Adjustments to comparable sales may be made by an appraiser to reflect local market conditions or other economic factors and may result in changes in the fair value of an asset over time, but none were made by management. As such, the fair values of these loans and properties are considered Level 3 in the fair value hierarchy. Collateral-dependent loans measured at fair value totaled $ 2.1 million with a specific reserve of $ 0.1 million at March 31, 2025, compared to $ 3.0 million with a specific reserve of $ 1.2 million at December 31, 2024. For recurring fair value measurements, transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstances that caused the transfer, which generally coincides with the Company’s monthly and/or quarterly valuation process. During the three months ended March 31, 2025, there were no such transfers. 28 Table of Contents For additional information on the valuation techniques and significant inputs for Level 2 and Level 3 assets and liabilities that are measured at fair value on a recurring basis, see “Note 16 - Fair Value” of the Annual Report on Form 10-K for the year ended December 31, 2024. The carrying amount and fair value of the Company’s other financial instruments that were not disclosed previously in the balance sheet and for which carrying amount is not fair value as of March 31, 2025 and December 31, 2024 is as follows: (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) March 31, 2025 Financial Assets Held-to-maturity debt securities 1 $ 624,650 $ — $ 509,751 $ — Time deposits with other banks 1,494 — 1,444 — Loans, net 10,300,804 — — 10,176,542 Financial Liabilities Deposits 12,574,796 — — 12,573,285 FHLB borrowings 465,000 — 463,106 — Long-term debt 107,132 — 96,944 — December 31, 2024 Held-to-maturity debt securities 1 $ 635,186 $ — $ 507,594 $ — Time deposits with other banks 3,215 — 3,194 — Loans, net 10,160,056 — — 10,019,964 Financial Liabilities Deposits 12,242,427 — — 12,242,205 FHLB borrowings 245,000 — 243,795 — Long-term debt 106,966 — 95,563 — 1 See “Note 3 – Securities” for further detail of recurring fair value basis of individual investment categories. The short maturity of Seacoast’s assets and liabilities results in a significant number of financial instruments whose fair value equals or closely approximates carrying value. Such financial instruments are reported in the following balance sheet captions: cash and due from banks, interest bearing deposits with other banks, and securities sold under agreements to repurchase. The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value at March 31, 2025 and December 31, 2024: Held-to-maturity debt securities : These debt securities are reported at fair value utilizing Level 2 inputs. The estimated fair value of a security is determined based on market quotations when available or, if not available, by using quoted market prices for similar securities, pricing models or discounted cash flow analyses, using observable market data where available. The Company reviews the prices supplied by independent pricing services, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. From time to time, the Company will validate, on a sample basis, prices supplied by the independent pricing service by comparison to prices obtained from other brokers and third-party sources or derived using internal models. Loans : Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, such as commercial or mortgage. Each loan category is further segmented into fixed and adjustable-rate interest terms as well as performing and nonperforming categories. The fair value of loans is calculated by discounting scheduled cash flows through the estimated life including prepayment considerations, using estimated market discount rates that reflect the risks inherent in the 29 Table of Contents loan. The fair value approach considers market-driven variables including credit related factors and reflects an “exit price” as defined in ASC Topic 820. Investments at NAV : The Company has equity investments in SBICs accounted for under the fair value practical expedient of NAV totaling $ 23.2 million at March 31, 2025 and $ 21.1 million at December 31, 2024, which are not included in the fair value hierarchy. These investments are made primarily through various SBIC funds as a strategy to provide expansion and growth opportunities to small businesses and are subject to various risks, including market, liquidity and credit risk. SBICs are generally structured to operate for approximately 10 years and the Company’s investments are not redeemable. Distributions are received through the liquidation of the underlying assets, which is expected to occur over the next 5 - 10 years. Unfunded commitments related to these investments were $ 7.1 million at both March 31, 2025 and December 31, 2024. Deposit liabilities : The fair value of demand deposits, savings accounts and money market deposits is the amount payable at the reporting date. The fair value of fixed maturity certificates of deposit is estimated using the rates currently offered for funding of similar remaining maturities. Note 11 – Business Combinations Proposed Acquisition of Heartland Bancshares, Inc. On February 27, 2025, the Company announced its proposed acquisition of Heartland Bancshares, Inc. (“Heartland”). The transaction, which is expected to close in the third quarter of 2025, will expand the Company’s presence in Central Florida. Heartland operates four branches, with total assets of approximately $ 763 million and deposits of approximately $ 666 million as of March 31, 2025. The acquisition is subject to customary regulatory approvals, Heartland shareholder approval, and the satisfaction of other customary closing conditions. Note 12 – Business Segment The Company's one reportable segment provides integrated financial services including commercial and consumer banking, wealth management, and mortgage and insurance services to customers. Segment revenues are driven primarily by interest and fees on loans, interest on cash and cash equivalents and on investment securities, and fees on depository products and services. The Company manages business activities, allocates resources and evaluates financial performance on an organization-wide basis. The chief operating decision maker (“CODM”) is the CEO. The financial results of the segment are presented using the same policies described in “Note 1 - Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The CODM evaluates the performance of the segment and allocates resources based on net income that is also reported on the Consolidated Statements of Income as consolidated net income and segment assets that are reported on the Consolidated Balance Sheets as total consolidated assets. Net income is used to monitor budget versus actual results. The significant segment expenses that are regularly provided to the CODM are interest expense, provision for credit losses, salaries and wages, employee benefits, outsourced data processing costs, and occupancy, which are all reflected in the Consolidated Statements of Income. Certain noncash expenses, such as depreciation and amortization expense, are disclosed in the Consolidated Statement of Cash Flows.