What changed in this filing

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Item 1. Business

2026-02-27 compared with 2025-03-03 · 22 added, 154 removed, 566 unchanged (24% of the section changed)

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income tax purposes.

Each of these entities is consolidated into the Company.

The financial results of each of these entities is consolidated into the Company’s financial results.

As a bank holding company, we are subject to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).

We are required to file reports with the Federal Reserve and are subject to regular examinations by that agency.

Business Strategy

We are a full service commercial bank focused on providing competitive products, state of the art technology and quality service.

Our business philosophy is to operate as a metropolitan community bank emphasizing prompt, personalized customer service to the individuals and businesses located in our primary markets.

We aggressively market to our target customers, which include privately held businesses generally with $2 million to $250 million in annual sales, professionals and affluent consumers whom we believe are underserved by the larger regional banks operating in our markets.

We also seek to capitalize on the extensive relationships that our management, directors, advisory directors and stockholders have with the businesses and professionals in our markets.

Focus on Core Banking Business.

We deliver a broad array of core banking products to our customers.

While many large regional competitors and national banks have chosen to develop non-traditional business lines to supplement their net interest income, we believe our focus on traditional commercial banking products driven by a high margin delivery system is a superior method to deliver returns to our stockholders.

We emphasize an internal culture of keeping our operating costs as low as practical, which we believe leads to greater operational efficiency.

Additionally, our centralized technology and process infrastructure contribute to our low operating costs.

We believe this combination of products, operating efficiency and technology make us attractive to customers in our markets.

In addition, we provide correspondent banking services to more than 380 community banks located in 30 states throughout the United States (“U.S.”).

We provide a source of clearing and liquidity to our correspondent bank customers, as well as a wide array of account, credit, settlement and international services.

Commercial Bank Emphasis.

We have historically focused on people as opposed to places.

This strategy translates into a smaller number of brick and mortar branch locations relative to our size, but larger overall branch sizes in terms of total deposits.

As a result, as of December 31, 2024, our branches averaged approximately $410.4 million in total deposits.

In the more typical retail banking model, branch banks continue to lose traffic to other banking channels which may prove to be an impediment to earnings growth for those banks that have invested in large branch networks.

In addition, unlike many traditional community banks, we place a strong emphasis on originating commercial and industrial loans, which comprised approximately 22.8% of our total loan portfolio as of December 31, 2024.

Scalable, Decentralized Business Model.

We emphasize local decision-making by experienced bankers supported by centralized risk and credit oversight.

We believe that the delivery by our bankers of in-market customer decisions, coupled with risk and credit support from our corporate headquarters, allows us to serve our borrowers and depositors directly and in person, while managing risk centrally and on a uniform basis.

We intend to continue our growth by repeating this scalable model in each market where we are able to identify a strong banking team.

Our goal in each market is to employ the highest quality bankers in that market.

We then empower those bankers to implement our operating strategy, grow our customer base and provide the highest level of customer service possible.

We focus on a geographic model of organizational structure as opposed to a line of business model employed by most regional banks.

This structure assigns significant responsibility and accountability to our regional chief executive officers, who we believe will drive our growth and success.

We have developed a business culture whereby our management team, from the top down, is actively involved in sales, which we believe is a key differentiator from our competition.

Identify Opportunities in Vibrant Markets.

Since opening our original banking facility in Birmingham in 2005, we have expanded into thirteen additional markets as of December 31, 2024.

Our focus has been to expand opportunistically when we identify a strong banking team in a market with attractive economic characteristics and market demographics where we believe we can achieve a minimum of $300 million in deposits within five years of market entry.

There are two primary factors we consider when determining whether to enter a new market:

the availability of successful, experienced bankers with strong reputations in the market;

the economic attributes of the market necessary to drive quality lending opportunities coupled with deposit-related characteristics of the potential market.

Prior to entering a new market, we have historically identified and built a team of experienced, successful bankers with market-specific knowledge to lead the Bank’s operations in that market, including a regional chief executive officer.

Generally, we or members of our senior management team are familiar with these individuals based on prior work experience and reputation, and strongly believe in the ability of such individuals to successfully execute our business model.

We also often assemble a non-voting advisory board of directors in our markets, comprised of members representing a broad spectrum of business experience and community involvement in the market.

We currently have advisory boards in each of the Huntsville, Montgomery, Dothan, Mobile, Pensacola, Nashville, Atlanta and Charleston markets.

In addition to organic expansion, we may seek to expand through targeted acquisitions.

Markets and Competition

Our primary markets are broadly defined in the tables below.

We operate primarily from locations in Alabama, Florida, Georgia, North and South Carolina, Tennessee and Virginia.

We also operate a loan production office in Florida.

As of December 31, 2025, we operated through 33 banking offices and one loan production office.

We draw most of our deposits from, and conduct most of our lending transactions in, these markets.

According to Federal Deposit Insurance Corporation (“FDIC”) reports, total deposits in each of our primary market areas have expanded from 2014 to 2024 (deposit data reflects totals as reported by financial institutions as of June 30th of each year) as follows:

Compound Annual Growth Rate

(Dollars in Billions)

Jefferson/Shelby County, Alabama

Mobile County, Alabama

Madison County, Alabama

Montgomery County, Alabama

Baldwin County, Alabama

Houston County, Alabama

Orange County, Florida

Hillsborough County, Florida

Sarasota County, Florida

Leon County, Florida

Escambia County, Florida

Okaloosa County, Florida

Bay County, Florida

Cobb County, Georgia

Muscogee County, Georgia

Douglas County, Georgia

North Carolina:

Mecklenburg County, North Carolina

Buncombe-Asheville, North Carolina

South Carolina:

Charleston County, South Carolina

Dorchester County, South Carolina

Davidson County, Tennessee

Virginia Beach (City), Virginia

Our bank is subject to intense competition from various financial institutions and other financial service providers.

Our bank competes for deposits with other commercial banks, savings and loan associations, credit unions and issuers of commercial paper and other securities, such as money-market and mutual funds.

In making loans, our bank competes with other commercial banks, savings and loan associations, consumer finance companies, credit unions, leasing companies, interest-based lenders and other lenders.

The following table illustrates our market share, by insured deposits, in our primary service areas at June 30, 2024 as most recently reported by the FDIC:

Number of Branches

Our Market Deposits

Total Market Deposits

Market Share Percentage

(Dollars in Millions)

Birmingham-Hoover MSA

Huntsville MSA

Montgomery MSA

Daphne-Fairhope-Foley MSA

Pensacola-Ferry Pass-Brent MSA

North Port-Sarasota-Bradenton MSA

Petersburg-Clearwater MSA

Panama City MSA

Crestview-Fort Walton Beach-Destin MSA

Tallahassee MSA

Orlando-Kissimmee-Sanford MSA

Atlanta-Sandy Springs-Alpharetta MSA

Columbus, GA-AL MSA

North Carolina:

Charlotte-Concord-Gastonia, NC-SC MSA

Buncombe-Asheville, NC-SC MSA

South Carolina:

Charleston-North Charleston MSA

Nashville-Davidson-Murfreesboro MSA

Virginia Beach-Norfolk-Newport News, VA-NC

The following table illustrates the combined total deposits for all financial institutions in the counties in which we operate as a percent of the total of all deposits in each state at June 30, 2024, as reported by the FDIC:

North Carolina

South Carolina

Our retail and commercial divisions operate in highly competitive markets.

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Providing convenient locations, desired financial products and services, convenient office hours, quality customer service, quick local decision making, a strong community reputation and long-term personal relationships are all important competitive factors that we emphasize.

In our markets, our five largest competitors are Regions Financial Corporation, Wells Fargo & Company, PNC Financial Services Group, Inc., Truist Financial Corporation, and Synovus Financial Corp.

In our markets, our five largest competitors are Regions Financial Corporation, Wells Fargo & Company, PNC Financial Services Group, Inc., Truist Financial Corporation, and Pinnacle Financial Partners, Inc.

(formerly Synovus Financial Corp.).

These institutions, as well as other competitors of ours, may have greater resources, serve broader geographic markets, have higher lending limits, offer various services that we do not offer and may better afford, and make broader use of, media advertising, support services, and electronic technology than us.

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At year-end 2025, owner-occupied commercial real estate totaled approximately $2.74 billion, representing 20.0% of our total loan portfolio.

Substandard loans in this segment totaled $25.1 million, and we recorded approximately $237,000 in charge-offs during 2024.

Substandard loans in this segment totaled $21.1 million, and we recorded approximately $4.0 million in net charge-offs during 2025.

In addition to the credit quality monitoring actions described above, we also require annual reviews for relationships greater than $3.0 million, which are completed by the responsible Lender and submitted to Credit Administration for approval.

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At year-end 2025, non-owner-occupied commercial real estate amounted to approximately $4.60 billion, representing 33.6% of our total loan portfolio.

Substandard loans in this category totaled $15.4 million, with no charge-offs recorded in 2024.

Substandard loans in this category totaled $88.7 million, we recorded approximately $1.2 million in net charge-offs during 2025.

In order to manage the risk inherent in these credits, we prepare a quarterly report to the Board of Directors detailing the top 20 metropolitan areas in which our collateral is located.

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These reviews include monitoring interest reserve sufficiency and assessing occupancy or absorption levels at six months post-completion for newly completed projects.

At year-end 2024, we had $3.5 million in substandard construction and development loans, and the Bank has not realized a loss in this portfolio over the past five years.

Relationships in excess of $3.0 million are also subject to annual review by the responsible Lender, with final approval required from Credit Administration, ensuring any potential concerns in this portfolio are identified and addressed proactively.

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Total construction loans decreased $31.7 million, or 2.1%, at December 31, 2025, compared to December 31, 2024.

There were $(8,000) in net charge-offs (recoveries) on construction loans during 2024 and $105,000 in net charge-offs (recoveries) on construction loans during 2023.

There were $16,000 in net charge-offs on construction loans during 2025 and $(8,000) in net charge-offs (recoveries) on construction loans during 2024.

There were $36.8 million in construction loans rated as substandard at December 31, 2025 and $3.5 million construction loans rated as substandard at December 31, 2024.

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As of December 31, 2025, we had commitments to extend credit beyond current amounts funded of $3.78 billion, had issued standby letters of credit in the amount of $117.4 million, and had commitments for credit card arrangements of $395.8 million.

In addition to loans, we purchase investments in securities, primarily in treasuries and mortgage-backed securities.

In addition to loans, we purchase investments in securities, primarily in mortgage-backed securities and state and municipal securities.

No investment in any of those instruments will exceed any applicable limitation imposed by law or regulation.

Our Board of Directors reviews the investment portfolio on an ongoing basis in order to ensure that the investments conform to the policy as set by the Board of Directors.

Our investment policy provides that no more than 30% of our total investment portfolio may be composed of municipal securities.

All securities held are traded in liquid markets, and we have no auction-rate securities.

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presidential administration and the composition of the U.S.

Congress is expected to lead to potentially significant changes to the existence, priorities, scope, practices and/or staffing levels of various regulatory agencies.

Congress has led to significant changes to the existence, priorities, scope, practices and/or staffing levels of various regulatory agencies.

For example, in February 2025, the Trump administration directed the CFPB to, among other things, suspend rule implementations and cease supervision activities.

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Under a rebuttable presumption established by the Federal Reserve, the acquisition of 10% or more of a class of voting stock of a bank holding company would, under the circumstances set forth in the presumption, constitute acquisition of control of the bank holding company.

(certain presumptions of control may apply once an acquiror owns 5% or more of the common stock and certain other factors are present).

In addition, any person or group of persons acting in concert must obtain the approval of the Federal Reserve before acquiring 25% or more of the outstanding common stock of a bank holding company or otherwise obtaining control or a “controlling influence” over the bank holding company (certain presumptions of control may apply once an acquiror owns 5% or more of the common stock and certain other factors are present).

Permissible Activities Under the BHC Act

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The special assessment will be collected at an annual rate of approximately 13.4 basis points for an initial total of eight quarterly assessment periods.

Due to updated loss estimates, the FDIC currently projects that the special assessment will be collected for an additional two quarters beyond the initial eight-quarter collection period, at a lower rate.

The amount the Bank pays to the FDIC in assessments is affected not only by the risk the Bank poses to the Deposit Insurance Fund, but also by the adequacy of the fund to cover the risk posed by all insured institutions.

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In addition, the final rule also exempts small and intermediate banks from new data requirements that apply to banks with assets of at least $2 billion and limits certain new data requirements to large banks with assets greater than $10 billion.

Most of the rule's requirements will be applicable beginning January 1, 2026.

The remaining requirements, including the data reporting requirements, will be applicable on January 1, 2027.

We continue to evaluate the new rule and its effects on our operations going forward.

Most of the new rule's requirements were originally scheduled to become applicable on January 1, 2026 with the remaining requirements, including the data reporting requirements, becoming applicable on January 1, 2027.

However, a federal court issued an injunction in March 2024 that indefinitely extended the compliance date until the injunction is lifted.

Further, in July 2025, the federal banking agencies issued a notice of proposed rulemaking to rescind the October 2023 final rulemaking and replace it with the prior CRA regulation.

Interest Rate Limitations

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The rule prohibits financial institutions from charging fees for paying overdrafts on ATM and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions.

There has been an enhanced focus by federal bank regulatory agencies with respect to industry practices relating to overdraft fees, credit card fees and non-sufficient funds fees.

For example, the CFPB issued a Request for Information in January 2022 seeking public input with respect to financial institution practices relating to, among other areas, credit card fees, overdraft fees and non-sufficient funds fees and stated its intent to reduce these types of fees through crafting rules, issuing industry guidance and focusing supervision and enforcement resources to achieve this goal.

In October 2022, the CFPB issued guidance with respect to certain practices relating to overdraft fees and bounced check fees.

The FDIC issued guidance in August 2022 with respect to bank practices involving charging multiple non-sufficient funds fees on the representment of items on a deposit account.

In March 2024, the CFPB finalized a rule restricting certain practices relating to credit card late fees.

In December 2024, the CFPB issued a final rule generally requiring financial institutions with over $10 billion in assets to either cap overdraft fees at $5.00 or otherwise follow Truth in Lending Act requirements when providing deposit account overdraft services.

Open Banking Rule

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According to the CFPB, the rule is designed to foster competition and innovation in the financial services industry by making it easier for consumers to switch financial providers and for new companies to offer innovative products and services.

The compliance deadline is phased-in based on the asset size of the financial institution.

For depositary institutions with $10 billion to $250 billion in total assets, the compliance deadline is April 1, 2027.

The rule is in a current state of flux as a federal court has issued a preliminary injunction prohibiting the CFPB from enforcing the rule until the CFPB can complete its reconsideration of the rule.

In August 2025, the CFPB issued an advance notice of proposed rulemaking seeking comments as it evaluates issuing a proposed rule that would replace the current rule.

Interchange Fees

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The proposal would also establish a regular process for updating the maximum amount every other year going forward.

The proposed rule is pending and has not been finalized.

Compensation Practices

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The purpose of the rulemaking is to increase transparency and combat discrimination in small business lending.

The CFPB issued a Notice of Proposed Rulemaking in November 2025 that would make certain changes to the rule, including reducing the number of data points banks must collect and report as well as extending the compliance deadline to January 1, 2028.

As noted above, the implementation of the Dodd-Frank Act is ongoing.

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New proposals to change the laws and regulations governing the banking industry are frequently introduced in the United States Congress, in the state legislatures and before the various bank regulatory agencies.

Additionally, the future implementation and enforcement of regulations may be affected by the outcome of the 2024 Presidential election, which is resulting in significant changes in the leadership of the various bank regulatory agencies.

Additionally, the future implementation and enforcement of regulations may be affected by current and future Presidential administrations.

The likelihood and timing of any such changes and the impact such changes might have on us and the Bank, however, cannot be determined at this time.

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As part of our compensation philosophy, we believe that we must offer and maintain market competitive total rewards programs for our employees in order to attract and retain superior talent.

Information about our Executive Officers

A brief description of the background of each of our executive officers as of December 31, 2024, is set forth below.

Broughton, III (69) – Mr.

Broughton has served as our President and Chief Executive Officer and a director since 2007 and as President, Chief Executive Officer and a director of the Bank since its inception in May 2005.

Broughton was appointed Chairman of the Board effective January 1, 2019, following the retirement of our former Chairman.

Broughton has spent the entirety of his banking career in the Birmingham area.

Broughton was named President of the de novo First Commercial Bank.

When First Commercial Bank was acquired by Synovus Financial Corp.

Broughton continued as President and was named Chief Executive Officer of First Commercial Bank.

In 1998, he became Regional Chief Executive Officer of Synovus Financial Corp., responsible for the Alabama and Florida markets.

Broughton’s Synovus region shifted, and he became Regional Chief Executive Officer for the markets of Alabama, Tennessee and parts of Georgia.

He continued his work in this position until his retirement from Synovus in August 2004.

Broughton’s experience in banking has afforded him opportunities to work in many areas of banking and has given him exposure to all bank functions.

Broughton served on the Board of Directors of Cavalier Homes, Inc.

from 1986 until 2009, when the company was sold to a subsidiary of Berkshire Hathaway.

Woodie, III (57) – Mr.

Woodie was appointed interim Chief Financial Officer effective October 2024.

In 1989, Ed joined SouthTrust Bank, and over his 15-year career with the bank served as Vice President in asset and liability and treasury management and then later in mergers and acquisitions.

Ed joined CapitalSouth Bank in 2004 as Vice President and Controller.

In 2008, Ed joined ServisFirst Bank as Controller and has served in that role for 16 years.

Rushing (67) – Mr.

Rushing has served as our Executive Vice President and Chief Operating Officer since February 2021.

From 2011 to 2021, he served as the Executive Vice President and Executive for Correspondent Banking for us and the Bank.

Prior to joining us, Mr.

Rushing was employed at BBVA Compass from 1982 to 2011, most recently serving as Executive Vice President of Correspondent Banking.

At the time of his departure in March 2011, the correspondent banking division of BBVA Compass provided correspondent banking services to over 600 financial institutions.

Henry Abbott (42) – Mr.

Abbott has served as Senior Vice President and Chief Credit Officer for us and the Bank since April 2018.

From 2013 to 2018, he served as Senior Vice President and Chief Credit Officer for our Correspondent Banking Division.

Prior to joining us, Mr.

Abbott was employed at BB&T (now Truist) from 2004 to 2013 in various senior lending and credit administration roles.

Available Information

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We also have direct links to our filings with the SEC, including, but not limited to, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and any amendments to these filings, which are available free of charge through our corporate website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.

Stockholders may request hard copies of our filings, free of charge, by contacting our Senior Vice President of Investor Relations, Davis Mange, at 2500 Woodcrest Place, Birmingham, AL 35209, telephone (205) 949-3420.

Stockholders may request hard copies of our filings, free of charge, by contacting our Senior Vice President of Corporate Treasury and Investor Relations, Davis Mange, at 2500 Woodcrest Place, Birmingham, AL 35209, telephone (205) 949-3420.

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 1. Business