What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-03-03 · 123 added, 122 removed, 1447 unchanged (14% of the section changed)

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Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of ServisFirst Bancshares, Inc.

To the Stockholders and Board of Directors

ServisFirst Bancshares, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of ServisFirst Bancshares, Inc.

and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 3, 2025, expressed an unqualified opinion thereon.

and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2026, expressed an unqualified opinion thereon.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses on Loans

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses

The Company’s loan portfolio and the associated allowance for credit losses (“allowance”) were $13.70 billion and $171.7 million as of December 31, 2025, respectively.

As further described in Notes 1 and 3 to the consolidated financial statements, the amount of the allowance represents management’s best estimate of current expected credit losses on loans considering the characteristics of the loan portfolio and the economic environment.

As further described in Notes 1 and 3 to the financial statements, the amount of the allowance represents management’s best estimate of current expected credit losses on loans considering the characteristics of the loan portfolio and the economic environment.

To calculate the allowance, loans with similar risk characteristics are collectively evaluated in pools and loans that do not share similar risk characteristics are excluded from the collective pools and evaluated on an individual basis.

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Estimating qualitative factor adjustments requires significant judgment and can either increase or decrease the quantitative model estimation.

We identified the allowance for credit losses, and more specifically the qualitative factor adjustments applied in the allowance, as a critical audit matter.

The principal consideration for our determination of the qualitative factor adjustments as a critical audit matter is the subjectivity of the assumptions that management utilized in determining and applying qualitative factors in the allowance model.

We identified the allowance for credit losses, and more specifically the other economic conditions qualitative factor adjustment applied in the allowance, as a critical audit matter.

The principal consideration for our determination of the other economic conditions qualitative factor adjustment as a critical audit matter is the subjectivity of the assumptions that management utilized in determining and applying the qualitative factor in the allowance model.

Furthermore, certain inputs and assumptions lack observable data and, therefore, applying audit procedures required a higher degree of auditor judgment and subjectivity due to the nature and extent of audit evidence and effort required to address this matter.

The primary audit procedures we performed to address this critical audit matter included:

Evaluated the design and tested the operating effectiveness of key controls relating to the Company’s allowance, including controls over the determination of qualitative factor adjustments, the precision of management’s review and approval of the resulting estimate, and testing of the model’s performance.

Assessed the appropriateness and reasonableness of the qualitative factor adjustment framework, including evaluating management’s judgments as to which factors and relevant assessed risks impacted the qualitative adjustments for each loan pool.

Evaluated and tested the reasonableness and relevance of data utilized in the qualitative factor adjustments, including considering the data’s completeness and accuracy and testing the mathematical accuracy of the calculations.

Utilized the assistance of the firm’s internal specialists to test the mathematical operation of the model and to evaluate the reasonableness of assumptions and judgments used in the forecast components.

Evaluated the design and tested the operating effectiveness of key controls relating to the Company’s allowance, including controls over the determination of other economic conditions qualitative factor adjustments and the precision of management’s review and approval of the resulting estimate.

Assessed the appropriateness and reasonableness of the qualitative factor adjustment framework, including evaluating management’s judgments as to which assumptions and relevant assessed risks impacted the other economic conditions qualitative adjustment for each loan pool.

Evaluated and tested the relevance and reliability of data utilized in the qualitative factor framework, including considering the data’s completeness and accuracy and testing the mathematical accuracy of the calculations for the other economic conditions qualitative factor.

Analyzed the total qualitative factor adjustment applied to each loan pool, in comparison to changes in the Company’s quantitatively driven expected credit losses and loan pools and evaluated the appropriateness and level of the total qualitative factor adjustment applied in the overall allowance.

/s/ Forvis Mazars, LLP

We have served as the Company’s auditor since 2014.

/s/ Forvis Mazars, LLP

Tampa, Florida

March 3, 2025

February 26, 2026

Report of Independent Registered Public Accounting Firm

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(2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2024 and 2023, and for each of the three years in the period ended December 31, 2024, and our report dated March 3, 2025, expressed an unqualified opinion on those financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of December 31, 2025 and 2024, and for each of the three years in the period ended December 31, 2025, and our report dated February 26, 2026, expressed an unqualified opinion on those financial statements.

Basis for Opinion

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Tampa, Florida

March 3, 2025

February 26, 2026

SERVISFIRST BANCSHARES, INC.

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Interest-bearing balances due from depository institutions

Securities purchased with agreement to resell

Federal funds sold

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Other comprehensive income (loss), net of tax:

Unrealized net holding gains (losses) arising during period from securities available for sale, net of $ 7,347 , $( 1,593 ), and $( 20,982 ) for the twelve months ended December 31, 2024, 2023, and 2022, respectively

Unrealized net holding gains (loss) arising during period from securities available for sale, net of tax of $ 6,919 , $ 7,347 , and $( 1,593 ) for the twelve months ended December 31, 2025, 2024, and 2023, respectively

Amortization of net unrealized gains on securities transferred from available-for-sale to held-to-maturity, net of tax of $( 143 ), $( 155 ), and $( 197 ) for the twelve months ended December 31, 2025, 2024, and 2023, respectively

Reclassification adjustment for net losses on call and sale of securities, net of tax of $ 1,295 for 2022

Reclassification adjustment for net losses on sale of securities, net of tax of $ 3,439 for 2025

Other comprehensive income (loss), net of tax

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Balance, December 31, 2023

Impact of adoption ASU 2023-02, net of tax

Adjusted balance, January 1, 2024

Common dividends paid, $ 0.90 per share

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Stock-based compensation expense

Other comprehensive loss, net of tax

Other comprehensive income, net of tax

Balance, December 31, 2024

Impact of adoption ASU 2023-02, net of tax

Adjusted balance, January 1, 2024

Common dividends paid, $ 1.00 per share

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Issue restricted shares pursuant to stock incentives, net of forfeitures

Restricted shares withheld for taxes

Issue shares of common stock upon exercise of stock options

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OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash provided by operations

Adjustments to reconcile net income to net cash provided by operating activities

Deferred tax expense (benefit)

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Accretion on acquired loans

Amortization of core deposit intangible

Amortization of investments in tax credit partnerships

Net (accretion) amortization of debt securities

Increase in accrued interest and dividends receivable

Net amortization (accretion) of debt securities

Decrease (increase) in accrued interest and dividends receivable

Stock-based compensation expense

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Gain on sale of mortgage loans held for sale

Gain on sale of securities available for sale

Loss on sale of securities available for sale

Net (gain) loss on sale of other real estate owned and repossessed assets

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Return of capital from tax credit partnerships and SBIC

Net (increase) decrease in loans

Net increase in loans

Purchases of premises and equipment

Purchase of bank owned life insurance contracts

Proceeds from death benefit of bank owned life insurance contracts

Proceeds from sale of other real estate owned and repossessed assets

Expenditures for other real estate owned

Net cash used in investing activities

FINANCING ACTIVITIES

Net decrease in non-interest-bearing deposits

Net increase (decrease) in non-interest-bearing deposits

Net increase in interest-bearing deposits

Net increase (decrease) in federal funds purchased

Net (decrease) increase in federal funds purchased

FHLB advances

Repayment of FHLB advances

Redemption of other borrowings

Proceeds from exercise of stock options

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Dividends paid on preferred stock

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

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Cash paid for:

Income tax refund

NONCASH TRANSACTIONS

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Dividends on nonvested restricted stock reclassified as compensation expense

Dividends declared

Dividends declared but not paid

See Notes to Consolidated Financial Statements.

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The Bank is headquartered in Birmingham, Alabama, and has provided a full range of banking services to individual and corporate customers throughout the Birmingham market since opening for business in May 2005.

The Bank has since expanded into Florida, Georgia, North Carolina, South Carolina, Tennessee, and Virginia.

The Bank has since expanded into Florida, Georgia, North Carolina, South Carolina, Tennessee, Texas and Virginia.

The Bank owns all of the stock of SF Intermediate Holding Company, Inc., which, in turn, owns all of the stock of SF TN Realty Holdings, Inc., which, in turn, owns all of the common stock of the Company’s real estate investment trusts, SF Realty 1, Inc., SF FLA Realty, Inc., SF GA Realty, Inc.

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and its subsidiaries are included in Note 11.

Reclassification

Certain amounts reported in prior years have been reclassified to conform to the current year’s presentation.

These reclassifications had no effect on the Company’s results of operations, financial position, or net cash flow.

Operating Segments

The Company operates as a single reportable segment, with a majority of its revenues derived from the business of banking.

Management, which serves as the Chief Operating Decision Maker (“CODM”), regularly reviews consolidated financial performance and allocates resources on a Bank-wide basis.

Senior management, which serves as the Chief Operating Decision Maker (“CODM”), regularly reviews consolidated financial performance and allocates resources on a Bank-wide basis.

As a result, the Company’s financial statements reflect one reportable segment.

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Cash and due from banks include cash on hand, cash items in process of collection, amounts due from banks and interest bearing balances due from financial institutions.

For purposes of cash flows, cash and cash equivalents include cash and due from banks and federal funds sold.

The Company considers financial instruments with an original maturity of three months or less to be cash equivalents.

For purposes of cash flows, cash and cash equivalents include cash and due from banks and federal funds sold and securities purchased with agreement to resell.

Generally, federal funds are purchased and sold for one-day periods.

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The ACL is reported as a component of other liabilities within the Consolidated Balance Sheets.

Adjustments to the ACL for unfunded commitments are reported in the Consolidated Income Statements as a component of other operating expense.

Adjustments to the ACL for unfunded commitments are reported in the Consolidated Income Statements as provision for credit losses.

Foreclosed Real Estate

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(2) the derivative expires or is sold, terminated, or exercised;

(3) the derivative is dedesignated as a hedge instrument, because it is unlikely that a forecasted transaction will occur;

(3) the derivative is designated as a hedge instrument, because it is unlikely that a forecasted transaction will occur;

(4) a hedged firm commitment no longer meets the definition of a firm commitment;

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This amendment is intended to improve disclosures about a public entity’s reportable segments and addresses requests from investors and other decision makers for additional, more detailed information about a reportable segment’s expenses.

The amendment applies to all public entities that are required to report segment information in accordance with Topic 280.The amendments are to be applied retrospectively to all periods presented and segment expense categories should be based on the categories identified at adoption.

The amendment applies to all public entities that are required to report segment information in accordance with Topic 280.

The amendments are to be applied retrospectively to all periods presented and segment expense categories should be based on the categories identified at adoption.

The Company adopted ASU 2023-07 effective December 31, 2024.

Adoption of ASU 2023-07 did not have a material impact on the Company's consolidated financial statements.

See Note 23 – Business Segment Information for disclosures required by ASU 2023-07.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

ASU 2023-09 requires enhanced income tax disclosures primarily related to the rate reconciliation and income taxes paid information to provide more transparency by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation table and (ii) income taxes paid, net of refunds, to be disaggregated by jurisdiction based on an established threshold.

The amendments in this standard will be effective for the Company on January 1, 2025.

The Company is currently evaluating the impact the amendments will have the consolidated financial statements and related disclosures.

In November 2024, the FASB issued 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) .

See Note 22 – Segment Reporting for disclosures required by ASU 2023-07.

In December 2023, the FASB issued ASU 2023‑09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires enhanced annual income tax disclosures, including additional disaggregation within the effective tax rate reconciliation and income taxes paid by jurisdiction.

The ASU is effective for public business entities for annual periods beginning after December 15, 2024, with early adoption permitted.

Entities may apply the guidance either prospectively or retrospectively.

In our Quarterly Report on Form 10‑Q for the period ending September 30, 2025, we previously disclosed that we had adopted ASU 2023‑09 using a retrospective transition method.

Upon further evaluation of the implementation considerations and in light of the optional transition methods permitted under ASU 2023‑09, management determined that prospective application would provide more decision‑useful information and reduce implementation complexity.

Accordingly, effective January 1, 2025, the Company is applying ASU 2023‑09 prospectively, and the enhanced income tax disclosures required by the ASU will first be reflected in our Annual Report on Form 10‑K for the year ending December 31, 2025.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) .

The amendments improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales and research and development).

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We are currently evaluating the impact these changes may have on our consolidated financial statements.

In November 2025, the FASB issued ASU 2025-08, Financial Instruments - Credit Losses - Purchased Loans .

The amendment expands the population of acquired financial assets accounted for using the gross-up approach and aims to enhance comparability, consistency, and better reflect the economics of acquiring financial assets.

The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted in an interim or annual reporting period in which financial statements have not been issued or made available for issuance.

We will adopt the amendment, but it will have no impact on current assets.

DEBT SECURITIES

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All mortgage-backed debt securities are issued by government sponsored enterprises (“GSEs”) such as Federal National Mortgage Association, Government National Mortgage Association, Federal Home Loan Bank, and Federal Home Loan Mortgage Corporation.

The carrying value of debt securities pledged to secure public funds on deposits and for other purposes as required by law as of December 31, 2024 and 2023 was $ 1.43 billion and $ 1.49 billion, respectively.

The carrying value of debt securities pledged to secure public funds on deposits or for other purposes as required by law as of December 31, 2025 and 2024 was $ 1.23 billion and $ 1.43 billion, respectively.

Restricted equity securities is comprised entirely of a restricted investment in Federal Home Loan Bank of Atlanta stock for membership requirement.

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Debt Securities available-for-sale

Treasury Securities

Government Agency Securities

Mortgage-backed securities

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Debt Securities available-for-sale

Treasury securities

Mortgage-backed securities

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The Company does not intend to sell these debt securities and it is more likely than not that the Company will not be required to sell the debt securities before recovery of their amortized cost, which may be at maturity.

During the year ended December 31, 2025, the Company sold available-for-sale mortgage-backed securities with an amortized cost basis of $ 153.9 million and recorded a pre-tax loss of $ 16.4 million as a result of our portfolio restructuring.

The proceeds from the sale were reinvested into higher-yielding securities.

The unrealized losses are due to increases in market interest rates over the yields available at the time the debt securities were purchased.

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Treasury and residential mortgage-backed securities issued by the U.S.

government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost bases of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S.

government, or agencies thereof, it is expected that the securities will not be settled at prices less than the amortized cost basis of the securities as such securities are backed by the full faith and credit of and/or guaranteed by the U.S.

Accordingly, no allowance for credit losses has been recorded for these securities.

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(In Thousands)

Sale and call proceeds

Sale proceeds

Gross realized gains

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For all loan pools utilizing the DCF method, the Company utilizes and forecasts national unemployment rate as a loss driver.

The Company also utilizes and forecasts gross domestic product (“GDP”) growth as a second loss driver for its agricultural and consumer loan pools.

The Company also utilizes and forecasts gross domestic product (“GDP”) growth as a second loss driver for the majority of its loan pools.

Consistent forecasts of the loss drivers are used across the loan segments.

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The Company leveraged economic projections from reputable and independent sources to inform its loss driver forecasts.

At December 31, 2024, the Company expects the national unemployment rate to rise during the forecast period with a declining national GDP growth rate, with both economic indicators showing improvement when compared to the forecast at December 31, 2023.

At December 31, 2025, the Company expects the national unemployment rate to fall during the forecast period with a rise in national GDP growth rate, with GDP showing improvement and unemployment relatively unchanged when compared to the forecast at December 31, 2024.

The Company uses a loss-rate method to estimate expected credit losses for its C&I revolving lines of credit and a remaining life methodology on credit card pools.

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Changes in the allowance for credit losses, segregated by loan type, during the years ended December 31, 2025, 2024 and 2023, respectively, are as follows:

financial and

Commercial, financial and

Real estate -

Owner-occupied

Non-owner occupied commercial

Total Real estate -

(In Thousands)

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Balance at January 1, 2025

Provision for credit losses on loans

Balance at December 31, 2025

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The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to take into account the probability of a drawdown on the commitment.

The ACL on unfunded loan commitments is classified as a liability account on the Consolidated Balance Sheets within other liabilities, while the corresponding provision for these credit losses is recorded as a component of other expense.

The allowance for credit losses on unfunded commitments was $ 572,000 and $ 608,000 at December 31, 2025 and 2024, respectively.

The provision expense for unfunded commitments was $ 32,000 for the year ended December 31, 2024 and was $ 0 for the year ended December 31, 2023.

The provision expense (release) for unfunded commitments was ($ 36,000 ) for the year ended December 31, 2025 and was $ 32,000 for the year ended December 31, 2024.

The credit quality of the loan portfolio is determined no less frequently than quarterly using categories similar to the standard asset classification system used by the federal banking agencies.

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Percentage of

Payment Deferral

(In Thousands)

Commercial, financial and agricultural

Real estate - construction

Owner-occupied commercial

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Percentage of

Payment Deferral

(In Thousands)

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Owner-occupied commercial

Non-owner occupied commercial

1-4 family mortgage

The following table summarizes the financial impacts of loan modifications made to borrowers experiencing financial difficulty during the year ended December 31, 2025:

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Foreclosed properties sold

Gain (loss) on sale

Write downs and partial liquidations

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To determine whether it must consolidate a VIE, the Company analyzes the design of the VIE to identify the sources of variability within the VIE, including an assessment of the nature of risks created by the assets and other contractual obligations of the VIE, and determines whether it will both absorb a majority of that variability and has the power to direct the activities that most significantly impact the economic performance of the entity.

See Note 17, Commitments and Contingencies, for additional disclosures related to the Company’s VIEs.

Deposits at December 31, 2024 and 2023 were as follows:

See Note 16, Commitments and Contingencies, for additional disclosures regarding the Company’s VIEs.

Deposits at December 31, 2025, and December 31, 2024 were as follows:

(In Thousands)

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At December 31, 2025, the Company had available lines of credit totaling approximately $ 472.0 million with various financial institutions for borrowing on a short-term basis, compared to $ 537.0 million at December 31, 2024.

The Company had $ 80.0 million outstanding borrowings from these lines at December 31, 2024, compared to no outstanding borrowings from these lines at December 31, 2023.

The Company had $ 100.0 million outstanding borrowings from these lines at December 31, 2025, compared to $ 80.0 million outstanding borrowings from these lines at December 31, 2024.

OTHER BORROWINGS

Other borrowings are comprised of:

$ 30.0 million on the Company’s 4.5 % Subordinated Notes due November 8, 2027, which were issued in a private placement in November 2017 and pay interest semi-annually.

The Notes may be prepaid by the Company.

$ 34.75 million of the Company’s 4 % Subordinated Notes due October 21, 2030, which were issued in a private placement in October 2020 and pay interest semi-annually.

The Notes may not be prepaid by the Company prior to October 21, 2025.

Debt is reported net of unamortized issuance costs of $ 0 and $ 7,000 as of December 31, 2025 and 2024, respectively.

During the fourth quarter of 2025, the Company redeemed its $ 30 million 4.5% Subordinated Notes due November 2027, which were outstanding as of December 31, 2024.

SF INTERMEDIATE HOLDING COMPANY, INC., SF HOLDING 1, INC., SF TN REALTY HOLDINGS, INC., SF REALTY 1, INC., SF FLA REALTY, INC., SF GA REALTY, INC.

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are all consolidated into the Company.

The Company has entered into forward loan sale commitments with secondary market investors to deliver loans on a “best efforts delivery” basis, which do not meet the definition of a derivative instrument.

When a rate is committed to a borrower, it is based on the best price that day and locked with the investor for the customer’s loan for a 30-day period.

In the event the loan is not delivered to the investor, the Company has no risk or exposure with the investor.

The interest rate lock commitments related to loans that are originated for later sale are classified as derivatives.

The fair values of the Company’s agreements with investors and rate lock commitments to customers as of December 31, 2024 and 2023 were not material.

EMPLOYEE AND DIRECTOR BENEFITS

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43.00 - 44.00

41.00 - 42.00

43.00 - 44.00

As of December 31, 2025, there were no non-vested stock options.

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The fair value of PSUs is determined using a Monte Carlo simulation model on the grant date.

As of December 31, 2024, there was $ 900,000 of total unrecognized compensation cost related to non-vested PSUs.

As of December 31, 2025, there was $ 1.5 million of total unrecognized compensation cost related to non-vested PSUs.

As of December 31, 2025, non-vested performance stock had a weighted average remaining time to vest of 3 years.

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Non-vested at beginning of year

Additional performance share attainment

Non-vested at end of year

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Mark to market interest rate cap derivative

Gain (loss) on sale of ORE

Death benefit of bank owned life insurance contracts(1)

Loss on sale of fixed assets

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Other operational losses

Other insurance expense

Core processing deconversion expense

EDP contract termination

Privilege tax expense

Total other operating expenses

For the years ended December 31, 2024 and 2023, death benefit amounts were included in Bank-owned life insurance income.

The components of income tax expense are as follows:

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Total income tax expense

The Company’s total income tax expense differs from the amounts computed by applying the Federal income tax statutory rates to income before income taxes.

A reconciliation of the differences is as follows:

The reconciliation of the effective income tax rate to the federal statutory rate is as follows:

Year Ended December 31, 2025

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(In Thousands)

Income tax at statutory federal rate

Effect on rate of:

State income tax, net of federal tax effect

Tax-exempt income, net of expenses

Bank-owned life insurance contracts

Excess tax benefit from stock compensation

Federal tax credits, net of related amortization

US federal statutory income tax

State and local income taxes, net of federal income tax effect(2)

Energy tax credits

Other credits

Nontaxable or nondeductible items

Change in unrecognized tax positions

Effective income tax and rate(1)

(1) Post-adoption of ASU 2023-09

(2) State taxes in Alabama, Florida, and South Carolina make up the majority (greater than 50%) of the tax effect in this category

Year Ended December 31, 2024

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Effective income tax and rate(3)

(3) 2024 and 2023 are pre-adoption of ASU 2023-09

Year Ended December 31, 2023

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Effective income tax and rate(3)

(3) 2024 and 2023 are pre-adoption of ASU 2023-09

The components of net deferred tax asset are as follows:

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Net deferred tax assets

The Federal and State total of income taxes paid (net of refunds received):

5% threshold (4)

(4) No individual state payments over threshold

The Company believes its net deferred tax asset is recoverable as of December 31, 2025 and 2024 based on the expectation of future taxable income and other relevant considerations.

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Increases related to current year tax positions

Lapse of statute

Balance, end of year

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Weighted average common shares outstanding

Dilutive effects of assumed exercise of stock options

and vesting of performance shares

Weighted average common and dilutive potential

common shares outstanding

Dilutive effects of assumed exercise of stock options and vesting of performance shares

Weighted average common and dilutive potential common shares outstanding

Net income available to common stockholders

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Deposits of related parties are also accepted in the ordinary course of business.

The aggregate balances of related party deposits are insignificant as of December 31, 2024 and 2023, respectively.

The aggregate balances of related party deposits are immaterial as of December 31, 2025 and 2024, respectively.

FAIR VALUE MEASUREMENT

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These measurements are classified as Level 3 within the valuation hierarchy.

Net losses on the sale and write-downs of OREO of $ 132,000 and $ 7,000 was recognized during the years ended December 31, 2024 and 2023, respectively.

Net gains (losses) on the sale and write-downs of OREO of $ 298,000 and ($ 132,000 ) were recognized during the years ended December 31, 2025 and 2024, respectively.

These charges were for write-downs in the value of OREO subsequent to foreclosure and losses on the disposal of OREO.

OREO is classified within Level 3 of the hierarchy.

There were three residential real estate loan foreclosures for $ 852,400 classified as OREO as of December 31, 2024, compared to three residential real estate loan foreclosures for $ 360,000 as of December 31, 2023.

There were five residential real estate loan foreclosures for $ 2.5 million classified as OREO as of December 31, 2025, compared to three residential real estate loan foreclosures for $ 852,400 as of December 31, 2024.

There was one residential real estate loan for $ 171,000 that was in the process of being foreclosed as of December 31, 2025.

There were three residential real estate loans for $ 292,000 that were in the process of being foreclosed as of December 31, 2023.

There was one residential real estate loan for $ 82,000 that was in the process of being foreclosed as of December 31, 2024.

The following table presents the Company’s financial assets and financial liabilities carried at fair value on a recurring basis as of December 31, 2025 and 2024.

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The nature of the remaining assets and liabilities is such that transfers in and out of any level are expected to be rare.

For the year ended December 31, 2024, there was two transfers from Level 3 to Level 2 for $ 5,531 .

For the year ended December 31, 2025, there were no transfers compared to two transfers from Level 3 to Level 2 during 2024.

The table below includes a rollforward of the balance sheet amounts for the years ended December 31, 2025 and 2024 (including the change in fair value) for financial instruments classified by the Company within Level 3 of the valuation hierarchy measured at fair value on a recurring basis including changes in fair value due in part to observable factors that are part of the valuation methodology:

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Cash and cash equivalents

Securities purchased with agreement to resell

Held to maturity U.S.

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Restricted equity securities

Held to maturity debt securities

Financial Liabilities:

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Restricted equity securities

Held to maturity debt securities

Financial Liabilities:

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200,000,000 shares authorized:

54,569,427 shares

issued and outstanding at December 31, 2024;

and 54,461,580 shares issued and

outstanding at December 31, 2023

at December 31, 2021

54,624,955 shares issued and outstanding at December 31, 2025;

and 54,569,427 shares issued and outstanding at December 31, 2024 at December 31, 2021

Additional paid-in capital

22 unchanged sentences

Financing activities

Proceeds from issuance of subordinated notes

Redemption of subordinated notes

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Executive Vice President, Chief Operating Officer.

Financial performance is reported to the CODM monthly, and the primary measure of performance is net income, net interest income, non-interest income, significant expenses and budget to actual results, and provides guidance in strategy and the allocation of resources.

The allocation of resources throughout the Bank is based on consolidated profitability and efficiency metrics.

The presentation of financial performance to the CODM is consistent with amounts and financial statement line items shown in the Bank’s consolidated balance sheets and consolidated statements of income.

Additionally, the Bank’s significant expenses are adequately segmented by category and amount in the consolidated statements of income to include all significant items when considering both qualitative and quantitative factors.

Significant expenses of the Company include salaries and employee benefits, equipment and occupancy expense, third-party processing and other services, and professional services.

All of the Bank’s financial results are similar and considered by management to be aggregated into one reportable operating segment.

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Accordingly, all of the Bank’s operations are considered by management to be aggregated in one reportable operating segment.

Financial performance is reported to the CODM monthly, and the primary measure of performance is net income, net interest income, non-interest income, and key operating expenses.

The allocation of resources throughout the Bank is based on consolidated profitability.

Significant expenses of the Company include salaries and employee benefits, equipment and occupancy expense, third-party processing and other services, and professional services.

Because we report on a single segment basis, our segment information may not be directly comparable to financial institutions that present multiple reportable segments.

Because we report on a single segment basis, our financial statements may not be directly comparable to financial institutions that present multiple reportable segments.

Should future organizational changes in our management structure or business model necessitate more detailed segment disclosures, we will revise our segment reporting accordingly.

3 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data