Burke & Herbert Financial Services Corp. (BHRB)

CIK: 0001964333. SIC: 6021 National Commercial Banks. Latest 10-K as of: 2026-02-27.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6021 National Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1964333. Latest filing source: 0001964333-26-000016.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001964333.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-08. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001964333.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001964333-26-000068.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-08. Report date: 2026-03-31.

Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our consolidated financial condition and results of operations of the Company should be read in conjunction with the preceding consolidated financial statements and notes presented in Item 1. Financial Statements of this Form 10-Q, as well as with the audited consolidated financial statements and notes for the year ended December 31, 2025, included in our Form 10-K filed with the SEC on February 27, 2026 (the “Form 10-K”). Historical results of operations and the percentage relationships among any amounts included and any trends that may appear may not indicate trends in operations or results of operations for any future periods. We are a financial holding company, and we conduct all of our material business operations through the Bank. As a result, the discussion and analysis below primarily relate to activities conducted at the Bank.

Disclosure Regarding Forward-Looking Statements

This Form 10-Q contains statements that we believe are, or may be considered to be, “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the beliefs, goals, intentions, and expectations of the Company regarding revenues, earnings, earnings per share, loan production, asset quality, and capital levels, among other matters; our estimates of future costs and benefits of the actions we may take; our assessments of expected losses on loans; our assessments of interest rate and other market risks; our ability to achieve our financial and other strategic goals; and other statements that are not historical facts.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on current beliefs, expectations, or assumptions regarding the future of the business, future plans and strategies, operational results, and other future conditions of the Company. All statements other than statements of historical fact included in this Form 10-Q regarding the prospects of our industry or our prospects, plans, financial position, or business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “plans,” “expects” or “does not expect,” “is expected,” “look forward to,” “budget,” “scheduled,” “estimates,” “forecasts,” “will continue,” “intends,” “the intent of,” “have the potential,” “anticipates,” “does not anticipate,” “believes,” “should,” “should not,” or variations of such words and phrases that indicate that certain actions, events, or results “may,” “could,” “would,” “might,” or “will,” “be taken,” “occur,” or “be achieved,” or the negative of these terms or variations of them or similar terms. Additionally, forward–looking statements speak only as of the date they are made; the Company does not assume any duty, does not undertake, and specifically disclaims any obligation to update such forward–looking statements, whether written or oral, that may be made from time to time, whether because of new information, future events, or otherwise, except as required by law. Furthermore, because forward–looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in or implied by such forward-looking statements because of a variety of factors, many of which are beyond the control of the Company. Further, factors identified herein are not necessarily all of the factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm the Company. Accordingly, you should consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company and not place undue reliance on forward-looking statements. The risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to, the following: the possibility that the anticipated benefits of the LNKB Merger will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company does business; the possibility that we may be unable to achieve expected synergies and operating efficiencies of the LNKB Merger within the expected timeframes or at all and to successfully integrate LNKB’s operations and those of the Company; such integration may be more difficult, time-consuming or costly than expected; revenues following the LNKB Merger may be lower than expected; the Company’s success in executing its business plans and strategies and managing the risks involved in the foregoing; the dilution caused by the Company’s issuance of additional shares of its capital stock in connection with the LNKB Merger; costs or difficulties associated with newly developed or acquired operations; changes in general economic, political, or market trends (either nationally or locally in the areas in which we conduct, or will conduct, business), including inflation, changes in interest rates, market volatility and monetary fluctuations, and changes in federal government policies and practices, including the impact of the federal government shutdown that began in October 2025 and with respect to spending on industries concentrated in our market area, as well as the impact from recently announced and future tariffs on the markets we serve; increased competition; changes in consumer confidence and demand for financial services, including changes in consumer borrowing, repayment, investment,

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and deposit practices; changes in asset quality and credit risk; our ability to control costs and expenses; adverse developments in borrower industries or declines in real estate values; changes in and compliance with federal and state laws and regulations that pertain to our business and capital levels; our ability to raise capital as needed; the impact, extent and timing of technological changes; the effects of any cybersecurity breaches or events; the development and use of artificial intelligence (“AI”) in business processes, services, and products, including emerging external focus among regulators and other officials related to risks in connection with the development and use of AI; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts and tensions, or public health events (such as pandemics), and of governmental and societal responses thereto; and the other factors discussed in the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” section of the Company's Annual Report on Form 10–K for the year ended December 31, 2025 and in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors in this Form 10-Q.

Overview

Burke & Herbert was organized as a Virginia corporation in 2022 to serve as the holding company for the Bank. Burke & Herbert became a bank holding company when it commenced operations on October 1, 2022, following a reorganization transaction in which it acquired control of the Bank under the BHCA. This transaction was treated as an internal reorganization as all shareholders of the Bank became shareholders of Burke & Herbert. Burke & Herbert has no material operations other than owning the Bank. In September 2023, Burke & Herbert elected to become a financial holding company under the BHCA. As a financial holding company of a Virginia state bank, Burke & Herbert is subject to regulation, supervision, and examination by the Federal Reserve and the Virginia BFI. The Bank is a Virginia chartered commercial bank that commenced operations in 1852. The Bank became a member of the Federal Reserve System on December 31, 2024. The Bank is subject to regulation, supervision, and examination by the Federal Reserve (through the Federal Reserve Bank of Richmond) and the Virginia BFI.

The Bank’s primary market area includes northern Virginia and West Virginia, and as of March 31, 2026, it has over 77 branches and commercial loan offices across Delaware, Kentucky, Maryland, Virginia, and West Virginia. The Company’s branch locations accept business and consumer deposits from a diverse customer base. The Company’s deposit products include checking, savings, and term certificate accounts. The Company’s loan portfolio includes commercial and consumer loans, a substantial portion of which are secured by real estate.

The Bank derives a significant portion of its income from interest received on loans and investments. The Bank’s primary source of funding is deposits, both interest-bearing and non-interest-bearing. In order to maximize the Bank’s net interest income, or the difference between the income on interest-earning assets and the expense of interest-bearing liabilities, the Bank must not only manage the volume of these balance sheet items, but also the yields earned on interest-earning assets and the rates paid on interest-bearing liabilities. To account for credit risk inherent in all loans, the Bank maintains an ACL to absorb expected credit losses on existing loans that may become uncollectible. The Bank establishes and maintains this ACL by charging a provision for credit losses against operating earnings. In order to maintain its operations and branch locations, the Bank incurs various operating expenses which are further described within the “Results of Operations” later in this section.

As of March 31, 2026, we had total consolidated assets of $7.9 billion, gross loans of $5.4 billion, total deposits of $6.3 billion, and total shareholders’ equity of $864.5 million. As of March 31, 2026, we had 830 full-time employees. None of our employees are covered by a collective bargaining agreement.

Merger With LINKBANCORP, Inc.

Effective on May 1, 2026, Burke & Herbert Financial Services Corp., a Virginia corporation, completed its previously announced merger with LINKBANCORP, Inc., a Pennsylvania corporation, pursuant to the LNKB Merger Agreement between Burke & Herbert and LNKB. See Note 1 - Nature of Business Activities and Significant Accounting Policies, in Notes to Consolidated Financial Statements for additional information regarding the LNKB merger.

Critical Accounting Policies and Estimates

Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America and conform to general practices within the industry in which we operate. To prepare financial statements in conformity with GAAP, management makes estimates, assumptions, and judgments based on available information. These estimates,

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assumptions, and judgments affect the amounts reported in the financial statements and accompanying notes and are based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions, and judgments reflected in the financial statements. In particular, management has identified several accounting policies that, due to the estimates, assumptions, and judgments inherent in those policies, are critical in understanding our financial statements.

Our most significant accounting policies are presented in the notes to

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-27. Report date: 2025-12-31.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our consolidated financial condition and results of operations of the Company should be read in conjunction with our consolidated financial statements and notes thereto presented in Item 8. Financial Statements and Supplementary Data. Historical results of operations and the percentage relationships among any amounts included, and any trends that may appear, may not indicate trends in operations or results of operations for any future periods. We are a financial holding company and we conduct all of our material business operations through the Bank. As a result, the discussion and analysis below primarily relate to activities conducted at the Bank.

We have made, and will continue to make, various forward-looking statements with respect to financial and business matters. Comments regarding our business that are not historical facts are considered forward-looking statements that involve inherent risks and uncertainties, see Disclosure Regarding Forward-Looking Statements. Actual results may differ materially from those contained in these forward-looking statements.

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Overview

Burke & Herbert Financial Services Corp. was organized as a Virginia corporation in 2022 to serve as the holding company for Burke & Herbert Bank & Trust Company. The Company became a bank holding company when it commenced operations on October 1, 2022, following a reorganization transaction in which it acquired control of the Bank under the BHCA. This transaction was treated as an internal reorganization as all shareholders of the Bank became shareholders of the Company. The Company has no material operations other than owning the Bank. In September 2023, the Company elected to become a financial holding company under the BHCA. As a financial holding company of a Virginia state bank, the Company is subject to regulation, supervision, and examination by the Federal Reserve and the Virginia BFI. The Bank is a Virginia chartered commercial bank that commenced operations in 1852. The Bank became a member of the Federal Reserve System on December 31, 2024. The Bank is subject to regulation, supervision, and examination by the Federal Reserve (through the Federal Reserve Bank of Richmond) and the Virginia BFI.

The Bank’s primary market area includes northern Virginia and West Virginia, and it has over 77 branches and commercial loan offices across Delaware, Kentucky, Maryland, Virginia, and West Virginia. The Company’s branch locations accept business and consumer deposits from a diverse customer base. The Company’s deposit products include checking, savings, and term certificate accounts. The Company’s loan portfolio includes commercial and consumer loans, a substantial portion of which are secured by real estate.

The Bank derives a significant portion of its income from interest received on loans and investments. The Bank’s primary source of funding is deposits, both interest-bearing and non-interest-bearing. In order to maximize the Bank’s net interest income, or the difference between the income on interest-earning assets and the expense of interest-bearing liabilities, the Bank must not only manage the volume of these balance sheet items, but also the yields earned on interest-earning assets and the rates paid on interest-bearing liabilities. To account for credit risk inherent in all loans, the Bank maintains an allowance for credit loss (“ACL”) to absorb expected credit losses on existing loans that may become uncollectible. The Bank establishes and maintains this ACL by charging a provision for credit losses against operating earnings. In order to maintain its operations and branch locations, the Bank incurs various operating expenses, which are further described within the “Results of Operations” later in this section.

As of December 31, 2025, we had total consolidated assets of $7.9 billion, gross loans of $5.4 billion, total deposits of $6.4 billion, and total shareholders’ equity of $854.6 million. As of December 31, 2025, we had 832 full-time equivalent employees. None of our employees are covered by a collective bargaining agreement.

Merger with Summit Financial Group, Inc.

On May 3, 2024, the Company completed its merger with Summit, pursuant to the Agreement and Plan of Reorganization and accompanying Plan of Merger dated August 24, 2023 between the Company and Summit.

Pending Merger with LINKBANCORP, Inc.

On December 18, 2025, the Company and LNKB entered into the Merger Agreement, which provides that, upon the terms and subject to the conditions set forth therein, LNKB will merge with and into the Company, with the Company as the surviving corporation. The LNKB Merger Agreement further provides that immediately following the Holding Company Merger, LINKBANK will merge with and into the Bank, with the Bank as the surviving bank.

Upon the terms and subject to the conditions of the Merger Agreement, at the effective time of the Holding Company Merger, each share of common stock, par value $0.01 per share, of LNKB outstanding immediately prior to the Effective Time will be converted into the right to receive 0.1350 shares of the Company’s common stock. Holders of LNKB common stock will receive cash in lieu of fractional shares.

Completion of the LNKB Merger is subject to customary conditions, including receipt of the requisite approvals of the Company’s and LNKB’s shareholders, receipt of all required regulatory approvals.

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Critical Accounting Policies and Estimates

Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (“GAAP”) and conform to general practices within the industry in which we operate. To prepare financial statements in conformity with GAAP, management makes estimates, assumptions, and judgments based on available information. These estimates, assumptions, and judgments affect the amounts reported in the financial statements and accompanying notes and are based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions, and judgments reflected in the financial statements. In particular, management has identified several accounting policies that, due to the estimates, assumptions, and judgments inherent in those policies, are critical in understanding our financial statements.

Our most significant accounting policies are presented in the notes to the accompanying consolidated financial statements. These policies, along with the other disclosures presented in the financial statement notes and in this financial review, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Based on the valuation techniques used and the sensitivity of financial statement amounts to the methods, assumptions, and estimates underlying those amounts, we have identified business combination and goodwill, the determination of the allowance for credit losses, and income taxes to be the accounting areas that require the most subjective or complex judgments, and as such, could be most subject to revision as new information becomes available.

Business Combination and Goodwill

For acquisitions, we are required to record the assets acquired, including identified intangible assets such as core deposit intangibles, and the liabilities assumed at their respective fair values. The difference between consideration and the net fair value of assets acquired is recorded as goodwill. Management uses significant estimates and assumptions to value such items, including projected cash flows, repayment rates, default rates and losses assuming default, discount rates, and realizable collateral values. The allowance for credit losses for purchased credit deteriorated (“PCD”) loans is recognized within acquisition accounting. The allowance for credit losses for non-PCD assets is recognized as provision for credit losses in the same reporting period as the acquisition. Fair value adjustments are amortized or accreted into the income statement over the estimated life of the acquired assets or assumed liabilities. The purchase date valuations and any subsequent adjustments determine the amount of goodwill recognized in connection with the acquisition. The use of different assumptions could produce significantly different valuation results, which could have material positive or negative effects on our results of operations. The carrying value of goodwill recorded must be reviewed for impairment on an annual basis, as well as on an interim basis if events or changes indicate that the asset might be impaired. An impairment loss must be recognized for any excess of carrying value over fair value of the goodwill.

The determination of fair values is based on valuations using management’s assumptions of future growth rates, future attrition, discount rates, multiples of earnings or other relevant factors. In addition, we engage third party specialists to assist in the development of fair values. Preliminary estimates of fair values may be adjusted for a period of time subsequent to the acquisition date if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. Adjustments recorded during this period are recognized in the current reporting period. Management uses various valuation methodologies to estimate the fair value of these assets and liabilities, and often involves a significant degree of judgment, particularly when liquid markets do not exist for the particular item being valued. Examples of such items include loans, deposits, identifiable intangible assets, and certain other assets and liabilities.

Changes in these factors, as well as downturns in economic or business conditions, could have a significant adverse impact on the carrying value of assets, including goodwill and liabilities, which could result in impairment losses affecting our financial statements as a whole and our banking subsidiary in which the goodwill resides.

Allowance for Credit Losses

The allowance for credit losses represents our estimate of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and projections including reasonable and

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supportable, reversion, and post-reversion forecasts. It is a valuation account that is deducted from the financial assets’ amortized cost basis to present the net amount expected to be collected on the financial asset. Financial assets are charged-off against the allowance when management believes the uncollectibility of a financial asset is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The Company’s loan portfolio is the largest financial asset that is in scope of this critical accounting estimate. Determining the amount of the allowance for credit losses is considered a critical accounting estimate, because it is based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts, and prepayment experience as related to credit contractual terms. Management estimates the allowance balance using relevant available information from internal and external sources. Historical credit loss experience provides the basis for the estimation of expected credit losses; adjustments to historical loss information are made for differences in current loan-specific risk characteristics, such as differences in underwriting standards, portfolio mix, and delinquency levels, as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. The model methodology used for funded credits, along with taking into consideration the probability of drawdowns or funding on unfunded commitments and whether such commitments are irrevocable or not by the Company, is how the Company determines the allowance for credit losses for unfunded commitments. These evaluations are conducted at least quarterly and more frequently, if deemed necessary.

The Company is using an internally developed model that produces an estimate of the allowance for credit losses as the lifetime expected credit losses of the loan portfolio. This model uses a remaining useful life or weighted average remaining maturity (“WARM”) method within defined-contractual terms by federal call codes. The model forecasts net charge-off rates by call codes using ordinary least squares (“OLS”) regression models that use macroeconomic variables to forecast the Company’s and peer banks’ net charge-off rates. These models are used to produce reasonable and supportable forecasts of net charge-off rates. The macroeconomic variables utilized by the Company include variables that meet defined criteria in forecasting credit losses for our loan portfolio. These variables include, but are not limited to, unemployment rates, housing and commercial real estate prices, gross domestic product levels, equity market conditions or interest rates, as well as other variables that are portfolio-specific, such as those pertaining to commercial real estate or to residential loan portfolios. The Company sources the macroeconomic variables and the macroeconomic variable forecasts that it uses in its ACL model from the Standard & Poor’s Global Market Intelligence and from CoStar Group.

The Company currently has set an initial reasonable and supportable forecast period of two years with a subsequent straight-line loss-rate reversion for the following four quarters before then utilizing historical average loss rates in remaining periods of the modeled contractual terms. Based on management’s analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond information used to calculate reasonable and supportable forecast and the subsequent reversion to historical loss information on collectively evaluated loans. As the reasonable and supportable forecast and reversion period forecast reflects the use of the macroeconomic variable loss drivers, management may consider that an additional or reduced reserve is warranted through qualitative risk factors based on current and expected conditions, including those that utilize supplemental information relative to the macroeconomic variable loss drivers. Qualitative adjustments considered by management include the following: (i) management’s assessment of macroeconomic forecasts used in the model and how those forecasts align with management’s overall evaluation of current expected credit conditions; (ii) organization specific risks such as credit concentrations, collateral specific risks, nature and size of the portfolio, and external factors that may ultimately impact credit quality; and (iii) underwriting and delinquency trends. The qualitative factors applied at December 31, 2025, and the importance and levels of the qualitative factors applied, may change in future periods depending on the level of changes to items such as the uncertainty of economic conditions and management’s assessment of the level of credit risk within the loan portfolio as a result of such changes, compared to the amount of ACL calculated by the model. Management reviews supplemental data sources including historical net charge-off rates and data measuring other specific credit outcomes from its systems of record in supporting

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qualitative factors. However, qualitative factor evaluations are inherently imprecise and require significant management judgment.

See Note 1 — Nature of Business Activities and Significant Accounting Policies for more discussion of the qualitative factors along with information on the allowance for credit losses for the off-balance sheet credit exposures.

Income Taxes

The Company’s income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated taxes due. The calculation of each component of the Company’s income tax provision is complex and requires the use of estimates and judgments in its determination. As part of the Company’s evaluation and implementation of business strategies, consideration is given to the regulations and tax laws that apply to the specific facts and circumstances for any tax position under evaluation. Management closely monitors tax developments on both the federal and state level in order to evaluate the effect they may have on the Company’s overall tax position and the estimates and judgments used in determining the income tax provision and records adjustments as necessary.

Deferred income taxes arise from temporary differences between the tax and financial statement recognition of revenue and expenses. In evaluating the Company’s ability to recover its deferred tax assets within the jurisdiction from which they arise, the Company must consider all available evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and the results of recent operations. A valuation allowance is recognized for a deferred tax asset if, based on the available evidence, it is more likely than not that some portion or all of a deferred tax asset will not be realized. See Note 8 — Income Taxes, in Notes to the Consolidated Financial Statements of the Company for additional information.

On July 4, 2025, the President signed H.R. 1, the “One Big Beautiful Bill Act,” into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. The Company is currently evaluating the impact on future periods.

Non-GAAP Financial Measures

We prepare our financial statements in accordance with U.S. GAAP and also present certain non-GAAP financial measures that exclude certain items or otherwise include components that differ from the most directly comparable measures calculated in accordance with U.S. GAAP. Non-GAAP measures are provided as additional useful information to assess our financial condition and results of operations (including period-to-period operating performance). These non-GAAP measures are not intended as a substitute for GAAP financial measures and may not be defined or calculated the same way as non-GAAP measures with similar names used by other companies. For more information, including the reconciliation of these non-GAAP financial measures to their corresponding GAAP financial measures, see the respective sections where the measures are presented.

Commercial Real Estate Sector Concentration

In recent years, commercial real estate (“CRE”) markets have been impacted by economic disruptions, including those resulting from the effects of increases in remote work in urban centers and changes in the characteristics of certain urban centers. CRE loans are generally viewed as having a greater risk of default than other types of loans and depend on cash flows from the owner’s business or the property’s tenants to service the debt. The borrower’s cash flows may be affected significantly by general economic conditions. Adverse conditions in the real estate market or the general business climate and economy or in occupancy rates where the property is located could increase the likelihood of default. In particular, CRE office borrowers in central business districts have been impacted by decreased property valuations, oversupply due to remote work trends, and rising interest rates which has increased default rates and impeded their ability to secure new financing. CRE loans generally have large loan balances, and therefore, the deterioration of one or a few of these loans could cause a significant increase in the percentage of our non-performing loans. An increase in non-performing loans could result in a loss of earnings from

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these loans, an increase in the provision for loan losses, and an increase in charge-offs, all of which could have a material adverse effect on our financial condition and results of operations.

The Bank continues to monitor its commercial real estate portfolio by reviewing various credit risk and concentration reports. The Bank’s exposure to commercial real estate at December 31, 2025, was $2.8 billion or 51.4% of its gross loan portfolio, not including owner-occupied commercial real estate and acquisition, construction & development. Commercial real estate as a percentage of total assets at December 31, 2025, was 35.0%, not including owner-occupied commercial real estate and acquisition, construction & development. Including owner-occupied commercial real estate and acquisition, construction & development, total exposure was $3.7 billion or 69.6% of our total gross loans and 47.4% of total assets at December 31, 2025.

Loan balances by portfolio segment amortized cost (in thousands) and by percentage of our total gross loan portfolio at December 31, 2025, were as follows:

December 31, 2025

Amortized Cost

Percentage

Commercial real estate

$

2,769,287 

51.4 

%

Owner-occupied commercial real estate

593,120 

11.0 

Acquisition, construction & development

386,870 

7.2 

Commercial & industrial

461,921 

8.6 

Single family residential (1-4 units)

1,127,684 

20.9 

Consumer non-real estate and other

48,794 

0.9 

Total gross loans

$

5,387,676 

100.0 

%

Monitoring of the CRE concentration is performed at both the loan level and at the portfolio level. The Credit Risk Management team provides management and the Board with periodic reports on the credit portfolio, which include the CRE portfolio (including owner-occupied CRE and acquisition, construction & development loans). These reports provide an assessment of asset quality and risk rating migration and monitor concentrations against the board approved concentration limits (including sub-limits). The tables below present the Company’s commercial real estate, owner-occupied commercial real estate, and acquisition, construction & development portfolios by collateral type and geographic location as of December 31, 2025 (in thousands).

Commercial Real Estate by Collateral Type and Geographic Location

VA

WV

MD

DC

Other

Total

Percentage

Retail Real Estate

$

299,405 

$

64,954 

$

130,347 

$

38,921 

$

94,260 

$

627,887 

22.7 

%

Multi-Family

184,227 

100,037 

29,328 

77,474 

37,131 

428,197 

15.5 

Office Buildings/Condos

235,867 

34,312 

134,897 

66,869 

56,505 

528,450 

19.1 

Hotels/Motels

99,678 

43,638 

85,585 

37,155 

86,110 

352,166 

12.7 

Industrial/Warehouse

251,219 

10,793 

34,770 

— 

— 

296,782 

10.7 

Self-Storage

65,736 

23,673 

1,413 

— 

33,635 

124,457 

4.5 

Nursing-Assisted Living

42,052 

26,250 

6,253 

— 

37,097 

111,652 

4.0 

Restaurants

14,965 

2,276 

10,121 

5,179 

3,927 

36,468 

1.3 

Gas Stations

7,809 

1,416 

1,957 

14,370 

2,297 

27,849 

1.0 

Other

148,464 

6,413 

12,404 

46,414 

21,684 

235,379 

8.5 

Total

$

1,349,422 

$

313,762 

$

447,075 

$

286,382 

$

372,646 

$

2,769,287 

100.0 

%

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Owner-Occupied Commercial Real Estate by Collateral Type and Geographic Location

VA

WV

MD

DC

Other

Total

Percentage

Office Buildings/Condos

$

60,292 

$

30,499 

$

17,091 

$

719 

$

8,021 

$

116,622 

19.7 

%

Retail

41,007 

36,738 

12,227 

— 

15,221 

105,193 

17.7 

Industrial/Warehouse

41,397 

13,233 

1,248 

— 

14,698 

70,576 

11.9 

Gas Stations

27,744 

9,683 

4,869 

— 

19,563 

61,859 

10.4 

Restaurants

7,325 

8,022 

3,970 

— 

10,241 

29,558 

5.0 

Churches/Religious Organizations

17,364 

7,613 

960 

226 

2,613 

28,776 

4.9 

Coal, oil, gas, and natural resource extraction

561 

7,151 

— 

— 

— 

7,712 

1.3 

Private School

14,225 

— 

— 

— 

— 

14,225 

2.4 

Other

92,694 

19,727 

28,854 

322 

17,002 

158,599 

26.7 

Total

$

302,609 

$

132,666 

$

69,219 

$

1,267 

$

87,359 

$

593,120 

100.0 

%

Acquisition, Construction & Development by Collateral Type and Geographic Location

VA

WV

MD

DC

Other

Total

Percentage

Multi-Family

$

57,974 

$

463 

$

41,803 

$

28,042 

$

33,076 

$

161,358 

41.7 

%

Land

94,746 

20,323 

9,656 

— 

5,900 

130,625 

33.8 

Office Buildings/Condos

3,275 

— 

905 

— 

5,161 

9,341 

2.4 

Self-Storage

5,423 

542 

23,548 

— 

13,150 

42,663 

11.0 

Retail Real Estate

1,492 

— 

— 

— 

472 

1,964 

0.5 

Residential For-Sale

1,359 

1,389 

— 

— 

— 

2,748 

0.7 

Other

16,470 

14,418 

4,207 

— 

3,076 

38,171 

9.9 

Total

$

180,739 

$

37,135 

$

80,119 

$

28,042 

$

60,835 

$

386,870 

100.0 

%

CRE loans are monitored through various processes that include payment monitoring, financial reporting, and covenant compliance monitoring, and annual reviews for larger relationships. Furthermore, construction loans are monitored throughout the life of the project and the construction loan administration function is centralized within the Credit Risk Management team. Monitoring the market conditions is also an important component of prudent CRE risk management. Quarterly construction progress reviews are also completed on all acquisition, construction & development loans. For each loan, management reviews the adequacy of the construction budget, adequacy of the interest reserve, pace of construction, and review of any loan covenants.

The Bank believes its underwriting and monitoring standards for commercial real estate loans are sufficient to evaluate its loan portfolio and keep it from incurring significant losses. The majority of the Company’s commercial real estate loans are in Virginia (approximately 48.9%), and it does not have significant exposure to any economic areas of the country that are underperforming the national economy. Additionally, the Bank’s overall exposure to the “Office Building/Condo” collateral type is 17.5% of total commercial real estate loans, including owner-occupied commercial real estate and acquisition, construction & development. The Bank believes that the combined loan portfolio is well-diversified, generally seasoned, manageable, and will outperform the industry in terms of performance through the economic cycle; however, our underwriting, review, and monitoring cannot eliminate all of the risks related to these loans. For further discussion see Item 1A, under the caption “Risk Factors”.

Liquidity Management

Liquidity is the ability of the Company to convert assets into cash or cash equivalents without significant loss and to raise additional funds by increasing liabilities. Liquidity management involves maintaining the Company’s ability to meet the day-to-day cash flow requirements of its customers, whether they are depositors wishing to

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withdraw funds or borrowers requiring funds to meet their credit needs. Without proper liquidity management, the Company would not be able to perform the primary function of a financial intermediary and would, therefore, not be able to meet the needs of the communities it serves.

The Company assesses the need for liquidity in a variety of scenarios. Those scenarios may include projected growth, credit deterioration, deposit decay, interest rate changes, and a variety of other economic scenarios that can impact the liquidity position of the Company. These analyses are performed on a quarterly basis in conjunction with the Company’s Asset/Liability meetings, and findings are reported to the Asset and Liability Management Committee (the “ALCO”) and to the Board. From time to time, management may change the frequency of such testing or update certain inputs as a result of abnormal market conditions.

Findings, as a result of the Company’s prudent liquidity modeling, may result in the change of certain products offered to customers or adjust the way the Company manages its balance sheet. Such changes could include adjusting interest rates offered on certain deposit products, changes to interest rates charged in lending activities, or the suspension of certain products and activities altogether. Times of significant economic stress may cause the mix of funding to shift and increase the likelihood of changes to certain products in order to manage the Company’s overall liquidity and capital position.

The asset portion of the balance sheet provides liquidity primarily through unencumbered securities available-for-sale, loan principal and interest payments, maturities and prepayments of investment securities, and, to a lesser extent, sales of investment securities available-for-sale. Other short-term investments available to the Company that could act as potential sources of liquidity are federal funds sold, securities purchased under agreements to resell, and maturing interest-bearing deposits with other banks.

The liability portion of the balance sheet provides liquidity through interest-bearing and non-interest-bearing deposit accounts and through FHLB and other borrowings. Brokered deposits, federal funds purchased, securities sold under agreements to repurchase, and other short-term borrowings are additional sources of liquidity and basically represent the Company’s incremental borrowing capacity. These sources of liquidity are used as necessary to fund asset growth and meet short-term liquidity needs.

In addition to the Company’s financial performance and condition, liquidity may be impacted by the Company’s structure as a financial holding company that is a separate legal entity from the Bank. The Company requires cash for various operating needs that could include payment of dividends to its shareholders, the servicing of debt, and the payment of general corporate expenses. The primary source of liquidity for the Company is dividends paid by the Bank. Applicable federal and state statutes and regulations impose restrictions on the amount of dividends that may be paid by the Bank. In addition to the formal statutes and regulations, regulatory authorities also consider the adequacy of the Bank’s total capital in relation to its assets, deposits, and other such items. Any future dividends must be set forth in the Company’s capital plans before any dividends can be paid.

Management believes that the current sources of liquidity are adequate to meet the Company’s requirements and plans for continued growth. See Note 7 — Borrowed Funds and Note 14 — Commitments and Contingencies, in Notes to Consolidated Financial Statements for additional information regarding outstanding balances of sources of liquidity and contractual commitments and obligations.

Capital

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

Applicable capital rules under the Basel III Framework require the Company and the Bank to maintain minimum Common Equity Tier 1 (“CET 1”), Tier 1, and Total Capital ratios, along with a capital conservation buffer, effectively resulting in new minimum capital ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET 1 capital to risk-weighted assets above the minimum but below the conservation buffer (or below the combined capital conservation buffer and

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counter-cyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. The Basel III Framework also provide for a “counter-cyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company or the Bank.

Under capital adequacy guidelines and the regulatory framework for “prompt corrective action,” the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Additionally, federal banking laws require regulatory authorities to take “prompt corrective action” with respect to depository institutions that do not satisfy minimum capital requirements. The extent of these powers depends upon whether the institution in question is “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” or “critically undercapitalized,” as such terms are defined under federal banking agency regulations. Depository institutions that do not meet minimum capital requirements will face constraints on payment of dividends, equity repurchases, and compensation based on the amount of shortfall. A depository institution that is not “well capitalized” is generally prohibited from accepting brokered deposits and offering interest rates on deposits higher than the prevailing rate in its market, may be subject to asset growth limitations, and may be required to submit capital restoration plans.

As of December 31, 2025, and December 31, 2024, the Bank complied with all regulatory capital standards and qualifies as “well capitalized”. Note 12 — Regulatory Capital Matters in Notes to the Consolidated Financial Statements contains additional discussion and analysis regarding the Company and the Bank’s regulatory capital requirements.

Effects of Inflation

The majority of assets and liabilities of a financial institution are monetary in nature; therefore, a financial institution differs greatly from most commercial and industrial companies, which have significant investments in fixed assets or inventories that are greatly impacted by inflation. However, inflation does have an important impact on the growth of total assets in the banking industry and the resulting need to increase equity capital at higher-than-normal rates in order to maintain an appropriate equity-to-assets ratio. Inflation also affects other expenses that tend to rise during periods of general inflation.

Management believes the most significant potential impact of inflation on financial results is a direct result of the Company’s ability to manage the impact of changes in interest rates. Management attempts to maintain a balanced position between rate-sensitive assets and liabilities over an economic cycle in order to minimize the impact of interest rate fluctuations on net interest income. However, this goal can be difficult to completely achieve in times of rapidly changing interest rates and is one of many factors considered in determining the Company’s interest rate positioning.

Key Factors Affecting Financial Performance

We face a variety of risks that may impact various aspects of our financial performance from time to time. The extent of such impacts may vary depending on factors such as the current business and economic conditions, political and regulatory environment, and operational challenges. Many of these risks and our risk management strategies are described in more detail elsewhere in this Report.

Our success will depend upon, among other things, the following factors that we manage or control:

•Effectively managing capital and liquidity, including:

◦Continuing to maintain and, over time, grow our deposit base as a low-cost stable funding source,

◦Prudent liquidity and capital management to meet evolving regulatory capital, capital planning, stress testing, and liquidity standards, and

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◦Actions we take within the capital and other financial markets,

•Our ability to manage any material costs related to the execution of our strategic priorities, including increased employees, infrastructure, compliance, and other costs in a profitable manner over the long term,

•Management of credit risk and interest rate risk in our portfolio,

•Our ability to continue to attract customers and compete with other banks and financial services providers in our markets,

•Our ability to manage and implement strategic business objectives within the changing regulatory environment,

•The impact of legal and regulatory-related contingencies,

•The appropriateness of critical accounting estimates and related contingencies,

•Our ability to manage operational risks related to new products and services, changes in processes and procedures, or the implementation of new technology, and

•The ability to make investments to promote compliance with existing and evolving regulatory requirements that will increase as the Company grows and will result in increased administrative expenses that we did not previously incur, which costs may materially increase our general and administrative expenses.

Our financial performance is also substantially affected by a number of external factors outside of our control, including the following:

•Economic conditions, and volatility in markets, including the effects of pandemics, wars, political conflicts, political instability, hostility and uncertainty both in the U.S. and abroad, government spending policies, trade policies, including tariffs and tariff counter-measures, and other barriers to trade (including the threat of such actions), the availability of labor, supply chain volatility, and any actions taken to mitigate and manage such impacts;

•The actions or inactions (including assumptions about potential actions or inactions) by the Federal Reserve, U.S. Treasury, and other government agencies, including those that impact money supply and market interest rates and inflation;

•The level of, and direction, timing, and magnitude of movement in interest rates and the shape of the interest rate yield curve;

•The functioning and other performance of and availability of liquidity in U.S. and global financial markets, including capital markets;

•Changes in the competitive landscape;

•Impacts of changes in federal, state, and local governmental policy, including on the regulatory landscape, capital markets, employment and unemployment levels in our markets, taxes, infrastructure spending, and social programs;

•The effect of climate change on our business and performance, including indirectly through impacts on our customers;

•The impact of market credit spreads on asset valuations,

•The ability of customers, counterparties, and issuers to perform in accordance with contractual terms and the resulting impact on our asset quality,

•Loan demand, utilization of credit commitments, and standby letters of credit, and

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•The impact on customers and changes in customer behavior due to changing business and economic conditions or regulatory or legislative initiatives.

The impact of these items, where material, is discussed in the applicable sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations. For additional information on the risks we face, see Item 1A. — Risk Factors.

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Selected Financial Data

The following table sets forth selected historical consolidated financial information for each of the periods indicated. This information should be read together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, below, and with the accompanying consolidated financial statements included in this Form 10-K. The historical information indicated as of and for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, has been derived from the Company’s audited consolidated financial statements for the years ended December 31, 2025, December 31, 2024, and December 31, 2023. Historical results set forth below and elsewhere in this Form 10-K are not necessarily indicative of future performance.

As of December 31,

(In thousands, except ratios, share, and per share data)

2025

2024

2023

Selected Financial Condition Data:

Total assets

$

7,920,626 

$

7,812,185 

$

3,617,579 

Total cash and cash equivalents

289,127 

135,314 

44,498 

Total investment securities, at fair value

1,615,954 

1,432,371 

1,248,439 

Net loans

5,319,853 

5,604,196 

2,062,455 

Company-owned life insurance

213,200 

182,834 

94,159 

Premises and equipment, net

136,809 

132,270 

61,128 

Total deposits

6,403,941 

6,515,239 

3,001,881 

Short-term borrowings

450,000 

365,000 

272,000 

Total shareholders’ equity

854,649 

730,157 

314,750 

Common shareholders’ equity

844,236 

719,744 

314,750 

As of or for the Year Ended December 31,

Selected Operating Data:

2025

2024

2023

Interest income

$

444,993 

$

367,063 

$

147,539 

Interest expense

149,081 

140,376 

53,137 

Net interest income

295,912 

226,687 

94,402 

Provision for credit losses

1,523 

24,220 

214 

Total non-interest income

46,110 

35,264 

17,309 

Total non-interest expense

195,561 

197,833 

86,436 

Income before income taxes

144,938 

39,898 

25,061 

Income tax expense

27,632 

4,190 

2,369 

Preferred stock dividends

900 

675 

— 

Net income applicable to common shares

116,406 

35,033 

22,692 

Per Share Data:

Average shares of common stock outstanding, basic

15,006,614 

12,393,677 

7,428,042 

Average shares of common stock outstanding, diluted

15,073,859 

12,441,831 

7,506,855 

Total shares of common stock outstanding

15,028,524 

14,969,104 

7,428,710 

Basic net income per common share

$

7.76 

$

2.83 

$

3.05 

Diluted net income per common share

7.72 

2.82 

3.02 

Dividends declared per common share

2.20 

2.14 

2.12 

Common stock dividend payout ratio (1)

28.50 

%

75.89 

%

70.20 

%

Book value per common share (at period end)

$

56.18 

$

48.08 

$

42.37 

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As of or for the Year Ended December 31,

2025

2024

2023

Performance Ratios:

Return on average assets

1.48 

%

0.45 

%

0.63 

%

Return on average equity (2)

14.76 

5.97 

8.00 

Interest rate spread (3)

3.54 

2.54 

2.24 

Net interest margin (4)

4.14 

3.10 

2.87 

Efficiency ratio (5)

57.18 

75.52 

77.37 

Capital Ratios:

Common equity tier 1 (CET 1) capital to risk-weighted assets

13.45 

%

11.53 

%

16.85 

%

Total risk-based capital to risk-weighted assets

16.17 

14.57 

17.88 

Tier 1 capital to risk-weighted assets

13.89 

11.96 

16.85 

Tier 1 capital to average assets (leverage ratio)

10.92 

9.80 

11.31 

Asset Quality Ratios:

Allowance coverage ratio

1.26 

%

1.20 

%

1.21 

%

Allowance for credit losses as a percentage of non-performing loans

91.36 

177.34 

675.77 

Net charge-offs to average outstanding loans during the period

0.05 

0.03 

— 

Non-performing loans as a percentage of total loans

1.38 

0.68 

0.18 

Non-performing assets as a percentage of total assets

0.97 

0.53 

0.10 

Other Data:

Number of full-service branches

77

77

23

Number of full-time equivalent employees

832

815

400

__________________

(1)Common stock dividend payout ratio represents per share dividends declared divided by diluted earnings per common share.

(2)Return on average equity computed using total average equity at period-end.

(3)The interest rate spread represents the difference between the fully taxable-equivalent weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

(4)The net interest margin represents fully taxable-equivalent net interest income as a percent of average interest-earning assets for the period.

(5)The efficiency ratio represents non-interest expense as a percentage of the sum of net interest income and non-interest income.

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Results of Operations

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

General

Consolidated net income applicable to common shares for the year ended December 31, 2025, was $116.4 million compared to $35.0 million during the year ended December 31, 2024. The $81.4 million or 232.3% increase in net income applicable to common shares in 2025 compared to 2024 was primarily due to higher rates on interest-earning assets and a slight decrease in non-interest expense compared to the prior year ended December 31, 2024.

Net interest income totaled $295.9 million for the year ended December 31, 2025, compared to $226.7 million for the year ended December 31, 2024. The $69.2 million increase in net interest income was primarily driven by higher rates which resulted in higher interest income on loans and securities, partially offset by higher deposit interest expense and higher interest expense on subordinated debt. Interest-bearing demand deposits and money market & savings accounts were the primary driver of increased net interest expense due mostly to an increase in rates, which was partially offset by a decline in volume.

For the year ended December 31, 2025, the Company recorded credit provision expense of $1.5 million compared to $24.2 million for the year ended December 31, 2024. For the year ended December 31, 2024, the Company recognized a one-time CECL Day 2 provision for non-PCD assets acquired in the Summit merger, which resulted in a higher credit provision expense when compared to the year ended December 31, 2025.

Non-interest income increased by $10.8 million, or 30.8%, to $46.1 million for the year ended December 31, 2025, compared to $35.3 million for the year ended December 31, 2024. The increase in non-interest income was mostly due to the effect of the Summit merger and included increases in all categories of non-interest income except net gains on securities. The largest increase was income from company-owned life insurance of $3.4 million followed by an increase in other non-interest income of $3.1 million, and an increase in bank debit and other card revenue of $2.5 million compared to the year ended December 31, 2024. Net realized gains on the sale of securities decreased by $1.2 million compared to the year ended December 31, 2024.

Non-interest expense decreased by $2.3 million, or 1.1%, to $195.6 million for the year ended December 31, 2025, compared to $197.8 million for the year ended December 31, 2024. The decrease was mostly due to large decreases in equipment rentals, depreciation and maintenance, which decreased $7.3 million and other operating expense which decreased by $9.5 million compared to the year ended December 31, 2024. Increases were noted in other non-interest expense categories including salaries and wages which increased by $6.4 million, core deposit intangible amortization which increased by $4.1 million during the first full year following the Summit merger, occupancy, which increased by $2.9 million, and pensions and other employee benefits which increased by $1.3 million compared to the year ended December 31, 2024.

Net Interest Income and Net Interest Margin

Net interest income is the principal component of the Company’s income stream and represents the difference, or spread, between interest and fee income generated from earning assets and the interest expense paid on deposits and borrowed funds. Net interest margin, stated as a percentage, is the yield obtained by dividing the difference between interest income generated on earning assets and the interest expense paid on all funding sources by average earning assets.

Fluctuations in interest rates as well as changes in the volume and mix of earnings assets and interest-bearing liabilities can impact net interest income and net interest margin. Management closely monitors both total net interest income and the net interest margin and seeks to maximize net interest income without exposing the Company to an excessive level of interest rate risk through our asset and liability policies. Interest rate risk is managed by monitoring the pricing, maturity, and repricing options of all classes of interest-bearing assets and liabilities.

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Net interest income totaled $295.9 million for the year ended December 31, 2025, compared to $226.7 million for the year ended December 31, 2024. The $69.2 million increase in net interest income was primarily driven by higher interest income on loans and securities, partially offset by higher deposit interest expense. Interest income on loans increased by $71.6 million while interest income on securities increased $4.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Accretion income associated with acquired loans and borrowings totaled $39.8 million for the year ended, December 31, 2025 compared to $40.9 million for the year ended December 31, 2024. Deposit interest expense increased by $3.3 million, while interest expense on subordinated debt assumed in the Summit merger led to an increase in interest expense of $3.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The tax adjusted net interest margin was 4.14% for the year ended December 31, 2025, compared to 3.10% for the year ended December 31, 2024. The increase in tax-adjusted net interest margin was primarily driven by higher rates on interest-earning assets for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The yield for the year ended December 31, 2025, for the loan portfolio was 6.85% compared to 5.48% for the year ended December 31, 2024. The increase was primarily the result of higher rates on loans, partially offset by lower volume.

For the year ended December 31, 2025, the tax-adjusted yield on the total investment securities portfolio was 3.96% compared to 3.36% for the year ended December 31, 2024. The increase was primarily due to higher rates and was partially offset by lower volume.

The rate paid on interest-bearing deposits increased to 2.40% during the year ended December 31, 2025, from 2.27% during the year ended December 31, 2024. The increase was a result of higher rates, partially offset by lower volume.

The rate paid on our short-term borrowings for the year ended December 31, 2025, was 3.90% compared to 3.35% for the year ended December 31, 2024. The increase was due to higher average rates for the year ended, December 31, 2025.

The weighted-average rate paid on subordinated debt and trust preferred securities acquired in the Summit merger was 9.85% for the year ended December 31, 2025 compared to 10.08% for the year ended December 31, 2024.

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The following table sets forth the major components of net interest income and the related yields and rates for the years ended December 31, 2025, and December 31, 2024, for comparison (dollars in thousands).

For the Years Ended

2025

2024

Average Outstanding Balance

Interest Income/Expense

Rate Earned/Paid

Average Outstanding Balance

Interest Income/Expense

Rate

Earned/

Paid

Assets:

Loans, gross (1)(2)

$

5,586,045 

$

382,794 

6.85 

%

$

5,684,348 

$

311,304 

5.48 

%

Tax-exempt loans (1)(2)(3)

3,613 

228 

6.31 

4,097 

149 

3.64 

Total loans

5,589,658 

383,022 

6.85 

5,688,445 

311,453 

5.48 

Interest-bearing deposits and fed funds sold

111,860 

4,777 

4.27 

118,067 

4,457 

3.77 

Taxable AFS securities and other securities (4)

1,019,031 

39,879 

3.91 

1,156,456 

40,941 

3.54 

Tax-exempt AFS securities (3)(4)

542,615 

21,980 

4.05 

449,980 

12,966 

2.88 

Total securities

1,561,646 

61,859 

3.96 

1,606,436 

53,907 

3.36 

Total interest-earning assets

7,263,164 

449,658 

6.19 

7,412,948 

369,817 

4.99 

Non-interest-earning assets

610,748 

329,082 

Total assets

$

7,873,912 

$

7,742,030 

Liabilities and shareholders’ equity:

Deposits:

Non-interest-bearing demand

$

1,353,250 

$

1,417,846 

Interest-bearing demand

2,262,564 

48,740 

2.15 

%

2,520,273 

45,926 

1.82 

%

Money market & savings

1,661,961 

33,214 

2.00 

1,404,870 

21,836 

1.55 

Brokered CDs & time deposits

1,165,200 

40,015 

3.43 

1,295,270 

50,902 

3.93 

Total interest-bearing deposits

5,089,725 

121,969 

2.40 

5,220,413 

118,664 

2.27 

Total deposits

6,442,975 

121,969 

1.89 

6,638,259 

118,664 

1.79 

Borrowings:

Short-term borrowings and other(5)

425,634 

16,585 

3.90 

426,278 

14,300 

3.35 

Subordinated debt and other

106,884 

10,527 

9.85 

73,507 

7,412 

10.08 

Total interest-bearing liabilities

5,622,243 

149,081 

2.65 

5,720,198 

140,376 

2.45 

Non-interest-bearing liabilities

109,553 

16,801 

Equity

788,866 

587,185 

Total liabilities and equity

$

7,873,912 

$

7,742,030 

Taxable-equivalent net interest income /net interest spread(6)

300,577 

3.54 

%

229,441 

2.54 

%

Taxable-equivalent net interest margin(7)

4.14 

%

3.10 

%

Taxable-equivalent net adjustment

(4,665)

(2,754)

Net interest income

$

295,912 

$

226,687 

Net interest-earning assets

$

1,640,921 

$

1,692,750 

(1)Non-accrual loans are included in average loan balances.

(2)Loan fees are included in the calculation of interest income.

(3)Yields and interest income on tax-exempt assets are computed on a taxable-equivalent basis assuming a 21% tax rate.

(4)Calculated based on fair value of investment securities.

(5)Short-term borrowings and other includes finance lease liabilities.

(6)The interest rate spread represents the difference between the fully taxable equivalent weighted-average yield on interest-earning assets and the weighted-average cost of interest-bearing liabilities for the period.

(7)The net interest margin represents fully taxable equivalent net interest income as a percent of average interest-earning assets for the period.

Taxable-equivalent net interest margin, as presented above, is calculated by dividing fully tax-equivalent (“FTE”) net interest income by total average earning assets. Net interest income, on an FTE basis, is a non-GAAP financial measure that the Company believes to provide a more accurate picture of the interest margin for comparative purposes. Management believes FTE net interest income is a standard practice in the banking industry,

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and when net interest income is adjusted on an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on net income. FTE net interest income is calculated by adding the tax benefit on certain financial interest earning assets, whose interest is tax-exempt, to total interest income and then subtracting total interest expense. As a non-GAAP measure, FTE net interest income should not be considered as a substitute for the nearest comparable GAAP measure, net interest income. Net interest income shown elsewhere in this Form 10-K is GAAP net interest income. The following table reconciles GAAP net interest income to FTE net interest income (in thousands).

For the Years Ended

December 31, 2025

December 31, 2024

GAAP Financial Measurements

Interest Income - Loans

$

382,794 

$

311,303 

Interest Income - Tax-exempt loans

180 

118 

Interest Income - Taxable AFS securities and other securities

36,807 

39,817 

Interest Income - Tax-exempt AFS securities

17,364 

10,243 

Interest Income - Other interest income

7,848 

5,582 

Total Interest Income

444,993 

367,063 

Interest Expense - Deposits

121,969 

118,664 

Interest Expense - Borrowed funds

16,480 

14,189 

Interest Expense - Subordinated debt

10,527 

7,412 

Interest Expense - Other

105 

111 

Total Interest Expense

149,081 

140,376 

Total Net Interest Income

$

295,912 

$

226,687 

Non-GAAP Financial Measurements

Add: Tax Benefit on Tax-Exempt Interest Income - Securities

$

4,665 

$

2,754 

Total Tax Benefit on Tax-Exempt Interest Income (1)

4,665 

2,754 

Tax-Equivalent Net Interest Income

$

300,577 

$

229,441 

(1)Tax benefit was calculated using the federal statutory tax rate of 21%.

Rate/Volume Analysis

The following table sets forth the dollar difference in interest earned and paid for each major category of interest-earning assets and interest-bearing liabilities for the noted periods and the amount of such change attributable to changes in average balances (volume) or changes in average interest rates. Interest income and interest expense for the years ended December 31, 2025, and December 31, 2024, are annualized using an actual days over calendar year method. The volume variances are equal to the increase or decrease in average balance multiplied by current period rates, and rate variances are equal to the increase or decrease in rate times prior period average balances. Variances attributable to both rate and volume changes are calculated by multiplying the change in rate by the change in average balance and are allocated to the volume variance. See table below (in thousands).

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Year Ended December 31, 2025, Compared to December 31, 2024

Increase (Decrease) Due to Change in:

Average Volume

Average Rate

Net Change

Income from the interest-earning assets:

Loans,(1) gross

$

(5,409)

$

76,978 

$

71,569 

AFS Securities and other securities (1)

(1,503)

9,455 

7,952 

Interest-bearing deposits and fed funds sold

(234)

554 

320 

Total interest income on interest-earning assets

(7,146)

86,987 

79,841 

Expense from the interest-bearing liabilities:

Interest-bearing demand deposits

(4,696)

7,510 

2,814 

Money market & savings

3,996 

7,382 

11,378 

Brokered CDs & time deposits

(5,112)

(5,775)

(10,887)

Total interest expense on interest-bearing deposits

(5,812)

9,117 

3,305 

Borrowings

Short-term borrowings

(22)

2,307 

2,285 

Subordinated debt and other

3,366 

(251)

3,115 

Total borrowings

3,344 

2,056 

5,400 

Total interest expense on interest-bearing liabilities

(2,468)

11,173 

8,705 

Taxable-equivalent net interest income

$

(4,678)

$

75,814 

$

71,136 

(1)Yields and interest income on tax-exempt securities have been computed on a taxable-equivalent basis.

Interest Income

Total interest income was $445.0 million for the year ended December 31, 2025, compared to $367.1 million for the year ended December 31, 2024, an increase of 21.2%. The increase in interest income was primarily driven by higher rates which resulted in higher loan and security interest income. Interest income on securities increased by $4.1 million or 8.2% for the year ended December 31, 2025, compared to the year ended December 31, 2024. Interest income on loans increased $71.6 million or 23.0% for the year ended December 31, 2025, compared to the year ended December 31, 2024.

Interest Expense

Total interest expense was $149.1 million for the year ended December 31, 2025, compared to $140.4 million for the previous year ended December 31, 2024, an increase of 6.2%. The increase in interest expense was primarily driven by higher rates and was partially offset by volume. Interest expense on interest-bearing deposits increased by $3.3 million or 2.8% for the year ended December 31, 2025, compared to the year ended December 31, 2024. Interest expense on borrowed funds increased by $2.3 million or 16.1% for the year ended December 31, 2025, compared to the year ended December 31, 2024. Interest expense on subordinated debt acquired in the Summit merger led to an increase in interest expense of $3.1 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.

Provision for (Recapture of) Credit Losses

The provision for credit losses was $1.5 million for the year ended December 31, 2025, compared to $24.2 million for the year ended December 31, 2024. For the year ended December 31, 2024, the Company recognized a one-time CECL Day 2 provision for non-PCD assets acquired in the Summit merger and acquired commitments for unfunded commitments, which resulted in a higher credit provision expense compared to the year ended December 31, 2025. See Note 4 — Allowance for Credit Losses in Notes to Consolidated Financial Statements for further information.

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Non-interest Income

The following table sets forth the various components of our non-interest income for the periods indicated (in thousands):

Years Ended December 31,

Increase (Decrease) 2025 vs. 2024

2025

2024

Amount

Percent

Fiduciary and wealth management

$

10,455 

$

8,411 

$

2,044 

24.3 

%

Service charges and fees

8,197 

7,199 

998 

13.9 

Net gains (losses) on securities

147 

1,357 

(1,210)

(89.2)

Income from company-owned life insurance

8,130 

4,686 

3,444 

73.5 

Bank debit and other card revenue

12,264 

9,772 

2,492 

25.5 

Other non-interest income

6,917 

3,839 

3,078 

80.2 

Total

$

46,110 

$

35,264 

$

10,846 

30.8 

%

Non-interest income increased by $10.8 million or 30.8% for the year ended December 31, 2025, compared to December 31, 2024. The increase was primarily driven by the effect of the Summit merger, and included increases in all categories of non-interest income except net gains on securities. The largest increase was income from company-owned life insurance of $3.4 million followed by an increase in other non-interest income of $3.1 million, and an increase in bank debit and other card revenue of $2.5 million compared to the year ended December 31, 2024. See Note 22 — Revenue from Contracts with Customers in Notes to Consolidated Financial Statements for further information. The Company realized a decrease of $1.2 million in net gains on securities for the year ended December 31, 2025, compared to December 31, 2024.

Non-interest Expense

The following table sets forth the various components of our non-interest expense for the periods indicated (in thousands):

Years Ended December 31,

Increase (Decrease) 2025 vs. 2024

2025

2024

Amount

Percent

Salaries and wages

$

83,441 

$

77,089 

$

6,352 

8.2 

%

Pensions and other employee benefits

18,521 

17,186 

1,335 

7.8 

Occupancy

14,441 

11,577 

2,864 

24.7 

Equipment rentals, depreciation and maintenance

15,825 

23,174 

(7,349)

(31.7)

Core deposit intangible amortization

15,553 

11,460 

4,093 

35.7 

ATM, card, and network expense

4,753 

5,398 

(645)

(11.9)

FDIC and other regulatory assessments

3,904 

3,329 

575 

17.3 

Other operating

39,123 

48,620 

(9,497)

(19.5)

Total

$

195,561 

$

197,833 

$

(2,272)

(1.1)

%

Non-interest expense decreased by $2.3 million, 1.1% for the year ended December 31, 2025, compared to December 31, 2024. The decrease was mostly due to large decreases in equipment rentals, depreciation and maintenance, which decreased $7.3 million and other operating expense which decreased by $9.5 million compared to the year ended December 31, 2024. See Note 20 — Other Operating Expenses in Notes to Consolidated Financial Statements for further information on “Other” non-interest expense. Increases were noted in other non-interest expense categories including salaries and wages which increased by $6.4 million, core deposit intangible amortization which increased by $4.1 million during the first full year following the Summit merger, occupancy, which increased by $2.9 million, and pensions and other employee benefits which increased by $1.3 million compared to the year ended December 31, 2024.

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Income Tax Expense

Income tax expense was $27.6 million for the year ended December 31, 2025, an increase of $23.4 million from the tax provision for the year ended December 31, 2024. For 2025 and 2024, our effective tax rates were 19.1% and 10.5%, respectively. An increase in income from operations led to an increase in the effective tax rate for 2025. The effective tax rate going forward will continue to depend on income from operations as well as any legislative corporate tax changes.

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

For a comparison of the 2024 results to the 2023 results and other 2023 information not included herein, refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of the Company’s 10-K filed with the SEC on March 17, 2025.

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Analysis of Financial Condition for Years Ended December 31, 2025, and December 31, 2024

Assets increased by $108.4 million to $7.9 billion as of December 31, 2025, compared to $7.8 billion as of December 31, 2024. The increase in assets was primarily due to an increase in the securities portfolio of $183.6 million, and an increase of $153.8 million in cash and cash equivalents, partially offset by a decrease in loans, net of ACL, of $284.3 million as of December 31, 2025 compared to December 31, 2024. Deposits decreased by $111.3 million and amounted to $6.4 billion at December 31, 2025, compared to $6.5 billion at December 31, 2024, while short-term borrowings increased by $85.0 million to $450.0 million as of December 31, 2025, compared to $365.0 million at December 31, 2024. Subordinated debt and subordinated debt owed to unconsolidated subsidiary trusts, which were assumed in the Summit merger, totaled $87.5 million at December 31, 2025, compared to $111.9 million at December 31, 2024, due to a redemption of subordinated debt in the second half of 2025.

Investment Securities

Our investment policy is established and reviewed annually by the Board. We are permitted under federal law to invest in various types of liquid assets, including United States Government obligations, securities of various federal agencies and of state and municipal governments, mortgage-backed securities, time deposits of federally insured institutions, certain bankers’ acceptances, and federal funds. Our securities are all classified as available-for-sale (“AFS”).

Our investments provide a source of liquidity because we can pledge them to support borrowed funds or can liquidate them to generate cash proceeds. Our investment portfolio is also a resource in managing interest rate risk because the maturity and interest rate characteristics of this asset class can be modified to match changes in the loan and deposit portfolios. The majority of our AFS investment portfolio is comprised of obligations of states and municipalities and residential mortgage-backed securities. During the year ended December 31, 2025, the unrealized losses on our holdings decreased $45.4 million from December 31, 2024 and amounted to $71.9 million as of December 31, 2025.

The Company determined that the declines in market value were due to increases in interest rates and market movements and not due to credit factors. Therefore, the Company has concluded that the unrealized losses for the AFS securities do not require an ACL at December 31, 2025, or at December 31, 2024. The Company has sufficient access to liquidity such that management does not believe it would be necessary to sell any of its investment securities at a loss to offset any unexpected deposit outflows. Management believes the structure of the Bank’s investment portfolio is appropriately aligned with the rest of the balance sheet to protect against significant and unexpected charges against earnings and capital.

The following tables reflect the amortized cost and fair market values for the total portfolio for each category of investment as of December 31, 2025, and December 31, 2024 (in thousands):

December 31, 2025

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Fair Value

Securities Available-for-Sale

U.S. Treasuries and government agencies

$

159,088 

$

— 

$

8,964 

$

150,124 

Obligations of states and municipalities

977,104 

5,414 

59,944 

922,574 

Residential mortgage backed — agency

57,731 

464 

2,810 

55,385 

Residential mortgage backed — non-agency

221,443 

1,860 

5,211 

218,092 

Commercial mortgage backed — agency

74,253 

250 

607 

73,896 

Commercial mortgage backed — non-agency

112,082 

584 

1,557 

111,109 

Asset backed

53,954 

89 

577 

53,466 

Other

32,162 

158 

1,012 

31,308 

Total

$

1,687,817 

$

8,819 

$

80,682 

$

1,615,954 

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December 31, 2024

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Fair Value

Securities Available-for-Sale

U.S. Treasuries and government agencies

$

165,619 

$

— 

$

16,492 

$

149,127 

Obligations of states and municipalities

777,181 

846 

79,303 

698,724 

Residential mortgage backed — agency

57,244 

121 

4,179 

53,186 

Residential mortgage backed — non-agency

259,964 

44 

12,132 

247,876 

Commercial mortgage backed — agency

33,791 

27 

747 

33,071 

Commercial mortgage backed — non-agency

158,621 

2 

4,112 

154,511 

Asset backed

64,308 

316 

568 

64,056 

Other

32,861 

302 

1,343 

31,820 

Total

$

1,549,589 

$

1,658 

$

118,876 

$

1,432,371 

The investment maturity table below summarizes contractual maturities for our investment securities at December 31, 2025. The actual timing of principal payments may differ from remaining contractual maturities because obligors may have the right to repay certain obligations with or without penalties. The overall weighted average duration of the Company’s investment portfolio is 4.7 years at December 31, 2025. The weighted-average yield below represents the effective yield for the investment securities and is calculated based on the amortized cost of each security (dollars in thousands). Interest on securities below excludes tax-equivalent adjustments.

December 31, 2025

One Year or Less

One to Five Years

Five to Ten Years

After Ten Years

Total

Amortized Cost

Weighted Average Yield

Amortized Cost

Weighted Average Yield

Amortized Cost

Weighted Average Yield

Amortized Cost

Weighted Average Yield

Amortized Cost

Weighted Average Yield

Securities Available-for-Sale

U.S. Treasuries and government agencies

$

— 

— 

%

$

159,088 

1.34 

%

$

— 

— 

%

$

— 

— 

%

$

159,088 

1.34 

%

Obligations of states and municipalities

6,326 

4.86 

286,277 

2.63 

437,303 

3.27 

247,198 

3.49 

977,104 

3.15 

Residential mortgage backed - agency

18 

2.86 

24,459 

4.30 

23,217 

2.39 

10,037 

4.29 

57,731 

3.53 

Residential mortgage backed - non-agency

4,064 

2.62 

59,742 

3.30 

132,672 

4.47 

24,965 

4.85 

221,443 

4.16 

Commercial mortgage backed - agency

— 

— 

24,723 

4.43 

40,851 

5.44 

8,679 

4.70 

74,253 

5.02 

Commercial mortgage backed - non-agency

17,175 

3.66 

62,903 

4.81 

32,004 

4.42 

— 

— 

112,082 

4.52 

Asset backed

8,076 

6.11 

18,924 

4.79 

17,567 

5.10 

9,387 

5.35 

53,954 

5.18 

Other

— 

— 

2,800 

6.58 

20,276 

6.41 

9,086 

9.52 

32,162 

7.30 

Total

$

35,659 

4.30 

%

$

638,916 

2.80 

%

$

703,890 

3.78 

%

$

309,352 

3.89 

%

$

1,687,817 

3.44 

%

Lending Activities

Our loan portfolio consists primarily of commercial real estate loans, but we offer a variety of loan products to meet the credit needs of our borrowers. The risks associated with lending activities differ among loan classes and are subject to the impact of changes in interest rates, market conditions of collateral securing the loans, and general economic conditions. Any of these factors may adversely impact a borrower’s ability to repay loans and also impact the associated collateral. Additional discussion on the classes of loans the Company makes and related risks is included in Note 1 — Nature of Business Activities and Significant Accounting Policies and Note 3 — Loans in Notes to Consolidated Financial Statements.

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Loan balances by portfolio segment were as follows (in thousands):

December 31, 2025

December 31, 2024

Commercial real estate

$

2,769,287 

$

2,637,802 

Owner-occupied commercial real estate

593,120 

614,362 

Acquisition, construction & development

386,870 

465,537 

Commercial & industrial

461,921 

613,085 

Single family residential (1-4 units)

1,127,684 

1,173,749 

Consumer non-real estate and other

48,794 

167,701 

Loans, gross

5,387,676 

5,672,236 

Allowance for credit losses

(67,823)

(68,040)

Loans, net

$

5,319,853 

$

5,604,196 

The loan portfolio, excluding ACL, decreased by $284.6 million from December 31, 2024, to December 31, 2025, primarily due to the Company exiting non-core loans. The Company has continued to grow organically by continuing to serve existing customers and new customers through our expansion into newer markets.

The following table shows the maturity distribution for total loans outstanding as of December 31, 2025. The maturity distribution is grouped by remaining scheduled principal payments that are due in the following periods. The principal balances of loans are indicated by both fixed and floating rate categories in the table below (in thousands).

December 31, 2025

Within One Year

One Year to Five Years

Five Years to 15 Years

After 15 Years

Fixed Rates

Adjustable Rates

Fixed Rates

Adjustable Rates

Fixed Rates

Adjustable Rates

Fixed Rates

Adjustable Rates

Total

Loans:

Commercial real estate

$

292,829 

$

190,550 

$

968,931 

$

458,450 

$

244,097 

$

316,031 

$

6,968 

$

291,431 

$

2,769,287 

Owner-occupied commercial real estate

22,941 

7,225 

153,282 

40,441 

89,012 

167,901 

10,676 

101,642 

593,120 

Acquisition, construction & development

61,953 

87,506 

62,657 

103,682 

13,973 

26,356 

7,354 

23,389 

386,870 

Commercial & industrial

13,510 

145,088 

132,047 

87,786 

27,962 

33,933 

15,494 

6,101 

461,921 

Total commercial loans

391,233 

430,369 

1,316,917 

690,359 

375,044 

544,221 

40,492 

422,563 

4,211,198 

Single family residential (1-4 units)

10,534 

9,470 

43,564 

6,807 

73,448 

74,571 

458,801 

450,489 

1,127,684 

Consumer non-real estate and other

3,902 

14,896 

23,044 

1,383 

4,452 

466 

110 

541 

48,794 

Total loans

$

405,669 

$

454,735 

$

1,383,525 

$

698,549 

$

452,944 

$

619,258 

$

499,403 

$

873,593 

$

5,387,676 

Asset Quality

The Company maintains policies and procedures to promote sound underwriting and mitigate credit risk. The Chief Credit Officer is responsible for establishing credit risk policies and procedures, including underwriting guidelines and credit approval authority, and monitoring credit exposure and performance of the Company’s lending-related transactions.

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A loan is placed on non-accrual status when (i) the Company is advised by the borrower that scheduled principal or interest payments cannot be met, (ii) when management’s best judgment indicates that payment in full of principal and interest can no longer be expected, or (iii) when any such loan or obligation becomes delinquent for 90 days, unless it is both well-secured and in the process of collection.

The Company’s asset quality remained strong through December 31, 2025. The Company’s non-performing assets, which includes non-performing loans consisting of non-accrual loans, loans that are more than 90 days past due and still accruing, and other real estate owned, as of December 31, 2025, and December 31, 2024, totaled $76.9 million and $41.2 million, respectively. The increase in the non-performing asset balance is mostly due to an increase in non-accrual loans of $34.7 million as of December 31, 2025 when compared to December 31, 2024. Most of the other real estate owned assets of $2.7 million were assumed as part of the Summit merger.

The following table summarizes the Company’s non-performing assets as of December 31, 2025, and December 31, 2024 (in thousands).

December 31, 2025

December 31, 2024

Non-accrual loans

$

70,613 

$

35,871 

90 days past due and still accruing

3,623 

2,497 

Total non-performing loans

74,236 

38,368 

Other real estate owned

2,689 

2,783 

Total non-performing assets

$

76,925 

$

41,151 

Allowance for Credit Losses

Refer to the discussion in the “Critical Accounting Policies and Estimates” section above and Note 1 — Nature of Business Activities and Significant Accounting Policies in Notes to Consolidated Financial Statements for management’s approach to estimating the allowance for credit losses.

The Company maintains the ACL at a level deemed adequate by management for expected credit losses. As disclosed in Note 1 and Note 4 in Notes to Consolidated Financial Statements, on January 1, 2023, the Company implemented CECL and increased the ACL, previously the allowance for credit losses, with a cumulative-effect adjustment to the ACL for credit losses of $4.4 million, which included a cumulative-effect adjustment to the ACL for off-balance sheet exposures of $274.8 thousand. The Company’s ACL is calculated quarterly with any adjustment recorded to the provision for credit losses in the consolidated Statement of Income. Management evaluates the adequacy of the ACL, utilizing a defined methodology to determine if it properly addresses the current and expected risks in the loan portfolio, which considers the performance of borrowers and specific evaluation of individually evaluated loans, including historical loss experiences, trends in delinquencies, non-performing loans and other risk assets, and qualitative factors. Risk factors are continuously reviewed and adjusted, as needed, by management when conditions support a change. Management believes its approach properly addresses relevant accounting and bank regulatory guidance for loans both collectively and individually evaluated.

Gross charged-off loans were $3.8 million, $1.8 million, and $194.0 thousand for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively. The increase in charge-offs during 2025, when compared to 2024, was due to an increase in charge-offs related to owner occupied commercial real estate loans of $1.1 million, and consumer non real estate and other loans of $1.2 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. Gross recoveries totaled $1.3 million, $161.0 thousand, and $96.0 thousand for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively. The ACL as a percentage of gross loans, net of unearned income, was 1.26%, 1.20%, and 1.21% as of December 31, 2025, December 31, 2024, and December 31, 2023, respectively.

The Company recorded a provision for credit losses of $2.3 million, a provision for credit losses of $20.5 million, and a provision recapture of credit losses of $235.0 thousand for the years ended December 31, 2025,

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December 31, 2024, and December 31, 2023, respectively. The increase in provision for the year ended December 31, 2024 was due to the Summit merger and the requirement to record an immediate provision expense for loans classified as non-PCD versus PCD loans where the Company is allowed to establish an adjustment to the ACL.

The following table summarizes the changes in the Company’s credit loss experience by portfolio for the year ended December 31, 2025, and the changes in the Company’s allowance for loan losses for the years ended December 31, 2024, and December 31, 2023 (dollars in thousands):

2025

2024

2023

Loans outstanding at end of period

$

5,387,676 

$

5,672,236 

$

2,087,756 

Balance of allowance at beginning of year

(68,040)

(25,301)

(21,039)

Initial CECL adjustment

— 

— 

(4,125)

Allowance established for acquired PCD loans

— 

(23,910)

— 

Loans charged-off

Commercial real estate

116 

382 

— 

Owner-occupied commercial real estate

1,100 

— 

— 

Acquisition, construction & development

1 

— 

— 

Commercial & industrial

238 

301 

29 

Residential

232 

190 

— 

Consumer non-real estate and other

2,148 

934 

165 

Total loans charged-off

3,835 

1,807 

194 

Recoveries of loans charged-off

Commercial real estate

42 

15 

38 

Owner-occupied commercial real estate

31 

— 

— 

Acquisition, construction & development

1 

— 

— 

Commercial & industrial

37 

39 

— 

Residential

298 

83 

52 

Consumer non-real estate and other

883 

24 

6 

Total recoveries of loans charged-off

1,292 

161 

96 

Net loan charge-offs (recoveries)

2,543 

1,646 

98 

Provision for (recapture of) credit losses for the period

2,326 

20,475 

235 

Ending allowance

$

(67,823)

$

(68,040)

$

(25,301)

Average loans outstanding during the period

$

5,589,658 

$

5,688,445 

$

2,007,030 

Allowance coverage ratio(1)

1.26 

%

1.20 

%

1.21 

%

Net charge-offs to average outstanding loans during the period(2)

0.05 

0.03 

0.00 

Allowance for credit losses as a percentage of non-performing loans(3)

91.36 

177.34 

675.77 

__________________

(1)The allowance coverage ratio is calculated by dividing the ACL at the end of the period by gross loans, net of unearned income at the end of the period.

(2)The Net charge-offs to average outstanding loans during the period is calculated by dividing total net loan charge-offs (recoveries) during the year by average gross loans outstanding during the year.

(3)The Allowance for credit losses as a percentage of non-performing loans ratio is calculated by dividing the ACL at the end of the period by non-accrual loans at the end of the period.

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The following table summarizes the ACL by portfolio with a comparison of the percentage composition in relation to total ACL and allowance for credit losses and total loans as of December 31, 2025, and December 31, 2024 (dollars in thousands).

December 31, 2025

In thousands

Allowance for credit losses

Percent of Allowance in Each Category to Total Allocated Allowance

Percent of Loans in Each Category to Total Loans

Commercial real estate

$

26,190 

38.62 

%

51.40 

%

Owner occupied commercial real estate

2,760 

4.07 

11.01 

Acquisition, construction & development

17,221 

25.39 

7.18 

Commercial & industrial

8,227 

12.13 

8.57 

Residential

12,536 

18.48 

20.93 

Consumer non real estate and other

889 

1.31 

0.91 

Total

$

67,823 

100.00 

%

100.00 

%

December 31, 2024

In thousands

Allowance for loan losses

Percent of Allowance in Each Category to Total Allocated Allowance

Percent of Loans in Each Category to Total Loans

Commercial real estate

$

30,444 

44.75 

%

46.50 

%

Owner occupied commercial real estate

3,261 

4.79 

10.83 

Acquisition, construction & development

17,386 

25.55 

8.21 

Commercial & industrial

6,633 

9.75 

10.81 

Residential

9,763 

14.35 

20.69 

Consumer non real estate and other

553 

0.81 

2.96 

Total

$

68,040 

100.00 

%

100.00 

%

Derivative Financial Instruments

The Company utilizes interest rate swap agreements as part of its asset/liability management strategy to help manage its interest rate risk position. The Company recognizes derivative financial instruments at fair value as either other assets or other liabilities on the Consolidated Balance Sheets. The Company’s use of derivative financial instruments is described more fully in Note 13 — Derivatives in Notes to Consolidated Financial Statements.

Off-Balance Sheet Arrangements

The Company enters into certain off-balance sheet arrangements in the normal course of business to meet the financing needs of its customers. These off-balance sheet arrangements include commitments to extend credit, standby letters of credit, and financial guarantees which would impact the Company’s liquidity and capital resources to the extent customers accept and/or use these commitments. See Note 14— Commitments and Contingencies in Notes to Consolidated Financial Statements for a discussion of credit extension commitments. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheet. With the exception of these off-balance sheet arrangements, the Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

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Funding Activities

The Company’s funding activities are monitored and governed through the Company’s asset/liability management process. Deposits are the primary source of funds for lending and investing activities; however, the Company will use borrowings to meet liquidity needs and for temporary funding. The Company has available secured lines of credit with the Federal Reserve Bank of Richmond, such as the Borrower-In-Custody program, the FHLB of Atlanta, and unsecured federal funds lines of credit from correspondent banking relationships. The Company also utilizes brokered time deposits. For more discussion of brokered time deposits, see the Deposits heading below this section.

As of December 31, 2025, the Company has available unused borrowing capacity of $4.6 billion through its available lines of credit with the FHLB of Atlanta, the Federal Reserve Borrower-In-Custody Program line, and unsecured federal fund lines of credit from correspondent banking relationships.

The following table shows certain information regarding short-term borrowings at year end 2025 and 2024 (dollars in thousands):

Balance at end of period

2025

2024

Short-term borrowings

$

450,000 

$

365,000 

Weighted average interest rate at end of period

3.90 

%

3.35 

%

The following table shows certain information regarding long-term debt at year end 2025, and 2024, respectively (dollars in thousands):

Balance at end of period

December 31, 2025

December 31, 2024

Subordinated debentures, net

$

70,222 

$

94,872 

Subordinated debentures owed to unconsolidated subsidiary trusts

17,268 

17,013 

Total long-term debt

$

87,490 

$

111,885 

Weighted average interest yield at end of period

9.85%

10.08%

Deposits

Total deposits decreased by $111.3 million from December 31, 2025, to December 31, 2024, primarily driven by a $180.4 million decrease in brokered deposits and a $43.6 million decrease in non-interest-bearing deposits, which was partially offset by a $106.6 million increase in interest-bearing deposits. The Company’s brokered deposits balance was $64.4 million and $244.8 million at December 31, 2025, and December 31, 2024, respectively. All of the Company’s brokered deposits are in the form of certificates of deposits that are insured by the FDIC. Excluding the brokered deposit balance, the Company’s total core deposit balance increased by $69.1 million from December 31, 2024 to December 31, 2025.

The following table sets forth the balance of each category of deposits as of the dates indicated (dollars in thousands).

Dec 31, 2025

Dec 31, 2024

Balance

Balance

Demand, non-interest-bearing

$

1,336,380 

$

1,379,940 

Demand, interest-bearing

2,330,181 

2,223,540 

Money market and savings

1,665,304 

1,658,480 

Brokered deposits

64,410 

244,802 

Time deposits, other

1,007,666 

1,008,477 

Total interest-bearing

5,067,561 

5,135,299 

Total Deposits

$

6,403,941 

$

6,515,239 

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The Company continues to seek organic growth in both interest-bearing and non-interest-bearing deposits consistent with our relationship-based strategy. Management evaluates its utilization of brokered deposits, taking into consideration the interest rate curve and regulatory views on non-core funding sources, and balances this funding source with its funding needs based on growth initiatives.

The Company has deposits that meet or exceed the FDIC insurance limit of $250,000 of $2.1 billion and $1.9 billion at December 31, 2025, and December 31, 2024. The increase in uninsured deposits as of December 31, 2025 was due to the decline in brokered CDs which are fully insured, and an increase in core deposits, some of which are uninsured. The Company does not have material deposit concentration risk to any significant market, industry or individual at December 31, 2025.

The following table sets forth maturity ranges of time deposits, as of December 31, 2025, that meet or exceed the FDIC insurance limit (in thousands).

Dec 31, 2025

Due within 3 months or less

$

160,536 

Due after 3 months and within 6 months

83,496 

Due after 6 months and within 12 months

43,511 

Due after 12 months

7,849 

Total uninsured, time deposits

$

295,392 

Shareholders’ Equity

Total shareholders’ equity at December 31, 2025, was $854.6 million, compared to $730.2 million at December 31, 2024. Shareholders’ equity increased by $124.5 million primarily due to the Company’s earnings from operations. Additionally, accumulated other comprehensive loss decreased by $36.8 million as a result of an increase in the fair value of investment securities available-for-sale.

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