ENTERPRISE FINANCIAL SERVICES CORP (EFSC)

CIK: 0001025835. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-02-27.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6022 State Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1025835. Latest filing source: 0001025835-26-000058.

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/CIK0001025835.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 2026-05-01. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001025835.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: 0001025835-26-000108.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-01. Report date: 2026-03-31.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Forward Looking Statements

This Quarterly Report on Form 10-Q contains information and statements that are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on the Company, and include, without limitation, statements about the Company’s plans, strategies, goals, objectives, expectations, or consequences of statements about the future performance, operations, products and services of the Company and its subsidiaries, as well as statements about the Company’s expectations regarding revenue and asset growth, financial performance and profitability, loan and deposit growth, yields and returns, loan diversification and credit management, products and services, stockholder value creation and the impact of acquisitions. Forward-looking statements are typically identified with the use of terms such as “may,” “might,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “could,” “continue,” “intend,” and the negative and other variations of these terms and similar words and expressions, although some forward-looking statements may be expressed differently. Forward-looking statements are inherently subject to risks and uncertainties and our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. You should be aware that our actual results could differ materially from those contained in the forward-looking statements.

While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: the Company’s ability to efficiently integrate acquisitions into its operations, retain the clients of these businesses and grow the acquired operations, the Company’s ability to collect insurance proceeds from claims made related to tax recapture events, credit risk, changes in the appraised valuation of real estate securing impaired loans, outcomes of litigation and other contingencies, exposure to general and local economic and market conditions, high unemployment rates, higher inflation and its impacts (including U.S. federal government measures to address higher inflation), impacts of trade and tariff policies, U.S. fiscal debt, budget and tax matters (including the effect of a prolonged U.S. federal government shutdown), and any slowdown in global economic growth, risks associated with rapid increases or decreases in prevailing interest rates, our ability to attract and retain deposits and access to other sources of liquidity, consolidation in the banking industry, competition from banks and other financial institutions, the Company’s ability to attract and retain relationship officers and other key personnel, burdens imposed by federal and state regulation, changes in legislative or regulatory requirements, as well as current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including rules and regulations relating to bank products and financial services, changes in accounting policies and practices or accounting standards, natural disasters (such as wildfires and earthquakes), terrorist activities, war and geopolitical matters (including in Israel, Iran and Ukraine, and the imposition of additional sanctions and export controls in connection therewith), or pandemics, and their effects on economic and business environments in which we operate, including the related disruption to the financial market and other economic activity; and other risks discussed under the caption “Risk Factors” under Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and other reports filed with the SEC, all of which could cause the Company’s actual results to differ from those set forth in the forward-looking statements. The Company cautions that the preceding list is not exhaustive of all possible risk factors and other factors could also adversely affect the Company’s results.

Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s analysis and expectations only as of the date of such statements. Forward-looking statements speak only as of the date they are made, and the Company does not intend, and undertakes no obligation, to publicly revise or update forward-looking statements after the date of this report, whether as a result of new information, future events or otherwise, except as required by federal securities law. You should understand that it is not possible to predict or identify all risk factors. Readers should carefully review all disclosures we file from time to time with the SEC which are available on the Company’s website at www.enterprisebank.com under “Investor Relations.”

31

Introduction

The following discussion describes the significant changes to the financial condition of the Company that have occurred during the first three months of 2026 compared to the financial condition as of December 31, 2025. In addition, this discussion summarizes the significant factors affecting the results of operations of the Company for the three months ended March 31, 2026, compared to the linked fourth quarter of 2025 (“linked quarter”) and the results of operations, liquidity and cash flows for the three months ended March 31, 2026 compared to the same period in 2025 (“prior year quarter”). In light of the nature of the Company’s business, the Company’s management believes that the comparison to the linked quarter is the most relevant to understand the financial results from management’s perspective. For purposes of the Quarterly Report on Form 10-Q, the Company is presenting a comparison to the corresponding prior year quarter. This discussion should be read in conjunction with the accompanying condensed consolidated financial statements included in this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Critical Accounting Policies and Estimates

The Company’s critical accounting policies are considered important to the understanding of the Company’s financial condition and results of operations. These accounting policies require management’s most difficult, subjective and complex judgments about matters that are inherently uncertain. Because these estimates and judgments are based on current circumstances, they may change over time or prove to be inaccurate based on actual experience. If different assumptions or conditions were to prevail, and depending upon the severity of such changes, the possibility of a materially different financial condition and/or results of operations could reasonably be expected.

A full description of our critical accounting policies and the impact and any associated risks related to those policies on our business operations are discussed throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” where such policies affect our reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

The Company has prepared all of the consolidated financial information in this report in accordance with GAAP. The Company makes estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Such estimates include the valuation of loans, goodwill, intangible assets, and other long-lived assets, along with assumptions used in the calculation of income taxes, among others. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using loss experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment will be reflected in the financial statement in future periods. There can be no assurances that actual results will not differ from those estimates.

32

ACL

The Company maintains separate allowances for funded loans, unfunded loans, and held-to-maturity securities, collectively referred to as the ACL. The ACL is a valuation account to adjust the cost basis to the amount expected to be collected, based on management’s experience, current conditions, and reasonable and supportable forecasts. For purposes of determining the allowance for funded and unfunded loans, the portfolios are segregated into pools that share similar risk characteristics that are then further segregated by credit grades. Loans that do not share similar risk characteristics are evaluated on an individual basis and are not included in the collective evaluation. The Company estimates the amount of the allowance based on loan loss experience, adjusted for current and forecasted economic conditions, including unemployment, changes in GDP, and commercial and residential real estate prices. The Company’s forecast of economic conditions uses internal and external information and considers a weighted average of a baseline, upside, and downside scenarios. Because economic conditions can change and are difficult to predict, the anticipated amount of estimated loan defaults and losses, and therefore the adequacy of the allowance, could change significantly and have a direct impact on the Company’s credit costs. The Company’s ACL on loans was $142.1 million at March 31, 2026 based on the weighting of the different economic scenarios. As a hypothetical example, if the Company had only used the upside scenario, the allowance would have decreased $24.6 million. Conversely, the allowance would have increased $36.4 million using only the downside scenario.

33

Executive Summary

Below are highlights of the Company’s financial performance for the periods indicated.

($ in thousands, except per share data)

Three months ended

March 31,

2026

December 31,

2025

March 31,

2025

EARNINGS

Total interest income

$

225,091 

$

232,273 

$

211,780 

Total interest expense

58,944 

64,099 

64,264 

Net interest income

166,147 

168,174 

147,516 

Provision for credit losses

7,243 

9,236 

5,184 

Net interest income after provision for credit losses

158,904 

158,938 

142,332 

Total noninterest income

19,088 

25,412 

18,483 

Total noninterest expense

115,137 

114,532 

99,783 

Income before income tax expense

62,855 

69,818 

61,032 

Income tax expense

13,493 

15,024 

11,071 

Net income

$

49,362 

$

54,794 

$

49,961 

Preferred dividends

938 

937 

938 

Net income available to common stockholders

$

48,424 

$

53,857 

$

49,023 

Basic earnings per common share

$

1.31 

$

1.46 

$

1.33 

Diluted earnings per common share

$

1.30 

$

1.45 

$

1.31 

Return on average assets

1.16 

%

1.27 

%

1.30 

%

Adjusted return on average assets1

1.16 

%

1.19 

%

1.29 

%

Return on average common equity

9.80 

%

10.95 

%

11.10 

%

Adjusted return on average common equity1

9.84 

%

10.28 

%

11.08

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

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. 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

Introduction

The objective of this section is to provide an overview of the results of operations and financial condition of the Company by focusing on changes in certain key measures from year to year. It should be read in conjunction with the Consolidated Financial Statements and related Notes contained in “Item 8. Financial Statements and Supplementary Data,” and other financial data presented elsewhere in this report, particularly the information regarding the Company’s business operations described in Item 1. A detailed discussion comparing 2024 and 2023 results is incorporated herein by reference to Item 7 of the Company’s 2024 Annual Report on Form 10-K filed on February 28, 2025.

Executive Summary

The Company offers a broad range of business and personal banking services including wealth management. Lending services include C&I, CRE, real estate construction and development, residential real estate, specialty, and consumer loans. A wide variety of deposit products and a complete suite of treasury management and international trade services complement our lending capabilities. The Company’s results of operations are also affected by prevailing economic conditions, competition, government policies and other actions of regulatory agencies.

The Company’s financial condition, operating results and liquidity in 2025 continued to be impacted by monetary policy actions. The Federal Reserve decreased the target federal funds rate 75 basis points in 2025, following a 100 basis point decrease in 2024. This follows the period of 2022 to 2023 when the Federal Reserve increased the target federal funds rate 525 basis points.

31

Financial Performance Highlights

Below are highlights of our financial performance for the years ended December 31, 2025, 2024 and 2023.

($ in thousands, except per share data)

At or for the year ended December 31,

2025

2024

2023

EARNINGS

Total interest income

$

888,410 

$

851,051 

$

764,919 

Total interest expense

261,672 

282,955 

202,327 

Net interest income

626,738 

568,096 

562,592 

Provision for credit losses

26,337 

21,508 

36,605 

Net interest income after provision for credit losses

600,401 

546,588 

525,987 

Total noninterest income

113,123 

69,703 

68,725 

Total noninterest expense

429,807 

385,047 

348,186 

Income before income tax expense

283,717 

231,244 

246,526 

Income tax expense

82,343 

45,978 

52,467 

Net income

$

201,374 

$

185,266 

$

194,059 

Preferred dividends

3,750 

3,750 

3,750 

Net income available to common stockholders

$

197,624 

$

181,516 

$

190,309 

Basic earnings per common share

$

5.34 

$

4.86 

$

5.09 

Diluted earnings per common share

$

5.31 

$

4.83 

$

5.07 

Return on average assets

1.24 

%

1.25 

%

1.41 

%

Adjusted return on average assets1

1.23 

%

1.26 

%

1.41 

%

Return on average common equity

10.58 

%

10.60 

%

12.27 

%

Adjusted return on average common equity1

10.45 

%

10.71 

%

12.35 

%

Return on average tangible common equity1

13.34 

%

13.58 

%

16.25 

%

Adjusted return on average tangible common equity1

13.17 

%

13.71 

%

16.35 

%

Net interest margin (tax-equivalent)

4.21 

%

4.16 

%

4.43 

%

Efficiency ratio

58.09 

%

60.37 

%

55.15 

%

Core efficiency ratio1

59.32 

%

58.42 

%

53.42 

%

Common dividend payout ratio2

22.98 

%

21.95 

%

19.72 

%

Book value per common share

$

53.22 

$

47.37 

$

43.94 

Tangible book value per common share1

$

41.37 

$

37.27 

$

33.85 

Average common equity to average assets

11.53 

%

11.54 

%

11.24 

%

Tangible common equity to tangible assets1

9.07 

%

9.05 

%

8.96 

%

ASSET QUALITY

Net charge-offs

$

24,302 

$

17,450 

$

38,044 

Nonperforming loans

82,809 

42,687 

43,728 

Nonaccrual loans

81,180 

42,667 

43,181 

Nonperforming assets

164,353 

46,642 

49,464 

Classified assets

410,485 

193,838 

185,389 

Total assets

17,300,884 

15,596,431 

14,518,590 

Total loans

11,800,338 

11,220,355 

10,884,118 

Classified assets to total assets

2.37 

%

1.24 

%

1.28 

%

Nonperforming loans to total loans

0.70 

%

0.38 

%

0.40 

%

Nonperforming assets to total assets

0.95 

%

0.30 

%

0.34 

%

ACL on loans to total loans

1.19 

%

1.23 

%

1.24 

%

Net charge-offs to average loans

0.21 

%

0.16 

%

0.37 

%

1Non-GAAP measures. A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.”

2Dividends per common share divided by diluted earnings per common share.

32

2025 Financial Highlights

During 2025, we noted the following significant developments:

•The Company had a return on average assets of 1.24%. This drove a 11.0% increase in tangible book value per share in 2025.

•Dividends paid in 2025 of $1.22 per share increased $0.16 per share, or 15%, compared to $1.06 per share in 2024.

•The Company repurchased 258,739 shares of its common stock at a weighted-average share price of $54.60.

•The Bank acquired 12 branches from First Interstate Bank, including certain deposits and loans, and the owned real estate and fixed and other assets associated with the 12 branches. The Company acquired $609 million in deposits, and certain, mostly commercially-oriented loans with outstanding balances of approximately $292 million as of December 31, 2025. The transaction added 10 branches in Arizona and two branches in Kansas City, and expands the Company’s presence in those markets.

•A solar provider from which the Company had purchased $24.1 million of transferrable solar tax credits declared bankruptcy. The bankrupt solar provider indirectly owned, through a complex structure of multiple entities, the solar projects generating the tax credits that the Company purchased. As part of the bankruptcy, the bankrupt solar provider sold and transferred equity interests in certain of those entities. As a result of this transfer, the $24.1 million of solar tax credits purchased by the Company were recaptured. The Company previously purchased an insurance policy to insure against recapture risk and anticipates proceeds from the insurance policy to cover the $24.1 million of recaptured tax credits and approximately $8.0 million of incremental tax liability attributable to the anticipated insurance proceeds from the insured recaptured credits.

•The Company redeemed $63.3 million of subordinated debt that had a floating rate of three-month Term SOFR plus a spread of 5.66%. The redemption was funded through the issuance of a $63.3 million senior note at a rate of one-month Term SOFR plus a spread of 2.50%.

The Company noted the following trends during 2025:

•The Company reported net income of $201.4 million, or $5.31 per diluted share for 2025, compared to $185.3 million, or $4.83 per diluted share for 2024. PPNR1 for 2025 was $274.7 million, compared to $255.2 million in 2024. PPNR ROAA1 for 2025 and 2024 was 1.70% and 1.72%, respectively. The increase in PPNR1 was primarily due to higher net interest income that benefited from an organic increase in average interest-earning asset balances and liquidity provided through the Branch Acquisition, and lower rates paid on interest-bearing liabilities. These increases were partially offset by an increase in noninterest expense due to the Branch Acquisition, merit increases, higher headcount and higher deposit costs from growth in the deposit verticals.

•Net interest income was $626.7 million, an increase of $58.6 million over the prior year. NIM increased to 4.21% in 2025, from 4.16% in 2024, primarily due to higher average loan and securities balances, higher yields on the securities portfolio, and lower short-term interest rates that decreased deposit interest expense. Average loans and securities increased $472.6 million and $753.8 million, respectively, compared to 2024. While the decline in market interest rates reduced the yield on loans 28 basis points, the yield on securities increased 51 basis points compared to 2024. The total cost of deposits was 1.77% in 2025 compared to 2.12% in 2024.

1 PPNR, PPNR ROAA, and the core efficiency ratio are non-GAAP measures. A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.”

33

•Noninterest income was $113.1 million, an increase of $43.4 million from $69.7 million in 2024. Noninterest income in 2025 includes $32.1 million of anticipated insurance proceeds from a pending claim related to a recapture event during the third quarter 2025 with respect to a $24.1 million solar tax credit. There is an offsetting amount of $32.1 million in income tax expense related to the solar tax credit recapture.

•Noninterest expense was $429.8 million in 2025, a 12% increase from $385.0 million in 2024. The increase in noninterest expense was primarily from higher deposit costs due to an increase in average deposit vertical balances, an increase in compensation due an expanded associate base and the onboarding of the associates from the fourth quarter 2025 Branch Acquisition, along with other expenses related to the Branch Acquisition. The increase was partially offset by a $4.9 million decline in core conversion expenses due to the completion of the core implementation in the fourth quarter 2024. The core efficiency ratio1 was 59.3% in 2025, compared to 58.4% in 2024.

2024 Financial Highlights

During 2024, noted the following significant developments:

•The Company had a return on average assets of 1.25%. This drove a 10.1% increase in tangible book value per share in 2024.

•Dividends paid in 2024 of $1.06 per share increased $0.06 per share, or 6%, compared to $1.00 per share in 2023.

•The Company repurchased 626,778 of its common shares at a weighted-average share price of $46.95.

•In the fourth quarter 2024, the Company successfully completed the conversion of its legacy core system into a new core banking platform.

34

RESULTS OF OPERATIONS

Net Interest Income

Average Balance Sheet

The following table presents, for the periods indicated, certain information related to our average interest-earning assets and interest-bearing liabilities, as well as, the corresponding interest rates earned and paid, all on a tax-equivalent basis. Average balances are presented on a daily average basis.

Year ended December 31,

2025

2024

2023

($ in thousands)

Average Balance

Interest

Income/Expense

Average

Yield/

Rate

Average Balance

Interest

Income/Expense

Average

Yield/

Rate

Average Balance

Interest

Income/Expense

Average

Yield/

Rate

Assets

Interest-earning assets:

Loans1, 2

$

11,463,410 

$

755,222 

6.59 

%

$

10,990,774 

$

755,448 

6.87 

%

$

10,324,951 

$

688,439 

6.67 

%

Taxable securities

2,057,017 

83,734 

4.07 

1,512,132 

53,167 

3.52 

1,320,664 

40,920 

3.10 

Non-taxable securities2

1,209,424 

43,623 

3.61 

1,000,558 

31,963 

3.19 

970,888 

30,209 

3.11 

Total securities

3,266,441 

127,357 

3.90 

2,512,690 

85,130 

3.39 

2,291,552 

71,129 

3.10 

Interest-earning deposits

418,980 

17,566 

4.19 

368,221 

18,918 

5.14 

260,214 

13,430 

5.16 

Total interest-earning assets

15,148,831 

900,145 

5.94 

13,871,685 

859,496 

6.20 

12,876,717 

772,998 

6.00 

Noninterest-earning assets

1,050,172 

970,005 

928,519 

Total assets

$

16,199,003 

$

14,841,690 

$

13,805,236 

Liabilities and Stockholders' Equity

Interest-bearing liabilities:

Interest-bearing demand accounts

$

3,311,368 

$

68,932 

2.08 

%

$

3,033,616 

$

76,932 

2.54 

%

$

2,559,238 

$

46,976 

1.84 

%

Money market accounts

3,730,110 

113,286 

3.04 

3,494,497 

127,651 

3.65 

3,043,794 

92,976 

3.05 

Savings accounts

535,021 

724 

0.14 

567,147 

1,261 

0.22 

668,368 

975 

0.15 

Certificates of deposit

1,533,608 

58,156 

3.79 

1,371,009 

58,764 

4.29 

1,198,551 

42,796 

3.57 

Total interest-bearing deposits

9,110,107 

241,098 

2.65 

8,466,269 

264,608 

3.13 

7,469,951 

183,723 

2.46 

Subordinated debentures and notes

135,809 

9,543 

7.03 

156,260 

10,497 

6.72 

155,702 

9,781 

6.28 

FHLB advances

75,027 

3,422 

4.56 

30,363 

1,691 

5.57 

54,615 

2,752 

5.04 

Securities sold under agreements to repurchase

201,001 

5,829 

2.90 

164,959 

5,667 

3.44 

168,745 

3,647 

2.16 

Other borrowings

56,610 

1,780 

3.14 

37,833 

492 

1.30 

71,738 

2,424 

3.38 

Total interest-bearing liabilities

9,578,554 

261,672 

2.73 

8,855,684 

282,955 

3.20 

7,920,751 

202,327 

2.55 

Noninterest-bearing liabilities:

Demand deposits

4,525,761 

4,042,368 

4,131,163 

Other liabilities

155,194 

159,463 

130,201 

Total liabilities

14,259,509 

13,057,515 

12,182,115 

Stockholders' equity

1,939,494 

1,784,175 

1,623,121 

Total liabilities & stockholders’ equity

$

16,199,003 

$

14,841,690 

$

13,805,236 

Net interest income

$

638,473 

$

576,541 

$

570,671 

Net interest spread

3.21 

%

3.00 

%

3.45 

%

Net interest margin

4.21 

%

4.16 

%

4.43 

%

1Average balances include nonaccrual loans. Interest income includes loan fees of $7.0 million, $9.6 million, and $13.8 million for the years ended December 31, 2025, 2024, and 2023 respectively.

2Non-taxable income is presented on a fully tax-equivalent basis using a tax rate of approximately 25%. The tax-equivalent adjustments were $11.7 million, $8.4 million, and $8.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.

35

Rate/Volume

The following table sets forth, on a tax-equivalent basis for the periods indicated, a summary of the changes in interest income and interest expense resulting from changes in yield/rates and volume.

2025 compared to 2024

2024 compared to 2023

Increase (decrease) due to

Increase (decrease) due to

($ in thousands)

Volume1

Rate2

Net

Volume1

Rate2

Net

Interest earned on:

Loans

$

31,919 

$

(32,145)

$

(226)

$

45,473 

$

21,536 

$

67,009 

Taxable securities

21,260 

9,307 

30,567 

6,347 

5,900 

12,247 

Non-taxable securities3

7,204 

4,456 

11,660 

936 

818 

1,754 

Interest-earning deposits

2,402 

(3,754)

(1,352)

5,549 

(61)

5,488 

Total interest-earning assets

62,785 

(22,136)

40,649 

58,305 

28,193 

86,498 

Interest paid on:

Interest-bearing demand accounts

$

6,617 

$

(14,617)

$

(8,000)

$

9,794 

$

20,162 

$

29,956 

Money market accounts

8,192 

(22,557)

(14,365)

14,928 

19,747 

34,675 

Savings accounts

(68)

(469)

(537)

(165)

451 

286 

Certificates of deposit

6,562 

(7,170)

(608)

6,674 

9,294 

15,968 

Subordinated debentures and notes

(1,421)

467 

(954)

35 

681 

716 

FHLB advances

2,086 

(355)

1,731 

(1,326)

265 

(1,061)

Securities sold under agreements to repurchase

1,126 

(964)

162 

(84)

2,104 

2,020 

Other borrowed funds

334 

954 

1,288 

(839)

(1,093)

(1,932)

Total interest-bearing liabilities

23,428 

(44,711)

(21,283)

29,017 

51,611 

80,628 

Net interest income

$

39,357 

$

22,575 

$

61,932 

$

29,288 

$

(23,418)

$

5,870 

1Change in volume multiplied by yield/rate of prior period.

2Change in yield/rate multiplied by volume of prior period.

3Nontaxable income is presented on a fully tax-equivalent basis using a tax rate of approximately 25%.

NOTE: The change in interest due to both rate and volume has been allocated to rate and volume changes in proportion to the relationship of the absolute dollar amounts of the change in each.

Net interest income (on a tax-equivalent basis) was $638.5 million for 2025, compared to $576.5 million for 2024, an increase of $61.9 million. The increase in net interest income in 2025 was primarily due to higher average interest-earning asset balances and a decrease in the average rates paid on interest-bearing liabilities.

Total tax-equivalent interest income of $900.1 million increased $40.6 million in 2025 primarily due to a $42.2 million increase in interest income from investment securities. Higher interest income on investment securities was primarily due to a $753.8 million increase in average securities balances and a 51 basis point increase in yield on investment securities. Average securities represented 22% and 18% of earnings assets for 2025 and 2024, respectively. Average loan balances increased $472.6 million during the year primarily from organic loan growth and the Branch Acquisition, partially offset by a 28 basis point decrease in loan yield resulting in a $0.2 million decrease in loan interest income.

Overall, average interest-earning assets increased $1.3 billion, or 9%, to $15.1 billion for the year ended December 31, 2025. Excess liquidity provided through the Branch Acquisition was deployed into the securities portfolio and other interest-earning assets. Volume growth of the balance sheet drove an increase in interest income on earning assets of $62.8 million, partially offset by a decrease of $22.1 million in yield on interest-earning assets in 2025 compared to 2024.

36

Total interest expense decreased $21.3 million in 2025 primarily due to decreased rates paid on interest-bearing liabilities. The decrease in deposit interest expense reflects lower rates paid on deposits, partially offset by successful marketing efforts and acquired deposits in connection with the Branch Acquisition that increased average deposit balances. Total average interest-bearing deposits increased to $9.1 billion, an increase of $643.8 million, or 8%, in 2025 over the average for 2024. Average noninterest-bearing deposits increased $483.4 million, or 12%, in 2025 compared to the average for 2024. Average noninterest-bearing deposits represented 33% of total average deposits in 2025, compared to 32% in 2024. Overall, average interest-bearing liabilities increased $722.9 million, or 8%, for the year ended December 31, 2025 as compared to the prior year end. The increase in the average balance of interest-bearing liabilities increased interest expense in 2025 by $23.4 million, which was partially offset by the decrease in the average cost of interest-bearing liabilities that decreased interest expense $44.7 million in 2025.

The tax-equivalent net interest margin was 4.21% for 2025, compared to 4.16% for 2024. The primary driver of the increase in net interest margin from 2024 to 2025 was lower interest expense on the deposit portfolio. Since September 2024, the Federal Reserve has reduced the federal funds target rate 175 basis points. As of December 31, 2025, variable-rate loans comprised approximately 60% of total loans. The earning-asset yield decreased 26 basis points to 5.94% in 2025, compared to 6.20% in 2024. Comparatively, the cost of interest-bearing liabilities decreased 47 basis points to 2.73%, from 3.20% in 2024.

Noninterest Income

The following table presents a comparative summary of the major components of noninterest income for each of the years in the three-year period ended December 31, 2025:

Year ended December 31,

Change from

($ in thousands)

2025

2024

2023

2025 vs. 2024

2024 vs. 2023

Deposit service charges

$

19,376 

$

18,344 

$

16,559 

$

1,032 

$

1,785 

Wealth management revenue

10,456 

10,452 

10,030 

4 

422 

Card services revenue

9,995 

9,966 

10,028 

29 

(62)

Tax credit income

7,697 

8,954 

9,196 

(1,257)

(242)

Anticipated insurance recoveries

32,112 

— 

— 

32,112 

— 

Other income

33,487 

21,987 

22,912 

11,500 

(925)

Total noninterest income

$

113,123 

$

69,703 

$

68,725 

$

43,420 

$

978 

Noninterest income increased $43.4 million, or 62%, in 2025 compared to 2024. The increase in noninterest income was primarily due to $32.1 million of anticipated insurance proceeds from a third quarter 2025 pending claim related to a recapture event with respect to a solar tax credit that the Company purchased and applied to prior taxable periods. Excluding this item, noninterest income increased primarily due to an $11.5 million increase in other income. Other income increased primarily due to higher BOLI income ($3.7 million), an increase in gains on the sale of SBA loans ($2.8 million), and an increase in net gain on OREO ($3.2 million). Private equity and community development income are not consistent sources of income and fluctuate based on distributions and earnings from the underlying funds. In 2025, the Company sold the guaranteed portion of SBA 7(a) loans of $78.2 million for a gain of $4.2 million, compared to $23.1 million and $1.4 million, respectively, in 2024.

37

Noninterest Expense

The following table presents a comparative summary of the components of noninterest expense:

Year ended December 31,

Change from

($ in thousands)

2025

2024

2023

2025 vs. 2024

2024 vs. 2023

Employee compensation and benefits

$

198,666 

$

182,713 

$

164,566 

$

15,953 

$

18,147 

Deposit costs

103,231 

88,645 

72,293 

14,586 

16,352 

Occupancy

20,154 

17,231 

16,526 

2,923 

705 

Data processing

20,239 

19,671 

15,196 

568 

4,475 

Professional fees

9,605 

6,257 

5,719 

3,348 

538 

Other expenses

77,912 

70,530 

73,886 

7,382 

(3,356)

Total noninterest expense

$

429,807 

$

385,047 

$

348,186 

$

44,760 

$

36,861 

Efficiency ratio

58.1 

%

60.4 

%

55.2 

%

(2.3)

%

5.2 

%

Core efficiency ratio1

59.3 

%

58.4 

%

53.4 

%

0.9 

%

5.0 

%

1 A non-GAAP measure. A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.”

Noninterest expense increased $44.8 million, or 12%, in 2025 compared to 2024. The increase was attributed primarily to an increase in compensation and benefits due to annual merit increases, an expanded associate base, the onboarding of the associates from the Branch Acquisition, and the recruitment of new relationship bankers. The total cost of the Branch Acquisition in noninterest expense was $3.7 million in 2025. The increase from 2024 was also primarily due to a $14.6 million increase in deposit costs due to an increase in average deposit vertical balances. For certain deposit accounts in the Company’s deposit verticals, clients receive an earnings credit allowance on average collected balances that may be used to offset expenses associated with the client’s activities for managing the accounts. These costs are reflected in noninterest expense as deposit costs. Average balances in the deposit verticals were approximately $3.8 billion and $3.1 billion, resulting in an average deposit vertical cost of 2.75% and 2.82% for 2025 and 2024, respectively.

Income Taxes

As part of the normal, ongoing review of state tax apportionment, the Company's state statutory tax rate was increased in the fourth quarter. Due to the increase, the Company’s blended federal and state tax rate was approximately 25.1% in 2025, compared to 24.8% in 2024. Included in tax expense during 2025 was $24.1 million in recaptured tax credits as discussed above and approximately $8.0 million of incremental tax liability attributable to the anticipated insurance proceeds from the insured recaptured credits. Excluding the impact of the recaptured tax credits and related insurance proceeds, the adjusted effective tax rate2 for 2025, after adjusting for permanent tax differences such as tax exempt income and tax credits, is approximately 20.0% compared to 19.9% in 2024. See “Item 8. Note 15 – Income Taxes” for additional information.

2 Adjusted effective tax rate is a non-GAAP measure. A reconciliation has been included in this MD&A section under the caption “Use of Non-GAAP Financial Measures.”

38

FINANCIAL CONDITION

Summary Balance Sheet

($ in thousands)

December 31,

% Increase (Decrease)

2025

2024

2023

2025 vs. 2024

2024 vs. 2023

Cash and cash equivalents

$

681,902 

$

764,170 

$

433,029 

(10.77)

%

76.47 

%

Securities

3,729,992 

2,791,205 

2,368,707 

33.63 

%

17.84 

%

Loans

11,800,338 

11,220,355 

10,884,118 

5.17 

%

3.09 

%

Assets

17,300,884 

15,596,431 

14,518,590 

10.93 

%

7.42 

%

Deposits

14,609,342 

13,146,492 

12,176,371 

11.13 

%

7.97 

%

Liabilities

15,261,498 

13,772,429 

12,802,522 

10.81 

%

7.58 

%

Stockholders’ equity

2,039,386 

1,824,002 

1,716,068 

11.81 

%

6.29 

%

The table below represents the summary balance sheet shown as a percentage of account class (total assets, total liabilities or total stockholders’ equity), as applicable:

December 31,

2025

2024

2023

Cash and cash equivalents to total assets

3.94 

%

4.90 

%

2.98 

%

Securities to total assets

21.56 

%

17.90 

%

16.31 

%

Loans to total assets

68.21 

%

71.94 

%

74.97 

%

Deposits to total liabilities

95.73 

%

95.46 

%

95.11 

%

Assets

Loans by Type

The Company has a diversified loan portfolio, with no particular concentration of credit in any one economic sector other than those noted in the table of loans by NAICS code below; however, a substantial portion of the portfolio, including the C&I category, is secured by real estate. The ability of the Company’s borrowers to honor their contractual obligations is partially dependent upon the local economy and its effect on the real estate market. Included in total loans at December 31, 2025 are $292.0 million of loans from the Branch Acquisition.

39

The following table sets forth the composition of the loan portfolio by type of loans:

December 31,

($ in thousands)

2025(1)

2024

C&I

$

5,231,616 

$

4,716,689 

CRE - investor owned

2,984,858 

2,606,964 

CRE - owner occupied

2,468,963 

2,367,823 

Construction and land development

687,584 

891,059 

Residential real estate

367,682 

359,263 

Consumer

59,635 

278,557 

Total loans

$

11,800,338 

$

11,220,355 

(1)Certain loans were reclassified from Consumer and into other categories in 2025. Prior period amounts were not adjusted.

December 31,

2025

2024

C&I

44.3 

%

42.0 

%

CRE - investor owned

25.3 

%

23.2 

%

CRE - owner occupied

20.9 

%

21.1 

%

Construction and land development

5.9 

%

8.0 

%

Residential real estate

3.1 

%

3.2 

%

Consumer

0.5 

%

2.5 

%

Total loans

100.0 

%

100.0 

%

C&I loans are made based on the borrower’s ability to generate cash flows for repayment from income sources, general credit strength, experience, and character, even though such loans may also be secured by real estate or other assets. The credit risk related to commercial loans is largely influenced by general economic conditions and the resulting impact on a borrower’s operations.

The Company continues to focus on originating high-quality C&I loan relationships as they allow for cross selling opportunities involving other banking products. Our specialized products, especially sponsor finance, life insurance premium financing, and tax credit lending, consist of primarily C&I loans, and have contributed significantly to the Company’s C&I loan growth. These loans are sourced through relationships developed with wealth and estate planning firms, private equity funds and tax credit specialists and are not bound geographically to our markets. As a result, these specialized loan products offer opportunities to expand and diversify our overall geographic concentration by entering into new markets. C&I also represents loans to state and political subdivisions, loans to nondepository financial institutions, and loans to purchase, or are fully secured by, investment securities.

40

Real estate loans place an emphasis on the estimated cash flows from the operation of the property and/or the underlying collateral value.

•Our CRE loans, including investor-owned and owner-occupied categories, primarily represent commercial property loans on which the primary source of repayment is income from the property for investor-owned and the operating business for owner-occupied. These loans are principally underwritten based on the cash flow coverage of the property, the Company’s loan to value guidelines, and generally require either the limited or full guaranty of principal sponsors of the credit. The Company also maintains standards for amortization and maturity terms. CRE loans also represent owner-occupied C&I loans for which the primary source of repayment is dependent on sources other than the underlying collateral. In an effort to mitigate credit risk, the Company routinely reviews its loan portfolio for various concentrations. Annually, management prepares an assessment of credit risk in the various loan portfolios, with a significant portion of the commercial loan portfolio subject to review. These reviews consider the Company’s collateral position as well as exposure to a given industry sector. The Company performs site visits as part of the underwriting process, in addition to stress tests for vacancy, rental and interest rates on certain property types. The Company believes that the loan portfolio is sufficiently diversified to provide protection from deterioration in any particular industry, geography or devaluation of a specific collateral type.

•Construction and land development loans relating primarily to residential and commercial properties, represent financing secured by real estate under development for eventual sale or undeveloped ground. At December 31, 2025, $378.5 million of these loans include the use of interest reserves and follow standard underwriting guidelines. Construction projects are monitored by the loan officer and a centralized independent loan disbursement function.

•Residential real estate loans include residential mortgages, which are loans that, due to size or other attributes, do not qualify for conventional home mortgages available-for-sale in the secondary market, second mortgages, home equity lines and conventional mortgages that are part of a broad banking relationship with the Company. Residential mortgage loans are usually limited to a maximum of 80% of collateral value at origination.

Consumer loans represent loans to individuals. Credit risk is managed by thoroughly reviewing the creditworthiness of the borrowers prior to origination and thereafter.

41

The following table presents a breakdown of loans by NAICS code at the periods indicated:

December 31,

2025

2024

($ in thousands)

Outstanding Balance

%

Outstanding Balance

%

Accommodation and food services

$

995,727 

8 

%

$

1,052,105 

9 

%

Administrative and support and waste management and remediation services

217,833 

2 

%

207,003 

2 

%

Agriculture, forestry, fishing and hunting1

106,535 

1 

%

141,339 

1 

%

Arts, entertainment, and recreation

143,315 

1 

%

139,256 

1 

%

Construction

635,854 

5 

%

584,421 

5 

%

Educational services

49,753 

NM

49,942 

NM

Finance and insurance

2,540,455 

22 

%

2,252,420 

20 

%

Health care and social assistance

678,129 

6 

%

612,767 

5 

%

Information

75,033 

1 

%

68,839 

1 

%

Management of companies and enterprises

65,127 

1 

%

91,890 

1 

%

Manufacturing

812,042 

7 

%

750,480 

7 

%

Mining, quarrying, and oil and gas extraction

15,872 

NM

5,494 

NM

Other services (except public administration)

547,447 

5 

%

556,325 

5 

%

Professional, scientific, and technical services

334,802 

3 

%

311,160 

3 

%

Public administration

13,156 

NM

11,889 

NM

Real estate and rental and leasing

3,091,499 

26 

%

2,904,153 

26 

%

Retail trade

602,440 

5 

%

561,932 

5 

%

Transportation and warehousing

254,049 

2 

%

286,906 

3 

%

Utilities

27,097 

NM

7,139 

NM

Wholesale trade

524,525 

4 

%

517,761 

5 

%

Other

69,648 

1 

%

107,134 

1 

%

Total loans

$

11,800,338 

100 

%

$

11,220,355 

100 

%

1Includes $40.6 million and $54.2 million in animal production at December 31, 2025, and 2024, respectively and $53.4 million and $69.4 million in crop production at December 31, 2025, and 2024, respectively.

At December 31, 2025 and 2024, the Company had an agricultural loan portfolio of $69.3 million and $121.8 million, respectively. The Company continues to wind down this portfolio over time as the loans mature or pay down. The Company does not intend to enter into new agricultural loans.

The following table presents a breakdown of C&I loans by size at the periods indicated:

December 31,

2025

2024

($ in thousands)

Number of Loans

Outstanding Balance

Average Balance

Number of Loans

Outstanding Balance

Average Balance

$2 million

2,828 

$

927,862 

$

328 

2,582 

$

864,511 

$

335 

$2-5 million

347 

1,110,868 

3,201 

343 

1,114,922 

3,251 

$5-10 million

173 

1,197,912 

6,924 

145 

1,001,137 

6,904 

$10 million

105 

1,994,974 

19,000 

95 

1,736,119 

18,275 

Total

3,453 

$

5,231,616 

$

1,515 

3,165 

$

4,716,689 

$

1,490 

42

The following table presents a breakdown of CRE loans (investor owned and owner occupied) by size at the periods indicated:

December 31,

2025

2024

($ in thousands)

Number of Loans

Outstanding Balance

Average Balance

Number of Loans

Outstanding Balance

Average Balance

$2 million

2,925 

$

1,760,971 

$

602 

2,958 

$

1,792,813 

$

606 

$2-5 million

481 

1,478,057 

3,073 

443 

1,363,797 

3,079 

$5-10 million

136 

946,589 

6,960 

114 

765,059 

6,711 

$10 million

74 

1,268,204 

17,138 

65 

1,053,118 

16,202 

Total

3,616 

$

5,453,821 

$

1,508 

3,580 

$

4,974,787 

$

1,390 

The Company had $574.8 million and $513.7 million of investor owned office real estate loans as of December 31, 2025 and 2024, respectively. The Company also had $399.0 million and $322.5 million of multifamily CRE loans as of December 31, 2025 and 2024, respectively.

The following table presents a breakdown of construction loans by size at the periods indicated:

December 31,

2025

2024

($ in thousands)

Number of Loans

Outstanding Balance

Average Balance

Number of Loans

Outstanding Balance

Average Balance

$2 million

284 

$

124,221 

$

437 

303 

$

128,236 

$

423 

$2-5 million

42 

128,749 

3,065 

52 

162,936 

3,133 

$5-10 million

15 

107,813 

7,188 

27 

201,108 

7,448 

$10 million

21 

326,801 

15,562 

25 

398,779 

15,951 

Total

362 

$

687,584 

$

1,899 

407 

$

891,059 

$

2,189 

The following table presents a breakdown of residential loans by size at the periods indicated:

December 31,

2025

2024

($ in thousands)

Number of Loans

Outstanding Balance

Average Balance

Number of Loans

Outstanding Balance

Average Balance

$2 million

1,998 

$

283,183 

$

142 

2,000 

$

275,321 

$

138 

$2-5 million

17 

57,858 

3,403 

19 

62,409 

3,285 

$5-10 million

4 

26,641 

6,660 

3 

21,533 

7,177 

Total

2,019 

$

367,682 

$

182 

2,022 

$

359,263 

$

178 

43

The following table presents a breakdown of consumer loans by size at the periods indicated:

December 31,

2025(1)

2024

($ in thousands)

Number of Loans

Outstanding Balance

Average Balance

Number of Loans

Outstanding Balance

Average Balance

$2 million

922 

$

57,134 

$

62 

1,023 

$

92,471 

$

90 

$2-5 million

1 

2,501 

2,501 

20 

65,074 

3,254 

$5-10 million

— 

— 

— 

6 

38,714 

6,453 

$10 million

— 

— 

— 

4 

82,298 

20,574 

Total

923 

$

59,635 

$

65 

1,053 

$

278,557 

$

265 

(1)Certain loans were reclassified from Consumer and into other categories in 2025. Prior period amounts were not adjusted.

The following table presents a breakdown of total loans by geographic region at the periods indicated:

December 31,

($ in thousands)

2025

2024

Midwest

$

3,372,474 

$

3,201,313 

Southwest

2,229,070 

1,784,824 

West

1,883,236 

1,855,380 

Specialty and Consumer loans

4,315,558 

4,378,838 

Total

$

11,800,338 

$

11,220,355 

The following table presents a breakdown of total loans by MSA, excluding specialty and consumer loans, at the periods indicated:

December 31,

($ in thousands)

2025

2024

St. Louis, MO-IL MSA

$

2,203,659 

$

2,225,856 

Los Angeles-Long Beach-Santa Ana, CA MSA

1,318,397 

1,557,990 

Phoenix-Mesa-Chandler, AZ MSA

1,254,713 

993,239 

Kansas City, MO-KS MSA

1,038,226 

975,457 

San Diego-Carlsbad-San Marcos, CA MSA

564,038 

297,359 

Dallas-Fort Worth-Arlington, TX MSA

279,196 

185,242 

Albuquerque, NM MSA

216,130 

211,642 

Santa Fe, NM MSA

169,771 

151,883 

Las Vegas-Paradise, NV MSA

236,047 

165,485 

Tucson-Nogales, AZ MSA

69,564 

— 

All other MSAs

135,039 

77,364 

Specialty and Consumer loans

4,315,558 

4,378,838 

Total

$

11,800,338 

$

11,220,355 

Loan guarantees, primarily on SBA 7(a) loans, totaled $960.1 million and $947.7 million at December 31, 2025 and 2024, respectively.

44

The following table sets forth additional information on certain categories of loans that are included in total loans above at the periods indicated:

($ in thousands)

December 31, 2025

December 31, 2024

Increase (decrease)

SBA loans

$

1,262,456 

1,298,007 

$

(35,551)

(3)

%

Sponsor finance

694,905 

782,722 

(87,817)

(11)

%

Life insurance premium finance

1,187,128 

1,114,299 

72,829 

7 

%

Tax credits

802,818 

760,229 

42,589 

6 

%

The sponsor finance portfolio is primarily comprised of loans in the manufacturing and wholesale trade sectors. It includes mid-market company mergers and acquisitions, targeted private equity firms, principally SBICs, and senior debt financing to portfolio companies.

The life insurance premium finance category specializes in financing whole life insurance premiums utilized in high net worth estate planning, through relationships with boutique estate planners throughout the United States.

The tax credit portfolio includes tax credit-related lending on affordable housing projects funded through the use of

federal and state low income housing tax credits. In addition, we provide leveraged and other loans on projects funded through the CDFI New Markets Tax Credit Program. This portfolio also includes tax credit brokerage through 10-year streams of state tax credits from affordable housing development funds. The tax credits are sold to clients and other individuals for tax planning purposes.

SBA loans are originated under the SBA 7(a) program and are primarily owner-occupied, CRE loans secured by a 1st lien. These loans predominantly have a 75% portion guaranteed by the SBA.

Significant loan concentrations are considered to exist for a financial institution when there are amounts loaned to numerous borrowers engaged in similar activities that would cause them to be similarly impacted by economic or other conditions. At December 31, 2025, no significant concentrations exceeding 10% of total loans existed in the Company’s loan portfolio, except as described above.

45

The following table presents the maturity distribution of loans at December 31, 2025 categorized by fixed or variable interest rates, net of unearned loan fees:

($ in thousands)

Due in One

 Year or Less (1)

After One Through Five Years

After Five Through Fifteen Years

After

Fifteen Years

Total

Percent of

Total Loans

Fixed rate loans

C&I

$

114,325 

$

1,036,964 

$

282,917 

$

13,419 

$

1,447,625 

12 

%

Real estate:

Commercial

589,463 

1,843,501 

316,639 

278,636 

3,028,239 

26 

%

Construction and land development

28,114 

58,563 

84 

4,999 

91,760 

1 

%

Residential

37,295 

84,957 

21,424 

13,160 

156,836 

1 

%

Consumer

2,618 

2,915 

17,862 

25,581 

48,976 

NM

Total

$

771,815 

$

3,026,900 

$

638,926 

$

335,795 

$

4,773,436 

40 

%

Variable rate loans

C&I

$

1,409,356 

$

2,062,589 

$

295,494 

$

16,552 

$

3,783,991 

32 

%

Real estate:

Commercial

243,460 

680,343 

409,149 

1,092,630 

2,425,582 

21 

%

Construction and land development

197,167 

239,263 

106,014 

53,380 

595,824 

5 

%

Residential

40,355 

30,708 

56,463 

83,320 

210,846 

2 

%

Consumer

4,181 

6,221 

141 

116 

10,659 

NM

Total

$

1,894,519 

$

3,019,124 

$

867,261 

$

1,245,998 

$

7,026,902 

60 

%

Total loans

C&I

$

1,523,681 

$

3,099,553 

$

578,411 

$

29,971 

$

5,231,616 

44 

%

Real estate:

Commercial

832,923 

2,523,844 

725,788 

1,371,266 

5,453,821 

47 

%

Construction and land development

225,281 

297,826 

106,098 

58,379 

687,584 

6 

%

Residential

77,650 

115,665 

77,887 

96,480 

367,682 

3 

%

Consumer

6,799 

9,136 

18,003 

25,697 

59,635 

NM

Total

$

2,666,334 

$

6,046,024 

$

1,506,187 

$

1,581,793 

$

11,800,338 

100 

%

(1) Includes loans with no stated maturity and overdraft lines of credit.

The majority of variable rate loans are based on the prime rate or SOFR. At December 31, 2025, $4.8 billion or 68% of variable rate loans were subject to an interest rate floor. Most variable rate loan originations have one-to three-year maturities. Management monitors this mix as part of its interest rate risk management. The Company has also entered into interest rate hedges to reduce the cash flow impact of changes in interest rates on the variable rate loan portfolio. These hedges, which include interest rate swaps and collars, had a notional amount of $400.0 million at both December 31, 2025 and 2024. See “Interest Rate Risk” of this MD&A section for additional information.

Provision and ACL

The following table presents the components of the provision for credit losses for the periods indicated:

December 31,

($ in thousands)

2025

2024

Provision for credit losses on loans

$

23,076 

$

20,629 

Benefit for off-balance sheet commitments

(100)

(586)

Benefit for held-to-maturity securities

(112)

(528)

Charge-offs of accrued interest

3,473 

1,993 

Provision for credit losses

$

26,337 

$

21,508 

46

The provision for credit losses, which includes a provision for losses on unfunded commitments, is a charge to earnings to maintain the ACL on loans at a level consistent with management’s assessment of expected losses in the loan portfolio at the balance sheet date. The Company also records reversals of interest on nonaccrual loans and interest recoveries directly through the provision of credit losses.

The CECL methodology requires economic forecasts to be factored into determining estimated losses. As a result, CECL is designed to typically require a higher level of provision at the start of an economic downturn. The increase in the provision for credit losses in 2025 was primarily due to loan growth, net charge-offs and the increase in nonperforming loans. The higher provision for credit losses in 2024 was also primarily due to loan growth, net charge-offs and the increase in nonperforming loans.

To the extent the Company does not recognize charge-offs and economic forecasts improve in future periods, the Company could recognize a reversal of provision for credit losses. Conversely, if economic conditions and the Company’s forecast worsens, the Company could recognize elevated levels of provision for credit losses. The provision is also reflective of charge-offs in the period.

The following table summarizes the allocation of the ACL on loans:

December 31,

($ in thousands)

2025

2024

Amount

Percent of loans in each category to total loans

Amount

Percent of loans in each category to total loans

C&I

$

68,345 

44.4 

%

$

63,231 

42.1 

%

Real estate:

Commercial

50,783 

46.2 

%

54,617 

44.3 

%

Construction and land development

11,016 

5.8 

%

9,837 

8.0 

%

Residential

8,023 

3.1 

%

6,534 

3.2 

%

Consumer

1,855 

0.5 

%

3,731 

2.4 

%

Total allowance

$

140,022 

100.0 

%

$

137,950 

100.0 

%

The ACL on loans was 1.19% of total loans at December 31, 2025, compared to 1.23%, and 1.24%, at December 31, 2024 and 2023, respectively. The decrease in the allowance to total loans ratio in 2025 compared to 2024 was primarily due to an improvement in the economic forecast, a reduction in qualitative reserves, and net loan charge-offs of $24.3 million. The Company adopted a new accounting standard in the current quarter that resulted in the $3.3 million credit mark on the acquired loan portfolio from the Branch Acquisition being added directly to the ACL in purchase accounting and no provision for credit losses was recognized on the acquired loans.

47

The following table is a summary of net charge-offs (recoveries) to average loans for the periods indicated:

December 31,

2025

2024

($ in thousands)

Net Charge-offs (Recoveries)

Average Loans(1)

Net Charge-offs (Recoveries)/Average Loans

Net Charge-offs (Recoveries)

Average Loans(1)

Net Charge-offs (Recoveries)/Average Loans

C&I

$

15,371 

$

5,069,686 

0.30 

%

$

10,425 

$

5,602,957 

0.19 

%

Real estate:

Commercial

5,030 

5,120,288 

0.10 

%

3,510 

3,934,764 

0.09 

%

Construction and land development

3,240 

848,995 

0.38 

%

3,125 

792,854 

0.39 

%

Residential

(70)

365,429 

(0.02)

%

(264)

352,754 

(0.07)

%

Consumer

731 

58,249 

1.25 

%

654 

306,583 

0.21 

%

Total

$

24,302 

$

11,462,647 

0.21 

%

$

17,450 

$

10,989,912 

0.16 

%

(1) Excludes loans held for sale.

See “Critical Accounting Policies and Estimates” of this MD&A section for more information on the ACL methodology.

Nonperforming loans and assets

See “Item 8. Note 1 – Summary of Significant Accounting Policies” for more information on nonaccrual loans and OREO. The following table presents the categories of nonperforming assets and other ratios, excluding government guaranteed portions, as of the dates indicated.

December 31,

($ in thousands)

2025

2024

Nonaccrual loans

$

81,180 

$

42,667 

Loans past due 90 days or more and still accruing interest

1,629 

20 

Total nonperforming loans

82,809 

42,687 

OREO

81,544 

3,955 

Total nonperforming assets

$

164,353 

$

46,642 

Total assets

$

17,300,884 

$

15,596,431 

Total loans

11,800,338 

11,220,355 

Total ACL on loans

140,022 

137,950 

ACL on loans to nonaccrual loans

172 

%

323 

%

ACL on loans to nonperforming loans

169 

%

323 

%

ACL on loans to total loans

1.19 

%

1.23 

%

Nonaccrual loans to total loans

0.69 

%

0.38 

%

Nonperforming loans to total loans

0.70 

%

0.38 

%

Nonperforming assets to total assets

0.95 

%

0.30 

%

48

Nonperforming loans based on loan type were as follows:

December 31, 2025

December 31, 2024

($ in thousands)

Amount

Percent

Number of loans

Amount

Percent

Number of loans

C&I

$

27,979 

34 

%

19 

$

15,821 

37 

%

23 

CRE

46,326 

56 

%

39 

25,096 

59 

%

33 

Construction and land development

155 

NM

1 

1,503 

3 

%

2 

Residential real estate

8,340 

10 

%

5 

258 

1 

%

1 

Consumer

9 

NM

4 

9 

NM

4 

Total

$

82,809 

100 

%

68 

$

42,687 

100 

%

63 

The following table summarizes the changes in nonperforming loans: 

Year ended December 31,

($ in thousands)

2025

2024

Nonperforming loans, beginning of period

$

42,687 

$

43,728 

Additions to nonaccrual loans

178,029 

55,747 

Charge-offs

(34,516)

(21,874)

Principal payments

(26,845)

(29,000)

Moved to OREO

(76,546)

(5,914)

Nonperforming loans, end of period

$

82,809 

$

42,687 

Nonperforming loans at December 31, 2025 increased $40.1 million, or 94%, when compared to December 31, 2024. The addition to nonperforming loans during 2025 was primarily related to seven real estate loans to special purpose entities (each an “SPE Borrower”) affiliated with two commercial banking relationships in Southern California that share some common ownership. Litigation resulting from a business dispute between the owners of the entities resulted in all of the SPE Borrowers filing bankruptcy in the first quarter 2025, which was subsequently dismissed. In the fourth quarter 2025, the Company foreclosed on six of the seven properties serving as collateral for the loans. The six properties were transferred to OREO at fair market value, less selling costs. Based on each individual property’s fair value, a net charge-off of $4.0 million and a gain on transfer of $6.2 million was recorded. The seventh property with a book value of $4.0 million was foreclosed on in the first quarter of 2026. The following table provides a summary of the six properties foreclosed in 2025 by collateral type:

($ in thousands)

Fair market value, less selling costs

Carrying value(1)

Charge-off

Gain

CRE - investor owned:

Multifamily

$

13,240 

$

17,209 

$

3,969 

$

— 

Mixed use

49,760 

47,694 

— 

2,066 

Total CRE - investor owned

$

63,000 

$

64,903 

$

3,969 

$

2,066 

Residential real estate:

Duplex

$

3,520 

$

1,953 

$

— 

$

1,567 

Condominiums

6,960 

4,413 

— 

2,547 

Total residential real estate

10,480 

6,366 

— 

4,114 

Total

$

73,480 

$

71,269 

$

3,969 

$

6,180 

(1) Includes accrued interest.

49

Other than these foreclosures, the increase in nonperforming loans during 2025 was driven primarily by net charge-offs of $24.3 million and a relationship with two loans totaling $28.0 million that went on nonaccrual. These loans are well-secured with real estate collateral and the Company expects to collect the full value of the outstanding loans. Subsequent to December 31, 2025, $17.5 million in nonperforming loans were fully paid off in the first quarter of 2026.

OREO

The following table summarizes the changes in OREO:

Year ended December 31,

($ in thousands)

2025

2024

OREO, beginning of period

$

3,955 

$

5,736 

Additions

84,905 

6,559 

Changes in valuation allowance

— 

(156)

Sales

(7,316)

(8,184)

OREO, end of period

$

81,544 

$

3,955 

Investment Securities

At December 31, 2025, our portfolio of investment securities was $3.7 billion, or 22% of total assets, compared to $2.8 billion, or 18% of total assets as of December 31, 2024. The portfolio is comprised of both available-for-sale and held-to-maturity securities.

The table below sets forth the carrying value of investment securities, excluding the ACL:

December 31,

2025

2024

($ in thousands)

Amount

%

Amount

%

Obligations of U.S. Government sponsored enterprises

$

182,572 

4.9 

%

$

276,040 

9.9 

%

Obligations of states and political subdivisions

1,492,904 

40.0 

%

1,168,256 

41.9 

%

Agency mortgage-backed securities

1,753,150 

47.0 

%

1,075,306 

38.5 

%

U.S. Treasury Bills

170,984 

4.6 

%

128,893 

4.6 

%

Corporate debt securities

130,527 

3.5 

%

142,967 

5.1 

%

Total

$

3,730,137 

100.0 

%

$

2,791,462 

100.0 

%

The ACL on held-to-maturity debt securities was $0.1 million and $0.3 million at December 31, 2025 and 2024, respectively. The Company had no debt securities classified as trading at December 31, 2025 or December 31, 2024.

The following table summarizes contractual maturity and tax-equivalent yields on the investment portfolio at December 31, 2025:

 Within 1 year

 1 to 5 years

 5 to 10 years

 Over 10 years

 Total

($ in thousands)

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Obligations of U.S. Government-sponsored enterprises

$

115,204 

1.4 

%

$

18,246 

2.4 

%

$

40,511 

4.2 

%

$

8,611 

2.2 

%

$

182,572 

2.2 

%

Obligations of states and political subdivisions

8,618 

2.9 

%

31,266 

3.5 

%

504,195 

3.4 

%

948,825 

4.3 

%

1,492,904 

4.0 

%

Agency mortgage-backed securities

4,489 

3.1 

%

15,363 

2.6 

%

89,323 

4.0 

%

1,643,975 

4.3 

%

1,753,150 

4.3 

%

U.S. Treasury Bills

130,439 

3.7 

%

40,545 

2.9 

%

— 

— 

%

— 

— 

%

170,984 

3.5 

%

Corporate debt securities

— 

— 

%

114,587 

3.4 

%

15,940 

5.8 

%

— 

— 

%

130,527 

3.7 

%

Total

$

258,750 

2.6 

%

$

220,007 

3.2 

%

$

649,969 

3.6 

%

$

2,601,411 

4.3 

%

$

3,730,137 

3.9 

%

50

Yields on tax-exempt securities are computed on a taxable equivalent basis using a tax rate of 25.1%. Actual maturities can differ from contractual maturities, as borrowers may have the right to call or repay obligations with or without prepayment penalties.

The following table details the balance of FHLB capital stock and other investments. Other investments consist primarily of common stock investments related to our trust preferred securities, community development funds, and investments in private equity funds, primarily SBICs. These investments do not have a stated maturity.

December 31,

2025

2024

($ in thousands)

Amount

%

Amount

%

FHLB capital stock

$

9,351 

11.6 

%

$

8,704 

12.0 

%

Other investments

71,533 

88.4 

%

64,080 

88.0 

%

Total

$

80,884 

100.0 

%

$

72,784 

100.0 

%

Deposits

The following table shows the breakdown of deposits by type:

December 31,

$ Increase (decrease)

% Increase (decrease)

($ in thousands)

2025

2024

2025 vs. 2024

2025 vs. 2024

Noninterest-bearing demand accounts

$

4,874,115 

$

4,484,072 

$

390,043 

8.7 

%

Interest-bearing demand accounts

3,537,334 

3,175,292 

362,042 

11.4 

%

Money market accounts

3,991,110 

3,564,063 

427,047 

12.0 

%

Savings accounts

537,400 

553,461 

(16,061)

(2.9)

%

Certificates of deposit:

Brokered

721,977 

484,588 

237,389 

49.0 

%

Customer

947,406 

885,016 

62,390 

7.0 

%

Total deposits

$

14,609,342 

$

13,146,492 

$

1,462,850 

11.1 

%

Noninterest-bearing deposits / Total deposits

33 

%

34 

%

Total deposits increased $1.5 billion primarily due to organic deposit growth, as well as $609.5 million of deposits from the Branch Acquisition. Brokered certificates of deposit increased $237.4 million, to $722.0 million at December 31, 2025. Brokered certificates of deposit are used for term liquidity purposes in place of FHLB borrowings. The brokered certificates of deposit balance has a weighted average cost of 3.98% and a weighted average remaining term of six months at December 31, 2025. The Company has a deposit vertical portfolio focusing primarily on property management, community associations, and legal industry and escrow services. These deposits totaled $3.8 billion and $3.4 billion at the end of 2025 and 2024, respectively.

51

The following table shows the average balance and average rate of the Company’s deposits by type:

Year ended December 31,

2025

2024

2023

($ in thousands)

Average Balance

Average Rate Paid

Average Balance

Average Rate Paid

Average Balance

Average Rate Paid

Noninterest-bearing demand accounts

$

4,525,761 

— 

%

$

4,042,368 

— 

%

$

4,131,163 

— 

%

Interest-bearing demand accounts

3,311,368 

2.08 

%

3,033,616 

2.54 

%

2,559,238 

1.84 

%

Money market accounts

3,730,110 

3.04 

%

3,494,497 

3.65 

%

3,043,794 

3.05 

%

Savings accounts

535,021 

0.14 

%

567,147 

0.22 

%

668,368 

0.15 

%

Certificates of deposit:

Brokered

654,786 

4.34 

%

519,279 

4.73 

%

557,761 

4.44 

%

Customer

878,822 

3.39 

%

851,730 

4.01 

%

640,790 

2.81 

%

Total interest-bearing deposits

$

9,110,107 

2.65 

%

$

8,466,269 

3.13 

%

$

7,469,951 

2.46 

%

Total average deposits

$

13,635,868 

1.77 

%

$

12,508,637 

2.12 

%

$

11,601,114 

1.58 

%

Average total deposits were $13.6 billion for the year ended December 31, 2025, an increase of $1.1 billion, or 9%, from December 31, 2024. The increase in 2025 was primarily due to acquired deposits related to the Branch Acquisition, and organic growth in noninterest-bearing demand accounts, interest-bearing demand accounts, and money market accounts.

The following table sets forth the maturities of estimated uninsured certificates of deposit as of December 31, 2025. Uninsured deposits are amounts estimated to exceed the FDIC deposit insurance limit and are not subject to any federal or state insurance program.

($ in thousands)

Total

Three months or less

$

147,492 

Over three through six months

71,333 

Over six through twelve months

61,779 

Over twelve months

9,248 

Total

$

289,852 

Estimated uninsured deposits totaled $5.1 billion, including $289.9 million of certificates of deposit, as of December 31, 2025, and $4.5 billion as of December 31, 2024. Estimated uninsured deposits include $0.4 billion and $0.5 billion of balances that are collateralized or secured with third party insurance at December 31, 2025 and 2024, respectively.

Stockholders’ equity

Stockholders’ equity totaled $2.0 billion at December 31, 2025, an increase of $215.4 million, or 12%, from December 31, 2024.

Significant activity during the year ended December 31, 2025 included the following:

•Increase from net income of $201.4 million;

•Net increase in fair value of available-for-sale securities and cash flow hedges of $62.1 million;

•Decrease from dividends paid on common stock of $45.1 million and preferred stock of $3.8 million; and

•Decrease from common stock repurchases of $14.1 million, pursuant to the Company’s publicly-announced stock repurchase program.

52

Liquidity and Capital Resources

Liquidity

The objective of liquidity management is to ensure we have the ability to generate sufficient cash or cash equivalents in a timely and cost-effective manner to meet our commitments as they become due. Typical demands on liquidity are changes in deposit levels, maturing time deposits which are not renewed, and fundings under credit commitments to clients. Funds are available from a number of sources, such as the core deposit base and loan and security repayments and maturities.

Liquidity is provided from lines of credit with the FHLB, the Federal Reserve, and correspondent banks; the ability to acquire large and brokered deposits; sales of the securities portfolio; and the ability to sell loan participations to other banks and loans on the secondary market. These alternatives are an important part of our liquidity plan and provide flexibility and efficient execution of the asset-liability management strategy.

The Company’s Asset-Liability Management Committee oversees our liquidity position, the parameters of which are approved by the Bank’s Board of Directors. Our liquidity position is monitored daily. Our liquidity management framework includes measurement of several key elements, such as a loan to deposit ratio, a liquidity ratio, and a dependency ratio. The Company’s liquidity framework also incorporates contingency planning to assess the nature and volatility of funding sources and to determine alternatives to these sources. While core deposits and loan and investment repayments are principal sources of liquidity, funding diversification is another key element of liquidity management and is achieved by strategically varying depositor types, terms, funding markets, and instruments.

Liquidity from assets is available primarily from cash balances and the investment portfolio. Cash and interest-bearing deposits with other banks totaled $681.9 million at December 31, 2025, compared to $764.2 million at December 31, 2024. The decrease in cash balances during 2025 is due to the deployment of liquidity into the investment portfolio. Investment securities are an important tool to the Company’s liquidity objectives. Securities totaled $3.7 billion at December 31, 2025, and included $1.7 billion pledged as collateral for deposits of public institutions, treasury, loan notes, and other requirements. The remaining $2.0 billion could be pledged or sold to enhance liquidity, if necessary.

Available on- and off-balance sheet liquidity sources include the following items:

($ in thousands)

December 31, 2025

Federal Reserve borrowing capacity

$

3,047,606 

FHLB borrowing capacity

1,603,974 

Unpledged securities

1,992,864 

Federal funds lines (eight correspondent banks)

135,000 

Cash and interest-bearing deposits

681,902 

Holding company line of credit

25,000 

Total

$

7,486,346 

The Company also has a portfolio of SBA guaranteed loans, a portion of which could be sold in the secondary market to generate earnings and liquidity. The guaranteed portion of SBA loans totaling $78.2 million and $23.1 million were sold during 2025 and 2024, respectively.

Liability funding sources are available to increase financial flexibility. In addition to amounts borrowed at December 31, 2025, the Company could borrow an additional $1.6 billion from the FHLB of Des Moines as of December 31, 2025 under blanket loan pledges and has additional real estate loans that could be pledged. The Company also has $3.0 billion available from the Federal Reserve under a pledged loan agreement. The Company also has unsecured federal funds lines with eight correspondent banks totaling $135 million as of December 31, 2025.

53

In the normal course of business, the Company enters into certain forms of off-balance sheet transactions, including unfunded loan commitments and letters of credit. These transactions are managed through the Company’s various risk management processes. Management considers both on-balance sheet and off-balance sheet transactions in its evaluation of the Company’s liquidity. The Company has $3.0 billion in unused commitments to extend credit as of December 31, 2025. While this commitment level would exhaust the majority the Company’s current liquidity resources, the nature of these commitments is such that the likelihood of funding them in the aggregate at any one time is low.

At the holding company level, our primary funding sources are dividends and payments from the Bank and proceeds from the issuance of equity (i.e. stock option exercises, stock offerings) and debt instruments. The main use of this liquidity is to provide the funds necessary to pay dividends to stockholders, service debt, invest in subsidiaries as necessary, repurchase common stock and satisfy other operating requirements. In 2025, the holding company maintained a revolving line of credit for an aggregate amount up to $25 million, all of which was available at December 31, 2025. The line of credit has a one-year term that was renewed in February 2026, has an interest rate of one-month Term SOFR plus 185 basis points, and the annual unused commitment fee was 0.40%. The proceeds can be used for general corporate purposes.

Strong capital ratios, credit quality and core earnings are essential to retaining cost-effective access to the wholesale funding markets. Deterioration in any of these factors could have a negative impact on the Company’s ability to access these funding sources and, as a result, these factors are monitored on an ongoing basis as part of the liquidity management process. The Bank is subject to regulations and, among other things, may be limited in its ability to pay dividends or transfer funds to the parent company. Accordingly, consolidated cash flows as presented in the consolidated statements of cash flows may not represent cash immediately available for the payment of cash dividends to the Company’s stockholders or for other cash needs.

Through the normal course of operations, the Company has entered into certain contractual obligations and other commitments. Such obligations relate to funding operations through deposits or debt issuances, as well as leases for premises and equipment. As a financial services provider, the Company routinely enters into commitments to extend credit. While contractual obligations represent future cash requirements of the Company, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans made by the Company. The Company also enters into derivative contracts under which the Company either receives cash from or pays cash to counterparties depending on changes in interest rates. Derivative contracts are carried at fair value on the Consolidated Balance Sheet with the fair value representing the net present value of expected future cash receipts or payments based on market interest rates as of the balance sheet date. The fair value of these contracts changes daily as market interest rates change. For additional information on the Company’s contractual obligations and commitments, see the following footnotes in Item 8: “Note 6 – Leases,” “Note 7 – Derivative Financial Instruments,” “Note 11 – Debt,” and “Note 16 – Commitments and Contingent Liabilities.”

Capital Resources

The Company and the Bank are subject to various regulatory capital requirements administered by the state and 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 financial statements and results of operations of the Company. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and its bank affiliate 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 banking affiliate’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

54

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and tier 1 capital to risk-weighted assets, and of tier 1 capital to average assets. To be categorized as “well-capitalized”, banks must maintain minimum capital ratios as noted in the table below. As of December 31, 2025, and December 31, 2024, the Company and the Bank met all capital adequacy requirements to which they are subject.

The Company and the Bank met the definition of “well-capitalized” at each of December 31, 2025 and 2024. Refer to “Item 8. Note 13 – Regulatory Capital” for a summary of our risk-based capital and leverage ratios. The following table summarizes the Company’s and Bank’s capital ratios:

December 31, 2025

December 31, 2024

($ in thousands)

EFSC

Bank

EFSC

Bank

To Be Well-Capitalized

Minimum Ratio

with CCB

CET1 Capital to Risk Weighted Assets

11.6 

%

11.9 

%

11.8 

%

12.4 

%

6.5 

%

7.0 

%

Tier 1 Capital to Risk Weighted Assets

12.8 

%

11.9 

%

13.1 

%

12.4 

%

8.0 

%

8.5 

%

Total Capital to Risk Weighted Assets

13.9 

%

13.0 

%

14.6 

%

13.4 

%

10.0 

%

10.5 

%

Leverage Ratio (Tier 1 Capital to Average Assets)

10.5 

%

9.7 

%

11.1 

%

10.5 

%

5.0 

%

N/A

Tangible common equity to tangible assets1

9.07 

%

9.05 

%

CET1 capital

$

1,583,989 

$

1,623,652 

$

1,505,162 

$

1,578,293 

Tier 1 capital

1,749,635 

1,623,711 

1,670,810 

1,578,353 

Total risk-based capital

1,891,444 

1,765,520 

1,864,334 

1,708,626 

1 Not a required regulatory capital ratio

At December 31, 2024, total regulatory capital included $63.3 million of subordinated debentures that were issued in 2020 at a fixed rate of 5.75%. Beginning June 1, 2025, the subordinated debentures bore interest at a floating rate per annum equal to a benchmark rate of three-month term SOFR (as defined in the Indenture, dated May 21, 2020, between the Company and U.S. Bank National Association, as trustee, and subsequent First Supplemental Indenture), plus 566 basis points. On September 2, 2025, the Company redeemed the 2030 Notes funded through the issuance of a $63.3 million senior note at a rate of one-month Term SOFR plus a spread of 250 basis points. Prior to being redeemed, the 2030 Notes bore interest at a floating rate then equal to 9.98% per annum, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year.

The Company believes the tangible common equity and regulatory capital ratios are important measures of capital strength. The tangible common equity to tangible assets ratio is considered a non-GAAP measure. The tables included in this MD&A section under the caption “Use of Non-GAAP Financial Measures” reconcile these ratios to U.S. GAAP. 

Risk Management

Market risk arises from exposure to changes in interest rates and other relevant market rate or price risk. The Company faces market risk in the form of interest rate risk through transactions other than trading activities. Market risk from these activities, in the form of interest rate risk, is measured and managed through a number of methods. The Company uses financial modeling techniques to measure interest rate risk. These techniques measure the sensitivity of future earnings due to changing interest rate environments. Guidelines established by the Bank’s Asset/Liability Management Committee and approved by the Bank’s Board of Directors are used to monitor exposure of earnings at risk. General interest rate movements are used to develop sensitivity as management believes it has no primary exposure to a specific point on the yield curve. These limits are based on the Company’s exposure to immediate and sustained parallel rate movements, either upward or downward. The Company does not have any direct market risk from commodity exposures.

55

Interest Rate Risk 

Our interest rate risk management practices are aimed at optimizing net interest income, while guarding against deterioration that could be caused by certain interest rate scenarios. Interest rate sensitivity varies with different types of interest-earning assets and interest-bearing liabilities. We attempt to maintain interest-earning assets, comprised primarily of both loans and investments, and interest-bearing liabilities, comprised primarily of deposits, maturing or repricing in similar time horizons in order to manage any impact from market interest rate changes according to our risk tolerance. The Company uses an earnings simulation model to measure earnings sensitivity to changing rates.

The Company determines the sensitivity of its short-term future earnings to a hypothetical plus or minus 100 to 300 basis point parallel rate shock through the use of simulation modeling. The simulation of earnings includes the modeling of the balance sheet as an ongoing entity. Future business assumptions involving administered rate products, prepayments for future rate-sensitive balances, and the reinvestment of maturing assets and liabilities are included. These items are then modeled to project net interest income based on a hypothetical change in interest rates. The resulting net interest income for the next 12-month period is compared to the net interest income amount calculated using flat rates. This difference represents the Company’s earnings sensitivity to a positive or negative parallel rate shock.

The following table summarizes the projected impact of interest rate shocks on net interest income:

Annual % change

in net interest income

At December 31,

Rate Shock

2025

2024

+ 300 bp

10.1%

7.9%

+ 200 bp

6.9%

5.4%

+ 100 bp

3.6%

2.7%

 - 100 bp

(4.1)%

(3.0)%

 - 200 bp

(7.9)%

(6.0)%

 - 300 bp

(11.0)%

(8.5)%

In addition to the rate shocks shown in the table above, the Company models net interest income under various dynamic interest rate scenarios. In general, changes in interest rates are positively correlated with changes in net interest income.

The Company occasionally uses interest rate derivative instruments as an asset/liability management tool to hedge mismatches in interest rate exposure indicated by the net interest income simulation described above. They are used to modify the Company’s exposures to interest rate fluctuations and provide more stable spreads between loan yields and the rate on their funding sources. At December 31, 2025, the Company had derivative contracts to manage interest rate risk, including $400.0 million in notional value on derivatives to hedge the cash flows on floating rate loans and $32.1 million in notional value on derivatives on floating rate debt. Derivative financial instruments are discussed in “Item 8. Note 7 – Derivative Financial Instruments.”

The Company had $7.0 billion in variable rate loans as of December 31, 2025. Of these loans, $4.8 billion have an interest rate floor and nearly all of those loans were at or above the floor. Variable rate loans include $2.7 billion indexed to the prime rate, $3.5 billion are indexed to SOFR, and $0.8 billion indexed to other rates.

Changes in interest rates will also have an effect on noninterest expense. Certain deposit accounts receive an earnings credit that provides a reimbursement for costs clients incur on the accounts. As interest rates increase, the amount available for reimbursement also increases, resulting in an increase to noninterest expense. Conversely, a decrease in interest rates would reduce the amount available for reimbursement and decrease noninterest expense.

56

Critical Accounting Policies and Estimates

The following accounting policies are considered most critical to the understanding of the Company’s financial condition and results of operations. These critical accounting policies require management’s most difficult, subjective and complex judgments about matters that are inherently uncertain. Because these estimates and judgments are based on current circumstances, they may change over time or prove to be inaccurate based on experience. In the event different assumptions or conditions were to prevail, and depending upon the severity of such changes, the possibility of a materially different financial condition and/or results of operations could reasonably be expected. The impact and any associated risks related to our critical accounting policies on our business operations are described throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” where such policies affect our reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see “Item 8. Note 1 – Summary of Significant Accounting Policies.”

The Company has prepared all of the consolidated financial information in this report in accordance with GAAP. The Company makes estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using loss experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. There can be no assurances that actual results will not differ from those estimates.

ACL

The Company maintains separate allowances for funded loans, unfunded loans, and held-to-maturity securities, collectively referred to as the ACL. The ACL is a valuation account to adjust the cost basis to the amount expected to be collected, based on management’s experience, current conditions, and reasonable and supportable forecasts. For purposes of determining the allowance for funded and unfunded loans, the portfolios are segregated into pools that share similar risk characteristics that are then further segregated by credit grades. Loans that do not share similar risk characteristics are evaluated on an individual basis and are not included in the collective evaluation. The Company estimates the amount of the allowance based on loan loss experience, adjusted for current and forecasted economic conditions, including unemployment, changes in GDP, and commercial and residential real estate prices. The Company’s forecast of economic conditions uses internal and external information and considers a weighted average of a baseline, upside, and downside scenarios. Because economic conditions can change and are difficult to predict, the anticipated amount of estimated loan defaults and losses, and therefore the adequacy of the allowance, could change significantly and have a direct impact on the Company’s credit costs. The Company’s ACL on loans was $140.0 million at December 31, 2025 based on the weighting of the different economic scenarios. As a hypothetical example, if the Company had only used the upside scenario, the allowance would have decreased $29.8 million. Conversely, the allowance would have increased $46.9 million using only the downside scenario.

57

Income Taxes

Management uses certain assumptions and estimates in determining income taxes payable or refundable for the current year, deferred income tax assets and liabilities and income tax expense. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. If current available information raises doubt as to the realization of the deferred tax assets, a valuation allowance may be established. We consider the determination of this valuation allowance to be a critical accounting policy because of the need to exercise significant judgment in evaluating the amount and timing of recognition of deferred tax liabilities and assets, including projections of future taxable income. These judgments and estimates are reviewed on a continual basis as regulatory and business factors change. A valuation allowance for deferred tax assets may be required in the future if the amounts of taxes recoverable through loss carry backs decline, if we project lower levels of future taxable income, or we project lower levels of tax planning strategies. Such valuation allowance would be established through a charge to income tax expense that would adversely affect our operating results.

Effects of New Accounting Pronouncements

See “Item 8. Note 1 – Summary of Significant Accounting Policies – Recent Accounting Pronouncements” for information on recent accounting pronouncements and their impact, if any, on our consolidated financial statements.

Use of Non-GAAP Financial Measures

The Company’s accounting and reporting policies conform to U.S. GAAP and the prevailing practices in the banking industry. However, the Company provides other financial measures, such as adjusted return on average assets, adjusted return on average common equity, return on average tangible common equity, adjusted return on average tangible common equity, tangible book value per common share, tangible common equity to tangible assets, pre-provision net revenue, pre-provision net revenue return on average assets, core efficiency ratio, and adjusted effective tax rate, in this report that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position, or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.

The Company considers its adjusted return on average assets, adjusted return on average common equity, return on average tangible common equity, adjusted return on average tangible common equity, tangible book value per common share, tangible common equity to tangible assets, pre-provision net revenue, pre-provision net revenue return on average assets, core efficiency ratio, and adjusted effective tax rate, collectively “core performance measures,” presented in this report as important measures of financial performance, even though they are non-GAAP measures, as they provide supplemental information by which to evaluate the impact of certain non-comparable items, and the Company’s operating performance on an ongoing basis. Core performance measures exclude certain other income and expense items, such as acquisition costs, core conversion expenses, FDIC special assessment, net gain or loss on OREO, and net gain or loss on the sale of investment securities, that the Company believes to be not indicative of or useful to measure the Company’s operating performance on an ongoing basis. The attached tables contain a reconciliation of these core performance measures to the GAAP measures. The Company believes that tangible common equity to tangible assets provides useful information to investors about the Company’s capital strength even though it is considered to be a non-GAAP financial measure and is not part of the regulatory capital requirements to which the Company is subject.

58

The Company believes these non-GAAP measures and ratios, when taken together with the corresponding GAAP measures and ratios, provide meaningful supplemental information regarding the Company’s performance and capital strength. The Company’s management uses, and believes investors benefit from referring to, these non-GAAP measures and ratios in assessing the Company’s operating results and related trends and when forecasting future periods. However, these non-GAAP measures and ratios should be considered in addition to, and not as a substitute for or preferable to, ratios prepared in accordance with GAAP. In the following tables, the Company has provided a reconciliation of, where applicable, the most comparable GAAP financial measures and ratios to the non-GAAP financial measures and ratios, or a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated.

Reconciliations of Non-GAAP Financial Measures

Pre-Provision Net Revenue (PPNR) and Pre-Provision Net Revenue Return on Average Assets (PPNR ROAA)

Year ended December 31,

($ in thousands)

2025

2024

2023

Net interest income (GAAP)

$

626,738 

$

568,096 

$

562,592 

Noninterest income (GAAP)

113,123 

69,703 

68,725 

FDIC special assessment

(652)

625 

2,412 

Core conversion expense

— 

4,868 

— 

Acquisition costs

3,675 

— 

— 

Less net gain on sale of investment securities

49 

— 

601 

Less net gain on OREO

6,255 

3,089 

187 

Less insurance recoveries1

32,112 

— 

— 

Less noninterest expense (GAAP)

429,807 

385,047 

348,186 

PPNR (non-GAAP)

$

274,661 

$

255,156 

$

284,755 

Average assets

$

16,199,003 

$

14,841,690 

$

13,805,236 

PPNR ROAA (non-GAAP)

1.70 

%

1.72 

%

2.06 

%

1 Represents anticipated proceeds from a pending insurance claim related to a third quarter 2025 solar tax credit recapture event.

Tangible Common Equity, Tangible Book Value per Common Share, and Tangible Common Equity to Tangible Assets

At December 31,

(in thousands, except per share data)

2025

2024

2023

Stockholders' equity (GAAP)

$

2,039,386 

$

1,824,002 

$

1,716,068 

Less preferred stock

71,988 

71,988 

71,988 

Less goodwill

416,968 

365,164 

365,164 

Less intangible assets

21,175 

8,484 

12,318 

Tangible common equity (non-GAAP)

$

1,529,255 

$

1,378,366 

$

1,266,598 

Common shares outstanding

36,965 

36,988 

37,416 

Tangible book value per share (non-GAAP)

$

41.37 

$

37.27 

$

33.85 

Total assets (GAAP)

$

17,300,884 

$

15,596,431 

$

14,518,590 

Less goodwill

416,968 

365,164 

365,164 

Less intangible assets

21,175 

8,484 

12,318 

Tangible assets (non-GAAP)

$

16,862,741 

$

15,222,783 

$

14,141,108 

Tangible common equity to tangible assets (non-GAAP)

9.07 

%

9.05 

%

8.96 

%

59

Adjusted Return on Average Common Equity, Return on Average Tangible Common Equity (ROATCE) and Adjusted Return on Average Assets (ROAA)

Year ended December 31,

($ in thousands)

2025

2024

2023

Average stockholder’s equity (GAAP)

$

1,939,494 

$

1,784,175 

$

1,623,121 

Less average preferred stock

71,988 

71,988 

71,988 

Less average goodwill

377,690 

365,164 

365,164 

Less average intangible assets

8,238 

10,329 

14,531 

Average tangible common equity (non-GAAP)

$

1,481,578 

$

1,336,694 

$

1,171,438 

Net income (GAAP)

$

201,374 

$

185,266 

$

194,059 

FDIC special assessment (after tax)

(488)

470 

1,814 

Core conversion expense (after tax)

— 

3,661 

— 

Acquisition costs (after tax)

2,753 

— 

— 

Less net gain on sale of investment securities (after tax)

37 

— 

452 

Less net gain on OREO (after tax)

4,685 

2,323 

141 

Net income adjusted (non-GAAP)

$

198,917 

$

187,074 

$

195,280 

Less preferred stock dividends

3,750 

3,750 

3,750 

Net income available to common stockholders adjusted (non-GAAP)

$

195,167 

$

183,324 

$

191,530 

Return on average common equity (GAAP)

10.58 

%

10.60 

%

12.27 

%

Adjusted return on average common equity (non-GAAP)

10.45 

%

10.71 

%

12.35 

%

ROATCE (non-GAAP)

13.34 

%

13.58 

%

16.25 

%

Adjusted ROATCE (non-GAAP)

13.17 

%

13.71 

%

16.35 

%

Average assets

$

16,199,003 

$

14,841,690 

$

13,805,236 

Return on average assets (GAAP)

1.24 

%

1.25 

%

1.41 

%

Adjusted return on average assets (non-GAAP)

1.23 

%

1.26 

%

1.41 

%

60

Core Efficiency Ratio

Year ended December 31,

($ in thousands)

2025

2024

2023

Net interest income (GAAP)

$

626,738 

$

568,096 

$

562,592 

Tax-equivalent adjustment

11,735 

8,445 

8,079 

Net interest income - FTE (non-GAAP)

638,473 

576,541 

570,671 

Noninterest income (GAAP)

113,123 

69,703 

68,725 

Less insurance recoveries1

32,112 

— 

— 

Less net gain on sale of investment securities

49 

— 

601 

Less net gain on OREO

6,255 

3,089 

187 

Core revenue (non-GAAP)

$

713,180 

$

643,155 

$

638,608 

Noninterest expense (GAAP)

$

429,807 

$

385,047 

$

348,186 

Less amortization on intangibles

3,724 

3,834 

4,601 

Less core conversion expense

— 

4,868 

— 

Less FDIC special assessment

(652)

625 

2,412 

Less acquisition costs

3,675 

— 

— 

Core noninterest expense (non-GAAP)

$

423,060 

$

375,720 

$

341,173 

Core efficiency ratio (non-GAAP)

59.32 

%

58.42 

%

53.42 

%

1 Represents anticipated proceeds from a pending insurance claim related to a third quarter 2025 solar tax credit recapture event.

Adjusted Effective Tax Rate

Year ended December 31,

($ in thousands)

2025

2024

Income before income tax expense (GAAP)

$

283,717 

$

231,244 

Less insurance recoveries1

32,112 

— 

Adjusted income before income tax expense (non-GAAP)

$

251,605 

$

231,244 

Income tax expense (GAAP)

$

82,343 

$

45,978 

Less tax credit recapture and tax applied to insurance recoveries1

32,112 

— 

Adjusted income tax expense (non-GAAP)

$

50,231 

$

45,978 

Effective tax rate (GAAP)

29.0 

%

19.9 

%

Adjusted effective tax rate (non-GAAP)

20.0 

%

19.9 

%

1Represents $32.1 million of anticipated proceeds from a pending insurance claim related to a third quarter 2025 solar tax credit recapture event included in noninterest income, and $24.1 million of tax liability related to the anticipated recapture plus approximately $8.0 million of estimated tax liability related to the anticipated proceeds from the pending insurance claim included in income tax expense.

61