FIRST BUSINESS FINANCIAL SERVICES, INC. (FBIZ)

CIK: 0001521951. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-02-25.

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

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1521951. Latest filing source: 0001193125-26-071523.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001521951.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 2026-04-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001521951.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: 0001193125-26-177139.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-04-24. Report date: 2026-03-31.

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

General

Unless otherwise indicated or unless the context requires otherwise, all references in this Report to the “Corporation,” “we,” “us,” “our,” or similar references mean First Business Financial Services, Inc. together with our subsidiary. “FBB” or the “Bank” refers to our subsidiary, First Business Bank.

Forward-Looking Statements

This report may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which reflect our current views with respect to future events and financial performance. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results, or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Such statements are subject to risks and uncertainties, including among other things:

•
Adverse changes in the economy or business conditions, either nationally or in our markets including, without limitation, inflation, economic downturn, labor shortages, wage pressures, the adverse effects of public health events on the global, national, and local economy, and geopolitical instability and international conflicts that may affect energy prices or otherwise result in market volatility.

•
Uncertainty created by potential federal government actions relating to the authority of regulatory agencies (including bank regulators), international trade policy, prolonged shutdown of the federal government, and other significant policy matters.

•
Competitive pressures among depository and other financial institutions nationally and in our markets.

•
Increases in defaults by borrowers and other delinquencies.

•
Management's ability to manage growth effectively, including the successful expansion of our client support, administrative infrastructure, and internal management systems.

•
Fluctuations in interest rates and market prices.

•
Changes in legislative or regulatory requirements applicable to us and our subsidiaries.

•
Changes in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations.

•
Fraud, including client and system failure or breaches of our network security, including our internet banking activities.

•
Failure to comply with the applicable SBA regulations in order to maintain the eligibility of the guaranteed portions of SBA loans.

•
Ongoing volatility in the banking sector may result in new legislation, regulations or policy changes that could subject the Corporation and the Bank to increased government regulation and supervision.

•
The proportion of the Corporation’s deposit account balances that exceed FDIC insurance limits may expose the Bank to enhanced liquidity risk.

•
The Corporation may be subject to increases in FDIC insurance assessments.

These risks could cause actual results to differ materially from what we have anticipated or projected. These risk factors and uncertainties should be carefully considered by our shareholders and potential investors. See Part I, Item 1A — Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025, and in this report, below, for discussion relating to risk factors impacting us. Investors should not place undue reliance on any such forward-looking statements, which speak only as of the date made. These factors could affect our financial performance and could cause actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods.

Where any such forward-looking statement includes a statement of the assumptions or bases underlying such forward-looking statement, we caution that, while our management believes such assumptions or bases are reasonable and are made in good

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faith, assumed facts or bases can vary from actual results, and the differences between assumed facts or bases and actual results can be material, depending on the circumstances. Where, in any forward-looking statement, an expectation or belief is expressed as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will be achieved or accomplished.

We do not intend to, and specifically disclaim any obligation to, update any forward-looking statements.

The following discussion and analysis is intended as a review of significant events and factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with the unaudited Consolidated Financial Statements and the Notes thereto presented in this Form 10-Q.

Overview

We are a registered bank holding company incorporated under the laws of the State of Wisconsin and are engaged in the commercial banking business through our wholly-owned banking subsidiary, FBB. All of our operations are conducted through FBB and First Business Specialty Finance, LLC, a wholly-owned subsidiary of FBB. We operate as a business bank focusing on delivering a full line of commercial banking products and services tailored to meet the specific needs of small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals. Our products and services include those for business banking, private wealth management services, and bank consulting. Within business banking, we offer commercial lending, asset-based lending, accounts receivable financing, equipment financing, floorplan financing, vendor financing, SBA lending and servicing, treasury management services, and company retirement plans. Our private wealth management services include trust and estate administration, financial planning, investment management, and private banking for executives and owners of our business banking clients and others. Our bank consulting experts provide investment portfolio administrative services and asset liability management services. We are not a retail bank and do not rely on a traditional branch network to gather deposits or attract clients. Instead, our operating model is built on deep client relationships, specialized financial expertise, and an efficient, centralized administrative structure designed to deliver best-in-class client satisfaction. This focused approach enables our experienced professionals to provide the level of insight and service required to develop and sustain long-term client relationships. We conduct our commercial banking operations through one operating segment.

Financial Performance Summary

Results as of and for the three months ended March 31, 2026 include:

•
Net income available to common shareholders totaled $12.0 million, or diluted earnings per share of $1.44, for the three months ended March 31, 2026, compared to $11.0 million, or diluted earnings per share of $1.32, for the same period in 2025.

•
Annualized return on average assets (“ROAA”) for the three months ended March 31, 2026 measured 1.13% compared to 1.14% for the same period in 2025.

•
Return on average tangible common equity (“ROATCE”) is defined as net income available to common shareholders divided by average equity less average intangible assets and average preferred stock. ROATCE was 13.55% for the three months ended March 31, 2026, compared to 14.12% for the same period in 2025.

•
Efficiency ratio measured 61.14% for the three months ended March 31, 2026, compared to 60.28% for the same period in 2025.

•
Pre-tax, pre-provision (“PTPP”) adjusted earnings, which excludes certain one-time and discrete items, for the three months ended March 31, 2026 was $17.2 million, compared to $16.2 million in the same period in 2025.

•
Net interest margin was 3.56% for the three months ended March 31, 2026 compared to 3.69% for the same period in 2025.

•
Top line revenue, defined as net interest income plus non-interest income, totaled $44.3 million for the three months ended March 31, 2026, compared to $40.8 million in the same period in 2025.

•
Effective tax rate, including the benefit from Low-Income Housing Tax Credits, was 15.16% for the three months ended March 31, 2026 compared to 17.00% for the same period in 2025.

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•
Provision for credit losses was $3.0 million for the three months ended March 31, 2026 compared to $2.7 million for the same period in 2025.

•
Total assets at March 31, 2026 increased $239.0 million, or 5.9%, to $4.321 billion from $4.082 billion at December 31, 2025.

•
Period-end gross loans and leases receivable increased $125.9 million, or 14.9% annualized, to $3.501 billion as of March 31, 2026 compared to $3.375 billion as of December 31, 2025. Average gross loans and leases of $3.426 billion increased $240.0 million, or 7.5%, for the three months ended March 31, 2026, compared to $3.186 billion for the same period in 2025.

•
Non-performing assets were $40.5 million and 0.94% of total assets as of March 31, 2026, compared to $43.9 million and 1.07% of total assets as of December 31, 2025.

•
The allowance for credit losses, including reserve for unfunded credit commitments, increased $797,000 compared to December 31, 2025. The allowance for credit losses, including reserve for unfunded credit commitments, was 1.10% of total loans, compared to 1.12% at December 31, 2025.

•
Period-end core deposits at March 31, 2026 increased $123.1 million, or 18.4% annualized, to $2.796 billion from $2.673 billion as of December 31, 2025. Average core deposits of $2.849 billion increased $485.7 million or 20.6%, for the three months ended March 31, 2026, compared to $2.363 billion for the same period in 2025.

•
Private wealth and trust assets under management and administration increased by $66.1 million, or 6.9% annualized, to $3.881 billion at March 31, 2026, compared to $3.815 billion at December 31, 2025. Private wealth trust assets under management and administration increased $456.2 million, or 13.3%, compared to March 31, 2025.

Results of Operations

Top Line Revenue

Top line revenue, comprised of net interest income and non-interest income, increased $3.5 million, or 8.5%, for the three months ended March 31, 2026, compared to the same period in 2025, due to a 6.8% increase in net interest income and a 15.8% increase in non-interest income. The increase in net interest income was primarily driven by increases in average loans and leases outstanding, partially offset by a decrease in net interest margin. The increase in non-interest income was due primarily to increases in commercial loan swap income, private wealth income, bank-owned life insurance income, and service charges on deposits, partially offset by decreases in gains on sale of SBA loans.

The components of top line revenue were as follows:

For the Three Months Ended March 31,

2026

2025

$ Change

% Change

(Dollars in Thousands)

Net interest income

$35,518

$33,258

$2,260

6.8%

Non-interest income

8,775

7,579

1,196

15.8

Top line revenue

$44,293

$40,837

$3,456

8.5

Annualized Return on Average Assets (“ROAA”) and Annualized Return on Average Tangible Common Equity (“ROATCE”)

ROAA for the three months ended March 31, 2026 was 1.13%, compared to 1.14% for the three months ended March 31, 2025. The decrease in ROAA was due to a decrease in net interest margin and an increase in operating expense, partially offset by an improved fee income ratio as non-interest income grew at a faster rate than net interest income. We consider ROAA a critical metric to measure the profitability of our organization and how efficiently our assets are deployed. ROAA also allows us to better benchmark our profitability to our peers without the need to consider different de

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

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-25. Report date: 2025-12-31.

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

General

Unless otherwise indicated or unless the context requires otherwise, all references in this Report to the “Corporation,” “we,” “us,” “our,” or similar references mean First Business Financial Services, Inc. together with our subsidiary. “FBB” or the “Bank” refers to our subsidiary, First Business Bank.

Forward-Looking Statements

This report may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which reflect our current views with respect to future events and financial performance. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results, or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Such statements are subject to risks and uncertainties, including among other things:

•
Adverse changes in the economy or business conditions, either nationally or in the Corporation's markets including, without limitation, inflation, economic downturn, labor shortages, wage pressures, and the adverse effects of public health events on the global, national, and local economy.

•
Uncertainty created by potential federal government actions relating to the authority of regulatory agencies (including bank regulators), international trade policy, prolonged shutdown of the federal government, and other significant policy matters.

•
Competitive pressures among depository and other financial institutions nationally and in the Corporation's markets.

•
Increases in defaults by borrowers and other delinquencies.

•
Management's ability to manage growth effectively, including the successful expansion of client support, administrative infrastructure, and internal management systems.

•
Fluctuations in interest rates and market prices.

•
Changes in legislative or regulatory requirements applicable the Corporation and its subsidiaries.

•
Changes in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations.

•
Fraud, including client and system failure or breaches of the Corporation's network security, including the Corporation's internet banking activities.

•
Failure to comply with the applicable SBA regulations in order to maintain the eligibility of the guaranteed portions of SBA loans.

•
Ongoing volatility in the banking sector may result in new legislation, regulations or policy changes that could subject the Corporation and the Bank to increased government regulation and supervision.

•
The proportion of the Corporation’s deposit account balances that exceed FDIC insurance limits may expose the Bank to enhanced liquidity risk.

•
The Corporation may be subject to increases in FDIC insurance assessments.

These risks, together with the risks identified in Item 1A — Risk Factors, could cause actual results to differ materially from what we have anticipated or projected. These risk factors and uncertainties should be carefully considered by our stockholders and potential investors. Investors should not place undue reliance on any such forward-looking statements, which speak only as of the date made.

Where any such forward-looking statement includes a statement of the assumptions or bases underlying such forward-looking statement, we caution that, while our management believes such assumptions or bases are reasonable and are made in good faith, assumed facts or bases can vary from actual results, and the differences between assumed facts or bases and actual results can be material, depending on the circumstances. Where, in any forward-looking statement, an expectation or belief is expressed as to future

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results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will be achieved or accomplished.

We do not intend to, and specifically disclaim any obligation to, update any forward-looking statements.

The following discussion and analysis is intended as a review of significant events and factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with the Consolidated Financial Statements and the Notes thereto.

Long-Term Strategic Plan

In early 2024, management finalized the development of its five year strategic plan and began the implementation of strategies and initiatives that drive successful execution. Management’s objective over this five year period is to foster innovative and engaged team members who develop deep client relationships and deliver exceptional results for all stakeholders. To meet this objective, we identified five key strategies which are linked to corporate financial goals, all business lines, and centralized administration functions to ensure communication and execution are consistent at all levels of the Corporation.

These strategies are described below:

•
We will protect and strengthen our unique culture with a growing and geographically diverse team.

•
We will develop future-ready talent who will thrive in the workplace of the future by continuously investing in our team to elevate their impact and contribution.

•
We will grow our core deposits by driving a company-wide commitment to adding new relationships and capitalizing on innovative sources and new technologies.

•
We will achieve operational excellence by fostering a culture of continuous process improvement and utilization of innovative technology.

•
We will optimize the performance of each business line and market to achieve sustainable profitability and growth.

The table below shows the Corporation’s performance for the years ended December 31, 2025, 2024, and 2023 in comparison to the key performance indicators included in the Corporation’s current strategic plan.

As of December 31,

Key Performance Indicators

2023

2024

2025

Strategic Plan

Return on average tangible common equity (“ROATCE”)(1)

14.5%

15.4%

15.3%

≥ 15% by 2028

Tangible book value (“TBV”) growth

12.9%

15.0%

13.7%

≥ 10% per year

Top line revenue growth

12.6%

6.6%

9.9%

≥ 10% per year

Efficiency ratio

60.99%

60.61%

58.78%

 60% by 2028

Core deposits to total funding

76.0%

71.1%

74.7%

≥ 75%

Employee engagement & participation (2)

90%

86%

85%

≥ 85%

Net promoter score (3)

78

70

78

≥ 70

(1)
Anonymous survey conducted annually.

(2)
Net promoter score assesses likelihood to recommend on a 11-point scale, where detractors (scores 0-6) are subtracted from promoters (scores 9-10), while passives (scores 7-8) are not considered

Financial Performance Summary

Results as of and for the year ended December 31, 2025, include:

•
Net income available to common shareholders for the year ended December 31, 2025 was $49.4 million, compared to $43.4 million for the year ended December 31, 2024.

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•
Diluted earnings per common share were $5.94 for the year ended December 31, 2025, compared to $5.20 in the prior year.

•
Return on average assets (“ROAA”) for the year ended December 31, 2025, was 1.24%, compared to 1.20% for 2024.

•
Return on average tangible common equity (“ROATCE”) is defined as net income available to common shareholders divided by average equity less average preferred stock and less intangibles. ROATCE was 15.25% for the year ended December 31, 2025, compared to 15.35% for the year ended December 31, 2024.

•
Efficiency ratio measured 58.78% for the year ended December 31, 2025, compared to 60.61% for the year ended December 31, 2024.

•
Pre-tax, pre-provision (“PTPP”) adjusted earnings, which excludes certain one-time and discrete items, was $69.4 million for the year ended December 31, 2025, compared to $60.4 million for the year ended December 31, 2024.

•
Net interest margin was 3.64% for the year ended December 31, 2025, compared to 3.66% for the year ended December 31, 2024.

•
Top line revenue, defined as net interest income plus non-interest income, totaled $168.6 million for the year ended December 31, 2025, compared to $153.5 million in the year ended December 31, 2024.

•
Effective tax rate was 16.8% for the year ended December 31, 2025, compared to 13.5% for the year ended December 31, 2024.

•
Provision for credit loss expense was $8.7 million for the year ended December 31, 2025, compared to $8.8 million for the year ended December 31, 2024.

•
Total assets at December 31, 2025, increased $228.7 million, or 5.9%, to $4.082 billion from $3.853 billion at December 31, 2024.

•
Period-end gross loans and leases receivable increased $261.4 million, or 8.4%, to $3.375 billion as of December 31, 2025, compared to $3.114 billion as of December 31, 2024. Average gross loans and leases of $3.272 billion increased $275.0 million, or 9.2%, for the year ended December 31, 2025, compared to $2.997 billion for the year ended December 31, 2024.

•
Non-performing assets were $43.9 million and 1.07% of total assets as of December 31, 2025, compared to $28.4 million and 0.74% of total assets as of December 31, 2024.

•
The allowance for credit losses, including reserve for unfunded credit commitments, increased $424,000 compared to December 31, 2024. The allowance for credit losses, including reserve for unfunded credit commitments, was 1.12% of total loans, compared to 1.20% at December 31, 2024.

•
Period-end core deposits at December 31, 2025, increased $276.6 million, or 11.5%, to $2.673 billion from $2.396 billion as of December 31, 2024. Average core deposits of $2.532 billion increased $153.4 million, or 6.4%, for the year ended December 31, 2025, compared to $2.378 billion for the year ended December 31, 2024.

•
Private wealth and trust assets under management and administration increased by $396.0 million, or 11.58%, to $3.815 billion at December 31, 2025, compared to $3.419 billion at December 31, 2024. Private wealth management service fees increased $1.5 million, or 11.0%, for the year ended December 31, 2025, compared to the year ended December 31, 2024.

The detailed financial discussion that follows focuses on 2025 results compared to 2024. Information pertaining to 2024 in comparison to 2023 was included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024, on page 37 under Part II, Item 7, "Management's Discussion and Analysis of Financial and Result of Operations," which was filed with the SEC on February 26, 2025.

Results of Operations

Top Line Revenue

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Top line revenue, comprised of net interest income and non-interest income, increased $15.2 million, or 9.9%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, due to a 10.1% increase in net interest income and a 9.2% increase in non-interest income. The increase in net interest income was driven by an increase in average gross loans and leases partially offset by net interest margin compression. The increase in non-interest income was due to increases in private wealth fee income, bank owned life insurance policy income, service charges on deposits, and commercial loan swap fee income, partially offset by a decrease in loan fees driven by a reclassification of certain items to net interest income.

The components of top line revenue were as follows:

For the Year Ended December 31,

Change From Prior Year

2025

2024

2023

$ Change 2025

% Change 2025

$ Change 2024

% Change 2024

(Dollars in Thousands)

Net interest income

$136,690

$124,206

$112,588

$12,484

10.1%

$11,618

10.3%

Non-interest income

31,937

29,251

31,308

2,686

9.2

$(2,057)

(6.6)

Top line revenue

$168,627

$153,457

$143,896

$15,170

9.9

$9,561

6.6

Return on Average Assets and Return on Average Tangible Common Equity

ROAA was 1.24% for the year ended December 31, 2025, compared to 1.20% for the year ended December 31, 2024. The increase in ROAA was due to the increase in net interest income and non-interest income, partially offset by an increase in operating expenses and a higher effective tax rate. We consider ROAA a critical metric to measure the profitability of our organization and how efficiently our assets are deployed. ROAA also allows us to better benchmark our profitability to our peers without the need to consider different degrees of leverage which can ultimately influence return on equity measures.

ROATCE for the year ended December 31, 2025 was 15.25%, compared to 15.35% for the year ended December 31, 2024. We view ROATCE as an important measurement for monitoring profitability and continue to focus on improving our return to our shareholders by enhancing the overall profitability of our client relationships, controlling our expenses, and minimizing our costs of credit.

Efficiency Ratio and Pre-Tax, Pre-Provision Adjusted Earnings

Efficiency ratio measured 58.78% for the year ended December 31, 2025, compared to 60.61% for the year ended December 31, 2024. Efficiency ratio is a non-GAAP measure representing operating expense divided by operating revenue. Operating expense is defined as non-interest expense excluding the effects of the SBA recourse benefit or provision, impairment of tax credit investments, net gains or losses on repossessed assets, amortization of other intangible assets, and other discrete items, if any. Operating revenue is defined as net interest income plus non-interest income less realized net gains or losses on securities, if any, and other discrete items.

PTPP adjusted earnings for the year ended December 31, 2025, was $69.4 million, increasing 14.8%, compared to $60.4 million for the year ended December 31, 2024. PTPP adjusted earnings is a non-GAAP measure defined as operating revenue less operating expense. In the judgment of the Corporation’s management, the adjustments made to non-interest expense and non-interest income allow investors and analysts to better assess the Corporation’s operating expenses in relation to its core operating revenue by removing the volatility associated with certain one-time items and other discrete items. PTPP adjusted earnings allows management to benchmark performance of our model to our peers without the influence of the loan loss provision and tax considerations, which will ultimately influence other traditional financial measurements, including ROA and ROATCE. The information provided below reconciles the efficiency ratio and PTPP adjusted earnings to their most comparable GAAP measure.

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Please refer to the Non-Interest Income and Non-Interest Expense sections below for discussion on additional drivers of the year-over-year change in the efficiency ratio and PTPP adjusted earnings.

For the Year Ended December 31,

Change From Prior Year

2025

2024

2023

$ Change 2025

% Change 2025

$ Change 2024

% Change 2024

(Dollars in Thousands)

Total non-interest expense

$99,519

$93,480

$88,575

$6,039

6.5%

$4,905

5.5%

Less:

Net loss on repossessed assets

27

168

12

(141)

(83.9)%

156

1,300.0

SBA recourse (benefit) provision

(64)

(104)

775

40

(38.5)%

(879)

(113.4)

Contribution to First Business Charitable Foundation

234

—

—

234

NM

—

NM

Impairment of tax credit investments

339

400

—

(61)

(15.3)%

400

NM

Total operating expense (a)

$98,983

$93,016

$87,788

$5,967

6.4

$5,228

6.0

Net interest income

$136,690

$124,206

$112,588

$12,484

10.1

$11,618

10.3

Total non-interest income

31,937

29,251

31,308

2,686

9.2

(2,057)

(6.6)

Less:

Bank-owned life insurance claim

234

—

—

234

NM

—

NM

Net loss on sale of securities

—

(8)

(45)

8

NM

37

NM

Adjusted non-interest income

31,703

29,259

31,353

2,444

8.4

(2,094)

(6.7)

Operating revenue (b)

$168,393

$153,465

$143,941

$14,928

9.7

$9,524

6.6

Efficiency ratio

58.78%

60.61%

60.99%

Pre-tax, pre-provision adjusted earnings (b-a)

$69,410

$60,449

$56,153

$8,961

14.8

$4,296

7.7

Average total assets

$3,999,878

$3,626,273

$3,212,149

$373,605

10.3

$414,124

12.9

Net Interest Income

Net interest income levels depend on the amount of and yield on interest-earning assets as compared to the amount of and rate paid on interest-bearing liabilities. Net interest income is sensitive to changes in market rates of interest and the asset/liability management processes to prepare for and respond to such changes.

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The table below shows average balances, interest, average rates, net interest margin and the spread between combined average rates earned on our interest-earning assets and cost of interest-bearing liabilities for the periods indicated. The average balances are derived from average daily balances.

For the Year Ended December 31,

2025

2024

2023

Average

Balance

Interest

Average

Yield/

Rate

Average

Balance

Interest

Average

Yield/

Rate

Average

Balance

Interest

Average

Yield/

Rate

(Dollars in Thousands)

Interest-earning assets

Commercial real estate and other mortgage loans(1)

$1,971,337

$123,113

6.25%

$1,793,041

$118,339

6.60%

$1,586,967

$98,370

6.20%

Commercial and industrial loans(1)

1,252,779

101,562

8.11%

1,153,955

95,782

8.30%

1,013,866

81,963

8.08%

Consumer and other loans(1)

47,756

2,636

5.52%

49,885

2,777

5.57%

47,018

2,316

4.93%

Total loans and leases receivable(1)

3,271,872

227,311

6.95%

2,996,881

216,898

7.24%

2,647,851

182,649

6.90%

Mortgage-related securities(2)

340,173

14,368

4.22%

266,098

10,405

3.91%

200,383

6,433

3.21%

Other investment securities(3)

46,681

1,007

2.16%

56,301

1,507

2.68%

62,921

1,770

2.81%

FHLB and FRB stock

11,109

1,016

9.15%

12,167

1,133

9.31%

15,162

1,231

8.12%

Short-term investments

85,305

3,608

4.23%

59,853

3,186

5.32%

54,311

2,845

5.24%

Total interest-earning assets

3,755,140

247,310

6.59%

3,391,300

233,129

6.87%

2,980,628

194,928

6.54%

Non-interest-earning assets

244,738

234,973

231,521

Total assets

$3,999,878

$3,626,273

$3,212,149

Interest-bearing liabilities

Transaction accounts

$1,018,735

$32,543

3.19%

$884,321

$33,796

3.82%

$689,500

$23,727

3.44%

Money market accounts

856,554

27,726

3.24%

815,603

32,180

3.95%

681,336

22,129

3.25%

Certificates of deposit

236,848

9,238

3.90%

237,228

10,879

4.59%

273,387

11,209

4.10%

Wholesale deposits

737,253

29,701

4.03%

515,197

21,066

4.09%

346,285

14,353

4.14%

Total interest-bearing deposits

2,849,390

99,208

3.48%

2,452,349

97,921

3.99%

1,990,508

71,418

3.59%

FHLB advances

246,485

7,880

3.20%

282,437

7,719

2.73%

351,990

8,881

2.52%

Other borrowings

54,748

3,532

6.45%

51,072

3,284

6.43%

38,891

2,041

5.25%

Total interest-bearing liabilities

3,150,623

110,620

3.51%

2,785,858

108,924

3.91%

2,381,389

82,340

3.46%

Non-interest-bearing demand deposit accounts

419,691

441,313

453,930

Other non-interest-bearing liabilities

81,427

92,708

102,668

Total liabilities

3,651,741

3,319,879

2,937,987

Stockholders’ equity

348,137

306,394

274,162

Total liabilities and stockholders’ equity

$3,999,878

$3,626,273

$3,212,149

Net interest income

$136,690

$124,205

$112,588

Interest rate spread

3.07%

2.96%

3.08%

Net interest-earning assets

$604,517

$605,442

$599,239

Net interest margin

3.64%

3.66%

3.78%

Average interest-earning assets to average interest-bearing liabilities

119.19%

121.73%

125.16%

Return on average assets

1.24%

1.20%

1.13%

Return on average tangible common equity

15.25%

15.35%

14.46%

Average equity to average assets

8.70%

8.45%

8.54%

Non-interest expense to average assets

2.49%

2.58%

2.76%

(1)
The average balances of loans and leases include non-accrual loans and leases and loans held for sale. Interest income related to non-accrual loans and leases is recognized when collected. Interest income includes net loan fees in lieu of interest.

(2)
Includes amortized cost basis of assets available-for-sale and held-to-maturity.

(3)
Yields on tax-exempt municipal securities are not presented on a tax-equivalent basis in this table.

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Table of Contents

The following table provides information with respect to: (1) the change in net interest income attributable to changes in rate (changes in rate multiplied by prior volume); and (2) the change in net interest income attributable to changes in volume (changes in volume multiplied by prior rate) for the year ended December 31, 2025 compared to the year ended December 31, 2024. The change in net interest income attributable to changes in rate and volume (changes in rate multiplied by changes in volume) has been allocated to the rate and volume changes in proportion to the relationship of the absolute dollar amounts of the change in each.

Increase (Decrease) for the Year Ended December 31,

2025 Compared to 2024

2024 Compared to 2023

Rate

Volume

Net

Rate

Volume

Net

(In Thousands)

Interest-earning assets

Commercial real estate and other mortgage loans(1)

$

(6,583

)

$

11,357

$

4,774

$

6,643

$

13,326

$

19,969

Commercial and industrial loans(1)

(2,273

)

8,053

5,780

2,240

11,579

13,819

Consumer and other loans(1)

(23

)

(118

)

(141

)

314

147

461

Total loans and leases receivable

(8,879

)

19,292

10,413

9,197

25,052

34,249

Mortgage-related securities

886

3,077

3,963

1,586

2,386

3,972

Other investment securities

(266

)

(234

)

(500

)

(83

)

(180

)

(263

)

FHLB and FRB Stock

—

(117

)

(117

)

165

(263

)

(98

)

Short-term investments

(745

)

1,167

422

47

294

341

Total net change in income on interest-earning assets

(9,004

)

23,185

14,181

10,912

27,289

38,201

Interest-bearing liabilities

Transaction accounts

(5,985

)

4,732

(1,253

)

2,832

7,237

10,069

Money market accounts

(6,007

)

1,553

(4,454

)

5,242

4,809

10,051

Certificates of deposit

(1,624

)

(17

)

(1,641

)

1,245

(1,575

)

(330

)

Wholesale deposits

(315

)

8,950

8,635

(197

)

6,910

6,713

Total deposits

(13,931

)

15,218

1,287

9,122

17,381

26,503

FHLB advances

102

59

161

697

(1,859

)

(1,162

)

Other borrowings

11

237

248

520

723

1,243

Total net change in expense on interest-bearing liabilities

(13,818

)

15,514

1,696

10,339

16,245

26,584

Net change in net interest income

$

4,814

$

7,671

$

12,485

$

573

$

11,044

$

11,617

(1)
The average balances of loans and leases include non-accrual loans and leases and loans held for sale.

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Table of Contents

The change in yield of the respective interest-earning assets or the rate paid on interest-bearing liability compared to the change in short-term market rates is commonly referred to as a beta. The table below displays the beta calculations for loans and leases, total interest earning assets, core deposits, interest-bearing deposits and total interest-bearing liabilities for the year ended December 31, 2025, and 2024.

For the Year Ended December 31,

2025

2024

2023

2025 Compared to 2024

2024 Compared to 2023

Asset and Liability Beta Analysis

Average Yield/Rate

Increase (Decrease)

Total loans and leases receivable (a)

6.95%

7.24%

6.90%

-0.29%

0.34%

Total interest-earning assets (b)

6.59%

6.87%

6.54%

-0.28%

0.33%

Total core deposits (e)

2.75%

3.23%

2.72%

-0.48%

0.51%

Total bank funding (f)

3.05%

3.33%

2.87%

-0.28%

0.46%

Net interest margin (g)

3.64%

3.66%

3.78%

-0.02%

(0.12)%

Effective fed funds rate (1)(i)

4.21%

5.14%

5.02%

-0.93%

0.12%

Beta Calculations:

Total loans and leases receivable (a)/(i)

31.2%

283.3%

Total interest-earning assets (b)/(i)

30.1%

275.0%

Total core deposits (e)/(i)

51.6%

425.0%

Total bank funding (2)(f)/(i)

30.1%

383.3%

(1)
Board of Governors of the Federal Reserve System (US), Effective Federal Funds Rates (DFF) retrieved from FRED, Federal Reserve Bank of St. Louis.

(2)
Total bank funding represents total deposits plus FHLB advances.

Net interest income increased $12.5 million, or 10.1% during the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase in net interest income reflected an increase in average gross loans and leases, the reclassification of certain types of C&I loan fees from non-interest income to interest income, and lower cost of interest-bearing liabilities due to decreases in interest rates. These changes were partially offset by a decrease in yield on loans, non-accrual interest reversals, and a decrease in asset-based loan fees. Average gross loans and leases of $3.272 billion increased by $275.0 million, or 9.2%, for the year ended December 31, 2025, compared to $2.997 billion for the same period in 2024.

The yield on average interest-earning assets for the year ended December 31, 2025, was 6.59%, compared to 6.87% for the year ended December 31, 2024. The decrease in yield was primarily due to lower interest rates, partially offset by the reinvestment of cash flows from the securities and fixed-rate loan portfolios.

The average rate paid on total interest-bearing liabilities was 3.51% for the year ended December 31, 2025, a decrease from 3.91% for the year ended December 31, 2024. Total interest-bearing liabilities includes interest-bearing deposits, FHLB advances, subordinated and junior subordinated notes and debentures payable, federal funds purchased, and other borrowings. The average rates paid decreased due to lower short-term interest rates, the replacement of maturing wholesale funds at higher fixed rates, and client movement from non-interest bearing to interest bearing core deposit products.

Net interest margin decreased to 3.64% for the year ended December 31, 2025, compared to 3.66% for the year ended December 31, 2024. The decrease in net interest margin was due to lower yields on interest-earning assets, partially offset by lower costs of interest-bearing liabilities due to lower interest rates and the reclassification of certain types of C&I loan fees from non-interest income to net interest income.

The Corporation maintains a target for net interest margin in the range of 3.60% to 3.65%. Performance in future periods will vary due to factors such as the level of fees in lieu of interest and the timing, pace, and scale of future interest rate changes.

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Table of Contents

Provision for Credit Losses

We determine our provision for credit losses pursuant to our allowance for credit loss methodology. It is based on a reasonable and supportable forecast as well as considerations for composition, risk, and performance indicators in our credit portfolio. Refer to Allowance for Credit Losses in the Critical Accounting Policy section, for further information regarding our allowance for credit loss methodology.

The following table shows the components of the provision for credit losses.

For the Year Ended December 31,

2025

2024

2023

(In Thousands)

Change in qualitative factors

$

(546

)

$

332

$

33

Change in quantitative factors

1,526

(977

)

(1,453

)

Charge-offs

9,665

5,255

1,781

Recoveries

(1,434

)

(699

)

(548

)

Change in reserves on individually evaluated loans, net

(3,368

)

2,928

4,330

Change due to loan growth, net

2,480

2,227

3,652

Change in unfunded credit commitment reserves

332

(239

)

387

Total provision for credit losses (a)

$

8,655

$

8,827

$

8,182

(a)
Management adopted ASC 326 on January 1, 2023.

Refer to Asset Quality, below, for further information regarding the overall credit quality of our loan and lease portfolio.

Non-Interest Income

Non-interest income increased by $2.7 million, or 9.2%, to $31.9 million for the year ended December 31, 2025, from $29.3 million for the year ended December 31, 2024. Management continues to focus on revenue growth from multiple non-interest income sources to maintain a diversified revenue stream through greater contributions from fee-based revenues. Total non-interest income accounted for 18.9% of total revenues for the year ended December 31, 2025, compared to 19.1% in 2024 as net interest income increased at a greater rate than non-interest income. The increase in total non-interest income for the year ended December 31, 2025, was driven by private wealth fee income, bank-owned life insurance policy income, commercial loan swap fee income, and service charges on deposits, partially offset by a reduction in loan fees driven by the reclassification of certain types of C&I fees from non-interest income to net interest income.

The components of non-interest income were as follows:

For the Year Ended December 31,

Change From Prior Year

2025

2024

2023

$ Change 2025

% Change 2025

$ Change 2024

% Change 2024

(Dollars in Thousands)

Private wealth management

   services fee income

$14,716

$13,262

$11,425

$1,454

11.0%

$1,837

16.1%

Gain on sale of SBA loans

1,882

1,942

2,055

(60)

(3.1)

(113)

(5.5)

Service charges on deposits

4,491

3,771

3,131

720

19.1

640

20.4

Loan fees

1,724

3,399

3,363

(1,675)

(49.3)

36

1.1

Bank-owned life insurance policy income

2,755

1,649

1,494

1,106

67.1

155

10.4

Net loss on sale of securities

—

(8)

(45)

8

(100.0)

37

(82.2)

Swap fees

1,995

1,403

2,964

592

42.2

(1,561)

(52.7)

Other non-interest income

4,374

3,833

6,921

541

14.1

(3,088)

(44.6)

Total non-interest income

$31,937

$29,251

$31,308

$2,686

9.2

$(2,057)

(6.6)

Fee income ratio(1)

18.9%

19.1%

21.8%

(1)
Fee income ratio is fee income, per the above table, divided by top line revenue (defined as net interest income plus non-interest income).

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Table of Contents

Private wealth fee income increased $1.5 million, or 11.0%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. Private wealth fee income increased compared to the prior year primarily due to an increase in assets under management and administration and increases in fee rates across the client base. Private wealth fee income can vary due to the mix of business at different fee structures and can be positively or negatively influenced by the timing and magnitude of volatility within the capital markets. As of December 31, 2025, private wealth and trust assets under management and administration totaled $3.815 billion, increasing $396.0 million, or 11.6%, compared to $3.419 billion as of December 31, 2024, due to an increase in market values, new clients, and new money from existing clients.

Bank-owned life insurance policy income increased $1.1 million, or 67.1%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase is primarily due to the purchase of new policies, totaling $24.5 million in the second quarter of 2025 and an insurance claim of $234,000 in the third quarter of 2025.

Service charges on deposits increased $720,000, or 19.1%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase is primarily driven by new and expanded core deposit relationships and a reduction in earnings credit rates. Treasury management business development efforts remain robust as gross treasury management service charges increased $473,000, or 7.3%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. Management believes growth in gross analyzed service charges is a strong indicator of success for the Corporation given the direct correlation to adding and expanding core business relationships.

Commercial loan interest rate swap fee income increased $592,000, or 42.2%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. We originate commercial real estate loans in which we offer clients a floating rate and an interest rate swap. The client’s swap is then offset with a counter-party dealer. The execution of these transactions generates swap fee income. Interest rate swaps can be an attractive product for our commercial borrowers, although associated fee income varies from period to period based on loan activity, the interest rate environment, and the duration of the swap contracts.

Other non-interest income increased $541,000, or 14.1%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase was primarily due to nonrecurring fee income in accounts receivable financing and increases in credit card fee income, bank consulting fee income, and other equipment finance related fees. These increases were partially offset by a decrease in limited partnership investment income.

Loan fee income decreased $1.7 million, or 49.3%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The change is primarily due to the reclassification of certain types of C&I loan fees from non-interest income to interest income. Excluding this reclassification, loan fee income increased $113,000, or 7.0%. The change excluding the reclassification is primarily due to an increase in traditional commercial loan fees.

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Table of Contents

Non-Interest Expense

Non-interest expense increased by $6.0 million, or 6.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. Operating expense, which excludes certain one-time and discrete items as defined in the Efficiency Ratio table above, increased $6.0 million, or 6.4%, for the year ended December 31, 2025, compared to the year ended December 31, 2024.

The components of non-interest expense were as follows:

For the Year Ended December 31,

Change From Prior Year

2025

2024

2023

$ Change 2025

% Change 2025

$ Change 2024

% Change 2024

(Dollars in Thousands)

Compensation

$67,874

$63,105

$61,059

$4,769

7.6%

$2,046

3.4%

Occupancy

2,303

2,373

2,381

(70)

(2.9)

(8)

(0.3)

Professional fees

5,018

5,671

5,325

(653)

(11.5)

346

6.5

Data processing

4,732

4,892

3,826

(160)

(3.3)

1,066

27.9

Marketing

3,844

3,518

2,889

326

9.3

629

21.8

Equipment

1,381

1,314

1,340

67

5.1

(26)

(1.9)

Computer software

6,987

6,166

4,985

821

13.3

1,181

23.7

FDIC insurance

3,231

2,760

2,238

471

17.1

522

23.3

Other non-interest expense

4,149

3,681

4,532

468

12.7

(851)

(18.8)

Total non-interest expense

$99,519

$93,480

$88,575

$6,039

6.5

$4,905

5.5

Total operating expense(1)

$98,983

$93,016

$87,788

$5,967

6.4

$5,228

6.0

Actual full-time equivalent employees

365

349

343

16

4.6

6

1.7

(1)
Total operating expense represents total non-interest expense, adjusted to exclude the impact of discrete items as previously defined in the non-GAAP efficiency ratio calculation, above.

Compensation expense increased by $4.8 million, or 7.6%, for the year ended December 31, 2025, compared to the year ended December 31, 2024, principally due to an increase in average FTEs, salary increases, growth in employee benefit costs, and increase in the annual cash bonus accrual. The increase reflects a $2.5 million, or 6.2%, increase in employee salaries and a $1.1 million, or 18.4%, increase in estimated annual cash bonuses compared to 2024. Average FTEs of 363 for the year ended December 31, 2025, increased by 13, or 3.7%, from 350 for the year ended December 31, 2024.

Computer software expense increased $821,000, or 13.3%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase was primarily due to our commitment to innovative technology to support growth initiatives, enhance productivity and security, and improve the client experience.

FDIC insurance increased $471,000, or 17.1%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase was commensurate with the increase in total assets, brokered deposits, and non-accrual loans.

Other non-interest expense increased $468,000, or 12.7%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase was primarily due to an increase in liquidation expenses and a release of SBA recourse reserve in the prior year period.

Marketing expense increased $326,000, or 9.3%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase was primarily due to an increase in business development efforts and advertising projects related to the Company’s growth initiatives.

Professional fees decreased $653,000, or 11.5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease was primarily due to a decrease in recruiting expense and professional consulting services for various projects.

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Table of Contents

Income Taxes

Income tax expense totaled $10.1 million for the year ended December 31, 2025, compared to $6.9 million for the year ended December 31, 2024. Income tax expense included a $1.6 million net benefit from tax credit investments for the years ended December 31, 2025 and 2024. The effective tax rate for the year ended December 31, 2025, was 16.8% compared to 13.5% for the year ended December 31, 2024. The year-over-year increase was mainly driven by a $1.7 million partial release of a state deferred tax asset valuation allowance in 2024, resulting from updated projections of taxable income at the state level. The Corporation expects to report an effective tax rate between 16% and 18% for 2026.

Financial Condition

General

Total assets increased by $228.7 million, or 5.9%, to $4.082 billion as of December 31, 2025, compared to $3.853 billion at December 31, 2024. The increase in total assets was primarily driven by an increase in loans and leases receivable and available-for-sale securities, partially offset by a reduction in short-term investments. Total liabilities increased by $185.7 million, or 5.3%, to $3.710 billion at December 31, 2025, compared to $3.525 billion at December 31, 2024. The increase in total liabilities was principally due to an increase in deposits, partially offset by a decrease in Federal Home Loan Bank borrowings.

Cash and Cash Equivalents

Cash and cash equivalents include short-term investments and cash and due from banks. Cash and due from banks increased $1.3 million to $30.8 million at December 31, 2025, from $29.5 million at December 31, 2024. Short-term investments decreased by $119.5 million to $8.7 million at December 31, 2025, from $128.2 million at December 31, 2024. Our short-term investments primarily consist of interest-bearing deposits held at the Federal Reserve Bank ("FRB"). We value the safety and soundness provided by the FRB, and therefore, we incorporate short-term investments in our readily accessible liquidity program. As of December 31, 2025, and December 31, 2024, interest-bearing deposits held at the FRB were $7.7 million and $127.8 million, respectively. In general, the level of our cash and short-term investments will be influenced by the timing of deposit gathering, scheduled maturities of wholesale deposits, funding of loan and lease growth when opportunities are presented, and the level of our securities portfolio. Please refer to the section entitled Liquidity and Capital Resources for further discussion.

Securities

Total securities, including available-for-sale and held-to-maturity, increased by $79.2 million, or 22.7%, to $427.3 million, or 10.5% of total assets at December 31, 2025, compared to $348.1 million or 9.0% of total assets at December 31, 2024. As of December 31, 2025, and 2024, our total securities portfolio had a weighted average estimated remaining maturity of approximately 4.7 years and 5.2 years, respectively. The investment portfolio primarily consists of mortgage-backed securities and is used to provide a source of liquidity, including the ability to pledge securities for possible future cash advances, while contributing to the earnings potential of the Bank. The overall duration of the securities portfolio is established and maintained to further mitigate interest rate risk present within our balance sheet as identified through asset/liability simulations. We purchase investment securities intended to protect net interest margin while maintaining an acceptable risk profile. In addition, we will purchase investment securities to utilize our cash position effectively within appropriate policy guidelines and estimates of future cash demands. While mortgage-backed securities present prepayment risk and extension risk, we believe the overall credit risk associated with these investments is minimal, as all of the securities we hold are guaranteed by the United States Treasury, the Federal National Mortgage Association (“FNMA”), the Federal Home Loan Mortgage Corporation (“FHLMC”), or the Government National Mortgage Association (“GNMA”), a U.S. government agency. The estimated repayment streams associated with this portfolio also allow us to better match short-term liabilities. The Bank’s investment policies allow for various types of investments, including tax-exempt municipal securities. The ability to invest in tax-exempt municipal securities provides for further opportunity to improve our overall yield on the securities portfolio. We evaluate the credit risk of the municipal securities prior to purchase and generally limit exposure to general obligation issuances from municipalities, primarily in Wisconsin.

The majority of the securities we hold have active trading markets; therefore, we have not experienced difficulties in pricing our securities. We use a third-party pricing service as our primary source of market prices for the securities portfolio. On a quarterly basis, we validate the reasonableness of prices received from this source through independent verification of the portfolio, data integrity

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validation through comparison of current price to prior period prices, and an expectation-based analysis of movement in prices based upon the changes in the related yield curves and other market factors. On a periodic basis, we review the third-party pricing vendor’s methodology for pricing relevant securities and the results of its internal control assessments. Our securities portfolio is sensitive to fluctuations in the interest rate environment and has limited sensitivity to credit risk due to the nature of the issuers and guarantors of the securities as previously discussed. If interest rates decline and the credit quality of the securities remains constant or improves, the fair value of our debt securities portfolio would likely improve, thereby increasing total comprehensive income. If interest rates increase and the credit quality of the securities remains constant or deteriorates, the fair value of our debt securities portfolio would likely decline and therefore decrease total comprehensive income. The magnitude of the fair value change will be based upon the duration of the portfolio. A securities portfolio with a longer average duration will exhibit greater market price volatility than a securities portfolio with a shorter average duration in a changing rate environment. During the year ended December 31, 2025, we recognized unrealized holding gains of $11.6 million before income taxes through other comprehensive income. These gains were primarily the result of a decrease in market interest rates. No securities within our portfolio were deemed to require an allowance for credit losses as of December 31, 2025. We sold no securities during the year ended December 31, 2025. As of December 31, 2025, no securities were classified as trading securities. At December 31, 2025, $38.8 million of our securities were pledged to secure various obligations, including interest rate swap contracts and municipal deposits.

The tables below set forth information regarding the amortized cost and fair values of our securities.

As of December 31,

2025

2024

Amortized

Cost

Fair

Value

Amortized

Cost

Fair

Value

(In Thousands)

Available-for-sale:

U.S. treasuries

$

4,995

$

4,901

$

4,989

$

4,718

U.S. government agency securities - government-

   sponsored enterprises

2,500

2,314

3,500

3,153

Municipal securities

46,993

43,892

39,997

34,861

Residential mortgage-backed securities - government

   issued

166,933

166,635

125,571

123,223

Residential mortgage-backed securities - government-

   sponsored enterprises

168,544

162,543

145,888

134,765

Commercial mortgage-backed securities - government

   issued

2,416

2,114

2,665

2,224

Commercial mortgage-backed securities - government-

   sponsored enterprises

42,326

39,688

43,033

38,448

$

434,707

$

422,087

$

365,643

$

341,392

As of December 31,

2025

2024

Amortized

Cost

Fair

Value

Amortized

Cost

Fair

Value

(In Thousands)

Held-to-maturity:

Municipal securities

$

2,144

$

2,141

$

3,137

$

3,099

Residential mortgage-backed securities - government

   issued

546

520

836

788

Residential mortgage-backed securities - government-

   sponsored issued

518

500

766

724

Commercial mortgage-backed securities - government-

   sponsored enterprises

2,002

1,980

2,002

1,924

$

5,210

$

5,141

$

6,741

$

6,535

U.S. Treasuries represent treasury bonds issued by the United States Treasury. U.S. government agency securities - government-sponsored enterprises represent securities issued by FNMA. Municipal securities include securities issued by various municipalities located primarily within Wisconsin and are primarily general obligation bonds that are tax-exempt in nature. Residential and

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commercial mortgage-backed securities - government issued represent securities guaranteed by GNMA. Residential and commercial mortgage-backed securities - government-sponsored enterprises include securities guaranteed by FHLMC, FNMA, and the FHLB.

The following table sets forth the contractual maturity and weighted average yield characteristics of the fair value of our available-for-sale securities and the amortized cost of our held-to-maturity securities at December 31, 2025, classified by remaining contractual maturity. Actual maturities may differ from contractual maturities because issuers have the right to call or prepay securities without call or prepayment penalties. Yields on tax-exempt securities have not been computed on a tax equivalent basis.

Less than One Year

One to Five Years

Five to Ten Years

Over Ten Years

Fair Value

Weighted

Average

Yield

Fair Value

Weighted

Average

Yield

Fair Value

Weighted

Average

Yield

Fair Value

Weighted

Average

Yield

Total

(Dollars in Thousands)

Available-for-sale:

U.S. treasuries

$

4,901

1.00

%

$

—

—

%

$

—

—

%

$

—

—

%

$

4,901

U.S. government agency

   securities - government-

   sponsored enterprises

—

—

2,314

0.95

—

—

—

—

2,314

Municipal securities

932

1.22

10,059

1.63

9,109

2.11

23,792

2.67

43,892

5,833

12,373

9,109

23,792

51,107

Residential mortgage-backed

   securities

329,178

Commercial mortgage-

   backed securities

41,802

$

5,833

$

12,373

$

9,109

$

23,792

$

422,087

Less than One Year

One to Five Years

Five to Ten Years

Over Ten Years

Amortized Cost

Weighted

Average

Yield

Amortized Cost

Weighted

Average

Yield

Amortized Cost

Weighted

Average

Yield

Amortized Cost

Weighted

Average

Yield

Total

(Dollars in Thousands)

Held-to-maturity:

Municipal securities

$

745

3.00

%

$

1,399

2.90

%

$

—

—

%

$

—

—

%

$

2,144

745

1,399

—

—

2,144

Residential mortgage-backed

   securities

1,064

Commercial mortgage-

   backed securities

2,002

$

745

$

1,399

$

—

$

—

$

5,210

Investments in Limited Partnerships

The Corporation has invested in a number of limited partnerships that provide income tax, financial, and regulatory benefits due to the nature of the partnerships. These investments included: seven Small Business Investment Companies ("SBIC") and four other limited partnership investments, whose purpose is to provide funding to small companies which meet certain criteria based on each particular fund's focus, five Historic Rehabilitation Tax Credit funds ("HTC"), whose purpose is to develop and operate real estate projects related to historical properties and communities, and 12 Low-Income Housing Tax Credits ("LIHTC") projects, whose purpose is to invest in approved low-income housing investment tax credit projects.

These investments are unconsolidated variable interest entities ("VIE") because we are not considered the primary beneficiary. We have determined that we are not the primary beneficiary of these VIEs because we do not have the power to direct the activities that most significantly impact their economic performance.

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All of our limited partnership investments are privately held and their market values are not readily available. These investments are accounted for using the equity method of accounting for SBIC, other limited partnerships, and HTC funds and the proportional amortization method for LIHTC investments and are included in Other Assets in the Consolidated Balance Sheets. Income from the SBIC and other limited partnerships are included in Other Non-interest Income in the Consolidated Statements of Income and totaled $1.2 million, $1.9 million, and $5.1 million for the years ended December 31, 2025, 2024, and 2023, respectively. Income or loss from the HTC and LIHTC investments is included in income tax expense. Income from investments in limited partnerships varies from period to period based on timing of new investments and investment performance.

Derivatives

The Board approved Bank policies allow the Bank to participate in hedging strategies or to use financial futures, options, forward commitments, or interest rate swaps. The Bank periodically utilizes derivative instruments in the course of its asset/liability management. The Corporation’s derivative financial instruments, under which the Corporation is required to either receive cash from or pay cash to counterparties depending on changes in interest rates applied to notional amounts, are carried at fair value on the consolidated balance sheets.

As of December 31, 2025, the aggregate amortizing notional value of interest rate swaps with various commercial borrowers was approximately $1.167 billion, compared to $1.022 billion as of December 31, 2024. We receive fixed rates and pay floating rates based upon designated benchmark interest rates on the swaps with commercial borrowers. These swaps mature between June 2026 and July 2041. Commercial borrower swaps are completed independently with each borrower and are not subject to master netting arrangements. As of December 31, 2025, the commercial borrower swaps were reported on the Consolidated Balance Sheets as a derivative asset of $9.7 million and liability of $34.6 million compared to a derivative asset of $2.0 million and liability of $56.6 million as of December 31, 2024. Relating to the offsetting swap contracts with dealer counterparties, we pay fixed rates and receive floating rates based upon designated benchmark interest rates. These interest rate swaps also have maturity dates between June 2026 and July 2041. Dealer counterparty swaps are subject to master netting agreements among the contracts within our Bank and were reported on the Consolidated Balance Sheets as a net derivative asset of $24.9 million as of December 31, 2025, compared to a net derivative asset of $54.5 million as of December 31, 2024. In both periods, the counterparties pledged U.S. Treasuries to fully collateralize the position. The gross amount of dealer counterparty swaps as of December 31, 2025, without regard to the enforceable master netting agreement, was a gross derivative liability of $9.7 million and gross derivative asset of $34.6 million, compared to a gross derivative liability of $2.0 million and gross derivative asset of $56.6 million as of December 31, 2024.

The Corporation also enters into interest rate swaps to manage interest rate risk and reduce the cost of match-funding certain long-term fixed rate loans. These derivative contracts involve the receipt of floating rate interest from a counterparty in exchange for the Corporation making fixed-rate payments over the life of the agreement, without the exchange of the underlying notional value. The instruments are designated as cash flow hedges as the receipt of floating rate interest from the counterparty is used to manage interest rate risk associated with forecasted interest payments on short-term FHLB advances or wholesale deposits. The change in the fair value of these hedging instruments is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged transactions affect earnings. As of December 31, 2025, the aggregate notional value of interest rate swaps designated as cash flow hedges was $497.5 million. These interest rate swaps mature between January 2026 and February 2041. A pre-tax unrealized loss of $8.9 million was recognized in other comprehensive income for the year ended December 31, 2025, respectively, and there was no ineffective portion of these hedges.

The Corporation also enters into interest rate swaps to mitigate market value volatility on certain long-term fixed securities. The objective of the hedge is to protect the Corporation against changes in fair value due to changes in benchmark interest rates. The instruments are designated as fair value hedges as the changes in the fair value of the interest rate swap are expected to offset changes in the fair value of the hedged item attributable to changes in the SOFR swap rate, the designated benchmark interest rate. These derivative contracts involve the receipt of floating rate interest from a counterparty in exchange for the Corporation making fixed-rate payments over the life of the agreement, without the exchange of the underlying notional value. The change in the fair value of these hedging instruments is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged transactions affect earnings. As of December 31, 2025, the aggregate notional value of interest rate swaps designated as fair value hedges was $12.5 million. These interest rate swaps mature between February 2031 and October 2034. A

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pre-tax unrealized loss of $175,000 was recognized in other comprehensive income for the year ended December 31, 2025, and there was no ineffective portion of these hedges.

Loans and Leases Receivable

Period-end loans and leases receivable, net of allowance for credit losses, increased by $260.0 million, or 8.4%, to $3.337 billion at December 31, 2025, from $3.077 billion at December 31, 2024.

There continues to be a concentration in CRE loans which represented 61.0% and 61.6% of our total loans, as of December 31, 2025, and December 31, 2024, respectively. Our CRE portfolio increased $143.1 million, or 7.5%, to $2.060 billion at December 31, 2025, from $1.917 billion at December 31, 2024. As of December 31, 2025, approximately 14.3% of the CRE loans were owner-occupied CRE, compared to 14.3% as of December 31, 2024. We consider owner-occupied CRE more characteristic of the Corporation's C&I portfolio as, in general, the client's primary source of repayment is the cash flow from the operating entity occupying the commercial real estate property. The increase in CRE loans was due to growth across most products in our Wisconsin and Kansas City markets.

Our C&I portfolio increased $122.3 million, or 10.6%, to $1.274 billion at December 31, 2025, from $1.152 billion at December 31, 2024. The Corporation experienced C&I loan growth in 2025, due to growth across most products and geographies. Management believes the investment in the Corporation’s C&I product lines has positioned the Corporation for strong and sustainable growth in 2026 and beyond.

We continue to actively pursue C&I loans across the Corporation as this segment of our loan and lease portfolio provides an attractive yield commensurate with an appropriate level of credit risk and creates opportunities for core deposit, treasury management, and private wealth management relationships which generate additional fee revenue. Underwriting of new credit is primarily through approval from a serial sign-off or committee process and is a key component of our operating philosophy. Business development officers have no individual lending authority limits, and thus, a significant portion of our new credit extensions require approval from a loan approval committee regardless of the type of loan or lease, or the related complexities of each proposal. To monitor the ongoing credit quality of our loans and leases, each credit is evaluated for proper risk rating using a nine grade risk rating system at the time of origination, subsequent renewal, evaluation of updated financial information from our borrowers, or as other circumstances dictate.

While we continue to experience competition from banks operating in our primary geographic areas, we remain committed to our underwriting standards and will not deviate from those standards for the sole purpose of growing our loan and lease portfolio. We expect our new loan and lease activity to allow us to continue growing in future years.

The following table presents information concerning the composition of the Bank’s consolidated loans and leases receivable.

As of December 31,

2025

2024

Amount

Outstanding

% of Total

Loans and

Leases

Amount

Outstanding

% of Total

Loans and

Leases

(Dollars in Thousands)

Commercial real estate:

Commercial real estate — owner occupied

$

293,706

8.7

%

$

273,397

8.8

%

Commercial real estate — non-owner occupied

885,870

26.2

845,298

27.1

Construction and land development

248,560

7.4

221,086

7.1

Multi-family

571,468

16.9

530,853

17.1

1-4 family

60,661

1.8

46,496

1.5

Total commercial real estate

2,060,265

61.0

1,917,130

61.6

Commercial and industrial

1,273,997

37.8

1,151,720

37.0

Consumer and other

40,965

1.2

45,000

1.4

Total gross loans and leases receivable

3,375,227

100.0

%

3,113,850

100.0

%

Less:

Allowance for credit losses

35,877

35,785

Deferred loan fees and costs, net

1,986

722

Loans and leases receivable, net

$

3,337,364

$

3,077,343

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Below is a view of selected loan portfolios disaggregated by North American Industry Classification (“NAICs”) code as of December 31, 2025:

Real Estate

Wholesale

and

Manufacturing

Retail and

Hospitality

Transportation

and

Warehousing

Other

Total

Commercial real estate — owner

   occupied

5%

32%

18%

12%

33%

100%

Commercial real estate — non-

   owner occupied

76% (1)

1%

9%

2%

12%

100%

Commercial and industrial

4%

28%

18%

8%

42%

100%

(1)
Includes approximately $287.3 million of office real estate, or 8.5% of gross loans.

See Asset Quality for further discussion of industry-specific risks.

The following table shows the scheduled contractual maturities of the Bank’s consolidated gross loans and leases receivable, as well as the dollar amount of such loans and leases which are scheduled to mature after one year and have fixed or adjustable interest rates, as of December 31, 2025.

Amounts Due

Interest Terms On Amounts

Due after One Year

In One Year

or Less

After One

Year through

Five Years

After Five

Years

Total

Fixed Rate

Variable

Rate

(In Thousands)

Commercial real estate:

Owner-occupied

$

23,702

$

173,918

$

96,086

$

293,706

$

218,983

$

51,021

Non-owner occupied

164,551

418,829

302,490

885,870

249,193

472,126

Construction and land development

66,403

115,333

66,825

248,561

30,154

152,004

Multi-family

58,679

318,283

194,506

571,468

63,085

449,704

1-4 family

15,906

28,059

16,696

60,661

27,078

17,677

Commercial and industrial

452,103

698,905

122,988

1,273,996

250,274

571,620

Consumer and other

14,095

26,438

432

40,965

23,242

3,628

$

795,439

$

1,779,765

$

800,023

$

3,375,227

$

862,009

$

1,717,780

Commercial Real Estate. The Bank originates owner-occupied and non-owner-occupied commercial real estate loans which have fixed or adjustable rates and generally terms of three to 12 years and amortization of up to 30 years on existing commercial real estate. The Bank also originates loans to construct commercial properties and complete land development projects. The Bank’s construction loans generally have terms of six to 24 months with fixed or adjustable interest rates and fees that are due at the time of origination. Loan proceeds are disbursed in increments as construction progresses and as project inspections warrant.

Commercial and Industrial. The Bank’s commercial and industrial loan portfolio is comprised of loans for a variety of purposes which principally are secured by inventory, accounts receivable, equipment, machinery, and other corporate assets and are advanced within limits prescribed by our loan policy. The majority of such loans are secured and typically backed by personal guarantees of the owners of the borrowing business. Of the $1.274 billion of C&I loans outstanding as of December 31, 2025, $604.0 million were conventional C&I loans and $670.0 million were originated by the FBSF subsidiary. FBSF products consists of equipment financing, asset-based lending, accounts receivable financing, and floorplan financing.

Consumer and Other. The Bank originates a small amount of consumer loans consisting of home equity, first and second mortgages, and other personal loans for professional and executive clients of the Bank.

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Asset Quality

Our total non-performing assets consisted of the following:

December 31,

2025

December 31,

2024

(Dollars in Thousands)

Non-accrual loans and leases

Commercial real estate:

Commercial real estate - owner occupied

$

—

$

591

Commercial real estate - non-owner occupied

—

—

Construction and land development

14,581

—

Multi-family

4,292

—

1-4 family

—

—

Total non-accrual commercial real estate

18,873

591

Commercial and industrial

24,982

27,776

Consumer and other

—

—

Total non-accrual loans and leases

43,855

28,367

Repossessed assets, net

—

51

Total non-performing assets

$

43,855

$

28,418

Total non-accrual loans and leases to gross loans

   and leases

1.30

%

0.91

%

Total non-accrual loans to gross loans and leases plus

   repossessed assets, net

1.30

0.91

Total non-performing assets to total assets

1.07

0.74

Allowance for credit losses to gross loans and leases

1.12

1.20

Allowance for credit losses to non-accrual loans

   and leases

85.95

131.38

Non-accrual loans and leases increased $15.5 million, to $43.9 million at December 31, 2025, compared to $28.4 million at December 31, 2024. The Corporation's non-accrual loans and leases as a percentage of total gross loans and leases measured 1.30% and 0.91% at December 31, 2025, and 2024, respectively. The increase in non-accrual loans and leases is primarily driven by a downgrade of $20.4 million of CRE loans from a single client relationship and a new non-accrual in accounts receivable financing, partially offset by a payoff of a large C&I loan from the prior year and lower non-accrual loans in equipment financing.

We use a wide variety of available metrics to assess the overall asset quality of the portfolio and no one metric is used independently to determine the asset quality. Non-performing assets as a percentage of total assets was 1.07% and 0.74% at December 31, 2025, and December 31, 2024, respectively. As of December 31, 2025, and December 31, 2024, the payment performance of our loans and leases did not point to any new areas of concern, as approximately 98.7% and 99.1%, respectively, of the total portfolio at the end of each period was in a current payment status.

We reviewed loans and leases with exposure to certain industries:

•
Transportation and Logistics, Equipment Finance: $23 million or less than 1% of total loans - Management considered the following: 10% of Equipment Finance Transportation loans are rated Category IV. Due to our experience and forecast of continued sector stress, we are not currently originating new loans to this borrower profile in this lending niche. Based on our reserve methodology for individually and collectively evaluated loans, we believe our reserves related to this industry to be appropriate.

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•
Transportation and Logistics, other than Equipment Finance: $46 million or 1% of total loans - Management considered the following: One borrower with a balance of $6.0 million, or 13%, of the loan balance in this category is rated Category IV. Collateral on these loans includes commercial real estate, business assets, and equipment. Based on our reserve methodology for individually and collectively evaluated loans, we believe our reserves related to this industry to be appropriate.

•
Office, Commercial Real Estate: $287 million or 9% of total loans - Management considered the following: office exposure is concentrated in the Wisconsin markets where local market vacancy rates are below national rates and none of the loans in this category are rated Category IV. Based on our reserve methodology for individually and collectively evaluated loans, we believe our reserves related to this loan category to be appropriate.

•
Multifamily, Commercial Real Estate: $571 million or 17% of total loans - Management considered the following: one borrower with a balance of $4.3 million, or 1% of the loan balance in this category is rated Category IV, multifamily exposure is concentrated in the Wisconsin markets where local market vacancy rates are below national rates. Based on our reserve methodology for individually and collectively evaluated loans, we believe our reserves related to this loan category to be appropriate.

We also monitor asset quality through our established categories as defined in Note 4 – Loans, Lease Receivables, and Allowance for Credit Losses of the Consolidated Financial Statements. As we continue to actively monitor the credit quality of our loan and lease portfolios, we may identify additional loans and leases for which the borrowers or lessees are having difficulties making the required principal and interest payments based upon factors including, but not limited to, the inability to sell the underlying collateral, inadequate cash flow from the operations of the underlying businesses, liquidation events, or bankruptcy filings. We proactively work with our loan borrowers experiencing financial difficulty to find meaningful solutions to difficult situations that are in the best interests of the Bank.

The following represents additional information regarding our non-accrual loans and leases:

As of and for the Year Ended

December 31,

2025

2024

(In Thousands)

Individually evaluated loans and leases with no

   specific reserves required

$

29,525

$

13,125

Individually evaluated loans and leases with

   specific reserves required

14,330

15,242

Total individually evaluated loans and leases

43,855

28,367

Less: Specific reserves (included in allowance

   for credit losses)

5,550

8,918

Net non-accrual loans and leases

$

38,305

$

19,449

Average non-accrual loans and leases

$

26,567

$

19,589

Loans and leases with no specific reserves represent non-accrual loans where the estimated collateral, less estimated cost to sell, equals or exceeds the net realizable value of the loan. As part of the underwriting process, as well as our ongoing monitoring efforts, we evaluate sufficiency of collateral to protect our interest in the related loan or lease. As a result of this practice, a significant portion of our outstanding balance of non-accrual loans or leases may not require additional specific reserves or require only a minimal amount of required specific reserve. Management is proactive in recording charge-offs to bring loans to their net realizable value in situations where it is determined with certainty that we will not recover the entire amount of our principal. This practice may lead to a lower allowance for credit loss to non-accrual loans and leases ratio as compared to our peers or industry expectations.

In 2025, as well as in all previous reporting periods, there were no loans over 90 days past due and still accruing interest. Loans and leases greater than 90 days past due are considered non-accrual and are placed on non-accrual status. Cash received while a loan or a lease is on non-accrual status is applied against the outstanding principal. If collectability of the contractual principal and interest is not in doubt, payments received may be applied to both interest due on a cash basis and principal.

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Allowance for Credit Losses

The allowance for credit losses ("ACL"), including unfunded commitment reserves, increased $424,000, or 1.1%, to $37.7 million as of December 31, 2025, from $37.3 million as of December 31, 2024. A summary of the activity in the ACL, inclusive of reserves for unfunded credit commitments, follows:

Year Ended December 31,

2025

2024

(Dollars in Thousands)

Allowance at beginning of period

$

37,268

$

32,997

Charge-offs:

Commercial real estate:

Commercial real estate — owner occupied

—

—

Commercial real estate — non-owner occupied

—

—

Construction and land development

—

—

Multi-family

—

—

1-4 family

—

—

Commercial and industrial

(9,651

)

(5,233

)

Consumer and other

(14

)

(22

)

Total charge-offs

(9,665

)

(5,255

)

Recoveries:

Commercial real estate:

Commercial real estate — owner occupied

2

5

Commercial real estate — non-owner occupied

—

—

Construction

—

—

Multi-family

—

—

1-4 family

25

132

Commercial and industrial

1,407

541

Consumer and other

—

21

Total recoveries

1,434

699

Net charge-offs

(8,231

)

(4,556

)

Provision for credit losses

8,655

8,827

Allowance at end of period

$

37,692

$

37,268

Components:

Allowance for credit losses on loans

$

35,877

$

35,785

Allowance for credit losses on unfunded credit commitments

1,815

1,483

Total ACL

$

37,692

$

37,268

Net charge-offs as a percent of average gross loans and leases

0.25

%

0.15

%

The Corporation recognized $8.7 million of provision expense for the year ended December 31, 2025, compared to $8.8 million for the year ended December 31, 2024. The provision expense for the year ended December 31, 2025, was primarily due to $8.2 million in net charge-offs and $2.5 million and $1.5 million increases in the general reserve due to loan growth and changes in quantitative factors, respectively. These increases were partially offset by a $3.4 million decrease in the specific reserves on individually evaluated loans.

The ACL reserve increased compared to prior year primarily driven by higher general reserve requirements and higher reserves on unfunded commitments partially offset by lower specific reserve requirements. General reserves as a percentage of total loans increased to 0.90% as of December 31, 2025 from 0.86% as of December 31, 2024. Specific reserves as a percentage of total loans decreased to 0.16% as of December 31, 2025 from 0.29% as of December 31, 2024.

As a result of our review process, we have concluded an appropriate ACL for the loan and lease portfolio is $37.7 million, or 1.12% of gross loans and leases, at December 31, 2025. However, given complexities of workout situations and the uncertainty surrounding future economic conditions, further charge-offs, and increased provisions for credit losses may be recorded if additional facts and circumstances lead us to a different conclusion.

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The table below shows our allocation of the allowance for loan losses by loan portfolio segments. The allocation of the allowance by segment is management’s best estimate of the inherent risk in the respective loan portfolio as described in Allowance for Credit Losses in the Critical Accounting Policies and Estimates section. Despite the specific allocation noted in the table below, the entire allowance is available to cover any loss.

As of December 31,

2025

2024

Balance

(a)

Balance

(a)

(Dollars in Thousands)

Loan and lease portfolios:

Commercial real estate

$

15,515

0.75

%

$

14,569

0.76

%

Commercial and industrial

19,989

1.57

20,934

1.82

Consumer and other

373

0.91

282

0.63

Total allowance for loan losses

$

35,877

1.06

%

$

35,785

1.15

%

Reserve for unfunded credit commitments

1,815

1,483

Total allowance for credit losses

$

37,692

1.12

%

$

37,268

1.20

%

(a)
Allowance for credit losses category as a percentage of total loans by category.

Deposits

As of December 31, 2025, deposits increased $273.3 million, or 8.8%, to $3.380 billion from $3.107 billion at December 31, 2024. The increase in deposits was primarily due to increases of $138.1 million, $99.8 million, and $96.1 million in interest-bearing transaction accounts, certificates of deposits, and money market accounts, respectively. These increases were partially offset by decreases of $57.3 million and $3.3 million in non-interest-bearing transaction accounts and wholesale deposits, respectively.

The following table presents the composition of the Bank's consolidated deposits:

As of December 31,

2025

2024

Balance

% of Total Deposits

Balance

% of Total Deposits

(Dollars in Thousands)

Non-interest-bearing transaction accounts

$

378,770

11.2

%

$

436,111

14.0

%

Interest-bearing transaction accounts

1,103,696

32.7

965,637

31.1

Money market accounts

905,773

26.8

809,695

26.0

Certificates of deposit

284,764

8.4

184,986

6.0

Wholesale deposits

707,412

20.9

710,711

22.9

Total deposits

$

3,380,415

100.0

%

$

3,107,140

100.0

%

Uninsured deposits

1,220,177

980,278

Less: uninsured deposits collateralized by pledged assets

68,656

6,864

Total uninsured, net of collateralized deposits

$

1,151,521

34.1

%

$

973,414

31.3

%

Total period end core deposits for the year ended December 31, 2025 were approximately $2.673 billion, or 74.7% of total bank funding. Total bank funding is defined as total deposits plus FHLB advances. This compares to ending core deposits of $2.396 billion, or 71.5% of total bank funding, for 2024.

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Period-end deposit balances associated with core deposit relationships will fluctuate based upon maturity of time deposits, client demands for the use of their cash, and our ability to maintain existing and acquire new client relationships. Deposits continue to be the primary source of the Bank’s funding for lending and other investment activities. A variety of accounts are designed to attract both short- and long-term deposits. These accounts include non-interest-bearing transaction accounts, interest-bearing transaction accounts, money market accounts, and certificates of deposit. Deposit terms offered by the Bank vary according to the minimum balance required, the time period the funds must remain on deposit, the rates and products offered by competitors, and the interest rates charged on other sources of funds, among other factors. Our Bank’s core deposits are obtained primarily from Wisconsin and the greater Kansas City Metro. Deposit growth is supported by dedicated treasury management sales resources that focus on the origination of commercial operating accounts, in contrast to branch‑centric or digital acquisition sales models commonly employed by peer institutions. We believe this approach continues to contribute to the growth of core deposits and to the overall stability of the Bank’s funding profile.

The following table sets forth the amount and maturities of the Bank's certificates of deposit and term wholesale deposits at December 31, 2025:

Interest Rate

Three Months and Less

Over Three Months Through Six Months

Over Six Months Through Twelve Months

Over Twelve Months

Total

(In Thousands)

0.00% to 0.99%

$

1,319

$

—

$

240

$

—

$

1,559

1.00% to 1.99%

1,481

81

473

—

2,035

2.00% to 2.99%

28,391

3,134

2,056

5,776

39,357

3.00% to 3.99%

329,529

28,167

29,700

57,073

444,469

4.00% to 4.99%

77,324

33,778

98,970

123,417

333,489

5.00% and greater

—

—

998

—

998

$

438,044

$

65,160

$

132,437

$

186,266

$

821,907

At December 31, 2025, time deposits included $113.0 million of certificates of deposit and wholesale deposits in denominations greater than or equal to $250,000. Of these certificates, $41.4 million are scheduled to mature in three months or less, $21.6 million in greater than three through six months, $39.2 million in greater than six through twelve months and $10.8 million in greater than twelve months.

A summary of annual maturities of core and wholesale certificates of deposit at December 31, 2025 is as follows:

(In Thousands)

Maturities during the year ended December 31,

2026

$

635,641

2027

127,620

2028

31,279

2029

18,462

2030

7,635

Thereafter

1,270

$

821,907

As of December 31, 2025, we have no wholesale certificates of deposit which the Bank has the right to call prior to the scheduled maturity.

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Borrowings

We had total borrowings of $252.1 million as of December 31, 2025, a decrease of $68.0 million, or 21.25%, from $320.0 million at December 31, 2024. The Bank elected to utilize more wholesale deposits in lieu of FHLB advances in consideration of liquidity risk management and business strategy. Total wholesale funding as a percentage of total bank funding was 25.3% as of December 31, 2025, compared to 28.9% as of December 31, 2024. Total bank funding is defined as total deposits plus FHLB advances.

Please refer to the section entitled Liquidity and Capital Resources, below, for further information regarding our use and monitoring of wholesale funds.

The following table sets forth the outstanding balances, weighted average balances, and weighted average interest rates for our borrowings (short-term and long-term) as indicated.

December 31, 2025

December 31, 2024

Balance

Weighted

Average

Balance

Weighted

Average

Rate

Balance

Weighted

Average

Balance

Weighted

Average

Rate

(Dollars in Thousands)

FHLB advances

$

197,246

$

246,486

3.20

%

$

265,350

$

282,437

2.73

%

Line of credit

—

1

4.25

—

1,229

8.03

Other borrowings

—

4

—

10

10

—

Subordinated notes and debentures

54,805

54,742

6.43

54,689

49,833

6.36

$

252,051

$

301,233

3.79

$

320,049

$

333,509

3.30

A summary of annual maturities of borrowings at December 31, 2025, is as follows:

(In Thousands)

Maturities during the year ended December 31,

2026

$

125,234

2027

10,000

2028

10,450

2029

23,929

2030

20,000

Thereafter

62,438

$

252,051

The aggregate principal amount of the 2024 issuance of subordinated notes payable was $20.0 million. The subordinated notes payable bear a fixed interest rate of 7.5% with a maturity date of September 13, 2034.

Stockholders' Equity

As of December 31, 2025, stockholders’ equity was $371.6 million, or 9.10% of total assets, compared to stockholders’ equity of $328.6 million, or 8.53% of total assets, as of December 31, 2024. Stockholders’ equity increased by $43.0 million during the year ended December 31, 2025. The increase was due to net income of $50.3 million for the year ended December 31, 2025, partially offset by preferred and common stock dividend declarations of $875,000 and $9.7 million, respectively.

The Corporation issued 12,500 shares, or $12.5 million in aggregate liquidation preference, of 7.0% Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series A, par value $0.01 per share, with a liquidation preference of $1,000 per share (the “Series A Preferred Stock”) in a private placement to institutional investors. The net proceeds received from the issuance of the Series A Preferred Stock were $12.0 million.

The Corporation expects to pay dividends on the Series A Preferred Stock when and if declared by its Board, at a fixed rate of 7.0% per annum, payable quarterly, in arrears, on March 15, June 15, September 15 and December 15 of each year up to, but excluding, March 15, 2027. For each dividend period from and including March 15, 2027, dividends will be paid at a floating rate of

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Three-Month Term SOFR plus a spread of 539 basis points per annum. During the year ended December 31, 2025, the Corporation paid $875,000 in preferred cash dividends. The Series A Preferred Stock is perpetual and has no stated maturity. The Corporation may redeem the Series A Preferred Stock at its option at a redemption price equal to $1,000 per share, plus any declared and unpaid dividends (without regard to any undeclared dividends), subject to regulatory approval, on or after March 15, 2027 or within 90 days following a regulatory capital treatment event, in accordance with the terms of the Series A Preferred Stock.

On April 26, 2024, the Corporation’s Board of Directors authorized the repurchase by the Corporation of shares of its common stock with a maximum aggregate purchase price of $5.0 million, in such quantities, at such prices and on such other terms and conditions as the Corporation’s Chief Executive Officer or Chief Financial Officer determine in their discretion to be in the best interests of the Corporation and its shareholders, any time with no expiration date. As of December 31, 2025, the Corporation has not repurchased any shares under this repurchase program.

Liquidity and Capital Resources

The Corporation expects to meet its liquidity needs through existing cash on hand, established cash flow sources, its third party senior line of credit, and dividends received from the Bank. While the Bank is subject to certain generally applicable regulatory limitations regarding its ability to pay dividends to the Corporation, we do not believe that the Corporation will be adversely affected by these dividend limitations. The Corporation’s principal liquidity requirements at December 31, 2025, were the interest payments due on subordinated notes and cash dividends payable to both common and preferred stockholders. During 2025 and 2024, FBB declared and paid cash dividends totaling $13.5 million and $11.5 million, respectively. The capital ratios of the Bank met all applicable regulatory capital adequacy requirements in effect on December 31, 2025, and continue to meet the heightened requirements imposed by Basel III, including the capital conservation buffer. The Corporation’s Board and management teams adhere to the appropriate regulatory guidelines on decisions which affect their capital positions, including but not limited to, decisions relating to the payment of dividends and increasing indebtedness.

The Bank maintains liquidity by obtaining funds from several sources. The Bank’s primary source of funds are principal and interest payments on loans receivable and mortgage-related securities and deposits and other borrowings, such as federal funds and FHLB advances. The scheduled payments of loans and mortgage-related securities are generally a predictable source of funds. Deposit flows and loan prepayments, however, are greatly influenced by general interest rates, economic conditions, and competition.

Sources of Liquidity

(Unaudited)

As of and for the Year Ended

December 31,

(in thousands)

2025

2024

Short-term investments

$

8,714

$

128,207

Collateral value of unencumbered pledged loans

992,398

444,453

Market Value of unencumbered securities

388,474

310,125

Readily accessible liquidity

1,389,586

882,785

Fed fund lines

45,000

45,000

Excess brokered CD capacity(1)

775,851

981,463

Total liquidity

$

2,210,437

$

1,909,248

Total uninsured, net of collateralized deposits

1,151,521

973,414

(1)
Bank internal policy limits brokered CDs to 50% of total bank funding when combined with value of unencumbered pledged loans.

We view readily accessible liquidity as a critical element to meet our cash and collateral obligations. We define our readily accessible liquidity as the total of our short-term investments, our unencumbered securities available-for-sale, and our unencumbered pledged loans. Our readily accessible liquidity increased $506.8 million from December 31, 2024, due primarily to engagement with the FRB to confirm pledge value of additional loans. As of December 31, 2025, and 2024, our readily accessible liquidity was $1.390 billion and $882.8 million, respectively. At December 31, 2025, and 2024, the Bank had $7.7 million and $127.8 million on deposit with the

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FRB recorded in short-term investments, respectively. Any excess funds not used for loan funding or satisfying other cash obligations were maintained as part of our readily accessible liquidity in our interest-bearing accounts with the FRB, as we value the safety and soundness provided by the FRB. We plan to utilize excess liquidity to fund loan and lease portfolio growth, pay down maturing debt, allow run off of maturing wholesale certificates of deposit or invest in securities to maintain adequate liquidity at an improved margin.

We had $904.7 million of outstanding wholesale funds at December 31, 2025, compared to $976.1 million of wholesale funds as of December 31, 2024, which represented 25.3% and 28.9%, respectively, of period end total bank funding. Wholesale funds include FHLB advances and brokered deposits. Total bank funding is defined as total deposits plus FHLB advances. We are committed to raising core deposits while utilizing wholesale funds to mitigate interest rate risk. Wholesale funds continue to be an efficient and cost effective source of funding for the Bank and allows it to gather funds across a larger geographic base at price levels and maturities that are more attractive than local time deposits when required to raise a similar level of core deposits within a short time period. Access to such deposits and borrowings allows us the flexibility to refrain from pursuing non-relationship based deposits in markets that may have experienced unfavorable pricing levels. The administrative costs associated with wholesale funds are considerably lower than those that would be incurred to administer a similar level of core deposits with a similar maturity structure. During the time frames necessary to accumulate wholesale funds in an orderly manner, we will use short-term FHLB advances to meet any temporary funding needs. The short-term FHLB advances will typically have terms of one week to one month to cover expected funding demands.

Period-end core deposits increased $276.6 million, or 11.5%, to $2.673 billion at December 31, 2025, from $2.396 billion at December 31, 2024, as core deposit balances increased due to successful business development efforts, partially offset by clients funding their normal course of business. Our core relationships continue to grow; however, deposit balances associated with those relationships will fluctuate. We expect to establish new client relationships and continue marketing efforts aimed at increasing the balances in existing clients’ deposit accounts. Nonetheless, we will continue to use wholesale funds in specific maturity periods, typically three to five years, needed to effectively mitigate the interest rate risk measured through our asset/liability management process or in shorter time periods if core deposit balances decline. In order to provide for ongoing liquidity and funding, substantially all of our wholesale funds are certificates of deposit which do not allow for withdrawal at the option of the depositor before the stated maturity (with the exception of deposits accumulated through the internet listing service which have the same early withdrawal privileges and fees as do our other core deposits) and FHLB advances with contractual maturity terms and no call provisions. The Bank limits the percentage of wholesale funds to total bank funds in accordance with liquidity policies approved by its Board. The Bank was in compliance with its policy limits as of December 31, 2025.

We will continue to use wholesale funds in specific maturity periods, typically three to five years, needed to effectively mitigate the interest rate risk measured through our asset/liability management process or in shorter time periods if core deposit balances decline. In order to provide for ongoing liquidity and funding, none of our wholesale certificates of deposit allow for withdrawal at the option of the depositor before the stated maturity date and FHLB advances have contractual maturity terms. The Bank limits the percentage of wholesale funds to total bank funds in accordance with liquidity policies approved by its Board. The Bank was in compliance with its policy limits as of December 31, 2025.

The Bank was able to access the wholesale funding market as needed at rates and terms comparable to market standards during the year ended December 31, 2025. In the event that there is a disruption in the availability of wholesale funds at maturity, the Bank has managed the maturity structure, in compliance with our approved liquidity policy, so at least one year of maturities could be funded through readily available liquidity. These potential funding sources include deposits maintained at the FRB or Federal Reserve Discount Window utilizing currently unencumbered securities and acceptable loans as collateral. As of December 31, 2025, the readily available liquidity was in excess of the stated policy minimum. We believe the Bank will also have access to the unused federal funds lines, cash flows from borrower repayments, and cash flows from security maturities. The Bank also has the ability to raise core deposits by offering attractive rates to generate the level required to fulfill its liquidity needs.

The Corporation has on file a shelf registration with the Securities and Exchange Commission that would allow the Corporation to offer and sell, from time to time and in one or more offerings, up to $75.0 million in aggregate initial offering price of common and preferred stock, debt securities, warrants, subscription rights, units, or depository shares, or any combination thereof.

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The Bank is required by federal regulation to maintain sufficient liquidity to ensure safe and sound operations. We believe that the Bank has sufficient liquidity to match the balance of net withdrawable deposits and short-term borrowings in light of present economic conditions and deposit flows.

During the year ended December 31, 2025, operating activities resulted in a net cash inflow of $61.7 million driven by net income of $50.3 million. Net cash used in investing activities for the year ended December 31, 2025, was $373.4 million which consisted of $268.3 million in cash outflows to fund net loan growth and $134.6 million in net cash outflows to purchase available-for-sale securities. Net cash provided by financing activities for the year ended December 31, 2025, was $193.5 million. Financing cash flows included a $273.3 million net increase in deposits and a $68.1 million net decrease in FHLB advances, partially offset by cash dividends paid of $9.7 million.

Refer to Note 12 – Regulatory Capital for additional information regarding the Corporation’s and the Bank’s capital ratios and the ratios required by their federal regulators at December 31, 2025, and 2024.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. By their nature, changes in these assumptions and estimates could significantly affect the Corporation’s financial position or results of operations. Actual results could differ from those estimates. Discussed below are certain policies that are critical to the Corporation. We view critical accounting policies to be those which are highly dependent on subjective or complex judgments, estimates and assumptions, and where changes in those estimates and assumptions could have a significant impact on the financial statements.

Allowance for Credit Losses. Management believes the determination of the ACL involves a higher degree of judgment and complexity than its other significant accounting policies. The ACL is calculated with the objective of maintaining a reserve level believed by management to be sufficient to absorb estimated credit losses over the life of an asset or an off-balance sheet credit exposure. Management’s determination of the adequacy of the ACL is based on periodic evaluations of past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. However, this evaluation has subjective components requiring material estimates, including expected default probabilities, the expected loss given default, the amounts and timing of expected future cash flows, and estimated losses based on historical loss experience and forecasted economic conditions. All of these factors may be susceptible to significant change. To the extent that actual results differ from management estimates, additional provisions for credit losses may be required that would adversely impact earnings in future periods. The ACL represents our recognition of the risks of extending credit and our evaluation of the quality of the loan and lease portfolio and as such, requires the use of judgment as well as other systematic objective and quantitative methods which may include additional assumptions and estimates.

One of the most significant judgments impacting the ACL estimate is the economic forecast for United States national unemployment and United States national GDP. Changes in the economic forecast could significantly affect the estimated credit losses which could potentially lead to materially different allowance levels from one reporting period to the next. Loans that no longer conform to the risk characteristics of any pool are evaluated individually. This includes all non-accrual loans and leases and may also include other loans and leases that management identifies as non-conforming. Reserves on individually-evaluated loans are estimated based on one or a combination of estimates of fair value of the underlying collateral less cost to sell, seniority of the Bank’s claim, and borrower repayment forecasts. For loans and leases less than $500,000 in the Equipment Finance pool, the recovery value is based on historical experience.

Management also evaluates debt securities for credit losses when a default or decline in fair value is identified.

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We also continue to exercise our legal rights and remedies as appropriate in the collection and disposal of non-performing assets and adhere to rigorous underwriting standards in our origination process in order to achieve strong asset quality. Although we believe that the ACL was appropriate as of December 31, 2025, based upon the evaluation of loan and lease delinquencies, non-performing assets, charge-off trends, economic conditions, and other factors, there can be no assurance that future adjustments to the allowance will not be necessary.

Income Taxes. Income tax expense or benefit represents the tax payable or tax refundable for a period, adjusted by the applicable change in deferred tax assets and liabilities for that period. The determination of current and deferred income taxes is based on complex analysis of many factors, including the interpretation of federal and state income tax laws, the difference between the tax and financial reporting basis of assets and liabilities (temporary differences), estimates of amounts currently due or owed, such as the timing of reversals of temporary differences, and current accounting standards. Deferred income taxes 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 bases. We apply a more likely than not approach to each of our tax positions when determining the amount of tax benefit to record in our Consolidated Financial Statements. 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.

We have made our best estimate of valuation allowances utilizing available evidence and evaluation of sources of taxable income including tax planning strategies and expected reversals of timing differences to determine if valuation allowances were needed for deferred tax assets. Realization of deferred tax assets over time is dependent on our ability to generate sufficient taxable earnings in future periods and a valuation allowance may be necessary if management determines that it is more likely than not that the deferred asset will not be utilized. These estimates and assumptions are subject to change. Changes in these estimates and assumptions could adversely affect future consolidated results of operations. The Corporation believes the tax assets, liabilities, and allowances are properly recorded in the Consolidated Financial Statements.

The Corporation also invests in certain development entities that generate federal historic, low income housing, or renewable energy tax credits. The tax benefits associated with these investments are accounted for either under the flow-through method, equity method, or proportional amortization method and are recognized when the respective project is placed in service or over the investment term.

The federal and state taxing authorities who make assessments based on their determination of tax laws may periodically review our interpretation of federal and state income tax laws. Tax liabilities could differ significantly from the estimates and interpretations used in determining the current and deferred income tax liabilities based on the completion of examinations by taxing authorities.

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